Xtek : ASX Announcement - XTEK Share Purchase Plan Opens

Release to the Australian Securities Exchange‌‌

XTEK Limited Share Purchase Plan Opens

Canberra - Monday 3 July 2017: XTEK Limited (ASX:XTE) is pleased to advise that the Share Purchase Plan (SPP or Offer) as previously announced by the Company has opened today.

The Record Date for participation in the SPP of Tuesday, 27 June 2017. Eligible Security Holders will have the opportunity to participate in the SPP and purchase new shares at an issue price of A$0.46 per share. The SPP, which is not underwritten, will be targeting to raise A$0.5 million. Patersons Securities Limited is acting as the Lead Manager for the SPP.

All new shares issued under the SPP will be issued on the same terms as, and will rank equally with, existing XTEK shares. The maximum number of New Shares able to be issued under the SPP is 30% of XTEK's share capital, being 8,841,728 shares.

Full details in respect to the SPP are detailed within the SPP Offer Document, which is attached and forms part of this announcement. Copies of the SPP Offer Document and individualised Application Forms have been mailed to all Eligible Security Holders.

The Company may, in its absolute discretion, undertake a scaleback so that not more than 30% of the number of shares already on issue are issued under the SPP.

About XTEK Limited

XTEK Limited is a leading company in the Australian Homeland Security Market. XTEK's knowledge and expertise is focused on the delivery of protection and sustainment solutions for the government, law enforcement, military and commercial sectors.

The supply and maintenance of Small Unmanned Aerial Systems (SUAS) is becoming a major focus for XTEK.

In addition, XTEK has developed a range of new technologies which it is now commercialising for the international market. XTclave composite protection products and XTatlas real time contextual video provide novel and valuable solutions for western military and homeland defence forces.

For more information visit the XTEK website at www.xtek.net

Signed for and on behalf of XTEK Limited:

Lawrence Gardiner Media enquiries:

Company Secretary Harrison Polites

3 July 2017 E: [e-mail]

M: 0409 623 618

Offer Document Share Purchase Plan‌ 28 June 2017

Page 1 of 16

Key Dates Share Purchase Plan

This Share Purchase Plan (SPP) Offer Document has been prepared in accordance with the Corporations Act and ASX Listing Rules and is dated 28 June 2017.

The following are the Key Dates relating to the SPP that you need to be aware of:

Event	Date
Record date for entitlement to participate in the SPP (Record Date)	27 June 2017
Announcement of SPP	28 June 2017
Opening date for SPP	3 July 2017
Offer Document and Application Form dispatched to Security Holders	3 July 2017
Closing date for SPP and receipt of Applications	24 July 2017
Allotment Date for New Securities issued under the SPP	31 July 2017
Dispatch of Holding Statements to Security Holders	1 August 2017
Commencement of trading of New Securities on ASX	1 August 2017

Note:

The above dates are indicative only and are subject to change. XTEK Limited reserves the right to alter Key Dates other than the Record Date.

Letter from the Chairman

Dear Fellow Security Holder,

Invitation to Participate in Share Purchase Plan

On behalf of the Company, I am pleased to invite you to participate in the XTEK Limited (XTEK) Share Purchase Plan (SPP or Offer) on terms and conditions set out in the attached document and in the enclosed "Share Purchase Plan Application Form".

The SPP provides eligible shareholders with an opportunity to apply for up to A$15,000 new fully paid ordinary shares in XTEK at A$0.46 per share, which

represents a discount of 16.4% to the last closing price of A$0.55, and a 11.3% discount to the volume weighted average price of XTEK shares traded over the last 5 trading days on which sales of the Company's shares were recorded on the ASX prior to the date of the announcement of the SPP of A$0.52.

The SPP provides Eligible Security Holders with an opportunity to apply for New Securities in XTEK without brokerage or other related charges.

Company update

XTEK is a market leader in homeland security equipment for the military and police sectors in Australasia. XTEK's strategy is focused on leveraging exclusive distribution agreements, and the development and commercialisation of XTEK's proprietary innovations in the same field.

As set out in Figure 1 below, XTEK has forecast A$9.0 million in revenue in FY17 and will achieve profitability during 2H FY17. The Company has also announced strong forecast revenue growth from FY18 out to FY20, based on contract wins and its strong sales pipeline.

Figure 1: XTEK forecast revenues (A$m)1

60

50

40

30

20

10

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FY16 FY17 FY18 FY19 FY20

Low case High case

Note: 1 Forecast revenue assumes the execution of UAS contract with the Australian Defence Force