ONE CLICK GROUP LIMITED - Capital/Financing Update 2017

UUV AQUABOTIX LTD ACN 616 062 072

PROSPECTUS

For an offer of 25,500,000 Shares at an issue price of $0.20 per Share to raise $5,100,000 together with 1 free attaching Option for every 1 Share subscribed for and issued ( Offer ). Oversubscriptions of up to a further 9,500,000 Shares at an issue price of $0.20 per Share to raise up to a further $1,900,000 (together with 1 free attaching Option for every 1 Share subscribed for and issued) may be accepted under the Offer,

and

for the offer of 10,000,000 Options to the Joint Lead Managers.

Joint Lead Managers: Patersons Securities Limited and KTM Capital Pty Limited

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered highly speculative.

1.	CORPORATE DIRECTORY .............................................................................................. 1
2.	IMPORTANT NOTICE ..................................................................................................... 2
3.	INVESTMENT OVERVIEW ............................................................................................... 4
4.	CHAIRMAN’S LETTER ................................................................................................... 24
5.	DETAILS OF THE OFFER ................................................................................................ 25
6.	COMPANY OVERVIEW ............................................................................................... 34
7.	RISK FACTORS ............................................................................................................ 45
8.	INTELLECTUAL PROPERTY REPORT ............................................................................... 51
9.	FINANCIAL INFORMATION AND INVESTIGATING ACCOUNTANT’S REPORT ............ 62
10.	BOARD, MANAGEMENT AND CORPORATE GOVERNANCE ..................................... 81
11.	MATERIAL CONTRACTS .............................................................................................. 88
12.	ADDITIONAL INFORMATION ...................................................................................... 93
13.	DIRECTORS’ AUTHORISATION .................................................................................. 108
14.	GLOSSARY ................................................................................................................ 109

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1. CORPORATE DIRECTORY

Directors

Registered Office

Peter James – Non-Executive Chairman Durval Tavares – Executive Director Brendan Martin – Executive Director Jay Cohen – Non-Executive Director

Level 29, 201 Elizabeth Street Sydney NSW 2000

Telephone: + 61 2 8072 1400 Facsimile: +61 2 8072 1440

Management

Durval Tavares - Chief Executive Officer Brendan Martin - Chief Financial Officer Anand Sundaraj - Company Secretary

Email: [email protected] Website: www.aquabotix.com

Proposed ASX Code

Share Registry*

UUV – Shares UUVO - Options

Link Market Services Limited Level 4, 152 St Georges Terrace Perth WA 6000

Telephone: +61 1300 554 474 Facsimile: +61 2 9287 0303

Solicitors in Australia

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000

Investigating Accountant and Auditor of the Company

HLB Mann Judd Level 19, 207 Kent Street Sydney NSW 2000

Patent Attorney

K&L Gates LLP 70 West Madison Street, Suite 3100 Chicago, IL 60602 USA

Auditor of Aquabotix Technology Corporation*

Cohen & Schaeffer P.C. 420 Lexington Avenue, Suite 2450 New York, NY 10170

Attorneys in the USA

Joint Lead Managers

Moses & Singer LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174 USA

Patersons Securities Limited Level 23, Exchange Tower 2 The Esplanade Perth WA 6000

KTM Capital Pty Limited Level 2, 16 O’ Connell Street Sydney NSW 2000

This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus.

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2. IMPORTANT NOTICE

This Prospectus is dated 14 March 2017 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered highly speculative.

2.1 Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. You should be aware that this examination may result in the identification of deficiencies in this Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications for Securities under this Prospectus will not be processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on applications lodged prior to the expiry of the Exposure Period.

2.2 Web Site – On-line Prospectus

A copy of this Prospectus can be downloaded from the website of the Company at www.aquabotix.com. If you are accessing the on-line version of this Prospectus, you must be an Australian resident and must only access this Prospectus from within Australia. In particular, the on-line version of this Prospectus may not be accessed within the United States.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company or contacting the UUV Aquabotix Offer Information Line on 1300 668 378 if calling within Australia or +61 1300 668 378 if calling from outside of Australia.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the on-line Application Form, it was not provided together with the on-line Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

2.3 Website

No document or information included on the Company’s website is incorporated by reference into this Prospectus.

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2.4 Forwarding-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and management.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law.

These forward-looking statements are subject to various risk factors that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Sections 3.5 and 7 of this Prospectus.

2.5 Photographs and Diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale.

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3. INVESTMENT OVERVIEW

This section is a summary only and not intended to provide full information for investors intending to apply for Securities offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

3.1 The Company

UUV Aquabotix Ltd (the Company ) was incorporated on 22 November 2016 for the primary purpose of acquiring Aquabotix Technology Corporation ( Aquabotix ) and engaging in the business of offering products manufactured by Aquabotix globally, as well as managing and operating Aquabotix’s business.

Aquabotix is a United States (Massachusetts) corporation that was formed on 4 March 2011 for the primary purpose of developing and selling commercial/industrial-grade unmanned underwater vehicles (also known as “ UUVs ” or “ underwater drones ”), commercial/industrial-grade networked underwater cameras, and UUV and underwater camera accessories.

Aquabotix owns the intellectual property in a range of UUV and underwater camera products, has been selling its products since November 2011 and generated approximately $1,100,000 in sales in calendar 2016, sales that are approximately 80% higher than its calendar 2015 sales. It is a leader in the nascent and rapidly-developing underwater robotics industry, with a particular focus on cost-effective commercial and industrial-grade underwater drones and cameras. It is also one of very few companies worldwide offering commercially-available hybrid underwater drones, which are capable of both autonomous and remote human operation.

On 24 February 2017, the Company entered into an exchange agreement ( Exchange Agreement ) with the current shareholders of Aquabotix to acquire 100% of the issued share capital of Aquabotix in consideration for the issue of an aggregate of 100,000,000 Shares and 45,000,000 Performance Shares in the Company to the current shareholders of Aquabotix, such issue to be conditional upon, and to occur concurrently with the Company issuing the Securities under the Offer (the Exchange ). The terms and conditions of the Performance Shares to be issued pursuant to the Exchange are set out in Section 12.3.

The effect of the Exchange Agreement is that, upon the Company obtaining the Listing Approval, raising the minimum subscription and issuing the Securities under the Offer, the current shareholders of Aquabotix will own approximately 79.7% of the Shares of the Company (or, in the event full oversubscriptions are raised under the Offer, the current shareholders of Aquabotix will own approximately 74.1% of the Shares of the Company) and Aquabotix will be a wholly owned subsidiary of the Company. Please refer to Section 11.1 for a summary of the key terms of the Exchange Agreement.

The Board considers that the quantum of the Shares and Performance Shares to be issued by the Company for the acquisition of Aquabotix reflects reasonable fair value of Aquabotix in view of the key investment highlights set out in Section 3.4 of the Prospectus and the Company having conducted arm’s length negotiations with the shareholders of Aquabotix to arrive at the commercial terms of the acquisition.

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In determining the quantum of Shares and Performance Shares to be issued for the Aquabotix acquisition, the Company also took into account the following considerations:

(a) internal revenue and profit forecasts of Aquabotix. However, those forecasts cannot be stated publicly as they do not comply with ASIC guidelines (in particular, ASIC Regulatory Guide 170 which requires directors to have a reasonable basis for disclosing forecast financial information);
(b) the fact that the underwater drone industry is a relatively new industry experiencing rapid growth;
(c) the Board’s assessment of the future prospects of Aquabotix based on the status of its technology and products and interest from third parties;
(d) the fact that Aquabotix has one granted patent and four patent applications, which potentially provide Aquabotix’s intellectual property with a defensible position in relation to third party infringement; and
(e) representations from the Aquabotix directors as to the price at which a takeover offer for the company would be likely to succeed.

As with the acquisition of any relatively early stage growth company, there is not always an appropriate formal valuation methodology (e.g. discounted cash flow) available when determining the purchase price and the Company was required to take into account qualitative factors such as those set out above in coming to a decision on price.

3.2 Business Model

Aquabotix sells its commercial/industrial-grade underwater drones and networked underwater cameras, supported by its proprietary software, to customers. Aquabotix’s business model is aimed at generating a revenue stream from such sales (as well as from the installation of underwater cameras), followed by revenues from add on software modules, data analysis tools, customer training, and extended warranties.

The actual and prospective end-users of Aquabotix’s products are based around the world, range widely in nature, and include, among others: defence agencies, oil and gas, aquaculture and marine construction companies, and recreationalists (refer to Section 6.2 for a full list of industries and end-users). Underwater robotics is a relatively nascent industry, and Aquabotix is one of the early movers in it. There is a limited number of underwater drone solutions that are readily commercially-available to end-users in the market and are credible, proven over time, effective and cost-effective. Demand for Aquabotix’s products is driven by the fact that it is one of the few industry participants with existing products (as opposed to prototypes or concepts) and the fact that its products have been in use in a range of industries for several years, consistently achieve their users’ operating objectives, are highly technically functional, and are costeffective.

Aquabotix views its industry as segmented into three broad layers (for further details, please refer to Section 6.2.1):

At the “top end” are the meaningfully more expensive military-grade solutions for unique and critical missions, such as unmanned submarines,

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that as a practical matter, are likely to be available largely only to governments and defence agencies.

In the “middle market” are cost-effective “every-day workhorse” solutions for government and commercial users.
The “lower layer” consists of consumer-grade products largely unsuitable for commercial use.

Aquabotix currently focuses on the “middle market”, where there exists a substantial potential government and commercial end-user market, with the market participants having the capacity to purchase systems and post-sale support on an ongoing basis.

Aquabotix has historically generated sales to this market through a combination of direct sales to end-users (despite not having a dedicated salesforce of its own), and sales through dealers, distributors and independent representatives. Geographically, while Aquabotix has sold its products to clients in 45 different countries, North American sales have historically predominated.

3.3 The Objectives

The Company’s main objectives on completion of the Offer are to:

build out an extensive distributor network in the United States, Australia and elsewhere internationally;
expand its direct sales force, with an increased emphasis on sales outside of the United States and a particular emphasis on specific industry verticals (e.g. defence, marine construction, aquaculture and others as set out in Section 6.2.1) in which the Company believes its products are particularly relevant globally;
expand the executive, operations, research and development and support teams;
expand its research and development in order to, among other things:
maintain Aquabotix’s products’ competitiveness and “edge”,
develop new versions of its existing products as demand evolves,
develop new products to meet market demand,
add product extensions to its existing products, such as sensor addons and software subscription products, as set out in Section 6.2;
make an additional investment in intellectual property protection; and
establish a multi-faceted publicly-traded underwater robotics company with sufficient resources for quick development and response to market requirements.

Each of these areas is critical to the Company’s ability to execute its strategy.

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3.4 Key Investment Highlights

Aquabotix is a six-year old, unique and established underwater robotics company which manufactures and sells commercial and industrial-grade underwater drones and networked underwater cameras for commercial, high-end consumer and military applications.
In the underwater drone segment, Aquabotix is currently selling to its customers remotely-operated underwater vehicles (operated remotely by a human user) and hybrid underwater vehicles (which can be operated autonomously or by a human user).
Aquabotix’s product range includes four product lines and 10 models.
Aquabotix’s products:
are proprietary hardware backed by proprietary intellectual property (which includes a granted patent and four patent applications) and software; and
are suitable for use in multiple industries (refer to Section 6.2 for further details).
Aquabotix is an early-mover in a nascent industry with very few participants.
Aquabotix is experiencing substantial sales growth. It has shipped approximately 840 units, including 350 vehicles, to clients in approximately 45 different countries since sales commenced in November 2011. Aquabotix’s calendar 2016 year sales were approximately $1,100,000, 80% higher than its calendar 2015 year sales.
Customers who have purchased Aquabotix’s products include the United States Navy, the United States Coast Guard, the United States Department of Homeland Security, BP, Shell, Pittsburg Tank, Virginia Institute of Marine Science, the University of Notre Dame, Broadspectrum Ltd and ConEdison.
There are no dominant players but Aquabotix is a leader in the nascent and rapidly-developing underwater robotics industry, with a particular focus on cost-effective commercial and industrial-grade underwater drones and cameras. It is also one of very few companies worldwide offering commercially-available hybrid underwater drones, which are capable of both autonomous and remote human operation.
There is an existing addressable market for Aquabotix’s UUV products, projected to grow to US$4.0 billion by 2020.
Aquabotix is highly-differentiated from the limited competition in that:
it produces a commercially affordable underwater drone solution.
in addition to commercial use, because of the relatively low cost of its underwater drones, they can be deployed in large numbers by military users.
its products can be operated without formal training.

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its products are highly functional and technologically differentiated from the other competitors’ products in the middle market (see Section 6.2.4 for further details).
The Company and Aquabotix are backed by a U.S. institutional investor and high profile industry insiders.
Members of the Company’s Board and management team are experienced in the industry and successful ASX small-caps (refer to Section 3.16 for further details). The standing, connectivity and relevant experience of the Board are highlighted by the following:
the Chief Executive Officer, Executive Director and founder Durval Tavares is an electrical engineer with over 30 years of business, technological and product development experience, including with the Naval Undersea Warfare Centre and Fidelity Investments;
the Chairman Peter James has 30 plus years of experience in public company management, with a current portfolio of directorships including Macquarie Telecom Ltd, nearmap Ltd, Dreamscape Networks Ltd and DroneShield Limited;
the Non-Executive Director Rear Admiral Jay Cohen US Navy (Ret), a former nuclear submarine commander, was also formerly the Chief of Naval Research and Chief Technology Officer of the United States Department of the Navy, and the U.S. Department of Homeland Security Undersecretary for Science and Technology and, during the most recent U.S. presidential transition, met (in his personal capacity, unrelated to the Company) with the then President-Elect Donald Trump and his transition team at Trump Tower in December 2016; and
Chief Financial Officer and Executive Director Brendan Martin has over 15 years’ experience in banking, finance and industry, and most recently held a senior strategy position at Broadspectrum Ltd and was part of the executive team responsible for the sale of Broadspectrum to Ferrovial Servicios in 2016 for an enterprise value of approximately $1.24 billion.

3.5 Key Risks

The business, assets and operations of the Company are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the securities of the Company.

The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can effectively manage them is limited.

Set out below are specific risks that the Company is exposed to. Further risks associated with an investment in the Company are outlined in Section 7.

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(a) Limited history

The Company was only recently incorporated and has limited operating history and limited historical financial performance. Further, Aquabotix’s financial performance across the previous three financial periods includes marginal profits in the periods ending 31 December 2014 and 31 December 2016, with a loss for the period ending 31 December 2015, for a combined profit of approximately $131,500 across the three financial periods. Please refer to the financial information in Section 9 for further details.

No assurance can be given that the Company will maintain or improve commercial viability through Aquabotix’s existing technology or otherwise. Until the Company is able to realise substantial value from the technology, it is likely to incur ongoing operating losses. Achievement of the Company’s objectives will depend on the Board’s and the executive team’s ability to successfully implement its development and growth strategy. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Offer – refer to the risk factor in Section 7.2(a) for further details.

(b) Research and Development and Technical Risk

Aquabotix’s products are the subject of continuous research and development and will likely need to be substantially developed further in order to enable the Company to remain competitive, increase sales and improve the products’ scalability. There are no guarantees that the Company will be able to undertake such research and development successfully. Failure to successfully undertake such research and development, anticipate technical problems, or estimate research and development costs or timeframes accurately will adversely affect the Company’s results and viability.

(c) Technology Risk

Aquabotix’s market involves rapidly evolving products and technological change. To succeed, the Company will need to research, develop, design, manufacture, assemble, test, market and support (i) substantial enhancements to its existing products and (ii) new products, on a timely and cost-effective basis. The Company cannot guarantee that it will be able to engage in research and development at the requisite levels. The Company cannot assure investors that it will successfully identify new technological opportunities and continue to have the needed financial resources to develop new products in a timely or cost-effective manner. At the same time, products and technologies developed by others may render the Company’s products and systems obsolete or noncompetitive.

(d) Intellectual Property Rights

A substantial part of the Company's commercial success will depend on its ability to maintain or as the case may be establish, and protect, Aquabotix’s intellectual property, maintain trade secret protection and operate without infringing the proprietary rights of third parties.

Aquabotix currently has one granted patent and four patent applications in the United States. There is a risk that each pending

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application will not be granted. There is a further risk that the claims of each patent application, as filed, may change in scope during examination by the United States Patent and Trademark Office ( USPTO ). Further, if and where a patent is granted, there can be no guarantee that such patent is valid or enforceable or that the patent will be granted in countries other than the United States. Aquabotix currently does not hold any patents or patent applications outside of the United States. Please refer to the Intellectual Property Report in Section 8 for further details.

The commercial value of these intellectual property assets is dependent on any relevant legal protections. These legal mechanisms, however, do not guarantee that the intellectual property will be protected or that the Company's competitive position will be maintained. No assurance can be given that employees or third parties will not breach confidentiality agreements, infringe or misappropriate the Company's intellectual property or commercially sensitive information, or that competitors will not be able to produce non-infringing competitive products. Competition in retaining and sustaining protection of technologies and the complex nature of technologies can lead to expensive and lengthy disputes for which there can be no guaranteed outcome. There can be no assurance that any intellectual property which the Company (or entities it deals with) may have an interest in now or in the future will afford the Company commercially significant protection of technologies, or that any of the projects that may arise from technologies will have commercial applications.

It is possible that third parties may assert intellectual property infringement, unfair competition or like claims against Aquabotix or the Company under copyright, trade secret, patent, or other laws. While the Company is not aware of any claims of this nature in relation to any of the intellectual property rights in which it has or will acquire an interest, such claims, if made, may harm, directly or indirectly, the Company's business. If the Company is forced to defend claims of intellectual property infringement, whether they are with or without merit or are determined in the Company's favour, the costs of such litigation will be potentially significant and may divert management's attention from normal commercial operations. Please refer to the Intellectual Property Report in Section 8 for further details.

Additionally, securing rights to (or developing) technologies complementing Aquabotix’s existing intellectual property will also play an important part in the commercial success of the Company. There is no guarantee that such rights can be secured or such technologies can be developed.

(e) Third Party Relationship Risk

The Company is dependent in part upon its relationships and alliances with industry participants. Some of Aquabotix’s partners do or may in the future assist Aquabotix in the development of its products through testing, research and development, contract manufacturing, supplier or teaming arrangements. If any of Aquabotix’s existing relationships with partners were impaired or terminated, or if the Company was unable to implement additional partnering arrangements it may require from time to time, the Company could experience significant delays in the development of products, and would incur additional costs. Additionally, the Company may take a credit risk with regard to parties to whom it supplies products. In the event of such parties failing to meet its

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obligations to the Company on time or at all, the Company may be adversely affected.

(f)

Reputational Risk

Any negative publicity regarding the Company, Aquabotix or their respective Boards, officers or employees, or the performance of its products, will adversely affect the Company’s ability to generate revenue.

(g) Competition Risk

The market in which Aquabotix participates is competitive and characterised by rapid technological change. The Company’s potential inability to improve existing product lines and develop new products and technologies could have a material adverse effect on the Company’s business. In addition, the Company’s competitors could introduce new products with greater capabilities or better pricing which could have a material adverse effect on the Company’s business. The Company competes with larger companies with greater resources on the basis of performance, cost, overall value, delivery and reputation.

(h) Concentration of Ownership and Dilution Risk

The Company currently has 1 Share on issue and will issue 100,000,000 Shares and 45,000,000 Performance Shares in the Exchange, meaning that the maximum number of Shares issued under this Offer will represent up to approximately 25.9% of the issued Share capital of the Company on completion of the Offer (assuming the full oversubscription is raised). Further, assuming only the minimum subscription is raised under the Offer, the number of Shares issued will represent approximately only 20.3% of the issued Share capital of the Company on completion of the Offer.

Assuming only the minimum subscription is raised, the Performance Shares convert into Shares and no other Shares are issued in the Company, the number of Shares issued under this Offer will represent approximately only 15.0% of the issued capital of the Company. There will therefore be a concentration of ownership within the existing shareholders of Aquabotix on completion of the Offer (and on any conversion of the Performance Shares). Some investors may consider that this increases the risk of participating in the Offer.

Conversion of the Performance Shares into ordinary shares (should the relevant milestones be achieved in the future) will dilute the holdings of Shares held by existing Shareholders at the time.

(i) Liquidity

As noted above, 100,000,000 Shares and 45,000,000 Performance Shares in the Company will be issued to the existing owners of Aquabotix in the Exchange. All of these Shares and Performance Shares are likely to be classified by the ASX as restricted securities and be placed into escrow. Please refer to Section 3.12 for further details. Some investors may consider that there is an increased liquidity risk as a large portion of issued capital may not be able to be traded freely for a period of time.

There is currently no public market through which Securities may be sold. On completion of the Offer, there can be no guarantee that an active

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market in the Securities will develop or that the price of the Securities will increase or not decrease. There may be relatively few or many potential buyers or sellers of the Securities on ASX at any time. This may increase the volatility of the market price of the Securities and may prevent investors from acquiring more Securities or disposing of Securities they acquire under the Offer. It may also affect the prevailing market price at which the Shareholders are able to sell their Securities. This may result in Shareholders who acquire Shares under the Offer receiving a market price for their Shares that is less or more than the Offer price.

(j)

Government Regulation Risk

The Company and Aquabotix are subject to government regulation which may require them to obtain additional licenses and could limit their ability to sell their products outside the United States. The sale of certain products outside the United States is subject to compliance with the United States Export Administration Regulations and the International Traffic in Arms Regulations. Failure to obtain the requisite licenses (if such licenses are required), meet registration standards or comply with other government export regulations, may affect the Company’s or Aquabotix’s ability to export such products or to generate revenues from the sale of products outside the United States, which could have a material adverse effect on the Company’s business, financial condition and results of operations. Compliance with government regulations may also subject the Company to additional fees and costs. The absence of comparable restrictions on competitors in other countries may adversely affect the Company’s competitive position.

(k) Reliance on Key Personnel Risk

A failure to attract and retain executive, business development, technical and other key personnel could reduce the Company’s revenues and operational effectiveness. There is a continuing demand for relevant qualified personnel, and the Company believes that its future growth and success will depend upon its ability to attract, train and retain such personnel. Competition for personnel in the Company’s industry is intense, and there is a limited number of persons with knowledge of, and experience in, this industry. An inability to attract or maintain a sufficient number of requisite personnel could have a material adverse effect on the Company’s performance or on the Company’s ability to capitalise on market opportunities.

(l) US Taxation Risk

The acquisition, ownership and disposal of Securities may have tax consequences for investors, which may vary depending on the individual financial affairs and tax residence of each investor. Further, due to the circumstances of the Company’s formation, its acquisition of Aquabotix and the continuation of Aquabotix shareholders as shareholders of the Company, the Company will be treated as a U.S. domestic corporation for U.S. tax purposes, and will therefore be subject to U.S., as well as Australian, tax laws. All potential investors in the Company are urged to obtain independent professional taxation and financial advice about the consequences of acquiring and disposing of Securities from a taxation viewpoint and generally. Please refer to Section 3.14 for a general summary of potential taxation consequences facing investors based on the applicable taxation law as at the date of this Prospectus.

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The above list of risk factors should not to be taken as exhaustive of the risks faced by the Company and you should refer to the additional risk factors in Section 7 of this Prospectus before deciding whether to apply for Securities pursuant to this Prospectus.

3.6 The Offer

The Company invites applications for 25,500,000 Shares at an issue price of $0.20 per Share to raise $5,100,000 together with one free attaching Option for every one Share subscribed for and issued. Oversubscriptions of up to a further 9,500,000 Shares at an issue price of $0.20 per Share to raise up to a further $1,900,000 together with 1 free attaching Option for every 1 Share subscribed for and issued may be accepted. As such, the maximum amount that can be raised under the Offer is $7,000,000.

The Options offered under the Offer will be issued on the terms and conditions set out in Section 12.3. All Shares issued on conversion of the Options will rank equally with the Share on issue at the date of this Prospectus. The key information relating to the Offer and references to further details are set out below.

Further, the Joint Lead Managers (or their respective nominees) may subscribe for a total of 10,000,000 Options subject to the terms of the Joint Lead Manager Mandates summarised in Section 11.2. The Options offered under the Joint Lead Manager Offer will be issued on the terms and conditions set out in Section 12.4 of this Prospectus.

3.7 Indicative timetable*

ndicative timetable*
Lodgement of Prospectus with the ASIC	14 March 2017
Opening Date	22 March 2017
Closing Date	19 April 2017
Despatch of holding statements	24 April 2017
Expected date for quotation on ASX	1 May 2017

* The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice.

3.8 Purpose of the Offer

The purpose of the Offer is to facilitate an application by the Company for admission to the Official List of ASX and position the Company to seek to achieve the objectives set out above in Section 3.3.

3.9 Use of Funds

The Company intends to apply funds raised from the Offer, together with existing cash reserves, over the first two years following admission of the Company to the official list of ASX as follows:

Funds available	Minimum Subscription ($) ($5,100,000)	Percentage of Funds (%)	Full Oversubscriptions ($) ($7,000,000)	Percentage of Funds (%)
Existing cash reserves1	$1,000,000	16.4%	$1,000,000	12.5%

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Funds raised from the Offer	$5,100,000	83.6%	$7,000,000	87.5%
Total	$6,100,000	100%	$8,000,000	100 %
Allocation of funds
Expenses of the Offer2	$400,000	6.5%	$520,000	6.5%
Expansion of the Company’s Executive, Sales, Research and Development, and Operational/Post-Sale Support Teams & Marketing	$3,800,000	62.3%	$4,700,000	58.8%
Engineering and Research and Development3	$800,000	13.1%	$1,400,000	17.5%
Ongoing intellectual property, legal, insurance and administration costs	$600,000	9.8%	$700,000	8.8%
Working capital	$500,000	8.2%	$680,000	8.5%
Total	$6,100,000	100%	$8,000,000	100%

1 As at 24 February 2017. Refer to the Financial Information and Investigating Accountant’s Report set out in Section 9 of this Prospectus for further details.

2 Refer to Section 12.11 of this Prospectus for full details of the expenses of the Offer, a portion of which have been paid prior to lodgement of this Prospectus.

3 This line item excludes remuneration of the research and development staff which is separately included in the above line item.

As noted above, the Company intends to use approximately $3,800,000 of the capital raised under the Offer (assuming minimum subscription), or approximately $4,700,000 (assuming full oversubscription), to establish an in-house sales force, expand Aquabotix’s distributor network (and establish a global distributor network), develop distribution in Aquabotix’s target geographic and industry markets, develop its pre-sale and post-sale support capabilities, and expand its executive team, with a particular focus on business development.

The Company intends to use approximately $800,000 of the capital raised under the Offer (assuming minimum subscription), or approximately $1,400,000 (assuming full oversubscription) to further scale Aquabotix’s existing technology, adapt Aquabotix’s products to meet unique customer demands as they arise, and develop its product range.

It is anticipated that the funds raised under the Offer will enable 2 years of full operations (if the minimum subscription is raised).

It should be noted that the Company may not be fully self-funding through its own operational cash flow at the end of this period. Accordingly, the Company may require additional capital beyond this point, which will likely involve the use of additional debt or equity funding. Future capital needs may also depend on development opportunities in relation to new applications that may arise from the Company’s technologies as they are developed over time and which may have significant value if further developed for the market.

In the event the Company raises more than the minimum subscription of $5,100,000, the additional funds raised will be first applied towards the additional expenses of the Offer, then towards expanding the Company’s engineering and research and development programmes in conjunction with expanding the Company’s executive, sales, operational and marketing programmes, and then

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on meeting intellectual property, legal, insurance and administration costs and general working capital. On completion of the Offer, the Board believes the Company will have sufficient working capital to achieve these objectives.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events and new circumstances (including the need to adapt to a changing competitive environment, and the level of demand for the Company’s products) have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

The use of further debt or equity funding will be considered by the Board where it is appropriate to expand sales, research and development and operations efforts, accelerate product development or capitalise on further opportunities.

3.10 Capital Structure

The capital structure of the Company following completion of the Offer (assuming minimum subscription and full oversubscriptions) is summarised below[1] :

Shares[2]

hares2
	Minimum Subscription	Full Oversubscription
	Number	Number
Shares currently on issue3	1	1
Shares to be issued pursuant to the Exchange Agreement4	100,000,000	100,000,000
Shares to be issued pursuant to the Offer	25,500,000	35,000,000
Total Shares on completion of the Offer	125,500,001	135,000,001

Options

	Minimum Subscription	Full Oversubscription
	Number	Number
Options currently on issue	nil	nil
Options to be issued under the Offer5	25,500,000	35,000,000
Options to be issued to Directors and Management6	11,400,000	11,400,000
Options to be issued to the Joint Lead Managers7	10,000,000	10,000,000
Total Options on completion of the Offer	46,900,000	56,400,000

Performance Shares

erformance Shares
	Minimum Subscription	Full Oversubscription
	Number	Number
Performance Shares currently on issue	nil	nil

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Performance Shares to be issued under the Offer	nil	nil
Performance Shares to be issued pursuant to the Exchange Agreement8	45,000,000	45,000,000
Total Performance Shares on completion of the Offer	45,000,000	45,000,000

1 Refer to the Investigating Accountant’s Report set out in Section 9 of this Prospectus for further details.
2 The rights attaching to the Shares are summarised in Section 12.2 of this Prospectus.
3 The Share currently on issue was issued on the date of incorporation of the Company to Long Hill Capital II, LLC.
4 Refer to Section 11.1 for a summary of the terms of the Exchange Agreement pursuant to which these Shares are to be issued.
5 Each Option will be quoted and is exercisable at 22 cents on or before the second anniversary of its issue. Refer to Section 12.3 for the full terms and conditions of these Options.
6 Each Option will be unquoted and is exercisable at 30 cents on or before the third anniversary of the date of its vesting. Refer to Section 3.18 for details of the vesting conditions attached to such Options and to Section 12.5 for the full terms and conditions of these Options.
7 Each Option will be unquoted and is exercisable at 22 cents on or before the third anniversary of its issue. Refer to Section 12.4 for the full terms and conditions of the Options. Refer to Section 11.2 for a summary of the Joint Lead Manager Mandates.
8 Consisting of 15,000,000 Class A Performance Shares, 15,000,000 Class B Performance Shares and 15,000,000 Class C Performance Shares. Each Performance Share is convertible into one Share in the Company on the achievement of certain milestones in respect of the UUV Technology. Refer to Section 12.6 for the full terms and conditions of these Performance Shares.

3.11 Substantial Shareholders

Those Shareholders holding 5% or more of the Shares on issue as at the date of this Prospectus assuming completion under the Exchange Agreement has occurred and on completion of the Offer (assuming minimum subscription) are set out in the respective tables below.

As at the date of the Prospectus

Shareholder	Shares	Options	% (undiluted)	% (fully diluted)
Long Hill Capital II, LLC	1	-	100	100

As at the date of the Prospectus and assuming the Shares under the Exchange Agreement are issued to the Aquabotix shareholders

Shareholder5	Shares	Options	% (undiluted)	% (fully diluted)
Long Hill Capital II, LLC	51,940,027	-	51.94	51.94
Durval Tavares1,3 & 4	29,387,143	-	29.39	29.39
Deniz Diogo2	6,798,457	-	6.80	6.80
Debra Tavares3	5,452,644	-	5.45	5.45

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1 6,337,330 Shares held by Durval Tavares directly and 23,049,813 Shares held for the benefit of Durval Tavares by the Trust for the Aquabotix Technology Corporation 401(k) Plan, a retirement trust established under US law.

2 635,234 Shares held by Deniz Diogo directly and 6,163,223 Shares held for the benefit of Deniz Diogo by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

3 4,337,330 Shares held by Debra Tavares (wife of Durval Tavares) directly and 1,115,314 Shares held for the benefit of Debra Tavares by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

4 In addition, Dawn Doraz (daughter of Durval Tavares) will hold a further 1,405,544 Shares in the Company with 309,810 Shares being held directly and 1,095,734 Shares being held for the benefit of Dawn Doraz by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

5 The Trust for the Aquabotix Technology Corporation 401(k) Plan will be the second largest registered holder of Shares in the Company with a combined holding of 34,767,299 Shares (representing approximately 34.77% of the issued share capital of the Company on the basis outlined above). As noted above, all of these Shares are held for the benefit of various shareholders of Aquabotix who are the beneficial holders of the Shares and have invested in Aquabotix via this retirement trust. The Trust for the Aquabotix Technology Corporation 401(k) Plan acts at the direction of these individual shareholders with respect to the shares such shareholder beneficially owns.

On completion of the Offer (assuming no existing substantial Shareholder subscribes and receives additional Shares pursuant to the Offer[1] )

	A	B	C	D	E=C+D	F=A/C	G=A/E
Shareholder	Shares	Options	Total Shares	Total Options	Diluted Shares	% undiluted	% diluted
Long Hill Capital II, LLC1	51,940,027	-	125,500,001	46,900,000	172,400,001	41.39%	30.13%
Durval Tavares2	29,387,143	-	125,500,001	46,900,000	172,400,001	23.42%	17.05%
Deniz Diogo3	6,798,457	-	125,500,001	46,900,000	172,400,001	5.42%	3.94%

Long Hill Capital II, LLC and/or its related parties may participate in the Offer.
6,337,330 Shares held by Durval Tavares directly and 23,049,813 Shares held for the benefit of Durval Tavares by the Trust for the Aquabotix Technology Corporation 401(k) Plan.
635,234 Shares held by Deniz Diogo directly and 6,163,223 Shares held for the benefit of Deniz Diogo by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

On completion of the Offer (assuming no existing substantial Shareholder subscribes and receives additional Shares pursuant to the Offer, all of the Performance Shares convert into Shares and no other Shares are issued in the Company)

		A1					F=(A+A1)	G=(A+A
	A		B	C	D	E=C+D	/C	1)/E
Shareholder	Shares	Performance Shares	Options	Total Shares	Total Options	Diluted Shares	% undiluted	% diluted
Long Hill Capital II, LLC1	51,940,027	23,373,012	-	170,500,001	46,900,000	217,400,001	44.17%	34.64%
Durval Tavares2	29,387,143	13,224,216	-	170,500,001	46,900,000	217,400,001	24.99%	19.60%
Deniz Diogo3	6,798,457	3,059,304	-	170,500,001	46,900,000	217,400,001	5.78%	4.53%

Long Hill Capital II, LLC and/or its related parties may participate in the Offer.

6,337,330 Shares held by Durval Tavares directly and 23,049,813 Shares held for the benefit of Durval Tavares by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

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635,234 Shares held by Deniz Diogo directly and 6,163,223 Shares held for the benefit of Deniz Diogo by the Trust for the Aquabotix Technology Corporation 401(k) Plan.

The Company will announce to the ASX details of its top-20 Shareholders (following completion of the Offer) prior to the Securities commencing trading on ASX.

3.12 Restricted Securities

Subject to the Company being admitted to the Official List, certain Shares, Performance Shares and Options will be classified by ASX as restricted securities and will be required to be held in escrow for up to 24 months from the date of Official Quotation. During the period in which these Securities are prohibited from being transferred, trading in Securities may be less liquid which may impact on the ability of a Shareholder to dispose of his or her Securities in a timely manner.

It is estimated that 100,000,001 Shares, 45,000,000 Performance Shares and 21,400,000 Options will be subject to escrow as follows:

(a) 1 Share issued on the incorporation of the Company for 24 months from the date of Official Quotation (held by Long Hill Capital II, LLC, the sole shareholder of the Company at the date of this Prospectus);
(b) 100,000,000 Shares and 45,000,000 Performance Shares for 24 months from the date of Official Quotation (to be issued under the Exchange Agreement and held by the shareholders of Aquabotix);
(c) 11,400,000 Options for 24 months from the date of Official Quotation (held by Directors);
(d) 10,000,000 Options for 24 months from the date of Official Quotation (held by the Joint Lead Managers).

The Company will announce to the ASX full details (quantity and duration) of the Shares, Performance Shares and Options required to be held in escrow prior to the Securities commencing trading on ASX.

3.13 Financial Information

The Company was only recently incorporated (22 November 2016) and has no operating history or history of financial performance.

Contained in the financial information in Section 9 is the pro forma historical balance sheet for the 12 months ended 31 December 2016 to provide investors with a summary of the Company’s historical financial information assuming the Company had existed for the duration of that financial period and Aquabotix had been owned by the Company for that period. Also included in the financial information in Section 9 is Aquabotix’s audited balance sheet at 31 December 2016.

This Prospectus is taken to include information contained in the audited annual financial statements of Aquabotix for the financial periods ended 31 December 2014, 31 December 2015 and 31 December 2016 (together, the Included Documents ).

The Included Documents were lodged with ASIC on the date of this Prospectus. The Company will give a copy of the Included Documents free of charge to any investor who asks for a copy before the Closing Date. Any such request should be

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made by contacting the Company at its registered office during normal business hours. The Company will also announce the Included Documents to the ASX prior to the Securities commencing trading on ASX.

Aquabotix’s financial performance across the previous three financial periods include marginal profits in the periods ending 31 December 2014 and 31 December 2016, with a loss for the period ending 31 December 2015, for a combined profit of approximately $131,500 across the three financial periods. Please refer to the financial information in Section 9 of this Prospectus for further details.

3.14 Taxation

The acquisition, ownership and disposal of Securities may have tax consequences, which will vary depending on the individual financial affairs and tax residence of each investor. All potential investors in the Company are urged to obtain independent professional taxation and financial advice about the consequences of acquiring and disposing of Securities from a taxation viewpoint and generally.

Due to the circumstances of the Company’s organisation, its acquisition of Aquabotix and the continuation of Aquabotix shareholders as shareholders of the Company, the Company will be treated as a U.S. domestic corporation for U.S. tax purposes, and will therefore be subject to U.S., as well as Australian, tax laws. Please refer to Section 5.7 for further details.

The information contained in Section 3.5(l) and in this Section 3.14 is not a complete summary of potential taxation consequences facing investors based on the applicable taxation law as at the date of this Prospectus. To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability or responsibility with respect to the taxation consequences of subscribing for Securities under this Prospectus or the reliance of any Shareholder on any part of the summary contained in, Section 3.5(l), this Section 3.14 or Section 5.7.

3.15 Dividend Policy

The Company anticipates that significant expenditure will be incurred in the furtherance of the Company’s development. These activities are expected to dominate the two year period following the date of this Prospectus. Accordingly, the Company does not expect to declare any dividends during that period.

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

3.16 Directors and Key Personnel

Set out below are short descriptions of the Directors and key personnel of the Company. Please refer to Section 10.1 for the full biographies of the Directors and key personnel.

Durval Tavares

Chief Executive Officer and Executive Director

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Mr. Tavares is the current President and CEO of Aquabotix, which he co-founded in 2011, and has served in those capacities since Aquabotix’s inception. Mr. Tavares has over 30 years of business and entrepreneurial leadership experience in technology, defence and finance organisations in both the private and public sectors. Mr. Tavares has logged over 20 years working with underwater technology, including autonomous underwater vehicle, remotely operated underwater vehicle, submarine and torpedo systems development for advanced defence projects and private contractors.

Peter James Non-Executive Chairman

Mr. James has over 30 years’ experience in the technology, telecommunications and media industries, and has extensive experience as Chair, Non-Executive Director and Chief Executive Officer across a range of publicly listed and private companies. He is currently Chair of ASX-listed companies Macquarie Telecom Ltd, nearmap Ltd, Dreamscape Networks Ltd and DroneShield Limited. Mr. James recently completed 12 years as a Non-Executive Director for ASX-listed iiNet, Australia’s second largest DSL Internet Services Provider, prior to it being acquired by TPG Telecom for $1.56bn.

Brendan Martin

Chief Financial Officer and Executive Director

Mr. Martin has over 15 years’ experience in the banking, accounting and industrials sectors within the Australian market. Having commenced his career in Chartered Accounting, his subsequent roles were with banking and investment firms. Most recently Mr. Martin held a senior strategy role within Broadspectrum Ltd and was part of the executive team responsible for the sale of Broadspectrum to Ferrovial Servicios in 2016 for an enterprise value of approximately $1.24 billion.

Rear Admiral Jay M. Cohen (ret) Non-Executive Director

A former nuclear submarine commander, Admiral Jay M. Cohen (ret) is a former Chief of Naval Research (United States Navy) and has served as the United States Department of the Navy Chief Technology Officer. Since leaving government, Admiral Cohen serves on corporate boards and is an independent consultant for science and technology in support of U.S. and international defence, homeland security and energy issues and solutions.

Anand Sundaraj Company Secretary

Mr. Sundaraj is a Principal and Solicitor Director of Whittens & McKeough Lawyers and Consultants. Mr. Sundaraj specialises in mergers and acquisitions and capital raisings. He also advises on funds management, Australian financial services licensing and general securities law matters including compliance with the ASX Listing Rules. Prior to joining Whittens, Mr. Sundaraj worked for international law firms Allen & Overy, King & Wood Mallesons and Herbert Smith Freehills as well as for global investment bank Credit Suisse. Mr. Sundaraj is the company secretary of several ASX listed companies. He is also the author of “Listed Companies: ASX Listing Rules” in Australian Corporation Practice, published by LexisNexis Butterworths.

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3.17 Corporate Governance

To the extent applicable, in light of the Company’s size and nature, the Company has adopted The Corporate Governance Principles and Recommendations (3[rd] Edition) as published by ASX Corporate Governance Council ( Recommendations ).

The Company’s main corporate governance policies and practices as at the date of this Prospectus are outlined in Section 10.2 of this Prospectus and the Company’s departures from the Recommendations are set out in Section 10.3 of this Prospectus.

In addition, the Company’s full Corporate Governance Plan is available from the Company’s website www.aquabotix.com.

3.18 Disclosure of Interests

The Company has paid remuneration totalling approximately $18,857 to its Board since incorporation to the date of this Prospectus. Further, in the same period, Aquabotix has paid Mr. Tavares remuneration of approximately $20,266.

For each of the Directors of the Company, the proposed annual remuneration for the financial year following the Company being admitted to the Official List together with the relevant interest of each of the Directors in the securities of the Company as at the date of this Prospectus is set out in the table below.

Director	Remuneration	Shares7	Options1
Durval Tavares	$205,0002	29,387,1433	-
Peter James	$100,000	-	6,000,0004
Brendan Martin	$285,0005	-	4,000,0004
Jay Cohen	$55,0006	-	1,400,0004

1 Each Option will be unquoted and exercisable at $0.30 each on before the third anniversary of the date of its vesting.

2 From the date the Company is admitted to the Official List ( Listing Date ), Mr. Tavares will be paid US$120,000 per annum (being approximately $164,000 per annum assuming an exchange rate of AU$1.00:USD$0.73) to act as Chief Executive Officer of Aquabotix under his employment agreement with Aquabotix and US$30,000 per annum (being approximately $41,000 per annum assuming an exchange rate of AU$1.00:USD$0.73) to act as Director and Chief Executive Officer of the Company under his employment agreement with the Company.

3 Mr. Tavares owns approximately 29.39% of the issued share capital of Aquabotix. Pursuant to the Exchange, Mr. Tavares will be issued 29,387,143 Shares and 13,224,216 Performance Shares in the Company in consideration for the Company’s acquisition of his shareholding in Aquabotix (both directly and as a participant in the Aquabotix 401(k) Plan). Further, Mr. Tavares’ wife and daughter will hold an interest in a total of 6,858,188 Shares and 3,086,184 Performance Shares under the Exchange (both directly and as participants in the Aquabotix 401(k) Plan).

4The Options to be granted to Mr. James will vest as follows: 3,000,000 Options 12 months after the Listing Date and 3,000,000 Options 24 months after the Listing Date. The Options to be granted to Mr. Martin will vest as follows: 2,000,000 12 months after the Listing Date, 1,000,000 Options 24 months after the Listing Date and 1,000,000 Options 36 months after the Listing Date. The Options to be issued to Mr. Cohen will vest as follows: 700,000 Options on the Listing Date and 700,000 12 months after the Listing Date.

5Exclusive of superannuation.

6The Company has agreed to pay Mr. Cohen US$40,000 per annum (being approximately $55,000 per annum assuming an exchange rate of AU$1.00:USD$0.73).

7The Directors of the Company may participate in the Offer.

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3.19 Agreements with Directors or Related Parties

The Company’s policy in respect of related party arrangements is:

(a) a Director with a material personal interest in a matter is required to give notice to the other Directors before such a matter is considered by the Board; and
(b) for the Board to consider such a matter, the Director who has a material personal interest is, unless otherwise agreed by the Board (excluding the relevant Director), not present while the matter is being considered at the meeting and does not vote on the matter.

Executive Employment Agreements – Durval Tavares

Durval Tavares has entered into contracts of employment with the Company and Aquabotix to act in the respective capacities of Chief Executive Officer and Executive Director of the Company and Chief Executive Officer of Aquabotix. Mr. Tavares is currently receiving an annual salary of US$40,000 from Aquabotix and an annual salary of US$10,000 from the Company. Commencing on the date the Company is admitted to the Official List, Mr. Tavares will receive a salary of US$30,000 per annum (being approximately $41,000 per annum assuming an exchange rate of AU$1.00:USD$0.73) from the Company and US$120,000 per annum (being approximately $164,000 per annum assuming an exchange rate of AU$1.00:USD$0.73) from Aquabotix (which will be the Company’s wholly-owned subsidiary from the Listing Date). Please refer to Section 11.3 for full details.

Executive Employment Agreement – Brendan Martin

Brendan Martin has a contract of employment with the Company to act in the capacity of Chief Financial Officer and Executive Director. Mr. Martin will receive an annual salary of $285,000 per annum (exclusive of superannuation). Please refer to Section 11.4 for full details.

Appointment Letters – Peter James and Jay Cohen

Peter James and Jay Cohen have entered into appointment letters with the Company to act in the capacity of Non-Executive Chairman and Non-Executive Director respectively. These Directors will receive the remuneration set out in Section 3.18 above upon the Company being admitted to the Official List.

Employment Agreements – Debra Tavares and Dawn Doraz

Debra Tavares and Dawn Doraz, the wife and daughter respectively of Durval Tavares (a Director), have contracts of employment with Aquabotix for the respective roles of Vice President (Administration) and Vice President (Marketing). They have been employed by Aquabotix since its inception. Each of Mrs Tavares and Ms Doraz are paid an annual salary of US$50,000 (being approximately $68,493 assuming an exchange rate of AU$1.00:USD$0.73) for 20 hours of work per week. Each contract of employment can be terminated by either party without cause and without notice.

Deeds of indemnity, insurance and access

The Company has entered into a deed of indemnity, insurance and access with each of its Directors. Under these deeds, the Company agrees to indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company. The Company is

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also required to maintain insurance policies for the benefit of the relevant officer and must also allow the officers to inspect board papers in certain circumstances.

Exchange Agreement – Aquabotix Technology Corporation

As set out above, the Company is party to the Exchange Agreement with the current shareholders of Aquabotix to acquire 100% of the issued share capital of Aquabotix. Mr. Tavares, a Director of the Company currently owns approximately 29.39% of the issued share capital of Aquabotix (directly and as a participant in the Aquabotix 401(k) Plan). Pursuant to the Exchange, Mr. Tavares, in these capacities, will be issued an aggregate of 29,387,143 Shares and 13,224,216 Performance Shares in the Company in consideration for the Company’s acquisition of his shareholding in Aquabotix (both directly and as a participant in the Aquabotix 401(k) Plan). As such, the Exchange Agreement is a related party arrangement.

The sole shareholder of the Company, Long Hill Capital II, LLC (who is unrelated to Mr. Tavares) approved the entry by the Company into the Exchange Agreement (which is deemed under the Corporations Act to be the giving of a financial benefit to Mr. Tavares). The Board (other than Mr. Tavares) also note that the Exchange Agreement is on arm’s length terms given the issue of Shares and Performance Shares to Mr. Tavares is on the same terms as the Shares and Performance Shares to be issued to all unrelated party Aquabotix shareholders under the Exchange. Full details of the material terms and conditions of the Exchange Agreement are set out at Section 11.1 of this Prospectus.

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4. CHAIRMAN’S LETTER

Dear Investor,

On behalf of the directors of UUV Aquabotix Ltd ( Company ), I am delighted to invite you to become a shareholder of the Company.

The Company is seeking to raise a minimum $5,100,000 through an issue of 25,500,000 Shares at a price of $0.20 per Share together with 1 free attaching Option for every 1 Share subscribed for and issued ( Offer ). Oversubscriptions of up to a further 9,500,000 Shares at an issue price of $0.20 per Share (together with 1 free attaching Option for every 1 Share subscribed for and issued) to raise up to a further $1,900,000 may be accepted under the Offer. The maximum amount which can be raised under the Offer is therefore $7,000,000.

The Company was incorporated on 22 November 2016 for the primary purpose of acquiring Aquabotix Technology Corporation ( Aquabotix ) and engaging in the business of offering products manufactured by Aquabotix globally, as well as managing and operating Aquabotix’s business.

Aquabotix is a six-year old, unique and established underwater robotics company. It manufactures commercial/industrial-grade underwater drones (also known as unmanned underwater vehicles or UUVs) and commercial/industrial-grade networked underwater cameras for commercial, high-end consumer and military applications in a wide range of industries, including defence, marine construction and aquaculture among others. It does so using its proprietary hardware and software.

Aquabotix is an early mover in a nascent and rapidly-developing underwater robotics industry. It is also a technology leader being one of very few companies worldwide offering commercially-available hybrid underwater drones, which are capable of both autonomous and remote human operation.

Aquabotix’s systems are among the few commercially available and affordable solutions to the underwater requirements of the industries which purchase them. This has led users as diverse as defence agencies, marine construction companies and scientific organisations to have purchased Aquabotix’s products, which generally range between US$1,500 and US$150,000 per unit in price.

There are no dominant players in the underwater drone industry but Aquabotix is a leader in low-cost commercial-grade underwater drones and in hybrids. It is estimated that the addressable UUV market will grow to US$4.0 billion by 2020. The Company seeks to capitalise on the existing and expected demand through applying the funds raised under the Offer to expand its executive and sales and marketing capability, build its operations team, invest in research and development, and meet the Company’s costs including the costs of the Offer.

Before making your decision to invest, I ask that you carefully read this Prospectus, consider the extensive risks of investing in the Company (which include the risk factors set out in Sections 3.5 and 7 and seek professional advice if required.

On behalf of the Board, I commend the Offer to you and look forward to welcoming you as a Shareholder.

Yours sincerely

Peter James

Non-Executive Chairman

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5. DETAILS OF THE OFFER

5.1 The Offer

Pursuant to this Prospectus, the Company invites applications for 25,500,000 Shares at an issue price of $0.20 per Share to raise $5,100,000 together with one free attaching Option for every one Share subscribed for and issued.

The Company may accept oversubscriptions of up to a further $1,900,000 through the issue of up to a further 9,500,000 Shares at an issue price of $0.20 each under the Offer together with one free attaching Option for every one Share subscribed for and issued. The maximum amount which may be raised under this Prospectus is therefore $7,000,000.

Further, the Joint Lead Managers (or their respective nominees) may subscribe for up to 10,000,000 Options for nil cash consideration subject to the terms of the Joint Lead Manager Mandates summarised in Section 11.2.

The Shares offered under this Prospectus will rank equally with the existing Share on issue. The Options offered under the Offer will be issued on the terms and conditions set out in Section 12.3 and the Options offered under the Joint Lead Manager Offer will be issued on the terms and conditions set out in Section 12.4.

5.2 Minimum subscription

If the minimum subscription to the Offer of $5,100,000 has not been raised within four months after the date of this Prospectus, or such period as varied by the ASIC, the Company will not issue any Securities and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

5.3 Applications

Applications for Securities under the Offer must be made using the Application Form or through the electronic payment facility described on the Application Form. If you wish to make your payment electronically, please refer to the instructions on the Application Form.

Applications for Shares must be for a minimum of 10,000 Shares and thereafter in multiples of 500 Shares and payment for the Shares must be made in full at the issue price of $0.20 per Share.

Completed Application Forms and accompanying cheques, made payable to “UUV Aquabotix Ltd Offer” and crossed “Not Negotiable”, must be mailed or delivered to the address set out on the Application Form by no later than the Closing Date.

The Company reserves the right to close the Offer early.

5.4 ASX listing

Application for Official Quotation by ASX of the Securities offered pursuant to the Offer will be made within 7 days after the date of this Prospectus. The Company will not seek ASX listing for the Options offered under the Joint Lead Manager Offer.

If the Securities are not admitted to Official Quotation by ASX before the expiration of 3 months after the date of issue of this Prospectus, or such period as varied by the ASIC, the Company will not issue any Securities and will repay all

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application monies for the Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Securities is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

5.5 Issue

Subject to the minimum subscription to the Offer being reached (See Section 5.2 above) and ASX granting conditional approval for the Company to be admitted to the Official List, the issue of the Securities offered by this Prospectus will take place as soon as practicable after the Closing Date.

Pending the issue of the Securities or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each applicant waives the right to claim interest.

To the extent application monies (or subscription proceeds in United States nomenclature) are raised through a concurrent Regulation D offering in the United States (see Section 5.6.2 below) or an equivalent concurrent offering in Singapore (see Section 5.6.1 below) or the United Kingdom (see Section 5.6.3 below) or any offering in any other jurisdiction in which it is lawful to make such offering (see Section 5.6 below), any subscription proceeds furnished by investors in such a concurrent offering will be included for calculating whether the minimum subscription has been reached, and such proceeds will be held in trust for these investors along with those proceeds invested by applicants generally, pending the issue of the Securities or payment of any refunds as set out in Sections 5.2 and 5.4. For investors in the United States, such proceeds must be returned to such investors if the Closing Date does not occur by 4 months from the date of the Prospectus.

The Directors will determine the recipients of the issued Securities in their sole discretion. The Directors reserve the right to reject any application or to allocate any applicant fewer Shares than the number applied for. Where the number of Shares issued is less than the number applied for, or where no issue is made, surplus application monies will be refunded without any interest to the applicant as soon as practicable after the Closing Date.

5.6 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

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If you are outside Australia it is your responsibility to obtain all necessary approvals for the issue of the Securities pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by you that all relevant approvals have been obtained. The Company will be the sole judge of whether an investor possesses such qualifications as may be required to purchase Securities. Notwithstanding the delivery of this Prospectus or other materials, the Company does not intend to extend an offer to sell or to solicit an offer to buy its Securities until it determines that the investor is qualified and expressly communicates such determination to the investor by accepting that investor’s subscription.

5.6.1 Singapore

This Prospectus and any other materials relating to the Securities have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of Securities, may not be issued, circulated or distributed, nor may the Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the SFA ), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

The following applies to persons in Singapore. This Prospectus has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this Prospectus immediately. You may not forward or circulate this Prospectus to any other person in Singapore. Any offer is not made to you with a view to the Securities being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire Securities. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

5.6.2 United States securities law matters

The offering of Securities under this Prospectus is being effected outside the United States of America (“United States”) pursuant to Regulation S ( Regulation S ), a “safe harbor” from registration under the United States Securities Act of 1933, as amended (the Securities Act ). The Securities offered by this Prospectus are being offered and sold outside the United States in an “offshore transaction” without ”directed selling efforts” in the United States, as both these terms are used in Regulation S.

Each applicant purchasing Securities outside the United States will be taken to have represented, warranted and agreed as follows:

the offer under this Prospectus was not made to the applicant while in the United States, and the applicant is not in the United States at the time of lodging its application;
it will be purchasing the Securities in an “offshore transaction” meeting the requirements of Regulation S; and

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its purchase of Securities is not as a result of “directed selling efforts” in the United States.

The Securities have not been, and will not be, registered under the Securities Act or the securities laws of any state of the United States, and the Securities may not be offered or sold, directly or indirectly, in the United States, except in a transaction exempt from the registration requirements of the Securities Act and the qualification requirements of applicable state laws. The Company intends to conduct a private offering of the Securities in the United States, concurrent with the offer of Securities under this Prospectus, pursuant to Regulation D, a “safe harbour” exemption under the Securities Act.

5.6.3 United Kingdom

Neither the information in this Prospectus nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ( FSMA ) has been published or is intended to be published in respect of the Securities offered pursuant to this Prospectus. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, and the Securities offered pursuant to this Prospectus may not be offered or sold in the United Kingdom by means of this Prospectus, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) of the FSMA. This Prospectus should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the Securities offered pursuant to this Prospectus has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to the Company.

In the United Kingdom, this Prospectus is being distributed only to, and is directed at, persons:

(a) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ( FPO );
(b) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO; or
(c) to whom it may otherwise be lawfully communicated,

(together, relevant persons ).

The investments to which this Prospectus relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

5.7 Taxation – U.S.

(a) Tax Residence of the Company

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Due to the circumstances of the Company’s formation, its acquisition of Aquabotix and the continuation of Aquabotix shareholders as shareholders of the Company, the Company will be treated as a U.S. corporation for U.S. tax purposes, and is therefore subject to U.S. tax laws. U.S. tax law imposes U.S. federal income tax on the Company’s worldwide income and withholding taxes on certain distributions with respect to, and on certain dispositions of, Securities in the Company, as further described below. Each investor should consult its own tax advisor for more information regarding the potential effects of U.S. tax law (including under the Foreign Account Tax Compliance Act, described below) on holders of Securities.

Despite being treated as a U.S. corporation for U.S. tax purposes, the Company will still be treated as an Australian resident for Australian tax purposes and therefore subject to Australian income tax as well as United States income tax. As a dual resident, the Company will not be entitled to any of the benefits available under the Australia/United States Double Tax Agreement to U.S. corporations which are not residents of Australia or to Australian resident companies which are not U.S. corporations. Despite this, the Company understands that under current Australian tax law, the income from its conduct of business in the United States (or other countries outside Australia) through one or more fixed places of business in the United States (or that other country) would generally not be subject to Australian income tax. Australian income taxes payable on income from the Company’s conduct of business in Australia (or in other countries outside Australia and the United States and otherwise than through a fixed place of business) may be creditable against the Company’s U.S. income tax liabilities under the United States foreign tax credit regime. However, the rules governing utilisation of United States foreign tax credits are complex, and the limitations imposed thereunder could prevent the Company from crediting some or all of its Australian income taxes against its U.S. tax liabilities.

The payment of Australian income tax would give rise to franking credits which, to that extent, would enable the Company to frank, or partially frank, any dividends which it distributes to Shareholders. The extent to which those franking credits arise would depend upon the extent to which the Company’s income is subject to Australian, as opposed to U.S., income tax; the payment of U.S. income tax does not give rise to franking credits or any comparable benefits. Dividends payable by the Company to Shareholders who or which are not tax residents of the U.S. may also be subject to withholding tax imposed by the United States (despite those dividends being franked, or partially franked).

(b) Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders of Securities

The following discussion summarises certain U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of an investment in the Company. This discussion assumes that Non-U.S. Holders hold Securities as a capital asset (generally, property held for investment) and does not address all of the U.S. federal income tax considerations that may be relevant to Non-U.S. Holders in light of their particular circumstances or to Non-U.S. Holders subject to special treatment under U.S. federal income tax law.

As used in this discussion, the term “Non-U.S. Holder” means a beneficial owner of Securities that, for U.S. federal income tax purposes, is not (i) an individual who is a citizen or tax resident of the United States, (ii) an entity created or organised under the law of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source, (iv) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more United

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States persons have the authority to control all of its substantial decisions or (y) that has in effect a valid election under applicable Treasury Regulations to be treated as a United States person, or (v) an entity treated as a partnership.

(i) Distributions with Respect to Shares

Subject to the discussion under the sub-section 5.7(b)(iii) below entitled "Foreign Account Tax Compliance Act", distributions made by the Company with respect to its Shares will be treated as U.S.-source dividends generally subject to U.S. federal withholding tax at a 30% rate to the extent of the Company’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles. An Australian resident Shareholder may, subject to certain limitations be entitled to offset that U.S. dividend withholding tax against the Australian income tax otherwise payable on that dividend. To the extent the amount of a distribution exceeds the Company’s current and accumulated earnings and profits, the distribution will be treated first as a non-taxable return of capital to the extent of a Non-U.S. Holder's adjusted tax basis in the Shares and thereafter as a gain from the sale of such Shares which is only subject to U.S. federal income tax as described under the sub-section 5.7(b)(ii) below entitled “Gain on Sale or Other Disposition of Shares”.

Australian residents may qualify for a reduced rate of dividend withholding tax, of 15%, under the tax treaty between Australia and the United States. To obtain a reduced rate of U.S. federal withholding tax on dividends under an applicable income tax treaty, a Non-U.S. Holder will be required to certify its entitlement to benefits under the treaty, generally on a properly completed IRS Form W-8BEN, W- 8BEN-E, or other form, as appropriate.

However, dividends that are effectively connected with a Non-U.S. Holder's conduct of a trade or business within the United States and, where required by an income tax treaty, that are attributable to a permanent establishment or fixed base of the Non-U.S. Holder, are not subject to the withholding tax described in the previous paragraph, but instead are subject to U.S. federal net income tax at graduated rates, provided the Non-U.S. Holder complies with applicable certification and disclosure requirements, generally by providing a properly completed IRS Form W-8 BEN-E, W-8 IMY or W-8ECI. Non-U.S. Holders that are corporations conducting a trade or business in the United States may also be subject to an additional branch profits tax at a 30% rate, except as may be provided by an applicable income tax treaty.

In addition, certain information reporting requirements may apply to the Company with respect to any distributions paid to Non-U.S. Holders.

(ii) Gain on Sale or Other Disposition of Shares

Subject to the discussion under the sub-section 5.7(b)(iii) below entitled "Foreign Account Tax Compliance Act", a Non-U.S. Holder will not be subject to U.S. federal income tax in respect of any gain on a sale or other disposition of Shares unless:

the gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States and, where required by an income tax treaty, is attributable to a permanent establishment or fixed base of the Non-U.S. Holder;
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the sale or other disposition and certain other conditions are met; or

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the Company is or has been a "U.S. real property holding corporation" during the shorter of the five-year period preceding the disposition and the Non-U.S. Holder's holding period for the Shares.

Non-U.S. Holders described in any of the bullet points above should consult their tax advisors regarding the U.S. federal income tax consequences to them of a sale or other disposition of the Shares. The Company does not expect to be a U.S. real property holding corporation at the completion of the Offer and intends to inform Shareholders, by posting a notice on its website, if it becomes aware that it is a U.S. real property holding corporation. Non-U.S. Holders should also consider the tax consequences under the tax laws of those jurisdictions to which they are subject, of any disposal or other dealing with Shares.

(iii) Foreign Account Tax Compliance Act

Pursuant to the Foreign Account Tax Compliance Act ( FATCA ), withholding taxes may apply to certain types of payments made to "foreign financial institutions" (as defined under those rules) and certain other non-U.S. entities. The failure to comply with additional certification, information reporting and other specified requirements could result in a withholding tax being imposed on payments of dividends and, and after 2018, sales proceeds to foreign intermediaries and certain Non-U.S. Holders. A 30% withholding tax may be imposed on dividends on, and after 2018, gross proceeds from the sale or other disposition of, Shares in the Company paid to a foreign financial institution or to a non-financial foreign entity, unless (I) the foreign financial institution undertakes certain diligence and reporting obligations, (II) the non-financial foreign entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner, or (III) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (I) above, it generally must register with the U.S. Treasury and obtain a “GINN” registration number and, if the institution is not located in a jurisdiction that maintains a Model 1 Intergovernmental Agreement with the U.S. (an IGA), enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.owned foreign entities, annually report certain information about such accounts and withhold 30% on payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have a Model 1 IGA with the United States will generally not be required to enter into such an agreement with the U.S. Treasury.

Under the applicable United States Treasury regulations and administrative guidance, the FATCA provisions described above generally apply to payments of dividends on the Company’s Shares and will apply to payments of gross proceeds from a sale or other disposition of Shares on or after 1 January 2019. Prospective investors are encouraged to consult their tax advisors regarding the potential application of withholding under FATCA to an investment in Shares in the Company.

(c) Certain Australian Tax Consequences to Holders of Securities

The following discussion summarises certain Australian tax consequences to investors who subscribe for Securities under this Prospectus. This discussion assumes that investors hold Securities as a capital asset (generally, property held for investment rather than for resale at a profit) and does not address all of the potential Australian tax consequences of the ownership of Securities. In particular, it does not address the positions of investors who acquire Securities in the course of a business of trading or investing in securities or who otherwise hold Securities

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on revenue account or as trading stock, nor does it address the position of investors who are subject to the provisions regarding the 'taxation of financial arrangements' in Division 230 of the Income Tax Assessment Act 1997 .

(i) Dividends

Australian resident investors will be required to include the amounts of any dividends paid by the Company in their assessable income.

If those dividends have been subject to United States dividend withholding tax (see section 5.7(b)(i) above), an Australian resident investor may also be entitled to claim a foreign income tax offset, which is essentially a credit against Australian income tax, for the amount of that United States dividend withholding tax. Potential investors should consult their own tax advisors regarding their entitlement to claim foreign income tax offsets and any limitations which may apply to those claims.

As discussed in section 5.7(a) above, the Company does not expect to be subject to Australian income tax in respect of a potentially significant portion of its profit, being that portion derived in the form of dividends from its wholly owned subsidiary or from its own conduct of business outside Australia through one or more fixed places of business outside Australia. Accordingly, the Company does not expect to be in a position to frank a significant portion of any dividends which it may pay.

To the extent that a dividend paid by the Company is franked, an investor who is a resident of Australia and a qualified person in relation to that dividend will be required to include the amount of the franking credit attached to the dividend in its assessable income, but would also be entitled to a refundable tax offset in the same amount. In order to be a qualified person in relation to a dividend an investor must satisfy an at risk requirement for a particular holding period or qualify for a safe harbour for small investors. Potential investors should consult their own tax advisors regarding those requirements.

To the extent that dividends paid by the Company to non-Australian resident investors, who do not hold their Shares through a fixed place of business in Australia, are either franked or declared to be conduit foreign income, those dividends will not be subject to Australian dividend withholding tax. The Company would be able to declare the unfranked portion of its dividends to be conduit foreign income to the extent to which those dividends are paid from certain foreign income derived by the Company which is not subject to Australian income tax (see the discussion at section 5.7(a) above).

To the extent that dividends paid by the Company to non-Australian resident investors are neither franked nor declared to be conduit foreign income, that portion of any such dividend would be subject to the Australian dividend withholding tax, which is imposed at the rate of 30% of the gross amount of the dividend, unless that rate is reduced by an applicable double tax treaty between Australia and the country in which the non-Australian resident investor is a resident for tax purposes. If the non-Australian resident investor is entitled to the benefit of such a treaty, the rate of Australian dividend withholding tax is generally reduced from 30% to 15%.

(ii) Disposal of Securities

An Australian resident investor would be subject to the Australian capital gains tax rules in relation to any sale, other disposal or certain other dealings of or in relation to Securities. Those rules generally include any gain in assessable income, but

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capital gain may be offset by capital losses incurred in the same or an earlier year of income. If the sale or other disposal by an Australian resident investor results in a capital loss, that loss would be available to offset other capital gains in that or a later year, but is not an allowable deduction.

Non-Australian resident investors who do not hold their Securities in connection with a business carried on through a fixed place of business in Australia would generally only be subject to Australian capital gains tax on a sale, other disposal or other dealing of or in relation to Securities if they have held 10% or more of the total Shares in the Company and if more than half of the value of the Company's assets is attributable to direct or indirectly held interests in Australian real property (which the Company believes is unlikely based on the nature of its business currently).

THE PRECEDING SUMMARY IS NOT A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND DISPOSITION OF SECURITIES IN THE COMPANY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS OF SECURITIES IN THE COMPANY SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF SECURITIES.

5.8 Not Underwritten

The Offer is not underwritten.

5.9 Joint Lead Managers

Patersons Securities Limited and KTM Capital Pty Limited have been appointed by the Company to jointly manage the Offer. In consideration for their role as Joint Lead Managers, Patersons Securities Limited and KTM Capital Pty Limited will be entitled to share a joint lead manager fee of $100,000, a 6.0% sales commission and the issue of 10,000,000 Options. For further details relating to the appointment of the Joint Lead Managers, please refer to Section 11.2. Any broker fees payable to other brokers or intermediaries (including those overseas) will be paid from the 6.0% sales commission payable to the Joint Lead Managers.

5.10 Enquiries

Any questions concerning the Company or the Offer should be directed to the Company at [email protected] or by contacting the UUV Aquabotix Offer Information Line on 1300 668 378 if calling within Australia or +61 1300 668 378 if calling from outside of Australia.

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6. COMPANY OVERVIEW

6.1 Background

There are a multitude of uses for underwater drones and cameras, in multiple industries. As a result, governments and owners of private assets are increasingly utilising and seeking to utilise underwater robotics products for a variety of purposes. However, there are currently limited cost-effective underwater robotics solutions available to government and commercial customers. Aquabotix is one of the few companies providing such solutions.

Aquabotix faces limited competition in its market segment. Its competitors’ products generally do not possess the same flexibility in relation to the ability to add various sensors to the products, or the same flexibility in relation to the build of the products, which translate into flexibility on cost. Additionally, in the opinion of Aquabotix, its products provide users with more advanced functionality, and competitors’ products substantially differ from Aquabotix’s in terms of their functionality (see Section 6.2.3).

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the Company. Please refer to Section 11.1 for a summary of the key terms of the Exchange Agreement.

The Company has attracted an expert Board and management team experienced in its industry and ASX small-caps (refer to Sections 3.16 and 10.1 for further details).

6.2 Business Model

6.2.1 The Need and the Market

The global unmanned underwater vehicle ( UUV ) market is expected to reach US$4.0 billion by 2020 according to Markets and Markets[1] . This growth can be partly attributed to growing deep-water offshore oil and gas production, rising demand for maritime security and an increased need for ocean data and mapping.

Aquabotix’s products have been used in and remain relevant to the following industries:

Defence
Law Enforcement & Public Safety
Marina & Boat Underwater Inspection
Marine Inspection and Construction
Potable Water Management
Power Plant Management
Fish Farming and Aquaculture
Research and Marine Biology
Consumer
Port Security
Pipeline Inspection

Defence

The world’s militaries currently use the most autonomous underwater vehicles. These are used for underwater mine mitigation, intelligence collection, surveillance, and reconnaissance.

The United States Navy has already purchased Aquabotix’s products, as has the United States Coast Guard. An unclassified October 2016 United States Defense Science Board Task Force Report on Next-Generation Unmanned Undersea Systems recommended that “New areas of investment [by the Navy] that are recommended include the adoption of commercial technologies, the development of new concepts of operations (CONOPS), and the acceptance of greater risk with larger numbers of low-cost assets… in the undersea domain, quantity has a quality all its own.” This report’s recommendations include adopting disposable commercial grade assets in large numbers.

The report’s recommendations are consistent with the Company seeing a substantial opportunity in this industry vertical. Drawing on its prior commercial dealings with the United States Navy, its CEO’s experience with the Naval Underwater Warfare Centre and the experience of its Director Admiral Cohen (ret) as a former Rear Admiral responsible for technology adoption in the United States Navy, the Company believes that its products can be used for a wide range

1 http://www.marketsandmarkets.com/Market-Reports/unmanned-underwater-vehicles-market140710720.html

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of types of missions by the United States Navy and other allied navies and coast guards.

In fact, on 5 December 2016, the U.S. Department of Defense ( DOD ) announced that it plans to invest as much as US$3 billion in an effort to build and field UUVs for surveillance operations. This was further supported by a 23 January 2017 Bloomberg Government article “Commercial unmanned subs may be in the Pentagon’s future”, which specifically singled out Aquabotix’s and one other company’s products as the kind of commercial products that may be relevant to this doctrine of commercial product adoption in the unmanned Navy space.

By way of example, UUVs hold the potential to scour the sea for hostile submarines and warships. The U.S. Navy is reported by the Autonomous Undersea Vehicles Applications Centre to be investing 22% of its science and technology dollars on the underwater domain and recently announced that it would invest up to US$1.43 billion to support unmanned mine countermeasure vehicles.

Mine mitigation is a major issue for the world’s navies. Over 90% of the world’s goods are transported by sea. Naval mines that block access to harbors can damage economies and pose danger to commercial and military vessels. Over 400,000 “active” naval mines are left over from prior wars and continue to threaten navigation for years after the conflicts have ended. Neutralising cheap naval mines is difficult, dangerous and expensive, and over 500 ships have been lost in mine-related accidents following World War II. Removing a single naval mine can cost 100 to 200 times more than its manufacturing and deployment costs. Because of the modest cost of Aquabotix’s products (particularly relative to the cost of a ship threatened by a mine), the products can be used in a “fire and forget” fashion, if need be.

Law Enforcement & Public Safety

UUVs can be used in connection with sunk vessels, search for missing persons and drown victims, forensics, inspection of vessels for contraband and illegal substances, and security patrols.

Aquabotix’s customers in this market segment include the United States Customs and Border Patrol, United States Coast Guard and New Rochelle Police Department.

Marina & Boat Underwater Inspection

UUVs offer a fast and effective way to perform dock and boat inspections, minimising labour costs and risks to human divers, and maximising inspectors’ capacity. UUVs have the added benefit of being small enough to fit into tight spaces inaccessible to human divers.

Aquabotix’s customers in this market segment include Hyannis Marina (Massachusetts) and Vortex Marina (Italy).

Marine Inspection and Construction

99% of all global communications occur via marine cabling. Additionally, underwater cabling systems are required to deliver offshore power to the mainland. Further, underwater infrastructure projects require a network of additional marine cables stretching thousands of kilometres. Routine inspections of these cables are critical to ensure they are seated properly to mitigate risks such as the entangling of fishing nets, causing boats to sink, as well as to review their

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structural integrity. Underwater drones are used for inspection, maintenance and repair in these areas.

Aquabotix’s customers in this market segment include the California Department of Transportation (CALTRANS).

Potable Water Management

For both giant municipal potable water supply facilities and small private tanks like facility storage tanks, UUVs offer a number of advantages over other methods of inspection. Tanks do not need to be drained, and there is no risk to human divers or the water system. Additionally, UUVs allow a built-in data gather, and increased frequency of monitoring.

Aquabotix’s customers in this market segment include Pittsburgh Tank & Tower Group.

Power Plant Management

At hydroelectric facilities and dams, UUVs are a cost-effective alternative to dewatering to perform inspection. UUVs equipped with sonar and light detection and ranging (LIDAR) can be used to help discover anomalies that may warrant further inspection. Instead of relying on calendar-based maintenance, owners of dams and hydro plants can use UUV inspections to identify if and where maintenance and repair work is required, thus saving the operator money by avoiding unneeded work.

Aquabotix’s customers in this market segment include ConEdison.

Fish Farming and Aquaculture

Aquaculture production is growing. Aquaculture facilities require careful monitoring on a number of important parameters. The environment needs to be monitored for water quality, temperature, current and other metrics. The operators need to inspect hardware such as nets and cages to count fish and check nutrient levels. This is often done by human labour, which is practical if the facility is on-shore, but impractical when it is far offshore. Underwater cameras and UUVs are an efficient option in this respect.

Research and Marine Biology

UUVs can be equipped with a wide array of scientific sensors, enabling them to monitor aquatic conditions.

Aquabotix’s customers in this market segment include Virginia Institute of Marine Science.

Consumer

The Company believes that the consumer market for UUVs and industrial-strength underwater cameras has not yet been tapped in any meaningful way. Users include fishermen (searching for fish), and recreational boat users.

Aquabotix has repeatedly sold its products to individual customers who adapted them for recreational uses.

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Aquabotix’s strategy does not depend on its ability to compete in the consumer underwater drone market. However, it wishes to do so. To achieve substantial penetration of the consumer market, Aquabotix would need to expand its product range into lower-cost models with functionality that is reduced relative to its commercial and government customer models.

Port Security

In the post-9/11 era, the security of sea and river ports became an issue of great and pressing public concern. There are 360 commercial sea and river ports in the United States alone, and those ports handle approximately one-fifth of the global maritime trade. Securing and ensuring the safety of these ports and associated trade is a job of substantial magnitude.

Aquabotix’s Endura 100 SLE product can be equipped with 360-degree scanning sonar, allowing it to see things that a human diver cannot. In addition, Endura can engage in much longer dives than humans. This allows exhaustive search scenarios that would be extremely expensive if human divers were deployed.

Aquabotix’s customers in this market segment include United States Customs and Border Patrol and United States Coast Guard.

Pipeline Inspection

UUVs can solve a range of inspection issues for pipeline operators, including safety performance, whilst lowering the cost.

Aquabotix’s customers in this market segment include BP (Alaska), Con Edison (USA), Corrosión y Protección Ingeniería S.C (Mexico) and Duke Energy (USA).

The below display outlines the size of the markets which Aquabotix is currently targeting, and which the Company proposes to target.

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==> picture [454 x 425] intentionally omitted <==

Aquabotix views its industry as segmented into three broad layers:

At the “top end” are the meaningfully more expensive military-grade solutions for unique and critical missions, such as unmanned submarines, that as a practical matter are likely to be available largely only to governments and defence agencies. Such top-end solutions typically cost in multiple millions of dollars and are customised for specific missions. By way of additional background, they could be compared to the market positioning of high-end military drones, such as “Predator” in the aerialdrone industry.
In the “middle market” are cost-effective “every-day workhorse” solutions for government and commercial users. These are products that cost in the range of thousands of dollars to up to one hundred and fifty thousand dollars, can generally be afforded by governmental, commercial or high net worth users, do not require professional operators and require limited to no customisation.
The “lower layer” consists of consumer-grade products largely unsuitable for commercial use.

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In each of the industry verticals identified above (other than the consumer market), Aquabotix currently focuses on the “middle market”, where there exists a substantial potential government and commercial end-user market, with the market participants having the capacity to purchase a system.

Aquabotix has historically generated sales to this market through a combination of (a) direct sales to end-users (despite not having a dedicated salesforce of its own), and (b) sales through dealers, distributors and independent representatives. Geographically, while Aquabotix has sold its products to clients in approximately 45 countries, North American sales have historically predominated.

6.2.2 The Products

Endura

Aquabotix’s Endura Professional series of remotely operated underwater vehicles ( ROVs ) includes five models that are engineered for a wide range of underwater applications. Five high torque motors allow Endura similar manoeuvring underwater to that of a helicopter. The product features a 1080p True HD Camera with pan and tilt support, 100-300 metres of depth rating and high intensity LED lighting. A range of tethers are available, up to 1 kilometre in length in some specifications. The operational ease of the product allows it to be configured and ready to use in three minutes, and for it to run self-diagnostics making troubleshooting and repairs seamless. This product sells for US$17,000 – US$100,000.

HydroView

The HydroView Sport series of ROVs includes three models that record live video and capture high definition photos. Easy controls allow the end-user to operate from an iPad, a laptop keyboard or a video game controller. Three high torque motors allow HydroView similar manoeuvring underwater to that of a plane. A range of tethers are available, up to 100 metres in length in some specifications. This product sells for US$5,900 – US$9,000.

Hybrid

The Hybrid ARV (autonomously or remotely operated vehicle) is the first true hybrid for shallow water tasks. The flexibility of the product allows capabilities of searching wide areas using autonomous underwater vehicle ( AUVs ) mode and conducting detailed inspections using ROV mode. Five high torque motors, capable of transferring eight pounds of payload, allow Hybrid ARV similar manoeuvring underwater to that of a helicopter. The product has a 100-300 metre rating featuring a 1080p True HD, 60 degree pan and tilt camera with 4X zoom capabilities. This product sells for US$25,000– US$150,000.

AquaLens

The AquaLens Connect is a commercial grade underwater camera system with networking capabilities, allowing 1080p HD colour still images and live feed video transferrable to the end-user’s iPhone, iPad, or laptop through Wi-Fi or Ethernet connection. This product can be used as an individual underwater camera or a part of a network of up to 32 cameras viewed from one platform through the Aquabotix proprietary operating system. AquaLens Connect features a depth rating of 100-300 metres, 120 degree/8X digital zoom camera with pan and tilt and optional sensors for a variety of applications. This product retails for US$1,495 plus accessories.

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Aquabotix’s products are the subject of continuous research and development and necessarily need to be developed further in order to enable the Company to be able to sell and subsequently support Aquabotix’s products in large numbers, and in order to meaningfully improve the products’ usability, scalability and accuracy on an ongoing basis. The Company’s ability to scale up its sales volumes, maintain credibility, and remain competitive, will necessarily depend on its ability to conduct such research and development successfully.

Further, the Company’s ability to generate product sales and support its distributor and customer network, as well as to generate recurring income after the initial sale of its products, will further depend on its ability to provide both pre-sale and post-sale support and training to its distributors and customers.

At the “lower layer” of the market, the Company intends to extend scaled-down versions of its products to the consumer market, with a particular focus on making its underwater cameras and lower-end underwater drones available to the midrange and high-end boating and sports fishing markets.

For the “top end” of the market, as well as in niches in which the Company is unable to easily establish a presence, following the completion of the Offer the Company will seek to generate revenue through partnerships with third party defence, national security, civil defence and other solution providers, defence contractors and other larger companies in the underwater robotics and electronics sectors, whereby the Company will seek to license its intellectual property to third parties for inclusion in their systems and receive a combination of one-off payments and royalties in relation to such licenses.

It is also part of the Company’s business model that it will consider expanding its business through the acquisitions (either outright or through licensing) of other complementary and enhancing technologies and businesses (e.g. sensor technologies) in appropriate geographies. The Company notes however that it is not in negotiations for any such acquisitions as at the date of this Prospectus.

In addition to receiving revenue from sales of its products, Aquabotix seeks to generate a recurring revenue stream for the life of the product from add on software modules, data analysis tools, customer training, and extended warranty.

Aquabotix and its products have received widespread press coverage. Below is a non-exhaustive list of press articles from around the world:

DATE	ARTICLE	SOURCE
January 2017	Commercial unmanned subs may be in the Pentagon's future	Bloomberg Government
July/August 2016	MTR: 100: The 11th Annual Listing of 100 Leading Subsea Companies	Marine Technology Reporter Magazine
July/August 2016	New mini-ROV from Aquabotix	International Ocean Systems
June 2016	Aquabotix Introduces New Mini Inspection Class ROV	ROV Planet

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May 2016	New Mini Inspection Class ROV: The Endura	Marine Technology News
February 2016	Small UUVs Make a Splash
		Unmanned Systems

February 2016	Upgraded ROV for aquaculture
		Aquaculture North America

September 2015	Aquabotix Reconfigures ROV for Aquaculture
		ECO Environmental Coastal
		& Offshore

February 2015	CEO Q&A: Durval Tavares– Boating tech goes global
		SouthCoastToday

January 2015	Law Enforcement Product News: Hydro View Pro SLE Remote Operated Vehicles
		Officer.com

December 2014	Law Officer– Hot Products
		Law Officer

June 2014	Top 10 Technologies from ACE14
		Water Online

January 2014	It Swims. It Inspects. It Cleans.
		Water System Operator

Refer to the Intellectual Property Report in Section 8 of this Prospectus for more detailed information on Aquabotix’s technology.

6.2.3 Progress to Date and Business Plan Execution

Below are the key milestones achieved by Aquabotix to date:

Commenced sales of the first product created, AquaLens	December 2011
Received private investor funding	January - July 2012
Established supplier relationship with West Marine, a specialty water based recreation retailer with more than 250 stores and an online sales platform	January 2013
Launch of the HydroView Pro	February 2013
Established supplier relationship with Smith- Root, a leading fisheries conservation equipment company with offices in 28 countries and online sales platform	August 2013
Achieved quarterly profitability for the first time in the quarter ended 31 December 2013	December 2013
Established supplier relationship with the largest US water tank inspection company – Utility Service Group	November 2014
Achieved annual profitability for the first time of approximately $139,000 for the year ended 31 December 2014	December 2014

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Established a sales channel in the Chinese market with Leeman China	May 2015
Established supplier relationship with one of the largest US water tank inspection companies - Pittsburg Tank and Tower Company	June 2015
Launch of the Endura	May 2016
Received institutional funding	November 2016
Achieved highest annual revenue since inception of approximately $1,100,000	December 2016
Achieved highest per month revenue of approximately $290,000	December 2016

6.2.4 Competition

While UUVs may be referred to as “underwater drones”, aerial and land drone manufacturers do not possess the technology needed to manufacturer UUVs.

At the “top end” of the UUV market, several market participants, such as prime defence contractors (i.e. top tier defence manufacturers) offer meaningfully more expensive military-grade solutions for unique and critical missions, such as unmanned submarines. As a practical matter, these products are likely to be relevant largely only to governments and defence agencies. Such top-end solutions typically cost in multiple millions of dollars and are customised for specific missions. By way of additional background, they could be compared to the market positioning of high-end military drones, such as “Predator” in the aerialdrone industry.

As noted in Section 6.2.2 above, Aquabotix operates in what it believes is the “middle market” which requires cost-effective “every-day workhorse” solutions for government and commercial users.

In the “middle market”, Aquabotix faces limited competition, as it develops, manufactures and sells affordably priced ubiquitous commercial/industrial-grade underwater drones (which can also be used in the military context).

Further, its competitors’ products generally do not possess the same flexibility in relation to the ability to add various sensors to the products, or the same flexibility in relation to the build of the product, which translates into flexibility on cost.

The limited number of competitors have developed products that are either ROVs (human operator required) or AUVs (autonomous) but not hybrids. Aquabotix is one of very few companies to have developed a hybrid product that can be both remotely operated and autonomous. The hybrid product represents a substantial technological leap in the industry, with Aquabotix currently being only one of the very few companies to offer such functionality in the one vehicle. It is important to note that the producers of other hybrid vehicles are not viewed by the Company as competing for the same customers as their vehicles are very different in nature, specification, size and cost.

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Additionally, Aquabotix’s products provide users with more advanced functionality, and competitors’ products thus vary from Aquabotix’s in the following technical respects.

Nature of technology	Key differentiating factors
Hybrid Autonomous/Remote Vehicles (ARVs or Hybrids)	• Competition (other than one other company) has not developed this technology to produce competing products • The hybrid allows a user to search wide areas using AUV mode and then conduct detailed inspections using ROV mode • The hybrid facilitates flexibility of two products in one to use for various applications
Remotely Operated Underwater Vehicles (ROVs)	• Competing products of comparable functionality: `o` are substantially more expensive, `o` do not support remote viewing and control, `o` do not have six degree freedom of motion, and `o` have lower knots of thrust power
Underwater Cameras	• Competing products of comparable functionality: `o` are substantially more expensive, `o` do not support remote viewing and control, `o` do not support full HD resolution, `o` provide limited recording options, and `o` do not possess network capabilities allowing multiple camera viewing concurrently

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7. RISK FACTORS

7.1 Introduction

The Securities offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free, and the Directors strongly recommend potential investors to consider the risk factors described in Section 3.5 of this Prospectus in addition to those listed below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this Section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Securities.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

7.2 Company-Specific Risks

(a) Additional requirements for capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Offer. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its development and research programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

(b) Shareholder dilution

In the future, the Company may elect to issue Shares or other securities. While the Company will be subject to the constraints of the ASX Listing Rules regarding the issue of Shares or other securities, Shareholders may be diluted as a result of issues of Shares or other securities. Further, on the conversion of Performance Shares (issued under the Exchange Agreement) into Shares, Shareholders will be further diluted - please refer to Section 3.5(h) for further details.

(c) Limited operations

The Company has limited operations and may be dependent on equity and debt fund-raising and/or dividends and distributions from its subsidiaries, including Aquabotix.

(d) Acquisitions

The Company’s growth strategy may involve finding and consummating acquisitions in areas complimentary to Aquabotix’s business. The

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Company may not be successful in identifying and acquiring suitable acquisition targets at acceptable cost. Further, acquisitions may require additional funding on acceptable terms, which may or may not be available at the relevant time. Further, the Company will experience competition in making acquisitions from larger companies with significantly greater resources.

(e)

Integration

Integration of the Company’s and Aquabotix’s operations (and the operations of the Company and any of its further potential acquisitions) will be complex, time-consuming and expensive and may adversely affect the results of the Company’s operations.

(f)

International operations

Aquabotix has previously sold its products to customers in 45 countries, and expects to continue to do business around the world. The Company’s operations will therefore be subject to a number of risks inherent in global operations, including political and economic instability in foreign markets, inconsistent product regulation by foreign agencies or governments, imposition of product tariffs and burdens, cost of complying with a wide variety of international and U.S. export laws and regulatory requirements (including the U.S. Foreign Corrupt Practices Act, the U.S. Export Administration Act and the U.S. Arms Export Control Act (and the regulations promulgated thereunder)), risks stemming from the Company’s lack of local business experience in specific foreign countries, foreign currency fluctuations, difficulty in enforcing intellectual property rights, foreign taxes, and language and other cultural barriers. Additionally, operating an international business with sales in a number of legal jurisdictions will necessarily require substantial input from a variety of legal counsel and expose the Company to legal costs that may be disproportionately high relative to its revenues, and will be incurred regardless of whether the Company derives revenues from a given jurisdiction or at all.

(g)

Disputes

The activities of the Company may result in disputes with third parties, including, without limitation, the Company’s investors, competitors, regulators, partners, distributors, customers, directors, officers and employees, and service providers. The Company may incur substantial costs in connection with such disputes.

(h)

Strategies

There are no limits on strategies that the Company may pursue. The strategy discussed in this Prospectus may evolve over time due to, among other things, market developments and trends, technical challenges, the emergence of new or enhanced technology, changing regulation and/or industry practice, and otherwise in the Company’s sole discretion. As a result, the strategy, approaches, markets and products described in this Prospectus may not reflect the strategies, approaches, markets and products relevant to, or pursued by, the Company at a later date.

Further, a change in strategy may involve material and as yet unanticipated risks, as well as a high degree of risk, including a higher

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degree of risk than the Company’s strategy in place as of the date hereof.

(i)

Governmental contracts

A portion of the Company’s revenues may depend on the Company’s ability to do business with the U.S. as well as foreign governments and their various agencies, whether directly or indirectly. Such customers may:

(i) award or terminate contracts at their convenience;
(ii) terminate, reduce or modify contracts or subcontracts if its requirements or budgetary constraints change;
(iii) cancel multi-year contracts and related orders if funds become unavailable;
(iv) shift their spending priorities;
(v) adjust contract costs and fees on the basis of audits done by its agencies;
(vi) use and practice intellectual property developed in the performance of a government contract or subcontract;
(vii) claim rights to intellectual property not properly protected pursuant applicable contract terms;
(viii) seek penalties and fines exceeding the value of a contract for contract activity that results in the submission of a false claim to the government;
(ix) debar the Company or its subsidiaries because of legal and other actions undertaken by or against the Company or its subsidiaries, the Company’s officers, directors, shareholders, employees and affiliates, or convictions of the Company’s officers, directors, shareholders, employees or affiliates; and
(x) inquire about and investigate business practices and audit compliance with applicable rules and regulations.

(j)

Contracts in general

There are a number of risks associated with contracts entered into by the Company or Aquabotix, including the risk that those contracts may contain unfavourable provisions, or be terminated, lost or impaired, or renewed on less favourable terms.

(k) Supply

The Company may experience delivery delays if its contract or component manufacturers fail to deliver products. Aquabotix’s products are currently manufactured solely by one contract manufacturer (refer to Section 11.5 for details of the Manufacturing Contract). Any operational issues that the manufacturer (or any future manufacturer) incurs may affect the delivery of the products. Aquabotix depends on the manufacturer (and any future manufacturer) to adjust operations accordingly with demand of the products to ensure no back log in

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production. There is also a risk with working with only one manufacturer, in that suspension or termination of the agreement to produce will temporary halt all deliveries until an issue is resolved or a new agreement is made with another manufacturer.

(l) Product liability

As with all new products, there is no assurance that unforeseen adverse events or manufacturing defects will not arise in the Company’s products. Adverse events could expose the Company to product liability claims or litigation, resulting in the removal of regulatory approval for the relevant products and/or monetary damages being awarded against the Company. In such event, the Company's liability may exceed the Company's insurance coverage, if any.

(m) Litigation

The Company is exposed to possible litigation risks including, but not limited to, intellectual property ownership disputes, contractual claims, environmental claims, occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute if proven, may impact adversely on the Company’s operations, financial performance and financial position. Neither the Company nor Aquabotix is currently engaged in any litigation.

(n) Environmental

The Company’s and Aquabotix’s operations are subject to government environmental legislation. While environmental issues are continually monitored to minimise the likelihood of risk there is no assurance that the Company’s or Aquabotix’s respective operations will not be affected by an environmental incident or subject to environmental liabilities. The introduction of new environmental legislation and regulations may result in additional cost to the Company arising from additional compliance, further capital expenditure and monitoring which may have a material adverse impact on the financial position and performance of the Company.

(o) Data loss, theft or corruption

Each of the Company and Aquabotix stores data in its own systems and networks and also with a variety of third party service providers. Exploitation or hacking of any of these systems or networks could lead to corruption, theft or loss of the data which could have a material adverse effect on the Company’s business, financial condition and results. Further, if the Company’s or Aquabotix’s systems, networks or technology are subject to any type of ‘cyber’ crime, its technology may be perceived as unsecure which may lead to a decrease in the number of customers.

(p) Foreign exchange

The Company will be operating in a variety of jurisdictions, including the United States of America and Australia, and as such, expects to generate revenue and incur costs and expenses in more than one currency. Consequently, movements in currency exchange rates may adversely or beneficially affect the Company’s results or operations and cash flows. For example, the appreciation or depreciation of the US dollar relative to

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the Australian dollar would result in a foreign currency loss or gain. Any depreciation of currencies in foreign jurisdictions in which the Company operates may result in lower than anticipated revenue, profit and earnings of the Company.

(q) Insurance coverage

The Company faces various risks in conducting its business and may lack adequate insurance coverage or may not have the relevant insurance coverage. The Company proposes to arrange and maintain insurance coverage for its employees, as well as professional indemnity, product liability and third party liability insurance, however it does not currently propose to arrange and maintain business interruption insurance or insurance against claims for certain property damage. The Company will need to review its insurance requirements periodically. If the Company incurs substantial losses or liabilities and its insurance coverage is unavailable or inadequate to cover such losses or liabilities, the Company’s financial position and financial performance may be adversely affected. Investors should note that the Company currently has no insurance policies in place in respect of its business or assets. The Company intends to insure its operations in accordance with industry practice once the Company’s operations are of a sufficient magnitude. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

7.3 General Risks

(a) Economic conditions and other global or national issues

General economic conditions, laws relating to taxation, new legislation, trade barriers, movements in interest and inflation rates, currency exchange controls and rates, national and international political circumstances (including wars, terrorist acts, sabotage, subversive activities, security operations, labour unrest, civil disorder, and states of emergency), natural disasters (including fires, earthquakes and floods), and quarantine restrictions, epidemics and pandemics, may have an adverse effect on the Company’s operations.

(b)

Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

general economic outlook;
introduction of tax reform or other new legislation;
interest rates and inflation rates;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.

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The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and technology stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

Further, the value of the Securities may fluctuate more sharply than that of other securities, given the low per Share pricing of the Shares under the Prospectus, and the fact that investment in the Company is highly speculative.

(c)

Price of Securities

As a publicly-listed company on ASX, the Company will be subject to general market risk that is inherent in all securities listed on a stock exchange. This may result in fluctuations in its Share price. The price at which Securities are quoted on ASX may increase or decrease due to a number of factors. These factors may cause the Shares to trade at prices below the Offer price. There is no assurance that the price of the Securities will increase or not decrease following the commencement of quotation on ASX, even if the Company’s earnings increase.

Further, after the end of the relevant escrow periods affecting Securities in the Company, a significant sale of then tradeable Securities (or the market perception that such a sale might occur) could have an adverse effect on the Company’s Share price. Please refer to Sections 3.5(i) and 3.12 for further details on the Securities likely to be classified by the ASX as restricted securities.

(d)

Investment speculative

The risk factors set out in this Prospectus ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. These factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Securities offered under this Prospectus.

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

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8. INTELLECTUAL PROPERTY REPORT

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==> picture [111 x 96] intentionally omitted <==

K&L GATES LLP

70 WEST MADISON STREET SUITE 3100 CHICAGO, IL 60602-4207 T 312.372.1121 F 312.827.8000 klgates.com

March 9, 2017

The Board of Directors UUV Aquabotix Limited Level 4, The Read Building 16 Milligan Street Perth, WA 6000 Australia

Intellectual Property Report: Aquabotix

I. REPORT SUMMARY

This intellectual property report (“Report”) has been prepared at the request of the Directors of UUV Aquabotix Limited (“UUV”), a public company registered in Australia which has agreed to acquire the entire stock in Aquabotix Technology Corp. (“Aquabotix”). The Report summarizes the current status of U.S. patents owned by Aquabotix and U.S. patent applications currently being prosecuted by K&L Gates LLP on behalf of Aquabotix. The Report is for inclusion in an IPO Prospectus to be lodged by UUV at the Australian Securities & Investments Commission for the purpose of raising funds through the issue of securities and listing on the Australian Securities Exchange Limited.

Section II below provides general information regarding aspects of the patent system including risks in the patent system and limitations of patent protection.

Section III provides an overview of Aquabotix’s patent portfolio.

Section IV provides limitations and qualifications regarding patents in general and Aquabotix’s patent portfolio.

II. GENERAL INFORMATION REGARDING PATENTS

Generally, “intellectual property” refers to a group of registrable and non-registrable rights, including rights in patents, designs, trademarks, plant varieties, copyright, confidential information, and trade secrets. Intellectual property has many of the characteristics possessed by real and personal property. In particular, intellectual property is an asset, which may be bought, sold, licensed, exchanged, or otherwise transferred. Accordingly, an intellectual property owner has the right to prevent the unauthorized use, manufacture, import, or sale of its property.

The Board of Directors UUV Aquabotix Limited March 9, 2017

This Report is only directed to intellectual property which is in the form of patents and patent applications. In addition, this Report is meant to provide only a high level summary of the patent system and should not be interpreted as providing an exhaustive description of patent law or of related risks regarding patents.

A. Patents in General

Patent rights constitute one component of intellectual property. Patents cover inventions and authorize the owner to exclude others from practicing the claims of the patent without the owner’s permission. This right is granted to the patent owner in exchange for an inventor’s full disclosure of the invention to the public. Typically, a patent may only be granted to inventor(s), or to a person who has entitlement to the invention by way of an assignment.

A patent may provide protection for novel (new), inventive (non-obvious), and useful inventions for a fixed period, which is typically up to 20 years for utility patents. Design patents typically provide protection for 14 years. Patents may be granted in relation to a wide range of subject matter, such as new or improved products. Such subject matter typically should have an industrial application or be useful in connection with a product or a service. Utility patents typically cover a process (a series of steps), a machine (device consisting of parts), a manufacture (an article produced from raw or prepared materials), or a composition of matter (compositions of two or more substances). In contrast, design patents typically cover a visual ornamental design embodied in an article of manufacture.

A patent cannot be granted on a worldwide basis. Rather, patents must be obtained in every country where protection is required. Although there is a certain amount of harmonization between the patent granting procedures and standards throughout the world, there are differences regarding the test for patentability. Accordingly, the scope of a patent may vary from country to country and indeed a patent may not be granted in a particular country for failure to comply with the relevant standards. In addition, to maintain a pending application or patent in force, certain countries require the payment of renewal or maintenance fees on a periodic basis.

B. Process for Obtaining a Patent

In most countries of the world, the process of protecting patent rights begins with the submission of a patent application comprising (i) a patent specification describing the invention, (ii) drawings illustrating the invention, and (iii) claims specifying the scope of the invention. Filing a patent application (provisional or non-provisional) in the United States, Australia, or other countries that permit such a filing satisfies this requirement. In some countries, such as the United States, a provisional patent application may be filed.

A provisional patent application is oftentimes less formal than a non-provisional patent application, but should include a written description of the invention and any drawings necessary for the understanding of the invention. A provisional application does not require claims and is not examined. The provisional patent application functions as a placeholder until a non-

The Board of Directors UUV Aquabotix Limited March 9, 2017

provisional patent application can be filed. In contrast, a non-provisional patent application includes a formal description of the invention and a complete claim set that is examined. Generally, countries that allow provisional patent applications require that a non-provisional be filed within a year of the filing of the provisional.

A fundamental requirement of all patent systems is that an invention be novel and inventive at the time of filing, relative to what was publicly known or used at the date of the application. It is important that the specification (including the drawings) of the patent application contains a full disclosure and description of the invention. A patent application also includes claims that define the scope of the invention. The description of the invention typically includes references to drawings that illustrate the invention and different examples of the invention. The description also typically provides background information, such as a description of existing products, manufacturing or testing methods, or processes and related problems, which enable an examiner and others to assess the application for inventiveness.

Pursuant to an International Treaty called the Paris Convention, once the initial utility application has been filed, further applications in foreign countries must be filed within twelve (12) months, otherwise rights to the invention may be lost in those countries. The filing of an initial patent application establishes a priority date for the invention in all other countries which are party to the Paris Convention, including countries such as the United States, Japan, Australia, China, Canada, Mexico, and countries within the European Union.

The filing of further patent applications in foreign countries may be pursued individually or in some instances by filing an application with a regional patent office that does the work for a number of countries, such as the European Patent Office and the African Regional Industrial Property Organization. Under such regional systems, an applicant requests protection for the invention in one or more countries, and each country decides as to whether to offer patent protection within its borders. The World Intellectual Property Organization-administered Patent Cooperation Treaty (“PCT”) provides for the filing of a single international utility patent application, which serves as a placeholder, for up to 31 months from the earliest filing date, until the applicant files national applications in the designated countries. An applicant seeking protection may file one utility application and request protection in as many signatory states as needed.

It should be noted that at present there are 148 countries that are party to the PCT and if patent protection is required in a country that is not party to the PCT then individual applications must be filed in these countries by the twelve (12) month anniversary of the initially filed application. An example of a country that is not a party to the PCT is Argentina.

Patent applications filed individually in countries rather than via the PCT are examined under the national laws of those countries. However, a PCT application is considered under the terms of the PCT. Once the PCT application has been filed, it is subjected to what is called an “international search,” carried out by one of the major patent offices. The search results are then communicated to the patent applicant in an “international search report,” which is a listing of published documents that might affect the patentability of the invention claimed in the

The Board of Directors UUV Aquabotix Limited March 9, 2017

international application. On the basis of the international search report the applicant may decide to withdraw the application. However, if the PCT application is not withdrawn, it is, together with the international search report, published by the International Bureau.

If the applicant decides to continue with the international application, then within thirty (30) months of the provisional patent application filing date, national patent applications need to be filed. In some countries such as Australia and regions such as Europe, the deadline is thirty-one (31) months. The applicant can also request preliminary examination, which is a report, prepared by one of the major patent offices that gives a preliminary and non-binding opinion on the patentability of the claimed invention.

Once the PCT process has been completed, the applicant nationalizes the PCT application in certain regions or individual countries, as the PCT application itself does not mature into a patent. The applicant may choose to enter one or more of the countries designated in the original PCT application. Entry into the national phase is essentially the same as filing an application in the first instance. Thus, the standard documentation and fee requirements will need to be satisfied in each country. Many non-English speaking countries require a translation of the PCT specification into the language of the relevant country. Failure to enter the national phase within the thirty (30) (or thirty-one (31)) month period will result in abandonment of the ability to secure patent protection in most PCT countries.

The national or regional applications progress under the jurisprudence and legislation of each country or region. In most jurisdictions, such as Australia, Europe, United States and Japan, examination by the relevant patent office comprises an examination of the art to which the invention pertains as it existed at the priority date of the application. This examination establishes what is referred to as the “state of the art.” The patent application is measured against the state of the art and an assessment is made regarding whether the invention described in the application is novel, inventive and useful. The patent application is also examined to ensure the invention is directed to something more than an abstract idea. Once the patent application is deemed to be novel, inventive, useful, and non-abstract, the patent office will indicate the patent application is allowable. At this point, the applicant has to pay a grant or issue fee and address any minor issues raised by the patent office. After the fee has been paid and those issues have been resolved, the patent office will grant a patent from the patent application. The time required to complete the process of examination differs from country-tocountry and the scope or protection may differ depending upon the law of each country. In general, it will take several years from the date of application until the patent is actually granted.

With respect to regional applications, such as a European patent application, the applicant files a single application designating specific countries within the relevant region that are signatories to the Paris Convention. The single application is subjected to examination, and assuming that the application is allowed, it will proceed to the grant phase. The applicant can then elect to have patents granted in all or some of the designated countries. The individual patents function as though they were patents granted by the patent office of the designated country.

The Board of Directors UUV Aquabotix Limited March 9, 2017

C. Patent Grant Information

After a patent has been granted, renewal or maintenance fees may need to be paid, otherwise the patent will cease or expire. Once a patent has been granted and subject to possible challenges as discussed in Section IV(B) below, the owner has the exclusive rights to exclude others from using the patented technology throughout the lifetime of a patent. This means that the owner can prevent others from using or selling the method or product covered by the claims of the granted patent. Alternatively, the owner can allow others to make or sell products or services covered by at least one claim of the patent under the terms of a license agreement. The terms of the license agreement generally define the limited scope of the use of the patent and the consideration to be paid for the use of the patent.

Enforcement of patent rights varies from country-to-country. The remedies for unauthorized use (patent infringement) available to the patent owner may include an injunction, which effectively stops further infringement of the patent, damages or account of profits, and costs. The cost of patent enforcement varies significantly from country-to-country in addition to the calculation for damages and the basis for determining whether to grant an injunction. Infringement proceedings typically cannot be initiated on the basis of a pending application.

III. Aquabotix PATENT PORTFOLIO AS OF FEBRUARY 14, 2017

A. Patent and Patent Applications

Aquabotix owns the following U.S. design patent and U.S. utility patent applications. The scope of the patent and patent applications referenced in (i) through (v) below is generally directed to features or components of an underwater remotely operated vehicle (“ROV”).

(i) U.S. Design Patent No. D677211

U.S. Design Patent No. D677211 is titled “Remotely Operated Underwater Vehicle.” It was granted by the United State Patent and Trademark Office on March 5, 2013. U.S. Design Patent No. D677211 was filed March 20, 2012, lists Durval M. Tavares as the sole inventor, and does not claim priority to any other patent applications. The design patent is directed to the external shape of a ROV with three propellers.

(ii) U.S. Patent Application No. 62/447,666

U.S. Patent Application No. 62/447,666 is titled “Remotely Operated Vehicle Camera Apparatus.” It was filed January 18, 2017 as a utility provisional application and lists Durval M. Tavares and Michael Aprea as co-inventors. U.S. Patent Application No. 62/447,666 does not claim priority to any other patent applications. The application is generally directed to a motorcontrolled rotatable camera and light for an ROV.

The Board of Directors UUV Aquabotix Limited March 9, 2017

(iii) U.S. Patent Application No. 62/456,952

U.S. Patent Application No. 62/456,952 is titled “Power Management for a Remotely Operated Vehicle.” It was filed February 9, 2017 as a utility provisional application and lists Durval M. Tavares as the sole inventor. U.S. Patent Application No. 62/456,952 does not claim priority to any other patent applications. The application is generally directed to an ROV power management system configured to proactively manage when features of the ROV are activated to complete one or more preassigned missions or objectives.

(iv) U.S. Patent Application No. 62/456,984

U.S. Patent Application No. 62/456,984 is titled “Navigation Management for a Remotely Operated Vehicle.” It was filed February 9, 2017 as a utility provisional application and lists Durval M. Tavares as the sole inventor. U.S. Patent Application No. 62/456,984 does not claim priority to any other patent applications. The application is generally directed to an ROV navigation management system configured to autonomously or semi-autonomously complete one or more missions.

(v) U.S. Patent Application No. 62/457,029

U.S. Patent Application No. 62/457,029 is titled “Liquid Sampling Container for a Remotely Operated Vehicle.” It was filed February 9, 2017 as a utility provisional application and lists Durval M. Tavares and Michael Aprea as co-inventors. U.S. Patent Application No. 62/457,029 does not claim priority to any other patent applications. The application is generally directed to a sampling container that is sealable underwater using a remotely controlled motor.

B. Ownership

An assignment was executed on March 19, 2012 by the inventor of record, Durval M. Tavares, conveying his rights in U.S. Design Patent No. D677211 to Aquabotix. The assignment was recorded at Reel 027897, Frame 0166 at the United State Patent and Trademark Office.

An assignment was executed on January 23, 2017 by the inventors of record, Durval M. Tavares and Michael Aprea, conveying their rights in U.S. Patent Application No. 62/447,666 to Aquabotix. The assignment was recorded at Reel 041466, Frame 0585 at the United State Patent and Trademark Office.

Assignments were executed on February 13, 2017 by the inventor of record, Durval M. Tavares conveying his rights of U.S. Patent Application Nos. 62/456,952 and 62/456,984 to Aquabotix. In addition, an assignment was executed on February 13, 2017 by the inventors of record, Durval M. Tavares and Michael Aprea, conveying their rights in U.S. Patent Application No. 62/457,029 to Aquabotix.

The assignment for U.S. Patent Application No. 62/456,952 was recorded at Reel 041238, Frame 0399 at the United State Patent and Trademark Office. The assignment for U.S. Patent Application No. 62/456,984 was recorded at Reel 041239, Frame 0171 at the United State Patent

The Board of Directors UUV Aquabotix Limited March 9, 2017

and Trademark Office. The assignment for U.S. Patent Application No. 62/457,029 was recorded at Reel 041238, Frame 0433 at the United State Patent and Trademark Office.

C. Renewal Fees

Renewal or maintenance fees may need to be paid to maintain granted or issued patents. For example, maintenance fees in the United States are due at three-and-a-half (3.5), seven-and-ahalf (7.5), and eleven-and-a-half (11.5) years from the time a patent is granted. At the time of this Report, there are no overdue renewal or maintenance fees with respect to the patents or patent applications described in Section III(A).

D. Third-Party Patent Litigation

K&L Gates LLP is not representing Aquabotix in any pending litigation in which it is named as a defendant, or in any litigation that is overtly threatened in writing against Aquabotix by a potential claimant, that asserts that Aquabotix has infringed any patent owned by a third-party.

IV. LIMITATIONS AND QUALIFICATIONS

A. Third-Party Rights

Filing a patent application, or receiving a patent, does not give the patent owner the right to freely commercially practice the patent. It is possible that intellectual property rights of another party may be infringed by a product or service of the patent owner. Typically, third-party rights are identified by conducting a Freedom to Operate (FTO) search in the country or counties it is proposed to commercialize an invention. K&L Gates LLP has not conducted any FTO on behalf of Aquabotix or UUV.

B. Validity of Patents

The grant of a patent does not guarantee that the patent is valid or enforceable. Various legal mechanisms exist to challenge the validity of patents and patent applications, including challenges (i) during examination, (ii) in an opposition or post-grant proceeding once the application has been found allowable, (iii) in a court during a revocation or invalidity proceeding brought by a third-party, or (iv) in an infringement proceeding initiated against an alleged infringer. Successful challenges to a patent application may result in some or all of the claims of an application being refused. Successful opposition proceedings to a granted patent may result in some or all of the claims being held invalid or restricted in scope.

As Aquabotix’s patent applications are provisional, it cannot be assumed that they (or any applications stemming from them) will proceed to grant or, if grant is achieved, that the claims will remain in their present form. It is possible, for example, that the scope of the claims of the patent applications may be restricted during examination of the applications. K&L Gates LLP provides no assurance that Aquabotix’s provisional applications will be granted or that they will be held valid and enforceable if they are granted.

The Board of Directors UUV Aquabotix Limited March 9, 2017

C. Information Sources

In preparing this report, in addition to reviewing our internal databases, we have relied upon information contained in relevant publicly available databases. We have not independently verified the information in such databases, and we are not responsible for the accuracy of that information.

D. Jurisdictional Requirements

Each jurisdiction has its own laws and particular requirements that need to be met for the grant and maintenance of a patent. Accordingly, the assessment of patentability varies from jurisdiction-to-jurisdiction, and inventions, which may be granted and registrable in one jurisdiction, may be excluded from grant and registration in another.

Moreover, the different jurisdictional requirements may result in variation of the scope of patent protection obtained for the same patent in different jurisdictions. The outcome of examination of the patent application by the office of one jurisdiction is not binding on the office of any other jurisdiction. Similarly, international PCT searches and examination reports are not binding on national patent applications during examination in the national phase. Examination of patent applications often occurs at different times in different jurisdictions. This means there is also a risk that a patent may be granted on an application in one jurisdiction, and that a third-party patent may subsequently be cited during examination of another patent application that has been filed elsewhere.

In some jurisdictions there is a duty to disclose certain information to the relevant patent office. This information can include relevant prior art information known to the applicant or its agents or search results issued in respect of corresponding foreign applications. Failure to disclose such information may adversely affect the validity and/or enforceability of the patent.

We further note that there may be changes to patent law in a particular jurisdiction from time-totime, which may have an impact on patents in the relevant country. For example, the Australian Government enacted the Intellectual Property Law Amendments (Raising the Bar) Act 2012 (Cth), which represents a significant amendment to Australian patent law. In particular, the Act raises the requirement for patentability and the description requirements for patent specifications. It applies to all Australian patent applications for which a request for examination was filed on or after 15 April 2013. In another example, in 2014 the United States Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank Int’l et al. , clarified the definition of what constitutes an abstract idea.

E. Patentability Search Limitations

A patentability search, such as international searches carried out by various patent offices under the PCT procedure, cannot be guaranteed to locate all prior art that may exist that is potentially relevant to the assessment of novelty and inventive step of a claimed invention. Such searches are generally computer-based searches and are dependent on the database search strategy and the coverage provided by the databases used. For example, the databases may not cover older published documents and/or certain jurisdictions. Further, all patentability searches are subject

The Board of Directors UUV Aquabotix Limited March 9, 2017

to the accuracy of records, as well as the indexing and classification of the subject matter comprising the records. The scope of each search is also dependent on the search strategy utilized and, for example, the keyword(s) selected for the search.

Accordingly, although patentability searches provide a reasonable indication of patentability, it is not possible to guarantee that every relevant prior art record has been located and considered. As a result, any conclusions regarding the validity of the claims of a particular patent based on patent office searches should be regarded as indicative rather than conclusive.

Further, non-provisional patent applications are not normally published until at least eighteen (18) months from the earliest acceptable priority date. Accordingly, a patentability search would not normally identify any third party patent application that is potentially relevant to the assessment of patent ability that have a priority date which is less than eighteen (18) months prior to the date of the patentability search. Delays between official publication and the incorporation of information into the relevant database can also occur, which means that some documents may not be located in a patentability search.

F. Patentability of an Invention Limitations

Besides published prior art, public use of an invention and non-confidential oral disclosures before the priority date of a patent application may also be relevant to the assessment of patentability of invention to which the patent application relates. As patentability searches are conducted on published documents, they may not locate such other forms of prior art disclosures.

Commercialization or secret use of an invention in a jurisdiction by, or with the authority of, a patent applicant (or their predecessor in title) before the priority date of a patent application that has been filed in the jurisdiction by the applicant in respect of the invention, can also be relevant to the patentability of intervention and the validity of any patents that may ultimately be granted on the application. Such commercial exploitation or secret use would not normally be identified by documentary patentability searches of publicly accessible databases.

G. Entitlement to Claimed Priority Data Limitations

In Australia and the United States, for subject matter contained in a non-provisional patent application to be entitled to the priority date established by a corresponding priority patent application (including provisional patent applications) there must be a real and reasonably clear disclosure of the subject matter in the priority application. Similar provisions apply in other jurisdictions. Subject matter disclosed in a non-provisional patent application that is not contained in a corresponding priority application is generally only entitled to the filing date of the non-provisional application as a priority date.

The Board of Directors UUV Aquabotix Limited March 9, 2017

H. Qualifications and Independence

K&L Gates LLP is a global law firm with fully integrated offices located on five continents. With approximately 190 intellectual property attorneys worldwide and over 85 United States Patent and Trademark Office registered professionals, K&L Gates LLP provides comprehensive intellectual property services including intellectual property procurement, litigation, counseling, and management. The firm is one of the top filers of patent and trademark applications in the United States and Australia.

K&L Gates LLP has no interest in Aquabotix or UUV, other than fees for professional work done. K&L Gates LLP expects to receive a fee of approximately US$4,500.00 based on time spent at normal professional rates for the preparation of this Report.

Except as otherwise expressly stated, all information contained in this Report is as of the date hereof, and K&L Gates LLP assumes no obligation to update this Report based on future developments of law or fact or information that may come to the attention of K&L Gates LLP at a future date.

K&L Gates LLP has no involvement in the preparation of the UUV Prospectus, other than the preparation of this Report. K&L Gates LLP gives its consent for inclusion of this Report in the Prospectus.

9. FINANCIAL INFORMATION AND INVESTIGATING ACCOUNTANT’S REPORT

9.1 Introduction

The Company was incorporated on 22 November 2016 for the primary purpose of acquiring Aquabotix and engaging in the business of offering products manufactured by Aquabotix globally as well as managing and operating Aquabotix’s business. Simultaneously with completion of the Offer, the Company will acquire all of the equity interests in Aquabotix under the Exchange Agreement.

The financial information in this Section 9 includes:

Statutory Historical Financial Information , being the:
statutory historical income statements for the financial years ending 31 December 2014, 31 December 2015 and 31 December 2016;
statutory historical statement of cash flows for the financial years ending 31 December 2014, 31 December 2015 and 31 December 2016
statutory historical statements of financial position as at 31 December 2014, 31 December 2015 and 31 December 2016;
Pro Forma Historical Financial Information , being the pro forma historical statement of financial position as at 31 December 2016;

The Statutory Historical Financial Information and the Pro Forma Historical Financial Information are collectively the Financial Information .

Aquabotix has a 31 December financial year end. As such, any references in this Section to “FY” refer to a 31 December financial year end.

Also summarised in this Section 9 are:

The basis of preparation and presentation of the Financial Information (see Section 9.2); and
The Company’s proposed dividend policy (see Section 9.11).

The Financial Information has been reviewed and reported on by HLB Mann Judd Corporate (NSW) Pty Ltd whose Investigating Accountant’s Report is contained in this Section 9. Investors should note the scope and limitations of the report.

The information in this Section 9 should also be read in conjunction with the risk factors set out in Section 7 and other information contained in this Prospectus.

All amounts disclosed in the tables are presented in Australian dollars unless otherwise stated.

9.2 Basis of preparation and presentation of the Financial Information

9.2.1 Overview

The Historical Financial Information has been prepared and presented in accordance with the recognition and measurement principles of the US Generally Accepted Accounting Principles (US GAAP) and Aquabotix’s adopted accounting policies in the United States of America.

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Aquabotix is based in the United States of America, resulting in the use of (U S GAAP ) in the preparation of their financial information, including the financial information presented in this Prospectus. US GAAP accounting standards have some differences to the International Financial Reporting Standards ( IFRS ), which are required to be used for the preparation of Financial Information used in a Prospectus by the ASX (Listing Rule 1.3.5). A reconciliation has been prepared between the Financial Information prepared under US GAAP and the Financial Information if prepared under IFRS. This reconciliation is included in Section 9.5.5 and highlights the material differences that occur when presenting the information under US GAAP and IFRS.

The Financial Information is presented in an abbreviated form insofar as it does not include all the presentation and disclosures required by US GAAP or IFRS and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act.

Aquabotix’s key accounting policies have been consistently applied throughout the periods and are set out in Section 9.5.

9.2.2 Preparation of Historical Financial Information

The Statutory Historical Financial Information has been prepared for the purposes of inclusion in this Prospectus and is a summarised version of the audited statutory financial statements of Aquabotix for the periods ending 31 December 2014, 31 December 2015 and 31 December 2016. The statutory financial statements were audited by Cohen & Schaeffer, P.C.

The Pro Forma Historical Financial Information has been prepared for the purposes of inclusion in this Prospectus. The Pro Forma Historical Financial Information is based on the audited statutory financial statements of Aquabotix for the period ending 31 December 2016 after adjusting for certain pro forma transactions and/or other adjustments.

The Pro Forma Historical Financial Information has been derived from the Statutory Historical Financial Information with adjustments made to reflect the impact of the operating and capital structure that will be in place following completion by the Company of the acquisition of Aquabotix and the Offer as if they had occurred at 31 December 2016.

Refer to Section 9.5 for a reconciliation between the audited statutory historical balance sheet of Aquabotix, and the pro forma historical balance sheet, as at 31 December 2016.

9.2.3 Foreign currency conversion

Aquabotix’s functional currency is US dollars due to the current operations being located in the United States of America. For each table within the financial section of this Prospectus the relevant information has been restated in Australian dollars. To translate the financial information into Australian Dollars ($AUD) we have used the following conversion rates based on the Reserve Bank of Australia’s ( RBA ) published foreign exchange rate tables:

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	Foreign Currency Conversion Rates
$USD to $AUD exchange rate 31 December 2014 31 December 2015 31 December 2016
Average rate used in translating the statutory historical income statement 1.1076 1.3289 1.3436
Exchange rate used in translating the statutory (and pro forma historical) statement of financial position 1.2192 1.3721 1.3699

9.3 Statutory Historical Income Statements

9.3.1 Overview

The table below sets out the statutory historical income statements for the financial year ending 31 December 2014, 31 December 2015 and 31 December 2016. The statutory historical income statements are presented in Australian dollars ($AUD).

dollars ($AUD).
	Statutory Historical Income Statement
	Year ending 31 December	Year ending 31 December	Year ending 31 December
	2014	2015	2016
	$AUD	$AUD	$AUD
Revenue from continuing operations Cost of sales	725,111	606,831	1,102,817
	(162,009)	(200,251)	(277,321)
Gross profit	563,102	406,580	825,496
Operating expenses
General and administrative Selling and marketing Research and development	(310,957)	(458,296)	(560,712)
	(34,036)	(25,509)	(35,032)
	(40,846)	(8,952)	(5,264)
Total operating expenses	(385,839)	(492,757)	(601,008)
Operating (loss)/ income	177,263	(86,177)	224,488
Other income (expenses)
Interest income Interest expense Impairment of long-lived assets Options issued and vested for compensation Depreciation	23	666	4,663
	(22,132)	(23,910)	(26,871)
	-	-	(64,649)
	(6,489)	-	(10,857)
	(9,936)	(11,923)	(12,054)
Total other (expenses)	(38,534)	(35,167)	(109,768)
Profit/(Loss) before tax	138,729	(121,344)	114,720
Income tax expense	-	(606)	-
Statutory profit/(loss)	138,729	(121,950)	114,720

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9.4 Statutory Historical Statement of Cash flows

9.4.1 Overview

The table below sets out the statutory historical statement of cash flows for the financial year ending 31 December 2014, 31 December 2015 and 31 December 2016. The statutory historical statements of cash flows are presented in Australian dollars ($AUD).

dollars ($AUD).
	Statutory Historical Statement of Cash Flows
Year ending 31 December		Year ending 31 December	Year ending 31 December
2014		2015	2016
$AUD		$AUD	$AUD
Cash flows from operating activities
Receipts from clients 727,666 Payments to suppliers and employees (647,921)		743,371	907,570
		(761,507)	(953,308)
Net cash (used in)/provided by operating activities 79,745		(18,136)	(45,738)
Cash flows from investing activities
Purchase of fixed assets -		-	(4,950)
Net cash used in investing activities -		-	(4,950)
Cash flow from financing activities
Proceeds from borrowings and other financing activities 377,608 Repayment of borrowings and other financing activities (380,395)		79,737	348,421
		(27,872)	(116,524)
Net cash provided by/(used in) financing activities (2,787)		51,865	231,897
Net increase in cash 76,958 Cash, beginning of year 55,629		33,729	181,209
		132,587	166,316
Cash, end of year 132,587		166,316	347,525

9.5 Statutory and Pro Forma Historical Statement of Financial Position

9.5.1 Overview

The tables below set out the audited statutory historical statements of financial position as at 31 December 2014, 31 December 2015 and 31 December 2016.

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	Statutory Historical Statement of Financial Position	Statutory Historical Statement of Financial Position	Statutory Historical Statement of Financial Position
	As at 31 December 2014	As at 31 December 2015	As at 31 December 2016
	$AUD	$AUD	$AUD
Current assets
Cash and cash equivalents Accounts receivable Inventory Prepaid expenses	132,587	166,316	347,525
	69,806	46,699	166,060
	68,052	107,927	206,867
	10,035	18,675	39,919
Total current assets	280,480	339,617	760,371
Non-current assets
Manufacturing, tools and equipment	122,514	125,569	52,210
Total non-current assets	122,514	125,569	52,210

Total assets	402,994	465,186	812,581
Current liabilities
Accounts payable Accrued expenses and other Customers deposits Deferred revenue Line of credit Related party liability	39,063	15,198	96,079
	-	21,388	13,259
	59,256	116,706	61,025
	-	41,372	2,429
	-	82,327	-
	34,310	38,613	38,549
Total current liabilities	132,629	315,604	211,341
Non-current liabilities
Notes Payable Related party liability	-	-	300,522
	381,355	400,403	363,138
Total non-current liabilities	381,355	400,403	663,660

Total liabilities	513,984	716,007	875,001

Net assets	(110,990)	(250,821)	(62,420)
Equity
Issued capital Retained earnings	966,592	1,087,814	1,151,796
	(1,077,582)	(1,338,635)	(1,214,216)
Total equity	(110,990)	(250,821)	(62,420)

9.5.2 Commentary on major items included in the Historical Statement of Financial Position for Aquabotix:

The key items included in the consolidated statement of financial position of Aquabotix as at 31 December 2016 are:

Cash and cash equivalents – these funds are held by local financial institutions in interest bearing accounts and are readily available for use by Aquabotix.
Accounts Payable – relates to amounts payable to third parties in relation to goods and services provided to Aquabotix.

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Notes Payable:

Convertible Note - On 14 November 2016, Aquabotix entered into an agreement for the initial interest-free Senior Secured Convertible Promissory Note with a face value of US$250,000 (the “Convertible Note”), with Long Hill Capital II, LLC maturing on 14 November 2018 (the “Maturity Date”), if not converted into equity prior to the Maturity Date. The Convertible Note is Convertible into common stock constituting 15% of the common stock outstanding of Aquabotix, determined as of the time immediately following such conversion of the Convertible Note and on a fully-diluted basis. The Convertible Note is recorded at the fair value of US$250,000 and was drawn in full as of 31 December 2016. The terms of the Convertible Note provide for its mandatory conversion in the event of the Company’s initial public offering (“IPO”), prior to the IPO.

Second Convertible Note - On 14 November 2016, Aquabotix entered into an agreement for a second interest free Senior Secured Convertible Promissory Note with a face value of US$300,000 (the “Second Convertible Note”), with Long Hill Capital II, LLC maturing on 14 November 2018, if not converted into equity prior to the Maturity Date. The Second Convertible Note is convertible into Common Stock constituting 18% of the Common Stock of Aquabotix, determined as of the time immediately following such conversion of the Second Convertible Note on a fully-diluted basis. As of 31 December 2016, US$5,128 had been advanced under the Second Convertible Note. The terms of the Second Convertible Note provide for its mandatory conversion in the event of the Company’s IPO, prior to the IPO.

Warrant – On 14 November 2016, in connection with the funds that were advanced under the Convertible Note, Aquabotix granted a warrant to Long Hill Capital II, LLC (the “Warrant”). The Warrant is convertible into common stock equal to 20% of Aquabotix’s common stock outstanding determined as of the time that immediately follows the exercise of the Warrant at the price of US$400,000. The Warrant will expire on the fifth anniversary of the initial exercise date. As of 31 December 2016, the fair market value of the Warrant is US$35,747 and is netted together with the Convertible Note and Second Convertible Note on the balance sheet.
Related party liabilities – On 27 June 2014, Aquabotix entered into a promissory note agreement with Durval Tavares for US$350,000. The unsecured note pays interest of 5% per annum, and is to be repaid upon the written demand of the lender to the borrower at any time on or after the maturity of the note or earlier upon the occurrence of an event of default. The maturity of the note shall be the first to occur of: (i) 27 June 2024; (ii) the date when Aquabotix has first raised US$500,000 in debt and/or equity financing cumulatively from one or more transactions; (iii) the consummation of a sale to, or a merger or consolidation of Aquabotix with another entity (other than for the purpose of reorganisation); or (iv) the IPO of Aquabotix. As of 31 December 2016 and 31 December 2015 the amount outstanding on the note was US$293,232 and US$319,955 respectively. Interest paid on this note for the period ended 31 December 2015 and 31 December 2016 was US$15,324 and US$16,505 respectively.

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9.5.3 Pro Forma Consolidated Statement of Financial Position:

The tables below set out the pro forma historical statement of financial position, as at 31 December 2016. The pro forma historical statement of financial position is provided for illustrative purposes only and is not represented as being necessarily indicative of the Company’s view of its future financial position.

	Statutory Historical Statement of Financial Position	*Pro forma Historical* *Statement of Financial* *Position(Minimum* *Subscription)*	*Pro forma Historical* *Statement of Financial* *Position(Minimum* *Subscription)*	*Pro forma Historical* *Statement of Financial* *Position(Full* *Oversubscription)*	*Pro forma Historical* *Statement of Financial* *Position(Full* *Oversubscription)*
	As at 31 December 2016	Pro forma Adjustments	As at 31 December 2016	Pro forma Adjustments	As at 31 December 2016
	$AUD	$AUD	$AUD	$AUD	$AUD
Current assets
Cash and cash equivalents Accounts receivable Inventory Prepaid expenses	347,525	5,241,879	5,589,404	7,021,879	7,369,404
	166,060		166,060		166,060
	206,867		206,867		206,867
	39,919		39,919		39,919
Total current assets	760,371	5,241,879	6,002,250	7,021,879	7,782,250
Non-current assets
Manufacturing, tools and equipment Investment in Aquabotix	52,210		52,210		52,210
	-		-		-
Total non-current assets	52,210	-	52,210	-	52,210

Total assets	812,581	5,241,879	6,054,460	7,021,879	7,834,460
Current liabilities
Accounts payable Accrued expenses and other Customers deposits Deferred revenue Related party liability	96,079		96,079		96,079
	13,259		13,259		13,259
	61,025		61,025		61,025
	2,429		2,429		2,429
	38,549		38,549		38,549
Total current liabilities	211,341	-	211,341	-	211,341
Non-current liabilities
Notes Payable Related party liability	300,522	(300,522) (363,138)	-	(300,522) (363,138)	-
	363,138		-		-
Total non-current liabilities	663,660	(663,660)	-	(663,660)	-

Total liabilities	875,001	(663,660)	211,341	(663,660)	211,341

Net assets	(62,420)	5,905,539	5,843,119	7,685,539	7,623,119
Equity
Issued capital Retained earnings Share Options Reserve	1,151,796	5,359,539 (1,322,000) 1,862,000	6,511,335	7,145,539 (1,322,000) 1,862,000	8,297,335
	(1,214,216)		(2,530,216)		(2,536,216)
	-		1,862,000		1,862,000
Total equity	(62,420)	5,905,539	5,843,119	7,685,539	7,623,119

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9.5.4 Notes on the Pro Forma Consolidated Statement of Financial Position:

The Pro forma statement of financial position as at 31 December 2016 is based on the consolidated statements of financial position of Aquabotix and the Company as at 31 December 2016 after allowing for the following adjustments:

Exchange Agreement - the acquisition of 100% of the equity interests in Aquabotix by the Company in consideration of the issue of 100,000,000 Shares and 45,000,000 Performance Shares in the Company to the existing members of Aquabotix. The terms of the Exchange are set out in Section 11.1.
Conversion of the Convertible Note at face value totalling US$250,000 into common stock of Aquabotix.
Conversion of the Second Convertible Note at face value totalling US$300,000 into common stock of Aquabotix.
Exercise of Warrant issued to Long Hill Capital II, LLC for US$400,000 in exchange for common stock of Aquabotix.
The Pro forma statement of financial position reflects the net impact of the proposed capital raising under the Offer. These include the following:
A minimum subscription of $5,100,000 (25,500,000 shares at $0.20 each) under the Offer, and the full oversubscription of $7,000,000 (35,000,000 shares at $0.20 each) under the Offer respectively. Each Share offered under the Offer has an attaching Option exercisable at $0.22 per Share within 24 months of the issue date (refer to Section 12.3);
Expenses of the Offer totaling $810,000 (Minimum Subscription) and $930,000 (Oversubscription) respectively (refer to Section 12.11). These represent gross expenses of the offer, subsequent to 31 December 2016 certain expenses have already been paid in full, in the order of $410,000;
A conversion of US$292,000 of the US$293,232 related party note balance between Aquabotix and Durval Tavares into 16,139 shares of Aquabotix common stock. The remainder US$1,232 of the related party note balance, and US$2,500 of accrued interest was paid to Durval Tavares to fully satisfy and repay the note entirely;
10,000,000 Joint Lead Manager Options to be issued to the Joint Lead Managers (as remuneration for services). The Joint Lead Manager Options have an exercise price of $0.22 each within 36 months of the issue date (refer to Section 12.4). The Joint Lead Manager Options have been valued at $950,000 ($0.095 per Option) using the Black-Scholes method utilising inputs that are relevant at the date of this Prospectus. However, in line with Australian accounting standards, an option’s value can only be measured using inputs relevant at the time of the option’s issue. As such, this value is purely indicative and may change at the date the Company is admitted to the Official List;
11,400,000 Options to be issued to Directors (as remuneration for services). The Options have an exercise price of $0.30 each within 36 months of the issue (or vesting) date (refer to Section 12.5). The Options in this category have been valued at $912,000 ($0.08 per Option) using the Black-Scholes method, utilising inputs that are relevant at the date of this Prospectus. However, in line with Australian accounting standards, an option’s value can only be measured using inputs relevant at the

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time of the option’s issue. As such, this value is purely indicative and may change at the date the Company is admitted to the Official List.

9.5.5 Pro Forma Cash Reconciliation:

The table below details the reconciliation of the pro forma cash balance of the Company group as at 31 December 2016, reflecting the actual cash at bank at the date and reflecting the impact of the pro forma adjustments as set out in Section 9.5.4.

Section 9.5.4.
	*Pro Forma HistoricalCash Reconciliation*
(Minimum Subscription)		(Full Oversubscription)
$AUD		$AUD
Cash Reconciliation
Cash at 31 December 2016 347,525 Convertible note 403,934 Warrant 547,945 Capital raising 5,100,000 Expense of offer (810,000)		347,525 403,934 547,945 7,000,000 (930,000)
Pro forma cash balance 5,589,404		7,369,404

9.5.6 Pro Forma Issued Capital Reconciliation:

The table below details the reconciliation of the pro forma issued capital balance of the Company group as at 31 December 2016, reflecting the actual cash at bank at the date and reflecting the impact of the pro forma adjustments as set out in Section 9.5.4.

out in Section 9.5.4.
	*Pro Forma Historical Issued Capital* *Reconciliation*
	(Minimum Subscription)	(Full Oversubscription)
	$AUD	$AUD
Issued Capital Reconciliation
Statutory balance at 31 December 2016: Conversion of Related Party liability Conversion of First Convertible Note Conversion of Second Convertible Note Conversion of Warrant Subscription of new capital Expense of offer (equity portion) Lead manager options granted	1,151,796 363,138 342,466 410,959 498,977 5,100,000 (406,000) (950,000)	1,151,796 363,138 342,466 410,959 498,977 7,000,000 (520,000) (950,000)
Pro forma Issued Capital balance	6,511,336	8,297,336

9.5.7 Pro Forma Retained Earnings Reconciliation:

The table below details the reconciliation of the pro forma retained earnings balance of the Company group as at 31 December 2016, reflecting the actual cash at bank at the date and reflecting the impact of the pro forma adjustments as set out in Section 9.5.4.

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	*Pro Forma Historical Retained Earnings* *Reconciliation*	*Pro Forma Historical Retained Earnings* *Reconciliation*
	(Minimum Subscription)	(Full Oversubscription)
	$AUD	$AUD
Retained Earnings Reconciliation
Balance at 31 December 2016: Options expense Expense of offer (P&L portion)	(1,214,216) (912,000) (404,000)	(1,214,216) (912,000) (410,000)
Pro forma Retained Earnings balance	(2,530,216)	(2,536,216)

9.6 Summary of Significant Accounting Policies

Set out below are a number of significant accounting policies and other material accounting matters that have been used in the preparation of the financial information in this Section.

9.6.1 Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company group and the results of all subsidiaries for each applicable period then ended.

The subsidiaries are all entities over which the Company has the power to govern the financial and operating policies of those subsidiaries. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations made by the Company group.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company group.

Investments in subsidiaries are accounted for at cost in the individual financial statements of the investing entity.

9.6.2 Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

Bank overdrafts are shown within current liabilities on the statement of financial position.

9.6.3 Accounts Receivable

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment. This provision includes amounts that are not considered to be recoverable from debtors. Trade receivables are generally due for settlement no more than 30 days from the date of recognition.

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Collectability of trade receivables is reviewed on an ongoing basis. A provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

9.6.4 Accounts Payable

Trade and other payables represent the liabilities for goods and services received by Aquabotix that remain unpaid at the end of the reporting period. The balance is recognised as a current liability.

9.6.5 Revenue

Revenue comprises the fair value for the sale of goods and services, excluding, rebates and discounts. Revenue is recognised as follows:

SALES OF GOODS

Sales of goods are recognised when the entity has delivered a product to the customer, which is defined as upon shipment. The recorded revenue is the gross amount of sale, including any fees payable for the transaction. Such fees are included in cost of goods sold.

SALES OF SERVICES

Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

9.6.6 Foreign Currency Transactions and Balances

FUNCTIONAL AND PRESENTATION CURRENCY

The functional currency of Aquabotix is measured using the currency of the primary economic environment in which that entity operates, being USD. The consolidated financial statements of the Company are presented in Australian dollars, and the financial statements of Aquabotix are presented in Australian dollars, which are the respective entities’ presentation currencies. The Pro forma statement of financial position has been presented in Australian dollars using the exchange rate prevailing at the reporting date.

GROUP COMPANIES

The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency is translated as follows:

Assets and liabilities are translated at year or other period end exchange rates prevailing at that reporting date.
Income and expenses are translated on the average exchange rate for the related period i.e. the average exchange rate from 1 January 2016 to 30 December 2016 has been used to translate the income and expenses for the 12 month period ending 31 December 2016; the average exchange rate from 1 January 2015 to 31 December 2015 has been used to translate the income and expenses for the year ending 31 December 2015; and the average exchange rate from 1 January 2014 to 31 December 2014 has been used to translate the income and expenses for the year ending 31 December 2014.

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Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the statement of financial position.

9.7 Reconciliation between US GAAP and IFRS

The Directors have performed an assessment of the variances between the application of US GAAP and IFRS in the preparation of Aquabotix’s audited financial statements for the period ended 31 December 2016, which is also the basis of the pro forma statement of financial position in Section 9.5.1. Following this review the Directors have not identified any material differences in the value or presentation of assets and liabilities recognised in the pro-forma statement of financial position, nor in the value of the net profit disclosed for the periods ended 31 December 2014, 2015 and 2016.

9.8 Cash Balance as at 24 February 2017:

The table below details the indicative cash balance of the Company group as at 24 February 2017, reflecting the actual cash at bank on that date. Amounts denominated in US Dollars have been translated to $AUD applying the foreign currency exchange rate of $USD 1 to $AUD 1.3699.

currency exchange rate of $USD 1 to $AUD 1.3699.
*Cash Balance as at 24 February 2017*

	$AUD

Cash at 31 December 2016 Receipt from Notes payable Receipt from Warrant Part payment of expenses of offer Net cashgeneratedfromoperationto24 February2017	347,525 410,970 547,960 (410,000) 107,128
Cash balance at 24 February 2017	1,003,583

9.9 Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company group are inherently uncertain. Any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

9.10 Funding

The funding for the Company’s short to medium term activities will be generated from the Offer under this Prospectus (see Section 5). As and when further funds are required, the Company may raise additional capital from the issue of securities.

9.11 Dividend policy

Depending on available profits and the financial position of the Company, it is not the current intention of the Board to declare dividends in respect of the year ending 31 December 2017. The payment of a dividend by the Company is at the discretion of the Directors and will be a function of a number of factors, including

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the general business environment, the operating results and financial condition of the Company, future funding requirements, capital management initiatives, tax considerations (including the level of franking credits available), any contractual, legal or regulatory restrictions on the payment of dividends by the Company, and any other factors the Directors may consider relevant.

No assurances can be given by any person, including the Directors, about the payment of any dividend and the level of franking on any such dividend in future periods. There may be periods in respect of which dividends are not paid.

Please read the risk factors set out in Section 7.

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INDEPENDENT LIMITED ASSURANCE REPORT

13 March 2017

Board of Directors UUV Aquabotix Limited Level 29, 201 Elizabeth Street SYDNEY NSW 2000

Dear Board of Directors

INDEPENDENT LIMITED ASSURANCE REPORT ON UUV AQUABOTIX LIMITED’S HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

Introduction

HLB Mann Judd Corporate (NSW) Pty Ltd (“HLBMJC”) has been engaged by UUV Aquabotix Limited (“UUV”) to prepare this report for inclusion in the prospectus to be dated on or around 13 March 2017 (“Prospectus”), and to be issued by UUV in respect of the initial public offering of shares in UUV which is proposing to acquire all of the issued capital of Aquabotix Technology Corporation (“ATC”) (“Transaction”).

Expressions defined in the Prospectus have the same meaning in this report.

Scope

Historical Financial Information

You have requested HLBMJC to review the following historical financial information of UUV and controlled entities included in the Prospectus:

Historical Income Statements for the years ended 31 December 2014, 2015 and 2016;
Historical Statements of Cash Flows for the years ended 31 December 2014, 2015 and 2016; and
Historical Statement of Financial Position as at 31 December 2014, 2015 and 2016,
(collectively the “Historical Financial Information”)

The Historical Financial Information has been prepared in accordance with the stated basis of preparation, being the recognition and measurement principles contained in Australian Accounting Standards and UUV and ATC’s adopted accounting policies. The Historical Financial Information has been extracted from the financial report of ATC for the years ended 31 December 2014, 2015 and 2016, which was audited by Cohen & Schaeffer in accordance with the US Generally Accepted Accounting Principles (US GAAP). Cohen & Schaeffer issued an unmodified audit opinion on the financial reports.

For the purposes of preparing this report we have performed limited assurance procedures in relation to the Historical Financial Information in order to state whether, on the basis of the procedures described, anything comes to our attention that would cause us to believe that the Historical Financial Information is not prepared or presented fairly, in all material respects, by the directors in accordance with the stated basis of preparation.

Pro Forma Historical Financial Information

You have requested HLBMJC to perform limited assurance procedures in relation to the pro forma Historical Financial Information of UUV included in the Prospectus.

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Pro Forma Historical Financial Information (continued)

The pro forma historical financial information has been derived from the Historical Financial Information of UUV and ATC, after adjusting for the effects of pro forma adjustments described in sections 9.5.3 of the Prospectus. The pro forma financial information consists of ATC’s pro forma historical Statement of Financial Position as at 31 December 2016 and related notes as set out in sections 9.5.3 and 9.5.4 of the Prospectus issued by UUV (collectively the “Pro Forma Historical Financial Information”).

The stated basis of preparation is the recognition and measurement principles contained in Australian Accounting Standards applied to the Historical Financial Information and the event(s) or transaction(s) to which the pro forma adjustments relate, as described in sections 9.5.3 and 9.5.4 of the Prospectus. Due to its nature, the Pro Forma Historical Financial Information does not represent the company’s actual or prospective financial position and financial performance.

The Historical and Pro Forma Historical Financial Information is presented in the Prospectus in an abbreviated form, insofar as it does not include all of the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act 2001 .

For the purposes of preparing this report we have performed limited assurance procedures in relation to the Pro Forma Historical Financial Information in order to state whether, on the basis of the procedures described, anything comes to our attention that would cause us to believe that the Pro Forma Historical Financial Information is not prepared or presented fairly, in all material respects, by the directors in accordance with the stated basis of preparation.

Our limited assurance engagement has not been carried out in accordance with auditing or other standards and practices generally accepted outside of Australia and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Directors’ responsibilities

The directors of UUV are responsible for the preparation of the Historical and Pro Forma Historical Financial Information, including the selection and determination of the pro forma transactions and/or adjustments made to the Historical Financial Information and included in the Pro Forma Historical Information.

The directors’ responsibility includes establishing and maintaining such internal controls as the directors determine are necessary to enable the preparation of financial information that is free from material misstatement, whether due to fraud or error.

Our responsibility

Our responsibility is to express a limited assurance conclusion on the financial information based on the procedures performed and the evidence we have obtained. We have conducted our engagement in accordance with the Standard on Assurance Engagement ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information.

A review consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Our engagement did not involve updating or re-issuing any previously issued audit or review report on any financial information used as a source of the financial information.

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Conclusions

Historical Financial Information

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the Historical Financial Information, as described in section 9.5 of the Prospectus, and comprising:

Historical Income Statements for the years ended 31 December 2014, 2015 and 2016;
Historical Statements of Cash Flows for the years ended 31 December 2014, 2015 and 2016; and
Historical Statement of Financial Position as at 31 December 2014, 2015 and 2016,

are not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in section 9.2 of the document.

Review statement on the Pro Forma Historical Financial Information

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the Pro Forma Historical Financial Information being the Pro Forma Statement of Financial Position as at 31 December 2016 is not presented fairly in all material respects, in accordance with the stated basis of preparation as described in section 9.2 of the document.

Independence

HLBMJC does not have any interest in the outcome of the proposed initial public offering, other than in connection with the preparation of this report and participation in due diligence procedures for which normal professional fees will be received. From time to time, HLB Mann Judd may also provide UUV with certain other professional services for which normal professional fees are received.

General advice warning

This report has been prepared, and included in the Prospectus, to provide investors with general information only and does not take into account the objectives, financial situation or needs of any specific investor. It is not intended to take the place of professional advice and investors should not make specific investment decisions in reliance on the information contained in this report. Before acting or relying on any information, an investor should consider whether it is appropriate for their circumstances having regard to their objectives, financial situation or needs.

Restriction on use

Without modifying our conclusions, we draw attention to the Prospectus, which describes the purpose of the financial information, being for inclusion in the Prospectus. As a result, the financial information may not be suitable for use for another purpose. We disclaim any assumption of responsibility for any reliance on this report, or on the financial information to which it relates, for any purpose other than that for which it was prepared.

HLBMJC has consented to the inclusion of this Investigating Accountant’s Report in the Prospectus in the form and context in which it is so included, but has not authorised the issue of the Prospectus. Accordingly, HLBMJC makes no representation regarding, and takes no responsibility for, any other statements, or material in, or omissions from, the Prospectus.

Yours faithfully

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S P James Director and Authorised Representative

N J Guest Partner – HLB Mann Judd

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FINANCIAL SERVICES GUIDE

Dated 13 March 2017

1. HLB Mann Judd Corporate (NSW) Pty Ltd

HLB Mann Judd Corporate (NSW) Pty Ltd ABN 94 003 918 125 (“HMJC” or “we” or "us” or “our” as appropriate) has been engaged to issue general financial product advice in the form of a Report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as a financial services licensee.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, No. 253134 ;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide reports for the purposes of acting for and on behalf of clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate restructures or share issues, securities valuations or reports and to provide general financial product advice for the following classes of financial products:

(i) debentures, stocks or bonds issued or proposed to be issued by a government;
(ii) interests in managed investment schemes excluding investor directed portfolio services;
(iii) securities; and
(iv) superannuation;

to retail and wholesale clients.

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

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4. General financial product advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared for the shareholder group as a whole without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product and there is no statutory exemption relating to the matter, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither HMJC, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by us

HMJC has no employees. All personnel who complete reports for HMJC are either partners of, or personnel employed by, HLB Mann Judd’s New South Wales Partnership. None of those partners or personnel is eligible for bonuses directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

HMJC is wholly owned by HLB Mann Judd (NSW) Pty Limited. Also, all directors of HMJC are partners in HLB Mann Judd’s New South Wales Partnership. Ultimately the partners of HLB Mann Judd’s New South Wales Partnership own and control HMJC.

From time to time HMJC, HLB Mann Judd (NSW) Pty Ltd or HLB Mann Judd’s New South Wales Partnership may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of their business.

9. Complaints resolution

9.1. Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. Complaints must be in writing, addressed to The Complaints Officer, HLB Mann Judd Corporate (NSW) Pty Ltd, Level 19, 207 Kent Street NSW 2000.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 7 days and investigate the issues raised. As soon as practical, and not more than one month after receiving the written complaint, we will advise the complainant in writing of the determination.

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9. Complaints resolution (continued)

9.2. Referral to external disputes resolution scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (“FOS”). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited GPO Box 3, Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. Contact details

You may contact us using the details at the foot of page 1 of this FSG.

10. BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

10.1 Directors and key personnel

Durval Tavares

Chief Executive Officer and Executive Director

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Mr. Tavares is the current President and CEO of Aquabotix, which he co-founded in 2011, and has served in those capacities since the company’s inception. Mr. Tavares has over 30 years of business and entrepreneurial leadership experience in technology, defence and finance organisations in both the private and public sectors.

Mr. Tavares has logged over 20 years working with underwater technology, including autonomous underwater vehicle, remotely operated underwater vehicle, submarine and torpedo systems development for advanced defence projects and private contractors. As Senior Vice President at ASFT AUV Inc., he was responsible for leading the operations of a venture business in the area of autonomous underwater vehicles. Further, his work at the Naval Underwater Warfare Centre on submarine technology included several patents in his name.

While at Fidelity Investments for 10 years, Mr. Tavares was a senior executive responsible for leading new product development for the financial services giant. Mr. Tavares earned his BSEE in Electrical Engineering from the University of Massachusetts, graduating first in his class. He has made frequent presentations to technical and motivational forums and is active in mentoring programs.

Mr. Tavares currently has no other directorships of public companies.

Peter James Non-Executive Chairman

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Mr. James has recently completed 12 years as a Non-Executive Director for ASXlisted iiNet, Australia’s second largest DSL Internet Services Provider, chairing iiNet’s Strategy and Innovation Committee. iiNet was recently acquired by TPG Telecom for $1,560,000,000. He travels extensively reviewing innovation and consumer trends primarily in the US and also Asia and he is a successful investor in a number of digital media, e-commerce and technology businesses in Australia and the US.

Mr. James is an experienced business leader with significant strategic and operational expertise. He is a Fellow of the Australian Institute of Company Directors, a Member of the Australian Computer Society and holds a BA Degree with Majors in Computer Science and Business.

Mr. James does not expect that his other directorships will impact his ability to act as a Director of the Company.

Rear Admiral Jay M. Cohen (ret) Non-Executive Director

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Jay M. Cohen is a former Chief of Naval Research (United States Navy) and has served as the United States Department of the Navy Chief Technology Officer. Admiral Cohen is a graduate of the United States Naval Academy and he holds a joint Ocean Engineering degree from Massachusetts Institute of Technology (MIT) and Woods Hole Oceanographic Institution and Master of Science in Marine Engineering and Naval Architecture from MIT. Earlier in his career, he commanded USS Hyman G. Rickover and served on the U.S. Atlantic Fleet before commanding the submarine tender USS L.Y. Spear including a deployment to the Persian Gulf in support of Operation Desert Storm.

Admiral Cohen was promoted to the rank of Rear Admiral in 1997 and reported to the Joint Staff as Deputy Director for Operations responsible to the President and Department of Defense leaders for strategic weapons release authority. In June 2000, he became the 20th Chief of Naval Research. He served during war as the Department of the Navy Chief Technology Officer, responsible for the US$2billion+ per annum Navy and Marine Corps Science and Technology (S&T) Program.

Unanimously confirmed by the US Senate, he was sworn in as Under Secretary for Science & Technology at the Department of Homeland Security in 2006. Since leaving government, Admiral Cohen serves on corporate boards and is an independent consultant for science and technology in support of U.S. and international defence, homeland security and energy issues and solutions.

Mr. Cohen is currently Chairman of the Board of Morpho Detection, Inc. and HALO Maritime Security Systems, Inc. and a Board member of NanoHoldings, LLC, ELTA North America, Decision Sciences International Corporation and Juliet Marine Systems. Mr. Cohen does not expect that his other directorships will impact his ability to act as a Director of the Company.

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Brendan Martin Chief Financial Officer and Executive Director

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Mr. Martin brings extensive experience in the financial and industrials sectors in the Australian market.

Most recently Mr. Martin was General Manager, Strategy & Investments at Broadspectrum Ltd, which was acquired by Ferrovial Servicios in May 2016 for an enterprise value of approximately $1.24 billion. Prior to Broadspectrum, Mr. Martin ran Bergen Capital (Australia)’s Sydney office, and held banking and advisory roles with Investec Bank and Citi. Mr. Martin began his career with PricewaterhouseCoopers in the insolvency and valuations practices.

Mr. Martin holds a Bachelor of Commerce from the University of Sydney, is a Chartered Accountant with the Institute of Chartered Accountants in Australia, and holds a Graduate Diploma in Applied Finance from FINSIA/Kaplan.

Mr. Martin currently has no other directorships of public companies.

Anand Sundaraj Company Secretary

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Mr. Sundaraj is a Principal and Solicitor Director of Whittens & McKeough Lawyers and Consultants. Mr. Sundaraj specialises in mergers and acquisitions and capital raisings. He also advises on funds management, Australian financial services licensing and general securities law matters including compliance with the ASX Listing Rules. Prior to joining Whittens, Mr. Sundaraj worked for international law firms Allen & Overy, King & Wood Mallesons and Herbert Smith Freehills as well as for global investment bank Credit Suisse. Mr. Sundaraj is the company secretary of ASX listed companies DroneShield Limited, Catapult Group International Limited, Freedom Insurance Group Limited, N1 Holdings Limited, iBuyNew Group Limited and Tomizone Limited. He is also the author of “Listed Companies: ASX Listing Rules” in Australian Corporation Practice, published by LexisNexis Butterworths.

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Management and Consultants

The Company is aware of the need to have sufficient management to properly supervise its operations, expansion and research and development, and the Board will continually monitor the management roles in the Company. As the Company’s projects require an increased level of involvement the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s projects.

10.2 ASX Corporate Governance Council Principles and Recommendations

The Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.

To the extent applicable, the Company has adopted The Corporate Governance Principles and Recommendations (3rd Edition) as published by ASX Corporate Governance Council ( Recommendations ).

In light of the Company’s size and nature, the Board considers that the current board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.

The Company’s main corporate governance policies and practices as at the date of this Prospectus are outlined below and the Company’s full Corporate Governance Plan is available in a dedicated corporate governance information section on the Company’s website www.Aquabotix.com.

Board of directors

The Board is responsible for corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to:

(a) maintain and increase Shareholder value;
(b) ensure a prudential and ethical basis for the Company’s conduct and activities; and
(c) ensure compliance with the Company’s legal and regulatory objectives.

Consistent with these goals, the Board assumes the following responsibilities:

(a) developing initiatives for profit and asset growth;
(b) reviewing the corporate, commercial and financial performance of the Company on a regular basis;
(c) acting on behalf of, and being accountable to, the Shareholders; and
(d) identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

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The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’ participation in the Board discussions on a fully-informed basis.

Composition of the Board

Election of Board members is substantially the province of the Shareholders in general meeting.

Identification and management of risk

The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings.

Ethical standards

The Board is committed to the establishment and maintenance of appropriate ethical standards.

Independent professional advice

Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s expense, may obtain independent professional advice on issues arising in the course of their duties.

Remuneration arrangements

The remuneration of an executive Director will be decided by the Board, without the affected executive Director participating in that decision-making process.

In accordance with the Constitution, the total maximum remuneration of nonexecutive Directors is initially set by the Board and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. The current amount has been set at an amount not to exceed $300,000 per annum.

In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval, non-cash performance incentives such as Options) as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director.

Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The Board reviews and approves the remuneration policy to enable the Company to attract and retain executives and Directors who will create value for Shareholders having consideration to the amount considered to be commensurate for a company of its size and level of activity as well as the relevant Directors’ time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed.

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Trading policy

The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its key management personnel (i.e. Directors and, if applicable, any employees reporting directly to the managing director). The policy generally provides that the written acknowledgement of the Chair (in the case of Directors), the Managing Director (in the case of the Chairman and other key management personnel) or Board (in all cases) must be obtained prior to trading.

External audit

The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

Audit committee

The Company will not have a separate audit committee until such time as the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient magnitude for a separate committee to be of benefit to the Company. In the meantime, the full Board will carry out the duties that would ordinarily be assigned to that committee under the written terms of reference for that committee, including but not limited to, monitoring and reviewing any matters of significance affecting financial reporting and compliance, the integrity of the financial reporting of the Company, the Company’s internal financial control system and risk management systems and the external audit function.

Diversity policy

The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and behaviours for the benefit of all staff, improved employment and career development opportunities for women and a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives.

10.3 Departures from Recommendations

Following admission to the Official List of ASX, the Company will be required to report any departures from the Recommendations in its annual financial report. The Company’s departures from the Recommendations as at the date of this Prospectus are set out on the following pages.

rospectus are set	out on the following pages.
Recommendation	Explanation
1.5	Due to the Company’s stage of development and number of employees, the Company may face particular issues in relation to setting, reviewing, assessing and reporting on certain diversity measures. Consequently, the Company will not comply with Recommendation 1.5 (diversity) in full.
2.1, 4.1, 7.1, 7.3 & 8.1	Due to the size and nature of the existing Board and the magnitude of the Company’s current operations, the Board does not consider that the Company will gain any benefit from individual Board committees and thatitsresourceswould be betterutilisedinotherareas. TheBoard

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is of the view that at this stage, the experience and skill set of the current Board is sufficient to perform these roles.

As such, the Company does not currently have a Nomination Committee, an Audit and Risk Committee, an internal audit function or a Remuneration Committee as required by Recommendations 2.1, 4.1, 7.1, 7.3 and 8.1 respectively. Pursuant to the Company’s Board Charter, the full Board carries out the duties that would ordinarily be assigned to the Nomination, Audit and Risk and Remuneration Committees. The roles and responsibilities of these Committees are outlined in the relevant Committee Charters contained in the Company’s Corporate Governance Plan which is available on the Company’s website.

The Board will devote time on an annual basis to discuss Board succession issues and to fulfil the roles and responsibilities associated with both maintaining the Company’s internal audit function and arrangements with external auditors and with setting the level and composition of remuneration for Directors and senior executives and ensuring that such remuneration is appropriate and not excessive. Further, all members of the Board are involved in the Company’s audit function to ensure the proper maintenance of the entity and the integrity of all financial reporting. The Company’s Board Charter also outlines the monitoring, review and assessment of a range of internal audit functions and procedures of the Company.

The Company will establish separate Nomination, Audit and Risk and Remuneration Committees once the Company’s operations are considered to be of sufficient magnitude to warrant such Committees.

2.4

As at the date of this Prospectus, two of the four Board members (i.e. exactly half and not a majority) are independent Directors. Durval Tavares is not considered to be an independent director due to his executive role on the Board and due to the fact he will be a substantial shareholder of the Company upon completion of the Exchange Agreement. Brendan Martin is not considered to be an independent director due to his executive role on the Board. Peter James and Jay Cohen are considered to be independent directors of the Company.

The Board, having regard to the Company’s stage of development and the collective experience and expertise of the Directors, considers the current composition of the Board is appropriate. The Board will also look to appoint additional independent Non-Executive Directors once the Company’s operations are considered to be of sufficient magnitude to warrant such appointments.

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11. MATERIAL CONTRACTS

11.1 Exchange Agreement – Acquisition of Aquabotix

The Company, Aquabotix, the shareholders of Aquabotix (including participants of the Trust for the Aquabotix 401(k) Plan) ( Aquabotix Shareholders ), Durval Tavares as stockholder representative and various other parties are party to an Exchange Agreement dated 24 February 2017 in respect of the acquisition by the Company of 100% of the issued share capital of Aquabotix ( Aquabotix Acquisition ) ( Exchange Agreement ). Pursuant to the Exchange Agreement, the Aquabotix Acquisition is to be effected by an issue by the Company of 100,000,000 Shares and 45,000,000 Performance Shares to be apportioned among the Aquabotix Shareholders pro rata to their respective shareholdings in Aquabotix. This issue will occur concurrently with the issue by the Company of the Securities under the Offer the subject of this Prospectus and in any event no later than 31 December 2017.

Completion of the Exchange Agreement is conditional upon the fulfilment of the following conditions precedent:

(a) each of the representations and warranties made by each party under the Exchange Agreement being true and correct in all material respects on and as at the date of completion as though such representation or warranty was made on and as of the date of completion;
(b) each party performing and complying with, in all material respects, each agreement, covenant and obligation required by the Exchange Agreement to be so performed or complied with by such party at or before completion; and
(c) the Company issuing the Securities the subject of the Offer to applicants under this Prospectus.

Under the Exchange Agreement, each Aquabotix Shareholder waives any and all pre-emptive (or similar) rights with regard to its shareholding in Aquabotix and Aquabotix authorises the use by the Company of Aquabotix’s corporate name and trademarks including its logo and domain name. Further, and in addition to the escrow trading restrictions imposed on Aquabotix Shareholders by ASX (see Section 3.12 for further details), each Aquabotix Shareholder who will hold less than 10% of the total Shares on issue on the date the Shares are issued under the Exchange Agreement agrees that they shall not, following the expiry of a period of 12 months from the date of issue of Shares under the Exchange Agreement, on any one ASX trading day sell such number of Shares which exceeds 2% of the trading volume of Shares traded on the ASX on that trading day, other than where approved by the Company. 18,642,831 Shares will be issued to such Aquabotix Shareholders under the Exchange Agreement.

The Exchange Agreement also contains other representations, warranties and conditions considered standard for an agreement of this nature, including those related to securities law compliance.

11.2 Joint Lead Manager Mandates – Patersons Securities Limited and KTM Capital Pty Limited

The Company has entered into a mandate letter with each of Patersons Securities Limited ( Patersons ) and KTM Capital Pty Limited ( KTM ) pursuant to which Patersons and KTM (together, the Joint Lead Managers ) have agreed to act as joint lead managers to the Offer ( JLM Mandates ).

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The Company has agreed to pay the Joint Lead Managers the following fees and issue the following Options to be shared by the Joint Lead Managers on an equal basis (unless agreed otherwise):

(a) a lead management fee of $100,000 (excluding GST);
(b) a selling fee equal to 6% of the total amount raised under the Offer (excluding GST);
(c) 10,000,000 Options on the terms and conditions set out in Section 12.4.

The Joint Lead Managers are also entitled to reimbursement of their reasonable expenses incurred in respect of the Offer.

The Patersons mandate may be terminated:

(a) by the Company at any time before Patersons has extended any firm commitment offer to any investor to participate in the Offer either:
(i) immediately, where Patersons has failed to rectify a material breach of the mandate within ten business days of notice of such breach; or
(ii) on a no fault basis within ten business days’ notice in writing by the Company (subject to certain conditions),

or at any time after 31 May 2017, on a no fault basis, within ten business days’ notice in writing by the Company; and

(b) by Patersons at any time prior to completion of the Offer on the occurrence of a number of standard termination events.

In the event that the Company terminates the mandate or Patersons terminates the mandate for cause, Patersons will be entitled to 50% of the compensation that it would have otherwise received and the reimbursement of expenses up to the date of termination.

The KTM mandate may be terminated immediately with or without cause by the Company or KTM at any time, by notice in writing, subject to the following arrangements:

(a) the Company will reimburse any expenses incurred, or committed to, by KTM prior to the date of termination; and
(b) should the Company terminate the mandate prior to 30 September 2017 (other than for breach, negligence, fraud or default by KTM):
(i) the Right of First Offer (as defined below) shall survive termination; and
(ii) should the Company raise capital within 12 months after termination from parties introduced by KTM or in receipt of documentation prepared pursuant to the KTM mandate, the Company will pay KTM its equal share of the issue management fee and selling fee, on the same basis as the remuneration described above.

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Under the JLM Mandates, the Company has also agreed to jointly engage Patersons and KTM as the joint lead managers in any further equity capital raisings undertaken in connection with the Company within 12 months of completion of the Offer, subject to competitive terms relative to market practices at the time ( Right of First Offer ). The JLM Mandates contain other standard indemnities, terms and conditions expected to be included in mandates of this nature.

11.3 Executive Employment Agreements – Durval Tavares

The Company and Aquabotix have respectively entered into separate executive employment agreements with Durval Tavares ( Executive Agreements ) pursuant to which Mr Tavares has been engaged as:

(a) an Executive Director and Chief Executive Officer of the Company; and
(b) Chief Executive Officer of Aquabotix.

The material terms and conditions of the Executive Agreements are summarised below:

(a) Term:

Mr Tavares commenced his employment with Aquabotix on incorporation and with the Company on 9 March 2017. Mr Tavares’ employment under the respective Executive Agreements may be terminated by either party, at any time, for any reason, with or without notice.

(b) Remuneration:

For services rendered under the Executive Agreements, Mr Tavares receives:

(i) a base salary from the Company of US$10,000 per annum, which will be increased to US$30,000 per annum (being approximately $41,000 per annum assuming an exchange rate of AU$1.00:USD$0.73) upon the Company’s admission to the Official List of ASX; and
(ii) a base salary from Aquabotix of US$40,000 per annum, which will be increased to US$120,000 per annum (being approximately $164,000 per annum assuming the exchange rate above) upon the Company’s admission to the Official List of ASX.

Upon fulfilment of applicable eligibility requirements, Mr Tavares has the right to participate in any employee benefit and insurance programs offered by the Company to its employees from time to time.

The Executive Agreements otherwise contain terms and conditions considered standard for agreements of this nature.

11.4 Executive Employment Agreement – Brendan Martin

The Company has entered into an executive employment agreement ( Executive Agreement ) with Mr. Brendan Martin, dated 29 November 2016, pursuant to which the Company has engaged Mr. Martin as Chief Financial Officer and Director of the Company.

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The material terms and conditions of the Executive Agreement are summarised below:

(a) Term:

Mr. Martin commenced his employment on 23 January 2017 ( Commencement Date ).

(b) Remuneration:

Mr. Martin will receive a gross base salary of $285,000 per annum (plus superannuation contributions).

(c) Incentive Programs:

Mr Martin may be eligible to participate in any short term incentive plan or long term incentive option plan that the Company may introduce from time to time. Mr Martin may also be entitled to be paid a short term incentive payment in the form of a cash or equity bonus at the absolute discretion of the Board, subject to regulatory approval.

The Executive Agreement provides that Mr. Martin shall be granted 4,000,000 Options on the terms set out in Sections 3.18 and 12.5 under the Company’s Concessional Incentive Option Plan (summarised in Section 12.7.2).

(d) Termination:

The Company may immediately terminate the employment of Mr. Martin by written notice if at any time Mr Martin:

(i) commits a material breach of any term of the Executive Agreement;
(ii) engages in conduct that constitutes intentional disobedience, dishonesty or serious or persistent neglect;
(iii) acts in a manner which, in the reasonable opinion of the Company, will detrimentally affect the Company or its reputation; or
(iv) ASX refuses to grant the Listing Approval to the Company or the ASIC issues a stop order in relation to this Prospectus or otherwise imposes limitations on the Company’s ability to raise capital due to any actions undertaken by Mr. Martin at any time or due to Mr. Martin’s involvement with the Company or any Australian or foreign governmental authority imposes any limitations on the Company (either in whole or in part) due to the same.

The Company may terminate Mr. Martin’s employment for any reason by giving six months’ notice. Mr. Martin may resign at any time and for any reason by giving the Company three months’ notice in writing.

The Executive Agreement contains other terms and conditions that are considered standard for an agreement of this nature.

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11.5 Manufacturing Contract – Cirtronics, Inc.

Aquabotix has entered into a non-exclusive manufacturing agreement ( Manufacturing Agreement ) with Cirtronics, Inc. ( Cirtronics ) which sets out the terms and conditions upon which Aquabotix has engaged Cirtronics to manufacture certain underwater robotic and viewing devices ( Products ) for use in its business.

The Manufacturing Agreement is subject to a trial period commencing on 17 February 2017 ( Effective Date ) and ending on the date which is three (3) months following the date of first shipment of the Products ( Trial Period ). Within ten (10) days following the expiration of the Trial Period, the parties may agree to extend the initial term of the Manufacturing Agreement for a period of five (5) years from the Effective Date. Thereafter, the Manufacturing Agreement shall automatically renew for successive one (1) year periods, unless otherwise terminated in accordance with its terms.

Either party may terminate the Manufacturing Agreement in the event that the other party:

(a) fails to cure a material default within thirty (30) days after receiving written notice thereof; or
(b) immediately, if the other party becomes insolvent, files or has filed against it a petition in bankruptcy, or generally becomes unable to pay its debts as they become due.

In addition, Aquabotix may terminate the Manufacturing Agreement for any reason on ninety (90) days’ written notice to Cirtronics. The Manufacturing Agreement otherwise contains terms and conditions considered standard for an agreement of this nature.

11.6 Company Secretarial and Legal Counsel Retainer – Whittens McKeough & Sundaraj Pty Ltd

The Company has entered into a company secretarial and legal counsel retainer with Whittens McKeough & Sundaraj Pty Ltd ( Whittens ), for the provision of company secretarial and legal services. The agreement provides for Anand Sundaraj to be appointed as company secretary of the Company.

The Company will pay Whittens a quarterly fee of $5,000 exclusive of GST for company secretarial and legal services and receive a total of 15 hours service per quarter. Time spent in excess of the retainer hours will be charged at a discounted rate of no more than $650 per hour.

The agreement may be terminated by the Company at any time, by written notice.

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12. ADDITIONAL INFORMATION

12.1 Litigation

As at the date of this Prospectus, neither the Company nor Aquabotix is involved in any legal proceedings nor are the Directors aware of any legal proceedings pending or threatened against the Company or Aquabotix.

12.2 Rights attaching to Shares

The following is a summary of the more significant rights attaching to Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

(a) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company. Shareholders may requisition meetings in accordance with section 249D of the Corporations Act and the Constitution.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited). Amounts paid in advance of a call are ignored when calculating the proportion.

(c) Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the proportion that the

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amount paid or credited as paid is of the total amounts paid and payable in respect of such Shares.

The Directors may from time to time pay to the Shareholders any interim dividends as they believe to be justified subject to the requirements of the Corporations Act. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Directors, grant shareholders or a class of shareholders the right to elect to reinvest cash dividends paid by the Company by subscribing for Shares on the terms determined by the Board.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

(e) Shareholder liability

As the Shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

(f)

Transfer of Shares

Generally, Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

(g)

Variation of rights

Pursuant to section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

(h)

Alteration of Constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general

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meeting. In addition, at least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

12.3 Options offered under the Offer

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.22 ( Exercise Price )

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on the second anniversary of the date of its issuance ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate (Notice of Exercise) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g)

Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

(i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

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(iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h)

Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i)

Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options .

(j)

Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(l) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(m) Quoted

The Company will apply for quotation of the Options on ASX.

(n) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

12.4 Options offered under the Joint Lead Manager Offer

The Options to be issued to the Joint Lead Managers under the Joint Lead Manager Offer will be issued on the same terms and conditions set out in Section

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12.3 above, except they will be unquoted and the expiry date will be the third anniversary of the date of their issuance.

12.5 Options to be issued to Directors

The Options to be issued to Directors of the Company will be issued on the same terms and conditions set out in Section 12.3 above, except they will be unquoted, the exercise price of such Options will be $0.30 each and the expiry date will be the third anniversary of the date of their vesting. Refer to Section 3.18 for details of the vesting conditions attaching to such Options.

12.6 Performance Shares

The terms and conditions of the Performance Shares to be issued to the current shareholders of Aquabotix pursuant to the Exchange are summarised below.

(a) Performance Shares

Each Class A Performance Share, Class B Performance Share and Class C Performance Share (together and each being a Performance Share ) is a share in the capital of the Company.

(b)

General meetings

Each Performance Share confers on the holder ( Holder ) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to Shareholders. Holders have the right to attend general meetings of Shareholders.

(c)

No voting rights

A Performance Share does not entitle the Holder to vote on any resolutions proposed by the Company except as otherwise required by law.

(d) No dividend rights

A Performance Share does not entitle the Holder to any dividends.

(e) No rights to return of capital

A Performance Share does not entitle the Holder to a return of capital, whether in a winding up, upon a reduction of capital or otherwise.

(f) Rights on winding up

A Performance Share does not entitle the Holder to participate in the surplus profits or assets of the Company upon winding up.

(g) Not transferable

A Performance Share is not transferable.

(h) Reorganisation of capital

If at any time the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

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(i) Application to ASX

The Performance Shares will not be quoted on ASX. However, if the Company is listed on ASX at the time of conversion of the Performance Shares into Shares, the Company must within three Business Days apply for the official quotation of the Shares arising from the conversion on ASX.

(j) Participation in entitlements and bonus issues

A Performance Share does not entitle a Holder (in their capacity as a holder of a Performance Share) to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.

(k) No other rights

A Performance Share gives the Holder no rights other than those expressly provided by their terms and those provided at law where such rights at law cannot be excluded by these terms.

(l) Conversion on achievement of milestone

Subject to paragraph (m), a Performance Share in the relevant class will convert into one Share upon achievement of:

(i) Class A Performance Share : each Class A Performance Share will vest into one Share upon the Shares achieving a 30 day volume weighted average price exceeding $0.30 and the Company securing no less than 20 paying customers of remotely operated underwater vehicles within 24 months of the date the Company is admitted to the Official List ( Class A Milestone ).
(ii) Class B Performance Share : each Class B Performance Share will vest into one Share upon the Company achieving, in relation to the UUV Technology, $7,000,000 of cumulative revenue or $2,500,000 of annual revenue in any given twelve month period, within 36 months of the date the Company is admitted to the Official List ( Class B Milestone ).
(iii) Class C Performance Share : each Class C Performance Share will vest into one Share upon the Company achieving, in relation to the UUV Technology, $3,000,000 of cumulative earnings before interest and taxes ( EBIT ) or $1,000,000 of annual EBIT in any given financial year, within 36 months of the date the Company is admitted to the Official List ( Class C Milestone ).
(m) ( Deferral of conversion if resulting in a prohibited acquisition of Shares ) If the conversion of a Performance Share under paragraph (l) would result in any person being in contravention of section 606(1) of the Corporations Act ( General Prohibition ) then the conversion of that Performance Share shall be deferred until such later time or times (but no later than 5 years from the date of issue of such Performance Share) that the conversion would not result in a contravention of the General Prohibition. In assessing whether a conversion of a Performance Share would result in a contravention of the General Prohibition:
(i) Holders may give written notification to the Company if they consider that the conversion of a Performance Share may result in the contravention of the General Prohibition. The absence of

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such written notification from the Holder will entitle the Company to assume the conversion of a Performance Share will not result in any person being in contravention of the General Prohibition.

(ii) The Company may (but is not obliged to) by written notice to a Holder request a Holder to provide the written notice referred to in paragraph (m)(i) within seven days if the Company considers that the conversion of a Performance Share may result in a contravention of the General Prohibition. The absence of such written notification from the Holder will entitle the Company to assume the conversion of a Performance Share will not result in any person being in contravention of the General Prohibition.
(n) ( Lapse of Performance Share ) each Class A Performance Share shall expire on the date that is 24 months and 1 day after the date the Company is admitted to the Official List and each Class B Performance Share and Class C Performance Share shall expire on the date that is 36 months and 1 day after the date the Company is admitted to the Official List ( Expiry Date ) if the relevant milestone attached to that Performance Share has not been achieved, at which time the Company will redeem the relevant Performance Shares in accordance with paragraph (o) below. For the avoidance of doubt, a Performance Share will not lapse in the event the relevant milestone is met before the relevant Expiry Date and the Shares the subject of a conversion are deferred in accordance with paragraph (m) above.
(o) ( Redemption if Milestone not achieved ) If the relevant milestone is not achieved by the relevant Expiry Date, then each Performance Share in the relevant class will be automatically redeemed by the Company for the sum of $0.00001 within 10 Business Days of that Expiry Date.
(p) ( Conversion procedure ) The Company will issue the Holder with a new holding statement for any Share issued upon conversion of a Performance Share within 10 Business Days following the conversion.
(q) ( Ranking upon conversion ) The Share into which a Performance Share may convert will rank pari passu in all respects with existing Shares.

12.7 Employee Share Option Plans

The Company has adopted two separate Incentive Option Plans to allow eligible participants to be granted Options to acquire Shares in the Company and to accommodate the differing taxation treatment of incentives issued to Australian resident Directors and employees to that of incentives issued to non-Australian resident Directors and employees. These are the UUV Incentive Option Plan and the UUV Concessional Incentive Option Plan. The principal terms of the Plans are summarised below.

12.7.1 UUV Incentive Option Plan

(a) Eligibility and Grant of Options : The Board may grant Options to any Director, full or part time employee, or casual employee or contractor who falls within ASIC Class Order 14/1000, of the Company or an associated body corporate ( Eligible Participant ). The Board may also offer Options ( Offer ) to a prospective Eligible Participant provided the

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Offer can only be accepted if they become an Eligible Participant. Options may be granted by the Board at any time.

(b) Consideration : Each Option granted under the Plan will be granted for no more than nominal cash consideration.
(c) Conversion: Each Option is exercisable into one Share in the Company ranking equally in all respect with the existing issued Shares in the Company.
(d) Exercise Price and Expiry Date : The exercise price and expiry date for Options granted under the Plan will be determined by the Board prior to the grant of the Options.
(e) Exercise Restrictions : The Options granted under the Plan may be subject to conditions on exercise as may be fixed by the Directors prior to grant of the Options ( Exercise Conditions ). Any restrictions imposed by the Directors must be set out in the offer for the Options.
(f) Lapsing of Options : An unexercised Option will lapse:
(i) on its Expiry Date;
(ii) if any Exercise Condition is unable to be met and is not waived, as determined by the Board; or
(iii) subject to certain good leaver exceptions or a determination by the Board, where the Eligible Participant ceases to be an Eligible Participant.
(g) Disposal of Options: Options will not be transferable except to the extent the Plan or any offer provides otherwise.
(h) Quotation of Options : Options will not be quoted on the ASX, except to the extent provided for by the Plan or unless an offer provides otherwise.
(i) Trigger Events : The Company may permit Options to be exercised in certain circumstances where there is a change in control of the Company (including by takeover) or entry into a scheme of arrangement.
(j) Participation generally: There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.
(k) Rights Issues and Bonus Issues: If the Company makes a pro rata issue of securities (except a bonus issue) to the holders of Shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the option exercise price shall be reduced according to the formula specified in ASX Listing Rule 6.22.2. In the event of a bonus issue of Shares being made pro rata to Shareholders, (other than an issue in lieu of dividends), the number of Shares issued on exercise of each Option will include the number of bonus Shares that would have been issued if the Option had been exercised prior to the record date for the

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bonus issue. No adjustment will be made to the exercise price per Share of the Option.

(l) Reorganisation : The terms upon which Options will be granted will not prevent the Options being re-organised as required by the Listing Rules on the re-organisation of the capital of the Company.
(m) Limitations on Offers : The Company must have reasonable grounds to believe, when making an Offer, that the number of Shares to be received on exercise of Options offered under an Offer, when aggregated with the number of Shares issued or that may be issued as a result of offers made in reliance on the Class Order at any time during the previous 3 year period under an employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme, will not exceed 5% of the total number of Shares on issue at the date of the Offer.

12.7.2 UUV Concessional Incentive Option Plan

The UUV Concessional Incentive Option Plan contains standard terms to those set out in the UUV Incentive Option Plan along with the following additional terms:

(a) Leaver Provisions : where an Eligible Participant ceases to be employed or contracted by the Company or an associated body corporate ( Leaver ), the Board may, in its absolute discretion:
(i) serve a notice on the Leaver advising that some or all the Leaver’s unvested Options have lapsed;
(ii) serve a notice on the Leaver requiring the Leaver to sell some or all of the Leaver’s vested Options for fair market value to any person nominated by the Board; or
(iii) allow the Leaver to retain some or all the Leaver’s Options.
(b) Cashless Exercise: The Plan also allows Eligible Participants to exercise vested Options by way of a ‘cashless exercise’. Where an Eligible Participant makes such an election, rather than the participant being required to pay the exercise price of each Option to be exercised, the Company will issue the Eligible Participant with a smaller number of Shares on the exercise of the Options representing the difference between the value of the Shares to be issued and the exercise price of the Option. Where the Options are exercised by a ‘cashless exercise’, the Company will only issue such number of Shares as is equivalent to the number of Options being exercised multiplied by the excess of the average Share price over the exercise price of the Options divided by the average Share price and then rounded down to a whole number of Shares.
(c) Loan: An Eligible Participant who is to be granted Options may request the Company to grant a loan up to the total amount payable in respect of the exercise price of the Options granted to the Eligible Participant ( Loan ), on the following terms:
(i) the Loan will be interest free;
(ii) the Loan will be deemed to have been made at the time the Company issues the Shares on exercise of the Options to the Eligible Participant;

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(iii) the Loan shall be applied by the Company directly toward payment of the exercise price of the Options on exercise of such Options by the Eligible Participant;
(iv) the Company will apply any cash dividends in respect of Shares issued on exercise of the Options to repayment of any outstanding Loan amount;
(v) the Loan repayment date and the manner for making such payments shall be determined by the Board and set out in the offer of Options;
(vi) an Eligible Participant must repay the Loan in full by the Loan repayment date but may elect to repay the Loan amount in respect of any or all of the exercised Options at any time prior to the Loan repayment date;
(vii) the Company shall have a lien over the Shares issued on exercise of the Options and in respect of which a Loan is outstanding and the Company shall be entitled to sell those Shares in the event the Eligible Participant does not repay the Loan by the repayment date;
(viii) the Loan is repayable in full where the Eligible Participant suffers an insolvency event or breaches any condition of the Loan or the Plan;
(ix) an Eligible Participant must not transfer, assign, encumber or otherwise deal with the Shares issued on exercise of the Options until the Loan has been fully repaid;
(x) a Loan will be non-recourse except against the Shares issued on exercise of Options issued under the Plan and which are held by the Eligible Participant to which the Loan relates; and
(xi) the Board may, in its absolute discretion, agree to forgive a Loan made to an Eligible Participant.

12.8 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

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(d) as an inducement to become, or to qualify as, a Director; or
(e) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.

12.9 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(d) the formation or promotion of the Company; or
(e) the Offer.

K&L Gates LLP ( K&L Gates ) has acted as Patent Attorney and has prepared the Intellectual Property Report which is included in Section 8 of this Prospectus. The Company estimates it will pay K&L Gates a total of $15,000 for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, K&L Gates has received fees totalling US$5,000 (being approximately $6,850 assuming an exchange rate of AU$1.00:USD$0.73) from the Company.

Moses & Singer LLP ( Moses & Singer ) has acted as attorneys to the Company in the USA in relation to the Offer. The Company estimates it will pay Moses & Singer a total of $100,000 for services provided in relation to the Offer. Subsequently, fees will be charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Moses & Singer has received fees totalling approximately $60,000 from the Company in relation to the Offer (which fees are included in the $100,000 estimate noted above).

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HLB Mann Judd has acted as Investigating Accountant and has prepared the Investigating Accountant’s Report which is included in Section 9 of this Prospectus. The Company estimates it will pay HLB Mann Judd a total of $28,500 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, HLB Mann Judd has not received fees from the Company.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offer. The Company estimates it will pay Steinepreis Paganin $100,000 (excluding GST) for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has not received fees from the Company for any other services.

Patersons Securities Limited has acted as Joint Lead Manager in relation to the Offer. The Company estimates it will pay Patersons Securities Limited the fees set out in Section 11.2 for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Patersons Securities Limited has not received fees from the Company for any other services.

KTM Capital Pty Limited has acted as Joint Lead Manager in relation to the Offer. The Company estimates it will pay KTM Capital Pty Limited the fees set out in Section 11.2 for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, KTM Capital Pty Limited has not received fees from the Company for any other services.

12.10 Consents

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this section; and
(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

K&L Gates has given its written consent to being named as the Patent Attorney in this Prospectus, the inclusion of the Intellectual Property Report in Section 8 of this Prospectus in the form and context in which the report is included. K&L Gates has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

HLB Mann Judd has given its written consent to being named as Investigating Accountant and Auditor of the Company in this Prospectus and to the inclusion of the Investigating Accountant’s Report in Section 9 of this Prospectus in the form and context in which the information and report is included. HLB Mann Judd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Steinepreis Paganin has given its written consent to being named as the Australian solicitors to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Moses & Singer has given its written consent to being named as the USA attorneys to the Company in this Prospectus. Moses & Singer has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

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Patersons Securities Limited has given its written consent to being named as Joint Lead Manager to the Offer. Patersons Securities Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

KTM Capital Pty Limited has given its written consent to being named as Joint Lead Manager to the Offer. KTM Capital Pty Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Link Market Services Limited has given its written consent to being named as the share registry to the Company in this Prospectus. Link Market Services Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Cohen & Schaeffer P.C. has given its written consent to being named in this Prospectus as the auditor of Aquabotix and to the inclusion of the audited financial statements for Aquabotix for the financial years ended 31 December 2014, 31 December 2015 and 31 December 2016 (which financial statements have been incorporated by reference into this Prospectus as described in Section 3.13) and has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

12.11 Expenses of the Offer

The total expenses of the Offer (excluding GST) are estimated to be approximately $810,000 for minimum subscription or $930,000 for full oversubscriptions and are expected to be applied towards the items set out in the table below:

Item of Expenditure ASIC fees ASX fees Broker Commissions Joint Lead Manager Fee Legal Fees Patent Attorney’s Fees Investigating Accountant’s Fees Miscellaneous TOTAL	Minimum Subscription ($) Full Oversubscriptions ($) 2,350 2,350 105,000 105,000 306,000 420,000 100,000 100,000 200,000 200,000 15,000 15,000 28,500 28,500 53,150 59,150
	810,000 930,000

Under the JLM Mandates, the Company has agreed to pay the Joint Lead Managers a selling fee equal to 6% of the total amount raised under the Offer (refer to Sections 5.9 and 11.2 of this Prospectus for further information).
** Consistent with the use of funds table contained in Section 3.9, Long Hill Capital II, LLC has paid the amount of US$300,000 (being approximately $410,000 assuming an exchange rate of AU$1.00:USD$0.73) towards the expenses of the Offer (pursuant to the Second Convertible Note in Aquabotix which was converted into shares in Aquabotix on 23 February 2017) and the Company will pay the balance of the expenses of the Offer (i.e. being approximately $400,000 assuming minimum subscription or $520,000 assuming full oversubscriptions) from the proceeds of the Offer.

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12.12 Continuous disclosure obligations

Following admission of the Company to the Official List, the Company will be a “disclosing entity” (as defined in Section 111AC of the Corporations Act) and, as such, will be subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company will be required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

Price sensitive information will be publicly released through ASX before it is disclosed to shareholders and market participants. Distribution of other information to shareholders and market participants will also be managed through disclosure to the ASX. In addition, the Company will post this information on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience.

12.13 Electronic Prospectus

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of this Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the website of the Company at www.aquabotix.com.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

12.14 Financial Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

12.15 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.

Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of Securities issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

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12.16 Privacy Statement

If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry.

You can access, correct and update the personal information that the Company holds about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application.

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13. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

Durval Tavares Executive Director For and on behalf of UUV Aquabotix Ltd

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14. GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

$ means an Australian dollar.

Application Form means the application form attached to or accompanying this Prospectus relating to the Offer or the Joint Lead Manager Offer.

Aquabotix means Aquabotix Technology Corporation, a company incorporated in Massachusetts, United States on 4 March 2011 and having a place of business at 21 Father DeValles Blvd., Suite 106, Unit 8, Fall River, Massachusetts, USA.

Aquabotix Acquisition has the meaning given in section 11.1.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the official listing rules of ASX.

Board means the board of Directors as constituted from time to time.

Closing Date means the closing date of the Offer as set out in the indicative timetable in the Investment Overview in Section 3 of this Prospectus (subject to the Company reserving the right to extend the Closing Date or close the Offer early).

Company means UUV Aquabotix Ltd (ACN 616 062 072).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company at the date of this Prospectus.

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act.

Joint Lead Manager means Patersons Securities Limited and/or KTM Capital Pty Limited (as the context requires).

Joint Lead Manager Application Form means the application form attached to or accompanying this Prospectus relating to the Joint Lead Manager Offer.

Joint Lead Manager Mandates means the mandates between the Company and the Joint Lead Managers summarised in Section 11.2.

Listing Approval means ASX granting conditional approval for the Company to be admitted to the Official List and for Official Quotation of the Securities.

Offer means the offer of Shares and Options pursuant to this Prospectus as set out in Section 5 of this Prospectus.

Official List means the official list of ASX.

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Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Performance Share means a performance share in the Company with the terms and conditions set out in Section 12.6.

Prospectus means this prospectus.

Section means a section of this Prospectus.

Securities means Shares and Options.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

UUV Technology means the technology owned by Aquabotix, including pending, current, and future provisional patent/s, patent/s and design protection registrations. For clarity, UUV Technology relates to remotely-operated, autonomous and hybrid underwater vehicles and underwater cameras.

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AI assistant

ONE CLICK GROUP LIMITED — Capital/Financing Update 2017

64250_rns_2017-04-26_d6b74fed-a698-4088-ba17-3016879d8d7c.pdf

UUV AQUABOTIX LTD ACN 616 062 072

PROSPECTUS

and

IMPORTANT INFORMATION

TABLE OF CONTENTS

1. CORPORATE DIRECTORY

Directors

Registered Office

Management

Proposed ASX Code

Share Registry*

Solicitors in Australia

Investigating Accountant and Auditor of the Company

Patent Attorney

Auditor of Aquabotix Technology Corporation*

Attorneys in the USA

Joint Lead Managers

2. IMPORTANT NOTICE

2.1

Exposure Period

2.2

Web Site – On-line Prospectus

2.3

Website

2.4 Forwarding-looking statements

2.5 Photographs and Diagrams

3. INVESTMENT OVERVIEW

3.1 The Company

3.2 Business Model

3.3 The Objectives

3.4 Key Investment Highlights

3.5 Key Risks

(a) Limited history

(b) Research and Development and Technical Risk

(c) Technology Risk

(d) Intellectual Property Rights

(e) Third Party Relationship Risk

(f)

Reputational Risk

(g) Competition Risk

(h) Concentration of Ownership and Dilution Risk

(i) Liquidity

(j)

Government Regulation Risk

(k) Reliance on Key Personnel Risk

(l) US Taxation Risk

3.6 The Offer

3.7 Indicative timetable*

3.8 Purpose of the Offer

3.9 Use of Funds

3.10 Capital Structure

Options

Performance Shares

3.11 Substantial Shareholders

As at the date of the Prospectus

As at the date of the Prospectus and assuming the Shares under the Exchange Agreement are issued to the Aquabotix shareholders

On completion of the Offer (assuming no existing substantial Shareholder subscribes and receives additional Shares pursuant to the Offer[1] )

3.12 Restricted Securities

3.13 Financial Information

3.14 Taxation

3.15 Dividend Policy

3.16 Directors and Key Personnel

Durval Tavares

Chief Executive Officer and Executive Director

Peter James Non-Executive Chairman

Brendan Martin

Chief Financial Officer and Executive Director

Rear Admiral Jay M. Cohen (ret) Non-Executive Director

Anand Sundaraj Company Secretary

3.17 Corporate Governance

3.18

Disclosure of Interests

3.19 Agreements with Directors or Related Parties

Executive Employment Agreements – Durval Tavares

Executive Employment Agreement – Brendan Martin

Appointment Letters – Peter James and Jay Cohen

Employment Agreements – Debra Tavares and Dawn Doraz

ONE CLICK GROUP LIMITED Capital/Financing Update 2017