EXPLANATORY STATEMENT
This Explanatory Statement is included in and forms part of the Notice of Meeting. It contains an explanation of, and information about, the Resolutions to be
considered at the Meeting. It is given to Shareholders to help them determine how to vote on the Resolutions set out in the Notice of Meeting.
Shareholders should read this Explanatory Statement in full and, if in doubt about what to do in relation to a Resolution, Shareholders should consult their
stockbroker, solicitor or financial or other professional advisor.
Special Business
(A)
|
Resolutions 1 and 2 Resolutions regarding the issue of Shares to sophisticated and professional
investors under the Placement
|
Background
As announced to the ASX on 28 October 2019, the Company undertook a placement of Shares under section 708A of the Corporations Act to qualified
sophisticated and professional investors at $0.40 per Share to raise $4 million (before costs) (Placement). The issue price represented a discount of 14% to the closing price of the Companys Shares on 23 October 2019 (being the
last closing price prior to the announcement of the Placement),
The Placement involved the issue of 10,000,000 Shares to qualified sophisticated and
professional investors under the Companys existing placement capacity under Listing Rules 7.1 and 7.1A. These Shares were issued on 1 November 2019.
Resolutions 1 and 2 seek approval from Shareholders under Listing Rule 7.4 (and for all other purposes) to ratify the issue of the Shares. 9,250,000
Shares were issued under the Companys 15% placement capacity under Listing Rule 7.1 and 750,000 Shares were issued under the Companys existing 10% additional placement capacity under Listing Rule 7.1A, which was approved by
Shareholders at the Companys 2018 annual general meeting. The Company is also seeking Shareholder approval for the additional 10% placement capacity under Listing Rule 7.1A at its 2019 Annual General Meeting, which will be held on
13 November 2019.
Ratification of previous issue of Shares (Resolutions 1 and 2)
Under Listing Rule 7.1, the Company is generally not permitted to issue more than 15% of its issued share capital in any 12-month period unless the issue
is approved by Shareholders or an exemption applies. However, Listing Rule 7.4 provides that where a company ratifies an issue of securities, the issue is treated as having been made with approval for the purpose of Listing Rule 7.1,
thereby replenishing the Companys 15% placement capacity and enabling it to issue further securities up to that limit.
Under Listing
Rule 7.1A, eligible entities may seek shareholder approval to issue up to 10% of the issued capital of the entity (within an existing class of quoted securities) within the 12 months from approval being granted. The Company received Shareholder
approval for the issue of securities under Listing Rule 7.1A at its last annual general meeting, which was held on 8 November 2018. The Company is also seeking Shareholder approval for the additional 10% placement capacity under Listing
Rule 7.1A at its 2019 Annual General Meeting, which will be held on 13 November 2019.
Listing Rule 7.4 also allows for issues under the
Companys existing 10% additional placement capacity under Listing Rule 7.1A to be ratified, the effect of which will be that, if Resolution 2 is passed, the Company will replenish its additional placement capacity under Listing
Rule 7.1A. As the Companys additional placement was last approved at the Companys 2018 annual general meeting, the capacity will expire on 8 November 2019, being the date that is 12 months from the date of that annual general
meeting. However, should Shareholders approve the Companys 10% additional placement capacity at its upcoming 2019 Annual General Meeting to be held on 13 November 2019, subject to receiving Shareholder approval for resolution 2, the
Companys additional 10% placement capacity will be replenished.
6