UNIVERSAL BIOSENSORS INC. — Capital/Financing Update 2016

Dec 28, 2016

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

UNIVERSAL BIOSENSORS, INC.

ARBN 121 559 993

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount	(1) Unquoted employee options over shares of common stock traded in the form of CHESS Depositary Interests (Options) (2) Restricted shares of common stock pursuant to Universal Biosensors, Inc. employee share plan (Restricted Shares) (3) Shares of common stock traded in the form of CHESS Depositary Interests (CDIs).
	(1) 256,000 Options (2) 181,800 Restricted Shares (3) 112,200 CDIs
	(1) Options granted subject to terms and conditions of the Universal Biosensors, Inc. employee option plan

outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

Exercise price: A$0.33 Grant date: 28December 2016 Expiry date: 27December 2023 Vesting of Options: 85,337 vesting on 31 December 2017; 85,337 vesting on 31 December 2018; 85,326 vesting on 31 December 2019, subject in each case to the employee’s continued employment at the vesting date. (2) 181,800restricted shares issued to 60 employees pursuant to terms and conditions of the Universal Biosensors, Inc. employee share plan. The Restricted Shares are not able to be traded until the earlier of the following: • three years from the date on which the shares were issued; or • the date the individual ceases to be an employee of the Universal Biosensors, Inc. and its associated group of companies. (3) The CDIs have the same terms as existing shares of common stock traded in the form of CDIs.

• 4 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted[+] securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

(1) No unquoted options issued. Shares of common stock issued on exercise of the Options will rank equally with existing shares of common stock. To participate in a dividend, the ordinary shares underlying the Options would need to be issued prior to the record date for the dividend. (2) Yes. (3) Yes.

• 5 Issue price or consideration

(1) Nil (2) Nil (3) Nil

• See chapter 19 for defined terms.

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6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of +securities issued with security holder approval under rule 7.1A 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.	(1) Issue of Options to certain employees. (2) Issue of Restricted Shares to certain employees. (3) Release of 112,200 restricted shares and conversion into CDIs pursuant to the Universal Biosensors, Inc. employee share plan.
	No.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.

6h If[+] securities were issued under Not applicable. rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining Not applicable. issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates (1) 28December 2016 Note: The issue date may be prescribed by ASX (2) 28December 2016 (refer to the definition of issue date in rule (3) 13 December 2016 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number +Class 8 Number and +class of all 175,811,304 CHESS Depositary +securities quoted on ASX Interests ( including the +securities in section 2 if applicable)

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	575,580 529,000 525,000 645,000 102,000 8,000 50,001 1,087,001	Shares of common stock (restricted) (Code UBIAC) Employee options expiring 22 March 2017 (Code: UBIAY) Employee options expiring 18 September 2017 (Code: UBIAI) Employee options expiring 16 March 2018 (Code: UBIAW) Employee options expiring 19 August 2018 (code: UBIAA) Employee options expiring 16 February 2019 (Code: UBIAK) Employee options expiring 14 May 2019 (Code: UBIAM)

• See chapter 19 for defined terms.

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	1,095,000 50,000 307,667 213,000 66,000 322,500 50,000 74,000 270,000 100,000 24,000 30,000 290,000 160,000 4,500,000	Employee options expiring 28 June 2019 (Code: UBIAZ) Employee options expiring 9 November 2019 (Code: UBIAB) Employee options expiring 10 February 2017 (Code: UBIAD) Employee options expiring on 10 November 2017 (Code: UBIAO) Employee options expiring on 9 March 2018 (Code: UBIAE) Employee options expiring on 21 September 2018 (Code: UBIAG) Employee options expiring on 17 November 2018 (Code: UBIAH) Employee options expiring on 12 March 2019 (Code: UBIAJ) Employee options expiring on 13 September 2019 (Code: UBIAJ) Employee options expiring on 12 November 2019 (Code: UBIAJ) Employee options expiring on 12 November 2019 (Code: UBIAJ) Employee options expiring on 11 March 2020 (Code: UBIAJ) Employee options expiring on 12 November 2019 (Code: UBIAJ) Employee options expiring on 11 December 2020 Employee options expiring on 11 December 2020 Warrants expiring 19

==> picture [401 x 313] intentionally omitted <==

----- Start of picture text -----

December 2020
80,000
Employee options
expiring on 13
August 2021
352,500
Employee options
expiring on 29
January 2022
160,000
Employee options
expiring on 29
January 2022
382,500
Employee options
expiring on 13
December 2022
9,035,000
Employee options
expiring on 20 April
2023
256,000
Employee options
expiring on 27
December 2023
`
10 Dividend policy (in the case of a Not applicable.
trust, distribution policy) on the
increased capital (interests)
----- End of picture text -----

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or nonrenounceable? 13 Ratio in which the[+] securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions

• See chapter 19 for defined terms.

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18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)

30 How do security holders sell their entitlements in full through a broker?

31 How do security holders sell part of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)?

33 +Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one ) (a) +Securities described in Part 1

(b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

• 38 Number of[+] securities for which +quotation is sought

• 39 +Class of +securities for which quotation is sought

• 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class

42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

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

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: .......................................................... Date: 29December 2016 (Chief Financial Officer)

Print name: Salesh Balak

== == == == ==

• See chapter 19 for defined terms.

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Not Applicable

• See chapter 19 for defined terms.

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