Ms Madeleine GreenSenior AdviserASX Listings ComplianceLevel 40,...

Ms Madeleine Green
Senior Adviser
ASX Listings ComplianceLevel 40, Central Park152-158 St Georges TerracePerth WA 6000

Dear Ms Green

Douugh Limited ACN 108 042 593 – Confirmations and Pre-Quotation Disclosure

We refer to the Australian Securities Exchange Limited’s (ASX) conditional admission letter dated 15September 2020 (Admission Letter), in relation to the application by Douugh Limited (formerly ZiptelLimited) ACN 108 042 593 (Company) to reinstate its securities to the official list of the ASX.

Capitalised terms which have not otherwise been defined in this document have the meaning given tothem in the Prospectus dated 11 August 2020 (Prospectus).

1. Confirmations

   In connection with the Admission Letter, we provide the following confirmations:

   1. (a) each of the Conditions Precedent under the Acquisition Agreement have been satisfiedand not waived unless agreed to by ASX, and the Acquisition Agreement has beencompleted, including the issue of the Consideration Shares, ConsiderationPerformance Shares and Consideration Options;

   2. (b) Douugh Technologies Limited (formerly Douugh Limited) ACN 620 721 342 (Douugh)has repaid the cash interest component in relation to the Convertible Notes to theConvertible Note Holders;

   3. (c) each of the following issues have been completed:

      1. (1) the issue of 13,750,000 shares to Advisors, Directors and the CompanySecretary pursuant to the Director Offer;

      2. (2) the issue of 8,333,333 Convertible Loan Shares to the Convertible NoteHolders pursuant to the Convertible Loan Offer; and

      3. (3) the issue of 27,500,000 Lead Manager Options to the Lead Manager and2,500,000 Lead Manager Options to the Lead Manager’s nominee Equitise PtyLtd under the Lead Manager Offer.

2. Material Agreements

1. 2.1 Loan with Innovation Structured Finance Co., LLC

   The Company confirms that the Secured Loan Agreement entered into with InnovationStructured Finance Co., LLC has been terminated in accordance with its terms, the $342,000loan has been repaid and the registered security over all present and after acquired property ofDouugh has been discharged.

2. 2.2 Exchange Capital Agreement

   The Company advises in relation to its corporate advisory engagement with Exchange CapitalAdvisory Pty Ltd (Exchange Capital) that:

1. (a) the IT services provided by Exchange Capital primarily related to the Scoping andTechnical Development of the Douugh Android Application. The services providedwere to include US and UI design and flow in addition to QA and testing prior tocommercial launch. The services were also to include integration of new financial well-being features and maintenance and upkeep of the Douugh platform;

2. (b) as the corporate advisory engagement with Exchange Capital has now beenterminated, the services will now be either brought in-house or sourced fromappropriate service providers;

3. (c) the Company has not appointed a new corporate advisor and does not intend inappointing a new corporate adviser within the next 6 months.

The Company confirms that no other agreements have been entered into since the date of theProspectus.

1. Largest Shareholders
   The names of the 20 largest holders of the Company’s quoted securities are set out in the

   attached “Top Holders Grouped Report”.

2. Statement of commitments

   The Company intends to apply funds raised from the Public Offer together with existing cashreserves post admission to the official list of the ASX as follows:

Use of proceeds	%	$ (AU)
Working capital andadministrative expenses1	24%	$1,435,000
Research and development2	18.3%	$1,100,000
Marketing/growth hacking3	45%	$2,700,000
Capital raising (6%)	6%	$360,000
Transaction expenses4	6.7%	$405,000
Total	100%	$6,000,000

Notes:

1. Comprises creditors, server costs, rental costs, employee costs (excluding marketing and development staff),

   directors’ fees, ongoing advisory fees, legal costs, accounting and tax costs, insurance, ongoing listing costs and

   other administrative costs.

2. Includes internal labour costs for the ongoing development of the Douugh Platform and Douugh App.

3. Marketing costs associated with the Company’s user acquisition strategy including creative production,

   awareness, promotion, public relations, agency costs, incentives and internal labour costs.

4. Includes adviser and legal fees of approximately $265,000, capital raising costs, printing and distribution costs

   for the Prospectus and company secretarial costs.

The above table is a statement of current intentions as of the date of this letter. As with anybudget, intervening events and new circumstances have the potential to affect the manner inwhich the funds are ultimately applied. The Board reserves the right to alter the way funds areapplied on this basis.

5. ASX restrictions and escrow
The Company confirms that the shares set out below will be subject to ASX restrictions:

Holder	Securities	Restriction Period
Current Directors and Advisors	12,925,000 Shares	24 months from thedate of the officialquotation of thesecurities
Lead Manager Options	30,000,000 Options	24 months from the

		date of the officialquotation of thesecurities
Convertible Note Holders	8,333,333 Shares	12 months from thedate of issue
Proposed Directors	199,050,018 Shares 54,286,369 Performance Shares54,286,369 Options	24 months from thedate of the officialquotation of thesecurities
Vendors (excluding the ProposedDirectors)	75,949,981 Shares 20,713,631 Performance Shares20,713,631 Options	12 months from thedate of issue

The escrowed securities comprise 100% of the Company’s Performance Shares, 100% of theCompany’s Options, and 49% of the Company’s Shares.

1. Voluntary Escrow
   Further to the statements made in part 5 of this letter, the Company confirms that the shares

   set out below will be subject to voluntary restrictions:

2. Capital structure
   As at Listing the Capital Structure of the Company will be as follows:

   Notes:

1. The number of Ordinary Shares on issue is lower than the 601,106,977 figure disclosed in the Updated Douugh

Limited Public Offer Prospectus (dated 12 August 2020) due to rounding from the Ziptel Share Consolidation,which was also completed during August 2020.

8. Waivers
The Company has received the following confirmations and waivers from the ASX for the

Transaction:

1. (a) a waiver to Listing Rule 2.12 condition 2 (20 cent rule) on the basis that theCompany’s shares traded at a price below $0.02 in the 20 trading days prior to thesuspension of its securities from quotation;

2. (b) waiver to Listing Rule 1.1 Condition 12 on the basis that the proposed exercise pricefor the options to be granted to the Lead Manager and Vendors as part of theTransaction is not less than 2 cents each and the issue of the Options will bespecifically approved by shareholders; and

Holder	Securities	Restriction Period
Proposed Directors	199,050,018 Shares 54,286,369 Performance Shares54,286,369 Options	24 months fromquotation of thesecurities
Vendors (excluding the ProposedDirectors, and shareholders Vi KyLam and Kaitlyn Lam)	75,090,310 Shares 20,479,175 Performance Shares20,479,175 Options	12 months from thedate of issue

Class/type	Number
Ordinary Shares1	601,106,689
Options	105,000,000
Performance Shares	75,000,000

(c) confirmation that the terms of the Performance Shares to be issued by the Company toVendors are appropriate and equitable on the basis that the milestones attached to thePerformance Shares fall within the parameters set out in Guidance Note 19.

The conditions for each of these waivers and confirmations are set out below.

1. 8.1 Listing Rule 2.12 condition 2 (20 cent rule)

   ASX granted the Company a waiver to the 20 cent rule on the basis that the Company’sshares traded at a price below $0.02 in the 20 trading days prior to the suspension of itssecurities from quotation. The Company undertook a consolidation of its securities at a 1.1:2ratio to achieve a market value for its securities of not less than 2 cents each.

   The waiver to the 20 cent rule permitted the Company to undertake the Capital Raising at anissue price less than $0.02 per share. The conditions to the waiver were as follows:

   1. (a) the issue price of the shares issue pursuant to the Capital Raising (Capital RaisingShares) be not less than $0.02 per share;

   2. (b) the terms of this waiver be disclosed to the market and, along with the terms andconditions of the Capital Raising Shares, be clearly disclosed in the Notice of Meetingand in the Prospectus;

   3. (c) shareholders approve the issue price of the Capital Raising Shares in conjunction withthe approval obtained under Listing Rule 11.1.2 in respect of the Acquisition; and

   4. (d) the Company completes a consolidation of its capital structure in conjunction with theAcquisition such that its securities are consolidated at a ratio that will be sufficient,based on the lowest price at which the Company’s securities traded over the 20 tradingdays preceding the date of the suspension of the ZIP’s securities from officialquotation, to achieve a market value for its securities of not less than two cents each.

2. 8.2 Listing Rule 1.1 Condition 12

   ASX granted the Company a waiver to Listing Rule 1.1 Condition 12 on the basis that theproposed exercise price for the Options to be granted to the Lead Manager and Douugh aspart of the Transaction be not less than 2 cents each and the issue of the Options isspecifically approved by shareholders.

   The waiver to Listing Rule 1.1 Condition 12 permitted the exercise price of the Lead ManagerOptions and the DOU Options (together, the Waiver Options) to not be at least 20 cents andwas granted on the following conditions:

   1. (a) the exercise price of the Waiver Options be not less than $0.02 each;

   2. (b) the terms of this waiver be disclosed to the market and, along with the terms andconditions of the Waiver Options, be clearly disclosed in the Notice of Meeting and inthe Prospectus; and

   3. (c) shareholders approve the exercise price of the Waiver Options in conjunction with theapproval obtained under Listing rule 11.1.2 for the Acquisition.

3. 8.3 Listing Rule 6.1

   ASX also confirmed that the terms of the Consideration Performance Shares to be issued bythe Company to Douugh Vendors were appropriate and equitable on the basis that themilestones attached to the Consideration Performance Shares fall within the parameters setout in Guidance Note 19. The terms and structure of the Performance Shares comply withsections 6 and 7 of Guidance Note 19.

9. Pre-Quotation Disclosure

We provide the following information by way of attachment to ASX for release to the market:

1. (a) an updated version of the Company’s Appendix 1A Information Form and Checklist;

2. (b) the Company’s constitution;

3. (c) Douugh’s audited accounts for the full years ended 30 June 2018 and 30 June 2019and its reviewed accounts for the half year ended 31 December 2019;

4. (d) an updated pro-forma statement of financial position based on the actual amount offunds raised under the Prospectus;

5. (e) Douugh’s 30 June 2020 audited accounts;

6. (f) the full terms and conditions of the employee share option plan;

7. (g) the Company’s securities trading policy;

8. (h) a distribution schedule of the numbers of holders in each class of securities to bequoted; and

9. (i) a report showing the largest 20 shareholders of the Company.

If you have any questions, please do not hesitate to contact us.Yours faithfully

Andy TaylorDouugh Limited