Lionhub : Response to ASX Appendix 4C Query

LionHub Group Limited ABN 29 119 999 441

Level 3A, Hyde Park Tower

148 Elizabeth Street T:(61 2) 8281 3008 Sydney NSW 2000 F:(61 2) 8281 3030www.lionhub.com.au

Mr. George Tharian

14 August 2018

Adviser, Listings Compliance (Sydney) ASX Compliance Pty Limited

20 Bridge Street

Sydney NSW 2000

Dear George

Appendix 4C Query

We refer to the ASX Appendix 4C Query dated 9 August 2018 and respond as follows:

1. The Company expects that it will continue to have negative operating cash flows for the time being while it resolves outstanding issues in respect of both its Xuancheng Singapore Technology Park and the Lu'an Singapore Eco-Park in the Anhui Province of China.

The company has made good progress in its negotiations with the XuanCheng City Economic and Technological Development Zone Management Committee for the disbursement of a rebate relating to the acquisition of 40 mu (2.67 hectare) of land within the Xuancheng Singapore Technology Park site for industrial development in joint venture with KSL (XC) Pte Ltd . The Company believes that negotiations are now in their final stages and anticipates that the rebate will be released before the end of its current financial year ending 31 December 2018.

The Company's negotiations with Lu'an Government officials have also advanced in respect of the termination notice received by the Company regarding the Lu'an Singapore Eco-Park (refer the Company's announcement "Lu'An Singapore Eco-Park - Notice of Termination of Investment Agreement Received" dated 9 January 2018). An official protest was made to the Lu'an Government in December 2017 and a formal filing was made to the Hefei court in March 2018. The Company is seeking to finalise a mutually acceptable settlement with the Lu'an Government and anticipates that this may be resolved in the short to medium term.

2.

LionHub announced on 8 August 2017, that it would be conducting a private placement of Convertible Notes to sophisticated investors initially to raise up to A$3.5 million. The proposed Notes terms were summarised in the Company's announcement headed "Private Placement of Convertible Notes" dated 8 August 2017.

Since that date, interests associated with LHB's Chairman, Mr CK Kho, have subscribed $790,000 for Convertible Notes including $50,000 received 25 July 2018. The Company is currently preparing a notice of meeting to convene a shareholder meeting to consider these Notes.

Other investors have also subscribed for Convertible Notes and the Company anticipates that it may receive additional funds from the issue of additional Convertible Notes in the short to medium term.

As outlined above the Company anticipates that it will receive a rebate in respect of land purchased for the Xuancheng Singapore Technology Park and that a settlement will be achieved in respect of the Lu'an Singapore Eco-Park, which will enhance the Company's ability to fund its ongoing operations.

• 3. The Company expects to be able to continue its operations and to meet its business objectives on the basis of the funding outlined above becoming available for further land acquisition or development and in the expectation that the issues identified above will be resolved in a timely manner.

• 4. The Company believes that it is in compliance with ASX Listing Rule 3.1 and there is no information that should be given to the ASX about its financial condition that has not already been released to the market.

• 5. The Company's responses to the ASX Appendix 4C Query dated 9 August 2018 have been authorised and approved by the Company's Chief Executive Officer who has been delegated authority from the Board to respond to the ASX on disclosure matters.

The Company's financial condition is adequate to warrant continued quotation of its securities and its continued listing as required by listing rule 12.2. The Company is firmly of the belief that it will be able to raise additional funding as and when required to fund operations.

Please do not hesitate to contact me if you require any additional information in relation to this matter.

Yours sincerely

Andrew J. Cooke Company Secretary

For further information:

Joseph Bek, Acting Chief Executive [e-mail]

Andrew J. Cooke, Company [e-mail]

Further information (including recent announcements and investor presentations) is available at the Company's web site:www.lionhub.com.au

9 August 2018

Mr Andrew Cooke

Company Secretary LionHub Group Limited Level 3A, Hyde Park Tower 148 Elizabeth Street Sydney NSW 2000

By email

Dear Mr Cooke

LionHub Group Limited ("LionHub"): Appendix 4C Query

I refer to LionHub's Appendix 4C quarterly report for the period ended 30 June 2018 lodged with ASX Market Announcements Platform and released on 31 July 2018 (the "Appendix 4C").

ASX notes that LionHub has reported:

•  negative net operating cash flows for the quarter of $461,000

•  cash at the end of the quarter of $202,000; and

•  estimated cash outflows for the next quarter of $150,000.

It is possible to conclude, based on the information in the Appendix 4C, that if LionHub were to continue to expend cash at the rate indicated by the Appendix 4C, LionHub may not have sufficient cash to continue funding its operations for its next two quarters. In view of that, ASX asks LionHub to answer separately each of the following questions and provide the following confirmations in a format suitable for release to the market in accordance with Listing Rule 18.7A:

• 1. Does LionHub expect that it will continue to have negative operating cash flows for the time being and, if not, why not?

• 2. Has LionHub taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

• 3. Does LionHub expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

• 4. Please confirm that LionHub is in compliance with Listing Rule 3.1 and that there is no information that should be given to ASX about its financial condition in accordance with that Rule that has not already been released to the market.

• 5. Please confirm that LionHub's responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of LionHub with delegated authority from the board to respond to ASX on disclosure matters.

Please also provide any other information that LionHub considers may be relevant to ASX forming an opinion on whether LionHub is in compliance with Listing Rule 12.2 (a listed entity's financial condition must, in ASX's opinion, be adequate to warrant the continued quotation of its securities and its continued listing).

20 Bridge Street	Customer service 13 12 79
ASX Limited ABN 98 008 624 691	Sydney NSW 2000	asx.com.au

When and where to send your response

This request is made under, and in accordance with Listing Rule 18.7. Your response is required as soon as reasonably possible and, in any event, by not later than 9.00am AEST on 14 August 2018. If we do not have your response by then, ASX will have no choice but to consider suspending trading in LionHub's securities under Listing Rule 17.3.

You should note that if the information requested by this letter is information required to be given to ASX under Listing Rule 3.1 and it does not fall within the exceptions mentioned in Listing Rule 3.1A, LionHub's obligation is to disclose the information "immediately". This may require the information to be disclosed before the deadline set out in the previous paragraph.

ASX reserves the right to release a copy of this letter and your response on the ASX Market Announcements Platform under Listing Rule 18.7A. Accordingly, your response should be in a form suitable for release to the market.

Your response should be sent to me by e-mail. It should not be sent directly to the ASX Market Announcements Office. This is to allow me to review your response to confirm that it is in a form appropriate for release to the market, before it is published on the ASX Market Announcements Platform.

Listing Rule 3.1

Listing Rule 3.1 requires a listed entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities. Exceptions to this requirement are set out in Listing Rule 3.1A.

In responding to this letter, you should have regard to LionHub's obligations under Listing Rules 3.1 and 3.1A and also to Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 - 3.1B.

It should be noted that LionHub's obligation to disclose information under Listing Rule 3.1 is not confined to, nor is it necessarily satisfied by, answering the questions set out in this letter.

Trading halt

If you are unable to respond to this letter by the time specified above, you should discuss with us whether it is appropriate to request a trading halt in LionHub's securities under Listing Rule 17.1.

If you wish to request a trading halt, you must tell us:

•  the reasons for the trading halt;

•  how long you want the trading halt to last;

•  the event you expect to happen that will end the trading halt;

•  that you are not aware of any reason why the trading halt should not be granted; and

•  any other information necessary to inform the market about the trading halt, or that we ask for.

We require the request for a trading halt to be in writing. The trading halt cannot extend past the commencement of normal trading on the second day after the day on which it is granted.

You can find further information about trading halts in Guidance Note 16 Trading Halts & Voluntary Suspensions.

If you have any queries or concerns about any of the above, please contact me immediately.

Kind regards

[Sent electronically without signature]

George Tharian

Adviser, Listings Compliance (Sydney)

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