RECCE PHARMACEUTICALS LTD — Capital/Financing Update 2017

Jun 21, 2017

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, 04/03/13

Name of entity

Recce Ltd

ABN

73 124 849 065

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 (Ordinary Shares) Convertible Security (Convertible Security) Unlisted options over Ordinary Shares (Options)

2 Number of +securities issued or to be issued (if known) or maximum number which may be issued

654,715 Ordinary Shares

641,000 Options

Convertible Security with a face value of $300,000 (Face Value)

+ See chapter 19 for defined terms.

3	Principal terms of the +securities(e.g.if options, exercise priceand expiry date; if partly paid+securities,theamountoutstanding and due dates for+convertiblepayment;ifsecurities, the conversion priceand dates for conversion)	Ordinary Shares654,715,Ordinary Shares will rank pari passu withexisting Ordinary SharesOptions641,000 OptionsExercise Price: $0.2593Expiry: 3 years from date of issue being 21 June2020]
		Convertible SecurityThe Convertible Security amountadvancedis$250,000 with a Face Value of $300,000TheconversionamountoftheConvertibleSecurity must be either the amount of theoutstandingFaceValueoftheConvertibleSecurity or an amount in multiples of $50,000 upto a maximum of the outstanding Face Value ofthe Convertible Security (Conversion Amount)as elected to be converted at the discretion of theConvertibleSecurityholder,TheAustralianSpecial Opportunity Fund after the expiry of the90 day lock up period.The Convertible Security will be convertible intonew Ordinary Shares of the Company at the'Conversion Price', being the lesser of:(a) 90% of the average 5 days consecutive dailyVWAPs per Company Share during the (20)consecutive trading days immediately prior tothe relevant conversion notice date selected byThe Australian Special Opportunity Fund, LP(in its sole discretion); and(b) 130% of the average of each of the 20 dailyVWAPsduringthe20tradingdaysimmediately prior to 16 June 2017.The ordinary Shares issued upon conversion ofthe Convertible Security will rank pari passu withexisting Ordinary SharesThe Convertible Security does not carry anyvoting rights at meetings of shareholders of theCompany, and has no rights of participation inany rights issues undertaken by the Companyprior to their conversion
		The Company can elect to buy-back the ConvertibleSecurity at any time. If the Company buys back theConvertible Security after the 90 day lock up periodfrom 16 June 2017, the Company must pay a 5%premium to the amount outstanding in respect of theConvertible Security at that time.

+ See chapter 19 for defined terms.

4	Do the +securities rank equally inall respects from the +issue datewith 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) or interestpaymentthe extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	The Ordinary Shares rank pari passu with existingOrdinary SharesThe Options will not be quoted. On exercise ofthe Options, the Ordinary Shares will rank paripassu with existing Ordinary Shares.On conversion of the Convertible Security, theOrdinary Shares will rank pari passu with existingOrdinary Shares.
5	Issue price or consideration	178,715 Ordinary Shares – aggregate deemed issueprice of $35,000(as payment of thecommitmentfeeundertheSharePurchaseandConvertibleSecurityAgreement dated 16 June 2017 betweentheCompanyandTheAustralianSpecial Opportunity Fund, LP).476,000 Ordinary Shares are issued for nilconsideration641,000 Options are issued for nil consideration$250,00 advanced for the Convertible Security
6	Purpose of the issue(If issued as consideration for theacquisitionofassets,clearlyidentify those assets)	The ordinary shares were issued as per the termsand conditions of the Share Purchase andConvertibleSecurityAgreementwithTheAustralianSpecialOpportunityFund,LP('Agreement'), details of which were announcedto the market on 16 June 2017.The purpose of the issue of the Ordinary Sharesand Options in satisfaction of the Company'sobligations to issue commitment fee shares,collateralsharesandoptionsundertheAgreement. The purpose of the issue of theConvertible Security is to raise $250,000 capitalforgeneralcorporateandworkingcapitalpurposes.

+ See chapter 19 for defined terms.

6a	Is the entity an +eligible entitythat has obtained security holderapproval under rule 7.1A?	No
	If Yes, complete sections 6b – 6hin 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 approval	654,715 fully paid ordinary shares
	under rule 7.1	641,000 Options
		Convertible Security with Face Value of $300,000
6d	Number of +securities issuedwith security holder 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
6f	Number of +securities issuedunder an exception in rule 7.2	N/A
6g	If +securities issued under rule	N/A
	7.1A, was issue price at least 75%of 15 day VWAP as calculatedunder rule 7.1A.3?Include the+issue date and both values.Include the source of the VWAPcalculation.
6h	If +securities were issued under	N/A
	rule7.1Afornon-cashconsideration,statedateonwhich valuation of considerationwas released to ASX MarketAnnouncements
6i	Calculate the entity's remaining	10,932,165 remaining capacity under rule 7.1
	issue capacity under rule 7.1 andrule 7.1A – complete Annexure 1andreleasetoASXMarketAnnouncements	7,724,587 remaining capacity under rule 7.1A

+ See chapter 19 for defined terms.

[Note: KL Gates comments 20 June 2017 subject to review by Recce]Appendix 3B New issue announcement

21 June 2017

7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
35,194,419	Ordinary

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
641,000	Options
42,810,081	Ordinary escrowed until 15/1/2018
8,754,423	Class B Performance Shares escroweduntil 15/1/2018
8,754,423	Class C Performance Shares escroweduntil 15/1/2018
8,754,423	Class D Performance Shares escroweduntil 15/1/2018
1	Convertible Security with Face Valueof $300,000

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

Part 2 - Pro rata issue

11 Is security holder approval required? N/A 12 Is the issue renounceable or nonrenounceable? N/A 13 Ratio in which the +securities will be offered N/A 14 +Class of +securities to which the offer relates N/A

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

15	+Recorddatetodetermineentitlements	N/A
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlementsin relation to fractions	N/A
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	N/A
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 the issue	N/A
23	Fee or commission payable to thebroker to the issue	N/A
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	N/A
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	N/A
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	N/A

+ See chapter 19 for defined terms.

[Note: KL Gates comments 20 June 2017 subject to review by Recce]Appendix 3B New issue announcement

27	If the entity has issued options,and the terms entitle optionholders to participate on exercise,the date on which notices will besent to option holders	N/A
28	Date rights trading will begin (ifapplicable)	N/A
29	Date rights trading will end (ifapplicable)	N/A
30	How do security holders sell theirentitlements in fullthrough abroker?	N/A
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	N/A
32	How do security holders disposeof their entitlements (except bysale through a broker)?	N/A

33 +Issue date N/A

+ See chapter 19 for defined terms.

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 theadditional +securities, and the number and percentage of additional +securitiesheld 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 categories1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over

37 A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

38	Number of +securities for which+quotation is sought
39	+Class of +securities for whichquotation is sought
40	Do the +securities rank equally inall respects from the +issue datewith an existing +class of quoted+securities?If the additional +securities do notrank equally, please state:
	the date from which they dotheextenttowhichtheyparticipateforthenextdividend, (in the case of a trust,distribution)orinterestpaymentthe extent to which they do notrank equally, other than inrelation to the next dividend,distributionorinterestpayment
41	Reason for request for quotationnowExample: In the case of restricted securities, endof restriction period
	(if issued upon conversion ofanother +security, clearly identifythat other +security)
42	+classNumberandofall+securitiesquotedonASX(including the +securities in clause38)	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.

• 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 is not available now, we 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:	22 June 2017
	(Director/Company secretary)
Print name:	Peter Williams
	== == == == ==

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

+ See chapter 19 for defined terms.