MACRO METALS LIMITED — Capital/Financing Update 2006

Jul 10, 2006

BRAINYTOYS LIMITED

ABN 28 001 894 033

Registered Office: 6/34 York Street North Perth WA 6006 Phone 08 9228 0703 Fax 08 9228 0704

11 July 2006

Company Announcements Australian Stock Exchange Limited 20 Bond Street SYDNEY NSW 2000

By Fax 1900 999 279

APPENDIX 3B

Please find enclosed appendix 3B for Brainytoys Limited.

JAY STEPHENSON COMPANY SECRETARY

$\cdot$

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Brainytoys Limited

ABN

28 001 894 033

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

⁺Class of ⁺securities issued or to be $\mathbf{1}$ issued

Fully Paid Ordinary Shares

• Number of ⁺securities issued or to $\overline{2}$ 7,572,429 be issued (if known) or maximum number which may be issued
• 3 Principal terms of the ⁺securities (eg, if options, exercise price and expiry date; if partly paid 'securities, the amount outstanding and due dates payment; if ⁺convertible for securities, the conversion price and dates for conversion)

Non-renounceable rights issue of 1 share for every 4 held by the shareholder at an issue price of 6 cents per share

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24/10/2005 Appendix 3B Page 1

⁺ See chapter 19 for defined terms.

$\overline{4}$ Do the *securities rank equally in all New issues rank equally with existing shares respects from the date of allotment with an existing ⁺class of quoted ⁺securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

$\sqrt{5}$ Issue price or consideration

6 cents per share

6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)

To raise approximately $$454,346$ which will be used to augment the current working capital and continue providing commercialisation.

$\overline{7}$ Dates of entering +securities into uncertificated holdings or despatch of certificates

20 July 2006

8	Number and + class of all + securities quoted on ASX (including the securities in clause $21$	Number 38,316,491	+ Class Ordinary Shares
	if applicable)

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Appendix 3B Page 2

⁺ See chapter 19 for defined terms.

9	Number and + class of all *securities not quoted on ASX (including the securities in clause 2 if applicable)	Number 10,054,498	+ Class Options
10	Dividend policy (in the case of a $\Box$ Dividende	الملائمة ومرومو

Dividend policy (in the case of a $\vert$ Dividends payable in accordance with trust, distribution policy) on the Corporations Act. increased capital (interests)

Part 2 - Bonus issue or pro rata issue

$\alpha$ is a subsequent for $\alpha$

$\ldots$ . . . .

$\sim$ $\sim$

11	Is security holder approval required?	Not Applicable
12	Is the issue renounceable or non- renounceable?	Non-renounceable
13	Ratio in which the + securities will be offered	$1$ for 4
14	+ Class of + securities to which the offer relates	Ordinary Shares
15	+ Record date determine to entitlements	23 June 2006
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	No
17	Policy for deciding entitlements in relation to fractions	Rounding Down to the nearest whole number
18	Names of countries in which the entity has *security holders who will not. be sent new issue documents	Not Applicable
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt οf acceptances or renunciations	12 July 2006

$\cdot$

$\mathbf{s}$ $\angle$ $\uparrow$ $\overrightarrow{z}$

Appendix 3B Page 3

20	Names of any underwriters
		Leadenhall Australia Limited
21	Amount of any underwriting fee or
	commission	A maximum of 454,384 fully paid ordinary shares.
22	Names of any brokers to the issue	Not Applicable
23	Fee or commission payable to the	Not Applicable
	broker to the issue
24	Amount of any handling fee payable	Not Applicable
	to brokers who lodge acceptances or renunciations on a behalf of
	*security holders
25	If the issue is contingent on	Not Applicable
	*security holders' approval, the date of the meeting
26	Date entitlement and acceptance form and prospectus or Product	28 June 2006
	Disclosure Statement will be sent to persons entitled
27	If the entity has issued options, and the terms entitle option holders to	Not Applicable
	participate on exercise, the date on
	which notices will be sent to option holders
28	Date rights trading will begin (if applicable)	Not Applicable
29	Date rights trading will end (if	N/A
	applicable)
30	How do "security holders sell their	Not Applicable
	entitlements in full through a broker?
31	How do *security holders sell part of their entitlements through a	Not Applicable
	broker and accept for the balance?

$\beta$

Appendix 3B Page 4

$1/1/2003$

⁺ See chapter 19 for defined terms.

32 How do *security holders dispose of Not Applicable their entitlements (except by sale through a broker)?

⁺Despatch date 33

20 July 2006

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)
• Securities described in Part 1
• $(b)$

$\left( a\right)$

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35

If the 'securities are 'equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36

If the ⁺securities are ⁺equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ 5,001 - 10,000 10,001 - 100,000 100,001 and over

37

A copy of any trust deed for the additional *securities

Ŀ

1/1/2003

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of securities for which ⁺quotation is sought
• Class of ⁺securities for which 39 quotation is sought
• 40 Do the ⁺securities rank equally in all respects from the date of allotment with an existing ⁺class of quoted *securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

42 Number and ⁺class of all ⁺securities quoted on ASX (including the securities in clause 38)

Number	+ Class

$\cdot$

Appendix 3B Page 6

1/1/2003

⁺ See chapter 19 for defined terms.

Quotation agreement

• $\mathbf{1}$ +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the 'securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not $\bullet$ for an illegal purpose.
• There is no reason why those *securities should not be granted *quotation.
• An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any *securities to be quoted and that no-one has any right to return any 'securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the *securities be quoted.
• If we are a trust, we warrant that no person has the right to return the *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.
• $\overline{3}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the 'securities begins. We acknowledge that ASX is relying on the information and documents. We wait that they are (will be) true and complete.

Sign here:

...................................... (Director/Company secretary)

Print name:

Jay Stephenson

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24/10/2005 Appendix 3B Page 7

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⁺ See chapter 19 for defined terms.