DIGITALX LIMITED — M&A Activity 2021

Sep 15, 2021

==> picture [200 x 68] intentionally omitted <==

Acquisition of Sell My Shares: A strategic fit positioned for growth DigitalX acquires profitable trade execution business Sell My Shares to expand its Drawbridge product and pursue growth opportunities.

Acquisition Summary

DigitalX to acquire Sell My Shares , a profitable trade execution business, for cash 1. consideration of $1,640,000, plus deferred consideration of up to $250,000 subject to certain performance milestones.

The synergistic acquisition of Sell My Shares accelerates Drawbridge’s existing 2. product and commercial offering by opening the way for a compliant share trading platform for employees of it’s growing base of publicly listed company customers.

Sell My Shares is a market leader in online share execution services such as 3. one-off share sales, deceased estates holdings, and finding lost shares, having helped over 42,000 Australians with over $300M worth of trades since 2013.

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

==> picture [200 x 68] intentionally omitted <==

Business Overview

Growing the blockchain economy

Digital Asset Management Management of digital asset investment funds for wholesale and institutional investors. ● DigitalX Bitcoin Fund ● DigitalX Digital Asset Fund	Digital Asset Management Management of digital asset investment funds for wholesale and institutional investors. ● DigitalX Bitcoin Fund ● DigitalX Digital Asset Fund	Digital Products Financial markets applications leveraging the benefits of distributed ledger technologies. ● Drawbridge ● Sell My Shares	Digital Products Financial markets applications leveraging the benefits of distributed ledger technologies. ● Drawbridge ● Sell My Shares	Digital Products Financial markets applications leveraging the benefits of distributed ledger technologies. ● Drawbridge ● Sell My Shares	Digital Products Financial markets applications leveraging the benefits of distributed ledger technologies. ● Drawbridge ● Sell My Shares		Blockchain Ventures Leading research and development of digital finance initiatives and Company assets. ● Digital Asset Treasury Management ● Special projects - Digital Finance CRC partner, xbullion	Blockchain Ventures Leading research and development of digital finance initiatives and Company assets. ● Digital Asset Treasury Management ● Special projects - Digital Finance CRC partner, xbullion
$30M funds under management		Growing Drawbridge customer
12 month returns of 292% and		base					$50M treasury balance sheet 1
436% respectively 1		$300M of Sell My Shares trades since 2013.					Partner to CRC with $60M funding over 10 years.

1 Refer to ASX Announcement 7 September 2021

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

DigitalX Products

Our objective is to develop and scale the next generation of financial markets products and services

==> picture [230 x 47] intentionally omitted <==

==> picture [220 x 73] intentionally omitted <==

A vision to become the digital governance standard for the world’s 630,000 publicly listed companies.

A leader in online share execution services with a mission to reduce the hassle for Australians dealing with shares.

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

A strategic fit positioned for growth

		Listed Companies		Employees & Shareholders
Accelerate	●	Improved sign-ups through lower	●	Faster and easier way to sell
Drawbridge		ongoing SaaS fees via shift to		employee shares and meet
customer and		brokerage based revenue model.		compliance obligations.
revenue growth	●	Strengthened customer value through	●	Improved share sales experience for
		matching of trade data with		international employees of ASX listed
		approvals.		companies.
Development of	●	Additional Drawbridge compliance	●	Bring future ASX DLT benefits to
expanded digital		functionality, such as facilitation of		consumers, such as tracking and
finance products		unmarketable parcel share sales, and		finding lost shareholdings.
and services		sales of un-escrowed share based
		payments.

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

==> picture [220 x 74] intentionally omitted <==

Overview

Sell shares online, fast. Australia’s #1 in one-off share sales. Since 2013 Sell My Shares has helped over 42,000 Australians sell over $300M worth of shares. www.sellmyshares.com.au

==> picture [354 x 263] intentionally omitted <==

A leading trade execution provider

==> picture [220 x 73] intentionally omitted <==

Sell My Shares is a trusted leader in providing customers with a range of trade execution services , including one-off share sales that avoid the time and expense needed to establish a traditional stockbroking account.

==> picture [122 x 51] intentionally omitted <==

==> picture [193 x 87] intentionally omitted <==

==> picture [523 x 146] intentionally omitted <==

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

Avenues to growth of existing business

==> picture [220 x 73] intentionally omitted <==

Sell My Shares provides an existing customer channel to grow adjacent services such as finding lost shares and liquidating assets from deceased estates.

==> picture [152 x 31] intentionally omitted <==

These and other highly process driven areas of securities trading are expected to benefit from the improved capabilities of the ASX Distributed Ledger Technologies DLT , providing a strong base from which to grow new and existing product offerings.

==> picture [496 x 159] intentionally omitted <==

----- Start of picture text -----

expected to benefit from the improved
, providing a strong base from which to grow new and
Employee
share trades
Find lost
shares
International
Deceased
share sales
IPO estate
shares holdings
----- End of picture text -----

One-off share trade execution

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

==> picture [416 x 405] intentionally omitted <==

==> picture [286 x 58] intentionally omitted <==

Overview

Eliminating governance risks for listed companies by identifying insider trading issues before they become a problem. www.opendrawbridge.io

Vision, mission & market opportunity

==> picture [151 x 31] intentionally omitted <==

Vision

Mission

To be the digital governance standard for the world’s 630,000 publicly listed

companies.

Drawbridge solves the lack of trust in corporate governance by digitising processes for good governance.

We do this by using the power of distributed ledger technologies to provide an open and transparent source of truth that supports listed company boards to lower corporate governance risks.

Regtech and digital compliance is a rapidly growing opportunity

Drawbridge plays in a large and growing market demonstrated by three key trends:

1. The global RegTech market is expected to grow from USD 6.3 billion in 2020 to USD 16.0 billion by 2025, a CAGR of 20.3% *

2. Australia is the world's third largest RegTech market and an excellent jurisdiction to grow from *

3. ASX will be the first securities exchange to adopt DLT globally giving first mover advantages *

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

Market segments

==> picture [151 x 31] intentionally omitted <==

==> picture [675 x 314] intentionally omitted <==

----- Start of picture text -----

Target Target Serviceable Total Available Market
Customers Market Available Market
630,000
Global listed companies
2,300
ASX listed companies
ASX Companies
4,000 with >30
governance employees
professionals
Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021
----- End of picture text -----

Our current solution

==> picture [151 x 31] intentionally omitted <==

1.

Compliance managers Set restriction rules and view trading history

==> picture [209 x 145] intentionally omitted <==

2. 3. Directors and staff Drawbridge View restrictions and Automates decisions and get trade approval identifies issues for review Approval granted Or Flagged for review

Digital audit trail of trading approvals stored using DAML based DLT database for integration and reconciliation with companies securities trading data.

A roadmap for in-built trade compliance

==> picture [151 x 31] intentionally omitted <==

==> picture [41 x 39] intentionally omitted <==

==> picture [377 x 210] intentionally omitted <==

----- Start of picture text -----

Monitor & Approve Trade Execution
Company Share Employee Share
Trading Policies Trading Accounts
Holding visibility and Employee trading facilitated
execution of approved via Sell My Shares backend
trades to ensure system
compliance
----- End of picture text -----

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

Accelerating our commercial strategy

==> picture [145 x 259] intentionally omitted <==

Sell My Shares enhances Drawbridge’s product strategy and business model by opening the way for a compliant share trading platform for employees of it’s growing base of publicly listed company customers. The DigitalX team have identified this as a high priority commercial offering through extensive market research and development of relationships with listed company customers since launching Drawbridge in late 2020.

==> picture [152 x 31] intentionally omitted <==

==> picture [151 x 31] intentionally omitted <==

==> picture [139 x 252] intentionally omitted <==

==> picture [183 x 61] intentionally omitted <==

New opportunities from industry changes

==> picture [151 x 31] intentionally omitted <==

Together, Drawbridge and Sell My Shares are positioned to benefit from new opportunities arising by way of the changing technology landscape in Australian financial markets.

DLT App Store

CHESS Replacement

==> picture [680 x 242] intentionally omitted <==

----- Start of picture text -----

ASX listed companies, Brokers, share
DLT App Users government agencies & registries,
enterprise organisations. custodians etc.
Innovative CHESS 
capital
App Layer markets Clearing & Settlements
applications System
Shared industry ASX Distributed Ledger Platform
infrastructure layer
----- End of picture text -----

==> picture [200 x 68] intentionally omitted <==

Transaction Summary

Transaction Overview

• Strategic Rationale 1. To accelerate the commercialisation of Drawbridge as a platform for digital governance through integration with Sell My Shares to provide compliant employee share trading services to listed companies.

• 1. To grow the existing profitability of the Sell My Shares business by capturing value from emerging opportunities in digital finance and the ASX DLT ecosystem.

• Business The business offers customers a range of trade execution services, including one-off share sales without the need for a broking account, finding lost share holdings, and handling shares owned by deceased estates.

• Consideration Total maximum cash consideration of up to $1,890,000 payable as follows: ● $1,640,000 paid at settlement;

• ● Up to $250,000 to be held in escrow for 6 months subject to satisfaction of revenue based performance milestones.

• The transaction will not be dilutive to existing shareholders.

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

Transaction Overview

Structure Acquisition of business through wholly owned subsidiary ACN 653 391 943 Pty Ltd (to be renamed Sell My Shares Pty Ltd following acquisition). ● Financial Impact Revenue for the financial year ending 30 June 2021 was $1.53m (unaudited) ● Acquisition will be earnings accretive from day 1 ● Consistent year on year revenue growth over last 5 years ● Historical gross profit margin of 64.6% (unaudited) ● Initial cost savings identified of ~$0.11m Staff & Team The Vendor will see out a twelve month hand-over period, with the remainder of Sell My Shares staff to transition over to DigitalX permanently. ● Timing Announcement of the acquisition - Thursday, 16 September 2021 ● Satisfaction of conditions precedent - Thursday, 30 September 2021 ● Settlement of transaction - Thursday, 30 September 2021 ● Integration commences - Friday, 1 October 2021

Drawbridge & Sell My Shares: A strategic fit positioned for growth | Sept 2021

==> picture [199 x 67] intentionally omitted <==

Growing the blockchain economy investors@digitalx.com