UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6–K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

May 12, 2020

Commission File Number 001-39059

AVITA MEDICAL LIMITED

(Name of Registrant)

Level 7, 330 Collins Street

Melbourne VIC 3000 Australia

Tel: +61 (0) 3 8689 9997

Fax: +61 (0) 8 9474 7742

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______.

AVITA MEDICAL LIMITED

Form 6-K

TABLE OF CONTENTS

EXPLANATORY NOTE

Avita Medical Limited (the “Company”) published a news release titled “Proposed redomiciliation to the United States of America – registration of Scheme Booklet with ASIC and financial reporting relief granted by ASIC” (the “Public Notice”) to the Australian Securities Exchange on May 12, 2020. A copy of the Public Notice is attached as exhibit 99.1 and a copy of the Scheme Booklet referenced in the Public Notice is attached as exhibit 99.2 to this report on Form 6-K.

This report on Form 6-K (including the exhibits hereto) shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 12, 2020

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Exhibit 99.1

AVITA Medical Limited

Proposed redomiciliation to the United States of America –

registration of Scheme Booklet with ASIC and financial reporting

relief granted by ASIC

Valencia, Calif., USA, and Melbourne, Australia, 12 May 2020: AVITA Medical Limited (Company) (ASX:AVH, NASDAQ:RCEL) is pleased to announce that the Australian Securities and Investments Commission (ASIC) has registered the scheme booklet (Scheme Booklet) in relation to the proposed scheme of arrangement under which AVITA Therapeutics, Inc. (Avita US), a newly-formed company incorporated in Delaware in the United States of America, will become the parent company of the Company and its subsidiaries (Avita Group) for the purposes of effecting a redomiciliation of the Avita Group from Australia to the United States of America (Scheme).

A copy of the Scheme Booklet in full is attached to this announcement. The Scheme Booklet includes the Notice of Scheme Meeting and an Independent Expert’s Report prepared by BDO Corporate Finance Limited, who has concluded that, in its opinion, the Scheme is in the best interests of the Company’s shareholders as a whole.

Despatch of Scheme Booklet

A copy of the Scheme Booklet, which includes the Notice of Scheme Meeting and Independent Expert’s Report, and a proxy form, will be sent to the Company’s shareholders by post or electronically (for those shareholders who have opted to receive notices electronically) on or before 14 May 2020.

Scheme meeting

The Scheme meeting will be held exclusively as a virtual meeting by way of a live webcast at 9.00am (AEST) on 15 June 2020. The Company’s shareholders are encouraged to read the Scheme Booklet in its entirety and vote at the Scheme meeting either by participating in the live webcast or by appointing a proxy, attorney or corporate representative (as applicable). Details and instructions on how to take part and vote are included in the Scheme Booklet.

Financial reporting relief granted by ASIC

In connection with the Scheme, the Company applied to ASIC for relief from the requirement for the Company to prepare and lodge with ASIC an annual report in accordance with Australian International Financial Reporting Standards (AIFRS) for the financial year in which the Scheme was implemented.

The reason for the Company seeking this relief was to reduce the substantial costs, burden and risks associated with the dual financial reporting and related compliance obligations that the Company currently has in both the United States and Australia as a result of being treated (since 31 December 2019) as a domestic public company in both of these jurisdictions for financial reporting purposes.

The Company is pleased to announce that ASIC has granted relief so that, if the Scheme is implemented on or before 30 June 2020, the Company will not be required to prepare and lodge with ASIC an annual report for the financial year ending 30 June 2020 in accordance with AIFRS.

Avita Medical Limited c/o Mertons Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

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In order to comply with the conditions to the relief:

If the Scheme is implemented on or before 30 June 2020, it is anticipated that the Avita Group will save approximately A$400,000 in external professional costs as a result of obtaining this relief.

Authorised for release by the Chief Financial Officer of AVITA Medical Limited.

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ABOUT AVITA MEDICAL LIMITED

AVITA Medical is a regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indications. AVITA Medical’s patented and proprietary collection and application technology provides innovative treatment solutions derived from the regenerative properties of a patient’s own skin. The medical devices work by preparing a REGENERATIVE EPIDERMAL SUSPENSION^™ (RES^™), an autologous suspension comprised of the patient’s skin cells necessary to regenerate natural healthy epidermis. This autologous suspension is then sprayed onto the areas of the patient requiring treatment.

AVITA Medical’s first U.S. product, the RECELL^® System, was approved by the U.S. Food and Drug Administration (FDA) in September 2018. The RECELL System is indicated for use in the treatment of acute thermal burns in patients 18 years and older. The RECELL System is used to prepare Spray-On Skin^™ Cells using a small amount of a patient’s own skin, providing a new way to treat severe burns, while significantly reducing the amount of donor skin required. The RECELL System is designed to be used at the point of care alone or in combination with autografts depending on the depth of the burn injury. Compelling data from randomized, controlled clinical trials conducted at major U.S. burn centers and real-world use in more than 8,000 patients globally, reinforce that the RECELL System is a significant advancement over the current standard of care for burn patients and offers benefits in clinical outcomes and cost savings. Healthcare professionals should read the INSTRUCTIONS FOR USE—RECELL^® Autologous Cell Harvesting Device (https://recellsystem.com/) for a full description of indications for use and important safety information including contraindications, warnings and precautions.

In international markets, our products are marketed under the RECELL System brand to promote skin healing in a wide range of applications including burns, chronic wounds and aesthetics. The RECELL System is TGA-registered in Australia and received CE-mark approval in Europe.

To learn more, visit www.avitamedical.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This letter includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “intend,” “could,” “may,” “will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,” “target,” “project,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning and the use of future dates. Forward-looking statements in this letter include, but are not limited to, statements concerning, among other things, our ongoing clinical trials and product development activities, regulatory approval of our products, the potential for future growth in our business, and our ability to achieve our key strategic, operational and financial goal. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward- looking statement contained in this letter is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement.

Avita Medical Limited c/o Mertons Corporate Services Pty Ltd Level 7, 330 Collins Street, Melbourne Victoria 3000

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Applicable risks and uncertainties include, among others, the timing of regulatory approvals of our products; physician acceptance, endorsement, and use of our products; failure to achieve the anticipated benefits from approval of our products; the effect of regulatory actions; product liability claims; risks associated with international operations and expansion; and other business effects, including the effects of industry, economic or political conditions outside of the company’s control. Investors should not place considerable reliance on the forward-looking statements contained in this letter. Investors are encouraged to read our publicly available filings for a discussion of these and other risks and uncertainties. The forward-looking statements in this letter speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.

FOR FURTHER INFORMATION:

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Exhibit 99.2

		AVITA MEDICAL LIMITED   ABN 28 058 466 523   SCHEME BOOKLET   11 MAY 2020

NOTICE IS GIVEN OF A SCHEME MEETING TO BE HELD ON 15 JUNE 2020 COMMENCING AT 9.00AM (AEST) (WHICH CORRESPONDS TO 7.00PM ON 14 JUNE 2020 IN WILMINGTON IN THE STATE OF DELAWARE IN THE UNITED STATES OF AMERICA) BY WAY OF LIVE WEBCAST

THE DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOUR OF THE SCHEME RESOLUTION AT THE SCHEME MEETING

THE INDEPENDENT EXPERT HAS CONCLUDED THAT THE SCHEME IS IN THE BEST INTERESTS OF SHAREHOLDERS AS A WHOLE

This is an important document and requires your immediate attention.

You should read the whole of this document carefully (taking notice of the advantages, disadvantages and risks of the proposal) before you decide whether and how to vote on the Scheme Resolution. If you are in doubt as to what you should do, please consult your financial, legal, taxation or other independent and qualified professional adviser. If you have recently sold all of your shares in the Company, please ignore this document.

A notice for the Scheme Meeting is included as Appendix F to this Scheme Booklet. A Proxy Form for the Scheme Meeting also accompanies this Scheme Booklet.

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Table of Contents

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CHAIR’S LETTER

Dear Shareholder,

On 20 April 2020, the Company announced that it will be seeking Shareholder approval of a scheme of arrangement under which the Avita Group will redomicile from Australia to the United States. This will occur through Avita US (a newly-formed company incorporated in Delaware in the United States for the sole purpose of the redomiciliation) becoming the new holding company of the Company and parent company of the Avita Group.

On behalf of the Board, I am pleased to invite you to take part in the Scheme Meeting that will be held by way of live webcast on 15 June 2020, commencing at 9.00am (AEST), to consider and vote on the Scheme Resolution.

Overview of the Proposed Transaction

If the necessary approvals for the Scheme (including the approval of the Scheme Resolution by the requisite majorities of Shareholders) are obtained and the Scheme becomes Effective, a series of transactions collectively referred to (at section 2.1 of this Scheme Booklet) as the “Proposed Transaction” will occur. Under the Proposed Transaction:

Therefore, Eligible Shareholders, on receiving the Scheme Consideration, will hold an equivalent proportional interest in Avita US as they held in the Company prior to the implementation of the Proposed Transaction (subject to the Sale Facility aspect of the Proposed Transaction dealing with Fractional Shareholder Interests, discussed at section 2.8 and section 11.5 of this Scheme Booklet).

Importantly, the Proposed Transaction will not result in any changes to the operations, management or strategy of the Avita Group.

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Your vote is important

For the Proposed Transaction to be implemented, a requisite majority of Shareholders must vote to approve the Scheme Resolution at the Scheme Meeting (being a majority in number of those Shareholders voting and which votes must represent at least 75% of the votes cast on the Scheme Resolution). You will be entitled to vote at the Scheme Meeting if you are registered as a Shareholder on the Register at 9.00am (AEST) on 13 June 2020. Your vote is important regardless of how many Shares you own.

Due to the COVID-19 pandemic and the restrictions imposed by Australian governments in response to it, the Company has made a successful application to the Federal Court of Australia for orders to permit the Scheme Meeting to be conducted exclusively as a virtual meeting. Accordingly, the Scheme Meeting will be conducted by way of a live webcast only.

On behalf of the Board, I encourage you to participate in the live webcast, which will be available to view via the Company’s website (www.avitamedical.com). Participating in the live webcast will enable you to listen to the Scheme Meeting live, view slides and proxy results, ask questions and cast your vote at the appropriate times whilst the Scheme Meeting is in progress. You are also invited to lodge questions in advance of the Scheme Meeting by sending an email containing your question(s) to info@avitamedical.com by 5.00pm (AEST) on 8 June 2020. Your emailed questions will be addressed during the Scheme Meeting.

If you are unable to participate in the Scheme Meeting and vote by way of the live webcast, or choose not to do so, you can vote by way of proxy, attorney or corporate representative (as applicable).

ADS Holders will be entitled to vote at the Scheme Meeting through The Bank of New York Mellon, the ADS Depositary.

Section 3 of this Scheme Booklet provides further information on voting at the Scheme Meeting, including how to vote by way of live webcast or by proxy, attorney or corporate representative, and on the voting process for ADS Holders.

The Board’s recommendation

For the reasons set out in this Scheme Booklet, the Board unanimously recommends that you vote in favour of the Scheme Resolution at the Scheme Meeting. Each member of the Board intends to vote the Shares which they hold (or that are held on their behalf) in favour of the Scheme Resolution.

Advantages, disadvantages and risks of the proposal

After carefully considering the advantages, disadvantages and risks of the Proposed Transaction, the Board is of the unanimous view that the advantages of the Proposed Transaction significantly outweigh its disadvantages and risks.

The Board believes that the advantages of the Proposed Transaction are that the Proposed Transaction will:

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The Board believes that the potential disadvantages and risks of the Proposed Transaction include the following:

You should carefully read this Scheme Booklet in full (including the advantages, disadvantages and risks of the Proposed Transaction in section 6 of this Scheme Booklet) before making any decision as to whether and how to vote on the Scheme Resolution.

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Independent Expert

The Company has engaged BDO Corporate Finance Limited to prepare the Independent Expert’s Report for this Scheme Booklet. The Independent Expert has concluded that the Proposed Transaction is in the best interests of Shareholders as a whole. The Independent Expert’s Report is included at Appendix A of this Scheme Booklet.

Further information

This Scheme Booklet sets out important information regarding the Proposed Transaction and I strongly encourage you to consider it carefully and in its entirety.

If you require further information, you should consult your financial, legal, taxation or other independent and qualified professional adviser or contact the Company’s enquiry line on 1300 113 256 (Australia toll free) or +61 3 9415 4090 (outside Australia).

Conclusion

On behalf of the Board, I thank you for your continued support of the Company. We encourage you to vote in favour of the Scheme Resolution, which we believe to be in the best interests of Shareholders.

Thank you,

Lou Panaccio

Chair

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Following Shareholder approval of the Proposed Transaction:

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This timetable is indicative only and, amongst other things, is subject to Court availability (particularly in the current environment) and the Conditions Precedent to the Scheme being satisfied or waived. In particular, the Proposed Transaction is subject to approval by Shareholders, FIRB and the Court. The Company has the right to vary any or all of these dates and times.

Any material variation to the timetable set out above will be announced to the ASX and NASDAQ and via news release, and will also be notified on the Company’s website (www.avitamedical.com). All dates and times are AEST.

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This overview includes information that is described in greater detail elsewhere in this Scheme Booklet. It does not include all of the important information contained in this Scheme Booklet. Accordingly, Shareholders should carefully read the entire Scheme Booklet and other documents referred to in, or accompanying, this Scheme Booklet for a more complete understanding of the Proposed Transaction before deciding how to vote on the Scheme Resolution.

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The transactions described above are collectively referred to in this Scheme Booklet as the “Proposed Transaction” and will occur if the Scheme Resolution is passed by the requisite majorities of Shareholders at the Scheme Meeting and the Scheme becomes Effective.

Importantly:

The Proposed Transaction will change the current corporate structure of the Avita Group. On and from the Implementation Date, Avita US will become the parent company of the Avita Group. Avita US will own all of the Shares and the Company will become a wholly-owned subsidiary of Avita US.

The following diagrams show the current corporate structure of the Avita Group and the structure of the Avita Group after the Proposed Transaction is completed.

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The Company is proposing to redomicile the Avita Group from Australia to the United States for a number of important reasons. These include:

The means by which the Company can resume being a domestic public company in only one jurisdiction (being the United States), but maintain a listing in two jurisdictions (being the United States and Australia), is to redomicile the Avita Group from Australia to the United States.

Section 6 of this Scheme Booklet provides detailed information on the advantages, disadvantages and risks of the Proposed Transaction. The Board, after considering the advantages, disadvantages and risks of the Proposed Transaction, unanimously believes that the redomiciliation of the Avita Group from Australia to the United States is in the best interests of Shareholders.

The Company appointed the Independent Expert to assess whether in its view the Scheme is in the best interests of Shareholders. The Independent Expert has concluded that the advantages of the Scheme outweigh its disadvantages and risks and, accordingly, has opined that the Scheme is in the best interests of Shareholders as a whole. A copy of the Independent Expert’s Report is set out in Appendix A to this Scheme Booklet.

For an overview of the key steps involved in implementing the Proposed Transaction, please refer to section 11.3 of this Scheme Booklet. Briefly, if the Scheme Resolution is passed by the requisite majorities of Shareholders, then, subject to the Court approving the Scheme and all Conditions Precedent to the Scheme being satisfied or waived, the Company will lodge the Court order approving the Scheme with ASIC, upon which the Scheme will become Effective and the Proposed Transaction will be implemented. The Court order will also be furnished to the SEC on a Form 6-K.

Shareholders (whose addresses as shown in the Register on the Record Date are) in the following jurisdictions will be “Eligible Shareholders” for the purposes of the Scheme and will be entitled to receive the Scheme Consideration:

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Eligible Shareholders, on receiving the Scheme Consideration, will hold an equivalent interest in Avita US to that which they held in the Company prior to implementation of the Proposed Transaction (subject to the Sale Facility aspect of the Proposed Transaction dealing with Fractional Shareholder Interests, discussed at section 2.8 and section 11.5 of this Scheme Booklet).

If the Scheme is approved and implemented, the Scheme Consideration will be provided to Eligible Shareholders as follows:

Eligible Shareholders who hold Shares (other than the ADS Depositary) will receive (via the Authorised Nominee) 5 Avita US CDIs for every 100 Shares held by them as at the Record Date.

For further information on the Authorised Nominee and CDIs, please refer to Appendix E of this Scheme Booklet and a summary of CDIs provided at section 2.12 of this Scheme Booklet.

Shares represented by the outstanding Company ADSs will be replaced with the right to receive Avita US Shares. The ADS Depositary has informed the Company that it will call for the surrender of all outstanding Company ADSs and will deliver the relevant Avita US Shares, and any Sale Facility Proceeds (from the sale of fractional entitlements), to ADS Holders upon surrender by them of their Company ADSs and payment of the fee to the ADS Depositary for such surrender. The ADS Depositary, DTC or DTC participants will sell the aggregated fractions of Avita US Shares to which ADS Holders would otherwise be entitled, and those holders will receive the net proceeds of that sale. The ADS program will also be terminated.

On implementation of the Proposed Transaction, the ADS Depositary will receive one Avita US Share for every 100 Shares held by it as at the Record Date and the ADS Depositary will deliver to each ADS Holder one Avita US Share for every 5 Company ADSs held by the ADS Holder as at the Record Date, subject (as noted above) to the ADS Holder surrendering all of their Company ADSs and paying the ADS Depositary’s fee for the surrender of their Company ADSs (which fee is equal to US$0.05 per Company ADS surrendered).

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After implementation of the Proposed Transaction, Avita US Shares (quoted for trading on NASDAQ) and Avita US CDIs (quoted for trading on ASX) will be transmutable, so that Avita US Shareholders can convert their Avita US Shares into Avita US CDIs (and vice versa) at any time. Each holder of Avita US Shares will be able to convert them to Avita US CDIs in the ratio of five Avita US CDIs for one Avita US Share, and each holder of Avita US CDIs will be able to convert them on the ratio of one Avita US Share for five Avita US CDIs.

Following implementation of the Scheme:

The exchange ratio has been determined by the Company and Avita US having regard to:

The Company and Avita US have determined that an appropriate exchange ratio should deliver approximately 20 to 30 million Avita US Shares on issue, and that it was prudent to determine an exchange ratio that would achieve the lower end of this band. As a result, on implementation of the Proposed Transaction, Avita US will have (subject to rounding) 1/100^th of the number of shares on issue (in the form of common stock) as compared with the number of Shares that the Company currently has on issue.

Where an Eligible Shareholder would otherwise be entitled under the Scheme to a fraction of an Avita US Share or a number of Avita US CDIs that will not be sufficient to equate to a whole Avita US Share as part of the Scheme Consideration (each a Fractional Shareholder Interest), the Shareholder’s Fractional Shareholder Interest will be aggregated with all other Fractional Shareholder Interests and issued to the Sale Agent (rather than the Shareholder) to be sold under the Sale Facility. The net proceeds of that sale (after deducting any applicable brokerage, stamp duty and other charges, fees and

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taxes) for those Fractional Shareholder Interests will be distributed to the relevant Shareholders in accordance with the Sale Facility described in section 11.5 of this Scheme Booklet. The ADS Depositary, DTC or DTC participants will separately sell, in accordance with the deposit arrangements between the ADS Depositary and ADS Holders, the aggregated fractions of Avita US Shares to which ADS Holders would otherwise be entitled, and those holders will receive the net proceeds of that sale.

A Shareholder will be an “Ineligible Shareholder” if the Shareholder’s address, as shown in the Register on the Record Date, is a place outside of Australia, the United States, Hong Kong, New Zealand, the United Kingdom, France, Norway, Switzerland, the United Arab Emirates and Singapore (unless the Company is satisfied, acting reasonably, that the laws of that place permit the offer and issue of Avita US Shares or Avita US CDIs to a Shareholder in that jurisdiction and, in Avita US’s sole discretion, it is not unduly onerous or impractical for Avita US to issue Avita US Shares or Avita US CDIs to a Shareholder with a registered address in that jurisdiction). Restrictions outside of these “eligible” jurisdictions make it impractical or unlawful to offer or receive securities in those other jurisdictions. For this reason, Ineligible Shareholders will not be entitled to receive Avita US Shares or Avita US CDIs under the Scheme. The Avita US Shares or Avita US CDIs to which an Ineligible Shareholder would otherwise be entitled will instead be issued to the Sale Agent for sale and the net proceeds from such sale will be remitted to the Ineligible Shareholder in accordance with the Sale Facility outlined in section 11.5 of this Scheme Booklet.

The Company has sought an ATO Class Ruling to confirm that full or partial scrip for scrip roll-over relief will be available to an Australian resident Shareholder and an Australian resident ADS Holder who would otherwise make a capital gain from the Proposed Transaction. The ATO Class Ruling, if provided by the ATO, will confirm the following Australian tax implications:

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To the extent that the Australian resident Shareholders or Australian resident ADS Holders hold their interests as either trading stock or on revenue account, scrip for scrip rollover relief will not be available. As such, any gain or loss made on the disposal of the Shares or Company ADSs when they are held on revenue account or as trading stock will be included in the assessable income of the Australian resident Shareholder or Australian resident ADS Holder.

Under Australia’s non-resident capital gains provisions, a non-Australian resident Shareholder or non-Australian resident ADS Holder who holds their Shares or Company ADSs on capital account will be able to disregard any capital gain made on the exchange on the basis that there are no material Australian real property interests disclosed in the Company’s financial statements and therefore the Shares or Company ADSs do not constitute Taxable Australian Real Property.

Non-Australian resident Shareholders or non-Australian resident ADS Holders who hold Shares or Company ADSs as either trading stock or on revenue account will not be able to disregard a gain made under the Scheme. However, non-Australian resident Shareholders and or non-Australian resident ADS Holders may be entitled to relief under the business profits article of a relevant Double Tax Agreement.

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The exchange of the Shares or Company ADSs for Avita US CDIs or Avita US Shares respectively pursuant to the Scheme, is intended to be treated as a transfer to which Section 351 of the US Internal Revenue Code of 1986, as amended (the Code) applies and/or as a reorganisation described in Section 368(a) of the Code in which no gain or loss is recognised to the Company, Avita US, United States Shareholders, Non-US Shareholders, United States ADS Holders or Non-US ADS Holders.

Assuming the exchange so qualifies, a United States Shareholder or United States ADS Holder will generally not recognise any gain or loss on the exchange of the Shares or Company ADSs for Avita US CDIs or Avita US Shares, except that United States Shareholders who are Fractional Shareholders (which includes Small Shareholders) who receive cash in lieu of certain Avita US Shares or Avita US CDIs pursuant to the Scheme may recognise a gain or loss, if any, to the extent of the cash consideration only.

Assuming the exchange qualifies as a transfer to which Section 351 of the Code applies and/or a reorganisation described in Section 368(a) of the Code, Non-US Shareholders and Non-US ADS Holders will generally not recognise any gain or loss as a result of the Scheme.

Any gain that is recognised by a Hong Kong Shareholder or Hong Kong ADS Holder will not be subject to Hong Kong Profits Tax provided that the acquisition of the shareholding or Company ADS holding took place through the ASX or NASDAQ and accordingly is not Hong Kong sourced

Where the Hong Kong Shareholder or Hong Kong ADS Holder purchased the Shares or Company ADSs off market pursuant to a private placement, any gain that is realised will not be subject to Hong Kong Profits Tax provided that the contracts for purchase of the Shares or Company ADSs were effected outside of Hong Kong, or the gain is capital in nature.

Please refer to section 10 of this Scheme Booklet for a more comprehensive summary of the taxation implications of the Proposed Transaction for Shareholders (and ADS Holders) in Australia, the United States and Hong Kong. In addition, Shareholders are strongly urged to consult with their tax advisers as to the specific tax consequences for them in connection with the Proposed Transaction, including the applicability and effect of foreign and local income and other tax laws in their particular circumstances.

The Proposed Transaction will not proceed if:

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In that event:

Even if you vote against the Scheme Resolution, or do not vote, the Scheme may still be implemented if it is approved by the required majorities of Shareholders and by the Court. If this happens, your Shares will be transferred to Avita US and you will receive the Scheme Consideration (subject to the Sale Facility aspect of the Proposed Transaction dealing with Fractional Shareholder Interests and Ineligible Shareholders, discussed at section 2.8 and section 11.5 of this Scheme Booklet) even though you voted against, or did not vote on, the Scheme Resolution.

Avita US is incorporated in the State of Delaware in the United States. The electronic transfer system used on the ASX (CHESS) cannot be used to transfer securities of foreign companies. To enable foreign companies, such as Avita US, to have their securities cleared and settled electronically through CHESS, depositary instruments called CDIs are issued.

Eligible Shareholders who hold Shares (other than the ADS Depositary) will receive Avita US CDIs as the Scheme Consideration. The ADS Depositary will receive Avita US Shares and will distribute those Avita US Shares to ADS Holders in the manner set out in section 11.4 of this Scheme Booklet. After implementation of the Proposed Transaction, Avita US Shares and Avita US CDIs will be transmutable, so that Avita US Shareholders can convert their Avita US Shares into Avita US CDIs (and vice versa).

Five Avita US CDIs will be equivalent to one Avita US Share.

The main difference between holding Avita US CDIs and Avita US Shares is that Avita US CDIs will confer the beneficial interest in Avita US Shares on Shareholders whilst the legal title to the Avita US Shares will be held by the Authorised Nominee, which is a subsidiary of ASX. Avita US CDI Holders will obtain the economic benefits of actual ownership of Avita US Shares.

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From an ASX trading perspective, Avita US CDIs will have the same trading capabilities on the ASX as Shares currently quoted on the ASX (with the ticker code of “AVH” unchanged before and after implementation of the Proposed Transaction). Similarly, Avita US Shares will have the same trading capabilities on NASDAQ as Company ADSs currently quoted on NASDAQ (with the ticker code of “RCEL” unchanged before and after implementation of the Proposed Transaction).

Appendix E to this Scheme Booklet provides further detail on CDIs and the rights and entitlements attaching to CDIs.

Under the terms of the Scheme, each Shareholder is deemed to have warranted to the Company, and is deemed to have authorised the Company to warrant to Avita US as agent and attorney for the Shareholder, that:

Under the terms of the Scheme, each Shareholder, without the need for any further action, also irrevocably appoints the Company and each of the Directors and officers of the Company, jointly and severally, as its attorney and agent for the purposes of doing all things and executing all deeds, instruments, transfers and other documents that may be necessary or desirable to give full effect to the Scheme and the transactions contemplated by it, as set out in section 12.11 of this Scheme Booklet.

If you have any questions in relation to this Scheme Booklet or the Proposed Transaction, please refer to section 4 of this Scheme Booklet for a response to frequently asked questions. Alternatively, you should consult your financial, legal, taxation or other independent and qualified professional adviser or contact the Company’s enquiry line on 1300 113 256 (Australia toll free) or +61 3 9415 4090 (outside Australia).

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You should read this Scheme Booklet in full (including the advantages, disadvantages and risks of the Proposed Transaction in section 6 of this Scheme Booklet and the Independent Expert’s Report at Appendix A) before making any decision as to whether and how to vote on the Scheme Resolution.

It is important that you consider the information disclosed in light of your own particular investment needs, objectives and financial circumstances.

For the Proposed Transaction to proceed, the Scheme Resolution must be approved by a majority in number (more than 50%) of Shareholders who are present and voting (either in person or by proxy, attorney or corporate representative) at the Scheme Meeting by way of live webcast. That majority who are present and voting must also represent at least 75% of the total number of votes cast on the Scheme Resolution.

Following approval of the Scheme Resolution by Shareholders, the Court must also approve the Scheme and it has discretion as to whether or not to approve the Scheme even if the Scheme Resolution has been approved by Shareholders.

Shareholders who are registered as at 9.00am (AEST) on 13 June 2020 will be entitled to vote at the Scheme Meeting. Accordingly, transactions registered after this time will be disregarded for determining a Shareholder’s entitlement to take part in and vote at the Scheme Meeting.

The resolution on which Shareholders are being asked to vote is to approve the Scheme and thereby permit the redomiciliation of the Avita Group from Australia to the United States. The Scheme Resolution is set out in full in the Notice of Meeting in Appendix F to this Scheme Booklet.

As detailed in section 5 of this Scheme Booklet, the Board unanimously recommends that Shareholders vote in favour of the Scheme Resolution that will be proposed at the Scheme Meeting.

In particular, the Board wishes to emphasise that redomiciliation of the Avita Group to the United States is necessary for the Company to avoid the substantial risk, burden, resourcing and resultant costs associated with the dual financial reporting and related compliance obligations that the Company now has in both the United States and Australia as a result of being treated since 31 December 2019 as a domestic public company in both of those jurisdictions. The mechanism by which the Company can resume being a domestic public company in only one jurisdiction (i.e. the United States), but maintain a listing in two jurisdictions (being the United States and Australia), is to redomicile from Australia to the United States.

Importantly, the Board believes that having its primary listing on NASDAQ, rather than on the ASX, should result in increased demand for, and liquidity of, the Avita Group’s securities in the United States capital market, which is the world’s largest by market capitalisation and trading volume. In addition, the Board believes that having a primary listing on NASDAQ will increase awareness of the Avita Group to larger and more diverse investors in the United States, while also making research much easier, and more intuitive, for those investors.

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The Scheme Meeting to approve the Proposed Transaction will be held at 9.00am (AEST) on 15 June 2020 by way of live webcast through the Lumi platform. The Company strongly encourages the participation of Shareholders in the live webcast, which will enable Shareholders to listen to the Scheme Meeting live, view slides and proxy results and to also ask questions and cast their vote at the appropriate times whilst the Scheme Meeting is in progress.

If you are a Shareholder (and eligible to vote at the Scheme Meeting) you can access the live webcast of the Scheme Meeting through the Lumi platform on a:

A link to the Lumi platform will also be made available on the Company’s website (www.avitamedical.com).

Once you have access to the Lumi platform on your computer or mobile device, you will be asked to enter:

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More information regarding participating in the live webcast, including how to vote and ask questions during the live webcast of the Scheme Meeting (as well as browser requirements) will be detailed in the Scheme Meeting User Guide, which will be made available on the Company’s website (www.avitamedical.com) prior to the Scheme Meeting. Instructions will also be provided during the Scheme Meeting.

Shareholders are also invited to lodge questions in advance of the Scheme Meeting by sending an email containing their question(s) to info@avitamedical.com by 5.00pm (AEST) on 8 June 2020. Emailed questions will be addressed during the Scheme Meeting.

ADS Holders are able to listen to the live webcast of the Scheme Meeting as a visitor by selecting the ‘guest’ option (after entering in the meeting ID for the Scheme Meeting on the Lumi platform via a computer or mobile device) and providing their name and email details. However, as a visitor, an ADS Holder will not be able to ask questions or vote at the Scheme Meeting by way of live webcast. Section 3.11 of this Scheme Booklet provides information on how ADS Holders can vote on the Scheme Resolution.

All Shareholders who are unable to take part in the Scheme Meeting by way of live webcast, or choose not to, are encouraged to submit their votes by proxy instead.

To vote by proxy, please vote online or complete and sign the enclosed Proxy Form and return it in accordance with the instructions set out on the Proxy Form. Completed Proxy Forms must be received by the Registry by no later than 9.00am (AEST) on 13 June 2020.

A Shareholder entitled to take part in and vote at the Scheme Meeting (by way of live webcast) may appoint an individual or a body corporate as a proxy.

If a body corporate is appointed as a proxy, that body corporate must ensure that it appoints a corporate representative in accordance with section 250D of the Corporations Act to exercise its powers as proxy at the Scheme Meeting.

A proxy need not be a Shareholder.

A Shareholder may appoint up to two proxies and specify the proportion or number of votes each proxy may exercise. If the Shareholder does not specify the proportion or number of votes to be exercised, each proxy may exercise half of the votes in which case any fraction of votes will be disregarded.

Shareholders entitled to take part in the Scheme Meeting and vote on the Scheme Resolution (by way of live webcast) who return their Proxy Forms, but do not nominate the identity of a proxy, will be taken to have nominated the Chair as their proxy to vote on their behalf. If the Proxy Form is returned, but the nominated proxy does not take part in the Scheme Meeting, the Chair will act in the place of the nominated proxy and vote (or abstain from voting) in accordance with the instructions on the Proxy Form.

The Chair intends to vote all valid undirected proxies which he receives

for (or in favour of) the Scheme Resolution.

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Details for completion and lodgement of proxies are on the reverse side of the Proxy Form. Please read the instructions on the Proxy Form carefully when completing the form.

To be effective, the Proxy Form must be received by the Registry by no later than 9.00am (AEST) on 13 June 2020. Proxy forms received after this time will be invalid. Proxies must be received by the Registry before that time by one of the following methods:

Additional or replacement Proxy Forms may be obtained from the Registry at the address above.

Completing and returning a Proxy Form will not preclude you from taking part in and voting at the Scheme Meeting by way of live webcast.

You may revoke your proxy at any time prior to the start of the Scheme Meeting by:

If you wish for your attorney to take part in and vote at the Scheme Meeting (by way of live webcast) on your behalf, the original or a certified copy of the power of attorney authorising your attorney to take part in and vote at the Scheme Meeting (by way of live webcast), and a declaration or statement by the attorney that he or she has not received any notice of revocation of appointment, must be lodged with the Registry by the cut-off time for receipt of proxies for the Scheme Meeting set out above, being 9.00am (AEST) on 13 June 2020.

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You may lodge the power of attorney (and any supporting documents) by delivering, posting or faxing it to the Registry at the address above.

A body corporate that is a Shareholder, or that has been appointed as a proxy, is entitled to appoint any person to act as its representative at the Scheme Meeting. The appointment of the representative must comply with the requirements under section 250D of the Corporations Act. The representative should lodge with the Registry (by the closing time for receipt of proxies for the Scheme Meeting set out above, being 9.00am (AEST) on 13 June 2020) a properly executed “Certificate of Appointment of Corporate Representative” (available from the Registry or www.investorcentre.com) confirming its authority to act as the body corporate’s representative.

ADS Holders as at a voting record date set by the ADS Depositary and notified by the ADS Depositary to ADS Holders may instruct the ADS Depositary how to vote the number of deposited Shares their Company ADSs represent. The ADS Depositary will notify ADS Holders of the Scheme Meeting and will send or make voting materials available to ADS Holders. Those materials will describe the matters to be voted on at the Scheme Meeting and explain how ADS Holders may instruct the ADS Depositary how to vote. For instructions to be valid, they must reach the ADS Depositary by a date set by the ADS Depositary. The ADS Depositary will try, as far as practicable, subject to applicable laws and the Constitution, to vote or to have its agents vote the deposited Shares as instructed by ADS Holders. In any event, the ADS Depositary will not exercise any discretion in voting deposited Shares and will only vote as instructed.

Except by instructing the ADS Depositary as described above, ADS Holders will not be able to exercise voting rights directly unless they surrender their Company ADSs, withdraw their underlying Shares and arrange to receive those Shares into their securities account in Australia (which is a process that typically takes one to two Business Days to complete). If ADS Holders wish to do this, but do not have a securities account in Australia, then they should contact their financial intermediary to make appropriate arrangements to receive the underlying Shares.

If any Share is jointly held with one or more persons, only one of the joint holders may vote. If more than one joint holder attempts to vote in respect of a jointly held Share, only the vote of the Shareholder whose name appears first in the Register (as at 9.00am (AEST) on 13 June 2020) will be counted.

Further information concerning the Scheme Resolution is set out in the Notice of Meeting in Appendix F to this Scheme Booklet.

If you have any further questions about the Scheme Meeting or about the Proposed Transaction, please call the Company’s enquiry line on 1300 113 256 (Australia toll free) or +61 3 9415 4090 (outside Australia) on Business Days from 8.30am to 5.00pm Monday to Friday. Alternatively, you should seek professional guidance from your financial, legal, taxation or other independent and qualified professional adviser.

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The Board unanimously believes that the Proposed Transaction is in the best interests of Shareholders. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Scheme Resolution to be proposed at the Scheme Meeting.

In making this recommendation, the Board has considered the advantages, disadvantages and risks of the Proposed Transaction as described in section 6 of this Scheme Booklet and also the conclusion reached by the Independent Expert. The Board considers that the advantages of the Proposed Transaction significantly outweigh its disadvantages and risks.

In particular, the Board believes that the approval of the Scheme and implementation of the Proposed Transaction is important for the Company in order to allow it to resume being regarded as a domestic public company in only one jurisdiction (i.e. the United States, noting that, as outlined in section 6.1 of this Scheme Booklet, it is not currently possible to have Australia as its sole domestic jurisdiction). This will mean that the Company can avoid the unnecessary costs, risks, resourcing and burden associated with being regarded as a domestic public company in each of the United States and Australia. The Proposed Transaction is the means by which the Company can achieve that objective whilst ensuring that the parent company of the Avita Group retains a listing in both the United States and Australia. This is discussed in more detail in section 6.1 of this Scheme Booklet.

All Directors who hold or control Shares intend to vote in favour of the Scheme Resolution in relation to the Shares which they hold (or which are held on their behalf).

In considering whether to vote in favour of, or against, the Scheme Resolution (or abstain from voting on the Scheme Resolution), the Board encourages you to:

The Independent Expert has concluded that the Scheme is fair and reasonable to, and in the best interests of, Shareholders as a whole. A copy of the Independent Expert’s Report, which includes the reasons for the Independent Expert’s conclusion, is contained in Appendix A. Shareholders are encouraged to read the Independent Expert’s Report carefully and in full.

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The Proposed Transaction has a number of potential advantages, disadvantages and risks which Shareholders should consider before deciding how to vote on the Scheme Resolution.

This section does not take into account the investment objectives, financial situation, taxation position or particular needs of Shareholders. Shareholders should have regard to the entire Scheme Booklet and its appendices, consider their personal circumstances and consult with their financial, legal, taxation or other independent and qualified professional adviser before deciding how to vote on the Scheme Resolution.

Shareholders who vote against the Scheme Resolution are ultimately voting against the Proposed Transaction. This will prevent the Company from realising the benefits that may arise from the advantages of the Proposed Transaction identified at section 6.1 of this Scheme Booklet. At the same time, the potential disadvantages and risks associated with the Proposed Transaction, identified at section 6.2 and section 6.3 of this Scheme Booklet, may not arise (except for some of the Proposed Transaction’s implementation costs, which have already been incurred, or will be incurred in any event).

As noted in section 5 of this Scheme Booklet, the Board has considered the advantages, disadvantages and risks of the Proposed Transaction as part of the process it undertook to make its unanimous recommendation to approve the Proposed Transaction.

It is not uncommon for entities to have their securities traded on more than one exchange (referred to as cross-listing or, in certain cases, a dual listing). Since October 2019, the Company’s securities have been quoted on two exchanges, with Shares traded on the ASX (in Australia) and Company ADSs traded on NASDAQ (in the United States).

All companies, including cross-listed companies, must prepare and lodge financial statements and comply with, among other things:

Since the Company is a public company incorporated in Australia, it is subject to regulatory oversight by ASIC and is required to prepare financial statements under applicable Australian laws in accordance with AIFRS. This costs the Company approximately A$400,000 per annum in external professional costs and is a significant burden on internal management and resources.

A cross-listed company is treated as a “foreign company” in the jurisdiction it elects for the secondary trading of its securities (i.e. the United States for the Company). In that second jurisdiction, the company is generally subject to lower levels of regulation and compliance, as its main compliance obligations continue to be imposed by the regulators in its country of origin (i.e. Australia for the Company). The Company, as a foreign company in the United States, has historically qualified for what is known as “foreign private issuer” exemption status by the SEC and, as a result, has been exempt from the financial reporting requirements applicable to United States companies under applicable United States laws (such as preparing financial statements in accordance with US GAAP).

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However, since 31 December 2019, the Company has ceased to qualify for the foreign private issuer exemption due to a majority of the Shares (taking into account Company ADSs) being beneficially held by investors in the United States (as at that date).

If no restructuring is undertaken, the practical consequences of this (beginning on 1 July 2020) will be:

In particular, in addition to continuing to incur the costs associated with preparing financial statements under applicable Australian laws (in accordance with AIFRS), the Company will be required to prepare a second set of financial statements under applicable United States laws (in accordance with US GAAP). The preparation of two different sets of financial statements is onerous, time-consuming and costly for the Company.

If the Proposed Transaction is implemented, Avita US will be subject to those Australian laws that are applicable to Australian registered foreign companies and it will also be subject to the ASX Listing Rules. Importantly, however, if the Proposed Transaction is implemented, Avita US will only have domestic status in the United States and will therefore only be required to prepare its financial statements under applicable United States laws (in accordance with US GAAP) and will not be required to also prepare its financial statements in accordance with AIFRS, thereby avoiding the most substantial part of the duplication of costs, burdens and risks associated with dual compliance.

Therefore, the Proposed Transaction would mean that the Company would not be required to undertake an Australian audit and incur audit-related expenses and ongoing compliance costs for each financial year, which will save approximately A$400,000 per annum in external professional costs.

If the Proposed Transaction is implemented, Shareholders will continue to receive audited, and detailed, financial reports on corporate activities and developments, although these financial reports will be prepared in accordance with US GAAP rather than AIFRS (in accordance with which the Company currently prepares its financial report). Avita US will file its financial statements with the SEC and ASIC, and make them generally available on its website and file them with both the ASX and NASDAQ.

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The Proposed Transaction will reorganise the Avita Group’s corporate structure by inserting Avita US as the new parent company of the Avita Group.

Having a company incorporated in the United States as the Avita Group’s parent company will mean the Avita Group’s corporate structure will be aligned with its business operations, since:

This structure will be more easily understood by potential investors and transaction partners in the United States. This may also increase the Avita Group’s attractiveness to potential merger partners, as well as increase opportunities with potential licensing partners and other commercial parties. In addition, if the Avita Group sought to acquire a target or asset, the Avita Group would have the ability to issue NASDAQ-listed Avita US Shares as consideration to sellers, which may be more attractive to certain third-party sellers.

In September 2018, the Company was granted approval by the FDA in respect of its RECELL^® System for the treatment of acute thermal burns in adults. Building upon that successful approval, the Company, in January 2019, formally launched its United States sales force and began selling RECELL to burn centres in the United States, which to date has been well received. Whilst the Company expects to continue to supply and support existing users of its products outside of the United States, the Board’s expectation is that, in the near term, the Company will devote most of its commercial efforts and resources to ensuring a successful and growing presence in the United States, the largest market for the treatment of burns.

Changing the primary listing of the Avita Group’s parent company from the ASX to NASDAQ is consistent with the Company’s strategy to grow its United States presence by enhancing the Avita Group’s visibility and market presence in the United States.

Avita US’s primary listing after implementation of the Proposed Transaction will be on NASDAQ in the United States. The United States capital market is the largest in the world in terms of market capitalisation and trading volume and, in October 2019, the Company listed Company ADSs on NASDAQ in order to access some of this opportunity. Whilst the Company has maintained this secondary listing to date, the Board believes that having its primary listing on NASDAQ, rather than on the ASX, should result in increased demand for, and liquidity of, the Avita Group’s securities in the United States market, because the Board believes that investors in the United States are more likely to invest in a United

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States incorporated company with a primary listing on a United States trading platform, as compared with an Australian incorporated company that has its primary listing on the ASX. While the Company believes that this advantage will accrue to the Company, there is a risk that the Proposed Transaction may lead to a potential loss of demand for, and reduction of liquidity of, Avita US’s securities in the Australian capital market. Notwithstanding that the use of the CDI structure is not uncommon in the Australian market, there could be some investor discomfort with that structure (i.e. investors in Australia may be less likely to invest in a company with a secondary listing in Australia, as compared with a company with a primary “local” listing on the ASX). In addition, due, for example, to investment mandate limitations, certain Australian institutional investors may be prohibited from holding CDIs or foreign securities, or may be limited in the amount of CDIs or foreign securities that they can hold, or may be restricted by the amount or proportion that CDIs or foreign securities are permitted to represent within a diversified portfolio. Nevertheless, the Company believes that the potential increased demand for, and liquidity of, the Avita Group’s securities in the United States capital market would offset this risk and result in a net benefit for the Avita Group.

In addition, ADSs are generally less favourable for United States holders than common stock, because ADS holders must pay depositary fees to the ADS Depositary, whilst holders of common stock and CDIs do not have to pay depositary fees. The Proposed Transaction will result in holders of Company ADSs receiving common stock in Avita US in place of Company ADSs through and pursuant to their depositary arrangement with the ADS Depositary, and therefore those ADS Holders will no longer be required to pay fees to the ADS Depositary, including annual service fees and fees for distributing cash and other distributions. Similarly, holders of Avita US CDIs will not be required to pay depositary fees in respect of their Avita US CDIs.

Another important benefit of the Proposed Transaction is that there are certain investment funds which cannot, or choose not to, invest in companies that do not have an incorporated presence in the United States because they cannot qualify for inclusion in United States indices. As a United States incorporated entity, Avita US may be eligible for inclusion on major United States indices. The Board believes that this should increase the awareness of the Avita Group to United States institutional investors and, if it did, could result in broader access to capital pools. This may lead to an improvement in the Avita Group’s ability to accelerate growth by attracting further investment and raising future capital for projects on more attractive terms.

Avita US may also still qualify for major Australian indices (which do not require an Australian corporate domicile or incorporation in Australia as a criterion for inclusion in these indices).

Undertaking research on entities trading on NASDAQ via ADSs is comparatively more difficult for investors in the United States, because certain well-used research platforms (e.g. S&P’s Market Intelligence platform) provide detailed data on entities with primary listings only.

In this regard, a search for the Company ADSs using the ticker code “RCEL” or the search term of “Avita” either:

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Since the implementation of the Proposed Transaction will result in Avita US having a primary listing on NASDAQ, research will be much easier, and more intuitive, for investors in the United States, which are generally both larger in number and capitalisation as compared to investors in Australia.

The implementation of the Proposed Transaction is expected to expose the Avita Group to a larger and more diverse range of investors in the United States. The Board believes that changing the domicile of the Avita Group to the United States will provide access to a broader range of institutional investors in a market which, in the Board’s view, relative to the Australian market, is more familiar with, and has historically had a stronger interest in, medical device and pharmaceutical companies. If successful, this may potentially lead to a re-rating of the Avita Group, a stronger market capitalisation/valuation and increased liquidity in trading.

Exposure to larger and more diverse investors may also result in greater access to lower-cost debt or equity capital in the United States. The Board believes that this access may enable future growth and development of the Avita Group to be financed at a lower cost than it has been to date.

While the Proposed Transaction will have a number of benefits from a United States perspective, the Company is very conscious of the fact that it has a number of Australian based investors. Accordingly, if the Proposed Transaction is implemented, the Avita Group will retain its listings on both the ASX and NASDAQ. Accordingly, following implementation of the Proposed Transaction, Eligible Shareholders will still be able to continue to hold their investment in the Avita Group through the ASX, as Avita US CDIs will be quoted on the ASX, and Avita US will be required to comply with the ASX Listing Rules (as well as the NASDAQ Listing Rules), including disclosure requirements under the continuous disclosure rules and the lodgement of financial statements and quarterly reports.

Avita US, as a company domiciled in the United States and incorporated in Delaware, will be governed by the laws and regulations of the United States and, in particular, the laws and regulations of Delaware. The regulatory environment in the United States is broadly comparable to that in Australia (although there are some differences between the relevant corporate laws, some of which could be viewed as advantageous to Shareholders, while others could be viewed as disadvantageous). Appendix G of this Scheme Booklet sets out a comparative table of a number of the major differences between relevant corporate laws of Australia and the United States.

Whilst the legal system in the United States is considered to be a relatively predictable one and is broadly comparable to that of Australia, it will be more familiar to the Company’s management, which is entirely located in the United States. This will mean that senior management will have ready access to legal, accounting and other resources in time zones where they are located. The Company anticipates that this will, over time, result in reductions in the Company’s overhead costs.

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The Proposed Transaction, if approved, will result in additional fees and costs being incurred to implement the Proposed Transaction (including regulatory application fees payable to ASIC and FIRB and listing fees payable to the ASX). It should be noted, however, that a majority of these fees, such as advisor fees, have already been incurred as part of the exploratory phase of the Proposed Transaction, obtaining the Independent Expert’s Report and preparing and distributing this Scheme Booklet. For more information about these fees and costs, please refer to section 12.3 of this Scheme Booklet.

Upon implementation of the Proposed Transaction, Eligible Shareholders will either directly (through holding Avita US Shares) or indirectly (through holding Avita US CDIs) become stockholders in Avita US, a Delaware corporation. Shareholders might not be familiar with the laws and regulations of the United States and the State of Delaware, to which Avita US will be subject. Currently, Shareholders wishing to take action to enforce the provisions of the Constitution or corporations or securities laws as they relate to the Company may take action in Australian courts, applying Australian law. After implementation of the Proposed Transaction, it may be necessary, depending on the circumstances, to undertake any such actions in relation to Avita US in accordance with the applicable laws of the United States and Delaware.

While the Company conducts the vast majority of its business in the United States already, Avita US may be exposed to increased litigation as a United States (Delaware) corporation, as the United States legal environment is generally understood to be more litigious than that of Australia. Under Delaware law, a stockholder must meet certain eligibility and standing requirements to bring a derivative action (i.e. proof of stock ownership), but settlement or dismissal of a derivative action requires the approval of the court and notice to stockholders of the proposed dismissal. Stockholders of United States incorporated companies are entitled to commence class action suits on their own behalf and on behalf of any other similarly situated stockholders to enforce an obligation directly owed to the stockholders where the requirements for maintaining a class action under Delaware law have been met. There is a risk that any material or costly dispute or litigation could adversely affect Avita US’s reputation, financial performance or value. It should be noted, however, that the contrast between levels of securities litigation in the United States and Australia is less pronounced now than in previous decades, because of the growth in Australia of shareholder class actions based on allegations of misleading or inadequate disclosure to the market.

The Avita US Shares or Avita US CDIs that would otherwise have been issued under the Scheme to Ineligible Shareholders will be issued to the Sale Agent (on behalf of Avita US) to be sold in accordance with the process outlined in section 11.5 of this Scheme Booklet. Fractional Shareholder Interests will also be dealt with in this manner.

Similarly, Eligible Shareholders who are classified as Small Shareholders (being Eligible Shareholders who hold less than 100 Shares and who are therefore Fractional Shareholders) will have their entitlement to Avita US CDIs sold in accordance with the process outlined in section 11.5 of this Scheme Booklet because their entitlement to Avita US CDIs will represent less than a whole Avita US Share. As at 1 May 2020, there are approximately 222 Shareholders who would be Small Shareholders on the Record Date if their holdings remain unchanged up to that date.

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Therefore, Ineligible Shareholders and Small Shareholders (and other Fractional Shareholders to the extent of their Fractional Shareholder Interests) will no longer hold equivalent securities in Avita US to that which they previously held in the Company and will not be able to benefit in any potential future increase in value of those securities in the future.

Please refer to section 10 of this Scheme Booklet for a comprehensive summary of the taxation implications of the Proposed Transaction for Shareholders (and ADS Holders) in Australia, the United States and Hong Kong as at the Record Date. In addition, Shareholders (and ADS Holders) are strongly urged to consult their tax advisers as to the specific tax consequences for them in connection with the Proposed Transaction, including the applicability and effect of foreign and local income and other tax laws in their particular circumstances.

Existing risks relating to the Company’s business

There are some risks that will continue to exist regardless of whether or not the Proposed Transaction is approved due to the nature of the Company’s business. Shareholders are currently already exposed to these risks given that they relate to the assets, operations and business of the Avita Group. Eligible Shareholders will continue to be exposed to materially the same risks after implementation of the Proposed Transaction. These risks have previously been disclosed to Shareholders through various public announcements made by the Company to the ASX and NASDAQ and through various periodic filings made by the Company with ASIC and the SEC. Some of the more material risks relating to the Company’s business are summarised below.

Like many companies, the Company is exposed to a number of general risks that could materially adversely affect its financial position, assets and liabilities, reputation, profits, prospects and the market price and/or value of Shares and Company ADSs.

These could include any or all of the following:

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Recently, governments around the world have been launching unprecedented public health and economic responses to the expanding COVID-19 pandemic, including implementing travel, movement, social distancing and related practices and policies (collectively, “COVID Restrictions”). The Company is closely monitoring the impact of COVID-19 on its business and operations and remains committed to addressing the needs of patients, healthcare providers, employees and broader stakeholders. The Company believes that it is well-positioned to address the challenges that may arise over the coming months by:

An overview of the impact of COVID-19 is set out below.

Commercial opportunities and demand for RECELL

The treatment of serious burns is not elective and cannot be deferred. This is because the loss of skin through a burn creates immediate and serious health complications that require immediate hospitalisation and care. In the period up to 31 March 2020, the Company had not experienced a material negative change in the ordering habits of customers for the RECELL System as a result of the COVID-19 pandemic, nor had the incidence of burn injuries seemed to reduce (acknowledging that burn injuries have not historically shown any seasonal or consistent pattern, and are generally impacted by numerous unpredictable factors such as weather, geography and vacation periods).

However, at the date of this Scheme Booklet, it is difficult to predict the extent to which COVID-19 may impact the Company’s commercial opportunities going forward, especially given it is presently indeterminate how long the COVID Restrictions will be enforced for, or the rate at which commercial conditions will normalise once the COVID-19 Restrictions are removed or reduced.

In the United States (where the Company derives more than 95% of its revenue), healthcare institutions have implemented various restrictions, and together with the Company’s own operating COVID-19 protocols, the results have been that the Company has dramatically reduced face-to-face interactions with its existing, new and potential customers. In the majority of territories in which the Company operates, the Company’s clinical and commercial support employees are no longer providing live case support at the hospitals and these resources and communications have been re-positioned to digital, audio and related remote interfaces. There has also been the cancellation of some professional meetings (e.g. the 2020 Annual American Burn Association Meeting in March 2020) resulting in a loss of ability to educate burn care providers on the benefits of the RECELL System.

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If these operating conditions were to persist, then it is likely that new account acquisition and new user uptake may be delayed or be more graduated than would otherwise have been the case, with a resultant negative impact on the Company’s revenues. Additionally, hospital resources are expected to be focused on treating COVID-19 patients and therefore investigational studies will be deprioritised, paused or terminated. It is also worth noting that the broader drop-off in general economic activity being experienced across the entire United States has, for example, led to reduced motor vehicle accidents, and thus it is possible that the number of burn patients could likewise decline and, if this were to occur, this would have a negative impact on the Company’s revenues. Lastly, some of the Company’s partner hospitals have paused enrollment in the Company’s studies. Therefore, the recruitment of new patients (and the addition of new sites into Company studies) is expected to slow dramatically, which will result in delays to the completion of those studies, and the timeline to potential regulatory approval of those studies (if successful) is likely to be delayed or jeopardised.

Supply chain and logistics

The Company remains committed to providing continuity of service, and the uninterrupted supply of the RECELL System, to the burns community during this time. Many of the Company’s customers already carry on-hand inventory to treat new patients, and the Company is fortunate to not have any material exposure to foreign-sourced materials. To this end, the Company is confident in its ability to continue to supply its partner hospitals and is not anticipating any interruptions to its supply chain or distribution network this calendar year. Notwithstanding the above, the Company is continuing to manufacture the RECELL System under controlled conditions but is reliant on its employees to continue such manufacturing. As a result, an extended or exaggerated outbreak of COVID-19 within the Company’s manufacturing facility in Valencia, California could lead to supply interruptions if production were to cease for an extended period.

The Company will continue to provide updates on COVID-19 as appropriate through its website (www.avitamedical.com) and via the ASX and NASDAQ, and, as appropriate, through filings with the SEC.

The Company faces specific risks which could materially and adversely affect its business, operations and financial condition. In such event, the trading price of Shares and Company ADSs (or Avita US Shares and Avita US CDIs after implementation of the Proposed Transaction) would likely decline. Specific risks relating to the Company include the following:

The Company has not yet achieved profitability, and losses are expected to continue in the foreseeable future, at least until margins from the sales of the RECELL System in the United States are adequate to fund operating expenses. Successful transition to profitable operations depends on achieving a level of revenues adequate to support the Company’s cost structure. However, the Company may never successfully achieve or sustain profitability.

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The viability of the Company’s future success depends significantly on obtaining and maintaining regulatory approvals in key jurisdictions for the Company. For example, key products produced by the Company either currently have, or are awaiting, approval by the FDA. Development and commercialisation of any products requires successful completion of the regulatory approval process, which can often take an extended period of time to complete or in some cases is not capable of being successfully completed. Further, obtaining and maintaining regulatory approval for a product in one jurisdiction does not guarantee success in obtaining and maintaining regulatory approval for that product in other jurisdictions.

In addition, the Company relies on third parties to conduct, supervise and monitor its clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, the Company may not be able to obtain regulatory approval for its product candidates and its business could be substantially harmed.

The Company cannot guarantee that it will receive favourable pricing and reimbursement for the use of its products and it may be unsuccessful in commercialising the RECELL System, or other future products, due to unfavorable pricing regulations or third-party coverage and reimbursement policies. The rules and regulations that govern pricing and reimbursement for medical products vary widely from country to country or from condition to condition and, within the United States, can also vary widely from one health system or hospital to the next.

As a result, even after obtaining regulatory approval for a product in a particular country, the Company may be subject to adverse price regulations or limited reimbursement which may:

If the Company is unable to promptly obtain coverage and profitable payment rates for the RECELL System (or any future products) from hospital budgets, government-funded purchasers or private purchasers, this could have a material adverse effect on the Company’s operating results, ability to raise capital needed to commercialise products and overall financial condition.

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The medical device, biotechnology and pharmaceutical industries in which the Company currently markets, or intends to market, the RECELL System (or future products) are intensely competitive and subject to significant changes due to technology and medical practice standards. The Company’s commercial opportunity could be reduced or eliminated if competitors develop and commercialise products, treatments or procedures that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than the RECELL System or any future products the Company develops.

The Company’s success is heavily dependent on its ability to obtain and maintain meaningful patent protection for its technologies and products throughout the world. The Company may be hindered in effectively protecting its intellectual property because of any or all of the following:

If the Company is unable to effectively protect its intellectual property, it may not be able to operate its business and third parties may be able to use and profit from the Company’s technology, both of which would impair the Company’s ability to be competitive.

In addition, the Company’s intellectual property may be affected by provisions in contracts with the United States government for funding of the Company’s activities, including through the contract with the United States Biomedical Advanced Research and Development Authority (BARDA). When new technologies are developed with United States government funding, the government obtains certain rights in any resulting patents, including the right to a non-exclusive license authorising the government to use the invention and rights that may permit the government to disclose the Company’s confidential information to third parties and to exercise “march-in” rights.

The Company is currently unable to finance its operations from commercial revenue and therefore is highly dependent on the ability to raise capital or receive funding. The Company may be required to raise additional capital if, among other things, the Company is unable to achieve profitability sufficient to fund its operations and other planned actions.

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There can be no assurance that such capital would be available on favourable terms, or at all. If additional capital is raised through the issuance of equity or convertible debt securities, the percentage ownership held by Shareholders (or Avita US Shareholders (including Avita US CDI Holders) after implementation of the Proposed Transaction) may be reduced, and the market price of Shares and Company ADSs (or Avita US Shares and Avita US CDIs after implementation of the Proposed Transaction) could fall due to an increased number of shares being available for sale in the market. Debt financing, if available, may involve restrictive covenants, which may limit the Company’s operating flexibility with respect to certain business matters. If the Company is unable to secure additional capital as circumstances require, the Company may not be able to fund planned activities or continue its operations.

The Company has limited experience in manufacturing its products in large-scale commercial quantities and may face manufacturing risks that could adversely affect its ability to manufacture products and its overall business. Manufacturing risks specific to the Company include, among other things, a failure to:

The Company produces, packages and warehouses the RECELL System at its manufacturing facility in Ventura, California, and relies on global third-party manufacturers for production of some of the components used in the RECELL System. If the Company’s facility, or the facilities of third-party contract manufacturers, suffer damage, or a force majeure event, this could materially impact the Company’s ability to operate.

The Company’s prospects for continued successful development and commercialisation of its products are, to varying degrees, dependent upon the research, development, commercialisation and marketing efforts of the Company and its collaborators. The Company’s growth and success also depends on its ability to attract and retain highly qualified and skilled sales and marketing, research and development, operational, managerial and finance personnel. Any failure to manage future growth effectively could have a material adverse effect on the Company’s business and results of operations.

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Risks associated with the Proposed Transaction

If the Proposed Transaction is implemented, then in addition to the risks mentioned above, Eligible Shareholders may gain exposure to the following risks:

The Proposed Transaction may fail to realise some or all of the anticipated advantages for the Avita Group, either in a timely manner or at all.

Under the terms of the Scheme, the holdings of Eligible Shareholders will effectively be converted from Shares (or Company ADSs) to equivalent holdings of Avita US CDIs and/or Avita US Shares. The exact value of the Avita US CDIs and/or Avita US Shares to be received by Eligible Shareholders will be dependent on the price at which the Avita US CDIs and/or Avita US Shares trade after the Implementation Date (which may be different from the equivalent price at which the Shares and/or Company ADSs traded before the Implementation Date).

As mentioned in section 6.1(d) of this Scheme Booklet, the Proposed Transaction may lead to a potential loss of demand for, and reduction of liquidity of, Avita US’s securities in the Australian capital market. Notwithstanding that the use of the CDI structure is not uncommon in the Australian market, investors in Australia may be less likely to invest in a company with a secondary listing in Australia, as compared with a company with a primary “local” listing on the ASX. In addition, due, for example, to investment mandate limitations, certain Australian institutional investors may be prohibited from holding CDIs or foreign securities, or may be limited in the amount of CDIs or foreign securities that they can hold, or may be restricted by the amount or proportion that CDIs or foreign securities are permitted to represent within a diversified portfolio. The Company’s securities (in the form of Shares) currently have higher liquidity in the Australian market (i.e. on the ASX) than they do (in the form of Company ADSs) in the United States market (i.e. on NASDAQ). However, holders of Avita US CDIs quoted on the ASX will be able to convert their holdings into Avita US Shares quoted on NASDAQ, if the NASDAQ market provides more liquidity.

The outline of these risks is a summary only and should not be considered exhaustive. This section does not purport to list every risk that may be applicable to Shareholders now or in the future. Further, the occurrence or consequences of some of the risks described in this section may be partially or completely outside the control of the Company, its Board and senior management.

These risk factors do not take into account any Shareholder’s individual investment objectives, financial situation, position or particular needs. Before deciding how to vote in relation to the Scheme Resolution, Shareholders should have a sufficient understanding of these matters, having regard to their own individual risk profile, portfolio strategy, investment objectives, financial circumstances and taxation position. If Shareholders do not understand any part of this Scheme Booklet or are in any doubt as to how to vote in relation to the Scheme Resolution, the Board strongly recommends that Shareholders seek professional guidance from their financial, legal, taxation or other independent and qualified professional adviser before deciding how to vote on the Scheme Resolution.

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The Company is a public limited liability company incorporated in Australia and registered as a reporting entity in the United States under the US Exchange Act. The Company is regulated by Australian law including the Corporations Act and the ASX Listing Rules, and by the NASDAQ Listing Rules and the securities laws of the United States.

The Company was incorporated on 21 December 1992 under the laws of the Commonwealth of Australia, and was listed on the ASX on 9 August 1993 under the ticker symbol “GRC” and is currently trading under the ticker symbol “AVH”. The Company was listed on NASDAQ on 1 October 2019 under ticker symbol “RCEL”.

The Company’s registered office is located at Level 7, 330 Collins Street, Melbourne VIC 3000, Australia.

The Company’s principal office in the United States is located at 28159 Avenue Stanford, Suite 220, Valencia, California and the Company has a production plant in Ventura, California.

As at 1 May 2020, there are 91 employees, of which 88 are located in the United States, 2 are located in the United Kingdom and one is located in Australia.

The Company is a regenerative medicine company with a technology platform positioned to address unmet medical needs in burn injuries, trauma injuries, chronic wound and dermatological and aesthetics indications. The Company’s patented and proprietary platform technology harnesses the regenerative properties of a patient’s own skin to help patients who have lost the outer layer of the skin (known as the epidermis) through injury, or have skin or skin cells that are otherwise defective.

The Company’s Spray-On Skin^™ Cell suspension is an autologous cellular suspension comprised of the patient’s skin cells necessary to regenerate natural healthy epidermis. This autologous suspension is sprayed onto the areas of the patient requiring treatment.

The Company’s first product in the United States, the RECELL^® System, was approved by the FDA in September 2018 for treatment of acute thermal burn injuries in patients 18 years and older. The RECELL System is used to prepare Spray-On Skin^™ Cell suspension using a small amount of a patient’s own skin, providing a new way to treat severe burns that significantly reduces the amount of donor skin required.

The RECELL System is designed to be used at the point of care alone or in combination with autografts, depending on the depth of the burn injury.

Data from randomised, controlled clinical trials conducted at major burn centres in the United States and real-world use in more than 8,000 patients globally indicates that the RECELL^® System is a significant advancement over the current standard of care for burn patients and offers benefits in clinical outcomes and costs savings.

The RECELL System is registered by the Therapeutic Goods Administration (TGA) in Australia for use in the treatment of burns, acute wounds, scars and vitiligo. In Europe, the RECELL System received “CE-Mark approval” (a term used by the European Union to certify that a product may be sold freely in any part of the European Economic Area) for the treatment of burns, chronic wounds, scars and vitiligo. However, virtually all of the Company’s revenue is derived from commercial sales in the United States.

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Market opportunity

As noted above, the Company is commercialising the RECELL System for the treatment of acute thermal burn injuries in patients 18 years and older. Acute thermal burns are life-threatening and debilitating injuries that are very expensive and complex to manage due to extended and costly hospitalisation, rehabilitation and scar treatment.

In the United States, the largest market for the treatment of burns, approximately 486,000 people seek treatment for burns each year. Of these, at least 40,000 have burn injuries severe enough to require in-patient treatment, and it is estimated that 3,800 people die from such injuries each year. The majority of patients treated on an in-patient basis in the United States are treated in specialised burn centres. Countries outside of the United States are smaller markets for the treatment of burns and the Company is therefore predominately focused on the United States market.

Burn treatment is dictated by the depth and extent of the injury, and deeper and more extensive injuries are most commonly treated with autologous split-thickness skin grafts (STSG) to achieve definitive closure of the burn wound. In a STSG, or autograft, the donor skin is harvested from a healthy part of the patient using a device called a dermatone. The donor skin is then transferred to the burn injury that has been prepared (debrided or cleaned).

Treatment with STSG creates additional trauma for the patient due to the harvesting of healthy donor skin. Although the use of STSG has been a standard treatment for more than 50 years, grafting is associated with significant pain, pruritus, infection, dyschromia, dyspigmentation, delayed healing and hypertrophic scarring of the donor site.

In large total body surface area (TBSA) injuries, the patient may not have enough donor skin available to allow for immediate treatment of the entire area of burn injuries with traditional grafting techniques. The lack of available healthy donor skin in patients with high TBSA burn injuries is often the central problem impacting time to autografting and definitive closure of the wounds. In severely burned patients, doctors often must wait until the donor sites have healed so that they can re-harvest from the site, resulting in delays in treatment and healing, requiring multiple procedures and extended hospital time. The overall cost of treatment with STSG is expensive; for example, in the United States, it costs approximately US$579,000 and involves 59.4 days in hospital for a patient with a 40% TBSA mixed or full-thickness burn.³

Trauma wounds (soft tissue injuries)

Examples of traumatic wounds include abrasions, lacerations, punctures, gunshot wounds, crush wounds, and degloving. Severe traumatic wounds may require surgical intervention to close the wound and stabilise the patient. The most common trauma injuries requiring autografting are degloving and lacerations. The RECELL System receives the most interest in connection with degloving and abrasion injuries. The harvesting and autografting procedures for trauma wounds are similar to the treatment of severe burn injuries, as are the limitations and shortcomings. Patients requiring autografting for trauma wounds are often treated in trauma centres in hospitals

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by trauma surgeons, plastic surgeons and burn surgeons. Approximately half of the burn centres treating patients with severe burns requiring autografting in the United States are also trauma centres that treat trauma patients requiring autografting; therefore, the soft tissue injury market complements the Company’s commercialisation efforts related to the United States burn market.

The Company is presently conducting a clinical trial in pursuit of FDA approval for a soft tissue reconstruction authorisation.

Vitiligo and other dermatological indications

Vitiligo is a disease that causes the loss of skin pigmentation or colour in patches which tends to increase in size over time. The extent and rate of colour loss from vitiligo is unpredictable, can affect the skin on any part of the body and may also affect hair and the inside of the mouth. Non-segmental vitiligo is the most common variant, impacts the majority of patients and is characterised by symmetrical patches that appear on both sides of the body, as on hands and knees.

Vitiligo occurs when melanocytes, the pigment-producing skin cells, die or stop producing melanin, the pigment that gives skin, hair and eyes colour. Vitiligo is believed to be an autoimmune disorder in which a patient’s immune system attacks and destroys the melanocytes in the skin. It may also be caused by heredity factors or a triggering event, such as sunburn, stress or exposure to industrial chemicals.

Vitiligo affects people of all skin types, but it may be more noticeable in people with darker skin. The condition is not life-threatening or physically painful but can significantly alter physical appearance, have negative emotional and psychological consequences, and impair quality of life.

Vitiligo cannot be cured at present. However, the RECELL System has been used internationally in over 1,000 patients to improve pigmentation in patients suffering from vitiligo. In the United States, the Company is currently pursuing a feasibility study ahead of a potential registration study in vitiligo.

Competition

The RECELL System is the only product to be granted premarket approval by the FDA in over 20 years following the completion of two randomised controlled clinical studies. However, the medical device, biotechnology and pharmaceutical industries are intensely competitive and subject to significant technological change, together with changes in clinical and commercial practice. While the Company believes that its innovative technology, knowledge, experience and scientific resources provide it with competitive advantages, the Company faces competition from many different sources with respect to the RECELL System and any product candidates that the Company may seek to develop and commercialise in the future. Possible competitors may include (among others) medical device, pharmaceutical and wound care companies, academic and medical institutions, governmental agencies, medical practitioners, and public and private research institutions.

Any product that the Company successfully develops and commercialises will compete with existing therapies and new therapies that may become available in the future. In addition, in the treatment of acute burns, the Company faces competition from the current standard of care, primarily split-thickness autografts. Although the RECELL System is complementary with autografts for the treatment of many burn injuries, the Company faces competition from this traditional surgical procedure for many burn patients. However, based on its clinical trials, the Company believes that the RECELL System has sustainable competitive clinical and economic advantages over the current standard of care.

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As at the date of this Scheme Booklet, the securities of the Company on issue are as follows:

The corporate structure of the Company and the Avita Group as at the date of this Scheme Booklet is provided at section 2.2 of this Scheme Booklet.

Board

As at the date of this Scheme Booklet, the Board consists of the following persons:

Further information about the Board, their experience and qualifications can be obtained by visiting the Company’s website (avitamedical.com/leadership). The security holdings that each Director has in the Company are detailed in section 12.1 of this Scheme Booklet.

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Senior management

As at the date of this Scheme Booklet, the senior management of the Company consists of the following persons:

Further information about the senior management team of the Company can be obtained by visiting the Company’s website (avitamedical.com/leadership).

The historical financial information for the Company is contained in the consolidated financial statements for the Company, copies of which can be found on the ASX’s website (www.asx.com.au) and the Company’s website (www.avitamedical.com/investors#investorResources).

Other than as disclosed in this Scheme Booklet, in the Company’s announcements to the ASX and NASDAQ, in its filings with the SEC and via the Company’s website, within the knowledge of the Board, the financial position of the Company has not materially changed since 31 December 2019, being the last half-year balance date of the Company’s financial statements in the Company’s most recent half-year financial report.

The Board considers that there are no reasonable grounds for including any financial information in this Scheme Booklet in light of the nature of the Proposed Transaction and the limited impact which the Proposed Transaction will have on the operations, assets and liabilities of the Company.

The Company is a “disclosing entity” for the purposes of the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules. The Company is required to notify the ASX (subject to certain exceptions) immediately if it becomes aware of any information concerning the Company which a reasonable person would expect to have a material effect on the price or value of its securities. Following implementation of the Proposed Transaction, Avita US will be subject to the same disclosure and (subject to any waivers granted by ASX) reporting obligations under the ASX Listing Rules by virtue of its listing on the ASX.

The Company is also subject to reporting requirements under the US Exchange Act and is required to file annual, quarterly and current reports, proxy statements and other information with the SEC. Upon implementation of the Proposed Transaction, Avita US will become a successor to the Company’s registration under the US Exchange Act and will therefore be required to file such annual, quarterly and current reports, proxy statements and other information with the SEC.

Copies of announcements made by the Company to the ASX are available on the ASX website (www.asx.com.au).

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Further announcements concerning developments relating to the Company will continue to be made available on the ASX website after the date of this Scheme Booklet in accordance with the Company’s continuous disclosure obligations in Australia and periodic disclosure obligations in the United States.

In addition, Shareholders can obtain annual and half-yearly reports lodged by the Company with ASIC from ASIC, as well as any document filed by the Company with the SEC through the SEC website (www.sec.gov).

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Avita US was incorporated on 17 April 2020 in Delaware in the United States, as a corporation under the DGCL.

Avita US was incorporated for the sole purpose of the Proposed Transaction. Consequently, Avita US has not conducted, and will not conduct, any business prior to the Implementation Date (whereupon it will become the ultimate holding company of the Company and its subsidiaries) other than entering into the agreements and performing the acts which are detailed in this Scheme Booklet. As Avita US is a newly formed entity, Avita US’s initial financial statements will be the Company’s historical financial statements.

As at the date of this Scheme Booklet, Avita US has the authority to issue 200,000,000 shares of voting common stock, par value $0.0001 per share (Common Stock), and 10,000,000 shares of preferred stock, par value $0.0001 per share (Preferred Stock). As at the date of this Scheme Booklet, no Avita US Shares or other securities have been issued by Avita US.

Avita US is not currently listed on any securities exchange. The Company will submit a company event form to NASDAQ for review in connection with the Company’s request to transfer the listing of the Company ADSs and quote the Avita US Shares on NASDAQ and Avita US will apply to be admitted to the official list of ASX, which forms part of the Conditions Precedent to completion of the Proposed Transaction. Avita US will also be registered in Australia as a foreign company under the Corporations Act.

If the Proposed Transaction is implemented, on the Implementation Date, all of the Avita US Shares will be owned by Eligible Shareholders (in the form of Avita US Shares or Avita US CDIs) in approximately the same proportions as the Eligible Shareholders’ existing holdings in the Company, subject to the Sale Facility aspect of the Proposed Transaction dealing with Fractional Shareholder Interests and Ineligible Shareholders (discussed at section 2.8 and section 11.5 of this Scheme Booklet).

The capital structure of Avita US immediately following implementation of the Proposed Transaction will be as set out in the following table.

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Please refer to section 12.6 of this Scheme Booklet for further information regarding the number of Avita US Shares that may be issued to holders of Options, RSUs and Warrants in Avita US upon exercise or vesting (as applicable) after implementation of the Proposed Transaction.

The Board considers that the State of Delaware is an appropriate jurisdiction for the domicile of Avita US. More than 50% of all publicly-traded companies in the United States, including more than 60% of the Fortune 500, are incorporated in Delaware. In addition, Delaware provides a well-developed body of law defining the fiduciary duties and decision-making processes expected of boards of directors in a variety of contexts, including evaluating potential and proposed corporate takeover offers and business combinations.

As the Company’s aim is to redomicile the Avita Group to the United States and obtain the advantages of Avita US being a United States company, Avita US has adopted a customary form of by-laws for a Delaware corporation, which it believes is appropriate for a NASDAQ listed company. A description of a number of the key differences between the Australian and Delaware corporate legal regimes and their implications for stockholders of Avita US is set out at Annexure G of this Scheme Booklet.

As a Delaware entity listed on NASDAQ, Avita US will adopt corporate governance policies and new board committee charters in line with NASDAQ listing standards. Avita US intends to adopt the same policies and charters as are currently in effect for the Company, with such changes as are necessary for Avita US to comply with the rules applicable to United States companies listed on NASDAQ.

Pursuant to the NASDAQ Listing Rules, Avita US will establish and adopt charters for its Audit Committee and Nominating and Governance Committee. Avita US will also establish a Compensation Committee, the main functions of which are to review, approve and recommend the base salary, equity-based incentives and short-term incentive compensation for executive officers, approve all long-term equity incentives to employees, review Avita US’s cash and stock-based incentive compensation plans to assess their effectiveness in meeting Avita US’s goals and objectives and take other actions to meet its responsibilities as set out in its written charter. Avita US may adopt other charters and policies as the Avita US Board determines is necessary or appropriate.

Avita US is committed to ensuring that its corporate governance systems comply with statutory and stock exchange requirements and to maintaining its focus on transparency, responsibility and accountability.

On the Implementation Date, the Avita US Board and senior management will be the same as currently exists for the Company.

The Avita US Board will review the amount of any future dividends that may be paid having regard to Avita US’s profits, its financial position and the Avita US Board’s assessment of the capital required to grow the business of the Avita Group.

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Broadly speaking, if the Proposed Transaction is implemented, the existing listing of the Company on the ASX (as its primary listing) and on NASDAQ (as its secondary listing) will be replaced with a new listing of Avita US on NASDAQ (as its primary listing) and on the ASX (as its secondary listing). In particular, this means that the Company will be removed from the official lists of the ASX and NASDAQ and, contemporaneously, Avita US will be listed on NASDAQ (as its primary listing) and on the ASX (as its secondary listing).

On and from the Implementation Date, the assets, business and operations of the Company will be unchanged, and the Avita US Board intends to continue the business and principal activities of the Avita Group as they were conducted prior to the Implementation Date, in a manner consistent with past practice. In particular, the Avita US Board intends to continue the employment of its current employees, without any major change or amendment (although the Avita US Board may undertake a review of the Avita Group after the Implementation Date to consider whether there are appropriate measures required to streamline its operations and structure further). All of the Avita Group’s operations are located in the United States and that will be unchanged from the Implementation Date. Notwithstanding the above, current and future economic, market and business conditions may cause the Avita US Board to make changes that it considers necessary and in the interests of its stockholders.

Further information on the Avita Group’s business plans and strategy can be found in the various announcements made by the Company on the ASX website (www.asx.com.au) and filings made by the Company with the SEC (www.sec.gov).

On and from the Implementation Date, Avita US will own all of the Shares, and the Company will become a wholly-owned subsidiary of Avita US.

Shortly after the Implementation Date, Avita US expects to pass a special resolution to convert the Company from a public company to a proprietary company limited by shares and to lodge all necessary documentation with ASIC to give effect to that conversion.

No winding up, merger or liquidation of the Company, nor any transfer of material assets from the Company to Avita US or any other member of the Avita Group, is currently contemplated.

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The Conditions Precedent to the Proposed Transaction include the approval by:

In connection with the above:

As the Company is incorporated under the laws of Australia, it is subject to, and the rights and obligations attaching to the Shares are governed by, the laws of Australia and the Constitution. The Company is also subject to the ASX Listing Rules and the NASDAQ Listing Rules by virtue of its listing on the ASX and NASDAQ.

As Avita US is incorporated under the laws of Delaware in the United States, it is subject to, and the rights and obligations attaching to the Avita US Shares are governed by, United States/Delaware law, Avita US’s certificate of incorporation and by-laws, the NASDAQ Listing Rules (upon listing on NASDAQ) and the federal securities laws of the United States. As a result of Avita US’s secondary listing on the ASX and its registration as a foreign company in Australia in connection with the Proposed Transaction, Avita US will also be subject to the ASX Listing Rules and certain provisions of the Corporations Act that are applicable to registered foreign companies in Australia (see section 9.5 of this Scheme Booklet).

There are a number of differences between the laws governing the Company’s securities and those that will govern Avita US’s securities, some of which could be viewed as advantageous to Shareholders, while others could be viewed as disadvantageous. For example, Australia’s takeover laws will not apply to Avita US. Instead, United States takeover laws will apply to Avita US and its securities. Appendix G of this Scheme Booklet sets out a comparative table of a number of the major differences between relevant corporate laws of Australia and the United States (including takeover laws).

If Shareholders would like to read Avita US’s certificate of incorporation or by-laws or the Constitution, copies can be obtained free of charge by writing to the company secretary of the relevant company. In addition, the Constitution has been filed as an exhibit to the Company’s Form 20-F Annual Report for the financial year ended 30 June 2019, filed with the SEC on 31 October 2019. If the Scheme is implemented, Avita US’s certificate of incorporation and by-laws will be publicly filed with the SEC at the time of implementation of the Scheme.

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This section provides an outline of the rights attaching to Avita US Shares, which are described in greater detail in Appendix G of this Scheme Booklet.

A meeting of Avita US Shareholders for the election of directors and to transact other business must be held annually at such time as may be designated by the Avita US Board.

Special meetings of Avita US Shareholders may be called by the Avita US Board, the Chair of the Avita US Board, the CEO or Avita US Shareholders holding at least 25% of the then-outstanding shares of Avita US’s voting stock, at such time and for such purpose as the persons calling the meeting shall see fit.

The number of directors of Avita US must not be less than one. Subject to ASX granting the waiver referred in section 12.9 of this Scheme Booklet to allow plurality of voting (which it has indicated that it will grant on receipt of Avita US’s application to be admitted the official list of ASX), the directors will be elected at the annual meeting of Avita US Shareholders by either a plurality of the votes cast in a contested election or by a majority of the votes cast in an uncontested election. Plurality voting provides that each candidate for a particular board seat is elected if he or she receives the most votes in favour for such director for that board seat.

Any director or the entire Avita US Board may be removed, with or without cause, by the holders of a majority of Avita US Shareholders then entitled to vote at an election of directors.

Avita US’s certificate of incorporation may be adopted, amended or repealed by the affirmative vote of a majority of the voting power of all of the then-outstanding Avita US Shares entitled to vote. Avita US’s by-laws may be adopted, amended or repealed by at least 66 2/3% of the voting power of all of the then-outstanding Avita US Shares entitled to vote generally in the election of directors, voting together as a single class. The Avita US Board may also amend the by-laws of Avita US.

Avita US Shareholders are entitled to one vote for each Avita US Share on all matters voted on by Avita US Shareholders, including the election of directors. Avita US’s by-laws provide that the holders of a majority of Avita US Shares entitled to vote at the meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business, unless or except to the extent that the presence of a larger number may be required by law or by the NASDAQ Listing Rules.

Avita US Shareholders are entitled to receive dividends when and as declared by the Avita US Board out of funds legally available for that purpose; provided, however, that any dividend on Avita US Shares that is payable in common stock must be paid only in common stock.

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Subject to applicable securities laws, Avita US Shares are deemed personal property and are freely transferable.

Under the DGCL, a variation of rights attached to Avita US Shares would require an Avita US Board resolution recommending an amendment to Avita US’s certificate of incorporation and the approval of a majority of the outstanding shares of common stock entitled to vote and a majority of the outstanding shares of each class entitled to vote.

Avita US Shareholders do not have any conversion, redemption or pre-emptive rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of Avita US, Avita US Shareholders will be entitled to receive all of the remaining Avita US assets available for distribution to Avita US Shareholders, pro rata in proportion to the number of common stock held by them.

As discussed in more detail in section 6.1 of this Scheme Booklet, the Company currently has dual financial reporting obligations in Australia and the United States, and currently must prepare two sets of financial statements, one under applicable Australian law (in accordance with AIFRS) and another under applicable United States law (in accordance with US GAAP). If the Proposed Transaction is successful, the Company will only have to prepare one set of financial statements under the applicable laws of one jurisdiction (being the United States) in accordance with one set of accounting principles (being US GAAP).

The Board believes that there is no material difference in reported results under the different sets of financial statements and that Shareholders who currently rely on the Company’s financial statements prepared in accordance with AIFRS will continue to understand the content of Avita US’s financial statements when prepared solely in accordance with US GAAP.

Financial reporting under US GAAP will be similar to that under AIFRS, although several items would be classified differently and the required reporting timetable would be different. In fact, after implementation of the Proposed Transaction (or, if not implemented, but as a result of the Company no longer qualifying as a foreign private issuer), the level of financial disclosure will increase with the addition of detailed quarterly financial reports reported on Form 10-Q under United States law (that are currently not otherwise required).

Shareholders should refer to Appendix H of this Scheme Booklet, which provides a comparison of the financial reporting requirements in Australia and the United States.

On and following implementation of the Proposed Transaction, it is also the Company’s intention to change its financial year end from 30 June to 31 December, to align with that of Avita US and other typical United States corporations listed on NASDAQ.

Avita US will be registered as a foreign company in Australia pursuant to Part 5B.2 of the Corporations Act. Accordingly, in addition to the laws and regulations set out elsewhere in this section, Avita US will also be subject to the provisions of Part 5B.2 of the Corporations Act.

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The key obligations that will be imposed on Avita US as a registered foreign company in Australia are:

As a foreign entity in Australia, Avita US will not be subject to Chapters 6, 6A, 6B and 6C of the Corporations Act dealing with the acquisition of shares (for example, substantial holdings and takeovers). However, consistent with Avita US’s application for admission to the official list of ASX, Avita US will undertake to inform the ASX upon becoming aware of:

The insider trading provisions under the Corporations Act will also apply to Avita US for any acts or omissions within Australia in relation to ‘Division 3 financial products’ (regardless of where the issuer of the products is formed, resides or is located and of where the issuer carries on business). The Avita US CDIs will constitute ‘Division 3 financial products’ and, as such, Avita US will be subject to the insider trading provisions under the Corporations Act in relation to the Avita US CDIs traded on the ASX.

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This section provides a general summary of the tax implications for certain Shareholders (and ADS Holders) as at the Record Date, as a result of the Proposed Transaction being implemented. The information in this section is general in nature and does not take into account the individual circumstances of Shareholders or ADS Holders. As such, it is not intended to be, nor should it be, construed as legal or tax advice to any Shareholder or ADS Holder. The Company recommends that Shareholders and ADS Holders consult a professional tax advisor in respect of the tax and reporting consequences that may arise from the implementation of the Proposed Transaction, as these may vary in accordance with their individual circumstances.

The Australian, United States and Hong Kong tax comments provided below are based on current taxation law, existing judicial interpretations thereof and administrative practices of Australian, the United States and Hong Kong revenue authorities as at the date of this Scheme Booklet. Shareholders and ADS Holders should appreciate that the tax law and administrative practices of revenue authorities are frequently being changed, both prospectively and retrospectively. No assurance can be given that any of the foregoing authorities will not be modified, revoked, supplemented, revised or overruled, or that any such change will not adversely affect the tax consequences addressed herein. This Scheme Booklet does not address changes in the taxation law after the date of this Scheme Booklet.

Based on current shareholder information, the majority of the Shareholders are residents of Australia, the United States or Hong Kong. Below is a broad summary of the potential tax implications for Shareholders and ADS Holders that are resident of these aforementioned jurisdictions. This Scheme Booklet does not take into account the taxation consequences for Shareholders or ADS Holders who are residents of countries other than Australia, the United States and Hong Kong.

The summary below is intended to provide a general overview of the Australian income tax, GST and stamp duty implications arising from the Proposed Transaction for Shareholders and ADS Holders.

The Company has sought an ATO Class Ruling to confirm that Australian resident Shareholders who hold their Shares on capital account and make a capital gain from the exchange of their Shares for Avita US Shares or Avita US CDIs under the Scheme and Australian resident ADS Holders who hold their Company ADSs on capital account and make a capital gain from the ADS Depositary exchanging the Shares it holds for the account of ADS Holders for Avita US Shares received under the Scheme in accordance with the terms of the depositary arrangements between the ADS Depositary and the ADS Holders will be eligible to choose full or partial scrip for scrip roll-over under paragraph 124-780(3)(d) of Income Tax Assessment Act 1997. The ATO Class Ruling, when issued, will be available to view via the website of the ATO (www.ato.gov.au) and, following completion of the Scheme, on the Company’s website (www.avitamedical.com).

Where an Australian resident Shareholder or ADS Holder holds Shares or Company ADSs (as applicable) on capital account, a CGT event will occur when the Shares or Company ADSs are exchanged for Avita US CDIs or Avita US Shares respectively under the Proposed Transaction as described in section 2.6 and section 11.4 of this Scheme Booklet.

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Subject to the availability of rollover relief (detailed below) any Australian resident Shareholder or ADS Holder will make a capital gain to the extent that the capital proceeds received for the Shares (including those Shares represented by the Company ADSs) exceed their cost base.

Alternatively, an Australian resident Shareholder or ADS Holder will make a capital loss to the extent that their capital proceeds from the Shares (including those Shares represented by the Company ADSs) are less than the reduced cost base of those Shares or Company ADSs.

Under the Australian CGT provisions, the capital proceeds for the Shares or Company ADSs will be the market value of the Avita US CDIs or Avita US Shares received by Shareholders or ADS Holders on the Implementation Date.

The Company has lodged a request for an ATO Class Ruling to confirm that full or partial scrip for scrip roll-over relief will be available for Australian resident Shareholders and ADS Holders who hold their Shares or Company ADSs (as applicable) on capital account and make a capital gain from the Proposed Transaction. The Company expects that the ATO Class Ruling will confirm that the aforementioned Australian resident Shareholders and ADS Holders will be eligible to choose scrip for scrip roll-over to disregard any capital gain, to the extent that the capital gain is attributable to the Shares or Company ADSs for which they receive replacement Avita US CDIs or Avita US Shares (including by delivery of such Avita US Shares to the ADS Holders by the ADS Depositary). Any capital gain attributable to the cash received in relation to the fractional entitlements will be taxable. The Class Ruling will confirm the following Australian tax implications.

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There are no formal requirements for a Shareholder or ADS Holder to follow if they elect for scrip for scrip roll-over to apply. Rather, the ATO considers that the Shareholder or ADS Holder has made an election of this nature where the tax return for the relevant entity / individual is completed on the basis that scrip for scrip rollover has been applied.

Where an Australian resident Shareholder or ADS Holder chooses to apply scrip for scrip roll-over to any capital gain made on the exchange of their Shares or Company ADSs (in the case of ADS Holders through the ADS Depositary) for Avita US CDIs or Avita US Shares pursuant to the Scheme, the Australian resident Shareholder or ADS Holder can disregard the capital gain.

For the purpose of determining whether a subsequent disposal of the Avita US Shares or Avita US CDIs by an Australian resident Shareholder or ADS Holder can qualify as a discounted capital gain for Australian CGT purposes, the acquisition date of the Avita US CDIs or Avita US Shares will be the date on which the Australian resident Shareholder or ADS Holder acquired the Shares or Company ADSs that were subsequently exchanged (in the case of ADS Holders through the ADS Depositary) for Avita US Shares or Avita US CDIs.

To the extent that an Australian resident Shareholder or ADS Holder qualifies for full scrip for scrip roll-over relief, the first element of the cost base and reduced cost base of the Avita US Shares or Avita US CDIs received (in the case of ADS Holders through the ADS Depositary) will be worked out by reasonably attributing the cost base and reduced cost base of the original Company ADSs or Shares which were exchanged and for which rollover relief was obtained, taking into account any variances in the number of shares subsequently held.

To the extent that an Australian resident Shareholder that is a Fractional Shareholder qualifies for partial scrip for scrip roll-over relief, the cost base and reduced cost base of the Shares or Company ADSs will be apportioned between the Avita US Shares or Avita US CDIs received and the cash received in lieu of their fractional entitlements.

An Australian resident Shareholder or ADS Holder who does not choose rollover, or cannot choose rollover, must take into account any capital gain or capital loss from the disposal of the Shares or Company ADSs in working out their net capital gain or net capital loss for the income year in which the CGT event occurs. This may occur, for example, because a capital loss arises at the time that a Shareholder or ADS Holder disposes of the Shares or Company ADSs.

Where an Australian resident Shareholder or ADS Holder makes a capital gain and rollover is not chosen or cannot be chosen, they may be entitled to a CGT discount as outlined below. In order to be entitled to a discounted gain, an Australian resident Shareholder or ADS Holder must have held their interest in the Shares or Company ADSs for at least 12 months. Under the discount CGT provisions, a Shareholder or ADS Holder who is an Australian resident individual or the trustee of a trust can obtain a 50% discount on any realised capital gain. Where the Shareholder or ADS Holder is a qualifying Australian superannuation fund, a discount of 33 1/3% is available. A CGT discount is not available to companies.

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To the extent that a capital loss is made, scrip for scrip rollover relief will not be available. Instead, a capital loss is treated as arising at the time of the disposal of the Shares or Company ADSs. This capital loss could be utilised to offset a capital gain derived by an Australian resident Shareholder or ADS Holder in that or later income years (subject to satisfying certain conditions). However, this capital loss cannot be offset against ordinary income, nor be carried back to offset net gains arising in earlier income years.

Australian resident Shareholders or ADS Holders that hold their interests as either trading stock or on revenue account will not be eligible for scrip for scrip rollover relief.

Any gain or loss made on the disposal of the Shares or Company ADSs will be included in the assessable income of the Australian resident Shareholder or ADS Holder. The gain is calculated as the market value of the Avita US CDIs or Avita US Shares received (in the case of ADS Holders through the ADS Depositary) less the cost of the Shares or Company ADSs.

The tax cost base of the Avita US Shares or Avita US CDIs received from the transfer should be its market value at the time that the Scheme is implemented.

No GST should be payable in respect of the disposal of the Shares or Company ADSs and the issuance of Avita US Shares or Avita US CDIs.

Shareholders or ADS Holders registered for GST are recommended to seek their own advice to determine whether they will be entitled to claim input tax credits for GST incurred on costs (such as brokerage or advisory fees) associated with the Proposed Transaction.

No Australian stamp duty will be payable by the Shareholders and ADS Holders in respect of the Proposed Transaction on the basis neither the Company nor Avita US will hold any material land or interests in land in any State or Territory of Australia (nor have entered into any agreements to acquire land in any State or Territory of Australia at that time).

The content that follows is intended to summarise the Australian income tax, GST and stamp duty implications that may arise for Shareholders or ADS Holders that are non-residents for Australian tax purposes.

Where a non-Australian resident Shareholder or ADS Holder holds the Shares or Company ADSs on capital account, a disposal should prima facie trigger a CGT event.

Notwithstanding this, under Australia’s non-resident CGT rules, a capital gain or loss made by a non-resident from a CGT event will be disregarded where the asset is not taxable Australian property for Australian income tax purposes.

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The Shares or Company ADSs will be considered to be taxable Australian property only if:

The Shares or Company ADSs should not be considered an “indirect Australian real property interest” for Australian income tax purposes on the basis that there are no material Australian real property interests disclosed in the Company’s financial statements.

Accordingly, any capital gain or loss made by a non-resident Shareholder or ADS Holder on the disposal of the Shares or Company ADSs will be disregarded, unless used by the Shareholder or ADS Holder in carrying on a business through a permanent establishment in Australia.

A non-Australian resident Shareholder or ADS Holder who holds Shares or Company ADSs on capital account through an Australian permanent establishment, to the extent that any capital gain arises, will generally be eligible for scrip for scrip rollover relief to disregard the capital gain in the same way as an Australian resident Shareholder or ADS Holder will be eligible for scrip for scrip rollover. Please refer to section 10.1(a) for the application of the scrip for scrip rollover relief.

Non-Australian resident Shareholders or ADS Holders who hold their Shares or Company ADSs as either trading stock or on revenue account, will not be eligible for rollover relief. Any gain derived by a non-Australian resident Shareholder or ADS Holder in association with the Scheme would be characterised as ordinary income and subject to Australian income tax if the gain from the transfer is Australian sourced. Given the exchange involves the transfer of Shares or Company ADSs in an Australian company and will take place under a scheme of arrangement governed by the Corporations Act, there is a material risk that the gain would be Australian sourced pursuant to the reasoning of the Full Federal Court of Australia in Commissioner of Taxation v Resource Capital Fund IV LP [2019] FCAFC 51 and therefore subject to Australian tax.

Non-Australian resident Shareholders or ADS Holders may be entitled to relief under the business profits article of a relevant Double Tax Agreement or another exemption (such as the Investment Manager Regime, as defined under subdivision 842-I of Income Tax Assessment Act 1997).

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The GST implications are the same as outlined at 10.1(a)(vi) above, however it is likely that the majority of related professional services (e.g. brokerage etc.) provided to non-Australian resident Shareholders and non-Australian resident ADS Holders would not be subject to GST.

The Australian stamp duty implications are the same as outlined at 10.1(a)(vii).

The following is a summary of certain material United States federal income tax consequences of the Scheme. This discussion is based in part upon the assumption that each obligation in the ADS Depositary’s deposit agreement with the ADS Holders and any related agreements will be performed according to its terms.

The following summary assumes the Scheme will be consummated as described in this Scheme Booklet, and applies only to Shareholders and ADS Holders that hold their Shares or Company ADSs, and that will hold their Avita US CDIs and Avita US Shares received respectively pursuant to the Scheme, as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This summary does not address all aspects of United States federal income taxation that may be relevant to a Shareholder or ADS Holder in light of such Shareholder’s or ADS Holder’s particular circumstances, including any tax consequences arising under the Medicare contribution tax on net investment income, the alternative minimum tax, or to any Shareholder or ADS Holder subject to special treatment under the Code, including, but not limited to:

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In addition, this summary does not address any aspect of foreign (except as otherwise provided herein) state, local, alternative minimum, estate, gift or other tax law that may be applicable to a holder. This summary is intended to provide only a general summary of certain material United States federal income tax consequences of the Scheme to holders of Shares or Company ADSs. The United States federal income tax laws are complex and subject to varying interpretation. Accordingly, the United States Internal Revenue Service (IRS) may not agree with the tax consequences described in this Scheme Booklet, and there is no assurance that the IRS’s position would not be sustained in a court. Shareholders and ADS Holders should consult their own tax advisor regarding the United States federal, state, local, non-US and other tax consequences to them of the receipt of Avita US Shares and Avita US CDIs in exchange for the Company ADSs or Shares pursuant to the Scheme and the ownership and disposition thereof.

For purposes of this summary, a “United States Shareholder” includes a beneficial owner of Shares or Company ADSs that is, for United States federal income tax purposes:

If a partnership (or other entity treated as a “tax transparent” entity for United States tax purposes) is the beneficial owner of Shares or Company ADSs, the tax treatment of a partner in the partnership (or interest holder in the “tax transparent” entity) will generally depend on the status of the partner (or interest holder) and the activities of the partnership (or “tax transparent” entity). In general, for United States federal income tax purposes, United States Shareholders of Company ADSs will be treated as the beneficial owners of the underlying Shares represented by the Company ADSs.

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A Non-US Shareholder is a beneficial owner (other than a partnership) of Shares or Company ADSs that is not a United States Shareholder (defined above). The following summary assumes that a Non-US Shareholder does not have a trade or business (or permanent establishment) in the United States.

As holders of Company ADSs are treated as the beneficial owners of the underlying Shares represented by the Company ADSs, we refer to holders of both Shares and Company ADSs as Shareholders for purposes of the discussion that follows.

The exchange of Shares or Company ADSs for Avita US CDIs or Avita US Shares, respectively, pursuant to the Scheme, is intended to be treated as a transfer to which Section 351 of the Code applies and/or as a reorganisation described in Section 368(a) of the Code in which no gain or loss is recognised to the Company, Avita US, United States Shareholders or Non-US Shareholders. This summary assumes that the exchange of Shares or Company ADSs for Avita US CDIs or Avita US Shares, respectively, pursuant to the Scheme will be treated as a transfer to which Section 351 of the Code applies and/or a reorganisation described in Section 368(a) of the Code.

The Code provides special, generally adverse, rules regarding sales, exchanges and other dispositions of the stock of a passive foreign investment company (PFIC). A foreign (non-US) corporation will be treated as a PFIC for any taxable year if at least 75% of its gross income for the taxable year is passive income or at least 50% of its gross assets during the taxable year, based on a quarterly average and generally by value, produce or are held for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties, gains from commodities and securities transactions and gains from assets that produce passive income. In determining whether a foreign corporation is a PFIC, a pro-rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

Depending upon the value and the nature of the Company’s assets and income over time, the Company could be classified as a “passive foreign investment company”, or “PFIC”, for United States federal income tax purposes. Based on the Company’s income and assets, the Company does not believe that it has been a PFIC and does not presently expect to be a PFIC for the current taxable year for United States federal income tax purposes. Since PFIC status is a factual determination made annually after the end of each taxable year, including ascertaining the fair market value of the Company’s assets on a quarterly basis and the character of each item of income the Company earns, the Company can provide no assurance that it will not be a PFIC for the current taxable year (prior to the Scheme). The below discussion assumes the Company is not, will not be, and has not been a PFIC at any point prior to the completion of the Scheme.

Upon the completion of the Scheme, the Company expects that the PFIC regime and associated implications discussed above will no longer be relevant to the Avita United States Shareholders. This is because United States Shareholders will then directly own Avita US Shares or Avita US CDIs in Avita US, which will be treated as a United States corporation and therefore not subject to the PFIC rules. Furthermore, PFIC status of any of the Avita US non-US subsidiaries could only be attributed to any of the United States Shareholders if such shareholder owned 50 percent or more of the outstanding Avita US Shares (including those Avita US Shares represented by Avita US CDIs), which is not expected to occur.

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A United States Shareholder will generally not recognise any gain or loss on the exchange of Shares or Company ADSs for Avita US CDIs or Avita US Shares, respectively, except that United States Shareholders that are Fractional Shareholders (which includes Small Shareholders) who receive cash in lieu of Avita US Shares or Avita US CDIs pursuant to the Scheme may recognise a gain or loss, if any, to the extent of the cash consideration only.

United States Shareholders will have an aggregate adjusted United States federal tax basis in the Avita US Shares or Avita US CDIs received pursuant to the Scheme equal to their aggregate adjusted United States federal tax basis in the Company ADSs or Shares surrendered. Thus, to the extent a United States Shareholder has a loss in its Company ADSs or Shares, such loss generally will be preserved. The holding period for Avita US Shares or Avita US CDIs received pursuant to the Scheme will generally include the holding period of Company ADSs or Shares surrendered pursuant to the Scheme.

United States Shareholders who are Fractional Shareholders and who receive cash in lieu of fractional Avita US Shares or Avita US CDIs pursuant to the Scheme will generally be treated as having received such fractional Avita US Shares or Avita US CDIs, and then having received cash in exchange for such fractional Avita US Shares or Avita US CDIs. Any such United States Shareholder will generally recognise a gain or loss equal to the amount of the cash received less the United States Shareholder’s adjusted United States federal tax basis in the fractional Avita US Share or Avita US CDIs deemed received and sold. Such gain or loss will generally be a capital gain or loss. If the United States Shareholder has a holding period in the Avita US Shares or Avita US CDIs sold of more than one year (taking into account such United States holder’s holding period in the Company ADSs or Shares surrendered), such capital gain or loss will be a long-term capital gain or loss. The deductibility of capital losses is subject to significant limitations.

United States backup withholding tax and information reporting requirements will generally apply to payments to non-corporate United States Shareholders. Information reporting will apply to proceeds from the disposition of Avita US Shares or Avita US CDIs by a paying agent within the United States to United States Shareholders who are Fractional Shareholders (which includes Small Shareholders), other than United States Shareholders that are exempt from information reporting and properly certify their exemption. A paying agent within the United States will be required to withhold at the applicable statutory rate, currently 24%, in respect of any payments of the proceeds from the disposition of Avita US Shares or Avita US CDIs within the United States to United States Shareholders who are Fractional Shareholders (which includes Small Shareholders) (other than United States Shareholders that are exempt from backup withholding and properly certify their exemption) if the Shareholder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. United States Shareholders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9.

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Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a United States Shareholder’s United States federal income tax liability. A United States Shareholder generally may obtain a refund of any amounts withheld under the backup withholding rules in excess of such United States Shareholder’s United States federal income tax liability by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information.

Non-US Shareholders will generally not recognise any gain or loss as a result of the Scheme, except that Non-US Shareholders that receive cash (from dispositions of fractional shares because they are Fractional Shareholders, or because they are Ineligible Shareholders or Small Shareholders) may recognise a gain or loss, if Avita US is considered a “United States real property holding corporation” (USRPHC) within the meaning of Section 897 of the Code, immediately after the Scheme. As discussed, below, the Company does not expect Avita US to be a USRPHC immediately after the Scheme. Assuming so, any gain recognised by a Non-US Shareholder that receives cash will generally not be subject to United States federal income taxation.

Non-US Shareholders will have an aggregate adjusted United States federal tax basis in the Avita US CDIs or Avita US Shares received pursuant to the Scheme equal to their aggregate adjusted United States federal tax basis in the Shares or Company ADSs surrendered. The holding period for Avita US CDIs or Avita US Shares received pursuant to the Scheme will generally include the holding period of Shares or Company ADSs surrendered pursuant to the Scheme.

Non-US Shareholders who (i) are Fractional Shareholders and receive cash in lieu of fractional Avita US CDIs or Avita US Shares or (ii) are Ineligible Shareholders or Small Shareholders and receive cash in respect of the Avita US CDIs or Avita US Shares they otherwise would have received will generally be treated as having received such Avita US CDIs or Avita US Shares, and then having received cash in exchange for such Avita US CDIs or Avita US Shares. Subject to the considerations described in “Exchange of Shares or Company ADSs for Avita US CDIs or Avita US Shares” above, any gain recognised by a Non-US Shareholder with respect to the receipt of cash in exchange for such fractional Avita US CDIs or Avita US Shares will generally not be subject to United States federal income taxation.

The payments of cash proceeds made to Non-US Shareholders who are Fractional Shareholders, Ineligible Shareholders or Small Shareholders by brokers upon a sale of Avita US Shares or Avita US CDIs will generally not be subject to information reporting or backup withholding, in each case so long as the Non-US Shareholder certifies its non-resident status (and a paying agent does not have actual knowledge or reason to know that the Non-US Shareholder is a United States person or that the conditions of any other exemption are not, in fact, satisfied) or otherwise establishes an exemption. A Non-US Shareholder who provides a valid IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable documentation) will generally satisfy the certification requirements necessary to avoid backup withholding.

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Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a Non-US Shareholder’s United States federal income tax liability. A Non-US Shareholder generally may obtain a refund of any amounts withheld under the backup withholding rules in excess of such Non-US Shareholder’s United States federal income tax liability by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information.

Natural persons who trade Shares or Company ADSs on personal account are generally not subject to Hong Kong Profits Tax on the basis that the individual in such circumstances are generally not regarded as carrying on a trade or business. However, Shareholders and ADS Holders should contact their own tax advisor to confirm this position for their own personal circumstances.

Section 14(1) of the Inland Revenue Ordinance (IRO) charges to profits tax every person in respect of their Hong Kong sourced profits from a trade, profession or business carried on in Hong Kong. Profits from the sale of capital assets are specifically excluded from chargeability to profits tax.

Accordingly, to the extent a person does not carry on business in Hong Kong, or the profits in question are not Hong Kong sourced, or the gain is Hong Kong sourced but is ‘capital’ in nature, the person will not be chargeable to profits tax.

In considering whether any gain to the Hong Kong Shareholders or ADS Holders from the Scheme may be Hong Kong sourced, the first question to consider is whether the Hong Kong investors will recognise a realised profit in their respective financial statements from the Scheme, since this would be the amount of the taxable gain if the gain were regarded as Hong Kong sourced. If no gain is recognised in the accounts then prima-facie no profits tax issue would arise. However, even if the gain is recognised and considered realised, the gain will be taxable only if it is considered Hong Kong sourced and not capital in nature.

For gains arising on listed securities, where both the purchase and sale of listed securities take place through an overseas exchange the source of the profit is the location of the exchange through which the purchase and sale take place.

Given that under the Scheme the substantive activities relating to formulating the proposal to Shareholders, Shareholders taking part in the shareholders’ meeting to approve the Scheme, and ultimate approval of the Scheme by the courts and regulators, will take place in Australia, or otherwise outside of Hong Kong, any gain arising on the exchange can be considered to be non-Hong Kong sourced where the acquisition of the original shareholdings in the Shares (including in the case of ADS Holders in the Shares represented by the ADSs they hold) took place through the ASX or NASDAQ.

Where the Hong Kong Shareholder or an ADS Holder originally purchased their Shares or Company ADSs off market pursuant to a private placement, any gain that is realised under the Scheme will not be subject to Hong Kong Profits Tax provided that the contracts for the original purchase of the Shares or Company ADSs were effected outside of Hong Kong.

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Shareholders and ADS Holders are urged to contact their own tax advisor regarding the source of profits from a Hong Kong Profits Tax perspective. In addition, to the extent that the gain is Hong Kong sourced, consideration may also be given to treating any gain as capital in nature as arising outside the ordinary course of business if the profits tax treatment were questioned by the Inland Revenue Department.

Investment funds may also consider the applicability of the fund tax exemptions contained within sections 20AC to 20AY of the IRO.

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Please refer to section 1 of this Scheme Booklet for a table of key dates.

For the Proposed Transaction to proceed, it is necessary that the Scheme Resolution be approved by a majority in number (more than 50%) of Shareholders who are present and voting (either in person or by proxy, attorney or corporate representative) at the Scheme Meeting by way of live webcast. That majority must also represent at least 75% of the total number of votes cast in favour of the Scheme Resolution.

As at the date of this Scheme Booklet, the following steps have been taken to prepare the Proposed Transaction for implementation:

The key steps required to implement the Proposed Transaction going forward are:

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Shareholders (whose addresses as shown in the Register on the Record Date are) in the following jurisdictions will be “Eligible Shareholders” for the purposes of the Scheme and will be entitled to receive the Scheme Consideration:

Shareholders (whose addresses as shown in the Register on the Record Date are) outside of the jurisdictions referred to above will be “Ineligible Shareholders” for the purposes of the Scheme, and the Avita US CDIs or Avita US Shares that they would otherwise be entitled to under the Scheme will be issued to the Sale Agent and dealt with in accordance with the process outlined in section 11.5 of this Scheme Booklet.

The Company has determined which jurisdictions would be “eligible” for the purposes of the Scheme based on a detailed analysis of its Register coupled with the regulatory and practical considerations of issuing securities in the various jurisdictions in which its Shareholders are located.

Eligible Shareholders, on receiving the Scheme Consideration, will hold an equivalent proportional interest in Avita US as they held in the Company prior to implementation of the Proposed Transaction (subject to the Sale Facility aspect of the Proposed Transaction dealing with Fractional Shareholder Interests, discussed at section 11.5 of this Scheme Booklet). The ratios for determining the number of Avita US Shares or Avita US CDIs to be exchanged for a particular Company shareholding are explained below.

On implementation of the Proposed Transaction, Eligible Shareholders who hold Shares (other than the ADS Depositary) will receive the Scheme Consideration in the form of Avita US CDIs to enable the underlying Avita US Shares to be traded on the ASX in a similar manner as Shares are currently traded on the ASX (and under the same ticker code currently used by the Company, “AVH”). This will occur through the Authorised Nominee, who will hold the legal title to the Avita US Shares for the benefit of Avita US CDI Holders.

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Eligible Shareholders who hold Shares (other than the ADS Depositary) will receive (via the Authorised Nominee) 5 Avita US CDIs for every 100 Shares held by them on the Record Date.

For further information on the Authorised Nominee and CDIs, please refer to Appendix E of this Scheme Booklet and a summary of CDIs provided at section 2.12 of this Scheme Booklet.

If the Scheme is approved and implemented, the Shares represented by the outstanding Company ADSs will be replaced with the right to receive Avita US Shares. The ADS Depositary has informed the Company that it will call for the surrender of all outstanding Company ADSs and will deliver the relevant Avita US Shares, and any Sale Facility Proceeds (from the sale of fractional entitlements), to ADS Holders upon surrender by them of their Company ADSs and payment of the fee to the ADS Depositary for such surrender. The ADS Depositary, DTC or DTC participants will sell the aggregated fractions of Avita US Shares to which ADS Holders would otherwise be entitled, and those holders will receive the net proceeds of that sale. The ADS program will also be terminated.

On implementation of the Proposed Transaction, the ADS Depositary will receive one Avita US Share for every 100 Shares held by it as at the Record Date and the ADS Depositary will deliver to each ADS Holder one Avita US Share for every 5 Company ADSs held by the ADS Holder as at the Record Date, subject (as noted above) to the ADS Holder surrendering all of their Company ADSs and paying the ADS Depositary’s fee for the surrender of their Company ADSs (which fee is equal to US$0.05 per Company ADS surrendered).

Avita US Shares will be able to be traded on NASDAQ in a similar manner to the way in which Company ADSs are currently traded on NASDAQ (and under the same ticker code currently used by the Company, “RCEL”).

After implementation of the Proposed Transaction, each holder of Avita US Shares will be able to convert them to Avita US CDIs in the ratio of five Avita US CDIs for one Avita US Share, and each holder of Avita US CDIs will be able to convert them to Avita US Shares in the ratio of one Avita US Share for five Avita US CDIs.

Where a Shareholder is an Ineligible Shareholder or a Fractional Shareholder (each, a Selling Shareholder), the number of Avita US Shares or Avita US CDIs (in the case of an Ineligible Shareholder) or Fractional Shareholder Interests (in the case of a Fractional Shareholder) to which that Selling Shareholder would otherwise be entitled under the Scheme will be aggregated with those of all the other Selling Shareholders (together, the Sale Securities) and issued to the Sale Agent in the form of Avita US CDIs to be dealt with in accordance with the Sale Facility. If the number of Sale Securities in aggregate does not represent a whole Avita US Share, then the number of Sale Securities will be rounded up to the next whole Avita US Share and be issued to the Sale Agent.

Under the Sale Facility, Avita US will procure that, after the Implementation Date, the Sale Agent must:

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The respective proportion of the Sale Facility Proceeds will be remitted by Avita US to each Selling Shareholder (at its discretion) by:

The amount of money to be received by each Selling Shareholder will be calculated on an averaged basis, so that all Selling Shareholders will receive the same price per Sale Security, subject to rounding to the nearest whole cent. Consequently, the amount received by a Selling Shareholder for each Sale Security may be more or less than the actual price that is received by the Sale Agent (acting on behalf of Avita US) for the sale of that particular Sale Security.

The remittance by the Sale Agent (acting on behalf of Avita US) to each Selling Shareholder of the Sale Facility Proceeds is in full and final satisfaction of that Selling Shareholder’s rights and entitlements to the Sale Securities referable to it.

Under the Scheme, each Selling Shareholder, without the need for any further action, irrevocably appoints Avita US and each of the directors and officers of Avita US, jointly and severally, as its attorney and agent for the purposes of receiving any financial services guide or other notice given by the Sale Agent under the Corporations Act.

Except for tax file numbers, and to the extent permitted by law, all instructions, notifications or elections by each Shareholder to the Company binding or deemed binding between the Shareholder and the Company relating to the Company or its securities, including instructions, notifications or elections relating to:

will be deemed from the Implementation Date (except to the extent determined otherwise by Avita US in its sole discretion) to be made by the Shareholder to Avita US and to be a binding instruction, notification or election to, and accepted by, Avita US in respect of any Avita US CDIs or Avita US Shares provided to that Shareholder until and unless that instruction, notification or election is revoked or amended in writing addressed to the Avita US Registry in Australia.

The obligations of the Company and Avita US to implement the Scheme are subject to the following Conditions Precedent being satisfied or, where applicable, waived in accordance with the terms of the Implementation Agreement:

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which approval may be conditional on the Scheme becoming Effective and any such other conditions that are acceptable to the boards of the Company and Avita US.

The Implementation Agreement can be terminated by the Company or Avita US by any of the ways outlined below.

The Implementation Agreement may be terminated at any time prior to 8.00am on the date of the Second Court Hearing by the Company or Avita US if:

The Implementation Agreement may be terminated at any time prior to 8.00am on the date of the Second Court Hearing by written agreement between the Company and Avita US.

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Each of the Directors’ security holdings in the Company, as at the date of this Scheme Booklet, are set out below.

None of the Directors currently hold any equity interests in Avita US. Immediately after implementation of the Proposed Transaction, the Directors will hold approximately the same proportionate equity interests in Avita US as they currently hold in the Company (with the only differences being on account of any Fractional Shareholder Interests of the Directors being sold pursuant to the Sale Facility).

Each Director will become a director of Avita US.

Those Directors who are non-executive directors will not receive any increase in their director’s remuneration on account of becoming directors of Avita US as a result of the Scheme or Proposed Transaction.

Other than as set out below or elsewhere in this Scheme Booklet, there are no agreements or arrangements made between a Director and any other person in connection with, or conditional upon, the outcome of the Scheme or the Proposed Transaction (other than in their capacity as a Shareholder).

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Except as disclosed elsewhere in this Scheme Booklet, no payment or other benefit is proposed to be made or given to any Director, secretary or executive officer of the Company or any Related Body Corporate of the Company as compensation for the loss of, or as consideration for or in connection with his or her retirement from, office as a Director, secretary or executive officer of the Company or any Related Body Corporate of the Company as a result of the Scheme or the Proposed Transaction.

Other than as set out above or elsewhere in this Scheme Booklet, neither the Independent Expert, nor any director or proposed director of Avita US, and no entity in which a director or proposed director of Avita US is or was a member or partner in the last two years, holds, or held at any time during the last two years before the date of lodgement of this Scheme Booklet with ASIC, any interest in:

and no amounts (whether in cash or securities or otherwise) have been paid or agreed to be paid, and no one has given or agreed to give a benefit, to any director or proposed director of Avita US either to induce them to become, or to qualify them as, a director of Avita US, or otherwise for services rendered by them in connection with the formation or promotion of Avita US or the Proposed Transaction.

The fees incurred by the persons named in this Scheme Booklet as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Scheme Booklet, up to the date of this Scheme Booklet, are:

Each of them will be entitled to receive professional fees charged as agreed with the Company, and in accordance with their normal basis of charging, up until implementation of the Proposed Transaction.

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As extracted from filings released on the ASX, as at the date of this Scheme Booklet, the following persons have disclosed pursuant to the Corporations Act to be Substantial Shareholders of the Company and carry 5% or more of the voting rights attached to the issued securities of the Company:

Options

Employee options

In November 2016, the Company adopted an Employee Incentive Option Plan (ESOP).

The ESOP is administered by the Remuneration Committee (to whom the Board delegated its powers under the ESOP). Subject to Board approval (where required), the Remuneration Committee has the authority, in its sole discretion, to grant unlisted Options under the ESOP to eligible employees of the Company and Directors (Employee Options).

The aggregate number of Shares which may be issued on exercise of all Employee Options issued under the ESOP cannot exceed 7.5% of the total number of issued Shares.

The ESOP gives eligible employees of the Company and Directors, who have been granted Employee Options, a right to purchase Shares upon the payment of a specified exercise price, which is determined at the time the Employee Option is granted. The ESOP is designed to, among other things:

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As at the date of this Scheme Booklet, there are 92 holders of outstanding Employee Options issued under the ESOP who have a right to purchase a total of 125,994,582 Shares, a summary of the exercise prices and expiration dates of which is outlined in the following table:

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A full set of the terms and conditions of the ESOP can be found on the ASX’s website (www.asx.com.au) and the Company’s website (www.avitamedical.com).

Options granted to Dr Michael Perry, CEO

At the Company’s 2018 AGM on 30 November 2018, Shareholders approved the issue to the Company’s CEO, Dr Michael Perry, of 15,000,000 unlisted Options (Perry Options), which were issued to Dr Perry on 30 November 2018.

The Perry Options are subject to vesting conditions based on the tenure of Dr Perry, the Company’s share price and various performance milestones.

Each Perry Option, once vested, gives Dr Perry the right to be issued one Share at an exercise price of A$0.082 per Perry Option.

As at the date of this Scheme Booklet, there are 15,000,000 outstanding Perry Options on issue, which expire on 30 November 2028.

A full set of the terms and conditions of the Perry Options can be found on the ASX’s website (www.asx.com.au) and the Company’s website (www.avitamedical.com).

Warrants

In February 2016, the Company issued warrants, in the nature of unlisted Options, to various advisers who assisted the Company with a private placement in late 2015 (Warrants).

Each Warrant gives the holder the right to be issued one Share at an exercise price of A$0.126 per Warrant.

As at the date of this Scheme Booklet, there are 862,415 outstanding Warrants on issue, which expire on 31 December 2020.

Restricted Stock Units (RSUs)

RSUs are unfunded and unsecured contractual entitlements to be issued or transferred one Share per RSU on a future date (after vesting of the entitlement) without the requirement for the RSU holder(s) to pay monetary consideration.

As at the date of this Scheme Booklet, 44,642,174 RSUs have been issued, and remain outstanding, to the following persons:

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The RSUs issued are subject to vesting conditions based on, among other things:

The existing Options, RSUs and Warrants in the Company arise out of contracts between the Company and the holders of those securities. Under those contracts, the existing Options, RSUs and Warrants will continue after implementation of the Proposed Transaction; however, the entitlements of holders to be issued Shares will instead become entitlements to be issued Avita US Shares (in the ratio of one Avita US Share for every 100 Shares to which the holder would otherwise be entitled). Avita US has separately covenanted (by way of deed poll) in favour of holders of existing Options, RSUs and Warrants in the Company to ensure that holders’ entitlements are made available in accordance with their contractual rights. In all other respects, the existing Options, RSUs and Warrants will continue to be subject to the contractual terms pursuant to which they were granted.

Holders of existing Options, RSUs and Warrants in the Company will be given a copy of this Scheme Booklet (for reference only) at the same time as Shareholders, and will receive a further notice from Avita US on or shortly after the Implementation Date advising them of particulars relating to the number of Avita US Shares that may be issued to the holder of Options, RSUs or Warrants in Avita US upon exercise or vesting (as applicable).

The Company does not intend to grant any further Options (under the ESOP or outside of it), RSUs, Warrants or similar rights and, once all of the existing Employee Options have been exercised or lapsed, the Company intends to terminate the operation of the ESOP. However, at the annual meeting of Avita US Shareholders, which is expected to take place in the last quarter of 2020, Avita US intends to seek Avita US Shareholder approval of a new employee incentive plan, which will generally contain similar or equivalent commercial terms to the ESOP.

As at the date of this Scheme Booklet, Grant Thornton Audit Pty Ltd are the auditors of the Company, and were appointed as such at the Company’s annual general meeting on 18 November 2011.

On and from implementation of the Proposed Transaction, it is expected that Grant Thornton LLC will be the auditors of the Avita Group.

As at close of trading, being:

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Financial reporting relief

If the Scheme is implemented on or before 30 June 2020, ASIC has granted relief from the requirement for the Company to prepare and lodge with ASIC an annual report for the financial year ending 30 June 2020 in accordance with AIFRS.

In order to comply with the conditions to that relief:

Fundraising relief

In accordance with ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2016/80, the Avita US Shares and Avita US CDIs issued pursuant to the Scheme will be freely tradable.

ASIC has indicated that it will grant relief for the purposes of:

Scheme Booklet content relief

ASIC has granted relief for the purposes of clause 8302(h) of Part 3 of Schedule 8 of the Corporations Regulations so that the Company is only required to disclose in this Scheme Booklet whether the financial position of the Company had materially changed since 31 December 2019 (being the last half-year balance date of the Company’s financial statements in the Company’s most recent half-year report) as opposed to 30 June 2019 (being the last annual balance date of the Company’s financial statements in the Company’s most recent annual report).

The Company will ensure that a copy of its financial reports for the financial year ended 30 June 2019 and the half-year ended 31 December 2019 is made available, free of charge, to any Shareholder who requests a copy before the Scheme becomes Effective.

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ASX has indicated that it is likely to grant the Company and Avita US the following confirmations and waivers on receipt of Avita US’s application to be admitted to the official list of ASX:

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