READCLOUD LIMITED — Share Issue/Capital Change 2018

Nov 25, 2018

ACN 136 815 891 ABN 44 136 815 891

Level 1, 426 Glen Huntly Road, Elsternwick, Victoria, 3185

Contact:

Phone: +61 3 9692 7222 Email: contact@readcloud.com

Board of Directors:

Paul Collins, Non- Exec Chairman Lars Lindstrom, Managing Director Darren Hunter, Executive Director Guy Mendelson, Non-Exec Director

Company Secretary:

Melanie Leydin

Securities on Issue:

RCL: 87,750,000 ordinary shares RCLO: 15,000,000 options

Website:

https://www.readcloud.com/

Section 708A Cleansing Statement and Appendix 3B

This notice is given by ReadCloud Limited (Company) under Section 708A(5)(e) of the Corporations Act 2001 (Cth) (Corporations Act).

The Company hereby confirms that:

• (a) the Company has issued 250,000 fully paid ordinary shares (Shares) pursuant to the completion of the acquisition of Australian Institute of Education and Training. 125,000 Shares will be subject to Disposal Restrictions until expiry of a 12-month escrow to 23 November 2019 and 125,000 Shares will be subject to Disposal Restrictions until expiry of a 24-month escrow to 23 November 2020.
• (b) the Shares were issued without disclosure to investors under Part 6D.2 of the Corporations Act;
• (c) the Company is providing this notice under paragraph 5(e) of section 708A of the Corporations Act;
• (d) as at the date of this notice the Company, as a disclosing entity under the Corporations Act, has complied with:
  • a. the provisions of Chapter 2M of the Corporations Act as they apply to the Company; and
  • b. section 674 of the Corporations Act as it applies to the Company; and
• (e) as at the date of this announcement, there is no excluded information of the type referred to in Sections 708A(7) and 708A(8) of the Corporations Act.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Melanie Leydin, Company Secretary +61 3 9692 7222

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

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

Name of entity

Readcloud Limited

ABN

44 136 815 891

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued Ordinary Fully Paid Shares

250,000

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

50% of the shares will be subject to Disposal Restrictions until expiry of a 12 month escrow to 23 November 2019 and the remaining 50% will be subject to Disposal Restrictions until expiry of a 24 month escrow to 23 November 2020.

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the date ofallotment with an existing +classof quoted +securities?If the additional securities donot rank equally, please state:•the date from which they do•the extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest payment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionor	Yes
	interest payment
5	Issue price or consideration	Deemed issue price of $0.40 per share
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	The Shareshave been issued as initialconsiderationfortheacquisitionofAustralian Institute of Education & Training.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6h	No
	in relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i
6b	The date the security holderresolution under rule 7.1A waspassed	N/A
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	N/A
6d	Number of +securities issuedwith securityholder approvalunder rule 7.1A	N/A
6e	Number of +securities issuedwith security holder approvalunderrule7.3,oranotherspecific security holder approval(specify date of meeting)	N/A

+ See chapter 19 for defined terms.

• 6f Number of securities issued under an exception in rule 7.2
• 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation.
• 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 7 Dates of entering +securities into uncertificated holdings or despatch of certificates

N/A

N/A

N/A

Listing Rule 7.1 12,875,000 Listing Rule 7.1A - TOTAL 12,875,000

23 November 2018

+ See chapter 19 for defined terms.

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX(includingthesecuritiesin	44,175,091	Fully paid ordinaryshares
	section 2 if applicable)	15,000,000	Options exercisableat $0.30 (30 cents)each, expiring 30November 2020
		Number	+Class
9	+classNumberandofall+securities not quoted on ASX(includingthesecuritiesinsection 2 if applicable)	43,574,909	Fully paid ordinaryshares subject toASX escrow for 24months to 6February 2020
		5,625,000	Performance Rightssubject to 24monthsescrowto 6 February2020
		1,666,663	Options exercisableat $0.30 (30 cents)each, expiring30November 2020,subject to ASXescrow to 1 February2019
		3,333,332	Options exercisableat $0.30 (30 cents)each, expiring 30November 2020,subject to ASXescrow 7February2020
		375,000	Unlistedoptions,exercisable at $0.20(20 cents) each,expiring 7 February2021
		225,000	Unlisted options,exercisable at $0.20(20 cents) each,expiring 7 February2022

+ See chapter 19 for defined terms.

240,000	Unlisted options,exercisable at $0.33(33 cents) each,expiring 21 March2021
120,000	Unlisted options,exercisable at $0.33(33 cents)each,expiring 27 March2021
300,000	Unlisted options,exercisable at $0.33(33 cents) each,expiring 7 May 2022
360,000	Unlisted options,exercisable at $0.41(41cents) each,expiring 17 July 2022

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Bonus issue or pro rata issue

11	IssecurityholderapprovalN/Arequired?
12	Is the issue renounceable or nonN/Arenounceable?
13	Ratio in which the +securitiesN/Awill be offered
14	+Class of +securities to which theN/Aoffer relates
15	+RecorddatetodetermineN/Aentitlements
16	WillholdingsondifferentN/Aregisters(orsubregisters)beaggregatedforcalculatingentitlements?
17	Policy for deciding entitlementsN/Ain relation to fractions

+ See chapter 19 for defined terms.

18	Names of countries in which theentity has +security holders whowillnotbesentnewissuedocuments	N/A
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closingdateforreceiptofacceptances or renunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting feeor commission	N/A
22	Names of any brokers to theissue	N/A
23	Fee or commission payable to thebroker to the issue	N/A
24	Amountofanyhandlingfee	N/A
	payable to brokers who lodgeacceptances or renunciations onbehalf of +security holders
25	If the issue is contingent on+security holders' approval, thedate of the meeting	N/A
26	Date entitlement and acceptanceform and prospectus or ProductDisclosure Statement will be sentto persons entitled	N/A
27	If the entity has issued options,
	andthe terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders	N/A
28	Date rights trading will begin (if	N/A
	applicable)
29	Date rights trading will end (ifapplicable)	N/A

+ See chapter 19 for defined terms.

• 30 How do +security holders sell their entitlements in full through a broker?
• 31 How do +security holders sell part of their entitlements through a broker and accept for the balance?

N/A

N/A

32 How do +security holders dispose of their entitlements (except by sale through a broker)? N/A

33 +Despatch date N/A

$\overline{\phantom{a}}$N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)
• (a) Securities described in Part 1.

(b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36	If the +securities are +equity securities, a distribution schedule of the additional+securities setting out the number of holders in the categories
	1 - 1,000
	1,001 - 5,000
	5,001 - 10,000
	10,001 - 100,000
	100,001 and over
37	A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

• 38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and +class of all
  • +securities quoted on ASX (including the securities in clause 38)

Number	+Class

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 23 November 2018

Print name: Melanie Leydin (Company Secretary)

== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

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

Introduced 01/08/12

Part 1

Rule 7.1 –	Issues exceeding 15% of capital
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
Insert number of fully paid ordinarysecurities on issue 12 months before dateof issue or agreement to issue	80,000,000
Add the following:	1,875,000 Shares – 27 March 2018
•Number of fully paid ordinary securities	1,875,000 Shares - 28 May 2018
issued in that 12 month period under anexception in rule 7.2	1,875,000 Shares - 8 August 2018
•Number of fully paid ordinary securitiesissued in that 12 month period withshareholder approval	1,875,000 Shares - 21 September 2018
•Number of partly paid ordinary securitiesthat became fully paid in that 12 monthperiod
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid ordinarysecurities cancelled during that 12 monthperiod	-
"A"	87,500,000

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	13,125,000
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	250,000
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable ) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"	-
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	13,125,000
Note: number must be same as shown inStep 2
Subtract "C"	-
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	12,875,000
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –	Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	-
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	-
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A	-
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	-

+ See chapter 19 for defined terms.

Step 4: Subtract "E"from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	-
Note: number must be same as shown inStep 2
Subtract "E"	-
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	-
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.