AROA BIOSURGERY LIMITED — Capital/Financing Update 2020

Jul 22, 2020

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AROA BIOSURGERY LIMITED ARBN 638 867 473 ( Aroa or Company )

PRE-QUOTATION DISCLOSURE

The following information is provided to ASX Limited ( ASX ) as pre-quotation disclosure for release to the market in connection with:

• (a) the initial public offering of the fully paid ordinary shares ( Shares ) in Aroa under a prospectus ( Prospectus ) lodged with the Australian Securities and Investments Commission on 22 June 2020 ( Offer ); and

• (b) the official quotation of the Shares in Aroa.

Capitalised terms not defined in this document have the meaning given to them in the Prospectus.

1. Close of Offer and issue and transfer of Shares

The Company confirms that the Offer under the Prospectus closed as scheduled and the Company has completed:

• (a) the issue of 40,000,000 Shares at an issue price of A$0.75 per Share; and

• (b) the sale and transfer of 20,000,000 Shares at a sale price of A$0.75 per Share.

2. Institutional Offer

The Company confirms that, in relation to any funds raised under the Institutional Offer as described in the Prospectus ( Bookbuild ):

• (a) 42,666,666 Shares were allocated to the Institutional Offer under the Bookbuild at the price of A$0.75 per Share ( Bookbuild Price ). A further 14,666,667 Shares were allocated to brokers participating in the Broker Firm Offer under the Bookbuild at the price of A$0.75 per Share;

• (b) no material number of securities have been taken up by a promoter or a related party of the Company;

• (c) no concessionary fees or other arrangements were entered into which have had the result that the effective transfer price paid by some allottees differs materially from the Bookbuild Price;

• (d) no arrangements have been entered into which have had the result that some allottees have received a material benefit for agreeing to participate in the Bookbuild and which have not been received by other allottees; and

• (e) no arrangements have been entered into with associates of the Company or the bookrunner to avoid a shortfall, or the appearance of a shortfall, in the Bookbuild.

AROABIO.COM I +64 9 869 3035

AROA BIOSURGERY LIMITED , 2 KINGSFORD SMITH PLACE, AUCKLAND 2022, NEW ZEALAND PO BOX 107111, AUCKLAND AIRPORT, AUCKLAND 2150, NEW ZEALAND

3. Escrow arrangements

Certain Shareholders have entered into voluntary escrow arrangements with the Company in relation to Shares that they will hold on Completion of the Offer.

The total number of Shares subject to voluntary escrow is 198,906,131. The voluntary escrow restrictions will apply to:

	No.	of	Release at	Release	6	Release 12	Release at	Release	Release	at
	escrowed		Admission	months		months	24 months	36	months
	Shares			after		after	after	after
				Admission*		Admission	Admission	Admission**
Non-	26,953,558			15%		42.5%	42.5%
executive
directors,
Management
Chief	33,125,800			10%		20%	30%	40%
Executive
Officer
Other	127,544,073		7.5%	20%^		72.5%^
Existing
Shareholders
and
employees
Existing	11,282,700			100%
Shareholders
from funding
round
Total	198,906,131

Notes :

• The 6 month IPO release is subject to the condition that the 5 day volume weighted average price of the Company’s shares reported on the ASX is 40% above the IPO price ( Release Condition ) at any time in the first 6 months after IPO. However if the Release Condition is not achieved within 6 months of the IPO then the 6 month IPO release is nil and the escrow is extended to the earlier of (i) 12 months after IPO; and (ii) the date when the Release Condition is met.

** Subject to early release at 24 months if the 5 day volume weighted average price of the Company’s shares reported on the ASX is 100% above the IPO price.

^ The majority of existing shareholders and employees have been allowed to ‘release’ 7.5% of their existing shares at the time of IPO, and only the balance (92.5% of existing shares) is subject to the escrow arrangements set out above.

4. ASX Waiver

The Company has received from ASX a waiver from Listing Rule 1.1 condition 12.

ASX has granted the Company a waiver from Listing Rule 1.1 Condition 12 to the extent necessary to permit the Company to have on issue 4,613,475 options with an exercise price less than 20 cents with the ability for cashless exercise, and 6,177,000 options with an exercise price of A$0.75 with the ability for cashless exercise, issued under its share option

plan ( Option Plan ) on condition that the material terms and conditions of the options are clearly disclosed in the Company’s initial public offering prospectus.

The waiver is also conditional on the Company satisfying Listing Rule 18.1.

5. Issue of Shares and conversion of warrants and preference shares

The Company confirms that prior to settlement of the Offer:

• (a) 4,365,000 unpaid ordinary shares in Aroa issued in relation to a historical employee share plan were paid up and became fully paid ordinary shares;

• (b) 3,860,850 existing and outstanding warrants were converted into Series C Preference Shares, which were then subsequently converted into Shares; and

• (c) Aroa converted the following into Shares:

• (i) 80,970,750 Series A Preference Shares;

• (ii) 59,856,600 Series B Preference Shares;

• (iii) 61,438,725 Series C Preference Shares.

Following the capital reconstruction set out above, and together with the existing 49,583,025 Shares on issue at that time, the total share capital of the Company immediately prior to settlement of the Offer was 260,074,950 Shares.

A further 40,000,000 Shares were issued by the Company under the Offer such that the Company’s total issued share capital on admission is 300,074,950 Shares.

6. Issue of options

The Company confirms that it has issued 6,177,000 options exercisable at A$0.75 on or before the date that is 5 years from the date of admission of the Company to the official list of ASX.

7. Documents enclosed for release to the market

Accompanying this statement are the following documents:

• (a) a distribution schedule of the number of holders of Shares to be quoted; and

• (b) a statement setting out the names of the 20 largest Shareholders.