Live Verdure : LV1 December 2021 Quarterly Business Review & Appendix 4C

ASX Release

31 January 2022

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LV1 December 2021 Quarterly Business Review & Appendix 4C

Live Verdure Ltd (ASX: LV1) ("LV1", "Live Verdure" or the "Company") is pleased to release our quarterly activities report and Appendix 4C for the three months ended 31 December 2021.

Record Sales Highlights

• Online Sales increased by ~58% to a record of ~$509,000
• Cash Receipts increased by ~55% on the previous quarter to a record of ~$518,000
• Record number of orders processed during the quarter
• Strong growth continued across several important Direct to Consumer (DtoC) metrics

Record Online Sales and Cash Receipts

The Company is pleased to advise we have delivered unaudited sales for the quarter of ~$518,000. This figure shows an increase of ~234% from the same quarter in 2020 and an increase of ~56% from the September 2021 quarter.

The Company is also proud to advise that it recorded its strongest cash receipts in the Company's history during this quarter, with ~$518,000 received from customers.

Online Sales (~$509,000) made up ~98% of total sales for the quarter, an increase from 97% in the previous quarter. This achievement marks the 5th consecutive quarter of online revenue growth since listing on the ASX in December 2020 and continues to prove the merit in Live Verdure's DtoC business strategy.

LV1's total number of orders for the December 2021 quarter also increased by more than ~52% compared to the September 2021 quarter.

Given the accelerated forecast growth trajectory, LV1 maintained increased investment in inventory during the quarter, including materials for TheraNight+ which was launched in the December 2021 quarter. This is reflected in the product manufacturing and operating costs.

LV1 also increased investment against marketing initiatives, including continuing to explore new channels to drive an improved return on investment on our digital spend. This is reflected in an increase in advertising and marketing expenditure.

Since launching TheraJoint+, LV1 has built strong digital capability in acquiring paying customers, driving repeat customers and increased AOV. The Company continues to assess and monitor its Customer

Live Verdure Ltd ACN: 614 347 269
Level 21, 459 Collins Street, Melbourne, Victoria 3000
W: liveverdure.com.au | T: [phone] | E: [e-mail]	1

Acquisition Cost ("CAC") and in the medium term is exploring opportunities to optimise customer lifetime value by focusing on acquiring high value new customers who are more likely to become repeat customers.

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Graph 1: Summary of online sales for FY21.

Key Direct to Consumer Metrics

In addition to the increase in online sales, LV1 has continued to show significant increases across several key categories since its ASX listing in December 2020. These are outlined in the table below and discussed in further detail.

		For the 3 months ended:
	Dec 2020	Mar 2021	June 2021		Sept 2021	Dec 2021
Online Sales	~$130,000	~$133,000	~$164,000		~$323,000	~$509,000
First Time Customer	~$89	~$82	~$79		~$94	~$95
Average Order Value
("AOV")
Repeat Customer	~$102	~$102	~$93		~$114	~$116
Average Order Value
("AOV")
Repeat Customer	45.6%	36.3%	40.1%		28.4%	23.7%
Rate

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First-Time vs Returning Customers

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During the December 2021 quarter, Live Verdure continued to attract a significant number of new customers. The Company recognises this as an excellent opportunity to convert these new customers into repeat customers, who historically have a higher AOV and are more likely to promote the products to their family and friends.

Graph 2: First-Time and Returning Customers - Dec 2020 to Dec 2021

LV1 is stepping up our marketing efforts and will continue focusing more on social media and email campaigns to maintain high levels of engagement and reduce CAC. Customer engagement has been proven to increase customer retention and encourage repeat spend - which will ultimately become our main profitability driver.

Repeat customers continue to be significantly more valuable than first-time customers because:

1. Repeat customers have a higher AOV than first-time customers;
2. Repeat customers are easier to sell to;
3. Repeat customers promote the products; and
4. New customers cost more to acquire.

AOV for First-Time and Repeat Customers

At $95 the AOV for first-time customers has consolidated relative to the September 2021 quarter. Our focus in subsequent quarters will include marketing higher value items and bundles of products sold together - now including TheraNight+.

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Graph 3: AOV for First Time Customers and AOV for Repeat Customers

The AOV for repeat customers has also been increasing, and during this quarter reached an all-time high of ~$116.

LV1's AOV over the period provides the foundation for continued growth in revenue and illustrates our customers' love of the products and strong support of the brand.

Continued DtoC Focused Business Model

Live Verdure remains confident in our DtoC business model. We look forward to further increasing online sales in future quarters by:

• Launching additional products;
• Continuing to scale product promotion campaigns on multiple social media platforms;
• Continuing to leverage our customer database to drive high return sales; and
• Scaling sales on the Amazon US and AU global marketplaces.

The financial year 2021 Research and Development return is in the process of being prepared and is expected to be lodged over the coming quarter.

During the December 2021 quarter, Live Verdure's expenditure included ~$77,000 on employee benefits, ~$736,000 on advertising and marketing expenses, ~$68,000 on research and development expenses, and ~$142,000 on product manufacturing and operating costs. This expenditure is in line with budget expectations.

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Operational Highlights

• Launch of Second TGA Registered Product and Commencement of First Sales
• LV1 Signs Retail Distribution Agreement to Enter US Market

Launch of Second TGA Registered Product and Commencement of First Sales

During the quarter (ASX Announcement 1 December 2021), Live Verdure Ltd launched, distributed, and booked the first sales of TheraNight+, our new, scientifically formulated, and TGA approved sleep capsules.

TheraNight+ is the second product to be developed and launched under our refined strategy. This strategy focuses on delivering an even broader range of high margin DtoC products, further assisting our consumers with their health and wellness needs. TGA approval allows LV1 to make specific claims (rather than vague suggestions) regarding the effects of TheraNight+ on its ability to provide long term improvements to the consumers' sleep.

TheraNight+ was developed after conducting a deep dive survey of our customer database. The responses revealed considerable consumer demand for a solution to a lack of sleep or poor sleep quality. LV1 identified this as a significant opportunity and began working with some of Australia's top pharmaceutical scientists to create a product which would help. The result, TheraNight+, has been carefully formulated to contain a unique combination of natural herbal ingredients in very high quantities. The formulation of these ingredients allows them to work synergistically, aiding relaxation and improving sleep quality.

TheraNight+ is the second new product to be launched under the 13 Seeds brand during 2021.

LV1 Signs Retail Distribution Agreement to Enter US Market

Subsequent to the end of the December 2021 quarter (ASX Announcement 24 January 2021), Live Verdure Ltd announced it has entered a non-exclusive national sales and distribution contract (Agreement) with TruLife Distribution ("TruLife"). Under this Agreement, TruLife agrees to distribute, market, and sell products from LV1's brand, 13 Seeds, across the United States through a variety of major e-commerce and brick-and-mortar retailers. The partnership with TruLife will pave the way for the rapid entry and expansion of the 13 Seeds brand in the U.S. health and wellness marketplace.

Under the terms of the Agreement, TruLife's compliance team has been working with LV1 to ensure all 13 Seeds product labelling is FDA compliant. Following this, TruLife will utilise their existing relationships and market the 13 Seeds product range into the following distribution channels.

• National Nutrition Food & Drug Mass Retailers
• Regional Nutrition Food and Drug Retailers

• Specialty Health and Nutrition Stores

The TruLife Distribution team includes many top industry leaders with vast experience in nutritional health and wellness product marketing and distribution. With over 100 years of combined experience, TruLife's team has established relationships with industry buyers and a proven track record of national distribution to top

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