Nuheara : Share Purchase Plan Offer Document

For personal use only

Nuheara Limited

ABN 29 125 167 133

Share Purchase Plan Booklet

Eligible Shareholders have the opportunity to participate in the Share Purchase Plan (SPP) by applying for up to $30,000 worth of new ordinary shares in the Company (New Shares) (SPP Offer). Details of the SPP Offer and how to participate are set out in this Booklet.

This Booklet is intended for use only in connection with the SPP to Eligible Shareholders in Australia or New Zealand. No action has been taken to permit an offering of New Shares in any jurisdiction outside of Australia and New Zealand. The distribution of this document may be restricted by law and persons (including custodians and nominees) who come into possession of this document should observe any such restrictions.

This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares will not be offered or sold, in any country outside Australia except to the extent set out in this document.

For personal use only

KEY DATES

Event	Date
Record Date (the time that eligibility to	5:00pm on Wednesday, 22 December 2021
participate in the SPP is determined)
Opening Date	9:00am on Friday, 31 December 2021
Closing Date	5:00pm on Monday, 17 January 2022
Announcement of results of SPP	Monday, 24 January 2022
Allotment of New Shares issued under SPP	Monday, 24 January 2022
Commencement of trading of New Shares on	Tuesday, 25 January 2022
ASX
Dispatch of holding statements for New Shares	Tuesday, 25 January 2022

This timetable (and each reference in this Booklet to a date specified in the timetable) is indicative only and the Company may, at its discretion, vary any of the above dates (other than the Record Date) by lodging a revised timetable with the Australian Securities Exchange (ASX). This timetable is subject to ASX approval. The commencement of trading and quotation of New Shares is subject to ASX confirmation.

All times referred to in this Booklet are to Western Standard Time (WST) unless otherwise specified.

IMPORTANT NOTICE

This Booklet contains important information. You should read it carefully and in its entirety.

This Booklet is not a prospectus under Chapter 6D of the Corporations Act 2001 (Cth) (the Corporations Act). The offer of New Shares under the SPP is made in accordance with Australian Securities and Investments Commission (ASIC) Corporations (Share and Interest Purchase Plans) Instrument 2019/547 (Instrument 2019/547), which grants relief from the requirement to issue a disclosure document for the SPP.

If you have any questions in relation to how to participate in the SPP after reading this Booklet, please contact Ronn Bechler of Market Eye Pty Ltd, the Company's Investor Relations advisor, from 8:30am to 5:30pm WST Monday to Friday on 0400 009 774 (within Australia) or [phone] (outside Australia) or by email at [e-mail].

This Booklet does not constitute or provide financial advice and has been prepared without taking into account your particular objectives, financial situation or needs. If you are in any doubt about whether to participate in the SPP, you should seek advice from your financial, taxation or other professional adviser before participating.

Foreign offer restrictions

This document may not be released or distributed outside Australia or New Zealand.

This document may not be distributed in the United States or released to US wire services. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any New Shares in the United States or in any jurisdiction in which such an offer would be unlawful. The New Shares to be offered and sold under the SPP have not been, and will not be, registered under the U.S. Securities Act of 1933 or the securities laws of any U.S. state or other jurisdiction of the United States, and may not be offered or sold, directly or indirectly, in the United States or to any person acting for the account or benefit of a person in the United States (to the extent such person is acting for the account or benefit of a person in the United States).

Information for New Zealand investors

The New Shares under the SPP are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the SPP Offer of New Shares is being made in reliance on the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016.

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013. This document is not a product disclosure statement under New Zealand law and is not required to, and may not, contain all the information that a product disclosure statement under New Zealand law is required to contain.

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For personal use only

LETTER FROM THE CHAIR

31 December 2021

Dear Shareholder,

Nuheara Limited Share Purchase Plan

On behalf of the Board of Nuheara Limited (ABN 29 125 167 133) (Nuheara or Company), I am pleased to offer you the opportunity to participate in the Company's Share Purchase Plan (SPP).

The SPP provides each Eligible Shareholder with an opportunity to apply for up to $30,000 worth of new fully paid ordinary shares in Nuheara (New Shares) without incurring brokerage or transaction costs. Participation in the SPP is optional. Pursuant to the SPP, the Company will raise funds through the issue of New Shares.

On 23 December 2021, the Company announced a capital raising comprising:

• $3.0 million agreed to be invested by United States (US) based Healthcare 2030, LLC;
• $1.6 million private placement commitments from existing and new professional and sophisticated investors; and
• this SPP aiming to raise up to $3.0 million (with Board discretion to accept oversubscriptions) to provide the opportunity for the Company's shareholders to further invest on the same terms as the private placement.

Executing on strategic priorities

When Nuheara last raised capital from shareholders in December 2020, the Company was well positioned to significantly expand sales through the Direct to Consumer (DTC) channel and expanding OEM partnerships. Since the prior raising, Nuheara has executed on its strategic objectives and achieved a number of important milestones, including:

• 517% increase in FY21 sales revenue to $10.7 million, with 15,117 IQbuds shipped (net of returns)
• HP launching Nuheara co-developed Elite Wireless Earbuds at CES 2021
• Commencing mass production and shipping of HP Elite Wireless Earbuds
• Receiving FDA registration and Hearing Aid Device listing in the US
• Appointing key senior talent within the business and the Company's new Innovation Team
• Launching in 241 Best Buy stores in the US, which offers hearing solutions as a specific product category online and in select retail stores
• Securing a global supply agreement with Sonova that adds significant potential worldwide Points of Sale to Nuheara's omni-channel sales strategy
• Preparing to further scale as a medical device company, with clinical trials of Nuheara's hearing aids to support entry into the US regulated hearing market
• Receiving ethical approval to commence a clinical trial with pathway to US FDA submission, ahead of the FDA issuing its landmark proposal for OTC hearing aids in the regulated market.

Having put in place key foundational relationships and a strong omni-channel network, Nuheara is well positioned to execute on current and future opportunities in key growth markets, particularly the US, in calendar year 2022.

US focus

Following regulatory developments in the US, that Nuheara had been positioning for and building towards over the last seven years, the Company is now engaged in ensuring it cements its first mover advantage into OTC hearing aids with clinically tested and FDA approved self-fit hearing aids. This market comprises approximately 30 million Americans, people with some trouble hearing, who don't currently use hearing devices.

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Recent agreements with Best Buy and Sonova underpin substantially larger retail footprints for Nuheara's product in the US (in addition to the Company's products being made available for sale via Amazon) providing a vast opportunity for Nuheara to deepen its brand recognition in advance of future OTC hearing aid products and sales following Nuheara's hearing solution receiving US FDA approval.

Your Board believes that the US hearing market provides a substantial opportunity that warrants significant further focus and investment. This will be the key focus of Nuheara's activity and expenditure over the next 12 months.

Use of proceeds

The proceeds of the SPP, in addition to the proceeds raised from the institutional investment by a US based fund, and the private placement, will support:

• Necessary activities and approvals to support 510(k) submission to the FDA for approval of a Class II, self-fitting air conduction, wireless hearing aid;
• transition of customers to payment terms arising from resurgent traditional retail sales growth through Nuheara's retail partners, particularly in the US;
• newly developed range of hearing aid products to underpin Nuheara's planned expansion into clinically tested and regulatory approved medical devices, particularly in the US; and
• working capital and costs of the offer.

The Company has an ambitious growth strategy with tremendous once-in-a-generation opportunities in front of us. The funds raised from the SPP and the other elements of the capital raising, will provide us with additional capital to execute on our growth plans, and rapidly scale our business globally, particularly in the US.

SPP details

Issue Price

Shares purchased under the SPP (New Shares) will be priced at $0.016 per New Share, which is equal to the issue price under the private placement.

Scale back

The Board is aiming to raise up to $3.0 million under the SPP, with the ability to accept oversubscriptions. If the Company receives applications for more New Shares than it decides to issue, applications may be scaled back.

To the extent it is determined to scale back the number of New Shares that will be issued to individual Shareholders under the SPP, the Company intends to do so having regard to, amongst other things, the pro rata shareholding of Eligible Shareholders (as at the Record Date) who apply for New Shares.

However, the Company may also, where considered appropriate, scale back the number of New Shares in its absolute discretion. If the scale back happens, you may be issued New Shares to a value that is less than the value of the New Shares you applied for. The balance of any application money that is not applied to acquire New Shares will be refunded to you without interest.

Participation in the SPP

To be eligible to participate in the SPP, you must have been a registered holder of Shares at the Record Date (5:00pm WST on Wednesday, 22 December 2021) and shown on the Register to have an address in Australia or New Zealand (Eligible Shareholder).

The Directors of the Company, as Eligible Shareholders, may participate in the SPP (without having to obtain shareholder approval) on the same terms as all other Eligible Shareholders in the Company. Nuheara's Board fully supports the SPP and all the Company's Directors have each committed to participate in the SPP.

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How to apply for New Shares

Details of how to apply under the SPP are contained in section 4 of the SPP terms and conditions on pages 6 to 7 of this SPP Booklet.

The fastest and easiest way to apply and pay is by BPAY®1. Alternatively, you can complete and return the enclosed personalised application form with your application payment.

Please ensure that the Registry receives your application and application payment by the Closing Date (expected to be 5.00pm WST on Monday, 17 January 2022).

Questions and further information

This Booklet sets out the details and the terms and conditions of the SPP Offer and I encourage you to read it carefully and in full, and to seek your own financial and taxation advice in relation to the SPP Offer, before making a decision on whether to participate.

If you have any additional questions you can call Ronn Bechler of Market Eye Pty Ltd, the Company's Investor Relations advisor, from 8:30am to 5:30pm WST Monday to Friday on 0400 009 774 (within Australia) or [phone] (outside Australia) or by email at [e-mail].

On behalf of Nuheara's Board of Directors, I invite you to consider participation in the SPP and thank you for your continued support of the Company.

Yours sincerely

Hon. Cheryl Edwardes AM

Chair, Nuheara Limited

• Registered to BPAY Pty Ltd ABN 69 079 137 518.

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