DXN LIMITED — Capital/Financing Update 2019

Dec 9, 2019

UnRule 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

Name of entity

DXN Limited

ABN

46 620 888 548

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

(a) Performance Rights (b) Unquoted Options (c) Unquoted Options (d) Unquoted Options (e) Unquoted Options (f) Unquoted Options (g) Unquoted Options

• 2 Number of[+] securities issued or to be issued (if known) or maximum number which may be issued

(a) 7,500,000 Performance Rights (b) 3,750,000 Unquoted Options (c) 5,000,000 Unquoted Options (d) 7,500,000 Unquoted Options (e) 750,000 Unquoted Options (f) 1,000,000 Unquoted Options (g) 1,500,000 Unquoted Options

• 3 Principal terms of the[+] securities (eg, 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)

• 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:

(a) 7,500,000 Performance Rights, subject to vesting conditions, expiring on various dates from 23 December 2020 to 14 July 2022 (b) Vest on achieving a share price that is at least $0.15 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before 19 August 2020 (c) Vest on achieving a share price that is at least $0.25 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before 19 August 2021 (d) Vest on achieving a share price that is at least $0.35 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before 19 August 2022 (e) Vest on achieving a share price that is at least $0.15 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before 28 October 2020 (f) Vest on achieving a share price that is at least $0.25 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before October 2021 (g) Vest on achieving a share price that is at least $0.35 for 10 consecutive trading days on ASX, calculated on a daily VWAP basis and are exercisable at $0.10 per option on or before 28 October 2022

  - (a) No - Shares issued on vesting of Performance Rights will rank equally with the Company’s Fully Paid Ordinary Shares.

  - (b) to (g) No – Shares issued on exercising of Unquoted Options will rank equally with the Company’s Fully Paid Ordinary Shares

• 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

• (a) to (g) Nil consideration

• See chapter 19 for defined terms.

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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 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.	(a) Performance Rights issued to management and employees as incentives pursuant to the Company’s Employee Incentive Plan, approved by shareholders on 29 November 2018. (b) to (g) Unquoted Options issued to management as incentives pursuant to the Company’s Employee Incentive Plan, approved by shareholders on 29 November 2018
	Yes
	28 November 2019
	Nil
	Nil
	Nil
	(a) 7,500,000 Performance Rights (b) to(g)19,500,000 Unquoted Options
	Not applicable
	Not applicable
	Rule 7.1 – 13,835,060 Rule 7.1A - 43,465,804
	9 December 2019

8 Number and+class of all+securities quoted on ASX (_including_the securities in section 2 if applicable) 9 Number and+class of all+securities not quoted on ASX (_including_the securities in section 2 if applicable)	Number	+Class
	372,352,362 82,994,923 105,568,130	Fully Paid Ordinary Shares Options exercisable at $0.10 on or before 13 May 2020 Options exercisable at $0.10 on or before 11 November 2020
	Number	+Class
	75,487,500 5,000,000 32,500,000 609,375 6,218,750 15,368,772 3,750,000 5,000,000 7,500,000 750,000 1,000,000 1,500,000	Fully Paid Ordinary Shares not quoted until 24 months from date of quotation Fully Paid Ordinary Shares not quoted until 36 months from date the Company is admitted to the Official List Unquoted Options exercisable at $0.30 on or before 30 November 2020 not quoted until 24 months from date of quotation Unquoted Options exercisable at $0.30 on or before 5 April 2021 not quoted until 24 months from date of quotation Unquoted Options exercisable at $0.30 on or before 5 April 2021 Performance Rights, subject to vesting conditions, expiring on various dates from 24 December 2019 to 14 July 2022 Unquoted Options exercisable at $0.10 on or before 19 August 2020 Unquoted Options exercisable at $0.10 on or before 19 August 2021 Unquoted Options exercisable at $0.10 on or before 19 August 2022 Unquoted Options exercisable at $0.10 on or before 28 October 2020 Unquoted Options exercisable at $0.10 on or before 28 October 2021 Unquoted Options exercisable at $0.10 on or before 28 October 2022

• See chapter 19 for defined terms.

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10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) Not applicable Part 2 - Pro rata issue 11 Is security holder approval required? Not applicable 12 Is the issue renounceable or non-renounceable? Not applicable 13 Ratio in which the+securities will be offered Not applicable 14 +Class of+securities to which the offer relates Not applicable 15 +Record date to determine entitlements Not applicable 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? Not applicable 17 Policy for deciding entitlements in relation to fractions Not applicable 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. Not applicable 19 Closing date for receipt of acceptances or renunciations Not applicable 20 Names of any underwriters Not applicable 21 Amount of any underwriting fee or commission Not applicable 22 Names of any brokers to the issue Not applicable 23 Fee or commission payable to the broker to the issue Not applicable 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders Not applicable 25 If the issue is contingent on+security holders’ approval, the date of the meeting Not applicable 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled Not applicable	Not applicable	Not applicable	Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable
		Not applicable

• 27 If the entity has issued options, and the terms Not applicable 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) Not applicable 29 Date rights trading will end (if applicable) Not applicable 30 How do[+] security holders sell their entitlements Not applicable in full through a broker?

• 31 How do +security holders sell part of their Not applicable entitlements through a broker and accept for the balance?

• 32 How do[+] security holders dispose of their Not applicable entitlements (except by sale through a broker)?

• 33 +Issue date Issue date Not applicable

• 33 +Issue date 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

• See chapter 19 for defined terms.

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37 A copy of any trust deed for the additional[+] securities

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

+Class

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: 10 December 2019 Company Secretary

Print name: George Lazarou

== == == == ==

• See chapter 19 for defined terms.

Appendix 3B Page 8

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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 182,312,501 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 1,000,008 – 3 October 2019

• • Number of fully paid ordinary securities 72,386,307 11 &12 November 2019 issued in that 12 month period with 12,969,512 – 21 January 2019

• shareholder approval 165,989,711 – 13 & 15 May 2019

• • 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 Nil securities cancelled during that 12 month period “A” 434,658,039

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	65,198,706
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	18,181,823 Fully Paid Ordinary Shares – 12November 2019 33,181,823 Listed Options – 12 November 2019
“C”	51,363,646
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	65,198,706
Subtract“C” Note: number must be same as shown in Step 3	51,363,646
Total[“A” x 0.15] – “C”	13,835,060 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 10

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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” 434,658,039 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 43,465,804 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” Nil

• See chapter 19 for defined terms.

Appendix 3B Page 11

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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	43,465,804
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	43,465,804 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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