RECCE PHARMACEUTICALS LTD — Share Issue/Capital Change 2017

Dec 3, 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 Pharmaceuticals Limited (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) Unlisted options over Ordinary Shares (Tranche 5 Options)
• 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)

620,347 Ordinary Shares 124,069 Tranche 5 Options

Ordinary Shares 620,347 Ordinary Shares will rank pari passu with existing Ordinary Shares. Tranche 5 Options

• 124,069 Tranche 5 Options
• Exercise Price: $0.2096
• Expiry: 30 November 2020

+ 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•the extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest payment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	The Ordinary Shares rank pari passuwithexisting Ordinary Shares.The Tranche 5 Options will not be quoted. Onexercise of the Tranche 5 Options, the OrdinaryShareswillrankparipassuwithexistingOrdinary Shares.
5	Issue price or consideration	620,347 Ordinary Shares –aggregate deemedissue price of $100,000 (as payment of theTranche 5 investment under the Share Purchaseand Convertible Security Agreement dated 16June 2017 between the Company and TheAustralian Special Opportunity Fund, LP).124,069 Tranche 5 Options are issued for nilconsideration.
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	The Ordinary Shares were issued as per theterms and 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 Tranche 5 Options is in satisfaction of theCompany's obligations to issue Tranche 5 sharesand options under the Agreement.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	Yes
6b	The date the security holderresolution under rule 7.1A waspassed	21 November 2017

+ See chapter 19 for defined terms.

• 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.

620,347 Ordinary Shares 124,069 Tranche 5 Options

N/A

N/A

N/A

N/A

See Annexure 1

1 December 2017

N/A

• See chapter 19 for defined terms.

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX+securities(includingtheinsection 2 if applicable)	43,959,141	FullyPaidOrdinaryShares
		Number	+Class
9	+classNumberandofall+securities not quoted on ASX+securities(includingtheinsection 2 if applicable)	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
		42,810,081	Ordinary escroweduntil 15/1/2018
		8,754,423	Class B PerformanceShares escrowed until15/1/2018
		8,754,423	Class C PerformanceShares escrowed until15/1/2018
		8,754,423	Class D PerformanceShares escrowed until15/1/2018
		1	Convertible Securitywith Face Value of$200,000

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 +securitieswill be 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 entitlementsin relation to fractions	N/A
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocuments	N/A
	Note: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.
19	Closingdateforreceiptofacceptances or renunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting feeor commission	N/A
22	Names of any brokers to theissue	N/A
23	Fee or commission payable tothe broker to the issue	N/A

+ See chapter 19 for defined terms.

24	Amount of any handling feepayable 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,and the terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices 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 selltheir entitlements in full througha broker?	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	+Issuedate	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 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 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)
		Number	+Class
42	+classNumberandofall+securitiesquotedonASX

• See chapter 19 for defined terms.

clause 38)

(including the +securities in

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.

Sign here: Date: 4 December 2017

Company secretary

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 the placementcapacity is calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue	76,290,785
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•	1,059,000 shares issued on conversion ofClass A Performance Shares5,408,487 issued 25 October 2017654,715 shares issued on 21 June 2017(ratified on 21 November 2017)299,401 shares issued on 19 July 2017(ratified on 21 November 2017)520,833 shares issued on 25 August 2017(ratified on 21 November 2017)730,460 shares issued on 22 September2017 (ratified on 21 November 2017)547,845 shares issued on 29 September
securities that became fully paid in that12 month periodNote:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items	2017 (ratified on 21 November 2017)
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	Nil
"A"	85,511,526

+ 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	12,826,728 (rounded down)
Step 3: Calculate "C", the amount of placement capacity under 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:•Under an exception in rule 7.2•Under rule 7.1A•With security holder approval under rule7.1 or rule 7.4Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items	637,349 shares issued on 2 November 2017127,470 options issued on 2 November2017620,347 shares issued on 1 December 2017124,069 options issued on 1 December2017
"C"	1,509,235
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	12,826,728
Note: number must be same as shown inStep 2
Subtract "C"	1,509,235
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	11,317,493

+ 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"	85,511,526
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	8,551,152 (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	Nil
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"	Nil

+ 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	8,551,152
Note: number must be same as shown inStep 2
Subtract "E"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	8,551,152

+ See chapter 19 for defined terms.