RECCE PHARMACEUTICALS LTD — Capital/Financing Update 2019

Oct 15, 2019

0Rule 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 Pharmaceuticals Ltd (Company)

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

Fully paid ordinary shares (Ordinary Shares)

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

26,684,614 Ordinary Shares

26,684,614 Ordinary Shares, which rank equally with existing fully paid ordinary shares.

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the +issuedate with an existing +class ofquoted +securities?If the additional +securities donot rank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpayment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	The Ordinary Shares rank equally with existingOrdinary Shares.
5	Issue price or consideration	25,840,170 Ordinary Shares were issued at $0.26per Ordinary Share.750,000 Ordinary Shares were issued at $0.20 perOrdinary Share.
		94,444 Ordinary Shares were issued for nil cashconsideration.
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	25,840,170OrdinaryShareswereissuedtosophisticated and institutional investors underthe Placement, as announced to the ASX on 10October2019, which raised $6.7mil (beforecosts). Funds raised will be used to further preclinical programs, for regulatory submissions andfor general working capital (including repaymentof outstanding loans).
		750,000 Ordinary Shares were issued to AcuityCapitalinaccordancewiththeControlledPlacement Agreement. The Company agreed toissue these Ordinary Shares as announced on 11September 2019.
		94,444OrdinaryShareswereissuedtocontractorsengagedbytheCompanyasconsideration for services rendered.
6a	Is the entity an +eligible entitythat has obtained security holderapproval under rule 7.1A?	Yes
	If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i

+ See chapter 19 for defined terms.

• 6b The date the security holder resolution under rule 7.1A was passed
• 6c Number of +securities issued without security holder approval under rule 7.1
• 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.

29 November 2018

15,971,623 Ordinary Shares

10,712,991 Ordinary Shares

N/A

N/A

Yes, agreed to be issued on 10 October 2019, which had a 15 day VWAP (up to 9 October 2019) of $0.327564. 75% of this VWAP is $0.245673, which is less than the issue price of $0.26. (source: Kaz Private Wealth).

N/A

See Annexure 1

16 October 2019

• See chapter 19 for defined terms.

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX+securities(includingtheinsection 2 if applicable)	133,814,533	FullyPaidOrdinaryShares

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

Number	+Class
641,000	Options
59,880	Tranche 1 Options
104,167	Tranche 2 Options
109,569	Tranche 3 Options
127,470	Tranche 4 Options
124,069	Tranche 5 Options
130,804	Tranche 6 Options
65,617	Tranche 7 Options
1,800,000	Options, with anexercise price of $0.168per option, and anexpiry date of 15February 2023.
8,754,423	Class B PerformanceShares
8,754,423	Class C PerformanceShares
8,754,423	Class D PerformanceShares

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

N/A

+ See chapter 19 for defined terms.

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?	N/A
13	Ratio in which the +securities willbe offered	N/A
14	+Class of+securities to which theoffer relates	N/A
15	+Recorddatetodetermineentitlements	N/A
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlements inrelation 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

+ See chapter 19 for defined terms.

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
27	If the entity has issued options,andthetermsentitleoptionholders 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
	+Issue
33	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 +securitiesExample: 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 convertiblesecurities

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 thecategories1 - 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 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) Number +Class
  • 42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

Number	+Class

+ See chapter 19 for defined terms.

Quotation agreement

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

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

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document 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: 16 October 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 capital
Step 1: Calculate "A", the base figure from which theplacementcapacity is calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue	89,342,418
Add the following:Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approvalNumber of partly paid +ordinary•securities that became fully paid in that	17,787,501 fully paid ordinary shares issuedon 15 February 2019
12 month periodNote:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	Nil
"A"	107,129,919

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	16,069,487 (rounded down)
Step 3: Calculate "C", the amount of placement capacityunder rule7.1 that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:	15,971,623 fully paid ordinary shares issuedon 16 October 2019
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) 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"	15,971,623
Step 4: Subtract "C" from ["A" x "B"] to calculateremainingplacement capacity under rule 7.1
"A" x 0.15	16,069,487
Note: number must be same as shown inStep 2
Subtract "C"	15,971,623
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	97,864

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", thebase figure from which the placementcapacity is calculated
"A"	107,129,919
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	10,712,991 (rounded down)
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod under rule 7.1A	10,712,991 fully paid ordinary shares issuedon 16 October 2019
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	10,712,991

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	10,712,991
Note: number must be same as shown inStep 2
Subtract "E"	10,712,991
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	0

+ See chapter 19 for defined terms.