ADALTA LIMITED — Share Issue/Capital Change 2018

Aug 21, 2018

ASX Announcement

AdAlta releases escrowed securities

MELBOURNE Australia, 22[nd] August 2018 , AdAlta Limited (ASX: 1AD), the biotechnology company advancing its lead i-body candidate towards clinical development, today announced the release of 24,047,138 ordinary shares from escrow. These ordinary shares were subject to an escrow period of two years from listing.

The 24,047,138 shares being released are held by major shareholder Yuuwa Capital (22,082,027), Non-executive Director and Chairman Paul MacLeman (439,636), Non-executive Director John Chiplin (610,883) and Managing Director and CEO Sam Cobb (914,592).

Pursuant to ASX listing rule 3.19 the Company is required to report any changes in Director’s holdings within 5 days after the change occurs by lodging an Appendix 3Y (Change of Director’s Interest Notice) with the ASX.

The Board and Management team remain focused on commercializing AdAlta’s i-body technology. The Company is not aware of any intent that Directors or major shareholder Yuuwa Capital have to sell any of these shares.

Following the quotation of the released shares, there will be 116,493,662 quoted securities. 588,411 ordinary shares remain subject to a Holding Lock.

The Appendix 3B is attached with this cover note and will also be made available on the Company website at www.adalta.com.au.

-ENDS-

Notes to Editors About AdAlta

AdAlta Limited is an Australian based drug development company headquartered in Melbourne. The Company is focused on using its proprietary technology platform to generate i-bodies, a new class of protein therapeutics, with applications as therapeutic drugs to treat disease.

I-bodies are a promising, novel class of drugs that offer a new and more effective approach to treating a wide range of human diseases. They are identified and developed using our proprietary technology platform.

We have pioneered a technology that mimics the shape and stability of a crucial antigenbinding domain, that was discovered initially in sharks and then developed as a human protein. The result is a range of unique compounds, now known as i-bodies, for use in treating serious diseases.

AdAlta is developing its lead i-body candidate, AD-214, 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 also plans to continue further drug discovery and development directed towards other drug targets and diseases with its i-body technology platform.

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

For more information, please contact: AdAlta Limited

Sam Cobb, CEO Tel: +61 (0)3 9479 5159 E: s.cobb@adalta.com.au

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

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	(1) Release of ordinary shares from escrow (to be quoted) (2) Release of ordinary shares from escrow subject to a holding lock (not to be quoted)

2 Number of[+] securities issued or to (1) 24,047,138 (to be quoted) be issued (if known) or maximum (2) 356,394 (not to be quoted) number which may be issued On 2 August 2018 the Company announced that 24,635,549 Ordinary Shares would be released from Escrow. 232,017 will remain subject to a Holding Lock pursuant to the Limited Recourse Loan Agreement in addition to the shares as outlined above at (2).

3 Principal terms of the[+] securities (eg, if options, exercise price and N/A expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if[+] convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 1

4 Do the+securities rank equally in all respects from the date of allotment 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	(1) Yes. (2) Yes.
	(1) N/A (2) N/A
	(1) Release of ordinary shares from escrow (to be quoted) (2) Release of ordinary shares from escrow subject to a holding lock (not to be quoted)
	Yes
	14 November 2017
	13,644,217
	Nil

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 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and+class of all+securities quoted on ASX (_including_the securities in section 2 if applicable)	Nil	Nil
	N/A
	N/A
	N/A
	7.1 1,871,461 7.1A 10,343,785
	22 August 2018.
	Number	+Class
	116,493,662	Ordinary fully paid shares

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 3

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
	588,411 234,472 600,000 1,150,000 650,000 350,000 350,000 200,000 200,000	Ordinary shares subject to a Holding Lock 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 2021 (1ADAD) Unlisted options exercisable at 31 cents and expiring 30 September 2022 (1ADAD)
	N/A

Part 2 - Bonus issue or 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 issue 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 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	Not applicable

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 5

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 prospectus or Product
	Disclosure Statement 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?
32	How do+security holders dispose of
	their entitlements (except by sale
	through a broker)?
33	+Despatch 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) X Securities described in Part 1

24,047,138 Ordinary Shares as referred to in (1) only.

(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 setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 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 ]

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought

39 Class of +securities for which quotation is sought

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 7

40 Do the[+] securities rank equally in all respects from the date of allotment 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 now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

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 not available now, 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.

==> picture [71 x 43] intentionally omitted <==

(Company secretary)

Print name: Cameron Jones Date: 22 August 2018

== == == == ==

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 9

Appendix 3B – Annexure 1

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

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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

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

Insert number of fully paid ordinary securities 101,110,890
on issue 12 months before date of issue or
agreement to issue
Add the following:
• Number of fully paid ordinary securities 146,544 (25 September 2017)
issued in that 12 month period under an
exception in rule 7.2 356,394 (30 November 2017)
• Number of fully paid ordinary securities 232,017 (30 November 2017)
issued in that 12 month period with
shareholder approval 1,592,011 (15 August 2018) (SPP)
• Number of partly paid ordinary securities
that became fully paid in that 12 month
period
Note:
• 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 ordinary 0
securities cancelled during that 12 month
period
“A” 103,437,856
----- End of picture text -----

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	15,515,678
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	13,644,217 – Private Placement (19 July 2018)
“C”	13,644,217
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	15,515,678
Subtract“C” Note: number must be same as shown in Step 3	13,644,217
Total[“A” x 0.15] – “C”	1,871,461 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 11

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

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

calculated
“A”	103,437,856
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	10,343,785
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” 10,343,785

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	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	10,343,785
Subtract“E” Note: number must be same as shown in Step 3	-
Total[“A” x 0.10] – “E”	10,343,785 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 13