MACH7 TECHNOLOGIES LIMITED — Investor Presentation 2016

Dec 6, 2016

Copyright © 2013 Mach7 Technologies

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COMPANY OVERVIEW

Top tier Board and management team with a high quality shareholder base

Financial information ($A)

Financial information ($A)
Share price (5-Dec-16)	$0.041
Number of shares (m)1	1,087.5
Market Capitalisation	$44.6m
Cash (30-Sep-16 pre recent $9.0m placement)	$1.8m
Debt (30-Sep-16 pre debt conversion to equity)	$2.9m
Enterprise value $45.7m

Top shareholders

#shares (m) % Top shareholders
Hunter Hall_(Australian fund manager)_	100.0	9.2%
BV Healthcare II_(BioVeda Capital)_	83.8	7.7%
Ravindran Krishnan_(Mach7 Founder, COO)_	57.8	5.3%
PT Dwi Satrya Utama	47.3	4.3%
United Overseas Venture Sdn. Bhd	46.7	4.3%

Board

Damien Lim

Non-Executive Chairman

Mr Lim has 21+ years in equity and investment banking, and is a co-founder of BioVeda Capital

Nobuhiko Ito

Non-Executive Director

Mr Ito is a former President and CEO of GE Japan, and executive with Exxon Chemical Japan

Management

Albert Liong

Managing Director & CEO

Mr Liong has 20+ years experience in financial management and planning, with previous executive experience in US-based IT companies

Eric Rice

CTO

Mr Rice has 20+ years industry experience and has held leadership roles with IDX and GE Healthcare

Dr Nigel Finch

Non-Executive Director

Mr Finch is a principal at Saki Partners Transaction Advisers, and has corporate transaction experience across ASX-listed firms

Wayne Spittle

Non-Executive Director

Mr Spittle is a former VP of Samsung Medical and former CEO of Phillips Healthcare

Jenni Pilcher

Global CFO and CEO (Australia)

Ms Pilcher has 10+ years CFO experience in ASX-listed healthcare companies (e.g. Alchemia and Mesoblast)

Ravi Krishnan

Founder & COO

Mr Krishnan is a founding partner of Mach7 Technologies, with 20+ years’ industry experience with GE and Agfa Healthcare

1. Number of shares is pre-consolidation; includes 500.7m shares escrowed to various dates in 2017; excludes 300m unlisted performance shares and 49.9m unlisted options

CORE TECHNOLOGY

Mach7 offers the best-in-class Enterprise Imaging Platform that comprises four core modular components that can be deployed independently or as an integrated solution.

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 Building blocks of Enterprise Imaging Platform

 Patented technology

THE MACH7 SOLUTION

Mach7 Enterprise Imaging Platform is a highly scalable and robust solution that can be deployed across clinical enterprise for varying facilities of all types and sizes

Deployment Options

Customer selects Mach7 Enterprise Imaging Platform, the best-in-class software, because it:

• Improves patient care delivery by enabling image portability – no CD’s

Easy Procedure tracking, monitoring and sharing

Cloud Onsite Service

Physician & Patient Portals Telehealth / Teleradiology

• Increases clinician productivity and revenue by consolidating data and simplifying clinical workflow

• Reduces IT infrastructure cost by providing single storage option

• Enterprise-wide implementation (not just radiology like many of our competitors)

Rapid delivery of patient data across the enterprise

Smart Device/Mobile Image Acquisition

Easy Access and Sharing of Patient Labs and Health Data

Referring Physician / Clinician Information Sharing

Health Information Exchanges Enterprise Connectivity Regional Patient Data Routing/Sharing Access to “Priors” and Complete Patient Histories

CUSTOMER EVOLUTION

Mach7’s global customer base is progressing from earlier adopters towards mid-market

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529 Installed sites, across…

11

• Countries

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47

• Unique customers, comprising…

34

• Hospital

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• 8 Imaging centres

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5 Other (eg. Telstra)

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Early customers – academic medical centres and large integrated delivery networks

Mid-market opportunities – mid-market adoption of VNA technology increasingly dominating Mach7’s customer focus

MARKET OPPORTUNITY

Mach7 has a US$3.8 billion+ addressable market with the ability to compete across numerous market segments – PACS replacement underway

Mach7 market opportunity

Conversion to an enterprise imaging based platform

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Initial target markets are the VNA, Departmental and Enterprise PACS segments (US$3.8 billion+)

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VNA
(US$736m
by 2020) [2]
Enterprise PACS
Departmental PACS
(US$440m by
(US$2.7bn by 2018) [1]
2018) [1]
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• Growth in mobile usage and healthcare “Big Data” is driving increased engagement with digital imaging technology

• Through its scalable platform, Mach7 is able to successfully target multiple segments of the growing digital medical image market

Healthcare providers are increasingly converting to VNA platforms , as current-generation PACS technology is rapidly becoming redundant due to limited and aging technology

Image management systems have evolved from first generation departmental based PACS of the 1990s – 2000s to today’s VNA technology

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1990
2000
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PACS 1.0
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 Clinician driven
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• Storage silos

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 DICOM media only
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• Storage silos

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PACS 2.0
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• DICOM media only

• Thin clients

• Enhanced workflows

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2010
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• Difficult to migrate systems

• Consolidated storage

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VNA
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• Improved engine for workflow efficiency

• Simplified EMR enablement, improved image distribution

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2020
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• DICOM and non-DICOM media

• Simple to migrate systems

• Best-of-breed visualisation support

• Markets and Markets: 2013 VNA and PACS Market Report

• IHS Technology, Medical Enterprise Data Storage, 2015

MARKET POSITION

Mach7 is well positioned in the market to add new customers and upsell to existing install base

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Mach7 is able to win contracts because of:

• Best-in-class technology (IDC award)

• Strong customer references from well-known, leading healthcare centres e.g. Sentara, Massachusetts General Hospital, Penn Medicine and Broward Health

• Recognised domain expertise and reputation in informatics

• Responsive support services

• Cost benefits of solution

REVENUE MODEL

Mach7 is shifting to recurring and scalable revenue model

Traditional capital, upfront software license fee, model giving way to monthly subscription revenue model

• Customer pays based on monthly usage – procedure volume

• Typical initial contract term is 5 years – predictive revenue stream

• Fee is per procedure – highly scalable, across the enterprise

• Customer looks to match expenditure with their revenue

Typical 5-year capital contract breakdown

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Upfront license
43%
48% fee
Prof services
Annual support
9%
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Target 5-year subscription contract breakdown:
10%
20% Monthly fee
70%
Upfront license
fee
Prof services
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CAPITAL RAISING OVERVIEW

Mach7 announced a successful A$9.0m placement on 16 November 2016

Overview

• Two tranche placement raising A$9.0m from sophisticated and institutional investors, existing private lenders and Mach7 Directors and senior management

• Tranche 1 raising A$5.3m under Mach7’s existing placement capacity pursuant to ASX Listing Rule 7.1

• Tranche 2 raising A$3.7m conditional on shareholder approval, with A$1.2m of this amount being issued to Directors and their associated entities

A$m % Use of funds	A$m % Use of funds	A$m % Use of funds
Expansion capital including sales and marketing and new product development1 1	6.9	76.7
Conversion of existing private debt 2	2.1	23.3
Total use of funds	9.0	100.0

1. Expansion capital includes costs associated with the Placement

Compelling use of funds

• New expansion capital would support and accelerate Mach7’s growth and progress towards profitability, with cash flow break even expected in 2017

• Expansion capital will be used for:

  • Investment into sales and marketing resources

  • Customer support services

  • New product development

  • Working capital and costs of the offer

• Conversion of the majority of Mach7’s existing private debt expected to strengthen its financial position and add support to

• Copyright © 2013 Mach7 Technologies future customer contract negotiations

KEY FY16 FINANCIALS

Pro-forma financials demonstrate strong traction

Profit & loss (pro-forma) FY16 (US$) FY16 (A$)	Profit & loss (pro-forma) FY16 (US$) FY16 (A$)	Profit & loss (pro-forma) FY16 (US$) FY16 (A$)
Revenue Cost of sales	$4.2m	$5.8m
	$0.5m	$0.7m
Gross Profit	$3.7m	$5.2m
EBITDA ($6.2m) ($8.5m)

• Pro-forma revenue was A$5.8m, which reflects what the group would have earned if the acquisition of Mach7 Enterprise Imaging Platform had been effective from 1 July 2015 (acquisition effective 1 April 2016)

• Pro-forma EBITDA excludes share-based payments expense

• FY = 1 July to 30 June

Balance sheet FY16 (US$) FY16 (A$)	Balance sheet FY16 (US$) FY16 (A$)	Balance sheet FY16 (US$) FY16 (A$)
Cash Receivables/prepayments Intangible assets and goodwill	$1.3m	$1.7m
	$2.0m	$2.7m
	$25.9m	$35.6m
Total assets $29.7m $40.8m Payables $0.9m $1.2m Deferred revenue $1.7m $2.4m Interest bearing liabilities $2.2m $3.2m Total liabilities $12.6m $17.3m
	$12.6m	$17.3m
Net assets $17.1m $23.5m
Net tangible liabilities $1.6m $2.2m

• Cash balance at the end of the period was A$1.7m

• $35.6m of intangible assets and goodwill relates to the acquisition of Mach7

• Interest bearing liabilities include three loans from original seed investors in the Mach7 Group (A$2.9m) and a finance lease (A$0.3m)

OUTLOOK FOR 2017

Mach7 expects significant revenue growth and to achieve profitability in the coming year

We are optimistic about our outlook for the following reasons:

• Increasing participation in project tenders

• Proven technology for regional and national health information exchange projects

• Early success with large hospital networks in US and rest of world

• Partnerships that may extend our sales channels

• Strong sales pipeline

• Strong partnerships with distributors in Europe and UK

DISCLAIMER

Summary of information: This presentation contains general and background information about Mach7 Technologies Limited (“ M7T ”) activities current as at the date of the presentation and should not be considered to be comprehensive or to comprise all the information that an investor should consider when making an investment decision. This presentation is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or under any other law. The presentation does not purport to contain all the information that a prospective investor may require in assessing a possible investment in M7T nor does it contain all the information which would be required in a prospectus prepared in accordance with the requirements of the Corporations Act 2001 (Cth). The information provided is in summary form, has not been independently verified, and should not be considered to be comprehensive or complete. It should be read solely in conjunction with the oral briefing provided by M7T and all other documents provided to you by M7T. The information in this presentation remains subject to change without notice. M7T is not responsible for providing updated information and assumes no responsibility to do so.

Not financial product advice: This financial information provided in this presentation is for information purposes only. The information contained in this presentation is of a general nature only and is not a financial product, investment advice or a recommendation to acquire M7T securities and has been prepared without taking into account the objectives, financial situation or needs of any person or entity. Before making an investment decision prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. M7T is not licensed to provide financial product advice in respect of its securities or and other financial products. Cooling off rights do not apply to the acquisition of M7T securities. M7T assumes that the recipient is capable of making its own independent assessment, without reliance on this document, of the information and potential investment and will conduct its own investigation.

Disclaimer: M7T and its related bodies corporate and each of their respective directors, agents, officers, employees and advisors expressly disclaim, to the maximum extent permitted by the law, all abilities (however, caused, including negligence) in respect of, make no representations regarding, and take no responsibility for, any part of this presentation and make no representation or warranty as to the currency, accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or future performance of M7T.

Future performance: This presentation contains certain forward-looking statements and opinions. The forward-looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of M7T. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast.

Risks: An investment in M7T securities is subject to investment and other known and unknown risks, some of which are beyond the control of M7T. You should have regard to the ‘Key Risks’ section of this presentation which outlines some of these risks.

Not an offer: This presentation is not, and should not be considered as, an offer or an invitation to acquire securities in M7T or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. This presentation is not a prospectus. Offers of securities in M7T will only be made in places which, or to persons to whom it would be lawful to make such offers. This presentation must not be disclosed to any other party and does not carry any right of publication. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of M7T.

No distribution in the US: This presentation is not an offer of securities for sale in the United States. Any securities to be issued by M7T have not been and will not be registered under the US Securities Act of 1933, as amended (the “US Securities Act”) and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. No public offer of the securities is being made in the United States and the information contained herein does not constitute an offer of securities for sale in the United States. This presentation is not for distribution directly or indirectly in or into the United States or to US persons.

Monetary values: Unless otherwise stated, all dollar values are in Australian dollars (AUD$). The information in this presentation remains subject to change without notice.

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