MACH7 TECHNOLOGIES LIMITED — Capital/Financing Update 2016

Dec 8, 2016

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

MACH7 TECHNOLOGIES LIMITED (the “Company”)

ABN 26 007 817 192

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion) 4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state: the date from which they do the extent to which they participate for the next	1. Fully paid ordinary shares (Shares). 2. Options to acquire fully paid ordinary shares (Options).
	1. 63,641,760 Shares. 2. 1,250,000 Options.
	1. The Shares are fully paid ordinary shares. 2. The Options are exercisable into fully paid ordinary shares at $0.10 each, vesting on 9 December 2018 and expiring on 9 December 2021.
	1. The Shares will be quoted and will rank equally with all other ordinary shares on issue in the Company. 2. The Options will not be quoted or rank equally with any class of quoted securities. However, fully paid ordinary shares issued on the exercise of the Options will be quoted. From the date of issue of those shares, the shares will rank equally with all other ordinary shares then on issue in the Company.

• See chapter 19 for defined terms.

Appendix 3B Page 1

04/03/2013

dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in relation to the+securities_ the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A
	1. The Shares were issued at $0.04 per Share. 2. The Options were issued for nil cash consideration.
	1. The Shares were issued under the second tranche of a capital raising placement which was announced to the ASX on 16 November 2016. The funds raised will be used for investment into sales and marketing resources, customer support services, new product development, working capital requirements, and to retire existing debt. 2. The Options were issued to Mr Wayne Spittle, a Non-Executive Director of the Company, under the Company’s Long Term Incentive Plan (LTIP) pursuant to shareholder approval obtained at the Company’s 2016 Annual General Meeting. The issue of the Options to Mr Spittle is intended to align his remuneration with that of the other Non- Executive Directors who received options on the same terms under the LTIP prior to Mr Spittle’s appointment as a Director.
	Yes.
	7 December 2016.
	3,141,760 Shares.
	60,500,000 Shares.

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	N/A	N/A
	1,250,000 Options were issued pursuant to Exception 14 in ASX Listing Rule 7.2.
	Yes, the issue price of the securities issued is at least 75% of the 15 day VWAP. The issue date is 9 December 2016. The VWAP as calculated under rule 7.1A.3 is $0.043 and the issue price is $0.04, which is greater than 75% of the VWAP. The VWAP calculation was performed by IRESS.
	N/A
	See Annexure 1
	9 December 2016
	Number	+Class
	650,506,864	Fully paid ordinary shares

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	58,748,168 441,933,006 288,567,381 11,432,619 29,952,573 12,939,854 1,000,000 4,750,000 1,250,000	Ordinary Shares escrowed until 18 February 2017 Ordinary Shares escrowed until 8 April 2017 Performance Shares escrowed until 8 April 2017 Performance Shares (non- escrowed) Unlisted options exercisable at $0.05 each, expiring 6 February 2017 Unlisted options exercisable at $0.05 each, expiring 6 February 2017, escrowed until 18 February 2017 Unlisted LTIP options exercisable at $0.10, vesting on 8 April 2017, expiring 8 April 2020 Unlisted LTIP options exercisable at $0.10, vesting on 8 April 2018, expiring 8 April 2021. Unlisted LTIP options exercisable at $0.10, vesting on 9 December 2018, expiring 9 December 2021.
	N/A

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates	N/A
	N/A
	N/A
	N/A

15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 5

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28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

(a) +Securities described in Part 1 *The Company is only applying for quotation of the Shares the subject of this Appendix 3B

(b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35[If the ][+][securities are ][+][equity securities, the names of the 20 largest holders of ] the additional[+] securities, and the number and percentage of additional +securities held by those holders

36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37[A copy of any trust deed for the additional ][+][securities ]

Entities that have ticked box 34(b)

38 Number of+securities for which +quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: the date from which they do the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security) 42 Number and +class of all +securities quoted on ASX (_including_the+securities in clause 38)	N/A
	N/A
	N/A
	N/A
	Number	+Class

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before[+] quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Alyn Tai

Company Secretary 9 December 2016

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

==> picture [404 x 405] intentionally omitted <==

----- Start of picture text -----

Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insert number of fully paid [+] ordinary securities
429,074,891
on issue 12 months before the [+] issue date or
date of agreement to issue
Add the following:
4,336,704 shares on 24 December 2015
• Number of fully paid [+] ordinary securities
459,499,119 shares on 8 April 2016
issued in that 12 month period under an
exception in rule 7.2
1,590,283 shares on 8 April 2016
• Number of fully paid [+] ordinary securities
42,000,000 shares on 6 May 2016
issued in that 12 month period with
shareholder approval
711,659 shares on 1 August 2016
• Number of partly paid [+] ordinary securities
that became fully paid in that 12 month 8,895,739 shares on 16 August 2016
period
1,500,000 shares on 31 May 2016
Note:
• Include only ordinary securities here – 4,650,600 shares on 2 September 2016
other classes of equity securities cannot be
added
• Include here (if applicable) the securities
the subject of the Appendix 3B to which this
form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid [+] ordinary Nil
securities cancelled during that 12 month
period
“A” 952,258,995
----- End of picture text -----

• See chapter 19 for defined terms.

Appendix 3B Page 9

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Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”		0.15
		[Note: this value cannot be changed]
Multiply“A” by 0.15		142,838,849
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already
been used
Insertnumber of+equity securities issued or		2,134,146 shares on 6 May 2016
agreed to be issued in that 12 month period
not	_counting_those issued:	100,000,000 shares on 18 November 2016
•	Under an exception in rule 7.2	33,153,137 shares on 22 November 2016
•	Under rule 7.1A
•	With security holder approval under rule	3,141,760 shares on 9 December 2016
	7.1 or rule 7.4
Note:
•	This applies to equity securities, unless
	specifically excluded – not just ordinary
	securities
•	Include here (if applicable) the securities
	the subject of the Appendix 3B to which
	this form is annexed
•	It may be useful to set out issues of
	securities on different dates as separate
	line items

been used	been used
Insertnumber of+equity securities issued or		2,134,146 shares on 6 May 2016
agreed to be issued in that 12 month period
not	_counting_those issued:	100,000,000 shares on 18 November 2016
•	Under an exception in rule 7.2	33,153,137 shares on 22 November 2016
•	Under rule 7.1A
•	With security holder approval under rule	3,141,760 shares on 9 December 2016
	7.1 or rule 7.4
Note:
•	This applies to equity securities, unless
	specifically excluded – not just ordinary
	securities
•	Include here (if applicable) the securities
	the subject of the Appendix 3B to which
	this form is annexed
•	It may be useful to set out issues of
	securities on different dates as separate
	line items
“C”		138,429,043
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule
7.1

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule	Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule
7.1
“A” x 0.15	142,838,849
Note: number must be same as shown in Step
2
Subtract“C”	138,429,043
Note: number must be same as shown in Step
3
Total[“A” x 0.15] – “C”	4,409,806
	[Note: this is the remaining placement capacity
	under rule 7.1]

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Part 2	Part 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	952,258,995
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	95,225,900
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	60,500,000 shares on 9 December 2016
“E”	60,500,000
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	95,225,900
Subtract“E” Note: number must be same as shown in Step 3	60,500,000
Total[“A” x 0.10] – “E”	34,725,900 Note: this is the remaining placement capacity under rule 7.1A

“A” x 0.10	95,225,900
Note: number must be same as shown in Step
2
Subtract“E”	60,500,000
Note: number must be same as shown in Step
3
Total[“A” x 0.10] – “E”	34,725,900
	Note: this is the remaining placement capacity
	under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 11

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Mach7 Technologies Limited provides the following information as required under ASX Listing Rule 3.10.5A:

• (a) Dilution to existing shareholders as a result of the shares issued pursuant to the placement under Listing Rule 7.1A ( 7.1A Placement ) (60,500,000 shares) is 5.27%.

• (b) The Company considered the alternative options for capital raising available to it in order to raise the funds for the purposes referred to in the Appendix 3B, and determined that such funds be raised under the 7.1A Placement as this was considered to be a more efficient and expedient manner to raise the funds than through other alternatives.

• (c) No underwriting arrangements were entered into in relation to the 7.1A Placement.

• (d) The following fees were incurred in relation to the 7.1A Placement, payable to the lead manager who facilitated the 7.1A Placement:

• i. a placement fee of 5% of the capital raised under the 7.1A Placement (total capital raised under the 7.1A Placement being $2,420,000 for 60,500,000 shares) (plus GST); and

• ii. a management fee of 1% of the capital raised under the 7.1A Placement (total capital raised under the 7.1A Placement being $2,420,000 for 60,500,000 shares) (plus GST).