DXN LIMITED — Capital/Financing Update 2020

Apr 7, 2020

Proposed issue of securities

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Announcement Summary

Entity name

DXN LIMITED

Announcement Type

New announcement

Date of this announcement

Wednesday April 8, 2020

The Proposed issue is:

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A standard pro rata issue (including non-renounceable or renounceable) A placement or other type of issue

Total number of +securities proposed to be issued for a standard pro rata issue (including non-renounceable or renounceable)

		Maximum Number of
ASX +Security Code	+Security Description	+securities to be issued
n/a	Listed options exercisable at $0.02 on or before the date	592,179,622
	which is 3 years from the date of issue
DXN	ORDINARY FULLY PAID	592,179,622

Ex date

Wednesday April 15, 2020

+Record date

Thursday April 16, 2020

Offer closing date

Tuesday May 12, 2020

Issue date

Monday May 18, 2020

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +Security Code	+Security Description	+securities to be issued
n/a	Listed Options exercisable at $0.02 on or before 18 May	60,000,000
	2023

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Proposed +issue date

Monday May 18, 2020

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

DXN LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

Registration Number

ABN 46620888548

1.3 ASX issuer code

DXN

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Wednesday April 8, 2020

1.6 The Proposed issue is:

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A standard +pro rata issue (non-renounceable or renounceable) A placement or other type of issue

1.6a The proposed standard +pro rata issue is:

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• Non-renounceable

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Part 3 - Details of proposed entitlement offer issue

Part 3A - Conditions

3A.1 - Are any of the following approvals required for the entitlement offer to be unconditional? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity

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No

Part 3B - Offer details

Class or classes of +securities that will participate in the proposed issue and class or classes of +securities proposed to be issued

ASX +Security Code and Description

DXN : ORDINARY FULLY PAID

Is the proposed security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional securities in a class that is already quoted or recorded by ASX)? Existing class

Will the proposed issue of this +security include an offer of attaching +securities? Yes

If the entity has quoted company options, do the terms entitle option holders to participate on exercise? Yes

Details of +securities proposed to be issued

ASX +Security Code and Description

DXN : ORDINARY FULLY PAID

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Offer ratio (ratio to existing holdings at which the proposed +securities will be issued)

The quantity of additional +securities For a given quantity of +securities to be issued held 13 10

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What will be done with fractional Maximum Number of +securities entitlements? proposed to be issued Fractions rounded up to the next 592,179,622 whole number

Purpose of the issue

Pursuant to rights issue announced by the Company on 8 April 2020.

Offer price details for retail security holders

Issue Currency Offer Price per +security Estimated or Actual? Actual AUD - Australian Dollar AUD 0.01000

Oversubscription & Scale back details

Are +security holders allowed to oversubscribe? Yes

Provide the oversubscription details

The Underwriter does not intend to refuse an application for Shortfall Securities from Eligible Shareholders other than in circumstances of oversubscription or where acceptance may result in a breach of the Corporations Act.

May a scale back be applied to this event? Yes

Provide the scale back details

If the number of Shortfall Securities applied for by Eligible Shareholders exceeds the total Shortfall, the Shortfall Securities will be allocated among applying Eligible Shareholders proportionate to their existing holdings.

Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

Attaching +Security

Is the proposed attaching security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional +securities in a class that is already quoted or recorded by ASX)? New class

Attaching +Security - New class (+securities in a class that is not yet quoted or recorded by ASX)

Details of attaching +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

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Have you received confirmation from ASX that the terms Will the entity be seeking quotation of the 'new' class of of the proposed +securities are appropriate and +securities on ASX? equitable under listing rule 6.1? Yes Yes ASX +Security Code +Security Description New class-code to be confirmed Listed options exercisable at $0.02 on or before the date which is 3 years from the date of issue

+Security Type

Options

Offer ratio (ratio of attaching securities at which the new +securities will be issued)

The quantity of attaching +securities to be issued For a given quantity of the new +securities issued 1 1 What will be done with fractional entitlements? Maximum Number of +securities proposed to be issued 592,179,622

Fractions rounded up to the next whole number

Offer price details for retail security holders

Issue Currency AUD - Australian Dollar

Offer Price per +security AUD 0.00000

Estimated or Actual? Actual

Oversubscription & Scale back details

Are +security holders allowed to oversubscribe?

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Yes

Provide the oversubscription details

The Underwriter does not intend to refuse an application for Shortfall Securities from Eligible Shareholders other than in circumstances of oversubscription or where acceptance may result in a breach of the Corporations Act.

May a scale back be applied to this event?

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Yes

Provide the scale back details

If the number of Shortfall Securities applied for by Eligible Shareholders exceeds the total Shortfall, the Shortfall Securities will be allocated among applying Eligible Shareholders proportionate to their existing holdings.

Will all the +securities issued in this class rank equally in all respects from their issue date?

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Yes

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Options details

+Security Currency

AUD - Australian Dollar

Exercise Price Expiry date AUD Thursday May 18, 2023

Details of the existing class of +security that will be issued upon exercise or conversion of this new class of company option

DXN : ORDINARY FULLY PAID

Please provide any further information relating to the principal terms of the +securities

The Company intends on applying for quotation of the options.

Details of company options where holders entitled to participate in the offer

ASX +Security Code and Description

DXNO : OPTION EXPIRING 13-MAY-2020

Date Option must be exercised by

Thursday April 16, 2020

ASX +Security Code and Description

DXNOA : OPTION EXPIRING 11-NOV-2020

Date Option must be exercised by

Thursday April 16, 2020

Part 3C - Timetable

3C.1 +Record date

Thursday April 16, 2020

3C.2 Ex date

Wednesday April 15, 2020

3C.4 Record date

Thursday April 16, 2020

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3C.5 Date on which offer documents will be sent to +security holders entitled to participate in the +pro rata issue Monday April 20, 2020 3C.6 Offer closing date Tuesday May 12, 2020

3C.7 Last day to extend the offer closing date Thursday May 7, 2020

3C.9 Trading in new +securities commences on a deferred settlement basis Wednesday May 13, 2020 3C.10 Last day for entity to announce the results of the offer to ASX, including the number and percentage of +securities taken up by existing +security holders and any shortfall taken up by underwriters or other investors Friday May 15, 2020

3C.11 Issue date Monday May 18, 2020

3C.12 Date trading starts on a normal T+2 basis Tuesday May 19, 2020

3C.13 First settlement date of trades conducted on a +deferred settlement basis and on a normal T+2 basis

Thursday May 21, 2020

Part 3E - Fees and expenses

3E.1 Will there be a lead manager or broker to the proposed offer? Yes 3E.1a Who is the lead manager/broker? Pinnacle Corporate Finance Pty Ltd.

3E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker? 1% Management Fee 3E.2 Is the proposed offer to be underwritten? Yes 3E.2a Who are the underwriter(s)? Pinnacle Corporate Finance Pty Ltd.

3E.2b What is the extent of the underwriting (ie the amount or proportion of the offer that is underwritten)? Fully Underwritten.

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3E.2c What fees, commissions or other consideration are payable to them for acting as underwriter(s)?

5% Underwriting Fee

3E.2d Please provide a summary of the significant events that could lead to the underwriting being terminated

S&P ASX 200 or S&P ASX 300 Index closes on any 1 Business Days from the date of the Underwriting Agreement at a level that is 10% or more below the level of the Index at the close of trading on the Business Day before the date of Underwriting Agreement; Company does not lodge the Prospectus with ASIC as required by the Underwriting Agreement; Company lodges a Supplementary Prospectus without prior written agreement of Underwriter; The Due Diligence Results or any part of Verification Material was materially false, misleading or deceptive or there was a material omission; ASIC or any other person conducts any enquiry, investigation or proceedings, or takes any regulatory action or seeks any remedy, in connection with the Offer/Offer Materials, or publicly foreshadows that it may do so; Company is prevented from issuing the underwritten Securities within time required; Company fails to lodge an Appendix 3B with ASX by the time required.

3E.2e Is a party referred to in listing rule 10.11 underwriting or sub-underwriting the proposed offer? No

3E.3 Will brokers who lodge acceptances or renunciations on behalf of eligible +security holders be paid a handling fee or commission? No

3E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed offer

Part 3F - Further Information

3F.1 The purposes for which the entity intends to use the cash raised by the proposed issue

Acquisition of DC3 Data Centre in Hobart from TasmaNet Pty Ltd, working capital to fund the manufacture of DXN Modules business, general working capital and costs of the offer

3F.2 Will holdings on different registers or subregisters be aggregated for the purposes of determining entitlements to the issue? No

3F.3 Will the entity be changing its dividend/distribution policy if the proposed issue is successful? No

3F.4 Countries in which the entity has security holders who will not be eligible to participate in the proposed issue

All countries except Australia, New Zealand and Singapore.

3F.5 Will the offer be made to eligible beneficiaries on whose behalf eligible nominees or custodians hold existing +securities

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Yes

3F.5a Please provide further details

Nominees and custodians may not submit an Entitlement and Acceptance Form on behalf of any Shareholder resident outside Australia, New Zealand and Singapore without the prior consent of the Company, taking into account relevant securities law restrictions. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

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3F.6 URL on the entity's website where investors can download information about the proposed issue

www.dxn.solutions

3F.7 Any other information the entity wishes to provide about the proposed issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity No

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? Yes Yes ASX +Security Code +Security Description New class-code to be confirmed Listed Options exercisable at $0.02 on or before 18 May 2023

+Security Type

Options

Maximum Number of +securities proposed to be issued

60,000,000

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Purpose of the issue

Underwriting and lead manager services provided by Pinnacle Corporate Finance Pty Ltd.

Offer price details for retail security holders In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes Oversubscription & Scale back details May a scale back be applied to this event? No

Options details +Security Currency Exercise Price Expiry date AUD - Australian Dollar AUD 0.0200 Thursday May 18, 2023 Details of the existing class of +security that will be issued upon exercise or conversion of this new class of company option DXN : ORDINARY FULLY PAID

Please provide any further information relating to the principal terms of the +securities

Listed Options exercisable at $0.02 on or before 18 May 2023.

Part 7C - Timetable

7C.1 Proposed +issue date Monday May 18, 2020

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the issue under listing rule 7.1? No

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7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes

7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

60,000,000

7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No

7D.2 Is a party referred to in listing rule 10.11.1 participating in the proposed issue? No

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? No

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

Part 7F - Further Information

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

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