MACH7 TECHNOLOGIES LIMITED — Interim / Quarterly Report 2017

Jul 16, 2017

ASX Announcement

17 July 2017

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Quarterly Cash Flow Report

30 June 2017

Summary

• Cash on hand $2.8 million

• Cash receipts from customers $2.9 million for the quarter, $8.4 million for the year

• Cash outflows (net of inflows) from operations $0.2 million for the quarter, $5.2 million for the year

Melbourne, Australia; 17 July 2017: Mach7 Technologies Limited ( Mach7 or the Company ) (ASX: M7T ), a leader in the global enterprise imaging market, today released its Appendix 4C quarterly cash report for the quarter ended 30 June 2017.

Cash on hand at 30 June 2017 was $2.8 million, compared to $3.0 million at the end of the last quarter, and $1.7 million at 30 June 2016.

Cash receipts from customers for the quarter were $2.9 million, an increase of $1.7 million compared to the previous quarter ($1.2 million). Cash receipts for the quarter includes receipts from software license fees ($1.4 million, 47%), service fees ($0.6 million, 22%), annual support fees ($0.8 million, 27%), and monthly subscription fees ($0.1 million, 4%).

Cash receipts from customers for the year ended 30 June 2017 were $8.4 million, and included receipts from software license fees ($4.0 million, 48%), service fees ($1.2 million, 14%), annual support fees ($2.7 million, 32%), and monthly subscription fees ($0.5 million, 6%).

The graph below (Figure 1) depicts cash flows from sales by category and quarter for the financial year ended 30 June 2017:

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ASX Announcement

17 July 2017

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Cash Collected by Quarter, by Category
Software Support Subscriptions Services 3DM/Other
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
FY2017 Q1 Q2 Q3 Q4
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Figure 1 – Cash collected by category

Cash payments (net of other revenue receipts) for operational activities were $3.1 million for the quarter, a decrease of $0.9 million compared to the previous quarter ($4.0 million). Cash payments for the current quarter are mainly comprised of staff costs - $2.6 million (84%).

Net cash outflows from operations were $0.2 million for the current quarter, an improvement of $2.7 million compared to the previous quarter ($2.9 million). The improvement in cash flows from operations for the current quarter is mainly due to the increase of cash receipts from customers as outlined above, certain cost reductions which have taken effect during the current quarter, and general operational timing differences which occur across quarters.

The Company expects to release its audited financial report for the year ended 30 June 2017 on or before 31 August which will provide further detail of the Mach7 groups’ financial performance and position.

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ASX Announcement

17 July 2017

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About Mach7 Technologies:

Mach7 Technologies (ASX:M7T) develops innovative enterprise imaging IT solutions that create a clear and complete view of the patient to inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. Mach7’s awardwinning enterprise imaging platform provides a vendor neutral foundation for unstructured data consolidation and communication to power interoperability and enables healthcare enterprises to build their best-of-breed clinical ecosystems. Mach7’s sophisticated workflow tools, advanced clinical viewing and optimized vendor neutral archiving solutions unlock silos of legacy systems empowering healthcare providers to own, access and share patient data without boundaries. Visit www.mach7t.com.

Contacts:

Jenni Pilcher CEO Australia, CFO +61 3 9286 7500 (Australia) jenni.pilcher@mach7t.com

Mike Lampron Chief Operating Officer (U.S.) +1 802 861 7745 (U.S.) mike.lampron@mach7t.com

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Appendix 4C

Q ~~u~~ arterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

Mach7 Technologies Limited

ABN 26 007 817 192

Quarter ended (“current quarter”) 30 June 2017

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (rental and reimbursements) 1.9 Net cash from / (used in) operating activities	2,935 - (44) (128) (43) (2,621) (459) - 12 - - 74 77	8,408 - (362) (974) (270) (10,156) (2,239) - 38 (138) (8) 103 423
	(197)	(5,175)

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets 2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	(1) 1	(1) 1 258
	-	258
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	(16) - - - - -	7,400 - - (551) - (737) - - -
	(16)	6,112

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	3,049 (197) - (16) (18)	1,721 (5,175) 258 6,112 (98)
	2,818	2,818
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,310 1,465 - 43	224 2,782 - 43
	2,818	3,049
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 23 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		23
		-
Payments made to non-executive directors for director fees.

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other 9.8 Total estimated cash outflows (before cash inflows)	- 64 25 44 2,241 624 -
	2,998

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1 Name of entity	N/A	N/A
10.2 Place of incorporation or registration
10.3 Consideration for acquisition or disposal
10.4 Total net assets
10.5 Nature of business

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

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

Sign here: ............................................................ Date: .......17 July 2017....... (Director)

Print name: ......DR. NIGEL FINCH.........................

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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