DXN LIMITED — Capital/Financing Update 2019

Oct 10, 2019

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

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 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)	(a) Fully Paid Ordinary Shares (b) Listed Options (c) Listed Options
	(a) 90,567,933 (b) 90,567,933 (c) 15,000,000
	(a) Fully Paid (b) Exercisable at $0.10 per Option on or before the date which is 12 months from the date of issue (c) Exercisable at $0.10 per Option on or before the date which is 12 months from the date of issue

• 4 Do the[+] securities rank equally (a) Yes in all respects from the[+] issue (b) No, however on exercise of the options date with an existing[+] class of into fully paid ordinary shares, the issued quoted[+] securities? shares will rank equally with existing fully paid ordinary shares currently on issue in

• If the additional[+] securities do the Company. not rank equally, please state: (c) No, however on exercise of the options • the date from which they do into fully paid ordinary shares, the issued • the extent to which they shares will rank equally with existing fully participate for the next paid ordinary shares currently on issue in dividend, (in the case of a the Company. 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) $0.055 per fully paid ordinary share (b) Free-attaching to the shares set out in (a) on the basis of 1 option for every 1 share applied for and issued

• (c) To be issued as part of lead manager and underwriter services provided by Pinnacle Corporate Finance Pty Ltd

• 6 Purpose of the issue Pursuant to rights issue announced by the Company (If issued as consideration for on 9 October 2019 and prospectus announced by the acquisition of assets, clearly the Company on 11 October 2019 identify those assets)

6a Is the entity an[+] eligible entity Yes 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 29 November 2018 resolution under rule 7.1A was passed 6c Number of[+] securities issued 15,000,000 Listed Options without security holder approval under rule 7.1

• See chapter 19 for defined terms.

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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.	Nil
	Nil
	(a) 90,567,933 Fully Paid Ordinary Shares (b) 90,567,933 Listed Options
	Not applicable
	Not applicable
	Rule 7.1 – 53,075,850 Rule 7.1A - 45,383,966
	11 November 2019 (subject to change in compliance with the ASX Listing Rules)

8 Number and +class of all +securities quoted on ASX ( including the +securities in section 2 if applicable)

Number	+Class
372,352,165 82,994,923 105,567,933	Fully Paid Ordinary Shares Options exercisable at $0.10 on or before 13 May 2020 Options exercisable at $0.10 on or before the date which is 12 months from the date of issue

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	75,487,500 5,000,000 32,500,000 609,375 6,218,750 8,168,772 100	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 Unlisted Options exercisable at $0.30 on or before 30 November 2020 not quoted until 24 months from date of quotation Unlisted Options exercisable at $0.30 on or before 5 April 2021 not quoted until 24 months from date of quotation Unlisted 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 26 June 2022 Convertible Notes
	Not applicable

Part 2 - Pro rata issue

Part 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	No
	Non-renounceable
	1 Share for every 4 Shares held, with 1 free- attaching listed Option for every 1 share applied for and issued

• See chapter 19 for defined terms.

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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 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	Fully paid ordinary shares
	17 October 2019
	No
	Rounded up
	All countries except Australia, New Zealand and Singapore
	4 November 2019
	Pinnacle Corporate Finance Pty Ltd
	5% of underwritten amount
	Pinnacle Corporate Finance Pty Ltd (Lead Manager) and Lucerne Investment Partners Pty Ltd (Co- Manager)
	6% (1% management fee and 5% underwriting fee) of the underwritten amount to Pinnacle Corporate Finance Pty Ltd. Any fees payable to Lucerne Investment Partners Pty Ltd will be paid by Pinnacle Corporate Finance Pty Ltd out of the 1% management fee and 5% underwritingfee
	As per Prospectus
	Not applicable

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? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	21 October 2019
	11 October 2019
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	11 November 2019

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)

• See chapter 19 for defined terms.

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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

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.

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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:

==> picture [114 x 48] intentionally omitted <==

Date: 11 October 2019

Company secretary

Print name: George Lazarou

== == == == ==

• See chapter 19 for defined terms.

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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 1,000,008 – 3 October 2019

• exception in rule 7.2 90,567,933 – 11 October 2019

• • Number of fully paid[+] ordinary securities 12,969,512 – 21 January 2019

• issued in that 12 month period with 165,989,711 – 13 & 15 May 2019

• shareholder approval

• 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” 453,839,665

• 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	68,075,950
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	100 Convertible Notes – 11 October 15,000,000 Listed Options – 11 October 2019
“C”	15,000,100
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	68,075,950
Subtract“C” Note: number must be same as shown in Step 3	15,000,100
Total[“A” x 0.15] – “C”	53,075,850 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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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” 453,839,665 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 45,383,966

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued Nil 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.

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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	45,383,966
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	45,383,966 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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