Control Bionics Limited

ACN 115 465 462

OFFER BOOKLET

Non-Renounceable Rights Issue

A 2-for-3 non-renounceable rights issue offer by Control Bionics Limited ACN 115 465 462 of up to approximately 68,272,612 new fully paid ordinary shares at an issue price of 4c per share to raise up to approximately $2.731 million (before costs). The rights issue is partially underwritten.

Last date for acceptance and payment:

5pm (Sydney time) on 24 November 2023

This Offer Booklet is an important document and requires your immediate attention. This document and the accompanying Entitlement and Acceptance Form should be read in their entirety. If you are in any doubt about what to do, you should consult your stockbroker, solicitor, accountant or other professional adviser without delay.

1. Introduction to the Rights Issue

1.1 Key details & use of funds

As announced on 30 October 2023, the Company invites all Eligible Shareholders to participate in the Rights Issue on the basis of 2 New Shares for every 3 Shares held at 7pm (Sydney time) on the 2 November 2023 at $0.04 per New Share.

As the Rights Issue is not fully underwritten, there is a risk that not all New Shares will be issued by the Company and therefore there is no certainty that the full amount of approximately $2.731 million sought by the Company under the Rights Issue will be raised. The Rights Issue is partially underwritten to $1.077 million.

The Company is raising capital to fund a specific set of new growth initiatives including the commercialisation of new products such as DROVE and the recently announced NeuroStrip, regulatory approvals required for export development of new and existing products and development of relevant new distribution channels in key export markets. Capital will also be used for increases in working capital to support business growth, both for the existing business and these new products.

With year-on-year revenue growth of more than 25% in FY23, the business continues to demonstrate the market’s desire for our existing products. This growth rate is forecast to continue into FY24 and will be supplemented by Control Bionics’ new products as they are brought to market during FY24. As announced during the recent AGM in October, Control Bionics unveiled the NeuroStrip which is a revolutionary advancement in wearable technology. This is a significant achievement for the business and will create new opportunities for us to expand the clinical settings in which our EMG device can be used in addition to potential new applications in the disability and consumer sectors.

The commercialisation of NeuroStrip and DROVE continue to be a priority for FY24, along with further success in our newest market of Japan.The funds raised under the Rights Issue (assuming that the Company raises the full amount of approximately $2.731 million sought under the Rights Issue) will be used by the Company for the following purposes and in the following approximate amounts:

approximate amounts:
Purpose	Amount $
New product development, production and Commercialisation of new products includingDROVE and NeuroStrip	1,000,000
Software development for NeuroStrip	500,000
Regulatory Approvals	500,000
Distribution channel development	300,000
Working capital and reserve	431,000
TOTAL	2,731,000

1.2 Additional New Shares

Under the Rights Issue, Eligible Shareholders may also apply for Additional New Shares (i.e. New Shares in excess of their pro rata entitlement under the Rights Issue ( Entitlement )).

The allocation of Additional New Shares and any scale back will be subject to availability of Additional New Shares and will occur in the Company's absolute discretion[1] .

1.3 Issue Price

The Issue Price of $0.04 represents an approximately 33% discount to the last closing price on 26 October 2023, and an approximately 37.9% discount to the volume weighted average price of Shares for the 30 days prior to the announcement of the Offer.

1.4 Rights Issue pursuant to section 708AA of the Corporations Act

The Rights Issue is being conducted by the Company in accordance with section 708AA of the Corporations Act 2001 (Cth) ( Corporations Act ) without the issue of a prospectus or other disclosure document under Chapter 6D of the Corporations Act.

Accordingly, this Offer Booklet is not a prospectus, disclosure document or other offering document under the Corporations Act (or any other Australian or foreign law) and has not been (and will not be) lodged with the Australian Securities and Investments Commission.

The Company is a "disclosing entity" for the purpose of section 111AC of the Corporations Act and as such it is subject to regular reporting and disclosure obligations under section 674 of the Corporations Act and the Listing Rules of ASX Limited ( ASX ) ( Listing Rules ).

These obligations require the Company to notify ASX of information about specified events and matters as they arise for the purpose of ASX making that information available to the securities exchange conducted by ASX.

In particular, the Company is required (subject to certain limited exceptions) to notify ASX immediately once it is or becomes aware of information concerning the Company which a reasonable person would expect to have a material effect on the price or value of the Shares.

For the Company to rely on the disclosure exemption in section 708AA of the Corporations Act, the Company is required to lodge a "cleansing notice" under section 708AA(2)(f) of the Corporations Act. That notice is required to:

(a) set out any information that has been excluded from a continuous disclosure notice in accordance with the Listing Rules and that investors and their professional advisers would reasonably require, and would reasonably expect to find in a disclosure document, for the purpose of making an informed assessment of:
(i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or
(ii) the rights and liabilities attaching to the New Shares; and
(b) state the potential effect of the issue of the New Shares on the control of the Company and the consequences of that effect.

The Company lodged the requisite cleansing notice in respect of the Rights Issue with ASX on 30 October 2023.

Neither ASX nor the Australian Securities & Investments Commission ( ASIC ) take any

1 Please note that Additional New Shares will only be allocated to you if there are sufficient New Shares from Eligible Shareholders who do not take up their Entitlement in full or from New Shares that would have been offered to Ineligible Shareholders had they been eligible to participate in the Rights Issue.

responsibility for the contents of this Offer Booklet.

1.5 Timetable

The Rights Issue will be conducted in accordance with the following indicative timetable:

Lodgement of Appendix 3B and Cleansing Notice for Rights Issue with ASX	30 October 2023
"Ex" Date (i.e. the date on and from which Shares trade on ASX without an Entitlement)	1 November 2023
Record Date (i.e. the time and date for determining Entitlements)	7pm (Sydney time) on 2 November 2023
Despatch of Offer Booklet and Entitlement and Acceptance Form to Eligible Shareholders	7 November 2023
Rights Issue Opening Date	7 November 2023
Last day to extend the offer Closing Date	21 November 2023
Rights Issue Closing Date	5pm (Sydney time) on 24 November 2023
Trading in New Shares on ASX on a "deferred settlement basis" begins	27 November 2023
Announcement of results of Rights Issue	29 November 2023
Issue of New Shares to successful applicants under the Rights Issue	29 November 2023
Trading in New Shares on ASX on a normal ("T+2") settlement basis begins	30 November 2023

Note : This timetable is indicative only and subject to change. The Company reserves the right, subject to the Corporations Act and Listing Rules, to change the dates, including the Closing Date and to accept late Applications under the Rights Issue (either generally, or in particular cases) without notice. Any extension of the Closing Date will have a consequential effect on the anticipated date for the issue of the New Shares. References in the timetable (or elsewhere in this Offer Booklet) to "New Shares" includes a reference to "Additional New Shares" if the context requires .

1.6 Shortfall

Any New Shares offered under the Rights Issue that are not subscribed for by Eligible Shareholders will form part of the shortfall ( Shortfall ). The Directors reserve the right, subject to the Corporations Act and the Listing Rules, to allocate any Shortfall to Eligible Shareholders that apply for Additional New Shares or otherwise, to place any remaining Shortfall at their discretion within 3 months after the Closing Date (on the same conditions as New Shares and at a price not less than the Issue Price).

2. Details of the Rights Issue

2.1 The Rights Issue

The Company is making a pro rata non-renounceable non-underwritten rights issue offer of New Shares to Eligible Shareholders to subscribe for up to 2 New Shares for every 3 Shares held at 7pm (Sydney time) on 2 November 2023 at $0.04 per share ( Rights Issue) . Fractional entitlements to New Shares will be rounded up to the nearest whole New Share.

Your Entitlement to New Shares under the Rights Issue is shown on your Entitlement and Acceptance Form. Details on how to accept your Entitlement (or part of it) are set out in Section 3. This Offer Booklet will be sent to Eligible Shareholders on or about 7 November 2023 together with a personalised Entitlement and Acceptance Form.

2.2 Size of the Rights Issue

The total number of New Shares that may be issued under the Rights Issue (and any subsequent placement of any Shortfall) will be approximately 68.272 million (noting that the exact number depends on the effect of rounding on individual holdings).

The table below sets out, for illustrative purposes only, the Company's Share capital structure (i.e. before the Rights Issue) together with the impact of the proposed issue of the New Shares under the Rights Issue.

Total number of Shares on issue as at 7pm (Sydney time) on 102,408,918 Thursday, 1 June 2023 Maximum number of New Shares that may be issued under the 68,272,612 Rights Issue Total number of Shares on issue on completion of the Rights Issue 170,681,530 (assuming that the Rights Issue is fully subscribed)[2] Number of New Shares that may be issued under the Rights Issue 34,136,306 (assuming that the Rights Issue is 50% subscribed for) Total number of Shares on issue on completion of the Rights Issue 136,545,224 (assuming that the Rights Issue is 50% subscribed for)

Note : The figures in the above table (which are subject to the minor effects of rounding) assume that no options and performance rights are exercised and/or that the Company does not issue any further Shares in either case before the Record Date .

If the Rights Issue is fully subscribed for, the effect of the Rights Issue will be to increase the number of Shares on issue by approximately 68.272 million and increase the cash held by the Company by approximately $2.731 million (before costs of the Rights Issue).

If the Rights Issue is 50% subscribed for, the effect of the Rights Issue will be to increase the number of Shares on issue by approximately 34.136 million and increase the cash held by the Company by $1.365 million (before costs of the Rights Issue).

2.3 Use of funds raised under the Rights Issue

The purpose of the Rights Issue is to enable the Company to raise up to a maximum of approximately $2.731 million (before costs).

The Company is raising capital to fund a specific set of new growth initiatives including the commercialisation of new products such as the recently announced Drove Autonomous Wheelchair Module, regulatory approvals required for export development of new and existing products and acquisition of relevant distribution channels in key export markets.

Assuming that the maximum amount is raised under the Rights Issue, the funds raised are intended to be allocated by the Company as follows:

Purpose	Amount $
New product development, production and Commercialisation of new products includingDROVE and NeuroStrip	1,000,000
Software development for NeuroStrip	500,000
Regulatory Approvals	500,000
Distribution channel development	300,000
Working capital and reserve	431,000
TOTAL	2,731,000

Note : Eligible Shareholders should note that the estimated expenditures referred to above are subject to modification by the Company depending on the actual amount raised under the Rights Issue .

2.4 No rights trading

The Rights Issue is structured as a "non-renounceable" rights issue. Accordingly, there will be no trading of any rights to subscribe for the New Shares ( Rights ) on ASX and Rights may not be sold or transferred.

2.5 Underwriting

The Offer is underwritten to the extent of $1.07 million.

Two of the three largest shareholders of CBL (Nightingale Partners Pty Ltd and Phoenix Development Fund Limited) have underwritten a total of $1,000,000.

CEO Jeremy Steele and Non-executive Directors Roger Hawke, Prof Rob Heard and Damian Lismore (either personally or through their related entities) have collectively committed a total of $140,000 to the Offer. This amount consists of their full entitlements plus an underwritten amount of $77,032.

Any New Shares not taken up by Eligible Shareholders by the Closing Date less the New Shares taken up by the underwriters will form part of the shortfall ( Shortfall ).

The Directors reserve the right, subject to the Corporations Act and the Listing Rules, to place any Shortfall to Eligible Shareholders that apply for Additional New Shares (refer to Section 3.4) and any other investors within 3 months after the close of the Rights Issue (and at an issue price not less than the Issue Price).

2.6 Potential effect on control of the Company

Eligible Shareholders who take up their Entitlements in full will not have their proportionate interests in the Company diluted by the Rights Issue.

The following persons are "substantial" Shareholders (i.e. Shareholders who hold 5% or more of the Company's voting securities (i.e. the Shares)):

Name	Number of Shares held before Rights Issue	Percent of issued capital before Rights Issue
Peter Shann Ford	19,623,433	19.2 %
Nightingale Partners Pty Ltd	19,537,595	18.6%
Phoenix Development Fund Limited	8,019,581	7.8%

Based on the substantial holder notices given to the Company prior to the date of this Offer Booklet, and, other than Peter Shann Ford, Nightingale Partners Pty Ltd and Phoenix Development Fund Limited (together the Substantial Shareholders ), there are no Shareholders with a "relevant interest" (as that term is defined in section 608(1) of the Corporations Act) in 5% or more of the Shares.

The potential effect of the issue of New Shares under the Rights Issue on the control of the Company is as follows:

(a) If all Eligible Shareholders take up their Entitlement in full, then the Rights Issue will not have a significant effect on the control of the Company.
(b) If an Eligible Shareholder does not take up their Entitlement in full, then the proportionate interest of that Eligible Shareholder in the Company will be diluted.
(c) The proportionate interests of Shareholders with registered addresses outside of Australia or New Zealand (if any), will be diluted because such Shareholders are not eligible to participate in the Rights Issue.
(d) If the Substantial Shareholders take up their Entitlement in full, but no other Eligible Shareholder participates in the Rights Issue (and the Directors do not issue any of the Shortfall or any other new Shares), the voting power of the substantial shareholders will increase and the voting power of all other Shareholders will decrease as shown in the table below. In these circumstances, the underwriters will not be required to subscribe for any Shortfall:

Name	Shares held before Rights Issue	Percent of Shares before Rights Issue	Shares held after taking-up Entitlement	Percent of Shares after Rights Issue
Peter Shann Ford	19,623,423	21.69 %	32,705,705	24.43%
Nightingale Partners Pty Ltd	19,537,595	19.08%	32,562,658	23.71%

	Phoenix Development Fund Limited	8,019,581	7.8%	13,365,968	9.73%

(e) If the Substantial Shareholders takes up their Entitlement in full, and all other Eligible Shareholders subscribe for half (i.e. 50%) of their Entitlement (and the Directors do not issue any of the Shortfall (or any other new Shares)), the voting power of the Substantial Shareholders will increase and the voting power of all other Shareholders will decrease as shown below:

Name	Shares held before Rights Issue	Percent of Shares before Rights Issue	Shares held after taking-up Entitlement	Percent of Shares after Rights Issue
Peter Shann Ford	19,623,423	21.69%	32,705,705	21.47%
Nightingale Partners Pty Ltd	19,537,595	19.08%	32,562,658	21.38%
Phoenix Development Fund Limited	8,019,581	9.62%	13,365,968	8.77%

(f) If Eligible Shareholders do not participate in the Rights Issue and the Underwriters (which include Nightingale and Phoenix) take up all of the underwritten amount, (and the Directors do not issue any of the Shortfall (or any other new Shares)), the voting power of Nightingale and Phoenix will increase and the voting power of all other Shareholders will decrease as shown below:

Name	Shares held before Rights Issue	Percent of Shares before Rights Issue	Shares held after taking-up Entitlement	Percent of Shares after Rights Issue
Peter Shann Ford	19,623,423	21.69%	19,623,423	14.99%
Nightingale Partners Pty Ltd	19,537,595	15.83%	32,037,595	24.47%
Phoenix Development Fund Limited	8,019,581	9.62%	20,519,581	15.67%

(g) Given the discounted Issue Price, the relatively small number of large Shareholders and the fact that Eligible Shareholders (other than the Directors and other related parties of the Company and their associates) are able to apply for Additional New Shares, the Company does not expect the Rights Issue to have a material effect on the control of the Company.

2.7 Quotation of New Shares

The Company will make an application to ASX for the New Shares issued under the Rights Issue to be quoted on the financial market provided by ASX. If that application is not approved by ASX, the Company will not issue any New Shares and all application monies received will

be refunded (without interest) in full to each applicant.

The fact that ASX may quote the New Shares is not to be taken in any way as an indication of the merits of an investment in the Company or of the New Shares. Trading of the New Shares will, subject to ASX approval, occur on or about the date specified in the timetable in Section 1.5 (which is expected to be 30 November 2023).

2.8 Issue of New Shares

Subject to the New Shares being granted quotation on ASX, the New Shares will be issued in accordance with the timetable in Section 1.5.

It is expected that New Shares will be issued and that updated holding statements for the New Shares will be despatched on 29 November 2023.

2.9 Eligible Shareholders

The Rights Issue is being made to all Shareholders who are, as at 7pm (Sydney time) on the Record Date, registered (in accordance with the records of Automic, the Company's share registry ( Share Registry )) with a registered address in Australia or New Zealand.

This Offer Booklet and a personalised Entitlement and Acceptance Form will be sent to Eligible Shareholders only.

The Offer contained in this Offer Booklet to Eligible Shareholders with a registered address in New Zealand is being made in reliance on th e Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any New Shares.

Eligible Shareholders who are nominees, trustees or custodians are advised to seek independent advice as to how to proceed. The Offer is being made to all Eligible Shareholders. The Company is not required to determine whether or not any Eligible Shareholder is acting as a nominee or the identity or residence of any underlying beneficial owners of Shares.

2.10 Ineligible Shareholders

As permitted by Listing Rule 7.7.1 and section 9A of the Corporations Act, the Company has decided that it is unreasonable to extend the Rights Issue to any Shareholder with a registered address (as at the Record Date) that is outside of Australia or New Zealand ( Ineligible Shareholder ), having regard to:

(a) the number of Shareholders with a registered address outside of Australia or New Zealand;
(b) the number and value of the New Shares those Shareholders would be offered under the Rights Issue; and
(c) the cost to the Company of complying with applicable legal and regulatory requirements in any such foreign countries.

Accordingly, the Rights Issue is not being extended to, and does not qualify for distribution or sale by or to, and no New Shares will be issued to Shareholders having registered addresses outside Australia or New Zealand.

To the extent that there are any Ineligible Shareholders registered at the Record Date, the Company will send details of the Rights Issue to each Ineligible Shareholder and advise each Ineligible Shareholder that they will not be offered New Shares under the Rights Issue.

2.11 Overseas Shareholders

This Offer Booklet does not, and is not intended to, constitute an offer or an invitation in the United States, to any U.S. person, to any person acting for the account or benefit of a person in the United States, or in any other place or jurisdiction in which, or to any other person to whom, it would not be lawful to make such an offer or invitation.

The distribution of this Offer Booklet in jurisdictions outside of Australia or New Zealand may be restricted by law and persons who come into possession of this Offer booklet should seek advice on and observe any such restrictions. A failure to comply with any such restrictions may constitute a violation of applicable securities laws.

No action has been taken by the Company to register the New Shares or otherwise permit an offering of the New Shares in any jurisdiction other than Australia or New Zealand.

Eligible Shareholders who are resident in Australia or New Zealand who hold Shares on behalf of persons who are resident in jurisdictions outside of Australia or New Zealand are responsible for ensuring that taking up Entitlements under the Rights Issue does not breach any securities law or other applicable regulation in the relevant overseas jurisdiction.

The New Shares have not been and will not be registered under the US Securities Act of 1933 or the securities laws of any State or jurisdiction in the United States and may only be offered, sold or resold in, or to persons in, the United States in accordance with an available exemption from registration.

Any person in the United States or any person that is, or is acting for the account or benefit of, a U.S. person with a holding through a nominee entity may not participate in the Rights Issue and that nominee must not take up any Entitlement or send any materials relating to the Rights Issue to the United States or to any person that is, or is acting for the account or benefit of, a U.S. person.

The Company is not required to determine whether any Eligible Shareholder is acting as a nominee or the identity or residence of any beneficial owners of Shares.

It is the responsibility of each Shareholder to ensure compliance with any laws of a country relevant to their application.

In respect of nominees, trustees or custodians acting on behalf of overseas shareholders, the foreign restrictions under the offer will be applied at the registered address of the custodian.

2.12 Appointment of foreign holder nominee

The Company has appointed Sequoia Wealth Management Pty Ltd ACN 002 314 310 (AFSL 472387) ( Nominee ) as its foreign holder nominee for the purposes of section 615 of the Corporations Act. ASIC has approved the appointment of the Nominee.

Pursuant to the arrangement with the Nominee, the Nominee will subscribe for Shares which Ineligible Shareholders would otherwise be entitled to if they were eligible to participate in the Offer ( Nominee Shares ). The Nominee will then sell the Nominee Shares and remit the net proceeds from the sale of the Nominee Shares (if any) to the Ineligible Shareholders in proportion to their respective shareholdings in accordance with this Section 2.12.

The Nominee will have the absolute and sole discretion to determine the timing and price at which the Nominee Shares are sold and the manner of any such sale. Any interest earned on the proceeds of the sale of the Nominee Shares will firstly be applied against expenses of the sale, including brokerage, and any balance will form part of the proceeds payable to the Ineligible Shareholders (if any).

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The Company will forward the proceeds of the sale of the Nominee Shares (if any) as soon as reasonably practicable to the Ineligible Shareholders in proportion to their respective shareholdings, after deducting the subscription price, brokerage commission and other expenses. If the net proceeds of sale are less than the reasonable costs that would be incurred by the Company for distributing those proceeds then such proceeds may be retained by the Company.

Despite the Nominee being required to sell the Nominee Shares, Ineligible Shareholders may nevertheless receive no proceeds if the subscription price and costs of the sale are greater than the sale proceeds.

The Company will pay the Nominee a fee of $5,000 plus GST for its services as the foreign nominee holder.

Neither the Company nor the Nominee takes any responsibility for the outcome of the sale of the Nominee Shares.

2.13 Rights and liabilities attaching to New Shares

The New Shares will, from the date of their issue, rank equally with existing Shares.

Full details of the rights and liabilities attaching to the New Shares (and the Shares) are set out in the Company's constitution, a copy of which is available for inspection at the Company's registered office during normal business hours or on request to Automic.

2.14 Costs of the Rights Issue

It is expected that the costs of preparing for and conducting the Rights Issue will be approximately $11,000 (excluding GST).

2.15 Privacy Act

If you complete an application for New Shares, you will be providing personal information to the Company (either directly or via the Share Registry). The Company collects, holds and uses that information to assess your application, service your needs as a Shareholder, facilitate payments and corporate communications to you as a Shareholder and carry out general administration.

The personal information provided to the Company may also be used from time to time and disclosed to persons, including persons inspecting the Share register, bidders for your Shares in the context of a proposed takeover or scheme of arrangement, regulatory bodies (including the Australian Taxation Office), authorised securities brokers, print service providers, mail houses and the Share Registry.

You can access, correct and update the personal information that the Company holds about you as a Shareholder at any time. Please contact the Share Registry during business hours if you wish to access, correct and/or update your personal information by calling the relevant contact number included on your personalised Entitlement and Acceptance Form (which form accompanies this Offer Booklet).

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for New Shares, the Company may not be able to accept or process your application.

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3. Action required by Shareholders

3.1 Your choices

Your personalised Entitlement and Acceptance Form details the number of New Shares to which you are entitled to subscribe for under the Rights Issue. You may:

(a) take up all of your Entitlement (refer to section 3.2);
(b) take up part of your Entitlement (refer to section 3.3);
(c) take up all of your Entitlement and apply for Additional New Shares (refer to section 3.4); or
(d) not take up any of your Entitlement (refer to section 3.5).

You cannot sell or transfer any of your Entitlement. That part of your Entitlement not taken up will form part of the Shortfall . The Company reserves the right to reject any Entitlement and Acceptance Form that is not correctly completed or that is received after the Closing Date.

3.2 Take up all of your Entitlement

If you wish to take up all of your Entitlement, please pay your Application Monies via BPAY® or Electronic Funds Transfer by following the instructions set out on the personalised Entitlement and Acceptance Form, so that they are received by the Share Registry by no later than 5pm (Sydney time) on the Closing Date.

3.3 Take up part of your Entitlement

If you decide to take up part of your Entitlement, and allow the balance to lapse, please pay your Application Monies via BPAY® or Electronic Funds Transfer by following the instructions set out on the personalised Entitlement and Acceptance Form, such that they are received by the Share Registry by no later than 5pm (Sydney time) on the Closing Date. The Company will treat you as applying for as many New Shares as your payment will pay for in full. Please make sure to use the specific Biller Code and unique Customer Reference Number on your personalised Entitlement and Acceptance Form. If you receive more than one personalised Entitlement and Acceptance Form, please only use the Customer Reference Number specific to the Entitlement on that Entitlement and Acceptance Form.

3.4 Take up all of your Entitlement and apply for Additional New Shares

If you apply to take up all your Entitlement, you may also apply for additional New Securities under the Shortfall Offer. Amounts received by the Company in excess of the issue price of A$0.04 multiplied by your Entitlement may be treated as an Application to apply for as many additional Shortfall Shares as your Application Monies will pay for in full. The Company will determine the allocation of any Additional New Shares under the Shortfall offer subject to the Corporations Act and Listing Rules.

Accordingly, there is no guarantee that Eligible Shareholders will receive all (or any) of the Additional New Shares that they apply for.

3.5 Not take up any of your Entitlement

If you do not wish to accept any part of your Entitlement, you do not need to take any further action.

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3.6 Shortfall

The Directors reserve the right, subject to the Corporations Act and the Listing Rules, to allocate any Shortfall to Eligible Shareholders (other than any Eligible Shareholders who are also Directors and/or related parties of the Company) that apply for Additional New Shares or otherwise, to place any remaining Shortfall at their discretion within 3 months after the close of the Rights Issue (and at a price not less than the Issue Price).

3.7 Acceptance of your Entitlement

The method of acceptance of your Entitlement will depend on your method of payment being by Electronic Funds Transfer (EFT) or BPAY®.

By completing and returning your personalised Entitlement and Acceptance Form, you will be deemed to have represented that you are an Eligible Shareholder.

3.8 Payment for New Shares

The Issue Price for each New Share accepted under your Entitlement is payable on application.

Payment by Electronic Funds Transfer (EFT) or by BPAY® will be accepted.

All payments must be in Australian currency. Other currency will not be accepted. Cash payments will not be accepted. Other currency or cash payments will be returned to the applicant and the acceptance will be deemed to be invalid. The amount payable on application will be deemed not to have been received until the Company's receipt of clear funds. Receipts for payment will not be issued.

Application monies will be held on trust for applicants until the issue of the New Shares.

Any application monies received for more than your final allocation of New Shares will be refunded (except when the amount is less than $2.00, in which case it will be retained by the Company) before the end of December 2023.

No interest will be paid on any application monies received or refunded. Interest earned on application monies will be for the benefit of the Company and will be retained by it whether or not issue under the Rights Issue ultimately takes place.

Payment by Electronic Funds Transfer (EFT)

EFT payments should be made in accordance with the instructions on the Entitlement and Acceptance Form using your Unique Reference Number shown on the form. The Unique Reference Number is used to identify your holding. If you have multiple holdings you will receive multiple Unique Reference Numbers. You must use the Unique Reference Number shown on each Entitlement and Acceptance Form to pay for each holding separately. If you pay by EFT and do not pay your full Entitlement, your remaining Entitlement will lapse. Your completed EFT acceptance, once paid, cannot be withdrawn. We do not accept any responsibility for incorrectly completed EFT payments. Please note that should you choose to pay by EFT:

you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and
if you do not pay your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of New Shares which is covered in full by your Application Money.
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It is your responsibility to ensure that funds submitted through EFT are received by the Closing Date. You should be aware that your own financial institution may implement earlier cut-off times with regard to electronic payment. You should take this into consideration when making payment.

Payment by BPAY®

For payment by BPAY®, please follow the instructions on the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions.

The Customer Reference Number is used to identify your holding. If you have multiple holdings you will receive multiple Customer Reference Numbers. You must use the Customer Reference Number shown on each Entitlement and Acceptance Form to pay for each holding separately. If you pay by BPAY and do not pay your full Entitlement, your remaining Entitlement will lapse.

Your completed BPAY acceptance, once paid, cannot be withdrawn. We do not accept any responsibility for incorrectly completed BPAY payments. Please note that should you choose to pay by BPAY:

(a) you do not also need to submit a completed copy of your personalised Entitlement and Acceptance Form but are taken to have made the declarations on that form; and
(b) you are deemed to have applied for such whole number of New Shares which is covered in full by your application monies, whether that number is less than, equal to, or more than your Entitlement.

It is your responsibility to ensure that your BPAY® payment is received by the Share Registry by no later than 5pm (Sydney time) on the Closing Date. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment and you should therefore take this timing requirement into consideration when making payment.

3.9 Entitlement Offer

Payment by an Eligible Shareholder creates a legally binding contract between the Applicant and the Company for the number of New Securities accepted by the Company. The Application Form does not need to be signed to be a binding acceptance of New Securities.

3.10 Representations by Acceptance

By paying your application monies by BPAY® or EFT, you will be deemed to have represented to the Company that you are an Eligible Shareholder and that you:

(a) acknowledge that you have read and understand this Offer Booklet and your Entitlement and Acceptance Form in its entirety;
(b) agree to be bound by the terms of the Rights Issue, the provisions of this Offer Booklet and the Company's constitution;
(c) authorise the Company to register you as the holder of New Shares (and Additional New Shares, if applicable to you) issued to you;
(d) declare that all details and statements in the Entitlement and Acceptance Form are complete and accurate;
(e) declare that you are at least 18 years of age and have full legal capacity and power to
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perform all your rights and obligations under the Entitlement and Acceptance Form;

(f) acknowledge that once the Company receives your Entitlement and Acceptance Form or any payment of application monies, you may not withdraw your application or application monies provided except as allowed by law;
(g) agree to apply for and be issued with up to the number of New Shares (and Additional New Shares, if applicable to you) specified on your Entitlement and Acceptance Form, or for which you have submitted payment of any application monies;
(h) authorise the Company, the Share Registry and their respective officers or agents to do anything on your behalf necessary for New Shares (and Additional New Shares, if applicable) to be issued to you, including to act on instructions of the Share Registry;
(i) declare that you were the registered holder at the Record Date of the Shares indicated on your personalised Entitlement and Acceptance Form as being held by you on the Record Date;
(j) acknowledge that the information contained in this Offer Booklet and your Entitlement and Acceptance Form is not investment advice nor a recommendation that New Shares (and Additional New Shares, if applicable to you) are suitable for you, given your investment objectives, financial situation or particular needs;
(k) acknowledge that an investment in the Company (including any investment made pursuant to the Rights Issue) are speculative and involve risks;
(l) acknowledge that neither the Company, its related bodies corporate and affiliates and their respective directors, officers, partners, employees, representatives, agents, consultants or advisers, guarantees the performance of the Company, nor do they guarantee the repayment of capital;
(m) agree to provide (and direct your nominee or custodian to provide) any requested substantiation of your eligibility to participate in the Rights Issue and of your holding of Shares on the Record Date;
(n) authorise the Company to correct any errors in your completed personalised Entitlement and Acceptance Form or other form provided by you;
(o) represent and warrant that the law of any place does not prohibit you from being given this Offer Booklet and the accompanying Entitlement and Acceptance Form, nor does it prohibit you from making an application for New Shares (and Additional New Shares, if applicable to you) and that you are otherwise eligible to participate in the Rights Issue as an Eligible Shareholder and you represent and warrant to the Company that there has been no breach of any such laws or regulatory requirements; and
(p) you understand and acknowledge that neither the Rights Issue nor the New Shares (or any Additional New Shares, if applicable to you) have been, or will be, registered under the U.S. Securities Act or any U.S. State or other securities laws in any jurisdiction, and may not be offered, sold or otherwise transferred except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws.
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4. General information regarding the Rights Issue

4.1 Risks

An investment in New Shares (and, if applicable to you, Additional New Shares) should be regarded as speculative and involves many risks.

Eligible Shareholders intending to participate in the Rights Issue should refer to the announcements made by the Company to ASX. This information is available on ASX's website: www.asx.com.au (ASX code: CBL). Shareholders should consider the investment in the context of their individual risk profile for speculative investments, investment objectives and individual financial circumstances.

Each Shareholder should consult their own stockbroker, solicitor, accountant or other professional adviser before deciding whether or not to participate in the Rights Issue.

Neither the New Shares (nor the Additional New Shares, if applicable) carry a guarantee with respect to the payment of dividends, the return of any capital or the market value or liquidity of those Shares.

Eligible Shareholders should be aware that there are risks associated with investment in shares of companies listed on a stock exchange. The value of securities can be expected to fluctuate depending on various factors including general condition of the Australian economy, general worldwide economic and political conditions, changes in government policies, taxation changes and legislative or regulatory changes, investor sentiment, movements in the price of shares, movements in interest rates and stock markets, industrial disruption, environmental impacts, international competition, and other factors which may affect the Company's financial performance and position.

Many of the factors mentioned in the preceding paragraph are beyond the control of the Company and the Company cannot therefore, to any degree of certainty, predict how they will impact on the Company. Accordingly, assuming that the New Shares (and if applicable, the Additional New Shares) are quoted on ASX, they may trade on ASX at higher or lower prices than the Issue Price.

The information in this Offer Booklet does not constitute a recommendation to subscribe for New Shares (or Additional New Shares) and this Offer Booklet does not purport to contain all the information that you may require to evaluate a possible application for New Shares (and if applicable, the Additional New Shares). You should make your assessment of what information is relevant to your decision to participate in the Rights Issue.

4.2 Tax consideration for investors

You should be aware that there may be taxation implications associated with participating in the Rights Issue. The Directors consider that it is not appropriate to give advice regarding the taxation consequences of subscribing for New Shares (and if applicable, the Additional New Shares) or the subsequent disposal of any such Shares. The Company, its advisers and its officers do not accept any responsibility or liability for any taxation consequences to Shareholders. The Directors recommend that all Shareholders consult their own tax advisers in connection with subscribing for, or subsequent disposal of, any securities in the Company.

4.3 Brokerage

No brokerage is payable by Eligible Shareholders who accept their Entitlement. No stamp duty is payable for subscribing for an Entitlement.

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4.4 Governing law

This Offer Booklet and the contracts which arise on the acceptance of applications are governed by the laws applicable in New South Wales and each applicant submits to the nonexclusive jurisdiction of the courts of New South Wales.

4.5 Enquiries

If you have any questions regarding the Rights Issue, please contact the Company by email [email protected] or your professional adviser.

4.6 Authorisation

For and on behalf of Control Bionics Limited Roger Hawke-Chairman 7 November 2023

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