#1KARAT PACKAGING INC. April 2021 Investor Presentation LOLLICUPSTORE BEVERAGE A MESTAURANT SOLUTIONS Karat BARISTA BLEND ALMOS Torani Karat CARAMEL STRIP#2DISCLAIMER Forward-Looking Statements Certain statements made in this presentation regarding Karat Packaging Inc. or its affiliates (the "Company") and any other statements regarding the Company's future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered forward-looking statements. Forward-looking statements include but are not limited to statements regarding the projections for the Company's business, and plans for future growth and operational improvements. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause the Company's actual results to differ materially from those indicated by those statements. There can be no assurance that the Company's expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance, will prove to be correct or that any of the Company's expectations, estimates or projections will be achieved. A number of important factors could cause actual results or events to differ materially from those indicated or implied by such forward-looking statements. Forward-looking statements speak only as of the date hereof, and the Company assumes no obligation to update the information in this presentation, except as otherwise required by law. CONFIDENTIAL Karat 1#3OFFERING SUMMARY Issuer Transaction Primary / Secondary Split 100% primary Shares Offered Offering Price / Share Overallotment Option Proposed Symbol Use of Proceeds Active Bookrunners Co-Managers Karat Packaging Inc. Initial Public Offering Expected Pricing 3,950,000 $18.00 $20.00 592,500 shares (all primary) KRT Repayment of approximately $30 million of existing indebtedness and other general corporate purposes, including possible facility expansion and acquisitions Stifel, William Blair, Truist Securities National Securities Corporation, D.A. Davidson & Co. Week of April 12, 2021 CONFIDENTIAL Karat 2#4Karat is a rapidly growing specialty distributor of disposable foodservice products and related items for the foodservice industry#5OUR HISTORY Alan Yu • Co-Founder • Chairman & CEO • Two decades of experience as co-founder, Chairman and CEO • 48.5% beneficial ownership of the Company prior to the IPO Founded as Lollicup USA Inc. in San Gabriel, CA to establish bubble tea stores nationwide 2000 E-Commerce website established at www.lollicupstore.com 2004 + Established Karat Earth® as an eco-friendly line of foodservice products Lollicup's business expanded to the sale and distribution of foodservice supplies 2006 2008 Lollicup grew to more than 60 stores from a single store in 2000 CONFIDENTIAL Began manufacturing products under the Karat brand in the Chino, CA facility 2013 Ann Sabahat . • 2014 Sold the retail tea business to focus on distribution of packaging and supplies CFO CPA with 25+ years experience of financial management experience 2018 Rockwall, TX facility opened 618 2019 Karat Packaging Inc. incorporated with Lollicup as its wholly-owned subsidiary Pacific Cup acquired 2020 2021 Branchburg, NJ facility opened Karat 4#6COMPANY OVERVIEW#7COMPANY OVERVIEW Our goal is to be the single-source provider to our customers for all of their disposable foodservice products and related needs ($ in millions) $46 $60 $73 Strong Revenue Growth 26.2% CAGR $100 $122 26.2% 2012-2020 Revenue CAGR 150+ Suppliers $140 (1) EBITDA margin reflects non-GAAP financial measure. $175 2012 2013 2014 2015 2016 2017 2018 2019 2020 $225 $296 Key Stats Company Overview ▪ Karat is a rapidly-growing specialty distributor and select manufacturer of environmentally friendly disposable foodservice products and related items . We are a nimble supplier of a wide range of products for the foodservice industry, including food and take out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products . . Our Karat Earth® line provides environmentally friendly options to our customers, who are increasingly focused on sustainability We offer customized solutions to our customers, including new product development, design, printing and logistics services 86% of revenue is generated from the distribution of our vendors' products, with 14% of revenue from products we manufacture ▪ 6 Locations >50,000 Customers CONFIDENTIAL 12.2% 2020 EBITDA margin(¹) 99% Customer Retention Karat 6#8INDUSTRY OVERVIEW ($ in billions) With the growing trend towards food delivery, take out and at home dining, restaurants are increasingly focused on providing a premium, branded experience to their customers $64 2020 $14 $25 Disposable Foodservice Products Market $67 2021 4.1% CAGR $69 $50 U.S. Online Delivery Market $72 2022 2023 2024 36.7% CAGR $63 $76 $75 $91 $107 $78 2025 $125 2018 2019 2020 2021 2022 2023 2024 2025 Source: Coherent Market Insights and UBS Research. We expect our growth to significantly outpace the industry average given: 1 Our increase of sales of high demand items like take out containers and bags CONFIDENTIAL 2 Our ability to continuously augment our product offering to address customer needs 3 Our avoidance of product categories in decline, including Styrofoam and other materials in the process of being banned under various governmental regulations The disposable foodservice products industry is large and growing and is expected to grow to $78 billion by 2025 according to Coherent Market Insights The primary categories of disposable foodservice products include food packaging, containers, tableware, cups, lids, cutlery, straws, napkins and bags . The breadth and scope of products is reflected in the diverse nature of the industry participants, which range from large international conglomerates to smaller regional and niche companies The industry is currently experiencing a period of both growth and transition as a result of several key factors that have emerged in recent years and have accelerated during the COVID- 19 pandemic 1. The growing market for food delivery and take out dining 2. New governmental regulations primarily resulting from an increasingly environmentally-conscious public Consolidation within the disposable foodservice products industry 3. Karat 7#9COMPANY HIGHLIGHTS Competitive Strengths 1 2 3 5 One-stop shop with broad product offering for the foodservice market and highly nimble sourcing capabilities Focus on distribution and advanced logistics network, complemented by flexible manufacturing capabilities Diverse and growing blue-chip customer base, including fast casual chains such as Chili's and Chipotle, as well as fast food chains El Pollo Loco and Panda Express Significant financial momentum, with a revenue CAGR of 30.1% from 2018 to 2020 Experienced and growth oriented management team CONFIDENTIAL € DOV typ EX € Karat 8#10ONE-STOP-SHOP WITH BROAD PRODUCT OFFERING Karat Karat Products: Wide selection of high-quality, single-use disposable products, including food and take out containers, bags, tableware, cups, lids, cutlery and straws, which can also be custom printed Recent New Products Paper Shopping SOS Paper Bags Bags Compostable Hinged Containers Utensil Kits CONFIDENTIAL Karat earth Packaging Supplies NE NES Karat Earth® Products: Sustainable, ethically-sourced product line includes food and take out containers, bags, tableware, cups, lids, cutlery and straws, which can also be custom printed Upcoming Products 100 New Take Out Box SKUS ONE Air Film * Labels Air Seal Equipment Karat 9#11FOCUS ON DISTRIBUTION AND ADVANCED LOGISTICS Complementary operating platform that allows Karat to leverage its supplier network and manufacturing footprint to provide customers the broadest product offering and customized alternatives Revenue Mix(1) 86% 14% Distribution Manufacturing Distribution WASHINGTON Sumner, WA -46,000 sq. ft. Leased facility (1) Figure for 12 months ended December 31, 2020. CALIFORNIA Chino, CA -300,000 sq. ft. Leased facility HAWAII Acquired in 2021 Distribution and manufacturing Distribution and manufacturing TEXAS Rockwall, TX -500,000 sq. ft. Leased facility Opened 2019 CONFIDENTIAL Opened July 2020 Distribution NEW JERSEY Branchburg, NJ -108,000 sq. ft. Leased facility Distribution SOUTH CAROLINA Summerville, SC -63,000 sq. ft. Leased facility Growing fleet of 25+ trucks and 25+ drivers resulting in efficient nationwide distribution network serving major metropolitan areas Investment in 2021 Karat 10#12DIVERSE AND GROWING BLUE CHIP CUSTOMER BASE We have increased our customer base over 150% from approximately 20,000 in 2019 to over 50,000 as of December 31, 2020 chili's National Chains (23% of LTM Revenue) Fast Casual FRIDAYS MIA COFFEE Fast Food *Key Growth Area • Grow our wallet share by supplying customers with a broader range of our foodservice disposables and related products Pollo Loco IN-N-OUT Retail (13% of LTM Revenue) Seachwave Note: % Revenue by Customer Type as of LTM 12/31/20. BURGER Tutti frutti PANDA PRESS CHINESE MITCHE CONFIDENTIAL Distributors (53% of LTM Revenue) BUNZL IFS IFS INDIVIDUAL FOODSERVICE Online (11% of LTM Revenue) LOLLICUPSTORE *Key Growth Area Grow our online distribution channel www.lollicupstore.com by upgrading our website and rolling out our mobile app Est.1926 Karat 11#13SIGNIFICANT FINANCIAL MOMENTUM ($ in millions) We are a nimble supplier that was able to react quickly to the pandemic and supply PPE to existing and new customers in April & May, which has helped entrench relationships and win new customers for the future $48.4 Q1-19A $46 2012 $60.0 Q2-19A $60 2013 $60.2 Q3-19A $73 2014 $56.3 Historical Revenue Growth % YoY growth % YoY growth (excl. PPE) $100 2015 Q4-19A Total Revenue (excl. PPE) 26.2% CAGR Quarterly Revenue With COVID-19 Products Breakout $64.1 $2.5 $61.6 Q1-20A $122 Q1-20A 32.3% 2016 27.1% $84.7 $29.3 $55.4 Total PPE Revenue Q2-20A Q2-20A 41.2% (7.6%) $140 CONFIDENTIAL 2017 $76.3 $71.2 Q3-20A Q3-20A 26.8% 18.3% $175 2018 $70.4 $69.2 Q4-20A Q4-20A 25.1% 23.0% $225 2019 $296 2020 Company was able to react quickly with PPE products to augment a decline in demand for core products Karat 12#14EXPERIENCED AND GROWTH ORIENTED MANAGEMENT TEAM Alan Yu - ■ Ann Sabahat CFO CPA with 25+ years experience of financial management experience Marvin Cheng ■ Joanne Wang + Management Team Bios Co-Founder Chairman & CEO Two decades of experience as co-founder, Chairman and CEO H Amy Tsen . Co-Founder, Director Vice President-Manufacturing and Secretary Two decades of experience managing supply chains and manufacturing ■ Chief Operating Officer Establishes pricing structure and sales training Prior experience in sales and marketing for various telecommunications companies Daniel Quire VP of Finance Leads the preparation of financial statements, tax filings and general accounting oversight Director of Sales Focused on expansion of the sales in the Eastern U.S. Over a decade of sales management experience in the food service setting CONFIDENTIAL Success in Achieving Key Recent Initiatives Significant investments to establish and grow our online distribution channel www.lollicupstore.com Opened a 108,000 square foot distribution facility in New Jersey in July 2020 Expanded our fleet of trucks to bolster our logistics capabilities Installed our own proprietary Warehouse Management System (WMS) Reduced excess production and labor costs from our manufacturing operations Reduced professional fees from outside sales representatives and brokers who historically have been less efficient than our growing internal sales force Expanded our in-house sales team by 18% in 2020 to 13 sales people spread across the country Karat 13#15GROWTH STRATEGY 111#16GROWTH STRATEGY OVERVIEW Continue to build online distribution channel Continuing investments in people, software and technology Committing additional resources and upgrading the website and online advertising efforts Expand into new customers via new capabilities, geographies, products, services and end markets Continue to add new experienced sales team members • Add additional distribution capabilities in South Carolina and Washington Enter new end markets, including sports venues, supermarket chains, airlines and other non- traditional foodservice markets 5 Disrupt the traditional foodservice supply chain As a full service distributor, we are able to provide products directly to the end user, eliminating the need for the traditional multi-layer supply chain We believe our nimble operating model can serve customers more quickly than the traditional supply chain, allowing us to react rapidly to customers' changes in demand Execute on operational initiatives to drive margin expansion Installation of our own proprietary Warehouse Management System (WMS) . Continue to execute on operational initiatives, building on recent reductions of excess production and labor costs from our manufacturing operations as well as reductions of professional fees from outside sales representatives and brokers CONFIDENTIAL 3 Grow base business with incremental revenue from existing customers Offer additional product lines allowing us to become a true "one- stop" supplier . As a reliable supplier with strong customer service and competitive prices, we are positioned to be a frequent recipient of requests for proposals from existing customers as they look for new sources of supply Pursue strategic acquisitions Pursue opportunistic acquisitions in order to expand the breadth of its distribution network, increase operating efficiency and add additional products and capabilities . We see certain acquisition opportunities on the East Coast and in the Midwest that we expect would enhance our national footprint Karat 15#17CONTINUE TO BUILD ONLINE DISTRIBUTION CHANNEL $20.0 2019 Revenue Growth 65.7% YoY Online BUT I OR MORE FOR $14.99. $33.2 Note: Figures are for 12 months ended December 31. 2020 DIY Gel s BARE ESSENTIAL BUY MORE. SAVE MORE CONFIDENTIAL LOLLICUPSTORE Highest margin channel for distribution • Ability to offer our entire range of products ▪ Primarily serving small businesses, often with less than 2 locations Considering offering free shipping to significantly increase revenue • Evaluating subscription model similar to Amazon Prime ($ in millions) Karat 16#18DISRUPT THE TRADITIONAL FOODSERVICE SUPPLY CHAIN . Different substrates have different manufacturers ▪ Manufacturers sell through a multilayer distribution network before the product reaches the end customer Primarily compete with manufacturers with a large installed base of equipment that are unable to react to changing customer needs ANCHOR PACKAGING Genpak Traditional Suppliers NOVOLEX Sysco Berry Graphic Packaging pactiv evergreen US. FOODS Sabert WWnCup CONFIDENTIAL Karat . Broad product offering sourced globally at competitive prices . Ability to supply customers directly, eliminating the multi-step supply chain • Broad offering that can "fill-the-truck" efficiently . Focus on supplying environmentally friendly products • Frequent introduction of new, high demand products • Ability to innovate and provide customized products • National footprint to be more responsive to customer . Multiple channels to market to drive economies of scale Karat 17#19GROW OUR BASE BUSINESS WITH INCREMENTAL REVENUE FROM EXISTING CUSTOMERS National Chains chili's FRIDAYS IN-N-OUT BURGER 2 Pollo Loco CHINE PANDA XPRESS ITCHEN 99% customer retention in 2019 National Accounts 110% growth YoY (2019 to 2020) • Ability to provide custom specifications Focus on strong customer service at competitive prices Frequent recipient of RFPs CONFIDENTIAL New Geographies Opened 2019 Acquired in 2021 ▪ Air Film • Packaging Supplies Opened July 2020 Recent Products Investment in 2021 New Products Air Seal Equipment . 100 New Take Out Box SKUS . Labels Karat 18#20EXPAND OUR CUSTOMER BASE $14 We have increased our customer base over 150% from approximately 20,000 in 2019 to over 50,000 as of December 31, 2020 U.S. Online Delivery Addressable Market is Growing $25 GRUBHUB DOORDASH $50 Source: UBS Research. 36.7% CAGR $63 2018 2019 2020 2021 2022 2023 2024 2025 seamless $76 /caviar $91 $107 Uber Eats $125 POSTMATES delivery.com Expand Sales Force Expanding Distribution Footprint Logistics Capabilities New End Markets New Product Categories Multiple Channels to Market CONFIDENTIAL New Customer Initiatives ($ in billions) Have 13 in-house sales people with additional hires expected Intends to double the capacity of our current distribution center in South Carolina to better service customers in the Southeast region Owns fleet of 25+ trucks and continues to add additional logistics service offerings Expansion into regional and national supermarket chains, airlines, sports and entertainment venues and other non-restaurant customers Adding incremental product categories such as packaging supplies, air film, air seal equipment, 100 new take out box SKUs, and labels Serve national account customers directly, mid- size customers via distributors and small (-2 locations) via online store Karat 19#21EXECUTE ON OPERATIONAL INITIATIVES Management identifies new operational initiative opportunities in these areas on a ongoing basis Continuing Investments in Technology . Proprietary Warehouse Management System (WMS) Overhaul of company website Rollout of mobile application Improving Operational Efficiencies • Reduced excess production and labor costs from our manufacturing operations Reduced professional fees from outside sales representatives and brokers Select Operational Initiatives CONFIDENTIAL Increasing Investments in Logistics ▪ Expanded fleet to 25+ trucks/trailers with plans to add additional logistics service offerings Increasing Sales Headcount • Expanded in-house sales team by 18% in 2020, and now have 13 sales people spread across the country broadening geographic reach Karat 20#22PURSUE STRATEGIC ACQUISITIONS We have the opportunity to selectively pursue opportunistic acquisitions in order to expand the breadth of our distribution network, increase our operating efficiency, and add additional products and capabilities Expand Distribution Network Acquire existing and new suppliers, particularly in the U.S., to further reduce our reliance on the Asian supply chain Pacific Cup Acquisition (Closed March 2021) Increase Operating Efficiency Take advantage of additional distribution channels, achieve significant cost synergies and realize increased purchasing power with scale TBD Add Products & Capabilities CONFIDENTIAL Supplement existing SKUS by adding complementary products and machinery we are currently lacking TBD Management believes there are attractive acquisition opportunities on the East Coast and in the Midwest Karat 21#23FINANCIAL OVERVIEW#24HISTORY OF CONSISTENT REVENUE GROWTH $140.1 2017 28.3% CAGR $175.4 Q4 overall revenue is up 25.1% YoY while Q4 revenue (excl. PPE) is up 23.0% YoY 2018 $224.9 2019 $295.5 $38.1 $257.4 2020 Revenue (excl. PPE) % YoY growth % YoY growth (excl. PPE) $64.1 $2.5 $61.6 Q1-20 PPE Revenue Q1-20A 32.3% 27.1% CONFIDENTIAL $84.7 $29.3 $55.4 Q2-20 Q2-20A 41.2% (7.6%) $76.3 $5.1 $71.2 Q3-20 Q3-20A 26.8% 18.3% ($ in millions) $70.4 $69.2 Q4-20 Q4-20A 25.1% 23.0% $1.2 Karat 23#252019 TO 2020 REVENUE AND EBITDA BRIDGES ■ ■ $224.9 2019 $10.9 National Chains $11.3 2019 $35.6 Revenue Bridge Distributors $18.9 EBITDA Bridge Gross Profit Expansion Commentary $10.9 Retail CONFIDENTIAL $5.8 SG&A Reduction $13.2 Online $36.0 2020 ($ in millions) $295.5 2020 From 2019 to 2020 revenue grew $70.6M from $224.9M to $295.5M From 2019 to 2020 gross profit increased by $28.1M from $61.0M to $89.1M From 2019 to 2020 SG&A as a percentage of revenue decreased from 25% to 21% From 2019 to 2020 operating income increased by $21.9M from $5.8M to $27.7M Gross profit margin increase can be attributed primarily to a shift in product mix to higher margin products (i.e. take out containers, films, foils and bags), reduced reliance on Chinese suppliers, mitigating the effect of tariffs We are also steadily increasing the percentage of our sales to retail and online customers, which are our higher margin sales channels SG&A declines as a percent of revenue attributable to recent reductions of excess production and labor costs from our manufacturing operations as well as reduction of professional fees from outside sales representatives and brokers Karat 24#26VIE OVERVIEW Year Ended December 31, 2020 ($ in millions) • • Net sales Cost of goods sold Gross profit • . Operating expenses Operating income Rental income Other income (expense) Income (loss) before provision for income taxes Add: Interest Depreciation and amortization EBITDA Karat Packaging $295.5 206.4 89.1 63.1 26.1 0.0 (3.3) 22.8 2.6 7.7 $33.1 Global Wells Eliminations Consolidated 0.0 0.0 0.0 2.0 (2.0) 3.9 (2.9) (1.0) CONFIDENTIAL 2.9 0.9 $2.8 0.0 0.0 0.0 (3.6) 3.6 (3.6) 0.1 0.1 0.0 0.0 $0.1 Global Wells was consolidated into Karat's financial statements for the period from March 23, 2018 under the risk and reward model of ASC Topic 810, Consolidation $295.5 206.4 89.1 61.4 27.7 0.3 (6.1) 21.9 Commentary Karat, Plutus, and two unrelated parties invested in Global Wells with the purpose of constructing the Rockwall, TX facility in 2018 In June 2020 we entered into 10 year commercial lease agreement with Global Wells with a $147,730 monthly lease payment for the Rockwall, TX facility Subsequently Global Wells has been used as the vehicle to finance the purchase the Branchburg, NJ facility as well in 2020 and Karat has entered into an operating lease to utilize that facility In June 2020, Global Wells entered into a new term loan which provides advances up to $16,540,000 to fund the purchase of the Branchburg, NJ facility We hold a 13.5% ownership interest and a 25% voting interest in Global Wells Karat was deemed to have a controlling financial interest in Global Wells and is therefore the primary beneficiary of the entity • As of December 31, 2020, the total loan guaranteed by Karat related to Global Wells amounted to $37,492,000 5.5 8.6 $36.0 Karat 25#27HISTORICAL CAPEX DETAIL ($ in millions) Excluding the construction of the Rockwall and Branchburg facilities, Karat capex has averaged approximately 1.2% of revenue from 2017 to Q4 2020 $5.8 $4.1 2017 $23.6 $20.3 2018 Capital Expenditures $37.5 $15.0 $4.1 $18.4 2019 Karat Construction $6.5 $0.2 $6.3 $31.1 Q1 2020 $25.8 $10,0 $113 $5.2 Q2 2020 Karat Other Global Wells 50.0 $8.7 Q3 2020 $3.2 $3.2 Q4 2020 Commentary • Global Wells (2017-2019) - $36 million (Rockwall) ▪ $4 million land . $27 million building • $4 million leasehold improvements • $19k furniture & equipment Karat (2017-2020) - $56 million . $32 million for Rockwall TX production machinery (thermo- forming, cup forming, extruders) CONFIDENTIAL • $2 million Chino, CA production machinery (thermo- forming) • $3 million molding machines • $2 million other machinery & equipment . $3 million trucking fleet . $13 million leasehold . $1 million computers, furniture & fixtures • Global Wells (2020)- $26 million (Branchburg) . $9 million land . $17 million building Karat 26#28CASH FLOW CONSIDERATIONS Current Assets Accounts Receivable Inventory Prepaid Expenses and Other Due From Affliates Total Current Assets Current Liabilities Accounts Payable Accrued Expenses Other Total Current Liabilities Net Working Capital % of LTM revenue Q1 2019 $17.6 31.7 2.3 0.2 $51.9 $19.1 3.7 7.0 $29.8 $22.1 11.8% Q2 2019 $21.2 38.9 2.4 0.8 $63.2 $19.1 2.3 4.7 $26.1 $37.1 18.5% Net Working Capital Q3 2019 $19.4 33.8 2.3 0.7 $56.2 $14.9 2.5 5.9 $23.3 $33.0 15.4% Q4 2019 CONFIDENTIAL $21.0 35.4 3.1 0.7 $60.2 $19.0 2.8 6.9 $28.7 $31.5 14.0% Q1 2020 $23.0 36.6 3.5 0.7 $63.8 $20.9 3.4 6.9 $31.2 $32.6 13.6% Q2 2020 $21.6 43.7 3.7 1.4 $70.4 $16.2 7.6 5.2 $29.0 $41.4 15.6% Q3 2020 $23.9 48.6 5.4 (0.0) $77.9 $19.9 7.5 6.8 $34.1 $43.8 15.6% ($ in millions) Q4 2020 $23.8 49.0 6.5 0.0 $79.3 $20.1 5.0 6.4 $31.5 $47.9 16.2% Karat 27#29DEBT PRE-DEAL AND POST-DEAL ($ in millions) Cash and Cash Equivalents Long Term Debt Line of Credit Total Institutional Debt Consolidated . $0.4 65.4 33.2 $98.6 Pre-Deal Eliminations $0.0 0 0 $0.0 Global Wells $0.1 37.4 0 $37.4 Karat Packaging $0.3 Commentary We intend to use approximately $30 million of the net proceeds of this offering to discharge the following indebtedness: 28 33.2 $61.2 CONFIDENTIAL Post-Deal IPO Adjustments $38.0 (9.8) (20.0) ($29.8) Pro-Forma Karat Packaging Note: Figures presented as of December 31, 2020, Cash to balance sheet assumes $75 million offering, $29.8 million debt paydown and 7% gross spread and other IPO related fees. $38.3 Term debt with an original principal of $4,814,677, with an outstanding principal balance of approximately $2,322,000 as of December 31, 2020, with a fixed interest rate of 4.98% and a maturity date of March 2023; 18.2 13.2 $31.4 Term debt with an original principal of $9,476,000, with an outstanding principal balance of approximately $7,450,000 as of December 31, 2020, with a fixed interest rate of 5.75% and a maturity date of July 2024; and Payment of $20,000,000 on our existing line of credit with an interest rate of prime less 0.25%, subject to a minimum rate of 3.75%, with an outstanding balance of approximately $33,169,000 as of December 31, 2020 Karat 28#30LONG-TERM FINANCIAL TARGETS Annual Revenue Growth Margin Expansion Capital Allocation (1) CAGR from 2018 to 2020. (2) Gross margin average from 2018 to 2020. Historical -30% revenue CAGR(¹) - 28% gross margin(2) Capital expenditures for build out of Rockwall and Branchburg facilities 1 CONFIDENTIAL 3-5 Year Target -15% revenue growth -29-31% gross margin M&A and growth projects Karat 29#31CONCLUSION Karat 1 2 3 5 One-stop shop with broad product offering for the foodservice market and highly nimble sourcing capabilities Focus on distribution and advanced logistics network, complemented by flexible manufacturing capabilities Diverse and growing blue-chip customer base, including fast casual chains such as Chili's and Chipotle, as well as fast food chains El Pollo Loco and Panda Express Significant financial momentum, with a revenue CAGR of 30.1% from 2018 to 2020 Experienced and growth oriented management team CONFIDENTIAL Karat 30