DOTZ NANO LIMITED — Capital/Financing Update 2018

May 15, 2018

16 May 2018

==> picture [78 x 41] intentionally omitted <==

ASX ANNOUNCEMENT

DOTZ ACHIEVES IPO PERFORMANCE MILESTONE

Dotz Nano Limited (ASX: DTZ) (“Dotz Nano” or the “Company ”), is pleased to advise that it has achieved one of its key performance milestones (Milestone A). Milestone A specified the production and distribution of an aggregate of 20 kilograms of GQDs through formal off-take agreements or commercial samples with reputable third parties.

Milestone A was required to be achieved within an 18-month period from the date of issue of the Performance Shares on ~15 November 2016.

66,000,000 Consideration Shares and 66,000,000 Performances Shares were issued to the shareholders of Datz Nano Limited (Israel) as part of the merger of the Company and Dotz Nano Limited (Israel) before the Company’s IPO .

The Company advises that Milestone A has been achieved and that 22,000,000 Performance Shares have been converted into 22,000,000 ordinary fully paid shares (Shares).

The attached Appendix 3B includes full details of the Performance Rights converted to Ordinary Shares

A further 44,000,000 Performance Shares will convert upon satisfaction of any one of the following milestones:

• Milestone B - 22,000,000 Performance shares shall convert upon Dotz achieving the production and distribution of an aggregate of 50 kilograms of GQDs in any 12-month period through formal off-take agreements with a reputable third party within a period of 30 months from the issue date; and

• Milestone C - 22,000,000 Performance shares shall convert upon Dotz achieving the production and distribution of an aggregate of 100 kilograms of GQDs in any 12-month period through formal off-take agreements with a reputable third party within a period of 48 months from the issue date.

---

FOR FURTHER INFORMATION:

Company Secretary

Ian Pamensky ian@cfo2grow.com.au +61 (0) 414 864 746

About Dotz Nano

Dotz Nano Limited (ASX: DTZ) is a technology company focusing on the development, manufacture and commercialisation of GQD/CDs. Its vision is to be the premier producer of GQD/CDs by producing and supplying high quality GQD/CDs for use in various applications including medical imaging, sensing, consumer electronics, energy storage, solar cells and computer storage.

To learn more about Dotz Nano please view the website and our corporate video via the following link: www.dotznano.com

Dotz Nano Limited ACN 125 264 575 T: +61 414 864 746 A: L14, 330 Collins Street, Melbourne, VIC, 3000

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

Dotz Nano Limited

ABN

71 125 264 575

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 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	1. Fully paid ordinary shares 2. Fully paid ordinary shares
	1. 2,044,034 2. 19,955,966
	1. Fully paid ordinary shares 2. Fully paid ordinary shares escrowed 24 months from quotation

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 1

Appendix 3B New issue announcement

4 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 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 6b The date the security holder resolution under rule 7.1A was passed	1. Yes - the fully paid ordinary shares will rank equally with existing quoted fully paid ordinary shares 2. Yes - the fully paid ordinary shares will rank equally with existing quoted fully paid ordinary shares
	1. $nil 2. $nil
	1. Achievement one of its key performance milestones (Milestone A). Milestone A specified the production and distribution of an aggregate of 20 kilograms of GQDs through formal off-take agreements or commercial samples with reputable third parties within an 18-month period from the date of issue of the Performance Shares on ~15 November 2016. 2. Achievement one of its key performance milestones (Milestone A). Milestone A specified the production and distribution of an aggregate of 20 kilograms of GQDs through formal off-take agreements or commercial samples with reputable third parties within an 18-month period from the date of issue of the Performance Shares on ~15 November 2016.
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 2

04/03/2013

Appendix 3B New issue announcement

6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 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 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 issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 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.	1. 2,044,034 Ordinary Shares 2. 19,955,966 Fully paid ordinary shares escrowed 24 months from quotation
	Nil
	Nil
	Nil
	N/A
	N/A
	7.1 15,866,279 7.1A 14,409,591
	15 May 2018

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 3

Appendix 3B New issue announcement

Number +Class 8 Number and +class of all 90,938,183 Fully paid ordinary +securities quoted on ASX shares ( including the +securities in section 2 if applicable)

• See chapter 19 for defined terms.

Appendix 3B Page 4

04/03/2013

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)	Number	+Class
	80,905,838 39,911,932 4,088,068 4,500,000 1,000,000 5,000,000 10,000,000 6,000,000 1,000,000 1,000, 000 212,500 212,500 1,000,000	Fully paid ordinary shares escrowed 24 months from quotation Performance shares escrowed 24 months from quotation Performance shares Options expiring 31/10/19, exercise price $0.40 each, escrowed 24 months from quotation Options expiring 31/10/19, exercise price $0.30 each, escrowed 24 months from quotation Options expiring 14/6/20 2020, exercise price $0.20 each, escrowed 24 months from quotation Options expiring 8/8/19, exercise price $0.20 Options expiring 5/2/20, exercise price $0.30 Options expiring 1/11/20, exercise price $Nil Options expiring 20/04/20, exercise price $Nil Options expiring 20/04/20, exercise price $0.105. Options expiring 20/04/20, exercise price $0.105. Vesting after 1 February 2019 Options expiring 20/04/20, exercise price $0.20.

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 5

Appendix 3B New issue announcement

10 Dividend policy (in the case of a N/A trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

art	2 - Pro rata issue
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

• See chapter 19 for defined terms.

Appendix 3B Page 6

04/03/2013

Appendix 3B New issue announcement

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?

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 7

Appendix 3B New issue announcement

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

• 33 +Issue date

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

• See chapter 19 for defined terms.

Appendix 3B Page 8

04/03/2013

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

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)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 9

Appendix 3B New issue announcement

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.

Sign here: ............................................................ Date: 16 May 2018 (Company secretary)

Print name: Ian Pamensky ........................................................ == == == == ==

• See chapter 19 for defined terms.

Appendix 3B Page 10

04/03/2013

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

==> picture [404 x 400] intentionally omitted <==

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

Insert number of fully paid [+] ordinary 109,984,802
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 12,500,000 approved at shareholder
securities issued in that 12 month meeting held on 5/10/2017
period with shareholder approval
21,611,111 approved at shareholder
meeting held on 16/01/2018
• 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” 144,095,913
----- End of picture text -----

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 11

Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

• “B” 0.15 [Note: this value cannot be changed]

• Multiply “A” by 0.15 21,614,387 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of[+] equity securities issued 363,108 – Placement – 10/05/2018 or agreed to be issued in that 12 month 5,385,000 – Issue – 10/05/2018 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” 5,748,108

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

placement capacity under rule 7.1
“A” x 0.15	21,614,387
Note: number must be same as shown in
Step 2
Subtract “C”	5,748,108
Note: number must be same as shown in
Step 3
Total [“A” x 0.15] – “C”	15,866,279
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 12

04/03/2013

Appendix 3B New issue announcement

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” 144,095,913 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 14,409,591

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.

04/03/2013

Appendix 3B Page 13

Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	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	14,409,591
Subtract “E” Note: number must be same as shown in Step 3	-
Total [“A” x 0.10] – “E”	14,409,591 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 14

04/03/2013