APPEN LIMITED — Capital/Financing Update 2017

Apr 4, 2017

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

**APPEN

LIMITED**

ABN

60
138
878
298

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	Performance Rights
	223,140

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) 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)	The Performance Rights are granted under the terms and conditions of the Appen Equity Incentive Plan, approved by shareholders at the 2015 General Meeting. Vesting of the Performance Rights are subject to prescribed Performance Conditions including: • Earnings per share growth of 10% per annum; and • Employed with the Company on 1 January 2020. Annual performance hurdle vesting dates are 1 March 2018,2019 and 2020.
	No, however upon attainment of the vesting conditions and following exercise of the Performance Rights, the shares issued will rank equally in all respects as existing fully paid ordinary shares on issue.
	Nil
	To incentivise key executives of the business.

• See
  chapter
  19
  for
  defined
  terms. Appendix
  3B
  Page
  2

04/03/2013

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 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	Yes
	27 May 2016
	Nil
	Nil
	Nil
	Nil
	Not applicable.
	Not applicable.
	Rule 7.1: 14,654,914 Rule 7.1A: 9,769,943

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) 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)	1 March 2017	1 March 2017
	Number	+Class
	97,699,432	Ordinary Shares
	Number	+Class
	81,800	Unlisted Options – Exercise Price $0.412 Expiry Date 1-Mar-18
	81,800	Unlisted Options – Exercise Price $0.494 ExpiryDate 1-Mar-19
	13,281	Unlisted Options – Exercise Price $0.500 ExpiryDate 1-Mar-20
	66,406	Unlisted Options – Exercise Price $0.500 ExpiryDate 1-Mar-21
	1,194,534	Performance Rights with various vesting dates
	Not applicable.

**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	Not applicable. Not applicable. Not applicable. Not applicable.

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
4

04/03/2013

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 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	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.

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 +Issue date	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.

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

• See
  chapter
  19
  for
  defined
  terms. Appendix
  3B
  Page
  6

04/03/2013

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
]

==> picture [413 x 550] intentionally omitted <==

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

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
40
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
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)
----- End of picture text -----

**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: ............................................................
Date:
3
April
2017 (Company
secretary) Print
name: Leanne
Ralph

==
==
==
==
==

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
8

04/03/2013

**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**

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the+issue date or date of agreement to issue	96,965,794
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • 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	26,563 16-Mar-16 106,250 10-June-16 81,800 11-Nov-16 359,650 1-Mar-17 53,125 3-Mar-17 106,250 9-Mar-17
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period
“A”	97,699,432

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
9

Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	14,654,914
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	Nil
“C”	Nil
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	14,654,914
Subtract“C” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.15] – “C”	14,654,91_4_ [Note: this is the remaining placement capacity under rule 7.1]

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
10

04/03/2013

**Part

2**

Part 2	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
“A” Note: number must be same as shown in Step 1 of Part 1	97,699,432
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	9,769,943
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber 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	Nil
“E”	Nil

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
11

Step 4: Subtract “E” from [“A” x “D”] to under rule 7.1A	calculate remaining placement capacity
“A” x 0.10 Note: number must be same as shown in Step 2	9,769,943
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	9,769,943 Note: this is the remaining placement capacity under rule 7.1A

• See
  chapter
  19
  for
  defined
  terms. Appendix
  3B
  Page
  12

04/03/2013