PENTANET LIMITED — Investor Presentation 2021

Jun 17, 2021

5GG

Capital Raise Presentation, June 2021

==> picture [328 x 103] intentionally omitted <==

DISCLAIMER

IMPORTANT: You must read the following before continuing.

Summary information in relation to Pentanet Limited.

This presentation contains summary information about Pentanet Limited (ACN 617 506 279) (“Company”), its subsidiaries and their activities which is current as at the date of this presentation, unless otherwise indicated. The information in this presentation remains subject to change without notice, and the Company is not responsible for updating, nor does it undertake to update, it.

Industry data - Certain market and industry data used in connection with or referenced in this presentation, including in relation to other companies in the Company’s peer group, may have been obtained from public filings, research, surveys or studies made or conducted by third parties, including as published in industry-specific or general publications. Neither the Company nor its advisors or their respective representatives, have independently verified any such market or industry data.

Not financial product advice - This presentation, and the information provided in it, does not constitute, and is not intended to constitute, investment or financial product advice (nor tax, accounting or legal advice). This presentation should not be relied upon as advice to investors or potential investors and has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. Any investment decision should be made based solely upon appropriate due diligence. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek legal, accounting and taxation advice appropriate to their jurisdiction. Recipients of this presentation are advised to consult their own professional advisers. An investment in the Company is subject to significant risks, both known and unknown and including (without limitation) risks of loss of income and capital. A number of risks are beyond the control of the Company.

Future performance, forward-looking statements and key risks - This presentation contains certain “forward-looking statements”. Forward-looking statements can generally be identified by the use of forward looking words such as “forecast”, “likely”, “believe”, “future”, “project”, “opinion”, “guidance”, “should”, “could”, “target”, “propose”, “to be”, “foresee”, “aim”, “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, “indicative” and “guidance”, and other similar words and expressions, which may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated dates, expected costs or outputs for the Company. To the extent that this presentation contains forward-looking information (including forward-looking statements, opinions or estimates), the forward-looking information is subject to a number of risk factors, including those generally associated with the telecommunications industry. Any such forward-looking statement also inherently involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements to be materially greater or less than estimated.

Any forward-looking statements are also based on assumptions and contingencies which are subject to change without notice and which may ultimately prove to be materially incorrect, as are statements about market and industry trends, which are based on interpretations of current market conditions. Investors should consider the forward-looking statements contained in this presentation in light of those disclosures and not place reliance on such statements. The forward-looking statements in this presentation are not guarantees or predictions of future performance and may involve significant elements of subjective judgment, assumptions as to future events that may not be correct, known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company. As a result, there can be no assurance that actual outcomes will not materially differ from these forward-looking statements. The forward-looking statements are based on information available to the Company as at the date of this presentation. Except as required by law or regulation, the Company undertakes no obligation to provide any additional or updated information or update any forward-looking statements, whether as a result of new information, future events or results or otherwise.

Indications of, and guidance on, future performance are also forward-looking statements, and include statements in this presentation regarding expected or indicative costs, indicative revenues, indicative outputs and anticipated dates. To the maximum extent permitted by law, the Company, its advisors and their respective directors, officers, employees, advisers, agents and intermediaries (together, “Relevant Parties”) disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions, or any change in events, conditions or circumstances on which any such information or statement is based. Nothing in this presentation will, under any circumstances (including by reason of this presentation remaining available and not being superseded or replaced by any other presentation or publication with respect to the Company or the subject matter of this presentation), create an implication that there has been no change in the affairs of the Company since the date of this presentation.

To the maximum extent permitted by law, the Relevant Parties make no representation or warranty (express or implied) as to the fairness, accuracy, reliability, currency, reasonableness or completeness of the contents of this presentation or any other information (whether written or verbal) that the Relevant Parties otherwise provide to the recipient. The recipient may not rely on the contents of the presentation or any information in it in making any decision to invest or acquire an interest in the Company or its assets. To the maximum extent permitted by law, the Relevant Parties are not liable for any direct, indirect or consequential loss or damage suffered (whether foreseeable or not) by any person (whether arising from negligence or otherwise) as a result of relying on this presentation or the information in it, any errors therein or omissions therefrom, or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company, or otherwise in connection with this presentation or the information in it.

Investment risk - As noted above, an investment in the Company’s securities is subject to investment and other known and unknown risks, a number of which are beyond the control of the Company. The Company (nor its related bodies corporate) does not guarantee any particular rate of return or the performance of the Company, nor does it guarantee the repayment of capital from the Company or any particular tax treatment. Prospective investors should make their own enquiries and investigations regarding all information in this presentation, including but not limited to the assumptions, uncertainties and contingencies which may affect future operations of the Company and the impact that different future outcomes may have on the Company.

Not an offer - This presentation is for information purposes only and does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company in any jurisdiction. This presentation and its contents must not be distributed, transmitted or viewed by any person in any jurisdiction where the distribution, transmission or viewing of this document would be unlawful under the securities or other laws of that or any other jurisdiction.

==> picture [14 x 13] intentionally omitted <==

Page 2 $20m Placement, June 2021

DETAILS OF THE PLACEMENT

CAPITAL STRUCTURE

Shares on issue	263,369,935
Shares issued under the placement	27,777,778
Shares on issue post placement	291,147,713
PLACEMENT DETAILS
Placement price	$0.72
Placement proceeds	$20m
MARKET CAPITALISATION AT OFFER PRICE	$209,626,353
Pro-forma net cash	$36.3m

USE OF FUNDS

Wireless acceleration & Network 5G Conversion	$6m
5G Spectrum	$3m
NVIDIA GeForce NOW expansion & exclusivity	$5m
CloudGG software development & gaming opportunities	$4m
General working capital and cost of offer	$2m
Total Proceeds	$20m

Note: 34,260,000 Options on issue, exercisable at various prices

==> picture [14 x 13] intentionally omitted <==

Page 3 $20m Placement, June 2021

ABOUT US

==> picture [327 x 103] intentionally omitted <==

==> picture [14 x 13] intentionally omitted <==

Page 4 $20m Placement, June 2021

==> picture [14 x 13] intentionally omitted <==

4.8 4.7

4.5

==> picture [372 x 78] intentionally omitted <==

The Pentanet brand continues to build in market, positioned around high-performance, speed, gaming, and next-generation technology .

==> picture [224 x 148] intentionally omitted <==

The Company maintains strong customer satisfaction results with a weighted average of 4.62 stars across Facebook, Google and Product Review for our telecommunications services.

==> picture [177 x 222] intentionally omitted <==

==> picture [234 x 154] intentionally omitted <==

==> picture [238 x 159] intentionally omitted <==

==> picture [248 x 82] intentionally omitted <==

==> picture [234 x 201] intentionally omitted <==

==> picture [243 x 139] intentionally omitted <==

==> picture [225 x 139] intentionally omitted <==

Page 5 $20m Placement, June 2021

12,000 active subscribers as at 31 May 2021

5,000 on-net 7,000 off-net

==> picture [270 x 183] intentionally omitted <==

----- Start of picture text -----

CLEAR LoS
SUBSCRIBER
ONLINE
----- End of picture text -----

==> picture [269 x 183] intentionally omitted <==

----- Start of picture text -----

DISRUPTED LoS
NO COVERAGE
----- End of picture text -----

==> picture [14 x 13] intentionally omitted <==

Page 6 $20m Placement, June 2021

==> picture [152 x 111] intentionally omitted <==

==> picture [149 x 81] intentionally omitted <==

==> picture [70 x 7] intentionally omitted <==

----- Start of picture text -----

NO COVERAGE
----- End of picture text -----

==> picture [114 x 30] intentionally omitted <==

----- Start of picture text -----

NOW ONLINE
----- End of picture text -----

Perth’s own next-generation gigabit wireless mesh network

==> picture [14 x 13] intentionally omitted <==

Page 7 $20m Placement, June 2021

==> picture [318 x 120] intentionally omitted <==

----- Start of picture text -----

ACCELERATED
----- End of picture text -----

Towards 5G mmWave spectrum licensing to ACMA.

==> picture [17 x 19] intentionally omitted <==

Conversion of Network to be 5G enabled. Accelerated marketing and Terragraph upgrade program for existing subscriber base.

==> picture [163 x 152] intentionally omitted <==

==> picture [14 x 13] intentionally omitted <==

Page 8 $20m Placement, June 2021

CLOUD GAMING

CONVENIENCE CHANGES MARKETS

==> picture [369 x 66] intentionally omitted <==

• Jim Keyes, Blockbuster CEO, 2008

==> picture [56 x 69] intentionally omitted <==

----- Start of picture text -----

Gaming
PC
----- End of picture text -----

==> picture [208 x 80] intentionally omitted <==

----- Start of picture text -----

TOTAL AUS GAMING
----- End of picture text -----

ADDRESSABLE MARKET

==> picture [49 x 51] intentionally omitted <==

==> picture [60 x 48] intentionally omitted <==

----- Start of picture text -----

CLOUD.GG
Subscription
Based Access
----- End of picture text -----

• 1Source – ACMA Communications Report 2018-19.2 | 2Source - IGEA 2018 Digital Australia Report

==> picture [14 x 13] intentionally omitted <==

Page 9 $20m Placement, June 2021

==> picture [427 x 462] intentionally omitted <==

----- Start of picture text -----

A total of 36 RTX servers to be
split across two deployments
in PER and SYD
35,224
----- End of picture text -----

==> picture [401 x 71] intentionally omitted <==

==> picture [228 x 80] intentionally omitted <==

==> picture [545 x 245] intentionally omitted <==

----- Start of picture text -----

24,300
0
27 Jan 26 Feb
Page 10
$20m Placement, June 2021
----- End of picture text -----

==> picture [411 x 140] intentionally omitted <==

----- Start of picture text -----

CloudGG manages the user community, subscription
and promotes the completion of quests, where users
gain XP to win rewards and enables the cloud gaming
provider to gather valuable behavioural data on users
for oversubscription efficiencies.
----- End of picture text -----

==> picture [401 x 71] intentionally omitted <==

==> picture [712 x 241] intentionally omitted <==

----- Start of picture text -----

Towards further software development of
CloudGG and Pentanet.GG gaming
opportunities.
Cloud.GG is a global top-level domain name controlled by Pentanet and
used to promote and represent cloud gaming.
The CloudGG portal which we have developed for the Cloud.GG domain is a
centralised user management and analytics program designed to assist
with cloud gaming onboarding. We plan to further develop the CloudGG
platform, adding more features, gamification and value to the onboarding
process to use for our own deployment, with the ability for the platform to
also help other cloud gaming deployments globally.
----- End of picture text -----

==> picture [305 x 123] intentionally omitted <==

50,000

==> picture [14 x 13] intentionally omitted <==

Page 11 $20m Placement, June 2021

ONGOING STRATEGY

==> picture [58 x 91] intentionally omitted <==

GROW OUR SUBSCRIBER BASE

⬟ Introduce new technology to increase on-net coverage

⬟ Deliver high-quality customer experience

• ⬟ Limit churn

• ⬟ Customers become advocates

• ⬟ Competitive service offering

⬟ Targeted marketing and media strategy

EXPAND NETWORK INCREASING POTENTIAL MARKET

• ⬟ Deployment of large-scale mmWave wireless

telecommunications network

• ⬟ Increase available speeds to 1Gbps for more fixed wireless customers

⬟ Line of sight to tower no longer required for every subscriber

• ⬟ Increase market penetration with greater fixed wireless coverage across Perth metro area

==> picture [39 x 75] intentionally omitted <==

INCREASE MARGINS $

• ⬟ Attract more off-net

• subscribers to higher margin on-net services

• ⬟ Diversify product offering (VOIP, consumer electronics)

• ⬟ NVIDIA GeForce NOW cloud gaming subscription bundling

• ⬟ Continue development of premium brand for alignment to speed and quality

Page 12 $20m Placement, June 2021

2/8 Corbusier Place +61 8 9466 2672 Balcatta WA investors@pentanet.com.au

pentanet.com.au/investor-centre ASX: 5GG

==> picture [309 x 97] intentionally omitted <==

Annexure A

Pentanet Ltd | Risk Disclosure

Risks specific to the Company (Pentanet Limited ACN 617 506 279)

1. Loss of carrier licence:

As a telecommunications carrier, Pentanet (or the Company ) is required to hold a carrier licence with the Australian Communications and Media Authority ( ACMA ) (which is essential for the Company to operate as a carrier of telecommunications infrastructure) and must comply with the licence conditions set out in the Telecommunications Act 1997 (Cth) ( Telecommunications Act ). There is a risk that licence conditions may be varied, or if the Company does not comply with the licence conditions, that the licence be cancelled, which would have a material impact on the Company’s activities and may result in the Company breaching a number of its contractual obligations.

2. Competition:

Pentanet and its subsidiaries ( Group ) operate in markets where customers have the choice of alternative suppliers of broadband internet and data connectivity (including but not limited to National Broadband Network ( NBN ) resellers). The ability of the Company and its subsidiaries ( Group ) to attract and retain customers will be affected by alternative service and price offerings of competitors in the markets in which the Group operates.

3. Network performance and reliability:

There is a risk that the performance, reliability and availability of the Group's technology platform (including online led customer service platform, customer support and communications systems) website and systems may be adversely affected by a number of factors, including damage, equipment faults, power failure, computer viruses, misuse by employees or contractors, or external or malicious interventions (such as hacking, fire, natural disasters or weather).

There is also a risk if the Group's contracted third-party suppliers' (who manage certain interfaces) services were interrupted, or if the Group was unable to contract with these suppliers, that the Group may experience a disruption in its service.

There is a risk that the Group’s operational processes, redundancy capacity and capability or disaster recovery plans may not adequately address every potential event. The Group’s insurance policies may not cover loss or damage that the Group suffers as a result of a system failure. This may reduce the Group’s ability to generate income, materially interrupt the level of customer service provided and cause damage to the brand, leading to a reduction in the retention rates of existing customers and potentially a material adverse effect on the Group’s financial position and performance.

4. Stage of development

There is a risk that the Group (being at an early stage of development) may not be able to manage accelerated growth, which could impact the financial results and growth funding of the Group, as well as the share price of the Company. The Company does not currently generate positive cash-flow and requires funding to expand its wireless and Terragraph network and provide equipment and installation of associated equipment at customer premises.

5. Future changes to NBN technology solutions

If there was a change to NBN’s technology solutions or strategies and the change made the NBN more competitive, then this could have a materially adverse impact on the Group’s ability to attract sufficient customers, generate sufficient revenues and profitability to provide a return to investors, as the fixed wireless market opportunity relies on offering NBN competitive services.

6. New technology evolution

The Group relies on third party hardware and software technologies to deliver its products and services. If the performance of these technologies decreased (e.g. fails to be continuous, without disruptions or cessation), there may be an impact on reputation, ability to deliver services and customer growth. Wireless technology changes are rapid, and failure to invest or upgrade to new technologies to remain competitive may lead to a loss of opportunities for the Group, which may materially affect future business operations and the financial results.

7. NVIDIA

Pentanet has entered into the NVIDIA GeForce NOW Alliance Partner Agreement ( NVIDIA Agreement ) with NVIDIA Corporation ( NVIDA ) dated 25 November 2020 (as amended), pursuant to which Pentanet has the right to purchase up to 72 GeForce NOW ( GFN ) Game Servers from NVIDIA (or its approved third-party vendors), in a staggered approach.

There can be no assurances that the commercialisation of the NVIDIA's gaming PC in the cloud service ( GFN Service ) will be successful. There is a risk that the GFN Service may not be fully understood by Pentanet’s target markets and that the cost and time required in penetrating these new markets are greater than estimated. These conditions may contribute to the risk that Pentanet is unable to successfully attract sufficient customers to commercialise the GFN Service.

There is no guarantee that Pentanet will be granted exclusivity in Australia, for a period or at all. There is also no guarantee that the Company or NVIDIA will be in a position to enable the term of the NVIDIA Agreement to be renewed beyond the initial term of 3 years.

8. Product development

The Group may introduce new products or services or functionality which carry a risk of unforeseen costs or risks, which may not perform as intended or may not deliver growth in customers. There is no guarantee that Pentanet will be able to undertake research and product development successfully. If testing during product development produces results that do not meet the Company's expectations, this could result in delays to Pentanet's growth plans. A failure to successfully develop new and current products or a delay stemming from product development will adversely affect Pentanet's financial position and prospects.

9. Legal or regulatory risks

The Group operates in a regulated environment and its behaviour is subject to ACMA, the the Australian Competition and Consumer Commission, Telecommunications Industry Ombudsman, state fair trading bodies, and consumer groups that monitor the conduct of telecommunication service providers. Pentanet may be affected by those bodies or by changes to government policies and legislation, including but not limited to those relating to the telecommunications industry and taxation, in respect of Australia and any other country that Pentanet has economic interests, and which may affect the viability and profitability of Pentanet.

Pentanet depends on the use of class license spectrum to operate its 5GHz and 60GHz networks. Access to class spectrum is currently allocated by ACMA at no cost. Pentanet also depends on the use of licensed spectrum and holds several ACMA licenses for use of specific spectrum as part of its wireless network. Pentanet uses class license spectrum for no fee and for non-exclusive use. Unlicensed spectrum is regulated by the International Telecommunication Union Standards and used by many devices in homes. Change to the class license spectrum would adversely impact Pentanet if access to, the rules or costs governing the use of, this spectrum were to change.

The Telecommunications Act imposes an obligation on owners of non-NBN fixed networks, which supply super-fast carriage services to residential or small business customers, to supply services only to a carrier or a service provider, i.e. to operate on only a wholesale basis. This regulation does not apply to fixed-wireless network owners, such as Pentanet and allows Pentanet to own and operate its end to end fixed-wireless network as owner of the network and supplier and retailer of services to residential and business customers. If this regulation was to change to include fixed-wireless networks (in the prohibition under the Telecommunications Act against a company operating as both owner of the network and supplier of services to residential and business customers), then this would have a materially adverse effect on Pentanet, as Pentanet would have to separate the ownership of the fixed-wireless network from the supply of services to residential and business customers.

10. Supplier and customer relationships

The Group relies on key business relationships to deliver its services, such as backhaul, site leases and network equipment and on contracting relationships with multiple suppliers. A failure to maintain supplier relationships could result in a loss of support, which could adversely impact the business operations and financial results. Loss of or interruption of any key supplier contracts such as Virtutel Pty Ltd (ABN 86 142 205 712), Vocus Pty Ltd (ACN 127 842 853), Axicom Pty Ltd (ABN 34 090 873 019) and Water Corporation (ABN 28 003 434 917), under which IP Transit, backhaul services and site leases are supplied would have a materially adverse impact on the profitability of Pentanet.

In addition, failure to maintain responsive customer service capability, a quality service offering and competitive prices may lead to customers seeking alternative providers, which could increase the customer churn of the Group and have an adverse impact on profitability.

11. Loss of customers or contracts and customer service risk

If the Group’s customer churn rates were to increase, this would have an adverse effect on the revenue, and therefore financial performance and profitability of the Group.

In particular, poor customer service experiences may result in the loss of customers. If Pentanet loses key customer service personnel, fails to provide adequate training and resources for customer service personnel, or if the computer systems relied on by customer service personnel are disrupted by technological failures, this could lead to adverse publicity, litigation, regulatory inquiries or a decrease in customers, all of which may negatively impact on Pentanet’s performance.

Further, a lack of customer demand, or oversupply of inexpensive fibre optics telecommunications infrastructure in the market, may impact the growth prospects and/or financial performance of the Group.

12. Key management personnel

Pentanet relies heavily on its existing key management personnel, who have intimate knowledge of the business. If a member of Pentanet’s key management team were to resign or leave the businesses this could have an adverse effect on Pentanet’s performance, and there is no guarantee that Pentanet could attract a suitably qualified replacement, or if it is able to do so, how long it may take to attract and employ such a replacement.

13. Growth strategies

Pentanet has a number of strategies in place to generate future growth and earnings. There is a risk that the implementation of growth strategies will be subject to delays or cost overruns and there is no guarantee that these strategies will generate the customer demand, full financial benefits anticipated or result in future sales and earnings growth and may not deliver a return on investment. Furthermore, the implementation of growth strategies may lead to changes to Pentanet’s business or the customer experience which may result in unintended adverse consequences.

14. Contract risk

The operations of Pentanet require involvement of a number of third parties, including the counterparties to agreements. With respect to these third parties, Pentanet is unable to completely avoid the risk of financial failure or default by a party to any agreement to which Pentanet is or may become a party; or termination or failure to renew the term of any agreement to which Pentanet is or may become a party.

15. Future capital requirements

Future additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the current market price or may involve restrictive covenants which limit Pentanet’s operations and business strategy. Debt financing, if available, may involve restrictions on financing and operating activities.

No assurances can be made that appropriate capital or funding, if and when needed, will be available on terms favourable to Pentanet or at all. If Pentanet is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and this could have a material adverse effect on Pentanet’s activities and affect Pentanet’s ability to continue as a going concern

Future offerings of Pentanet shares (Shares) and of securities convertible into Shares will increase in the number of Shares issued and outstanding, the possibility of sales of such shares may have a depressive effect on the price of Shares. In addition, as a result of such additional Shares, the voting power of Pentanet’s existing shareholders will be diluted.

16. Health and safety

Employees and contractors are exposed to risks in relation to installation. If installation risks are not properly identified and/or work practices are not implemented in a safe manner, employees or contractors may sustain injuries or, in extreme cases, serious injury or death. If Electromagnetic Radiation Emissions (EME) from Pentanet’s equipment are not in accordance with equipment specifications and/or work practices are not implemented in a safe manner, employees or contractors, or even third parties, may sustain injuries or, in extreme cases, serious injury.

17. Data security risk

Through the ordinary course of business, the Group collects a personal, financial land service usage data from customers and the Group is reliant on technology providers and partners that collect certain information about the Group’s customers.

Cyberattacks, data theft and hacking may lead to a compromise or even breach of the technology and online customer service platforms used by the Group to protect confidential information. Measures taken by the Group may not be sufficient to detect or prevent unauthorised access to, or disclosure of, confidential information or access to such information by hackers or potentially government agencies.

If a cyberattack is successful, any data security breaches or the Group’s failure to protect confidential information could result in loss of information integrity, breaches of the Group’s obligations under applicable laws or customer agreements, and website and system outages and fraud, each of which may potentially have a material adverse effect on the Group’s reputation and financial performance.

18. Extreme weather events

The Group’s wireless broadband business uses equipment which could be impacted by significant adverse weather conditions such as hurricanes, cyclones, or high winds impacting on the operation of its equipment or other adverse weather conditions or floods impacting third party networks on which Pentanet depends for backhaul. These events could have an adverse impact on future operations and profitability. Other adverse climate related events may impact the supply and price of hardware components and Pentanet's logistics.

19. Infectious diseases and COVID-19

Infectious diseases could interrupt Pentanet's operations, impair deployment of its solutions to customers and prevent customers from honouring their contractual obligations. Such diseases can also cause hospitalisation or death of Pentanet's existing and potential customers and staff. Containment strategies imposed by governments are likely to inhibit the installation and maintenance of Pentanet's products, as well as causing disruptions to supply chains and delays in sourcing component parts.

20. Brand maintenance

The Group’s reputation and the value of its brands may be damaged as a result of negative customer or end-user experiences due to poor product performance or product failures, adverse media coverage or other publicity, or disputes with customers, suppliers, landlords or employees. Erosion of the Group’s reputation as a result of one or a combination of these factors may reduce demand for its products, diminish the value of its brands, or adversely impact relationships with customers, suppliers or employees; and adversely impact the Group’s ability to attract and retain customers, sales and revenue performance, and profitability.

21. Future profitability

The Company's limited financial history creates uncertainty in relation to the business and its prospects. There can be no certainty that Pentanet will achieve or sustain profitability or achieve or sustain positive cash flow from its operating activities. The Group’s profitability may be impacted by many factors and the extent of future profits (if any) and the time required to achieve sustained profitability are uncertain and cannot be reliably predicted.

22. Credit risk

Pentanet is exposed to credit risks relating to the delayed payments or non-payments from its customers, including in the event a customer ceases operations or suffers an insolvency event. If a material portion of customers were to default in payment under their respective arrangements with Pentanet this could have a material adverse effect on Pentanet’s business, operating results and financial condition, including decreasing operating cash flows. There may be an increased risk of default as a result of poor economic conditions (including in relation to COVID-19).

23. Future acquisition risk

Pentanet may seek to acquire businesses or companies in order to achieve its objectives. There is a risk that Pentanet's due diligence investigations will not identify issues which are material to the acquisition and may result in additional liabilities affecting Pentanet.

Placement and general investment risks

24. Economic

Factors such as inflation, currency fluctuations, interest rates, legislative changes, political decisions and industrial disruption have an impact on operating costs. Pentanet's future income, asset values and share price can be affected by these factors.

25. Market price of shares

The market price of Shares may fluctuate over time as a result of a number of factors including the financial performance and prospects of Pentanet. Prevailing market conditions, general investor sentiment, interest rates, commodity prices and the liquidity and volume of shares being bought or sold at any point in time. It should be noted that there can be no guarantee that there will be an active or liquid market in shares traded on the ASX and there is no guarantee that new Shares issued under the placement will trade at or above the issue price. The historic price performance of Shares does not necessarily provide any guidance as to the future share price performance.

26. Taxation

Future changes in Australian tax law may affect the taxation treatment of an investment in Pentanet shares or the holding or disposal of those shares. Further, changes in tax law. or the way tax law is expected to be interpreted may impact the future tax liabilities of Pentanet.

27. Force majeure

Significant catastrophic force majeure events - such as war. acts of terrorism, pandemics, loss of power, cyber security breaches could disrupt Pentanet's operations and impair deployment of its solutions by its customers, interrupt critical functions, reduce demand for Pentanet products, prevent customers from honouring their contractual obligations to Pentanet or otherwise harm the business.

==> picture [460 x 472] intentionally omitted <==