Turpaz Industries Ltd.

M&A Activity • Mar 27, 2023

Amendment to the acquisition agreement of a fragrance company in the USA false

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TURPAZ INDUSTRIES LTD
Corporation no: 514574524	13939
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	Israel Securities Authority			Tel Aviv Stock Exchange		�150 ( Public )		Reported via MAGNA:	27/03/2023
	www.isa.gov.il			www.tase.co.il				Reference:	2023-01-028012	Time of broadcast: 09:08 09:08

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English language report to Israeli corporateThis form is for reports that has been translated to English (convenience translation) and should be published alongside with the report in Hebrew in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730 - 1970.

References of previous reports relating to this matter:   _________   _________   _________

Further to the immediate report published by the Company on September 18, 2022 (Ref. No. 2022-01-118207) regarding the acquisition, through Turpaz USA, a wholly-owned US subsidiary (Thereinafter - "Turpaz USA") of 81% of the issued share capital and voting rights of Klabin Fragrance Inc., a privately-held company incorporated in the USA (hereinafter - �Klabin�) from its shareholders (hereinafter � the �Sellers�) in consideration for USD 24.3 million subject to adjustments in accordance with Klabin�s results in 2022 (hereinafter - the �Acquisition Agreement�), and further to the immediate report of October 3, 2022 (Ref. No. 2022-01-100530) regarding the completion of the transaction, the Company is honored to reported as follows: Since the date of its acquisition and during the first quarter of 2023, Klabin focused on expanding the manufacturing function, and invested efforts in taking on and consolidating the activity of Turpaz USA into Klabin�s activity in Klabin�s innovative manufacturing facility in New Jersey. As part of this process, Klabin integrated Turpaz USA�s manufacturing, development, IT and finance functions. As of the publication date of this report, the consolidation of the activity of Turpaz USA with that of Klabin�s was completed. Klabin�s activity in the fourth quarter of 2022 was also affected by the reduction in its customers� inventory levels as part of a trend of inventory levels reduction that currently characterizes the entire sector following interest rates hikes across the world and the economic uncertainty in the markets; therefore, Klabin�s EBITDA in 2022 declined. In view of the above, the parties conducted negotiations for the assessment of the adjustment of the purchase price and the terms of the transaction, and reached an agreement whereby instead of adjusting the consideration in accordance with Klabin�s results in 2022, the Acquisition Agreement will be revised such that: (1) the remaining balance of issued and paid up share capital and voting rights of Klabin (19%) will be transferred immediately to Turpaz USA, such that Turpaz will hold the entire (100%) issued share capital and voting rights of Klabin; (2) the immediate consideration for the acquisition (for 100% of Klabin�s shares) shall be reduced to USD 22.4 million; (3) the sellers will be entitled to additional consideration (of up to USD 3 million) in accordance with Klabin�s business results in 2023-2025.

Attached hereto is a report on	Amendment to the acquisition agreement of a fragrance company in the USA

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	Reference to parallel Hebrew report:	2023-01-027922
	This report was not reported in Hebrew.

Details of the authorized signatories to sign on behalf of the corporation:

	Name of the signer	Corporate Role
1	Yoni Adini	Other General Counsel

Note: According to Rule 5 of the Periodic and Immediate Reports Regulations (1970), a report submitted under these Regulations will be signed by the authorized persons to sign on behalf of the corporation. For the ISA staff notice Click here .2 2

References of previous documents relating to this matter(the reference does not constitute incorporation by reference):
2022-01-100548     2022-01-118225
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Stock Exchange/Market: �����	Date of revision of form structure: 21/02/2023
Address: ���� 2 , ����� 5885708   , Tel: 03-5560913 , Fax: 03-5560915
E-mail address: karen@turpaz.co.il   Company site: www.turpaz.co.il
Previous names of reporting entity:
Name of the Signatory: ����� ���� Position of Signatory in the reporting corporation: Name of Employer Company:
Address: ���� 2 , ����� 5885708 Telephone: 054-8010552 Facsimile: E-mail: yoni@turpaz.co.il 1