RECCE PHARMACEUTICALS LTD — Capital/Financing Update 2019

Dec 18, 2019

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 becomes 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 Pharmaceuticals Ltd

ACN

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

(a) Ordinary Fully Paid Shares (RCE)

(b) Unlisted Options

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principle terms of the +securities (e.g. 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)

(a) 235,785

(b) 2,500,000

(a) Ordinary Fully Paid Shares (RCE)

(b) Unlisted Options; Exercise Price $0.312; Expiry Date 19 December 2023

4	Do the +securities rank equally in allrespects from the +issue date withan existing +class of quoted+securities?If the additional +securities do notrank equally, please state:•the date from which they do•the extent to which theyparticipate for the next dividend,(in the case of a trust distribution)or interest payment•the extent to which they do notrank equally, other than inrelation to the next dividend,distribution or interest payment	(a) YES(b) NO
5	Issue price or consideration	(a) 192,307 Ordinary Fully Paid Shares with anissue price of $0.26 per share. 43,478Ordinary Fully Paid Shares for nil cashconsideration(b) NIL
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearly identifythose assets)	(a) 235,785 Ordinary Fully Paid Shares wereissued following receipt of Shareholderapproval at the Annual General Meeting heldon 25 November 2019.(b) 2,500,000 unlisted options were issuedfollowing receipt of Shareholder approval atthe Annual General Meeting held on 25November 2019.
6a	Is the entity an +eligible entity thathas obtained security holderapproval under rule 7.1A?If yes complete sections 6b - 6h inrelation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	YES
6b	The date the security holderresolution under rule 7.1A waspassed	25 November 2019
6c	Number of +securities issued withoutsecurity holder approval under rule7.1	N/A

+ See chapter 19 for defined terms.

• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting
• 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 +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)
• 9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)

N/A

(a) 235,785

(b) 2,500,000

N/A

N/A

N/A

N/A

19 December 2019

Number	+Class
134,050,318	ORDINARY FULLYPAID SHARES

Number	+Class
8,754,423	PERFORMANCESHARES CLASS B

+ See chapter 19 for defined terms.

8,754,423	PERFORMANCESHARES CLASS C
8,754,423	PERFORMANCESHARES CLASS D
641,000	UNL OPT EXP21/06/20 @ $0.00
59,880	UNL OPT EXP19/07/20 @ $0.2171
104,167	UNL OPT EXP25/08/20 @ $0.1872
109,569	UNL OPT EXP29/09/20 @ $0.1780
127,470	UNL OPT EXP01/11/20 @ $0.2040
124,069	UNL OPT EXP30/11/20 @ $0.2096
130,804	UNL OPT EXP10/01/21 @ $0.1988
65,617	UNL OPT EXP13/02/21 @ $0.1981
1,800,000	UNL OPT EXP15/02/23 @ $0.1680
2,500,000	UNL OPT EXP19/12/23 @ $0.312

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

N/A

Part 2 - Pro rata issue

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

N/A

N/A

N/A

• 15 +Record date to determine entitlements
• 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?
• 17 Policy for deciding entitlements in relation to fractions
• 18 Names of countries in which the entity has security holders who will not be sent new offer documents

Note: Security holders must be told how their entitlements are to be dealt with.

Cross reference: rule 7.7.

• 19 Closing date for receipt of acceptances or renunciations
• 20 Names of any underwriters N/A
• 21 Amount of any underwriting fee or commission
• 22 Names of any brokers to the issue N/A
• 23 Fee or commission payable to the broker to the issue
• 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders
• 25 If the issue is contingent on security holders' approval, the date of the meeting
• 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders	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 full through a broker?	N/A
31	How do security holders sell part oftheir entitlements through a brokerand accept for the balance?	N/A
32	How do security holders dispose oftheir entitlements (except by salethrough a broker)?	N/A
33	+Issue date	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

+ See chapter 19 for defined terms.

• 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

Entities that have ticked box 34(b)

• 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 +issue date 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)

N/A

N/A N/A

N/A

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 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.

Company Secretary

Sign here: Date: 19 December 2019

Print name: Alistair McKeough

+ 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 Amended 04/03/13

Part 1

Rule 7.1 - Issues exceeding 15% of capitalStep 1: Calculate "A", the base figure from which the placementcapacity is calculated
Add the following:•Number of fully paid +ordinary securitiesissued in that 12 month period under anexception in rule 7.2•Number of fully paid +ordinary securitiesissued in that 12 month period withshareholder approval•Number of partly paid +ordinary securitiesthat became fully paid in that 12 monthperiodNote:•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	15 February 2019; 17,787,501; ORDINARYFULLY PAID SHARES16 October 2019; 26,684,614; ORDINARYFULLY PAID SHARES19 December 2019; 235,785; ORDINARYFULLY PAID SHARES
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	N/A
"A"	134,050,318
Step 2: Calculate 15% of "A"

+ See chapter 19 for defined terms.

"B"	0.15[Note: this value cannot be changed]
Multiply "A" by 0.15	20,107,547

Step 3: Calculate "C", the amount of placement capacity under rule 7.1 that has already been used

Insert number of +equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:•Under an exception in rule 7.2•Under rule 7.1A	N/A
•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) 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
"C"	NIL

Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placement capacity under rule 7.1

"A" x 0.15	20,107,547
Note: number must be same as shown inStep 2
Subtract "C"	NIL
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	20,107,547
	[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"	134,050,318
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	13,405,031
Step 3: Calculate "E", the amount of placement capacity under rule 7.1Athat has already been used
Insert number of +equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1ANotes:•This applies to equity securities – not justordinary securities•Include here – if applicable – thesecurities the subject of the Appendix 3Bto which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt with inPart 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	N/A
"E"	NIL
Step 4: Subtract "E" from ["A" x "D"] to calculate remaining placementcapacity under rule 7.1A
"A" x 0.10	13,405,031
Note: number must be same as shown inStep 2

+ See chapter 19 for defined terms.

Subtract "E"	NIL
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	13,405,031
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.