LawFinance : Successful Restructure and Capital Raising

ASX Announcement (ASX: LAW)

19 April 2021

Successful Restructure and Capital Raising

LawFinance Limited ("LAW" or the "Company") is pleased to announce that it has successfully negotiated terms for greater than a 90% reduction in its corporate net debt ( "Restructure"), agreed terms to refinance the Front Book secured facility ("Front Book Refinancing"), arranged a new debt facility of A$3 million ("New Debt Facility") and received firm commitments of A$17.2 million under a conditional placement from converting lenders and existing and new institutional and sophisticated investors ("Conditional Placement") (all together, "Restructure and Capital Raising"). The finalisation of the Restructure, Front Book Refinancing and Conditional Placement are conditional on shareholder approval at the AGM and other conditions as outlined in this announcement.

Highlights

• Conversion of c.A$55 million of corporate debt to equity at an average of A$0.037 cents per share;
• Refinancing of the Atalaya Front Book facility with Partners for Growth at a significantly lower interest rate and better strategic alignment;
• Raising A$20.2 million of fresh capital through:

1. a New Debt Facility of A$3 million which is immediately available;

• 1. a Conditional Placement of A$17.2 million at A$0.013 cent per share; and
• Independent expert Grant Thornton concluded that the Restructure and Capital Raising is fair and reasonable to the non-associated shareholders and valued LAW post Restructure and Capital Raising at $0.020-0.027 cents per share. A copy of Grant Thornton's report will be lodged with the ASX separately.

CEO and Managing Director, Daniel Kleijn said: "Without the overwhelmingly positive response from converting lenders, existing and new investors, the Restructure and Capital Raising would not have been possible. With a significantly strengthened balance sheet, LAW can now focus on the execution of its strategy and capitalise on the attractive opportunity the U.S. medical receivables funding market offers."

Restructure

The Company has executed binding debt-to-equity agreements with more than 40 lenders to convert c.A$55 million of corporate debt to equity at an average price of $0.037 cents per share. A summary of the material individual conversion terms are included in the attached Restructure and Capital Raising investor presentation ("Investor Presentation"), which forms part of this ASX announcement.

In addition to converting c.A$36 million of debt-to-equity, the lenders in the Syndicated Acquisition Facility ("SAF") have agreed to amend the terms for the remaining c.A$21 million as follows1:

• Interest rate reduced from c.13.6% p.a. to 9.5% p.a.;
• Ability to capitalise interest payments until the third anniversary of the amended SAF loan; and
• Defer the repayment date to May 2025 for c.A$1m and to May 2026 for A$20m .

1 Further amendments (and tidy-ups) will made to the SAF agreements, these are not expected to materially alter the original agreement

Level 16, 56 Pitt Street, Sydney NSW 2000

T [phone] | E [e-mail] | W lawfinance.com.au

Front Book Refinancing

Following the completion of the Restructure and Capital Raising, LAW's existing Front Book facility with Atalaya Capital Management ("Atalaya") will be refinanced with a new facility (subject to the satisfaction of customary conditions precedent) provided by Partners for Growth VI, LP ("PFG"). A summary of the key terms of the new facility are contained in the Investor Presentation.

New Debt Facility

AquAsia, one of the largest lenders in the SAF syndicate, has agreed to provide a new loan of A$3 million which (subject to the satisfaction of customary conditions precedent) is immediately available to LAW. Following the completion of the Restructure and Capital Raising, the New Debt Facility will form part of the amended SAF with the same key commercial terms. The New Debt Facility has a term of 4 years.

Conditional Placement

The Conditional Placement to raise A$17.2 million was oversubscribed and received strong support from existing shareholders as well as introducing new institutional and sophisticated investors to the register. The Conditional Placement was priced at $0.013 cents per share.

The funds raised from the Conditional Placement will be used to fund the Company's ongoing operations and growth strategies, as set out in more detail in the Investor Presentation. A timetable for the Conditional Placement is also included in the Investor Presentation.

LAW will offer retail shareholders the opportunity to participate in a share purchase plan ("SPP") at the same price as under the Conditional Placement if they were shareholders on 16 April 2021 (the record date). Further information in relation to timing of the SPP will be announced in due course. The Company reserves the right to not proceed with or to withdraw the SPP at any time, subject to regulatory requirements.

Conditions

The Restructure and Capital Raising is subject to a number of conditions:

• Shareholder approval of the resolutions relating to Restructure and Capital Raising at the upcoming AGM (expected to be held on 25 May 2021);
• Parties to the Company's Syndicated Acquisition Facility amending the original facility agreement to reflect the key terms set out in the implementation deed executed by the parties together with satisfaction of customary conditions precedent to such facility amendment;
• Satisfaction of customary conditions precedent and entry into ancillary documentation to affect the transfer and refinance of outstanding debt, collateral and security from Atalaya under the 'Loan and Security Agreement' between amongst others the Company and Atalaya;
• Finalise intercreditor agreement regarding PFG security over National Health Finance DM LLC (as borrower) under the Loan and Security Agreement between the Company, PFG and others;
• Agreeing and executing documents with AssetSecure Pty Limited to cap claims under the corporate guarantee granted by the Company over the debt owed by JustKapital Financing Pty Ltd and increase the current standstill period each to levels acceptable to the Company; and
• Executing amending agreements to the original finance documentation in respect of the Company's facility with Efficient Frontier Investing ("EFI") to waive a default and review event together with related facility amendments and satisfaction of customary conditions precedent to such amending agreement.

If any of these conditions are not fulfilled, the Restructure and Capital Raising will not be able to proceed and it is the view of the board of directors that the Company is likely to be placed into administration.

Level 16, 56 Pitt Street, Sydney NSW 2000

T [phone] | E [e-mail] | W lawfinance.com.au

Board Renewal Process

Following the completion of the Restructure and Capital Raising, the board of directors will commence a process of board renewal. This process will include a review of the composition of the current board of directors, the level of diversity and required mix of skills and attributes. Further updates on the renewal process will be provided in due course.

Share Consolidation

The Company will propose a 100-to-1 share consolidation at the upcoming AGM. LAW is expected to have c.4 billion shares outstanding following the completion of the Restructure and Capital Raising. The Company believes that the share consolidation would result in a more appropriate and effective capital structure for the Company and is intended to result in a share price more appealing to a wider range of investors. More details will be provided in the notice of meeting for the AGM to be released ahead of the AGM.

Advisers

LAW is being advised by Arnold Bloch Leibler (Australia) and Lewis Roca (U.S.) as Legal Advisers. Wexted Advisors and Deloitte Financial Advisory are acting as Financial Advisers. MST Financial and Conrad Capital were appointed as Joint Lead Managers on the share placement and Grant Thornton prepared the independent expert report.

Authorised by:

Daniel Kleijn

Chief Executive Officer and Managing Director

For media enquiries:	For investor enquiries:
Sascha Moore	Daniel Kleijn
Director	Chief Executive Officer
Create Design & Marketing	LawFinance Limited
Tel: [phone]	Tel: + 61 2 9696 0220
Email: [e-mail]

Level 16, 56 Pitt Street, Sydney NSW 2000

T [phone] | E [e-mail] | W lawfinance.com.au

Restructure and Capital Raising

Investor Presentation

19 April 2021

Important Notice

Summary information

The announcement ("Announcement") and presentation have been prepared by LawFinance Limited (ABN 72 088 749 008) ("LAW" or the "Company") in connection with its proposed corporate debt restructure ("Restructure") and capital raising, which includes a conditional placement and the provision of a new loan at 9.5% interest p.a. and tenor of 4 years ("New Debt Facility") (together, "Capital Raising"). It is a presentation of general background information about LAW's activities current at the date of this presentation, which may be subject to change. The information is in a summary form and does not purport to be complete, comprehensive or to comprise all the information which a shareholder or potential investor in LAW may require in order to determine whether to deal in LAW shares, nor does it contain all the information which would be required in a disclosure document prepared in accordance with the Corporations Act 2001 (Cth) ("Corporations Act'). It is to be read in conjunction with LAW's other announcements released to the Australian Securities Exchange (available at www.asx.com.au).

Nothing contained in this presentation constitutes financial product, investment, legal, tax or other advice or any recommendation. It does not take into account the investment objectives, financial situation or needs of any particular investor. The appropriateness of the information in this presentation should be considered by you having regard to your own investment objectives, financial situation and needs and with your own professional advice, when deciding if an investment is appropriate.

Forward-looking statements

This presentation contains forward looking statements, including statements regarding the financial condition, results of operations and business of LAW, the outcome of the capital raising, results of the corporate debt restructure and the implementation of LAW's strategy. These statements relate to expectations, beliefs, intentions, or strategies regarding the future. Forward looking statements may be identified by the use of words like 'anticipate', 'believe', 'aim', 'estimate', 'expect', 'intend', 'may', 'plan', 'project', 'will', 'should', 'seek' and similar expressions.

Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements, as well as statements about market and industry trends, which are based on interpretations of current market conditions. The forward-looking statements reflect views and assumptions with respect to future events as of the date of this presentation. However, they are not guarantees of future performance. They involve known and unknown risks, uncertainties, assumptions, contingencies and other factors, many of which are beyond the control of LAW and its related bodies corporate and affiliates and each of their respective directors, shareholders, officers, employees, partners, agents, advisers and management, and may involve significant elements of subjective judgment and assumptions as to future events that may or may not be correct. Forward-looking statements speak only as of the date of this presentation and there can be no assurance that actual outcomes will not differ materially. Past performance is not indicative of future performance. Refer to the 'Key risks' in the Appendix of this presentation for a summary of certain risk factors that may affect LAW.

No guarantee, representation, or warranty, express or implied, is made as to the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns, statements, or tax treatment in relation to future matters contained in this presentation. Readers are cautioned not to place undue reliance on the forward-looking statements, which are based only on information currently available to LAW. Except as required by applicable laws or regulations, LAW does not undertake to publicly update or revise the forward-looking statements or other statements in this presentation, whether as a result of new information or future events or circumstances.

April 2021

Restructure and Capital Raising

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