NORWOOD SYSTEMS LIMITED — Capital/Financing Update 2016

Dec 13, 2016

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 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Norwood Systems Limited

ACN

062 959 540

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).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to 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 for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares
	2,000,000
	Fully paid ordinary shares

4 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in_ relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	Yes, share issued rank equally with existing fully paid ordinary shares.
	Non cash – agreed quantum of shares issued in respect of advisoryservicesprovided to company.
	Issued as consideration for services provided.
	Yes
	30 November 2016
	2,000,000
	Nil
	Nil

• See chapter 19 for defined terms.

Appendix 3B Page 2

01/08/2012

6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and+class of all+securities quoted on ASX (_including_the securities in section 2 if applicable)	Nil
	N/A
	N/A
	Rule 7.1 – 80,399,036 Rule 7.1A – NIL
	14 December 2016
	Number	Class
	970,779,576	Ordinary shares [218,654,678 ordinary shares remaining are subject to escrow]

9 Number and+class of all+securities not quoted on ASX (including the securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	78,869,761 78,869,761 2,000,000 3,927,774 3,927,774 16,970,401 9,500,000 9,500,000 6,000,000 10,000,000 25,336,111 10,167,973 500,000 2,000,000 33,333,333 6,400,000	Unlisted class A performance shares Unlisted class B performance shares Unlisted performance shares Unlisted class A performance rights Unlisted class B performance rights Unlisted options, exercisable at $0.02 to 9 June 2018 Unlisted options, exercise price $0.198, expiring 27 November 2020 with a restriction on disposal until 27 November 2017 Unlisted options, exercise price $0.297, expiring 27 November 2020 with a restriction on disposal until 27 November 2017 Unlisted options, exercise price $0.173 and expiring 27 November 2018 Unlisted options exercise price $0.135, expiring 27 November 2020, vesting on 27 November 2018 with a restriction on disposal until 19 April 2017 Unlisted options, exercise price of $0.02, expiring 27 November 2018 and vesting on 16 June 2017 Unlisted options, exercise price of $0.02 and expiring 27 November 2018 Unlisted options, exercise price of $0.02 and expiring 27 November 2018 Unlisted options, exercise price of $0.107 and expiring 29 December 2018 Unlisted options, exercise price of $0.055 and expiring 15 July 2018 Unlisted options, exercise price of $0.057 and expiring 2 August 2021 (vesting 25% upon each 12 months of continued employment on the anniversary of the issue date)
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 4

01/08/2012

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

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 ) (a)[Securities described in Part 1 ]

(b)[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

• See chapter 19 for defined terms.

Appendix 3B Page 6

01/08/2012

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

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which 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)

Number +Class

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

• See chapter 19 for defined terms.

Appendix 3B Page 8

01/08/2012

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not 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 this warranty

• 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.

• 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 warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 14 December 2016 (Company Secretary)

Print name: Steven Wood

• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for[+] eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid ordinary securities on issue 12 months before date of issue or agreement to issue	844,859,598
Addthe following: • Number of fully paid ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	29/12/2015 – Shareholder approved SPP – 18,749,958 29/12/2015 – Shareholder approved allotment for services provided – 4,000,000
Subtractthe number of fully paid ordinary securities cancelled during that 12 month period	Nil
“A”	867,609,556

• See chapter 19 for defined terms.

Appendix 3B Page 10

01/08/2012

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	130,141,433
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	15/06/16 – placement shares – 13,239,044 15/06/16 – Consideration shares for services provided – 1,170,000 21/6/16 – placement unlisted options – 33,333,333 21/6/16 – prospectus cleansing shares - 20 13/12/16 – Consideration shares for services provided – 2,000,000
“C”	49,742,397
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	130,141,433
Subtract“C” Note: number must be same as shown in Step 3	49,742,397
Total[“A” x 0.15] – “C”	80,399,036 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	130,141,433
Note: number must be same as shown in
Step 2
Subtract“C”	49,742,397
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	80,399,036
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 11

01/08/2012

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 867,609,556 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 86,760,956

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of equity securities issued 15/6/16 – Placement - 86,760,956 or agreed to be issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” 86,760,956

• See chapter 19 for defined terms.

Appendix 3B Page 12

01/08/2012

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	86,760,956
Subtract“E” Note: number must be same as shown in Step 3	86,760,956
Total[“A” x 0.10] – “E”	Nil Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 13

01/08/2012

==> picture [216 x 63] intentionally omitted <==

ASX ANNOUNCEMENT

14 December 2016

The Manager Company Announcements Office ASX Limited Level 6, 20 Bridge Street SYDNEY NSW 2000

NOTICE UNDER SECTION 708A(5)(e) OF THE CORPORATIONS ACT

On 14 December 2016, Norwood Systems Limited ( Company ) completed the issue and allotment of 2,000,000 fully paid ordinary shares in the capital of the Company as non-cash consideration for advisory services provided to the Company ( Shares ).

The Company gives notice pursuant to section 708A(5)(e) of the Corporations Act 2001 (Cth) ( Corporations Act ) that:

1. the Company issued the Shares without disclosure under Part 6D.2 of the Corporations Act; and

2. as at the date of this notice, the Company has complied with:

3. (a) the provisions of Chapter 2M of the Corporations Act as they apply to the Company; and

4. (b) section 674 of the Corporations Act; and

5. as at the date of this notice, there is no information to be disclosed which is excluded information (as defined in section 708A(7) of the Corporations Act) that is reasonable for investors and their professional advisers to expect to find in a disclosure document.

For Norwood Systems Limited

Steven Wood

Company Secretary

Company: Investor Relations: Media: Paul Ostergaard , CEO & Founder Shane Murphy , FTI Consulting David Tasker , Professional Public Office: +61 8 9200 3500 Office: +61 9485 8888 Relations Web: www.norwoodsystems.com email: Mobile: +61 433 112 936 Twitter: @norwoodsystems, shane.murphy@fticonsulting.com email: david.tasker@ppr.com.au @paulostergaard Mobile : +61 420 945 291 Twitter : @ShaneWMurphy