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GREEN360 TECHNOLOGIES LIMITED Proxy Solicitation & Information Statement 2017

Mar 9, 2017

65020_rns_2017-03-09_fd964fa1-6875-4e50-95eb-88d899f42275.pdf

Proxy Solicitation & Information Statement

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NOTICE OF GENERAL MEETING

Accompanied by an explanatory statement & proxy form

General meeting to be held at Level 6, 105 St Georges Terrace, Perth, Western Australia on Monday, 10 April 2017, commencing at 11.00am WST.

UltraCharge Limited

ACN 140 316 463

This notice of meeting, explanatory statement and proxy form should be read in their entirety.

If you are in doubt as to how you should vote, you should seek advice from your accountant, solicitor or other professional advisor prior to voting.

If you wish to discuss this notice of meeting or the accompanying documents, please do not hesitate to contact the Company Secretary at [email protected]

NOTICE OF GENERAL MEETING UltraCharge Limited ACN 140 316 463

Contents

Contents
NOTICE OF GENERAL MEETING ............................................................................. 2
PROXY APPOINTMENT, VOTING AND MEETING INSTRUCTIONS .......... 3
EXPLANATORY STATEMENT ...................................................................................... 5
1. SELECTIVE REDUCTION OF CAPITAL .................................................................... 5
1.1. Background ............................................................................................................................. 5
1.2. Reasons for resolution ........................................................................................................... 6
1.3. Reasons for the selective reduction of capital .................................................................... 7
1.4. Financial effect of the selective reduction of capital on the Company .......................... 7
1.5. Impact on control ................................................................................................................... 7
1.6. Advantages of the selective reduction of capital ................................................................ 8
1.7. Disadvantages of the selective reduction of capital ........................................................... 9
1.8. What if the selective reduction of capital does not proceed?........................................... 9
1.9. ASX waiver .............................................................................................................................. 9
1.10. Directors’ recommendation ................................................................................................ 10
2. GLOSSARY .......................................................................................................................... 11
SCHEDULE 1 – CANCELLATION SHAREHOLDERS ......................................... 13
PROXY FORM

Key dates

An indicative timetable of key proposed dates is set out below. These dates are indicative only and the dates are subject to change.

8 April 2017 last day for receipt of proxy forms* 10 April 2017 general meeting

  • proxy forms received after 11.00am WST will be disregarded.

1

Notice of General Meeting

Notice is hereby given that a general meeting of UltraCharge Limited ACN 140 316 463 ( company ) will be held at Level 6, 105 St Georges Terrace, Perth, Western Australia on Monday, 10 April 2017, commencing at 11.00am WST ( general meeting ).

The explanatory statement , which accompanies and forms part of this notice , describes the matter to be considered.

Terms used in this notice , unless the context otherwise requires, have the meanings given to them in the glossary set out in the explanatory statement .

Agenda

resolution Selective reduction of capital

  • 1 To consider and, if thought fit, pass with or without amendment the following resolution as a special resolution :

“That, for the purposes of section 256C of the Corporations Act and for all other purposes, approval is given for the company to selectively reduce its capital by cancelling 129,217,424 shares for nil consideration and on the terms and conditions set out in the explanatory statement .”

By order of the board of directors

Peter Webse

Company Secretary

10 March 2017

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Proxy appointment, voting and meeting instructions

Lodgement of a proxy form

The proxy form (and any power of attorney or other authority, if any, under which it is signed) or a copy which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be lodged with the company no later than 11.00am WST on 8 April 2017 being not later than 48 hours before the commencement of the general meeting . Any proxy form received after that time will not be valid. Proxy forms may be lodged:

by hand Level 6, 105 St Georges Terrace, Perth, Western Australia

by mail Company Secretary UltraCharge Limited Level 6, 105 St Georges Terrace Perth WA 6000

by email [email protected]

Appointment of a proxy

A shareholder entitled to attend and vote at the general meeting is entitled to appoint a proxy. The proxy may, but need not be, a shareholder .

If you wish to appoint the chairman as your proxy, mark the box on the proxy form . If the person you wish to appoint as your proxy is someone other than the chairman of the general meeting please write the name of that person. If you leave this section blank, or your named proxy does not attend the general meeting , the chairman will be your proxy.

You are entitled to appoint up to two persons as proxies to attend the general meeting and vote on a poll. If you wish to appoint a second proxy, an additional proxy form may be obtained by telephoning the company on +61 (0) 8 6377 8043 or you may photocopy the proxy form .

To appoint a second proxy you must on each proxy form state (in the appropriate box) the percentage of your voting rights which are the subject of the relevant proxy. If both proxy forms do not specify that percentage, each proxy may exercise half your votes. Fractions of votes will be disregarded.

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Corporate shareholder s

Corporate shareholders should comply with the execution requirements set out on the proxy form or otherwise with the provisions of section 127 of the Corporations Act . Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

  • two directors of the company;

  • a director and a company secretary of the company; or

  • for a proprietary company that has a sole director who is also the sole company secretary – that director.

Votes on resolutions

You may direct your proxy how to vote on a resolution by placing a mark in one of the boxes opposite the resolution . All your shareholding will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on the resolution by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the resolution , your proxy may vote as he or she chooses. If you mark more than one box on a resolution your vote on the resolution will be invalid.

Voting entitlement (snapshot date)

For the purposes of determining voting and attendance entitlements at the general meeting , shares will be taken to be held by the persons who are registered as holding the shares at 11.00am WST on 8 April 2017 . Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the general meeting .

Corporate representatives

A company may elect to appoint an individual to act as its representative in accordance with section 250D of the Corporations Act , in which case the company will require a certificate of appointment of the corporate representative executed in accordance with the Corporations Act . The certificate of appointment must be lodged with the company before the general meeting or at the registration desk on the day of the general meeting .

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Explanatory statement

This explanatory statement has been prepared for the information of shareholders in relation to the business to be conducted at the general meeting .

The purpose of this statement is to provide shareholders with all information known to the company which is material to a decision on how to vote on the resolution in the accompanying notice of meeting .

This explanatory statement should be read in conjunction with the notice of meeting . Italicised terms in this explanatory statement are defined in the glossary .

  1. SELECTIVE REDUCTION OF CAPITAL

1.1. Background

  • 1.1.1. The company was recently reinstated to quotation having re-complied with Chapters 1 and 2 of the listing rules to facilitate the backdoor listing of UltraCharge Ltd, an Israelregistered company developing potentially valuable lithium-ion battery technology ( UltraCharge Israel ).

  • 1.1.2. The vendor consideration for the acquisition of UltraCharge Israel by the company ( acquisition ) was 485,900,000 shares ( consideration shares ).

  • 1.1.3. The value of the consideration shares issued to the vendors of UltraCharge Israel ( UltraCharge vendors ), based on the issue price ($0.05) of shares under the public offer undertaken in conjunction with the acquisition ( public offer ), was $24,295,000.

  • 1.1.4. At the time of entering into the binding heads of agreement with UltraCharge Israel (then known as Voltape Ltd) on 13 May 2016, and at all relevant times until the requotation of shares on 21 December 2016, the company’s directors and corporate advisors were of the view that the consideration shares represented fair value for the business being acquired from the UltraCharge vendors by way of the acquisition .

  • 1.1.5. However, the company was subject to ASX’s since-discontinued policy of requiring entities proposing a backdoor listing to be suspended from trading from the date of announcement of the relevant transaction until reinstatement. Whatever the merits of that policy, it had the (presumably) unintended consequence of removing the price discovery mechanism in respect of the acquisition i.e. there was no opportunity for the market to provide any signal as to whether or not the market considered that the acquisition on the terms disclosed was likely to be value-accretive to the company .

  • 1.1.6. In any event, the company’s market performance since reinstatement has been disappointing for all relevant parties (including pre-existing shareholders , subscribers

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under the public offer and the UltraCharge vendors ). Since reinstatement, as at the date of this notice , UTR has traded in the range $0.032 to $0.05.

  • 1.1.7. Feedback received by the current directors from corporate advisors and investors strongly indicates a market perception that the consideration paid to the UltraCharge vendors (as represented by the consideration shares ) may have been excessive.

  • 1.1.8. Following reinstatement, soundings of key UltraCharge vendors suggested that there was a recognition that the number of consideration shares issued to the UltraCharge vendors may have been more than the market could comfortably bear and indicated a preparedness to reduce their holdings of shares by way of a selective reduction of capital.

  • 1.1.9. The company has taken the view that only those UltraCharge vendors who received a considerable number of consideration shares as a consequence of the successful completion of the acquisition and the issue of the consideration shares should be the subject of a 40% “haircut” ( cancellation shareholders ). Accordingly, there are 14 cancellation shareholders currently holding a total of 323,043,559 shares (representing approximately 43.1% of issued capital).

  • 1.1.10. Included amongst the cancellation shareholders are CPS Capital Group Pty Ltd, Armada Capital and Equities Pty Ltd and Cityscape Asset Pty Ltd (together, advisors ), each of which received shares as consideration for services provided under corporate advisory mandates. The company understands that the advisors have taken the view that it is in the company’s , and ultimately their clients’, interests to materially support the company’s strategy by agreeing to participate in the proposed capital reduction.

1.1.11. Importantly:

  • (a) none of the cancellation shareholders paid cash for their shares in UltraCharge Israel and

  • (b) all the shares issued to the cancellation shareholders are the subject of either restriction agreements entered into pursuant to listing rule 9.1 ( restriction agreements ) or voluntary escrow agreements entered into by the company with particular cancellation shareholders ( voluntary agreements ).

  • 1.1.12. The company proposes to cancel 129,217,424 shares , comprised of 40% of each cancellation shareholder’s holding and approximately 17.2% of the ordinary capital of the company ( selective reduction of capital ).

  • 1.1.13. The identities of the cancellation shareholders and their shareholdings in the company are set out in schedule 1 .

1.2. Reasons for resolution

  • 1.2.1. The cancellation of the cancellation shares is a selective reduction of capital for the purposes of the Corporations Act .

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  • 1.2.2. Section 256C of the Corporations Act has the effect that shareholders must approve the selective reduction of capital by cancellation of the cancellation shares by passing special resolutions at:

  • (a) a general meeting of shareholders ( general meeting ); and

  • (b) a meeting of the cancellation shareholders ( special meeting ).

  • 1.2.3. Resolution 1 will be passed by shareholders as a special resolution if 75% of the votes cast by shareholders present and eligible to vote (whether in person, by proxy, by attorney or, in the case of a corporate shareholder , by a corporate representative) are in favour of it.

1.2.4. If shareholders approve resolution 1 , and subject to cancellation shareholders also passing a special resolution at the special meeting , the company will reduce its issued capital by 129,217,424 shares , or 17.2% of the issued capital of the company. 1.3. Reasons for the selective reduction of capital

The directors consider that the relatively poor market performance of shares since reinstatement to quotation is a consequence of a market perception that the consideration paid for the acquisition of UltraCharge Israel may, in all the circumstances, have been excessive.

1.4. Financial effect of the selective reduction of capital on the Company

1.4. reinstatement to_quotation_is a consequence of a market perception that the
consideration paid for the acquisition of_UltraCharge Israel_may, in all the
circumstances, have been excessive.
Financial effect of the selective reduction of capital on
the Company
The cancellation of the_cancellation shares_for nil consideration will have no effect on
the_company’s_financial position.
1.5. Impact on control
1.5.1. The_cancellation shares_represent approximately 17.2% of the issued capital of the
company. Other things being equal, the_selective reduction of capital_would have the effect
of:
(a)
decreasing the issued capital of the company by approximately 17.2%; and
(b)
increasing each shareholder’s voting power in the_company_by approximately
20.8%.
1.5.2. However, the effect of the_selective reduction of capital_on_shareholders’_holdings is not
uniform as the % holding of each_cancellation shareholder_will obviously decrease, so for
these purposes the relevant information is the effect on the holdings of_substantial_
shareholders(some of which are_cancellation shareholders_); accordingly, the table below
sets out the_substantial shareholders’positions following cancellation of the_cancellation
shares:

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Substantial shareholder Voting power as at date of
notice
Voting power following
selective reduction of capital
UltraCharge Limited* 63.45% 55.84%
Ariel Malik 7.29% 5.28%
Amiram Borenstein 6.91% 5.01%
Kobi Ben-Shabat 6.21% 4.50%
Yehuda Cohen 5.61% 4.06%
Jason Peterson 5.45% 5.80%

*pursuant to section 608(1) of the Corporations Act , the company is deemed to have a relevant interest in shares the subject of the restriction agreements and the voluntary agreements

1.6.

Advantages of the selective reduction of capital

  • 1.6.1. From the company’s perspective, the following benefits will accrue if the selective reduction of capital is approved:

  • (a) The selective reduction of capital will have the effect of reducing the issued capital of the company by 17.2% whilst theoretically leaving its market capitalisation unchanged; accordingly the value of each of the company’s securities should increase by a corresponding amount. Shareholders not participating in the selective reduction of capital will therefore benefit from an anticipated increase in the value of their shareholdings.

  • (b) All of the cancellation shares are currently subject to escrow arrangements under restriction agreements or voluntary agreements and are therefore not counted for the purposes of calculating the company’s “free float” (i.e. the number of shares that are freely tradeable on ASX and therefore a measure of potential liquidity). Cancellation of the cancellation shares will have the effect of increasing the % free float of the company’s quoted shares (although not the absolute number of quoted shares ).

  • (c) The cancellation shareholders all have significant holdings of shares and collectively account of approximately 43.1% of issued capital (on an undiluted basis). The effect of the selective reduction of capital will be to reduce their collective shareholding to approximately 31.2% of issued capital. Whilst there is no suggestion that the cancellation shareholders are associates for the purposes of Chapter 6 of the Corporations Act or have voting power in each other’s shares , the perception of the existence of an informal “bloc” of shareholders may provide a deterrent to potential bidders, and a reduction of the voting power of that bloc would accordingly be to the benefit of shareholders generally.

  • 1.6.2. The selective reduction of capital provides no advantages to the cancellation shareholders other than in their capacity as continuing shareholders of the company ; it is not possible

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to determine whether those advantages will ultimately outweigh the costs to the cancellation shareholders associated with cancellation of the cancellation shares .

1.7. Disadvantages of the selective reduction of capital

  • 1.7.1. For those shareholders not participating in the selective reduction of capital , there are no disadvantages to the proposal.

  • 1.7.2. For the cancellation shareholders , the disadvantage of the selective reduction of capital is that they will have a proportion of their holdings in the company cancelled for nil consideration.

1.8. What if the selective reduction of capital does not proceed?

If the selective reduction of capital does not proceed, the issued capital of the company and the holdings of cancellation shareholders will not change.

1.9. ASX waiver

  • 1.9.1. Listing rule 9.7 provides that, during the escrow period, an entity must not do either of the following:

  • (a) change an executed restriction agreement; or

  • (b) ask for, or agree to:

    • (i) removal of the holding lock under listing rule 9.5 or listing rule 9.17 ; or

    • (ii) release of a certificate held on the certificated subregister by a bank or recognised trustee,

  • (c) unless ASX has given written consent to the release of the certificate or removal of the holding lock under listing rule 9.5 or listing rule 9.17 .

  • 1.9.2. The underlying policy to listing rule 9.7 is to prevent the transfer of, or creation of other interests in, restricted securities during the period in which ASX has determined that those securities should be held in escrow.

  • 1.9.3. ASX has granted the company a waiver from listing rule 9.7 ( waiver ) to the extent necessary to permit the company to amend the restriction agreements between the company and the cancellation shareholders such that the company be permitted to cancel up to 129,217,424 cancellation shares held by the cancellation shareholders which were issued as consideration for the acquisition , on the following conditions:

  • (a) the cancellation shares are cancelled for nil consideration;

  • (b) the company announces the terms of the waiver to the market;

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  • (c) shareholders , including the cancellation shareholders , approve a selective buy-back or a cancellation by way of a selective reduction of capital in relation to the cancellation shares in accordance with the Corporations Act ; and

  • (d) the company conducts the selective buy back or the cancellation by way of a selective reduction of capital in relation to the cancellation shares in accordance with the Corporations Act .

1.10. Directors’ recommendation

The directors unanimously support the selective reduction of capital and recommend that shareholders vote in favour of resolution 1 .

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2. GLOSSARY

In this notice , unless the context otherwise requires, the following terms bear the following meanings:

acquisition has the meaning given in section 1.1.2 of the notice . ASX means ASX Limited (ACN 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX . cancellation the shareholders identified as such in Schedule 1. shareholders cancellation the shares held by the cancellation shareholders that will be cancelled if resolution 1 shares is approved at the general meeting and a corresponding resolution is approved at the special meeting . chairman the chairman of the meeting. company UltraCharge Limited ACN 140 316 463, a public company incorporated and existing in Australia. consideration has the meaning given in section 1.1.2 of the notice . shares Corporations the Corporations Act 2001 (Cth). Act director a director of the company . explanatory this explanatory statement which accompanies and forms part of the notice . statement general the meeting of shareholders convened by the notice , or any meeting adjourned meeting or thereof. meeting glossary this glossary of terms. listing rules means the listing rules of ASX . notice of this Notice of General Meeting. meeting or notice proxy form the proxy form accompanying the notice.

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public offer has the meaning given in section 1.1.3 of the notice. quotation official quotation of shares by ASX resolution a resolution set out in the notice . restriction has the meaning given in section 1.1.11(b) of the notice . agreement section a section of the notice. selective has the meaning given in section 1.1.12 of the notice . reduction of capital share a fully paid ordinary share in the company . shareholder the holder of a share . special the meeting of cancellation shareholders to be held at around the same time as meeting the meeting in accordance with section 256C(2) of the Corporations Act . substantial has the meaning given in section 9 of the Corporations Act holding substantial the holder of a substantial holding of shares . shareholder UltraCharge has the meaning given in section 1.1.1 of the notice . Israel UltraCharge has the meaning given in section 1.1.3 of the notice . vendors voluntary has the meaning given in section 1.1.11(b) of the notice . agreement waiver has the meaning given in section 1.9.3 of the notice . WST Western Standard Time, being the time in Perth, Western Australia.

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Schedule 1 – cancellation shareholders

Cancellation shareholder Shares Cancellation
shares
Balance
Yury Nehushtan 14,009,968 5,603,987 8,405,981
Kobi Ben-Shabat 25,021,803 10,008,721 15,013,082
Reblaze Singapore Pte Ltd 21,547,331 8,618,932 12,928,399
Ariel Malik 54,638,875 21,855,550 32,783,325
Dr. Borenstien Ltd 51,836,882 20,734,753 31,102,129
Open Platform Systems Limited 16,811,962 6,724,785 10,087,177
Tamarind Investment Inc 30,821,930 12,328,772 18,493,158
Dragon Innovation Ltd. 2,801,994 1,120,798 1,681,196
Yehuda Cohen 42,029,904 16,811,962 25,217,942
Yehuda Yarmut 28,019,936 11,207,974 16,811,962
Libertine Investments P/L 11,207,974 4,483,190 6,724,784
Armada Capital & Equities Pty
Ltd
12,147,500 4,859,000 7,288,500
Cityscape Asset Pty Ltd 8,503,250 3,401,300 5,101,950
CPS Capital Group Pty Ltd 3,644,250 1,457,700 2,186,550
TOTAL 323,043,559 129,217,424 193,826,135

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Appointment of Proxy

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