DATADOT TECHNOLOGY LIMITED — Capital/Financing Update 2010

Oct 13, 2010

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DataDot Technology Limited ABN 54 091 908 726

Securities Exchange Announcement

14 October 2010

Acquisition of CSIRO Interest in DataTraceDNA

The Directors of DataDot Technology Limited (ASX:DDT) announce that a non binding Term Sheet has been executed with Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) to purchase CSIRO’s entire interest in DataTraceDNA Pty Limited (“DataTrace”).

Under the terms agreed:

• DDT will acquire CSIRO’s interest in the 50% of DataTrace shares not already owned by DDT, so making DataTrace a wholly-owned subsidiary of DDT. The agreed value of the purchase of the shares, based on an independent valuation, is $1 million.

Consideration will be given in the form of ordinary shares in the Company valued at $0.041 per share, which is based on the volume weighted average share price of the Company’s shares over the six months to 31 August 2010. This equates to 24,390,244 ordinary shares.

• CSIRO will assign the DataTrace Intellectual Property to DataTrace providing DataTrace with full ownership and control. DataTrace may now access additional potential markets in currency, passports, national identification documents or instruments and national security which have previously been inaccessible under the CSIRO-DataTrace licensing arrangements. This further component of the transaction has the agreed value of $395,015.

Consideration will be on the same valuation basis and given in the form of an additional 9,634,523 ordinary shares in the Company.

The transaction is subject to shareholder approval at DDT’s Annual General Meeting on 26[th] November and to execution of legal documentation. DDT will issue to CSIRO a total of 9% of DDT’s issued share capital on a fully diluted basis (post this transaction). This values the combined transaction at $1,395,015. Completion of the transaction is anticipated by mid-December 2010.

The DDT shares acquired by CSIRO will be subject to a voluntary escrow for a period of 6 months.

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A table summarising the transaction is presented below:

Purchase description	Number of Shares	Transaction Price ($/share)	Valuation (A$)	Relative Capitalisation (% of total)
Shares in DataTrace	24,390,244	0.041	1,000,000	6.5
Assignment of Intellectual Property	9,634,523	0.041	395,015	2.5
Total	34,024,767	0.041	1,395,015	9

Mr Ben Bootle, CEO of DDT, stated that the acquisition of the DataTrace Technology would add significantly to the value of DataTrace’s intellectual property assets.

“DataTrace is a strategically important asset for DDT and recent developments and enhancements of DataTrace Technology make it a valuable asset for the authentication and anti-counterfeit market globally.” Mr Bootle said.

Mr Bootle also said “management continues to build the DataTrace sales pipeline and future sales prospects, although not guaranteed, look very encouraging. Recent announcements regarding DataTrace prospects include:

1. July 2010 – Execution of a five-year pharmaceutical brand protection contract with a world leading pharmaceutical company (which cannot be named due to confidentiality obligations) to authenticate one of its successful drugs;

2. May 2010 – Filing of a new patent-pending system for product authentication;

3. March 2010 – Commercialisation of the Verifi TT technology (which utilises DataTrace) in a textile authentication project for Elders New Zealand and Primary Wool Cooperative was commenced; and

4. January 2010 – joint development of the patent-pending AuthentiCable[TM] product for the protection of copper, aluminium, steel and other cable was signed.”

Mr Bruce Rathie, Chairman of DDT, said “The transaction stemmed from DDT’s fiveyear strategic planning process and the Board’s conclusion that the full ownership of the DataTrace Technology is strategically important. Given DDT’s push for a greater share of the international brand and product authentication market, the price being attractive and the timing right due to future sales potential, the Board thought it in the interests of all shareholders to move now to secure full ownership of this asset.”

Ms Ellen Gorissen of CSIRO said “We are pleased that CSIRO technology is being transferred to an Australian company and look forward to its continued successful commercialisation.”

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Contact Information:

DataDot Technology Limited Ben Bootle, CEO Phone: +61 (2) 8977 4900 e-mail: info@datadotdna.com web site: www.datadotdna.com

CSIRO

Ms Ellen Gorissen, Commercialisation Manager, Licensing and Investment Management Phone: +61 (2) 9490 8185 e-mail: ellen.gorissen@csiro.au