MACH7 TECHNOLOGIES LIMITED — Annual Report 2014

Aug 28, 2014

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

			2014
Results for announcement to market	Up / Down	% Change	$
Revenue from ordinary activities	Down	79.8%	3,220
Loss after tax from ordinary activities attributable to	Up	67.8%	(302,272)
members
Loss attributable to members	Up	67.8%	(302,272)
		Amount	Franked Amount
Dividend Information		per share	per share
Dividend – current reporting period		Nil	Nil
Dividend – previous reporting period		Nil	Nil

Net Tangible Asset Backing per Ordinary Share		cents
Net tangible asset backing per ordinary share – current reporting period	(855,868,074 shares)	0.06
Net tangible asset backing per ordinary share – previous reporting period	(396,455,466 shares)	0.12

Commentary on the Results for the Period

During the year, the net loss of the Company consisted of administration costs incurred in the ordinary course of business. During the prior year, the net loss of the Company was higher as expenditure on The Three Rivers project was written off as the Company did not wish to proceed with the acquisition.

In addition, it was announced on the 18 December 2013 that Safety Medical Products Limited and Kisara Gold Pty Ltd had mutually agreed to withdraw from the Agreement for the Company to acquire Kisara. Part of the withdrawal agreement results in the Company agreeing to capitalise funds forwarded to Kisara as part of its original agreement with Kisara, into equity in Kisara.

Audit

This Preliminary Final Report is based on the Annual Financial Report which is in the process of being audited.

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Stephen Hewitt-Dutton

Director

Dated at Perth this 29[th] day of August 2014

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

Principal activities and review of operations

3D Medical Limited

On 19 June 2014, Safety Medical Products Limited (“ the Company ”) entered into a Heads of Agreement to acquire 3D Medical Limited (“ 3DM ”), an Australian unlisted company focussed on the commercialisation and integration of 3D printing and holographic projection technology into the Australian medical industry.

The application of these two technologies in the field of medicine has the potential to revolutionise patient treatment and care, by providing healthcare professionals with more meaningful information and greater insight into the complexities of patient anatomy.

The directors of the Company believe that the proposed acquisition of 3DM is in the interests of shareholders and is a very positive step for the Company, and offers potential for significant increase in shareholder value over the medium to long term.

3DM currently focuses its activities on the twin technology platforms of 3D printing and holographic projection.

3D printing creates physical three-dimensional models of a patient’s anatomical parts utilising the images and data already captured by conventional diagnostic imaging tools. The models are unique to the individual patient’s anatomy and can therefore act as a functional and visual aid in reviewing and understanding the complexities of a patient’s condition. This is particularly relevant in complex pre-surgical planning and patient communication. The application of 3D printing and its incorporation into best practice medical protocols offers clinicians, healthcare professionals, patients and researchers greater accuracy, effectiveness and efficiency in achieving improved patient outcomes.

Holographic projection is the second launch technology platform for 3DM. They believe that this technology will significantly alter the practice of medicine and will enhance efficacy and workflow at the practitioner level, accelerate the pathway to excellence in medical education and training and offer patients greater insight into their condition and ailment.

3DM seeks to quickly become the pre-eminent company in identifying and facilitating the take up and application of technologies that apply the data already being captured by conventional diagnostic imaging in a greater and more meaningful way to achieve greater systemic efficiencies, improve practitioner effectiveness and achieve better patient outcomes.

3DM expects its revenue streams to come from marketing its technical expertise in 3D printing and from the distribution of holographic projection viewers to radiology providers and medical specialists such as cardiology, neurology, gastroenterology and orthopaedics, areas of healthcare that currently receive medical data in 2D, even though it is captured in 3D.

The Australian medical and healthcare sector is extremely competitive and consequently Australian medical providers are early adopters of new medical technology and techniques to provide a superior customer (clinician, patient) experience that enables them to protect and grow market share and profitability. 3DM believes radiology providers in particular will be early adopters of the Company’s services so as to offer their referrers alternative methods of diagnosis delivery that provide superior healthcare outcomes for their patients.

Subsequent to year end, 3DM has signed a Memorandum of Understanding with Canadian based GestSure Technologies Inc (“ GestSure ”). GestSure was created to solve the problem of sterile information access in the operating room. Using cutting-edge machine vision technology, GestSure empowers surgeons to achieve better patient care while saving time and resources. The GestSure System has been specifically designed and developed for use in operating rooms as a way of accessing and interacting with digital scan imagery through simple hand gestures.

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

3D Medical Limited (continued)

3DM has also signed a Memorandum of Understanding (“ EchoPixel MoU ”) with EchoPixel Inc. EchoPixel, Inc. is a Silicon Valley company that is building a new world of patient care by providing visualisation and machine learning based solutions that enable doctors to work with and share patient specific body parts instead of images.

Under the terms of both the GestSure MoU and the EchoPixel MoU, 3DM has secured the exclusive marketing and distribution rights for Australia and New Zealand. Included in the MoUs is a provision for this exclusive territory to be expanded to include Asia.

3DM is also pleased to have received its first order for purchase of the EchoPixel viewer, a holographic viewer, to a leading radiology centre. The t3D-Viewer loads CT and MR DICOM image data and enables doctors to see tissue in open 3D space using holographic projection as if it were a real physical object where they can interact with it using a hand-directed stylus.

Kisara Gold Pty Ltd

It was announced on the 18th December that the Company and Kisara Gold Pty Ltd (“ Kisara ”) had mutually agreed to withdraw from the Agreement for the Company to acquire Kisara.

The hurdle associated with re-compliance with Chapters 1 and 2 of the ASX Listing Rule has been difficult to overcome given the changes to the Listing Rules that require a higher NTA hurdle ($2M to $3M) than was originally contemplated when the transaction was entered into, particularly given the difficult capital raising markets for resource juniors, and more so those with a gold focus.

Part of the withdrawal agreement results in the Company agreeing to capitalise funds forwarded to Kisara as part of its original agreement with Kisara into equity in Kisara.

On 9 January 2014, Kisara issued 66,666,667 shares to the Company. Kisara are to reconstruct their issued capital such that the Safety Medical shareholding to be distributed to Safety Medical shareholders will be 10,000,000.

A general meeting of shareholders was held on 17 February 2014 and the following resolutions in respect of Kisara were approved by shareholders:

• The issued share capital of the Company be reduced, without cancelling any shares, by an amount equal to the value as per the Company’s financial statements of all the fully paid ordinary shares in the capital of Kisara Gold Pty Ltd with effect on 18 February 2014. The reduction be satisfied by the distribution and transfer of all the Kisara Shares to holders of ordinary shares in the Company registered as such on 2 January 2014 in the ratio of 1 Kisara Share for every 50 ordinary shares in the Company held as at 2 January 2014; and

• Clause 10.2 of the Company's Constitution is altered by adding the following sentence at the end of that clause:

• "Subject to the Act and the Listing Rules, if the Company reduces its capital by the distribution of securities of another corporation, each Member consents to being a member of the other corporation and be bound by its constitution."The right of the Directors to participate in the public offer under the prospectus”;

On 18 February 2014, the Company had sent all the information in relation to the distribution of the shares to Safety Medical shareholders to Kisara. From that point forward, it was and still is the responsibility of Kisara to action the distribution.

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

SecureTouch Syringe

The Company retains its interest in the SecureTouch Syringe through two ongoing patent applications in the USA and Australia, as well as registered Trademarks in New Zealand and Australia.

The Company has recently filed a response to an Office Action issued by the United States Patent and Trademark Office on the examination of the United States Patent Application No 12/674422.

The Australian Patent Application No 2007357859 has completed its examinations and will proceed to grant. Both the US and Australian patent relates to the “Lockable Shield Assembly for a Syringe”, the core of the Company’s technology.

The Company has allowed other international patents to lapse associated with its Safety Syringe, which was considered fiscally prudent and which considered that if SFP were able to achieve an outcome on its keynote patent in the US that many of these could be regenerated and patented very quickly based on the US patent experience.

Share Issues

On 11 September 2013, the Company had completed a sophisticated placement raising of $100,000 and issued 50,000,000 fully paid ordinary shares at 0.2 cents per share. The raising was to provide funds to assist the Company with its progress toward finalising the acquisition of Kisara Gold Pty Ltd.

At the Company’s Annual General Meeting held on 29 November 2013, Shareholders approved to issue fully paid ordinary shares to Creditors in satisfaction of amounts due and payable. In December, the total debt of $247,063 was converted into 49,412,608 shares at an issue price of $0.005.

At the Company’s General Meeting held on 17 February 2014 and the following resolutions in respect of share issues were approved by shareholders:

• The ratification of the prior issue of 74,000,000 fully paid ordinary shares to Sophisticated and Professional Investors under the Tranche 1 Placement on 3[rd] January 2014; and

• The approval of issue of the remaining 176,000,000 fully paid ordinary shares to Sophisticated and Professional Investors under the Tranche 2 Placement.

On 21 February 2014, $352,000 was received for the Tranche 2 Placement and 176,000,000 fully paid ordinary shares at $0.002 per share.

On 30 June 2014, the Company had completed a sophisticated placement raising of $220,000 and issued 110,000,000 fully paid ordinary shares at 0.2 cents per share. The raising was to enable the Company to advance loan funds as per the Heads of Agreement with 3DM.

Director Changes

On 20 May 2014, Mr Simon Lill resigned as a Director of the Company and Mr Simon Jenkins was appointed as a new Director.

Safety Medical Products Limited ABN 26 007 817 192 Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

Safety Medical Products Limited Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2014

Note	2014 $ 2013 $
Revenue Cost of sales Gross profit Other income Business development, marketing & intellectual property expenses Accounting and audit fees Directors’ and company secretarial fees Legal fees Consultancy and corporate advisors Administrative expenses Exploration expenses Bad debts Results from operating activities Financial income Financial expense Profit/(loss) before tax Income tax (expense)/benefit Profit/(loss) after tax from continuing operations Profit/(loss) from discontinued operations Profit/(loss) for the year Other comprehensive income Total comprehensive loss for the year Earnings per share Basic earnings per share (cents) 3	- - - -
	- - - 2,492 - (15,522) (44,663) (62,537) (154,001) (160,000) (575) (82,325) - (223,379) (89,136) (53,707) - (16,390) (356,836) -
	(304,765) (951,814) 3,220 13,448 (727) (447)
	(302,272) (938,813) - -
	(302,272) (938,813) - -
	(302,272) (938,813) - -
	(302,272) (938,813)
	(0.05) (0.2)

The statement of profit or loss and other comprehensive income should be read in conjunction with the notes to the financial statements.

Safety Medical Products Limited ABN 26 007 817 192 Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

Safety Medical Products Limited Statement of Financial Position As at 30 June 2014

Note	2014 $ 2013 $
Assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Deferred acquisition cost 2 Total non-current assets Total assets Liabilities Trade and other payables Loans and borrowings Total current liabilities Total liabilities Net assets / (deficiency) Equity Issued capital 4 Reserves Accumulated losses Total equity	566,836 26,606 57,469 42,900
	624,305 69,506
	- 619,400
	- 619,400
	624,305 688,906
	85,799 195,393 - 25,000
	85,799 220,393
	85,799 220,393
	538,506 468,513
	3,151,893 2,779,628 - - (2,613,387) (2,311,115)
	538,506 468,513

The statement of financial position should be read in conjunction with the notes to the financial statements.

Safety Medical Products Limited ABN 26 007 817 192 Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

Safety Medical Products Limited Statement of Changes in Equity For the financial year ended 30 June 2014

	Note 2014	Note 2014	Note 2014
	Balance at 1 July 2013 2,779,628 (2,311,115) Loss for the year - (302,272) Total comprehensive income for the year - (302,272) Transactions with owners, in their capacity as owners, and other transfers Shares issued 1,067,063 - Transaction costs (30,751) - Reduction of capital (664,047) - Closing balance at 30 June 2014 3,151,893 (2,613,387) Amounts are stated net of tax 2013	2,779,628 (2,311,115) - (302,272)
		- (302,272)
			1,067,063 - (30,751) - (664,047) -
			3,151,893 (2,613,387)
Balance at 1 July 2012 2,779,628 (1,372,302) Loss for the year - (938,813) Total comprehensive income for the year - (938,813) Transactions with owners, in their capacity as owners, and other transfers Shares Issued - - Transaction costs - - Closing balance at 30 June 2013 2,779,628 (2,311,115) Amounts are stated net of tax			2,779,628 (1,372,302) - (938,813)
			- (938,813)
			- - - -
			2,779,628 (2,311,115)

The statement of changes in equity should be read in conjunction with the notes to the financial statements.

Safety Medical Products Limited ABN 26 007 817 192 Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

Safety Medical Products Limited Statement of Cash Flows For the year ended 30 June 2014

Note

2014 $ 2013 $ (251,513) (993,711) 3,220 13,447 (727) (447) (249,020) (980,711) - (17,106) - (17,106) 820,000 - (30,750) - - 25,000 789,250 25,000 540,230 (972,817) 26,606 999,423 566,836 26,606

Cash flows from operating activities Cash paid to suppliers and employees Interest received Interest paid Net cash used in operating activities Cash flows from investing activities Deferred acquisition costs Net cash from investing activities Cash flows from financing activities Proceeds from share issues Payments for share issue costs Proceeds from borrowings Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June

The statement of cash flows should be read in conjunction with the notes to the financial statements.

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

1 Segment reporting

		Medical Technology Project Evaluation Eliminations	Company
	Business segments	2014 $ 2013 $ 2014 $ 2013 $ 2014 $ 2013 $	2014 $ 2013 $
	External revenues Inter-segment revenues Total segment revenue Segment result Unallocated expenses Results from operating activities Net financing revenue /(costs) Impairment Loss/Assets written off Gain on deconsolidation of subsidiaries Profit/(Loss) for the year Profit/(Loss) for the year	- 2,492 - - - - - - - - - -	- 2,492 - -
		- 2,492 - - - -	- 2,492
		(289,102) (554,539) - (400,213) - - - - - - - -	(289,102) (954,751) - -
		(289,102) (552,050) - (400,213) - - 3,220 13,447 - - - - (16,390) - - - - - - - - - - -	(289,102) (952,260) 3,220 13,447 (16,390) - - -
		(302,272) (538,600) - (400,213) - -	(302,272) 938,813
			(302,272) 938,813

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

1 Segment reporting (continued)

Segment reporting (continued)
	Medical Technology Project Evaluation		Eliminations	Total
Business segments	2014 $ 2013 $ 2014 $ 2013 $		2014 $ 2013 $	2014 $ 2013 $
Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Capital expenditure Depreciation	616,836 42,996 - 619,400 7,469 26,510 - -		-- - -- -	616,836 662,396 7,469 26,510
	624,305 69,506 - 619,400		-- -	624,305 688,906
	85,799 195,393 - - - 25,000 - -		- -- - -- -	85,799 195,393 - 25,000
	85,799 220,393 - -		-- -	85,799 220,393
	- - - -	- 619,400 - -	-- - -- -	- 619,400 - -

2 Deferred acquisition costs

Deferred acquisitions costs – Kisara	- 619,400
	- 619,400

It was announced on the 18 December 2013 that Safety Medical Products Limited and Kisara Gold Pty Ltd had mutually agreed to withdraw from the Agreement for Safety Medical to acquire Kisara. Part of the withdrawal agreement results in the Company agreeing to capitalise funds forwarded to Kisara as part of its original agreement with Kisara, into equity in Kisara.

On 18 February 2014, the Company had sent all the information in relation to the distribution of the shares to Safety Medical shareholders to Kisara. From that point forward, it was and still is the responsibility of Kisara to action the distribution.

3 Earnings per share

Reconciliation of earnings to profit or loss: Earnings used to calculated basis EPS Profit/(loss) attributable to equity holders (302,272) (938,813)

Weighted average number of shares Ordinary shares on issue at 1 July Effect of shares issued Weighted average number of ordinary shares at 30 June	No. No. 396,455,466 396,455,466 163,495,271 -
	559,950,737 396,455,466

.

Safety Medical Products Limited ABN 26 007 817 192

Appendix 4E – Preliminary Final Report For the Year Ended 30 June 2014

4 Share capital

Issued and paid-up capital

855,868,074 (2013: 396,455,466) ordinary shares fully paid, net of capital raising cost

$ $ 3,151,893 2,779,628

Ordinary shares Balance at 30 June 2013: Sophisticated Placement Share Issue(1) Debt to Equity Share Issue(2) Debt to Equity Share Issue(2) Sophisticated Placement Share Issue(3) Sophisticated Placement Share Issue(4) Sophisticated Placement Share Issue(5) Balance at 30 June 2014: (1) 50,000,000 ordinary fully paid shares issued on 11 September 2013 at $0.002 per share. (2) 49,412,608 ordinary fully paid shares issued in December 2013 at $0.005 per share. (3) 74,000,000 ordinary fully paid shares issued on 3 January 2014 at $0.002 per share. (4) 176,000,000 ordinary fully paid shares issued on 21 February 2014 at $0.002 per share.	No. No. 396,455,466 396,455,466
	50,000,000 - 47,738,188 - 1,674,420 - 74,000,000 - 176,000,000 - 110,000,000 -
	855,868,074 396,455,466

(5) 110,000,000 ordinary fully paid shares issued on 30 June 2014 at $0.002 per share.

Terms and conditions

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. Share have no par value.

In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds of liquidation.

No dividends were paid or proposed during the current or prior financial years.

Capital Management

Safety Medical Products’ working capital, being current assets less current liabilities, has increased from a surplus of $150,887 in 2013 to a surplus of $538,506 in 2014, as during the year, the Company raised funds from sophisticated investors as well as not proceeding with the acquisition of Three River tenements and the acquisition of Kisara Gold Pty Ltd. There are no externally imposed capital requirements.

5 Dividends

No dividends were paid or proposed in the current or prior financial years.