Ann: Appendix 4D and Half Year Report, page-3

BLC operates in the consumer business segment of the consolidated entity. BLC contributed total
revenue of $2,541,518 and profit after tax of $288,679.
That profit is effectively for one quarter or a run rate of say 4 * $288,679 = $1,154,716.00
Subtract $500K = $654,716.00. (=incremental Growth)
Three times incremental Growth = $1,964,148.00

If this trend continues and I believe it will, we pay HNG $700K plus $1,264,147 in shares either 22million @ 9 cents or 39million @ 5 Cents.
HGL currently hold 37,759,433 million shares or 17.08%, given the above 5 cent Scenario they could own 76 million shares or 35% of AN1 assuming no cap raises. Of course if the results for BLC are greater then they get a even bigger holding.

Given this BLC growth and a Sandy Beard ,clean up we have to be profitable by then IMO.

But there is no cap on 3 * incremental growth, only the 50 million shares.

What if 3 * incremental growth is greater than the cash balance after taking into account the 50 million shares. A cap raise????

I tell my kids the world is full of wood ducks make sure you maximise your opportunities, some of these wood ducks sit in very high positions.

Tranche 2
Should there be an increase in BLC’s EBITDA between FY2021 and FY2022, Cellmid will also
pay Tranche 2 after October 2022. Tranche 2 will be calculated as three times the incremental growth between a base FY2021 EBIDTA of $500K, and BLC’s FY2022 audited EBIDTA.

Any Tranche 2 payment will be made in cash and shares as follows:
• The first $700K will be payable in cash and is expected to be paid from the Company’s reserves at the time.
• The remaining amount is payable in shares issued at a price which is the lower of 9 cents or the VWAP over the previous 30 days prior to the issue.
• The number of shares to be issued under Tranche 2 is capped at 50m and will be subject to shareholders’ approval at the time.
• Tranche 2 shares will be subject to 12 months voluntary escrow.
• If the value of the Tranche 2 payment exceeds the aggregate of $700K in cash and 50 million shares the excess will also be settled in cash.
• Should there be no growth in BLC’s EBITDA in FY2022, there will be no second tranche payment made to HGL Limited.