CARBONXT GROUP LIMITED — Capital/Financing Update 2018

Oct 14, 2018

Appendix 3B New issue announcement

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

Carbonxt Group Limited

ABN

097 247 464

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	Fully Paid ordinary shares (each, aNew Share)
	Placement – Carbonxt proposes to issue approximately 7,500,000 New Shares to sophisticated investors (Placement) as announced to ASX on 15 October 2018 (Placement New Shares) Entitlement Offer – Carbonxt proposes to issue 18,400,000 New Shares pursuant to the terms of the non-renounceable pro-rata entitlement offer (Entitlement Offer) announced to ASX on 15 October 2018 (Entitlement New Shares). The exact number of Entitlement New Shares and Placement New Shares to be issued under the Entitlement Offer is not known as at the date of this Appendix 3B as it remains subject to the determination of Carbonxt and holding reconciliation and rounding.

• See chapter 19 for defined terms.

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3 Principal terms of the[+] securities Same as existing quoted fully paid ordinary (e.g. if options, exercise price and shares in Carbonxt. 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.

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4 Do the[+] securities rank equally in Yes, the New Shares will rank equally with all respects from the[+] issue date existing ordinary shares from the date of with an existing[+] class of quoted issue of the New Shares. +securities? New Shares under the Placement will not If the additional[+] securities do be entitled to participate in the Entitlement not rank equally, please state: Offer. • 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 For both Placement and Entitlement Offer – $0.40 per New Share 6 Purpose of the issue As announced on 15 October 2018 the (If issued as consideration for funds to be raised under the Placement the acquisition of assets, clearly and Entitlement Offer will be applied to identify those assets) fund capital expenditure to expand Carbonxt's production capacity for activated carbon pellets, working capital to fill increased volumes in activated carbon pellets, and transaction costs associated with the Placement and Entitlement Offer.

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

No.

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

N/A N/A

6d Number of +securities issued with security holder approval under rule 7.1A

N/A

• See chapter 19 for defined terms.

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6e Number of[+] securities issued N/A with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued N/A under an exception in rule 7.2 6g If[+] securities issued under rule N/A 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 N/A 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 N/A issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Placement – 22 October 2018 Entitlement Offer – 7 November 2018 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. Number +Class

• See chapter 19 for defined terms.

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8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	After completion of the Placement and Entitlement Offer, there will be up to 99,494,836 ordinary shares quoted on ASX. (Based on 73,594,836 ordinary shares on issue at the date of this Appendix 3B and the aggregate approximate 25.9m New Shares to be issued under the Entitlement Offer and thePlacement).	Fully Paid ordinary shares.

• See chapter 19 for defined terms.

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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
	2,500,000 3,500,000 500,000 300,000 475,000 200,000 157,534 3,623,774 **Held on 24-month escrow from the date of the Company’s quotation on ASX (23 January 2018)	Convertible notes. Expiry date 1 January 2022. Unlisted options Expiry date 30 November 2021. Exercisable at $0.50. Unlisted options. Expiry date 8 June 2020. Exercisable at $0.60. Unlisted options. Expiry date 30 November 2021. Exercisable at $0.50. Unlisted options. Expiry date 30 November 2021. Exercisable at $0.70. Unlisted options. Expiry date 30 November 2021. Exercisable at $0.56. Shares held in ASX mandatory escrow for 12 months from issue. Shares held in ASX mandatory escrow for 24 months from quotation
	N/A

Part 2 - Pro rata issue

• See chapter 19 for defined terms.

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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 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	No.
	Non-renounceable.
	1 New Share for every 4 ordinary shares held as at the record date for the Entitlement Offer.
	Fully paid ordinary shares.
	7.00pm (Sydney time) on 18 October 2018.
	No.
	Fractional entitlements will be rounded up to the next whole number of ordinary shares.
	All countries other than Australia and New Zealand.
	Entitlement Offer – 31 October 2018

• See chapter 19 for defined terms.

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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 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?	N/A.
	N/A.
	Shaw and Partners Limited.
	6% of gross proceeds raised from the Entitlement OfferandPlacement Offer.
	N/A.
	N/A.
	No disclosure document is being prepared. An Entitlement Offer Booklet and personalised entitlement and acceptance form will be sent on or around 22October 2018.
	N/A.
	N/A.
	N/A.
	N/A.
	N/A.

• See chapter 19 for defined terms.

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• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

N/A.

33 +Issue date

Entitlement Offer – 7 November 2018

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

• See chapter 19 for defined terms.

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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) 42 Number and +class of all +securities quoted on ASX (_including_the+securities in clause 38)
	Number	+Class

• See chapter 19 for defined terms.

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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.

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Sign here:

............................................................ Date: ...15/10/2018................. Company Secretary

Print name: ....THOMAS BLOOMFIELD….

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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

Rule 7.1 – Issues exceeding 15% of capital

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

Insert number of fully paid[+] ordinary securities on issue 12 months before the + issue date or date of agreement to issue

Add the 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

Subtract the number of fully paid[+] ordinary securities cancelled during that 12 month period

“A”

• See chapter 19 for defined terms.

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

• See chapter 19 for defined terms.

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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

Step 2: Calculate 10% of “A”

“D”

0.10

Note: this value cannot be changed

Multiply “A” by 0.10

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”

• See chapter 19 for defined terms.

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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 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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ASX RELEASE

15 October 2018

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Entitlement Offer Cleansing Notice

This notice is given by Carbonxt Group Limited (Company) (ASX: CG1) under section 708AA(2)(f) of the Corporations Act 2001 ( Act ).

Today the Company announced a proposed institutional placement (“Placement”) and nonrenounceable pro-rata 1 for 4 entitlement offer (“Entitlement Offer”) of new shares in Carbonxt (“New Shares”) to raise approximately $10.3 million (being approximately $3.0 million under the Placement and approximately $7.3 million under the Entitlement Offer) before costs. CG1 shareholders registered at the Record Date with a registered address in Australia or New Zealand will be entitled to participate in the Entitlement Offer (Eligible Shareholders).

Shares under the Entitlement Offer will be offered at $0.40 per New Share. The Entitlement Offer is not underwritten but is being lead managed by Shaw and Partners Limited (Lead Manager).

An Information Booklet will be mailed to Eligible Shareholders on 22 October 2018 together with personalised Entitlement and Acceptance Forms.

The Company hereby gives notice under section 708AA(2)(f) of the Act that:

• a) the Company will offer the Shares under the Entitlement Offer for issue without disclosure to investors under Part 6D.2 of the Act;

• b) the Company is providing this notice under section 708AA(2)(f) of the Act;

• c) at the date of this notice, the Company has complied with the provisions of Chapter 2M of the Act as they apply to the Company and has complied with section 674 of the Act;

• d) at the date of this notice, there is no information that is “excluded information” within the meaning of section 708AA(8) and section 708AA(9) of the Act; and

• e) the Entitlement Offer is not expected to have any material effect or consequence on the control of the Company. Any potential effect will depend on a number of factors including investor demand. However:

• if all Eligible Shareholders take up their entitlements under the Entitlement Offer, the issue of Shares under the Entitlement Offer will have no effect on the control of the Company and all shareholders will hold the same percentage interest in the Company, subject only to changes resulting from ineligible shareholders being unable to participate in the Entitlement Offer;

• in the more likely event that there is a shortfall, Eligible Shareholders who do not subscribe for their full entitlement to Shares under the Entitlement Offer and ineligible shareholders unable to participate in the Entitlement Offer will be diluted relative to those Eligible Shareholders who subscribe for some or all of their entitlement; and

• the Lead Manager will assist with placing any shortfall of Shares after Eligible Shareholders have taken up their entitlements. Having regard to the number of Shares to be issued under the Entitlement Offer even if a substantial shortfall eventuated, there is unlikely to be a change in a shareholder’s position to exercise any substantive control of the Company.

Yours Sincerely

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Tom Bloomfield, Company Secretary

Carbonxt Group Limited. Level 12, 225 George Street, Sydney NSW 2000