DXN LIMITED — Capital/Financing Update 2020

Feb 13, 2020

14 February 2020

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ASX Announcement

Impairment of Intangible Assets

Pre-fabricated modular data centre specialist, DXN Limited (ASX:DXN) (DXN or the Company) announces that its financial statements for the half year ended 31 December 2019 will recognise a $1.97 million impairment to its Lease - Right of Use Asset in relation to the Melbourne data centre facility.

In line with all companies in Australia that have long term operating leases in place DXN is required to recognise these operating leases on balance sheet consistent with AASB16 Leases which came into effect 1 July 2019 and in line with the Company’s half yearly reporting requirements. This requires that DXN recognises any lease liability and a right-of-use (“ROU”) asset based on the future lease payments for substantially all lease contract terms. The expected asset impairment relates to the carrying value of the right-of-use asset raised under AASB 16 for the Melbourne data centre facility. This is a point in time assessment and DXN is looking at the following alternatives to improve this impairment position by the full financial year end:

• Sub-lease

• Reassignment of the lease

• Alternate use for the site

The impairment is non-cash in nature and has no impact on DXN’s ability to undertake capital management initiatives.

To show the impact on DXN’s EBITDA of the impairment charge on DXN’s half yearly unaudited profit and loss statements for the 6 months ended 31 December 2019, please refer to Annexure A.

-ends-

About DXN Limited

DXN Limited designs, builds, owns and operates data centres. Offering integrated, customised and tailored solutions to clients, DXN provides businesses with the option of delivering solutions to site through containerised modules, or space in DXN’s modular colocation facilities to suit technical specifications and operational requirements. From a single rack in the colocation facilities through to fully customised Edge Infrastructure, DXN can deliver a range of solutions to meet modern data centre requirements. DXN has achieved an industry first and become the first modular data centre developer in the world to receive both Uptime Institute Tier-Ready III and Tier-Ready IV design review awards. For more https://dxn.solutions

for more information please contact:

Matthew Madden, CEO T +61 1300 328 239 E: Matthew.Madden@dxn.solutions

ASX Release authorised by the Board of Directors

DXN Limited

ABN: 46 620 888 548

9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: info@dxn.solutions

Annexure A

UNAUDITED STATEMENT OF PROFIT OR LOSS For the 6 months ended 31 December 2019

RevenueSales to CustomersCost of SalesGross ProfitOnce off IncomeLess Other operating expensesEBITDADepreciationAmortisation - intangiblesLease amortisationImpairment on assets *EBIT	With AASB16 ImpairmentWithout AASB16Impairment$$2,503,6342,503,634(1,950,052)(1,950,052)
	553,582553,582
	927,548927,548(4,235,201)(4,235,201)
	(2,754,071)(2,754,071)
	(310,954)(310,954)(10,339)(10,339)(588,415)(588,415)(1,969,000)
	(5,632,779)(3,663,779)

* Impairment charge on the Melbourne facility ROU asset

DXN Limited ABN: 46 620 888 548

9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: info@dxn.solutions