Midway : Response to ASX Query Letters

Market Announcement

5 April 2022

Attached for the information of the market are ASX's query letters to Midway Limited (ASX:MWY) dated 22

March 2022 and 31 March 2022. MWY's responses dated 30 March 2022 and 5 April 2022.

5 April 2022

Market Announcement 1/1

ASX Limited

ASX Customer Service Centre 131 279 | asx.com.au

Midway Limited

ABN: 44005616044

T: [phone] F: [phone]

30 March 2022

Mr Jon Chow

Adviser, Listings Compliance (Melbourne) ASX

By email only:[e-mail]

Dear Jon

Midway Limited: General - Aware Query

We refer to ASX's letter of 25 March 2022 and respond adopting the defined terms in that letter.

• 1 Does MWY consider the Information to be information that a reasonable person would expect to have a material effect on the price or value of its securities?

• 1.1 MWY considers the Information to be information that a reasonable person would expect to have a material effect on the price or value of its securities.

• 2 If the answer to question 1 is "no", please advise the basis for that view.

• 2.1 Not applicable.

• 3 When did MWY first become aware of the Information?

• 3.1 MWY became aware of the Information, on 24 February 2022 (the day of lodgement of MWY's Appendix 4D and 1H22 Results Presentation).

• 3.2 In or around mid-January 2022 and following the internal preparation of its draft 1H22 financial statements, MWY suspected its consolidated revenue for half year ended 31 December 2021 would be down by around 39%. However, the draft figures were subject to review and approval by MWY's directors and by its auditors KPMG, as is usual practice and encouraged by ASX as explained in ASX Guidance Note 8 at 7.1.

• 3.3 Finalised metrics for 1H22 were provided to MWY on 24 February 2022, at which point MWY can be said to have become "aware" of the Information such that disclosure was required by it under Listing Rule 3.1. MWY's Appendix 4D was lodged on MAP on that day in compliance with the requirement for immediate disclosure.

• 4 If the answer to question 1 is "yes" and MWY first became aware of the Information before 24

  February 2022, did MWY make any announcement prior to the relevant date which disclosed the information? If so, please provide details. If not, please explain why this information was not released to the market at an earlier time, commenting specifically on when you believe MWY was obliged to release the information under Listing rules 3.1 and 3.1A and what steps MWY took to ensure that the information was released promptly and without delay.

• 4.1 By reference to MWY's responses to question 3, MWY confirms that no announcement of the Information was made prior to 24 February 2022 because MWY did not become aware of the Information until 24 February 2022.

• 4.2 For the sake of completeness, MWY understands that anything it was aware of prior to the announcement on 24 February 2022 (i.e. that its consolidated revenue may differ from internal and or market expectation) was not required to be disclosed to the market in reliance on Listing Rule 3.1A, being information comprising matters of supposition or that are insufficiently definite to warrant disclosure (noting that revenue can be classified as earnings guidance and as such, sufficient due diligence is required before any forward looking statement is made), that is confidential to MWY, and that a reasonable person would not expect to be disclosed.

• 4.3 Further and in any event, ASX Guidance Note 8 makes clear at 7.1 that an entity's earnings for a particular reporting period (such as for 1H22):

  • (a) are not required to be reported to market until the due date for the release of that information, being no later than two months after the end of the accounting period (i.e.

    28 February 2022 in the present instance); and

  • (b) should be "vetted and signed off at a suitably senior level" before being released.

  As such, MWY was under no obligation to provide any information in respect of its consolidated revenue for 1H22 prior to the lodging of Appendix 4D and following director review and approval, particularly in circumstances where it gave no forecasted revenue guidance to the market that required correction.

• 5 In light of the above, does MWY consider that the Outlook figures for FY22 may still be achieved?

• 5.1 MWY does not consider that the Outlook figures for FY22 are achievable.

• 6 If the answer to question 5 is yes, what is the basis for this view. If the answer to question 5 is "no" has MWY made any announcement to that effect? If so, please provide details. If not, please explain why this information was not released to the market at an earlier time, commenting specifically on when you believe MWY was obliged to release the information under Listing Rules 3.1 and 3.1A and what steps MWY took to ensure that the information was released promptly and without delay.

• 6.1 MWY confirms that it has not made any announcement to the market in respect of the information that it will not achieve the FY22 Outlook figures. This is because disclosure pursuant to Listing Rule 3.1 requires a reformulation of the Outlook figures by MWY. Whilst the revision process is underway, MWY has not yet been able to determine the revised Outlook figures.

• 6.2 Our customer contracts are generally dealt with on a twice year basis and are mostly negotiated and executed in May and June for the first half of the financial year and late November and

  December for the second half of the financial year. However, and consistent with 2020 and 2021, contract negotiations with some of MWY's customers (and in the industry generally) have

  been delayed as a result of the pandemic. As such, we are only now reaching the end of the negotiation and execution process. We expect these issues will be resolved in the coming days.

  At that time MWY will make immediate disclosure under Listing Rule 3.1 in relation to not achieving FY22 Outlook figures together with the revised outlook figures.

• 6.3 Similarly, to that set out at 4.2 above, MWY has not made disclosure of the fact that the Outlook figures will not be met, because the relevant information (being that the Outlook figures for FY22 will not be achieved, but not the extent of any adjustment):

• (a) comprises a matter of supposition or is insufficiently definite to warrant disclosure such that a Rule 3.1A.1 is enlivened; and

• (b) is confidential in that the Outlook figures are formed based upon a range of negotiations with customers in China and Japan of which some are on a spot basis and are "secret",

  satisfying Rule 3.1A.2; and

• (c) would not be expected to be disclosed by a reasonable person, noting that as a general rule, where the information is confidential (as is the case here) and absent some surrounding circumstances sufficient to displace the general rule (of which we do not believe there any), the reasonable person test will be satisfied.

• 7 Please confirm that MWY is complying with the Listing Rules and, in particular, Listing Rule 3.1.

• 7.1 MWY confirms that it is complying with the Listing Rules, including Listing Rule 3.1.

• 8 Please confirm that MWY'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 MWY with delegated authority from the board to respond to ASX on disclosure matters.

• 8.1 MWY confirms that its responses to the above questions have been authorised and approved by the Board.

Yours sincerely

Rob Bennett Company Secretary Midway Limited

22 March 2022

Mr Rob Bennett Company Secretary Midway Limited 10 The Esplanade, North Shore VIC 3214

By email:

Dear Mr Bennett

Midway Limited('MWY'): General - Aware Query

ASX refers to the following:

A. MWY's announcement entitled "FY21 Results Presentation" lodged on the ASX Market Announcements

Platform ('MAP') on 26 August 2021 (the 'Announcement'), disclosing on page 27 the projected sales volumes figures for FY22 and FY23 ('Outlook'). Based on the Announcement, FY22 forecasted sales volumes were expected to increase by 24.7% to 3,069,000 GMT from FY21 actual sales volume of 2,460,000 GMT.

• B. MWY's Appendix 4D lodged on MAP on 24 February 2022 disclosing that the half year ended 31 December 2021 consolidated revenue is down by 39.6% to $91.2 million from the corresponding half year ended 31 December 2020 in which MWY recorded consolidated revenue of $150.9 million (the 'Information').

  MWY's 'Results for Announcement to the Market' also provided the following statement:

• C. MWY's announcement "1H22 Results Presentation" lodged on MAP on 24 February 2022 disclosing that the actual sales volumes for the first half of FY22 to be 1,193,000 (approximately 38% of the FY22 forecasted sales volumes (1H Sales)).

• D. MWY's share price decreased by 23.97% from $1.21 as at the close of trading on 23 February 2022 to a low and closing price of $0.92 on 24 February 2022.

• E. Listing Rule 3.1, which requires a listed entity to immediately give ASX 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.

ASX Limited [[Listings]]

ASX Customer Service Centre 131 279 | asx.com.au