AUDEARA LIMITED — AGM Information 2022

Oct 27, 2022

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Need assistance?

Phone:

1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia)

Online:

www.investorcentre.com/contact

27 October 2022

Dear Shareholder

Upcoming Annual General Meeting of Shareholders

The Company’s Annual General Meeting is scheduled to be held on Monday, 28 November 2022 at 10.00am (Brisbane Time) ( Meeting ).

The Company strongly encourages Shareholders to lodge a directed proxy form by Saturday, 26 November 2022 at 10.00am (Brisbane Time). Questions should also be submitted in advance of the Meeting as this will provide management with the best opportunity to prepare for the Meeting, for example by preparing answers in advance to Shareholders’ questions. However, votes and questions may also be submitted during the Meeting. Further details of how to participate in the Meeting are set out in the Notice of Meeting.

The Notice of Meeting can be viewed and downloaded from https://audeara.com/pages/investors within “Recent ASX Announcements”.

The Annual Report can be viewed and downloaded from https://audeara.com/pages/investors-presentations.

Shareholders who have nominated an email address and elected to receive electronic communications from the Company, will receive an email to their nominated email address with a link to an electronic copy of the important Meeting documents.

In accordance with sections 110C-110K the Corporations Act, as amended by the Corporations Amendment (Meetings and Documents) Act 2022 (Cth), no hard copy of the Notice of Annual General Meeting and Explanatory Memorandum will be circulated, unless a shareholder has requested a hard copy.

If you are unable to access any of the important Meeting documents online or if you wish to receive a hard copy of the Meeting documents please contact our share registry, Computershare Investor Services Pty Ltd on 1300 555 159850 505 (within Australia) or +61 3 9415 4062 4000 (Overseas).Your request must be made by Monday, 21 November 2022.

Your right to elect to receive documents electronically or in hard copy

In order to receive electronic communications or to elect to receive a physical copy of documents (including the Notice of Meeting) from the Company in the future, please update your Shareholder details with our share registry. You can contact Computershare Investor Services Pty Ltd by telephone on 1300 850 505 (within Australia) or +61 3 9415 4000 (Overseas).

Yours sincerely,

Stephen Buckley

Company Secretary

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AUDEARA LIMITED ACN 604 368 443

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NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 10.00am (Brisbane Time) DATE : 28 November 2022 PLACE : The offices of Grant Thornton King George Central Level 18 145 Ann Street Brisbane QLD 4000

The business of the Meeting affects your shareholding and your vote is important.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 10.00am (Brisbane Time) on Saturday, 26 November 2022.

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of the Shareholders of Audeara Limited (the Company ) will be at the offices of Grant Thornton, King George Central, Level 18, 145 Ann Street, Brisbane Queensland on Monday, 28 November 2022 commencing at 10.00am (Brisbane Time) (the Meeting ).

Shareholders are strongly encouraged to cast their vote by proxy prior to the Meeting in accordance with the instructions set out on page 4 of this Notice to ensure their votes are counted.

The Explanatory Memorandum that accompanies this Notice provides additional information on the matters to be considered at the Meeting. The Explanatory Memorandum and Proxy Form are part of this Notice.

Should circumstances further change between the date of this Notice of Meeting and the proposed time of the Meeting, the Directors will further update Shareholders with the proposed next steps.

BUSINESS OF THE MEETING

AGENDA

1. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2022 together with the declaration of the directors, the Directors’ Report, the Remuneration Report and the auditor’s report.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding ordinary resolution :

“That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2022.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

The Company’s 2022 Annual Report, which contains the Remuneration Report, is available on the Company’s website www.audeara.com

A voting prohibition statement applies to this Resolution. Please see below.

3. RESOLUTION 2 – ELECTION OF DR ELAINE SAUNDERS AS A DIRECTOR

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That Elaine Saunders, being a Director of the Company, who retires by rotation in accordance with clause 14.4 of the Company’s Constitution, and being eligible, offers herself for re-election, be re-elected as a Director of the Company in accordance with ASX Listing Rule 14.4 and clause 14.4 of the Company’s Constitution.”

Note: Information about the candidate appears in the Explanatory Memorandum

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4. RESOLUTION 3 – ELECTION OF HSIN-CHIEH “BILL” PENG AS A DIRECTOR

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, Hsin-Chieh “Bill” Peng, being a Director of the Company, who retires in accordance with clause 14.4 of the Company’s Constitution, and being eligible, offers himself for re-election, be re-elected as a Director of the Company in accordance with ASX Listing Rule 14.4 and clauses 14.4 of the Company’s Constitution.”

Note: Information about the candidate appears in the Explanatory Memorandum

5. RESOLUTION 4 – RE-ELECTION OF DAVID TRIMBOLI AS A DIRECTOR

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, David Trimboli, being a Director of the Company, who retires in accordance with clause 14.2 of the Company’s Constitution, and being eligible, offers himself for reelection, be re-elected as a Director of the Company in accordance with ASX Listing Rule 14.4 and clause 14.2 of the Company’s Constitution.”

Note: Information about the candidate appears in the Explanatory Memorandum

6. RESOLUTION 5 – APPROVAL OF 7.1A MANDATE

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, approval is given for the Company to issue up to that number of Equity Securities equal to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Memorandum.”

A voting exclusion statement applies to this Resolution. Please see below.

7. RESOLUTION 6 – RATIFICATION OF PLACEMENT SHARES

To consider and, if thought fit, to pass the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 7.4, and for all other purposes, Shareholders ratify the issue of 10,000,000 Shares on 7 June 2022 on the terms set out in the Explanatory Memorandum.”

A voting exclusion statement applies to this Resolution. Please see below.

8. RESOLUTION 7 – REPLACEMENT OF CONSTITUTION

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, for the purposes of section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

Dated: 27 October 2022

By order of the Board

Stephen Buckley, Company Secretary

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Voting Prohibition Statement

Resolution 1 – Adoption of Remuneration Report

A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or b) a Closely Related Party of such a member. However, a person (thevoter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either: a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or b) the voter is the Chair and the appointment of the Chair as proxy: i. does not specify the way the proxy is to vote on this Resolution; and ii. expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

Voting Exclusion Statements

In accordance with Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution set out below by or on behalf of the following persons:

Resolution 5 – Approval of 7.1A Mandate	A person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons).
Resolution 6 – Ratification of Placement Shares	BP Peng Pty Ltd who participated in the issue the subject of Resolution 6 or an Associate of BP Peng Pty Ltd including Hsin- Chieh “Bill” Peng or an Associate of Hsin-Chieh “Bill” Peng due to Hsin-Chieh “Bill” Peng being the controller of BP Peng Pty Ltd.

However, this does not apply to a vote cast in favour of the Resolution by:

• a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with the directions given by the beneficiary to the holder to vote in that way.

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How to vote and ask questions

You may vote by attending the Meeting in person, by proxy, personal representative at the time, date and place set out above.

Shareholders will be able to ask questions during the Meeting, in respect to the formal items of business as well as general questions in respect to the Company and its business at the conclusion of the Meeting.

Shareholders are also encouraged to submit questions in advance of the Meeting to the Company whether they are in relation to specific agenda items, about the business in general or questions for the auditor, Grant Thornton. Questions must be submitted in writing to the Company Secretary at least 48 hours before the Meeting to:

The Company Secretary Level 1, North Tower 527 Gregory Terrace Fortitude Valley QLD 4006

or via email: stephen.buckley@audeara.com

Voting in person

If you attend the Meeting, please bring your personalised proxy form with you. The proxy form will help you to register at the Meeting. If you do not bring your proxy form with you, you will still be able to attend and vote at the Meeting but representatives from the Share Registry will need to verify your identity.

Voting by proxy

Shareholders are strongly encouraged to vote by lodging a directed proxy appointing the Chair as early as possible and in any event prior to the cut-off for proxy voting as set out in the Notice. Proxy forms can be lodged as below:

• In person at Computershare, Level 1, 200 Mary Street, Brisbane QLD;

• By post to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001;

• By facsimile to 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia); or

• By following the directions on the Proxy Form.

All proxy forms must be received by the Company not later than 10.00am (Brisbane Time) on Saturday, 26 November 2022 .

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

In addition:

• if a proxy is given by a body corporate, a Proxy Form must be executed in writing under the common seal of the corporation or otherwise in accordance with section 127 of the Corporations Act or signed by an attorney;

• if a proxy is given by a natural person, a Proxy Form must be executed under the hand of that person or that person’s attorney;

• to be effective, the Proxy Form and the power of attorney or other authority (if any) under which it is signed or a certified copy, must be received by the Company at least 48 hours before the time for holding the Meeting or any adjourned Meeting;

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• if a Shareholder appoints the Chair as the Shareholder's proxy and does not specify how the Chair is to vote, the Chair will vote, as proxy for that Shareholder, in favour of or against each resolution as set out in the Explanatory Memorandum;

• a Shareholder that is a body corporate may appoint an individual as its representative to exercise all or any of the powers the body corporate may exercise at the Meeting (the appointment may be a standing one); and

• any Proxy Form received after this deadline will be treated as invalid.

Personal Representative

To vote by personal representative, please forward the authority under which the personal representative has been appointed (or a certified copy of the authority) to the address set out above for the return of Proxy Forms so that it is received no later than 10.00am (Brisbane Time) on Saturday, 26 November 2022 .

Corporate Representative

Any corporate Shareholder who has appointed a person to act as its corporate representative at the Meeting should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company and/or Share Registry in advance of the Meeting. An appointment of corporate representative form can be obtained from Computershare or online at – https://www-au.computershare.com/Investor/#Home under the help tab, “Printable Forms”

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6189 1155.

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EXPLA NATO R Y MEMO RA NDU M

This Explanatory Memorandum has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

Shareholders should read this statement and the Notice in full before deciding how to vote on the Resolutions set out in the Notice. All resolutions to be considered at the Meeting will be decided by poll based on both proxy votes received prior to the commencement of the Meeting and votes cast in person by those in attendance at the Meeting. Shareholders are encouraged to cast their vote by proxy prior to the Meeting in accordance with the instructions set out on page 4 of this Notice.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2022, together with the declaration of the directors, the Directors’ Report, the Remuneration Report and the auditor’s report.

There is no requirement for shareholders to vote on these statements and reports. Shareholders will be given a reasonable opportunity to raise questions and make comments on these reports and on the management of the Company at the Meeting.

Representatives of the Company’s auditor will be present for discussion purposes on matters of relevance to the audit.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at https://www.audeara.com/investors/

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the company’s remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company.

The remuneration report sets out a company’s remuneration arrangements for its directors and senior management. The remuneration report is part of the directors’ report contained in the annual financial report of a company for a financial year.

The Chair of the meeting must allow a reasonable opportunity for shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

A company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

Following the Spill Meeting, those persons whose election or re-election as directors of the company is approved will be the directors of the company.

The Remuneration Report for the financial year ended 30 June 2021 did not receive a vote of more than 25% against its adoption at the Company’s 2021 annual general meeting held on 19 November 2021. Accordingly, if at least 25% of the votes cast on Resolution 1 are against adoption of the Remuneration Report it will not result in the Company putting a Spill Resolution to Shareholders.

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2.1 Directors’ Recommendation

As the resolution relates to matters including the remuneration of the Directors, the Board, as a matter of good corporate governance and in accordance with the spirit of section 250R(4) Corporations Act, the Board makes no recommendation regarding this resolution.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 1.

3. RESOLUTION 2 – ELECTION OF DR ELAINE SAUNDERS AS A DIRECTOR

3.1 General

In accordance with clause 14.4 of the Constitution, Dr Saunders was appointed as a NonExecutive by the Board on 1 January 2022 to fill a casual vacancy. In accordance with Rule 14.4 of the Constitution, a director appointed to fill a casual vacancy shall only hold office until the next following annual general meeting of the Company. Accordingly, Dr Saunders now offers herself for election in accordance with clause 14.4 of the Constitution.

3.2 Election of Dr Elaine Saunders

Dr Saunders, who has served as a Director since 1 January 2022, retires by rotation and seeks re-election.

(a) Qualifications and other material directorships

Dr Saunders holds these qualifications (BSc MSc, PhD, GAICD, Grad Dip Mgt (Technology)). Dr Saunders is a Biomedical Engineer, Audiological Scientist, business-woman, author, speaker and professional director. She started her career in the British NHS and now leads consulting company; Bingarra Scale-Up Solutions, specialising in helping businesses through growth.

Dr Saunders’ personal awards include the American Academy of Audiology's award for research within industry, the AFR/Westpac's 100 Women of Influence (2015), and the ATSE Clunies Ross Medal for Entrepreneur of the Year (2016). In 2004 she was the National Telstra Businesswoman of the Year in the Government, Private and Corporate Sector. She is a Churchill Fellow; a Fellow of the Academy of Technology, Science and Engineering; an Adjunct Professor at Swinburne University; an active mentor to Women in STEM and to early stage medical device companies.

Dr Saunders currently holds no other public company directorships.

(b) Independence

If elected, the Board considers that Dr Saunders will be an independent director.

3.3 Directors’ Recommendation

The Directors (with Dr Saunders abstaining) recommend that you vote in favour of this Ordinary Resolution.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 2.

4. RESOLUTION 3 – ELECTION OF HSIN-CHIEH “BILL” PENG AS A DIRECTOR

4.1 General

In accordance with clause 14.4 of the Constitution, Mr Peng was appointed as a NonExecutive by the Board on 5 August 2022 to fill a casual vacancy. In accordance with Rule 14.4 of the Constitution, a director appointed to fill a casual vacancy shall only hold office until the next following annual general meeting of the Company. Accordingly, Mr Peng now offers himself for election in accordance with clause 14.4 of the Constitution.

4.2 Election of Hsin-Chieh “Bill” Peng

Mr Peng, having been appointed by the Board as a Director on 5 August 2022, seeks reelection.

(a) Qualifications and other material directorships

Mr Peng holds these qualifications (BBus(Mktg), MBus(Entr)). Mr Peng has worked in the electronics industry and has extensive knowledge and experience in the production from electronic materials, components, and semi-product through to

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finished products. Most recently he has founded an Australian company specialising in electronic medical products.

Mr Peng brings extensive business experience across operational, supply chain management, product development and international sales, particularly in the Asia Pacific Region.

Mr Peng currently holds no other public company directorships.

(b) Independence

If elected the Board considers that Mr Peng will not be an independent director as he holds an executive position within the Company and has a substantial holding in the Company..

4.3 Directors’ Recommendation

The Directors (with Mr Peng abstaining) recommend that you vote in favour of this Ordinary Resolution.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 3.

5. RESOLUTION 4 – RE-ELECTION OF DAVID TRIMBOLI AS A DIRECTOR

5.1 General

Mr Trimboli was originally appointed as a Director of the Company on 27 August 2015 and is the Non-Executive Chairman of Audeara. In accordance with clause 14.2 of the Company’s Constitution, Mr Trimboli will retire at the Annual General Meeting, and in accordance with clause 14.2 of the Company’s Constitution, will stand for re-election.

• 5.2 Election of David Trimboli

Mr Trimboli, having been appointed by the Board as a Director on 27 August 2015, seeks reelection.

(a) Qualifications and other material directorships

Mr Trimboli holds these qualifications (B. Commerce, Major in Accounting and Corporate Finance). Mr Trimboli has extensive experience as an executive and company director across many industries. He was a seed investor in Audeara in 2015, helping launch the Company. His experience includes 10 years with the international commodity trading and asset management company, Glencore International AG, as a senior coal trader based in Zug, Switzerland.

Mr Trimboli currently holds director positions with Quantum Graphite Ltd (ASX:QGL) and Medibio Limited (ASX:MEB).

(b) Independence

If elected the Board considers that Mr Trimboli is not an independent director due to him having a substantial shareholding in the Company.

5.3 Directors’ Recommendation

The Directors (with Mr Trimboli abstaining) recommend that you vote in favour of this Ordinary Resolution.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 4.

6. RESOLUTION 5 – APPROVAL OF 7.1A MANDATE

6.1 General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek shareholder approval by special resolution passed at an annual general meeting to have the capacity to issue up to that number of Equity Securities equal to 10% of its issued capital ( 10% Placement Capacity ) without using that company’s existing 15% annual placement capacity granted under ASX Listing Rule 7.1.

Broadly speaking, and subject to a number of exceptions, ASX Listing Rule 7.1 limits the amount of Equity Securities that a listed company can issue without approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that period.

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Under ASX Listing Rule 7.1A, however, an Eligible Entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10%.

An ‘Eligible Entity’ means an entity which is not included in the S&P/ASX 300 Index and which has a market capitalisation of $300 million or less. The Company is not included in the S&P/ASX 300 index and has a market capitalisation of $300 million or less and is therefore an Eligible Entity for these purposes.

This Resolution 5 seeks shareholder approval by way of special resolution for the Company to have the additional 10% capacity provided for in ASX Listing Rule 7.1A to issue Equity Securities up to the combined 25% limit in ASX Listing Rules 7.1 and 7.1A without any further shareholder approval.

If this Resolution 5 is passed, the Company will be able to issue equity securities up to the combined 25% limit in ASX Listing Rules 7.1 and 7.1A without any further shareholder approval.

If Resolution 5 is not passed, the Company will not be able to access the additional 10% capacity to issue equity securities without shareholder approval provided for in ASX Listing Rule 7.1A and will remain subject to the 15% limit on issuing equity securities without shareholder approval set out in ASX Listing Rule 7.1.

This Resolution 5 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 5 for it to be passed.

6.2 Technical information required by ASX Listing Rule 7.3A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 5:

(a) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting;

• (ii) the time and date of the Company’s next Annual General Meeting; and

• (iii) the time and date of approval by Shareholders of a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking), or such longer period if allowed by ASX,

( 10% Placement Capacity Period ).

(b) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average market price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed by the Company and the recipient of the Equity Securities; or

• (ii) if the Equity Securities are not issued within 10 trading days of the date in the section 7.2 (b)(i) of this Notice, the date on which the Equity Securities are issued.

(c) Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for cash consideration in which case if undertaken, the Company intends to use funds raised to be applied towards working capital requirements to support the Company’s growth strategies and general working capital.

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(d) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 5 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the market price of Shares and the number of Equity Securities on issue as at 11 October 2022.

There is a risk that the market price for the Shares may be significantly lower on the issue date than on the date of approval under rule 7.1A; and the Shares may be issued at a price that is a discount to the market price for the Shares on the issue date.

The table below also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

Number of Shares on issue (Variable ‘A’ in ASX Listing Rule 7.1A2)	Potential Dilution and Funds Raised	Potential Dilution and Funds Raised	Potential Dilution and Funds Raised	Potential Dilution and Funds Raised
	Issue Price (per Share)	$0.044 (50% decrease in Issue Price)	$0.088 (Issue Price)	$0.132 (50% increase in Issue Price)
Variable A 105,000,000	Shares issued – 10% voting dilution	10,500,000	10,500,000	10,500,000
	Funds raised	$462,000.00	$924,000.00	$1,386,000.00
(50% increase in Variable A) 157,500,000	Shares issued – 10% voting dilution	15,750,000	15,750,000	15,750,000
	Funds raised	$693,000.00	$1,386,000.00	$2,079,000.00
(100% increase in Variable A) 210,000,000	Shares issued – 10% voting dilution	21,000,000	21,000,000	21,000,000
	Funds raised	$924,000.00	$1,848,000.00	$2,772,000.00

(e) Allocation policy under the 10% Placement Capacity

The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

(i) the purpose of the issue;

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• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

Furthermore, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.

• (f) Equity Securities under ASX Listing Rule 7.1A.2

The Company previously obtained approval from its Shareholders pursuant to ASX Listing Rule 7.1A at its annual general meeting held on 19 November 2021.

The Company has not issued or agreed to issue Equity Securities under ASX Listing Rule 7.1A.2 in the 12 months preceding the Meeting.

• (g)

Compliance with ASX Listing Rules 7.1A.4 and 3.10.3

When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it must:

• (i) state in its announcement of the proposed issue under ASX Listing Rule 3.10.3 or in its application for quotation of the securities under ASX Listing Rule 2.7 that the securities are being issued under ASX Listing Rule 7.1A; and

• (ii) give to ASX immediately after the issue a list of names of the persons to whom the entity issued the equity securities and the number of equity securities issued to each. This list is not for release to the market.

The Company will comply with the disclosure obligations under ASX Listing Rules 7.1A.4 and 3.10.3 upon issue of any Equity Securities.

6.3 Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 5.

6.4 Directors Recommendation

The Directors consider the approval of the 10% Placement Capacity to be in the best interests of the Company and recommend that Shareholders vote in favour of this Special Resolution to give effect to the approval.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 5.

7. RESOLUTION 6 – RATIFICATION OF PLACEMENT SHARES

7.1 General

On 7 June 2022, the Company announced that it had completed a placement of $1,000,000 (before costs) ( Placement ). The funds raised from the issue of the Placement will provide working capital for an expanding sales team, forward stock ordering and logistics.

On 7 June 2022 ( Issue Date ), the Company issued 10,000,000 Placement Shares at an issue price of $0.10 per share.

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders

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over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that period.

The Issue does not fit within any of these exceptions and, it has not yet been approved by Audeara Limited’s ( Audeara ) shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing Audeara’s capacity to issue further equity securities without shareholder approval under Listing Rule 7.1 for the 12 month period following the Issue Date.

Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule.

Audeara wishes to retain as much flexibility as possible to issue additional securities into the future without having to obtain shareholder approval for such issues under Listing Rule 7.1.

To this end, Resolution 6 seeks shareholder approval to the Issue under and for the purposes of Listing Rule 7.4.

If Resolution 6 is passed, the issue of the Placement Shares are taken to have been approved under ASX Listing Rule 7.1 and so do not reduce the Company’s 15% capacity to issue further equity securities without Shareholder approval under that rule.

The Board will only undertake further issues of equity securities if they consider it is in the best interests of the Company to do so.

If Resolution 6 is not passed, the issue of the Placement Shares will be included in calculating the Company’s 15% capacity in ASX Listing Rule 7.1, effectively decreasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date the Company issued those Shares.

7.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

• (a) 10,000,000 Placement Shares were issued on 7 June 2022;

• (b) the issue price was $0.10 per Share;

• (c) the Placement Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Placement Shares were issued to BP Peng Pty Ltd an entity controlled by HsinChieh “Bill” Peng, who at the time of the Placement was not a related party of the Company. The Board notes that subsequent to the completion of the Placement, Mr Peng accepted an invitation to join the Board as an executive director and was appointed a Director on 5 August 2022, however Mr Peng (including BP Peng Pty Ltd) was not a related party of the Company when these Placement Shares were issued in June 2022; and

• (e) the funds raised from this issue will provide working capital for an expanding sales team, forward stock ordering and logistics. The Company did not pay any introduction fees or similar to third party providers in connection with the Placement.

7.3 Directors Recommendation

The Directors (with Mr Peng abstaining) consider the Placement to be in the best interests of the Company and recommend that Shareholders vote in favour of Resolution 6 to give effect to the Placement.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 6.

8. RESOLUTION 7 – REPLACEMENT OF CONSTITUTION

8.1 General

A company may modify or repeal its constitution or a provision of its constitution by special resolution of shareholders.

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Resolution 7 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is of the type required for a listed public company limited by shares updated to ensure it reflects the current provisions of the Corporations Act and Listing Rules.

This will incorporate amendments to the Corporations Act and Listing Rules since the current Constitution was adopted prior to the Company’s listing on ASX.

The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

The Proposed Constitution is broadly consistent with the provisions of the existing Constitution.

The Directors believe these amendments are not material nor will they have any significant impact on Shareholders. It is not practicable to list all of the changes to the Constitution in detail in this Explanatory Memorandum, however, a summary of the proposed material changes is set out below.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website www.audeara.com and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary by email at stephen.buckley@audeara.com. Shareholders are invited to contact the Company if they have any queries or concerns.

8.2 Summary of the material proposed changes

Minimum Securities holding (clause 3)

This Proposed Constitution now extends the minimum holding provisions to all securities as provided for under the Listing Rules. The clause previously only referred to shares.

Joint Holders (clause 9.8)

CHESS is currently being replaced by ASX with a projected go-live date of April 2023. As part of the CHESS replacement, the registration system will be modernised to record holder registration details in a structured format that will allow up to four joint holders of a security. Clause 9.8 of the Proposed Constitution provides that the number of registered joint holders of securities shall be as permitted under the Listing Rules and the ASX Settlement Operating Rules.

Capital Reductions (clause 10.2)

The Proposed Constitution now permits sales of unmarketable parcels to a sale nominee as part of a capital reduction.

Use of technology (clause 14)

The Proposed Constitution includes a new provision to permit the use of technology at general meetings (including wholly virtual meetings) to the extent permitted under the Corporations Act, Listing Rules and applicable law.

Partial (proportional) takeover provisions (new clause 37)

A proportional takeover bid is a takeover bid where the offer made to each shareholder is only for a proportion of that shareholder’s shares.

Pursuant to section 648G of the Corporations Act, the Company has included in the Proposed Constitution a provision whereby a proportional takeover bid for Shares may only proceed after the bid has been approved by a meeting of Shareholders held in accordance with the terms set out in the Corporations Act.

This clause of the Proposed Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

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Information required by section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

Where offers have been made under a proportional off-market bid in respect of a class of securities in a company, the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under such a proportional off-market bid is prohibited unless and until a Resolution to approve the proportional off-market bid is passed.

Reasons for proportional takeover provisions

A proportional takeover bid may result in control of the Company changing without Shareholders having the opportunity to dispose of all their Shares. By making a partial bid, a bidder can obtain practical control of the Company by acquiring less than a majority interest. Shareholders are exposed to the risk of being left as a minority in the Company and the risk of the bidder being able to acquire control of the Company without payment of an adequate control premium. These amended provisions allow Shareholders to decide whether a proportional takeover bid is acceptable in principle, and assist in ensuring that any partial bid is appropriately priced.

Knowledge of any acquisition proposals

As at the date of this Notice, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

Potential advantages and disadvantages of proportional takeover provisions

The Directors consider that the proportional takeover provisions have no potential advantages or disadvantages for them and that they remain free to make a recommendation on whether an offer under a proportional takeover bid should be accepted.

The potential advantages of the proportional takeover provisions for Shareholders include:

• (a) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;

• (b) assisting in preventing Shareholders from being locked in as a minority;

• (c) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and

• (d) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

The potential disadvantages of the proportional takeover provisions for Shareholders include:

• (a) proportional takeover bids may be discouraged;

• (b) lost opportunity to sell a portion of their Shares at a premium; and

• (c) the likelihood of a proportional takeover bid succeeding may be reduced.

Recommendation of the Board

The Directors do not believe the potential disadvantages outweigh the potential advantages of adopting the proportional takeover provisions and as a result consider that the proportional takeover provision in the Proposed Constitution is in the interest of Shareholders and unanimously recommend that Shareholders vote in favour of Resolution 7.

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8.3 Directors’ Recommendation

The Directors of the Company believe Resolution 7 is in the best interest of the Company and its Shareholders and unanimously recommend that the Shareholders vote in favour of this Resolution.

The Chair of the Meeting intends to vote all available proxies in favour of this Resolution 7.

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9. GLOSSARY

$ means Australian dollars.

10% Placement Capacity has the meaning given in section 6.1.

Annual General Meeting or Meeting means the meeting convened by the Notice.

ASIC means the Australian Securities & Investments Commission.

Associate has the meaning given in the ASX Listing Rules.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Closely Related Party has the meaning given in section 9 of the Corporations Act.

Company means Audeara Limited (ACN 604 368 443).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Eligible Entity means an entity that, at the date of the relevant general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Explanatory Memorandum means the explanatory memorandum accompanying the Notice.

Group means the Company and its Related Bodies Corporate from time to time.

Group Company means a member of the Group.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Listing Rules means the Listing Rules of ASX.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Memorandum and the Proxy Form.

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Proxy Form means the proxy form accompanying the Notice.

Related Body Corporate has the meaning given in section 9 of the Corporations Act.

Remuneration Report means the remuneration report set out in the Directors’ Report section of the Company’s annual financial report for the year ended 30 June 2022.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Memorandum.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a registered holder of a Share.

Share Registry means Computershare Investor Services Pty Ltd.

Variable A means “A” as set out in the formula in ASX Listing Rule 7.1A(2).

Volume Weighted Average Market Price in relation to the ordinary fully paid shares of Audeara Limited for a particular period, means the volume weighted average price of trading in the ordinary fully paid shares on the ASX market and the Chi-X market over that period, excluding block trades, large portfolio trades, permitted trades during the pre-trading hours period, permitted trades during the post-trading hours period, out of hours trades and exchange traded option exercises.

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Need assistance?

Phone:

1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia)

Online:

www.investorcentre.com/contact

AUA

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

YOUR VOTE IS IMPORTANT

For your proxy appointment to be effective it must be received by 10.00am (Brisbane time) Saturday, 26 November 2022.

Proxy Form

How to Vote on Items of Business

Lodge your Proxy Form:

XX

All your securities will be voted in accordance with your directions.

Online:

APPOINTMENT OF PROXY

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Lodge your vote online at www.investorvote.com.au using your secure access information or use your mobile device to scan the personalised QR code.

Your secure access information is

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Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999

For Intermediary Online subscribers (custodians) go to www.intermediaryonline.com

A proxy need not be a securityholder of the Company.

SIGNING INSTRUCTIONS FOR POSTAL FORMS

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne VIC 3001 Australia

By Fax:

1800 783 447 within Australia or +61 3 9473 2555 outside Australia

PARTICIPATING IN THE MEETING

Corporate Representative

If a representative of a corporate securityholder or proxy is to participate in the meeting you will need to provide the appropriate “Appointment of Corporate Representative”. A form may be obtained from Computershare or online at www.investorcentre.com/au and select "Printable Forms".

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

You may elect to receive meeting-related documents, or request a particular one, in electronic or physical form and may elect not to receive annual reports. To do so, contact Computershare.

Samples/000001/000001

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ‘ X ’) should advise your broker of any changes.



I 9999999999

I ND

Proxy Form

Please mark

to indicate your directions

Step 1

Appoint a Proxy to Vote on Your Behalf

I/We being a member/s of Audeara Limited hereby appoint the Chairman OR of the Meeting

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of Audeara Limited to be held at the offices of Grant Thornton, King George Central, Level 18, 145 Ann Street, Brisbane QLD 4000 on Monday, 28 November 2022 at 10.00am (Brisbane time) and at any adjournment or postponement of that meeting.

Chairman authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention in step 2) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Resolution 1 by marking the appropriate box in step 2.

Step 2 Items of Business

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

For Against Abstain

RESOLUTION	1	ADOPTION OF REMUNERATION REPORT
RESOLUTION	2	ELECTION OF DR ELAINE SAUNDERS AS A DIRECTOR
RESOLUTION	3	ELECTION OF HSIN-CHIEH “BILL” PENG AS A DIRECTOR
RESOLUTION	4	RE-ELECTION OF DAVID TRIMBOLI AS A DIRECTOR
RESOLUTION	5	APPROVAL OF 7.1A MANDATE
RESOLUTION	6	RATIFICATION OF PLACEMENT SHARES
RESOLUTION	7	REPLACEMENT OF CONSTITUTION

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

Step 3 Signature of Securityholder(s)

This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
/ /
Sole Director & Sole Company Secretary Director Director/Company Secretary Date
Update your communication details (Optional) By providing your email address, you consent to receive future Notice
Mobile Number Email Address of Meeting & Proxy communications electronically
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