20 February 2019

2019 Extraordinary General Meeting – Blue Whale transaction

Aquis Entertainment Limited (the Company) (ASX Code: AQS) refers to its previous announcement on 21 December 2018 regarding transactions to be implemented between the Company, Blue Whale Entertainment Pty Ltd (a company owned and controlled by Mr Michael Gu, the Group CEO of iProsperity Group) and Aquis Canberra Holdings (Aus) Pty Ltd (Proposed Transactions). The Company is pleased to announce that an Extraordinary General Meeting (EGM) of the Company will be held at 10.00am (Brisbane time) on Thursday, 21 March 2019 at Level 2, Icon Energy Building, 204 Miami Key, Broadbeach Waters, Queensland to consider the Proposed Transactions. The Notice of Meeting relating to the EGM (which incorporates the Explanatory Notes, Proxy Form and Independent Expert’s Report) is attached to this announcement and has been mailed to shareholders. The Notice of Meeting is also available on the Company’s website. The Notice of Meeting (including the Independent Expert’s Report) is an important document and shareholders are encouraged to read it in full.

For further information please contact: Allison Gallaugher CEO & Executive Director 02 6257 7074 [email protected] AQUIS ENTERTAINMENT LIMITED

ABN 48 147 411 881

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

Date of Meeting 21 March 2019 Time of Meeting 10:00AM (AEST) Place of Meeting Level 2, Icon Energy Building, 2-4 Miami Key, Broadbeach Waters, Queensland

The Independent Directors unanimously recommend that Shareholders vote in favour of each Resolution in the absence of a superior proposal and subject to the Independent Expert maintaining its conclusion that the Proposed Transaction is fair and reasonable. The Independent Expert has determined that the Proposed Transaction is fair and reasonable to the non-associated Shareholders of the Company. This document is important and requires your immediate attention. Carefully read this document in its entirety and consult your stockbroker, legal adviser, accountant, licensed financial adviser or other professional adviser if you are in any doubt as to what to do.

A Proxy Form is enclosed If you are unable to attend the General Meeting please complete and return the enclosed Proxy Form in accordance with the specified directions.

Importance Notices and Disclaimer

BACKGROUND Notice is given that a general meeting of Shareholders of Aquis Entertainment Limited ABN 48 147 411 881 will be held at Level 2, Icon Energy Building, 2-4 Miami Key, Broadbeach Waters, Queensland on 21 March 2019 at 10:00AM (AEST). The Explanatory Memorandum and Proxy Form, which accompany and form part of this Notice of Meeting, describe in more detail the matters to be considered. The Directors recommend Shareholders read the Notice of Meeting, the accompanying Explanatory Memorandum, Independent Expert’s Report and the Proxy Form in full before making any decision in relation to the Resolutions. DEFINED TERMS Capitalised terms not otherwise defined in this Notice of Meeting have the meaning given in the Glossary contained in the Explanatory Memorandum below. DISCLAIMER AS TO FORWARD LOOKING STATEMENTS This Notice of Meeting (which includes the Explanatory Memorandum, the Independent Expert’s Report and the Proxy Form) contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. These forward looking statements are based on, among other things, the assumptions, expectations, estimates, objectives, plans and intentions of Aquis (and, to the extent applicable, Blue Whale). Forward looking statements are subject to inherent risks and uncertainties. Although Aquis believes that the expectations reflected in any forward looking statement included in this Notice of Meeting are reasonable, no assurance can be given that such expectations will prove to be correct. Actual events, results or outcomes may differ materially from the events, results or outcomes expressed or implied in any forward looking statement. Except as required by applicable law or the Listing Rules, Aquis does not undertake to update or revise these forward looking statements, nor any other statement whether written or oral, that may be made from time to time by or on behalf of Aquis, whether as a result of new information, future events or otherwise. None of Aquis (nor any of its officers, employees or advisers) or any other person named in, or involved in the preparation of, this Notice of Meeting, makes any representation or warranty (express or implied) as to the accuracy or likelihood or fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. You are cautioned not to place undue reliance on any forward looking statement. The forward looking statements in this Notice of Meeting reflect views held only as at the date of this Notice of Meeting. Forward looking information is by its very nature subject to uncertainties and can be affected by unexpected events, many of which are outside the control of the directors of Aquis. Any variation to the assumptions on which the forward looking statements have been prepared could be materially positive or negative to actual performance of Aquis. Information provided by Aquis for the Independent Expert Report included forecasts of future revenues, expenditures, profits and cash flows. Aquis and the Independent Expert do not in any way guarantee or otherwise warrant the achievability of the outcomes contemplated in the forward looking information. This type of information in inherently uncertain. This information represents predictions of future events that cannot be assured and are necessarily based on assumptions, many of which are beyond the control of the company and its management. Actual results may be more or less favourable.

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NO ACCOUNT OF PERSONAL CIRCUMSTANCES AND NO OFFER OF SECURITIES This Notice of Meeting does not take into account the individual investment objectives, financial or tax situation or particular needs of any person. You should seek independent legal, financial and taxation advice before making a decision as to whether or not to vote in favour of the Resolutions. This Notice of Meeting is not an offer, invitation or recommendation to subscribe for or purchase securities in Aquis and is not a disclosure document. This Notice does not constitute investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. RISK FACTORS Shareholders should note that there are many potential benefits to them if the Proposed Transaction proceeds, there are also a number of disadvantages or risk factors will apply if the Resolutions are passed and the Proposed Transaction proceeds. The Section entitled “Key Reasons to Vote Against the Resolutions and the Proposed Transaction” in Section 3 of the Explanatory Statement set out some of these disadvantages and risk factors.

EFFECT OF ROUNDING Certain figures, amounts, percentages, prices, estimates, calculations of value and fractions in this Notice of Meeting may be subject to the effect of rounding. Accordingly, the actual calculation of these figures, amounts, percentages, prices, estimates, calculations of value and fractions may differ from the figures, amounts, percentages, prices, estimates, calculations of value and fractions set out in this Notice of Meeting. NOTICE TO PERSONS OUTSIDE AUSTRALIA This Notice of Meeting has been prepared in accordance with Australian laws, disclosure requirements and accounting standards. These laws, disclosure requirements and accounting standards may be different to those in other countries. The distribution of this Notice of Meeting may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this Notice of Meeting should inform themselves of, and observe, any such restrictions. AUTHORISATION No person is authorised to give any information or make any representation in connection with the Proposed Transaction, as it relates to the Resolutions, which is not contained in this Notice of Meeting. Any information or representation not contained in this Notice of Meeting (other than to the extent that information has been provided by Aquis), may not be relied on as having been authorised by Aquis or the Board in connection with the Resolutions. PRIVACY To assist Aquis to conduct the Meeting, Aquis may collect personal information including names, contact details and shareholdings of Shareholders and the names of persons appointed by Shareholders to act as proxy at the Meeting. Personal information of this nature may be disclosed by Aquis to its share registry, print and mail service providers, advisers and agents of Aquis for the purposes of implementing the Proposed Transaction. Shareholders have certain rights to access their personal information that has been collected. If you would like details of information about you held by Aquis, please contact Aquis on + 61 262 577 074. RESPONSIBILITY FOR INFORMATION The information contained in this Notice of Meeting (except for the Independent Expert’s Report and information regarding Blue Whale and its Associates and their intentions) has been prepared by Aquis and is the responsibility of Aquis. None of Blue Whale, its Associates or its advisers assumes any responsibility for the accuracy or completeness of that information.

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Information concerning Blue Whale, its Associates and their intentions has been provided by Blue Whale and is the responsibility of Blue Whale. None of Aquis, its Associates or its advisers assumes any responsibility for the accuracy or completeness of that information. Sumner Hall Associates Pty Ltd ACN 074 140 177 (the Independent Expert) has prepared the Independent Expert’s Report. The Independent Expert has consented to the inclusion of the Independent Expert’s Report, and references to them, in this Notice of Meeting. The Independent Expert takes responsibility for the Independent Expert’s Report, and references to it, but they are not responsible for any other information contained within this Notice of Meeting. Blue Whale assumes no responsibility for the accuracy or completeness of the Independent Expert's Report. Shareholders are urged to read the Independent Expert’s Report set out in Attachment B carefully to understand the scope of the reports, the methodology of the assessment, the sources of information and the assumptions made. ASIC AND ASX INVOLVEMENT A copy of this Notice of Meeting has been lodged with ASIC pursuant to ASIC Regulatory Guide 74 and with ASX pursuant to the ASX Listing Rules. Neither ASIC, nor ASX, nor any of their officers, take any responsibility for the contents of this Notice of Meeting.

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TABLE OF CONTENTS

Importance Notices and Disclaimer 2

Lead Independent Director Letter 6

Notice of Meeting 8

Additional Information 10

Explanatory Memorandum 12

1 Overview of the Proposed Transaction 12

2 Key Reasons to Vote in Favour of the Resolutions and the Proposed Transaction 17

3 Key Reasons to Vote Against the Resolutions and the Proposed Transaction 18

4 Summary of Transaction Documents 20

5 Information about Blue Whale 25

6 Aquis directors’ interests 27

7 Additional Information for Resolution 1 28

8 Additional Information for Resolution 2 32

Glossary 35

Attachment A - Proxy Form 37

Attachment B - Independent Expert’s Report 39

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Lead Independent Director Letter

Dear Shareholder

On 21 December 2018, Aquis Entertainment Limited (ASX: AQS) (Aquis) announced it had entered into a binding Implementation Deed and related agreements with Blue Whale Entertainment Pty Ltd (Blue Whale) and Aquis Canberra Holdings (Aus) Pty Ltd (ACH).

The transaction contemplates Blue Whale’s acquisition of the outstanding convertible loan and 137.0 million Company shares held by ACH which will, in effect, see Blue Whale replacing ACH as the majority shareholder of Aquis.

In summary, if the transaction is implemented:

 ACH will sell 137.0 million AQS Shares to Blue Whale for consideration of $4 million;

 ACH will transfer its existing Convertible Loan to Aquis to Blue Whale for consideration of $24 million;

 Blue Whale will forgive a minimum of $2 million of the outstanding amount owed by Aquis under the Convertible Loan;

 Blue Whale will convert the remaining outstanding amount under the Convertible Loan to AQS Shares, and consequently Aquis will issue up to 184.9 million AQS Shares at $0.20 per AQS Share to Blue Whale and the Convertible Loan will be extinguished and terminated; and

 Blue Whale will grant a Put Option to ACH which, if the Put Option is exercised, will entitle Blue Whale to acquire the remaining 26.9 million AQS Shares held by ACH.

The Company commissioned an independent expert to provide an opinion on whether the Proposed Transaction is fair and reasonable to the independent shareholders.

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable.

A complete copy of the Independent Expert's Report is provided in Attachment A to this Notice. Shareholders are encouraged to read the Independent Expert’s Report in its entirety before making a decision on how to vote on the Resolutions.

I would like to take this opportunity to briefly outline some of the key reasons why the independent directors of the Company decided to enter into these agreements with Blue Whale and recommend you vote in favour of the Resolutions to effect the transaction, namely:

 The Scheme delivers significant value uplift to existing shareholders

Under the Proposed Transaction, the convertible loan is being converted at A$0.20 per AQS Share. This represents a significant premium to the price at which AQS Shares have traded at any time in the previous 12 months.

In addition, the Proposed Transaction also contemplates a component of debt forgiveness under the convertible loan. This results in even less dilution to minority shareholders than would be the case where the loan is converted in the absence of the Proposed Transaction.

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 Improved capital structure

Immediate conversion of the convertible loan removes a material near-term repayment event. It will mean the Company is debt-free on Completion. It ensures Aquis has an efficient capital structure going forward, enabling the Company to focus on its continued business enhancement and growth ambitions.

 Intention to grow the business

If the transaction is implemented, Blue Whale will replace ACH as Aquis’ majority holder with a shareholding of approximately 86.64% (based on value of the Convertible Note as at 31 December 2018). Blue Whale intends to undertake further upgrades to Casino Canberra, including introduction of new world class restaurants, and further optimisation of the venue’s premium gaming facilities. Blue Whale’s vision is to reinforce Casino Canberra as the entertainment hub of the nation’s capital to drive even greater numbers of visitors. If shareholders approve the Proposed Transaction, Aquis looks forward to working collaboratively with Blue Whale to deliver on its vision for Casino Canberra.

Prior to entering into a binding agreement with Blue Whale, Aquis undertook a process to determine if any superior alternative transactions were viable. The Independent Directors of Aquis view the Proposed Transaction with Blue Whale as superior to any alternatives and ensures shareholder value is maximised.

On the basis of the above, the Independent Directors of your Board unanimously recommend shareholders vote in favour of the Resolutions and intend to vote in favour of the Resolutions in respect of any Shares they hold or control. This recommendation and voting intention statement is made in the absence of a superior proposal and subject to the Independent Expert maintaining its conclusion in respect of the Proposed Transaction.

I encourage you to read this Notice of Meeting and attached Independent Expert Report in its entirety ahead of voting at the upcoming Extraordinary General Meeting.

Mr Russell Shields Independent Director Aquis Entertainment Limited

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Notice of Meeting

Notice is given that a general meeting of Shareholders of Aquis Entertainment Limited ABN 48 147 411 881 will be held at Level 2, Icon Energy Building, 2-4 Miami Key, Broadbeach Waters, Queensland on 21 March 2019.

BUSINESS Resolution 1 – Approval of Blue Whale Parties acquiring a relevant interest and voting power greater than 20%

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“That, for the purposes of item 7 of section 611 of the Corporations Act, and for all other purposes, Shareholders authorise and approve all aspects of the Proposed Transaction, including:

(i) Blue Whale acquiring 137,004,377 AQS Shares from ACH (the Sale Shares);

(ii) Blue Whale being issued up to 184,856,437 AQS Shares by the Company at $0.20 per AQS Share (the Conversion Shares); and

(iii) Blue Whale granting ACH a Put Option in respect of ACH’s remaining 26,867,497 AQS Shares under which (if ACH exercises the Put Option) Blue Whale will be required to acquire such shares,

each as summarised, and on the terms set out, in the Explanatory Memorandum.”

Voting exclusion statement: The Company will disregard any votes cast in favour of Resolution 1 by or on behalf of ACH, the Blue Whale Parties or an Associate of any of those entities.

However, the Company need not disregard a vote if: (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Resolution 2 – Approval of the Company carrying out its obligations in relation to the Proposed Transaction

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“That, subject to the passing of Resolution 1, for the purposes of Chapter 2E and Part 2J.3 of the Corporations Act, and for all other purposes, Shareholders approve the Company undertaking its obligations in relation to the Proposed Transaction under the Implementation Deed, Share Purchase Agreement, Put Option Deed, Loan Transfer Deed and Loan Termination Deed including:

(i) consenting to ACH transferring the Convertible Loan to Blue Whale;

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(ii) the issue by the Company of up to 184,856,437 AQS Shares (Conversion Shares) at an issue price of $0.20 per AQS Share to Blue Whale, on conversion of the Convertible Loan; and

(iii) incurring costs in facilitating the Proposed Transaction including in relation to calling and holding this general meeting and seeking regulatory approval for the Proposed Transaction,

as summarised and on the terms set out in the Explanatory Memorandum.”

Voting exclusion statement: The Company will disregard any votes cast in favour of Resolution 2 by or on behalf of ACH, Blue Whale or an Associate of either of those entities. However, the Company need not disregard a vote if: (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Independent Expert’s Report: Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approvals including the approval required under section 611 Item 7 of the Corporations Act. The Independent Expert’s Report comments on the fairness and reasonableness of the transactions, which are the subject of the Resolutions, to the independent or non-associated Shareholders in the Company.

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Additional Information

How to vote

Shareholders can vote by either:  attending the Meeting and voting in person or by attorney or, in the case of corporate Shareholders, by appointing a corporate representative to attend and vote; or  appointing a proxy to attend and vote on their behalf using the Proxy Form accompanying this Notice of Meeting and by submitting their proxy appointment and voting instructions in person, by post, electronically via the internet or by facsimile, by following the instructions below. Voting in person (or by attorney)

Shareholders or their attorneys who plan to attend the Meeting are asked to arrive at the venue 15 minutes prior to the time designated for the Meeting, so that their shareholding may be checked against the Company's share register and their attendance recorded. In respect of attorneys, in order for documentation to be accepted, a certified copy of the Power of Attorney, or the original Power of Attorney, must be received by the Company in the same manner, and by the same time as outlined for proxy forms below. Voting by a Corporation

A Shareholder that is a corporation may appoint an individual to act as its representative and vote in person at the Meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which it is signed. Voting by proxy

 A Shareholder entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on a poll and also to speak at the Meeting.  The appointment of the proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed and the appointment does not specify the proportion or number of the Shareholder's votes each proxy may exercise, the votes will be divided equally among the proxies (i.e. where there are two proxies, each proxy may exercise half of the votes). Fractions of votes will be disregarded.  A proxy need not be a Shareholder.  The proxy can be either an individual or a body corporate. A body corporate appointed as a Shareholder’s proxy may appoint a representative to exercise any of the powers the body may exercise as a proxy at the Meeting (as summarised below).  To be effective, proxies must be received not less than 48 hours before the time of the Meeting, being 10:00AM (AEST) on 19 March 2019. Proxies received after this time will be invalid.  In accordance with section 250BA of the Corporations Act, the Company specifies that proxies may be lodged using any of the following methods:  In person at: Share Registry – Boardroom Pty Limited Level 12, 225 George Street Sydney NSW  By post at: Share Registry – Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001  electronically: by recording the proxy appointment and voting instructions electronically via the internet at https://www.votingonline.com.au/aqsegm2019. Only registered

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Shareholders may access this facility and will need their Holder Identification Number (HIN) or Securityholder Reference Number (SRN)  or by facsimile: +61 2 9290 9655  The Proxy Form must be signed by the Shareholder or the Shareholder's attorney. Proxies given by corporations must be executed in accordance with the Corporations Act. Where the appointment of a proxy is signed by the appointer's attorney, a certified copy of the Power of Attorney, or the power itself, must be received by the Company at the above address, or by facsimile, and not less than 48 hours before the time of the Meeting, being 10:00AM (AEST) on 19 March 2019. If facsimile transmission is used, the Power of Attorney must be certified. Directing a proxy to vote

 Sections 250BB and 250BC of the Corporations Act apply to voting by proxy. The effect of these sections is that:  if proxy holders vote, they must cast all directed proxies as directed; and  any directed proxies which are not voted will automatically default to the chair, who must vote the proxies as directed.  Therefore Shareholders who return their Proxy Forms with a direction how to vote, but who do not nominate the identity of their proxy, will be taken to have appointed the Chair of the Meeting as their proxy to vote on their behalf.  If a Proxy Form is returned but the nominated proxy does not attend the Meeting, the Chair of the Meeting will act in place of the nominated proxy and vote in accordance with any instructions.  Should any resolution other than those specified in this Notice of Meeting be proposed at the Meeting, a proxy may vote on that resolution as they think fit.  If a proxy is instructed to abstain from voting on an item of business, they are directed not to vote on the Shareholder's behalf on the poll and the Shares that are the subject of the proxy appointment will not be counted in calculating the required majority. Chairman’s intention

Proxy appointments in favour of the Chair, the secretary of Aquis or any Director that do not contain a direction how to vote will be used, where possible, to support each of the Resolutions proposed in this Notice of Meeting, provided they are entitled to cast votes as a proxy under the voting exclusion rules which apply to some of the proposed Resolutions. In exceptional circumstances, the Chair may change this voting intention, in which case an ASX announcement will be made. Shareholders who are entitled to vote

In accordance with paragraphs 7.11.37 and 7.11.38 of the Corporations Regulations and ASX Settlement Operating Rule 5.6.1, the Board has determined that the persons eligible to vote at the Meeting are those people who are registered as Shareholders of the Company as at 7:00pm (AEST time) on 19 March 2019.

By order of the Board

Louise Sheppard Company Secretary Dated: 21 February 2019

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Explanatory Memorandum

This Explanatory Memorandum is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Meeting.

Certain abbreviations and other defined terms are used throughout this Explanatory Memorandum. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations are set out in the Glossary to the Explanatory Memorandum.

The Independent Expert has determined that the Proposed Transaction is fair and reasonable to the non-associated Shareholders of the Company.

1 Overview of the Proposed Transaction

1.1 Proposed Transaction

On 21 December 2018, Aquis announced to the ASX that it had entered into an Implementation Deed with ACH and Blue Whale (Implementation Deed) and related documentation, pursuant to which Aquis, ACH and Blue Whale have conditionally agreed to implement the following steps:

(a) ACH will transfer 137,004,377 AQS Shares (Sale Shares) to Blue Whale for consideration of $4,000,000;

(b) ACH will transfer its loan to the Company (Convertible Loan) to Blue Whale for consideration of $24,000,000;

(c) Blue Whale will forgive $2,000,000 of the outstanding amount owed by the Company under the Convertible Loan;1

(d) Blue Whale will convert the remaining outstanding amount under the Convertible Loan to Shares, and consequently the Company will issue up to 184,856,437 AQS Shares2 at $0.20 per AQS Share to Blue Whale (Conversion Shares) and the Convertible Loan will be extinguished and terminated; and

(e) Blue Whale will grant a Put Option to ACH which, if the Put Option is exercised, will entitle Blue Whale to acquire 26,867,497 AQS Shares held by ACH (Option Shares),

(together, the Proposed Transaction).

Completion of the Proposed Transaction is conditional on approval by the independent or non- associated Shareholders of the Company and ACT gaming regulatory approvals. Blue Whale may also terminate the agreements if limited material adverse events occur.

The key documents signed by the Company to give effect to the Proposed Transaction are further summarised below at Section 4 below.

This Notice of Meeting sets out the Resolutions necessary to satisfy the condition precedent to completion of the Proposed Transaction in respect of independent or non-associated shareholder approvals for the Proposed Transaction. Resolution 1 is also required by law to be passed if the

1 The Implementation Deed and transaction documents provide that Blue Whale will forgive an amount equal to the greater of $2,000,000 and an amount which will ensure Blue Whale’s shareholding in the Company on Completion will not exceed 86.99%. Based on the current loan size and Aquis' current and expected financial performance, the amount to be forgiven will be $2,000,000. 2 This is the maximum number of Conversion Shares which can be issued to Blue Whale under the Implementation Deed. The total number of AQS Shares to be issued will depend on the balance of the Convertible Loan at Completion, which is not known as at the date of this Notice. By way of illustration, 175,144,205 AQS Shares would be issued based on the balance of the Convertible Loan at 31 December 2018 of $37,028,841.

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Proposed Transaction to proceed. Therefore, if Resolution 1 is not approved by Shareholders the Proposed Transaction will not proceed.

The Independent Directors, being all of the Directors other than Mr Tony Fung and Ms Allison Gallaugher, recommend that you vote in favour of all Resolutions at this Meeting.

The Independent Expert has determined that the Proposed Transaction is fair and reasonable to the non-associated Shareholders of the Company.

1.2 Indicative timetable

An indicative timetable for Proposed Transaction is set out below:

Event Date

1 Announcement of Proposed Transaction 21 December 2018 2 Date of this Notice of Meeting 21 February 2019 3 Shareholders Meeting 21 March 2019 4 Satisfaction of Conditions Precedent Anticipated by mid May 2019 5 Completion Anticipated by mid May 2019

Please note each of the dates above are subject to change.

The Proposed Transaction is subject to the Conditions Precedent set out in the Share Purchase Agreement and listed in section 4.2(a) of this Explanatory Memorandum.

It is currently uncertain as to the precise timing of the satisfaction of the Conditions Precedent. However, as at the date of this Notice, the Directors anticipate that Completion will take place before the end of May 2019. However, this is greatly dependent on the timing of satisfaction of the ACT gaming regulatory approvals which can take some time and is inherently uncertain. Therefore, there can be no guarantee as to when, or if, such Conditions Precedent will be satisfied.

1.3 Summary of Resolutions

A summary of the Resolutions is as follows:

Resolution 1

Blue Whale’s acquisition of the Sale Shares, issue of Conversion Shares to Blue Whale and the granting of the Put Option in respect of the Option Shares will result in the Blue Whales Parties acquiring a relevant interest in such shares and as a result its voting power in the Company will increase to more than 20%.

The Corporations Act restricts any person from acquiring a relevant interest in shares in a listed company if such acquisition results in a person’s voting power exceeding 20% unless the acquisition is pursuant to an exemption in section 611 of the Corporations Act. One of these exemptions (item 7 of section 611) applies where the acquisition is approved by a resolution passed at a general meeting where no votes are cast in favour of the resolution by persons proposing to make the acquisition, persons from whom the acquisition is made, and any associates of the acquirer or the transfer.

Accordingly, approval by the shareholders not associated with ACH, Mr Tony Fung and Blue Whale is sought for the proposed acquisition of the Sales Shares and Conversion Shares and the acquisition of the relevant interest acquiring from the Put Option for the purposes of item 7 of section 611 of the Corporations Act.

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Resolution 2

The Company has entered into the Transaction Documents and will need to implement certain steps to give effect to the Proposed Transaction, including consenting to the transfer of the Convertible Loan from ACH to Blue Whale and the issue of Conversion Shares to Blue Whale and will incur costs in relation to facilitating the Proposed Transaction (albeit noting that Blue Whale will reimburse the Company for costs in seeking ACT gaming regulatory approval).

Chapter 2E of the Corporations Act requires a public company to obtain shareholder approval before it can provide a financial benefit to a related party of the public company unless an exemption applies. There is an exemption for a financial benefit that would be reasonable in the circumstances if the public company and the related party were dealing on arm’s length terms.

ACH is a related party of the Company and Blue Whale is also a related party for the purposes of Chapter 2E of the Corporations Act. The Independent Directors of the Company consider that the exemption for transactions on arms’ length terms apply having regard to the manner in which the negotiations for the transaction has been conducted and the potential benefits that will flow to the Company as a result of the Proposed Transaction. It also considers the assistance provided to be immaterial. However, to put the matter beyond any doubt, shareholder approval is sought to confirm there is no issue or residual concern under the related party provisions.

Part 2J.3 of the Corporations Act restricts a company from providing financial assistance to a person to acquire shares in a company unless the assistance, among other matters:

(a) does not materially prejudice the interests of shareholders or the company’s ability to pay its creditors; or

(b) the assistance is approved by the company’s shareholders.

It could be said that the Company in facilitating the transactions by seeking approval from shareholders and the ACT gaming regulatory authorities and incurring costs in such regard amounts to financial assistance (albeit noting that the costs of seeking ACT gaming regulatory approval is to be paid for by Blue Whale). Even if this is the case, the Independent Directors consider that such assistance will not materially prejudice the interests of shareholders or the company’s ability to pay its creditors. However, given the company needs to seek shareholder approval for other reasons, the Company seeks shareholder approval for the financial assistance to put the matter beyond doubt.

Accordingly, Resolution 2 seeks shareholder approval under Chapter 2E and Part 2J.3 of the Corporations Act for the above reasons.

Conditionality of Resolutions

Resolution 1 is required by law for the Proposed Transaction to proceed. Therefore, if Resolution 1 is not approved by Shareholders, the Proposed Transaction will not proceed.

Resolution 2 is not essential to the Proposed Transaction proceeding. The Independent Directors of Aquis consider the financial benefit to ACH, and the financial assistance in relation to acquisition of shares by Blue Whale, arising from carrying out its obligations in relation to the Proposed Transaction is not material, is on arm’s length terms, are reasonable in the circumstances and does not materially prejudice the interests of shareholders or the ability of the Company to pay its creditors. Accordingly, the Independent Directors of the Company do not consider it necessary to seek shareholder approval under the related party provisions or the financial assistance provisions of the Corporations Act but are seeking such approval for the avoidance of any doubt on these matters. In the unlikely event that Resolution 1 was approved but Resolution 2 was not approved, the Independent Directors may consider waiving the relevant shareholder approval condition to completion (on the basis the necessary shareholder approval in Resolution 1 had been obtained) and proceeding with the Proposed Transaction in the above circumstances.

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Further information

Further information and background on the technical aspects of the Resolutions is set out in sections 7 and 8.

1.4 Independent Expert opinion

To assist Shareholders to assess the Proposed Transaction and consider whether to vote in favour of the Resolutions, Aquis appointed Sumner Hall Associates Pty Ltd to act as Independent Expert to prepare the Independent Expert’s Report.

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable to the non-associated Shareholders of the Company. The full Independent Expert’s Report is set out in Attachment B.

The Independent Expert’s Report is an important document and Shareholders are encouraged to read it in full before deciding whether to vote in favour of the Resolutions.

1.5 Overview of Blue Whale

Blue Whale Entertainment Pty Ltd is a newly established entity which is wholly-owned by Mr Michael Gu. The directors of Blue Whale Entertainment Pty Ltd are Mr Michael Gu and Mr Kevin Fan.

Mr Michael Gu is the Group CEO of iProsperity Group, a bespoke advisory company for high net worth investors. Blue Whale is associated with the investment manager of the SB&G Hotel Group (Australia) Fund, which owns a number of hotel properties in Australia including the Crowne Plaza Canberra (located adjacent to Casino Canberra). Blue Whale is focused on developing assets that provide world class experiences and showcase Australia to the world.

Blue Whale currently holds no shares in the Company and neither it nor any of its Associates hold any voting power in the Company.

Further information about Blue Whale is set out in section 5.

If the Resolutions are approved and the Proposed Transaction proceeds, Blue Whale and Mr Michael Gu will control the Company. Under the Implementation Deed, on Completion, Blue Whale may appoint 4 nominees to the board of the Company. At this stage it is proposed that Blue Whale would appoint Mr Michael Gu and Mr Kevin Fan, and may appoint up to two other directors (together, the Proposed Directors). On Completion, Tony Fung and Alex Chow will resign as directors of the Company. As previously announced to the ASX, it is intended that Jessica Mellor will resign as a director effective 21 February 2019. Allison Gallaugher and Russell Shields will continue on as directors following Completion.

The appointment of the Proposed Directors will be subject to Completion occurring and obtaining ACT gaming regulatory approval in respect of each appointment.

As Blue Whale and Mr Michael Gu will control the Company and the board of directors, it is important for the independent shareholders to understand who Blue Whale and Mr Michael Gu are and their intentions for the Company under its control. These matters are set out in section 5.

1.6 Directors’ recommendation and voting intention

After carefully considering all aspects, benefits and risks of the Proposed Transaction and the Independent Expert’s Report, the Independent Directors unanimously support the Proposed Transaction and each of them recommends that Shareholders vote in favour of all Resolutions in the absence of a superior proposal and subject to the Independent Expert maintaining a conclusion that the Proposed Transaction is reasonable.

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The Directors have formed this view for reasons including the following:

(a) the Independent Expert has concluded in the Independent Expert’s Report that the Proposed Transaction is fair and reasonable to Shareholders;

(b) the Proposed Transaction is expected to provide Aquis with the opportunity to materially enhance its growth prospects under the majority ownership of Blue Whale;

(c) the Proposed Transaction is expected to provide increased balance sheet strength and flexibility;

(d) the Conversion Shares are being issued at an attractive valuation to the Company and for independent shareholders;

(e) the Proposed Transaction includes a component of debt forgiveness; and

(f) there has been a significant period of time and opportunity for a superior proposal to emerge. As at the date of this notice, no competing proposal has been received by the Company and the Directors are not aware of any superior proposal that is likely to be made.

Each Independent Director intends to vote in favour of the Resolutions in respect of any Shares they hold or control, in the absence of a superior proposal and subject to the Independent Expert maintaining a conclusion that the Proposed Transaction is reasonable or fair and reasonable.

Further detail regarding the above benefits is set out in section 2. Shareholders should, however, also consider the disadvantages and risks of the Proposed Transaction set out in section 3.1.

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2 Key Reasons to Vote in Favour of the Resolutions and the Proposed Transaction

2.1 Advantages of the Proposed Transaction

(a) Reduce Company debt levels and improve balance sheet strength

As a result of the Proposed Transaction, the Company’s current debt owing under the Convertible Loan will be entirely extinguished. As a result, at the time of completion the Company’s debt and interest costs will be reduced to nil and the Company will have greater balance sheet flexibility and strength to pursue future growth initiatives.

(b) A component of the Convertible Loan will be forgiven

Blue Whale will forgive $2,000,000 of the outstanding amount of the Convertible Loan for the benefit of the Company;

(c) The Conversion Shares are being issued at an attractive valuation to the Company and for independent shareholders

Blue Whale will convert the remaining outstanding amount under the Convertible Loan to Shares at $0.20 per AQS Share. This conversion price reflects a significant premium to the prevailing AQS Share price, resulting in the entire extinguishment of existing Company debt with relatively limited dilution.

(d) New intentions and strategy

Following completion of the Proposed Transaction the Company would be owned by a new majority shareholder, Blue Whale. Blue Whale would hold up to 94.25% of Shares in the Company.

It is expected that new directors will bring to the Company refreshed perspective at the Board level, and the opportunity for refinements to the strategy of the Company. For example, following Completion, Blue Whale intends to consider outsourcing management of the Company to an external manager which would be affiliated with Blue Whale and the iProsperity Group. These plans are set out in further detail in section 5.2(b).

Other than as set out in this Notice, it is Blue Whale’s intention to retain the existing management and continue to operate the business in materially the same manner as currently operated.

(e) The Proposed Transaction is expected to provide Aquis with the opportunity to enhance its growth prospects under the majority ownership of Blue Whale

Blue Whale will look to implement new business opportunities and refine the existing patron offering.

(f) The Independent Expert has concluded in the Independent Expert’s Report that the Proposed Transaction is fair and reasonable to Shareholders

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable to Shareholders, in the absence of a superior proposal, and that in the Independent Expert’s view the financial position of the Company will be “significantly improved” as a result of the Proposed Transaction. See the Independent Expert’s summary and conclusions in section 2 of the Independent Expert’s Report, attached as Annexure A, for further information. The Independent Expert’s Report is an important document and you are encouraged to read it in full.

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3 Key Reasons to Vote Against the Resolutions and the Proposed Transaction

3.1 Key Disadvantages of the Proposed Transaction

(a) Potential for superior proposal

If the Proposed Transaction proceeds, Blue Whale will immediately hold up to 86.99% of Shares in the Company, with a conditional obligation to increase its shareholding up to 94.25%, which may reduce the probability in the future of any control transaction proposal being received by the Company. No control transaction proposal could proceed without Blue Whale reducing their shareholding or without Blue Whale’s support.

As at the date of this Notice, no competing proposal has been received by ACH and the Directors are not aware of any superior proposal that is likely to be made.

(b) Preference for the Company’s current ownership structure and no desire for a change of the majority shareholder

Although Shares in the Company are currently held by a majority Shareholder, ACH, following Completion a majority of Shares will be held by a new Shareholder, Blue Whale. A majority shareholding in the Company would afford Blue Whale with effective control of Shareholder resolutions. Blue Whale will also be able to appoint up to four directors.

(c) Dilution

If the Proposed Transaction proceeds, Shareholders’ interests in the Company will be diluted as a result of the issue of the Conversion Shares. Following completion of the Proposed Transaction Blue Whale will hold up to 86.99% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares), and Blue Whale will be subject to a conditional obligation to increase its shareholding up to 94.25%.

That said, the terms of the Convertible Loan always meant that dilution was possible. Indeed, dilution could have been greater if conversion had of taken place at a lower share price per share (eg comparable with current price on ASX).

(d) Regulatory risks

The Company operates in the casino industry within the Australian Capital Territory. The Company is subject to local laws and regulations in this jurisdiction.

The Proposed Transaction requires approvals to be obtained from the relevant Minister as prescribed under the Casino Control Act 2006 (ACT) and the Commissioner for Fair Trading ACT and may require approval from other Government Agencies. The time frame for approval of casino regulatory requirements is not certain and can take significant time. Obtaining casino regulatory approvals is a Condition Precedent to the Share Purchase Agreement (as discussed at section 4.2(a)(i)). If the required regulatory approvals are not obtained the Proposed Transaction will not proceed.

(e) Limited casino and gaming experience

While Mr Michael Gu and certain associates have had some limited exposure to the global gaming industry, Blue Whale does not currently own or operate any Australian casino businesses. That said, it is Blue Whale’s intention to retain all existing management and continue to operate the business in materially the same manner as currently operated.

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3.2 Intentions for the Company if the Resolutions are not passed

In the event that Resolution 1 is not passed, the Proposed Transaction will not proceed. In these circumstances, ACH and Mr Tony Fung would remain as the controlling shareholders and the Company will continue to focus on its gaming and entertainment operations in Canberra.

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4 Summary of Transaction Documents

A summary of the material transaction documents and contracts which have been entered into between ACH, Blue Whale and the Company to implement the Proposed Transaction and their effect is set out below.

4.1 Implementation Deed

Under the Implementation Deed, each of ACH, Blue Whale and Company agree to cooperate and act in good faith to implement the Proposed Transaction in accordance with the timetable set out in section 1.2. The material terms of the Implementation Deed are as follows:

(a) Board to support Proposed Transaction: The Independent Directors confirm that, in the absence of a superior proposal and subject to the Independent Expert maintaining a conclusion that the Proposed Transaction is reasonable, they will each recommend that Shareholders vote in favour of the Resolutions and they intend to vote in favour of the Resolutions in respect of any Shares in which each director has a Relevant Interest.

(b) Exclusivity: ACH and the Company have agreed to various exclusivity arrangements including "no-shop" and "no-talk" restrictions (subject to customary fiduciary carve-outs for ACH and the Company) for a period up to the earlier of termination of the Implementation Deed, 21 December 2019 or certain other circumstances in which Blue Whale has materially breached the Implementation Deed.

(c) Conduct of business undertakings by the Company: The Company has agreed to certain restrictions in respect of the conduct of its and its subsidiaries' businesses prior to Completion which are customary for a transaction of this nature, including to ensure the business is operated in the ordinary course and to not alter its share capital or constitution without consent from Blue Whale or in certain other circumstances.

(d) Conditions Precedent: The Implementation Deed can be terminated on termination of the Share Purchase Agreement. The Conditions Precedent contained in the Share Purchase Agreement are discussed in further detail at section 4.2(a).

(e) Representations and warranties: The Implementation Deed contains representations and warranties given by each of the Company and ACH to Blue Whale that are customary for an agreement of its type. The Company has given warranties in respect of certain matters such as the accuracy of its financial accounts and compliance with laws and authorisations.

4.2 Share Purchase Agreement

The Share Purchase Agreement provides for the sale of the Sale Shares for the payment of $4 million cash from Blue Whale to ACH. The material terms of the Share Purchase Agreement are as follows:

(a) Conditions Precedent: The Conditions Precedent to the Share Purchase Agreement, and the conditions to the Proposed Transaction as a whole, are as follows:

(i) Casino regulatory approvals: the following licence approvals being obtained:

. approval required from the Minister as prescribed under the Casino Control Act 2006 (ACT) (or his or her delegate) to allow for the change of control of the Casino Licence which will occur as a result of the Proposed Transaction and of each influential person (as defined in the Casino Control Act 2006 (ACT)) connected with the Company in relation to the Casino Licence;

. approvals of the Commissioner of Fair Trading ACT and any other Government Agency which may be required under the Liquor Act 2010 (ACT) which may be

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required to allow the change of ownership which will occur as a result of the Proposed Transaction; and

. any other approval, consent, authorisation, registration, filing, lodgement, permit, franchise, agreement, notarisation, certificate, permission, licence, direction, declaration, authority, waiver, modification or exemption which is required under the Casino Control Act 2006 (ACT) in connection with the Acquisition;

(ii) Shareholder Approvals: the Company obtaining all necessary shareholder approvals pursuant to the ASX Listing Rules, Corporations Act or any other law to allow the Company to lawfully proceed with the Proposed Transaction, being the Resolutions the subject of this Notice;

(iii) No regulatory action: prior to the date of Completion there is not in effect any preliminary or final decision, law, statute, ordinance, regulation, rule, temporary restraining order, preliminary or permanent injunction or other judgment, order or decree issued by any court of competent jurisdiction or government agency or other legal restraint or prohibition preventing, materially restricting, making illegal or restraining the Proposed Transaction; and

(iv) Independent Expert’s Report: The issue of the Independent Expert’s Report by the Independent Expert, and no change or public withdrawal of the conclusions contained in that Independent Expert’s Report by the Independent Expert before the date of Completion.

(b) Termination: Either party may terminate the Share Purchase Agreement if:

(i) any of the Conditions are not satisfied or waived by the following dates:

. in respect of all of the Conditions other than the Casino Regulatory Condition, by 31 March 2019; or

. in respect of the Casino Regulatory Condition, by 21 December 2019,

provided that the party seeking to terminate is not in breach of a material term of the Share Purchase Agreement or the Implementation Deed; or

(ii) if the other party does not take the necessary steps for Completion to occur when required to do so, other than as a result of default of another party, and that failure is not rectified within 10 business days;

(c) Material Adverse Change: Subject to a number of exceptions, Blue Whale has a right to terminate the Share Purchase Agreement if at any time prior to Completion:

(i) solely and directly as a result of the conduct of ACH or Aquis or its subsidiaries, the EBITDA generated by CCL in respect of the year ending 31 December 2019 is less than (or is reasonably likely to be less than) $1,000,000 (excluding all nonrecurring costs and expenses);

(ii) if cash or cash equivalents held by Aquis at any time are less than $3,000,000; or

(iii) the casino licence is revoked, cancelled, or no longer held by Casino Canberra Limited.

(d) Representations and warranties: The Share Purchase Agreement contains representations and warranties given by each of the Company and ACH to Blue Whale that are customary for an agreement of its type.

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(e) Indemnity: The Company must procure the replacement of certain chiller compressors. ACH indemnifies the Company in respect of certain costs incurred in relation to the chiller compressors.

4.3 Loan Transfer Deed, Loan Termination Deed and Loan Conversion Deed

The Loan Transfer Deed and Loan Termination Deed are conditional on, and only take effect following the satisfaction of, the Conditions Precedent, which are discussed in further detail at section 4.2(a).

Pursuant to the terms of the Implementation Deed and Transaction Documents:

(a) ACH will transfer its loan to the Company (the Convertible Loan) to Blue Whale. In this respect, the Loan Transfer Deed provides for the transfer and assignment from ACH to Blue Whale all of ACH’s rights in the Convertible Loan, the Intercompany Loan Agreement and Loan Conversion Deed for consideration of $24,000,000 payable by Blue Whale to ACH;

(b) Blue Whale (as lender) must forgive that amount of the Convertible Loan equal to the greater of:

(i) $2 million; and

(ii) that amount which will ensure that Blue Whale’s shareholding in the Company on Completion must not exceed 86.99% of the Company following the issue of the Conversion Shares; and

(c) following the step above, pursuant to the terms of the Loan Conversion Deed and the Loan Termination Deed, Blue Whale (as lender) will convert the remaining balance of the Outstanding Amount to the Conversion Shares at a price of $0.20 per Conversion Share, provided that Blue Whale’s shareholding in the Company at Completion must not exceed 86.99% following the issue of the Conversion Shares, and consequently the Company will issue up to 184,856,437 AQS Shares, representing approximately 49.96% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares).

The Loan Termination Deed provides for the termination of the Intercompany Loan Agreement, Loan Conversion Deed and the Convertible Loan (including the loan forgiveness), following the implementation of the Proposed Transaction and conversion of the Convertible Loan, as described above.

The Outstanding Amount of the Convertible Loan as at 31 December 2018 was $37,028,841. By way of illustration, a total of 175,144,205 Conversion Shares would be issued to Blue Whale at Completion, based on this balance of the Convertible Loan and following the forgiveness of $2,000,000 of the Convertible Loan. This would result in Blue Whale holding a Relevant Interest in 94.10% of the issued shares in the Company (this includes the Option Shares, which Blue Whale will not own at Completion). The 94.25% Relevant Interest referred to in the Resolutions would be the Relevant Interest which Blue Whale would hold in AQS Shares if the maximum number of Conversion Shares were issued on Completion under the Implementation Deed.

The balance of the Outstanding Amount cannot be known with certainty on the date of Completion, as the Company may elect to repay additional amounts of the Convertible Loan prior to Completion. The Company is permitted to make such repayments provided that no less than $34,000,000 is owing under the Convertible Loan at the date of Completion.

For the reasons set out above, it cannot be known at the date of this Notice the precise number of Conversion Shares which will be issued pursuant to the above steps. However, because Blue Whale’s shareholding cannot exceed 86.99% on Completion, the maximum number of Conversion Shares which the Company can issue is 184,856,437. The approval of Shareholders for the Resolutions below is sought on the basis that the maximum number of Conversion Shares will be issued to Blue Whale.

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The effect of the issue of the maximum number of Conversion Shares to Blue Whale on the capital structure of the Company can be summarised as follows:

Shares Number Percentage

Shares currently on issue 185,141,050 50.04%

Maximum number of Conversion Shares 184,856,437 49.96%

Total Shares upon completion of the 369,997,487 100.00% Proposed Transaction

Importantly, following the conversion of part of the Convertible Loan and forgiveness of the remainder of the Loan, the Convertible Loan will be extinguished and terminated on completion of the Proposed Transaction. Accordingly, at that time, the Company will have no third party debt.

4.4 Put Option

The Put Option Deed provides for the granting of the Put Option by Blue Whale to ACH, pursuant to which ACH may require Blue Whale to purchase the Option Shares on exercise of the Put Option. The material terms of the Put Option Deed are as follows:

(a) Exercise Period: ACH may only exercise the Put Option in the period beginning at the earlier of:

(i) the earlier of 3 years from the date of Completion and 1 February 2022; and

(ii) an announcement or communication being made by the Company to Shareholders in relation to the de-listing of the Company.

(b) Exercise Price: Blue Whale must pay ACH $4,000,000 on exercise of the Put Option. The exercise price is payable to ACH irrespective of whether some or all of the Option Shares cannot be transferred to Blue Whale at the relevant time.

(c) Conditions Precedent: The Conditions Precedent to the completion of the transfer of the Option Shares under the Put Option Deed are as follows:

(i) the Company obtains all approvals, consents, waivers or other authorisations from each of ASIC and ASX necessary for completion under the Put Option Deed to occur (if any);

(ii) the Company obtains approval required from the Minister for Racing and Gaming for the ACT (or his or her delegate), the Commissioner of Fair Trading ACT, or any other approval or authorisation required under ACT Gaming Law necessary for completion under the Put Option Deed to occur (if any); and

(iii) the Company obtains all necessary shareholder approvals required by the Corporations Act and the ASX Listing Rules for completion under the Put Option Deed to occur (if any).

Following Completion, Blue Whale will hold up to 86.99% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares). ACH will hold at least 7.26% of the Company (on a fully diluted basis following the issue of the Conversion Shares), which will be the subject of the Put Option and which, if exercised, can also be acquired by Blue Whale, which would result in Blue Whale holding 94.25% of the issued shares in the Company.

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As a result of the granting of the Put Option by Blue Whale to ACH, the Blue Whales Parties will have a Relevant Interest in the Option Shares, meaning that the total voting power of the Blue Whale Parties in the Company for the purposes of section 610 of the Corporations Act will be up to 94.25% of the Company (on a fully diluted basis following the issue of the Conversion Shares).

ACH may only exercise the Put Option in the period beginning at the earlier of:

 the earlier of 3 years from the date of Completion and 1 February 2022; and

 an announcement or communication being made by the Company to Shareholders in relation to the possible de-listing of the Company.

Following exercise of the Put Option, certain conditions must be satisfied prior to completion of the transfer of Option Shares (Option Completion).

At Option Completion, assuming there has been no equity capital raisings, no change to the capital structure of the Company and Blue Whale has not sold any of its other Shares by the date of Option Completion, then, if the Put Option is exercised, Blue Whale’s shareholding in the Company will increase to above 90%. As a result of increasing its shareholding in the Company to above 90%, Blue Whale would be entitled to compulsorily acquire the remaining Shares in the Company under section 661A of the Corporations Act. This would require the Company to obtain an Independent Expert’s report in relation to the purchase price of the shares under any compulsory acquisition.

Blue Whale will be obliged to acquire the Option Shares if Completion occurs and the Put Option is subsequently exercised by ACH. Beyond the shareholder approval provided at the Meeting in relation to the acquisition of voting power by Blue Whale pursuant to the granting and exercise of the Put Option, no further shareholder approval is proposed in relation to the Put Option. Shareholders should be aware that it is possible that Blue Whale may then be entitled to proceed to the compulsory acquisition of all the Shares of the Company if the Proposed Transaction is implemented, without further Shareholder approval.

4.5 Effect on shareholdings

The Company’s shareholdings as at the date of this Notice is as follows:

Shareholder Total Shares and percentage of shareholding

Aquis Canberra Holdings Pty Ltd 163,871,874 (88.512%) Other shareholders 21,269,176 (11.49%) Total 185,141,050 (100%)

On the basis that completion of the Proposed Transaction occurs on the terms set out in this section 4, including the issue of the maximum amount of Conversion Shares, the Company’s shareholdings will be as follows:

Shareholder Total Shares and percentage Relevant Interest held of shareholding pursuant to Put Option

Aquis Canberra Holdings Pty Ltd 26,867,497 (7.26%) N/A Blue Whale Entertainment Pty Ltd 321,860,814 (86.99%) 26,867,497 Other shareholders 21,269,176 (5.75%) N/A Total 369,997,487 N/A

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5 Information about Blue Whale

5.1 Overview of Blue Whale

Blue Whale Entertainment Pty Ltd was incorporated on 26 July 2018 and is wholly-owned by Mr Michael Gu. The directors of Blue Whale Entertainment Pty Ltd are Mr Michael Gu and Mr Kevin Fan.

Blue Whale currently holds no shares in the Company and neither it nor any of its Associates hold any voting power in the Company. Further, none of Blue Whale or its Associates are related parties of the Company, other than by virtue of the transactions contemplated by this Notice of Meeting.

5.2 Blue Whale intentions for the Company

(a) Composition of the Board of Directors

If the Resolutions are approved and the Proposed Transaction proceeds, Blue Whale and Mr Michael Gu will control the Company. Under the Implementation Deed, on Completion, Blue Whale may appoint 4 nominees to the board of the Company. At this stage it is proposed that Blue Whale would appoint Mr Michael Gu and Mr Kevin Fan, and may appoint up to two additional directors (together, the Proposed Directors). At Completion, Tony Fung and Alex Chow will resign as directors of the Company. It is intended that Jessica Mellor will resign as a director, effective 21 February 2019. Allison Gallaugher and Russell Shields will remain as directors following Completion.

The appointment of the Proposed Directors will be subject to Completion occurring and obtaining ACT gaming regulatory approval in respect of each appointment.

(i) Information about Mr Michael Gu

Michael is the Group CEO of iProsperity Group (iPG), and Executive Director at Atlas Capital and SB&G. Under Michael’s stewardship, iPG’s rapid growth has cemented its place among the top hotel owners in Australia. Today, iPG is recognised as a leading destination for ultra-high net worth investors in real estate development, asset management, global funds management, private equity and venture capital.

Bringing a decade of experience in the telecommunications industry, and holding senior roles at both People Telecom and Planet Tel, Michael has strong marketing insight and judgement which has seen him lead Atlas to become highly recognised for structured investment vehicle funds management.

(ii) Information about Mr Kevin Fan

Kevin is the Head of Investment & Risk for iProsperity Group (iPG), where he spearheads the successful commercial operations of iPG. Chinese-born Kevin has significant experience in investment strategy within Asia where he has worked extensively with high net worth clients in portfolio structure, investment selection and asset allocation. Prior to joining iPG four years ago as Head of Investments, Kevin spent five years at HSBC, where he was a Vice President in their Wealth Management division based in Shanghai. Kevin is now the CEO of Capari Asset Management Pte Ltd, a licensed funds manager in Singapore.

Kevin holds a Bachelor of Science in Environmental Science from Fudan University, Shanghai.

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It is anticipated that the key terms of appointment of the Proposed Directors will be as follows:

 The Proposed Directors will enter into director appointment agreements, which are on terms similar to those of the other Directors of Aquis.

 The Proposed Directors’ remuneration will be consistent with remuneration paid to other non-executive Directors and will fall within the existing non-executive director fee cap as approved by Shareholders.

 The Proposed Directors will also enter into agreements with the Company where they agree to disclose information to the Company to enable it to satisfy its disclosure obligations (regarding details of director’s interests in securities of the company).

(b) Intentions for the Company’s business, assets and employees

It is Blue Whale’s intention to retain the existing management and employees and continue to operate the business in materially the same manner as currently operated, subject to the following considerations.

Following Completion, Blue Whale intends to consider outsourcing management of the Company to an external manager which would be affiliated with Blue Whale and the iProsperity Group. The terms of any such management agreement between the Company and the management company would need to be negotiated and agreed between the parties. If this was to occur, it is expected that the employment of the senior management of the Company would transfer to the management company. Any such external management arrangement would need to be approved by the independent directors of the Company (i.e. independent of those nominated by, or affiliated with, Blue Whale and independent of management) and, to the extent required by the Corporations Act or the Listing Rules, would be subject to an independent shareholder vote (i.e. independent of Blue Whale). Mr Tony Fung has advised Blue Whale that, in his capacity as a significant independent shareholder, he would be supportive of such an arrangement provided it is on arm’s length terms which are commercially reasonable to Aquis.

Blue Whale does not have any intention to transfer any assets to or from the entity and Blue Whale, ACH or their associates, and does not intend to redeploy the fixed assets of the Company.

Aquis has not paid a dividend to date. Blue Whale has advised that, as it seeks to grow the Company, its current intention is that Aquis would not pay any dividends in the short to medium term.

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6 Aquis directors’ interests

6.1 Directors’ interests in the Proposed Transaction

Mr Tony Fung, a director of the Company, owns, via wholly owned subsidiaries, all of the shares in ACH. As a counterparty to the various transactions proposed in this notice, ACH has a material interest in the outcome of the Resolutions. For this reason, Mr Tony Fung has a material personal interest in the Proposed Transactions and the outcome of the Resolutions contemplated in this Notice of Meeting. Mr Fung’s director’s duties to ACH may potentially conflict with his director’s duties to the Company.

Ms Allison Gallaugher is a director of ACH. Given ACH is a party to the Proposed Transaction, Ms Gallaugher’s directors duties to ACH may potentially conflict with her director’s duties to the Company.

For the above reason, each of Mr Tony Fung and Ms Allison Gallaugher have not participated in board meetings of the Company in relation to the Proposed Transaction and decline to make any recommendation in respect of the Resolutions contemplated in this Notice of Meeting.

The remaining independent Directors do not have a material personal interest in the outcome of the Resolutions.

Further, no other special benefits to management (such as the vesting of performance rights or additional payments) are proposed to be triggered by the Proposed Transaction.

6.2 Directors shareholdings

As at the date of this Notice of Meeting, the interests of the Directors in the Shares of the Company were:

Directors AQS Shares

Tony Fung 163,871,874

A Chow -

R Shields -

J Mellor -

A Gallaugher -

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7 Additional Information for Resolution 1

7.1 Background

On completion of the acquisition of the Sale Shares, Conversion Shares and the granting of the Put Option, which is anticipated to occur by May 2019 but may take longer, Blue Whale will obtain a Relevant Interest in, and voting power of, up to 94.25% of the AQS Shares, by virtue of the following:

(a) the transfer of 137,004,377 AQS Shares (Sale Shares) by ACH to Blue Whale, representing approximately 37.03% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares);

(b) the Company will issue up to 184,856,437 AQS Shares to Blue Whale (Conversion Shares) at $0.20 per Company Share, representing 49.96% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares); and

(c) the granting of a put option by Blue Whale to ACH which, if exercised, will entitle and require Blue Whale to acquire ACH’s remaining 26,867,497 AQS Shares (Option Shares), representing approximately 7.26% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares).

The acquisition by Blue Whale of a Relevant Interest in more than 20% of the Share capital of the Company is prohibited by section 606 of the Corporations Act unless an exception applies. Item 7 of section 611 of the Corporations Act sets out an exception for acquisitions approved by non-associated shareholders. Accordingly, under Resolution 1, the Company seeks such shareholder approval for the Proposed Transaction for the purposes of item 7, section 611 of the Corporations Act.

This approval does not allow Blue Whale to acquire a Relevant Interest in more than 20% of the Share capital of the Company other than as set out in this Explanatory Statement or as otherwise allowed by law.

7.2 Section 606 prohibition

Section 606(1) of the Corporations Act prohibits a person from acquiring a Relevant Interest in issued voting shares of a listed company if the person acquiring the interest does so through a transaction in relation to the securities entered into by or on behalf of the person and, because of the transaction, that person’s or someone else’s voting power in the listed company increases from 20% or below to more than 20% (Section 606 Prohibition).

The voting power of a person in a company is determined in accordance with section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting shares in the company in which the person and the person’s Associates have a Relevant Interest.

Under section 608 of the Corporations Act, a person has a Relevant Interest in securities if they are the holder of the securities, have the power to exercise, or control the exercise of, a right to vote attached to the securities or have power to dispose of, or control the exercise of a power to dispose of, the securities.

For the purposes of determining voting power under the Corporations Act, a person (second person) is an “Associate” of the other person (first person) if:

(a) the first person is a body corporate and the second person is:

(i) a body corporate the first person controls;

(ii) a body corporate that controls the first person; or

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(iii) a body corporate that is controlled by an entity that controls the first person;

(b) the second person has entered or proposed to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; or

(c) the second person is a person with whom the first person is acting or has proposed to act, in concert in relation to the company’s affairs.

Members of the corporate groups of each entity having a Relevant Interest will therefore be associates of the relevant entity (and will therefore acquire voting power equivalent to that held by the relevant entity).

If the Resolutions are approved and the Proposed Transaction occurs, it will result in each of the Blue Whale Parties, namely Blue Whale and Mr Michael Gu, obtaining a Relevant Interest in the Sale Shares, Conversion Shares and Option Shares. Consequently, the voting power of each of the Blue Whale Parties will exceed 20% of the voting shares in the Company, which would breach the Section 606 Prohibition unless a relevant exemption applies.

7.3 Item 7 exemption

Item 7 of section 611 of the Corporations Act provides an exemption to the Section 606 Prohibition. This exemption enables the Blue Whale Parties to acquire a Relevant Interest in the Company’s Share capital in excess of 20% if the Shareholders approve the acquisition of that Relevant Interest at a general meeting.

This is the approval which is sought under Resolution 1 which can be passed by the approval of a simple majority of the votes validly cast by Shareholders by a resolution passed by a simple majority of votes cast by shareholders (in person or by proxy or by representative) at a general meeting where no votes are cast in favour of the resolution by persons proposing to make the acquisition, persons from whom the acquisition is made, and any associates of the acquirer or the transfer. Accordingly, approval by the shareholders not associated with ACH, Mr Tony Fung and Blue Whale is sought for the proposed acquisition of the Sales Shares and Conversion Shares and the acquisition of the relevant interest acquiring from the Put Option for the purposes of item 7 of section 611 of the Corporations Act.

Company Shareholders must be given all information known to the Company or Blue Whale or its Associates, that is material to the Shareholders’ decision on how to vote on this Resolution 1. This information is set out in this Explanatory Memorandum.

7.4 Independent Expert’s Report

The Company has engaged the Independent Expert to provide an independent expert’s report relating to the Proposed Transaction (Independent Expert’s Report), to determine whether it is fair and reasonable for shareholders to approve a potential acquisition of a Relevant Interest in voting shares by the Blue Whale Parties that would otherwise contravene the Section 606 Prohibition.

The Independent Expert is of the opinion that the acquisition of Shares by Blue Whale pursuant to the Proposed Transaction is fair and reasonable to Shareholders.

A copy of the Independent Expert’s Report is set out in Attachment B. The Directors recommend that Shareholders read the Independent Expert’s Report in its entirety before deciding how to vote on Resolution 1.

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7.5 Information required for item 7 approvals

The Company is required to give all material information, known to the Company and known to the person proposing to make the acquisition (or their associates), to shareholders to assist them in determining how to vote on this Resolution 1. The information required is set out in item 7 itself and informed by ASIC Regulatory Guide 74:

As discussed at section 4.3, the precise number of Conversion Shares which will be issued will not be known until Completion. However, Blue Whale is not expected to hold more than 86.99% of the Shares in the Company as at Completion.

As a result of completion of the Proposed Transaction, Blue Whale would acquire a Relevant Interest in up to 348,728,311 Shares (the Maximum BW Shares) representing 94.25% of the issued share capital of the Company and total voting power of 94.25% in the Company.

(a) The identity of the person proposing to make the acquisition and their associates

On completion of the Proposed Transaction, Blue Whale will be the holder of the Sale Shares and Conversion Shares and will have a Relevant Interest in (or at least voting power in respect of) the Option Shares. Each of the Blue Whale Parties will acquire a relevant interest of up to 94.25% of the issued share capital of the Company as a result of the Proposed Transaction. The Blue Whale Parties are Blue Whale and Mr Michael Gu.

See section 5 for further information about the Blue Whale Parties and their associates.

(b) The maximum extent of the increase in Blue Whale (and its associates) voting power in the Company, and total voting power of Blue Whale (and its associates), resulting from the Proposed Transaction

As at the date of the Notice, Blue Whale and its associates do not have any voting power in Aquis.

If the Resolutions are passed and the Proposed Transaction occurs, the maximum increase in the voting power of each Blue Whale Party (and their associates) in Aquis that will result is the total voting power that attaches to the Total Blue Whale Shares, being 94.25%.

Other material information required in relation to Resolution 1 is set out elsewhere in this Explanatory Statement and in the Independent Expert’s Report.

7.6 Application of Listing Rule 7.1

Listing Rule 7.1 imposes a limit on the number of equity securities (eg shares or options to subscribe for shares) which an ASX listed company can issue without shareholder approval.

In general terms, a company may not, without prior shareholder approval, issue, or agree to issue equity securities if the equity securities will in themselves or when aggregated with the securities issued by the company during the previous 12 months exceed 15% of the number of fully paid ordinary shares on issue at the commencement of that 12 month period.

Listing Rule 7.2, exception 16 states that Listing Rule 7.1 does not apply to an issue of securities approved by shareholders for the purposes of item 7 of section 611 of the Corporations Act. That approval is sought from Shareholders for the issue of the Conversion Shares under Resolution 1. Accordingly, separate shareholder approval under Listing Rule 7.1 for the issue of the Conversion Shares to Blue Whale is not required.

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Directors’ recommendation

Ms Jessica Mellor and Messrs Alex Chow Yu Chun and Russell Shields (who have no personal interest in the outcome of Resolution 1), being the Independent Directors, recommend that Shareholders vote in favour of Resolution 1. Mr Tony Fung and Ms Allison Gallaugher decline to make a recommendation in respect of Resolution 1 as they each have a material personal interest in the outcome of this Resolution (see Section 6.1 for further information).

The Independent Directors are not aware of any other information that would reasonably be required by the Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 1.

The Chairman intends to vote all available proxies in favour of Resolution 1.

Voting exclusion

A voting exclusion applies to Resolution 1 which is set out in the ‘Business of the Meeting’ section.

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8 Additional Information for Resolution 2

8.1 Overview

As described at section 4, each of ACH, the Company and Blue Whale have agreed to implement the following steps as part of the Proposed Transaction:

(a) ACH will transfer its loan to the Company (Convertible Loan) to Blue Whale;

(b) Blue Whale (as lender) must forgive $2 million the Convertible Loan; and

(c) following the step above, pursuant to the terms of the Loan Conversion Deed, Blue Whale (as lender) will convert the remaining balance of the Outstanding Amount to the Conversion Shares at a price of $0.20 per Conversion Share, provided that Blue Whale’s shareholding in the Company at Completion must not exceed 86.99% following the issue of the Conversion Shares, and consequently the Company will issue up to 184,856,437 AQS Shares, representing approximately 49.96% of the issued share capital of the Company (on a fully diluted basis following the issue of the Conversion Shares).

The Company is also entering into the Transaction Documents, the terms of which are further described at section 4. The Company is undertaking to implement certain steps and must comply with certain obligations under those Transaction Documents in order to implement the Proposed Transaction and will incur costs in relation thereto.

Resolution 2 seeks Shareholder approval to implement the above steps for the purpose of Chapter 2E and Part 2J.3 of the Corporations Act, and for all other purposes.

8.2 Related party transactions

Pursuant to Part 2E.1 of the Corporations Act, a public company must not give a financial benefit to a related party of the public company unless either:

(a) the giving of the financial benefits falls within one of the nominated exceptions to the provision; or

(b) Shareholder approval is obtained prior to the giving of the financial benefit and the benefit is given within 15 months after obtaining such approval.

ACH controls the Company and is a related party to the Company under section 228(1) of the Corporations Act.

Further, section 228(6) of the Corporations Act states that an entity is a related party of a public company at a particular time if the entity believes or has reasonable grounds to believe that it is likely to become a related party at any time in the future. As a result of this provision, the Directors consider that Blue Whale is a related party of Aquis under the Corporations Act, by virtue of the fact that Blue Whale will be the majority shareholder of Aquis following completion of the Proposed Transaction.

8.3 Shareholder Approval for the purposes of the related party provisions

Resolution 2 relates to the transfer the Convertible Loan from ACH to Blue Whale, the proposed issue of Shares to Blue Whale and the Company undertaking its obligations under the Transaction Documents and generally facilitating the Proposed Transaction. It could be said that that the Company in undertaking such steps and facilitating the transactions generally by seeking approval from shareholders and the ACT gaming regulatory authorities and incurring costs in such regard amounts to a financial benefit to the related parties (albeit noting that the costs of seeking ACT gaming regulatory approval is to be paid for by Blue Whale).

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Chapter 2E of the Corporations Act requires a public company to obtain shareholder approval before it can provide a financial benefit to a related party of the public company unless an exemption applies. There is an exemption for a financial benefit that would be reasonable in the circumstances if the public company and the related party were dealing on arm’s length terms.

ACH is a related party of the Company and Blue Whale is also a related party for the purposes of Chapter 2E of the Corporations Act. The Independent Directors of the Company consider that the exemption for transactions on arms’ length terms apply having regard to the manner in which the negotiations for the transaction has been conducted and the benefits which will flow to the Company as a result of the Proposed Transaction. It also considers the assistance provided to be immaterial. However, to put the matter beyond any doubt, shareholder approval is sought to confirm there is no issue or residual concern under the related party provisions.

Accordingly, resolution 2 seeks shareholder approval under Chapter 2E and Part 2J.3 of the Corporations Act for the above reasons.

8.4 Financial assistance in relation to the acquisition of shares

Chapter 2J.3 of the Corporations Act restricts a company from providing financial assistance to a person to acquire shares in a company unless the assistance, among other matters:

(a) does not materially prejudice the interests of shareholders or the company’s ability to pay its creditors; or

(b) the assistance is approved by the company’s shareholders.

It could be said that the Company in facilitating the transactions by seeking approval from shareholders and the ACT gaming regulatory authorities and incurring costs in such regard amounts to financial assistance (albeit noting that the costs of seeking ACT gaming regulatory approval is to be paid for by Blue Whale). Even if this is the case, the Independent Directors consider that such assistance will not materially prejudice the interests of shareholders or the company’s ability to pay its creditors. However, given the company needs to seek shareholder approval for other reasons, the Company seeks shareholder approval for the financial assistance to put the matter beyond doubt.

Accordingly, resolution 2 seeks shareholder approval under Part 2J.3 of the Corporations Act for the above reasons.

8.5 Application of Listing Rule 10.11

Listing Rule 10.11 prohibits listed entities from issuing shares to related parties without the approval of shareholders. As noted above, the Directors consider that the Blue Whale Parties (and their respective directors and subsidiaries) are likely to be deemed to be related parties of Aquis under the Corporations Act despite the fact that the Proposed Transaction has not yet completed.

However, under Listing Rule 10.12, Exception 6, the deeming provision in section 228(6) of the Corporations Act (which deems future related parties to already be related parties) is not applicable for the purposes of Listing Rule 10.11. Listing Rule 10.11 approval of the Proposed Transaction is therefore not required for the issue of the Conversion Shares or any of the other transactions contemplated under the Implementation Deed, because for the purposes of Listing Rule 10.12, Exception 6, the Implementation Deed and the associated transaction documents setting out these arrangements were negotiated and put in place prior to any of those related parties having any shareholding in, or influence over, Aquis (which will occur as and from Completion).

Directors’ recommendation

Ms Jessica Mellor and Messrs Alex Chow Yu Chun and Russell Shields (who have no personal interest in the outcome of Resolution 2), being the Independent Directors, recommend that Shareholders vote in favour of Resolution 2.

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Mr Tony Fung and Ms Allison Gallaugher decline to make a recommendation in respect of Resolution 2 as they each have a material personal interest in the outcome of this Resolution (see Section 6.1 for further information).

The independent Directors are not aware of any other information that would reasonably be required by the Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 2.

The Chairman intends to vote all available proxies in favour of Resolution 2.

Voting exclusion

A voting exclusion applies to Resolution 2 which is set out in the ‘Business of the Meeting’ section.

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Glossary Independent Directors means each of the Directors other than Mr Tony Fung and Ms Allison Gallaugher. $ means Australian dollars. Independent Expert means the independent Accounting Standards has the meaning expert appointed by the Company to prepare given to that term in the Corporations Act. the Independent Expert’s Report, being ACH means Aquis Canberra Holdings (Aus) Sumner Hall Associates Pty Ltd. Pty Ltd ACN 167 934 992. Independent Expert’s Report means the AEST means Australian eastern standard report to be prepared and issued by the time. Independent Expert in connection with the Aquis or Company means Aquis Proposed Transaction and annexed to this Entertainment Limited ABN 48 147 411 881. Notice of Meeting at Attachment B. Associate has the meaning given to that term Intercompany Loan Agreement means the in the Corporations Act. Intercompany Loan Agreement between the ASX means ASX Limited ABN 98 008 624 691 ACH (as lender) and the Company (as and, where the context permits, the Australian borrower) dated on 4 November 2016. Securities Exchange operated by ASX Limited. Listing Rules means the ASX Listing Rules. Blue Whale means Blue Whale Entertainment Loan Conversion Deed means the Amended Pty Limited ACN 627 759 139, an entity and Restated Loan Conversion Deed between wholly-owned by Mr Michael Gu. the Company and ACH dated on 4 November Blue Whale Parties means Blue Whale and 2016, pursuant to which ACH may convert the Mr Michael Gu. Outstanding Amount into AQS Shares. Board means the Directors. Loan Termination Deed means the deed between the Company and Blue Whale to give Casino Licence means the licence issued to effect to the extinguishment of the Convertible CCL pursuant to the Casino Control Act which Loan. permits CCL to operate the Canberra Casino at 21 Binara St, Canberra ACT. Loan Transfer Deed means the deed between the Company, ACH and Blue Whale CCL means Casino Canberra Limited ACN to give effect to the transfer of the Convertible 051 204 114. Loan. Chair or Chairman means the individual Maximum BW Shares means the maximum elected to chair the Meeting, which is proposed number of Shares in which the Blue Whale to be Russell Shields. Parties would have a Relevant Interest at Completion means completion of the transfer Completion, being 348,728,311 AQS Shares. of Sale Shares under the Share Purchase Meeting means the General Meeting Agreement and Complete has a convened by this Notice of Meeting. corresponding meaning. Notice or Notice of Meeting means this Constitution means the Company's Notice of General Meeting. constitution, as amended from time to time. Option Shares means 26,867,497 AQS Convertible Loan means the loan made by Shares held by ACH which are the subject of ACH to the Company under the Intercompany the Put Option granted by Blue Whale to ACH. Loan Agreement. Outstanding Amount means the amount Corporations Act means Corporations Act owing by the Company to ACH under the 2001 (Cth). Convertible Loan from time to time. Directors means the directors of the Proposed Transaction means the: Company. Explanatory Memorandum means the (a) the transfer of the Sale Shares from explanatory memorandum accompanying this ACH to Blue Whale for consideration of Notice of Meeting. $4,000,000; Implementation Deed means the (b) the transfer by ACH of the Convertible implementation deed entered into between Loan and its rights to the Intercompany ACH, the Company and Blue Whale to give Loan Agreement and Loan Conversion effect to the Proposed Transaction. Deed to Blue Whale for consideration of $24,000,000;

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(c) the forgiveness by Blue Whale of a minimum of $2,000,000 of the outstanding amount owed by the Company under the Convertible Loan; (d) the conversion of the remaining outstanding amount under the Convertible Loan by Blue Whale, following which the Company will issue the Conversion Shares to Blue Whale; (e) the termination of the Intercompany Loan Agreement and Loan Conversion Deed; and (f) the granting of the Put Option by Blue Whale to ACH which, if the Put Option is exercised and completion occurs, will entitle and require Blue Whale to acquire the Option Shares from ACH for consideration of $4,000,000. Proxy Form means the proxy form accompanying the Notice of Meeting and annexed to this Notice of Meeting at Attachment A. Put Option means the option granted by Blue Whale to ACH to sell the Option Shares. Put Option Deed means the put option deed entered into between ACH, the Company and Blue Whale to give effect to the Put Option. Relevant Interest has the meaning given to it in section 608 of the Corporations Act. Resolution means a resolution contained in the Notice of Meeting. Sale Shares means 137,004,377 AQS Shares to be sold by ACH to Blue Whale pursuant to the Proposed Transaction. Share Purchase Agreement means the share purchase agreement entered into between ACH, the Company and Blue Whale to give effect to the transfer of Sale Shares from ACH to Blue Whale. Shareholder means a shareholder of the Company. Shares or AQS Shares means fully paid ordinary shares in the capital of the Company. Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules. Transaction Documents means the Implementation Deed, Share Purchase Agreement, Put Option Deed, Loan Transfer Deed and Loan Termination Deed.

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Attachment A - Proxy Form

AQUIS ENTERTAINMENT LIMITED ABN 48 147 411 881

[Shareholder Name Address 1] [Shareholder Name Address 2] [Shareholder Name Address 3] [Shareholder Name Address 4] [Shareholder Name Address 5] [Shareholder number barcode]

Appointment of Proxy

If appointing a proxy to attend the General Meeting on your behalf, please complete the form and submit it in accordance with the directions on the reverse side of this page.

I/We ______of ______, being a Shareholder/Shareholders of Aquis Entertainment Limited, pursuant to my/our right to appoint not more than two proxies, appoint:

Write here the name of the person you are appointing if this The Chair of the person is someone other than the Chair of the Meeting. Meeting OR Write here the name of the person you are appointing as a (mark with an "X") second proxy (if any).

or failing him/her, (or if no proxy is specified above), the Chair of the meeting, as my/our proxy to vote for me/us and on my/our behalf at the General Meeting to be held at Level 2, Icon Energy Building, 2-4 Miami Key, Broadbeach Waters, Queensland and at any adjournment of that Meeting.

This proxy is to be used in respect of ______% of the ordinary Shares I/we hold.

Voting directions to your Proxy

The Chair of the Meeting intends to vote all available undirected proxies in favour of Resolutions 1 and 2 (inclusive). In exceptional circumstances, the Chair of the Meeting may change [his/her] voting intention on any resolution, in which case an ASX announcement will be made. RESOLUTION For Against Abstain* 1. Approval of Blue Whale Parties acquiring a relevant interest and voting    power greater than 20% 2. Approval of the Company carrying out its obligations in relation to the    Proposed Transaction

If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

*If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented. If executed by a company, executed in accordance with section 127 of the Corporations Act 2001 (Cth):

Individual or Shareholder 1 Joint Shareholder 2 Joint Shareholder 3

Sole Director and Sole Company Secretary Director Director/Company Secretary

Date: ______/______2019

______Contact Name Contact Business Telephone/Mobile

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INSTRUCTIONS FOR COMPLETING PROXY FORM

1. Completion of a Proxy Form will not prevent individual Shareholders from attending the General Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy's authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the General Meeting.

2. A Shareholder of the Company entitled to attend and vote is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the Shareholder's voting rights. If the Shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes.

3. A proxy need not be a Shareholder of the Company.

4. If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your Shares are not to be counted in computing the required majority on a poll.

5. Should any resolution, other than those specified in this Notice of Meeting, be proposed at the Meeting, a proxy may vote on that resolution as they think fit.

6. If a representative of a company Shareholder is to attend the Meeting, a properly executed original (or certified copy) of evidence of appointment is required. The appointment must comply with section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment to including any authority under which it is signed.

7. If a representative as power of attorney of a Shareholder is to attend the Meeting, a certified copy of the Power of Attorney, or the original Power of Attorney, must be received by the Company in the same manner, and by the same time as outlined for proxy forms in paragraph 9 below.

8. Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: Where the holding is in one name, the holder must sign.

Joint Holding: Where the holding is in more than one name, all of the Shareholders should sign.

Power of Attorney: If you are signing under a Power of Attorney, you must lodge an original or certified photocopy of the appropriate Power of Attorney with your completed Proxy Form.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this Proxy Form must be signed by that person.

If the company (pursuant to section 204A of the Corporations Act) does not have a Company Secretary, a Sole Director can also sign alone.

Otherwise this Proxy Form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

9. Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address below not later than 10:00AM (AEST) on 19 March 2019 (48 hours before the commencement of the Meeting). Any Proxy Form received after that time will not be valid for the scheduled Meeting.

Hand deliveries: Share Registry – Boardroom Pty Limited, Level 12, 225 George Street, Sydney NSW

Postal address: Share Registry – Boardroom Pty Limited, GPO Box 3993, Sydney NSW 2001

Fax number: +61 2 9290 9655

Online: https://www.votingonline.com.au/aqsegm2019

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Attachment B - Independent Expert’s Report

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Sumner Hall AssocIates Pty Ltd 14 February 2019 ABN 72 074 140 177 AFS Licence No. 231214 The Directors 48 Darling Point Road Aquis Entertainment Limited Darling Point 21 Binara Street NSW 2027 Australia Canberra ACT 2601

Phone +61 2 9328-0475

Email [email protected] Web www.sumnerhall.com Dear Sirs,

Independent Expert’s Report - Proposed Transaction with Blue Whale Entertainment Pty Ltd

1 Introduction

The Directors of Aquis Entertainment Limited (“Aquis Entertainment”) announced on 21 December 2018 that they would seek approval from Aquis Entertainment shareholders for a proposal pursuant to which Blue Whale Entertainment Pty Ltd (“Blue Whale”) will acquire a relevant interest of up to 94.10% of the shares in Aquis Entertainment and replace Aquis Canberra Holdings (Aus) Pty Ltd (“the Aquis Group”) as the controlling shareholder of the company (“the Proposed Transaction”).

Blue Whale is a company owned and controlled by Mr Michael Gu. Mr Gu is also the Chief Executive Officer of iProsperity Group Pty Ltd (“IPG”), a Sydney based funds management and financial advisory company that focuses on providing investment advice to high net worth Chinese and other Asian investors. IPG’s related company, SB&G Hotel Group Pty Ltd, owns a number of hotel properties in Australia including the Crowne Plaza Canberra (located adjacent to Casino Canberra) and several other hotels in New South Wales, Victoria and Queensland.

The Proposed Transaction involves the following:

! Blue Whale will acquire 137,004,377 of the shares in Aquis Entertainment that are currently held by the Aquis Group for $4.0 million (equivalent to 2.9¢ per share);

! Blue Whale will acquire the convertible loan that is owing by Aquis Entertainment to the Aquis Group, with a book value of $37.0 million as at 31 December 2018 and a maturity date of August 2024, for $24.0 million. Blue Whale will forgive a minimum of $2.0 million from the balance of the convertible loan and immediately convert the remaining balance into no more than 175,144,205 new shares in Aquis Entertainment at the conversion price of 20¢ per share; and

! Blue Whale will grant a put option to the Aquis Group over its remaining 26,867,497 shares in Aquis Entertainment1 with an exercise price of $4.0 million, equivalent to 14.9¢ per share, exercisable on the earlier of 1 February 2022 or three years from the completion of the Proposed Transaction and provided that the Aquis Entertainment share price is less than or equal to 14.9¢ per share.

The overall result of the Proposed Transaction is that Aquis Entertainment will be debt free and Blue Whale will immediately hold an 86.64% shareholding in Aquis Entertainment in exchange for a total payment of $28.0 million. Blue Whale will also have a conditional right to increase its shareholding up to 94.10% for an additional payment of $4.0 million to the Aquis Group.

The Proposed Transaction is subject to a number of conditions including:

! all necessary casino licensing approvals being obtained; and ! approval of Aquis Entertainment shareholders.

Shareholder approval for the Proposed Transaction is being sought in accordance with item 7 of section 611 of

1 The put option does not apply to any shares in Aquis Entertainment that the Aquis Group might acquire subsequent to the date of the announcement of the Proposed Transaction.

- 2 -

the Corporations Act (“item 7 of s611”). The Directors of Aquis Entertainment have requested that Sumner Hall Associates Pty Ltd (“Sumner Hall”) prepare an independent expert’s report setting out Sumner Hall’s opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. Sumner Hall is independent of Aquis Entertainment and the Aquis Group and has no other involvement with, or interest in the outcome of, the Proposed Transaction. This report has been prepared to assist the Directors of Aquis Entertainment in making their recommendations to shareholders in relation to the Proposed Transaction.

A copy of this report is to be included in the Notice of Meeting to be sent to Aquis Entertainment shareholders.

2 Summary and Conclusions

In Sumner Hall’s opinion, the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

Sumner Hall has attributed a nil value to 100% of the shares in Aquis Entertainment (assuming that 100% of the shares were freely available for acquisition by a hypothetical, willing but not anxious purchaser) prior to the Proposed Transaction. For the purpose of takeover style analysis, the value of the consideration for Aquis Entertainment shareholders is considered to be the price at which Aquis Entertainment shares are expected to trade following completion of the Proposed Transaction. While any judgment in this regard is by its very nature subject to considerable uncertainty, Sumner Hall has adopted for the purposes of this analysis a post completion Aquis Entertainment share price in the range 3.1-4.8¢ (refer to Section 6.3 of this report for further detail). Because this range of share prices is greater than the underlying value of Aquis Entertainment of nil, the Proposed Transaction is fair.

A transaction that is fair is also, by definition, reasonable. Accordingly, the Proposed Transaction is fair and reasonable. Sumner Hall has, nonetheless, had regard to other factors in considering the reasonableness of the Proposed Transaction. The market for shares in Aquis Entertainment is illiquid and it does not provide a reliable indicator of value or a realistic opportunity for shareholders to dispose of their shares if they so wished. The Directors of Aquis Entertainment have undertaken a thorough process designed to maximise shareholder value and they have concluded that the Proposed Transaction is superior to all of the alternatives that were presented. Completion of the Proposed Transaction will, however, mean that the possibility of an alternative offer for control of Aquis Entertainment will be effectively eliminated because Blue Whale will hold at least 86.64% of the shares in Aquis Entertainment. Nonetheless, the opportunity to put forward an alternative proposal will remain until the meeting to consider the Proposed Transaction is held and the Directors of Aquis Entertainment would consider any such proposal on its merits if and when it arose.

Taking all of these factors into account, Sumner Hall has concluded that the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

An expanded summary of the reasons for Sumner Hall’s opinion is set out below:

! Sumner Hall has attributed a nil value to the shares in Aquis Entertainment (prior to the Proposed Transaction).

Sumner Hall’s valuation of Aquis Entertainment is summarised below:

Aquis Entertainment – Valuation Summary ($ millions) Valuation Range (A$ millions)

Low High Casino business 12.0 18.0 Prepaid casino license fee 1.0 1.0 Surplus cash 3.0 3.0 Surplus land 1.7 3.4 Carryforward tax losses - - Total value of Aquis Entertainment’s assets 17.7 25.4 Convertible loan 37.0 37.0 Net value (deficiency) of Aquis Entertainment (19.3) (11.6) Shares on issue (millions) 185.141 185.141 Net value per share nil nil

Sumner Hall - 3 -

Aquis Entertainment has been valued by aggregating the estimated fair market value of the company’s principal business, Casino Canberra, and the other assets and liabilities of Aquis Entertainment that are surplus to the requirements of the casino business (or not otherwise reflected in the valuation of the casino business). This value is appropriate for the acquisition of Aquis Entertainment as a whole and, accordingly, incorporates a premium for control (or would, if the value was positive). A value determined on this basis would also usually exceed the price at which shares trade on the sharemarket in the absence of a takeover offer or other proposal involving a change in control and assuming that the market is fully informed.

The principal approach to valuing the casino business of Aquis Entertainment has been by reference to capitalised earnings and cash flows (in particular, by reference to capitalisation multiples applied to forecast EBITDA). Sumner Hall has adopted an EBITDA figure in the range $1.5-2.0 million as a sustainable level of EBITDA for the casino business as it is currently being operated (ie, excluding any value for a potential redevelopment of the casino into a significantly different and larger casino, hotel and entertainment property).

Casino Canberra incurred substantial losses for the years ending 31 December 2016 and 2017. Even though visitor numbers and net casino gaming revenue increased during that period, that growth was achieved through a marketing and operating strategy that focused on attracting premium and high stakes players with concomitant costs both in terms of marketing and promotional costs and payroll related expenses. Casino Canberra modified its operating strategy in 2018 to refocus on its broader customer base with less emphasis on high stakes players (although still leveraging the marketing efforts that had been conducted in previous years) and a significantly reduced cost base. This has resulted in a return to profitability in the second half of 2018 with EBITDA on pace to be in the order of $1.5 million on an annualised basis. Management has prepared forecasts for the period beyond 2018 that suggest that EBITDA can be improved further, based on the current operating strategy and modest increases in visitor numbers and/or casino winnings per visitor, to EBITDA in the order of $2.5-3.0 million per annum. Those figures should, however, be viewed with some caution given the short track record to date.

An EBITDA multiple in the range 8.0-9.0 times has been applied to the estimated sustainable EBITDA figure to arrive at a value for the casino business in the range $12.0-18.0 million. These multiples compare to other casino transaction and listed company multiples as summarised below:

Other assets and liabilities have been valued on the basis of their estimated net realisable value. The outstanding balance of the convertible loan from the Aquis Group has been deducted from the aggregate value of the assets of Aquis Entertainment.

Based on the valuation approach that is described briefly above and set out in detail in the valuation section of this report, Sumner Hall has attributed a nil value to the shares in Aquis Entertainment prior

Sumner Hall - 4 -

to the Proposed Transaction (due to the face value of the convertible loan exceeding the assessed value of the casino business and the other assets of Aquis Entertainment).

! Sumner Hall considers it reasonable to expect that Aquis Entertainment shares could trade in the range 3.1-4.8¢ per share post completion of the Proposed Transaction.

Based on recent market practice, the regulatory framework for a transaction such as the Proposed Transaction, where consideration is not paid directly to Aquis Entertainment shareholders (other than the Aquis Group) in the form of a payment for their shares, is that the relevant consideration (in terms of fairness) should be taken to be the price at which Aquis Entertainment shares can be expected to trade following completion of the Proposed Transaction. In this context, it is critical for Aquis Entertainment shareholders to understand that any judgments regarding future sharemarket trading prices are inherently subject to considerable uncertainty and volatility. For the purpose of this analysis, Sumner Hall has adopted a share price of 3.1-4.8¢ as being a likely trading price range for Aquis Entertainment shares in the short term post completion of the Proposed Transaction and in the absence of the announcement of any significant corporate activity or other material price sensitive information.

Sumner Hall’s view reflects the following factors:

! Aquis Entertainment shares have traded in the range 3.2-5.5¢ since the announcement of the Proposed Transaction. However, the market for Aquis Entertainment shares is highly illiquid and the share price cannot necessarily be regarded as a reliable indicator of value. The Aquis Group owns 88.5% of the shares on issue. Even allowing for the short period of time between the date of the announcement and the date of this report, the total volume of share trading has been exceptionally small (at less than 600,000 shares representing less than $25,000 in total value and less than 1/3rd of 1% of the shares on issue);

! the underlying value of Aquis Entertainment, assuming completion of the Proposed Transaction, would be increased from nil to the range 5.3-7.7¢ as summarised below:

Aquis Entertainment – Underlying Value Per Share Before and After the Proposed Transaction Before Proposed After Completion of 2 Transaction Proposed Transaction Low High Low High Casino business 12.0 18.0 12.0 18.0 Prepaid casino license fee 1.0 1.0 1.0 1.0 Surplus cash 3.0 3.0 3.0 3.0 Surplus land 1.7 3.4 1.7 3.4 Carryforward tax losses - - 1.5 2.5 Total value of Aquis Entertainment’s assets 17.7 25.4 19.2 27.9 Convertible loan 37.0 37.0 - - Net value (deficiency) of Aquis Entertainment (19.3) (11.6) 19.2 27.9 Shares on issue (millions) 185.141 185.141 360.285 360.285 Net value per share nil nil 5.3¢ 7.7¢

! non-controlling interests in shares typically trade at a discount to underlying value. All else being equal, this discount can be estimated as the inverse of the premium for control that would be paid in a takeover offer for the company. Premiums for control can vary significantly depending on the circumstances for each particular company but they tend to be in the range 25-35% for takeovers and schemes of arrangement in the Australian market when compared to the pre-offer share trading price3 and a premium of 30% is a widely used rule of thumb. Assuming that a 30% premium for control would apply in the case of Aquis Entertainment, the corresponding share

2 These figures assume that convertible loan is converted into shares based on the outstanding balance of the loan as at 31 December 2018 (and as reduced by $2.0 million in accordance with the terms of the Proposed Transaction). However, the outstanding balance of the convertible loan could increase or decrease depending on working capital and other cash requirements between 31 December 2018 and the date at which the Proposed Transaction is completed. Any such change is, however, unlikely to have a material impact on the number of new shares that would be issued to Blue Whale or the percentage interest in the shares in Aquis Entertainment that would be owned by Blue Whale. 3 Refer, for example, to the Control Premium Study 2017 by RSM Australia Pty Ltd and the KPMG Valuation Practices Survey 2017.

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price (based on the underlying value estimates that are set out above) would be in the range 4.1- 6.0¢ post completion of the Proposed Transaction;

! in this case there is a further important consideration which is that Sumner Hall’s estimate of the underlying value of the casino business is based on forecast levels of profitability that have significant uncertainty attached to them. The forecasts assume that the turnaround in the profitability of the casino business that has been achieved in the second half of 2018 is sustainable and can be improved upon. There can be no guarantee that this will occur and if this turnaround is not sustained then the share price would be adversely affected. Sumner Hall has assumed that the market would apply a further discount in the order of 20-25% to the share price until such time as Aquis Entertainment has achieved a longer track record of casino profitability. Allowing for this further discount results in a share price estimate in the range 3.1-4.8¢ post completion of the Proposed Transaction; and

! Blue Whale will have a shareholding of 86.64% immediately following completion of the Proposed Transaction. There will be little if any change to the lack of liquidity in the market for shares in Aquis Entertainment. The financial position of the company will, however, be significantly improved insofar as the company will be debt free and trading in Aquis Entertainment shares, to the extent that it occurs, is more likely to be a realistic indicator of value than it has been in the recent past.

This expected trading range of 3.1-4.8¢ per share is greater than Sumner Hall’s estimate of the underlying value of Aquis Entertainment of nil prior to the Proposed Transaction and, accordingly, the Proposed Transaction is fair.

! Additional factors have been considered in determining whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

An offer price that is fair is also, by definition, reasonable. Accordingly, the Proposed Transaction is fair and reasonable having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. Sumner Hall has, nonetheless, had regard to other factors in considering the reasonableness of the Proposed Transaction.

The market for Aquis Entertainment shares is highly illiquid and the share price should not be regarded as a reliable indicator of value. The total volume of share trading over the past twelve months has been less than the equivalent of 1% of the total number of shares on issue. Based on Sumner Hall’s assessment of the company in its present form (ie, with the convertible loan in place), the shares have no value due to the size of the outstanding convertible loan amount.

The price of 2.9¢ per share at which Blue Whale will acquire its initial 86.64% interest in Aquis Entertainment from the Aquis Group represents a nil premium over the price at which a large parcel of shares was traded on 3 December 2018. Excluding that day’s trading, Aquis Entertainment shares had traded at 2.0¢ (when they had traded at all) during the 90 days prior to the announcement of the Proposed Transaction. The acquisition price represents a premium of 45% over a share price of 2.0¢. However, these calculations are essentially meaningless because the acquisition price of 2.9¢ per share on which they are based is an artificial price that has been agreed between Blue Whale and the Aquis Group in the context of an overall transaction where the combined amount that has been paid for the convertible loan and the shares is the relevant consideration from the perspective of the Aquis Group. In that context, the Aquis Group has agreed to accept a total payment of up to $32.0 million4 in exchange for the convertible loan (with an amount owing of $37.0 million) and for all of its shares in Aquis Entertainment. The substance of the Proposed Transaction is that the convertible loan is being acquired at a discount to face value and the shares in Aquis Entertainment that are held by the Aquis Group are being acquired for nil consideration.

In mid 2018, following receipt of an unsolicited offer for parts of the company including the casino business and the surplus land but not for the shares in Aquis Entertainment, the Directors of Aquis Entertainment determined that it was in the interests of Aquis Entertainment shareholders to conduct a comprehensive strategic review to examine all options that might be available to maximise shareholder value. Aquis Entertainment and its advisers actively progressed discussions with a number of parties on

4 This figure includes an assumed payment of $4.0 million upon exercise of the put option over the remaining shares in Aquis Entertainment that will be held by the Aquis Group.

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a range of potential transactions, including potential change of control proposals and potential asset sales. The Directors of Aquis Entertainment concluded that the Proposed Transaction is superior to all of the alternatives that were presented.

Aquis Entertainment has agreed to no-shop, no-talk provisions and a break fee arrangement with Blue Whale. Although these types of provisions are no longer unusual in the Australian market and the break fee of $280,000 does not present a material barrier to alternative proposals, these provisions could still inhibit a counter bidder.

Completion of the Proposed Transaction will mean that the possibility of an alternative offer for control of Aquis Entertainment will be effectively eliminated because Blue Whale will hold at least 86.64% of the shares in Aquis Entertainment. However, the opportunity to put forward an alternative proposal will remain until the meeting to consider the Proposed Transaction is held and the Directors of Aquis Entertainment would consider any such proposal on its merits if and when it arose.

In the event that the Proposed Transaction is not approved and Aquis Entertainment remains listed in its present form (with the full outstanding amount of the convertible loan owing), Sumner Hall has no reason to believe that the shares have any value (at least in the short term). In the absence of the Proposed Transaction or some alternative proposal (or some other material price sensitive information), Sumner Hall does not expect that Aquis Entertainment shares would trade for any price at all other than on a purely speculative basis.

! Aquis Entertainment shareholders should also consider certain other matters when making a decision in relation to the Proposed Transaction.

Sumner Hall’s opinion has been formed on the basis of business conditions specific to Aquis Entertainment and other general economic and market conditions that applied during the weeks leading up to the date of this report.

Sumner Hall has been engaged to prepare an independent expert’s report setting out its opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. Sumner Hall has not been engaged to provide a recommendation to Aquis Entertainment shareholders in relation to the Proposed Transaction. Responsibility for a recommendation in relation to the Proposed Transaction rests with the Directors of Aquis Entertainment.

In any event, approval or rejection of the Proposed Transaction is ultimately a matter for individual shareholders based on each shareholder’s views as to the value of Aquis Entertainment, expectations about future market conditions and their particular circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. Aquis Entertainment shareholders who are in any doubt as to the action that they should take in relation to the Proposed Transaction should consult their own professional adviser.

Sumner Hall has prepared a Financial Services Guide as required by the Corporations Act. Sumner Hall’s Financial Services Guide is included as Annexure C to this report.

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3 Scope of the Report

3.1 Purpose of the Report

The Proposed Transaction is subject to the approval of Aquis Entertainment shareholders pursuant to item 7 of section 611 of the Corporations Act (“item 7 of s611”) because it will result in Blue Whale acquiring a relevant interest in up to 94.10% of the shares in Aquis Entertainment. Section 606 of the Corporations Act prohibits a person from acquiring an interest in a public listed company where that person’s voting power would increase from 20% or below to more than 20% or, if that person already has voting power of more than 20%, from increasing that voting power further, except in a limited number of prescribed ways. One of those ways is provided for in item 7 of s611 whereby shareholders can waive the prohibition by passing a resolution to that effect in general meeting.

Regulatory Guide 74 (Acquisitions approved by members), published by the Australian Securities & Investments Commission (“ASIC”), sets out the guidelines for meetings that are held pursuant to item 7 of s611. An explanatory statement (in this case, the Notice of Meeting) must be sent to shareholders explaining the effect of the proposal and setting out such information as is prescribed and any other information that is material to the making of a decision by a shareholder as to whether or not to agree to the proposed transaction. Shareholders are to be provided with a detailed analysis of the proposal. There is no requirement in the Corporations Act for an independent expert’s report to be included as part of the explanatory statement but standard market practice is for an analysis of the proposed transaction to be provided in the form of an independent expert’s report rather than the directors of the company preparing such a report themselves.

Sumner Hall is independent of Aquis Entertainment and the Aquis Group and has no other involvement with, or interest in, the outcome of the Proposed Transaction. A copy of this report is to be despatched to Aquis Entertainment shareholders along with the Notice of Meeting issued by Aquis Entertainment. This report has been prepared by Sumner Hall to assist the Directors of Aquis Entertainment in making their recommendation to shareholders. The sole purpose of this report is an expression of Sumner Hall’s opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. This report should not be used for any other purpose or by any other party. To the extent that this report is used by any party other than the Directors of Aquis Entertainment, this report would constitute general financial product advice only and has been prepared without taking into account the objectives, financial situation or needs of individual shareholders in Aquis Entertainment. Shareholders should consider the appropriateness of the advice having regard to their own objectives, financial situation or needs before acting in relation to their holdings. Shareholders should read the Notice of Meeting issued by Aquis Entertainment in relation to the Proposed Transaction.

3.2 Basis of the Evaluation

Regulatory Guide 111 (Content of expert reports) sets out the principles and matters that ASIC expects an independent expert to take into account when preparing a report for various purposes including a proposal pursuant to item 7 of s611. Proposals that are subject to item 7 of s611 can encompass a wide variety of transaction types. Accordingly, Regulatory Guide 111 differentiates between the analysis that should apply to transactions involving a change in control of a company and other transactions.

In the context of control transactions (whether by takeover bid, scheme of arrangement or some other means), the expert is required to determine whether the transaction is “fair” and whether it is “reasonable” as discrete concepts. For a takeover offer, fairness involves a comparison of the offer price with the value that can be attributed to the securities that are the subject of the offer based on the value of the underlying businesses and assets. Any existing entitlement to securities by the offeror is to be ignored and the value is to be determined on the basis that 100% ownership of the company is available. Reasonableness, by contrast, involves an analysis of factors other than the relationship between price and value that shareholders might consider in determining whether to accept or reject a proposal including:

! the offeror’s shareholding and other significant shareholdings;

! the likelihood of an alternative offer;

! other alternatives that might be available to the company; and

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! the liquidity of the market for the company’s shares.

Fairness is a more demanding criterion than reasonableness. A proposal that is “fair” will also be “fair and reasonable” (both logically and by definition, according to Regulatory Guide 111) but a proposal that is “reasonable” may not necessarily be “fair”. A proposal might be considered reasonable, even if it was not fair, provided that there were valid reasons to accept the offer notwithstanding that the offer price was less than the value of the underlying businesses and assets. For example, an offer price that is in excess of pre-existing market prices but less than full value will not be fair but may be reasonable if shareholders are otherwise unlikely to realise an amount for their shares in excess of the offer price in the foreseeable future.

In this case, the Proposed Transaction involves the acquisition of shares in Aquis Entertainment from the Aquis Group by Blue Whale and the acquisition of a convertible loan (which will be converted into shares in Aquis Entertainment) with the effect that Blue Whale will hold a relevant interest of up to 94.10% of the shares in Aquis Entertainment. Accordingly, Sumner Hall has evaluated the Proposed Transaction as a control transaction and formed an opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

While the Proposed Transaction is considered a control transaction, it is not a takeover offer in the conventional sense. The Proposed Transaction does not involve the making of any offer or the direct provision of any consideration to Aquis Entertainment shareholders other than the Aquis Group. Following completion of the Proposed Transaction, Aquis Entertainment shareholders will continue to hold shares in Aquis Entertainment although the value and likely trading price of those shares will be affected by the terms of the Proposed Transaction. Given that Blue Whale will not provide any consideration directly to Aquis Entertainment shareholders, application of takeover analysis to the Proposed Transaction is problematic. Based on recent market practice, the regulatory framework is that the consideration for the Proposed Transaction should be taken to be the likely trading price for shares in Aquis Entertainment post completion of the Proposed Transaction. Conceptually, this approach assumes that Aquis Entertainment shareholders will be surrendering the opportunity to realise full underlying value for their shares (ie, a value including a control premium). In this context, fairness from the perspective of Aquis Entertainment shareholders requires that they are compensated by an increase in the trading price of Aquis Entertainment shares such that the trading price immediately after the completion of the Proposed Transaction matches or exceeds the full underlying value of Aquis Entertainment prior to the Proposed Transaction.

3.3 Sources of Information

During the course of preparing this report, Sumner Hall held discussions with, and received information from, senior management of Aquis Entertainment and its advisors. In preparing this report, Sumner Hall has utilised and relied upon, without independent verification, the following information:

! a draft Notice of Meeting in relation to the Proposed Transaction dated 7 January 2019;

! the Implementation Deed for the Proposed Transaction dated 21 December 2018 entered into by Aquis Entertainment, Blue Whale and Mr Gu;

! the Annual Reports of Aquis Entertainment for the years ended 31 December 2017, 31 December 2016 and 31 December 2015;

! management accounts of Aquis Entertainment and Casino Canberra for the years ended 31 December 2018, 31 December 2017, 31 December 2016 and 31 December 2015;

! other confidential or non public documents including market research studies, budgets and strategic plans related to the business operations of Casino Canberra;

! press releases, stock exchange announcements and other public filings by Aquis Entertainment; and

! annual reports, stock exchange announcements, investor and analysts’ presentations, brokers’ analysts reports and press clippings on publicly listed companies in the casino and gambling industry and transactions involving acquisitions of casinos and related sharemarket data.

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3.4 Limitations and Reliance on Information

Sumner Hall’s opinion is based on economic, financial market, business trading and other conditions and expectations prevailing at the date of this report. These conditions can change significantly over relatively short periods of time and, if they did change materially, the valuations and opinions expressed in this report could be different.

This report is also based upon financial and other information provided by Aquis Entertainment. Sumner Hall has considered and relied upon this information. Sumner Hall has no reason to believe that any material facts have been withheld. The information provided to Sumner Hall has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. However, Sumner Hall does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or “due diligence” investigation might disclose. Sumner Hall has made what it considers to be appropriate enquiries for the purpose of forming its opinion but due diligence of the type undertaken by companies and their advisers in relation to prospectuses, profit forecasts and acquisitions is beyond the scope of an independent expert’s report. Accordingly, this report and Sumner Hall’s opinion as to whether the Proposed Transaction is fair and reasonable should be considered more in the nature of an overall review rather than a comprehensive audit or detailed investigation.

An important part of the information used in forming an opinion of the kind expressed in this report is comprised of the opinions and judgment of management. This type of information was also evaluated through analysis, enquiry and review to the extent practical. However, such information is not always capable of external verification or validation.

The information provided to Sumner Hall included forecasts of future revenues, expenditures, profits and cash flows. Aquis Entertainment is responsible for this information. Sumner Hall has assumed that any forward looking information was prepared appropriately and accurately based on the information available to management at the time and within the practical constraints and limitations of such forward looking information. It has been assumed that this information does not reflect any material bias, either positive or negative. Based on the enquiries that have been made, Sumner Hall has no reason to believe otherwise. However, Sumner Hall does not in any way guarantee or otherwise warrant the achievability of the outcomes contemplated in the forward looking information. This type of information is inherently uncertain. This information represents predictions of future events that cannot be assured and are necessarily based on assumptions, many of which are beyond the control of the company and its management. Actual results may be significantly more or less favourable.

Preparation of this report does not imply that Sumner Hall has audited in any way the management accounts or other books and records of Aquis Entertainment. It is understood that the accounting information that was provided to Sumner Hall was prepared in accordance with Australian equivalents to International Financial Reporting Standards and in a manner consistent with the method of accounting in previous years unless otherwise noted.

In forming its opinion, Sumner Hall has also relied on representations from the management of Aquis Entertainment that matters such as compliance with laws and regulations are in good standing and will remain so and that there are no material adverse legal proceedings. To the extent that there are legal issues or issues relating to compliance with applicable laws, regulations and policies, Sumner Hall assumes no responsibility and offers no legal opinion or interpretation.

Sumner Hall believes that this report and the opinions included in it must be considered as a whole and that selecting portions of the analysis, without considering all of the factors and analysis together, could create a misleading view of the process underlying the opinion. The preparation of a report of this nature is a complex process and is not necessarily susceptible to partial analysis or summary.

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4 Profile of Aquis Entertainment

4.1 Background to the Company

Aquis Entertainment was incorporated in 2010 as Discovery Resources Limited (“Discovery Resources”) for the primary purpose of exploring for minerals in Africa and elsewhere with the aim of discovering commercially significant mineral deposits. The company’s shares were listed on the ASX in December 2011. Discovery Resources’ first exploration activities were in Namibia involving rare earth elements (eg, lanthanum, actinium, scandium, yttrium, europium, promethium) and transition metals (eg, tantalum, tungsten and vanadium).

Those efforts were ultimately unsuccessful and the company became the vehicle for a backdoor listing of Casino Canberra in April 2015 through the acquisition of Casino Canberra in exchange for the issue of new shares in Discovery Resources to the Aquis Group. That transaction (including an associated capital raising) resulted in the Aquis Group holding an interest of approximately 89% in the company. Discovery Resources was renamed as Aquis Entertainment.

The Aquis Group is controlled by Mr Tony Fung, a Hong Kong resident who is involved in financial services and property investment including significant investments that have been made in Australia over the past twenty years.

The sole business of Aquis Entertainment is the ownership and operation of Casino Canberra.

4.2 Casino Industry Overview

The casino industry forms part of the broader gambling industry. The oldest legal form of gambling in Australia is betting on horse racing that has been conducted since the early to mid 1800s (with legalised lotteries not far behind). Casinos and gaming clubs operated illegally from the time of British settlement until the 1970s.

The first licensed casino in Australia was the Wrest Point Hotel Casino that opened in Hobart, Tasmania in 1973. There are now 13 licensed casinos in Australia with the original opening dates and original owners of each casino shown below:

Australian Casinos – Original Owners and Opening Dates Year Location Original Owner Opened Wrest Point Hotel Casino 1973 Hobart, Tasmania Federal Hotels Group Don Hotel Casino 1979 Darwin, Northern Territory Federal Hotels Group Country Club Casino 1982 Launceston, Tasmania Federal Hotels Group Lasseters Hotel Casino 1982 Alice Springs, Northern Territory Federal Hotels Group Conrad Jupiters Casino 1985 Gold Coast, Queensland Jupiters Trust Burswood Island Casino 1985 Perth, Western Australia Burswood Property Trust Adelaide Casino 1985 Adelaide, South Australia Lotteries Commission of South Australia Breakwater Island Casino 1986 Townsville, Queensland Breakwater Island Trust Casino Canberra 1992 Canberra, ACT Casinos Austria International Limited Conrad Treasury Casino 1995 Brisbane, Queensland Jupiters Trust Reef Hotel Casino 1996 Cairns, Queensland Reef Casino Trust Crown Casino 1997 Melbourne, Victoria Crown Limited Sydney Harbour Casino 1997 Sydney, New South Wales Showboat, Inc.

Apart from racing and casinos, the main forms of legal gambling in Australia are electronic gaming machines (“EGMs” or “pokies”), lotteries, Lotto, keno and, more recently, sports betting5. Racing’s market share has been significantly eroded since the 1980s by the introduction of licensed casinos in the larger city markets and the rapid expansion of EGMs as shown below:

5 A limited amount of legal sports betting has been allowed through TABs since the 1980s. Online sports betting was legalised in the Northern Territory in 1996 and subsequently in the other states and territories.

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The casino industry remained fairly small from 1973 through the 1980s with licensed casinos restricted to regional markets and the smaller state capital cities in Tasmania, Western Australia and South Australia. This changed in the 1990s with the opening of licensed casinos in Brisbane, Sydney and Melbourne (and the expansion of the casino in Perth) as shown below:

Ownership of a number of the licensed casinos has changed hands (and the locations6 and names of some of the casinos have also changed) since they were originally established (more than once for several of them) with the current ownership summarised below:

6 Some of these casinos have moved from temporary to permanent locations since they were originally established and/or moved into newer physical facilities at nearby locations but they have all remained in the same local population area as the original casinos.

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Australian Casinos – Current Owners Year Location Current Owner Opened Wrest Point Hotel Casino 1973 Hobart, Tasmania Federal Hotels Group SkyCity Darwin Casino 1979 Darwin, Northern Territory Delaware North, Inc. Country Club Casino 1982 Launceston, Tasmania Federal Hotels Group Lasseters Hotel Casino 1982 Alice Springs, Northern Territory Lasseters International Holdings Ltd The Star Gold Coast 1985 Gold Coast, Queensland The Star Entertainment Group Limited Crown Perth 1985 Perth, Western Australia Crown Resorts Limited SkyCity Adelaide Casino 1985 Adelaide, South Australia SkyCity Entertainment Group Limited The Ville Resort-Casino 1986 Townsville, Queensland Colonial Leisure Group Casino Canberra 1992 Canberra, ACT Aquis Entertainment Limited Treasury Casino Brisbane 1995 Brisbane, Queensland The Star Entertainment Group Limited Pullman Reef Hotel Casino 1996 Cairns, Queensland Reef Casino Trust Crown Melbourne 1997 Melbourne, Victoria Crown Resorts Limited The Star Sydney 1997 Sydney, New South Wales The Star Entertainment Group Limited

There have been a relatively large number of transactions over the past twenty years involving the ownership of these casinos. The most significant transactions (in reverse chronological order) are described below:

! an agreement was entered into in November 2018 for SkyCity Darwin to be sold by SkyCity Entertainment Group Limited (“SkyCity Entertainment Group”), a New Zealand listed company that operates casinos in New Zealand and is the owner of the Adelaide Casino, to Delaware North, Inc. (“Delaware North”), a privately owned United States based company;

! the Aquis Group acquired Casino Canberra in December 2014;

! Colonial Leisure Group, an Australian private company, acquired the Jupiters Casino in Townsville from The Star Entertainment Group Limited (“Star Entertainment Group”) in October 2014;

! an unsuccessful offer was made by the Aquis Group to acquire the Reef Hotel Casino in March 2014;

! Tabcorp Holdings Limited (“Tabcorp”) demerged its racing and casino business operations by spinning off the casino assets (comprising the Star City Casino in Sydney and its three Queensland casinos in Brisbane, Gold Coast and Townsville) into a separate listed company named Echo Entertainment Group Limited (now Star Entertainment) in April 2011;

! Publishing and Broadcasting Limited (“PBL”), the gaming division of which is now part of Crown Resorts Limited (“Crown Resorts”), made a successful takeover offer for the Burswood Island Casino (now Crown Perth) in April 2004;

! Casinos Austria International Holding GmbH made a successful takeover offer in May 2004 for the shares that it did not already own in Casinos Austria International Limited, the owner of Casino Canberra and a 30% economic interest in the Reef Hotel Casino;

! SkyCity Entertainment Group acquired the MGM Grand Darwin Casino (originally the Don Hotel Casino) from MGM Mirage Inc., a New York Stock Exchange listed company, in February 2004;

! Tabcorp made a successful takeover offer (by way of a scheme of arrangement) for Jupiters Limited (formerly Jupiters Trust) in September 2003 which brought with it ownership of the Conrad Jupiters Casino in Gold Coast, the Conrad Treasury Casino in Brisbane and the Jupiters Casino (originally the Breakwater Island Casino) in Townsville;

! Jupiters Limited, the owner of the Conrad Jupiters Casino in Gold Coast and the Conrad Treasury Casino in Brisbane, made a successful takeover for Breakwater Island Trust, the owner of the

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Breakwater Island Casino in Townsville, in October 2002;

! SkyCity Limited (now SkyCity Entertainment Group) acquired the Adelaide Casino from the Lotteries Commission of South Australia in June 2000;

! Tabcorp acquired Star City Casino in Sydney (originally Sydney Harbour Casino) by making a successful takeover offer for Star City Holdings Limited (a listed company that was majority owned by Showboat, Inc., a New York Stock Exchange listed company) in June 1999; and

! PBL acquired Crown Casino in Melbourne in December 1998 by merging with Crown Limited.

These transactions have resulted in a significant consolidation of the casino industry (not only in terms of the number of casinos owned by individual parties but even more so in terms of market share (to the extent that market share as measured on a national basis is meaningful). Star Entertainment and Crown Resorts own five of the sixth largest casinos in Australia (excluding only the Adelaide Casino) and those casinos account for an estimated 90% of the national market share7.

This consolidation and dominance of the casino industry by Star Entertainment and Crown Resorts will become further entrenched with the expected opening of two new casinos in 2021 and 2022:

! Crown Resorts is set to complete and open a new casino8 at Barangaroo in Sydney in 2021; and

! Star Entertainment is set to complete and open a new casino at Queen’s Wharf, Brisbane in 2022 (for which the casino license will be transferred from the Treasury Casino and that property will be repurposed).

The relative size9 and location of the 13 licensed casinos that are currently operating in Australia is shown below:

The Crown Melbourne casino, Crown Perth casino and Sydney Star casino are part of major hotel,

7 Source: IBISWorld Industry Report – Casinos in Australia, February 2018. 8 This casino will be for premium and high stakes gamblers only but the development also includes hotels, restaurants and other casino resort related activities. 9 The size of the bubbles for Star Sydney and Crown Melbourne have been scaled down because they would otherwise be too large for the scale of this map (or, conversely, some of the other bubbles would be too small to be legible).

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resort and casino complexes that are operating on a global scale. The remaining casinos range from medium sized operations (in Adelaide, Brisbane and Gold Coast) to relatively small casinos in regional tourism markets and small capital cities.

Casino Canberra is among the smallest casinos in terms of gambling expenditure, even when compared to the five casinos that operate in the regional tourism markets and capital cities of Tasmania, the Northern Territory and South Australia, as shown below:

Apart from the relatively small population base for the ACT, total casino expenditure at Casino Canberra is also limited by virtue of being the only Australian casino that is not currently allowed to offer EGMs (and one of only two casinos that do not have their own hotel accommodation). A comparison of the facilities that are available at each of the Australian casinos is set out below10:

Australian Casinos – Gaming and Hotel Facilities Gaming Hotel EGMs Other Facilities Tables Rooms Crown Melbourne 500 2,600 1,604 Bars, restaurants, cinemas, ballroom, conference rooms, retail outlets Crown Perth 350 2,500 1,188 Bars, restaurants, theatre, ballroom, convention centre, retail outlets The Star Sydney 200 1,500 352 Bars, restaurants, lyric theatre, night club, ballroom, conference rooms, retail outlets SkyCity Adelaide Casino 90 970 - Bars and restaurants, convention centre The Star Gold Coast 88 1,100 592 Bars, restaurants, theatre, convention centre and retail outlets Treasury Casino Brisbane 80 1,300 125 Bars, restaurants, banquet hall, retail outlets Casino Canberra 40 - - Restaurant and bar Pullman Reef Hotel Casino 38 500 128 Bars and restaurants, night club, conference centre, retail outlets SkyCity Darwin Casino 33 600 152 Bars and restaurants, night club, convention centre The Ville Resort-Casino 30 370 194 Bars and restaurants, convention centre, apartments and marina Wrest Point Hotel Casino 29 650 269 Bars and restaurants, convention centre Country Club Casino 25 500 200 Convention centre, golf course Lasseters Hotel Casino 21 200 205 Bars and restaurants, convention centre

Casino Canberra, like all casinos, seeks to attract a range of customers including interstate visitors, international tourists and high stakes gamblers both from overseas and interstate. However, unlike

10 These figures are in some cases approximate, as disclosed by each of the individual casino operators.

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some of the other small casinos that are located in regional tourism markets (eg, the Pullman Reef Hotel Casino in Cairns or the SkyCity Darwin casino), Casino Canberra relies on the local population for the majority of its custom. Unlike those other casinos, Casino Canberra also relies solely on table gaming expenditure (and some food and beverage expenditure) rather than also being able to generate revenue from EGMs and hotel accommodation. Accordingly, Casino Canberra is in direct competition with other venues that offer gambling opportunities for the local market to a greater degree than other Australian casinos.

Total gambling expenditure in the ACT from 1976 to 2017 is summarised below11

EGMs and some other forms of non-casino gaming (including lotteries and Lotto) were legalised in the ACT in 1977. EGMs soon came to dominate gambling expenditure in the ACT, even moreso than on a national basis. Casino gambling was legalised in the ACT in 1988 with the passage of the Casino Control Act. That legislation stipulated that there could be only a single casino license in force in the ACT at any point in time. That legislation also effectively limited the casino to table gaming by excluding EGMs from the definition of “authorised games”12.

A temporary casino was established in Canberra in 1992 and Casino Canberra opened on the current site in 1994 after a two year construction period. Casino Canberra’s casino license, issued under the Casino Control Act, expires in 2091.

Casinos are highly regulated by State and Territory governments in Australia through various forms of legislation and other regulation including, in the case of Casino Canberra, the Gambling and Racing Control Act, the Gaming Machines Act, the Casino Control Act, the Casino Control Regulation and the Deed between the ACT, the ACT Gambling and Racing Commission and Casino Canberra dated 23 December 2014.

The objectives of these regulations (with respect to the casino) are to ensure that:

! ownership and operation of the casino is conducted by appropriate persons (subject to regulatory checks and approval in relation to probity, financial standing, relevant managerial experience and business reputation);

! the community can have confidence that the casino is a legitimate and safe place to visit;

! gaming is conducted honestly and that casino management and operations remain free from

11 Sports betting statistics were not available for the ACT. 12 The casino was not authorised under the Gaming Machines Act to operate EGMs and the Casino Control Act did not provide for any exception in relation to EGMs. This effective prohibition on EGMs has since been superceded by the Casino (Electronic Gaming) Act 2017 that entitles Casino Canberra to apply to operate up to 200 EGMs subject to approval by the ACT Gambling and Racing Commission.

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criminal influence;

! the potential for the casino to cause harm to the public interest and to individuals or families is contained and controlled; and

! employment, tourism and economic development in the ACT are promoted.

Aquis Entertainment made an unsolicited proposal to the ACT Government in August 2015 for a major redevelopment of Casino Canberra and its adjoining land to create an integrated casino, hotel and entertainment complex at a proposed cost of over $300 million. The proposal envisaged:

! a new and expanded casino; ! an expansion of the neighbouring National Convention Centre Canberra (“NCCC”); ! two new hotels; ! restaurants, bars, a night club and other entertainment facilities; ! retail outlets; and ! additional car parking and improved street access.

The proposal was subject, inter alia, to:

! amendments to the relevant gambling legislation to allow Casino Canberra to increase the number of table games permitted at the casino and to operate up to 500 EGMs at the casino; and

! granting of the management rights for the NCCC to Aquis Entertainment upon expiry of the current manager’s term in 2018.

This proposal was progressed during 2016 and 2017 with conditional approval being given by the ACT Government in November 2017 for Casino Canberra to operate up to 200 EGMs as part of the redevelopment.

The ACT Government also enacted the Casino (Electronic Gaming) Act 2017 that provided for the operation of EGMs at the casino, subject to specific authorisations, commencing from May 2018. This Act provides that Casino Canberra can apply to the ACT Gambling and Racing Commission for an authorisation certificate to operate up to 200 EGMs at the casino. The application must be accompanied by a Social Impact Assessment that sets out the likely economic and social impact of the operation of EGMs at the casino. The ACT Gambling and Racing Commission can then issue an authorisation certificate if it is satisfied that it was appropriate to do so.

Aquis Entertainment announced in December 2018 that progress on the unsolicited redevelopment proposal had been slow and that certain decisions made by the ACT Government, including the limit of 200 EGMs at the casino, made it difficult to progress the original proposal. In addition, Aquis Entertainment could not provide detailed information to the ACT Government in relation to financing of the redevelopment proposal without the ACT Government providing assurances sought by Aquis Entertainment with respect to key aspects of the proposal including tax rates, license fees and the legislative framework. In that context, the ACT Government has advised the company that it has ceased the unsolicited proposal process. However, the ACT Government also confirmed that there were potential future benefits for Canberra through a casino redevelopment and invited Aquis Entertainment to continue to work with the ACT Government in the pursuit of the redevelopment of Casino Canberra.

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4.3 Operating Results for Aquis Entertainment

The audited historical operating results of Aquis Entertainment for the three years ended 31 December 2017 and the unaudited results for the year ending 31 December 2018 are summarised below:

Aquis Entertainment – Operating Performance ($000s) Year ended 31 December Year ending 31 December 2015 2016 2017 2018 (audited) (audited) (audited) (unaudited)

Casino gaming revenue, net of casino tax 16,017 19,448 20,827 20,832 Food and beverage revenue 1,743 2,251 2,655 2,333 Other revenue 146 149 426 329 Total revenue 17,906 21,848 23,908 23,494 Salaries and wages 17,917 18,331 18,646 16,426 Marketing and promotion 1,829 3,140 4,352 1,694 Other operating expenses 2,333 4,058 4,505 4,111 Listed company and other corporate costs 606 2,164 1,155 361 Total expenses 22,685 27,693 28,658 22,592 EBITDA (loss) from operations (4,779) (5,845) (4,750) 902 Depreciation and amortisation 519 1,144 1,776 1,768 EBIT (loss) from operations (5,298) (6,989) (6,526) (866) Non-recurring losses and expenses (1,505) (179) - (326) Total profit (loss) before interest and tax (6,803) (7,168) (6,526) (1,192) Net interest expense 583 1,575 1,788 1,455 Net profit (loss) before tax (7,386) (8,743) (8,314) (2,647)

In addition to the usual corporate income tax, payroll taxes and GST, Casino Canberra is subject to a casino tax of 10.9% on all casino revenue except for program play13 (which attracts a casino tax of only 0.9% on the basis that this activity attracts expenditure to the ACT that would not otherwise occur). Casino gaming revenue is shown net of casino tax in the table above.

Casino gaming revenue increased significantly from 2015 to 2016 (a 21% increase) and has grown steadily since then. The increase in 2016 was achieved despite the casino being temporarily relocated (to an upstairs part of the casino building) and reduced in size for a period of four months from February 2016 to May 2016 during which time the refurbishment took place.

Casino gaming revenue is a function of three principal factors being:

! the number of visitors to the casino;

! the amount that each visitor wagers (referred to as the “drop”)14; and

! the amount that the casino wins (referred to as the “hold”).

Growth in the first two factors can be influenced, to some extent, by the marketing and promotion that Casino Canberra undertakes and the ability of Casino Canberra management to target and respond to customer interests and requirements (both in relation to individual high stakes customers and the broader casino and gambling market). The third factor (the hold) is by and large constant over the long term. Recent casino gaming revenue results for Casino Canberra are summarised below:

13 Program play refers to the use of a program of ancillary activities and benefits (eg, event tickets, hotel rooms, meals and other entertainment options) that are offered to specifically identified high stakes players from interstate and overseas who agree in return to spend a specified significant minimum amount wagering at the casino over the period of time during which they visit Canberra. 14 There is a potentially significant measurement issue associated with table gaming drop. The drop can only be measured by the value of the gaming chips that are originally issued to each visitor rather than the value of the originally issued gaming chips that are wagered at the gaming tables (which will include originally issued chips, but not necessarily all of them, and chips that are re-wagered from winnings). Accordingly, the figures for total gaming drop that are capable of being recorded by the casino (being the value of the chips that are originally issued) will be overstated to the extent that some of those chips are never put at risk. This differential is sometimes referred to as “false drop” but it cannot be reliably measured.

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Aquis Entertainment – Casino Gaming Revenue 2013 2014 2015 2016 2017 2018 Visitors 232,981 191,159 213,402 203,354 246,638 236,889 Casino winnings per visitor $76 $83 $93 $119 $105 $110 Table gaming revenue ($000s) 16,093 14,424 18,144 21,962 23,496 23,699 Casino tax ($000s) (1,890) (1,694) (2,127) (2,514) (2,669) (2,867) Casino gaming revenue, net of casino tax 14,203 12,730 16,017 19,448 20,827 20,832

The trend in visitor numbers and the relationship between visitor numbers and net casino gaming revenue is shown graphically below:

The number of visitors per month was higher in 2011 that it has been during the period that Aquis Entertainment has owned Casino Canberra. However, visitor numbers had declined significantly from those 2011 highs by the time that Aquis Entertainment acquired the casino in December 2014 (in part due to the closure of a nightclub that was included in the visitor numbers). Apart from the period from February to May 2016 when the casino was relocated and reduced in size for the refurbishment, visitor numbers have steadily increased and returned to levels significantly above the low points reached in 2014. Average visitor levels are now approximately 20,000 per month. More importantly, casino gaming revenue has increased significantly. This reflects a significant increase in casino winnings per visitor as shown below:

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Average casino winnings have been consistently over $100 per visitor since the acquisition of Casino Canberra by Aquis Entertainment (compared to average casino winnings in the order of $80 per visitor prior to that time). This reflects both a different approach to management of the casino as well as the refurbishment of the casino (from 2016 onwards).

During the period 2016 and 2017, casino winnings were volatile, varying in a range of $50-150 per visitor (while still averaging around $100 per visitor) whereas casino winnings have been more consistent during 2018 (varying in a range of $90-120 per visitor). This reflected the circumstances where Aquis Entertainment initially pursued a marketing strategy that was heavily focused towards attracting high stakes visitors through the use of promotions, prizes and giveaways. Although that resulted in higher average winnings it also resulted in higher volatility and significantly higher operating expenses.

Aquis Entertainment revised its marketing strategy in 2018 to focus less on intermittent high stakes visitors and more on a steady stream of relatively high spending gamblers (with regular, low spending entertainment oriented visitors catered for during both periods of time). Average winnings were maintained at approximately the same level but operating expenses were reduced significantly. Marketing and promotional costs were in the order of $3-4 million per annum during 2016 and 2017 but have been reduced to less than $2 million without an adverse impact on either visitor numbers or average casino winnings.

In addition to the costs of operating the casino business itself, Aquis Entertainment incurs substantial costs as a listed company (eg, directors fees, shareholder communications and the like). These costs have been identified as a separate line item in the profit and loss statement that is set out above. Furthermore, Aquis Entertainment incurred significant costs during 2016 and 2017 relating to the $300 million casino, hotel and entertainment precinct redevelopment proposal. Those costs are also shown in the line item for listed company costs and included consulting fees, legal costs and a $1.6 million sponsorship deal (spread over two years) with the ACT Brumbies rugby union team. Excluding the costs associated with the redevelopment proposal, the additional costs incurred by Aquis Entertainment by virtue of being a listed company are now in the order of $0.5 million per annum.

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4.4 Aquis Entertainment’s Financial Position

The audited balance sheets of Aquis Entertainment as at 31 December 2016 and 31 December 2017, together with the unaudited balance sheet as at 31 December 2018, are summarised below:

Aquis Entertainment – Balance Sheets ($000s) 31 December 31 December 2016 2017 2018

(audited) (audited) (unaudited)

Cash at bank and on hand 5,184 4,658 4,676 Receivables, inventories and other current assets 1,176 802 572 Prepaid casino license fee 2,750 1,858 966 Casino land, building, plant and equipment 14,752 13,434 12,004 Casino license, net of amortisation and impairment 1,920 1,894 1,868 Deferred tax assets 5,498 - - Other assets 4 4 4 Total assets 31,284 22,650 20,090 Creditors and accrued expenses 4,949 5,200 5,083 Funds employed in the casino business 26,335 17,450 15,007 Convertible loan (including capitalised interest)15 26,349 30,705 30,90916 Net assets (deficiency) (14) (13,255) (15,902) Shares on issue (000s) 185,141 185,141 185,141 Net assets (deficiency) per share - (7.2¢) (8.6¢)

The company had net assets per share of essentially nil as at 31 December 2016 with total funds employed in the casino business of $26.3 million and amounts owing to the Aquis Group (in the form of a convertible loan) of $26.3 million. This position worsened significantly in 2017, to a negative net assets position of $13.2 million (equivalent to negative 7.2¢ per share), as a result of an accumulated loss from operations of $8.3 million and a writeoff of the deferred tax asset of $5.5 million that had been recognised in the balance sheet in the previous year. The deferred tax asset consisted primarily of carryforward tax losses that were no longer considered able to meet the accounting test for recognition whereby it must be probable that future taxable profit will be available against which the losses can be utilised.

Aquis Entertainment has had cash at bank and on hand in the range $4-5 million during this period. This amount of cash is well in excess of the working capital needs for the casino business. However, the terms and conditions of the Deed that was entered into with the ACT Gambling and Racing Commission at the time of the acquisition of Casino Canberra require Aquis Entertainment to maintain in its accounts at all times a minimum of $3.0 million in liquid assets that are not otherwise used in the day to day operations of the casino business. Aquis Entertainment maintains a separate bank account of $3.0 million in order to meet this requirement.

The terms on which the ACT Gambling and Racing Commission agreed to transfer the casino license for Casino Canberra from the previous owner to Aquis Entertainment also required Aquis Entertainment to prepay the casino license fee for a period of five years. The annual casino license fee is approximately $0.9 million and this prepayment totaled approximately $4.5 million in cash. This prepaid license fee is recorded as an asset on the balance sheet and reduced by the amount of the license fee that is recognised as an operating expense in each year.

The two largest assets of Aquis Entertainment are the casino land and building (and the associated furniture and fixtures including gaming tables) and the casino license. Both of these assets have been written down from their historical cost in order to recognise impairment in their value since the date of

15 The figures that are shown in the balance sheet for the convertible loan include principal plus capitalised interest less a portion of the loan that is defined as equity (rather than debt) for accounting purposes. For valuation purposes (as discussed in Section 5 of this report), the full amount owing in relation to the convertible loan, including principal and capitalised interest, has been taken into account irrespective of the accounting treatment. 16 The full balance of the convertible loan as at 31 December 2018, including principal and capitalised interest and without the accounting based reclassification of a portion of the convertible loan from debt to equity, was $37.0 million.

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acquisition.

The company’s principal liability is a convertible loan owing to the Aquis Group. The proceeds from this loan, which has been amended and increased several times over the past few years, have been used to fund the company’s initial cash requirements for a minimum of $3.0 million in liquid assets and a five year prepayment of $4.5 million for the annual casino license fee, the $13.6 million casino refurbishment that was undertaken in 2016 and funding of annual operating losses in the period 2015 to 2017.

The key terms and conditions of the loan are:

! the loan facility limit is $36.45 million;

! the maturity date for the loan is 25 August 2024;

! the full amount of the loan, together with any capitalised interest, is repayable in full in cash on the maturity date;

! interest is payable at the lower of the Bank Bill Swap Bid Rate plus 2% and the RBA’s indicator lending rate for “small business; variable; residential secured and term rates”; and

! the Aquis Group, at its sole election, can convert any portion of the outstanding balance of the loan into new fully paid ordinary shares in Aquis Entertainment at any time at a conversion price of 20¢ per share.

The outstanding balance of the convertible loan as at 31 December 2018 was $37.0 million consisting of $33.4 million in principal and $3.6 million in capitalised interest. This differs from the amount that is shown in the balance sheet due to the accounting treatment of the conversion option whereby a portion of the outstanding balance is accounted for as equity rather than debt.

4.5 Capital Structure and Shareholders of Aquis Entertainment

Aquis Entertainment had the following securities on issue as at 6 November 2018:

! 185,141,050 fully paid ordinary shares that are listed and trading on the ASX; and

! no other options, performance rights or other securities.

The major shareholders in Aquis Entertainment as at 6 November 2018 are set out below:

Aquis Entertainment – Major Shareholders Number of Fully Paid Percentage Shares of Total

Aquis Group 163,871,874 88.5% Landsec Pty Ltd 1,444,799 0.8% Mr Paul Manka 1,325,079 0.7% Mr Honghao Sun 1,213,625 0.7% Mr Thomas Pickett 1,200,000 0.6% Taralake Pty Ltd 790,329 0.4% Life in Verse Pty Ltd 545,153 0.3% Mr Denis Muddle 500,000 0.3%

Subtotal – major shareholders 170,801,859 92.3% Other shareholders with less than 500,000 shares (less than 500 holders) 14,250,191 7.7% Grand total 185,141,050 100.0%

The Aquis Group is the controlling shareholder of Aquis Entertainment with an 88.5% interest. The remainder of the share register is widely held with approximately 500 small shareholdings of less than

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1% with most of those shareholdings significantly less than 1%.

4.6 Sharemarket Performance of Aquis Entertainment Shares

The Aquis Entertainment share price and volume of trading for the five years since January 201417 are set out graphically below:

Prior to the announcement on 17 April 2015 that Discovery Resources would be used as the vehicle for a backdoor listing of Casino Canberra, the Discovery Resources share price had traded in a wide range of 4-12¢ per share. The share price rose sharply (but with volatility) to trade as high as 19¢ during the period in which the details of the proposed backdoor listing were disclosed along with plans for a significant capital raising at 20¢ per share to fund the operations of Casino Canberra. A trading halt was imposed during the period 10 July 2015 to 24 August 2015 pending the outcome of the shareholders meeting called to vote on the proposal.

The Aquis Entertainment share price declined sharply following the lifting of the trading halt on 25 August 2015. The share price continued to fall despite announcement of the unsolicited proposal to the ACT Government for a $300 million redevelopment of the casino precinct and the announcement of a fast tracked $13.6 million refurbishment of the existing casino.

For the next two years, the Aquis Entertainment share price declined gradually, trading in the range 6- 8¢ for most of 2016 (including the period during which the refurbishment of the casino took place) and in the range 4-6¢ for most of 2017. This decline in the share price coincided with ongoing losses being incurred by the casino business.

The Aquis Entertainment share price spiked from 3.9¢ to 6.5¢ on 24 August 2017 with over 1 million shares traded (compared to the total volume of approximately 1 million shares that had been traded in the previous ten months). This appeared to be due to market rumors that the ACT Government was about to approve EGMs at the casino. Aquis Entertainment released a statement to the market that it was aware of the rumors but that the legislation in that regard had yet to be debated or enacted and the company had nothing to disclose in relation to the market rumors. The share price fell back to 4¢ and eventually to a low of 2.9¢ on 13 April 2018 (on very low volumes of trading).

Another share price spike occurred on 24 April 2018 when the share price increased from 2.9¢ to 4.5¢ with approximately 0.2 million shares traded (which is relatively low volume but still significantly higher than the typical market for Aquis Entertainment shares). This appeared to have been related to a report in the Canberra Times on 13 April 2018 that the $300 million casino precinct redevelopment had stalled. Aquis Entertainment released a statement to the market on 16 April 2018 acknowledging that

17 Trading from January 2014 to April 2015 is for Discovery Resources prior to the announcement of the backdoor listing of Casino Canberra. Trading from April 2015 to date is for Aquis Entertainment as the foreshadowed owner (until August 2015) and then the official owner (from August 2015) of Casino Canberra.

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the company had received a request from the ACT Government for confirmation of the company’s intentions and stating that Aquis Entertainment remained committed to the redevelopment while recognising that a thorough process had to be undertaken in order to determine the impact of the regulatory and land use restrictions that had been imposed.

The Aquis Entertainment share price fell back to 3¢ following that announcement and declined further to trade at 2¢ (on very low volumes) until 3 December 2018 when a relatively large parcel (in the context of the market for shares in Aquis Entertainment) of 239,366 shares was traded at 2.9¢ per share.

There was no further trading before the date of the announcement of the Proposed Transaction although the company did announce on 12 December 2018 that a number of non-binding, indicative and preliminary proposals had been received regarding the acquisition of Casino Canberra or a controlling shareholding in Aquis Entertainment. Aquis Entertainment also announced on 12 December 2018 that the ACT Government had advised the company that it had ceased the unsolicited proposal process. However, the ACT Government also confirmed that there were potential future benefits for Canberra through a casino redevelopment and invited Aquis Entertainment to continue to work with the ACT Government in the pursuit of the redevelopment of Casino Canberra.

Since the announcement of the Proposed Transaction, there have been several parcels of shares traded at prices ranging from 3.2-5.5¢ per share. The weighted average share price has been 4.6¢ on total volume of less than 600,000 shares (representing less than $25,000 in total value and less than 1/3rd of 1% of the shares on issue).

Movement in the Aquis Entertainment share price compared to market indices for the five years since January 2014 is shown below:

The Aquis Entertainment share price has been volatile but has underperformed the market indices (both general market indices and gambling related market indices) for most of the period from the completion of the backdoor listing of Casino Canberra to date.

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5 Valuation of Aquis Entertainment

5.1 Valuation Summary

Sumner Hall has attributed a nil value to the shares in Aquis Entertainment (prior to the Proposed Transaction) as summarised below:

Aquis Entertainment – Valuation Summary ($ millions) Valuation Range (A$ millions)

Low High Casino business 12.0 18.0 Prepaid casino license fee 1.0 1.0 Surplus cash 3.0 3.0 Surplus land 1.7 3.4 Carryforward tax losses - - Other assets18 - - Total value of Aquis Entertainment’s assets 17.7 25.4 Convertible loan 37.0 37.0 Net value (deficiency) of Aquis Entertainment (19.3) (11.6) Shares on issue (millions) 185.141 185.141 Net value per share nil nil

Aquis Entertainment has been valued by aggregating the estimated fair market value of the casino business and the estimated net realisable value for other assets and deducting the amount of the convertible loan, including capitalised interest, that is owing to the Aquis Group.

5.2 Valuation Methodology

The value of each of the casino business has been estimated on the basis of fair market value as a going concern, defined as the price that would be realised in an open market over a reasonable period of time assuming that potential buyers have full information. Other assets have been valued on the basis of estimated net realisable value.

There are four primary methodologies commonly used for valuing businesses and assets:

i) discounting of projected cash flows; ii) capitalisation of earnings; iii) industry rules of thumb; and iv) estimation of the aggregate proceeds from an orderly realisation of assets.

Each of these valuation methodologies has application in different circumstances. The primary factors to be considered in determining which methodology is appropriate are the nature and level of information available and the usual practice adopted by purchasers and valuers of the type of businesses and assets involved.

Sumner Hall’s primary approach to estimating the value of the casino business has been the capitalisation of earnings valuation methodology. This methodology is the most commonly used method for the valuation of non-mining companies. This methodology involves capitalising the sustainable earnings or cash flows of a business at a multiple that reflects the risks of the business and the income stream that it generates. These multiples can be applied to a variety of earnings or cash flow measures including EBITDA, EBIT or net profit after tax. Price earnings multiples are commonly used in the context of assessing the prices at which portfolio interests in shares trade but not for the value of companies as a whole. EBITDA and EBIT multiples are more commonly used in valuing companies and businesses for acquisition purposes where corporate strategy, management and gearing will be in the control of the purchaser.

18 Aquis Entertainment holds a small parcel of units in Reef Casino Trust. The value of that unit holding rounds to zero.

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In particular, Sumner Hall has adopted the use of EBITDA multiples as the primary valuation methodology for the casino business. The use of EBITDA multiples is the most common practice adopted by purchasers, analysts and valuers in the casino and gambling industry. This reflects the nature of the industry. The casino and gambling industry typically involves mature markets and competitors with established market positions. There is significant variation between companies in within the industry in terms of capital intensity with some companies owning and depreciating land and buildings not only for their casinos but also for substantial hotel and related resort and entertainment facilities while other companies have relatively small land and building ownership and/or lease those facilities to third party operators. Some companies have relatively large amounts of intangible assets and the accounting treatment of those assets can vary considerably between companies and markets. These factors render the use of EBIT multiples less transparent and reliable than the use of EBITDA multiples.

The discounted cash flow approach has been used as a secondary check on the valuation result. However, Aquis Entertainment has not provided any management information regarding earnings and cash flows beyond the period 2019 to 2021. A discounted cash flow valuation is heavily dependent on reliable projections of future cash flows over a long time horizon and that type of information is not typically available for companies operating in an industry like the casino and gambling industry. As a result, the use of a discounted cash flow model can be little more than a modified capitalised earnings valuation and should be viewed in that context.

5.3 Valuation of the Casino Business

Sumner Hall has valued the casino business, excluding surplus land related to the proposed casino redevelopment and other surplus assets, in the range $12.0-18.0 million.

The casino business has been valued on the basis of a multiple of EBITDA. This valuation methodology involves:

i) estimation of the earnings or cash flow levels (in this case, EBITDA) that a purchaser would utilise for valuation purposes having regard to historical and forecast operating results, non- recurring items of income and expenditure and known factors likely to impact on future operating performance; and

ii) selection of an appropriate capitalisation multiple having regard to the market rating of comparable businesses, the extent and nature of competition, the quality of earnings, growth prospects and relative business risk.

Sumner Hall has adopted an EBITDA figure in the range $1.5-2.0 million as a sustainable level of EBITDA for the casino business as it is currently being operated (ie, excluding any value for a potential redevelopment of the casino into a significantly different and larger casino, hotel and entertainment property). An EBITDA multiple in the range 8.0-9.0 times has been applied to the estimated sustainable EBITDA figure to arrive at a value for the casino business in the range $12.0-18.0 million.

Casino Canberra incurred substantial losses for the years ending 31 December 2016 and 2017. Even though visitor numbers and net casino gaming revenue increased during that period, that growth was achieved through a marketing and operating strategy that focused on attracting premium and high stakes players with concomitant costs both in terms of marketing and promotional costs and payroll related expenses. The net result was an ongoing loss from operations despite increasing revenue.

Casino Canberra modified its operating strategy in 2018 to refocus on its broader customer base with less emphasis on high stakes players (although still leveraging the marketing efforts that had been conducted in previous years) and a significantly reduced cost base. This has resulted in a return to profitability with EBITDA of approximately $0.9 million being achieved for the year ended 31 December 2018. This turnaround is more clearly visible in terms of operating results for the second half of the year that show that EBITDA is on pace to be in the order of $1.5 million on an annualised basis. Management has prepared forecasts for the period beyond 2018 that suggest that EBITDA can be improved further, based on the current operating strategy and modest increases in visitor numbers and/or casino winnings per visitor, to EBITDA in the order of $2.5-3.0 million per annum. Those figures should, however, be viewed with some caution given the short track record to date.

For valuation purposes, Sumner Hall has adopted a sustainable EBITDA figure in the range $1.5-2.0 million. The low end of this range is comparable to the run rate that the casino has achieved in the most

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recent six month period. The high end of this range allows for some part of management’s expected increases beyond that level to be achieved and sustained.

An EBITDA multiple in the range 8.0-9.0 times has been applied to the estimated sustainable EBITDA figure. This range of multiples compares to the multiples at which selected casino businesses have been acquired in Australia and New Zealand (not all of which are recent) as summarised below:

Selected Casino Transaction Multiples Enterprise EBITDA Multiple Date Target Acquiror Value ($ millions) Historical Forecast

2018 SkyCity Darwin Delaware North 188 7.5 na 2014 Jupiters Townsville Colonial Leisure Group 70 10.0 na 2014 Reef Casino Aquis Group 218 11.5 11.4 2004 Burswood Island Casino PBL 727 6.9 8.0 2004 MGM Grand Darwin SkyCity Entertainment 195 8.8 7.2 Jupiters Brisbane, Gold 2003 Tabcorp 1,645 9.2 9.3 Coast, Townsville 2002 Breakwater Island Casino Jupiters 45 8.2 7.1 2000 Adelaide Casino SkyCity Entertainment 183 11.7 7.9 1999 Star City Casino Sydney Tabcorp 1,470 11.5 10.9 1998 Crown Casino Melbourne PBL 1,798 16.4 8.1 Average 654 10.2 8.7 Median 207 9.6 8.1

A more detailed analysis of these transaction multiples is set out in Annexure A to this report.

These transactions ranged in size from $1.8 billion for the acquisition of Crown Casino Melbourne by PBL in December 1998 to $45 million for Breakwater Island Casino (later renamed Jupiters Townsville) in October 2002. The average transaction size was approximately $650 million and the median transaction size was approximately $200 million. All of these transactions were for casinos that are larger than Casino Canberra (and, in most cases, significantly larger). There was, however, a relatively high degree of consistency between the multiples that were paid with little or no correlation to enterprise value. Although only a few of these transactions are recent, there is no pattern to suggest that current transaction multiples are significantly higher or lower than multiples that were paid in the past. The multiple that applies to the recent proposal to acquire SkyCity Darwin is lower than the multiple paid for that same property in 2004 but, equally, the multiple paid for Jupiters Townsville in 2014 is higher than the multiple paid for that same property in 2002.

Sumner Hall’s selection of an EBITDA multiple in the range 8.0-9.0 times sustainable EBITDA has also been influenced by an analysis of the multiples at which selected casino and gambling companies trade on the sharemarket. Sumner Hall has considered the trading multiples for two categories of companies: i) trading multiples for listing casino and gambling companies in Australia and New Zealand; and ii) trading multiples for listed casino and gambling companies overseas (principally in the United States and Hong Kong).

The trading multiples for these companies are summarised below (with the Australia and New Zealand companies shown first, followed by Tabcorp, followed by overseas casino and gambling companies):

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Selected Listed Casino and Gambling Company Multiples Enterprise Stock Principal EBITDA Multiple Value19 Exchange Operations ($ millions) Historical Forecast

Crown Resorts ASX Melbourne and Perth casinos 8,317 9.5 9.4

The Star Entertainment ASX Sydney, Brisbane and Gold 5,130 8.7 8.1 Group Coast casinos

SkyCity Entertainment NZX/ASX New Zealand and Adelaide 2,717 8.5 8.3 Group casinos Reef Casino Trust ASX Cairns casino 138 7.8 na

Tabcorp Holdings ASX Racing and EGMs 12,357 16.7 11.3

Las Vegas Sands NYSE Las Vegas, Macau and 67,671 10.6 9.6 Singapore casinos and hotels MGM Resorts International NYSE Las Vegas casino and hotel 40,052 11.4 10.4 operations

Galaxy Entertainment Hong Kong Hong Kong and Macau casinos 38,547 17.0 13.1

Caesars Entertainment NASDAQ 47 casinos in the United States 31,611 19.5 10.0 and overseas

Wynn Resorts NASDAQ Las Vegas casino and hotel 26,036 11.7 9.8 operations

Wynn Macau Hong Kong Two Wynns hotels and casinos 21,150 14.8 11.5 in Macau

Melco Resorts & NASDAQ Hotels and casinos in Macau 20,585 13.1 11.6 Entertainment and the Philippines MGM China Holdings Hong Kong MGM Macau hotel and casino 9,574 15.8 12.8 Genting Singapore Singapore Sentosa Island resort/casino 7,900 6.7 6.3 Red Rock Resorts NASDAQ Small market Nevada casinos 5,832 8.5 8.5 Bloomberry Resorts Philippines Casinos in the Philippines and 2,604 8.1 6.6 South Korea Average excluding Tabcorp 19,191 11.5 9.7 Median excluding Tabcorp 15,080 11.0 9.7 Average for Australia and New Zealand casinos only 4,075 8.6 8.6

A more detailed analysis of these listed casino and gambling company multiples is set out in Annexure B to this report.

In comparing these multiples, it should be noted that the trading multiples for these listed companies do not include a premium for control (except to the extent that takeover speculation might be incorporated into any of the share prices).

The most comparable companies are the Australia and New Zealand casino companies. Tabcorp is to some extent comparable because it competes for gambling expenditure but it operates primarily in the racing industry as well as offering EGMs. None of the other companies operate in the racing industry and Casino Canberra does not currently offer EGMs (although most of these other companies do).

The Australia and New Zealand casino companies range in size from Crown Resorts with an enterprise value of $8.3 million to Reef Casino Trust with an enterprise value of $138 million. The three large casino companies are trading on forecast EBITDA multiples in the range 8.1-9.4 times with an average of 8.6 times (detailed forecasts were not available for Reef Casino Trust but its forecast EBITDA multiple is likely to be around 8 times on the basis that market guidance has been provided that

19 The enterprise value for companies that are not based in Australia have been converted from their native currency into Australian dollars.

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indicates a slight reduction in EBITDA compared to the prior year). Unlike the other Australia and New Zealand casino companies, Reef Casino Trust owns but does not operate its casino (or its hotel). Both the hotel and the casino are leased to operators associated with Reef Casino Trust’s major shareholder (with the casino operated by Casinos Austria and the hotel operated by Accor Hotels). Revenues for Reef Casino Trust consist of rental income rather than casino and hotel revenues. However, a significant portion of the rental income is based on casino and hotel turnover and profitability and to that extent the profitability of Reef Casino Trust reflects the profitability of a casino and hotel operation.

The overseas casino and gambling companies are much larger than Casino Canberra. These companies have an average enterprise value of approximately $19 billion ranging from Las Vegas Sands with an enterprise value of approximately $68 billion to Bloomberry Resorts with an enterprise value of approximately $3 billion. The median enterprise value is approximately $15 billion. There is a relatively wide range of forecast EBITDA multiples from a low of 6.3 times for Genting Singapore to a high of 13.1 times for Galaxy Entertainment. The average forecast EBITDA multiple for the overseas companies is 10.0 times.

The multiples for Sumner Hall’s valuation of Aquis Entertainment’s casino business are summarised below, together with the multiples paid for selected casino acquisitions in Australia and the multiples that apply to listed casino and gambling companies in Australia and overseas:

Sumner Hall’s valuation of the casino business is based on EBITDA multiples that are broadly consistent with the forecast EBITDA multiples observed in transactions involving the acquisition of casinos in Australia. After allowing for a premium for control in the listed company multiples (which are shown in the table above without any such premium), Sumner Hall’s selected multiples for Casino Canberra are well below the control multiples that would apply to those companies. Sumner Hall regards this as appropriate given that Casino Canberra operates in a more restricted market than those other companies both in terms of population size and in terms of being solely a casino operation rather than being an integrated casino, hotel and resort operation like many of the international comparisons.

5.4 Alternative Valuation Methodologies

Regulatory Guide 111 states that an expert should, where possible, use more than one valuation methodology (at least as a secondary check on the results of the principal valuation methodology). Regulatory Guide 111 refers to a number of valuation methodologies that ASIC considers it generally appropriate for an expert to consider:

! the discounted cash flow valuation methodology together with the estimated realisable value of any surplus assets;

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! the application of earnings multiples appropriate to the business or industry in which the company operates to the estimated future maintainable earnings or cash flows of the business together with the estimated realisable value of any surplus assets;

! the amount that would be available for distribution to security holders in an orderly realisation of the company’s assets;

! the quoted price for listed securities, when there is a listed and active market and allowing for the fact that the quoted price may not reflect the value of those securities in the context of an acquisition of 100% of the company; and

! any recent genuine offers received by the company for the entire business or for any business units.

Sumner Hall regards the methodology described in item ii) above to be the most appropriate methodology to apply in the case of the casino business. In particular, Sumner Hall regards the capitalisation of projected EBITDA (rather than EBIT, net profit after tax or some other measure of earnings or cash flows) to be the most appropriate valuation methodology to apply. That is the principal methodology that has been applied as discussed in detail in the previous sections of this report. There are a number of reasons for this including that:

! Casino Canberra operates in a relatively mature industry;

! EBITDA is preferable to other measures of earnings and cash flows because of the variation between companies operating in the casino and gambling industry where some companies own and operate capital intensive integrated casino, hotel and entertainment complexes whereas others only operate casinos or, in some cases, own the assets but lease operations to third parties (or vice versa);

! differing approaches by different companies in different markets to accounting for intangible assets and the amortisation of those assets; and

! purchasers, analysts and valuers of this type of business typically adopt the capitalisation of EBITDA as their preferred valuation approach.

Sumner Hall does not regard any of the other methodologies to be particularly appropriate or useful in a valuation of the casino business of Aquis Entertainment for the reasons set out below:

! discounted cash flow valuations are heavily dependent on projections of future cash flows over a long time horizon and that type of information is not typically available for companies operating in an industry like the casino and gambling industry. The owners and managers of these types of businesses do not typically prepare detailed long term (ie, 10-25 year) projections of earnings and cash flows, unlike the owners and managers of companies in the mining and natural resources industry, because they do not have the same requirements for long term planning in terms of major capital expenditure, depletion and renewal of reserves and resources. In the absence of such documentation, a discounted cash flow valuation is to some degree simply a modified version of a capitalised earnings approach. Nonetheless, a discounted cash flow valuation has been adopted as a secondary check on the primary valuation approach (refer to Section 5.5 of this report);

! valuations based on an estimate of the aggregate proceeds from an orderly realisation of assets typically attribute no value to goodwill or other intangible assets associated with ongoing trading and are rarely appropriate for valuation of a company as a going concern. This valuation approach is not appropriate for Aquis Entertainment either as a principal or alternative valuation methodology; and

! the prices for shares that can be observed through sharemarket trading typically represent the value of portfolio interests in those shares and do not reflect the value of a controlling interest in the company. Valuations based on the use of quoted prices for listed securities are typically found in relation to the estimated realisable value of surplus assets where a company has an investment portfolio including non-controlling interests in various businesses. For this reason, and because the market for shares in Aquis Entertainment is illiquid, this valuation approach is not appropriate for Aquis Entertainment either as a principal or alternative valuation methodology.

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With respect to any recent genuine offers received by the company for the entire business or for any business units, Sumner Hall has made enquiries with the advisers and management of Aquis Entertainment and has been informed that a thorough process was undertaken in that regard prior to announcing the Proposed Transaction. Following receipt of an unsolicited offer in mid 2018 for parts of the company including the casino business and the surplus land (this particular offer did not envisage acquiring the shares in Aquis Entertainment) and an unsolicited proposal in relation to the shares in Aquis Entertainment, the Directors of Aquis Entertainment determined that it was in the interests of Aquis Entertainment shareholders to conduct a comprehensive strategic review to examine all options to maximise shareholder value. A process was put in place and Aquis Entertainment and its advisers actively progressed discussions with a number of parties on a range of potential transactions, including potential change of control proposals and potential asset sales. The Directors of Aquis Entertainment concluded that the Proposed Transaction was superior to all of the alternatives that were presented.

5.5 Discounted Cash Flow Valuation

The management of Casino Canberra has prepared a limited set of confidential projections for the casino business for the period to 31 December 2021. Based on those projections, Sumner Hall has prepared a discounted cash flow model for the casino business that includes projections of nominal, ungeared after-tax cash flows from 1 January 2019 to 31 December 2021. A residual value has been incorporated into the discounted cash flow model for the indefinite period beyond 31 December 2021.

Sumner Hall has undertaken an analysis of management’s projections including the reasonableness of assumptions regarding visitor numbers, net gaming revenue, operating expenses, corporate overhead costs and taxes. The projections are, however, related to future events that may well be affected by unforeseen factors and the projections are dependent on Casino Canberra management’s actions in relation to both expected and unforeseen factors. Accordingly, actual results may be significantly different than these projected results.

The key assumptions that are incorporated into the discounted cash flow model include:

! net casino gaming revenue is assumed to grow by 0.5% (in real terms) through a combination of increased visitors and increased casino winnings per visitor over the next three years and then to increase in line with inflation thereafter;

! operating expenses and corporate overheads are assumed to increase in line with inflation;

! EBITDA growth beyond 2021 is assumed to be in line with inflation;

! a corporate income tax rate of 30% (carryforward tax losses have not been incorporated in the discounted cash flow model on the basis that they have been valued separately as a surplus asset);

! sustaining capital expenditure of $0.3 million per annum increasing in line with inflation; and

! a nominal discount rate in the range 12-14%.

Based on these assumptions, the discounted cash flow model produces a net present value in the range $14-15 million for the casino business. This compares to the valuation result from Sumner Hall’s primary valuation methodology in the range $12-18 million. Sumner Hall has no reason to alter the primary valuation result as a result of this secondary check.

5.6 Other Assets

The assets of Aquis Entertainment that are not taken into account in Sumner Hall’s valuation of the casino business include:

i) the remainder of the five year prepaid license fee that Aquis Entertainment paid to the ACT Gambling and Racing Commission upon acquisition of Casino Canberra in December 2014;

ii) surplus cash that Aquis Entertainment is required to maintain as a condition of the Deed that accompanied the approval of Aquis Entertainment as licensee of the casino;

iii) surplus land that formed part of the planned redevelopment of the casino; and

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iv) carryforward tax losses.

Aquis Entertainment entered into a Deed with the ACT Gambling and Racing Commission and the ACT Government dated 23 December 2014 that formed part of the arrangements pursuant to which Aquis Entertainment was approved as the new licensee for Casino Canberra. The Deed requires Aquis Entertainment to maintain a minimum of $3.0 million of liquid assets in its accounts at all times. Aquis Entertainment has chosen to meet this requirement by keeping a separate bank account with a $3.0 million balance that is not used for any other purpose. This cash balance of $3.0 million is regarded as a surplus asset for valuation purposes.

Casino Canberra is required to pay an annual license fee of approximately $0.9 million to the ACT Gambling and Racing Commission. Aquis Entertainment agreed to prepay the license fee for a five year period as part of the arrangements pursuant to which Aquis Entertainment was approved as the new licensee for Casino Canberra. The annual amount of this license fee has been taken into account in the valuation of the casino business. The $1.0 portion of the original five year prepayment that remains prepaid at the valuation date, which represents a period of approximately twelve months paid in advance, is regarded as a surplus asset for valuation purposes.

Casino Canberra is located in the city centre of Canberra between the Crowne Plaza Hotel and the National Convention Centre Canberra (“NCCC”) as shown below:

The land that is owned by Aquis Entertainment is outlined in yellow in the picture above (with the existing casino highlighted in purple within that yellow boundary). The total site area is 8,019 square metres. The land that is surplus to the existing casino (and which was planned to be the site for the new redeveloped casino adjoining the NCCC) totals approximately 5,000 square metres. The proposal for the planned redevelopment envisages that the existing casino would eventually be demolished and replaced with a new hotel as Stage 2 of the redevelopment following completion of Stage 1 of the redevelopment which involves the construction of a new casino and related entertainment and convention facilities on the vacant part of the land owned by Aquis Entertainment.

The land that is outlined in red in the picture above (which is not owned by Aquis Entertainment) was owned (until 2015) by the developers of the Glebe Park residential apartments that are located on Coranderrk Street next to the NCCC. That land was restricted to use as green space except for a small paved car parking area and the potential to build a restaurant within the parklands. The developer sold the land to the ACT Government in 2015 for use as wetlands and to build a civic stormwater control pond. That parcel of land totals 12,335 square metres and was sold to the ACT Government for $4.18 million representing a price of $339 per square metre.

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Sumner Hall’s valuation of the casino business excludes any value attributable to the land owned by Aquis Entertainment other than the land and building occupied by the existing casino. No value has been included for the potential redevelopment of the casino or the addition to the casino of any EGMs.

The surplus land has significant value to Aquis Entertainment. In the event that a redevelopment of the casino does not proceed, Aquis Entertainment could pursue other property development opportunities in relation to this land or sell this land to other parties who might seek to pursue other property development opportunities.

Sumner Hall has estimated the net realisable value for this surplus land in the range $1.7-3.4 million. The low end of this range is based on the price per square metre that was received by the vendors of the adjoining wetlands site. However, it is likely that the land owned by Aquis Entertainment would attract a significantly higher price because the redevelopment potential of this land is significantly greater (either as part of a redevelopment of the casino or as a separate and unrelated property development). For valuation purposes, Sumner Hall has assumed a value at the high end of the range that represents a price per square metre that is twice as high as the price paid for the adjoining wetlands site. This value is to some extent speculative but it may also be conservative. Aquis Entertainment has not offered this parcel of land for sale but Sumner Hall has been advised that unsolicited non-binding and indicative offers have been received for the entirety of the casino land and buildings, including this surplus land, that exceed the combined value that Sumner Hall has attributed to the casino business and this surplus land (but that are less than the value for those assets that is implied by the Proposed Transaction).

Aquis Entertainment has carryforward tax losses in the order of $20 million (in gross terms20). Sumner Hall’s valuation of the casino business does not include any benefit from utilisation of these carryforward tax losses. Prior to completion of the Proposed Transaction, it is unlikely that these tax losses have any value because Aquis Entertainment is unlikely to generate sufficient assessable income for tax purposes, after allowing for depreciation charges and interest charges on the convertible loan from the Aquis Group, in order to utilise these tax losses. However, Aquis Entertainment will be debt free upon completion of the Proposed Transaction and the possibility that these tax losses will be utilised will be significantly increased. Sumner Hall has estimated the value of the carryforward tax losses in the range $1.5-2.5 million on the basis of a discounted cash flow analysis using the projected EBITDA figures that have been adopted for the valuation of the casino business. Utilisation of these tax losses will also be subject to Aquis Entertainment meeting the requirements of the “same business test” for deductibility of tax losses (because the “continuity of ownership test” would no longer apply). Sumner Hall has assumed that Aquis Entertainment would meet the requirements of the same business test, and has no reason to believe otherwise, but that cannot be assured in the absence of specific legal and taxation advice.

20 The figure of $20 million represents the gross amount of the losses that have been incurred. If those losses were utilised at the current corporate tax rate of 30%, the net amount of the carryforward tax losses would be $6 million.

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6 Evaluation of the Proposed Transaction

6.1 Overall conclusion

In Sumner Hall’s opinion, the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

Sumner Hall has attributed a nil value to 100% of the shares in Aquis Entertainment (assuming that 100% of the shares were freely available for acquisition by a hypothetical, willing but not anxious purchaser) prior to the Proposed Transaction. For the purpose of takeover style analysis, the value of the consideration for Aquis Entertainment shareholders is considered to be the price at which Aquis Entertainment shares are expected to trade following completion of the Proposed Transaction. While any judgment in this regard is by its very nature subject to considerable uncertainty, Sumner Hall has adopted for the purposes of this analysis a post completion Aquis Entertainment share price in the range 3.1-4.8¢ (refer to Section 6.3 of this report for further detail). Because this range of share prices is greater than the underlying value of Aquis Entertainment of nil, the Proposed Transaction is fair.

A transaction that is fair is also, by definition, reasonable. Accordingly, the Proposed Transaction is fair and reasonable. Sumner Hall has, nonetheless, had regard to other factors in considering the reasonableness of the Proposed Transaction. The market for shares in Aquis Entertainment is illiquid and it does not provide a reliable indicator of value or a realistic opportunity for shareholders to dispose of their shares if they so wished. The Directors of Aquis Entertainment have undertaken a thorough process designed to maximise shareholder value and they have concluded that the Proposed Transaction is superior to all of the alternatives that were presented. Completion of the Proposed Transaction will, however, mean that the possibility of an alternative offer for control of Aquis Entertainment will be effectively eliminated because Blue Whale will hold at least 86.64% of the shares in Aquis Entertainment. Nonetheless, the opportunity to put forward an alternative proposal will remain until the meeting to consider the Proposed Transaction is held and the Directors of Aquis Entertainment would consider any such proposal on its merits if and when it arose. In the event that the Proposed Transaction is not approved and Aquis Entertainment remains listed in its present form (with the full outstanding amount of the convertible loan owing), Sumner Hall has no reason to believe that the shares have any value (at least in the short term). In the absence of the Proposed Transaction or some alternative proposal (or some other material price sensitive information), Sumner Hall does not expect that Aquis Entertainment shares would trade for any price at all other than on a purely speculative basis.

Taking all of these factors into account, Sumner Hall has concluded that the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

6.2 Key terms of the Proposed Transaction

The Proposed Transaction provides for the following:

! Blue Whale will acquire 137,004,377 of the shares in Aquis Entertainment that are currently held by the Aquis Group for $4.0 million (equivalent to 2.9¢ per share);

! Blue Whale will acquire the convertible loan that is owing by Aquis Entertainment to the Aquis Group, with a book value of $37.0 million as at 31 December 2018 and a maturity date of August 2024, for $24.0 million. Blue Whale will forgive a minimum of $2.0 million from the balance of the convertible loan and immediately convert the remaining balance into no more than 175,144,205 new shares in Aquis Entertainment at the conversion price of 20¢ per share; and

! Blue Whale will grant a put option to the Aquis Group over its remaining 26,867,497 shares in Aquis Entertainment21 with an exercise price of $4.0 million, equivalent to 14.9¢ per share, exercisable on the earlier of 1 February 2022 or three years from the completion of the Proposed Transaction and provided that the Aquis Entertainment share price is less than or equal to 14.9¢ per share.

The overall result of the Proposed Transaction is that Aquis Entertainment will be debt free and Blue Whale will immediately hold an 86.64% shareholding in Aquis Entertainment in exchange for a total

21 The put option does not apply to any shares in Aquis Entertainment that the Aquis Group might acquire subsequent to the date of the announcement of the Proposed Transaction.

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payment of $28.0 million. Blue Whale will also have a conditional right to increase its shareholding up to 94.10% for an additional payment of $4.0 million to the Aquis Group.

The Proposed Transaction is subject to a number of conditions including:

! all necessary casino licensing approvals being obtained; and ! approval of Aquis Entertainment shareholders.

6.3 The Proposed Transaction is fair

Based on assumptions that are regarded as reasonable and described in detail elsewhere in this report, Sumner Hall has attributed a nil value to 100% of the shares in Aquis Entertainment prior to the Proposed Transaction.

For the purpose of takeover style analysis, the value of the consideration for Aquis Entertainment shareholders is considered to be the price at which Aquis Entertainment shares might be expected to trade following completion of the Proposed Transaction. Judgments regarding future sharemarket trading prices are inherently subject to considerable uncertainty. Share prices are affected by different factors than the underlying value of the assets of a company and those factors are not always readily apparent. Share prices can also be volatile, even in the short term.

Within that context, Sumner Hall has adopted a share price in the order of 3.1-4.8¢ as the price at which shares in Aquis Entertainment might be expected to trade following completion of the Proposed Transaction and in the absence of the announcement of any significant corporate activity or other material price sensitive information.

Sumner Hall’s view reflects the following factors:

! Aquis Entertainment shares have traded in the range 3.2-5.5¢ since the announcement of the Proposed Transaction. However, the market for Aquis Entertainment shares is highly illiquid and the share price cannot necessarily be regarded as a reliable indicator of value. The Aquis Group owns 88.5% of the shares on issue. Even allowing for the short period of time between the date of the announcement and the date of this report, the total volume of share trading has been exceptionally small (at less than 600,000 shares representing less than $25,000 in total value and less than 1/3rd of 1% of the shares on issue);

! the underlying value of Aquis Entertainment, assuming completion of the Proposed Transaction, would be increased from nil to the range 5.3-7.7¢ as summarised below:

Aquis Entertainment – Underlying Value Per Share Before and After the Proposed Transaction Before Proposed After Completion of 22 Transaction Proposed Transaction Low High Low High Casino business 12.0 18.0 12.0 18.0 Prepaid casino license fee 1.0 1.0 1.0 1.0 Surplus cash 3.0 3.0 3.0 3.0 Surplus land 1.7 3.4 1.7 3.4 Carryforward tax losses - - 1.5 2.5 Total value of Aquis Entertainment’s assets 17.7 25.4 19.2 27.9 Convertible loan 37.0 37.0 - - Net value (deficiency) of Aquis Entertainment (19.3) (11.6) 19.2 27.9 Shares on issue (millions) 185.141 185.141 360.285 360.285 Net value per share nil nil 5.3¢ 7.7¢

22 These figures assume that convertible loan is converted into shares based on the outstanding balance of the loan as at 31 December 2018 (and as reduced by $2.0 million in accordance with the terms of the Proposed Transaction). However, the outstanding balance of the convertible loan could increase or decrease depending on working capital and other cash requirements between 31 December 2018 and the date at which the Proposed Transaction is completed. Any such change is, however, unlikely to have a material impact on the number of new shares that would be issued to Blue Whale or the percentage interest in the shares in Aquis Entertainment that would be owned by Blue Whale.

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! non-controlling interests in shares typically trade at a discount to underlying value. All else being equal, this discount can be estimated as the inverse of the premium for control that would be paid in a takeover offer for the company. Premiums for control can vary significantly depending on the circumstances for each particular company but they tend to be in the range 25-35% for takeovers and schemes of arrangement in the Australian market when compared to the pre-offer share trading price23 and a premium of 30% is a widely used rule of thumb. Assuming that a 30% premium for control would apply in the case of Aquis Entertainment, the corresponding share price (based on the underlying value estimates that are set out above) would be in the range 4.1- 6.0¢ post completion of the Proposed Transaction;

! in this case there is a further important consideration which is that Sumner Hall’s estimate of the underlying value of the casino business is based on forecast levels of profitability that have significant uncertainty attached to them. The forecasts assume that the turnaround in the profitability of the casino business that has been achieved in the past six months is sustainable and can be improved upon. There can be no guarantee that this will occur and if this turnaround is not sustained then the share price would be adversely affected. Sumner Hall has assumed that the market would apply a further discount in the order of 20-25% to the share price until such time as Aquis Entertainment has achieved a longer track record of casino profitability. Allowing for this further discount results in a share price estimate in the range 3.1-4.8¢ post completion of the Proposed Transaction; and

! Blue Whale will have a shareholding of 86.64% immediately following completion of the Proposed Transaction. There will be little if any change to the lack of liquidity in the market for shares in Aquis Entertainment. The financial position of the company will, however, be significantly improved insofar as the company will be debt free and trading in Aquis Entertainment shares, to the extent that it occurs, is more likely to be an indicator of value than it has been in the recent past.

This expected trading range of 3.1-4.8¢ per share is greater than Sumner Hall’s estimate of the underlying value of Aquis Entertainment of nil prior to the Proposed Transaction and, accordingly, the Proposed Transaction is fair.

6.4 The Proposed Transaction is reasonable

An offer price that is fair is also, by definition (in terms of Regulatory Guide 111), reasonable. Accordingly, the Proposed Transaction is fair and reasonable having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group.

Sumner Hall has, nonetheless, had regard to other factors in considering the reasonableness of the Proposed Transaction as discussed in the following sections of this report.

6.4.1 Liquidity in the market for Aquis Entertainment shares

Apart from trading on one day (being 3 December 2018) when 239,366 shares were traded at 2.9¢ per share, Aquis Entertainment shares had traded at 2.0¢ (when they had traded at all) during the 90 days prior to the announcement of the Proposed Transaction. The market for Aquis Entertainment shares is highly illiquid and the share price should not be regarded as a reliable indicator of value. The Aquis Group owns 88.5% of the shares on issue. The total volume of share trading over the past twelve months has been less than the equivalent of 1% of the total number of shares on issue. Based on Sumner Hall’s assessment of the company in its present form (ie, with the convertible loan in place), the shares have no value due to the size of the outstanding convertible loan amount.

6.4.2 Premium for control

The price of 2.9¢ per share at which Blue Whale will acquire its initial 86.64% shareholding in Aquis Entertainment from the Aquis Group represents a nil premium over the price at which the large (relative to the market) parcel of shares was traded on 3 December 2018. Excluding that day’s trading, the acquisition price represents a premium of 45% over the weighted average share price of 2.0¢ for the 90 days preceding the announcement of the Proposed Transaction. However, these calculations are essentially meaningless because the acquisition price of 2.9¢ per

23 Refer, for example, to the Control Premium Study 2017 by RSM Australia Pty Ltd and the KPMG Valuation Practices Survey 2017.

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share on which they are based is an artificial price that has been agreed between Blue Whale and the Aquis Group in the context of an overall transaction where the combined amount that has been paid for the convertible loan and the shares is the relevant consideration from the perspective of the Aquis Group. In that context, the Aquis Group has agreed to accept a total payment of up to $32.0 million24 in exchange for the convertible loan (with an amount owing of $37.0 million) and for all of its shares in Aquis Entertainment. The substance of the Proposed Transaction is that the convertible loan is being acquired at a discount to face value and the shares in Aquis Entertainment that are held by the Aquis Group are being acquired for nil consideration.

6.4.3 Alternative proposals

In mid 2018, following receipt of an unsolicited offer for parts of the company including the casino business and the surplus land (this particular offer did not envisage acquiring the shares in Aquis Entertainment) and an unsolicited proposal in relation to the shares in Aquis Entertainment, the Directors of Aquis Entertainment determined that it was in the interests of Aquis Entertainment shareholders to conduct a comprehensive strategic review to examine all options that might be available to maximise shareholder value. A process was put in place and Aquis Entertainment and its advisers actively progressed discussions with a number of parties on a range of potential transactions, including potential change of control proposals and potential asset sales. The Directors of Aquis Entertainment concluded that the Proposed Transaction is superior to all of the alternatives that were presented.

Aquis Entertainment has agreed to no-shop and no-talk provisions and a break fee arrangement with Blue Whale. Although these types of provisions are no longer unusual in the Australian market and the break fee of $280,000 does not present a material barrier to alternative proposals, these provisions could still inhibit a counter bidder.

Completion of the Proposed Transaction will mean that the possibility of an alternative offer for control of Aquis Entertainment will be effectively eliminated because Blue Whale will hold at least 86.64% of the shares in Aquis Entertainment. However, the opportunity to put forward an alternative proposal will remain until the meeting to consider the Proposed Transaction is held and the Directors of Aquis Entertainment would consider any such proposal on its merits if and when it arose.

6.4.4 Outlook for trading in Aquis Entertainment shares

In the event that the Proposed Transaction is not approved and Aquis Entertainment remains listed in its present form (with the full outstanding amount of the convertible loan owing), Sumner Hall has no reason to believe that the shares have any value (at least in the short term). In the absence of the Proposed Transaction or some alternative proposal (or some other material price sensitive information), Sumner Hall does not expect that Aquis Entertainment shares would trade for any price at all other than on a purely speculative basis.

6.5 Each Aquis Entertainment shareholder should make their own decision based on their own criteria

Sumner Hall has been engaged to prepare an independent expert’s report setting out its opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. Sumner Hall has not been engaged to provide a recommendation to Aquis Entertainment shareholders in relation to the Proposed Transaction. Responsibility for a recommendation in relation to the Proposed Transaction rests with the Directors of Aquis Entertainment.

In any event, approval or rejection of the Proposed Transaction is a matter for individual shareholders based on each shareholder’s views as to the value of Aquis Entertainment, expectations about future market conditions and their particular circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. Aquis Entertainment shareholders who are in any doubt as to the action that they should take in relation to the Proposed Transaction should consult their own professional adviser.

24 This figure includes an assumed payment of $4.0 million upon exercise of the put option over the remaining shares in Aquis Entertainment that will be held by the Aquis Group.

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7 Qualifications, Declarations and Consents

7.1 Qualifications

Sumner Hall is a specialist advisory firm providing corporate advisory services in relation to mergers and acquisitions, divestments, capital raisings, corporate restructuring and financial matters generally. One of its activities is the preparation of corporate and business valuations and the provision of independent advice and expert’s reports in connection with mergers, takeovers and capital reconstructions.

The person responsible for preparing this report on behalf of Sumner Hall is Mr Jeff Hall, B.Sc. (Hons), M.Com. (Hons), ACA, AICPA, CFA. Mr Hall is a Director of Sumner Hall and has over thirty years experience in relevant corporate advisory matters. Mr Hall is the key person of Sumner Hall in relation to its AFS License No. 231214 issued pursuant to section 913B of the Corporations Act.

7.2 Disclaimers

It is not intended that this report should be used or relied upon for any purpose other than as an expression of Sumner Hall’s opinion as to whether the Proposed Transaction is fair and reasonable, having regard to the interests of Aquis Entertainment shareholders other than the Aquis Group. This opinion relates to Aquis Entertainment shareholders as a whole and it does not take into account the risk profile, personal objectives or financial situation of individual shareholders. Shareholders should consider the appropriateness of this report having regard to their own circumstances before making any decisions in relation to the Proposed Transaction. Shareholders should also consider all other parts of the Notice of Meeting before making any decisions in relation to the Proposed Transaction. Sumner Hall expressly disclaims any liability to any Aquis Entertainment shareholder who relies or purports to rely on this report for any other purpose and to any other party who relies or purports to rely on this report for any purpose whatsoever.

Sumner Hall has had no involvement in the preparation of the Notice of Meeting and has not verified or approved any of the contents of the Notice of Meeting. Sumner Hall does not accept any responsibility for the contents of the Notice of Meeting except for this independent expert’s report.

This report has been prepared by Sumner Hall with care and diligence and the statements and opinions given by Sumner Hall in this report are given in good faith and in the belief on reasonable grounds that such statements and opinions are correct and not misleading. However, no responsibility is accepted by Sumner Hall or any of its officers or employees for errors or omissions however arising in the preparation of this report, provided that this shall not absolve Sumner Hall from liability arising from an opinion expressed recklessly or in bad faith.

7.3 Independence

Sumner Hall does not have at the date of this report, and has not had within the previous two years (or at any previous time), any shareholding in or other relationship with Aquis Entertainment or the Aquis Group that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Proposed Transaction.

Sumner Hall was not involved in the formulation of the Proposed Transaction. Sumner Hall’s only role has been the preparation of this independent expert’s report.

Sumner Hall will receive a fixed fee of $65,000 for the preparation of this report. This fee is not contingent on the conclusions reached or the outcome of the Proposed Transaction. Sumner Hall’s out- of-pocket expenses in relation to the preparation of this report will also be reimbursed. Sumner Hall will not receive any other benefit for the preparation of this report.

Sumner Hall considers itself to be independent in terms of Regulatory Guide 112 published by ASIC.

7.4 Declarations

An advance draft of this report was provided to Aquis Entertainment and its advisers. Certain changes were made to this report as a result of the circulation of the draft report. No alterations were made to the methodology or conclusions as a result of circulating the draft report.

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Aquis Entertainment has agreed that, to the extent permitted by law, it will indemnify Sumner Hall and its employees and officers in respect of any liability suffered or incurred as a result of or in connection with the preparation of this report. This indemnity will not apply to the extent that any liability suffered is caused by the negligence, fraud, breach of contract or willful misconduct of Sumner Hall. Aquis Entertainment has also agreed to indemnify Sumner Hall and its employees and officers for time incurred and any costs in relation to any inquiry or proceeding initiated by any person. Where Sumner Hall or its employees and officers are found to have been negligent, fraudulent, in breach of contract or engaged in willful misconduct then Sumner Hall shall bear the proportion of such costs caused by its actions.

7.5 Financial Services Guide

Sumner Hall has prepared a Financial Services Guide in relation to this report. Sumner Hall’s Financial Services Guide is included as Annexure C to this report.

7.6 Consents

Sumner Hall consents to the issuing of this report in the form and context in which it is to be included in the Notice of Meeting to be sent to shareholders of Aquis Entertainment. Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of Sumner Hall as to the form and context in which it appears.

Yours faithfully, SUMNER HALL ASSOCIATES PTY LTD

Sumner Hall

Annexure A – Transactions Involving Casino Businesses

Sumner Hall Comparable Companies and Transactions Analysis Year end / Market Enterprise EBITDA Multiple EBIT Multiple Company Principal Industry Acquisition Latest Share Capitalisation Value Sub-sector Date Bal. Sheet Price (A$ millions) (A$ millions) Historical Current Historical Current

Selected acquisitions of Australia and New Zealand casino businesses

SkyCity Darwin acquired by Delaware North, Inc. Darwin casino 07-Nov-18 30-Jun-18 na na 188 7.5 nc 14.8 nc

Casino Canberra acquired by the Aquis Group Canberra casino 23-Dec-14 31-Dec-13 na na 6 (loss) nc (loss) nc

Jupiters Casino in Townsville acquired by Colonial Leisure Group Townsville casino 01-Oct-14 30-Jun-14 na na 70 10.0 nc 16.3 nc

Unsuccessful offer for Reef Casino by the Aquis Group Cairns casino 21-Mar-14 31-Dec-13 AUD 4.35 217 218 11.5 11.4 15.2 nc

Christchurch, New Zealand casino acquired by Skyline Enterprises New Zealand casino 19-Dec-12 30-Jun-12 na na 128 12.6 nc nc nc

Burswood Island Casino acquired by Publishing and Broadcasting Limited Burswood casino 30-Jun-04 27-Apr-04 AUD 1.40 700 727 6.9 8.0 9.1 11.1

Casino Canberra and other casino interests acquired by Casinos Austria International Canberra casino 22-Apr-04 31-Dec-03 AUD 0.90 153 27 14.4 nc nc nc

MGM Grand Darwin Casino acquired by SkyCity Entertainment Group Limited Darwin casino 15-Feb-04 31-Dec-03 na na 195 8.8 7.2 nc nc

Tabcorp acquired Jupiters Limited including three Queensland casinos Queensland casinos 05-Mar-03 30-Jun-03 AUD 6.51 1,313 1,645 9.2 9.3 13.2 13.3

Breakwater Island Casino acquired by Jupiters Limited Townsville casino 07-Oct-02 30-Jun-02 AUD 0.37 53 45 8.2 7.1 19.3 13.9

Adelaide Casino acquired by SkyCity Entertainment Group Limited Adelaide casino 30-Jun-00 30-Jun-00 na na 183 11.7 7.9 18.5 10.5

Star City Casino acquired by Tabcorp Holdings Limited Sydney casino 02-Jun-99 31-May-99 AUD 1.64 1,069 1,470 11.5 10.9 20.1 18.9

Crown Casino Melbourne acquired by Publishing and Broadcasting Limited Melbourne casino 14-Dec-98 30-Jun-98 AUD 0.65 647 1,798 16.4 8.1 202.0 13.1

Average 515 10.7 8.7 36.5 13.5 Median 188 10.7 8.1 16.3 13.2

Transactions Involving the Acquisition of Casino Businesses

SkyCity Darwin

Delaware North, Inc., a privately held company based in the United States, announced on 7 November 2018 that it had reached agreement to acquire SkyCity Darwin from SkyCity Entertainment Group Limited (“SkyCity Entertainment Group”), a New Zealand listed company that operates casinos in New Zealand and Australia. SkyCity Darwin is a hotel, casino and resort complex located at Mindil Beach in Darwin, Northern Territory. The hotel has 152 guest rooms and associated hotel and resort facilities. The casino has approximately 30 gaming tables and 600 EGMs.

Casino Canberra

The Aquis Group acquired Casino Canberra from Casinos Austria International Limited in December 2014.

Jupiters Casino

Colonial Leisure Group, an Australian private company controlled by Mr Chris Morris (founder and former Chairman of Computershare Limited), acquired the Jupiters Townsville Hotel and Casino in Townsville, Queensland from The Star Entertainment Group Limited (“Star Entertainment Group”) in October 2014. The casino and hotel complex included approximately 30 gaming tables, approximately 370 EGMs and 194 hotel rooms and suites. The casino and hotel complex has been renamed The Ville Resort-Casino.

Reef Casino Trust

The Aquis Group made a conditional takeover offer for 100% of the units in the Reef Casino Trust in March 2014. The Reef Casino Trust owned (and still owns) the Pullman Reef Hotel and Casino complex on the waterfront in the Cairns central business district. The casino complex included the Reef Hotel Casino with 38 gaming tables and over 500 EGMs as well as a TAB wagering facility and a Keno lounge. The associated Pullman Reef Hotel offered 128 rooms and suites. Operation of the casino was subcontracted to Casinos Austria and operation of the hotel was subcontracted to the Accor Hotels Group. The offer by the Aquis Group lapsed in November 2014 because the conditions were not satisfied.

Christchurch Casino

Skyline Enterprises Limited (“Skyline Enterprises”) acquired the 50% of the Christchurch Casino that it did not already own from its partner, SkyCity Entertainment Group, in December 2012. Skyline Enterprises is not a listed company but its shares are traded on a New Zealand based internet share trading site. The Christchurch Casino offered 36 gaming tables and 500 EGMs.

Burswood Property Trust

Publishing and Broadcasting Limited (“PBL”), the gaming division of which is now part of Crown Resorts Limited (“Crown Resorts”), made a successful takeover offer for all of the shares in Burswood Limited in April 2004. Burswood Limited owned and operated the Burswood Island Casino (now Crown Perth). At that time, the Burswood Island Casino comprised a casino, hotel, convention centre and the Burswood Dome (a sporting stadium) on freehold land just outside of the Perth CBD. The casino had approximately 130 gaming tables and approximately 1,300 EGMs. The hotel had 413 rooms and suites.

Casinos Austria International Limited

Casinos Austria International Holding GmbH made a successful takeover offer in May 2004 for the shares that it did not already own in Casinos Austria International Limited, the owner of Casino Canberra and a 30% economic interest in the Reef Hotel Casino.

MGM Grand Darwin Casino

SkyCity Entertainment Group acquired the MGM Grand Darwin Casino from MGM Mirage Inc., a New York Stock Exchange listed company, in February 2004. The MGM Grand Darwin Casino, a hotel, casino and resort complex located at Mindil Beach in Darwin, Northern Territory offered 26 gaming tables, 450 EGMs and 107 hotel rooms and suites at the time of the acquisition.

Sumner Hall

Jupiters Limited

Tabcorp Holdings Limited (“Tabcorp) acquired 100% of the shares in Jupiters Limited in September 2003 through a scheme of arrangement that was approved by Jupiters Limited shareholders. Jupiters Limited (formerly Jupiters Trust) owned and operated the Conrad Jupiters casino and hotel complex in Gold Coast, the Conrad Treasury casino and hotel complex in Brisbane and the Jupiters casino, hotel and marina complex (originally the Breakwater Island Casino) in Townsville. These three casino and hotel complexes offered 205 gaming tables, over 2,500 EGMs and 927 hotel rooms and suites. Jupiters Limited also operated a Keno game in Queensland and New South Wales, owned Centrebet (a Northern Territory based online fixed odds sports betting book) and gaming and wagering technology for use by Jupiters Limited and for sale or license to third parties in Australia and overseas.

Breakwater Island Trust

Jupiters Limited, the owner of the Conrad Jupiters Casino in Gold Coast and the Conrad Treasury Casino in Brisbane, made a successful takeover for all of the units in Breakwater Island Trust in October 2002. Breakwater Island Trust owned and operated the Jupiters Hotel and Casino and the Breakwater Marina in Townsville, Queensland. The Jupiters Hotel and Casino offered 16 gaming tables, approximately 300 EGMs and 192 hotel rooms and suites.

Adelaide Casino

SkyCity Limited (now SkyCity Entertainment Group) acquired the Adelaide Casino from the Lotteries Commission of South Australia in June 2000. The Adelaide Casino offered 70 gaming tables and 760 EGMs. There was no hotel facility but the Hyatt Regency hotel was located next door.

Star City Holdings Limited

Tabcorp made a successful takeover offer for 100% of the shares in Star City Holdings Limited (a listed company that was majority owned by Showboat, Inc., a New York Stock Exchange listed company) in June 1999. Star City Holdings Limited owned and operated the Star City Casino in Sydney (originally the Sydney Harbour Casino). The Star City Casino and the associated hotel and entertainment complex offered 200 gaming tables, 1,500 EGMs, 352 hotel rooms, a lyric theatre, conference facilities and retail outlets.

Crown Limited

PBL acquired Crown Casino in Melbourne in December 1998 by merging with Crown Limited through a scheme of arrangement that was approved by Crown Limited shareholders. Crown Casino was at the time (and still is) the largest casino complex in Australia. The main gaming floor offered 270 gaming tables and 2,500 EGMs. The associated Crown Towers Hotel offered 500 hotel rooms and suites. The Crown Casino complex also housed a large number of restaurants, bars and retail outlets.

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Annexure B – Listed Casino and Gambling Businesses

Sumner Hall Comparable Companies and Transactions Analysis Year end / Market Enterprise EBITDA Multiple EBIT Multiple Company Principal Industry Acquisition Latest Share Capitalisation Value Sub-sector Date Bal. Sheet Price (A$ millions) (A$ millions) Historical Current Historical Current

Local (Australia and Asia Pacific) listed casino and gambling companies

Crown Resorts Limited Melbourne and Perth casinos 30-Jun 30-Jun-18 AUD 12.60 8,669 8,317 9.5 9.4 14.0 13.7

The Star Entertainment Group Limited Sydney, Brisbane and Gold Coast casinos 30-Jun 30-Jun-18 AUD 4.82 4,420 5,130 8.7 8.1 12.8 11.9

SkyCity Entertainment Group Limited New Zealand and Adelaide casinos 30-Jun 30-Jun-18 NZD 3.70 2,366 2,717 8.5 8.3 11.8 11.6

Reef Casino Trust Cairns casino 31-Dec 31-Dec-17 AUD 3.30 1,388 138 7.8 nc 10.9 nc

Lasseters International Holdings Ltd Alice Springs casino 30-Jun 30-Jun-18 AUD 0.02 10 79 8.8 nc 46.2 nc

Tabcorp Holdings Limited Racing and EGMs 30-Jun 30-Jun-18 AUD 4.58 9,220 12,357 16.7 11.3 25.3 15.5

Average 4,345 4,789 10.0 9.3 20.2 13.2 Median 3,393 3,923 8.8 8.2 13.4 11.7 Average excluding Lasseters and Tabcorp 4,211 4,075 8.6 8.6 12.4 12.4

Selected international listed casino companies

Las Vegas Sands Corporation Las Vegas, Macau and Singapore casinos and hotels 31-Dec 31-Dec-17 USD 52.39 56,215 67,671 10.6 9.6 14.2 12.8

Galaxy Entertainment Group Limited Casinos in Hong Kong and Macau 31-Dec 31-Dec-17 HKD 58.70 44,333 38,547 17.0 13.1 22.7 16.8

MGM Resorts International, Inc. Las Vegas casino and hotel operations 31-Dec 23-Nov-18 USD 27.93 20,171 40,052 11.4 10.4 18.5 19.6

Wynn Macau Limited Two Wynns hotels and casinos in Macau 31-Dec 31-Dec-17 HKD 18.90 17,158 21,150 14.8 11.5 22.0 15.7

Wynn Resorts Limited Las Vegas casino and hotel operations 31-Dec 31-Dec-17 USD 113.99 16,958 26,036 11.7 9.8 17.7 18.1

Melco Resorts & Entertainment Limited Hotels and casinos in Macau and the Philippines 31-Dec 31-Dec-17 USD 24.97 16,754 20,585 13.1 11.6 23.8 22.4

Genting Singapore Limited Sentosa Island resort and casino in Singapore 31-Dec 31-Dec-17 SGD 0.89 10,828 7,900 6.7 6.3 8.8 8.1

Caesars Entertainment Corporation 47 casinos in the United States and overseas 31-Dec 31-Dec-17 USD 9.53 8,715 31,611 19.5 10.0 36.2 23.3

MGM China Holdings Limited MGM Macau hotel and casino 31-Dec 31-Dec-17 HKD 11.16 7,414 9,574 15.8 12.8 20.4 21.4

Bloomberry Resorts Corporation Casinos in the Philippines and South Korea 31-Dec 31-Dec-17 PHP 8.12 2,334 2,604 8.1 6.6 12.6 9.4

Red Rock Resorts, Inc. Small market casinos in Nevada 31-Dec 31-Dec-17 USD 23.78 2,257 5,832 8.5 8.5 13.2 12.0

Average 18,467 24,688 12.5 10.0 19.1 16.3 Median 16,754 21,150 11.7 10.0 18.5 16.8

Listed Companies – Casinos and Gambling Businesses

Crown Resorts Limited

Crown Resorts Limited (“Crown Resorts”) owns and operates integrated casino, gaming, hotel and entertainment facilities in Melbourne and Perth. The company’s two main operations include over 800 gaming tables, over 5,000 gaming machines and over 2,500 hotel rooms. Crown Resorts also owns and operates Crown Aspinalls, a small private casino in London and provides online betting and social gaming services.

The Star Entertainment Group Limited

The Star Entertainment Group Limited (“Star Entertainment”) owns and operates integrated casino, gaming, hotel and entertainment facilities in Sydney, Brisbane and Gold Coast. The company’s three main operations include over 350 gaming tables, over 3,500 gaming machines and over 1,000 hotel rooms.

SkyCity Entertainment Group Limited

SkyCity Entertainment Group Limited (“SkyCity Entertainment”) operates in the gaming, entertainment, hotel, convention and tourism sectors in New Zealand and Australia. SkyCity Entertainment owns and operates the Adelaide Casino and until recently, owned and operated the SkyCity Darwin casino. The company also owns and operates the SKYCITY Auckland casino as well as smaller casinos in Queenstown and Hamilton, New Zealand.

Reef Casino Trust

Reef Casino Trust owns and leases the operation of the Pullman Reef Hotel Casino complex located in Cairns.

Lasseters International Holdings Limited

Lasseters International Holdings Limited (“Lasseters International”) is an investment holding company with gaming and hospitality businesses in Australia and Malaysia. The company owns and operates the Lasseters casino and hotel complex in Alice Springs. The company is also involved in property investment and property management.

Tabcorp Holdings Limited

Tabcorp Holdings Limited (“Tabcorp”) provides gambling and entertainment services. The company operates four division: Wagering and Media, Lotteries and Keno, Gaming Services and Sun Bets. The Wagering and Media division provides totalisator and fixed odds betting products on racing, sporting and other events and operates a network of TAB and UBET agencies and on-course operations. This division also operates three Sky Racing television channels broadcasting thoroughbred, harness and greyhound racing to audiences in TAB outlets, hotels, clubs, other licensed venues and in-home to pay TV subscribers. The Lotteries and Keno division is involved in the lottery business. The Gaming Services division provides electronic gaming machines and monitoring and value-add services to gaming venues. The Sun Bets division provides wagering and gaming services through internet and mobile devices.

MGM Resorts International, Inc.

MGM Resorts International, Inc. (“MGM Resorts”) owns and operates integrated casino, hotel and entertainment resorts in the United States. The company is based in Las Vegas, Nevada. MGM Resorts operates 14 casino and hotel resorts in the United States. The company’s operations serve premium gaming customers, leisure and wholesale travel customers, business travelers and groups including conventions and trade associations. MGM Resorts also holds a controlling shareholding in MGM China Holdings Limited which owns and operates the MGM Macau hotel and casino with over 1,000 slot machines, over 400 gaming tables and 582 hotel rooms and suites.

Las Vegas Sands Corporation

Las Vegas Sands Corporation (“Las Vegas Sands”) owns and operates integrated casino, hotel and entertainment resorts in the United States and Asia. The company is based in Las Vegas, Nevada. Las Vegas Sands owns and operates the Venetian Resort Hotel Casino and the Palazzo Resort Hotel Casino on the Las Vegas Strip, the Sands Expo and Convention Center in Las Vegas and the Sands Casino Resort Bethlehem in Bethlehem, Pennsylvania. Outside of the United States, Las Vegas Sands owns and operates the Venetian Macao Resort Hotel, the Sands Cotai Central, the Parisian Macao, the Plaza Macao and the Sands Macao in Macau and the Marina Bay Sands in Singapore.

Galaxy Entertainment Group Limited

Galaxy Entertainment Group Limited (“Galaxy Entertainment’) is involved in the gaming and entertainment business

Sumner Hall in Hong Kong, Macau and mainland China. The company is based in Hong Kong. Galaxy Entertainment owns and operates Galaxy Macau and StarWorld Macau as well as City Club casinos. The company also manufactures, sells, and distributes construction materials, including concrete pipes, asphalt, ready mixed concrete, slag and cement.

Wynn Resorts Limited

Wynn Resorts Limited (“Wynn Resorts”) owns and operates destination casino resorts. The company is based in Las Vegas, Nevada. Wynn Resorts’ Las Vegas casino operations include approximately 250 table games and 1,800 slot machines along with private gaming salons, a sky casino, a poker room and a racing and sports betting book. The Las Vegas hotel operations include two luxury hotel towers with a total of 4,748 guest rooms, suites and villas.

Wynn Macau Limited

Wynn Macau Limited (“Wynn Macau”) owns and operates the Wynn Macau and Wynn Palace casino resorts in Macau. The company is based in Macau. The Wynn Macau resort offers 24 hour gaming, two hotel towers with over 1,000 rooms and suites, eight restaurants and various recreation and leisure facilities. The Wynn Palace resort offers 24 hour gaming, a luxury hotel with over 1,700 guest rooms and suites and eleven food and beverage outlets.

Melco Resorts & Entertainment Limited

Melco Resorts & Entertainment Limited (“Melco Resorts”) owns and operates casino and resort facilities in Asia. The company is based in Hong Kong. Melco Resorts operates City of Dreams, an integrated casino resort in Macau with over 450 gaming tables, over 650 gaming machines and over 1,400 hotel rooms and suites. The company operates Altira Macau, a casino hotel that has approximately 100 gaming tables, 120 gaming machines and 215 hotel rooms. Melco Resorts also owns and operates Studio City, a cinematically-themed entertainment, retail and gaming resort in Macau that has over 250 gaming tables and over 950 gaming machines in Macau.. The company also operates City of Dreams Manila, an integrated casino, hotel, retail and entertainment resort in the Philippines.

Genting Singapore Limited

Genting Singapore Limited (“Genting Singapore”) develops and operates integrated casino and resort destinations in Asia. The company is based in Singapore. Genting Singapore’s principal asset is Resorts World Sentosa, a destination resort in Singapore that offers a casino, a waterpark, an aquarium, the Universal Studios Singapore Theme Park, hotels, restaurants and specialty retail outlets.

Caesars Entertainment Corporation

Caesars Entertainment Corporation (“Caesars Entertainment”) owns and operates 47 casinos in the United States and internationally. The company is based in Las Vegas, Nevada. Caesars Entertainment operates over 36,000 slot machines, over 2,700 table games and other games including keno, poker and racing and sports betting books. The company also operates an online gaming business and owns the World Series of Poker tournaments and brand.

MGM China Holdings Limited

MGM China Holdings Limited (“MGM China”) engages in development and operation of casino and hotel resort properties in greater China. The company is headquartered in Macau. The company’s principal asset is the MGM Macau which has over 1,000 slot machines, over 400 gaming tables and a 35 story hotel tower with 582 rooms.

Bloomberry Resorts Corporation

Bloomberry Resorts Corporation (“Bloomberry Resorts”) develops and operates hotels, casinos and tourism resorts in the Philippines and South Korea. The company is based in Manila in the Philippines. Bloomberry Resorts’ largest single operation is the Solaire Resort & Casino in Manila, a hotel and gaming resort with over 1,600 slot machines, over 300 gaming tables and over 450 hotel rooms. Bloomberry Resorts also owns and operates the Jeju Sun Hotel & Casino, located on the South Korean island of Jeju, with 36 gaming tables and over 200 hotel rooms.

Red Rock Resorts, Inc.

Red Rock Resorts, Inc. (“Red Rock Resorts”) engages in casino gaming and entertainment businesses in the United States. The company is based in Las Vegas, Nevada. Red Rock Resorts specialises in the “locals casinos” market rather than the mainstream casinos market. “Locals casinos” are typically small scale operations that are patronised by the local population rather than the tourism market. The company has two principal business segments which are its Las Vegas based operations and its non Las Vegas operations that are predominantly based on Native American owned land. Red Rock Resorts operates over 19,00 slot machines, over 300 table games and over 4,000 hotel rooms.

Sumner Hall

Annexure C – Financial Services Guide

Sumner Hall

Financial Services Guide

Financial Services Provided to Clients

Sumner Hall holds AFS License No. 231214 that authorises the company to provide financial product advice on securities and interests in managed investment schemes.

Sumner Hall provides financial product advice when Sumner Hall is engaged to prepare an independent expert’s report in relation to transactions involving mergers and acquisitions. In this case, Sumner Hall has been engaged by the Directors of Aquis Entertainment to provide general financial product advice in the form of an independent expert’s report to be included in the Notice of Meeting prepared by Aquis Entertainment in relation to the Proposed Transaction. Sumner Hall is not acting for anyone other than the Directors of Aquis Entertainment.

Sumner Hall does not accept instructions from retail clients. Sumner Hall does not receive any remuneration from retail clients for financial services. Sumner Hall does not provide any personal retail financial product advice to retail investors. Sumner Hall does not provide any market related advice to retail investors.

Responsibilities and General Advice

When providing an independent expert’s report, Sumner Hall’s client is the entity to which the report is provided which, in this case, is Aquis Entertainment. Sumner Hall receives its remuneration from that entity. No related body corporate of Sumner Hall, or any of the directors or employees of Sumner Hall or any of those related bodies corporate or any associates receives any remuneration or other benefit attributable to the preparation and provision of this report.

This report has been prepared for the Directors of Aquis Entertainment to assist in making their recommendation to shareholders in relation to the Proposed Transaction. This report should not be used for any other purpose or by any other party. To the extent that this report is used by any party other than the Directors of Aquis Entertainment, this report would constitute general financial product advice only and has been prepared without taking into account the personal objectives, financial situation or other relevant criteria of shareholders. Shareholders should consider the appropriateness of the general financial product advice in this report having regard to their own circumstances before acting on the general financial product advice contained in this report. Shareholders should also consider all other parts of the Notice of Meeting before making any decisions in relation to the Proposed Transaction.

Sumner Hall is responsible for this independent expert’s report including this Financial Services Guide. Sumner Hall is not responsible for the Notice of Meeting or any other aspect of the Proposed Transaction other than this independent expert’s report. Comments, questions or complaints regarding the Notice of Meeting or any other aspect of the Proposed Transaction other than this independent expert’s report should not be directed to Sumner Hall because Sumner Hall is not responsible for that material. Sumner Hall will not respond in any way that might involve the provision of financial product advice to any retail investor.

Fees and Other Remuneration

Sumner Hall charges fees for preparing reports such as this report. These fees are usually agreed with, and paid by, the recipient of the report. These fees are sometimes agreed on a fixed fee basis and sometimes on a time and cost basis. In this case, Aquis Entertainment has agreed to pay Sumner Hall a fixed fee of $65,000 for the preparation of this report. This fee is not contingent on the conclusions reached or the outcome of the Proposed Transaction. Sumner Hall’s out-of-pocket expenses in relation to the preparation of this report will also be reimbursed. Sumner Hall and its officers, representatives, related entities and associates will not receive any other fee or benefit in connection with the provision of this report.

Sumner Hall does not pay commissions or provide any other benefits to any person for referring customers or clients to Sumner Hall in connection with this report.

Conflicts of Interest

Sumner Hall is required to be independent of Aquis Entertainment and the Aquis Group in order to provide this report. The guidelines for independence when preparing an independent expert’s report are set out in Regulatory Guide 112 published by ASIC.

Sumner Hall has not been involved in the formulation of the Proposed Transaction. Sumner Hall’s only role has been the preparation of this independent expert’s report.

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Sumner Hall and its related entities have not provided any services to Aquis Entertainment or the Aquis Group over the past two years (or at any previous time). Neither Sumner Hall and its related entities nor any individual involved in the preparation of this report holds a substantial interest in, or is a substantial creditor of Aquis Entertainment or the Aquis Group or has any other material financial interest in the Proposed Transaction.

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Complaints should be sent in writing to The Complaints Officer, Sumner Hall Associates Pty Ltd, 48 Darling Point Road, Darling Point, NSW, 2027. Written complaints will be recorded, acknowledged within five days and investigated. As soon as practical, and not more than 45 days after receipt, a response will be advised in writing.

If the complaint is not satisfactorily resolved, the matter can be referred to the Financial Ombudsman Service. Sumner Hall is a member of the Financial Ombudsman Service (Member No. 35589). This service is provided free of charge to the complainant. The Financial Ombudsman Service is an independent company that has been established to provide advice and assistance to help in resolving complaints relating to the financial services industry. Further details regarding the Financial Ombudsman Service are available at their website, www.fos.org.au, or by contacting them directly at Financial Ombudsman Service Limited, GPO Box 3, Melbourne, Victoria, 2001 or by telephone on 1 300 780 808.

Contact Details

Sumner Hall can be contacted as follows:

Sumner Hall Associates Pty Limited 48 Darling Point Road Darling Point NSW 2027

Telephone: (02) 9328-0475 Email: [email protected] Web: www.sumnerhall.com

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Attachment A - Proxy Form

AQUIS ENTERTAINMENT LIMITED ABN 48 147 411 881

Appointment of Proxy

If appointing a proxy to attend the General Meeting on your behalf, please complete the form and submit it in accordance with the directions on the reverse side of this page.

I/We ______of ______, being a Shareholder/Shareholders of Aquis Entertainment Limited, pursuant to my/our right to appoint not more than two proxies, appoint:

Write here the name of the person you are appointing if this The Chair of the person is someone other than the Chair of the Meeting. Meeting OR Write here the name of the person you are appointing as a

(mark with an "X") second proxy (if any).

or failing him/her, (or if no proxy is specified above), the Chair of the meeting, as my/our proxy to vote for me/us and on my/our behalf at the General Meeting to be held at Level 2, Icon Energy Building, 2-4 Miami Key, Broadbeach Waters, Queensland and at any adjournment of that Meeting.

This proxy is to be used in respect of ______% of the ordinary Shares I/we hold.

Voting directions to your Proxy

The Chair of the Meeting intends to vote all available undirected proxies in favour of Resolutions 1 and 2 (inclusive). In exceptional circumstances, the Chair of the Meeting may change [his/her] voting intention on any resolution, in which case an ASX announcement will be made. RESOLUTION For Against Abstain* 1. Approval of Blue Whale Parties acquiring a relevant interest and voting    power greater than 20% 2. Approval of the Company carrying out its obligations in relation to the    Proposed Transaction

If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

*If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented. If executed by a company, executed in accordance with section 127 of the Corporations Act 2001 (Cth):

Individual or Shareholder 1 Joint Shareholder 2 Joint Shareholder 3

Sole Director and Sole Company Secretary Director Director/Company Secretary

Date: ______/______2019

______Contact Name Contact Business Telephone/Mobile

INSTRUCTIONS FOR COMPLETING PROXY FORM

1. Completion of a Proxy Form will not prevent individual Shareholders from attending the General Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy's authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the General Meeting.

2. A Shareholder of the Company entitled to attend and vote is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the Shareholder's voting rights. If the Shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes.

3. A proxy need not be a Shareholder of the Company.

4. If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your Shares are not to be counted in computing the required majority on a poll.

5. Should any resolution, other than those specified in this Notice of Meeting, be proposed at the Meeting, a proxy may vote on that resolution as they think fit.

6. If a representative of a company Shareholder is to attend the Meeting, a properly executed original (or certified copy) of evidence of appointment is required. The appointment must comply with section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment to including any authority under which it is signed.

7. If a representative as power of attorney of a Shareholder is to attend the Meeting, a certified copy of the Power of Attorney, or the original Power of Attorney, must be received by the Company in the same manner, and by the same time as outlined for proxy forms in paragraph 9 below.

8. Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: Where the holding is in one name, the holder must sign.

Joint Holding: Where the holding is in more than one name, all of the Shareholders should sign.

Power of Attorney: If you are signing under a Power of Attorney, you must lodge an original or certified photocopy of the appropriate Power of Attorney with your completed Proxy Form.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this Proxy Form must be signed by that person.

If the company (pursuant to section 204A of the Corporations Act) does not have a Company Secretary, a Sole Director can also sign alone.

Otherwise this Proxy Form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

9. Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address below not later than 10:00AM (AEST) on 19 March 2019 (48 hours before the commencement of the Meeting). Any Proxy Form received after that time will not be valid for the scheduled Meeting.

Hand deliveries: Share Registry – Boardroom Pty Limited, Level 12, 225 George Street, Sydney NSW

Postal address: Share Registry – Boardroom Pty Limited, GPO Box 3993, Sydney NSW 2001

Fax number: +61 2 9290 9655

Online: Step 1: VISIT https://www.votingonline.com.au/aqsegm2019 Step 2: Enter your Postcode OR Country of Residence (if outside Australia) Step 3: Enter your Voting Access Code (VAC): If you vote online, you do not need to return this form.