Hydration Pharmaceuticals : Issue of Securities

4660 La Jolla Village Drive, Suite 100 San Diego, CA 92122

For personal use only

Company Announcement

ASX: HPC

DATE: 22 July 2022

Issue of Securities

Functional hydration solutions provider, The Hydration Pharmaceuticals Company Limited (ASX: HPC) ("Hydralyte North America" or "the Company"), wishes to advise that it has issued a total of 232,142 unlisted options ("Options") as follows:

• 53,571 Options to each of Adem Karafili, Gretta van Riel and Margaret Hardin (each a non-executive Director of the Company) under the Company's Equity Incentive Plan ("Plan"); and
• 71,429 Options under the Plan to George Livery in his capacity as the Chair of the Board,

pursuant to shareholder approval at the Company's Annual General Meeting ("AGM") on 27 May 2022.

The key terms of the Options are set out in Annexure A below. For further information, please see the Company's Addendum to the Notice of AGM lodged with ASX on 20 May 2022.

Appendices 3Y regarding the changes to directors' interests are attached. An Appendix 3G in relation to the issue of Options will also follow this announcement.

ENDS

This announcement was authorised for release by the Board of Hydralyte North America.

For further information:

Investors/Media

Henry Jordan

Six Degrees Investor Relations 0431 271 538 [e-mail]

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4660 La Jolla Village Drive, Suite 100

San Diego, CA 92122

Annexure A - Terms of Options

Nature of Options

Each Option constitutes a right to receive one (1) Share in the capital of the Company, subject to the terms and conditions of the Plan Rules.

Quotation

Options will not be quoted on the ASX however application will be made to ASX for official quotation of any Shares issued under the Plan to the extent required by the ASX Listing Rules.

Vesting Conditions

The Options will vest and be able to be immediately exercised on the three-year anniversary of the date of issue of the Options (Vesting Date), subject to the directors continued provision of services to the Company as a director (and no notice of resignation being given) as at the Vesting Date.

Exercise of Options

The exercise of any Option granted under the Plan will be effected in the form and manner determined by the Board, and must be accompanied by payment of the relevant exercise price (if any).

Exercise Price

Each Option is exercisable for one Share at an Exercise Price of A$0.476.

Expiry Date

Any unexercised Options will lapse and automatically expire on the date that is five years after the date of issue of the Options, being 22 July 2027.

Allocation following exercise

Subject to any express rules to the contrary, as soon as practicable following the exercise of an Option, the Board must issue to, procure the transfer to, or procure the setting aside for, the director the number of Shares in respect of which Options have been exercised.

Vested Options must be satisfied by Shares that been purchased on market, unless:

1. No shareholder approval is required under the ASX Listing Rules in respect of the director's participation in the Plan; or
2. Shareholders have approved the director's participation in the Plan to the extent required under the ASX Listing Rules.

Prohibited Dealings

Subject to the Securities Dealing Policy, any dealing in respect of an Option is prohibited unless the Board determined otherwise or the dealing is required by law and the director has provided satisfactory evidence to the Company of that fact. Where, in the opinion of the Board, a director deals with an Option in contravention of the Plan Rules, the Option will immediately lapse.

Change of Control Events

Subject to any express rules to the contrary, where there is a Takeover Bid for Shares or another transaction, event or state of affairs, that, in the Board's opinion, is likely to result in a change in the Control of the Company or should otherwise be treated in accordance with the Plan Rules, the Board may, in its absolute discretion, determine that all or a specified number of a Participant's Options vest or cease to be subject to restrictions (as applicable).

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For personal use only

Appendix 3Y

Change of Director's Interest Notice

Rule 3.19A.2

Appendix 3Y

Change of Director's Interest Notice

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 30/09/01 Amended 01/01/11

Name of entity	The Hydration Pharmaceuticals Company Limited
ABN	620 385 677

We (the entity) give ASX the following information under listing rule 3.19A.2 and as agent for

the director for the purposes of section 205G of the Corporations Act.

Name of Director	Adem Karafili
Date of last notice	15 December 2021

Part 1 - Change of director's relevant interests in securities

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust

Note: In the case of a company, interests which come within paragraph (i) of the definition of "notifiable interest of a director" should

be disclosed in this part.

	Direct or indirect interest	Indirect
	Nature of indirect interest	Ankara Holdings Pty Ltd ATF A&N Karafili
	(including registered holder)	Family Trust
	Note: Provide details of the circumstances giving rise to the relevant
	interest.	(Adem Karafili has the power to exercise, or control
		the exercise of, a right to vote attached to the
		securities and to dispose of, or control the exercise
		of a power to dispose of, the securities.)
	Date of change	22 July 2022
	No. of securities held prior to change
	Ankara Holdings Pty Ltd	458,852 fully paid ordinary shares
	Trust>*	448,437 fully paid ordinary shares subject to
		escrow until 13/06/2023
		653,128 fully paid ordinary shares subject to
		escrow until 13/12/2023
		74,739 unlisted options with an exercise price
		of $0.45 expiring on 13 January 2029 subject
		to escrow until 13/12/23

• See chapter 19 for defined terms.
  01/01/2011 Appendix 3Y Page 1

Appendix 3Y

Change of Director's Interest Notice

For personal use only

*Adem Karafili has the power to exercise, or control the exercise of, a right to vote attached to the securities and to dispose of, or control the exercise of a power to dispose of, the securities.

Class

Number acquired

Number disposed

Value/Consideration

Note: If consideration is non-cash, provide details and estimated

valuation

No. of securities held after change

Ankara Holdings Pty Ltd *

Ankara Holdings Pty Ltd ATF A&N Karafili Family Trust*

The following unlisted options to acquire ordinary shares, all of which are subject to ASX escrow until 9 December 2023:

• 100,000 unlisted options with an exercise price of $0.29 expiring on 31 August 2024;
• 800,000 unlisted options with an exercise price of $0.20 expiring on 31 August 2024; and
• 1,000,000 unlisted options with an exercise price of $0.29 expiring on 1 December 2026.

Unlisted options

53,571 unlisted options issued under the Company's Equity Incentive Plan (EIP) Exercisable at $0.476 and expiring on 22 July 2027.

Nil

Nil

458,852 fully paid ordinary shares

448,437 fully paid ordinary shares subject to escrow until 13/06/2023

653,128 fully paid ordinary shares subject to escrow until 13/12/2023

74,739 unlisted options with an exercise price of $0.45 expiring on 13 January 2029 subject to escrow until 13/12/23

The following unlisted options to acquire ordinary shares, all of which are subject to ASX escrow until 9 December 2023:

• 100,000 unlisted options with an exercise price of $0.29 expiring on 31 August 2024;
• 800,000 unlisted options with an exercise price of $0.20 expiring on 31 August 2024; and
• 1,000,000 unlisted options with an exercise price of $0.29 expiring on 1 December 2026.

53,571 unlisted options issued under the EIP exercisable at $0.476 per option and expiring on 22 July 2027

+ See chapter 19 for defined terms.

Appendix 3Y Page 2

01/01/2011

Appendix 3Y

Change of Director's Interest Notice

only

*Adem Karafili has the power to exercise, or control the exercise of, a right to vote attached to the securities and to dispose of, or control the exercise of a power to dispose of, the securities.

Nature of change

Example: on-market trade, off-market trade, exercise of options, issue

of securities under dividend reinvestment plan, participation in buy-

back

Issue of unlisted options issued under the EIP, upon receiving shareholder approval at the Company's annual general meeting held on 27 May 2022.

For personal use

Part 2 - Change of director's interests in contracts

Note: In the case of a company, interests which come within paragraph (ii) of the definition of "notifiable interest of a director" should

be disclosed in this part.

Detail of contract

N/A

Nature of interest

Name of registered holder (if issued securities)

Date of change

No. and class of securities to which interest related prior to change

Note: Details are only required for a contract in

relation to which the interest has changed

Interest acquired

Interest disposed

Value/Consideration

Note: If consideration is non-cash, provide details

and an estimated valuation

Interest after change

Part 3 - +Closed period

Were the interests in the securities or contracts No

detailed above traded during a +closed period where prior written clearance was required?

If so, was prior written clearance provided to allow the trade to proceed during this period?

If prior written clearance was provided, on what date was this provided?

• See chapter 19 for defined terms.
  01/01/2011 Appendix 3Y Page 3