VECTION TECHNOLOGIES LTD — Capital/Financing Update 2021

Apr 14, 2021

Proposed issue of securities

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Announcement Summary

Entity name

VECTION TECHNOLOGIES LTD

Announcement Type

New announcement

Date of this announcement

Thursday April 15, 2021

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Unlisted performance rights	18,000,000
VR1	ORDINARY FULLY PAID	3,777,778

Proposed +issue date

Thursday April 22, 2021

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

VECTION TECHNOLOGIES LTD

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ABN

Registration Number

93614814041

1.3 ASX issuer code

VR1

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Thursday April 15, 2021

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity No

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? Existing class

Details of +securities proposed to be issued

ASX +security code and description VR1 : ORDINARY FULLY PAID

Number of +securities proposed to be issued

2,777,778

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

Please describe the consideration being provided for the +securities

In partial consideration for the acquisition of Blank Canvas Studios (Aus) Pty Ltd.

Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities 250,000.000000

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Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

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	Is the proposed security a 'New	Will the proposed issue of this
	class' (+securities in a class that is	+security include an offer of
	not yet quoted or recorded by ASX)	attaching +securities?
	or an 'Existing class' (additional	No
	securities in a class that is already
	quoted or recorded by ASX)?
	Existing class
	Details of +securities proposed to be issued
	ASX +security code and description
	VR1 : ORDINARY FULLY PAID
	Number of +securities proposed to be	issued
	1,000,000
	Offer price details
	Are the +securities proposed to be issued being issued for a cash
	consideration?
	No
	Please describe the consideration being provided for the +securities Facilitation and introduction fee in relation to the proposed acquisition.
	Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities
	100,000.000000
	Will these +securities rank equally in all respects from their issue date with
	the existing issued +securities in that class?
	Yes
	Is the proposed security a 'New	Will the proposed issue of this
	class' (+securities in a class that is	+security include an offer of
	not yet quoted or recorded by ASX)	attaching +securities?
	or an 'Existing class' (additional	No
	securities in a class that is already
	quoted or recorded by ASX)?
	New class

Details of +securities proposed to be issued

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ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

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Have you received confirmation from Will the entity be seeking quotation
ASX that the terms of the proposed of the 'new' class of +securities on
+securities are appropriate and ASX?
equitable under listing rule 6.1? No
No
ASX +security code +Security description
New class-code to be confirmed Unlisted performance rights
+Security type
Performance options/rights
Number of +securities proposed to be issued
18,000,000
Offer price details
Are the +securities proposed to be issued being issued for a cash consideration?
No
Please describe the consideration being provided for the +securities
In partial consideration for the acquisition of Blank Canvas Studios (Aus) Pty Ltd.
Please provide an estimate of the AUD equivalent of the consideration being
provided for the +securities
1,800,000.000000
Will all the +securities issued in this class rank equally in all respects from
their issue date?
Yes
Performance options/rights details
+Security currency Exercise price Expiry date
AUD - Australian Dollar AUD 0.0000 Sunday June 30, 2024
Details of the type of +security that will be issued if the option is exercised
VR1 : ORDINARY FULLY PAID
Number of securities that will be issued if the option is exercised
One fully paid ordinary share (ASX:VR1)
Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities
proposed to be issued or provide the information by separate announcement.
Annexure A to Announcement "Vection to Acquire Leading Australian Archviz Studio" dated 15 April 2021.
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Part 7C - Timetable

7C.1 Proposed +issue date Thursday April 22, 2021

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No 7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes 7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

21,778,778

7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? No 7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No 7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? No 7E.2 Is the proposed issue to be underwritten? No

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7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

The Company has agreed to pay a fee of $100,000 to be satisfied by the issue of 1,000,000 Shares (Advisor Shares) to a non-related party as a facilitation and introduction fee in relation to the acquisition of Blank Canvas.

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

In partial consideration for the acquisition of Blank Canvas Studios (Aus) Pty Ltd.

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

The Consideration Shares will be priced at the 20-day volume-weighted average price (VWAP) for Shares prior to the date of settlement. The current estimate is based on the last closing price ($0.09) and is therefore subject to change.

The Advisor Shares are priced at a deemed price of $0.10 per Share.

The Performance Rights are subject to revenue performance milestones with:

i. $500,000 equivalent value in Shares being converted upon Blank Canvas achieving A$1,500,000 in audited revenue and EBITDA being equal to or above 0 by the financial year ending 30 June 2022 (Class A Milestone);

ii. $600,000 in Shares upon Blank Canvas achieving A$3,000,000 in audited revenue and EBITDA being equal to or above 0 by the financial year ending 30 June 2023 (Class B Milestone); and

iii. $700,000 in Shares upon Blank Canvas Blank Canvas achieving A$5,000,000 in audited revenue and EBITDA margin being equal to or above 15% by the financial year ending 30 June 2024 (Class C Milestone).

The applicable conversion price, being the greater of:

i. $0.10; (this price used to estimate the number of securities proposed to be issued)

ii. Vection's 14-day VWAP prior to the date the relevant audited accounts demonstrating the achievement of the relevant Milestone is released on ASX.

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