Announcement PDF ATOMO DIAGNOSTICS LIMITED (ACN 142 925 684) Share Purchase Plan Booklet Important Notice and Disclaimer This Booklet offers Eligible Shareholders the opportunity to purchase up to $30,000 of fully paid ordinary shares in Atomo Diagnostics Limited (ACN 142 925 684) (Atomo or Company) under a share purchase plan (SPP). This Booklet does not provide financial advice and has been prepared without taking into account the individual investment objectives, financial situation or needs of any investor. You should read this Booklet in its entirety and seek independent financial and taxation advice before making a decision to participate in the SPP. The offer of New Shares under the SPP is made in accordance with ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 (ASIC Instrument). The ASIC Instrument grants relief from the requirement for Atomo to provide a prospectus in relation to the SPP. The ASIC instrument limits the maximum amount that a shareholder is able to subscribe for under the SPP or any similar arrangement, to $30,000 in any consecutive 12-month period. This Booklet is not a product disclosure statement or a prospectus under the Corporations Act. The SPP was announced to the ASX on 13 July 2023 in conjunction with a placement of fully paid ordinary shares to institutional and sophisticated investors. Atomo will use its best endeavours to ensure that SPP participants have a reasonable opportunity to participate equitably in the overall capital raising. Accordingly, any scale-back arrangements for SPP participants will be applied on a pro rata basis based on the number of New Shares that the Eligible Shareholder has applied for. The laws of some countries prohibit or make impracticable participation in the SPP by certain overseas Shareholders. Atomo has determined that it is not practical to permit Shareholders who are not resident in Australia, New Zealand or the United Kingdom to participate in the SPP. Accordingly, Shareholders who are not resident in Australia or New Zealand or the United Kingdom will not be able to participate in the SPP. The SPP does not constitute an offer of New Shares for sale in any other jurisdictions. Refer to clause 14 for foreign offering restrictions and rules applicable to Shareholders resident in New Zealand and the United Kingdom. Page 1 MANAGING DIRECTOR & CEO'S LETTER 18 July 2023 Dear Shareholder On behalf of the Board of Directors of Atomo Diagnostics Limited (ACN 142 925 684) (Atomo or Company), I am pleased to offer Eligible Shareholders an opportunity to participate in Atomo’s Share Purchase Plan (SPP), which was announced to the ASX on 13 July 2023 in conjunction with a placement of fully paid ordinary shares to institutional and sophisticated investors (Placement). Atomo received firm commitments of approximately $1.25 million under the Placement and expects to issue approximately 35 million Placement Shares tomorrow. Under the SPP, Eligible Shareholders have the opportunity to subscribe for up to $30,000 of fully paid, ordinary shares in Atomo (New Shares) at the SPP Issue Price. The exact pricing of the SPP is still to be determined, but New Shares will be issued pursuant to the SPP at an issue price to be at the lower of: (a) $0.036 per New Share, being the price paid under the Placement; and (b) a 2.5% discount to the VWAP of shares traded on the ASX during the five trading days up to the closing date of the SPP, rounded to the nearest half cent. The Company has applied to ASX for a waiver of Listing Rule 7.1, to permit the Company to issue New Shares under the SPP to be conducted in accordance with the ASIC Instrument, without shareholder approval, with the pricing to be determined as set out above, and on the condition that the number of New Shares issued under the SPP is not greater than 30% of the number of fully paid ordinary shares already on issue (ASX Waiver). In the event that the Waiver is not granted, the Company intends to seek Shareholder approval to issue the New Shares under the SPP, with such issue to be conditional on receipt of this shareholder approval. Use of proceeds As announced to the ASX on 13 July 2023, Atomo successfully raised $1.25 million under the Placement. Proceeds from the Placement and the SPP will be used to fund expanding and accelerating sales, marketing, business development and new product registration activities focussing on revenue generating activities and growth. Specifically, the funds will be applied to achieving the following primary objectives: (a) finalising the registration and launch of the Atomo hCG Pregnancy Test in the Asia-Pacific region, which is in the advanced planning stage; (b) commencement of the FDA registration process for the hCG Pregnancy Test in the US; (c) optimising operations for the production of Atomo's Iron Deficiency Test in the Company's South African facility, and registering and launching this product in Australia, New Zealand and Europe; and (d) ongoing development of the Company's product pipeline. Further details on the Placement are set out in the announcement released to the Company's ASX platform on 13 July 2023. Details of the offer under the SPP The SPP is not underwritten and the total amount to be raised under the SPP is subject to a cap of $2.75 million. Atomo reserves the right to scale-back applications in its absolute discretion and it may, in its absolute discretion, increase the cap in order to reduce or prevent the need for a scale-back should total demand under Page 2 Error! Unknown document property name. the SPP exceed $2.75 million. Atomo will use its best endeavours to ensure that SPP participants have a reasonable opportunity to participate equitably in the overall capital raising. Accordingly, any scale-back arrangements for SPP participants will be applied on a pro rata basis to all participants based on the number of New Shares that the Eligible Shareholder has applied for. In the event of a scale-back, you may be allocated New Shares to a value which is less than the parcel which you applied for and the difference will be refunded to you without interest. The New Shares issued under the SPP will rank equally with existing Atomo shares quoted on the ASX. Participation in the SPP is optional and is open to Eligible Shareholders, being holders of fully paid ordinary Atomo shares as at 7:00pm (AEST) on 12 July 2023 with a registered address in Australia, New Zealand or the United Kingdom and who meet certain other conditions set out in clause 14 of this Booklet. Your right to participate in the SPP is not transferrable. Shortfall Facility If there remains any shortfall in the subscription of New Shares under the SPP (Shortfall), the Board reserves the right to issue all or any of the New Shares that comprise the Shortfall under a shortfall facility at their discretion (Shortfall Facility), subject to the requirements of the ASX Listing Rules and the Corporations Act. The New Shares issued under a Shortfall Facility will be offered through a placement to institutional and sophisticated investors at the same price as the SPP Issue Price. New Shares issued under the Shortfall Facility will rank equally with existing Atomo Shares quoted on the ASX. As set out in the announcement of 13 July 2023, Atomo has received a binding commitment of up to $1 million (at the same price as the SPP) in the event that less than $1 million is raised under the SPP. This commitment will be reduced (pro rata) to the extent of the funds raised under the SPP. Any Shares issued pursuant to such commitment will be issued without disclosure to an institutional investor and within the Company's placement capacity under Listing Rule 7.1. The SPP is not underwritten. Bell Potter has been engaged to assist with the placement of New Shares under the Shortfall Facility. If you are an institutional or sophisticated investor and would like to participate in the Shortfall Facility, please contact Harry Mighell, Bell Potter at hmighell@bellpotter.com.au or by calling 03 9235 1733. How to apply If you are an Eligible Shareholder and wish to participate in the SPP, you may apply to purchase New Shares with a minimum application amount of $1,000 and any additional New Shares in the increments shown at clause 5.2 of the Terms and Conditions, with a maximum application amount of $30,000. You can apply for New Shares by completing your application online and making payment directly by BPAY. Your online application and BPAY payment must be received by 5.00pm (AEST) on 1 August 2023 (Closing Date). Timetable The offer of New Shares under the SPP will be conducted in accordance with the following timetable*: Timetable Record Date 7.00pm (AEST), 12 July 2023 Announcement of Offer 13 July 2023 Page 3 Offer opens (Opening Date) 9.00am (AEST), 18 July 2023 Offer closes (Closing Date) 5.00pm (AEST), 1 August 2023 Announcement of results of SPP By noon, 8 August 2023 Issue of New Shares (Issue Date) 8 August 2023 Commencement of trading of New Shares on the ASX (Trading Date) 9 August 2023 Despatch of holding statements 11 August 2023 *Atomo may vary any of the above dates at its absolute discretion by lodging a revised timetable with the ASX. Important information The offer of New Shares under the SPP is made in accordance with the ASIC Instrument which grants relief from the requirement to issue a disclosure document for the SPP. The terms and conditions of the offer of New Shares under the SPP are set out in this Booklet. The Board of Atomo encourages you to read this Booklet in its entirety and seek independent professional advice before deciding whether to participate in the SPP. For further information about the SPP or how to apply, please call Link Market Services Limited on 1300 420 208 (within Australia) or +61 1300 420 208 (outside Australia) between 8:30am to 5:30pm (AEST), Monday to Friday. On behalf of the Board of Directors, I thank you for your continued support of Atomo and invite you to participate in the SPP. Yours faithfully John Kelly Managing Director & CEO Atomo Diagnostics Limited Page 4 Error! Unknown document property name. Important Notice You should read these Terms and Conditions carefully as you will be bound by them if you participate in the SPP. If you participate in the SPP by completing an online application and by making a payment by BPAY, you are accepting the risk that the market price of Shares may change between the date of the Offer, the date you apply for New Shares and the issue of New Shares to you. The value of the New Shares that you apply for, over time, is likely to rise and fall. Importantly, there is a risk that during the period between when you apply for New Shares and when the New Shares are issued to you, you may be able to buy Shares on the ASX at a lower price than the SPP Issue Price. After the issue of the New Shares to you, the value of these New Shares will fluctuate over time and there is no guarantee that their value will not fall below the SPP Issue Price. 1. Eligible Shareholders 1.1 Subject to clauses 1.2 to 1.4, you are entitled to participate in the share purchase plan (SPP), if you: (a) were registered on the Register of Atomo Diagnostics Limited (Atomo) as a Shareholder at 7.00pm (AEST) on 12 July 2023 (Record Date); (b) have a registered address on the Record Date in Australia, New Zealand or the United Kingdom; and (c) if your registered address is in New Zealand or the United Kingdom, continue to hold Shares from the Record Date to the Opening Date, (Eligible Shareholder). 1.2 Eligible Shareholders who hold Shares as a “custodian” (as defined in ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547) (Custodian) may participate in the SPP on behalf of one or more persons whom the Custodian holds Shares on behalf of (Custodian Beneficiaries), provided the conditions set out in clause 4 are met. 1.3 Shareholders who hold Shares on behalf of persons who reside outside Australia or New Zealand or the United Kingdom are not entitled to participate in the SPP. 1.4 If you are a joint holder of Shares, you are taken to be a single registered holder of Shares for the purposes of determining whether you are an Eligible Shareholder and joint holders are entitled to participate in the SPP in respect of that single holding only. 2. Offer 2.1 Atomo offers each Eligible Shareholder the opportunity to purchase up to $30,000 worth of fully paid ordinary shares in Atomo (New Shares) under the SPP, subject to and in accordance with these Terms and Conditions. 2.2 The price at which New Shares may be acquired under the SPP (SPP Price) is the lower of: (a) $0.036 per New Share, being the price paid under the Placement (Placement Price); and (b) a 2.5% discount to the VWAP of shares traded on the ASX during the five trading days up to the closing date of the SPP, rounded to the nearest half cent (Discounted Price). 2.3 The final SPP Issue Price will therefore be determined at the Closing Date and announced at that time. Allocations will be made on that basis. 2.4 Participation in the SPP is optional. The Offer is non-renounceable which means Eligible Shareholders cannot transfer their right to purchase New Shares to another person. 2.5 The Offer to each Eligible Shareholder (whether as a Custodian or on its own account) is made on these same Terms and Conditions. 2.6 All references to $ or dollars in this Booklet are references to Australian dollars unless otherwise indicated. Page 5 3. Joint holders 3.1 If you receive more than one Offer due to multiple registered holdings, you may apply for New Shares by way of different Application Forms, but you may not apply for New Shares with an aggregate value of more than $30,000. 4. Custodians 4.1 If a Custodian applies for New Shares on behalf of a Custodian Beneficiary, Atomo will not issue New Shares under the SPP unless the Custodian certifies the following in writing to Atomo: (a) either or both of the following: (i) that the Custodian holds the Shares on behalf of one or more persons that are not custodians (Participating Beneficiaries); or (ii) that another custodian (Downstream Custodian) holds beneficial interests in Shares on behalf of a Participating Beneficiary, and the Custodian holds the Shares to which those beneficial interests relate on behalf of the Downstream Custodian or another custodian, on the Record Date, and that each Participating Beneficiary has subsequently instructed the following persons to apply for New Shares under the SPP on their behalf: (iii) where sub-paragraph 4.1(a)(i) applies – the Custodian; and (iv) where sub-paragraph 4.1(a)(ii) applies – the Downstream Custodian, (b) the number of Participating Beneficiaries; (c) the name and address of each Participating Beneficiary, and that each Participating Beneficiary’s address is located in Australia, New Zealand or the United Kingdom; (d) in respect of each Participating Beneficiary: (e) (f) (i) where sub-paragraph 4.1(a)(i) applies – the number of Shares that the Custodian holds on their behalf; and (ii) where sub-paragraph 4.1(a)(ii) applies – the number of Shares to which the beneficial interests relate; in respect of each Participating Beneficiary: (i) where sub-paragraph 4.1(a)(i) applies – the dollar amount of New Shares they instructed the Custodian to apply for on their behalf; and (ii) where sub-paragraph 4.1(a)(ii) applies the dollar amount of New Shares they instructed the Downstream Custodian to apply for on their behalf; there are no Participating Beneficiaries in respect of which the total of the application price for the following exceeds $30,000: (i) the New Shares applied for by the Custodian under the SPP in accordance with the instructions referred to in sub-paragraph 4.1(e); and (ii) any other Shares issued to the Custodian in the 12 months before the application as a result of an instruction given by them to the Custodian or the Downstream Custodian to apply for Shares on their behalf under an arrangement similar to the SPP; Page 6 Error! 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(g) that a copy of this Booklet was given to each Participating Beneficiary; and (h) where sub-paragraph 4.1(a)(ii) applies – the name and address of each Custodian who holds beneficial interests in the Shares held by the Custodian in relation to each Participating Beneficiary, (Custodian Certificate). 4.2 A Custodian Certificate can be requested from Link Market Services Limited via email at capitalmarkets@linkmarketservices.com.au, For further information about the custodian application process, a Custodian should contact the Registry, Link Market Services Limited on 1300 420 208 (within Australia) or +61 1300 420 208 (outside Australia) between 8:30am to 5:30pm (AEST), Monday to Friday. 4.3 Applications received from Custodians must be accompanied by a duly completed and signed Custodian Certificate. 4.4 If you hold Shares as a trustee or nominee for another person, but are not a Custodian, you cannot participate for beneficiaries in the manner described above. In this case, the $30,000 maximum still applies and the rules relating to multiple single holdings apply (see clauses 6.4, 6.5(c) and 6.5(d)). 5. How much can I Invest under the SPP? 5.1 Eligible Shareholders may apply for a parcel of New Shares under the SPP in accordance with the application amounts set out below in clause 5.2. The maximum investment amount under the SPP is $30,000 worth of New Shares, subject to Scale-back. In the event Atomo receives applications in excess of the amount of $2.75 million dollars to be raised under the SPP, it will either scale back the applications (in the manner provided at clause 11 or increase the $2.75 million cap in order to reduce or prevent the need for a scale-back should total demand under the SPP exceed $2.75 million. 5.2 The number of new shares issued to an applicant will be calculated by dividing the application monies by the final SPP Issue Price, which is to be determined on the basis set out at clause 2. The table below shows how many New Shares may be issued on the basis of different parcel sizes at an assumed SPP Issue Price of $0.036 ((being the Placement Price) 1. Application Amount Number of New Shares at SPP Price of $0.036 $1,000 27,778 $2,500 69,445 $7,500 208,334 $10,000 277,778 $15,000 416,667 $20,000 555,556 $30,000 833,334 5.3 The number of New Shares will be rounded up to the nearest whole number. 5.4 It should be noted that the Company has the discretion to increase or decrease the size of the SPP. This final SPP Issue Price may be more or less depending on the movement in trading prices for the Company's Shares up to the Closing Date of the SPP. 1 Page 7 6. Applying for New Shares 6.1 If you are an Eligible Shareholder and wish to participate in the SPP, you may apply to purchase New Shares with a minimum application amount of $1,000 and any additional New Shares in increments of the amounts shown at clause 5.2 above, with a maximum application amount of $30,000. If you do not wish to participate in the SPP, you may disregard this Booklet. 6.2 You can apply for New Shares by completing an online application and making payment directly by BPAY. 6.3 Your online application and payment must be received by the Share Registry by BPAY by 5.00pm (AEST) on 1August 2023 (Closing Date). The time of your application will be the time at which the Registry has received your BPAY® payment. If you submit an online application in the 24 hours before the Offer closes you must ensure that your BPAY® payment is processed by your bank so that your application monies are received before 5:00PM (AEST) on the Closing Date. If your payment is not received by this time, your application will be treated as a late application and may not be processed. 6.4 Eligible Shareholders who receive more than one Offer (for example, because they hold Shares in more than one capacity or in different registered holdings) may apply on different Application Forms for New Shares but may not apply for New Shares with an aggregate value of more than $30,000. 6.5 Atomo may either accept or reject your application for New Shares at its absolute discretion. Atomo may reject your application in the following circumstances (among others): 6.6 (a) your Application Form is incorrectly completed, incomplete or otherwise determined by Atomo to be invalid; (b) your online application and BPAY payment is not received by the Closing Date or is otherwise incomplete or invalid. Late payments will be refunded (without interest); (c) Atomo believes that you are applying either directly or indirectly (such as through a trust) to buy more than an aggregate of $30,000 of New Shares; (d) Atomo believes that you and one or more other registered holders of the same or similar name or address are applying to buy more than an aggregate of $30,000 of New Shares; (e) Atomo believes you are not an Eligible Shareholder (subject to compliance with any applicable ASIC or ASX requirements); or (f) your name is not recorded in the Register on the Record Date. If your BPAY payment is for: (a) an amount less than $1,000, Atomo may, at its discretion, reject your application for New Shares and refund your application money in full (without interest); or (b) an amount greater than $1,000 that is not equal to one of the designated amounts, Atomo may, at its discretion: (i) reject your application for New Shares and refund your application money in full (without interest); or (ii) treat your application as if you had applied for the next lowest parcel of New Shares and refund the excess application money to you (without interest). Page 8 Error! Unknown document property name. 7. Issue price of New Shares under the SPP 7.1 The SPP Issue Price is yet to be determined, with the shares offered under the SPP (New Shares) to be offered at the lower of: (i) $0.036 per SPP Share, being the price paid under the Placement; or (ii) a 2.5% discount to the VWAP of shares traded on the ASX during the five trading days up to the closing date of the SPP, rounded to the nearest half cent. Accordingly the SPP Issue Price will not be determined until the Closing Date. 7.2 The current Share price can be obtained from the ASX. 7.3 In accordance with the requirements of the ASIC Instrument, the Company notes that: (a) On the last trading day immediately prior to the announcement date of the SPP (being 10 July 2023), the closing price of the Shares traded on the ASX was $0.052 per Share. If the SPP Issue Price is determined to be $0.036, it will represent a 30.8% discount to that last closing price. (b) The volume weighted average market price (VWAP) of the Company's Shares over the last 5 trading days up to and including 10 July 2023 was $0.077 (5 Day VWAP). If the SPP Issue Price is determined to be $0.036, it will represent a 53.5% discount to that price. (c) The method of determining the SPP Issue Price ensures that it will be a price that is less than the market price of Shares during a 'specified period' in the 30 days before the date of the Offer (such specified period being the 5 Day VWAP). (d) The market price of Shares in the Company may rise and fall between the date of the Offer, the date that you apply, or the date on which Shares are issued under the SPP. (e) By making an application under the SPP, each Eligible Shareholder will be acknowledging that although the SPP Issue Price is at a discount to the 5 Day VWAP, Shares are a highly speculative investment and the price of Shares on ASX may change between the date of the Company announcing its intention to make the Offer and the date of issue of New Shares under the SPP. The Share prices may rise or fall and the price of Shares might trade below or above the SPP Issue Price. There can be no guarantee that trading pricing will be sustained. 7.4 The SPP Issue Price will be less than 80% of the volume weighted average market price for the 5 trading days up to and including the announcement of the SPP on 10 July 2023 (being $0.077). Accordingly, the Offer is not being made pursuant to Listing Rule 7.2, Exception 5. The Company has applied to ASX for a waiver of Listing Rule 7.1, to permit the Company to issue New Shares under the SPP to be conducted in accordance with the ASIC Instrument, without shareholder approval, at the SPP Issue Price (to be determined as set out above), and on the condition that the number of New Shares issued under the SPP is not greater than 30% of the number of fully paid ordinary shares already on issue (ASX Waiver). In the event that the Waiver is not granted, the Company intends to seek Shareholder approval to issue the New Shares under the SPP, with such issue to be conditional on receipt of this shareholder approval. 7.5 You agree to pay the SPP Issue Price per New Share for the number of New Shares that are allocated to you in accordance with these Terms and Conditions. 8. Number of New Shares to be issued 8.1 If you apply for New Shares, you will apply for a certain value, rather than a certain number of New Shares. If your application is accepted, Atomo will divide the value of your application monies by the SPP Issue Price (as specified in clause 5) in order to determine the number of New Shares which, subject to Scale-back, will be issued to you. Page 9 8.2 If this calculation produces a fraction number, the number of New Shares you are issued will be rounded down to the nearest whole number of New Shares (refer to clause 11 for information on rounding in the event of a Scale-back). 9. The New Shares 9.1 New Shares will be issued on the Issue Date. 9.2 New Shares issued under the SPP will rank equally in all respects with existing Shares quoted on the ASX, with the same voting rights, distribution rights and other entitlements from issue. These rights are contained in the Company's constitution (which is available for inspection at the registered office of the Company during normal business hours.) 9.3 Atomo will apply for the New Shares issued under the SPP to be quoted on ASX. If the New Shares are not quoted on the ASX, the New Shares will not be issued and all application monies will be refunded (without interest). 9.4 Subject to these Terms and Conditions, the New Shares will be allotted as soon as possible after the Closing Date. The Company will send or cause to be sent to you a holding statement as soon as practicable thereafter. 10. Costs of participation No brokerage or other transaction costs will apply to the application for, and issue of, New Shares under the SPP. 11. Scale-back 11.1 If the total of the application monies under the SPP is greater than $2.75 million, Atomo may at its discretion scale-back the maximum number of New Shares issued to each Eligible Shareholder to the extent and in the manner that it sees fit (Scale-back). Atomo will use its best endeavours to ensure that SPP participants have a reasonable opportunity to participate equitably in the overall capital raising. Accordingly, any Scale-back will be applied on a pro rata basis based on the number of New Shares that the Eligible Shareholder has applied for. 11.2 If a Scale-back occurs, you may receive less than the parcel of New Shares for which you have applied. 11.3 If a Scale-back produces a fractional number of Shares when applied to your issue of New Shares, the number of New Shares you will be allocated will be rounded down to the nearest whole number of New Shares. 11.4 If there is a Scale-back, your application monies may be greater than the value of the New Shares you will be issued. In such event, the excess application monies will be refunded to you without interest by direct credit (to your nominated account as recorded on the Register) or cheque as soon as practicable. 11.5 If demand for the SPP exceeds $2.75 million, Atomo has reserved the right to increase this cap in order to limit any Scale-back. Any increase to the cap will be made in compliance with the Corporations Act, the ASIC Instrument and the ASX Listing Rules. 12. Effect of the Offer 12.1 The principal effect of the SPP, assuming all New Shares are subscribed for and granted, will be to issue up to 76,388,889 2 New Shares, assuming the SPP Issue Price is the same as the price paid under the Placement, being $0.036 per New Share. Where the SPP Issue Price is less than under the Placement, more Shares will be issued in connection with the SPP on the basis of the lower SPP Issue Price. 12.2 By way of illustrative example only, if the market price falls during the Offer period, such that the VWAP price of Shares during the five trading days up to the closing date of the SPP, is $0.032, a 2.5% discount to that price is 2 This number may vary due to rounding. Page 10 $0.0312. If the SPP is fully subscribed up (up to $2,750,000), this would result in up to 88,141,026 New Shares being under the SPP (which would represent 15.4% of existing Shares on issue prior to the Placement and SPP). 12.3 No more than $2,750,000 worth of New Shares at the SPP Issue Price will be issued under the SPP. 12.4 The table below sets out the effect on the capital structure of the Company before and after the completion of the Placement and the SPP: Event Shares % (at Completion of raise) Existing Shares 570,890,991 83.67 Placement Shares 34,977,932 5.13 SPP Shares 76,388,889 11.20 Total 682,257,812 100 Notes: 1. Assumes the SPP occurs at same price as Placement. 2. Assumes no increase to the Offer size (noting Atomo has reserved the right to increase the size of the raising). 3. SPP Shares (assuming they are issued at the same price as the Placement) represent ~13.38% of existing ordinary shares before the Placement and SPP