Essential Queensland Pty Ltd entered into an agreement to acquire Leaf Resources Limited (ASX:LER) in a reverse merger transaction for AUD 19.3 million on July 16, 2020. Under the terms, Leaf Resources will issue 1.02 billion shares for all shares of Essential Queensland (EQ), 34.5 million in options in lieu of the cancellation of EQ's existing options and 33 million performance rights in lieu of the cancellation of the existing performance rights on issue in EQ. The acquisition is conditional on the satisfaction of a number of conditions precedent including, LER obtaining all required shareholder and regulatory approvals necessary for implementation of the acquisition (including, under the ASX Listing Rules and Corporations Act), LER entering into a loan agreement in respect of the advance of AUD 0.60 million by EQ to LER, each shareholder of EQ executing a binding share sale and purchase agreement with LER in relation to the sale of all of the shares in EQ held by them, LER and each of the relevant shareholders of EQ executing cancellation deeds in relation to the cancellation of the options and performance rights in the capital of EQ held by those shareholders in consideration for the issue of options and performance rights in the capital of LER, LER entering into service agreements and obtaining shareholder approval, all third party approvals, EQ and LER having net debt of less than AUD 1.50 million and AUD 1.1 million respectively and if required, LER re-complying with Chapters 1 and 2 of the ASX Listing Rules.

Leaf Resources will hold shareholder meeting on November 27, 2020. On November 30, 2020, LER obtained shareholder approval and other resolutions that the transaction is conditional on were also passed in the meeting. PKF Melbourne Corporate Pty Ltd acted as independent expert for Leaf Resources Limited.