THORNEY TECHNOLOGIES LTD - Capital/Financing Update 2020

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Entitlement Offer Booklet

Non-renounceable Entitlement Offer of 1 New Share for every 9 Existing Shares at $0.35 per new share to raise up to approximately $10,000,000.

The Entitlement Offer opens on Monday, 16 November 2020 and closes at 5.00pm (Melbourne time) on Monday 30 November 2020 (unless extended).

This Offer Booklet is an important document and requires your immediate attention. It should be read in its entirety and before you decide whether to participate in the Entitlement Offer. If you have any questions about any part of the Offer Booklet you should consult your professional adviser.

This Offer Booklet may not be released to US wire services or distributed in the United States.

⎯

Authorised Intermediary

Bell Potter Securities Limited (ACN 006 390 772)

Entitlement Offer Booklet

Table of Contents	Table of Contents
Important information		3
Key	offer terms and timetable	5
Chairman’s Letter		6
Entitlement Offer		8
1	Details of the non-renounceable Entitlement Offer	8
1.1	The non-renounceable Entitlement Offer	8
1.2	Purpose of the non-renounceable Entitlement Offer	9
1.3	Top Up Offer	9
1.4	Short Fall Offer	10
1.5	Underwriting	10
1.6	Authorised Intermediary	10
1.7	Issue of New Shares	10
1.8	ASX quotation	10
1.9	Application Money	10
1.10	Market prices for Shares on ASX	10
1.11	Foreign Shareholders	11
1.12	Nominees and custodians	11
1.13	Taxation implications	11
1.14	Risks	12
1.15	Regular reporting and disclosure	12
1.16	Rights and liabilities attaching to New Shares	12
1.17	Disclaimer	12
1.18	Financial amounts	12
1.19	Privacy	12
1.20	Governing Law	13
2	Required Actions	14
2.1	Eligible Shareholders	14
2.2	Payment	14
2.3	Applying for additional shares under Top Up Offer	15
2.4	Declining all or part of your Entitlement	15
2.5	Non-Eligible Foreign Shareholders	16
2.6	Warranties made on acceptance of Entitlement Offer	16
2.7	Refunds	17
2.8	Withdrawals	18
3	Effect of the Entitlement Offer	19
3.1	Effect of the Entitlement Offer on capital structure	19
3.2	Financial effect of the Entitlement	19
3.3	Effect on the control of the Company and dilution of the Capital Raising	20
3.4	Directors and directors’ interests	21
4	Risk factors	22
4.1	Introduction	22
4.2	Key risks	22
4.3	New Zealand Shareholders	26
5	Foreign jurisdictions	27
5.1	New Zealand	27
6	Taxation	28
6.1	Australian Income tax	28

Entitlement Offer Booklet

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6.2 New Shares	29
6.3 Goods and Services Tax and Stamp Duty	30
Glossary	31
Corporate Directory	35

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statement under New Zealand law is required to contain.

Important information

The Offer Booklet is dated Monday, 16 November 2020. The information in this Offer Booklet is not a prospectus, product disclosure statement, disclosure document or other offering document under the Corporations Act (or any other law) and has not been lodged with ASIC.

The information in this Offer Booklet contains an offer of New Shares to Eligible Shareholders in Australia or New Zealand (and certain existing Shareholders who are institutional, sophisticated or professional investors in any other jurisdictions as determined by the Company) and has been prepared in accordance with section 708AA of the Corporations Act as modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84 .

Foreign Jurisdictions

This Offer Booklet does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register or qualify the New Shares, or otherwise permit a public offering of the New Shares, in any jurisdiction outside of Australia and New Zealand. This Offer Booklet and any Entitlement and Acceptance Form issued in relation to the Entitlement Offer may not be distributed outside Australia and New Zealand except as may be permitted under Section 1.11 and Section 5 of this Offer Booklet.

The New Shares have not been, and will not be, registered under the US Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States. In addition, the Company is not registered as an “investment company” under the US Investment Company Act of 1940. Accordingly, the New Shares will only be offered and sold to non-US persons outside the United States in "offshore transactions", as defined and in compliance with Regulation S under the US Securities Act.

New Zealand

The New Shares are not being offered to the public within New Zealand other than to existing shareholders with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016 (“ Exemption Notice ”).

This Offer Booklet has been prepared in compliance with Australian law and has not been registered, filed with or approved by any New Zealand regulatory authority. This Offer Booklet is not a product disclosure statement under New Zealand law and is not required to, and may not, contain all the information that a product disclosure

Future performance and forward-looking statements

This Offer Booklet may contain certain forwardlooking statements. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan”, “consider”, “foresee”, “aim”, “will” and other similar expressions are intended to identify forwardlooking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are provided as a general guide only, are not guarantees of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and which are based on change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions.

No investment advice

This Offer Booklet is not financial product or investment advice nor a recommendation to acquire New Shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. The Company is not licensed to provide financial product advice in respect of the New Shares or any other financial products. No cooling off period applies to the acquisition of the New Shares.

Risks

An investment in New Shares is subject to investment and other known and unknown risks, uncertainties and assumptions, many of which are beyond the control of the Company and the Board, including the risks described in Section 4.2, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by any forward-looking statements in this Offer Booklet. Neither the Company, its officers, employees, agents, associates and advisers, nor any other person, warrants or guarantees the future performance of the New Shares, any particular rate of return, the performance of the Company, the repayment of capital from the Company or any particular taxation treatment. In considering an investment in the New Shares, investors should have regard to (among other things) the risks and disclaimers outlined in this Offer Booklet.

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Past performance

Past performance information given in this Offer Booklet is provided for illustrative purposes only and should not be relied on as (and is not) an indication of future performance. The historical information in this Offer Booklet is, or is based on, information that has been released to the market. For further information, please see past announcements released to ASX.

of the New Shares under this Offer Booklet and the Company will only issue the New Shares in accordance with the offers contained in this Offer Booklet and no others. Each Eligible Shareholder appoints the Company as its agent to receive on its behalf any Financial Services Guide or other notices (including any updates of those documents) (if any) that the Authorised Intermediary is required to give to the Eligible Shareholder under the Corporations Act in connection with the Entitlement Offer.

No representations

The Authorised Intermediary (as defined below) and its representatives, and Arnold Bloch Leibler and its partners and employees, expressly disclaim any responsibility or liability for the contents of this Offer Booklet to the maximum extent permitted by law.

Authorised intermediary

The issuer of this Offer Booklet is the Company. Offers of New Shares under this Offer Booklet will be made under an arrangement between the Company and Bell Potter Securities Limited (ACN 006 390 772) (“ Authorised Intermediary ”), as a holder of an Australian Financial Services Licence, under section 911A(2)(b) of the Corporations Act. The Company has authorised the Authorised Intermediary to make offers to arrange for the issue

New Shares quoted on a deferred settlement basis

New Shares will be quoted on a deferred settlement from market open on Tuesday, 1 December 2020] 2020 and issued on Monday, 7 December 2020. It is the responsibility of Eligible Shareholders to determine their allocation prior to trading in New Shares. The Company recommends that Eligible Shareholders should only sell up to the amount of New Shares applied for under their Entitlement and not trade any additional New Shares applied for under the Top Up Offer as there is no assurance as to the level of allocations under the Top Up Offer. Eligible Shareholders who sell New Shares before they

receive confirmation of their allotment will do so at their own risk.

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Ke offer terms and timetable y

Key offer terms
Issue Price	$0.35 per New Share payable in full on Application
Entitlement	1 New Share for every 9 Existing Shares held ontheRecordDate
Discount to the Company’s most recent
unaudited after tax NTA as announced to ASX	18%
on5November 2020
Closing price of the Company’s Shares on
Thursday, 4 November 2020 (being the last full day Shares traded on ASX before the	$0.34
announcement oftheEntitlement Offer).
5-day VWAP to the closing price of the
Company’s Shares on ASX on Thursday, 4	$0.3326
November 2020.
Approximate number of New Shares to be
issued under the Entitlement Offer (if fully	Approximately 28,587,247 New Shares
subscribed)
Approximate amount to be raised under the Entitlement Offer(excluding expenses)	$10,000,000
Approximate number of Shares on issue following the Entitlement Offer (if fully subscribed)	323,015,329 Shares (including following completion of the Tranche 1 Placement)
Approximate number of Shares on issue
following the Tranche 2 Placement (if fully	363,015,329 Shares
subscribed) (subject to shareholderapproval)

Timetable Event

Event Time ASX announcement of the Entitlement Offer, Before commencement of trading on Monday, 9 lodgement of Appendix 3B and cleansing notice November 2020 Ex Date – date on which Shares commence Wednesday, 11 November 2020 trading without an entitlement to participate in the Entitlement Offer *Record Date (7.00 pm Melbourne time) for Thursday, 12 November 2020 entitlements to participate in Entitlement Offer This Offer Booklet and Entitlement and Monday, 16 November 2020 Acceptance Forms made available online to Eligible Shareholders and announced to ASX Opening Date for the Entitlement Offer Monday, 16 November 2020 Closing Date for lodgement of Entitlement and 5.00pm on Monday, 30 November 2020 Acceptance Forms and payment Deferred settlement trading commences Tuesday, 1 December 2020 ASX notified of under subscriptions (if any) Thursday, 3 December 2020 Allotment of New Shares under the Entitlement Monday, 7 December 2020 Offer Dispatch of holding statements for New Shares Tuesday, 8 December 2020 New Shares commence normal trading on ASX Tuesday, 8 December 2020

The above dates other than those marked with an asterisk (*) are indicative only and are subject to change. The Company reserves the right to amend this indicative timetable at any time and in particular (subject to the Corporations Act and ASX Listing Rules), to extend the latest date for receipt of Entitlement and Acceptance Forms, to accept late Entitlement and Acceptance Forms either generally or in particular cases, or to cancel the Entitlement Offer without prior notice.

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Chairman’s Letter

Monday, 16 November 2020

Dear Fellow Shareholder

On behalf of the directors of the Company, I am pleased to invite you to participate in the nonrenounceable Entitlement Offer to subscribe for 1 New Share for every 9 Existing Shares in the Company held as at 7.00 pm (Melbourne time) on Thursday, 12 November 2020 at an Issue Price of $0.35 per New Share to raise up to approximately $10,000,000. The Thorney Group and other directors intend to take up their full Entitlement in the Entitlement Offer.

The Entitlement Offer will take place in conjunction with the Placements to institutional, sophisticated and professional investors to raise approximately $27,000,000, which will be conducted in two tranches:

(a) $13,000,000 under the first tranche, which took place before the Entitlement Offer; and
(b) $14,000,000 under the second tranche, which will take place after the closure of the Entitlement Offer and subject to the approval of shareholders at the Company’s annual general meeting to be held on or around Tuesday, 15 December 2020.

The Company welcomes Woodson Capital Management LP (“Woodson Capital”) as a substantial shareholder. Woodson Capital manages a global consumer and technology investment fund headquartered in New York and launched in 2010 with seed backing from Tiger Management.

The Thorney Group will also participate in the Entitlement Offer and Tranche 2 Placement, subject to shareholder approval, and intends to maintain a shareholding of at least 21.0% in the Company.

The proceeds of the Entitlement Offer and the Placements will be used primarily to invest in technology-related companies across the investment life-cycle, with a continuing focus on pre-IPO opportunities. Funds will also be used to increase the Company’s working capital and pay the costs associated with conducting the Entitlement Offer and the Placements.

New Shares issued under the Entitlement Offer and the Placements will rank equally in all respects with existing Shares.

Issue Price

The Issue Price of $0.35 per New Share represents an 18% discount to the Company’s most recent unaudited after tax NTA as announced to ASX on 5 November 2020.

The closing price of the Company’s Shares on ASX on Thursday, 5 November 2020, being the last full day Shares traded on ASX before the announcement of the Entitlement Offer, was $0.34.

The 5-day VWAP to the closing price of the Company’s Shares on ASX on Thursday, 5 November 2020 was $0.3326.

Top Up Offer and Short Fall Offer

Eligible Shareholders who accept their Entitlement under the Entitlement Offer in full will have the opportunity to apply for additional New Shares in excess of their Entitlement (subject to scale back at the sole discretion of the Company) under the Top Up Offer.

To the extent that there remains any short fall of New Shares taken up by Eligible Shareholders (including after the application of the Top Up Offers), these New Shares may be issued by the Company’s Board at its discretion to institutional, sophisticated and professional investors within 3 months of the close of the Entitlement Offer under the Short Fall Offer. Please refer to Sections 1.3 and 1.4 of this Offer Booklet for further details.

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Entitlement and Acceptance Form

You will not receive a paper copy of this Offer Booklet and personalised Entitlement and Acceptance Forms unless you request it. Paper copies of this Offer Booklet and personalised Entitlement and Acceptance Forms can be requested from the Share Registry by contacting 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia).

If you do not request a personalised Entitlement and Acceptance Form, you can still accept the Entitlement Offer by following the instructions outlined at https://tekoffer.thereachagency.com.

The closing date for the receipt of Entitlement and Acceptance Forms and Application Money is 5.00pm (Melbourne time) on Monday, 30 November 2020.

To participate in the Entitlement Offer please ensure that, before this time, you have paid your Application Money by BPAY® in accordance with the instructions set out at https://tekoffer.thereachagency.com or on your personalised Entitlement and Acceptance Form (if you requested one) and Section 2 (Required Actions) of this Offer Booklet.

If you do not wish to take up any of your Entitlement, you do not have to take any action.

Full details on the Entitlement Offer are set out in this Offer Booklet, which you should read carefully and in its entirety. Additionally, you can call our Share Registry for further information on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) (outside Australia) between 8.30am and 5.00pm (Melbourne time) Monday to Friday.

Further details on the Entitlement Offer can be found at https://tekoffer.thereachagency.com.

On behalf of the Board, I thank you for your continued support as a shareholder and I encourage you to consider this investment opportunity.

Yours sincerely

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Alex Waislitz Chairman

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Entitlement Offer Booklet

Entitlement Offer

1 Details of the non-renounceable Entitlement Offer

1.1 The non-renounceable Entitlement Offer

As announced to ASX on Monday, 9 November 2020, the Company is undertaking a capital raising to raise approximately $37,000,000 via the Placements and the Entitlement Offer.

The Company proposes to raise up to approximately $10,000,000 through the Entitlement Offer, which is non-renounceable, and approximately $27,000,000 via the Placements, which will be conducted in two tranches:

(a) $13,000,000 under the first tranche, which took place before the Entitlement Offer; and
(b) $14,000,000 under the second tranche, which will take place after the closure of the Entitlement Offer and subject to the approval of shareholders at the Company’s annual general meeting to be held on or around Tuesday, 15 December 2020.

As the Entitlement Offer is non-renounceable, Eligible Shareholders who do not take up their Entitlements by 5.00pm (Melbourne time) on the Closing Date of Monday, 30 November 2020 will not receive any payment or value for those Entitlements and their proportionate equity interest in the Company will be diluted.

You can find out the number of New Shares to which you are entitled by entering your details when prompted at https://tekoffer.thereachagency.com. Alternatively, if you request a personalised Entitlement and Acceptance Form, the number of New Shares to which you are entitled will be shown on the Entitlement and Acceptance Form.

Fractional entitlements to New Shares have been rounded up to the nearest whole number of New Shares. If you have more than one registered holding of Shares, you will have separate Entitlements for each separate holding and must accept your Entitlement in relation to each holding separately.

New Shares issued under the Entitlement Offer will be fully paid and rank equally with Existing Shares, including with respect to entitlement to dividends. If you take no action you will not be allocated any New Shares and your Entitlement will lapse.

To qualify for the Entitlement Offer under this Offer Booklet, a Shareholder must:

(a) be registered as a Shareholder at 7.00pm (Melbourne time) on the Record Date;
(b) have an address in Australia or New Zealand other than certain institutional or professional shareholders and investors in any other jurisdictions determined by the Directors in compliance with applicable local laws, as recorded on the Company's share register as at the Record Date;
(c) not be in the United States nor acting for the account or benefit of a person in the United States; and
(d) be eligible under all applicable securities laws to receive an offer under the Entitlement Offer without any requirement for a prospectus, disclosure document, or any lodgement, filing, registration or qualification,

(“ Eligible Shareholder ”). Shares issued to participants under the Tranche 1 Placement will not be eligible for participation in the Entitlement Offer.

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1.2 Purpose of the non-renounceable Entitlement Offer

1.3 Top Up Offer

Eligible Shareholders who take up their Entitlement in full are also able to participate in a further offer of additional New Shares, being the New Shares that were initially offered under the Entitlement Offer but which were not taken up (“ Top Up Offer ”). Please note that New Shares in excess of Entitlements will only be allocated to Eligible Shareholders if and to the extent that the Company determines in its absolute discretion based on the Allocation Policy outlined below.

Any New Shares in excess of Entitlements will be limited by the Allocation Policy and also to the extent that there are sufficient New Shares from Eligible Shareholders who do not take up their full Entitlements.

Allocation Policy

Each Eligible Shareholder who:

(a) has fully taken up their Entitlement; and
(b) subscribes for additional New Shares under the Top Up Offer,

may be allocated that number of additional New Shares which represents up to 400% of their Entitlement (“ Additional New Share Cap ”). Allocations under the Top Up Offer will be prioritised over allocations under the Short Fall Offer.

In addition, Eligible Shareholders should be aware that:

(a) allocations of additional New Shares are at the discretion of the Company and will be subject to the Additional New Share Cap;
(b) the Company may scale back Applications for additional New Shares having regard to all relevant circumstances, including an Eligible Shareholder's underlying shareholding at the Record Date;
(c) in the event of a scale back, the difference between the Application Money received, and the number of additional New Shares allocated to you multiplied by the Issue Price will be refunded following allotment. No interest will be paid on any Application Money received and returned;
(d) no additional New Shares will be issued to an Eligible Shareholder if this would result in the relevant Eligible Shareholder having voting power in the Company in excess of 20% of the total issued Share capital of the Company;
(e) there is no guarantee that any Application for additional New Shares under the Top Up Offer will be successful and the Directors reserve the right to issue any short fall by way of the Top Up Offer or by other means and the right to satisfy Applications under the Top Up Offer at its sole and complete discretion, including by applying the pro rata scale-back mechanism;
(f) the Issue Price of additional New Shares under the Top Up Offer is the same as the Issue Price, which is $0.35 per additional New Share; and
(g) the Company will not issue additional New Shares under the Top Up Offer where to do so would be likely to result in a breach of its constitution, the Corporations Act or the ASX Listing Rules.

Note, Listing Rule 10.11 parties are not entitled to participate in the Top Up Offer or the Short Fall Offer.

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1.4 Short Fall Offer

To the extent that there remains any short fall of Shares taken up by Eligible Shareholders including after the application of the Top Up Offer (“ Residual Short Fall ”), the Directors of the Company reserve the right to issue all or any of the New Shares comprising the Residual Short Fall at their discretion.

The Directors' Allocation Policy in respect of any Residual Short Fall is to encourage the introduction of new investors to the Company by placing the New Shares to institutional, sophisticated and professional investors.

The Residual Short Fall must be issued not later than 3 months after the Closing Date of the Entitlement Offer and the issue price of New Shares comprising the Residual Short Fall must not be less than the Issue Price of the New Shares under the Entitlement Offer.

1.5 Underwriting

The Entitlement Offer, the Top Up Offer and any Short Fall Offer will not be underwritten.

1.6 Authorised Intermediary

$75,000 is payable by the Company to the Authorised Intermediary in connection with the Entitlement Offer, the Top Up Offer or any Short Fall Offer.

1.7 Issue of New Shares

New Shares under the Entitlement Offer and the Top Up Offer are expected to be issued on or around Monday, 7 December 2020 (subject to change at the discretion of the Company).

The Company reserves the right (in its absolute discretion) to reduce the number of New Shares allocated to Eligible Shareholders, or persons claiming to be Eligible Shareholders, if their claims prove to be overstated or otherwise incorrect or if they fail to provide information to substantiate their claims.

1.8 ASX quotation

The Company will apply for quotation of the New Shares issued under this Offer Booklet. If permission for quotation is not granted by ASX, the New Shares will not be issued and Application Money will be refunded (without interest) as soon as practicable.

New Shares will be quoted on a deferred settlement from market open on Tuesday, 1 December 2020. It is the responsibility of Eligible Shareholders to determine their allocation prior to trading in New Shares. The Company recommends that Shareholders should only sell up to the amount of New Shares applied for under their Entitlement and not trade any additional New Shares applied for under the Top Up Offer as there is no assurance as to the level of allocations under the Top Up Offer. Shareholders who sell New Shares before they receive confirmation of their allotment will do so at their own risk.

1.9 Application Money

Until New Shares are issued under the Entitlement Offer, the Company will hold the Application Money in one or more bank accounts in Australia. The account(s) will be established and kept solely for the purpose of depositing Application Money and retaining those funds for as long as required.

Any interest accrued on Application Money will be retained by the Company and will not be paid to the relevant Eligible Shareholder, including if the Entitlement Offer is cancelled or withdrawn.

1.10 Market prices for Shares on ASX

The lowest and highest market prices of Shares on ASX during the 3 months immediately preceding the announcement of the Entitlement Offer on Monday, 9 November 2020 were $0.245 and $0.40 respectively.

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The Issue Price of $0.35 per New Share represents an 18% discount to the Company’s most recent unaudited after tax NTA as announced to ASX on 5 November 2020.

The closing price of the Company’s Shares on ASX on Thursday, 5 November 2020, which was the last full day Shares traded on ASX before the announcement of the Entitlement Offer, was $0.34.

The 5 day VWAP to the closing price of the Company’s Shares on ASX on Thursday, 5 November 2020 was $0.3326.

1.11 Foreign Shareholders

The New Shares being offered under this Offer Booklet are being offered to Shareholders with registered addresses in Australia and New Zealand.

The Entitlement Offer will not be offered to Non-Eligible Foreign Shareholders. The Company has determined that it is not economically viable and/or practicable for it to make offers to Non-Eligible Foreign Shareholders due to the cost of meeting compliance requirements with securities laws in each applicable jurisdiction in which Non-Eligible Foreign Shareholders reside. The Company reserves the right in its absolute discretion to offer the Entitlement Offer to a Shareholder with an address in the Company's Share register outside Australia and New Zealand if the Company is satisfied that it is not precluded from lawfully issuing New Shares to that Shareholder either unconditionally or after compliance with conditions which the Directors in their sole discretion regard as acceptable.

For further details see the Foreign Jurisdictions Section 5 of this Offer Booklet.

1.12 Nominees and custodians

If the Company believes you hold Shares as a nominee or custodian you will have received, or will shortly receive, a letter in respect of the Entitlement Offer. Nominees and custodians should consider carefully the contents of that letter.

The Company is not required to determine whether or not any registered holder or investor is acting as a nominee or custodian or the identity or residence of any beneficial owners of Existing Shares. Where any person is acting as a nominee or custodian for a foreign person, that person, in dealing with its beneficiary, will need to assess, taking into account guidance and deemed provided in this Offer Booklet, whether the distribution of any documents relating to the Entitlement Offer (including this Offer Booklet) or the indirect participation in the Entitlement Offer by the beneficiary complies with applicable foreign laws.

Due to legal restrictions, nominees and custodians may not distribute any part of this Offer Booklet or any material relating to the Entitlement Offer to, or participate in the Entitlement Offer on behalf of, any beneficial shareholder in the United States or elsewhere outside Australia and New Zealand, without the consent of the Company, taking into consideration applicable securities laws.

1.13 Taxation implications

Eligible Shareholders should be aware that there may be taxation implications for participating in the Entitlement Offer and the Top Up Offer, and for subscribing for New Shares. These taxation consequences may vary depending on the individual circumstances of each Eligible Shareholder.

Please refer to Section 6 of this Offer Booklet for a general discussion of the Australian taxation consequences of the Entitlement Offer for Eligible Shareholders resident in Australia and who hold their Shares as capital assets.

Eligible Shareholders should consult their own professional taxation adviser to obtain advice in relation to the taxation laws and regulations applicable to their personal circumstances.

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1.14 Risks

There are a number of risks associated with an investment in the Company which may affect its financial performance, financial position, cash flows and Share price.

The ‘key risks’ associated with the Entitlement Offer are set out in Section 4.2 of this Offer Booklet.

1.15 Regular reporting and disclosure

The Company is a disclosing entity for the purposes of the Corporations Act and is therefore subject to regular reporting and disclosure obligations under the Corporations Act and ASX Listing Rules. These obligations require the Company to notify ASX of information about specific events and matters as they arise for the purposes of ASX making that information available to the market. In particular, the Company has an obligation (subject to certain limited exceptions) to notify ASX once it is, or becomes, aware of information concerning the Company which a reasonable person would expect to have a material effect on the price or value of the Company’s securities. All announcements made by the Company are available from the 'News and Announcements' section of the Company’s website at https://www.thorneytechnologies.com.au/ or from ASX's website at www.asx.com.au.

Additionally, the Company is also required to prepare and lodge with ASIC yearly and half yearly financial statements accompanied by a directors’ statement and report and an audit review or report. These reports are released to ASX and published on the Company and ASX websites.

1.16 Rights and liabilities attaching to New Shares

New Shares issued under this Offer Booklet will be fully paid ordinary shares in the capital of the Company and will rank equally with all Existing Shares.

The rights and liabilities attaching to Shares are set out in the Company’s constitution and are regulated by the Corporations Act, the general law, the ASX Listing Rules and the ASX Settlement Operating Rules. The Company’s constitution may only be varied by a special resolution which is a resolution passed by at least 75% of the votes cast by Shareholders present (and entitled to vote).

1.17 Disclaimer

No person is authorised to give any information or make any representation in connection with the Entitlement Offer described in this Offer Booklet, which is not contained in this Offer Booklet. Any information or representation not contained in this Offer Booklet may not be relied on as being authorised by the Company or Authorised Intermediary in connection with the Entitlement Offer.

1.18 Financial amounts

Money as expressed in this Offer Booklet is in Australian dollars ($) unless otherwise indicated. Any discrepancies between totals in tables and sums of components in tables in this Offer Booklet and between those figures and figures referred to in other parts of this document may be due to rounding.

1.19 Privacy

Chapter 2C of the Corporations Act requires information about you as a Shareholder (including your name, address and details of your Shares) to be included in the public register of the Company. Information is collected to administer your Shares. Your personal information may be disclosed to the Company. You can obtain access to your personal information by contacting the Share Registry at the address or telephone number listed in the corporate directory.

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1.20 Governing Law

This Offer Booklet, the Entitlement Offer and the contracts formed on acceptance of the Entitlement Offer are governed by the laws applicable in Victoria, Australia. Each Applicant for New Shares submits to the non-exclusive jurisdiction of the courts of Victoria, Australia.

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2 Required Actions

2.1 Eligible Shareholders

For details in relation to whether or not you are an Eligible Shareholder, see Section 1.1 of this Offer Booklet.

If you are an Eligible Shareholder you may either:

(a) take up all of your Entitlement in accordance with this Offer Booklet;
(b) unless you are a Listing Rule 10.11 party in relation to the Company, take up all of your Entitlement and also apply for that number of additional New Shares in excess of your Entitlement which represents up to 400% of your Entitlement under the Top Up Offer;
(c) take up some of your Entitlement, in which case the balance of your Entitlement will lapse and you will receive no value for your lapsed Entitlement; or
(d) do nothing, in which case your Entitlement will lapse and you will receive no value for your lapsed Entitlement.

Before you decide whether to accept the Entitlement Offer, the Board recommends that Eligible Shareholders:

(a) read this Offer Booklet in full; and
(b) consider the ‘key risks’ associated with the Entitlement Offer, as summarised in 4.2 of this Offer Booklet, in light of your personal circumstances.

If you decide to participate in the Entitlement Offer, whether by taking up all or some of your Entitlement, you will need apply for New Shares and arrange payment for the New Shares by the method described immediately below.

BPAY®

You can make payment by BPAY® in accordance with the instructions set out at https://tekoffer.thereachagency.com or on your personalised Entitlement and Acceptance Form (if you request one).

By paying via BPAY®, you do not need to return the Entitlement and Acceptance Form to the Share Registry if you have requested one. However, Eligible Shareholders should be aware of the time required to process payment by BPAY®.

2.2 Payment

The Issue Price of $0.35 per New Share is payable on exercise of your Entitlement. For all Eligible Shareholders, payments must be received by 5.00pm (Melbourne time) on the Closing Date (or such other date as may be determined by the Company).

Payment will only be accepted in Australian currency and must be (other than with the express consent of the Company) made through the payment methods outlined in Section 2.1 above.

Cash will not be accepted. Receipts for payment will not be issued. If you provide insufficient funds to meet the Application Money due to take up all or part of your Entitlement, you may be taken by the Company to have applied for such lower number of New Shares as your cleared Application Money will pay, or your Application may be rejected.

Any Excess Amount may be treated as an Application to apply for additional New Shares under the Top Up Offer to the value of your Excess Amount. Your Application for the additional New Shares may not be successful (wholly or partially). Any surplus Application Money received for more than your final allocation of any additional New Shares will be refunded (only where the amount is $5.00 or greater). You are not entitled to any interest that accrues on any Application Money received or returned (wholly or partially).

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Eligible Shareholders may pay through BPAY®

Eligible Shareholders with an Australian bank account may pay through BPAY®. Payment by BPAY® should be made in accordance with the instructions set out at https://tekoffer.thereachagency.com or on your personalised Entitlement and Acceptance Form (if you have requested one) and must be received by no later than 5.00pm (Melbourne time) on the Closing Date (or such other date as may be determined by the Company). Applicants should be aware that their own financial institution may implement earlier cut off times with regard to electronic payment. Applicants should therefore take this into consideration when making payment. It is the responsibility of the Applicant to ensure that funds submitted through BPAY® are received by this time.

The reference number is used to identify your holding. If you have multiple holdings you will also have multiple reference numbers. You can find out your reference number by providing your details when prompted at https://tekoffer.thereachagency.com. If you have more than one holding, you must provide log onto https://tekoffer.thereachagency.com separately for each holding.

Alternatively, if you have applied for a personalised Entitlement and Acceptance Form and have more than one holding, you will receive separate Entitlement and Acceptance Forms for each holding. You must use the reference number shown on each Entitlement and Acceptance Form to pay for each holding separately. If you pay by BPAY® and do not pay for your full Entitlement, your remaining Entitlements will lapse.

If you make your payment by BPAY® you do not need to return the Entitlement and Acceptance Form (if you have requested one) to the Share Registry.

Your BPAY® acceptance cannot be withdrawn once received. No cooling off period applies.

2.3 Applying for additional shares under Top Up Offer

If you have applied for your full Entitlement and you are not a Listing Rule 10.11 party in relation to the Company, you may wish to apply for more New Shares than the number shown when you log into https://tekoffer.thereachagency.com or on your Entitlement and Acceptance Form (if you have requested one) under the Top Up Offer. To do this, make a payment for more than your Entitlement by BPAY®. The Excess Amount will be taken to be an application for additional New Shares under the Top Up Offer.

Applications for additional New Shares under the Top Up Offer may be considered if and to the extent that not all Shareholders take up their full Entitlement. Applications for additional New Shares under the Top Up Offer are capped at that number of additional New Shares which represents 400% of an Eligible Shareholder's Entitlement. No Eligible Shareholder may receive any New Shares under the Top Up Offer which would result in the relevant Shareholder having voting power in the Company in excess of 20% of the total issued Share capital of the Company, and any Application may be capped or scaled back at the sole and complete discretion of the Directors. The Directors reserve the right to issue any short fall by way of the Top Up Offer or by other means. There is no guarantee that any Applications under the Top Up Offer will be successful.

2.4 Declining all or part of your Entitlement

If you decide not to take up all or part of your Entitlement, the Entitlements which are unexercised will lapse and may be taken up by other Eligible Shareholders under the Top Up Offer. Your Entitlement to participate in the Entitlement Offer is non-renounceable and cannot be traded on the ASX nor any other financial markets, nor can it be privately transferred. Eligible Shareholders who do not take up their Entitlements in full will not receive any payment or value for those Entitlements they do not take up.

If you decide not to participate in the Entitlement Offer, you do not need to follow the payment instructions outlined at https://tekoffer.thereachagency.com or on your personalised Entitlement and Acceptance Form (if you have requested one).. Although you will continue to own the same number of Shares as you held prior to the Entitlement Offer,

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your percentage shareholding in the Company will be diluted by the issue of New Shares under the Entitlement Offer and the Placements.

2.5 Non-Eligible Foreign Shareholders

If you are a Non-Eligible Foreign Shareholder, other than certain institutional or professional shareholders and investors in foreign jurisdictions determined by the Directors, you may not take up any of, or do anything in relation to, your Entitlement under the Entitlement Offer. See Section 1.11 for further information in relation to foreign Shareholders who may be Eligible Shareholders.

2.6 Warranties made on acceptance of Entitlement Offer

By making a payment by BPAY®, you will be deemed to have acknowledged, represented and warranted that you, and each person on whose account you are acting, are an Eligible Shareholder or otherwise eligible to participate in the Entitlement Offer.

By making a payment by BPAY®, you will also be deemed to have acknowledged, represented and warranted on your own behalf and on behalf of each person on whose account you are acting that:

(a) you are (or the person on whose account you are acting is) an Eligible Shareholder and are not otherwise a person to whom it would be illegal to make an offer or issue of New Shares under the Entitlement Offer and under any applicable laws and regulations;
(b) you are outside the United States and are subscribing for New Shares as a nonUS person in an “offshore transaction” (as defined and in reliance on Regulation S under the US Securities Act;
(c) you and each person on whose account you are acting have not and will not send any materials, or copies thereof, relating to the Entitlement Offer to any person in the United States or elsewhere outside Australia or New Zealand;
(d) you acknowledge that you have read and understand this Offer Booklet, the information on https://tekoffer.thereachagency.com and your Entitlement and Acceptance Form (if you have requested one) in their entirety;
(e) you agree to be bound by the terms of the Entitlement Offer, the provisions of this Offer Booklet and the Company’s constitution;
(f) you authorise the Company to register you as the holder of New Shares allotted to you;
(g) you declare that all details and statements outlined when you log onto https://tekoffer.thereachagency.com or on your Entitlement and Acceptance Form (if you have requested one) are complete and accurate;
(h) you declare you are over 18 years of age and have full legal capacity and power to perform all of your rights and obligations under https://tekoffer.thereachagency.com or your Entitlement and Acceptance Form (if you have requested one) and as described in this Offer Booklet;
(i) you acknowledge that after the Company receives your payment of Application Money by BPAY®, you may not withdraw your application or funds provided except as allowed by law;
(j) you agree to apply for and be issued up to the number of New Shares for which you have submitted payment of any Application Money by BPAY® at the Issue Price;
(k) you authorise the Company, Authorised Intermediary, the Share Registry and their respective officers or agents to do anything on your behalf necessary for New Shares to be issued to you, including to act on instructions of the Share Registry

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using the contact details set out on https://tekoffer.thereachagency.com or in your Entitlement and Acceptance Form (if you have requested one);

(l) you declare that you were the registered holder at the Record Date of the Shares indicated on https://tekoffer.thereachagency.com or on your Entitlement and Acceptance Form (if you have requested one) as being held by you on the Record Date;
(m) you acknowledge that the information contained in this Offer Booklet, https://tekoffer.thereachagency.com and your Entitlement and Acceptance Form is not investment advice nor a recommendation that New Shares are suitable for you given your investment objectives, financial situation or particular needs;
(n) you acknowledge that this Offer Booklet is not a prospectus, does not contain all of the information that you may require in order to assess an investment in the Company and is given in the context of the Company’s past and ongoing continuous disclosure announcements to ASX;
(o) you acknowledge the statement of ‘key risks’ in Section 4.2 of this Offer Booklet and that investments in the Company are subject to risk;
(p) you acknowledge that none of the Company, Authorised Intermediary, or their respective Related Bodies Corporate and affiliates and their respective directors, officers, partners, employees, representatives, agents, consultants or advisers, guarantees the performance of the Company, nor do they guarantee the repayment of capital;
(q) you agree to provide (and direct your nominee or custodian to provide) any requested substantiation of your eligibility to participate in the Entitlement Offer and of your holding of Shares on the Record Date;
(r) you authorise the Company to correct any errors on https://tekoffer.thereachagency.com or on your Entitlement and Acceptance Form or other form provided by you;
(s) you represent and warrant that the law of any place does not prohibit you from being given this Offer Booklet, the information available at https://tekoffer.thereachagency.com and your Entitlement and Acceptance Form, nor does it prohibit you from making an Application for New Shares and that you are otherwise eligible to participate in the Entitlement Offer;
(t) if in the future you decide to sell or otherwise transfer the New Shares, you will only do so in regular transactions on the ASX or otherwise where neither you nor any person acting on your behalf know, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is, a person in the United States or is acting for the account or benefit of a person in the United States unless an available exemption applies; and
(u) if you are acting as a nominee or custodian, each beneficial holder on whose behalf you are accepting the Entitlement Offer is resident in Australia or New Zealand as applicable, and you have not sent this Offer Document, the information available at https://tekoffer.thereachagency.com, the Entitlement and Acceptance Form or any information relating to the Entitlement Offer to any such person.

2.7 Refunds

Any Application Money received for more than your final allocation of New Shares will be refunded as soon as practicable after the Closing Date (except for where the amount is less than $5.00). No interest will be paid to applicants on any Application Money received or refunded.

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2.8 Withdrawals

You cannot, in most circumstances, withdraw your application once it has been accepted. Cooling off rights do not apply to an investment in New Shares.

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3 Effect of the Entitlement Offer

3.1 Effect of the Entitlement Offer on capital structure

The capital structure of the Company (assuming that the maximum number of New Shares are issued under the Entitlement Offer and the Placements) will be as follows:

Event	Shares
Shares on issue on prior to announcement of the Placement and Entitlement Offer	257,285,224
New Shares issued under the Tranche 1 Placement	37,142,858
Aggregate number of Shares on issue after the Tranche 1 Placement	294,428,082
New Shares to be issued under the Entitlement Offer	28,587,247
Aggregate number of Shares on issue after the Entitlement Offer and the Tranche 1 Placement	323,015,329
New Shares to be issued under the Tranche 2 Placement (subject to Shareholder approvals)	40,000,000
Aggregate number of Shares on issue after the Entitlement Offer and Placements (assuming shareholder approval for the Tranche 2 Placement)	363,015,329

The final number of New Shares to be issued under the Entitlement Offer is subject to reconciliation.

3.2 Financial effect of the Entitlement

Set out below is:

(a) the audited consolidated statement of financial position of the Company as at 30 June 2020;
(b) the unaudited consolidated statement of financial position of the Company as at 31 October 2020; and
(c) the unaudited pro forma statement of financial position of the Company at 31 October 2020 adjusted to reflect the unaudited effects of the Placement and Entitlement Offer, assuming the Entitlement Offer is fully subscribed, less estimated costs.

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The statements of financial position have been prepared to provide Shareholders with information on the assets and liabilities of the Company and the pro forma assets and liabilities of the Company as noted above. The audited historical and unaudited pro forma information is presented in abbreviated form; it does not include all of the disclosures required by the Australian Accounting Standards applicable to annual financial statements. The unaudited pro forma statement of financial position has been prepared on the basis that the assets and liabilities of the Company have not been subject to any material change between 30 June 2020 and the completion of the Placement and Entitlement Offer, other than as disclosed above.

3.3 Effect on the control of the Company and dilution of the Capital Raising

Dilutionary impacts of the Capital Raising

Neither the Placements nor the Entitlement Offer are underwritten.

However, Shareholders should be aware that they will be subject to dilution by reason of the Company undertaking the Placements and the Entitlement Offer, including by way of:

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(a) the issue of New Shares under the Tranche 1 Placement;
(b) the issue of New Shares under the Tranche 2 Placement (subject to Shareholder approvals); and
(c) the issue of New Shares pursuant to the Entitlement Offer, the Top-up Offer and the Shortfall Offer.

Shareholders should note that:

(a) if they do not participate in the Entitlement Offer and the Company issues the maximum number of Shares under the Placements, their holdings will likely be diluted by approximately 29.12% (as compared to their holdings and the number of Shares on issue as at the date of this Offer Booklet Note; and
(b) if they do participate in the Entitlement Offer and the Company issues the maximum number of Shares under the Placements, their holdings will likely be diluted by approximately 21.25% (as compared to their holdings and the number of Shares on issue as at the date of this Offer Booklet.

Thorney Group participation

Subject to shareholder approval, the Thorney Group has committed to subscribe for 6,898,830 Shares in the Tranche 2 Placement at an aggregate subscription price of approximately $2 million. The Thorney Group also intends to participate in the Entitlement Offer up to their maximum pro-rata entitlement.

If the Entitlement Offer is fully subscribed, following completion of the Capital Raising, the Thorney Group will have a relevant interest of 21.00% in the Company.

If only the Thorney Group participates in the Entitlement Offer and the shortfall is unallocated, and on the basis that all Shares under the Tranche 2 Placement are issued (subject to shareholder approval), then following completion of the Capital Raising, the Thorney Group will have a relevant interest of 22.33% in the Company.

If only the Thorney Group participates in the Entitlement Offer and the shortfall is unallocated, and shareholder approval is not obtained for the Tranche 2 Placement, then the Thorney Group will have a relevant interest of 23.1% in the Company.

Whilst the Thorney Group has no current intention to acquire further Shares in the Company following completion of the Capital Raising, it reserves the right to do so and may seek to acquire Shares on-market as permitted under the ‘creep provisions’ in accordance with item 9, section 611 of the Corporations Act.

3.4 Directors and directors’ interests

Each Director whose name appears with an asterisk (*) currently intends to participate in whole or in part in the Entitlement Offer. Each Director reserves the right to not participate or to only participate in part. Note that the Directors cannot participate in the Top Up Offer.

As at the date of this Offer Booklet, the Directors have a relevant interest in the Company's securities as follows:

Director	Shares
Alan David Fisher*	50,000
Martin John Casey	Nil
Alexander Gidaliahu Waislitz*	62,400,951
Jeremy Leibler*	492,266

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4 Risk factors

4.1 Introduction

The Company's operations are subject to a number of risks which may impact on its future performance and forecasts. Before subscribing for New Shares, Shareholders should carefully consider and evaluate the Company and its business and whether the New Shares are suitable to acquire having regard to their own investment objectives and financial circumstances, and taking into consideration the material risk factors.

In particular, Shareholders should consider the ‘key risks’ outlined in Section 4.2 below, any of which could affect the operating and financial performance of the Company or the value of an investment in the Company. The ‘key risks’ outlined in Section 4.2 are not exhaustive.

You should consult your stockbroker, accountant, solicitor or other independent professional adviser to evaluate whether or not to participate in the Entitlement Offer. The Company will apply to ASX for the grant of official quotation of the New Shares. It is expected that New Shares proposed to be issued under the Entitlement Offer will commence trading on a deferred settlement basis on Tuesday, 1 December 2020. It is expected that normal trading on ASX will commence in relation to New Shares issued under the Entitlement Offer on Tuesday, 8 December 2020.

The Company will have no responsibility and disclaims all liability (to the maximum extent permitted by law, including for negligence) to persons who trade New Shares before the New Shares are listed on the official list of ASX or before they receive their written confirmation of issue, whether on the basis of confirmation of the allocation provided by the Company, the Share Registry or Authorised Intermediary. ASX accepts no responsibility for any statement in this Offer Booklet.

4.2 Key risks

Speculative nature of the New Shares

New Shares acquired under this Entitlement Offer are considered speculative because of the inherent risks associated with a listed investment company like the Company.

Neither the Company nor any of its Directors nor any other party associated with the preparation of the Entitlement Offer guarantees that any specific objectives of the Company will be achieved or that any particular performance of the Company or of its Shares, including those offered by the Entitlement Offer, will be achieved.

Risks specific to an investment in the Company

The Company is managed by the privately-owned Thorney Management, a member of the Thorney Group, under the Investment Management Agreement. The major risks associated with investment in the Company are described below.

(a) Investment Strategy

The success and profitability of the Company depends almost entirely on the ability of Thorney Management to identify, execute and manage investments which increase in value over time. The performance fees payable to Thorney Management under the Investment Management Agreement may create an incentive for Thorney Management to make investments that are riskier or more speculative than would be the case in the absence of any performance fees.

In addition, the investments made by Thorney Management on behalf of the Company may be in businesses that are in the early stages of development. These early-stage businesses may not have well-developed business strategies in place, may not yet be in a position of profitability, and may not generate consistent revenue. As such, there is a risk that the investments will not deliver returns for Shareholders. Investments made by Thorney Management may be made by way of derivatives, whether as part of a hedging strategy or as an investment for the purposes of

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pursuing absolute investment returns. Derivative transactions can be volatile and may create investment leverage, which could cause the Company to lose more than the amount of assets initially contributed to the transaction.

(b) Retention of key personnel within the Thorney Group

The Thorney Group may not be able to retain, nor replace, key investment management personnel and thus the experience and expertise of those people may not be available to the Company through its relationship with Thorney Management. The ongoing involvement of Mr Alexander Waislitz is a critical factor in the performance of the Thorney Group.

(c) Investment returns

The investments pursued and managed by Thorney Management pursuant to the Investment Management Agreement may not result in an absolute return to the Company and Shareholders, and may result in a reduction in the net asset value of the Company and potentially in the value of Shares in the Company.

There is also a risk that Thorney Management may not deploy the capital of the Company on a timely basis thereby reducing the investment returns of the Company.

(d) Lack of diversification

The investment portfolio of the Company managed by Thorney Management pursuant to the Investment Management Agreement may be less diversified than the investment portfolios of other listed entities investing in international and Australian entities.

While Thorney Management is authorised to pursue a broad investment policy, it is expected that the Company’s investment portfolio will be concentrated on both listed and unlisted investments in businesses with a technology focus and other disruptive business models. This concentration risk means that the Company’s investment portfolio may underperform relative to the performance of other asset classes or industries.

(e) Additional funding needs

Given the Company’s investment portfolio may include investments in early stage businesses and unlisted investments, those businesses may be reliant on private capital to fund ongoing operations, and there is no certainty that private funding may be available as a source of capital on an ongoing basis.

In addition, some of the investments may have limited revenue and may operate at a loss. These investments may require ongoing funding and/or positive operational developments, neither of which may occur. Accordingly, there are a number of risks relating to such businesses, including the risk of insolvency, poor performance and/or not being able to demonstrate or realise future value or investment returns.

(f) Termination of the Investment Management Agreement

The Investment Management Agreement between Thorney Management and the Company may be terminated in certain circumstances, and another party may be responsible for the management of the Company’s capital. The financial performance of the Company may be different in these circumstances.

(g) Borrowings

Thorney Management may, under the Investment Management Agreement, expose the Company’s investment portfolio to an investment by way of borrowings or an investment in financial products such as derivatives which give the effect of using borrowings. Currently, Thorney Management does not have a policy in respect of borrowings or taking out derivative positions but will consider these positions on an ongoing basis. The Investment Management Agreement vests significant discretion in Thorney Management, and while Thorney Management does not currently intend

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to either borrow funds to make investments or take out derivative positions, it may decide to do so in the future, on a case by case basis.

Further, the fee structure specified in the Investment Management Agreement incentivises Thorney Management to borrow funds to make investments, which may magnify the impact of any movements in the prices of the underlying investments of the Company. Actual or effective borrowing will magnify the impact of any movements in the prices of the underlying investments of the Company. It may also create theoretically unlimited losses and positions that cannot be hedged.

Currently, the Company does not have any borrowings.

(h) Liquidity of investments

Thorney Management may, under the Investment Management Agreement, include unlisted equity investments, derivative contracts and other financial instruments in the Company’s investment portfolio, which are not traded in an organised public market and which may be illiquid. As a result, the Company may not be able to promptly liquidate some of its investments in these instruments at an amount close to their fair value in order to respond to specific events.

(i) Capital raising risk

The Entitlement Offer is not underwritten. There can be no assurance that the Company will raise the approximately $37,000,000 that it aims to raise under the Entitlement Offer and the Placements. The investment strategy that Thorney Management will pursue under the Investment Management Agreement may be impacted by the amount of funds raised under the Entitlement Offer and the Placements, and the Company may be required to forgo investment opportunities having regard to the funds that are available for investment.

(j) Tax loss risk

The Company is able to recognise a deferred tax asset for unused tax losses to the extent that it is probable that future taxable profit will allow all or part of the deferred tax asset (DTA) to be utilised. The Company’s historical and forecasted performance is used to determine whether the Company fulfils this requirement, and also to what extent a DTA may be recognised. The DTA balances are accounted for in-line with AASB 112. There is a risk that unused tax losses may not be available to offset against future taxable capital and revenue profits if the Company does not, or is not able to, continue to meet the relevant statutory tests.

General risks

The general risks that may affect the performance of the Company are outlined below.

(a) Impact of COVID-19

There is continued uncertainty as to the ongoing impact of COVID-19 on the Australian economy and debt and equity markets, including in relation to governmental action, work stoppages, university and school stoppages, lockdowns, quarantines and travel restrictions. Any of these events and resulting market fluctuations may materially adversely impact the Company’s earnings or the market price of its Shares. Such impacts of the pandemic on the Company may also materially and adversely impact the net tangible assets of the Company’s investment portfolio.

(b) Market risk

Share markets tend to move in cycles, and share prices may fluctuate and underperform other asset classes over extended periods of time. The value of the New Shares quoted on the ASX may rise or fall depending on a range of factors beyond the control of the Company including:

(i) movement in domestic and international securities markets;

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(ii) changes in economic, social, technological or political conditions; and
(iii) changes in market sentiment.

Shareholders of the Company are exposed to this risk both through their holding in new Shares as well as through the Company's investment portfolio.

(c)

Acquisition activities

From time to time, the Company may evaluate acquisition opportunities. Any acquisition would lead to a change in the Company's net tangible assets and could increase the volatility of its earnings.

Integration of new investments into the Company’s investment portfolio may be costly, may not generate expected earnings and may occupy a large amount of management’s time. There is no guarantee that future potential acquisitions will be available on favourable terms or that they will be successfully integrated.

(d)

Regulatory risk

All investments carry the risk that their value may be affected by changes in laws and regulations, especially taxation laws. Regulatory risk includes risk associated with variations in the taxation laws of Australia or other jurisdictions in which the Company holds investments. Future changes in taxation law may impact the future tax liabilities of the Company or may affect taxation treatment of an investment in its Shares, or the holding or disposal of those Shares. Tax liabilities are the responsibility of each individual shareholder.

(e)

Interest rate risk

Interest rate movements may adversely affect the value of the Company through their effect on the price of Shares and the cost of borrowing.

(f)

Liquidity risk

The Company is exposed to liquidity risk in relation to the investments within its investment portfolio. If a security cannot be bought or sold quickly enough to minimise potential loss, the Company may have difficulty satisfying commitments associated with financial instruments.

Moreover, as the Company is a listed entity, the ability to sell Shares will be a function of the turnover of the Shares at the time of sale. Turnover itself is a function of the size of the Company and also the cumulative investment intentions of all current and possible investors in the Company at any one point in time.

(g)

Economic risk

Investment returns are influenced by numerous economic factors. These factors include changes in the economic conditions (e.g. changes in interest rates or economic growth), changes to legislative and political environment, as well as changes in investor sentiment.

In addition, exogenous shocks, natural disasters and acts of terrorism and financial market turmoil (such as the global financial crisis) can add to equity market volatility as well as impact directly on individual entities. As a result, no guarantee can be given in respect of the future earnings of the Company, the earnings and capital appreciation of its investment portfolio or the appreciation of the Company’s Share price.

(h)

Time frame for investment

Shareholders are strongly advised to regard any investment in the Company as a medium-to-long term proposition for at least 7 years and to be aware that, as with any investment, substantial fluctuations in the value of their investment may occur over that period. Even if the investments made by the Company prove successful, they are unlikely to produce a realised return for a number of years.

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(i) Discount to net tangible assets

As an ASX-listed company, the Company’s Shares may not trade in line with the underlying value of its investment portfolio. Shares may trade at a discount or premium to the Company’s net tangible assets.

(j) Unlisted investments

A portion of the Company's investment portfolio is in unlisted investments. The Company’s unlisted investments are typically in early stage companies and accordingly have a risk of failure. Unlisted financial assets are valued at fair value in accordance with the Australian Accounting Standards Board’s Accounting Standard AASB 13 “Fair Value Measurement” (“ AASB 13 ”), applying the principles ” in the “International Private Equity and Venture Capital Valuation Guidelines .

There may be limited liquidity in unlisted investments as well as potential formal restrictions on selling unlisted investments. The information provided by unlisted investments is typically limited, making it challenging to identify impairment risks or validate holding values.

(k) Assessment of NTA

When determining the fair value of its financial assets and financial liabilities, the Company uses the fair value hierarchy prescribed in AASB 13. The Company's valuation policy for calculation of its monthly NTA and for its financial statements is to adopt market values such as ASX share prices for listed investments.

In the case of unlisted investments, the initial investment cost is adopted as its starting value modified by identifiable market transactions (such as a further capital raising round) or risk of impairment. This means that there may be latent value or impairment in the value of some unlisted investments that is not yet recognised in the Company's NTA or financial statements. Accordingly, the Company's NTA might not reflect the true underlying value of the Company's investment portfolio.

(l) Currency risk

The Company has exposure to financial assets and liabilities denominated in foreign currencies as it invests in listed and unlisted Australian and international companies. Therefore, the Company is exposed to movements in the exchange rate of the Australian dollar relative to foreign currencies. The effect of movements in foreign currencies relative to the Australian dollar are reflected in the Company’s reported NTA.

Risks associated with not taking up the Entitlement Offer

You should note that if you do not take up all or part of your Entitlement, then your percentage shareholding in the Company will be diluted by not participating to the full extent in the Entitlement Offer in addition to the dilution effect of the Placements.

Investors may also have their investment diluted by other capital raisings by the Company, including the Placements. The Company may issue new Shares in the future to finance acquisitions or pay down debt which may, under certain circumstances, dilute the value of a Shareholder’s interest. Before deciding whether to take up New Shares under the Entitlement Offer, you should seek independent advice.

4.3 New Zealand Shareholders

New Zealand Shareholders should also consider the taxation and currency risks associated with investing in New Shares.

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5 Foreign jurisdictions

In particular, the New Shares have not been, and will not be, registered under the US Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States. In addition, the Company is not registered as an “investment company” under the US Investment Company Act of 1940. Accordingly, the New Shares will only be offered and sold to non-US persons outside the United States in "offshore transactions", as defined and in compliance with Regulation S under the US Securities Act.

Making your BPAY® payment will be taken by the Company as a representation by you that there has been no breach of any such laws.

The distribution of this Offer Booklet (including an electronic copy) outside Australia or New Zealand may be restricted by law. If you come into possession of this Offer Booklet, you should observe such restrictions. Any non-compliance with these restrictions may contravene applicable securities laws.

Due to legal restrictions, nominees and custodians may not send copies of this Offer Booklet or any material relating to the Entitlement Offer or accept the Entitlement Offer in relation to any person in the United States or elsewhere outside Australia or New Zealand except to institutional or professional investors in certain foreign countries as the Company may otherwise permit in compliance with applicable law.

5.1 New Zealand

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6 Taxation

Taxation is only one of the matters that must be considered when making a decision whether or not to participate in the Entitlement Offer and subscribe for New Shares.

Set out below is a general summary of the Australian income taxation, GST and stamp duty implications of participating in the Entitlement Offer for Eligible Shareholders who are residents of Australia for taxation purposes and who hold their Shares (and any New Shares acquired on exercise of their Entitlements) as capital assets.

This section does not consider the Australian taxation consequences for particular types of Eligible Shareholders, including those who:

(a) hold their Shares as assets used in carrying on a business or who may carry on the business of share trading, banking or investment;
(b) hold their Shares through an employee share scheme or whose Shares are held as revenue assets or trading stock;
(c) are subject to the taxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (Cth) (“ 1997 Tax Act ”) in relation to their holding of Shares, New Shares or Entitlements;
(d) may be subject to special taxation rules, such as insurance companies, partnerships, income tax exempt organisations, trusts (except where expressly stated), superannuation funds (except where expressly stated) or temporary residents; or
(e) are tax residents of any jurisdiction other than Australia (including New Zealand).

The summary below is based on the law in effect as at the date of this Offer Booklet, is general in nature and should not be relied on by Eligible Shareholders as tax advice. Eligible Shareholders should seek specific advice applicable to their own particular circumstances from their own financial or tax advisers.

6.1 Australian Income tax

Issue of Entitlements

Subject to the qualifications noted above and assuming that the Eligible Shareholder continues to hold their Shares until the issue of the Entitlements, the issue of the Entitlements should not, of itself, result in any amount being included in the assessable income of an Eligible Shareholder on the basis that the Entitlements satisfy the requirements in section 59-40 of the 1997 Tax Act and will therefore be treated as nonassessable non-exempt income of the Eligible Shareholder.

Exercise of Entitlements and cost base of New Shares

Eligible Shareholders who exercise their Entitlements and subscribe for New Shares will acquire those Shares with a cost base and reduced cost base for CGT purposes equal to the Issue Price payable by them for those shares plus any non-deductible incidental costs they incur in acquiring them. Eligible Shareholders should not make any capital gain or loss, or derive assessable income, from exercising the Entitlements or subscribing for the New Shares.

Lapse of Entitlements

Any Entitlement not taken up under the Entitlement Offer will lapse or expire and the Eligible Shareholders will not receive any consideration as a result of the expiration of the Entitlement. On this basis, there should not be any tax implications for an Eligible Shareholder. In 2012, the Commissioner of Taxation (“ Commissioner ”) released Taxation Ruling 2012/1 “Retail Premiums paid to shareholders where share entitlements are not taken up or are not available” (“ TR 2012/1” ). In that ruling, the Commissioner states that certain retail premiums are assessable as either an unfranked dividend or as ordinary income, and not as capital gains. However, you will not receive any consideration for the

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lapse or expiry of your Entitlement not taken up under the Entitlement Offer or through any related bookbuild because there will be no retail premium paid by the Company to you. Accordingly, the tax treatment applied by the Commissioner in TR 2012/1 should not apply.

6.2 New Shares

Taxation of income for Eligible Shareholders

Eligible Shareholders who exercise their Entitlements will acquire New Shares. Any future dividends or other distributions made in respect of those New Shares will be subject to the same taxation treatment as dividends or other distributions made on any other Shares held in the same circumstances.

For Eligible Shareholders to be eligible for a tax offset in relation to any franking credits attached to a dividend paid by the Company on the New Shares, they will need to hold the New Shares at risk for at least 45 days, not counting the day of acquisition or disposal (referred to as the holding period rule). The holding period rule generally only needs to be satisfied once for the New Shares and will begin to apply (in respect of the New Shares) the day after the day on which the Eligible Shareholder acquires the New Shares. If the ‘related payments rule’ applies the holding period rules may differ. This rule does not apply if the Eligible Shareholder is an individual whose total franking credit entitlement for the year of income in which the dividend is received does not exceed $5,000 (referred to as the small shareholder rule). However, a shareholder will not be a ‘qualified person’ under the small shareholder rule if ‘related payments’ have been made, or will be made, in respect of such amounts.

Taxation of disposals for Eligible Shareholders

The disposal of New Shares will give rise to a CGT event for Eligible Shareholders. Eligible Shareholders may make a capital gain or capital loss, depending on whether the capital proceeds of that disposal are more than the cost base or less than the reduced cost base of the New Shares. The cost base and reduced cost base will include the Issue Price payable by Eligible Shareholders for those shares plus any non-deductible incidental costs they incur in acquiring and disposing of the New Shares.

New Shares will be treated for the purposes of the CGT rules as having been acquired when the Eligible Shareholder exercised the Entitlement to subscribe for them. In order to benefit from the CGT discount that may be available to individuals, trusts and complying superannuation funds in respect of a disposal of the New Shares, the New Shares must have been held for at least 12 months before the disposal of the New Shares (calculated by excluding the date of acquisition and the date of disposal). The CGT discount for individuals and trusts is 50%. The CGT discount for complying superannuation funds is 33.33%. A company is not entitled to the CGT discount.

Capital losses may be offset against other capital gains in the same income year or, subject to the relevant loss recoupment rules (if applicable), carried forward and offset against future capital gains.

Taxation of a return of capital by the Company

Where a return of capital is made by the Company, the cost base and reduced cost base of the Eligible Shareholder's New Shares for CGT purposes will be reduced by the amount of the return of capital. Any excess returned over the cost base may trigger a capital gain. In some circumstances, where the Eligible Shareholder disposes of their New Shares in the period between becoming entitled to the return of capital and its actual payment, the Eligible Shareholder will generally make a capital gain equal to the amount of the return of capital in addition to any capital gain that might arise on the disposal of the New Shares. The amount returned may also include a dividend component, or be deemed under taxation law to include a dividend component, which will be subject to tax as set out above.

Withholding tax

The Company may be required to withhold tax on payments of dividends that are not fully franked, at the specified rate and remit such amounts to the ATO, unless you have

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previously provided your TFN or ABN to the Company, or you have informed the Company that you are exempt from quoting your TFN or ABN.

You are not required to provide your TFN or ABN to the Company, however if you have not already provided your TFN or ABN to the Company you may wish to do so.

6.3 Goods and Services Tax and Stamp Duty

No Australian GST is payable in respect of the issue or exercise of the Entitlement Offer, nor in respect of the acquisition of New Shares under the Entitlement Offer as set out in this Offer Booklet. Eligible Shareholders may be charged GST on costs (such as third party brokerage or advisor costs) in respect of the issue or exercise of the Entitlement Offer or the acquisition of New Shares, but may not be entitled to claim full input tax credits for the GST included in such costs. Eligible Shareholders should obtain independent advice in relation to the impact of GST on their individual circumstances.

No stamp duty should be payable by an Eligible Shareholder in respect of the issue or exercise of the Entitlement Offer, nor in respect of the acquisition of New Shares under the Entitlement Offer provided each Eligible Shareholder, and any associated persons, do not hold, as a result of such acquisition, 90% or more of the interest in the Company.

Information availability

Eligible Shareholders in Australia or New Zealand can obtain a copy of this information during the period of the Entitlement Offer by calling the Share Registry on 1300 850 505 (within Australia) and + 61 3 9415 4000 (outside Australia) between 8.30am to 5.00pm (Melbourne time) Monday to Friday during the Entitlement Offer period. A personalised Entitlement and Acceptance Form (including any replacements can be requested by calling the Share Registry.

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Glossar y

Term		Definition
1997 Tax Act		Income Tax Assessment Act 1997(Cth).
AASB 13		Accounting Standard AASB 13 “Fair Value Measurement” made by the
		Australian Accounting Standards Board.
ABN		Australian Business Number.
ACN		Australian Company Number.
Additional	New	As defined in Section 1.3 of this Offer Booklet.
Share Cap
Allocation	Policy	As defined in Section 1.3 of this Offer Booklet.
Applicant		An Eligible Shareholder who applies for New Shares (and if applicable,
		additional New Shares) under this Offer Booklet.
Application		An application for a specified number of New Shares (and if applicable,
		additional New Shares) by an Applicant under this Offer Booklet.
Application Money		Funds paid by BPAY®.
ASIC		Australian Securities and Investments Commission.
ASX		ASX Limited ACN 008 624 691 or the financial market operated by it, as
		the context requires.
ASX Listing Rules		The listing rules of ASX.
ASX	Settlement	The settlement operating rules of ASX.
Operating	Rules
ATO		Australian Taxation Office.
Australian	Financial	An Australian Financial Services Licence as defined by the Corporations
Services Licence		Act.Australian Financial Services Licenseehas a corresponding
		meaning.
Authorised		Bell Potter Securities Limited (ACN 006 390 772).
Intermediary
Board		The Directors acting as a board of the Company.
Business Day		A day on which both the ASX and major trading banks are open for trading
		in Sydney.
Capital Raising		The Entitlement Offer and the Placements to raise approximately
		$37,000,000.
CGT		Capital Gains Tax.

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Term		Definition
Class Order		ASIC (Non-Traditional Rights Issues) Instrument 2016/84.
Closing Date		The date on which the Entitlement Offer closes, expected to be 5.00pm
		(Melbourne time) on Monday, 30 November 2020.
Commissioner		Commissioner of Taxation.
Company		Thorney Technologies Limited (ACN 096 782 188).
Corporations Act		Corporations Act 2001(Cth).
Directors		The directors of the Company.
Eligible Shareholder		As defined in Section 1.1 of the Entitlement Offer overview section of this
		Offer Booklet.
Entitlement		The number of New Shares each Eligible Shareholder is offered under the
		Entitlement Offer as specified onhttps://tekoffer.thereachagency.comor on
		their Entitlement and Acceptance Form (if they have requested one).
Entitlement	and	The personalised form that may be requested by a Shareholder.
Acceptance	Form
Entitlement	Offer	The non-renounceable entitlement offer to Eligible Shareholders as at the
		Record Date to subscribe for 1 New Share for every 9 Existing Shares at
		the Issue Price.
Excess Amount		Any money in excess of the full amount of Application Money for an Eligible
		Shareholder's whole Entitlement.
Exemption Notice		Financial Markets Conduct (Incidental Offers) Exemption Notice 2016.
Existing Shares		Shares on issue at the Record Date.
Financial	Services	A Financial Services Guide required to be prepared in by an Australian
Guide		Financial Services Licensee accordance with section 941A of the
		Corporations Act.
GST		Goods and Services Tax.
Issue Price		The price payable for one New Share under this Offer Booklet being $0.35.
Investment		The investment management agreement between the Company and
Management		Thorney Management dated 10 November 2016.
Agreement
Listing Rule 10.11		Any person noted in Listing Rule 10.11, being the following:
party		• A related party of the Company.
		• A person who is or was at any time in the 6 months before the issue
		of New Shares under this Offer Booklet, a substantial (30%+)
		holder in the Company.
		• A person who is, or was at any time in the 6 months before the
		issue of New Shares under this Offer Booklet, a substantial (10%+)
		holder inthe Company andwhohasnominated a directorto the

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Term

Definition board of the Company pursuant to a relevant agreement which gives them a right or expectation to do so.

An associate of any of the above.

		board of the Company pursuant to a relevant agreement which gives them a right or expectation to do so. • An associate of any of the above.
		• A person whose relationship with the Company or a person
		referred to above is such that, in ASX’s opinion, the issue or
		agreement should be approved by shareholders.
Melbourne time		The time in Melbourne, Australia.
New Share		A Share offered and issued under this Offer Booklet, the terms and
		conditions of which are set out in this Offer Booklet.
New	Zealand	Financial Markets Conduct Act 2013(New Zealand).
Financial	Markets
Conduct Act
Non-Eligible	Foreign	A Shareholder with an address in the Company's share register outside
Shareholder		Australia or New Zealand unless the Company is satisfied that it is not
		precluded from lawfully issuing New Shares to that Shareholder either
		unconditionally or after compliance with conditions which the Board in its
		sole discretion regards as acceptable and not unduly onerous.
NTA		means net tangible asset backing per Share.
Offer Booklet		This document which was given to ASX on Monday, 16 November 2020.
Offer Period		Monday, 16 November 2020 to Monday, 30 November 2020 or any other
		date as may be determined by the Company.
Opening Date		Monday, 16 November 2020.
Placements		Placements to institutional, sophisticated and professional investors by the
		Company to raise approximately $27,000,000 which will be conducted
		across the Tranche 1 Placement and the Tranche 2 Placement.
Record Date		7.00pm (Melbourne time) on Thursday, 12 November 2020.
Related	Body	The meaning given to that term in section 50 of the Corporations Act.
Corporate
Residual Short Fall		As defined in Section 1.4 of this Offer Booklet.
Share		A fully paid ordinary share in the capital of the Company.
Shareholder		A holder of at least one Share as recorded on the Company's share
		register.
Share Registry		Computershare Investor Services Pty Limited (ABN 48 078 279 277).
Short Fall Offer		The offer described in Section 1.4 of this Offer Booklet.
Subsidiary		Has the meaning given to that term in the Corporations Act.
TFN		Tax File Number.

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Term	Definition
Thorney Group	Thorney Investment Group Australia Pty Ltd (ACN 117 488 892) and its
	associates.
Thorney	Thorney Management Services Pty Ltd (ACN 164 880 148).
Management
Timetable	The Entitlement Offer timetable.
Top Up Offer	The offer described in Section 1.3 of this Offer Booklet.
TR 2012/1	Taxation Ruling 2012/1 “Retail Premiums paid to shareholders where share
	entitlements are not taken up or are not available”.
Tranche 1 Placement	A placement to institutional, sophisticated and professional investors by the
	Company to raise approximately $13,000,000 which will take place before
	the Entitlement Offer.
Tranche 2 Placement	A placement to institutional, sophisticated and professional investors by the
	Company to raise approximately $14,000,000 which is subject to the
	approval of shareholders at the Company’s annual general meeting to be
	held on or around Tuesday, 15 December 2020.
US Securities Act	US Securities Act of 1933, as amended.
VWAP	Volume weighted average price.

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Corporate Directory

DIRECTORS

Alexander Gidaliahu Waislitz Alan David Fisher Martin John Casey Jeremy Leibler

REGISTERED OFFICE

Level 39, 55 Collins Street, Melbourne VIC 3000

SHARE REGISTRY

Computershare Investor Services Pty Limited (ABN 48 078 279 277)

COMPANY SECRETARY

Craig Antony Graham Smith

LAWYERS

Arnold Bloch Leibler Level 21, 333 Collins Street, Melbourne VIC 3000

LEAD MANAGER

Bell Potter Securities Limited (ACN 006 390 772) Level 29, 101 Collins Street, Melbourne VIC 3000

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[Entitlement and Acceptance Form]

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[Notice to ineligible shareholders]

AI assistant

THORNEY TECHNOLOGIES LTD — Capital/Financing Update 2020

65908_rns_2020-11-15_b1290b49-e6f7-48d3-b2b1-deb5e040e379.pdf

Entitlement Offer Booklet

Authorised Intermediary

Entitlement Offer Booklet

Table of Contents

Important information

Foreign Jurisdictions

New Zealand

Future performance and forward-looking statements

No investment advice

Risks

Past performance

No representations

Authorised intermediary

New Shares quoted on a deferred settlement basis

Ke offer terms and timetable y

Timetable Event

Dear Fellow Shareholder

Issue Price

Top Up Offer and Short Fall Offer

Entitlement and Acceptance Form

Entitlement Offer Booklet

Entitlement Offer

1 Details of the non-renounceable Entitlement Offer

1.1 The non-renounceable Entitlement Offer

1.2 Purpose of the non-renounceable Entitlement Offer

1.3 Top Up Offer

Allocation Policy

1.4 Short Fall Offer

1.5 Underwriting

1.6 Authorised Intermediary

1.7 Issue of New Shares

1.8 ASX quotation

1.9 Application Money

1.10

Market prices for Shares on ASX

1.11

Foreign Shareholders

1.12 Nominees and custodians

1.13

Taxation implications

1.14 Risks

1.15 Regular reporting and disclosure

1.16 Rights and liabilities attaching to New Shares

1.17

Disclaimer

1.18

Financial amounts

1.19

Privacy

1.20 Governing Law

2 Required Actions

2.1 Eligible Shareholders

BPAY®

2.2 Payment

Eligible Shareholders may pay through BPAY®

2.3 Applying for additional shares under Top Up Offer

2.4

Declining all or part of your Entitlement

2.5 Non-Eligible Foreign Shareholders

2.6 Warranties made on acceptance of Entitlement Offer

2.7 Refunds

2.8 Withdrawals

3.1 Effect of the Entitlement Offer on capital structure

3.2 Financial effect of the Entitlement

3.3 Effect on the control of the Company and dilution of the Capital Raising

Dilutionary impacts of the Capital Raising

Thorney Group participation

3.4 Directors and directors’ interests

4.1 Introduction

4.2 Key risks

Speculative nature of the New Shares

Risks specific to an investment in the Company

(a) Investment Strategy

(b) Retention of key personnel within the Thorney Group

(c) Investment returns

(d) Lack of diversification

(e) Additional funding needs

THORNEY TECHNOLOGIES LTD Capital/Financing Update 2020