ROCKETDNA LTD. — Regulatory Filings 2018

Dec 2, 2018

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30 November 2018

Ms P Reid Adviser, Listings Compliance ASX Limited Level 40 152 St Georges Terrace PERTH WA 6000

By email: ListingsCompliancePerth@asx.com.au

Dear Ms Reid

I refer to your letter dated 27 November 2018 regarding the Company’s Appendix 4C for the period ended 30 September 2018.

In response to the questions outlined in your letter, the Company responds as follows:

1. Does PRZ expect that it will continue to have negative operating cash flows for the time being and, if not, why not?

PRZ offers a smart and intuitive solution to enable the drone industry to realise its greatest potential by designing, developing and providing best-in-class autonomous safety systems for drones.

The Company is still in its development phase and is investing major efforts in developing a production capability for its product to meet the demand of the high-end consumer segment by the end of December 2018.

The September and current cash outflow has been elevated due to production facility development and building of inventory that will be sold in 2019. The Company’s other main expenditure is research and development and product development. This investment is required to continue to lead the market with new and innovative products that address the market demand with cutting-edge technology.

For this reason, it is reasonable to expect the Company to continue to have a negative operating cashflow into the foreseeable future, at least until the second half of 2019.

1. Has PRZ taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

PRZ continues to monitor its cash position and the need for further capital to meet its growing demand and needs. PRZ is in dialogue with several groups regarding different forms of potential capital raisings including both equity and debt facilities, to allow for the build-up of inventory to meet the demand of the high-end consumer market. The Company therefore has reason to believe that should additional capital be required to advance its growing business plan, that it will be available.

1. Does PRZ expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

PRZ currently has available to it two major sources of cash inflow: sales revenue; and capital raising. With these sources of inflows, PRZ expects to be able to continue its operations and meet its business objectives.

Parazero Limited ACN 618 678 701 T: +61 8 6377 8043 | A: Level 2, 46-50 Kings Park Road, West Perth WA 6005

The company has three sources of sales revenue: Project based - sales to OEMs (drone manufacturers); aftermarket products aimed to commercial users (off the shelf products that have been developed to the most common platforms in the market); and sales to highly professional consumers (off the shelf products that are an attachment to the most common professional consumer drones).

The Company is continuing to see sales revenue increase, and retains the option of raising additional working capital as needed through a capital raising. As such, the Company expects to be able to continue its operations and meet its business objectives.

1. Please confirm that PRZ is complying with Listing Rule 3.1 and that there is no information that should be given to ASX about its financial condition under that rule that has not already been released to the market.

PRZ confirms that it is complying with Listing Rule 3.1 and that there is no information that should be given to ASX about its financial condition under that rule that has not already been released to the market.

1. Please confirm that PRZ’s responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of PRZ with delegated authority from the board to respond to ASX on disclosure matters.

PRZ confirms that the responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy and by its board.

6. Please also provide any other information that PRZ considers may be relevant to ASX forming an opinion on whether PRZ is complying with Listing Rule 12.2 that a listed entity’s financial condition must, in ASX’s opinion, be adequate to warrant the continued quotation of its securities and its continued listing.

As outlined above, the higher expenditure in the last quarter was partly due to increased expenditure on inventories required to market its products and to meet customer demand. The Company expects to recoup its investment on product inventory in the first half of 2019 by selling the high-end consumer inventory through its established global distribution channels. There are also agreements in place with major OEMs including ACSL (announcement dated 23 November 2018) and Airobotics (announcement dated 12 November 2018) which underpin PRZ’s confidence that the company will transition into a net operating cashflow positive position towards the second half of 2019.

Yours sincerely

Stephen Buckley Company Secretary ParaZero Limited

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27 November 2018

Mr Stephen Buckley Company Secretary Parazero Limited Level 12, 46-50 Kings Park Road WEST PERTH WA 6005

By email: stephen.buckley@companysecsol.com.au

Dear Mr Buckley

Parazero Limited (‘PRZ’): Appendix 4C Query

ASX refers to PRZ’s Appendix 4C quarterly report for the period ended 30 September 2018 lodged with the ASX Market Announcements Platform and released on 31 October 2018 (the ‘Appendix 4C’).

ASX notes that PRZ has reported:

• negative net operating cash flows for the quarter of -$1,672,000;

• cash at the end of the quarter of $1,526,000; and

• estimated cash outflows for the next quarter of $1,340,000.

It is possible to conclude, based on the information in the Appendix 4C, that if PRZ were to continue to expend cash at the rate indicated by the Appendix 4C, PRZ may not have sufficient cash to continue funding its operations.

Request for Information

In view of that, ASX asks PRZ to answer separately each of the following questions and provide the following confirmations in a format suitable for release to the market under Listing Rule 18.7A:

1. Does PRZ expect that it will continue to have negative operating cash flows for the time being and, if not, why not?

2. Has PRZ taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

3. Does PRZ expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

4. Please confirm that PRZ is complying with Listing Rule 3.1 and that there is no information that should be given to ASX about its financial condition under that rule that has not already been released to the market.

5. Please confirm that PRZ’s responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of PRZ with delegated authority from the board to respond to ASX on disclosure matters.

Please also provide any other information that PRZ considers may be relevant to ASX forming an opinion on whether PRZ is complying with Listing Rule 12.2 that a listed entity’s financial condition must, in ASX’s opinion, be adequate to warrant the continued quotation of its securities and its continued listing.

When and where to send your response

ASX Customer Service Centre 131 279 | asx.com.au

ASX Limited [[Listings]]

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This request is made under Listing Rule 18.7. Your response is required as soon as reasonably possible and, in any event, by no later than 4 PM AWST Friday, 30 November 2018 .

If we do not have your response by then, ASX will have no choice but to consider suspending trading in PRZ’s securities under Listing Rule 17.3. You should note that if the information requested by this letter is information required to be given to ASX under Listing Rule 3.1 and it does not fall within the exceptions mentioned in Listing Rule 3.1A, PRZ’s obligation is to disclose the information “immediately”. This may require the information to be disclosed before the deadline set out in the previous paragraph.

ASX reserves the right to release a copy of this letter and your response on the ASX Market Announcements Platform under Listing Rule 18.7A. Accordingly, your response should be in a form suitable for release to the market. Your response should be sent to me by e-mail at ListingsCompliancePerth@asx.com.au . It should not be sent directly to the ASX Market Announcements Office. This is to allow me to review your response to confirm that it is in a form appropriate for release to the market, before it is published on the ASX Market Announcements Platform.

Listing Rule 3.1 and 3.1A

Listing Rule 3.1 requires a listed entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. Exceptions to this requirement are set out in Listing Rule 3.1A. In responding to this letter, you should have regard to PRZ’s obligations under Listing Rules 3.1 and 3.1A and also to Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B . It should be noted that PRZ’s obligation to disclose information under Listing Rule 3.1 is not confined to, nor is it necessarily satisfied by, answering the questions set out in this letter.

Trading halt

If you are unable to respond to this letter by the time specified above, you should discuss with us whether it is appropriate to request a trading halt in PRZ’s securities under Listing Rule 17.1. If you wish to request a trading halt, you must tell us:

• the reasons for the trading halt;

• how long you want the trading halt to last;

• the event you expect to happen that will end the trading halt;

• that you are not aware of any reason why the trading halt should not be granted; and

• any other information necessary to inform the market about the trading halt, or that we ask for.

We may require the request for a trading halt to be in writing. The trading halt cannot extend past the commencement of normal trading on the second day after the day on which it is granted.

You can find further information about trading halts in Guidance Note 16 Trading Halts & Voluntary Suspensions .

Enquiries

If you have any queries or concerns about any of the above, please contact me immediately.

Yours sincerely

Penelope Reid

Adviser, Listings Compliance (Perth)

2/2 ASX Customer Service Centre 131 279 | asx.com.au