ADALTA LIMITED — Capital/Financing Update 2019

Dec 11, 2019

12 December 2019

ASX Announcement

APPENDIX 3B

Cancellation of Limited Recourse Loan Ordinary Shares

As per the Appendix 3B included in this announcement, 356,394 Ordinary Shares subject to a holding lock have been cancelled. The shares have been cancelled in accordance with the terms of the Limited Recourse Loan Agreement whereby full repayment of the Loan was made by forfeiting 356,394 Ordinary Shares.

Quotation of Limited Recourse Loan Ordinary Shares

An application for quotation of 232,017 Ordinary Shares subject to a holding lock is included as part of the Appendix 3B included in this announcement. The Ordinary Shares subject to a holding lock were issued on 30 November 2017 as non-quoted securities.

Cameron Jones Company Secretary

- ENDS-

About AdAlta

AdAlta Limited is an Australian-based drug development company headquartered in Melbourne. The Company is using its proprietary technology platform to generate a promising new class of protein therapeutics, known as i-bodies, that have the potential to treat some of today’s most challenging medical conditions. The technology mimics the shape and stability of a crucial antigen-binding domain, that was discovered initially in sharks and then developed as a human protein. The result is a range of unique compounds, capable of uniquely interacting with previously difficult to access targets such as G-protein coupled receptors and ion channels that are implicated in many serious diseases.

AdAlta is currently preparing for its phase 1 clinical studies for its lead i-body candidate, AD214. The clinical program is expected to commence in early 2020 following completion of the current toxicity study, clinical trial design finalisation and manufacture of clinical product. AD214 is being developed for the treatment of Idiopathic Pulmonary Fibrosis (IPF) and other human fibrotic diseases, for which current therapies are sub-optimal and there is a high-unmet medical need. The Company is also in collaborative partnerships to advance the development of its i-body platform. It has recently announced an agreement with UKbased research organisation, Excellerate Bioscience to collaborate on an undisclosed target of commercial interest and an agreement with GE Healthcare for diagnostic imaging agents against several drug targets, including Granzyme B.

AdAlta plans to continue further drug discovery and development directed towards other drug targets and diseases.

Further information can be found at: www.adalta.com.au.

For more information, please contact:

Investors Media

Tim Oldham, CEO & Managing Director IR Department Tel: +61 403 446 665 Tel: +61 411 364 382 E: t.oldham@adalta.com.au E: gabriella.hold@irdepartment.com.au

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

ADALTA LIMITED

ABN

92 120 332 925

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	N/A – Cancel Ordinary Shares subject to a holding lock
	Cancel 356,394 Ordinary Shares subject to a holding lock
	356,394 Ordinary Shares subject to a holding lock

• See chapter 19 for defined terms.

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Appendix 3B Page 1

Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	N/A
	N/A
	Cancellation of 356,394 Ordinary Shares subject to a holding lock
	Yes
	26 November 2019
	Nil
	Nil

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	Nil
	Nil
	N/A
	N/A
	7.1 24,591,841 7.1A 16,394,561
	N/A
	Number	+Class
	163,945,613 23,348,803	Ordinary fully paid ordinary shares (1AD) (including securities for which quotation is sought in clause 38) Options, exercisable at $0.25 expiring on 30 June 2021(1ADO)

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 3

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	234,472 600,000 400,000 150,000 100,000 100,000 200,000 200,000 620,535 4,929,060	Unlisted options exercisable at 17 cents and expiring 1 November 2020* (1ADAD) Unlisted options exercisable at 17 cents and expiring 16 October 2020 (1ADAD) Unlisted options exercisable at 25 cents and expiring 14 November 2021 (1ADAD) Unlisted options exercisable at 50 cents and expiring 14 November 2021 (1ADAD) Unlisted options exercisable at 75 cents and expiring 14 November 2021 (1ADAD) Unlisted options exercisable at 1 dollar and expiring 14 November 2021 (1ADAD) Unlisted options exercisable at 31 cents and expiring 30 September 2022 (1ADAD) Unlisted options exercisable at 31 cents and expiring 30 September 2021 (1ADAD) Unlisted options exercisable at 24 cents and expiring 27 February 2022 (1ADAD) Unlisted options exercisable at 25 cents and expiring 26 November 2025 (1ADAD)
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

Part 2 - Pro rata issue

11	Is security holder	approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities will
	be offered
14	+Class of+securities to	which the
	offer relates
15	+Record date to	determine
	entitlements
16	Will holdings on	different
	registers (or subregisters) be
	aggregated for	calculating
	entitlements?
17	Policy for deciding entitlements in
	relation to fractions
18	Names of countries in	which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be	told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on exercise,
	the date on which notices will be
	sent to option holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell their
	entitlements_in full_through a
	broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the balance?

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

• 33 +Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of[+] securities for which 232,017 +quotation is sought 39 +Class of +securities for which Ordinary Shares subject to a holding lock quotation is sought 40 Do the[+] securities rank equally in Yes all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation Ordinary shares subject to a holding lock now were issued on 30 November 2017 as nonExample: In the case of restricted securities, end quoted securities. of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and +class of all 163,945,613 Ordinary fully paid +securities quoted on ASX ordinary shares (1AD) ( including the[+] securities in clause 38) 23,348,803 Options, exercisable at $0.25 expiring on 30 June 2021 (1ADO)

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:

12 December 2019 ........................................................... Date: ......................... (Company secretary)

Print name: Cameron Jones

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B Page 9

Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

==> picture [404 x 407] intentionally omitted <==

----- Start of picture text -----

Insert number of fully paid [+] ordinary 117,604,523
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following: 4,868,898 – (17 June 2019 - Entitlement
Offer)
• Number of fully paid [+] ordinary
securities issued in that 12 month 8,495,252 – (18 June 2019 – Entitlement
period under an exception in rule 7.2 Offer – Shortfall)
• Number of fully paid [+] ordinary 1,162,668 (Directors participation in
securities issued in that 12 month placement – ratified by shareholders on 27
period with shareholder approval June 2019)
• Number of partly paid [+] ordinary 19,600,753 (Ratified by shareholders on 27
securities that became fully paid in that June 2019)
12 month period
12,569,913 (Ratified by shareholders on 27
Note: June 2019)
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid 356,394
+ ordinary securities cancelled during that
12 month period
“A” 163,945,613
----- End of picture text -----

• See chapter 19 for defined terms.

Appendix 3B Page 10

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	24,591,841
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items
“C”	0
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	24,591,841
Subtract“C” Note: number must be same as shown in Step 3	0
Total[“A” x 0.15] – “C”	24,591,841 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B Page 11

Appendix 3B New issue announcement

Part 2

==> picture [354 x 12] intentionally omitted <==

----- Start of picture text -----

Rule 7.1A – Additional placement capacity for eligible entities
----- End of picture text -----

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 163,945,613 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 16,394,561 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” 0

• See chapter 19 for defined terms.

Appendix 3B Page 12

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	16,394,561
Subtract“E” Note: number must be same as shown in Step 3	0
Total[“A” x 0.10] – “E”	16,394,561 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 13