MACH7 TECHNOLOGIES LIMITED — Investor Presentation 2020

Jan 27, 2020

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January 2020 Investor Update

Disclaimer ‘Forward-Looking’ Statements

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.

Sophisticated and professional investor: By attending this presentation, you present and warrant that (i) if you are in Australia, you are a person to whom an offer of securities may be made without a disclosure document as defined in the Corporation Act 2001 (Cth) (“Corporation Act”)) on the basis that you are exempt from the disclosure requirements of Part 6D.2 in accordance with Section 708(8) or 708(11) of the Corporations Act; (ii) if you are in the United States, you are a qualified institutional buyer (as defined under Rule 144A Under the U.S. Securities Act; (iii) if you are outside Australia and the United States, you are a person to whom an offer and issue of securities can be made outside Australia without registration, lodgement or approval of a formal disclosure document or other filing in accordance with the laws of that foreign jurisdiction. If you are not such a person, you are not entitled to attend this presentation. Please return this presentation and any copies and do not provide this presentation to any other person.

No distribution: Distribution of this presentation may be restricted by law. Persons who come into possession of this presentation should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable security laws.

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Mach7 Technologies: Global enterprise imaging software provider for healthcare

• Growing global customer base: USA, UK, Qatar, South East Asia …

• Global imaging market ~US$3BN

• Two revenue models: SaaS & upfront license

• Delivery: On-premise, cloud solutions

• Employing 40 staff (US, Asia-Pacific)

• ASX listed (since 2016) “M7T”

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USA HQ ASEAN
Burlington, VT Operations
Singapore
Group HQ
Melbourne (ASX listed “M7T”
~$130m market cap)
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Mach7 Enterprise Imaging Product Strategy

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 Vendor Neutral Archive (VNA) is the cornerstone of an EI strategy

• Mach7 is considered a pioneer in the VNA market space

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Referring
Physician Radiologist
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• Core Capability is providing Enterprise Imaging (EI) solutions for healthcare

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• Mach7 sells a Picture Archive and Communications System (PACS) with its partner Client Outlook

• Enterprise-first strategy (vs. Radiology-first)

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Addressable Global Imaging Market

Mach7 Addressable Market*

3,500
500 1,000 1,500 2,000 2,500 3,000
-
	2016		2017		2018		2019			2020		2021		2022
					PACS		EI	VNA	&	IE

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*Market Data from Signify Research

• Total Market ~US$3BN – growing 5-6% CAGR

• Enterprise Imaging Market (EI) $520M 2018 – forecast growth ~30% p/a for next two**

• years

• EI market is fastest growing market

• Standalone departmental PACS $2BN 2018* - market is shrinking in favour of Enterprise

• Imaging

• Standalone VNA market is growing globally at 7.2% CAGR .

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Competition (VNA)

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Other
IBM Watson
14%
Health
22%
Sectra AB
3%
Mach7
3%
Agfa Healthcare
4%
Carestream
4%
GE Healthcare
Hitachi
17%
7%
Hyland
Healthcare
7% NTT Fujifilm Medical
11%
8%
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• Mach7 only independent VNA company featured on this chart

• Disruptive technology

• Most “big brand names” are selling “VNA” inclusive with other products

• Mach7 is a market leader for customers implementing an enterprise imaging strategy – requiring true interoperability

*Market Data from Signify Research 2017

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Mach7 Competitive Advantages

Customer controls their – own data easy user interface and rules engine

Very Little Hardware (Lowers cost and accelerates install)

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Interoperability across the enterprise (connecting all systems, across all ‘ologies’) Attractive Price Point

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Ease of Install;
Quality (& Fast)
Support
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Mach7 Enterprise Imaging Platform

With an industry recognized best-of-breed enterprise platform, Mach7 Management Studio solutions deliver control and ownership over your clinical images and content.

Mach7 solutions…

• 67% less time and effort to install and configure

• 30% - 50% smaller infrastructure footprint required

• Requires fewer FTE hours to maintain

Enterprise Imaging Simplified.

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• Solutions Features Enterprise Imaging Platform • Vendor Neutral Archive (VNA) • Communication Workflow Engine • DICOM routing • Pre and post fetching of patient procedures • HL7 interface engine • XDS Registry & Repository

• Vendor Neutral Archive (VNA) • Storage Management • Data Replication • Lifecycle Management: Purge, move, compress… • Metadata and format localization • Archive Segmentation • Strict system and user security access controls

• Routing Engine • One to many destinations • Scheduled based routing • Metadata and format localization • Workflow diagram driven configuration • Instance level processing

• Fetching Engine • Pre and Post fetch patient procedures • HL7, DMWL, routing, archiving, and Mach7 Event triggered workflows

• • Advanced criteria builder • Duplication checking

• Migration Engine (optional) • Traditional DICOM Migrations • Direct Filesystem Migrations • Detailed progress and exception reporting • Predictive progress and completion analytics

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Mach7 Clinical Studio

Mach7 Clinical Solutions Mach7 Clinical Studio delivers workflows for clinical end users and patients that simplify the access, capture, import, and sharing of the patient record across departments and traditional boundaries.

	Solutions	Features
	Clinical Viewer	• Zero install browser based viewer – no browser plug-in dependencies • Supports DICOM and native Non-DICOM formats • Universal access from any device
	Referring Physician & Patient Portal	• Provides a consolidated view of the patient record • Access to DICOM Studies, results, medications, allergies, lab results… • Secure and predefined workflows for referring physicians and patients
	Clinical Content Capture (iModality)	• Capture still visual light images, video, audio, notes… • iModality worklist links EMR patients and encounters to captured content automatically • Native format storage and access supported along with XDS and DICOM wrapping options • Useful with encounter-based workflows
	Image Sharing	• URL and email based sharing • Share DICOM, non-DICOM media, results and more through a simple web interface • Zero footprint upload • Drag and drop CD/DVD import
	EMR Image Enablement	• Browser based clinical viewer • Embedded EMR integration • Support for universal format (DICOM + Non-DICOM)

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Mach7 Diagnostic Studio

Mach7 Diagnostic Solutions (PACS)

	Solutions Enterprise PACS	Features • Universal Worklist • QC Workflow • Diagnostic Viewer (eUnity)
		•	Diagnostic Reporting Integration
		•	Modality Worklist (DMWL)
		•	VNA
	Universal Worklist	•	RVU and physician preference based workload balancing
		•	Zero install browser based user interface (eUnity)
		•	Workflow diagram driven configuration
	QC Workflow	•	Study Verification
		•	Study Split
		•	Patient and Study Merge
		•	Annotation Eraser
		•	Metadata Reconciliation
	Diagnostic Viewer	Mach7 has a database level integration with Client Outlook’s eUnity
		diagnostic viewer and can offer a single source contract and support.
		Mach7 also offers customers the option to select their best-of-breed
		diagnostic viewer from a number of third party solutions.
	Diagnostic Reporting	•	3rd party integrations to industry leading diagnostic reporting
			solutions
	Modality Worklist (DMWL)	•	DICOM Modality Worklist Provider
		•	Supports customizable queries
		•	Highly available, scalable, and redundant

Mach7 Diagnostics Studio advances PACS with intelligent vendor neutral workflow and data management capabilities while delivering diagnostic viewing technologies through proven industry solutions.

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Customers

• Global customer base & growing

• 100% retention in all major markets

• FY19 and 1HFY20 strong sales orders results

• Premier healthcare institutions (examples)

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Our Customers (sample of Mach7’s expanding global customer base) 100% Customer Retention in all Major Markets

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Sales Wins – last 12 months

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$5.7M /
5 yrs.
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(excluding relicensing fees/license expansion)

$2.1M / 5 yrs. $950k $760k / / 4 yrs. $365k / 5 yrs. 5 yrs. $65k $63k $25k $43k $57k Mississippi State Loyola University Adventist Children’s Sentara Healthcare University Veterinary Health System Health Alabama (Diagnostic Studio) (Clinical Portal) (Migration) Maine Health Strategic Sampson Regional St Teresa’s Advocate Aurora (Cardiology viewer Radiology Medical Centre Hospital, Hong Kong Health integration) (VNA)

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Sales Orders

73% of sales orders come from tenders 25% existing customers (expansions, new features)

Last 3 Years New (Tender) New (Other) Existing

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25%
2%
73%
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Strong sales orders results in FY19 and 1HFY20 (leading to recurring revenue growth FY20 & beyond)

Sales Orders (TCV) $m

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25
20
15
10
5
0
FY17 FY18 FY19 1HFY20
FY17 FY18 FY19 1HFY20
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Advocate Aurora Health

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About AAH

• One of top 10 not-for-profit integrated health networks in US

• Located in Illinois and Wisconsin

• 28 hospitals, 500 outpatient locations

• +3300 Physicians, 70,000 employees

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Mach7 Platform & Migration

• Mach7 Platform to be health-network-wide

• ~3.5 Petabytes of archived data to migrate

• 3.5 Million Annual Procedures

• Contract value $5.7M over 5 years

• 100% Gross Margin

Customer Objectives

• Enable scalable and interoperable platform to meet →

• their business goals goal to double current size over next 5 years

• Common platform across all facilities and departments with a single database and archive

• Enable capture and storage of non-DICOM images – this will be enabled in stage 1 of the plan while

• radiology and cardiology data is being migrated

• Reduce operating expenses

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Sentara Healthcare

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About Sentara

• Leading hospital system in Virginia & NC, USA

• 12 hospitals, 1000 + Physicians, 3800 provider staff

• 8 PACS systems (GE, Agfa, Fuji, Medstream Cardiology)

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Enterprise Imaging, Migration & PACS Modernisation Projects

• Mach7 VNA and 20 million study migration underway

• Recent PACS modernization contract won $2.1M over 5 years (+ volume expansion opportunity)

• • 100% Gross Margin

Customer Objectives

• Reduce complexities and costs related to system integration and the consolidation, sharing, access and management of medical imaging data across all ‘ologies’

• Common PACS platform across all facilities with a single Database and Archive

• Sentara’s objectives included the following”

• Innovative Technology

• Cost Reduction

• Workflow Efficiency

• Geographic Freedom

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Hospital Authority of Hong Kong

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Deal value HK$81 Million (~ A$15M) / 5 years

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Enterprise Imaging and Viewer for entire Hong Kong territory

• The Hospital Authority manages 43 public hospitals and institutions, 48 specialist outpatient clinics and 73 general outpatient clinics.

Customer Objective:

• Reduce complexities and costs related to system integration and the consolidation, sharing, access and management of medical imaging data across Hong Kong.

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Financials

• 2 Revenue models (SaaS and Capital)

• Strong annual recurring revenue growth

• Cashflow positive H1 2020, on track for cash flow break even target

• Strong cash receipts growth while payments are flat

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2 Revenue Models – Capital & Subscription

	Revenue component	Type, P&L recognition	FY18	FY19	Q1 FY20*
CAPITAL SALE	Software license fee (5yr)	One-off, at sale	$3.2M	$3.1M	$3.5M
	Services	One-off, over services period (~6- 12 mths)	$2.1M	$1.9M	$0.7M
	Annual Support (5yr)	Recurring (ARR), Monthly	$3.0M	$4.0M	$1.3M
SUB.	Subscription license (5yr)	Recurring (ARR), Monthly	$0.3M	$0.2M	$0.1M
	TOTAL		$8.6M	$9.3M	$5.6M (Q1 YTD)

Contracts typically have a five-year term. Renewals are occurring now. *H1 2020 result will be released with half year financial statements – end of February.

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Annual Recurring Revenue (ARR, CARR)

CARR and ARR Tracking

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10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
 Six months
2,000,000
1,000,000
0
2017 2018 2019 2020(H1)
CARR Recognised AR + Sub
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Contracted Recurring Revenue (“CARR”) is derived from software support & subscription contracts. Typical length of contract is 5 years.

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Cashflow Break Even Target On-track

Cash flow positive H1 FY2020. On track for cash flow break even over 12 months (since March 2019).

Cash Flows (Operating + Investing) $m

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16
14
12
10
8
6
4
2
0
FY17 FY18 FY19 1HFY20
Payments Receipts
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Cashflows – Receipts Growth, Payments Flat

Strong growth in cash receipts

Payments are steady

Cash Receipts

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12,000
10,000
8,000
6,000
4,000
2,000
0
FY17 FY18 FY19 H120 (YTD)
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Cash Payments

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4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1Q 17 2Q 17 3Q 17 4Q17 1Q 18 2Q 18 3Q 18 4Q18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20
Cash Payments Linear (Cash Payments)
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Wrap-up

 Positive cash flow results and sales momentum continues for H1 FY20

• The year ahead – accelerate revenue growth

• Investment thesis

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1H FY20 – Positive cash flow and sales momentum

Cash flow positive for the second consecutive quarter

• Receipts of $8.3m and payments of $6.1 million (H1)

• On track to achieve our stated target to be free cash flow positive for the 12 months ending 29/2/20

Well capitalised with $23.3m cash at bank

• Successful placement in Q2 to raise $20m

• Debt free

Sales momentum continues

• 2 new customers and 7 contract expansions in Q2

• H1 sales orders $9.4m (TCV)

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The Year Ahead….

Growth Acceleration

• Target potential acquisition of complementary technologies to accelerate growth

• Strengthen sales team and invest more in marketing

Profitability

• Improving EBITDA result

• Continue free cash flow positive results

Sales Focus

• Keep focusing on core regions to capitalise on success to date

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Investment Thesis

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Med-Tech-Thematic

• No obvious ASX alternative for pure exposure to Enterprise Imaging

• Disruptive Technology

Strong Financials

• High Proportion of Recurring Revenue

• • $ High (>80%) gross $$

• margins

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Proven Tech

Large Addressable Market

• Established Global Customer Base

• • IP 100% Owned

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• $3B and growing EI Market

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Pending Catalysts

• Free cash flow positive by Feb 2020

• Nearing profitability

• • Customer wins

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Thank You!

Mike Lampron Managing Director Mike.Lampron@mach7t.com +1 845 5547277

Jenni Pilcher

CFO, Company Secretary Jenni.Pilcher@mach7t.com +61 424 750737

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