VYSARN LIMITED — Capital/Financing Update 2019

Sep 8, 2019

09 September 2019

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ASX:VYS

PRE-REINSTATEMENT DISCLOSURE

The following information is required to be provided to ASX Limited ( ASX ) for release to the market in connection with the official quotation of fully paid ordinary Shares in Vysarn Limited (ACN 124 212 175) ( Company ). Capitalised terms not defined in this announcement have the same meanings given to them in the prospectus issued by the Company on 11 July 2019, as supplemented by supplementary prospectuses dated 26 July 2019, 14 August 2019 and 16 August 2019 (the Prospectus ).

CAPITAL STRUCTURE

The Company confirms that upon reinstatement the capital structure will be as follows:

Number	Class
297,658,246	Fully paid ordinary Shares
10,000,000	Performance Rights exercisable into Shares subject to the satisfaction of specified performance criteria as detailed in the Prospectus
10,000,000	Unlisted Options exercisable at $0.054 each on or before 5 years from the date of issue

STATEMENT OF RESTRICTED SECURITIES

The Company confirms that the following securities are classified as restricted securities by the ASX:

Number	Class	Escrow Period
31,800,000	Fully paid ordinary Shares	24 months from the date the Company is reinstated to the Official List of ASX
10,000,000	Performance Rights	24 months from the date the Company is reinstated to the Official List of ASX
10,000,000	Unlisted Options exercisable at $0.054 each on or before 5 years from the date of issue	24 months from the date the Company is reinstated to the Official List of ASX

STATEMENT OF COMMITMENTS

The Company intended use of funds raised from the Public Offer based on full subscription under the Public Offer of $7,000,000 over the first two years following re-instatement of the Company to the official list of ASX is provided In section 1.7 of the Prospectus set out below. The use of funds should be read In conjunction with the notes set out In section 1.7 of the Prospectus.

Vysarn Limited | ABN: 41 124 212 175 | ACN: 124 212 175 | 108 Outram St, West Perth, WA 6005 | PO Box 1974, West Perth WA 6872 T +61 (0) 8 9486 7244 | F +61 (0) 8 9463 6373 | E info@vysarn.com.au | vysarn.com.au

Funds Available	Full Subscription
Cash position of the Company as at 31 March 2019 $7,373,000 Funds raised under the Public Offer $7,000,000 Debt Facility $8,800,000
Total Funds Available $23,173,000

Allocation of Funds	Full Subscription
Purchase price of the Assets $16,000,000 Net operating costs since 31 March 20191 $123,000 Payments to Directors2 - Debt Facility instalment repayment3 $800,000 Working Capital4 $5,230,000 Costs associated with the Offers and Acquisitions5 $1,020,000
Total $23,173,000

1. Excludes costs of the Offers and Acquisitions.

2. As detailed In the Prospectus, the Directors Past Services Offer allowed Mr Hutchinson, Mr Ismail and Mr Young to elect to subscribe for Shares or be paid in cash (or a combination of both), in consideration for past services provided to the Company. As the directors have elected to receive Shares there is no cash impact.

3. Under the terms of the Financing Agreement, the Company will repay $800,000 of the Debt Facility within 4 months of draw down. Refer to section 7.2 of the Prospectus for key terms of the Financing Agreement.

4. The Company will pay GST of $1,600,000 on the acquisition of the Assets but expects to receive a full GST refund which will be applied towards working capital. The working capital amount in this table includes this refund.

5. Some of these costs have been paid.

The above is a statement of current intention as at the date of this announcement. Investors should note that, as with any budget, the allocation of funds detailed in the above table may change depending on a number of factors, including the outcome of operational activities, regulatory developments and market and general economic conditions. In light of this, the Board reserves the right to alter the way the funds are applied.

CORPORATE GOVERNANCE

The Company's most recent Corporate Governance Statement and a copy of the Company's corporate governance policies and procedures can be found on the Company's website:

https://vysarn.com.au/corporate-governance/

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CONFIRMATION STATEMENTS

The Company confirms the satisfaction of the conditions precedent (without waiver) and completion of:

• a) the Pentium Share Sale Agreement, including the issue of 7,800,000 Shares under the Pentium Offer, under which the Company has acquired 100% of the issued shares in Pentium Hydro Pty Ltd;

• b) the Asset Sale Agreement, including the payment of $16,000,000 to Ausdrill, under which the Company and Pentium have acquired various waterwell drilling assets and associated inventory from Ausdrill;

• c) the deed of assignment of the Hancock Contract, under which Ausdrill has assigned its interest in the drilling services contract with Hancock to the Company and Pentium;

• d) the Westpac Financing Agreement, under which the Company and Pentium have drawn down on the Debt Facility to (partly) fund the purchase price under the Asset Sale Agreement;

• e) the Directors Past Services Offer, under which the Company has issued 24,000,000 Shares to nominees of Mr Hutchinson (as to 15,500,000 Shares), Mr Ismail (as to 4,250,000 shares) and Mr Young (as to 4,250,000 shares) in consideration for past services rendered by them as Directors of the Company; and

• f) the Chairman Options Offer, under which the Company has issued 10,000,000 options each with an exercise price of $0.054 and expiring 5 years from the date of issue to a nominee of Mr Hutchinson as incentive in connection with his role as Chairman of the Company.

For and on behalf of Vysarn Limited.

Kyla Garic

Company Secretary

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