AVECHO BIOTECHNOLOGY LIMITED — Capital/Financing Update 2021

Feb 9, 2021

Proposed issue of securities

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Announcement Summary

Entity name

AVECHO BIOTECHNOLOGY LIMITED

Announcement Type

New announcement

Date of this announcement

Wednesday February 10, 2021

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Options at an exercise price of $0.035 each, expiring on 31	115,000,000
	December 2023.
n/a	Options at an exercise price of $0.035 each, expiring on 31	7,500,000
	December 2023.
AVE	ORDINARY FULLY PAID	230,000,000

Proposed +issue date

Monday February 15, 2021

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

AVECHO BIOTECHNOLOGY LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ABN

Registration Number

32056482403

1.3 ASX issuer code

AVE

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Wednesday February 10, 2021

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity

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No

Part 7B - Issue details

Is the proposed security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional securities in a class that is already quoted or recorded by ASX)? Existing class

Will the proposed issue of this +security include an offer of attaching +securities? Yes

Details of +securities proposed to be issued

ASX +security code and description

AVE : ORDINARY FULLY PAID

Number of +securities proposed to be issued

230,000,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? Yes

In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 0.02200

Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

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Attaching +Security

Is the proposed attaching security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional +securities in a class that is already quoted or recorded by ASX)? New class

Attaching +Security - New class (+securities in a class that is not yet quoted or recorded by ASX)

Details of attaching +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from ASX that the terms of the proposed +securities are appropriate and equitable under listing rule 6.1? No

Will the entity be seeking quotation of the 'new' class of +securities on ASX? Yes

ASX +security code +Security description New class-code to be confirmed Options at an exercise price of $0.035 each, expiring on 31 December 2023.

+Security type

Options

Number of +securities proposed to be issued

115,000,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

Please describe the consideration being provided for the +securities

Nil - attaching Options to the Placement Shares.

Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

Options details

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+Security currency AUD - Australian Dollar

Exercise price Expiry date AUD 0.0350 Sunday December 31, 2023

Details of the type of +security that will be issued if the option is exercised

AVE : ORDINARY FULLY PAID

Number of securities that will be issued if the option is exercised

One AVE Share for each AVE Option exercised.

Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement.

Please refer to the ASX Announcement lodged on 10 February 2021.

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? Yes No ASX +security code +Security description New class-code to be confirmed Options at an exercise price of $0.035 each, expiring on 31 December 2023.

+Security type

Options

Number of +securities proposed to be issued

7,500,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration?

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No

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Please describe the consideration being provided for the +securities Nil - Issued as part of the Lead Manager's fees. Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities Will all the +securities issued in this class rank equally in all respects from their issue date? Yes Options details +Security currency Exercise price Expiry date AUD - Australian Dollar AUD 0.0350 Sunday December 31, 2023 Details of the type of +security that will be issued if the option is exercised AVE : ORDINARY FULLY PAID Number of securities that will be issued if the option is exercised One AVE Share for each AVE Option exercised. Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement. Please refer to the ASX Announcement lodged on 10 February 2021.

Part 7C - Timetable

7C.1 Proposed +issue date

Monday February 15, 2021

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No

7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes

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7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

72,110,532 Fully Paid Ordinary Shares. 115,000,000 Options attached to the New Shares (1:2 basis). 7,500,000 Options to Peak Asset Management.

7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? Yes

7D.1c ( i ) How many +securities are proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A?

157,889,468 Fully Paid Ordinary Shares.

7D.1c ( ii ) Please explain why the entity has chosen to do a placement rather than a +pro rata issue or an offer under a +security purchase plan in which existing ordinary +security holders would have been eligible to participate

It was considered that the Placement was the most cost-efficient and expedient method available to the Company at the time for raising the funds required by the Company to achieve its objectives, given the funding certainty, investor enquiry and the pricing achieved under the Placement.

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? No

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

Peak Asset Management

7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

For the whole capital raise: 1% Management Fee on the entire raise, 6% capital raising fee for funds raised by the Broker, and 7.5 million unlisted Options at an exercise price of $0.035 each, expiring on 31 December 2023.

7E.2 Is the proposed issue to be underwritten?

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Yes

7E.2a Who are the underwriter(s)?

Peak Asset Management

7E.2b What is the extent of the underwriting (ie the amount or proportion of the proposed issue that is underwritten)?

$4,000,000.

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7E.2c What fee, commission or other consideration is payable to them for acting as underwriter(s)?

For the whole capital raise: 1% Management Fee on the entire raise, 6% capital raising fee for funds raised by the Broker, and 7.5 million unlisted Options at an exercise price of $0.035 each, expiring on 31 December 2023.

7E.2d Please provide a summary of the significant events that could lead to the underwriting being terminated. Company can terminate the agreement at any time, following the conclusion of the Placement or if Peak Asset Management fails to raise the minimum amount of $4,000,000.

7E.3 Is a party referred to in listing rule 10.11 underwriting or sub-underwriting the proposed issue? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue None.

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

To advance pharmaceutical cannabinoid program.

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

N/A

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