DXN LIMITED — Investor Presentation 2021

Sep 8, 2021

Investor Update & Capital Raise Presentation

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9 September 2021

Disclaimer

This presentation has been prepared by DXN Limited (ACN 620 888 548) ( DXN or Company ).

NOT AN OFFER

This presentation is for information purposes only. This presentation does not comprise a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with the Australian Securities and Investments Commission) or any other law.

This presentation also does not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities nor shall they or any part of them form the basis of or be relied upon in connection therewith or act as any inducement to enter into any contract or commitment with respect to securities. In particular, this presentation does not constitute an offer to sell or a solicitation to buy, securities in the United States of America.

NOT INVESTMENT ADVICE

This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and are not intended to be used for the basis of making an investment decision. Recipients should obtain their own advice before making any investment decision.

SUMMARY INFORMATION

This presentation does not purport to be all inclusive or to contain all information about the Company or any of the assets, current or future, of the Company.

This presentation contains summary information about the Company and its activities which is current as at the date of the presentation. The information in this presentation is of a general nature and does not purport to contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a prospectus or product disclosure statement or other offering document prepared in accordance with the requirements of Australian law or the laws of any other jurisdiction, including the United States of America.

The Company does not undertake to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

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FORWARD LOOKING STATEMENTS

Certain statements contained in this presentation, including information as to the future financial or operating performance of the Company and its assets, are forward looking statements. Such forward looking statements:

• (a) are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies;

• (b) involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements; and

• (c) may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.

The Company disclaims any intent or obligation to publicly update any forward looking statements, whether as a result of new information, future events or results or otherwise.

The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements.

All forward looking statements contained in this presentation are qualified by the foregoing cautionary statements. Recipients are cautioned that forward looking statements are not guarantees of future performance and accordingly recipients are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein.

NO LIABILITY

The Company has prepared this presentation based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, the Company, its related bodies corporate (as that term is defined in the Corporations Act 2001 (Cth) ( Corporations Act )) and the officers, directors, employees, advisers and agents of those entities do not accept any responsibility or liability including, without limitation, any liability arising from fault or negligence on the part of any person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

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Executive Summary

DXN Progresses its Regional Edge Operator strategy

• DXN is acquiring the Secure Data Centre in Darwin for $4.88m (Acquisition)

• DXN is planning to raise ~ $7.1m in a combination of placement & share purchase plan (SPP) at a price of $0.009 and a $4m debt facility

• Singapore-based Edge data centre operator, DC Alliance, has invested $1.25m in this placement with a view to forming a strategic partnership with DXN

• DXN has placed a further ~$0.39 million to sophisticated investors in this placement

• SPP of up to $1.5m

• Pure Asset Management Term Loan facility of $4 million

• The funds raised will be used for the Acquisition and working capital (to take advantage of the strong demand for modular data centres)

• The Darwin acquisition is another step in DXN’s desire to position itself as a leading participant in the rapidly growing Edge data centre market in both Australia and the Asia Pacific region

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Secure Data Centre Provides a Gateway to Subsea Cables and Domestic Fibre Routes

• Secure Data Centre (SDC) has been in operation for 17 years and offers the only continuously maintainable data centre in the Northern Territory of Australia

• The data centre is a profitable well-maintained facility and provides an excellent gateway path into Asia and other subsea cables that may come into Australia as well as terrestrial cable systems in Australia

• The data centre is the most connected facility for telecommunication services in the Northern Territory

• The Subsea Cable from Vocus that extends from Port Headland to Darwin will now be linked to the ASC cable that extends Australia to Singapore

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Source: Vocus to link up subsea cables to create Darwin-Jakarta-Singapore Cable | ZDNet

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Secure Data Centre Acquisition

DXN expands its portfolio of Edge data centres

• DXN has entered an agreement to purchase Secure Data Centre (SDC), a data centre in Darwin, Northern Territory, for ~$4.88m (including entitlements and warranties)

• ~$3.83m in cash payable upon settlement, plus $0.2m in equity on settlement, and $0.85m warranty retention will be paid after 12 months from settlement

• SDC’s vendors to operate the facility and provide continuity with DXN for a period of three years (reviewed annually)

• FY21 revenue of ~$1.7m and EBITDA of ~$0.7m

• SDC is the only continuously maintainable data centre in the Northern Territory

• Significant organic growth opportunity with ~70 racks occupied with the capacity to expand to 127 racks in existing data halls

• The acquisition adds further strength to DXN’s position in Edge data centre ownership and operation, adding to the Hobart data centre acquired in May 2020

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Financials

Proforma profit & loss statement

Year to June (A$'000)	Data Centres ▪ Darwin ▪ Hobart ▪ Sydney Manufacturin ▪ Perth ▪ Domestic a Unaudited DXN Current Unaudited Darwin Acquisition Unaudited DXN Proforma Change 984 1,726 2,710 175% 7,219 - 7,219 0% 1,314 10 1,324 1% 9,517 1,736 11,253 18% -5,787 -399 -6,186 7% 3,730 1,337 5,067 36% 39% 77% 45% 15% -6,083 -627 -6,710 10% -2,353 710 -1,643 -30%
DC Operations DC Manufacturing Other1 Group Revenue2 COGS Gross Profit Gross Margin Expenses EBITDA (normalised)

• Manufacturing ▪ Perth

• Domestic and International sales

1 Other revenue of $1.3m relates to EM DG and R&D grants

2 Excludes add-back of Lease liability of $3.3m in favour of DXN

• 175% increase in DC Operations, with now three datacentres, all with significant rack space available to grow revenues

• Funding from this capital raising and the improved group cashflow means more resources can be focused on customer acquisition

• Proforma Group Gross Profit increase by 36% to over $5.0m

• Modules revenue for the proforma year remains unchanged at $7.2m

• Refer to appendix for reconciliation

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Capital-lite Edge Data Centre Model DXN will look to offset the capital component of its growth into the Edge DC market

• DXN will continue to look for brownfield and greenfield opportunities to expand its position in the Edge data centre market

• Large property development groups across Asia Pacific have recently shown a strong appetite to enter the Edge data centre market

• DXN believes there is an opportunity to utilise third party capital to facilitate the purchase of brownfield assets or the development of greenfield assets whilst retaining management control

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Modular Manufacturing Update

Strong global demand for modular data centres

• DXN is well placed in the Asia Pacific and Australian markets, with strong demand for its high quality, bespoke data centre modules

• Key focus markets with a strong pipeline

• ✓ Telco

• ✓ Mining

• ✓ Subsea Cables

• ✓ EDGE DC

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Targeted Market Segments

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• Cable Landing Telco and Mining Micro DC EDGE DC

• Stations Government

• • Pre-fabricate specific • Purpose built • Plug and play, fully • 1-3 MW deployment • Edge deployment for submarine cable • High quality integrated solution • 100-400 racks • 20kW to 1MW industry Australian design • Combining UPS, • Modular solution that • 5-200 rack

• • Rapid deployment and build cooling, security, allows scale • 16 week build 90 days • Dark site monitoring and HMI • 6 month build to any • Satellite earth

• • Highest quality management • Ideal for enterprise tier rating stations factory built surface • Rugged and resilient • 5G telco sites where • Own and operate Protection C4 • Custom designed there is a need for options

• • Seismic rating solutions closer to • Cyclone rating the end user Current Opportunity Emerging Opportunity

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Commercial in Confidence

Equity Capital Raising

Capital raising to generate up to $3.14m with an additional placement of $1.25m

• Placement of $1.64m at a price of 0.009 per share

• $1.25m to DC Alliance

• ~$0.39m to sophisticated investors

• Share purchase plan (SPP) to raise up to $1.5m at a price of $0.009 per share

• Second tranche placement of $1.25m to DC Alliance, who has an option that lapses on December 15, 2021 and is subject to FIRB and shareholder approval

• GM anticipated to be held on Friday 22 October 2021

• Second tranche placement to DC Alliance shall be priced at a 20% premium to the 10-day VWAP ahead of exercise, capped at $0.015 cents per share

• Shares will rank equally with existing ordinary shares

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New Debt Facility

New $4.0m Term Loan Facility

Binding terms agreed with PURE Asset Management (“PURE”), subject to finalising documentation. PURE is a credit investor that provides funding that is less dilutive to shareholders

• $4.0m Secured Term Loan Facility

• $2.50m initially drawn to partially fund the Darwin acquisition, with $1.5m available at DXN’s until March

• 2022

• 8.75% Interest Rate

• 2.50% Line Fee

• 4-year term, Loan can be fully repaid by exercise of warrants

• 200m warrants with a conversion price of 2.0cps (122% premium to the placement price)

PURE is a alternative debt investor that is looking to fund growing companies. It has indicated that is would be willing to provide additional funding for future DC acquisitions, subject to due diligence and terms

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Sources and Uses of Funds

Source of Funds
Placement to DC Alliance and sophisticated investors	$1.64m
Share purchase plan	$1.50m
PURE debt facility	$4.0m
Total	$7.14m

• DXN will withhold $0.85m from the SDC purchase price for 12 months to cover any potential warranty claims against SDC

Uses of Funds
Purchase of SDC – cash	$3.83m
Module manufacturing growth and working capital	$1.41m
Acquisition costs and facility establishment fee	$0.2m
Repayment of existing debt	$1.3m
Capital raising fees	$0.4m
Total	$7.14m

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Capital Raising Timetable

Key dates for the offer event
Record date for share purchase plan (7pm AEST)	Wednesday 8 September 2021
Announcement of the SPP and Lodge Appendix 3B	Thursday 9 September 2021
Issue of Shares under Placement and release of Appendix 2A and Cleansing Notice	Friday 10 September 2021
Documents mailed to eligible shareholders	Wednesday 15 September 2021
SPP opens – opening date for acceptances	Thursday 16 September 2021
SPP closes – closing date for acceptances	Thursday 30 September 2021
Announcement of results	Monday 4 October 2021
Issue of new shares under SPP and release Appendix 2A	Wednesday 6 October 2021
Quotation of shares issued under the issue	Thursday 7 October 2021

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Thank you

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Appendix

Pro-forma profit & loss statement reconciliation to Unaudited Statutory NPAT

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FY21 DXN Reconciliation between Normalised
EBITDA and Statutory NPAT
EBITDA (normalised) -2,353,446
Lease Liability 3,302,433
Acquisition expenses -54,487
Amortisation – intangibles -487,328
Depreciation -4,121,271
Finance expenses -203,495
Lease amortisation -599,555
Lease interest charge -295,482
NPAT Statuatory -4,812,631
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• Depreciation, Amortisation, finance expenses and lease interest charges as well as one off Acquisition expenses were not included in the Normalised EBITDA

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