MEMPHASYS LIMITED. — Capital/Financing Update 2021

May 25, 2021

Proposed issue of securities

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Announcement Summary

Entity name

MEMPHASYS LIMITED.

Announcement Type

New announcement

Date of this announcement

Wednesday May 26, 2021

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Convertible Notes	50,000,000
n/a	Options	3,000,000

Proposed +issue date

Friday July 9, 2021

Refer to next page for full details of the announcement

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Proposed issue of securities

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Part 1 - Entity and announcement details

1.1 Name of +Entity

MEMPHASYS LIMITED.

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ACN

Registration Number

120047556

1.3 ASX issuer code

MEM

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Wednesday May 26, 2021

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity Yes

7A.1a Conditions

Approval/Condition Date for determination Is the date estimated or ** Approval actual? received/condition met? +Security holder approval Friday July 9, 2021 Estimated

Comments

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional Yes securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? No No ASX +security code +Security description New class-code to be confirmed Convertible Notes

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+Security type

+Convertible debt securities

Number of +securities proposed to be issued

50,000,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? Yes

Yes
In what currency is the cash	What is the issue price per
consideration being paid?	+security?
AUD - Australian Dollar	AUD 0.06000

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

+Convertible debt securities details

These securities are:	Type of security
Convertible	Capital Note
+Security currency	Face value
AUD - Australian Dollar	AUD 0.0600
Interest rate type
Fixed rate
Frequency of coupon/interest	First interest payment date
payments per year
Annual
	Saturday December 31, 2022
Interest rate per annum	Is the interest rate per annum
8.00000 %	estimated at this time? No

s128F of the Income Tax Assessment
Act status applicable to the +security
s128F exemption status unknown
Is the +security perpetual (ie. no	Maturity date
maturity date)? No	Saturday December 31, 2022

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Select other features applicable to the +security None of the above

Is there a first trigger date on which a If yes, what is the first trigger date right of conversion, redemption, call Friday September 30, 2022 or put can be exercised (whichever is first)? Yes

Details of the type of +security that will be issued if the securities to be quoted are converted, transformed or exchanged

MEM : ORDINARY FULLY PAID

Number of +securities that will be issued if the +securities to be quoted are converted, transformed or exchanged

50,000,000

Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement.

Attaching +Security

Is the proposed attaching security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional +securities in a class that is already quoted or recorded by ASX)? New class

Attaching +Security - New class (+securities in a class that is not yet quoted or recorded by ASX)

Details of attaching +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from ASX that the terms Will the entity be seeking quotation of the 'new' class of of the proposed +securities are appropriate and +securities on ASX? equitable under listing rule 6.1? No No ASX +security code +Security description New class-code to be confirmed Options

+Security type

Options

Number of +securities proposed to be issued

3,000,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

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Please describe the consideration being provided for the +securities

Convertible Note raising AUD$3,000,000

Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities 0.060000

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

Options details

+Security currency

AUD - Australian Dollar

Exercise price AUD 0.0600

Expiry date Sunday December 31, 2023

Details of the type of +security that will be issued if the option is exercised

MEM : ORDINARY FULLY PAID

Number of securities that will be issued if the option is exercised

50,000,000

Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement.

Part 7C - Timetable

7C.1 Proposed +issue date

Friday July 9, 2021

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? Yes

7D.1a Date of meeting or proposed meeting to approve the issue under listing rule 7.1

Friday July 9, 2021

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7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? Yes

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

Canaccord

7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

• (a) a gross 2% fee,

• (b) an additional 2% of the Convertible Notes subscribed for by Peters Investments Pty Ltd when the Convertible Notes are issued; and

(c) a further 2% fee on conversion of the Convertible Notes (if conversion occurs) by Peters Investments Pty Ltd.

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue None

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

Funding will enable the Company to complete a range of necessary tasks for the upgraded Felix device, ahead of the re-commencement of commercial sales discussions in early access markets during the later stages of the quarter ending September 2021

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

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7F.2 Any other information the entity wishes to provide about the proposed issue

¿ Conversion Price: the lower of: o $0.06; and

o a 20% discount to the issue price of shares and/or the exercise price of any options offered under any capital raising(s) completed by the Company of greater than $1,000,000 prior to the Repayment Date.

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