MACH7 TECHNOLOGIES LIMITED

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ABN 26 007 817 192

ASX Appendix 4E Preliminary Final Report &

Directors’ Report and Audited Financial Statements

For the year ended 30 June 2024

(Previous corresponding period: year ended 30 June 2023)

Provided to the ASX in accordance with listing rule 4.3A

Mach7 Technologies Limited (ACN 007 817 192 ABN 26 007 817 192) Level 4 | 100 Albert Road | South Melbourne VIC 3205 Australia

Mach7 Technologies Limited Contents 30 June 2024

Appendix 4E………………………………………………………………………………………………………………………….	3
Corporate directory………………………………………………………………………………………………………………….	5
Directors' report………………………………………………………………………………………………………………………	6
Auditor's independence declaration……………………………………………………………………………………………….	30
Statement of profit or loss and other comprehensive income………………………………………………………….……….	31
Statement of financial position……………………………………………………………………………………………………..	32
Statement of changes in equity…………………………………………………………………………………………………….	33
Statement of cash flows…………………………………………………………………………………………………………….	34
Notes to the financial statements………………………………………………………………………………………………….	35
Consolidated entity disclosure statement…………………………………………………………………………………………	72
Directors' declaration………………………………………………………………………………………………………………..	73
Independent auditor's report to the members of Mach7 Technologies Limited………………………………………….……	74

Mach7 Technologies Limited Appendix 4E Preliminary final report

1. Company details

Name of entity: Mach7 Technologies Limited ABN: 26 007 817 192 Reporting period: For the year ended 30 June 2024 Previous period: For the year ended 30 June 2023

2. Results for announcement to the market

			$
Revenues from ordinary activities	down	3.1% to	29,112,863
Loss from ordinary activities after tax attributable to the owners of Mach7
Technologies Limited	up	660.4% to	(7,970,324)
Loss for the year attributable to the owners of Mach7 Technologies
Limited	up	660.4% to	(7,970,324)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the consolidated entity after providing for income tax amounted to $7,970,324 (30 June 2023: $1,048,112). Please refer to the Directors’ Report for a detailed explanation and analysis of the Group’s performance for the year ended 30 June 2024.

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 10.0	Previous period Cents 10.0

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

6. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

Mach7 Technologies Limited Appendix 4E Preliminary final report

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements have been audited and an unmodified opinion has been issued.

11. Attachments

Details of attachments (if any):

The Directors’ Report and Audited Financial Statements of Mach7 Technologies Limited for the year ended 30 June 2024 is attached.

12. Signed

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Signed _________

Date: 28 August 2024

Robert Bazzani Chairman Melbourne

Mach7 Technologies Limited Corporate directory 30 June 2024

Directors	Mr Robert Bazzani (Independent Non-Executive Chairman)
	Mr Michael Lampron (Managing Director and Chief Executive Officer)
	Dr Eliot Siegel (Independent Non-Executive Director)
	Ms Rebecca Thompson (Independent Non-Executive Director)
Company secretary	Mr. Tony Panther
Registered office	Level 4, 100 Albert Road, South Melbourne VIC 3205
Principal place of business	120 Kimball Avenue, Suite 210
	South Burlington, VT 05403, United States
	T: +1 802.861.7745
Share register	Computershare Investor Services Pty Limited
	452 Johnston Street, Abbotsford, VIC 3067
	Telephone: 1300 850 505
	Website: www.computershare.com
Auditor	RSM Australia Partners
	Level 27, 120 Collins Street, Melbourne, VIC 3000
Solicitors	Gadens Lawyers
	Level 13, Collins Arch, 447 Collins Street, Melbourne, VIC 3000
Bankers	Westpac Banking Corporation
	150 Collins Street, Melbourne VIC 3000
Stock exchange listing	Mach7 Technologies Limited shares are listed on the Australian Securities Exchange
	(ASX code: M7T)

Mach7 Technologies Limited Directors' report 30 June 2024

The directors of Mach7 Technologies Limited are pleased to present their report for the year ended 30 June 2024 consisting of Mach7 Technologies Limited (referred to hereafter as the 'company' or 'parent entity') and its controlled entities (hereafter referred to as the 'consolidated entity', 'Group' or 'Mach7'). All amounts are in AUD.

ABOUT MACH 7

WHO WE ARE

Mach7 is a developer and supplier of enterprise imaging and data management software to global healthcare enterprises including integrated delivery networks (IDN’s), hospitals, diagnostic imaging centers, and other healthcare providers in North America, Asia Pacific, Middle East and Australia.

Corporate Structure

Mach7 Technologies Limited is an Australian incorporated company, listed in the Australian Stock Exchange (ASX) with operating subsidiaries in North America and Asia Pacific.

Principal activities

The principal activity of the Company is the development and commercialisation of medical imaging and data management software solutions for global healthcare enterprises.

Mach7 at a glance

Our key business activities consist of the following functional areas:

Research & Development (Engineering) – software development, innovation, enhancements, upgrades, analytics, artificial intelligence integration
Sales – including direct and channel partnership sales
Product – strategy and road-map
Professional Services – training and project management, clinical applications, support and maintenance
Administration – finance, people and culture (human resources), IT, risk management, governance

Mach7 Technologies develops innovative image management and viewing solutions for healthcare providers globally. Our products form the core of an integrated enterprise imaging ecosystem and their modularity, interoperability, and ease of use and deployment deliver customers true technological independence.

Mach7’s Enterprise Imaging Solution includes:

The Mach7 eUnity Enterprise Diagnostic Viewer – a one-of-a-kind, industry leading, zero-footprint viewer that allows medical professionals to remotely access patients’ medical images at any location, from any device, in a secure and efficient manner without loss of speed or image quality. eUnity is a best-in-market viewing platform designed for reading radiologists performing primary diagnosis or clinical staff viewing images, reports and other patient information to plan patient care pathways and treatment plans. It may be integrated into an Electronic Health Record as well to image enable the entire health system’s network with a comprehensive view of the patient’s imaging history.
The Mach7 Vendor Neutral Archive (VNA) – a powerful vendor agnostic data management solution that includes administration tools that allow for the fast storage, access, retrieval and viewing of images across a healthcare network. Mach7’s VNA is unique in that it gives customers ultimate control to consolidate and standardise all of their imaging data across the enterprise in a single platform. The VNA enhances the patient’s electronic health record and allows healthcare organisations to incorporate advanced applications such as AI and provides connectivity to the cloud.
Mach7’s Workflow Applications – designed to promote better clinical decision-making by giving users tools and worklists that provide access to contextual patient data and images. Core components of these applications include a Universal Worklist, Quality Control (QC) tools designed for technologists workflows; image sharing and exchange capabilities; teleradiology services; and additional specialised tools to best serve departmental patient care needs.

Mach7 Technologies Limited Directors' report 30 June 2024

FINANCIAL PERFORMANCE

FY24 has been a transformational year for Mach7 and record results were achieved in various areas. These are summarised in the sub-sections below where further details are provided on Sales Orders, Cash and Cashflows, Revenue, Expenses and Profitability. The following table also provides a snapshot of important balances from the Group’s statement of financial position as at 30 June:

	30 June 2024	30 June 2023	Change	Change
	$	$	$	%
Cash	26,175,405	23,394,568	2,780,837	12%
Deferred Revenue – yet to be recognised	(11,632,669)	(11,223,534)	(409,135)	4%
Net current assets	18,814,275	20,059,667	(1,245,392)	(6%)
Net tangible assets	29,068,108	31,018,023	(1,949,915)	(6%)
Intangible assets net of associated deferred tax liability	22,788,776	28,465,643	(5,676,867)	(20%)
Net assets	51,856,878	59,483,666	(7,626,788)	(13%)

SALES ORDERS

Large renewal program completed in FY24. For the fourth year in a row Mach7 achieved record annual sales orders with $61.3 million this year, up $21 million or 52% on prior year.

Mach7 has produced its most successful year in its history with sales orders of $61.3 million Total Contract Value (TCV[1] ) (FY23 $40.3 million TCV), showing 52% growth over the prior year. Pleasingly, customer churn remains very low.

FY24 Sales Orders of $61.3 million TCV comprised of $50.9 million (or 83%) in Annual Recurring Revenue (ARR) type sales (Maintenance and Support contracts and Subscription licences recognised as revenue over the contract term when the customer achieves First Productive Use (FPU)), $3.9 million (or 6%) in Capital Software sales (recognised as revenue upfront upon electronic delivery of software), and $6.5 million (or 11%) of Professional Services sales (recognised on a percent completion basis).

FY24 Sales Orders(TCV)	ARR Sales ($M) (Subscription licences and Maintenance and Support contracts)	Capital Software Sales ($M)	Professional Services Sales ($M)	FY24 Total Sales Orders ($M) %
New customers Renewals Add-on orders Expansions Existing customers TOTAL SALES ORDERS	$12.0 $32.8 $3.7 $2.4 $38.9 $50.9 83%	$0.0 $1.8 $0.1 $2.0	$1.2 $2.9 $1.8 $0.6	$13.2 22% $37.5 61% $5.6 9% $5.0 8% $48.1 78% $61.3 100%
		$3.9	$5.3
		$3.9	$6.5
		6%	11%

As indicated in the table above, the proportion of ARR sales increased to 83% in FY24 (58% in the prior year). This signals the ongoing shift of procurement preference by Mach7 customers from capital licence sales (a capex purchase) to subscription licence sales (an opex purchase), as more customers lean towards spreading the cost of software over the term of usage rather than paying 100% upfront. This also benefits Mach7 by increasing its ARR. This is an industry-wide trend and one that Mach7 believes will continue over time.

Of the $61.3 million total, sales orders from existing customers were $48.1 million (or 78%) of which $37.5 million (or 61%) were for renewals. Additionally, expansions accounted for $5.0 million (or 8%) demonstrating an increase in usage by existing customers and add-ons accounted for $5.6 million (or 9%) which validates the long-standing land and expand sales strategy and its effectiveness. Sales Orders from new customers were $13.2 million (22% of total sales orders) and represents 3 new logos for FY24.

1 Total Contract Value (TCV): capital software licence fees, professional services fees, annual subscription fees and annual maintenance and support fees over the life of the contract.

Mach7 Technologies Limited Directors' report 30 June 2024

CASH AND CASHFLOWS

Highest cash balance in four years. Operating cashflow positive in FY24 with cash on hand of $26.2 million, compared to $23.4 million at the end of FY23.

Cash receipts from customers in FY24 amounted to $34.9 million, up 42% on FY23 ($24.6 million). Mach7 reported positive operating cashflow of $3.5 million for FY24 which was a significant achievement in the context of its transition to a predominantly subscription sales model.

The financial position of the Company remains solid, with no debt and $26.2 million cash on hand at 30 June 2024 ($23.4 million at 30 June 2023).

REVENUE

Marginal decline in revenue due to subscription transition. $29.1 million or -3% on prior year

The Group reported $29.1 million revenue from operations (FY23: $30.1 million), a decrease of $0.9 million or 3% on the prior year due to the short-term impact of the capital to subscription transition. Pleasingly the Group’s ARR recognised for the year (that is Maintenance and Support revenue and Subscription revenue) increased by 29% over the prior year, to $21.1 million (FY23: $16.3 million), accounting for 72% of total revenue (FY23: 54%) and representing 72% of operating expenditure (FY23: 63%). Capital Software Licence revenue decreased by 64% to $4.0 million (FY23: $11.0 million) due to the subscription transition. Professional Services revenue increased by 52% to $4.1 million (FY23: $2.7 million).

Subscription revenue Maintenance and Support revenue Total recurring revenue Software Licence revenue Professional Services revenue**	30 June 2024 $ 9,203,681 11,868,361	30 June 2023 $ 6,539,388 9,791,611	Change Change $ % 2,664,293 41% 2,076,750 21% 4,741,043 29% (7,073,666) (64%) 1,395,720 52% (5,677,946) (41%) (936,903) (3%)
	21,072,042	16,330,999
	3,966,869 4,073,952	11,040,535 2,678,232
	8,040,821	13,718,767
	29,112,863	30,049,766

Subscription and Software Licence revenue above comprises the total software licence revenue amounting to $13,170,550 as disclosed in note 6 to these financial statements.

** Represents combination of implementation, training, migration and other custom services disclosed in note 6 to these financial statements.

72% OF MACH7’S REVENUE IS NOW RECURRING

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30 80%
72%
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15 40%
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FY22 FY23 FY24
Recurring Revenue Capital Software Licence Revenue
Total revenue (A$M)
Recurring revenue as % total revenue
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Mach7 Technologies Limited Directors' report 30 June 2024

EXPENSES

Disciplined cost management capped opex growth at 13%.

Operating expenditure increased by 13% (FY23: 19%) due to the increased cost of operations mainly driven by company growth, inflation and increased labour force to meet customer needs.

Operating expenditure increased by 13% (FY23: 19%) due to the increased cost of operations mainly driven by company growth, inflation and increased labour force to meet customer needs.	Operating expenditure increased by 13% (FY23: 19%) due to the increased cost of operations mainly driven by company growth, inflation and increased labour force to meet customer needs.	Operating expenditure increased by 13% (FY23: 19%) due to the increased cost of operations mainly driven by company growth, inflation and increased labour force to meet customer needs.	Operating expenditure increased by 13% (FY23: 19%) due to the increased cost of operations mainly driven by company growth, inflation and increased labour force to meet customer needs.
Operating expenditure (excluding right-of-use lease liability interest expense, share-based payments expense, foreign
exchange losses/gains, depreciation and amortisation) presents in the following table:
Employment and related expenses General administration and office expenses Professional fees and corporate expenses Travel and related expenses Marketing and investor relations expenses TOTAL OPERATING EXPENDITURE	30 June 2024 $ 23,350,307 2,331,116 1,479,917 1,324,641 818,245	30 June 2023 $ 20,282,346 2,022,953 1,722,535 1,123,796 755,985	Change Change $ % 3,067,961 15% 308,163 15% (242,618) (14%) 200,845 18% 62,260 8% 3,396,611 13%
	29,304,226	25,907,615

Mach7 Technologies Limited Directors' report 30 June 2024

PROFITABILITY

**NPATA* of -$1.2 million and Adjusted EBITDA of -$2.0 million impacted by subscription transition.

The Group continues to deliver strong Gross Margin of 95% or $27.7 million (FY23: 95% or $28.4 million), a decrease of $0.8 million or 3%.

The short-term decline in revenue from the subscription transition translated to lower EBITDA (on an adjusted basis) of -$2.0 million (FY23: $2.5 million).

The Group reported a net loss for the year of $8.0 million, compared to $1.0 million for FY23 which benefited from an additional $3.8 million income tax benefit primarily from the recognition of additional deferred tax assets on historical net operating tax losses. The FY24 increase in net loss is directly attributable to the short-term decline in revenue.

Revenue from contracts with customers Cost of sales Gross Margin Gross Margin% Operating expenditure Net foreign exchange (loss)/gain (realised) Other income/(expenses) (net) EBITDA Adjusted Interest income Net foreign exchange (loss)/gain (unrealised) Share-based payments expense (non-cash) Right-of-use lease liability interest expense Depreciation and amortisation (non-cash) Income tax benefit (non-cash) Loss for the year**	30 June 2024 $ 29,112,863 (1,443,205)	30 June 2023 $ 30,049,766 (1,625,139)	Change Change $ % (936,903) (3%) 181,934 (11%) (754,969) (3%) (3,396,611) 13% (147,414) (117%) (186,408) 154% (3,730,433) 14% (4,485,402) (178%) 491,922 125% (343,573) (136%) (197,032) 18% 5,037 (8%) 1,429,771 (16%) (3,822,935) (68%) (2,436,810) 68% (6,922,212) 660%
	27,669,658	28,424,627
	95% (29,304,226) (21,518) (307,315)	95% (25,907,615) 125,896 (120,907)
	(29,633,059)	(25,902,626)
	(1,963,401) 886,364 (90,571) (1,274,433) (61,866) (7,251,053) 1,784,636	2,522,001 394,442 253,002 (1,077,401) (66,903) (8,680,824) 5,607,571
	(6,006,923)	(3,570,113)
	(7,970,324)	(1,048,112)

NPATA (Net Profit After Tax and before Amortisation) is NPAT adjusted for amortisation of acquired intangibles.

** Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation) is EBITDA adjusted for unrealised net foreign exchange gains/losses and non-cash item share-based payments expense.

Mach7 Technologies Limited Directors' report 30 June 2024

ORGANISATIONAL OVERVIEW

Global Operations

The structure of our global operations and how they impact of financial outcomes in summarized below:

Australia	North America	Asia Pacific/Middle East

The majority of Mach7’s shareholder base is located in Australia. Certain regulatory and governance activities are undertaken by the Board of Directors and other administration functions in Australia. Mach7 does not yet derive revenue from customers based in Australia.	North America is where Mach7’s executive team resides and where the vast majority of Mach7’s employees reside including sales, marketing, research & development (engineering), product and professional services teams. Operations are conducted in both the US and Canada. Research & development (engineering) teams are located in both the US & Canada, each having a principal product focus of Mach7 Vendor Neutral Archive (US) and Mach7 eUnity Viewer (Canada). Overall, revenue has decreased in North America by 2% compared to the prior year. This is attributed to the subscription transition. Excluding software licence revenue, North America revenue has increased year- on-year in all product areas and revenue categories. Growth is attributed to new customers as well as existing customer expansions, renewals and add-ons, together with organic growth from price increases.	Mach7’s Asia Pacific team undertakes the sales and support activities in the Asia Pacific and Middle East Regions. Our team is mainly located in Singapore and Malaysia. Overall, revenue has decreased in Asia Pacific by 1% compared to the prior year.

EXTERNAL ENVIRONMENT

Adoption of Electronic Medical Records (EMR)

The mandate in the US that all medical records be converted to and stored in an electronic format continues to drive investment in software and technology across the healthcare industry and generates demand for Mach7 products. Medical images are the largest component of the medical record and the necessity to store and provide diagnostic reading and viewing capabilities both inside and outside the walls of the hospital is an essential operational function that is becoming more complex with ever increasing volumes, file types, file sizes and data repositories. As these complexities increase for healthcare providers, the enterprise-wide medical imaging solutions provided by Mach7 empowers our customers with the functionality, inter-operability and efficiencies that they need to provide the best possible patient care.

Volume-based business model - capital and subscription pricing options

Mach7 has a volume-based business model and offers all customers the flexibility of procuring their software as either a term capital software licence (a capex purchase) or a subscription licence (an opex purchase). This allows our customers full procurement flexibility to suit their individual business needs and provides them with multiple options to suit their budgetary requirements.

Mach7’s incoming sales orders are showing a shift of procurement preference by its customers from term capital software licence sales (a capex purchase) to subscription licence sales (an opex purchase), as more customers lean towards spreading the cost of software over the term of usage rather than paying 100% upfront. This also benefits Mach7 by increasing its ARR. This is an industry-wide trend and one that Mach7 believes will continue over time.

Mach7 Technologies Limited Directors' report 30 June 2024

OUR BUSINESS STRATEGIES

The Group continues to focus on gaining market share in the enterprise imaging market within its core regions of North America, Asia Pacific and the Middle East. This past year, the Group has increased its sales, marketing and services expertise in support of further revenue growth. Furthermore, the Company’s products have resonated with the Acute Care market as well as the Ambulatory Care market. This has given the company continued growth in sales funnel and is a key contributing factor to the overall success of the business across the spectrum of customer types.

The Group continues to invest in internal product development and innovation, with a major focus on enterprise imaging and interoperability. Mach7 prides itself on providing leading-edge products and services to its customers and product development remains a core focus of the Group.

Risk Management

The Board takes a proactive approach to risk management. The Board oversees the Audit and Risk Management Committee, which is responsible for ensuring that risks and opportunities are identified on a timely basis and that the Group’s objectives and activities take these risks and opportunities into account.

Key Business Risks

The Group’s operations are subject to several risks. The Board, through its Audit and Risk Management Committee, regularly reviews the possible impact of these risks and seeks to minimise this impact through a commitment to its corporate governance principles and its various risk management functions. A number of specific risk factors that may impact the future performance of the Company are described below.

Shareholders should note that this list is not exhaustive, and only includes risks that could affect the Group’s financial prospects, taking into account the nature and business of the Group and its business strategy.

Commercialisation risk

The principal activity of the Group is the provision of enterprise imaging data storage, sharing and interoperability for healthcare enterprises. There is a risk that the Group will be unable to attract ample customers to be sufficiently profitable to fund future operations. In addition, commercial success of new technology is subject to inherent uncertainty due to unknown variables.

Competition and new technologies

The industry in which the Group is involved is subject to increasing domestic and global competition which is fast-paced and fast-changing. Whilst the Group will undertake all business decisions and operations with reasonable care and diligence, it will have no influence or control over the activities or actions of its competitors, whose activities or actions may positively, or negatively affect the operating and financial performance of its business. For instance, the image management platform may be superseded by new and cheaper technology creating competitive pressures, in which case, the Group’s revenues and profitability could be adversely affected.

Risks associated with the regulatory environment

The Group operates in a highly regulated market both in Australia and internationally. Success can be impacted by changes to the regulatory environment. Mach7 continues to monitor changes and proposed changes to the regulatory environment to which it is exposed.

Mach7 Technologies Limited Directors' report 30 June 2024

DIRECTORS

The following persons were Directors of the Company during the whole of the financial year and up to the date of this report, unless otherwise stated:

Mr Robert Bazzani - Chairman (Independent Non-Executive Director until 16 November 2023 and appointed Chairman effective 16 November 2023)

Mr Michael Lampron - Managing Director and Chief Executive Officer

Mr Eliot Siegel, MD - Independent Non-Executive Director

Ms Rebecca Thompson - Independent Non-Executive Director (Appointed effective 16 November 2023) Mr David Chambers - Chairman (Resigned effective 16 November 2023)

Mr Philippe Houssiau - Independent Non-Executive Director (Resigned effective16 November 2023)

Board of Directors

The names and details of the Company’s Directors in office during the financial year and until the date of this report are as follows:

Name:	Robert Bazzani
Title:	Independent Non-Executive Director until 16 November 2023 and appointed Chairman
	effective 16 November 2023
Qualifications:	Master of Business Administration, Bachelor of Laws and Bachelor of Science
Experience and expertise:	Mr. Robert Bazzani spent 20 years with the global consulting firm KPMG, where he rose
	to the top and served as Chairman of KPMG Victoria, National Managing Partner for
	KPMG Australia’s Enterprise Division and National Managing Partner for KPMG’s M&A
	Division. Whilst in these roles, Rob was a member of KPMG’s National Executive
	Committee (NEC), which oversees and is responsible for the Firm’s turnover, strategic
	decision making, profitability and operations. Rob has a demonstrated track record of
	leading and growing large scale and complex businesses. He has played a significant
	role in advising clients (public, private, and global subsidiaries) on commercial matters,
	public transitions, corporate governance, investment banking and law, M&A and has
	engaged with Government and Regulators. With extensive experience in corporate
	advisory, Rob has deep commercial and industry knowledge across financial services,
	asset and wealth management, technology, property, insurances and consumer &
	industrial markets.
Other current directorships:	Keypath Education International Inc. (ASX:KED)
	OFX Group Ltd (ASX: OFX)
Former directorships (last 3 years): Class Limited (ASX:CL1)
Special responsibilities:	Remuneration & Nomination Committee – Chair, and Audit & Risk Management
	Committee - member
Interests in shares:	119,300
Interests in options:	325,000
Interests in rights:	None

Mach7 Technologies Limited Directors' report 30 June 2024

Name: Eliot Siegel, MD Title: Independent Non-executive Director Qualifications: Doctor of Medicine Experience and expertise: Dr. Eliot Siegel is a well-known thought leader in the world of radiology and imaging informatics and artificial intelligence applications in medicine. He is currently Professor at the University of Maryland School of Medicine, Department of Diagnostic Radiology, and also works for the Veterans Affairs Maryland Healthcare System, both in Baltimore, MD as well as adjunct professor of computer science and biomedical engineering at the undergraduate campuses of the University of Maryland. He is a pioneer and co-founder of United Theranostics, a company created to bring state-of-the-art radiopharmaceuticals to patients for cancer therapy. Under his guidance, the VA Maryland Healthcare System became the first filmless healthcare enterprise in the World. He has written over 300 articles and book chapters about PACS (Picture Archiving and Communication Systems) and digital imaging, and has edited numerous books on the topic, including Filmless Radiology and Security Issues in the Digital Medical Enterprise. He has given more than 1,000 presentations throughout the world on a broad range of topics involving the use of computers in medicine and artificial intelligence. Dr. Siegel was symposium chairman for the Society of Photo-optical and Industrial Engineers (SPIE) Medical Imaging Meeting for three years and has been honored as a fellow in that organisation as well as the American College of Radiology and the Society of Imaging Informatics in Medicine. He is also a Board member of Carestream Health and serves on numerous advisory boards in medical imaging. Other current directorships: None. Former directorships (last 3 years): Carestream Health Special responsibilities: Audit & Risk Management Committee - member, and Remuneration & Nomination Committee - member Interests in shares: 246,100 Interests in options: 125,000 Interests in rights: None

Name: Michael Lampron Title: Managing Director and Chief Executive Officer Qualifications: B.S. Health Science, Sports Medicine Experience and expertise: Mr. Michael Lampron is the CEO of Mach7 Technologies. With over 20 years of experience in business and operational management for Healthcare IT companies, Michael brings a broad experience ranging from private start-up organizations as well as long established companies such as IBM and GE. Michael was previously the Chief Executive Officer for a National Teleradiology Company and has a proven ability to drive results through a combination of astute analysis, innovative execution and crossfunctional teamwork. Michael is responsible for our customers’ success while driving excellence throughout Mach7.

Other current directorships: None Former directorships (last 3 years): Watchtower Consultants, LLC Special responsibilities: None Interests in shares: 833.405 Interests in options: 750,000 Interests in rights: 1,825,185

Mach7 Technologies Limited Directors' report 30 June 2024

Name:	Rebecca Thompson
Title:	Independent Non-Executive Director (Appointed effective 16 November 2023)
Qualifications:	Bachelor of Economics, Graduate Diploma in Applied Finance and Investment
Experience and expertise:	Ms Rebecca Thompson has more than 25 years of financial markets experience gained
	at global investment banks, listed companies and a fintech start-up. Rebecca’s
	executive career included seven years at J.P, Morgan as the Head of Corporate Broking
	followed by a role at KPMG Australia as the Head of Capital Advisory and most recently
	Head of Investor Relations for CSR Limited (ASX:CSR). Rebecca has a broad skillset
	across equities, property, and foreign exchange with experience in the real estate,
	building materials, healthcare, resources and software industries. Stakeholder relations,
	communications, sustainability and financial analysis are core competencies.
Other current directorships:	Independent Community Living Australia (ICLA), Non-Executive Director; MarketMeter,
	Non-Executive Director
Former directorships (last 3 years): None
Special responsibilities:	Audit & Risk Management Committee – Chair, and Remuneration & Nomination
	Committee - member
Interests in shares:	69,934
Interests in options:	225,000
Interests in rights:	None

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

Company secretary

Name: Mr Tony Panther Title: Company Secretary Appointment date: 1 February 2023 Qualifications: B.Ec., LLB, CA, AGIA, ACIS. Experience and expertise: Mr Panther is a Chartered Accountant with over 30 years’ experience in a variety of fields. Following completion of university commerce and law degrees he worked as an external auditor with a major international chartered accounting firm and has progressed to a range of internal audit, compliance, senior finance, and company secretarial roles with a number of ASX-listed and unlisted public companies and professional services firms, covering financial services, utilities, biotech, IT services, mineral exploration and environmental technologies. He specialises in financial reporting and company secretarial practice.

Meetings of directors

The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2024, and the number of meetings attended by each director were:

			Remuneration and	Remuneration and	Audit and Risk	Audit and Risk
	Full	Board	Nomination	Committee	Management Committee
		Eligible to		Eligible to		Eligible to
	Attended	attend	Attended	attend	Attended	attend
Mr David Chambers	5	6	2	2	1	2
Eliot Siegel, MD	11	12	1	1	5	5
Mr Robert Bazzani	12	12	3	3	5	5
Mr Michael Lampron	12	12	-	-	-	-
Mr Philippe Houssiau	2	6	-	2	-	-
Ms Rebecca Thompson	6	6	1	1	3	3

Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.

Mach7 Technologies Limited Directors' report 30 June 2024

Outlook

Mach7’s innovative and interoperable products are the foundation of an enterprise imaging strategy that provides both hospital networks and private practices with a consolidated image data management solution with diagnostic image viewing from any location.

Mach7 continues to benefit from market dynamics influencing the adoption of enterprise imaging with buying decisions increasingly being made by the C-suite or CIO for the whole hospital system and outpatient practice or enterprise rather than the radiology department.

The Company is well positioned to take advantage of a highly fragmented market for medical imaging and the ongoing shift in demand from acute to ambulatory settings. The Company has a strong sales pipeline which reflects opportunities with new and existing customers across different regions, care settings and product combinations.

The record sales orders achieved in FY24 reflected the ongoing shift to subscription sales, especially in North America, and a large renewal program which demonstrated strong retention among existing customers. The changing customer preference for subscription licencing will ultimately provide Mach7 with a more predictable and scalable business model.

In FY25, Mach7 will leverage its capabilities to innovate and create new solutions which will further differentiate the Company from its competitors and increase the scalability of the business. This will involve investment in its people, processes and tools which is expected to be in the range of $2M-$3M.

Mach7 expects to deliver growth in FY25 of 15-25% in both revenue and contracted annual recurring revenue with revenue growth to exceed the growth in operating expenses.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Company during the financial year.

Indemnity and insurance of auditor

The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.

Non-audit services

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 28 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The directors are of the opinion that the services as disclosed in note 28 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' Report.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Mach7 Technologies Limited Directors' report 30 June 2024

Likely developments and expected results of operations

The Group will continue to announce material contract wins as and when they occur. In addition, it will aim to grow its revenues from smaller product sales via its customer install base and community hospitals, which the Group will endeavour to keep the market updated on a regular basis. The Group will continue its product development strategy to ensure its product is at the forefront of medical imaging software to meet the customers’ needs.

Environmental regulation

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory of Australia, or any of the regions where it operates.

REMUNERATION REPORT (AUDITED)

The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

Key management personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Group. The KMP included in this report are as follows:

Non-executive Directors (NED)	Role	Period covered for remuneration
Mr Robert Bazzani	Independent, Non-Executive Director until 16	Full year
	November 2023 and appointed Chairman
	effective 16 November 2023
Dr Eliot Siegel, MD	Independent, Non-Executive Director	Full year
Ms Rebecca Thompson	Independent, Non-Executive Director	16 November 2023 to 30 June 2024
	(Appointed effective 16 November 2023)
Mr David Chambers	Independent, Non-Executive Chairman	Till 16 November 2023
	(Resigned effective16 November 2023)
Mr Philippe Houssiau	Independent, Non-Executive Director	Till 16 November 2023
	(Resigned effective16 November 2023)
Executives
Michael Lampron	Chief Executive Officer & Managing Director	Full year
Ms Dyan O'Herne	Chief Financial Officer	Full year
Mr David Madaffri	Chief Operating Officer	Full year

REMUNERATION PHILOSOPHY

The performance of the Group depends on the quality of its directors and executives. The Group’s remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.

REMUNERATION STRUCTURE

The Board, through its Nomination and Remuneration Committee, is responsible for determining and reviewing remuneration arrangements for the Group’s directors and executives. In accordance with best practice corporate governance, the structure of Non-Executive Directors and executive remunerations are separate.

Principles used to determine the nature and amount of remuneration

The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency

Mach7 Technologies Limited Directors' report 30 June 2024

The Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the Company. The framework is designed to:

ensure that coherent remuneration policies and practices are observed which enable the attraction and retention of directors and management who will create value for shareholders
fairly and responsibly reward directors and senior management having regard to the Group's performance, the performance of the senior management and the general pay environment; and
comply with all relevant legal and regulatory provision.

In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate.

NON-EXECUTIVE DIRECTORS' REMUNERATION FRAMEWORK

Objective

Remuneration for Non-Executive Directors is set with the objective of attracting and retaining highly experienced and skilled directors, and which reflect the demands and responsibilities of their role.

Structure

The financial position of the Company is considered when determining the mix between cash and non-cash remuneration. Non-Executive Directors’ fees and payments are reviewed annually by the Board. The Board may, from time to time, seek advice from independent remuneration consultants to ensure Non-Executive Directors’ fees and payments are appropriate and in line with market standards. Remuneration for Non-Executive Directors (NEDs) may contain any or all of the following:

Annual fees, reflecting the value of the individual's personal performance, time commitment and responsibilities of the role;
Equity based remuneration, issues of shares or securities, reflecting the contribution of the Director toward the Group's medium and long-term performance objectives (each award is subject to shareholder approval); and
● Other benefits required by law, for example, superannuation payments.

All non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office of director.

ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general meeting. Following the adoption of a revised Company Constitution on 31 March 2016, the aggregate remuneration for all non-executive directors has been set at a maximum amount of $500,000 per annum under clause 50 (a) of the Company’s Constitution.

The annual fees awarded to non-executive Directors are as follows:

	From 1 July
Base fee	2023
	$
Chair	110,000
Director	90,000
Additional fees for each Chair of Board Committees	10,000

EXECUTIVE REMUNERATION FRAMEWORK

The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components.

Structure

Fixed Remuneration:

Fixed remuneration is set with reference to the skills, experience and performance of the individual performing the role, comparable market remuneration for the role being performed, and the overall size and financial position of the Group as a whole. Fixed remuneration is reviewed annually by the Board (via its Nomination & Remuneration Committee).

Fixed remuneration for key management personnel includes the following:

Mach7 Technologies Limited Directors' report 30 June 2024

Annual base salary
Benefits in compliance with local laws (e.g. paid leave, medical insurance and superannuation payments)

Performance-based (variable) remuneration:

Performance-based remuneration for key management personnel includes:

Bonuses to reward individuals following an outstanding business contribution having regard to clearly specified performance targets;
Sales commission (sales executives only); and
Equity based remuneration, reflecting the Group’s medium and long-term performance objectives.

The Group has both a short-term incentive program (STIP) and a long-term incentive plan (LTIP).

SHORT TERM INCENTIVE PLAN (STIP)

STIP is designed to align corporate and departmental goals with the targets of executives responsible for meeting those goals. STI payments are granted to executives based on the achievement of specific annual targets/key performance indicators (KPI’s). KPI’s can include (but are not necessarily limited to) the following elements:

Achievement of financial targets (e.g. revenue, earnings/profitability, cash flows, sales orders, budgeted operating expenses)
Excellence in customer service and satisfaction
Leadership contribution
Product development
Capital management
Corporate transactions

Description of the plan

The STIP is an annual incentive plan under which executives are eligible to receive an annual award if they satisfy challenging strategic, operational and individual performance targets. Executives will be entitled to a STIP award up to a maximum fixed percentage of their annual fixed remuneration. The maximum amount will differ between individuals.

Appropriate STIP incentive

The STIP is designed to motivate and reward high performance. It puts a significant proportion of the executive’s remuneration at-risk against targets linked to the Group’s performance objectives, thereby aligning executive’s interests with shareholders.

Choice of performance conditions

The choice of performance conditions for the STIP will be relevant to the Group in its current phase of growth and will be heavily focussed on financial metrics, such as revenue, earnings, cash flow, and sales orders targets. The Directors believe these targets are most closely aligned with growing shareholder value. In addition, the performance conditions will be set with relevance to the individuals’ role, such that the person is appropriately incentivised and motivated to achieve the best they can.

Performance period

The STIP is an annual plan.

Performance conditions - current year

Any payment made under the STIP is on the basis that performance conditions are met. For the current period, performance conditions were outlined in a business plan approved by the Board and included:

Sales Orders
Revenue
Annual Recurring Revenue
EBITDA
Cashflow positive

Mach7 Technologies Limited Directors' report 30 June 2024

Assessment of performance conditions

Financial targets as assessed by the Board with reference to annual financial statements and sales order information. For non-financial and individual targets, the Board assesses the personal performance of each executive against non-financial and personal performance of other executives and makes recommendations to the Remuneration & Nomination Committee in relation to the payment of any STI. The Remuneration and Nomination Committee review these recommendations and provide a final recommendation to the Board for its approval of STIs to be paid.

Payment of the STIP

Any STI payment is generally made within two to three months of the end of the performance period. The Board may, in its discretion, vary the general payment period.

Cessation of employment

In order to qualify for inclusion in the STIP plan, the executive must remain employed with a Group Company as an eligible employee at the end of the fiscal year and must have been employed for all or portion of the performance period. If the executive leaves for a qualifying reason, the Board may award the STI in its full discretion.

LONG-TERM INCENTIVE PROGRAM (LTIP)

The LTIP provides for the issue of equity instruments such as performance rights, shares and options that are linked to the achievement of targets related to the Group’s medium to long-term performance. Option awards typically vest over a period of between one and three years, expire within five years and have an exercise price that may include a premium to the market price as at the date of issue. The most recent LTIP was approved by shareholders in November 2023.

Performance conditions

The performance conditions must be satisfied in order for performance rights or equity options to vest. Performance conditions can include time-based conditions, whereby the holder must remain employed by the Group through to vesting date, or financial targets. Each performance right or equity option entitles the holder to acquire one share in the Company for a stated exercise price, subject to meeting specific performance conditions. The performance rights and equity options do not carry rights to dividends or voting.

As of 30 June 2024, the Company has 1,825,185 performance rights on issue, including:

402,185 which were to vest on 30 June 2024 and are under the Board’s consideration for the performance conditions;
723,000 performance rights which will vest on 30 June 2025; and
700,000 performance rights which will vest on 30 June 2026

provided the following performance conditions are met and the holder remains employed on this date. The total shareholder return (TSR) will be measured over the three-year period ending on the vesting date.

Hurdle: M7T relative TSR performance compared to the S&P/ASX All Technology Index

Percentage of Performance Rights to vest

<50th percentile No vesting ≥50th percentile to 75th percentile Pro–rata straight line vesting between 50% and 100% ≥75th percentile 100% vesting

Cessation of employment

If a KMP ceases to be employed or engaged by the Group for any reason other than as a result of a Qualifying Event, any unvested performance rights and equity options held by the participant will lapse immediately on the participant ceasing to be employed. Any vested performance rights and equity options must be exercised within 30 days of termination date. A Qualifying Event means:

Death;
Serious injury, disability or illness which prohibits continued employment;
Retirement or retrenchment; or
Such other circumstances which the Board determines to be a Qualifying Event.

Where a participant in the LTIP scheme ceases to be employed by the Group as a result of a Qualifying Event, the Board may, in its absolute discretion, make a determination as to whether some or all of those performance rights or equity options become vested at the time of the cessation of employment of the participant or another date determined by the Board.

In the event of a change of control, the Board has discretion to determine that the vesting of some or all of non-vested performance rights and equity options should be accelerated. Any remaining unvested performance rights or options will immediately lapse.

Mach7 Technologies Limited Directors' report 30 June 2024

Details of remuneration

Amounts of remuneration

Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.

30 June 2024 Non-Executive Directors: David Chambers Eliot Siegel Robert Bazzani Philippe Houssiau Rebecca Thompson Executive Director: Michael Lampron Other Key Management Personnel: Dyan O'Herne David Madaffri**	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 40,840 - - 90,000 - - 101,351 - - 26,664 - - 55,180 - - 596,084 146,475 79,928 488,177 119,958 69,142 674,980 78,722 82,890 2,073,276 345,155 231,960	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 40,840 - - 90,000 - - 101,351 - - 26,664 - - 55,180 - - 596,084 146,475 79,928 488,177 119,958 69,142 674,980 78,722 82,890 2,073,276 345,155 231,960	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 40,840 - - 90,000 - - 101,351 - - 26,664 - - 55,180 - - 596,084 146,475 79,928 488,177 119,958 69,142 674,980 78,722 82,890 2,073,276 345,155 231,960	Post- employment benefits Super- annuation $ 4,493 - 11,149 - 6,070 - - -	Long-term benefits Long service leave $ - - - - - - - -	1Share- based payments Equity- settled $ (13,739) 9,269 9,269 (25,864) 38,985 574,145 69,335 85,654	Other cash payments $ - - - - - - - -	Total $ 31,594 99,269 121,769 800 100,235 1,396,632 746,612 922,246
	2,073,276	345,155	231,960	21,712	-	747,054	-	3,419,157

Mr David Chambers resigned as Chairman and Mr Philippe Houssiau resigned as Non- Executive Director effective 16 November 2023. Negative share-based payment expense represents the net of the charge for year on options vested during the year and the reversal of option reserve into share-based payment expense that were related to the unvested options forfeited on resignation. Ms Rebecca Thompson was appointed as Independent Non-Executive Director effective 16 November 2023.
** Equity settled share-based payment of $574,145 includes $234,000 towards the value of 325,000 shares issued as compensation to Mr Lampron in November 2023.
*** Mr David Madaffri was appointed as Chief Operating Officer effective 1 July 2023. Cash salary and fees for the year includes sales commission.

1Equity-settled share-based payments in the table above represents the valuation of the options and/or performance rights granted to the relevant KMP, as required by Accounting Standard AASB 2- Share-based Payment to be accounted as the cost to the company. The amount disclosed for equity-settled share-based payments represents the accounting valuation recognised as cost to the company during the year as disclosed in note 36 and does not represent cash remuneration to the KMP.

Mach7 Technologies Limited Directors' report 30 June 2024

30 June 2023 Non-Executive Directors: David Chambers Eliot Siegel Robert Bazzani Philippe Houssiau2 Executive Director: Michael Lampron Other Key Management Personnel: Steven Parkes Dyan O'Herne*	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 90,498 - - 80,000 - - 72,398 - - 259,992 - - 558,088 141,942 77,466 529,314 171,569 168,528 167,112 85,005 31,641 1,757,402 398,516 277,635	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 90,498 - - 80,000 - - 72,398 - - 259,992 - - 558,088 141,942 77,466 529,314 171,569 168,528 167,112 85,005 31,641 1,757,402 398,516 277,635	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 90,498 - - 80,000 - - 72,398 - - 259,992 - - 558,088 141,942 77,466 529,314 171,569 168,528 167,112 85,005 31,641 1,757,402 398,516 277,635	Post- employment benefits Super- annuation $ 9,502 - 7,602 - - - -	Long-term benefits Long service leave $ - - - - - - -	1Share- based payments Equity- settled $ 16,169 11,852 14,866 32,760 296,456 55,745 46,052	Other cash payments $ - - - - - - -	Total $ 116,169 91,852 94,866 292,752 1,073,952 925,156 329,810
	1,757,402	398,516	277,635	17,104	-	473,900	-	2,924,557

Mr Steven Parkes resigned as Chief Financial Officer on 1 January 2023. Cash salary for the year includes severance payments in additional to the normal salary for the period.

** Ms Dyan O'Herne was appointed as Interim Chief Financial Officer on 1 January 2023 and Chief Financial Officer effective 1 July 2023.

2 Cash salary and fees for Mr Houssiau for the year ended 30 June 2023 comprised fees of $80,000 for performance of nonexecutive director duties and additional fees of $179,992 for the performance of extra services, in addition to and outside the scope of his services as a non-executive director, in connection with work performed by a technical sub-committee, as approved by the Board. The amount of the extra services fees was based on normal commercial rates for services of that kind.

Mach7 Technologies Limited Directors' report 30 June 2024

The proportion of remuneration linked to performance and the fixed proportion are as follows:

	Remuneration		At risk - STI		At risk - LTI
Name	30 June 2024 30 June	2023 30 June 2024 30 June		2023 30 June 2024 30 June		2023
Non-Executive Directors:
David Chambers	143%	86%	-	-	(43%)	14%
Eliot Siegel	91%	87%	-	-	9%	13%
Robert Bazzani	92%	84%	-	-	8%	16%
Philippe Houssiau	3321%	89%	-	-	(3221%)	11%
Rebecca Thompson	61%	-	-	-	39%	-
Executive Directors:
Michael Lampron	48%	59%	11%	13%	41%	28%
Other Key Management
Personnel:
Steven Parkes	-	75%	-	19%	-	6%
Dyan O'Herne	75%	60%	16%	26%	9%	14%
David Madaffri	82%	-	9%	-	9%	-

Service agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows:

Component

Requirement

Fixed remuneration Reviewed annually Variable remuneration Participation in the Company's STIP and LTIP; Annual Sales Commission Plan for Sales Executives only Contract duration Ongoing Termination of employment (without cause) by the Company 6 months' notice (CEO & CFO), 3 months’ notice (COO) or by individual Termination of employment (for cause) by Company Terminated immediately

Share-based compensation

Issue of shares

Details of shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2024 are set out below:

Name	Date	Shares	Issue Price	$
Michael Lampron	17/11/2023	325,000	$0.72	234,000

Details of shares issued to directors and other key management personnel upon exercise of remuneration related options during the year ended 30 June 2024 are set out below:

Name Grant Date Date of exercise of option Exercise price Michael Lampron 17/10/2018 21/09/2023 $0.185 Eliot Siegel 12/11/2018 01/11/2023 $0.244	Number of options exercised 350,000 225,000	Number of shares issued 350,000 225,000
	575,000	575,000

Mach7 Technologies Limited Directors' report 30 June 2024

Options

The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows:

	Number of					Fair value
	options		Vesting date and		Exercise	per option at
Name	granted	Grant date	exercisable date	Expiry date	price	grant date
Eliot Siegel	8,333	18/11/2019	18/11/2020	18/11/2024	$0.820	$0.367
Eliot Siegel	8,333	18/11/2019	18/11/2021	18/11/2024	$0.820	$0.367
Eliot Siegel	8,334	18/11/2019	18/11/2022	18/11/2024	$0.820	$0.367
Michael Lampron	250,000	18/11/2019	01/07/2020	18/11/2024	$0.800	$0.370
Michael Lampron	250,000	18/11/2019	01/07/2021	18/11/2024	$0.950	$0.347
Michael Lampron	250,000	18/11/2019	01/07/2022	18/11/2024	$1.100	$0.326
Robert Bazzani	75,000	18/11/2019	01/01/2021	18/11/2024	$0.820	$0.367
Robert Bazzani	75,000	18/11/2019	01/01/2022	18/11/2024	$0.820	$0.367
Robert Bazzani	75,000	18/11/2019	01/01/2023	18/11/2024	$0.820	$0.367
Eliot Siegel	8,333	01/12/2020	01/12/2021	30/11/2025	$1.400	$0.790
Eliot Siegel	8,333	01/12/2020	01/12/2022	30/11/2025	$1.400	$0.790
Eliot Siegel	8,334	01/12/2020	01/12/2023	30/11/2025	$1.400	$0.790
Robert Bazzani	8,333	01/12/2020	01/12/2021	30/11/2025	$1.400	$0.790
Robert Bazzani	8,333	01/12/2020	01/12/2022	30/11/2025	$1.400	$0.790
Robert Bazzani	8,334	01/12/2020	01/12/2023	30/11/2025	$1.400	$0.790
Eliot Siegel	8,333	11/11/2021	11/11/2022	11/11/2026	$0.910	$0.380
Eliot Siegel	8,333	11/11/2021	11/11/2023	11/11/2026	$0.910	$0.380
Eliot Siegel	8,334	11/11/2021	11/11/2024	11/11/2026	$0.910	$0.380
Robert Bazzani	8,333	11/11/2021	11/11/2022	11/11/2026	$0.910	$0.380
Robert Bazzani	8,333	11/11/2021	11/11/2023	11/11/2026	$0.910	$0.380
Robert Bazzani	8,334	11/11/2021	11/11/2024	11/11/2026	$0.910	$0.380
Eliot Siegel	8,333	12/12/2022	12/12/2023	12/12/2027	$0.610	$0.320
Eliot Siegel	8,333	12/12/2022	12/12/2024	12/12/2027	$0.610	$0.320
Eliot Siegel	8,334	12/12/2022	12/12/2025	12/12/2027	$0.610	$0.320
Robert Bazzani	8,333	12/12/2022	12/12/2023	12/12/2027	$0.610	$0.320
Robert Bazzani	8,333	12/12/2022	12/12/2024	12/12/2027	$0.610	$0.320
Robert Bazzani	8,334	12/12/2022	12/12/2025	12/12/2027	$0.610	$0.320
Dyan O'Herne	23,333	11/10/2019	01/10/2020	11/10/2024	$0.680	$0.450
Dyan O'Herne	23,333	11/10/2019	01/10/2021	11/10/2024	$0.680	$0.450
Dyan O'Herne	23,334	11/10/2019	01/10/2022	11/10/2024	$0.680	$0.450
Dyan O'Herne	23,333	03/02/2021	30/06/2021	30/06/2025	$1.480	$0.800
Dyan O'Herne	23,333	03/02/2021	30/06/2022	30/06/2025	$1.480	$0.800
Dyan O'Herne	23,334	03/02/2021	30/06/2023	30/06/2025	$1.480	$0.800
Dyan O'Herne	16,667	10/09/2021	01/09/2022	31/08/2026	$0.980	$0.390
Dyan O'Herne	16,667	10/09/2021	01/09/2023	31/08/2026	$0.980	$0.390
Dyan O'Herne	16,666	10/09/2021	01/09/2024	31/08/2026	$0.980	$0.390
Dyan O'Herne	200,000	01/01/2023	01/07/2023	01/01/2028	$0.570	$0.340
Michael Lampron*	402,185	11/11/2021	30/06/2024	30/09/2024	$0.000	$0.519
Michael Lampron*	723,000	17/11/2022	30/06/2025	30/09/2025	$0.000	$0.572
David Madaffri**	116,667	10/09/2021	01/09/2022	31/08/2026	$0.980	$0.394
David Madaffri**	116,667	10/09/2021	01/09/2023	31/08/2026	$0.980	$0.394
David Madaffri**	116,666	10/09/2021	01/09/2024	31/08/2026	$0.980	$0.394
David Madaffri	66,667	01/07/2023	01/07/2026	01/07/2028	$0.582	$0.358
David Madaffri	66,667	01/07/2023	01/07/2025	01/07/2028	$0.582	$0.358
David Madaffri	66,666	01/07/2023	01/07/2024	01/07/2028	$0.582	$0.358
Dyan O'Herne	66,666	01/07/2023	01/07/2024	01/07/2028	$0.582	$0.358
Dyan O'Herne	66,667	01/07/2023	01/07/2025	01/07/2028	$0.582	$0.358
Dyan O'Herne	66,667	01/07/2023	01/07/2026	01/07/2028	$0.582	$0.358
Rebecca Thompson	75,000	16/11/2023	16/11/2024	16/11/2028	$0.710	$0.457
Rebecca Thompson	75,000	16/11/2023	16/11/2025	16/11/2028	$0.710	$0.457

Mach7 Technologies Limited Directors' report 30 June 2024

Rebecca Thompson	75,000	16/11/2023	16/11/2026	16/11/2028	0.710	0.457
Robert Bazzani	8,334	01/12/2023	01/12/2026	01/12/2028	0.725	0.416
Robert Bazzani	8,333	01/12/2023	01/12/2024	01/12/2028	0.725	0.416
Robert Bazzani	8,333	01/12/2023	01/12/2025	01/12/2028	0.725	0.416
Eliot Siegel	8,333	01/12/2023	01/12/2024	01/12/2028	0.725	0.416
Eliot Siegel	8,333	01/12/2023	01/12/2025	01/12/2028	0.725	0.416
Eliot Siegel	8,334	01/12/2023	01/12/2026	01/12/2028	0.725	0.416
David Madaffri	50,000	18/12/2023	18/12/2025	18/12/2028	0.730	0.461
David Madaffri	50,000	18/12/2023	18/12/2026	18/12/2028	0.730	0.461
David Madaffri	50,000	18/12/2023	18/12/2024	18/12/2028	0.730	0.461
Dyan O'Herne	50,000	18/12/2023	18/12/2024	18/12/2028	0.730	0.461
Dyan O'Herne	50,000	18/12/2023	18/12/2025	18/12/2028	0.730	0.461
Dyan O'Herne	50,000	18/12/2023	18/12/2026	18/12/2028	0.730	0.461
Michael Lampron*	140,000	16/11/2023	30/06/2026	30/09/2026	-	0.501
Michael Lampron*	105,000	16/11/2023	30/06/2026	30/09/2026	-	0.647
Michael Lampron*	350,000	16/11/2023	30/06/2026	30/09/2026	-	0.647
Michael Lampron*	105,000	16/11/2023	30/06/2026	30/09/2026	-	0.647

performance rights subject to performance hurdles.

** Mr David Madaffri held 350,000 options granted on 10 September 2021 at the time of his appointment as Chief Operating Officer effective 1 July 2023.

Options granted carry no dividend or voting rights.

There were no options over ordinary shares granted to or vested by directors and other key management personnel in-lieu of their fees/salaries during the year ended 30 June 2024.

	Number of	Number of	Number of	Number of	Value of	Value of	Value of
	options	options	options	options	options	options	options
	granted	granted	vested	vested	granted	exercised	lapsed
	during year	during year	during year	during year	during year	during year	during year
	30 June	30 June	30 June	30 June	30 June	30 June	30 June
	2024	2023	2024	2023	2024	2024	2024
David Chambers*	-	35,000	-	109,999	-	-	-
Eliot Siegel	25,000	25,000	25,000	100,000	10,398	34,335	-
Robert Bazzani	25,000	25,000	100,000	91,666	10,398	-	-
Philippe Houssiau*	-	250,000	-	83,333	-	-	-
Dyan O'Herne****	350,000	200,000	216,667	63,335	207,788	-	-
Michael Lampron**	700,000	723,000	-	250,000	433,546	45,780	315,839
Steven Parkes****	-	-	-	200,000	-	-	-
Rebecca Thompson*	225,000	-	-	-	102,786	-	-
David Madaffri***	350,000	-	116,667	-	140,748	-	-

Mr David Chambers resigned as Chairman and Mr Philippe Houssiau resigned as Non-Executive Director effective 16 November 2023. Ms Rebecca Thompson was appointed as Independent Non-Executive Director effective 16 November 2023.

** Performance rights granted to Mr Michael Lampron during year ended 30 June 2024 and 30 June 2023 subject to performance hurdles.

*** Mr David Madaffri was appointed as Chief Operating Officer effective 1 July 2023.

**** Mr Steven Parkes resigned as Chief Financial Officer on 1 January 2023. Ms Dyan O'Herne was appointed as Interim Chief Financial Officer effective 1 January 2023 and Chief Financial Officer effective 1 July 2023.

Mach7 Technologies Limited Directors' report 30 June 2024

Additional information

The earnings of the consolidated entity for the five years to 30 June 2024 are summarised below:

	2024	2023	2022	2021	2020
	$	$	$	$	$
Profit/(loss) for the year	(7,970,324)	(1,048,112)	(4,167,850)	(9,357,196)	169,293
Basic earnings per share (EPS) (Cent)	(3.4)	(0.4)	(1.8)	(4.0)	0.1
Improvement in EPS	(3.0)	1.4	2.2	(4.1)	5.1
Share price ($)	0.640	0.620	0.490	1.065	0.970
% change in share price (%)	3%	27%	(54%)	10%	105%

Additional disclosures relating to key management personnel

Shareholding

The number of shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares Robert Bazzani1 Eliot Siegel2 Rebecca Thompson3 Michael Lampron4 Dyan O'Herne David Chambers5	Balance at the start of the year 89,900 21,100 - 248,215 178,205 385,000	Received as part of remuneration - - - 325,000 - -	Additions* 29,400 225,000 - 350,000 - -	Other movements** - - 69,934 (89,810) - (385,000)	Balance at the end of the year 119,300 246,100 69,934 833,405 178,205 -
	922,420	325,000	604,400	(404,876)	1,446,944

1 Additions of 29,400 shares from on-market purchase during the year.

2 Additions of 225,000 shares from exercise of 225,000 options on 1 November 2023.

Ms Rebecca Thompson was appointed as Independent Non-Executive Director effective 16 November 2023. Other movement of 69,934 represents the shares held at the time of becoming a KMP of the Company.

4 On 17 November 2023, 325,000 shares were issued to Mr Lampron as compensation. Addition of 350,000 shares from exercise of 350,000 options 21 September 2023 and 89,810 in other movement represents disposal of shares.

5 Mr David Chambers resigned as Chairman effective 16 November 2023. Other movement of 385,000 represents the shares held at the time of exiting as a KMP of the Company.

Mach7 Technologies Limited Directors' report 30 June 2024

Option and performance rights holding

The number of options and performance rights over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Options over ordinary shares Robert Bazzani6 Eliot Siegel7 Rebecca Thompson8 Michael Lampron9 Dyan O'Herne6 David Madaffri10 David Chambers11 Philippe Houssiau12	Balance at the start of the year 300,000 325,000 - 2,603,299 390,000 - 140,000 275,000	Granted 25,000 25,000 225,000 700,000 350,000 350,000 - -	Exercised - (225,000) - (350,000) - - - -	Expired/ forfeited/ other - - - (378,114) - 350,000 (140,000) (275,000)	Balance at the end of the year 325,000 125,000 225,000 2,575,185 740,000 700,000 - -
	4,033,299	1,675,000	(575,000)	(443,114)	4,690,185

6 During the year 25,000 options were granted to Mr Bazzani and 350,000 options were granted to Ms O'Herne. 7 During the year 25,000 options were granted to Mr Siegel and 225,000 options were exercised on 1 November 2023. 8 225,000 sign-on options were granted to Ms Rebecca Thompson upon her appointment as Independent Non-Executive Director effective 16 November 2023.
9 Mr Michael Lampron's closing balance includes 402,185 performance rights granted on 11 November 2021, 723,000 performance rights granted on 17 November 2022, 700,000 performance rights granted on 16 November 2023 and share options of 750,000 granted in previous years. During the year 378,114 performance rights expired and Mr Lampron exercised 350,000 options.
10 Mr David Madaffri was appointed as Chief Operating Officer effective 1 July 2023. On this date, Mr Madaffri held 350,000 options granted during previous years. Subsequent to becoming a KMP as Chief Operating Officer, he was granted 200,000 options on 1 July 2023 and 150,000 Options on 18 December 2023.
11 Mr David Chambers resigned as Chairman effective 16 November 2023. Other movement of 140,000 represents the options held at the time of exiting as a KMP of the Company.
12 Mr Philippe Houssiau resigned as Non-Executive Director effective 16 November 2023. Other movement of 275,000 represents the options held at the time of exiting as a KMP of the Company.

Options over ordinary shares Robert Bazzani Eliot Siegel Rebecca Thompson Michael Lampron Dyan O'Herne David Madaffri	Vested and exercisable 274,999 74,999 - 750,000 373,334 233,334	Unvested 50,001 50,001 225,000 1,825,185 366,666 466,666	Balance at the end of the year 325,000 125,000 225,000 2,575,185 740,000 700,000
	1,706,666	2,983,519	4,690,185

Other transactions with key management personnel and their related parties There have been no other transactions with KMPs during the year.

This concludes the remuneration report, which has been audited.

Mach7 Technologies Limited Directors' report 30 June 2024

Shares under option

Unissued ordinary shares of Mach7 Technologies Limited under option at the date of this report are as follows:

Exercise Grant date Expiry date price 11/10/2019 11/10/2024 $0.680 18/11/2019 18/11/2024 $0.820 18/11/2019 18/11/2024 $0.800 18/11/2019 18/11/2024 $0.950 18/11/2019 18/11/2024 $1.100 01/12/2020 30/11/2025 $1.400 03/02/2021 30/06/2025 $1.480 10/09/2021 31/08/2026 $0.980 10/09/2021 21/07/2024 $0.980 11/11/2021 11/11/2026 $0.910 11/11/2021 31/12/2025 $1.380 20/01/2022 20/01/2027 $0.782 24/02/2022 24/02/2027 $0.731 12/12/2022 12/12/2027 $0.610 01/01/2023 01/01/2028 $0.570 01/05/2023 01/05/2028 $0.636 10/07/2023 01/07/2028 $0.582 14/08/2023 14/08/2028 $0.800 01/09/2023 01/09/2028 $0.760 16/11/2023 16/11/2028 $0.710 01/12/2023 01/12/2028 $0.725 18/12/2023 18/12/2028 $0.730 15/01/2024 15/01/2029 $0.732 01/03/2024 01/03/2029 $0.679	Number under option 881,666 285,000 250,000 250,000 250,000 73,334 1,440,000 2,240,000 26,666 89,999 150,000 200,000 250,000 50,000 200,000 200,000 400,000 50,000 30,000 225,000 50,000 2,335,000 200,000 200,000
	10,326,665

Exercise
Grant date
Expiry date
price
11/10/2019
11/10/2024
$0.680
18/11/2019
18/11/2024
$0.820
18/11/2019
18/11/2024
$0.800
18/11/2019
18/11/2024
$0.950
18/11/2019
18/11/2024
$1.100
01/12/2020
30/11/2025
$1.400
03/02/2021
30/06/2025
$1.480
10/09/2021
31/08/2026
$0.980
10/09/2021
21/07/2024
$0.980
11/11/2021
11/11/2026
$0.910
11/11/2021
31/12/2025
$1.380
20/01/2022
20/01/2027
$0.782
24/02/2022
24/02/2027
$0.731
12/12/2022
12/12/2027
$0.610
01/01/2023
01/01/2028
$0.570
01/05/2023
01/05/2028
$0.636
10/07/2023
01/07/2028
$0.582
14/08/2023
14/08/2028
$0.800
01/09/2023
01/09/2028
$0.760
16/11/2023
16/11/2028
$0.710
01/12/2023
01/12/2028
$0.725
18/12/2023
18/12/2028
$0.730
15/01/2024
15/01/2029
$0.732
01/03/2024
01/03/2029
$0.679

Number
under option
881,666
285,000
250,000
250,000
250,000
73,334
1,440,000
2,240,000
26,666
89,999
150,000
200,000
250,000
50,000
200,000
200,000
400,000
50,000
30,000
225,000
50,000
2,335,000
200,000
200,000

10,326,665

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate.

Shares issued on the exercise of options

The following ordinary shares of Mach7 Technologies Limited were issued during the year ended 30 June 2024 and up to the date of this report on the exercise of options granted:

Exercise Date options granted price 17/10/2018 $0.185 12/11/2018 $0.244 2/05/2019 $0.265 11/10/2019 $0.680	Number of shares issued 626,666 225,000 50,000 5,000
	906,666

Indemnity and insurance of officers

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Mach7 Technologies Limited Directors' report 30 June 2024

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

This report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of the Corporations Act 2001 (Cth).

On behalf of the Directors

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_________ Robert Bazzani Chairman

28 August 2024

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Mach7 Technologies Limited and its controlled entities for the year ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

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RSM AUSTRALIA PARTNERS

M PARAMESWARAN Partner

Dated: 28 August 2024 Melbourne, Victoria

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Mach7 Technologies Limited

Page | 30

Mach7 Technologies Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2024

Note Revenue from contracts with customers 6 Other income 7 Expenses Cost of sales Employment and related expenses 8 Depreciation and amortisation 8 Professional fees and corporate expenses General administration and office expense Marketing and investor relations expense Travel and related expense Share-based payments expense (non-cash) Right-of-use lease liability interest expense Net foreign exchange (losses)/gains Other expenses 8 Loss before income tax benefit Income tax benefit 10 Loss after income tax benefit for the year attributable to the owners of Mach7 Technologies Limited Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Mach7 Technologies Limited Basic and diluted earnings per share 9	Consolidated 30 June 2024 30 June 2023 $ $ 29,112,863 30,049,766 899,547 407,838 (1,443,205) (1,625,139) (23,350,307) (20,282,346) (7,251,053) (8,680,824) (1,479,917) (1,722,535) (2,331,116) (2,022,953) (818,245) (755,985) (1,324,641) (1,123,796) (1,274,433) (1,077,401) (61,866) (66,903) (112,089) 378,898 (320,498) (134,303)	Consolidated 30 June 2024 30 June 2023 $ $ 29,112,863 30,049,766 899,547 407,838 (1,443,205) (1,625,139) (23,350,307) (20,282,346) (7,251,053) (8,680,824) (1,479,917) (1,722,535) (2,331,116) (2,022,953) (818,245) (755,985) (1,324,641) (1,123,796) (1,274,433) (1,077,401) (61,866) (66,903) (112,089) 378,898 (320,498) (134,303)
	(9,754,960) 1,784,636	(6,655,683) 5,607,571
	(7,970,324) (1,118,380)	(1,048,112) 893,918
	(1,118,380)	893,918
	(9,088,704)	(154,194)
	Cents (3.3)	Cents (0.4)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Mach7 Technologies Limited Statement of financial position As at 30 June 2024

Note Assets Current assets Cash and cash equivalents 11 Trade and other receivables 12 Customer contract assets 13 Other assets 14 Total current assets Non-current assets Customer contract assets 13 Right-of-use assets 15 Property, plant and equipment 16 Intangibles 17 Deferred tax asset 21 Other assets 14 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 18 Customer contract liabilities 19 Lease liabilities 20 Total current liabilities Non-current liabilities Lease liabilities 20 Deferred tax liability 21 Total non-current liabilities Total liabilities Net assets Equity Issued capital 22 Reserves 23 Accumulated losses Total equity	Consolidated 30 June 2024 30 June 2023 $ $ 26,175,405 23,394,568 3,552,783 6,707,403 2,621,409 3,897,609 1,559,318 890,916	Consolidated 30 June 2024 30 June 2023 $ $ 26,175,405 23,394,568 3,552,783 6,707,403 2,621,409 3,897,609 1,559,318 890,916
	33,908,915	34,890,496
	4,549,814 1,204,648 711,630 27,781,577 4,087,764 786,991	5,005,951 1,181,128 815,602 35,466,096 4,153,583 793,131
	39,122,424	47,415,491
	73,031,339	82,305,987
	3,280,712 11,632,669 181,259	3,397,681 11,223,534 209,614
	15,094,640	14,830,829
	1,087,019 4,992,802	991,039 7,000,453
	6,079,821	7,991,492
	21,174,461	22,822,321
	51,856,878	59,483,666
	116,244,526 6,617,819 (71,005,467)	115,697,098 7,312,323 (63,525,755)
	51,856,878	59,483,666

The above statement of financial position should be read in conjunction with the accompanying notes

Mach7 Technologies Limited Statement of changes in equity For the year ended 30 June 2024

Issued capital $ 115,295,443 - -	Share based payments Reserves $ 4,080,659 - -	Foreign exchange translation $ 2,494,548 - 893,918	Accumulated losses $ (63,495,432) (1,048,112) -	Total equity $ 58,375,218 (1,048,112) 893,918
- - 185,241 - 216,414	- 1,077,401 - (1,017,789) (216,414)	893,918 - - - -	(1,048,112) - - 1,017,789 -	(154,194) 1,077,401 185,241 - -
115,697,098	3,923,857	3,388,466	(63,525,755)	59,483,666
Issued capital $ 115,697,098 - -	Share based payments Reserves $ 3,923,857 - -	Foreign exchange translation $ 3,388,466 - (1,118,380)	Accumulated losses $ (63,525,755) (7,970,324) -	Total equity $ 59,483,666 (7,970,324) (1,118,380)
- - 187,483 - 125,945 234,000	- 1,040,433 - (490,612) (125,945) -	(1,118,380) - - - - -	(7,970,324) - - 490,612 - -	(9,088,704) 1,040,433 187,483 - - 234,000
116,244,526	4,347,733	2,270,086	(71,005,467)	51,856,878

The above statement of changes in equity should be read in conjunction with the accompanying notes

Mach7 Technologies Limited Statement of cash flows For the year ended 30 June 2024

Note Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Net cash from/(used in) operating activities 26 Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles 17 Net cash used in investing activities Cash flows from financing activities Proceeds from exercise of share options Repayment of lease liabilities Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 11	Consolidated 30 June 2024 30 June 2023 $ $ 34,865,625 24,566,804 (31,893,140) (27,334,186) 477,863 155,335	Consolidated 30 June 2024 30 June 2023 $ $ 34,865,625 24,566,804 (31,893,140) (27,334,186) 477,863 155,335
	3,450,348	(2,612,047)
	(147,271) (244,041)	(361,007) -
	(391,312)	(361,007)
	187,483 (219,567)	185,241 (253,872)
	(32,084)	(68,631)
	3,026,952 23,394,568 (246,115)	(3,041,685) 25,747,608 688,645
	26,175,405	23,394,568

The above statement of cash flows should be read in conjunction with the accompanying notes

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 1. Corporate information

The financial statements cover Mach7 Technologies Limited as a consolidated entity consisting of Mach7 Technologies Limited (the “Company” or the “Parent”) and the entities it controlled at the end of, or during, the year.

Mach7 Technologies Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX:M7T). Its registered office and principal place of business are:

Registered office

Principal place of business

Level 4, 100 Albert Road, South Melbourne VIC 3205

120 Kimball Avenue, Suite 210 South Burlington, VT 05403, United States

The nature of the operations and principal activities of Mach7 Technologies Limited and its consolidated entities (the “Group” or "Consolidated entity") are described in the Directors’ Report.

The financial report of Mach7 Technologies Limited for the year ended 30 June 2024 was authorised for issue in accordance with a resolution of the Directors on 28 August 2024 .

Note 2. Material accounting policy information

The accounting policies that are material to the consolidated entity are set out below. The accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 31.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Mach7 Technologies Limited ('company' or 'parent entity') as at 30 June 2024 and the results of all subsidiaries for the year then ended. Mach7 Technologies Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and noncontrolling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Operating segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start-up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors. Operating segments have been identified based on the information provided to the chief operating decision makers – being the executive management team. The group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in each of the following respects:

Nature of the products and services;
Nature of the production processes;
Type or class of customer for the products and services;
Methods used to distribute the products or provide the services; and if applicable
Nature of the regulatory environment.

Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements. Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “all other segments”.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Mach7 Technologies Limited's presentation currency. The Group has multiple functional currencies including Australian dollar, US dollar, Canadian dollar and Singapore dollar.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

Revenue recognition

The consolidated entity recognises revenue as follows:

Revenue from contracts with customers

Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

In determining the transaction price, the Group adjusts the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provides the customer or the Group with a significant benefit of financing the transfer of goods or services to the customer. In those circumstances, the contract contains a significant financing component. A significant financing component may exist regardless of whether the promise of financing is explicitly stated in the contract or implied by the payment terms agreed to by the parties to the contract.

Sale of software

Revenue from the sale of software licences is recognised at the point in time when the customer obtains control of the software, which is generally at the time of delivery. The provision of the software licence is a distinct performance obligation as the customer can derive substantial benefits from the licence on its own when the licence is delivered and installed. Therefore, revenue from the sale of software is recognised when the software is delivered to the customer.

Subscription of software licence

Subscription revenue from software licence subscription is recognised over the annual subscription period as the services are rendered.

Rendering of professional services

Revenue from a contract to provide professional services, such as implementation, training and annual support services, is recognised over time as the services are rendered. This is because the professional services price is based on either a fixed price or an hourly rate.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and subsequent measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

amortised cost
fair value through profit or loss
equity instruments at fair value through other comprehensive income
● debt instruments at fair value through other comprehensive income

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses. Classifications are determined by both:

The entities business model for managing the financial asset
The contractual cash flow characteristics of the financial assets

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Financial assets at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Impairment of financial assets

AASB 9’s impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit losses (ECL) model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.

The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

financial instruments that have not deteriorated significantly in credit quality since initial recognition of that have low credit risk ('Stage 1') and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low ('Stage 2').

Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category.

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 3045 days.

The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

Contract assets

Contract assets are recognised when the consolidated entity has transferred goods or services to the customer but where the consolidated entity is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

Computer hardware and software 2 - 5 years Furniture, fixtures & office equipment 5 - 7 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

Intangible assets

Intangible assets acquired separately are initially measured at cost. Intangible asset acquired in a business combination are initially measured at their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over their useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Software development costs

Software development costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related projects.

Goodwill

Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.

Impairment of non-financial assets

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other nonfinancial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Contract liabilities

Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.

Lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

Employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave are measured as short-term employee benefits when expected to be settled wholly within 12 months of the reporting date or as long-term benefits when not expected to be settled within 12 months of the reporting date.

Termination benefits

Termination benefits are recognised when a detailed plan of termination has been communicated to affected employees. They are measured as short-term employee benefits when expected to be settled wholly within 12 months of the reporting date or as long-term benefits when not expected to be settled within 12 months of the reporting date.

Defined contribution superannuation expense

Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.

Share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 2. Material accounting policy information (continued)

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Mach7 Technologies Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year,

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 3. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or BlackScholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Revenue from contracts with customers involving sale of goods

When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the consolidated entity is considered to be the point of delivery of the goods to the customer, as this is deemed to be the time that the customer obtains control of the promised goods and therefore the benefits of unimpeded access.

Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Goodwill and other indefinite life intangible assets

The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

Income tax

The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 3. Critical accounting judgements, estimates and assumptions (continued)

Lease term

The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the consolidated entity's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances.

Incremental borrowing rate

Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.

Note 4. Restatement of comparatives

Reclassification

There were changes in the presentation of the comparative balances in the statement of profit or loss and other comprehensive income for the year ended 30 June 2023, due to the presentation of :

(i) commission expenses and distributor and licence fees as cost of sales; and

(ii) share-based payments expenses as a separate expense item

in the statement of profit or loss and other comprehensive income for the year ended 30 June 2024.

The impact of the change in the comparative for the year ended 30 June 2023 is as below:

Cost of sales Distributor and licence fees Employment and related expenses Share-based payments expense (non-cash)	30 June 2023 - 988,332 21,996,554 -	Reclass 1,625,139 (988,332) (1,714,208) 1,077,401	30 June 2023 Restated 1,625,139 - 20,282,346 1,077,401 22,984,886
	22,984,886	-

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 5. Operating segments

Description of segments and principal activities

Mach7 Technologies is a global provider of enterprise imaging solutions for healthcare institutions, predominantly throughout the North America, Asia Pacific and the Middle East region. The Group’s performance is monitored and reported for one main segment, which is enterprise imaging. In addition, revenue is monitored at a regional and product/services level. This information is presented in Note 6.

Profit or Loss

The Group’s profit and loss is managed as a whole and is the same as what is presented in the statement of financial performance and other comprehensive income. In addition, management and the directors monitor Gross Margins, Earnings Before Interest, Tax and Depreciation (EBITDA), and EBITDA adjusted for non-cash items. This is presented below:

Revenue from contracts with customers Cost of sales Operating expenditure Net foreign exchange (loss)/gain (realised) Other income/(expenses) (net) EBITDA – before the following items Share-based payments expense (non-cash) Net foreign exchange (loss)/gain (unrealised) EBITDA Depreciation and amortisation expense Right-of-use lease liability interest expense Interest income Income tax benefit Net loss after tax	Consolidated 30 June 2024 30 June 2023 $ $ 29,112,863 30,049,766 (1,443,205) (1,625,139) (29,304,226) (25,907,615) (21,518) 125,896 (307,315) (120,907)	Consolidated 30 June 2024 30 June 2023 $ $ 29,112,863 30,049,766 (1,443,205) (1,625,139) (29,304,226) (25,907,615) (21,518) 125,896 (307,315) (120,907)
	(1,963,401)	2,522,001
	(1,274,433) (90,571)	(1,077,401) 253,002
	(3,328,405)	1,697,602
	(7,251,053) (61,866) 886,364 1,784,636	(8,680,824) (66,903) 394,442 5,607,571
	(7,970,324)	(1,048,112)

Segment assets and liabilities

The Group’s chief decision makers review and monitor assets and liabilities as a whole.

Geographical non-current assets

The total of non-current assets, other than intangible assets, broken down by location of the assets, is shown in the table below:

North America Asia	Consolidated 30 June 2024 30 June 2023 $ $ 10,937,608 11,553,773 403,239 395,622	Consolidated 30 June 2024 30 June 2023 $ $ 10,937,608 11,553,773 403,239 395,622
	11,340,847	11,949,395

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 6. Revenue from contracts with customers

Disaggregation of revenue from contracts with customers

Mach7 is a global provider of medical imaging software solutions. Every software sale, or provision of services, is subject to a software licence agreement, statement of work and/or an order form. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions:

Software Licence Revenue (major segment) Professional Services Revenue - implementation and training services - migration services Maintenance and Support (recurring revenue) Total segment Revenue Geographical segment revenues North America Asia Pacific Middle East Europe and other regions Timing of revenue recognition* Revenue recognised at a point in time Revenue recognised over time	Consolidated 30 June 2024 30 June 2023 $ $ 13,170,550 17,579,923 3,734,024 2,077,742 339,928 600,490 11,868,361 9,791,611	Consolidated 30 June 2024 30 June 2023 $ $ 13,170,550 17,579,923 3,734,024 2,077,742 339,928 600,490 11,868,361 9,791,611
	29,112,863	30,049,766
	24,249,369 3,320,017 857,017 686,460	25,027,853 3,798,638 828,580 394,695
	29,112,863	30,049,766
	3,966,869 25,145,994	11,040,535 19,009,231
	29,112,863	30,049,766

Software Licence Revenue is comprised of Subscription Revenue (annual recurring revenue) and Capital Software Licence Revenue (recognised upfront upon delivery of software and is recurring at the end of each term, which is normally 5 years)

Revenues of approximately $2.8 million, 9.8% (2023: $5.9m, 20%) are derived from a single external customer.

Assets and liabilities related to contracts with customers

Refer to note 13 and note 19 for current assets and current liabilities (respectively) related to contracts with customers.

Revenue recognised in relation to prior year contract liabilities

The following table shows revenue recognised in the current reporting period that relates to carried-forward contract liabilities:

Revenue recognised that was included in the contract liability balance at the beginning of the period Maintenance and Support and Subscription Revenue Professional Services Revenue Software Licence Revenue	Consolidated 30 June 2024 30 June 2023 $ $ 7,984,079 5,176,913 1,110,364 545,279 37,780 37,088	Consolidated 30 June 2024 30 June 2023 $ $ 7,984,079 5,176,913 1,110,364 545,279 37,780 37,088
	9,132,223	5,759,280

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 6. Revenue from contracts with customers (continued)

Unsatisfied performance obligations

The following table shows unsatisfied performance obligations resulting from fixed-price professional services and annual maintenance and support and subscription contracts.

Contracted Maintenance and Support and Subscription Revenue: (recurring) Contracted Professional Services Revenue: (non-recurring) Contracted Capital Software Licence Revenue: (non-recurring) Amounts expected to be recognised as revenues: Contracted Maintenance and Support and Subscription Revenue within one year Contracted Maintenance and Support and Subscription Revenue within two years Contracted Maintenance and Support and Subscription Revenue beyond two years Contracted Professional Services and Capital Software Licence Revenue within one year Contracted Professional Services and Capital Software Licence Revenue within two years Contracted Professional Services and Capital Software Licence Revenue beyond two years	Consolidated 30 June 2024 $ 27,937,856 3,043,876 183,471	Consolidated 30 June 2023 $ 20,593,604 3,789,465 128,452
	31,165,203	24,511,521
	24,390,537 2,629,117 918,202	19,205,849 436,719 951,036
	27,937,856	20,593,604
	3,045,458 181,889 -	3,355,706 487,376 74,835
	3,227,347	3,917,917

Note 7. Other income

Interest Income Other revenues Other income	Consolidated 30 June 2024 30 June 2023 $ $ 886,364 394,442 13,183 13,396	Consolidated 30 June 2024 30 June 2023 $ $ 886,364 394,442 13,183 13,396
	899,547	407,838

Interest income of $886,364 includes interest of approximately $0.6 million from term deposits and cash at banks and interest of approximately $0.3 million, from the long-term Akumin contract asset (refer to note 13).

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 8. Expenses

Loss before income tax includes the following specific expenses: Depreciation and amortisation Amortisation of intangible asset Depreciation of right-to-use assets Depreciation of property, plant and equipment Employment and related expenses Salaries and wages Employee benefits Employer tax Contractors Other employment related expenses Bonuses Severance Defined contribution plan expense (superannuation) Annual leave provision movement Other expenses Losses (net of any gains during the year) on fixed asset disposals Other tax Doubtful debt (recovery)/expense Other miscellaneous	Consolidated 30 June 2024 30 June 2023 $ $ 6,739,988 8,209,074 244,592 242,843 266,473 228,907	Consolidated 30 June 2024 30 June 2023 $ $ 6,739,988 8,209,074 244,592 242,843 266,473 228,907
	7,251,053	8,680,824
	17,439,723 1,783,762 1,069,820 1,041,352 266,585 1,272,227 58,977 430,801 (12,940)	15,454,781 1,537,083 925,166 454,217 278,708 1,000,298 273,668 373,548 (15,123)
	23,350,307	20,282,346
	10,341 369,932 (71,847) 12,072	- 83,430 50,443 430
	320,498	134,303

Note 9. Earnings per share

Basic earnings per share (“EPS”) is calculated by dividing the net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. The income and share data used in the calculations of basic and diluted EPS is as follows:

Earnings per share for loss from continuing operations Loss after income tax attributable to the owners of Mach7 Technologies Limited Weighted average number of ordinary shares used in calculating basic and diluted earnings per share Basic and diluted earnings per share	Consolidated 30 June 2024 30 June 2023 $ $ (7,970,324) (1,048,112)	Consolidated 30 June 2024 30 June 2023 $ $ (7,970,324) (1,048,112)
	Number 240,894,930 Cents (3.3)	Number 239,385,710 Cents (0.4)

Number of share options and performance rights not included in the diluted earnings per share calculation as they are antidilutive: 12,151,850 (FY23: 9,859,964).

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 10. Income tax benefit

(a) Unused tax losses

At 30 June 2024, the Group has gross tax losses of $53,169,591 (FY23: $53,983,075) arising in Australia ($23.3m), US ($17.8m), Singapore ($1.6m) and Canada ($10.5m) that are likely to be available indefinitely for offset against future taxable profits of the companies in which the losses arose, subject to satisfying the relevant income tax loss carry forward rules.

(b) Deferred tax liabilities

The Group has recognised a deferred tax liability of as a result of the acquisition of Mach7 Technologies Canada Inc. in accordance with AASB112 Income Taxes. Refer note 21.

(c) Income tax expense/(benefit) The major components of income tax expense are: Current income tax on profits (Increase) / decrease in deferred tax assets (Decrease) / increase in deferred tax liabilities Numerical reconciliation of income tax benefit and tax at the statutory rate Loss before income tax benefit Tax at the statutory tax rate of 25% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments Unrealised foreign exchange (gains)/losses Other non-deductible expenses/non-assessable income Deferred tax liability not recognised for temporary differences Option exercises deductible for tax Tax losses not recognised Tax losses utilised Differences in local tax rates Tax losses recognised Income tax benefit	Consolidated 30 June 2024 30 June 2023 $ $ - (3,518,610) (1,784,636) (2,088,961)	Consolidated 30 June 2024 30 June 2023 $ $ - (3,518,610) (1,784,636) (2,088,961)
	(1,784,636)	(5,607,571)
	Consolidated 30 June 2024 30 June 2023 $ $ (9,754,960) (6,655,683)
	(2,438,740) 31,120 84,713 149,260	(1,663,921) 22,848 (123,333) 77,548
	(2,173,647) (261,417) 100,969 764,029 (149,833) (64,737) -	(1,686,858) (244,936) 122,427 986,798 (977,159) (289,233) (3,518,610)
	(1,784,636)	(5,607,571)

*Tax losses recognised and tax losses unrecognised are related to different tax jurisdictions.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 11. Cash and cash equivalents

Current assets Cash at bank Cash on deposit	Consolidated 30 June 2024 30 June 2023 $ $ 18,863,998 16,083,161 7,311,407 7,311,407	Consolidated 30 June 2024 30 June 2023 $ $ 18,863,998 16,083,161 7,311,407 7,311,407
	26,175,405	23,394,568

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Note 12. Trade and other receivables

Current assets Trade receivables Less: Allowance for expected credit losses Interest receivable GST receivable Other receivables	Consolidated 30 June 2024 30 June 2023 $ $ 3,410,057 6,618,876 - (74,366)	Consolidated 30 June 2024 30 June 2023 $ $ 3,410,057 6,618,876 - (74,366)
	3,410,057	6,544,510
	102,152 36,896	54,359 74,628
	139,048	128,987
	3,678	33,906
	3,552,783	6,707,403

Trade receivables typically have 30-45 day payment terms.

The carrying amounts of trade and other receivables are assumed to approximate their fair values due to their short-term nature.

Allowance for expected credit losses

The consolidated entity has recognised no allowance (FY23: $74,366) in profit or loss in respect of expected credit losses net of recoveries for the year ended 30 June 2024. The aging of the trade and other receivables and allowance for expected credit losses provided for above are as follows:

The ageing of the trade receivables and allowance for expected credit losses provided for above are as follows:

Expected credit loss rate 30 June 2024 30 June 2023 Consolidated % % Not overdue - - 0 to 3 months overdue - - 3 to 6 months overdue - - Over 6 months overdue - 16.00%	Carrying amount 30 June 2024 30 June 2023 $ $ 1,376,923 2,644,088 834,786 1,083,029 265,968 2,430,534 932,380 461,225	Carrying amount 30 June 2024 30 June 2023 $ $ 1,376,923 2,644,088 834,786 1,083,029 265,968 2,430,534 932,380 461,225	Allowance for expected credit losses 30 June 2024 30 June 2023 $ $ - - - - - - - 74,366 - 74,366	Allowance for expected credit losses 30 June 2024 30 June 2023 $ $ - - - - - - - 74,366 - 74,366
	3,410,057	6,618,876	-	74,366

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 12. Trade and other receivables (continued)

Movements in the allowance for expected credit losses are as follows:

Opening balance Additional provisions recognised Amounts recovered Closing balance	Consolidated 30 June 2024 30 June 2023 $ $ 74,366 - - 74,366 (74,366) -	Consolidated 30 June 2024 30 June 2023 $ $ 74,366 - - 74,366 (74,366) -
	-	74,366

Note 13. Customer contract assets

Current assets Contract assets Non-current assets Contract assets	Consolidated 30 June 2024 30 June 2023 $ $ 2,621,409 3,897,609	Consolidated 30 June 2024 30 June 2023 $ $ 2,621,409 3,897,609
	4,549,814	5,005,951
	7,171,223	8,903,560

Customer contract assets (or accrued revenue) represents fees which have been recognised as revenue which are yet to be invoiced to the customer. The customer is invoiced when certain contract milestones have been met. This can fluctuate from period to period, as these balances are impacted by the timing of when contracted sales occur, performance obligations are met and the payment milestones that are specified within each contract. The carrying values are assumed to approximate the fair values for these balances.

Under the accounting standards, contracts in which payment by the customer and performance by the Group occur at significantly different times will need to be assessed to determine whether the contract contains a significant financing component. In the FY23 reporting period, the Group identified that its customer contract with Akumin contains a significant financing component due to the performance obligation in relation to the delivery of the capital licence being completed in December 2022 but payment for the capital software licence occurring over a 10-year period. In determining the promised amount of consideration adjusted for the significant financing component, the Group used a discount rate that would be reflected in a separate financing transaction between the Group and Akumin at contract inception which takes into account the credit characteristics of Akumin. The difference between the contract value and the capital software licence revenue recognised at contract inception will unwind over the 10-year contract term as interest income in the statement of profit or loss and other comprehensive income. The contract asset recognised in relation to the Akumin contract is split between current and non-current based on the invoicing schedule in the contract.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 14. Other assets

Current assets Prepayments Deferred expenses Security deposits Non-current assets Contract deposits	Consolidated 30 June 2024 30 June 2023 $ $ 876,335 628,952 636,489 215,072 46,494 46,892	Consolidated 30 June 2024 30 June 2023 $ $ 876,335 628,952 636,489 215,072 46,494 46,892
	1,559,318	890,916
	786,991	793,131
	2,346,309	1,684,047

Contract deposit relates to a 5% contract deposit in cash to a customer, Hospital Authority of Hong Kong, as security for the due and faithful performance of Mach7’s services under the current and future contracts.

Note 15. Right-of-use assets

Non-current assets Land and buildings - right-of-use Less: Accumulated depreciation Net book value - opening balance Additions Depreciation Foreign exchange movements	Consolidated 30 June 2024 30 June 2023 $ $ 1,455,978 1,579,445 (251,330) (398,317)	Consolidated 30 June 2024 30 June 2023 $ $ 1,455,978 1,579,445 (251,330) (398,317)
	1,204,648	1,181,128
	Consolidated 30 June 2024 $ 1,181,128 283,234 (244,592) (15,122)	Consolidated 30 June 2023 $ 1,362,708 23,153 (242,843) 38,110
	1,204,648	1,181,128

The consolidated entity leases land and buildings for its offices in Vermont (USA), Waterloo (Canada) and Johor (Malaysia). The Vermont lease originally commenced 1 August 2014. It was renegotiated in May 2024 to rent additional office space. The seven-year lease term ends 31 July 2031. The Waterloo lease commenced 1 November 2019, for a term of 6 years ending 31 December 2026. This lease was renegotiated in April 2022 to reduce the size of the rented premises by approximately half. This lease has the option to renew for a further two additional periods of five years each. The Johor lease originally commenced 1 June 2019. It was renewed on 1 June 2024 for a term of two years through 31 May 2026, with an option to renew for a further two years.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 16. Property, plant and equipment

Non-current assets Leasehold improvements - at cost Less: Accumulated depreciation Computer hardware & software - at cost Less: Accumulated depreciation Office equipment - at cost Less: Accumulated depreciation	Consolidated 30 June 2024 30 June 2023 $ $ 355,202 363,748 (226,469) (191,877)	Consolidated 30 June 2024 30 June 2023 $ $ 355,202 363,748 (226,469) (191,877)
	128,733	171,871
	1,073,234 (685,535)	1,377,421 (980,348)
	387,699	397,073
	484,923 (289,725)	530,785 (284,127)
	195,198	246,658
	711,630	815,602

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial year are set out below:

Consolidated Balance at 1 July 2023 Additions Disposals Depreciation expense Foreign exchange revaluations Balance at 30 June 2024	Office Equipment $ 246,658 18,227 (4,861) (63,466) (1,360)	Computer Hardware & Software $ 397,073 161,527 (5,402) (160,937) (4,562)	Leasehold Improvements $ 171,871 1,383 - (42,070) (2,451)	Total $ 815,602 181,137 (10,263) (266,473) (8,373)
	195,198	387,699	128,733	711,630

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 17. Intangibles

Non-current assets Goodwill - at cost Patents and trademarks - at cost Less: Accumulated amortisation Customer contracts - at cost Less: Accumulated amortisation Software - at cost Less: Accumulated amortisation Brand - at cost Less: Accumulated amortisation	Consolidated 30 June 2024 30 June 2023 $ $ 4,187,982 4,354,315	Consolidated 30 June 2024 30 June 2023 $ $ 4,187,982 4,354,315
	399,322 (325,002)	402,650 (322,290)
	74,320	80,360
	11,548,522 (10,984,733)	11,656,701 (10,504,132)
	563,789	1,152,569
	57,496,457 (38,979,316)	58,930,559 (33,666,329)
	18,517,141	25,264,230
	5,996,319 (1,557,974)	6,172,596 (1,557,974)
	4,438,345	4,614,622
	27,781,577	35,466,096

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial year are set out below:

Consolidated Balance at 1 July 2023 Additions Amortisation expense Exchange differences Balance at 30 June 2024	Patents $ 80,360 - (5,513) (527)	Customer contracts $ 1,152,569 - (558,651) (30,129)	Brand Names $ 4,614,622 - - (176,277)	Software $ 25,264,230 240,171 (6,175,824) (811,436)	Goodwill $ 4,354,315 - - (166,333)	Total $ 35,466,096 240,171 (6,739,988) (1,184,702)
	74,320	563,789	4,438,345	18,517,141	4,187,982	27,781,577

Amortisation methods and useful lives

The Group amortises intangible assets with a limited useful life using the straight-line method over the following periods:

Patents and software acquired – 7 years
Customer contracts – 5 years
Brand names – 7 years and indefinite

Customer contracts, software, brand names and patents

In FY24, the Group capitalised approximately $0.2 million development costs related to a specific Research & Development project. The project is expected to be completed in FY25. The remaining software, customer contracts, brand names and patents were acquired as part of two business combinations. They are recognised at their fair value at the date of acquisition and are subsequently amortised on a straight-line based on the timing of projected cash flows of the contracts over their estimated useful lives.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 17. Intangibles (continued)

Impairment tests for goodwill and indefinite useful life brand names

For impairment testing, the Group views that its past business combination giving rise to goodwill on acquisition relate to synergistic opportunities for its Enterprise Imaging Segment. Therefore, goodwill is allocated to the Group’s Enterprise Imaging Segment, being the only operating and reportable segment of the business. The recoverable amount of that segment (cash generating unit) was determined based on a value-in-use calculation using a discounted cash flow valuation which requires the use of assumptions. The valuation estimates future cash flows over a five-year period. Cash flows beyond the five-year forecast period are extrapolated using the estimated terminal growth rates.

Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive. The following table sets out the key assumptions for the Enterprise Imaging cash-generating unit to which goodwill and indefinite life intangible have been allocated:

Item	Key Assumption	Rationale
Revenue growth rates	First year = Budget	Year 2 to 5 growth rate is based on Group
	Year 2 to 5 = 17%	results achieved over the past 3 years.
Expenditure growth	First year = Budget	Year 2 to 5 growth rate is based on targeted
rates	Year 2 to 5 = Average 10% growth rate across all	expenditure growth. Management is focused on
	expenditure	controlling expenses and increasing the EBITDA
		margins each year.
Discount Rate	13.1% post-tax; 16.7% pre-tax	As per management’s estimate of the Group’s
		weighted average cost of capital.
Terminal growth rate	2.5%	Growth rate reverts back to long-term inflation
		targets at Year 5.

Results of impairment testing and sensitivity to changes in assumptions

Based on the discounted cash flow valuation using the assumptions above, the recoverable amount of goodwill and other intangible assets exceeded the carrying amount at 30 June 2024 and no impairment charge was recognised.

Sensitivity

Revenue growth rate for years 2 to 5 will need to decrease to 14.4% per annum for there to be no headroom available when comparing the calculation of the estimated recoverable amount of the cash-generating unit against its carrying value at 30 June 2024. Management believes that other reasonable changes in the key assumption on which the recoverable amount of the cash-generating unit is based would not cause its carrying amount to exceed its recoverable amount.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 18. Trade and other payables

Current liabilities Trade creditors Accrued expenses Employee entitlements and related costs Distributor/reseller fees payable	Consolidated 30 June 2024 30 June 2023 $ $ 823,687 742,045 437,089 495,309 1,482,352 1,449,826 537,584 710,501	Consolidated 30 June 2024 30 June 2023 $ $ 823,687 742,045 437,089 495,309 1,482,352 1,449,826 537,584 710,501
	3,280,712	3,397,681

Refer to note 25 for further information on financial instruments.

Trade creditors are non-interest bearing and are normally settled on 30-day terms. Accrued expenses comprise general operating expenses where costs are incurred but have not yet been invoiced. Employee entitlements includes sales commissions, redundancy provisions, withholding taxes, superannuation etc. Distributor/reseller fees will become payable at the time the customer pays their invoice, usually within 30-45 days.

Due to the short-term nature of trade and other payables, their carrying value is assumed to approximate their fair value.

Note 19. Customer contract liabilities

Current liabilities Maintenance and Support Revenue received in advance Professional Services Revenue received in advance Subscription Revenue received in advance Capital Software Licence Revenue received in advance	Consolidated 30 June 2024 30 June 2023 $ $ 6,499,073 6,316,755 2,018,610 2,664,481 3,017,842 2,113,846 97,144 128,452	Consolidated 30 June 2024 30 June 2023 $ $ 6,499,073 6,316,755 2,018,610 2,664,481 3,017,842 2,113,846 97,144 128,452
	11,632,669	11,223,534

Customer contract liabilities (or deferred revenue) represents cash amounts that have been collected from customers that will be recognised as revenue in a future period. Revenue is recognised:

at a point in time when Capital Software Licences are delivered.
over a period of time when Professional Services are performed.
over a period of time when Maintenance and Support services are performed.
for Subscription over the subscription period upon the customer achieving First Productive Use.

The carrying values are assumed to approximate the fair values for these balances. Maintenance and Support revenue and Subscription revenue received in advance are expected to grow year on year as the Group signs new customer contracts, i.e. every new Maintenance and Support contract and Subscription contract signed going forward will add to this balance. Professional Services revenue received in advance is expected to fluctuate from year to year, as timing of sales orders, cash payment milestones and Professional Services performed will impact this balance.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 20. Lease liabilities

Current liabilities Lease liability Non-current liabilities Lease liability

Consolidated 30 June 2024 30 June 2023 $ $ 181,259 209,614	Consolidated 30 June 2024 30 June 2023 $ $ 181,259 209,614
1,087,019	991,039
1,268,278	1,200,653

Refer to note 25 for further information on financial instruments.

Note 21. Deferred tax asset and liability

Non-current liabilities Deferred tax liability Initial recognition value Accumulated amortisation Movements: Opening balance Amortisation credit for the period Foreign exchange differences Closing balance	Consolidated 30 June 2024 30 June 2023 $ $ 4,992,802 7,000,453	Consolidated 30 June 2024 30 June 2023 $ $ 4,992,802 7,000,453
	11,892,928 (6,900,126)	12,365,279 (5,364,826)
	4,992,802	7,000,453
	7,000,453 (1,784,636) (223,015)	9,023,846 (2,088,961) 65,568
	4,992,802	7,000,453

Deferred tax asset comprises temporary differences attributable to: Unutilised tax losses Deferred tax asset Opening balance Credited to profit or loss (note 10) Exchange differences	Consolidated 30 June 2024 30 June 2023 $ $ 4,087,764 4,153,583	Consolidated 30 June 2024 30 June 2023 $ $ 4,087,764 4,153,583
	4,087,764	4,153,583
	4,153,583 - (65,819)	579,629 3,518,610 55,344
	4,087,764	4,153,583

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 22. Issued capital

30 June 2024 Shares 241,241,047	Consolidated 30 June 2023 30 June 2024 Shares $ 240,009,381 116,244,526	30 June 2023 $ 115,697,098
1 July 2022 30 June 2023 30 June 2024	Shares 238,826,048 1,183,333 240,009,381 906,666 325,000 241,241,047	$ 115,295,443 401,655
		115,697,098 313,428 234,000
		116,244,526

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Share buy-back

There is no current on-market share buy-back.

Options and performance rights outstanding

Options and performance rights do not entitle the holders to voting rights, to participate in dividends or the proceeds on winding up of the Company. Refer to note 36 for details on options and performance rights.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.

The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.

The capital risk management policy remains unchanged from the 2023 Annual Report.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 23. Reserves

Foreign currency reserve Options reserve	Consolidated 30 June 2024 30 June 2023 $ $ 2,270,086 3,388,466 4,347,733 3,923,857	Consolidated 30 June 2024 30 June 2023 $ $ 2,270,086 3,388,466 4,347,733 3,923,857
	6,617,819	7,312,323

Foreign currency reserve

The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.

Options reserve

The Company has a share-based payment option scheme under which options to subscribe for the Company’s shares have been granted to certain executives and other employees.

Movements in reserves

Movements in each class of reserve during the current and previous financial year are set out below:

Consolidated Balance at 1 July 2022 Share-based payments (note 36) Transfer upon lapse of options Transfer to share capital Foreign exchange on translation of subsidiaries Balance at 30 June 2023 Share-based payments (note 36) Transfer upon lapse of options Transfers upon exercise of options/rights Foreign exchange on translation of subsidiaries Balance at 30 June 2024	Options reserve $ 4,080,659 1,077,401 (1,017,789) (216,414) -	Foreign Exchange Translation Reserve $ 2,494,548 - - - 893,918	Total $ 6,575,207 1,077,401 (1,017,789) (216,414) 893,918
	3,923,857 1,040,433 (490,612) (125,945) -	3,388,466 - - - (1,118,380)	7,312,323 1,040,433 (490,612) (125,945) (1,118,380)
	4,347,733	2,270,086	6,617,819

Note 24. Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 25. Financial instruments

Financial risk management objectives

The Group’s principal financial instruments comprise receivables, payables, cash and short-term deposits.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate and foreign exchange. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board, through the Audit and Risk Management Committee, reviews and agrees policies for managing each of these risks as summarised below. This includes the setting of limits of concentration risks with any one financial institution, credit rate limits, and future cash flow forecast projections.

Market risk

Foreign currency risk

The Group has transactional currency exposure. Such exposure arises from purchases by the Group in currencies other than the functional currency and through foreign currency receipts in the form of milestone, profit share or expense reimbursements under the Group’s various collaborations. Generally, the Group does not use financial instruments to hedge the foreign exchange exposure.

The Group’s exposure to foreign currency risk at the reporting date that are not designated in cash flow hedges was as follows (all amounts are in AUD):

USD $ 18,057,798 3,383,354 7,168,539 -	SGD $ 42,979 - - -	CAD $ 735,441 30,381 - -	GBP - - - -	HKD $ - - 2,685 786,991	Total $ 18,836,218 3,413,735 7,171,224 786,991
28,609,691	42,979	765,822	-	789,676	30,208,168
(2,399,457) (964,345)	(134,242) (57,978)	(474,004) (245,955)	- -	- -	(3,007,703) (1,268,278)
(3,363,802)	(192,220)	(719,959)	-	-	(4,275,981)
28,609,691 (3,363,802)	42,979 (192,220)	765,822 (719,959)	- -	789,676 -	30,208,168 (4,275,981)
25,245,889	(149,241)	45,863	-	789,676	25,932,187

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 25. Financial instruments (continued)

USD $ 15,685,138 6,633,919 8,844,042 -	SGD $ 52,838 - - -	CAD $ 264,890 346 - -	GBP - 18,517 - -	HKD $ - - 59,518 793,131	Total $ 16,002,866 6,652,782 8,903,560 793,131
31,163,099	52,838	265,236	18,517	852,649	32,352,339
(2,536,102) (820,416)	(121,791) (38,800)	(445,744) (341,437)	- -	- -	(3,103,637) (1,200,653)
(3,356,518)	(160,591)	(787,181)	-	-	(4,304,290)
31,163,099 (3,356,518)	52,838 (160,591)	265,236 (787,181)	18,517 -	852,649 -	32,352,339 (4,304,290)
27,806,581	(107,753)	(521,945)	18,517	852,649	28,048,049

Based on the financial instruments held at 30 June 2024, had the Australian dollar strengthened/weakened by 10% against the above currencies, with all other variables held constant, the Group’s post-tax loss for the year would have been (reduced)/increased by:

			Equity	Equity
	Profitability	Profitability	(excluding	(excluding
	(post-tax)	(post-tax)	accumulated	accumulated
	higher/(lower)	higher/(lower)	losses)	losses)
Sensitivity	2024	2023	2024	2023
	$	$	$	$
AUD strengthens +10% (2023:+10%)	(2,357,472)	(2,549,822)	-	-
AUD weakens -10% (2023:-10%)	(2,881,355)	3,116,450	-	-

Management believes the balance date risk exposures are representative of the risk exposure inherent in those financial instruments.

Significant assumptions used in the foreign currency exposure sensitivity analysis include:

Reasonably possible movements in foreign exchange rates were determined based on a review of the historical movements and economic forecaster's expectations;
The reasonably possible movement of 10% was calculated by taking the foreign currency spot rate as at balance date, moving this spot rate by 10% and the re-converting the foreign currency into AUD with the "new spot-rate"; and
This methodology reflects the translation methodology undertaken by the Group.

Price risk

The consolidated entity does not consider it to have any material exposure to price risk

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 25. Financial instruments (continued)

Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the income earned on the Group’s cash and short-term deposits of various deposit terms.

At 30 June 2024, the Group’s cash and cash equivalents comprised of deposits on call and foreign currency accounts.

The Group’s policy to manage its interest rate risk, given its dependence on cash and cash equivalents is to keep maturities short generally using 30-90 day term deposit and savings facilities. The Group constantly analyses its interest rate exposure with respect to renewal of existing positions, alternative investment opportunities/facilities and whether to consider a mix of fixed and variable instruments.

At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian and US variable interest rate risk that are not designated as cash flow hedges (other currencies or non-interest bearing accounts are not included):

Consolidated AUD Term deposit (maturity date < 3 months after 30 June) USD Deposits at call AUD Term deposit (maturity date > 3 months after 30 June) Net exposure to cash flow interest rate risk	30 June 2024 Balance $ 7,311,407 8,563,572 -	30 June 2023 Balance $ 7,311,407 5,160,596 -
	15,874,979	12,472,003

An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.

The Group believes that the carrying amount approximates fair value because of their short term to maturity. Significant assumptions used in the interest rate sensitivity analysis include:

Reasonably possible movements in interest rates were determined based on economic forecaster's expectations
The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next twelve months from the balance date.

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, short term deposits, trade and other receivables and customer contract assets. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note. The Group does not hold any credit derivatives to offset its credit exposure.

The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to securitise its trades and other receivables.

Term deposits are all held with Westpac Banking Corporation.

Liquidity risk

The Group’s objective is to maintain a balance between continuity of product development utilising an optimal combination of equity funding, finance and operating lease commitments. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities.

The Group manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring forecast and actual cash flows and matching maturity profiles in financial assets and liabilities.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 25. Financial instruments (continued)

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

1 year or less $ 3,280,712 295,616	Between 1 and 2 years $ - 309,876	Between 2 and 5 years $ - 676,229	Over 5 years $ - 441,415	Remaining contractual maturities $ 3,280,712 1,723,136
3,576,328	309,876	676,229	441,415	5,003,848
1 year or less $ 3,397,681 266,297	Between 1 and 2 years $ - 273,776	Between 2 and 5 years $ - 648,852	Over 5 years $ - 180,446	Remaining contractual maturities $ 3,397,681 1,369,371
3,663,978	273,776	648,852	180,446	4,767,052

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 26. Reconciliation of loss after income tax to net cash from/(used in) operating activities

Loss after income tax benefit for the year Adjustments for: Depreciation and amortisation Lease interest expense Net loss on disposal of property, plant and equipment Share-based payments Foreign exchange differences Income tax benefits Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease/(increase) in customer contract deposits Decrease/(increase) in other current assets Increase/(decrease) in trade and other payables Increase in customer contract liabilities Net cash from/(used in) operating activities	Consolidated 30 June 2024 30 June 2023 $ $ (7,970,324) (1,048,112) 7,251,053 8,680,824 61,866 66,903 10,341 - 1,274,433 1,077,401 97,369 (125,457) (1,784,636) (5,607,571) 3,134,453 (4,627,086) 1,732,337 (5,012,343) (648,711) (441,155) (116,967) 231,035 409,134 4,193,514	Consolidated 30 June 2024 30 June 2023 $ $ (7,970,324) (1,048,112) 7,251,053 8,680,824 61,866 66,903 10,341 - 1,274,433 1,077,401 97,369 (125,457) (1,784,636) (5,607,571) 3,134,453 (4,627,086) 1,732,337 (5,012,343) (648,711) (441,155) (116,967) 231,035 409,134 4,193,514
	3,450,348	(2,612,047)

Note 27. Key management personnel disclosures

Directors

The following persons were directors of Mach7 Technologies Limited during the financial year:

Mr Robert Bazzani Chairman (Independent Non-Executive Director until 16 November 2023 and appointed Chairman effective 16 November 2023) Mr Eliot Siegel, MD Independent Non-Executive Director Ms Rebecca Thompson Independent Non-Executive Director (Appointed effective 16 November 2023) Mr Michael Lampron Managing Director and Chief Executive Officer Mr David Chambers Chairman (Resigned effective 16 November 2023) Mr Philippe Houssiau Independent Non-Executive Director (Resigned effective16 November 2023)

Other key management personnel

The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, during the financial year:

Ms Dyan O'Herne (appointed as Chief Financial Officer effective 1 July 2023) Mr David Madaffri (appointed as Chief Operating Officer effective 1 July 2023)

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Share-based payments	Consolidated 30 June 2024 30 June 2023 $ $ 2,650,391 2,433,553 21,712 17,104 747,054 473,900	Consolidated 30 June 2024 30 June 2023 $ $ 2,650,391 2,433,553 21,712 17,104 747,054 473,900
	3,419,157	2,924,557

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 28. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of the company:

Audit services - RSM Australia Partners Audit or review of the financial statements Other services - RSM Australia Partners Preparation of the tax return	Consolidated 30 June 2024 30 June 2023 $ $ 173,000 169,250	Consolidated 30 June 2024 30 June 2023 $ $ 173,000 169,250
	10,250	10,000
	183,250	179,250

Note 29. Commitments

There are no expenditure commitments as at 30 June 2024 (FY23: nil).

Note 30. Related party transactions

Parent entity

Mach7 Technologies Limited is the parent entity.

Subsidiaries Interests in subsidiaries are set out in note 32.

Key management personnel

Disclosures relating to key management personnel are set out in note 27.

Transactions with related parties

There were no transactions with related parties during the current and previous financial year.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

Note 31. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax Total comprehensive income	Parent 30 June 2024 30 June 2023 $ $ (1,017,444) (1,408,831)	Parent 30 June 2024 30 June 2023 $ $ (1,017,444) (1,408,831)
	(1,017,444)	(1,408,831)

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 31. Parent entity information (continued)

Statement of financial position

Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Options reserve Accumulated losses Total equity	Parent 30 June 2024 30 June 2023 $ $ 13,201,888 13,495,154	Parent 30 June 2024 30 June 2023 $ $ 13,201,888 13,495,154
	84,252,552	85,522,804
	444,163	1,668,356
	444,163	1,668,356
	116,244,526 4,347,733 (36,783,870)	115,697,098 3,923,857 (35,766,507)
	83,808,389	83,854,448

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2024 and 30 June 2023.

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.

Material accounting policy information

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for the following:

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

Note 32. Interests in subsidiaries

Mach7 Technologies Limited is the ultimate parent of the Group. The consolidated financial statements include the financial statements of Mach7 Technologies Limited and its direct/indirect subsidiaries listed below:

		Ownership	interest
	Principal place of business /	30 June 2024 30 June 2023
Name	Country of incorporation	%	%
*Direct subsidiary*		-	-
Mach7 Technologies International Pty Ltd	Australia	100%	100%
*Indirect subsidiaries*		-	-
Mach7 Technologies UK Ltd	UK	100%	100%
Mach7 Technologies Pte Ltd	Singapore	100%	100%
Mach7 Technologies, Inc.	U.S.A	100%	100%
Mach7 Technologies Canada Inc.	Canada	100%	100%

Note 33. Contingent assets

The Group has no contingent assets at 30 June 2024 (FY23: none).

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 34. Contingent liabilities

On 3 November 2021, Mach7 Technologies, Inc. a wholly-owned subsidiary of Mach7 Technologies Limited received a patent infringement claim from AI Visualize, Inc. On 4 April 2024, the United States Court of Appeals for the Federal Circuit affirmed a lower court’s dismissal of patent infringement claims asserted by AI Visualize, Inc. In affirming the decision of the United States District Court for the District of Delaware, the Court of Appeals held that the subject patent claims “are patent ineligible because they are directed to an abstract idea and fail to transform that abstract idea into patent-eligible subject matter.” In doing so, the Court confirmed that Mach7 Technologies, Inc. did not infringe on any patents.

The Group has no contingent liabilities at 30 June 2024.

Note 35. Events after the reporting period

Note 36. Share-based payments

A share option plan has been established by the entity, whereby the entity may grant options and performance rights over ordinary shares in the company to certain key management personnel, employees and consultants of the entity. The options are issued for nil consideration.

Share-based payments expense during the year is $1,274,433 (FY23: 1,077,401). Out of this $234,000 relates to the value of 325,000 shares issued as remuneration to Mr Michael Lampron, Managing Director and Chief Executive Officer (refer to note 22). The remaining balance of $1,040,433 of Share-based payments expense relates to vesting charge on options and performance rights issued to Directors, KMP and employees of the company.

Types of share-based payment plans

Employee Share Option Plan, ‘ESOP’

A Long-Term Incentive Plan has been established and approved by shareholders where Mach7 Technologies Limited may, at the discretion of the Board, grant options over the ordinary shares of Mach7 Technologies Limited to Directors, Executives, contractors and employees of the consolidated entity. Upon vesting, the options, issued for nil consideration, are exercisable any time two to three years after the grant date and expire four to five years after the grant date.

The exercise of the options is not subject to any performance conditions other than the employee remaining in the employ of the Company at the date of exercise. The options cannot be transferred and will not be quoted on the ASX.

Set out below are summaries of options granted under the plan:

Outstanding at the beginning of the financial year Granted Exercised Expired/Forfeited Outstanding at the end of the financial year Exercisable at the end of the financial year	Number of options Weighted average exercise price 30 June 2024 30 June 2024 8,356,665 $0.924 3,590,000 $0.711 (906,666) $0.207 (713,334) $0.985 10,326,665 $0.908 5,756,657 $1.031	Number of options Weighted average exercise price 30 June 2023 30 June 2023 10,791,665 $0.907 760,000 $0.728 (983,333) $0.579 (2,211,666) $1.102 8,356,666 $0.924 5,209,989 $0.885

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 36. Share-based payments (continued)

30 June 2024 Exercise Grant date Expiry date price 17/10/2018 17/10/2023 $0.185 12/11/2018 12/11/2023 $0.244 02/05/2019 02/05/2024 $0.265 11/10/2019 11/10/2024 $0.680 18/11/2019 18/11/2024 $0.820 18/11/2019 18/11/2024 $0.800 18/11/2019 18/11/2024 $0.950 18/11/2019 18/11/2024 $1.100 01/12/2020 30/11/2025 $1.400 03/02/2021 30/06/2025 $1.480 10/09/2021 31/08/2026 $0.980 10/09/2021 21/07/2024 $0.980 11/11/2021 11/11/2026 $0.910 11/11/2021 31/12/2025 $1.380 20/01/2022 20/01/2027 $0.782 24/02/2022 24/02/2027 $0.731 12/12/2022 12/12/2027 $0.610 01/01/2023 01/01/2028 $0.570 01/05/2023 01/05/2028 $0.636 01/07/2023 01/07/2028 $0.582 14/08/2023 14/08/2028 $0.800 01/09/2023 01/09/2028 $0.760 16/11/2023 16/11/2028 $0.710 01/12/2023 01/12/2028 $0.725 18/12/2023 18/12/2028 $0.730 15/01/2024 15/01/2029 $0.732 01/03/2024 01/03/2029 $0.679 Weighted average exercise price	Balance at the start of the year 646,666 225,000 50,000 959,999 285,000 250,000 250,000 250,000 85,000 1,550,000 2,483,334 26,666 110,000 225,000 200,000 250,000 110,000 200,000 200,000 - - - - - - - -	Granted - - - - - - - - - - - - - - - - - - - 400,000 50,000 30,000 225,000 50,000 2,435,000 200,000 200,000	Exercised (626,666) (225,000) (50,000) (5,000) - - - - - - - - - - - - - - - - - - - - - - -	Expired/ forfeited/ other (20,000) - - (73,333) - - - - (11,666) (110,000) (243,334) - (20,001) (75,000) - - (60,000) - - - - - - - (100,000) - -	Balance at the end of the year - - - 881,666 285,000 250,000 250,000 250,000 73,334 1,440,000 2,240,000 26,666 89,999 150,000 200,000 250,000 50,000 200,000 200,000 400,000 50,000 30,000 225,000 50,000 2,335,000 200,000 200,000
	8,356,665	3,590,000	(906,666)	(713,334)	10,326,665
	$0.924	$0.711	$0.207	$0.985	$0.908

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 36. Share-based payments (continued)

30 June 2023 Exercise Grant date Expiry date price 03/11/2017 03/11/2022 $0.170 17/10/2018 17/10/2023 $0.185 12/11/2018 12/11/2023 $0.244 02/05/2019 02/05/2024 $0.265 11/10/2019 11/10/2024 $0.680 11/10/2019 01/10/2024 $0.680 11/10/2019 18/10/2022 $0.680 18/11/2019 18/11/2024 $0.820 18/11/2019 18/11/2024 $0.800 18/11/2019 18/11/2024 $0.950 18/11/2019 18/11/2024 $1.100 13/07/2020 30/06/2025 $0.900 01/12/2020 30/11/2025 $1.400 03/02/2021 30/06/2025 $1.480 10/09/2021 31/08/2026 $0.980 11/11/2021 11/11/2026 $0.910 11/11/2021 31/12/2025 $1.380 20/01/2022 20/01/2027 $0.782 24/02/2022 24/02/2027 $0.731 12/12/2022 12/12/2027 $0.610 01/01/2023 01/01/2028 $0.570 01/05/2023 01/05/2028 $0.636 Weighted average exercise price	Balance at the start of the year 663,333 768,332 450,000 50,000 911,667 166,666 166,666 285,000 250,000 250,000 250,000 533,333 85,000 2,386,667 2,790,000 110,000 225,000 200,000 250,000 - - -	Granted - - - - - - - - - - - - - - 250,000 - - - - 110,000 200,000 200,000	Exercised (663,333) (95,000) (225,000) - - - - - - - - - - - - - - - - - - -	Expired/ forfeited/ other - (26,666) - - (118,334) - (166,666) - - - - (533,333) - (836,667) (530,000) - - - - - - -	Balance at the end of the year - 646,666 225,000 50,000 793,333 166,666 - 285,000 250,000 250,000 250,000 - 85,000 1,550,000 2,510,000 110,000 225,000 200,000 250,000 110,000 200,000 200,000
	10,791,664	760,000	(983,333)	(2,211,666)	8,356,665
	$0.907	$0.728	$0.188	$1.102	$0.924

The weighted average remaining contractual life of options outstanding at the end of the financial year was 2 years 6 months (FY23: 2 years 7 months).

Option pricing model

Equity-settled transactions

The fair value of the equity-settled share options granted under the ESOP is estimated as at the date of grant using a BlackScholes option pricing model taking into account the terms and conditions upon which the option was granted. The model takes into account the share price volatilities and co-variances of the Company and excludes the impact of any estimated forfeitures related to the service-based vesting conditions on the basis that management has assessed the forfeiture rate to be zero.

For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

		Share price	Exercise	Expected	Dividend	Risk-free	Fair value
Grant date	Expiry date	at grant date	price	volatility	yield	interest rate	at grant date
01/07/2023	01/07/2028	$0.620	$0.582	63.00%	-	3.78%	$0.358
14/08/2023	14/08/2028	$0.800	$0.800	62.00%	-	3.93%	$0.449
01/09/2023	01/09/2028	$0.780	$0.760	63.00%	-	3.76%	$0.442
16/11/2023	16/11/2028	$0.780	$0.710	62.00%	-	4.23%	$0.457
01/12/2023	01/12/2028	$0.725	$0.695	62.00%	-	4.14%	$0.416
18/12/2023	18/12/2028	$0.775	$0.730	67.00%	-	3.37%	$0.461
15/01/2024	15/01/2029	$0.730	$0.732	62.00%	-	3.72%	$0.406
01/03/2024	01/03/2029	$0.695	$0.679	62.00%	-	3.78%	$0.391

Mach7 Technologies Limited Notes to the financial statements 30 June 2024

Note 36. Share-based payments (continued)

Performance rights

The Company has on issue 1,825,185 (FY23: 1,503,299) performance rights of which 402,185 expire on 30 September 2024, 723,000 expire on 30 September 2025 and 700,000 expire on 30 September 2026.

Summaries of performances rights is as below:

Outstanding at the beginning of the financial year Granted Exercised Expired/Forfeited Outstanding at the end of the financial year	30 June 2024 1,503,299 700,000 - (378,114)	30 June 2023 1,180,299 723,000 (200,000) (200,000)
	1,825,185	1,503,299

During the period, the consolidated entity issued 700,000 performance rights to Mr Michael Lampron with various vesting conditions relating to service period and performance hurdles. The fair value of the performance rights was determined using the Black Scholes option pricing model using the following inputs:

Number of performance rights granted	560,000	140,000
Grant date	16 November 2023	16 November 2023
Expiry date	30 September 2026	30 September 2026
Weighted average share price at date of grant ($)	$0.72	$0.72
Weighted average exercise price ($)	-	-
Weighted average volatility %	54.74%	54.74%
Weighted average risk-free rate %	4.177%	4.177%
Vesting conditions with 30 June 2026 target date	Note 1	Note 2
Fair value per performance right $	$0.5096	$0.5096
Fair value of performance right $	$362,208	$71,338

Note 1:

Note 1:
Vesting condition Company performance vesting condition linked to Revenue Compound Annual Growth Rate Company performance vesting condition linked to EBITDA Margin Company performance vesting condition linked to Net Profit After Tax	No. of Performance Rights 105,000 350,000 105,000
	560,000

Note 2:

Vesting condition

Market-based vesting condition linked to Total Shareholder Return

No. of Performance Rights 140,000

Mach7 Technologies Limited Consolidated entity disclosure statement As at 30 June 2024

Entity	name	Entity type	Place formed / Country	Ownership interest	Tax
			of incorporation	%	residency
Mach7	Technologies Limited	Body Corporate	Australia	N/A (parent entity)	Australia
Mach7	Technologies International Pty Ltd	Body Corporate	Australia	100%	Australia
Mach7	Technologies UK Ltd	Body Corporate	UK	100%	UK
Mach7	Technologies Pte Ltd	Body Corporate	Singapore	100%	Singapore
Mach7	Technologies, Inc.	Body Corporate	U.S.A	100%	U.S.A
Mach7	Technologies Canada Inc.	Body Corporate	Canada	100%	Canada

Basis of preparation

This Consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the Group as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements.

Determination of tax residency

Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted, and which could give rise to a different conclusion on residency.

In determining tax residency, the consolidated entity has applied the following interpretations:

Australian tax residency

The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5.

Partnerships and Trusts

None of the entities noted above were trustees of trusts within the consolidated entity, partners in a partnership within the consolidated entity or participants in a joint venture within the Group.

Mach7 Technologies Limited Directors' declaration 30 June 2024

In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2024 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
the information disclosed in the attached consolidated entity disclosure statement is true and correct.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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_________ Robert Bazzani Chairman

28 August 2024

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INDEPENDENT AUDITOR’S REPORT

To the Members of Mach7 Technologies Limited

Opinion

We have audited the financial report of Mach7 Technologies Limited (the Company) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors' declaration.

In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key Audit Matters (Continued)

Key Audit Matter

How our audit addressed this matter

Recognition of Revenue
Refer to Note 6 in the financial
statements

Revenue
recognition
was
considered a key audit matter,
as
it
involves
significant
management estimates and
judgement.
The Group’s revenue is derived
from the sale of software
licenses
and
subscription
services,
and
provision
of
professional services including
implementation and training,
migration, and support and
maintenance.
Revenue in respect of some of
the service contracts is based
on percentage of completion,
which involves management’s
estimate and judgement.

Our audit procedures in relation to the recognition of revenue included:
•
Assessing whether the Group’s revenue recognition policies was in
compliance with_AASB 15_ Revenue from Contracts with Customers;
•
For a sample of revenue transactions that were recognised at a point
in time (i.e. sale of software license), substantiating transactions by
agreeing to supporting documentation, including contracts with
customers and proof of delivery to assess whether performance
obligation has been satisfied and whether transaction price has been
allocated onto each performance obligation correctly;
•
For a sample of revenue transactions that were recognised on a
percentage of completion basis (i.e. implementation services), our
testing included:
-
Agreeing the contract price to customer contracts; and
-
Assessing the reasonableness of management’s estimated
percentage of completion for services delivered up to 30 June
2024
•
For a sample of revenue transactions that were recognised overtime
(i.e. subscription, support and maintenance service revenue), our
testing included:
-
Agreeing the value of services to customer contracts; and
-
Assessing the reasonableness of revenue recognised for
services delivered for the financial year and revenue being
deferred at 30 June 2024
•
Inquiring management about long-term contracts that might have
embedded financing components, and assessing the related
accounting treatment against_AASB15 Revenue from Contracts with_
Customers;
•
Reviewing the group listing of unbilled receivables to identify any
items potentially to be invoiced to the customers over a long period of
time that might have embedded financing arrangements with the
customers;
•
Reviewing sales transactions before and after year-end to ensure that
revenue was recognised in the correct period; and
•
Reviewing adequacy of disclosures against the requirements of
AASB15 Revenue from Contracts with Customers;

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Impairment Assessment of Goodwill and Intangibles
Refer to Note 17 in the financial statements

At 30 June 2024, the Group has
intangible assets and goodwill
(collectively
known
as
intangibles)
with
carrying
values of $23.6m and $4.2m
respectively.
We determine this to be a Key
Audit
Matter
due
to
the
materiality of the intangibles. In
addition,
the
directors’
assessment of the recoverable
amount of the cash generating
unit (“CGU”) to which these
intangibles relate to involves
significant
judgments
and
estimates.
Namely, the calculation of the
recoverable amount of the
CGU
involves
judgements
about the future underlying
cashflows
of
the
CGU,
estimated growth rates for the
CGU, and judgments of an
appropriate discount rate to
apply
to
the
estimated
cashflows.
Management also performed
sensitivity analysis over the
calculations, by varying the
assumptions
used
in
the
revenue growth rate to assess
the impact on the valuations.

Our audit procedures, which involved the assistance of our Corporate
Finance team, included:
•
Assessing whether there is a change in assumptions supporting
management's determination that the intangible assets should be
allocated to a single CGU, based on the nature of the Group’s
operating business;
•
Assessing the valuation methodology used to determine the
recoverable amount of the intangible assets and CGU to which the
goodwill has been allocated to;
•
Verifying the mathematical accuracy of the impairment assessment
calculations;
•
Evaluating the reasonableness of the key assumptions built into the
model which includes the future revenue growth rates, cost of sales
growth rates, overhead growth rates, discount rate, terminal value,
and working capital;
•
Performing sensitivity analysis on growth rates applied to cash flows,
to determine the extent of headroom for the intangibles; and
•
Reviewing the adequacy of disclosures against the requirements of
AASB 136 Impairment of Assets.

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Share-Based Payments
Refer to Note 36 in the financial

statements

During the year, the Group
issued new share options and
performance
rights
to
key
management personnel and
employees, and had options
cancelled.
Management have accounted
for the above in accordance
with_AASB 2_ Share -Based
Payments.
We consider this to be a key
audit matter because of the
complexity of the accounting
required
to
value
the
instruments
and
the
judgemental nature of inputs
into the valuation models.

Our audit procedures, which involved the assistance of our Corporate
Finance team, included:
•
Reviewing the terms and conditions of the instruments issued;
•
Reviewing the valuation methodology to ensure it is in compliance
with_AASB 2 Share-based Payments_;
•
Verifying the mathematical accuracy of the underlying model;
•
Critically evaluating the key assumptions used including considering
the grant date share price, expected volatility, vesting period and
number of instruments expected to vest;
•
Recalculating the value and accounting treatment of the share-based
payment expense to be recognised and the reserve balance for
accuracy, factoring in any cancellations due to expiry, forfeiture of
other reasons; and
•
Reviewing the adequacy of the relevant disclosures against the
requirements of_AASB 2 Share-based Payments._

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2024, but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of:

a. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and

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Responsibilities of the Directors for the Financial Report (Continued)

b. the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001 , and

for such internal control as the directors determine is necessary to enable the preparation of:

i. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and
ii. the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf This description forms part of our auditor's report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2024.

In our opinion, the Remuneration Report of Mach7 Technologies Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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RSM AUSTRALIA PARTNERS

M PARAMESWARAN

Partner Dated: 28 August 2024 Melbourne, Victoria

Mach7 Technologies Limited

Page | 78

AI assistant

MACH7 TECHNOLOGIES LIMITED — Annual Report 2024

65285_rns_2024-08-27_35c09d47-047c-445e-8ab6-4be1cf2b902b.pdf

Mach7 Technologies Limited

ABN 26 007 817 192

For the year ended 30 June 2024

1. Company details

2. Results for announcement to the market

Dividends

Comments

3. Net tangible assets

4. Control gained over entities

5. Loss of control over entities

6. Dividends

Current period

Previous period

7. Dividend reinvestment plans

8. Details of associates and joint venture entities

9. Foreign entities

10. Audit qualification or review

11. Attachments

12. Signed

Mach7 Technologies Limited Directors' report 30 June 2024

ABOUT MACH 7

WHO WE ARE

Corporate Structure

Principal activities

Mach7 at a glance

Mach7’s Enterprise Imaging Solution includes:

FINANCIAL PERFORMANCE

SALES ORDERS

CASH AND CASHFLOWS

Highest cash balance in four years. Operating cashflow positive in FY24 with cash on hand of $26.2 million, compared to $23.4 million at the end of FY23.

REVENUE

Marginal decline in revenue due to subscription transition. $29.1 million or -3% on prior year

72% OF MACH7’S REVENUE IS NOW RECURRING

EXPENSES

Disciplined cost management capped opex growth at 13%.

PROFITABILITY

NPATA* of -$1.2 million and Adjusted EBITDA of -$2.0 million impacted by subscription transition.**

ORGANISATIONAL OVERVIEW

Global Operations

EXTERNAL ENVIRONMENT

Adoption of Electronic Medical Records (EMR)

Volume-based business model - capital and subscription pricing options

OUR BUSINESS STRATEGIES

Risk Management

Key Business Risks

Commercialisation risk

Competition and new technologies

Risks associated with the regulatory environment

DIRECTORS

Board of Directors

Company secretary

Meetings of directors

Outlook

Dividends

Significant changes in the state of affairs

Indemnity and insurance of auditor

Non-audit services

Auditor's independence declaration

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

REMUNERATION REPORT (AUDITED)

REMUNERATION PHILOSOPHY

REMUNERATION STRUCTURE

Principles used to determine the nature and amount of remuneration

NON-EXECUTIVE DIRECTORS' REMUNERATION FRAMEWORK

Objective

Structure

EXECUTIVE REMUNERATION FRAMEWORK

Structure

Fixed Remuneration:

Performance-based (variable) remuneration:

SHORT TERM INCENTIVE PLAN (STIP)

Description of the plan

Appropriate STIP incentive

Choice of performance conditions

Performance period

MACH7 TECHNOLOGIES LIMITED Annual Report 2024

**NPATA* of -$1.2 million and Adjusted EBITDA of -$2.0 million impacted by subscription transition.