Announcement PDF Amaero International Limited Share Purchase Plan Share Purchase Plan – Offer Eligible Shareholders have the opportunity to participate in the Offer by applying for up to $30,000 worth of Shares without incurring brokerage, commissions, stamp duty or other transaction costs. Details of the Offer and how to participate are set out in these Terms and Conditions. Shares issued under the Offer will rank equally in all respects with all other Shares on issue as at the Issue Date and will carry the same voting rights, dividend rights and other entitlements as those Shares. Share Purchase Plan – Key Dates Event Date Record Date (being the trading business day prior to Amaero's announcement of the Plan) Friday, 4 December 2020 Opening Date Monday, 14 December 2020 Closing Date Friday, 15 January 2021 Announcement of results of the Plan Wednesday, 20 January 2021 Issue Date (ie. the date of issue of Shares under the Offer) Wednesday, 27 January 2021 Date on which Shares issued under the Offer are expected to commence trading on ASX Wednesday, 27 January 2021 Despatch of holding statements in respect of Shares issued under the Offer Friday, 29 January 2021 Note: The Company reserves the right to vary the dates and times set out above subject to the Corporations Act and other applicable laws. Registered Office: 13 Normanby Road, Notting Hill, VIC, 3168, Australia Chairman's letter 11 December 2020 Dear Shareholder Amaero International Limited Share Purchase Plan I am pleased to invite you to participate in the offer of fully paid ordinary shares (Shares) in Amaero International Limited ACN 633 541 634 (Amaero or the Company) under the share purchase plan (Plan) established by Amaero (Offer). The Company is raising $3,000,000 under the Offer. The Offer is partially underwritten up to $1,500,000 by Amaero’s Strategic Alloys joint venture partner PPK Group Ltd (ACN 003 964 181) (PPK). The Offer is in addition to a capital raising of $9.0 million (before costs) through a share placement to domestic and international institutional funds, and sophisticated investors, announced to the ASX on 7 December 2020 (Placement). Overview of the Offer The Offer provides you, as an 'Eligible Shareholder' of Amaero (subject to certain conditions), with an opportunity to acquire up to, in aggregate, $30,000 of Shares in Amaero at an issue price of $0.55 per Share (Issue Price). The Issue Price represents an approximate 16.0% discount to the volume-weighted average price (VWAP) of Shares traded on the ASX on 4 December 2020, which was the last day of trading prior to Amaero's announcement of the Plan. The Issue Price is a 19.9% discount to the 5-day VWAP and a 20.8% discount to the 15-day VWAP. The Issue Price is the same as the issue price applicable to the Placement. Amaero is raising $3,000,000 under the Offer, however, the Company may, at its absolute discretion, scale back the number of Shares that will be allotted to individual Shareholders under the Plan and/or increase the size of the Plan. If applications are scaled back, excess funds will be returned to applicants without interest. Participation in the Offer is optional and is open to 'Eligible Shareholders' who, as at the Record Date (7.00pm AEDT on Friday 4 December 2020), were registered as holders of ordinary shares in Amaero and whose address on the share register is in Australia or New Zealand. If an 'Eligible Shareholder' holds shares as a 'Custodian' (as that term is defined in ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547) the Offer is also being made to the 'Custodian' and, subject to a number of conditions, the 'Custodian' has the discretion to extend the Offer to the relevant beneficiaries. The Offer is being undertaken in conjunction with, and supplemental to, the Placement. In addition to funding the costs of the Offer and Placement, the proceeds of the Offer (along with the Placement) will be applied as follows: Use Funds allocated Equipment purchases $6,300,000 Capital expenses (install & fitout) $1,000,000 Research & Development Working capital Capital raising costs Total $750,000 $3,410,000 $540,000 $12,000,000 (Note, $70,000 of capital raising fees will be issued in the form of shares at the offer Price, in lieu of cash fees.) . 2|Page Timing considerations The Offer will be undertaken in accordance with the below timetable. However, Amaero reserves the right to vary the dates and times set out below subject to the Corporations Act and other applicable laws. Event Date Record Date (the last trading day prior to Amaero's announcement of the Plan) Friday, 4 December 2020 Opening Date Monday, 14 December 2020 Closing Date Friday, 15 January 2021 Announcement of results of the Plan Wednesday, 20 January 2021 Issue Date (ie. the date of issue of Shares under the Offer) Wednesday, 27 January 2021 Date on which Shares issued under the Offer are expected to commence trading on ASX Wednesday, 27 January 2021 Despatch of holding statements in respect of Shares issued under the Offer Friday, 29 January 2021 To participate in the Offer, you must pay via BPAY® either online or by telephone from your eligible Australian bank account, or by Electronic Funds Transfer to the bank account as shown on the attached application form. Amaero will not be accepting cheque or cash payments. Further information In accordance with the enclosed terms and conditions (Terms and Conditions), the Offer is non-renounceable and Shares in Amaero may be issued under the Offer only to the 'Eligible Shareholder' to whom they are offered. Further details in relation to the Offer are set out in the accompanying documentation, including the Terms and Conditions. In deciding whether to participate in the Offer, you should seek your own independent financial, legal and taxation advice in respect of the Offer. No cooling off regime applies to the acquisition of ordinary shares in Amaero under the Offer. On behalf of the Board, I thank you for your continued support of Amaero and I invite you to consider participating in the Offer. Yours faithfully David Hanna Chairman Amaero International Limited 3|Page Questions and answers Question Answer What is the Share Purchase Plan? The Plan is an opportunity for Eligible Shareholders to purchase additional Shares without brokerage, commissions or other transaction costs. All Shares issued to you under the Plan will rank equally with your existing fully paid Shares and will carry the same voting rights and other entitlements. Am I eligible to participate? You are eligible to participate if you fulfil the criteria set out in section 2 of the Terms and Conditions. For you to be eligible to participate in the Offer, you must have been a holder of Amaero shares at 7.00pm (AEDT) 4 December 2020 (Record Date) with a registered address in Australia or New Zealand. Certain Eligible Shareholders who are custodians holding Shares on behalf of certain beneficiaries are also able to participate in the Plan in accordance with the Terms and Conditions. Do I have to participate? No. Participation in the Plan is entirely voluntary. If you do not wish to participate in the Plan, no action is required on your part. Before you apply for Shares, Amaero recommends you seek independent financial advice from your stockbroker, accountant or other professional adviser, and you monitor the price of the Shares (which is quoted at www.asx.com.au). This booklet does not purport to contain all of the information that you need to make an investment decision. Are there any risks in participating in the Plan? There are risks associated with holding Shares and participating in the Plan. These risks are summarised in section 10 of these Terms and Conditions. Eligible Shareholders are encouraged to read these risks carefully before deciding to apply for Shares under the Plan. In addition, there is a risk that the Issue Price may differ from the market price of Shares on the day Shares are issued or allotted to you under the Plan. The market price or value of Shares is subject to market volatility. It may be higher or lower, at any time, than the Issue Price of the Shares you receive. Can I transfer my entitlement to participate? If you are eligible to participate in the Offer, you cannot transfer your right to purchase Shares under the Offer to anyone else. What is the Issue Price of the Shares under the Plan? The Issue Price of each Share issued under the Offer will be $0.55 per Share, being the same price as Shares issued under the Placement which was announced by Amaero on 7 December 2020. The Issue Price represents an approximate 16.0% discount to the volume-weighted average price (VWAP) of Shares traded on the ASX on 4 December 2020, which was the last day of trading prior to Amaero's announcement of the Plan. The Issue Price is a 19.9% discount to the 5-day VWAP and a 20.8% discount to the 15-day VWAP. How many Shares can I apply for under the Plan? If you are an Eligible Shareholder, you are entitled to contribute a set amount of $1,000, $2,500, $5,000, $10,000, $15,000, $20,000, $25,000 or $30,000 in applying for Shares under the Offer, regardless of the number of Shares you currently hold. These amounts may be subject to scale back. If you receive more than one copy of this booklet, or you hold Shares in more than one capacity (e.g. because you are both a sole and joint holder of Shares), the maximum amount you may apply to invest under the Plan in all capacities, and in aggregate, is $30,000. By applying to purchase Shares under the Plan, you certify you have not exceeded this $30,000 limit. If the Issue Price cannot be divided into $1,000, $2,500, $5,000, $10,000, $15,000, $20,000, $25,000 or $30,000, to give a whole number of Shares, there will be rounding down of the number of Shares. By applying to purchase Shares under the Plan, you acknowledge that any remaining balance of your payment arising from any rounding down will be deemed to form part of the aggregate Issue Price for the Shares. You will not receive a refund for this amount which will always be less than the Issue Price of one Share. Is the Plan underwritten? The Plan is partially underwritten to $1,500,000 by PPK Group Ltd. underwriting are in section 9. More details of the 4|Page Question Answer What will happen if the Plan is oversubscribed? The Plan aims to raise $3,000,000. Amaero may, at its absolute discretion, scale back the number of Shares that will be allotted to individual Shareholders under the Plan and/or increase the size of the plan. If this happens you may be allocated Shares to a value which is less than the value of Shares that you applied for and the difference will be refunded to you. How do I apply? To apply for Shares under the Offer, make a payment of $1,000, $2,500, $5,000, $10,000, $15,000, $20,000, $25,000 or $30,000, using the BPAY® facility provided by your bank, or by electronic funds transfer, as per the instructions on the Application Form. If you make a payment, you will be deemed to have completed an Application Form accepting Shares to the value of $1,000, $2,500, $5,000, $10,000, $15,000, $20,000, $25,000 or $30,000. You do not need to return the Application Form. You will not be able to withdraw or revoke your Application once you have made a payment. Amaero will not be accepting cheque or cash payments. Can I apply for Shares under the Plan if my Shares are held by a custodian, trustee or nominee? If you are beneficiary of Shares held by a custodian, trustee or nominee, and you reside in Australia or New Zealand, you may be eligible to participate in the Plan through your Custodian, subject to the requirements set out in section 3.2 of the Terms and Conditions. How long is the Plan open for? The Plan opens at 9.00am (AEDT) on Monday 14 December 2020 and closes at 5.00pm (AEDT) on Friday 15 January 2021. If you want to participate you must ensure that Automic receives payment in cleared funds by no later than 5.00pm (AEDT) on 15 January 2021 (the Closing Date for the Plan). Do I have a guaranteed allocation of Shares under the Plan? No. Amaero reserves the right (at its absolute discretion) to scale back applications under the Plan. If this happens, you may be allocated fewer Shares than the Parcel of Shares for which you applied, and you will be refunded the difference in the application amount (without interest payable on funds prior to your refund). What is the market price of Shares? The market price of Amaero Shares can be found on www.asx.com.au using the stock code '3DA'. Information is also available in the financial pages of major metropolitan newspapers. What will funds raised under the Plan be used for? Proceeds of the Offer will be applied as follows: Use Funds allocated Equipment purchases $6,300,000 Capital expenses (install & fitout) $1,000,000 Research & Development Working capital Capital raising costs Total $750,000 $3,410,000 $540,000 $12,000,000 (Note, $70,000 of capital raising fees will be issued in the form of shares at the offer Price, in lieu of cash fees.) Further assistance: If you have any questions in relation to the Plan please call your stockbroker, accountant or other professional advisor. If you require further information, please contact the Share Registry, Automic Pty Ltd, between 8:30am to 5:00pm (AEST) Monday to Friday on 1300 288 664 (callers within Australia) or +61 2 9698 5414 (callers outside Australia). 5|Page Terms and conditions 1. Establishment The Plan is established pursuant to ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 (ASIC Instrument) and in accordance with ASIC Regulatory Guide 125 and the ASX Listing Rules. The ASIC Instrument grants relief from the requirement to prepare a prospectus for the offer of Shares under the Plan, subject to the satisfaction of certain conditions. 2. Participation The Board may make offers under the Plan to all persons who, as at the Record Date, are Eligible Shareholders. You are eligible to participate in the Offer (an Eligible Shareholder) if you were a registered holder of Shares at the Record Date (7.00pm AEDT on 4 December 2020) with a registered address in Australia or New Zealand (as shown on Amaero's share register) unless: (a) you hold Shares on behalf of another person who resides outside Australia or New Zealand in which case you will not be eligible to participate in respect of the Shares of that person unless participation complies with all applicable foreign laws; or (b) you are, or are acting for the account or benefit of, a U.S. Person as defined in Regulation S under the US Securities Act of 1933, as amended (U.S. Person). Amaero has determined that it is not practical for a holder of Shares with a registered address (as shown on Amaero's share register) in any jurisdiction other than Australia or New Zealand to participate in the Offer. No Offer is made to persons who are not Eligible Shareholders. Participation in the Offer by Eligible Shareholders is optional and is subject to these Terms and Conditions. 3. Offer 3.1 Nature of offer The Offer is non-renounceable and Shares may be issued under the Plan only to the Eligible Shareholder to whom they are offered. The Offer will be made on the same terms and conditions to each Eligible Shareholder. For the avoidance of doubt, all Eligible Shareholders will receive the same offer, irrespective of the number of Shares which they hold on the Record Date. 3.2 Plan participation rules The following rules apply to participation by Eligible Shareholders. Single holders Unless a holder is a Custodian, each Eligible Shareholder is entitled to apply under the Offer to purchase a Parcel of Shares valued at $1,000, $2,500, $5,000, $10,000, $15,000, $20,000, $25,000 or $30,000 (irrespective of whether the holder receives multiple offer documents under the Plan, for example, due to multiple registered sole or joint holdings), subject to the holder certifying that the total of the application price for the following does not exceed $30,000: (a) the Shares the subject of the application; (b) any other Shares applied for by the holder under the Plan or any similar arrangement in the 12 months before the application; (c) any other Shares which the holder has instructed a Custodian to acquire on their behalf under the Plan; and (d) any other Shares issued to a Custodian under an arrangement similar to the Plan in the 12 months before the application as a result of an instruction given by the holder to the Custodian or another Custodian which resulted in the holder holding beneficial interests in the Shares. By completing and submitting an application for Shares under the Offer, a holder certifies the above. 6|Page Joint holders Unless a holder is a Custodian, if an Eligible Shareholder is recorded with one or more other persons as a joint holder of Shares, that joint holding is considered to be a single registered holding for the purpose of the Plan and certifications or representations given by a joint holder are taken to have been given by all joint holders. Joint holders are only entitled to participate in the Offer in respect of that single holding. If the same joint holders receive more than one offer document under the Plan due to multiple identical holdings, the joint holders may only apply for one maximum amount of $30,000 worth of Shares. Custodians If an Eligible Shareholder holds Shares as a Custodian, the Offer is made to the Custodian and, subject to a number of conditions, the Custodian has the discretion to extend the Offer to the Beneficiaries. The Custodian may apply for up to a maximum amount of $30,000 worth of Shares in respect of each Beneficiary, however, Amaero will not allocate Shares under the Offer to the Custodian unless the Custodian certifies the matters set out in paragraph 8 of the ASIC Instrument in a Custodian Certificate, which it will need to provide to Automic in conjunction with its application. Custodians wishing to participate in the Offer on behalf of one or more Beneficiaries should contact Automic to obtain further information on how to apply and how to obtain a Custodian Certificate. If a Custodian holds Shares jointly on behalf of two or more Beneficiaries, the $30,000 limit applies jointly in relation to those Beneficiaries as if the Custodian held the Shares on behalf of a single person. To the extent that a Custodian holds Shares on behalf of a Beneficiary resident outside of Australia and New Zealand and which is not a U.S. Person, it is the responsibility of the Custodian to ensure that any acceptance complies with all applicable foreign laws. A Custodian must not participate in the Plan if their participation in the Plan would breach the ASIC Instrument. 3.3 Other terms The Offer opens at 9.00am (AEDT) on Monday 14 December 2020. Under the Offer you may apply for shares up to a maximum of $30,000 (subject to scale back described further below). 4. Issue Price Shares will be issued under the Offer at an issue price of $0.55 per Share (Issue Price), being the same price as Shares issued under the Placement, which was announced by Amaero on 7 December 2020. The Issue Price represents an approximate 16.0% discount to the volume-weighted average price (VWAP) of Shares traded on the ASX on 4 December 2020, which was the last day of trading prior to Amaero's announcement of the Plan. The Issue Price is a 19.9% discount to the 5-day VWAP and a 20.8% discount to the 15-day VWAP. Shareholders should note that there is a risk that the market price of Shares may change between the date of the Offer and the date on which Shares are issued pursuant to the Plan. This means it is possible that, between the time you make your application and the date on which Shares are issued pursuant to the Plan, you may be able to buy Shares at a lower price than the Issue Price. No cooling-off regime applies in relation to the application for or acquisition of Shares under the Plan. The Board recommends that you monitor the Share price and any Amaero announcements on ASX's website at www.asx.com.au. 5. Costs of participation No brokerage, commissions, stamp duty or other transaction costs will be payable by Eligible Shareholders in respect of the application for, and issue of, Shares under the Plan. 6. Acceptance of Offer 6.1 Payment method If you wish to participate in the Offer, you must make payment by BPAY® or by electronic funds transfer, following the instructions on your Application Form. You do not need to return your Application Form. By making payment, you are deemed to make the certifications and representations described in these Terms and Conditions and the Application Form. However, Custodians applying for Beneficiaries must still complete and return a Custodian Certificate. 7|Page Payment must be received by no later than 5.00pm (AEDT) on the Closing Date. You should be aware that your own financial institution may implement earlier cut-off times with regard to electronic payment, and you should therefore take this into consideration when making payment. It is your responsibility to ensure that funds submitted through BPAY® or electronic funds transfer are received by the Closing Date. 6.2 Further information Amaero will not be accepting cheque or cash payments. Applications received after 5.00pm (AEDT) on the Closing Date will not be processed. If you have more than one holding of Shares and consequently receive more than one Application Form, when applying for Shares in respect of one of those shareholdings you must only use the customer reference number specific to that shareholding as set out in the relevant Application Form. Do not use the same customer reference number for more than one of your shareholdings. This can result in your application monies being applied to your application in respect of only one of your shareholdings (with the result that any application in respect of your remaining shareholdings will not be recognised as valid). If one or more Applications are received under the Plan from an Eligible Shareholder in relation to Shares with a value greater than $30,000 in any 12 month period, the Shareholder will be issued with the maximum number of Shares permitted by the Plan and the terms of the Offer. Any excess subscription monies will be refunded to the Eligible Shareholder (without interest) as soon as reasonably practicable following allocation. If an Eligible Shareholder subscribes for an amount which is not exactly divisible by the Issue Price, in calculating the number of Shares to be issued, all fractional entitlements will be rounded down to the nearest whole number of Shares. Amaero will not refund any resulting small excess in subscription monies (ie. $0.54 or less) which will be deemed to form part of the aggregate Issue Price for the Shares. 6.3 Board discretion Notwithstanding any other provision of these Terms and Conditions, the Board may, at its absolute discretion, accept, reject, correct or amend your application for Shares under the Offer, including, without limitation, if: 7. (a) the BPAY® or electronic funds transfer payment received in respect of your application is for less than the full, requisite amount; or (b) the Board is not reasonably satisfied that you are an Eligible Shareholder. Amount to be raised and scale back The Company seeks to raise $3,000,000 through the Plan. The Company, however, reserves its absolute discretion regarding the final amount raised under the Plan subject to the ASX Listing Rules. Subject to complying with applicable laws and the ASIC Instrument, Amaero reserves the right to close the Offer early or to scale back applications in its sole and absolute discretion. If applications from Eligible Shareholders for participation in the Plan in aggregate exceed $3,000,000 or such other limit as determined by the Board, the Board will scale back applications to the extent and in the manner that the Board sees fit, including by taking into account the size of an Eligible Shareholder's holding as at the Record Date. If there is a scale back, Eligible Shareholders may receive less Shares than the number of Shares for which they applied. If a scale back produces a fractional number of Shares when applied to a particular parcel, the number of Shares allocated to an Eligible Shareholder will be rounded down to the nearest whole number of Shares. In the event of a scale back, the difference between the application monies received, and the number of Shares allocated to you under the Offer multiplied by the Issue Price, will be refunded to you, without interest, as soon as reasonably practicable following allocation. 8. Issue of Shares Amaero intends to issue Shares pursuant to the Offer on the Issue Date (27 January 2021). All Shares issued under the Plan will rank equally in all respects with all other Shares on issue as at the date of issue and will carry the same voting rights, dividend rights and other entitlements as those Shares. Amaero will apply for Shares issued under the Plan to be quoted on ASX. It is expected that they will be quoted on ASX, on or shortly after the Issue Date. Amaero will, within the period required by the ASX Listing Rules, send Eligible Shareholders, whose application has been accepted by the Board, a holding statement in respect of any Shares issued to them under the Plan. 8|Page 9. Underwriting The Plan is partially underwritten to $1,500,000 by PPK Group Ltd (PPK). PPK is an Australian company investing in Boron Nitride Nanotubes (BNNT), commercialisation of high performance batteries, ballistic armour, dental products and mining technology. Headquartered in Brisbane, PPK is listed on the ASX (code PPK) and has a market capitalisation of approximately $515 million. On 9 November 2020, Amaero and PPK announced that they had entered a joint venture with Deakin University to develop a super strength aluminium alloy. The parties have incorporated Strategic Alloys Pty Ltd to undertake this project, with an Amaero subsidiary owning 45% of the company, a PPK subsidiary also owning 45% and Deakin University owning 10%. Amaero and PPK have entered into an Underwriting Agreement under which:  PPK agrees to underwrite the subscription for the first $1,500,000 of the SPP Shares.  Amaero agrees to issue to PPK an amount of Shares such that PPK subscribes for a minimum of $500,000 under the Offer. (That is, once Amaero receives valid elections exceeding $1,500,000 to participate in the SPP, PPK’s obligation to underwrite shortfall shares will have been satisfied and PPK will subscribe for shares to the value of $500,000.)  All shares issued to PPK will be issued at the same Price and at the same time as SPP Shares.  PPK must subscribe for the shares itself and may not appoint sub-underwriters.  Amaero will pay PPK an underwriting fee of $1.00 upon request. The Underwriting Agreement also contains customary legal terms, including:  Amaero and PPK giving each other certain representations, warranties and undertakings in connection with the SPP.  Amaero agreeing to indemnify PPK from claims relating to the SPP, subject to certain exceptions.  PPK having rights to terminate the Underwriting Agreement, and be released from its obligations to subscribe for the shares, if certain events happen, including if Amaero’s shares are suspended by ASX, if the S&P/ASX 200 Index is at any time during the period from 7 December 2020 to the shortfall settlement date, 10% or more below its level as at the close of business on 7 December 2020 for at least 2 trading days, or Amaero is prevented from allotting and issuing the Offer Shares within the time required by the Agreement. Please refer to the Amaero ASX announcement of 7 December 2020 for a description of the termination events. Shares issued to PPK will be issued without prior shareholder approval, under the Company’s placement capacity of up to 15% of total issued shares. 10. Risk factors Prior to deciding whether to apply for Shares under the Plan, Eligible Shareholders should read this document in its entirety and review all recent announcements made by the Company to the ASX in order to gain an understanding of the Company, its activities, operations, financial position and prospects. The risks included in this Section are those risks identified by the Board as being relevant to the Company and its operations as at the date of this document and reasonably anticipated by the Board. It is important to note that the risks listed in this Section are not an exhaustive list of the risks relevant to the Company. Shareholders are strongly encouraged to: rely on their own knowledge of the Company; refer to disclosures made by the Company to ASX;and consult their independent professional advisers, before deciding whether to apply for Shares. Announcements made by the Company to ASX are available from the ASX website www.asx.com.au. 9|Page The risks described in this Section may impact upon the Company’s future performance, so the Company and its Board has endeavoured (and will continue to do so) to take steps to safeguard the Company from, and to mitigate the Company’s exposure to, these risks. Specific risk factors Dilution The Offer will result in the issue of new ordinary shares. If you do not participate in the Offer, your percentage holding in the Company (held at the Record Date) will be reduced by the take up of Shares by other Shareholders (and by PPK). COVID-19 risk Amaero has observed that in response to COVID-19 a growing number of governments globally are imposing restrictions on the movement of its citizens and limiting non-essential services and activities. Governments around the world are also recommending or enforcing restrictions on domestic and international travel in order to slow the spre