Notice of Special Meeting

12704148_1
2 March 2021


Dear Shareholder


This letter is the first formal communication to you from your directors since the settlement of the
transaction that resulted in the acquisition by the Company of three aged care facilities. The
acquisition cost of $31.385 million was financed by:

 the issue of $8 million of equity to the vendor
 the issue of debt of $18 million
 raising new capital of approximately $7 million

At the shareholders’ meeting held on 11 June 2020, shareholders approved the issue of $8 million of
new equity for cash at a price of 0.1c per share to finance the acquisition and provide working capital.
The sum of $6 million was raised on settlement date and a further $750,000 was raised on 16
December 2020 and a commitment for an additional $300,000 has been secured, subject to
shareholder approval. The Company is continuing with its capital raising and has a further $950,000
of the shareholder approved capacity to raise additional funds.

While this meeting of shareholders is being held, a Share Purchase Scheme (SPP) is being
undertaken by the Company. The SPP enables existing shareholders to invest up to $15,000 each in
new equity at a price of 0.1c per share. The SPP was approved by shareholders on 11 June 2020
and a maximum of 5 billion shares are available for subscription. The issue price is the same as the
issue price for the capital issued above.

The Company has many small shareholders holding parcels of shares that are uneconomic to sell.
These shareholders have recently been advised that if they do not increase their shareholding (either
through the SPP or on-market purchases) to a minimum holding then their shares will be acquired
compulsorily by the Company and re-purchased. The directors have resolved that the minimum
holding level will be $1,000 of shares (calculated at the price per share of 0.2c). It is likely that a
significant percentage of the Company’s shareholders, potentially as high as 80%, will be subject to
compulsory acquisition however these shareholders do have a brokerage free opportunity to increase
their holding to or above this minimum holding level through the SPP.

The Company pays a monthly administration charge based on the number of shareholders on its
share register and has associated postage and printing costs when Company documents are
distributed. A reduction in the number of shareholders will provide cost savings in these costs, which
should be meaningful over time. The amount of cost savings will depend on the uptake of the SPP by
shareholders holding less than a minimum holding and the number of small shareholders whose
holdings are compulsorily acquired,

The Company’s three aged care facilities are all trading well. A summary of each facility is as follows:

Ranfurly Manor, Fielding – a 162-bed facility consisting of 74 hospital beds, 63 assisted living beds,
25 dementia beds and 6 independent living units. As at 31 January, it is operating at 98% capacity for
hospital beds, 68% capacity for assisted living beds and 84% capacity for dementia care. The
independent living units are 100% occupied.

Nelson Street Facility, Fielding –a 49-bed rest home facility operated in conjunction with Ranfurly
Manor and is operating at 70% capacity as at 31 January.

Eileen Mary, Dannevirke – a 58 bed facility consisting of 18 rest home beds, 21 hospital beds, 19
assisted living beds and 5 independent living beds. As at 31 January, it is operating at 73% capacity
for hospital and rest home beds and 86% capacity for assisted living beds. The independent living
units are 100% occupied.

In addition to these facilities the Company has a lease of Aldwins House, a 146-bed aged care facility
in central Christchurch. This facility has been subject to a significant upgrade and strengthening work

12704148_1 2
over the last 18 months and reopened in December 2020. The facility is receiving new residents and
the number of new residents is increasing each week. The facility will have 66 beds allocated to rest
home care and the remaining 80 beds allocated to hospital level care.

All facilities offer respite and end of life care.

The primary operational focus of the Company is securing additional residents in Aldwins House to get
the facility to a breakeven and then profitable position as soon as possible.

The Ranfurly development which was in detail in the notice of special meeting and listing profile dated
23 May 2020 (Ranfurly Development) is expected to get underway during the year. The directors are
also investigating a number of potential acquisitions of suitable large and modern aged care facilities
where current owners are seeking to exit direct ownership but retain an equity interest via a listed
entity.

As advised in September 2020, the Company has settled all outstanding matters with the Ministry of
Health relating to its former business and the charges for alleged breaches of the Medicines Act have
been withdrawn. The Company has disposed of all assets relating to its former business.

The resolutions in the attached Notice of Meeting will enable the Company to convert debt to equity,
preserve cash for investing in growth and strengthen the balance sheet. The directors recommend
support of these resolutions.

As advised to shareholders last year, the Company still intends to undertake a share consolidation.
The directors are working through scenarios for that consolidation and will advise the intended
consolidation ratio in due course. It is anticipated that the consolidation will occur after the acquisition
of minimum holdings is completed in May this year.

Yours faithfully




Stephen Underwood
Chairman

12704148_1 3



NOTICE OF SPECIAL MEETING

If you have sold or otherwise transferred all of your shares in the Company, please pass this Notice
of Meeting, together with all accompanying documents, as soon as possible to the purchaser or
transferee or to the broker or other person who arranged the sale or transfer of your shares.

The Board of Promisia Healthcare Limited (Company) gives notice that a special meeting (Meeting) of
shareholders will be held on 24 March 2021 at the offices of Duncan Cotterill, Level 2, Chartered
Accountants House, 50 Customhouse Quay, Wellington starting at 10 am.
AGENDA
A. Chairman’s introduction.
B. Presentation to shareholders.
C. Shareholder discussion.
D. Resolutions.
To consider and, if thought fit, to pass the following ordinary resolutions:

1. Approval to issue Capitalisation Shares to Brankin Family Interest Trust: That under
Listing Rule 4.2.1(a) (issue of equity securities) the Board is authorised to issue up to
1,557,683,100 Shares at an issue price of 0.1c per Share to the Brankin Family Interest Trust
on the basis described in this Notice of Meeting.

2. Approval to issue Investment Shares to Brankin Family Interest Trust: That under Listing
Rule 4.2.1(a) (issue of equity securities) the Board is authorised to issue up to 300,000,000
Shares at an issue price of 0.1c per Share to the Brankin Family Interest Trust on the basis
described in this Notice of Meeting.

3. Approval to issue Director Shares: That under Listing Rule 4.2.1(a) (issue of equity securities)
the Board is authorised to issue up to 92,683,333 Shares at an issue price of 0.1c per Share to
select Directors on the basis described in this Notice of Meeting.

E. Close.

12704148_1 4
PROCEDURAL NOTES
Relationship to Market Price

As at 2 March 2021 (being the date of this Notice of Meeting) the price of an ordinary share in the
Company (Share) on the NZX was 0.2c.
The proposed share issues under Resolutions 1, 2 and 3 will be undertaken at a price per share of 0.1c.
This represents a discount of 50% from the market price of a Share. The issue price is the same as the
issue price for shares under the Company’s share purchase plan offer to shareholders that opens on 3
March 2021.
Proxies
Any shareholder of the Company who is entitled to attend and vote at the Meeting may appoint a proxy
to attend and vote on their behalf. A corporation which is a shareholder may appoint a representative
to attend the Meeting online on its behalf in the same manner as it could appoint a proxy. A proxy does
not need to be a shareholder of the Company. A Proxy Form can be returned by delivery, mail, email,
fax, or online (as set out below).
The Chairman of the Meeting and any of the directors of the Company (Directors) are prepared to act
as proxy. Where any Director is appointed as a discretionary proxy and is not prohibited from voting,
each of the Directors intend to vote in favour of each Resolution.
Voting restrictions apply to Mr. Thomas Brankin and his associated persons (as detailed below) in
respect of Resolution 1 and 2. Voting restrictions apply to every Director (Mr. Stephen Underwood, Ms.
Helen Down, Mr. Duncan Priest and Mr. Thomas Brankin) and their respective associated persons (as
detailed below) in respect of Resolution 3. Shareholders must give express voting directions to any
Director that they appoint as their proxy in respect of Resolutions.
To appoint a proxy you should complete and sign the enclosed Proxy Form and either return it by
delivery, mail, email or fax to the share registrar of the Company:
By delivery:
Promisia Healthcare Limited
C/- Link Market Services Limited
Level 11, Deloitte Centre
80 Queen Street
Auckland
By mail:
Promisia Healthcare Limited
C/- Link Market Services Limited
PO Box 91976
Auckland 1142
By email: meetings@linkmarketservices.co.nz (please put the words “Promisia Healthcare
Limited Proxy Form” in the subject line for easy identification)
By fax: +64 9 375 5990

You may also lodge your proxy online at https://investorcentre.linkmarketservices.co.nz/voting/PHL .
You will require your CSN/Holder Number and FIN to complete your proxy appointment. A shareholder
will be taken to have signed the Proxy Form by lodging it in accordance with the instructions on the
website.
The completed Proxy Form must be received by Link Market Services no later than 48 hours before the
Meeting, being 10 am on 22 March 2021. Online proxy appointments must also be completed by this
time. Registered shareholders at that time will be the only persons entitled to vote at the Meeting and
only the shares registered in those shareholders’ names at that time may be voted at the Meeting.
Ordinary Resolutions
All resolutions are ordinary resolutions. An ordinary resolution is a resolution passed by a simple majority
of votes of those shareholders entitled to vote and voting on the resolutions in person or by proxy.

12704148_1 5
Voting Restrictions

In relation to Resolution 1 and pursuant to Listing Rule 6.3.1, Mr. Thomas Brankin, Mr. Michael John
Kirwin Lay and their respective Associated Persons are prohibited from voting any Shares that they
hold.
In relation to Resolution 2 and pursuant to Listing Rule 6.3.1, Mr. Thomas Brankin, Mr. Michael John
Kirwin Lay and their respective Associated Persons are prohibited from voting any Shares that they
hold.In relation to Resolution 3 and pursuant to Listing Rule 6.3.1, the Directors (Mr. Stephen
Underwood, Ms. Helen Down, Mr. Duncan Priest and Mr. Thomas Brankin) and their respective
Associated Persons are prohibited from voting any Shares that they hold.
Under the NZX Listing Rules (Listing Rules) Associated Persons are, in summary, where the persons
are acting jointly or in concert, where one person exerts a substantial degree of influence over the
activities of the other, where the persons are related companies or where one person is the majority
shareholder of the other person.
The Company will disregard any votes cast on Resolutions 1, 2 and 3 (as applicable) by any person to
whom the above restrictions apply. Any discretionary proxies given to persons disqualified from voting
under the requirements set out above will not be valid.
Interested Directors
Mr. Thomas Brankin is interested in Resolutions 1 and 2 and has abstained from voting on the Board
on matters associated with the subject matters of those Resolutions.
Every Director is interested in Resolution 3. The Directors have however been permitted to vote on and
be counted in a quorum for a board meeting in relation to Resolution 3 on the basis of Listing Rule
2.10.2.
Waiver from Rule 7.8.5(b)

The Company has applied to NZ RegCo, and received, a waiver from Rule 7.8.5(b). Rule 7.8.5(b)
requires a notice of meeting to be accompanied by an appraisal report where resolutions in the notice
of meeting propose to issue financial products and more than 50% of those financial products will, or
are likely to, be issued to directors or their associated person. All financial products proposed to be
issued in Resolutions 1, 2 and 3 will be issued to directors or their associated persons.

An appraisal report is a report prepared by an independent, appropriately qualified person that gives
an opinion, with supporting reasons, as to whether the proposed issuance is fair to shareholders that
are not participating in the issuance.

The conditions of the waiver are:

 the Directors who are independent of the Brankin Family Interest Trust (Independent
Directors) certify to NZX, that in the opinion of each of the Independent Directors, the
Capitalisation Shares and Investment Shares are in the best interest of, and fair and
reasonable to the Company and non-associated Shareholders; and

 the Board certifies to NZX, that in the opinion of each of the Directors, the Director Shares are
in the best interests of, and fair and reasonable to the Company and non-associated
Shareholders.

 the waiver is disclosed in this Notice; and

 the Company completes its SPP offer to all Shareholders at 0.1c per Share prior to 31 May
2021 to give all Shareholders an opportunity to subscribe for Shares at the same price as
under the Resolutions.

The waiver decision (including the reasons for granting the waiver) can be viewed at
https://www.nzx.com/companies/PHL/announcements.

12704148_1 6

When shareholders of the Company approved the acquisition of aged care facilities by the Company
last year, shareholders approved an aggregate issuance of up to 25.1 billion shares at 0.1c per share.
The Board considers that the issuances proposed under the resolutions in this Notice of Meeting are
an extension and variation of those previous approvals. Shareholders seeking more information are
encouraged to review the notice of meeting, listing profile and independent report prepared for that
meeting last year. They are available at https://www.nzx.com/announcements/353771.

NZ RegCo Non-Objection

This Notice of Meeting has been reviewed by NZ RegCo. NZ RegCo has confirmed it has no objection
to this Notice of Meeting.

12704148_1 7
EXPLANATORY NOTES

The Resolutions put forward in this Notice of Meeting involve seeking shareholder approval for the
following:

 Capitalisation Shares: issuing up to 1,557,683,100 Shares at an issue price of 0.01c per Share
to the Brankin Family Interest Trust to reduce debt.

 Investment Shares: issuing up to 300,000,000 Shares at an issue price of 0.01c per Share to
the Brankin Family Interest Trust to raise capital.

 Director Shares: issuing up to 92,683,333 Shares at an issue price of 0.1c per Share to the
Directors to reduce debt.

The purpose of the Resolutions is to approve the issue of Shares in order to preserve cash for growth,
in particular

 The Company’s leased facility, Aldwins House, is now open to residents and the Company is
investing in marketing efforts and staffing resources to increase resident occupancy.

 As occupancy grows, the value of Aldwins House is anticipated to increase. The Company has
a fixed price option to acquire the Aldwins House property until mid-2021 which, if Aldwins
House does increase in value, the Company will likely exercise.

 Three separate acquisition opportunities have been identified and the Company is currently
negotiating non-binding term sheets with three vendor groups with a view to commencing due
diligence in the second quarter of this year. If any of these opportunities proceed, the Company
will likely look at a further equity raise and on revised pricing from the 0.1c per Share that it is
currently raising capital at.

Resolution One: Approval to issue Capitalisation Shares to Brankin Family Interest Trust

Resolution 1 of this Notice of Meeting is intended to approve the issue of 1,557,683,100 Shares at an
issue price of 0.1c per Share to Thomas David Brankin and Michael John Kirwin Lay as trustees of the
Brankin Family Interest Trust (Brankin Family Interest Trust) to capitalise amounts owing to the
Brankin Family Interest Trust by the Company ($1,557,683.10). All shares being issued will be fully paid
ordinary shares ranking equally in all respects with all existing shares.

Capitalisation of Loans

The Company has a historic loan owing to the Brankin Family Interest Trust with a current balance of
$557,683.10 (Historic Loan). This loan originated from the Brankin Family Interest Trust taking an
assignment of a loan owing by the Company to Wells Investments Limited (2018: $798,175). This loan
was previously secured under a general security agreement however that security was discharged in
October 2020 to facilitate the Company obtaining new debt facilities to fund the acquisition of aged care
facilities. In addition, interest was payable by the Company on this loan at 8% per annum (until the loan
was restructured as discussed below). The Brankin Family Interest Trust was otherwise entitled to
demand repayment of the Historic Loan from March 2021.

At completion of the acquisition of the aged care facilities, the Brankin Family Interest Trust also left $1
million of working capital in the companies that own the facilities and were acquired by the Company
(Working Capital Loan). This assisted the Company with meeting higher than anticipated transaction
costs (arising from the delays in completing the acquisition) and provided the Company more financial
capacity as it prepared its Aldwins House facility in Christchurch for opening. Under the sale and
purchase agreement the Working Capital Loan would have been treated as excess working capital in
the acquired companies. Under the sale and purchase agreement excess working capital was to be
calculated through a completion adjustment statement and then repaid to the Brankin Family Interest
Trust within 20 business days of completion.

12704148_1 8
At completion of the aged care facility acquisitions, the Company and the Brankin Family Interest Trust
agreed as follows:

 to defer the requirement for the Company to repay the Working Capital Loan.

 to discharge the general security agreement that secured the Historic Loan.

 to cease the requirement for the Company to pay interest on the Historic Loan and for the
Working Capital Loan to be owing on an interest free basis.

 for the Company to seek shareholder approval at a later time to convert the Historic Loan and
the Working Capital Loan (together, the Loan) into ordinary shares of the Company at 0.1c per
share.

 that if shareholders did not approve conversion or the Loan was not otherwise converted into
shares by 31 March 2022, then the Brankin Family Interest Trust could demand repayment of
the Loan on three months written notice. If such notice was given, interest would be deemed to
be re-applied to the Loan at 8% per annum.

Under Resolution 1 the Board now seeks approval to convert the Loan and issue 1,557,683,100 Shares
to the Brankin Family Interest Trust (Capitalisation Shares). Upon the Loan being fully converted, there
will be no remaining debt owing under the Loan to the Brankin Family Interest Trust. Please note there
will still be a limited recourse loan of $14,180,000 repayable to the Brankin Family Interest Trust
contingent on the sale of occupational rights agreements to new units under the Ranfurly Development.

Resolution Two: Approval to issue Investment Shares to Brankin Family Interest Trust

Resolution 2 of this Notice of Meeting is intended to approve the issue of 300,000,000 Shares at an
issue price of 0.1c per Share to the Brankin Family Interest Trust to raise new cash for the Company
($300,000). All shares being issued will be fully paid ordinary shares ranking equally in all respects with
all existing shares.

New Cash Issue

As advised to shareholders on 16 December 2020, the Company entered a conditional equity
commitment for $300,000 of shares at an issue price of 0.1c per share (Investment Shares) from
associated persons of executive director and majority shareholder Mr. Thomas Brankin, being, the
Brankin Family Interest Trust. The purpose of the equity commitment is to provide more growth funding
for the Company. Under shareholder approvals obtained last year the following capital programme for
the Company was established (Capital Programme):

 the Company obtained shareholder approval to raise up to $8 million in new capital at 0.1c per
share over a 12 month period to fund its aged care facility acquisitions and fund its growth plans.
However, directors and their associated persons were not permitted under the shareholder
approval to participate in this capital raising. At the date of this notice of meeting, $6.75 million
has been raised under this approval and, while a new approval is being sought for the
Investment Shares, the Board’s intention is the Investment Shares form part of this $8 million
target.

 the Company will open a share purchase plan offer to all shareholders on 3 March 2021 where
every shareholder may subscribe for up to $15,000 of new shares at 0.1c per share (subject to
a maximum issue of 5 billion new shares). Applications will be scaled back on a pro rata basis
if the SPP is oversubscribed.

The intention of the Board is to complete the Capital Programme at 0.1c per share by 31 March within
the above limits approved by shareholders.

Payment for the Investment Shares is due 5 business days after the date that shareholders of the
Company approve the issue of the Investment Shares. The Investment Shares will be issued upon
receipt of that payment.

12704148_1 9

Resolution Three: Approval to issue Directors Shares

Resolution 3 of this Notice of Meeting is intended to approve the issue of up to 92,683,333 Shares at an
issue price of 0.1c per Share to select Directors to partially capitalise amounts of director’s fees owing
to them
1
.

While changing the business focus of the Company to become an aged care operator and completing
the acquisition of aged care facilities from the Brankin Family Interest Trust, directors’ fees have accrued
but have not been paid to Directors. Thomas Brankin, Duncan Priest and Stephen Underwood as
Directors wish to support the Company and have agreed to capitalise an amount of the directors’ fees
owing by subscribing for Shares in the Company at 0.1c per Share subject to shareholder approval.

The Company seeks approval to issue up to 92,683,333 fully paid ordinary shares at 0.1c per share
(Director Shares) in satisfaction of $92,683.33 of directors’ fees as follows:

 Thomas Brankin (to be issued to Brankin Family Interest Trust as his nominee) – 18,983,333
Shares;

 Duncan Priest – 18,983,333 Shares; and

 Stephen Underwood – 54,716,667 Shares.

The Director Shares will be fully paid ordinary shares ranking equally in all respects with all existing
shares. The Director Shares will be issued within five business days of shareholder approval being
obtained.

While Directors are permitted to receive shares in lieu of directors fees under the Listing Rules, absent
a specific shareholder approval, those shares must be issued at the volume weighted average price of
shares on the NZX Market, which would be 0.2c per share. Given the directors have supported the
Company for a long period without remuneration, they would appreciate shareholders considering
approving the issue of the Directors Shares at $0.001, being the same issue price as under the capital
programme described above.

The Board considers that issuing equity securities rather than cash is advantageous to the Company as
it preserves cash for its current and anticipated working capital requirements.

Resolutions 1, 2 and 3: Voting Control implications of Resolutions

The Company is a “Code Company” as it is listed on the NZX Market and its shares (including the
Capitalisation Shares, Investment Shares and the Director Shares once issued) confer voting rights and
is subject to the Takeovers Code. The fundamental rule under rule 6 of the Takeovers Code provides
that a person (and their associates) who hold or control 20% or more of the voting rights in a Code
Company may not become the holder or controller of an increased percentage of the voting rights in the
Code Company.

The Brankin Family Interest Trust currently holds 53.91% of all shares on issue in the Company.
Accordingly, the Takeovers Code must be complied with in issuing the Capitalisation Shares, Investment
Shares and the Director Shares to the Brankin Family Interest Trust.

An exception to the fundamental rule under rule 7(e) of the Takeovers Code (the Creep Rule) is that a
person may become the holder or controller of an increased percentage of the voting rights in a Code
Company if:

 the person holds or controls more than 50%, but less than 90%, of the voting rights in the Code
Company; and


1
Director’s fees accrued to 30 October 2020 less resident withholding tax total $111,666.67. Resolution 3 seeks to capitalise
83% of director’s fees.

12704148_1 10
 the resulting percentage of the total voting rights in the Code Company that is held or controlled
by the person does not exceed by more than 5, the lowest percentage of the total voting rights
in the Code Company that was held or controlled by the person in the 12-month period ending
on, and inclusive of, the date of the increase.

The lowest percentage of the total voting rights in the Company held or controlled by the Brankin Family
Interest Trust in the 12-month period prior to the date of the Meeting is 51.29%. Accordingly, the Brankin
Family Interest Trust may rely on the Creep Rule to increase the total voting rights it holds in the
Company to 56.29% (Creep Limit) and still comply with the Takeovers Code.

If the Resolutions are all passed, the Company will issue the new shares as follows:

 within five business days of the Meeting (Initial Allotments):

o the Director Shares will all be issued (92,683,333 Shares in total (0.55%), 18,983,333
Shares being issued to the Brankin Family Interest Trust (0.11%)).
o the Investment Shares will all be issued (300,000,000 Shares (1.73%)).
o the Capitalisation Shares will be issued to the extent that the shareholding of the
Brankin Family Interest will not exceed the Creep Limit (expected to be 695,000,000
Shares (3.86%) but assuming no other allotments are made under the Capital
Programme).

 as further shares are issued to persons that are not associated with the Brankin Family Interest
Trust (for example, under the Capital Programme) further tranches of the Capitalisation Shares
will be issued to the Brankin Family Interest Trust within the following restrictions:

o the resulting shareholding percentage of the Brankin Family Interest Trust will not
exceed the Creep Limit (that applies to it at that time).
o in accordance with the Listing Rules, all Capitalisation Shares must be issued within 12
months of the date of the Meeting or the approval under Resolution 1 lapses.

Assuming that the Company does not issue any other shares between the date of this Notice of Meeting
and the time that it undertakes the Initial Allotments, 695,000,000 Capitalisation Shares will be issued
to the Brankin Family Interest Trust as part of the Initial Allotments. This is demonstrated in the following
table:



All of the remaining Capitalisation Shares can then be issued to the Brankin Family Interest Trust within
the Creep Limit when approximately 670,000,000 shares in the Company are issued to persons that are
not associated with the Brankin Family Interest Trust. The Board anticipates that this will occur through
the Capital Programme at 0.1c per share (approximately $670,000).

As at date of this Notice of Meeting
16,901,797,451 9,112,099,27853.91%
Issue of Directors Shares
16,994,480,784 9,131,082,61153.73%
Issue of Investment Shares
17,294,480,784 9,431,082,61154.53%
Issue of 695 million Capitalisation Shares
17,989,480,784 10,126,082,61156.29%
Amount of Loan converted
695,000.00$
Amount of Loan outstanding
862,683.10$
Capitalisation Shares still to issue
862,683,100
Position following Initial Allotments:
Brankin Family
Interest Trust
Shareholding
Total Shares on
Issue
Brankin Family Interest
Trust Shareholding
Percentage

12704148_1 11
Given the intention to raise further funding under the Capital Programme, the Board has decided to
manage the issue of the Capitalisation Shares under the Creep Rule rather than seek a shareholder
approval to allot all the Capitalisation Shares under the Takeovers Code all at once. This means the
Company avoids the expense of commissioning an independent adviser’s report for what it anticipates
would only be a short term increase in control for the Brankin Family Interest Trust given the Capital
Programme.

EFFECT OF RESOLUTIONS

Effect of Resolutions Passing

If the Resolutions are both passed, the Company will issue the Capitalisation Shares, Investment Shares
and the Director Shares. This will strengthen the Company’s balance sheet by removing approximately
$1.65 million of liabilities and increasing its equity by an equivalent amount. In addition, the Company
will gain $300,000 in cash from the Investment Shares.

Assuming that both Resolutions are passed and all of the Capitalisation Shares, Investment Shares and
Directors Shares are issued, the dilutionary effect on a Shareholder is as follows:
2


Current shares on issue: 16,901,797,451
Resolution 1: Capitalisation Shares to Brankin Family Interest
Trust
1,357,683,100
Resolution 2: Investment Shares to Brankin Family Interest
Trust
300,000,000
Resolution 3: Share issue to Directors 92,683,333
Total Shares on issue after Resolutions passed: 18,852,163,884
Example Shareholder percentage holding pre-allotments: 10%
Example Shareholder percentage holding post allotments: 8.97%

The Resolutions will result in a Shareholder’s shareholding in the Company being diluted. The number
of shares each Shareholder has in the Company will remain unchanged, but the percentage of the
Company that a Shareholder holds will be reduced.

Shareholders will have an opportunity to increase their shareholding and off-set this dilutionary effect by
subscribing for additional Shares in the Company under the share purchase plan to be conducted shortly
as part of the Capital Programme.

Effect of Resolutions not Passing

The Resolutions are not interdependent.

If Resolution 1 is not passed:

 the Company will be liable to pay interest on the Loan at 8% per annum from the period of 30
October 2020 until the date the Loan is repaid.


2
This table excludes additional shares that may be issued under the Capital Programme.

12704148_1 12
 the Brankin Family Interest Trust may call for repayment of the Loan on three months written
notice to the Company. If that occurred, the Company would need to expand the Capital
Programme and divert cash to fund the Loan repayment rather than Company growth.
Accordingly, Shareholders would still incur the dilutionary effects outlined above. If the
Company is unable to raise capital to fund the Loan repayment, the Company will need to
return to Shareholders for alternative capital options.

If Resolution 2 is not passed the Company will not issue the Investment Shares and will not receive
$300,000 in new capital from the Brankin Family Interest Trust. The Company will look to instead place
these shares with a person that is not a director of the Company (or an associated person of a director).

If Resolution 3 is not passed:

 the Company will remain liable to pay the accrued directors fees of $92,683.33 in cash and
until they are paid, this amount will remain a liability on the Company’s balance sheet.

 the Company will need to expand the Capital Programme and divert cash to fund the director’s
fees rather than Company growth. If the Company is unable to raise capital to fund director’s
fees repayments, the Company will need to return to Shareholders for alternative capital
options.

LISTING RULE REQUIREMENTS FOR RESOLUTIONS

Shareholder approval for Resolution 1 (Approval to issue Capitalisation Shares to Brankin Family
Interest Trust) is required under Listing Rules 4.2.1(a) given that the Brankin Family Interest Trust is an
associated person of a director of the Company.

Shareholder approval for Resolution 2 (Approval to issue Investment Shares to Brankin Family Interest
Trust) is required under Listing Rules 4.2.1(a) given that the Brankin Family Interest Trust is an
associated person of a director of the Company.

Shareholder approval for Resolution 3 (Approval to issue Director Shares) is also required under Listing
Rules 4.2.1(a) given that, in only limited circumstances that are not applicable here, may a listed
company issue shares to a director without shareholder approval.

Listing Rule 4.2.1(a) requires Shareholders to approve the precise terms and conditions of certain issues
of equity securities. Listing Rules 4.2.2(b) provides that, in the present circumstances, the equity security
issue must be completed within 12 months of the date that Shareholders pass Resolutions 1 and 2.

The tables below sets out the specific disclosures required by Listing Rule 7.8.4 for the equity security
issues being authorised in Resolution 1.

Capitalisation Shares
Number of Shares to be issued 1,557,683,100 fully paid shares
Purpose of issue To capitalise the Loan owing by the Company to the
Brankin Family Interest Trust
Issue price 0.1c per Share
Party to whom Shares will be issued Thomas David Brankin and Michael John Kirwin Lay as
trustees of the Brankin Family Interest Trust
Consideration for the issue $1,557,683 (being the amount owing to the Brankin
Family Interest Trust under the Loan)

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Time period for the issue The issue of Capitalisation Shares may occur at multiple
times. The issue will initially and partially occur within five
business days of the Meeting. The issue will otherwise
occur within 12 months of the date of the Meeting in
accordance with the Listing Rule 4.2.2(b).
Ranking of Shares to be issued The Capitalisation Shares will rank equally in all respects
with all other shares on issue in the Company.

The tables below sets out the specific disclosures required by Listing Rule 7.8.4 for the equity security
issues being authorised in Resolution 2.

Investment Shares
Number of Shares to be issued 300,000,000 fully paid Shares
Purpose of issue To raise further capital for future growth.
Issue price 0.1c per Share
Party to whom Shares will be issued
Thomas David Brankin and Michael John Kirwin Lay as
trustees of the Brankin Family Interest Trust
Consideration for the issue $300,000
Time period for the issue Investment Shares will be issued upon receipt of payment
and within five business days of the date of the Meeting.
Ranking of Shares to be issued The Investment Shares will rank equally in all respects
with all other shares on issue in the Company.

The tables below sets out the specific disclosures required by Listing Rule 7.8.4 for the equity security
issues being authorised in Resolution 3.

Director Shares
Number of Shares to be issued 92,683,333 fully paid Shares
Purpose of issue To capitalise amounts owing by the Company to the
Directors for directors fees
Issue price 0.1c per Share
Party to whom Shares will be issued Duncan Priest, Stephen Underwood and Thomas David
Brankin and Michael John Kirwin Lay as trustees of the
Brankin Family Interest Trust
Consideration for the issue $92,683.33 (being the amounts owing to the Directors
that are being capitalised)
Time period for the issue The Director Shares will be issued within five business
days of the date of the Meeting.
Ranking of Shares to be issued
The Director Shares will rank equally in all respects with
all other shares on issue in the Company.