Good Drinks Australia Limited (ASX:GDA) executed a binding term sheet to acquire Stomping Ground on August 19, 2022. Under the terms of the acquisition, Good Drinks will pay an up front consideration of AUD 7 million cash, 4.5 million GDA Ordinary Shares and a trailing 5-year performance component. Deferred consideration based on volume performance: Shares: up to 3,500,000 ordinary shares over a maximum of 5 years based on 0.2 shares per litre of Stomping Ground volume sold (issued annually). Cash: paid annually based on Stomping Ground volumes sold per annum at a rate of AUD 0.57 per litre. Estimated to be AUD 6 million - AUD 8 million over 5 years based on current forecasts. Based on Venue performance: FY24: Up to AUD 1.2 million cash based on Stomping Ground venue earnings on a sliding scale, with the maximum payment based on an EBITDA target of AUD 3.54 million. FY25: Up to AUD 1.2 million cash based on Stomping Ground venue earnings on a sliding scale, with the maximum payment based on an EBITDA target of AUD 3.71 million. The venue performance cash payments set out above are payable within 60 days of the end of the relevant FY. GDA has secured the required funding, increasing its Commonwealth Bank debt facility from AUD 12.5 million to AUD 20 million to fund the upfront AUD 7 million cash component and accordingly will not require an equity raising. The upfront 4.5 million ordinary shares to be placed using the Group's 15% placement capacity under LR 7.1. The performance-based cash component is to be funded from the cashflows generated by the Stomping Ground business as well as the operating cashflows from the Good Drinks business. Stomping Ground founders Steve Jeffares, Guy Greenstone and Justin Joiner will remain key leaders within the business, also joining Good Drinks Australia as significant shareholders. Stomping Ground crew will join the Good Drinks team. Completion of the acquisition is subject to GDA Board approval, the execution of a share purchase agreement, transfer of licenses and other third-party, Stomping Ground shareholder approval and regulatory consents. If these conditions are not met, the agreement may be terminated by either party. GDA expects completion to occur around November 2022. The transaction will be EPS accretive.

Good Drinks Australia Limited (ASX:GDA) cancelled the acquisition of Stomping Ground on February 10, 2023.