IODM LIMITED — Capital/Financing Update 2017

Aug 22, 2017

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23[rd] August, 2017

Dear Shareholder,

NOTIFICATION OF PRO-RATA NON-RENOUNCEABLE ENTITLEMENT ISSUE – INELIGIBILITY TO PARTICIPATE

As announced to ASX on 8 August, 2017, IODM Limited (‘ IODM ’ or ‘ the Company ’) is undertaking a pro-rata nonrenounceable entitlement issue of fully paid ordinary shares in the capital of IODM (‘ Entitlement Offer ’). The Company lodged an offer document setting out the terms and conditions of the Entitlement Offer (‘ Offer Document’ ) with ASX Limited (' ASX ') on 22 August, 2017 and will be despatched to all eligible shareholders together with a personalized Entitlement and Acceptance Form on 28 August, 2017.

The Company has determined that it would be unreasonable to make offers under the Entitlement Offer to all shareholders with addresses outside of Australia or New Zealand (' Ineligible Shareholders ') having regard to the Company's current shareholding and the costs of complying with legal and regulatory requirements in those jurisdictions. Accordingly, the Entitlement Offer is not being extended to Ineligible Shareholders. Any entitlements to such shares will lapse and the relevant shares will form part of the additional shares and shortfall under the Entitlement Offer.

The Company has determined that you are an Ineligible Shareholder given that you reside outside of Australia and New Zealand. This letter constitutes the notice that the Company is required to give each Ineligible Shareholder under ASX Listing Rule 7.7.1(b).

Key details

For your information, key details of the Entitlement Offer are as follows Key indicative dates

The proposed timetable for the Entitlement Offer is as follows:*

IODM Limited ABN 28 102 747 133 `Level 5, 22 Albert Road, South Melbourne, VIC, 3205 www.iodm.com.au

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Type of issue

Pro-rata non-renounceable entitlement issue of fully paid ordinary shares (' Shares ') of 3 Shares for every 8 Shares held.

Issue price

$0.008 (0.8 cents) per Share.

Number of shares to be issued

Up to 124,276,295 Shares.

Amount to be raised

Up to approximately $1,000,000.

Rights trading

Rights cannot be traded or sold.

Additional Shares and shortfall

Shareholders can apply for additional Shares in excess of their entitlement. Additional Shares will be allocated in accordance with the allocation policy set out in the Offer Document. Any entitlement and additional Shares not taken by eligible shareholders will form part of the shortfall. The directors of the Company reserve the right to place the shortfall Shares at their absolute discretion.

Shortfall

The Company has entered into an underwriting agreement with Domain Capital Pty Ltd ACN 113 004 078 (' Domain Capital ') under which Domain Capital has agreed to partially underwrite any shortfall of the Entitlement Offer up to $700,000, subject to terms and conditions of the underwriting agreement.

Listing

The Company has applied to ASX for quotation of the Shares.

Key indicative dates

The proposed timetable for the Entitlement Offer is as follows:*

Lodgement of Offer Document, cleansing notice & Appendix 3B with ASX	22/08/2017
Notice sent to shareholders	23/08/2017
Notice sent to Option holders	23/08/2017
Notice sent to ineligible shareholders	23/08/2017
Ex date	24/08/2017
Record Date for determining entitlements (5:00pm AEST)	25/08/2017
Offer Document despatched to Shareholders & Company announces this has been completed	28/08/2017
Last day to extend the Closing Date	05/09/2017
Closing Date (5:00 pm AEST)	08/09/2017
Shares quoted on a deferred settlement basis	11/09/2017
Notify ASX of under subscriptions	13/09/2017
Issue date	15/09/2017
Quotation of Shares issued under the Entitlement Offer	18/09/2017

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and the terms and conditions of the Underwriting Agreement, the Directors reserve the right to vary the dates for the Entitlement Offer at their discretion.

The Entitlement Offer is only open to eligible shareholders, being shareholders whose registered address is in Australia or New Zealand at 5.00pm on AEST on 25 August 2017.

Full details of the Entitlement Offer are contained in the Offer Document which is available on the ASX website by searching under the ASX Code "IOD".

Yours sincerely

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Petrina Halsall

Company Secretary IODM LIMITED

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