Digitalx : June 2017 Quarterly Report – Appendix 4C

28 July 2017

Highlights:

• Secured funding agreement for approximately $4.35m from Blockchain Global Limited (BGL) and associated investors, subject to shareholder approval

• Due Diligence completed by BGL

• Alignment with a major player in the blockchain industry which will assist with the expansion of Blockchain consulting

• AirPocket awarded for Social Inclusion at the United Nations held Remittance Technology event

DigitalX Limited (ASX:DCC, DigitalX and the Company) is pleased to provide the following report on activities completed in the quarter ended 30 June 2017.

Funding and Company Strategy

As announced on 7 June 2017, the Company entered into a conditional subscription agreement and converting loan agreement (Agreements) with BGL, an Australian incorporated company operating in the Blockchain space. The Agreements provide for the provision of funding of approximately $4.35 million at 2.7 cents per share to acquire an interest of approximately 40% of the Company on a fully diluted basis (Transaction). The price of the investment was at a 28.5% premium to the 5 day VWAP of the Company's share price prior to the announcement on 7 June 2017. The Transaction is subject to regulatory approval which is being sought at the General Meeting scheduled for 25 August 2017 (Meeting).

Pursuant to the Agreements, the Company received AUD$300,000 by way of a convertible loan, paid in Bitcoin, which was an ASX first. The Company was then able to trade the Bitcoin for a total value in excess of AUD$300,000.

Subject to shareholder approval at the Meeting, BGL will subscribe for, or procure subscribers for shares, convertible notes and options in the Company for a further $4.05 million. Further details on the Transaction can be found in the Notice of Meeting which was released to ASX and despatched to shareholders on 26 July 2017.

The conditional subscription agreement has proceeded with BGL approving due diligence and a use of funds budget, with shareholder approval pending at the Meeting.

The Company's Blockchain remittance App, AirPocket was live during the quarter but had an insignificant volume of transfers. While AirPocket has been built to the highest degree of security, was marketed by leading Fintech marketing company Pinta and was awarded for Social Inclusion at the Remittance Technology (Remtech) Awards night held at the United Nationsi, the App has not yet gained initial traction with customers. To date, over 2000 users have registered with the App but the volume of transfers has been insignificant.

The AirPocket campaign review highlighted three key areas of focus. Firstly, the marketing budget was not large enough to gain traction with a target customer base that is slow to trust new products with their finances. The compliance screening process enforced by our money

transfer partner was rigid, with over a third of all potential users rejected due to email or IP reputation issues. Finally, competition during the quarter peaked. Given initial results and the Company's limited finances, the Company has been reviewing its strategy around AirPocket. The Company retains confidence in the technology and continues to consider the best options to exploit this asset.

Pursuant to the Company's partnership with Lateral Communications, the Company has delivered Blockchain development pitches to a number of businesses during the quarter. While these discussions have not yet led to sales agreements, DigitalX is being recognised as a leading voice in the Australian marketplace and continues to advise on Blockchain matters. One of the highlights of the partnership included the launch of a proof of concept app at the 2017 Blockchain Summit on Sir Richard Branson's Necker Island, to present how Blockchain technology can support Mission Blue's goals to safeguard marine protected areas around the globe including at Western Australia's Abrolhos Islands.

Capital Structure Changes

Since the previous quarterly report, the Company issued a further 9 Convertible Notes with a face value of $10,000, converting to Fully Paid Ordinary Shares at $0.05 per Share and maturing 23 May 2018, pursuant to the Convertible Note raising announced 20 March 2017. Further details on the Convertible Notes can be found in the Notice of Meeting which was released to ASX and despatched to shareholders on 26 July 2017.

As released to ASX on 3 July 2017, 3,849,517 Unlisted Options exercisable at $0.286 each on or before 30 June 2017, lapsed unexercised.

Summary of Working Capital Position

DigitalX Ltd had total cash and cash equivalents of $232,000 at quarter end. The Company expects to receive up to approximately $4 million from the balance of the BGL investment after shareholder approval on 25 August 2017.

DigitalX generated revenues of approximately $18,000 related to DigitalX Direct referral fees and $4,000 from foreign exchange referral fees which will be received during the current quarter.

Outlook

With the Blockchain market further improving over the quarter and DigitalX close to securing significant funding from Blockchain Global the remaining team is hungry for success in the 2018 financial year. DigitalX is now regularly approached for advice and partnership opportunities within the Blockchain stack including the digital currency market. The Company is reviewing these opportunities while the funding is finalised and continues to execute on its current assets with a very lean structure and small head count with expertise in Blockchain technology, digital currency and funds management. The Company looks forward to delivering its strategy presentation and potential new Board appointments during August 2017.

Ends

For further information, please contact DigitalX Limited

Leigh Travers Managing Director leigh@digitalx.com T: +61 439 376 847

About DigitalX

DigitalX is a Blockchain technology Company with offices in Perth and New York. Partners can use DigitalX's technology expertise to deliver innovative products to global markets.

i http://www.nasdaq.com/article/blockchain-based-remittance-companies-win-at-remtech- awards-ceremony-cm807098

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

1. Cash flows from investing activities

2. Payments to acquire:

3. property, plant and equipment - -

4. businesses (see item 10) - -

5. + See chapter 19 for defined terms

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