MACH7 TECHNOLOGIES LIMITED — Interim / Quarterly Report 2015

Oct 29, 2015

ASX Announcement

30 October 2015

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SEPTEMBER 2015 QUARTERLY CASH FLOW REPORT

3D Medical Limited (ASX: 3DM ) ( 3DM or the Company ) attaches its quarterly cash flow report for the quarter ending 30 September 2015 ( Quarter ).

COMMENTARY

During the Quarter, the Company received cash from the sale of data migration services for the launch customer of its Mach7 image management software. It is expected that further cash will be received while the data migration continues, after which the Company will begin to receive cash from ongoing licence fee income as the launch customer transitions into production and enterprise-wide deployment of the Mach7 software. The Company expects to accelerate conversion of its Mach7 client pipeline following the announcement of the merger with Mach7 (see below).

The Company received and expects to continue to receive cash from the sale of 3D printed biomodels, customised implants and non-implant consumables for use in a variety of medical applications and surgical procedures. In addition, the Company expects to receive cash from data migration and licence fees as it secures further customers for its Mach7 image management software.

During the Quarter, the Company announced it had entered into a partnership with Intelerad Medical Systems™ to develop seamless ordering of patient-specific 3D printed anatomical models directly from within Intelerad’s InteleViewer™ software. This innovation will allow clinicians to order the Company’s 3D printing services while the clinician is reviewing a patient’s diagnostic image study, all without interruption to existing clinical workflow processes. It is envisaged that when this software enhancement is released to Intelerad’s global customer base, the Company will benefit from having a direct ordering channel covering more than 1,000 clinical sites across Oceania, North America and the United Kingdom.

Subsequent to the Quarter, the Company also announced that it had entered into a Research Collaboration Agreement with Hephaestus CAD/CAM, an Australian-based dental research and prosthetic design company. 3DM and Hephaestus CAD/CAM will jointly undertake research on production methods to manufacture mass-customised dental prosthetics using 3D print technology. This research will assist the Company in validating specific dental product lines, and ultimately broaden the Company’s range of medical modalities in which it commercially operates.

Subsequent to the Quarter, on 26 October 2015, the Company announced it had entered into a binding Heads of Agreement with Mach7 Technologies Pte. Ltd. ( Mach7 ) to merge through the acquisition of 100% of the issued shares in Mach7. The Company currently has a strong working relationship with Mach7 which is anchored in 3DM’s status as exclusive reseller of the Mach7 image management solutions for hospitals and radiology clinics in Australia and New Zealand.

3D Medical Limited ACN 007 817 192 Unit 4, 435 Williamstown Road, Port Melbourne, Victoria 3207 W:www.3Dmedical.com.au I E:info@3Dmedical.com.au I T:+613 9646 2222 I F:+613 9645 4707

ASX Announcement

30 October 2015

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Mach7’s global customer base includes leading hospital groups such as Penn Medicine, Raffles Hospital and Massachusetts General Hospital and has operations in 10 countries. Mach 7 has 43 employees with the majority located in Vermont USA and generates strong contractual cash flows from software licence and support agreements with the majority denominated in US dollars. For the 9 months ending September 2015, Mach7 generated revenue of US$4.1 million and is nearing cash flow breakeven.

The proposed merger is subject to certain closing conditions including 3DM obtaining shareholder approval and 3DM raising a minimum of AUD$10 million in new capital to provide working capital to support, among other things, accelerated sales and marketing activities within both Mach7 and 3DM. The minimum $10 million in new capital will be obtained in three tranches; (i) a placement of around $4 million to sophisticated and professional investors; (ii) the exercise of existing 3DM options on issue to raise around $2 million; and (iii) an offer under a Share Purchase Plan to enable existing shareholders to subscribe for new shares on the same terms as the placement, to raise approximately $5 million.

On October 28 2015, the Company confirmed it had successfully raised $4 million through the issue of shares at 7.5 cents per share in an oversubscribed placement managed by the Company’s Lead Manager, Wilson HTM. The Company will shortly announce details of the Share Purchase Plan, and send documentation about the Share Purchase Plan to all shareholders for their consideration.

Upon completion of 3DM’s capital raising initiatives and proposed merger with Mach7, the Company will be well capitalised and appropriately positioned to aggressively pursue its sales and marketing strategy. In addition, 3DM will benefit from Mach7’s existing contractual and rapidly growing USD denominated revenue base to underscore the cost base of the merged group.

The Company continues to invest in sales and marketing infrastructure as well as in equipment and processes to ensure ongoing high quality supply of products and services.

Net operating cash outflow for the September 2015 quarter was $694,000 with a further $479,000 in non-recurring cash outflow relating to investment in non-current assets comprising 3D printers, software, leasehold improvements at its Port Melbourne facility, and $77,000 in costs relating to the Company’s quality management systems. The Company also made a USD$500,000 secured loan to Mach7 Technologies.

In reviewing the Company’s liquidity and cash flow, the Directors note the Company holds a cash balance of $886,000 as at 30 September 2015, and will shortly receive the cash proceeds of the $4 million placement in early November.

- ENDS

3D Medical Limited ACN 007 817 192 Unit 4, 435 Williamstown Road, Port Melbourne, Victoria 3207 W:www.3Dmedical.com.au I E:info@3Dmedical.com.au I T:+613 9646 2222 I F:+613 9645 4707

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ASX Announcement

30 October 2015

For more information, contact :

3D Medical Limited Dr Nigel Finch, Chairman (+61 421 742 878) Email: info@3Dmedical.com.au Web: www.3Dmedical.com.au

About 3D Medical Limited:

At 3D Medical our aim is to aid medical professionals in the facilitation of improved clinical care, improving medical procedures, diagnostics and ultimately improving patient outcomes.

3D Medical is a medical specific 3D printing and holographic projection and data integrations provider. Our services 3D Medical Printing; EchoPixel (holographic projection technology); GestSure (in surgery image control); Mach 7 (enterprise imaging solution provides healthcare organisations with the ability to archive, consolidate, access, and share medical imaging data across departments, locations and regions); and MediDATA provide medical practices the opportunity to leverage their analytical capabilities to gain an improved understanding of the characteristics of the patients which drive their business.

These new and innovative products leverage data already captured by conventional imaging modalities and apply it in more meaningful ways to deliver improved economic and patient outcomes.

Further information is available at www.3DMedical.com.au

About Mach7 Technologies:

Mach7 is a global provider of enterprise image management systems and services that allow healthcare enterprises to easily identify, connect, and share diagnostic image and patient care intelligence where and when it is needed. Their innovative communication and workflow technology delivers complete image management including rapid record identification, integration, synchronisation and routing, advanced clinical viewing, and optimized vendor neutral archiving (VNA) across the enterprise.

Healthcare institutions around the world use Mach7 solutions for archiving, clinical productivity improvement, IT cost savings, health information exchange, meaningful use compliance, and improved patient data communication. Mach7 has locations in the U.S., Asia, Australia, and the Middle East.

Further information is available at www.mach7t.com

3D Medical Limited ACN 007 817 192 Unit 4, 435 Williamstown Road, Port Melbourne, Victoria 3207 W:www.3Dmedical.com.au I E:info@3Dmedical.com.au I T:+613 9646 2222 I F:+613 9645 4707

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

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

Name of entity
3D MEDICAL LIMITED
ABN 26 007 817 192	Quarter ended (“current quarter”)
26 007 817 192	30 September 2015

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising & marketing (c) research &development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Current quarter $A’000	Year to date (12 months) $A’000
	125 (206) (40) - - (580) - 7 - - -	125 (206) (40) - - (580) - 7 - - -
	(694)	(694)

• See chapter 19 for defined terms.

Appendix 4C Page 1

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date (12 months) $A’000
1.8 Net operating cash flows (carried forward)	(694)	(694)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other – Acquisition costs Other – Cash acquired on completion of transaction with Safety Medical Products Ltd. Net investing cash flows 1.14 Total operating and investing cash flows	- - - (402) (77) - - - - - (736) - - -	- - - (402) (77) - - - - - (736) - - -
	(1,215)	(1,215)
	(1,909)	(1,909)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other – Capital raising costs Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter	(1,909) 2,795 -	(1,909) 2,795 -
	886	886

• See chapter 19 for defined terms.

Appendix 4C Page 2

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 1.25	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.11	Current quarter $A'000
		83
		-
1.26	Explanation necessaryforanunderstanding ofthe transactions
	Directors fees which include amounts paid to entities associated with the Directors.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

• See chapter 19 for defined terms.

Appendix 4C Page 3

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other – Lease Bond	812	2,721
	30	30
	-	-
	44	44
Total: cash at end of quarter(item 1.23)	886	2,795

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	-	-
	-	-
	-	-
	-	-
	-	-

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

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Dr. Nigel Finch Chairman 30 October 2015

• See chapter 19 for defined terms.

Appendix 4C Page 4

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.

3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

Appendix 4C Page 5

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