MICRO-X LIMITED — AGM Information 2019

Nov 28, 2019

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Ltd

ACN 153 273 735

ASX: MX1

CEO Presentation Building sales of next generation x-ray

29[th] November 2019

Peter Rowland Managing Director & CEO

Disclaimer

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SCOPE & LIMITATIONS

This Presentation has been prepared by Micro-X Limited ( Micro-X or the Company ) (ASX.MX1). The Presentation is a summary only and does not contain all the information about the Company’s assets and liabilities, financial position and performance, profits and losses and prospects. This material in this Presentation may be supplemented with an oral presentation and/or other more detailed documents and should not be taken out of context. Although the information contained herein is based upon generally available information and has been obtained from third-party sources believed to be reliable, the Company does not guarantee its accuracy, and such information may be incomplete or condensed. The Company also refers to its filings made with the ASX Limited and the Australian Securities & Investments Commission.

FORWARD LOOKING INFORMATION

This Presentation contains forward looking and other subjective information. Such expectations, estimates, projections and in formation are not a guarantee of future performance and involve unknown risks and uncertainties. Actual results and developments will almost certainly differ from those expressed or implied and recipients of this Presentation should make their own assessment of the expectations, estimates, projections and the relevant assumptions and calculations upon which the opinions, estimates and projections are based. No representation or warranty, express or implied, is given as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the Company, or its directors, members, officers, employees, agents or advisers for any use or, or reliance placed upon, such information or opinions.

NOT AN OFFER FOR SECURITIES

This Presentation is not a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This Presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any shares nor does it constitute financial product or investment advice nor take into account your investment objectives, taxation situation, financial situation or needs. An investor must not act on the basis of any matter contained in this Presentation but must make its own assessment of the Company and conduct its own investigations and analysis. Before making an investment in the Company, a prospective investor should consider whether such an investment is appropriate to their particular investment objectives and financial situation and seek appropriate advice, including legal, taxation and financial advice appropriate to their jurisdiction and circumstances.

UNITED STATES

The Company’s securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ), or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the Company’s securities may not be offered or sold, directly or indirectly, within the United States or to, or for the account of benefit of, U.S. Persons (as defined in Regulation S under the Securities Act as amended). This Presentation may not be distributed within the United States or to any person in the United States

OTHER JURISDICTIONS

This Presentation may only be accessed in other jurisdictions where it is legal to do so.

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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Overview

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Next generation X-ray for global health and security markets

• ASX listed hi-tech X-ray company based in Tonsley, Adelaide

• Next generation, cold cathode, Carbon Nano Tube technology

• X-ray products with significant reduction in size, weight and power

• Platform technology – health and new security applications

• Selling first product - Carestream DRX Revolution Nano

• Mobile ultra-lightweight digital x-ray system for hospitals

• Sold into 10 countries including United States – Available for sale in Australia

• Strategic partnerships and investors

• Distribution of Nano - Carestream (ex Kodak Medical, US$2.5b sales)

• Security collaboration - Thales (technology giant, €16b sales)

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Carestream DRX Revolution Nano

• Growth trajectory - building customer traction and sales

• Accelerated sales and marketing activities + sales infrastructure

• Second product - Rover product for military market – first contract for sale 1H 2020

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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Product roadmap

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Planned product evolution – from current X-ray uses to solving unmet needs

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Mobile medical X-ray
Nano
Launched 2019
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Mobile medical X-ray Counter terrorism
for Military IED Detection
Rover MBI
First contract Prototype end 2020
1H2020
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Airport screening
MBS
Prototype ~ 2021
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Healthcare applications
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Military & Counter terror applications
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• Additional healthcare opportunities

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Security applications
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• e.g. Mobile 3D CT imager for stroke diagnosis

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© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

Corporate Snapshot

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Growth stage company with institutional and strategic investor support

Share & Trading Statistics (Closing Price on 27 November 2019)

Share Price	$0.23 per share
Total Shares On Issue	177.5 million
Options Issued	11.6 million
Convertible Notes	$4.5 million – convert at 23 to 40 cps
Market Cap	~$40.8 million

Key Financials & Shareholders

Current Cash	$3.6 million ($1.09 m at 18 Nov 2019+$2.5 m first tranche of Placement)
Loan Facilities	SAFA $3 million facility
Strategic Investors	Carestream (5.7%), Thales ($10m Con Loan)
Institutional Investors	Thorney (~7%) + Other Institutions (~6%)
Board & Management	~ 10.4% shares

MX1 - Three month trading to 27 Nov 2019

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Private Placement

A$16.5 million via a two tranche Share Placement to Institutional and Sophisticated investors at A$0.20 per share.

• Tranche 1 : A$2.5 million ~ 12.4 million shares – completed 25 November 2019

• Tranche 2 : A$14.0 million ~ 70.1 million shares - subject to shareholder approval at an EGM on 19 December 2019

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

5

Business model & Strategies

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Commercialise our proprietary technology products with selected global partners

• Dual Market strategy in healthcare and defence/security – based on proprietary technology

• Maintain world leading in-house design and technology development capabilities

• Expand highly robust quality manufacturing capability

• Enter markets in partnership with globally recognised brands

• First product in healthcare builds credibility before entering new markets without competition

• v Earn attractive margins as a highly differentiated technology manufacturer in large global markets

• seek opportunities to move up the value chain

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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New solution in mobile X-ray for healthcare

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Carestream Health is a world leader in mobile X-ray for the healthcare market

• Carestream Health appointed global distributor

• Premium positioning

• Already sold into 10 countries including U.S.

• Now available for sale in Australia

• New geographies underway

• Strong customer feedback

• High reliability proven

• $1.25M sales in June & Sept Quarters

• Sales expected to grow materially in Dec Quarter after Adelaide Tube approval

• Addressable market: First Tier: $300M, Second tier: $200M

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Product Overview

• FDA approved Class II Medical device

• True mobile X-ray device overcoming limitations of competing mobile X-ray

• Light & manoeuvrable 90kg v 350 - 600kg

• Battery operation – 12 hour endurance

• Unique “tusks” for alignment with controls

• Bar code reader for patient-image association

• Small footprint – narrow hospital corridors/lifts

• Exceptional visibility for operator & patient safety

• Sold as the Carestream DRX Revolution Nano

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Carestream trade booth – DRX Revolution Nano

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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Revised Sales & Marketing– building sales traction

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Responding to slower than anticipated ramp up

• Early quality/yield and reliability issues – resolved with insourcing

• Micro-X has insourced and proven a proprietary and superior emitter

• Lack of tubes from previous supplier severely impacted Sept 2019 Quarter sales

• Sales and Marketing strategies adapted for breakthrough technology

• Reset marketing approach with Carestream

• Customer head to head demonstrations prove technology benefits

• Carestream have dedicated technical sales team actively running

• U.S. reference Hospitals and KOLs – strong customer endorsement

• Broadens awareness and credibility for potential hospital customers

• Australian market now open for sales with ARTG and Quantum Health

• The sales pipeline is now growing and traction is building – this December Quarter should see continued growth

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Manufacturing Nano units to meet demand - Tonsley, Adelaide

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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Insourcing & Manufacturing Scale up Next stage Expansion and vertical integration of tube supply

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Capacity of 85 Nano or Rover units p.m. Increases with weekend or second shift

Tonsley Facility, Adelaide

• 1,000 m[2]

• Capacity for medium term needs

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• Dedicated Rover production

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• Test facilities for MBI project

• Mechanical & electrical lab space

• Shielded rooms for customer demos

• ISO 13485

• Tonsley Innovation District

• SA Government initiative

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© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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First generation Rover – on sale mid-2020

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Responding to US military interest to buy the product

• U.S. Army – Medical Materiel Agency (medical procurement)

• Recent demonstrations at Fort Detrick, Maryland

• Interest for all three services - supporting deployments and domestic Base and DVA hospitals

• Planning a Low Rate Initial Production order – small batch of Rover without tender

• First generation Rover will be enhanced output & ruggedised Nano

• Design complete and testing underway

• Regulatory pathway - 510(k) filing early 2020 – approval mid 2020

• First sales contracts – U.S. Army in mid-2020 – six months ahead of plan

• Delivery for customer testing after passing military risk management framework

• Revenue recognised on final product acceptance – by end 2020

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• Australian Defence Force sales – end 2020

• Micro-X part of successful tender for JP2060 project – completing final pricing

We aim to be selling to two major defence customers by the end of 2020 - building customer interest for larger follow-on orders

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© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

MBI - Third Product in development

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Unmanned assessment of potential Improvised Explosive Devices

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• Bomb disposal technicians face life threatening harm when placing X-ray detector behind the IEDs

• MBI takes x-ray images without separate detector– one sided

• Australian Defence Force proof of concept imaging completed

Above – Illustration of MBI carried by EOD* Robot

• Customer support - military and FBI / bomb disposal interest

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• Addressable market ~$1.8B

• No competition & unmet need means high gross margins

Product Characteristics

• Multi-beam CNT imaging with Backscatter detector – enables one-sided X-ray image

• Thales collaborating on new tube development

• Light and able to be carried by any EOD* robot – maintaining distance of bomb technician

• Resolution of better than 0.5mm

• Ideal in a wide range of counter-terrorism scenarios

Above – Current bomb disposal X-ray imaging technique * EOD – Explosive Ordnance Disposal

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© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

Thales partnership & $10m investment

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Technology partnership with a global leader in defence and aircraft security

• $10M investment via loan facility

• $5m cash already received July 2019 on completion

• Subject to EGM approval (to be sought by end 2019), Thales has option to convert loan to shares after July 2024

• Micro-X can elect to repay loan rather than issue shares to Thales

• Contract design and licensing of Airport Checkpoint Security Imaging

• Distribution for MBI in Defence/ security - outside Five-Eyes countries

• Australia, US, UK, Canada and New Zealand

• Contract manufacture of future miniature X-ray tubes

“….we are at the birth of a new technology evolution. CNT is a game changer in so many fields but none offer such practical and quantifiable benefits as in the X-ray imaging market. From airport checkpoints to counter terrorism activities to future medical imaging devices, Thales and Micro-X are at the cusp of an historical moment. This partnership will give us a technological leap that no one else in this industry has.” Jean Jacques Guittard, Thales Vice-President, Electron Devices

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

Milestones - setting our new course

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Focused on delivering commercial outcomes for all stakeholders

Early US sales of Nano Thales Partnering deal & $5m Next Stage Facility expansion CNT in-sourcing complete First Nano sales with MX1 tube Patent published - CNT emitter 1H – Rover 1st gen 510(k) Reference hospitals + KOLs 1H - Building Nano sales UK Airport security grant award 1H – Japanese reg process Significant Rover & Nano sales Q4 – Build sales + pipeline 2H – Rover 1[st] gen U.S. Army sales Japan reg clearance – Nano Q4 – Nano sold in Australia 2H – MBI first imaging demo MBI customer demo / testing Q4 – Japan entry strategy 2H – Rover 2[nd] gen 510(k) MBI launch in ~ 2022 Q4 – Rover tube built & tested 2H – Rover 2[nd] gen ADF contract Airport security prototype

The above forecast dates are estimated and indicative and may change

© Micro-X Ltd 2019

Annual General Meeting – 29 November 2019

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ACN 153 273 735

Peter Rowland Managing Director 1284 South Road Tonsley SA 5042 +61 8 7099 3966 admin@micro-x.com