Clarification of news or information requested by SET

SET requests to clarify news or information Subject : Clarification of news or information requested by SET Description : No. XBIO-AD41/2026 June 29, 2026 Subject: Additional Clarification on the Increased Loss in the Financial Statements for Q1/2026 Compared to the same Period of the Previous Year (Revise-1) To: Director of The Stock Exchange of Thailand Dear: Sir/Madam, The Company refers to the letter from the Stock Exchange of Thailand ("SET") addressed to X Bioscience Public Company Limited ("the Company") regarding the significant increase in the Company's operating loss for the first quarter of 2026 compared to the same period of the previous year (an increase of 437%), primarily due to higher administrative expenses. In response, the Company hereby provides clarification and disclosure through the SET system as follows: 1. Investment in the Food Business 1.1 The Company recorded impairment of investment and goodwill in HOSHI Co., Ltd. due to the agreement to repurchase shares at cost, which is higher than the current book value. The auditor considered the excess as goodwill. However, recognition of the brand "KOKO," a Japanese omakase restaurant, remains uncertain. Coupled with accumulated losses exceeding equity, the auditor deemed it appropriate to record impairment of both goodwill and investment. 1.2 The Company recognized the necessity of additional investment in the central kitchen project to support the expansion of its restaurant business planned under the brand "Kizuna." The primary objectives of this investment were to enhance raw material management efficiency, reduce operating costs, and ensure stable food production quality, which would serve as key drivers supporting the sustainable growth of our core business. Furthermore, this investment was intended to support business restructuring to achieve an optimal scale by maintaining only high-potential and robust branches to increase operational agility. This action strictly aligned with the Company's strategic and efficient resource allocation. Currently, this central kitchen project has been de facto suspended due to the resolution of the Executive Committee Meeting No. 8/2026, held on June 12, 2026. The committee resolved to terminate the Agreement to Sell and to Purchase land and buildings intended for the central kitchen project, and instructed to proceed with the refund of the deposit in accordance with the contractual terms. The Company subsequently received the full deposit refund of THB 10 million on June 28, 2026. The termination of the said agreement was a result of the renovation plans and cash flow allocation required for structural modifications. The Company has recently initiated two new renovation projects, namely for "Le Boeuf" restaurant and "KOKO" Omakase restaurant. 1.3 The Company confirms that the resignation of the Chief Operating Officer (COO) of the food business has no impact on operations. Management continues to perform duties as usual, with uninterrupted workflows and coordination. The Company assures that overall management remains strong, with clear systems in planning, quality control, and customer service, ensuring business continuity without adverse effects on stakeholders and shareholders. 2. Future Business Policy The Company has invested in the construction business, which has already been recognized in the Q1/2026 financial statements. Additionally, the Company has reserved THB 288 million for investment in the food business under the brand "Chokdee Dim Sum," which will be recognized as a new subsidiary in Q2/2026. This business involves both retail operations and OEM production, aligning with the planned divestment of an indirect subsidiary in Q2/2026. Furthermore, in Q2/2026, the Company signed two additional construction projects, bringing the total to seven projects. The Company's future business operations and strategic plans are structured as follows: - X Bioscience Public Company Limited: Originally operating as a holding company, the Company will pivot its core operations to focus on the construction business sector. - Chokdee Dim Sum Company Limited: As a newly established subsidiary, this entity will operate in the food and beverage industry, currently managing 8 branches and utilizing its own manufacturing facility to expand into Original Equipment Manufacturer (OEM) business opportunities. - Crepes & Co. Development Company Limited: The subsidiary will continue to operate its French restaurant business under the brand "Le Boeuf," following a major relocation and extensive renovation. - Hoshi Company Limited: The subsidiary will continue to operate its Japanese restaurant business, specifically focusing on the "Omakase" dining segment. - Eastern Cuisine (Thailand) Company Limited: Previously operating a Japanese buffet business under the brand "Kagonoya" with 4 branches. The Executive Committee has resolved to approve the divestment of all 4 branches. The purchase and sale agreement has been fully executed, and the Company received the payment in full on June 23, 2026. - Fruita Biomed Company Limited: The transaction agreement is currently in the process of being extended for an additional period of one year. Concurrently, negotiations remain ongoing regarding the terms and conditions for the share buyback allocation of Fruita Biomed Company Limited. - Fresh Energy Fusion Company Limited: Business operations have been temporarily suspended. - Joire Cuisine & Bar Company Limited: Business operations have been temporarily suspended. 3. Administrative Expenses Related to Impairment The Company provides details of impairment expenses as follows: X Bioscience PCL Investment 117,328,309.01 Software 14,362,007.48 Eastern Cuisine (Thailand) Goodwill 111,301,008.36 Brand 45,091,263.09 Crepes & Co. Development Goodwill 12,084,272.14 Brand 7,971,355.83 HOSHI Co.,Ltd. Goodwill 10,961,241.65 Joire Cuisine & Bar Co.,Ltd. Investment 800,000.00 Totals: Investment 118,128,309.01 Goodwill 134,346,522.15 Brand 53,062,618.92 Software 14,362,007.48 Impairment was considered based on: - Investments in Assets Held for Sale and Subsidiaries: The assessment is determined based on the fair value of the securities held and the valuation of the respective subsidiaries. The valuation of each subsidiary is assessed using the Discounted Cash Flow (DCF) method to reflect its future revenue-generating potential. If the valuation results indicate that the market value (or fair value) is lower than the carrying amount, the Company will recognize an impairment loss and transparently disclose this information to shareholders and the Stock Exchange of Thailand. - The assessment of impairment for Goodwill and Brand Value must be referenced against strategic business factors that reflect future revenue-generating capabilities and market share retention. If a business experiences a loss of competitive advantage or a decline in market perception, the carrying value of its Goodwill and Brand Value must be adjusted downward. The key factors influencing this impairment consideration are outlined below: o Market Share: The reduction in the number of operating branches from 14 to only 4 has resulted in a significant loss of market share. o Cessation of Certain Business Segments: The termination of the bakery and bar business operations has directly led to a decline in brand awareness and market recognition. o Financial Performance and Cash Flows: The combined impact of branch reductions and the cessation of certain business segments has caused a continuous decline in revenues and profits. This indicates that the estimated future recoverable amounts may no longer support their current carrying values. Currently, the Company has fully recognized impairment losses on certain assets. However, future impairment risks remain regarding the investment held for sale in Fruita Biomed Company Limited. The transaction period for this investment has been extended for an additional year from the original deadline of June 30, 2026, to the new deadline of June 30, 2027. The remaining carrying value of this investment stands at THB 165 million. 4. Policy on Advance Payments and Deposits 4.1 The Company placed a deposit of THB 10 million to study feasibility of investment in Charoensuk Passion Co., Ltd. The investment is under review and negotiation, with a conclusion expected by July 31, 2026. Updates will be disclosed via the SET system. The payment of the aforementioned deposit strictly complied with the Company's established procedures and internal control principles. The transaction was formally approved during the Executive Committee Meeting No. 4/2026, held on February 24, 2026, which granted the authorizing power to the Chief Executive Officer (CEO) or their designated sub-authorized representative. Consequently, the Company executed a sub-power of attorney authorizing an independent third party to act on its behalf for this specific transaction, and the appointed representative is not a director of the Company. 4.2 The Company paid a deposit of THB 10 million under a land purchase agreement, with the right to cancel by June 30, 2026. The Board of Directors' Meeting No. 8/2026 on June 12, 2026 resolved to cancel the agreement, and the deposit has been fully refunded. 4.3 The Company plans to relocate and renovate the French restaurant "LeBouef" due to lease expiration. A construction contract with clear payment terms and timeline was signed, with completion scheduled for July 15, 2026. The Company has established clear criteria and procedures for the disbursement of advance payments and deposits as follows: 1. Advance Payments - Request Procedure: The requesting party must complete the Advance Payment Request Form, specifying the purpose, estimated expenditure details, and the required amount. - Approval Authority: All requests must be formally approved by the respective supervisor or the Finance Department Manager prior to disbursement. - Settlement Timeline: The recipient must clear and settle the advance payment within 7 days from the date of receipt, accompanied by valid supporting expense documents. - Surplus/Deficit Adjustment: If the actual expenditure is less than the advanced amount, the remaining balance must be returned to the Company. Conversely, if the actual expenditure exceeds the advanced amount, the Company will reimburse the excess amount based on actual and verifiable supporting evidence. - Credit Limits: Maximum advance payment limits are strictly determined in accordance with the requester's corporate position. 2. Deposits - Transaction Purpose: Deposits are utilized for executing purchase/sale agreements, lease services, or other necessary business transactions. - Documentary Evidence: Every deposit transaction must be supported by formal contractual agreements and official receipts issued by the counterparty. - Refund Terms: The return of deposits must strictly comply with the terms and conditions specified in the respective contracts. - Approval Authority: The approval of any deposit placement must be authorized by the Executive Committee or executives with designated delegation of authority. 5. Reasonableness of Deposits The Company wishes to clarify that for every procurement and service engagement, a rigorous sourcing and price comparison process must be conducted. The terms of work and payment conditions must be strictly aligned, with clearly defined deliverables and project milestones. Furthermore, any deposit paid must not be excessive in proportion to the total contract value and must remain within acceptable industry standards for similar business transactions. Therefore, the Company considers the payment of the aforementioned deposits to be entirely appropriate, in accordance with the mutual agreements and contractual terms established with the counterparties, with the details outlined below: - Deposit paid to Charoensuk Passion Company Limited: The purpose of this deposit was to conduct a comprehensive business study of the "Kizuna" restaurant brand. This engagement specified a thorough 4-month evaluation period, with a decision-making timeframe extending until July 31, 2026. From a marketing and strategic perspective, gaining access to proprietary and sensitive insights?such as specific business models or recipes?is highly restricted for external parties. Consequently, the deposit serves as a necessary and appropriate mechanism to secure the Company's exclusive rights to thoroughly study the business. Under the agreement, the Company retains the absolute right to cancel the investment and request a full refund of the deposit if the feasibility study does not meet expectations, or if the Company decides not to proceed. Currently, the Company is actively continuing its business study of the "Kizuna" restaurant brand as originally planned, and a final summary will be presented for a strategic decision upon the expiration of the timeline on July 31, 2026. - Deposit paid to Lite Corporate Company Limited: This deposit was placed under an Agreement to Sell and to Purchase land and buildings. The contractual terms were explicitly defined based on the property valuation conducted by an independent professional appraisal firm. Currently, this agreement has been formally terminated, and the Company has already received the full refund of THB 10 million in strict compliance with the contractual terms. Yours sincerely (Sign) (Miss Saowanee Khaoubol) X Bioscience Public Company Limited Signature ___________________________ ( Miss Saowanee Khaoubol ) Acting Chief Executive Officer Authorized to sign on behalf of the company ______________________________________________________________________ This announcement was prepared and disseminated by listed company or issuer through the electronic system which is provided for the purpose of dissemination of the information and related documents of listed company or issuer to the Stock Exchange of Thailand only. The Stock Exchange of Thailand has no responsibility for the correctness and completeness of any statements, figures, reports or opinions contained in this announcement, and has no liability for any losses and damages in any cases. In case you have any inquiries or clarification regarding this announcement, please directly contact listed company or issuer who made this announcement. 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