ORTHOCELL LIMITED — Capital/Financing Update 2022

Jul 14, 2022

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Option Terms and Conditions

Perth, Australia; 15 July 2022: Regenerative medicine company Orthocell Limited (ASX: OCC, “Orthocell” or the “Company”) advises that the terms and conditions of 2,200,000 options issued and notified in the Notification of Issue, Conversion or Payment up of Unquoted Equity Securities on 14 July 2022 are attached.

Release authorised by

Simon Robertson Company Secretary

For more information, please contact:

General & Investor enquiries

Paul Anderson Orthocell Limited Managing Director P: +61 8 9360 2888 E: paul.anderson@orthocell.com.au

About Orthocell Limited

Orthocell is a regenerative medicine company focused on regenerating mobility for patients by developing products for the repair of a variety of soft tissue injuries. Orthocell’s portfolio of products include CelGro®, a collagen medical device which facilitates tissue repair and healing in a variety of dental, nerve and orthopaedic, reconstructive applications. Orthocell recently received FDA 510(k) approval for Striate+, the first application of the CelGro® platform for dental GBR applications. Striate+ is also approved in Australia (ARTG) and Europe (CE Mark) for the same. The Company’s other major products are the cell therapies Autologous Tenocyte Implantation (Ortho-ATI®) and Autologous Chondrocyte Implantation (Ortho-ACI®), which aim to regenerate damaged tendon and cartilage tissue respectively. Orthocell is moving forward with Ortho-ATI® clinical studies designed to assist in the US (FDA) approval process and has completed its pre-IND meetings with the FDA.

For more information on Orthocell, please visit www.orthocell.com.au or follow us on Twitter @Orthocellltd and LinkedIn www.linkedin.com/company/orthocell-ltd

Ph: +61 8 9360 2888 Fax: +61 8 9360 2899 www.orthocell.com.au

Terms and Conditions of Options

1. Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of each Option. 2. Exercise Price, Vesting Conditions and Expiry Date

Exercise Price	Vesting	Specified
	Conditions	Expiry Date
0.403	On Issue	13/7/2025

The options will expire (Expiry Date), if not previously exercised, on the first to occur of:

• I. The Specified Expiry Date;

• II. the expiry of 30 days (or any longer period which the Board determines) after the holder ceases to be engaged by the Company or any of its subsidiaries for any reason;

• III. a determination of the Board that the holder has acted fraudulently, dishonestly or in breach of the holders’ obligations to the Company or any of its subsidiaries and that the option is to be forfeited; and

• IV. as determined in accordance with item 3 below,

and thereafter no party has any claim against any other party arising under or in respect of the Options.

3. Change in Control

Upon the occurrence of a Change in Control Event the Board may determine (in its discretion) to procure that an offer is made to holders of Options on like terms (having regard to the nature and value of the Options) to the terms proposed under the Change in Control Event in which case the Board shall determine an appropriate period during which the holder may elect to accept the offer and, if the holder has not so elected at the end of that period, any unvested Options shall immediately vest and become exercisable and if not exercised within 10 days, shall lapse.

For the purposes of this Item 3 "Change in Control Event" means:

• (a) the occurrence of:

  • (i) the offeror under a takeover offer in respect of all Shares announcing that it has achieved acceptances in respect of 50.1% or more of the Shares; and

  • (ii) that takeover bid has become unconditional (except any condition in relation to the cancellation or exercise of the Options); or

• (b) the announcement by the Company that:

  • (iii) Shareholders have at a Court convened meeting of shareholders voted in favour, by the necessary majority, of a proposed scheme of arrangement under which all Shares are to be either:

    • (A) cancelled; or

    • (B) transferred to a third party; and

(iv) the Court, by order, approves the proposed scheme of arrangement; or

(c) at the absolute discretion of the Board, the occurrence of a sale of at least 50% of the Company's main undertaking.

5.

Exercise Period

• The Options are exercisable at any time after the Vesting Date in item 2 above and on or prior to the Expiry Date. Notice of Exercise

The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

1. Cashless Exercise Facility

(a) The holder of Options may, subject to item 6(c) below, elect to pay the Exercise Price for an Option by setting off the exercise price against the number of Shares which they are entitled to receive upon exercise ( Cashless Exercise Facility ). By using the Cashless Exercise Facility, the holder will receive Shares to the value of the surplus after the Exercise Price has been set off.

(b) If a holder elects to use the Cashless Exercise Facility, the holder will only be issued that number of Shares (rounded down to the nearest whole number) as are equal in value to the difference between the total Exercise Price otherwise payable for the Options on the Options being exercised and the then market value of the Shares at the time of exercise (determined as the volume weighted average of the prices at which Shares were traded on the ASX during the one week period immediately preceding the exercise date) calculated in accordance with the following formula: S = O x (MSP – EP)

MSP

Where:

S = Number of Shares to be issued on exercise of the Options.

O = Number of Options.

MSP = Market value of the Shares (calculated using the volume weighted average prices at which Shares were traded on the ASX over the one week period immediately preceding the exercise date).

EP = Option exercise price.

(c) If the difference between the total Exercise Price otherwise payable for the Options on the Options being exercised and the then market value of the Shares at the time of exercise (calculated in accordance with item 6(b)) is zero or negative, then a holder will not be entitled to use the Cashless Exercise Facility.

1. Shares issued on exercise

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

1. Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

1. Timing of issue of Shares

After an Option is validly exercised, the Company must, as soon as possible following receipt of the Notice of Exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

• (a) issue the Share;

• (b) 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 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

• (c) do all such acts matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Share.

1. 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.

1. Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

• (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the option holder would have received if the option holder had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

1. Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders there will be no adjustment of the Exercise Price of an Option.

1. Adjustments for reorganisation

If there is any reorganisation of the issued share capital of the Company, the rights of the option holder may be varied to comply with the Listing Rules which apply to a reorganisation of capital at the time of the reorganisation.

1. Quotation of Options

No application for quotation of the Options will be made by the Company.

1. Options not transferable

Options are transferable only with the prior written approval of the Board of directors of the Company and subject to compliance with the Corporations Act.

1. Lodgment Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's Registry.