VECTION TECHNOLOGIES LTD — Capital/Financing Update 2020

Apr 5, 2020

6 April 2020 | Australia

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ASX RELEASE

MINDESK CONSORTIUM RECEIVES E.U. GRANT INVITATION FOR MULTIDISCIPLINARY VR PLATFORM

ALIGNED WITH VECTION TECHNOLOGIES’ TREASURY MANAGEMENT STRATEGY

• Real-time software company Vection Technologies Ltd ( ASX:VR1 ) ( Vection Technologies or the Company ) is pleased to advise that, following a successful evaluation phase, a consortium including (the Company’s proposed acquisition) Mindesk has received a grant preparation invitation letter from the European Commission for a ~$3.5M[1] Horizon 2020 non-refundable grant ( Grant ). Vection Technologies previously announced the proposed acquisition of HTC backed Mindesk with shareholders set to approve the transaction on 23 April 2020. 3D Highlights: ● Mindesk consortium receives ~$3.5M E.U. grant invitation (Horizon 2020 Grant) for PrismArch VIRTUAL

• project of which $520k would flow directly to Mindesk REALITY

• ● Grant to develop PrismArch, a multi discipline VR software for architects and engineers ● Consortium participants include the Centre for Research and Technology Hellas, Zaha Hadid Virtual Reality Group, the University of Malta, the Swiss Federal Institute of Technology, AKT II Limited, SWECO II Limited and Mindesk AUGMENTED REALITY

• ● Mindesk to integrate additional CAD, CAE and BIM software to its VR platform ● Grant aligned to the Company’s overarching treasury management strategy, with several initiatives underway

• ● Mindesk acquisition anticipated to complete by the end of April 2020, increasing the INDUSTRIAL

• Company’s cash balance by ~$1.2M[1] IoT

• ● General Meeting of Vection Technologies’ shareholders to be held on 23 April 2020

• Horizon 2020 Grant: CAD

Framework Programme

Horizon 2020 is the biggest EU Research and Innovation program ever with nearly €80 billion of funding available over 7 years (2014 to 2020). Horizon 2020 funding is part of the Innovation Union initiative, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness.

The Consortium

Besides Mindesk, the consortium includes the Centre for Research and Technology Hellas as coordinator, Zaha Hadid Virtual Reality Group, the University of Malta, the Swiss Federal Institute of Technology, AKT II Limited and SWECO UK Limited ( Consortium ).

The Project

The project subject of the Grant, called PrismArch, aims to develop a multi discipline Virtual Reality ( VR ) software that will enable architects and structural, mechanical, electrical and piping engineers to collaborate and jointly decide, preview and assess the outcome of their decisions in a Virtual Reality universal software solution.

Vection Technologies Ltd (ASX:VR1) ACN: 614 814 041 1 AUD to € exchange rate of 0.5599 at 3 April 2020 (Source: Reserve Bank of Australia)

Asia Pacific Address: Suite 1, 437 Roberts Road Subiaco WA 6008, Australia Phone: +618 6380 2555

Europe Address: Via Isonzo 61 40033 Casalecchio di Reno (BO), Italy Phone: +39 051 0142248

Media Enquiries AUpress@vection.com.au EUpress@vection.com.au

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Through PrismArch, designers, architects and engineers will be able to experience in real-time how their decisions affect both their own and other disciplines via a discipline-specific and personalized point of view.

Mindesk’s Role

Mindesk will develop the novel VR component in the PrismArch project including the design of the interface between the user and the platform, the seamless integration between all components (e.g., simulations and 3D models) and the implementation of a light cognition load user experience.

Mindesk will use the outcome of this research to include additional Computer Aided Design ( CAD ), Computer Aided Engineering ( CAE ) and Building Information Modelling ( BIM ) software into its real-time platform and increase the overall quality and performance of its user experience, while providing for stronger commercial opportunities.

An AEC specific use case of the current commercialised Mindesk platform can be found at this link: https://www.youtube.com/watch?v=w-pv4swNsic.

Funding

The non-refundable Grant of ~$3.5M will be disbursed on a working-progress basis over a period of 24 months from the Grant signature. Although the Consortium as a whole will receive comercial benefits from the development of the PrismArch platform, each party to the Consortium will receive a predetermined funding allocation based on their resources’ commitment, with Mindesk receiving ~$520k for its VR component.

Intellectual Property

Mindesk will own all newly developed expertise, knowledge and technologies it develops. Further specifics will be documented and regulated in a Consortium agreement.

Next Steps

As the European Commission has confirmed the positive evaluation of the PrismArch project providing a 5/5 score for the excellence component, the Consortium has commenced the preparation of the documentation required to achieve the grant signature stage, expected by mid-June 2020.

Treasury Strategy:

The combined management of Vection Technologies and Mindesk, have advanced initiatives to access smart capital to secure a stronger cash position across each of the Company’s international subsidiaries to ensure a robust framework for future growth during this uncertain time. A summary of these activities is detailed below:

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3D VIRTUAL REALITY

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AUGMENTED REALITY INDUSTRIAL IoT CAD

● European Commission Grant: ~$0.5M, non-repayable (pending); ● Italian Government Loan: ~$2.0M, 30% non-repayable and 70% repayable after 10 years at nil interest (pending); ● Commercial Loan: ~$0.2M, 10% interest repayable in 12 months (granted); ● Commercial Loan: ~$0.2M, short-term at commercial interest rates (pending); ● Research & Development grant: ~$0.3M fiscal incentive (pending).

Vection Technologies Ltd (ASX:VR1) ACN: 614 814 041

Asia Pacific Address: Suite 1, 437 Roberts Road Subiaco WA 6008, Australia Phone: +618 6380 2555

Europe Address: Via Isonzo 61 40033 Casalecchio di Reno (BO), Italy Phone: +39 051 0142248

Media Enquiries AUpress@vection.com.au EUpress@vection.com.au

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These initiatives integrate a comprehensive treasury plan for cash management implemented as part of the Company’s overall growth strategy.

Mindesk Acquisition Update:

The Company has accelerated combined management and commercial initiatives with Mindesk to ensure cross collaboration and aligned objectives prior to Vection Technologies’ shareholders meeting to vote on the proposed acquisition on 23 April 2020.

All outstanding contractual items are in the process of finalisation, with Mindesk holding over ~$1.2M cash at bank pursuant to the share sale agreement.

Gianmarco Biagi, Managing Director of Vection Technologies, commented:

“Vection Technologies has implemented a comprehensive treasury plan for cash management responding to the immediate challenges and, more importantly, opportunities arising from global lockdowns. The Board and Management remain committed to and focussed on the long-term success of the Company and of its stakeholders.

The grant invitation from the European Commission further recognises the validity of the acquisition of Mindesk, providing for significant treasury opportunities in anticipation of the Company’s shareholders meeting on 23 April 2020.”

Gabriele Sorrento, CEO of Mindesk, commented:

“Horizon 2020 is the most esteemed grant in Europe. Being selected and invited to apply means that the E.U. Commission has recognized a strong value in both the project we proposed as a consortium and the background of each partner. Our team is honored to be part of a selected task force composed of Design, Technology and Academy experts. We will collaborate to push these industries boundaries even further.”

Investor Relations Contact Details

Gianmarco Biagi - Managing Director (Europe Based) Email: gianmarco.biagi@vection.com.au Phone: +39 051 0142248

Gianmarco Orgnoni - Director and COO (Australia Based) Email: gianmarco.orgnoni@vection.com.au Phone: +61 8 6380 2555

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3D VIRTUAL REALITY

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AUGMENTED REALITY

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INDUSTRIAL IoT

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CAD

ENDS

Vection Technologies Ltd (ASX:VR1) ACN: 614 814 041

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Asia Pacific Address: Suite 1, 437 Roberts Road Subiaco WA 6008, Australia Phone: +618 6380 2555

Media Enquiries AUpress@vection.com.au EUpress@vection.com.au

Europe Address: Via Isonzo 61 40033 Casalecchio di Reno (BO), Italy Phone: +39 051 0142248

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About Vection Technologies:

Vection Technologies Ltd (ASX:VR1) is a multinational software company that focuses on real-time technologies for industrial companies’ digital transformation.

Through a combination of our 3D, Virtual Reality, Augmented Reality, Industrial IoT and CAD solutions, Vection helps companies and organisations to innovate, collaborate and create value. vection.com.au

About Mindesk:

Mindesk Inc. is a multinational SaaS company that develops a Real-Time 3D design platform that integrates with existing commercial CAD software to extend their operations to the third-dimension: Virtual Reality, Augmented Reality, Real-time rendering, and Multi-user collaboration. mindeskvr.com

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ASX release authorised by the Board of Directors of Vection Technologies Ltd.

3D VIRTUAL REALITY AUGMENTED REALITY INDUSTRIAL IoT CAD

Vection Technologies Ltd (ASX:VR1) ACN: 614 814 041

Europe Address: Via Isonzo 61 40033 Casalecchio di Reno (BO), Italy Phone: +39 051 0142248

Media Enquiries AUpress@vection.com.au EUpress@vection.com.au

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Asia Pacific Address: Suite 1, 437 Roberts Road Subiaco WA 6008, Australia Phone: +618 6380 2555