Hydration Pharmaceuticals : Securities Dealing Policy

Securities Dealing Policy

The Hydration Pharmaceuticals Company Limited

ACN 620 385 677

Amended and Adopted by the Board on 29 March 2022

Table of Contents

TABLE OF CONTENTS ........................................................................................................... 2

• 1 WHAT IS THE PURPOSE OF THIS POLICY? .............................................................. 3

• 2 WHO MUST COMPLY WITH THIS POLICY? ................................................................ 3

• 3 RESTRICTIONS APPLYING TO ALL EMPLOYEES .................................................... 3

• No dealing while in possession of Inside Information .......................................... 3

  Inside Information and other relevant terms ........................................................ 4

  The Front Page Test ............................................................................................ 5

  No short-term or speculative dealing ................................................................... 5

  Hedging of Company securities ........................................................................... 5

  Margin lending arrangements .............................................................................. 6

  Dealing in other companies' securities ................................................................ 6

• 4 ADDITIONAL RESTRICTIONS APPLYING TO RESTRICTED PERSONS .................. 6

  No dealing in Blackout Periods ............................................................................ 6

  Incomplete buy or sell orders .............................................................................. 7

  Exceptional circumstances .................................................................................. 7

  Approval required for dealing outside Blackout Periods ...................................... 7

  Written request process ....................................................................................... 8

  Dealing in financial products issued over Company securities by third parties ... 9

  Connected Persons ............................................................................................. 9

  Extension of this Policy ...................................................................................... 10

• 5 ARE ANY DEALINGS EXCLUDED FROM THIS POLICY? ........................................ 10

• 6 WHAT ARE THE RULES ABOUT INSIDER TRADING? ............................................ 11

• 7 WHAT HAPPENS IF THIS POLICY IS BREACHED? ................................................. 11

  Breach of this Policy .......................................................................................... 11

  Breach of insider trading laws ........................................................................... 11

• 8 CONFIDENTIAL INFORMATION ................................................................................. 12

• 9 AWARENESS AND TRAINING ................................................................................... 12

• 10 WHO SHOULD I CONTACT? ...................................................................................... 12

• 11 REVIEW ........................................................................................................................ 12

Securities Dealing Policy

• 1 What is the purpose of this Policy?

  The purpose of this Securities Dealing Policy (Policy) is to:

  ensure that public confidence is maintained in the reputation of The Hydration Pharmaceuticals Company Limited ACN 620 385 677 (the Company) and its related bodies corporate (together, the Group), the Directors, officers and employees of the Group and the trading of the Company's securities; explain the Company's policy and procedures for the buying and selling of securities to assist the Group's Directors and employees; and

  recognise that some types of dealing in securities are also prohibited by law.

  The Company will take a substance over form approach and will have regard to the intent and spirit of this Policy when applying and enforcing it.

• 2 Who must comply with this Policy?

  This Policy applies to all Directors, officers, senior management and other employees, consultants and contractors of the Group (collectively, Employees).

  Certain aspects of this Policy apply only to Restricted Persons who, for the purposes of this Policy, are:

  Directors;

  other key management personnel of the Company; and

  other persons who regularly possess Inside Information (see section 3.2) and who have been advised by the Company Secretary that they are subject to special restrictions under this Policy.

  Restricted Persons must also take steps in relation to dealings by their Connected Persons. See section 4.7 for further information.

• 3 Restrictions applying to all Employees

  No dealing while in possession of Inside Information

  Employees must not deal in (that is, apply for, acquire or dispose of) the Company's securities if:

they are aware of Inside Information in relation to the Company; or

the Company has notified Employees that they must not deal in securities (either for a specified period, or until the Company gives further notice).

Inside Information and other relevant terms

Inside Information is information that:

is not generally available to the market; and

if it were generally available to the market, a reasonable person would expect it to have a material effect (upwards or downwards) on the price or value of a security.

Information is generally available if it:

consists of readily observable matters or deductions;

has been made known in a manner that would be likely to bring it to the attention of investors, and a reasonable time period has elapsed since disclosure. That is, information will be 'generally available' if it has been released to the ASX or published in an annual report, prospectus or similar document and a reasonable time has elapsed; or

consists of deductions, conclusions or inferences made or drawn from information referred to in paragraphs (c) and (d) above.

Examples of readily observable matters are:

a change in legislation which will affect the Company's ability to make certain types of investments; or

a severe downturn in global securities markets.

Information is regarded as being likely to have a material effect if it would, or would be likely to, influence persons who commonly invest in securities or other traded financial products in deciding whether or not to deal in the security.

Inside Information may include matters of supposition, matters that are not yet certain and matters relating to a person's intentions.

Some examples which may constitute Inside Information include:

the financial performance of the Company against its budget or against investor and analyst expectations;

an undisclosed significant change in the Company's market share;

changes in the capital structure of the Company, including proposals to raise additional equity or increase debt;

material acquisitions or sales of assets by the Company;

major new initiatives or proposed changes in the nature of the business of the Company;

changes to the board of Directors of the Company (Board) or significant changes in key management personnel;

likely or actual entry into, or loss of, a material contract;

a proposed dividend or other distribution or a change in dividend policy; or

a material claim against the Company or other unexpected liability.

It does not matter how or in what capacity a person becomes aware of the Inside Information. Information does not have to be obtained from the Company to constitute Inside Information.

Section 6 contains further details regarding the scope of the insider trading laws.

The Front Page Test

It is important that public confidence in the Group is maintained. It would be damaging to the Group's reputation if the market or the general public perceived that Employees might be taking advantage of their position in the Group to make financial gains (by dealing in securities on the basis of Inside Information).

As a guiding principle, Employees should ask themselves:

If the market was aware of all the current circumstances, could I be perceived to be taking advantage of my position in an inappropriate way? How would it look if the transaction were reported on the front page of the newspaper?

This is referred to as the Front Page Test.

If the Employee is unsure, he or she should consult the Company Secretary.

Where any approval is required for a dealing under this Policy, approval will not be granted where the dealing would not satisfy the Front Page Test.

No short-term or speculative dealing

Employees must not deal in the Company's securities on a speculative or short-term trading basis. Short-term trading includes buying and selling securities on market within a 6-month period, and entering into other short-term dealings (for example, forward contracts).

Selling securities received following the vesting of entitlements under an employee, executive or director equity plan within 6 months of the vesting date is not a short-term dealing.

Hedging of Company securities

Hedging includes entering into arrangements that operate to limit the economic risk associated with holding the Company's securities.

Under this Policy, hedging of Company securities by an Employee is subject to the following rules:

the hedge transaction must not be entered into, renewed, altered or closed out when the Employee is in possession of Inside Information;

Company securities acquired under an employee, executive or director equity plan operated by the Company must never be hedged prior to vesting;