NEXTED GROUP LIMITED — Capital/Financing Update 2017

May 9, 2017

10 May 2017

Australian Securities Exchange Limited Via e-lodgement ASX Code ICT

ICOLLEGE TO ACQUIRE AUSTRALIAN CAPITAL COLLEGE

Key points:

• iCollege to acquire Australian Capital College, a CRICOS accredited Education Institution;

• Proposed acquisition provides optimal integration to ICT’s existing business units;

• Exports from international education valued at $18.8 billion[1]

• 100% scrip deal.

iCollege Ltd (“ICT” or “the Company”) (ASX: ICT) has signed a binding term sheet (“Term Sheet”) with Capital College Student Services Pty Limited (“Australian Capital College” or “ACC”) in relation to the proposed acquisition by the Company (“Proposed Acquisition”) of 100% of Australian Capital College, a CRICOS accredited education institution based in ACT.

iCollege Executive Chairman, Ross Cotton commented: “This acquisition provides the opportunity to capitalise on iCollege’s proposed acquisition of the Lara Group and to leverage that company’s existing relationship with over 5,000 clients based in the UK.

“Australian Capital College marks the entry of iCollege into the International Student Market, with its highly valuable CRICOS registration”.

Overview of Australian Capital College

Australian Capital College is a successful Australian education institution that is established in the ACT. ACC is registered on the Commonwealth Register of Courses and Institutions for Overseas Students (CRICOS), and currently delivers vocational education and training services to international students pursuing a career in business management.

Key Information on Australian Capital College:

1. highly profitable entity with low operating expenses;

2. unblemished compliance record with the regulator (ASQA);

3. currently delivering Diploma level qualifications to international students;

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1 Australian Bureau of Statistics (ABS), 2014-2015.

1. no state funded training subsidies nor VET Student Loans program;

2. strong ties to international education agents both onshore and abroad, with the majority of its student base coming from Europe and Korea;

3. finalised lodgement of the application to become a provider of English Language Intensive Courses for Overseas Students (ELICOS) courses, which will give prospective students the opportunity to be granted an Australian Study Visa.

Strategic Rationale of the Australian Capital College acquisition

This acquisition follows iCollege’s strategy to expand into the international student market, which provides the company with the opportunity to capitalise on the proposed acquisition of the Lara Group (refer ASX announcement dated 3 May 2017) and leverage its relationship with over 5,000 childcare clients in the UK.

The latest changes in the 457 visa legislation, announced by the Federal Government, have sparked a rally toward regional centres, such as Canberra, marking a shift from the traditional education services in large metropolitan cities.

As a result, Canberra is regarded as one of the best options for students who hope to further their studies and start a career in Australia.

The international education sector is growing by 10% per annum and is set to increase in FY 2018/19 to 15% with the largest rapid growth in VET fields of commerce, family and health care, built environment, and Tourism, Hospitality, Cuisine (Going, Staying, Eating).

The Market

International education is on an expanding trajectory in Australia fuelled by growth in the following factors:

1. Emerging middle class growth in the Asia Pacific region;

2. Growth in value added economies in the Asia Pacific including the expansion of services sector;

3. Centring of economic and political power within the Asia Pacific, i.e. shift from Europe.

It is estimated that Australia’s current stock of international students will contribute 130,000 skilled migrants to our workforce after they graduate. This represents a 3% increase in the share of Australia’s current workforce with a tertiary education.

Inbound students from overseas into Australia has increased by 36% in the three years to December 2016; in the VET sector over the same period the increase was 25%

The VET sector accounted for 26.3% of total enrolments in 2016 and 28.9% of total commencements. Enrolments and commencements in the sector increased 11.6% and 10.1% respectively in 2016. India had the largest share of total enrolments (14.7%) and total commencements (13.4%). The Republic of Korea was the next largest source country for enrolments with 8.6%, followed by Thailand (8.3%) and China (7.4%).

iCollege plans to expand on ACC's current training facilities in Canberra to allow it to increase its international student capacity.

In addition, iCollege plans to expand its delivery locations and fields of study to include the following:

• Early Childhood Education and Care;

• Nursing;

• Aged Care;

• Hospitality;

• Construction;

• Health and Fitness.

Key Material Terms of the Proposed Acquisition

A summary of the key terms of the Proposed Acquisition is set out below.

• Purchase price:

• 100% of the total shares in ACC will be acquired by ICT for a total of 4,375,000

(Consideration Shares) as follows:

• 3,750,000 shares at $0.04 per share at completion date; and

• 625,000 shares at $0.04 per share 4 months after completion date.

• Conditions Precedent:

• The Company obtaining all regulatory and shareholder approvals under Corporations Act and under the ASX Listing Rules (if required) in connection with the acquisition of ACC;

• the execution of a binding sale and purchase agreement;

• completion of due diligence by the Company on ACC to the satisfaction of the Company.

• Completion:

Completion will occur within 2 business days of the satisfaction (or waiver) of the Conditions Precedent.

– Ends –

For further Information: Mr. Ross Cotton Executive Chairman iCollege Limited +61 8 9466 9008 ross.cotton@icollege.edu.au

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