RECCE PHARMACEUTICALS LTD — AGM Information 2019

Oct 24, 2019

Recce Pharmaceuticals Ltd Level 36, 1 Macquarie Place Gateway Tower Sydney NSW 2000 ACN: 124 849 065

www.recce.com.au

Recce Pharmaceuticals Ltd

Notice of 2019 Annual General Meeting

Explanatory Statement | Proxy Form

25 November 2019

10:00 AM AEDT

Address

Automic Group Level 5, 126 Phillip Street Sydney NSW 2000

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Contents

Venue and Voting Information	2
Notice of Annual General Meeting – Agenda and Resolutions	3
Notice of Annual General Meeting – Explanatory Statement	11
Glossary	29
Proxy Form	Attached

Venue and Voting Information

The Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 10.00am (AEDT) on 25 November 2019 at Automic Group, Level 5, 126 Phillip Street, Sydney NSW 2000.

Your vote is important

The business of the Annual General Meeting affects your shareholding and your vote is important.

Voting in person

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

Voting by proxy

To vote by proxy, please use one of the following methods:

Online	Lodge the Proxy Form online at https://investor.automic.com.au/#/loginsah by followingthe instructions: Login to the Automic website using the holding details as shown on theProxy Form. Click on 'View Meetings' – 'Vote'. To use the online lodgement facility,Shareholders will need their holder number (Securityholder Reference Number (SRN) orHolder Identification Number (HIN)) as shown on the front of the Proxy Form.
By post	Automic, GPO Box 5193, Sydney NSW 2001
By hand	Automic, Level 5, 126 Phillip Street, Sydney NSW 2000

Your Proxy instruction must be received not later than 48 hours before the commencement of the Meeting. Proxy Forms received later than this time will be invalid.

Power of Attorney

If the proxy form is signed under a power of attorney on behalf of a shareholder, then the attorney must make sure that either the original power of attorney or a certified copy is sent with the proxy form, unless the power of attorney has already provided it to the Share Registry.

Corporate Representatives

If a representative of a corporate shareholder or a corporate proxy will be attending the Meeting, the representative should bring to the Meeting adequate evidence of their appointment, unless this has previously been provided to the Share Registry.

Notice of Annual General Meeting

Notice is hereby given that an Annual General Meeting of Shareholders of Recce Pharmaceuticals Ltd ACN 124 849 065 will be held at 10.00 am (AEDT) on 25 November 2019 at Automic Group, Level 5, 126 Phillip Street, Sydney NSW 2000 (Meeting).

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the Proxy Form forms part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders at 10.00am (AEDT) on 23 November 2019.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

Agenda

Ordinary business

Financial statements and reports

"To receive and to consider the Annual Financial Report of the Company for the financial year ended 30 June 2019 together with the declaration of the Directors, the Directors' Report, the Remuneration Report and the Auditor's Report for that financial year."

Note: This item of ordinary business is for discussion only and is not a resolution.

Pursuant to the Corporations Act, Shareholders will be given a reasonable opportunity at the Meeting to ask questions about, or make comments in relation to, each of the aforementioned reports during consideration of these items.

Resolutions

Remuneration Report

1. Resolution 1 – Adoption of Remuneration Report

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company's Annual Financial Report for the financial year ended 30 June 2019."

Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Exclusion Statement: In accordance with the Corporations Act, the Company will disregard any votes cast on Resolution 1 by or on behalf of a member of the Company's key management personnel (including the Directors), whose remuneration details are included in the Remuneration Report (KMP), or any of that person's Closely Related Parties (such as close family members and any controlled companies of those persons) (collectively referred to as Restricted Voter). However, the Company need not disregard a vote if:

• (a) it is cast by a person as a proxy appointed in writing that specifies how the proxy is to vote on Resolution 1; and
• (b) it is not cast on behalf of a Restricted Voter.

If you appoint the person chairing the Meeting (Chair) and you are not a Restricted Voter, by submitting the Proxy Form you authorise the person chairing the Meeting to exercise the proxy even though Resolution 1 is connected directly or indirectly with the remuneration of a KMP, and you will be taken to have directed the Chair to vote in accordance with his or her stated intention to vote in favour of Resolution 1. If you do not want your vote exercised in favour of Resolution 1, you should direct the person chairing the Meeting to vote "against", or to abstain from voting on, this Resolution.

Re-election of Directors

2. Resolution 2 – Re-election of Michele Dilizia as Director

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That Ms Michele Dilizia, a Director who retires by rotation in accordance with the Company's Constitution and ASX Listing Rule 14.5, and being eligible offers herself for re-election as a Director of the Company, effective immediately."

3. Resolution 3 – Election of Justin Ward as Director

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That Dr Justin Ward, a Director appointed as an additional Director and holding office until the next general meeting of the Company after his appointment in accordance with the Company's Constitution and ASX Listing Rule 14.4, be elected as a Director of the Company, effective immediately."

ASX Listing Rule 7.1A (Additional 10% Capacity)

4. Resolution 4 – ASX Listing Rule 7.1A Approval of Future Issue of Securities

To consider and, if thought fit, to pass the following resolution as a Special Resolution:

"That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, the Shareholders approve the issue of equity securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 4 by or on behalf of:

• (a) a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company); or

• (b) an Associate of those persons.

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Ratification of Prior Issue of Shares

5. Resolution 5 – Ratification of Prior Issue of Shares to Acuity Capital Pty Ltd

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 750,000 fully paid ordinary shares issued on 16 October 2019 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 5 by or on behalf of:

• (a) a person who participated in the issue; or
• (b) an Associate of those persons.

However, the Company need not disregard a vote if:

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

6. Resolution 6 – Ratification of Prior Issue of Shares to Spark Plus Pte Ltd

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 50,000 fully paid ordinary shares issued on 16 October 2019 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 6 by or on behalf of:

• (a) a person who participated in the issue; or

• (b) an Associate of those persons.

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

7. Resolution 7 – Ratification of Prior Issue of Shares to Arthur Kollaras

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 44,444 fully paid ordinary shares issued on 16 October 2019 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 7 by or on behalf of:

• (a) a person who participated in the issue; or
• (b) an Associate of those persons.

However, the Company need not disregard a vote if:

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

8. Resolution 8 – Ratification of Prior Issue of Placement Shares

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 15,127,180 fully paid ordinary shares issued on 16 October 2019 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 8 by or on behalf of:

• (a) a person who participated in the issue; or

• (b) an Associate of those persons.

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

9. Resolution 9 – Ratification of Prior Issue of Placement Shares

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 10,712,991 fully paid ordinary shares issued on 16 October 2019 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 9 by or on behalf of:

• (a) a person who participated in the issue; or
• (b) an Associate of those persons.

However, the Company need not disregard a vote if:

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Issue of New Equity Securities

10. Resolution 10 – Approval of Issue of Placement Shares to James Graham, Director of the Company

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, the Shareholders of the Company approve the issue and allotment of 192,307 fully paid ordinary shares at an issue price of $0.26 per share to James Graham (or his nominee), a Director of the Company, and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 10 by or on behalf of:

• (a) a person who is to receive securities in relation to the entity; and

• (b) an Associate of those persons.

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

11. Resolution 11 – Approval of Issue of Advisor Options

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the Shareholders of the Company approve the issue and allotment of 2,500,000 unlisted options to Shaw and Partners Limited (or its nominee), and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 11 by or on behalf of:

• (a) a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company); or
• (b) an Associate of those persons.

However, the Company need not disregard a vote if:

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

12. Resolution 12 – Approval of Issue of Shares to Justin Ward, Director of the Company

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, the Shareholders of the Company approve the issue and allotment of 43,478 fully paid ordinary shares to Justin Ward (or his nominee), a Director of the Company, and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of Resolution 12 by or on behalf of:

• (a) a person who is to receive securities in relation to the entity; and

• (b) an Associate of those persons.

• (i) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (ii) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Amendments to Constitution

13. Resolution 13 – Amendments to Constitution

To consider and, if thought fit, to pass with or without amendment, the following resolution as a Special Resolution:

"That, for the purposes of section 136 of the Corporations Act and for all other purposes, the constitution of the Company be amended as set out in the amended Constitution tabled at this Meeting and signed by the Chair for the purposes of identification, effective immediately."

BY ORDER OF THE BOARD

Alistair McKeough Company Secretary

Explanatory Statement

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at 10.00am (AEDT) on 25 November 2019 at Automic Group, Level 5, 126 Phillip Street, Sydney NSW 2000.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

If you are in any doubt about what to do in relation to the Resolutions contemplated in the Notice of Meeting and this Explanatory Statement, it is recommended that you seek advice from an accountant, solicitor or other professional advisor.

Full details of the business to be considered at the Annual General Meeting are set out below.

Agenda

Ordinary business

Financial statements and reports

In accordance with the Constitution and the Corporations Act, the business of the Annual General Meeting will include receipt and consideration of the Annual Financial Report of the Company for the financial year ended 30 June 2019 together with the declaration of the Directors, the Director's Report, the Remuneration Report and the Auditor's Report.

In accordance with the amendments to the Corporations Act, the Company is no longer required to provide a hard copy of the Company's Annual Financial Report to Shareholders unless a Shareholder has specifically elected to receive a printed copy.

Whilst the Company will not provide a hard copy of the Company's Annual Financial Report unless specifically requested to do so, Shareholders may view the Company Annual Financial Report on its website at https://www.recce.com.au/index.php/shareholder-centre/company-announcements.

No resolution is required for this item, but Shareholders will be given the opportunity to ask questions and to make comments on the management and performance of the Company.

The Company's auditor will be present at the Meeting. During the discussion of this item, the auditor will be available to answer questions on the:

• Conduct of the audit;
• Preparation and content of the Auditor's Report;
• Accounting policies adopted by the Company in relation to the preparation of the financial statements; and
• Independence of the auditor in relation to the conduct of the audit.

Written questions of the auditor

If you would like to submit a written question about the content of the Auditor's Report or the conduct of the audit of the Annual Financial Report of the Company's auditor, please send your question to the Company Secretary. A list of qualifying questions will be made available at the Meeting.

Please note that all written questions must be received at least five business days before the Meeting, which is by 18 November 2019.

Resolutions

Remuneration Report

Resolution 1 – Adoption of Remuneration Report

In accordance with section 250R(2) of the Corporations Act, the Company is required to present to its Shareholders the Remuneration Report as disclosed in the Company's Annual Financial Report.

The vote on the Resolution is advisory only and does not bind the Directors or the Company. The Remuneration Report is set out in the Company's Annual Financial Report and is also available on the Company's website at https://www.recce.com.au/index.php/shareholder-centre/companyannouncements.

However, if at least 25% of the votes cast are against the adoption of the Remuneration Report at the Meeting (subject of this Notice of Meeting), and then again at the 2020 Annual General Meeting (2020 AGM), the Company will be required to put to the vote a resolution (Spill Resolution) at the 2020 AGM to approve the calling of a further meeting (Spill Meeting). If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene the Spill Meeting within 90 days of the 2020 AGM. All of the Directors who were in office when the 2020 Directors' Report was approved, other than the Managing Director, will (if desired) need to stand for re-election at the Spill Meeting.

The Remuneration Report explains the Board's policies in relation to the nature and level of remuneration paid to KMPs (including Directors) and sets out remuneration details, service agreements and the details of any share-based compensation.

Voting

Note that a voting exclusion applies to Resolution 1 in the terms set out in the Notice of Meeting. In particular, the Directors and other Restricted Voters must not vote on this Resolution and must not cast a vote as proxy, unless the appointment gives a direction on how to vote, or the proxy is given to the Chair and you submit the Proxy Form, authorising the Chair to exercise the proxy even though Resolution 1 is connected directly or indirectly with the remuneration of a KMP and that in doing so you will be taken to have directed the Chair to vote in accordance with the Chair's stated intention to vote in favour of Resolution 1.

Shareholders are urged to read carefully the Proxy Form and to provide a direction to the proxy on how to vote on this Resolution.

Re-election of Directors

Resolution 2 – Re-election of Michele Dilizia as Director

The Company's Constitution requires that at the Company's annual general meeting, one third of the Directors shall retire from office. The retiring Directors must not be a Managing Director. The Directors to retire at the annual general meeting are those who have been in office the longest since their last election.

It has been agreed that Ms Michele Dilizia will retire by rotation at this Meeting.

ASX Listing Rule 14.5 also provides that an entity which has Directors must hold an election of Directors at each annual general meeting.

Ms Michele Dilizia was last re-elected as a Director at the Company's at a general meeting held on 16 February 2018.

Under this Resolution, Ms Michele Dilizia has elected to retire by rotation, and being eligible, seeks reelection as a Director of the Company at this AGM.

Michele commenced her career in journalism and subsequently obtained post-graduate qualifications in business. She has had a successful executive career in public relations and marketing for a leading retail chain. Michele has had experience as a market research consultant, which included marketing development of healthcare and pharmaceutical products.

Michelle is a qualified medical scientist with a specialisation in medical microbiology. She holds a BSC (Med Sci), Grad Dip Bus (Mkting), BA (Journ), is a graduate of the Australian Institute of Company Directors and is a member of the Australian Society for Microbiology.

Directors' recommendation

The Directors (excluding Ms Michele Dilizia) recommend that Shareholders vote for this Resolution.

Resolution 3 – Election of Justin Ward as Director

The Company's Constitution provides that any Director appointed in addition to the existing Directors will hold office until the next following annual general meeting and is then eligible for re-election.

ASX Listing Rule 14.4 also provides that each additional director appointed during the year is to hold office until the next general meeting and is then eligible for election as a Director of the Company.

Dr Justin Ward was appointed as an additional Director of the Company on 9 July 2019 and has since served as a Director of the Company.

Under this Resolution, Dr Justin Ward seeks election as a Director of the Company at this AGM.

Justin has a combination of clinical and commercial experience and he has worked as an executive with Pfizer Inc and a number of high growth early-stage Australian drug development companies. Justin joined the Company in 2016 and has served on the management team as Principle Quality Chemist, a position which he will continue to hold.

Directors' recommendation

The Directors (excluding Dr Justin Ward) recommend that Shareholders vote for this Resolution.

ASX Listing Rule 7.1A

Resolution 4 – ASX Listing Rule 7.1A Approval of Future Issue of

Securities

ASX Listing Rule 7.1A enables eligible entities to seek Shareholder approval by Special Resolution passed at an annual general meeting to issue equity securities (which must be in the same class as an existing quoted class of equity securities of the Company) which do not exceed 10% of the existing ordinary share capital without further Shareholder approval. The ability of the Company to make an issue under Listing Rule 7.1A is in addition to its 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation less than the amount prescribed by ASX (currently $300 million).

As of the date of this Notice of Meeting, the Company is an eligible entity. If at the time of the Meeting the Company is no longer an eligible entity this Resolution will be withdrawn.

Approval under this Resolution is sought for the Company to issue equity securities under Listing Rule 7.1A.

If this Resolution is approved the Company may make an issue of equity securities under Listing Rule 7.1A at any time (either on a single date or progressively) up until the earlier of:

• (a) the date which is 12 months after the date of the 2019 Annual General Meeting; or
• (b) the date on which Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking).

Accordingly, the approval given if this Resolution is passed will cease to be valid on the earlier of 25 November 2020 or the date on which holders of the Company's ordinary securities approve a transaction under Listing Rules 11.1.2 or 11.2.

The maximum number of equity securities which may be issued in the capital of the Company under the approval sought by this Resolution will be determined in accordance with the following formula prescribed in Listing Rule 7.1A.2:

(A x D) – E

where:

• A is the number of fully paid ordinary securities on issue 12 months before the date of issue or agreement to issue:
  • (i) plus the number of fully paid ordinary securities issued in the 12 months under an exception in Listing Rule 7.2;
  • (ii) plus the number of partly paid ordinary securities that became fully paid in the 12 months;
  • (iii) plus the number of fully paid ordinary securities issued in the 12 months with approval of the holders of ordinary securities under Listing Rules 7.1 and 7.4 (this does not include an issue of fully paid ordinary securities under the entity's 15% placement capacity without Shareholder approval); and
  • (iv) less the number of fully paid ordinary securities cancelled in the 12 months.
• D is 10%.
• E is the number of equity securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of holders of ordinary securities under Listing Rules 7.1 or 7.4.

The ability of the Company to make an issue under Listing Rule 7.1A is in addition to its 15% placement capacity under Listing Rule 7.1. The effect of this Resolution will be to allow the Company to issue equity securities under Listing Rule 7.1A without using the Company's 15% placement capacity under Listing Rule 7.1.

As at the date of this Notice, the Company has on issue 133,814,533 fully paid ordinary securities and therefore has capacity to issue:

• (a) subject to Shareholder approval being obtained for Resolutions 5-8, 20,072,180 equity securities under Listing Rule 7.1; and
• (b) subject to Shareholder approval being sought under this Resolution, 13,381,453 equity securities under Listing Rule 7.1A.

The issue price of the equity securities issued under Listing Rule 7.1A will be determined at the time of issue. The minimum price at which the equity securities, the subject of this Resolution, will be issued is 75% of the volume weighted average market (closing) price (VWAP) of the Company's equity securities over the 15 days on which trades in that class were recorded immediately before either:

• (a) the date on which the price at which the equity securities are to be issued is agreed; or
• (b) if the equity securities are not issued within 5 ASX trading days of the date in paragraph (a) the date on which the securities are issued.

If this Resolution is approved, and the Company issues equity securities under Listing Rule 7.1A, the existing Shareholders' economic and voting power in the Company will be diluted. There is a risk that:

• (a) the market price for the Company's equity securities in that class may be significantly lower on the issue date than on the date of the approval of this Resolution; and
• (b) the equity securities issued under Listing Rule 7.1A may be issued at a price that is at a discount (as described above) to the market price for the Company's equity securities on the issue date;

which may have an effect on the amount of funds raised by the issue.

The table set out below shows the dilution of existing Shareholders on the basis of:

• The market price of the Company's ordinary shares and the number of ordinary shares as at 17 October 2019.
• Two examples where the number of ordinary shares on issue ("A") has increased, by 50% and 100%. The number of ordinary shares on issue may increase as a result of issues of ordinary shares that do not require Shareholder approval (for example, pro-rata entitlements issues) or as a result of future specific placements under Listing Rule 7.1 that are approved by Shareholders.
• Two examples of where the issue price of ordinary shares has decreased by 50% and increased by 100% as against the market price as at 17 October 2019.

		Dilution
		$0.1325	$0.265	$0.53
Variable "A" ASX Listing Rule 7.1A.2		50% decrease in issue	issue price **	100% increase in
		price		issue price
"A" is the number of	10% voting	13,381,453	13,381,453	13,381,453
shares on issue, being	dilution
133,814,533 *** shares	Funds raised	$1,773,043	$3,546,085	$7,092,170
"A" is a 50% increase in	10% voting	20,072,179	20,072,179	20,072,179
shares on issue, being	dilution
200,721,800 *** shares	Funds raised	$2,659,564	$5,319,127	$10,638,255
"A" is a 100% increase	10% voting	26,762,906	26,762,906	26,762,906
in shares on issue,	dilution
being	Funds raised	$3,546,085	$7,092,170	$14,184,340
267,629,066 *** shares
*

Notes:

(i) The table assumes that the Company issues the maximum number of equity securities available under Listing Rule

7.1A.

• (ii) The table assumes that no options are exercised in ordinary shares before the date of the issue of equity securities under Listing Rule 7.1A.
• (iii) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of issues of equity securities under Listing Rule 7.1A based on that Shareholder's holding at the date of this Explanatory Statement.
• (iv) The table shows the effect of an issue of equity securities under Listing Rule 7.1A, not under the Company's 15% placement capacity under Listing Rule 7.1.
• (v) The issue of equity securities under the Listing Rule 7.1A consists only of ordinary shares. If the issue of equity securities includes Options and/or Performance Rights, it is assumed that those Options and/or Performance Rights are exercised (or converted) into ordinary shares for the purposes of calculating the voting dilution effect on existing Shareholders.
• * Any issue of equity securities is required to be made in accordance with the Listing Rules. Any issue made other than under the Company's 15% capacity (Listing Rule 7.1) or the Company's additional 10% capacity (Listing Rule 7.1A) and not otherwise made under an exception in Listing Rule 7.2 (for example, a pro-rata rights issue) would require Shareholder approval.
• ** Based on the closing price of the Company's Shares on ASX on 17 October 2019.
• *** Based on the Company's Share structure as at 17 October 2019.

If this Resolution is approved the Company will have the ability to issue up to 10% of its issued capital without further Shareholder approval and therefore allow it to take advantage of opportunities to obtain further funds if required and available in the future.

As at the date of this Explanatory Statement, the Company has not formed an intention to offer any equity securities under Listing Rule 7.1A to any particular person or at any particular time. The total amount that may be raised by the issue of equity securities under Listing Rule 7.1A will depend on the issue price of the equity securities which will be determined at the time of issue. In some circumstances, the Company may issue equity securities under Listing Rule 7.1A for non-cash consideration (for example, in lieu of cash payments to consultants, suppliers or vendors). While the Company has not formed an intention to offer any equity securities under Listing Rule 7.1A, some of the purposes for which the Company may issue equity securities under Listing Rule 7.1A include (but are not limited to):

• (a) raising funds to further develop the Company's business;
• (b) raising funds to be applied to the Company's working capital requirements;
• (c) acquiring assets. In these circumstances, the issue of the ordinary shares may be made in substitution for the Company making a cash payment for the assets; and
• (d) paying service providers or consultants of the Company.

Details regarding the purposes for which any particular issue under Listing Rule 7.1A is made will be more fully detailed in an announcement to the ASX made pursuant to Listing Rule 7.1A.4 and Listing Rule 3.10.5A at the time the issue is made. The identity of the allottees of equity securities under Listing Rule 7.1A will be determined at the time the Company decides to make an issue having regard to a number of factors including:

• (a) the capital raising and acquisition opportunities available to the Company and any alternative methods for raising funds or acquiring assets that are available to the Company;
• (b) the potential effect on the control of the Company;
• (c) the Company's financial situation and the likely future capital requirements; and
• (d) advice from the Company's corporate or financial advisors.

Offers made under Listing Rule 7.1A may be made to parties (excluding any related parties) including professional and sophisticated investors, existing Shareholders of the Company, clients of Australian Financial Service Licence holders and/or their nominees, or any other person to whom the Company is able to make an offer of equity securities.

The allocation policy the Company may adopt for a particular issue of equity securities under Listing

Rule 7.1A and the terms on which those equity securities may be offered will depend upon the circumstances existing at the time of the proposed capital raising under Listing Rule 7.1A. Subject to the requirements of the Listing Rules and the Corporations Act, the Directors reserve the right to determine at the time of any issue of equity securities under Listing Rule 7.1A, the allocation policy that the Company will adopt for that issue.

As the Company has previously obtained Shareholder approval under Listing Rule 7.1A, it is required by Listing Rule 7.3A.6 to provide details of all issues of equity securities in the 12 months preceding the date of the Meeting. The details of all issues of equity securities by the Company during the 12 months preceding the date of the Meeting are detailed below:

Number/Class ofequity securitiesissued	Terms of thesecurities issued	Price and discountto closing marketprice on the date ofissue (if any)	Consideration details	Allottees of theSecurities
Issued on 15 February 2019
4,500,000 fully paidordinary shares	Issue of shares ascollateral for thecontrolled placementdeed with AcuityCapital, providing theCompany with up to$3 million of standbyequity until 31December 2020.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	N/A – issued for nilconsideration.	Shares were issued ascollateral to AcuityCapital pursuant to acontrolled placementdeed, and thereforeno cash was receivedby the Company.Based on the closingshare price on 17October 2019($0.265), the currentvalue of these optionsis $1,192,500.00.	Acuity Capital
12,857,143 fully paidordinary shares	Issue of sharespursuant to aplacement announcedby the Company on 8February 2019.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	Issue price of $0.14per Shares.Share price on thedate of issue was$0.155, whichrepresents a discountof 9.68%.	Total cashconsideration of $1.8million.All of the funds havebeen used by theCompany to furtherpre-clinical programs,repayment of directorloans and for generalworking capital.	Institutional and othersophisticatedinvestors
430,358 fully paidordinary shares	Issue of sharepursuant to theCompany's EmployeeIncentive Plan.250,000 shares wereissued to DrPrendergast, asapproved byshareholders at the2018 AGM.The shares were fullypaid on issue andranked equally in allaspects with all	N/A – issued for nilconsideration.	N/A – issued for nilconsideration.Based on the closingshare price on 17October 2019($0.265), the currentvalue of these optionsis $114,044.87.	Invited participantsunder the Company'sEmployee IncentivePlan including DrPrendergast

	existing fully paidordinary sharespreviously issued bythe Company.
1,800,000 unlistedoptions	Issue of options aspart of the fees foracting as LeadManager for thePlacement announcedby the Company on 8February 2019.The options areexercisable at $0.168per option andexpires on 15February 2023.	N/A – issued for nilconsideration.	N/A – issued for nilconsideration.The current value ofthe unlisted options is$0.0934 per option.	DJ Carmichael, LeadManager for thePlacement
Issued on 16 October 2019
25,840,171 fully paidordinary shares	Issue of sharespursuant to aplacement announcedby the Company on10 October 2019.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	Issue price of $0.26per share.No discount.	Total cashconsideration of$6.768,444.The funds have notyet been used by theCompany, and will beused to further preclinical programs, forregulatorysubmissions and forgeneral workingcapital.	Institutional and othersophisticatedinvestors
750,000 fully paidordinary shares	Issue of shares toAcuity Capital inaccordance with theControlled PlacementAgreement,announced by theCompany on 11September 2019.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	Issue price of $0.20per share.Share price on thedate of issue was$0.265, whichrepresents a discountof 24.53%.	Total cashconsideration of$150,000.The funds have notyet been used by theCompany, and will beused to further preclinical programs, forregulatorysubmissions and forgeneral workingcapital purposes.	Acuity Capital
44,444 fully paidordinary shares	Issue of shares toArthur Kollaras forservices providedpursuant to theConsultancy ServicesAgreement.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	N/A – issued for nilconsideration.	The shares wereissued to ArthurKollaras for servicesprovided to theCompany, andtherefore no cash wasreceived by theCompany.Based on the closingshare price on 17October 2019($0.265), the currentvalue of these optionsis $11,777.66.	Arthur Kollaras

50,000 fully paidordinary shares	Issue of shares toSpark for servicesprovided pursuant tothe ConsultancyServices Agreement.The shares were fullypaid on issue andranked equally in allaspects with allexisting fully paidordinary sharespreviously issued bythe Company.	N/A – issued for nilconsideration.	The shares wereissued to Spark forservices provided tothe Company, andtherefore no cash wasreceived by theCompany.Based on the closingshare price on 17October 2019($0.265), the currentvalue of these optionsis $13,250.00.	Spark
--------------------------------------	-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	----------------------------------------	--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	-------

Total equity securities issued in previous 12 months*("A")	46,272,116
Percentage that "A" represents based on the totalnumberofequitysecuritiesonissueatthecommencement of that 12 month period	51.79%

*Based on Company's fully diluted capital structure as at the date of the Company's 2018 Annual General Meeting

This Resolution is a Special Resolution. For a Special Resolution to be passed, at least 75% of the votes validly cast on the resolution by Shareholders (by number of ordinary shares) must be in favour of this Resolution.

Directors' recommendation

Ratification of Prior Issue of Shares

Resolution 5 – Ratification of Prior Issue of Shares to Acuity Capital Pty Ltd

As announced by the Company on 1 November 2018, the Company entered into a Controlled Placement Deed with Acuity Capital Pty Ltd (Acuity), providing the Company with up to $3 million of standby equity until 31 December 2020 (CPD). Under the CPD, the Company retains full control of all aspects of the placement process including determining the quantum of issued shares, the minimum price of shares and the timing of each placement tranche (if any).

Accordingly, as announced by the Company on 11 September 2019, the Company elected to issue 750,000 fully paid ordinary shares to Acuity for a total consideration of $150,000 pursuant to the CPD. This issue was completed on 16 October 2019.

ASX Listing Rule 7.1

This Resolution proposes that Shareholders of the Company approve and ratify the prior issue and allotment of 750,000 fully paid ordinary shares, which were issued on 16 October 2019.

All of the shares were issued by utilising the Company's existing capacity under Listing Rule 7.1.

Listing Rule 7.1 allows an entity to issue (or agree to issue) up to 15% of the Company's fully paid ordinary shares on issue in any 12 month period without the approval of the Shareholders of the Company.

Listing Rule 7.4 provides that where an entity in a general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1), those securities will be deemed to have been made with Shareholder approval for the purposes of Listing Rule 7.1, thereby "refreshing" the Company's capacity under Listing Rule 7.1.

Therefore, the effect of approval of this Resolution is to allow the entity to retain the flexibility to issue additional securities within the 15% capacity under Listing Rule 7.1 after this Resolution is adopted.

Information required by ASX Listing Rule 7.5

The following information is provided to Shareholders for the purposes of Listing Rule 7.5.

• (a) The Company issued 750,000 fully paid ordinary shares.
• (b) Each of the shares were issued at $0.20 per share.
• (c) The Shares were fully paid on issue and ranked equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.
• (d) The shares were issued to Acuity.
• (e) Funds raised from the issue of the Shares have been and will be used by the Company to further pre-clinical programs, for regulatory submissions and for general working capital purposes.

Directors' recommendation

Resolution 6 – Ratification of Prior Issue of Shares to Spark Plus Pte Ltd

The Company engaged Spark Plus Pte Ltd (Spark) for the provision of investor relations services to Singapore and Hong Kong investors in the Company (Service Agreement). For services provided under this engagement, the Company agreed to issue to Spark, shares in the Company. Accordingly, on 16 October 2019, the Company issued 50,000 shares to Spark as payment for its services.

ASX Listing Rule 7.1

This Resolution proposes that Shareholders of the Company approve and ratify the prior issue and allotment of 50,000 fully paid ordinary shares, which were issued on 16 October 2019.

All of the shares were issued by utilising the Company's existing capacity under Listing Rule 7.1.

Listing Rule 7.1 allows an entity to issue (or agree to issue) up to 15% of the Company's fully paid ordinary shares on issue in any 12 month period without the approval of the Shareholders of the Company.

Listing Rule 7.4 provides that where an entity in a general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1), those securities will be deemed to have been made with Shareholder approval for the purposes of Listing Rule 7.1, thereby "refreshing" the Company's capacity under Listing Rule 7.1.

Therefore, the effect of approval of this Resolution is to allow the entity to retain the flexibility to issue additional securities within the 15% capacity under Listing Rule 7.1 after this Resolution is adopted.

Information required by ASX Listing Rule 7.5

The following information is provided to Shareholders for the purposes of Listing Rule 7.5.

• (a) The Company issued 50,000 fully paid ordinary shares.
• (b) Each of the shares were issued for nil cash consideration.
• (c) The Shares were fully paid on issue and ranked equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.
• (d) The shares were issued to Spark.
• (e) Funds were not raised from the issue of the shares as the shares were issued as part of the fee payable for the services provided by Spark Plus Pte Ltd.

Directors' recommendation

Resolution 7 – Ratification of Prior Issue of Shares to Arthur Kollaras

On 14 August 2019, the Company entered into an agreement with Arthur Kollaras for the provision of consultancy services to the Company (Consultancy Agreement). In consideration for entry into the Consultancy Agreement, the Company agreed to issue Mr Kollaras fully paid ordinary shares in the Company, with the quantum determined by reference to the share price on the date of entry into the agreement. Accordingly, on 16 October 2019, the Company issued 44,444 fully paid ordinary shares to Mr Kollaras, pursuant to the terms of the Consultancy Agreement.

ASX Listing Rule 7.1

This Resolution proposes that Shareholders of the Company approve and ratify the prior issue and allotment of 44,444 fully paid ordinary shares, which were issued on 16 October 2019.

All of the shares were issued by utilising the Company's existing capacity under Listing Rule 7.1.

Listing Rule 7.1 allows an entity to issue (or agree to issue) up to 15% of the Company's fully paid ordinary shares on issue in any 12 month period without the approval of the Shareholders of the Company.

Listing Rule 7.4 provides that where an entity in a general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1), those securities will be deemed to have been made with Shareholder approval for the purposes of Listing Rule 7.1, thereby "refreshing" the Company's capacity under Listing Rule 7.1.

Therefore, the effect of approval of this Resolution is to allow the entity to retain the flexibility to issue additional securities within the 15% capacity under Listing Rule 7.1 after this Resolution is adopted.

Information required by ASX Listing Rule 7.5

The following information is provided to Shareholders for the purposes of Listing Rule 7.5.

• (a) The Company issued 44,444 fully paid ordinary shares.
• (b) Each of the shares were issued for nil cash consideration.
• (c) The Shares were fully paid on issue and ranked equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.
• (d) The shares were issued to Arthur Kollaras.
• (e) Funds were not raised from the issue of the shares as the shares were issued as part of the fee payable for the services provided by Arthur Kollaras.

Directors' recommendation

Resolutions 8 and 9 – Ratification of Prior Issue of Placement Shares

Background

As announced by the Company on 10 October 2019, the Company successfully completed a placement to institutional, professional and sophisticated investors (Placement) of 26,032,478 fully paid ordinary shares at an issue price of 26 cents ($0.26) (Placement Shares), raising $6,768,444.28 (before costs) for the Company.

On 16 October 2019, the Company issued 25,840,171 Placement Shares, utilising the Company's existing capacity under Listing Rule 7.1 and Listing Rule 7.1A. The remaining 192,307 Placement Shares will be issued to James Graham, Director of the Company for his participation in the Placement, subject to shareholders approving Resolution 9 in this Notice of Meeting.

ASX Listing Rules 7.1 and 7.1A

Resolution 8 proposes that Shareholders of the Company approve and ratify the prior issue and 15,127,180 fully paid ordinary shares were issued under Listing Rule 7.1, which were issued on 16 October 2019.

Resolution 9 proposes that Shareholders of the Company approve and ratify the prior issue and 10,712,991 fully paid ordinary shares were issued under Listing Rule 7.1A, which were issued on 16 October 2019.

Listing Rule 7.1 allows an entity to issue (or agree to issue) up to 15% of the Company's fully paid ordinary shares on issue in any 12 month period without the approval of the Shareholders of the Company.

Listing Rule 7.1A provides that, in addition to issues permitted without prior Shareholder approval under Listing Rule 7.1, an entity that is eligible and obtains Shareholder approval under Listing Rule 7.1A may issue (or agree to issue) during the period for which the approval is valid a number of quoted equity securities which represents 10% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period as adjusted in accordance with the formula in Listing Rule 7.1A. The Company is an eligible entity and sought and received Shareholder approval for this additional 10% capacity at the Company's annual general meeting last year.

Listing Rule 7.4 provides that where an entity in a general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1), those securities will be deemed to have been made with Shareholder approval under Listing Rule 7.1, thereby "refreshing" the Company's capacity under Listing Rule 7.1. A note to Listing Rule 7.4 also provides it can also be used to ratify previous issue of securities made with approval pursuant to Listing Rule 7.1A.

Therefore, the effect of approval Resolutions 8 and 9 is to allow the entity to retain the flexibility to issue additional securities within the 15% capacity under Listing Rule 7.1 and the additional 10% capacity under Listing Rule 7.1A, after this Resolution is adopted.

Information required by ASX Listing Rule 7.5

The following information is provided to Shareholders for the purposes of Listing Rule 7.5.

• (a) The Company issued 25,840,171 fully paid ordinary shares. 15,127,180 fully paid ordinary shares were issued under Listing Rule 7.1 and 10,712,991 fully paid ordinary shares were issued under Listing Rule 7.1A.
• (b) Each of the shares were issued at $0.26 per share.
• (c) The Shares were fully paid on issue and ranked equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.
• (d) The shares were issued to institutional and other sophisticated investors.
• (e) Funds raised from the issue of the Shares have been and will be used by the Company to further

pre-clinical programs, for regulatory submissions and for general working capital purposes.

Directors' recommendation

The Board of Directors recommend that Shareholders vote for Resolutions 8 and 9.

Issue of New Equity Securities

Resolution 10 – Approval of Issue of Shares to James Graham, Director of the Company

Background

This Resolution seeks Shareholder approval to issue and allot 192,307 fully paid ordinary shares at an issue price of $0.26 per share to James Graham, Director of the Company for his participation in the Placement announced by the Company on 10 October 2019.

Related Party Approvals

ASX Listing Rule 10.11 provides that the Company, as a listed company, must not issue equity securities to a related party without Shareholder approval.

If approval is obtained under Listing Rule 10.11, in accordance with Listing Rule 7.2 (exception 14), separate approval is not required under Listing Rule 7.1.

Chapter 2E of the Corporations Act prohibits the Company from giving a financial benefit to a related party of the Company unless either:

• (a) the giving of the financial benefit falls within one of the exceptions to the provisions; or
• (b) Shareholder approval is obtained prior to the giving of the financial benefit.

The proposed issue of Shares (which is a type of equity security, for the purposes of the ASX Listing Rules) constitutes the giving of a financial benefit.

A "related party" for the purposes of the Corporations Act and the Listing Rules is widely defined and includes a director of a public company, a spouse of a director of a public company or an entity controlled by a director of a public company. The definition of "related party" also includes a person whom there is reasonable grounds to believe will become a "related party" of a public company.

The non-conflicted Directors of the Company (being the Board with James Graham removed from discussions) carefully considered the issue of these shares to James Graham and formed the view that the giving of this financial benefit are on arm's length terms, as the shares are proposed to be issued on the same terms as offered to other non-related parties of the Company under the terms of the Placement.

Accordingly, the non-conflicted Directors of the Company believe that the issue of these Shares to James Graham fall within the "arm's length terms" exception as set out in section 210 of the Corporations Act, and relies on this exception for the purposes of this Resolution.

Information required by ASX Listing Rule 10.13

The following information in relation to the issue of the shares to James Graham is provided to Shareholders for the purposes of ASX Listing Rule 10.13:

• (a) The related party is James Graham, a Director of the Company.

• (b) The maximum number of shares to be issued is 192,307.

• (c) The shares will be issued within 1 month of Shareholder approval being obtained by the Company (or otherwise, as determined by the ASX in the exercise of their discretion).

• (d) The shares will be offered at an issue price of $0.26 per share.

• (e) The Shares will be fully paid on issue and rank equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.

• (f) Funds raised from the issue of the Shares will be used by the Company for to further pre-clinical programs, for regulatory submissions and for general working capital purposes.

Directors' Recommendation

The Board of Directors (excluding Mr James Graham) recommend Shareholders vote for this Resolution.

Resolution 11 – Approval of Issue of Advisor Options

Background

This Resolution seeks Shareholder approval to issue and allot 2,500,000 unlisted options to Shaw and Partners Limited (Shaw) (or its nominee) as part of the fee payable to Shaw as corporate advisor to the Company for the Placement announced by the Company on 10 October 2019.

The effect of this Resolution is for Shareholders to approve the issue of these options to fall within an exception to ASX Listing Rule 7.1, which will allow the Company to issue these without using the Company's 15% capacity under Listing Rule 7.1.

Information Required by Listing Rule 7.3

The following information is provided to Shareholders for the purposes of Listing Rule 7.3:

• (a) The maximum number of options to be issued is 2,500,000.
• (b) These options will be issued by within 3 months of Shareholder approval being obtained by the Company (or otherwise, as determined by the ASX in the exercise of their discretion). These options will be issued in one tranche and not progressively.
• (c) The options will be offered for nil issue price and nil cash consideration.
• (d) The allottee is Shaw (or its nominee).
• (e) The full terms of the options are as follows: exercise price of $0.312 per option and expires on the date that is 4 years from the date of issue.
• (f) Funds will not be raised from the issue of these options as the proposed issue will be part of the fee payable to Shaw for its services as advisor to the Company.

Directors' Recommendation

Resolution 12 – Approval of Issue of Shares to Justin Ward, Director of

the Company

Background

This Resolution seeks Shareholder approval to issue and allot 43,478 fully paid ordinary shares to Justin Ward, a Director of the Company as part of this remuneration, pursuant to the terms of his appointment as announced on 9 July 2019.

Related Party Approvals

ASX Listing Rule 10.11 provides that the Company, as a listed company, must not issue equity securities to a related party without Shareholder approval.

If approval is obtained under Listing Rule 10.11, in accordance with Listing Rule 7.2 (exception 14), separate approval is not required under Listing Rule 7.1.

Chapter 2E of the Corporations Act prohibits the Company from giving a financial benefit to a related party of the Company unless either:

• (a) the giving of the financial benefit falls within one of the exceptions to the provisions; or
• (b) Shareholder approval is obtained prior to the giving of the financial benefit.

The proposed issue of shares (which is a type of equity security, for the purposes of the ASX Listing Rules) constitutes the giving of a financial benefit.

A "related party" for the purposes of the Corporations Act and the Listing Rules is widely defined and includes a director of a public company, a spouse of a director of a public company or an entity controlled by a director of a public company. The definition of "related party" also includes a person whom there is reasonable grounds to believe will become a "related party" of a public company.

The non-conflicted Directors of the Company (being the Board with Justin Ward removed from discussions) carefully considered the issue of these shares to Justin Ward and formed the view that the giving of this financial benefit as part of their remuneration would be reasonable, given the circumstances of the Company, the quantum and terms of the securities, and the responsibilities held by Justin Ward as Director of the Company.

Accordingly, the non-conflicted Directors of the Company believe that the issue of these shares to Justin Ward fall within the "reasonable remuneration" exception as set out in section 210 of the Corporations Act, and relies on this exception for the purposes of this Resolution.

Information required by ASX Listing Rule 10.13

The following information in relation to the issue of the shares to Justin Ward is provided to Shareholders for the purposes of ASX Listing Rule 10.13:

• (a) The related party is Justin Ward, a Director of the Company.
• (b) The maximum number of shares to be issued is 43,478.
• (c) The shares will be issued within 1 month of Shareholder approval being obtained by the Company (or otherwise, as determined by the ASX in the exercise of their discretion).
• (d) The shares will be offered for nil cash consideration.
• (e) The Shares will be fully paid on issue and rank equally in all aspects with all existing fully paid ordinary shares previously issued by the Company.
• (f) Funds will not be raised from the issue of these shares as the proposed issue will be part of the remuneration payable to Justin Ward in his capacity as Director of the Company.

Directors' Recommendation

The Board of Directors (excluding Justin Ward) recommend Shareholders vote for this Resolution.

Amendments to Constitution

Resolution 13 – Amendments to Constitution

The Company's current constitution was adopted by the Company on 29 November 2018.

Effective 1 December 2019 the ASX propose to implement changes to their escrow regime. In accordance with those changes there will be an update to ASX Listing Rule 15.12 which requires a listed entity's constitution to contain certain provisions for so long as an entity has "restricted securities" (as defined by the Listing Rules) are on issue. These amendments (if approved) provide the constitutional underpinning for ASX's modified escrow regime.

Accordingly, the Company has updated clause 2.12 of the Constitution which incorporates the following key amendments (Amended Constitution):

Restricted securities: The Company shall comply in all respects with the requirements of the Listing Rules with respect to "restricted securities". Without limiting the generality of the above:

• (a) a holder of restricted securities must not dispose of, or agree or offer to dispose of, the securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX;
• (b) if the securities are in the same class as quoted securities, the holder will be taken to have agreed in writing that the restricted securities are to be kept on the entity's issuer sponsored subregister and are to have a holding lock applied for the duration of the escrow period applicable to those securities;
• (c) the entity will refuse to acknowledge any disposal (including, without limitation, to register any transfer) of restricted securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX;
• (d) a holder of restricted securities will not be entitled to participate in any return of capital on those securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX; and
• (e) if a holder of restricted securities breaches a restriction deed or a provision of the Company's constitution restricting a disposal of those securities, the holder will not be entitled to any dividend or distribution, or to exercise any voting rights, in respect of those securities for so long as the breach continues.

Prior to the Meeting, a copy of the Amended Constitution is available for review by Shareholders at the Company's registered office during normal business hours. A copy of the Amended Constitution can also be sent to Shareholders of the Company upon a request being made to the Company Secretary on +61 2 8072 1400.

A complete signed copy of the Amended Constitution will be tabled at the Meeting.

Pursuant to section 136(2) of the Corporations Act, a medication to the Company's Constitution can only be effected by way of a Special Resolution passed by its Shareholders. Therefore, this Resolution is a Special Resolution that can only be passed if at least 75% of the total votes cast by Shareholders entitled to vote on this Resolution are voted in its favour.

Professional Advice

If you have any doubt or do not understand this Resolution, it is strongly recommended that you seek advice from a solicitor or other professional advisor.

Directors' Recommendation

Enquiries

Shareholders are asked to contact the Company Secretary on +61 2 8072 1400- if they have any queries in respect of the matters set out in these documents.

Glossary

AEDT means Australian Eastern Daylight Time as observed in Sydney, New South Wales.

Annual Financial Report means the 2019 Annual Report to Shareholders for the period ended 30 June 2019 as lodged by the Company with ASX on 27 September 2019.

Annual General Meeting or AGM or Meeting means an Annual General Meeting of the Company and, unless otherwise indicated, means the meeting of the Company's members convened by this Notice of Meeting.

ASIC means Australian Securities and Investment Commission.

Associate has the meaning given to it by the ASX Listing Rules.

ASX means ASX Limited ACN 008 624 691 or the financial market operated by it, as the context requires, of 20 Bridge Street, Sydney, NSW 2000.

ASX Listing Rules or Listing Rules means the official ASX Listing Rules of the ASX and any other rules of the ASX which are applicable while the Company is admitted to the official list of the ASX, as amended or replaced from time to time, except to the extent of any express written waiver by the ASX.

Auditor's Report means the auditor's report of BDO Audit (WA) Pty Ltd dated 27 September 2019 as included in the Annual Financial Report.

Board means the current board of Directors of the Company.

Business Day means a day on which trading takes place on the stock market of ASX.

Chair means the person chairing the Meeting.

Closely Related Party of a member of the KMP means:

• (a) a spouse or child of the member;
• (b) a child of the member's spouse;
• (c) a dependant of the member or of the member's spouse;
• (d) anyone else who is one of the member's family and may be expected to influence the member, or be influenced by the member, in the member's dealings with the Company;
• (e) a company the member controls; or
• (f) a person prescribed by the Corporation Regulations 2001 (Cth).

Company means Recce Pharmaceuticals Ltd ACN 124 849 065.

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth) as amended or replaced from time to time.

Director means a current director of the Company.

Directors' Report means the report of Directors as included in the Annual Financial Report.

Dollar or "$" means Australian dollars.

Explanatory Statement means the explanatory statement accompanying this Notice of Meeting.

KMP means key management personnel (including the Directors) whose remuneration details are included in the Remuneration Report.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting dated 24 October 2019 including the Explanatory Statement.

Option means an option which, subject to its terms, could be exercised into a Share.

Ordinary Resolution means a resolution that can only be passed if at least 50% of the total votes cast by Shareholders entitled to vote on the resolution are voted in its favour at the meeting.

Performance Right means a performance right which, subject to its terms, could convert to a Share.

Proxy Form means the proxy form attached to this Notice of Meeting.

Remuneration Report means the remuneration report as set out in the Annual Financial Report.

Resolutions means the resolutions set out in this Notice of Meeting, or any one of them, as the context requires.

Restricted Voter means a member of the Company's KMP and any Closely Related Parties of those members.

Securities mean Shares and/or Options (as the context requires).

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

Shareholder means a holder of a Share.

Share Registry means Automic Group, Level 5, 126 Phillip Street, Sydney NSW 2000.

Special Resolution means a resolution that can only be passed if at least 75% of the total votes cast by Shareholders entitled to vote on the resolution are voted in its favour at the meeting.

Spill Meeting means the meeting that will be convened within 90 days of the 2020 AGM if a threshold of votes is cast against the adoption of the Remuneration Report at the Meeting and the 2020 AGM.

Spill Resolution means the resolution required to be put to Shareholders at the 2020 AGM if a threshold of votes is cast against the adoption of the Remuneration Report at the Meeting and 2020 AGM.

Trading Day has the meaning given to that term in ASX Listing Rule 19.12.

VWAP means the volume weighted average market (closing) price, with respects to the price of Shares.

RCE

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	Return your completed form			All enquiries to Automic
Contact	$\bowtie$BY MAILIN PERSON	BY EMAIL	WEBCHAThttps://automic.com.au/
	AutomicAutomicGPO Box 5193	meetings@automicgroup.com.auLevel 5, 126 Phillip Street	PHONE
	Sydney NSW 2001	Sydney NSW 2000		1300 288 664 (Within Australia)+61 2 9698 5414 (Overseas)
	Complete and return this form as instructed only if you do not vote online			I/We being a Shareholder entitled to attend and vote at the Annual General Meeting of Recce Pharmaceuticals Ltd, to be held at
	10.00am (AEDT) on Monday, 25 November 2019 at Automic Group, Level 5, 126 Phillip Street, Sydney NSW 2000 hereby:
				Appoint the Chairman of the Meeting (Chair) OR if you are not appointing the Chairman of the Meeting as your proxy, pleasewrite in the box provided below the name of the person or body corporate you are appointing as your proxy or failing the person
				so named or, if no person is named, the Chair, or the Chair's nominee, to vote in accordance with the following directions, or, if no
	directions have been given, and subject to the relevant laws as the proxy sees fit and at any adjournment thereof.
Appoint Your Proxy
$\div$	The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote.with the Chair's voting intention.			Unless indicated otherwise by ticking the "for"," against" or "abstain" box you will be authorising the Chair to vote in accordance
STEP	AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS
				Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expresslyauthorise the Chair to exercise my/our proxy on Resolutions 1 and 12 (except where I/we have indicated a different voting intention
	Management Personnel, which includes the Chair.			below) even though Resolutions 1 and 12 are connected directly or indirectly with the remuneration of a member of the Key
	ResolutionsAdoption of Remuneration Report$\mathbf{1}$	Against AbstainFor	ResolutionsRatification of Prior Issue of8.	Against AbstainFor
			15,127,180 Placement Shares
Direction	$\overline{2}$ .Re-election of Michele Dilizia asDirector		Ratification of Prior10,712,991 Placement Shares	Issue of
	Election of Justin Ward as Director3.		Approval of Issue of Placement10 1Shares to James Graham, Directorof the Company
Your Voting	ASX Listing Rule 7.1A Approval of4.Future Issue of Securities		Approval of Issue of Advisor Options11
	5.Ratification of Prior Issue of Shares toAcuity Capital Pty Ltd		12.Approval of Issue of Shares toJustin Ward, Director of theCompany
Δ$\overline{\mathbf{u}}$	Ratification of Prior Issue of Shares to6.Spark Plus Pte Ltd		13Amendments to Constitution
$\Omega$	Ratification of Prior Issue of Shares to7.Arthur Kollaras
	Please note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of handsor on a poll and your votes will not be counted in computing the required majority on a poll.
	SIGNATURE OF SECURITYHOLDERS - THIS MUST BE COMPLETED
Contact Details	Individual or Securityholder 1		Securityholder 2	Securityholder 3
	Sole Director and Sole Company Secretary		Director	Director / Company Secretary
	Contact Name:
	Email Address:
Sign Here +
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(a t	Contact Daytime Telephone		Date (DD/MM/YY)
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ნ	By providing your email address, you elect to receive all of your communications despatched by the Company electronically (where legallypermissible).

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