The Arrowhead A shares receive either 15 cents per quarter (60 cents per annum) or 50% of the total distributed income per combined Arrowhead A share and Arrowhead B share, whichever is higher.

The Arrowhead Memorandum of Incorporation provides that, when the distribution per Arrowhead A share in respect of each income period for four consecutive income periods exceeds 30 cents, then the Arrowhead B shares automatically convert into Arrowhead A shares, creating a single class of Arrowhead security.

Arrowhead A shares and Arrowhead B shares have received the same distribution since the first quarter of the 2014 financial year (when the quarterly distribution per Arrowhead A share exceeded 15 cents for the first time) and there is now no meaningful difference between the economic participation of the Arrowhead A shares and the Arrowhead B shares.

In the circumstances, the Arrowhead executives believe that there is merit in accelerating the creation of a single class of Arrowhead security, in order to simplify the structure and improve liquidity.

The company has instructed its advisors to begin working on the potential conversion to a single class of Arrowhead security.