SPRINTEX LIMITED — Interim / Quarterly Report 2021

Jan 28, 2021

SPRINTEX LIMITED ABN: 38 106 337 599

ASX Code: SIX

ASX RELEASE: 29 January 2021

Quarterly Activities Report

For the quarter ended 31 December 2020

Highlights

• Improvements to the installation of the new Front Entry ("FE") supercharger system
• Continued progress on the recapitalisation of the Company

Sprintex Limited (ASX: SIX) ("Sprintex" or "the Company") is pleased to provide shareholders with this Quarterly Activities Report for the three (3) months ended 31 December 2020.

The Company manufactures and distributes its patented range of Sprintex® superchargers and supercharger systems. During the quarter the Company continued research and development on the installation of the supercharger assembly for production of the new FE supercharger system, and reviewed and refined production samples and modelling for the supercharger sub-components.

The Company continued to receive good results on the tuning development on the new Jeep JL FE supercharger system, with road testing, monitoring and further calibration continuing to be evaluated. This activity is required to be completed prior to releasing the new system to market.

COVID-19

COVID-19 continued to have an impact on the group operations, with some relaxing and subsequent reinstatement of restriction on Movement Control Orders ("MCO") in effect in Malaysia, Stay at Home Orders in the USA, and social distancing restrictions imposed in Australia, which lead to continuing challenges on production and sales activity A resurgence of the virus adding further uncertainty to the economies. Conditions created by the COVID-19 pandemic remain fluid, uncertain and constantly evolving. The Company continues adapting to a work-from-home environment, as and when required, and follows increased hygiene, health and work practice advice from relevant state and federal governments across its global operations.

Although the Company continues to be a recipient of a number of Australian Government assistance packages, it remains focused on conservatively managing its cashflow through this period of uncertainty.

The Company continues to monitor announcements on stimulus measures to support its ongoing work arrangements with its employees and will implement further responses as required. The health and safety of its staff remains a key priority.

CORPORATE

Efforts to advance the previously announced recapitalisation and relisting plan for the Company continued during the quarter.

During the quarter, the following corporate activities were completed and the Company remains focused on the successful reinstatement of its securities on the ASX:

• On 19 October 2020, the Company released its recapitalisation prospectus under which it offered 75,581,396 new shares at an issue price of $0.086 per new share to raise $6,500,000 ("Prospectus"). The Prospectus also contained an offer of up to 100 new shares at an issue price of $0.086 per new share to raise up to $8.60 and an offer of 5,000,000 Options exercisable at $0.086 each on or before 3 years from the date of issue;
• On 28 October 2020, the Company issued securities to a number of investors in satisfaction of its obligations under a number of recapitalisation agreements, including:
  • o 5,755,814 shares to Lidx Technology Limited (an entity controlled by Director, Li Chen) (Lidx) in lieu of a financing charge payable to Lidx and in lieu of repayment of $440,000 owing under the loan agreement entered into between the Company and Lidx; and
  • o 10,146,790 shares to Wilson's Pipe Fabrication Pty Ltd (WPF) in lieu of part conversion of the amount owing to WPF of $1,462,642; and
  • o 5,000,000 options exercisable at $0.086 on or before the date that is three years from the date of issue to Mr Wayne Knight (proposed Chairman who will be appointed upon reinstatement of the Company's securities to trading), which options will be cancelled by the Company where reinstatement does not occur by 22 February 2021;
• On 30 October 2020, the Company issued a supplementary prospectus and on 19 January 2021 issued a second supplementary prospectus as a "refresh document" detailing an extension of time to the timetable for the offer under the Prospectus and to meet the conditions for Minimum Subscription and Quotation (among other things);
• On 11 December 2020, the Company held its Annual General Meeting for the financial year ended 30 June 2020 at which all resolutions were passed;
• On 16 December 2020, the Company announced an extension of the Offers with a closing date of 15 January 2021. This was subsequently extended through agreement with ASX to 16 February 2021 with a revised expected date for readmission to the Official List of 22 February 2021;
• On 22 December 2020, the Company issued 18,681,395 shares to Ganado Investments Corporation Ltd (GICL) in full and final repayment of the total amount of US$1,110,000 owing to GICL; and

• On 28 January 2021, the Company announced that ASX had granted a waiver of Listing Rule 14.7 permitting the Company to issue certain shares (including shares under the Prospectus) after the date which is 3 months from the date of shareholder approval, which was received at the General Meeting held on 28 September 2020. The Company has until 22 February 2021 to issue these shares.

The Company reminds shareholders that the reinstatement of the Company's securities to quotation on the official list of the ASX is at the discretion of the ASX, including satisfaction of the Listing Rules. There is no guarantee that the securities of the Company will be reinstated and if so, when.

At the end of the quarter, the Company had approximately $98,000 in cash.

No payments were made during the quarter to related parties of the Company or an associate of a related party of the Company.

During the quarter, the Company spent $136k on research and development and $16k on product development, predominantly on the development of the new FE system.

ENDS

Further Enquiries Robert Molkenthin Company Secretary Phone: +61 8 9262 7277 Email: robert.molkenthin@sprintex.com.au

This ASX announcement was authorised for release by the Board of Sprintex Limited.

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity
SPRINTEX LIMITED
ABNQuarter ended ("current quarter")
38 106 337 599	31 December 2020

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6months)$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	168	402
1.2	Payments for
	(a)research and development	(136)	(215)
	(b)product manufacturing and operatingcosts	(16)	(43)
	(c)advertising and marketing	(2)	(8)
	(d)leased assets	(6)	(10)
	(e)staff costs	(116)	(309)
	(f)administration and corporate costs	(115)	(275)
1.3	Dividends received (see note 3)
1.4	Interest received
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Government grants and tax incentives*	48	103
1.8	Other (provide details if material)
1.9	Net cash from / (used in) operatingactivities	(174)	(353)
	Note - * Australian Government COVID-19 stimulus payments received during the current quarter.
2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a)entities
	(b)businesses
	(c)property, plant and equipment		(4)

• (d) investments
• (e) intellectual property
• (f) other non-current assets

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6months)$A'000
2.2	Proceeds from disposal of:
	(a)entities
	(b)businesses
	(c)property, plant and equipment
	(d)investments
	(e)intellectual property
	(f)other non-current assets
2.3	Cash flows from loans to other entities	(191)	(234)
2.4	Dividends received (see note 3)
2.5	Other (provide details if material)
2.6	Net cash from / (used in) investingactivities	(191)	(238)

3.	Cash flows from financing activities
3.1	Proceeds from issues of equity securities(excluding convertible debt securities)
3.2	Proceeds from issue of convertible debtsecurities
3.3	Proceeds from exercise of options
3.4	Transaction costs related to issues ofequity securities or convertible debtsecurities
3.5	Proceeds from borrowings*	460	550
3.6	Repayment of borrowings
3.7	Transaction costs related to loans andborrowings
3.8	Dividends paid
3.9	Other (provide details if material)
3.10	Net cash from / (used in) financingactivities	460	550

Note - * Additional working capital funding received from LIDX Technology Ltd in advance of the completion of the proposed recapitalisation and relisting of the Company.

4.	Net increase / (decrease) in cash andcash equivalentsfor the period
4.1	Cash and cash equivalents at beginning ofperiod	3	139
4.2	Net cash from / (used in) operatingactivities (item 1.9 above)	(174)	(353)
4.3	Net cash from / (used in) investing activities(item 2.6 above)	(191)	(238)

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6months)$A'000
4.4	Net cash from / (used in) financing activities(item 3.10 above)	460	550
4.5	Effect of movement in exchange rates oncash held
4.6	Cash and cash equivalents at end ofperiod	98	98

5.	Reconciliation of cash and cashequivalentsat the end of the quarter (as shown in theconsolidated statement of cash flows) to therelated items in the accounts	Current quarter$A'000	Previous quarter$A'000
5.1	Bank balances	98	3
5.2	Call deposits
5.3	Bank overdrafts
5.4	Other (provide details)
5.5	Cash and cash equivalents at end ofquarter (should equal item 4.6 above)	98	3

6.	Payments to related partiesof the entityand theirassociates	Current quarter$A'000
6.1	Aggregate amount of payments to related parties and theirassociates included in item 1	-
6.2	Aggregate amount of payments to related parties and theirassociates included in item 2	-
	Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of,and an explanation for, such payments

7. Financing facilities Note: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity.

• 7.2 Credit standby arrangements
• 7.3 Other (please specify)

7.	FinancingfacilitiesNote: the term "facility' includes all forms of financingarrangements available to the entity.Add notes as necessary for an understanding of thesources of finance available to the entity.	Total facilityamount at quarterend$A'000	Amount drawn atquarter end$A'000
7.1	Loan facilities	3,540	3,540
7.2	Credit standby arrangements
7.3	Other (please specify)
7.4	Total financing facilities	3,540	3,540

7.5 Unused financing facilities available at quarter end -

7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.

* Loan facilities represent amounts from China Automotive Holdings Limited ($A2,530k), Wilson's Pipe Fabrication Pty Ltd ($A600k) and LIDX Technology Ltd ($A410k).

8.	Estimated cash available for future operating activities	$A'000
8.1	Net cash from / (used in) operating activities (Item 1.9)	(174)
8.2	Cash and cash equivalents at quarter end (Item 4.6)	98
8.3	Unused finance facilities available at quarter end (Item 7.5)	-
8.4	Total available funding (Item 8.2 + Item 8.3)	98
8.5	Estimated quarters of funding available (Item 8.4 divided byItem 8.1)	<1

8.6 If Item 8.5 is less than 2 quarters, please provide answers to the following questions:

1. Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?

Answer: Yes, it is anticipated that the current level of net operating cash flows will continue for the time being.

1. Has the entity 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? Answer: Yes, SIX notes that it is currently finalising a recapitalisation of the Company which includes loan forgiveness, loan conversions to equity, 100% acquisition of joint venture company, Proreka Sprintex Sdn. Bhd., and a capital raising of $6.5m. The proposed recapitalisation is conditional upon the following: • the ASX confirming the conditions that SIX needs to satisfy in order for the recommencement of quotation of the Company's shares on ASX and the Company determining that it is able to satisfy these conditions; and • all current directors of the Company agreeing to resign from the Board upon completion of the recapitalisation, issue of new shares (in respect of the debt conversions, capital rising and acquisition of joint venture company, Proreka Sprintex Sdn. Bhd.) and relisting of the Company's securities on the ASX. The reinstatement of SIX's securities to quotation on the official list of the ASX is at the discretion of the ASX including with respect to satisfaction of the Listing Rules. There is no guarantee that the securities of the Company will be reinstated and if so when. 3. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? Answer: Yes. The Company has reduced its spending and some working capital funding has been provided ahead of the completion of the potential recapitalisation and

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
• 2 This statement gives a true and fair view of the matters disclosed.

relisting of the Company.

Date: 29 January 2021

Authorised by: By the Board

(Name of body or officer authorising release – see note 4)

Notes

• 1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
• 1. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been

prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

• 1. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
• 1. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee – eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".
• 1. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.