Further to that in Section 1.29.1 of the Max Stock Ltd.'s 2021 annual report, regarding the company executing a memorandum of understanding with a local partner in Portugal to establish a joint venture with the objective of establishing and managing a Max Stock chain of stores in Portugal and Spain (the Portugal Transaction). On August 15, 2022, the company's board of directors approved for the company to enter into the Portugal Transaction with the local partner, Fortera Properties, LDA ("Fortera") to establish a Max Stock chain of stores in Portugal and Spain, inter alia, in accordance with the principles detailed below in this report. Purpose of the Transaction: The establishment of a common company in Portugal (the Common Company), which shall be jointly held by the Company (75%) and Fortera (25%), for the purpose of establishing and managing the Max Stock chain of stores in Portugal and Spain.

According to the business plan, the chain of stores will first operate in Portugal and may also subsequently expand to Spain, as decided upon by the parties and the board of directors of the Common Company. The Portuguese Market: The discount stores in Portugal are estimated to constitute 15%-18% of the total retail market (both food and non-food), a relatively low rate for Europe, which presents an opportunity for growth. The non-food segments in which the Company operate are estimated to be about EUR 12 billion.

Most purchases in Portugal are made offline.