SEQUOIA FINANCIAL GROUP LTD — Capital/Financing Update 2014

Jun 11, 2014

MDS Financial Group Limited ACN 091 744 884

Rights Issue Offer Document

An offer to raise up to approximately $1.03 million by way of a non-renounceable pro rata offer of 1 New Share for every 1 Share held at a price of $0.002 per New Share

The Offer opens on Thursday 19 June 2014

Valid acceptances must be received by 5pm on Monday 30 June 2014

This is an important document that requires your immediate attention. It should be read in its entirety. If, after reading this document you have any questions about the securities being offered under it or any other matter, you should contact your stockbroker, solicitor, accountant or other professional adviser.

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MDS Rights Issue June 2014

IMPORTANT NOTICES

This Offer Document was lodged with ASX on 12 June 2014. ASX takes no responsibility for this Offer Document.

This Offer is being made by MDS Financial Group without a prospectus in accordance with section 708AA of the Corporations Act. This Offer Document is not a prospectus or any other form of disclosure document regulated by the Corporations Act and has not been lodged with ASIC. Accordingly, this Offer Document does not contain all of the information which a prospective investor may require to make an investment decision and it does not contain all of the information which would otherwise be required by Australian law or any other law to be disclosed in a prospectus. The information in this Offer Document does not constitute a securities recommendation or financial product advice.

This Offer Document is important and should be read in its entirety before deciding to participate in the Offer. This Offer does not take into account, and this Offer Document has been prepared without taking into account, the investment objectives, financial or taxation situation or particular needs of any Applicant.

Before applying for New Shares, each Applicant should consider whether such an investment, and the information contained in this Offer Document, is appropriate to their particular needs, considering their individual risk profile for speculative investments, investment objectives and individual financial circumstances. Each Applicant should consult their stockbroker, solicitor, accountant or other professional adviser without delay.

Neither MDS Financial Group, nor any other person guarantees the repayment of capital or the payment of income. Investors should note that the past Share price performance of MDS Financial Group provides no guidance to its future Share price performance.

By returning an Acceptance Form, you acknowledge that you have received and read this Offer Document, you have acted in accordance with the terms of the Offer detailed in this Offer Document and you agree to all of the terms and conditions as detailed in this Offer Document.

Risks

Please refer to the non-exhaustive summary of risks relating to the Offer contained in section 5 of this Offer Document.

Privacy

MDS Financial Group collects information about each Applicant provided on an Acceptance Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant's shareholding in MDS Financial Group.

By submitting an Acceptance Form, you will be providing personal information to MDS Financial Group (directly or through the Share Registry). MDS Financial Group collects, holds and will use that information to assess your Application. MDS Financial Group collects your personal information to process and administer your Shareholding in MDS Financial Group and to provide related services to you. If you do not complete the Acceptance Form in full, MDS Financial Group may reject your Application. MDS Financial Group may disclose your personal information for purposes related to your shareholding, including to the Share Registry, MDS

Financial Group’ related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to the ASX and regulatory bodies. You can obtain access to personal information that MDS Financial Group holds about you. To make a request for access to your personal information held by (or on behalf of) MDS Financial Group, please contact MDS Financial Group through the Share Registry.

No Overseas offering

This Offer Document and the accompanying Acceptance Form does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. In particular, this Offer Document does not constitute an offer to Non-qualifying Shareholders. No action has been taken to lodge this Offer Document in any jurisdiction outside of Australia, or to otherwise permit a public offering of Rights or Shares, in any jurisdiction outside Australia and New Zealand.

This Offer Document is not to be distributed in, and no offer of New Shares is to be made in countries other than Australia and New Zealand.

The distribution of this Offer Document in jurisdictions outside Australia may be restricted by law and therefore persons who come into possession of this Offer Document should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

Definitions, currency and time

Definitions of certain terms used in this Offer Document are contained in section 6. All references to currency are to Australian dollars and all references to time are to Sydney time, unless otherwise indicated.

Entire Agreement

Subject to this paragraph, the terms contained in this Offer Document constitute the entire agreement among MDS Financial Group and you as to the Offer and your participation in the Offer, to the exclusion of all prior representations, understandings and agreements between MDS Financial Group and you.

Governing law

This Offer Document, the Offer and the contracts formed on acceptance of the Applications are governed by the law applicable In New South Wales, Australia. Each Applicant submits to the exclusive jurisdiction of the courts of New South Wales, Australia.

Disclaimer

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation in connection with the Offer not contained in the Offer Document may not be relied upon as having been authorised by MDS Financial Group or any of its officers.

Enquiries

If you have any questions in relation to the Offer, please contact your stockbroker, solicitor, accountant or other professional adviser. If you have any questions with respect to completing the Entitlement and Acceptance Form, please contact the Share Registry.

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INDICATIVE TIMETABLE

Event	Date
Announcement of Offer	Tuesday 10 June 2014
Lodgment of Appendix 3B, Offer Document and Cleansing Notice with	Thursday 12 June 2014
ASX
Despatch of notices to Shareholders informing them of the Offer	Friday 13 June 2014
Shares quoted on ex-entitlement basis	Monday 16 June 2014
Record Date for determining Entitlements	7pm, Wednesday 18 June 2014
Offer opens - despatch of Offer Document and Entitlement and	Thursday 19 June 2014
Acceptance Form
Offer Closing Date	5pm, Monday, 30 June 2014
Shares quoted on deferred settlement basis	Tuesday 1 July 2014
Company notifies the ASX of under-subscriptions	Wednesday 2 July 2014
Despatch of holding statements and allotment and issue of New Shares	Friday 4 July 2014

This Timetable is indicative only and subject to change. The Directors reserve the right to vary these dates, including the Closing Date without prior notice, subject to the Listing Rules. Any extension of the Closing Date will have a consequential effect on the anticipated date for allotment and issue of the New Shares.

The Directors also reserve the right not to proceed with the whole or part of the Offer any time prior to allotment and issue of the New Shares. In that event, any payments received for Applications will be returned in full without interest.

The Directors encourage all Eligible Shareholders to participate in the Rights Issue.

If you have any questions about the Offer, then please contact the Company at finance@mdsfinancial.com.au or on +61 3 9617 0630 or consult your stockbroker, solicitor, accountant or other professional adviser.

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SECTION 1 DESCRIPTION OF THE OFFER

1.1 Overview

MDS Financial Group is seeking to raise up to approximately $1.03 million by way of a nonrenounceable offer to Eligible Shareholders of 1 New Share for every 1 Share held on the Record Date at a price of $0.002 per New Share.

Fractional entitlements will be rounded up to the nearest whole number of New Shares. An Acceptance Form setting out your entitlement to New Shares accompanies this Offer Document. If you do not take up your Entitlement your shareholding in MDS Financial Group will be diluted.

Eligible Shareholders should be aware that an investment in MDS Financial Group involves risks and Eligible Shareholders should consider the investment in the context of their individual risk profile, investment objectives and individual financial circumstances (see section 5).

Several substantial Shareholders have indicated their support for the Rights Issue and the Company expects a significant take up of this offer by these Shareholders.

1.2 Size of the Offer

Up to 515,083,001 New Shares will be issued to raise up to approximately $1.03 million. Following completion of the Offer, assuming that all Eligible Shareholders take up their Entitlement, there will be approximately 1,030,166,002 Shares on issue.

1.3 No Rights trading

The Offer is non-renounceable. There will be no trading of Rights on the ASX and Rights may not be sold to third parties.

1.4 Applying for more than your Entitlement – Shortfall Facility

You may subscribe for New Shares in excess of your Entitlement under the Shortfall Facility. Please refer to sections 2.5 and 2.6 of this Offer Document for details. Please note that there is no guarantee that you will receive any Shortfall Shares.

1.5 Closing Date

The Closing Date for acceptance of Entitlements is expected to be 5pm on Monday 30 June 2014. This date may be varied by MDS Financial Group without prior notice subject to the Listing Rules. Applications completed incorrectly or received after 5pm on the Closing Date may be rejected at MDS Financial Group' discretion. MDS Financial Group reserves the right not to proceed with the whole or part of the Offer at any time prior to allotment and issue of the New Shares.

1.6 Use of Funds

The proceeds of the Offer will be used to strengthen the Company’s balance sheet, fund working capital requirements and pursue growth opportunities.

1.7

Effect on Capital Structure

The following table illustrates the changes in the capital structure of the Company that will occur as a consequence of the Offer assuming the Offer is fully subscribed.

Issued Shares at the date of this Offer Document	515,083,001 Shares
New Shares which will be issued as part of the Offer	515,083,001 Shares

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Issued Shares following completion of the 1,030,166,002 Shares Offer

Eligible Shareholders who take up their Entitlement in full will not be diluted as a result of the Offer. Eligible Shareholders who do not take up all of their Entitlements and Non-qualifying Shareholders will be diluted.

1.8 Effect on Control

The issue of the New Shares by the Company is not intended to have any material effect or consequence on the control of the Company. If all Shareholders take up their full Entitlement there will not be any change in the control of the Company as a result of the Offer.

However, if all Eligible Shareholders do not take up their full Entitlement and the Substantial Shareholders do take up their full Entitlement there may be a change in the control of the Company as described in the table below.

Table outlining the potential impact of the Offer on the control of the Company by existing Substantial Shareholders

	A		B
Shareholder	Shares	%	Shares	%
Peter & Ros Stirling	105,000,000	20.4%	210,000,000	27.2%
Sequoia Group (4 various holdings)	84,999,570	16.5%	169,999,140	22.0%
Richard Symon/Gwandoban (2 holdings)	38,060,001	7.4%	76,120,002	9.9%
Kaitong Industry Co Ltd	33,333,334	6.5%	33,333,334	4.3%
Global Equity / Leon Hinde (2 holdings)	27,944,722	5.4%	55,889,444	7.2%

Legend

A Current Shareholding and percentage interest of the Substantial Shareholders (greater than 5%). B Shareholding of each Substantial Shareholder (other than Kaitong Industry Co Ltd) if that Shareholder accepted their full Entitlement and no other Shareholders participated in the Offer or shortfall allocated to interested parties. Kaitong Industry Co Ltd is excluded from participating in the Rights Issue as the Rights Issue is only open to Australian and New Zealand residents.

1.9 Additional shares

In accordance with Exception 3 of ASX Listing Rule 7.2, the Company may place any Shortfall Shares at its discretion for up to 3 months after the Closing Date. The issue price of any Shortfall Shares will be $0.002, being the price and terms at which the Entitlement has been offered to Eligible Shareholders pursuant to this Offer Document. Each Eligible Shareholder in Australia or New Zealand may apply for additional New Shares in excess of their Entitlement ( Additional Shares ), which the Company may issue to them at its discretion as part of the Shortfall.

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1.10 Discretions

Without limiting the other powers and discretions set out in this Offer Document, the Directors (or their delegate for this purpose) may implement the Offer in the manner they think fit and settle any difficulty, anomaly or dispute which may arise either generally or in a particular case in connection with, or by reason of, the operation of the Offer or a matter in this Offer Document, as they think fit, whether generally or in relation to any Shareholder or any Shares, and the determination of the Directors (or their delegate) is conclusive and binding on all relevant Shareholders and other persons to whom the determination relates.

SECTION 2 YOUR CHOICES

2.1 Options available to Eligible Shareholders

If you are an Eligible Shareholder, you may:

• (a) take up all or part of your Entitlement , in which case your proportionate shareholding will:

• (i) remain the same if you take up all of your Entitlement (see section 2.2); or

• (ii) be diluted if you take up only part of your Entitlement (see section 2.3); or

• (b) apply for more than your Entitlement under the Shortfall Facility (see sections 2.5 and 2.6), in which case your proportionate shareholding will:

• (i) increase if you are allocated any Shortfall Shares; or

• (ii) remain the same if you are not allocated any Shortfall Shares; or

• (c) do nothing and allow all of your Entitlement to lapse, in which case you will not take up your Entitlement and your proportionate shareholding in the Company will be diluted (see section 2.4).

2.2 Taking up all of your Entitlement

If you wish to take up your Entitlement in full, complete the Acceptance Form in accordance with its instructions.

Forward your completed Acceptance Form together with your cheque or bank cheque made payable to “MDS Financial Group Limited Rights Issue” for the amount shown on your Acceptance Form so that it is received by Computershare Investor Services Pty Limited (whose details are on the Acceptance Form) not later than 5pm on the Closing Date.

2.3 Taking up part of the Entitlement and allowing the balance to lapse

If you wish to take up part of your Entitlement and allow the balance to lapse, complete the Acceptance Form by indicating the number of New Shares you wish accept.

The Application Amount for taking up part of your Entitlement is calculated as follows:

Application Amount = Number of New Shares applied for x $0.002

Forward your completed Acceptance Form together with your cheque or bank cheque made payable to “MDS Financial Group Limited Rights Issue” for the Application Amount (as calculated using the

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formula above) so that it is received by Computershare Investor Services Pty Limited (whose details are on the Acceptance Form) not later than 5pm on the Closing Date.

The balance of your Entitlement not taken up will lapse and part of your shareholding may be diluted.

2.4

Allow all of the Entitlement to lapse

If you do not wish to accept any part of your Entitlement, do not take any further action and your Entitlement will lapse. By not taking any action and not taking up your Entitlement your shareholding in MDS Financial Group will be diluted.

2.5 Shortfall Facility

Eligible Shareholders may apply for New Shares in addition to their Entitlement under the Shortfall Facility. The Shortfall Facility allows the Company to place the Shortfall Shares with Eligible Shareholders and third parties so that the maximum amount can be raised under the Offer.

For Eligible Shareholders wishing to take up Shortfall Shares please indicate the number of New Shares in addition to your Entitlement that you wish to subscribe for. The Application Amount can be calculated as follows:

Application = Number of Shortfall x $0.002 + Amount shown on Acceptance Amount Shares applied for Form

Forward your completed Acceptance Form together with your cheque or bank cheque made payable to “MDS Financial Group Limited Rights Issue” for the Application Amount (as calculated using the formula above) so that it is received by Computershare Investor Services Pty Limited (whose details are on the Acceptance Form) not later than 5pm on the Closing Date.

2.6 Allocation of Shortfall Shares

The following rules apply to the allocation of Shortfall Shares:

• (a) there is no guarantee that any participating Shareholder will receive Shortfall Shares under the Shortfall Facility, however, all participating Shareholders will receive at least their Entitlement;

• (b) the Board reserves its right to scale back or decline applications for Shortfall Shares and the Board’s decision is final; and

• (c) the Board reserves its right to place the Shortfall Shares with Eligible Shareholders participating in the Shortfall Facility and third parties (subject to the Listing Rules and the Corporations Act).

The Board intends to issue the Shortfall Shares at its discretion within 3 months from the Closing Date.

2.7 Acceptance Form is binding

A completed and lodged Acceptance Form constitutes a binding offer to acquire New Shares (including Shortfall Shares) on the terms and conditions set out in this Offer Document and, once lodged, cannot be withdrawn. If the Acceptance Form is not completed correctly it may still be treated as a valid application for New Shares. The Board’s decision whether to treat an Acceptance as valid and how to construe, amend or complete the Acceptance Form is final.

2.8

Brokerage and stamp duty

No brokerage or stamp duty is payable by you if you accept your Entitlement.

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SECTION 3 INFORMATION REGARDING MDS FINANCIAL GROUP AND THIS OFFER

3.1 Continuous disclosure and reporting obligations

MDS Financial Group is a "disclosing entity” (as defined in the Corporations Act) and is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules. These obligations require MDS Financial Group to notify the ASX of information about specific events and matters as they arise for the purpose of the ASX making the information available to the securities market conducted by the ASX. In particular, MDS Financial Group has an obligation under the Listing Rules (subject to certain limited exceptions), to notify the ASX once it is, or becomes aware of information concerning MDS Financial Group which a reasonable person would expect to have a material effect on the price or value of MDS Financial Group's Shares. The ASX maintains records of company announcements for all companies listed on the ASX. The announcements of MDS Financial Group are available for inspection at the ASX and may be viewed on the ASX website at www.asx.com.au.

MDS Financial Group is also required to prepare and lodge with ASIC yearly and half-yearly financial statements accompanied by a Directors' statement and report, and an audit review or report. Copies of documents lodged with ASIC in relation to MDS Financial Group may be obtained from, or inspected at, an office of ASIC.

3.2 Cleansing Notice

This Offer Document is issued pursuant to section 708AA of the Corporations Act as an offer document for the offer of securities for issue, under a rights issue, without disclosure to investors under Part 6D.2 of the Corporations Act. Pursuant to the conditions imposed on MDS Financial Group by section 708AA of the Corporations Act for the making of a rights issue without disclosure to investors, MDS Financial Group provided the ASX with a cleansing notice that complied with the requirements of section 708AA(7) on 12 June 2014, prior to despatch of this Offer Document. In addition to certain minor and technical matters that notice was required to:

• (a) set out any information that had been excluded from a continuous disclosure notice in accordance with the Listing Rules and that investors and their professional advisers would reasonably require, and would reasonably expect to find in a disclosure document, for the purpose of making an informed assessment of:

• (1) the assets and liabilities, financial position and performance, profits and losses and prospects of MDS Financial Group; or

• (2) the rights and liabilities attaching to the New Shares; and

• (b) state the potential effect of the issue of the New Shares on control of MDS Financial Group and the consequences of that effect.

3.3

Taxation

You and your Nominee should be aware that there may be taxation implications associated with participating in the Offer and receiving New Shares. The Directors consider that it is not appropriate to give advice regarding the taxation consequences of subscribing for New Shares under this Offer Document or the subsequent disposal of any New Shares allotted and issued under this Offer Document. MDS Financial Group, its advisers and officers do not accept any responsibility or liability for any taxation consequences to potential Applicants. The Directors recommend that all Eligible Shareholders and their Nominees consult their own professional tax advisers in connection with this Offer.

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SECTION 4 ASX QUOTATION AND ALLOTMENT OF NEW SHARES

4.1 ASX quotation

MDS Financial Group has made an application to the ASX for the New Shares to be granted quotation on the ASX. If permission is not granted for quotation of the New Shares on the ASX, then no allotment and issue of any New Shares will take place and any application monies (without interest) will be returned in full to Applicants.

Trading of New Shares will, subject to the ASX approval, occur on or about the date specified in the Timetable.

4.2 Allotment and despatch of Holding Statements

Subject to the New Shares being granted quotation on the ASX, the New Shares will be allotted and issued and holding statements despatched in accordance with the Timetable. It is expected that despatch of holding statements and allotment and issue of New Shares will take place on or about Friday 4 July 2014.

Application monies received from Applicants will be held in trust by MDS Financial Group until allotment and issue of the New Shares. MDS Financial Group will be entitled to retain any interest paid on the monies so held, even if this Offer does not proceed.

It is the responsibility of Applicants to determine the number of New Shares allotted and issued to them prior to trading in the New Shares. The sale by an Applicant of New Shares prior to receiving their holding statement is at the Applicant's own risk.

4.3 CHESS

MDS Financial Group participates in CHESS. Under CHESS, MDS Financial Group does not issue certificates to Shareholders but will instead provide Shareholders with a statement of their holdings in MDS Financial Group. If you are broker sponsored, ASTC will send you a CHESS statement. The CHESS statement will set out the number of New Shares issued to you under the Offer Document and give details of your holder identification number, in the case of a holding on the CHESS subregister and the terms and conditions applicable to the New Shares.

If you are registered in the issuer sponsored sub register your statement will be despatched by the Share Registry and will contain the number of New Shares issued under the Offer Document and your security holder reference number.

A CHESS statement or issuer sponsored statement is routinely sent to Shareholders by MDS Financial Group' Share Registry at the end of any calendar month during which the balance of their holding changes. Shareholders may request a statement at any other time; however, a charge may be incurred for additional statements.

4.4 Rights attaching to New Shares

From allotment and issue, the New Shares allotted and issued pursuant to the Offer Document will rank equally in all respects with existing Shares. The rights and liabilities attaching to Shares are set out in the constitution of the Company and in the Corporations Act.

SECTION 5 RISKS

The business activities of MDS Financial Group are subject to risks and there are many risks, which may impact on MDS Financial Group' future performance. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but many are outside of the control of MDS Financial Group and cannot be mitigated. There are also general risks associated with any investment. Investors should consider all of these risks before they make a decision whether or not to apply for New Shares. In

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addition, investors should speak to their financial, legal or other adviser about these risks before making a decision to invest in New Shares. The principal risk factors include, but are not limited to, the following:

5.1 Competition

The corporate advisory and financial services marketplace is subject to competition. MDS Financial Group faces competition from other organisations, many of which may have significantly greater financial, technical and marketing resources than MDS Financial Group. MDS Financial Group has faced and is expected to continue to face, additional competition from new entrants into its markets.

Increased competition could result in margin reductions, lower customer numbers, under-utilisation of employees, reduced operating margins and loss of market share. Any of these occurrences could adversely affect MDS Financial Group’ business, operating results and financial condition. There can be no assurance that MDS Financial Group will be able to compete successfully against current or future competitors globally.

As a strategic response to changes in the competitive environment, the Company may from time to time make research and development, manufacturing, pricing, service or marketing decisions that could have a material effect on the Company's business, results of operations and financial conditions. There can be no certainty that these strategic responses are the correct responses.

5.2 Dependence on General Economic Conditions and Uncertainty Surrounding Financial Markets

In common with other companies, MDS Financial Group may be affected by general economic conditions, including the level of interest rates, currency exchange rates, tax regulation and tax rates, global and national economic cycles, global and national political stability, employment rates, inflation, changing consumer demands and spending by customers. Any changes in government fiscal, monetary and regulatory policies of a government may also adversely affect MDS Financial Group’ business. In particular, the performance of the Company is likely to be affected by the adverse changes in economic conditions as a result of the recent global financial crisis.

5.3 Further Capital Requirements

There can be no assurance that MDS Financial Group can meet all of its business objectives without further financing or, if further financing is necessary, that it can be obtained on favourable terms or at all.

5.4 Profitability

No assurance as to future profitability or dividends can be given, as they are dependent on future earnings and the working capital requirements of the Company's business.

There can be no guarantee that the assumptions on which the planning or marketing strategies of the Company, or those upon which the Company has based its decisions to expand, will ultimately prove to be valid or accurate. The Company's strategies depend on various factors many of which are outside the control of the Company.

5.5

Loss of Key Clients / Termination of Material Contracts

There are a number of existing clients and arrangements, which are material to MDS Financial Group’ business. Further clients are likely to be won and contracts will likely be entered into by MDS Financial Group which will also be material to MDS Financial Group’ business.

Loss or termination of those clients or arrangements for any reason may have a significant adverse impact on the business, revenues and profitability of MDS Financial Group.

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5.6 Management of Future Growth

MDS Financial Group is anticipating a period of increasing growth. This growth is resulting in new and increased responsibilities for management and will continue to place a significant strain on MDS Financial Group’ management. MDS Financial Group will be required to continue to implement and improve its systems on a timely basis in order to accommodate the increased number of transactions and customers and the increased size of its operation. There is a risk that management of the Company will not be able to continue to implement the Company’s growth strategy after completion of the Offer.

5.7

Price and Liquidity for Shares

An investment in Shares should be regarded as speculative. The price of Shares can rise or fall. A range of factors affecting stock markets generally, or industries in which MDS Financial Group’ business is operated can affect it. Those matters are often beyond the control of MDS Financial Group. In addition, liquidity in the trading of Shares (whether on the ASX or otherwise) can be affected by a range of matters beyond the control of MDS Financial Group. Further, there is no guarantee of any return in respect of an investment in Shares, whether a return by way of profit or capital.

In particular, the prices of many stocks listed on the ASX have, in recent times, been subject to large fluctuations, which, in some cases, may have been unrelated to the operating performance of the individual companies concerned. Such fluctuations may adversely affect the market price of Shares.

5.8 Recent Growth Record

There is no assurance that the recent revenue growth of MDS Financial Group is sustainable, or is indicative of future revenue growth or profitability, or future dividend payments. Nor is there any assurance that revenue will increase in response to marketing and promotional activities proposed to be undertaken by MDS Financial Group. In the future, there is no assurance that MDS Financial Group’s products will be readily taken up by the market or taken up at all.

5.9 Regulatory Changes

Changes in government policies in any country may affect MDS Financial Group’s revenues and profitability and the value of an investment in MDS Financial Group.

5.10 Reliance on Key Personnel

MDS Financial Group’s success will depend in part on the continued services of its key employees. The loss of services of one or more of MDS Financial Group’s key employees or contractors could have a material adverse effect on MDS Financial Group’s business, operating results and financial condition. This risk is addressed in part by the existence of service contracts with executives and senior management. MDS Financial Group does not have, nor does it intend to take out, key man insurance in respect of any of its key employees and contractors.

.

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SECTION 6 DEFINITIONS

These definitions are provided to assist persons in understanding some of the expressions used in this Offer Document.

Acceptance Form means the Entitlement and Acceptance Form accompanying this Offer Document.

Additional Shares has the meaning given in section 1.9 of this Offer Document.

Applicant means a person who has applied to subscribe for New Shares by submitting an Acceptance Form.

Application means the lodgment of an Acceptance Form with the Share Registry together with the relevant Application Amount.

Application Amount means the total amount payable by Eligible Shareholders for accepting part or all of their Entitlement.

ASIC means the Australian Securities and Investments Commission.

ASTC means ASX Settlement Pty Limited ACN 008 504 532.

ASTC Settlement Rules means the operating rules of ASTC.

ASX means the ASX Limited ACN 008 624 691.

Board means the board of directors of MDS Financial Group.

CHESS means the clearing house electronic sub-register system operated by ASTC, a wholly-owned subsidiary of the ASX, in accordance with the Listing Rules and the ASTC Settlement Rules.

Cleansing Notice means the notice required by section 708AA(2)(f) of the Corporations Act and lodged with the ASX on 12 June 2014.

Closing Date means 5pm on Monday 30 June 2014.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of MDS Financial Group.

Eligible Shareholder means a Shareholder as at the Record Date who is not a Non-qualifying Shareholder.

Entitlement means an Eligible Shareholder’s entitlement to subscribe for New Shares pursuant to the Offer.

Listing Rules means the official listing rules of the ASX.

MDS Financial Group and Company means MDS Financial Group Limited ACN 091 744 884 and when the context requires, each of its subsidiaries.

New Shares means Shares to be allotted and issued under the Offer.

Nominee means a person or entity nominated by an Eligible Shareholder to take up part or all of their Entitlement in accordance with this Offer Document.

Non-qualifying Shareholder means a Shareholder as at the Record Date whose registered address is not situated in Australia or New Zealand.

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Offer means a pro rata non-renounceable offer to Eligible Shareholders to subscribe for 1 New Share for every 1 Share held to raise up to approximately $1.03 million at an offer price of $0.002 per New Share

Offer Document means this document.

Record Date means 7pm, Wednesday 18 June 2014.

Rights means the rights to subscribe for New Shares pursuant to this Offer Document.

Shareholder means a holder of Shares.

Shares means fully paid ordinary shares in the capital of MDS Financial Group.

Share Registry means Computershare Investor Services Pty Limited ACN 078 279 277.

Shortfall means the difference between the number of New Shares offered pursuant to this Offer Document and the number of New Shares for which no Applications have been received.

Shortfall Facility means the mechanism under which the Company may issue Shortfall Shares to Eligible Shareholders or third parties.

Shortfall Shares means the New Shares that are not subscribed for by Shareholders pursuant to their Entitlements and which may be allocated by the Directors at their absolute discretion.

Substantial Shareholder has the meaning given to that term in the Corporations Act.

Timetable means the indicative timetable set out at the front end of this Offer Document.

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SECTION 7 CORPORATE DIRECTORY

Directors

Peter Stirling Chairman and Non-Executive Director

Registered Office

Level 37, Rialto South Tower, 525 Collins Street, Melbourne, VIC 3000 Telephone: (03) 9617 0600

Richard Symon Executive Director

Solicitors to the Offer

Jamie Khoo Non-executive Director

Andrew Phillips Company Secretary

Kemp Strang Level 17, 175 Pitt Street Sydney NSW 2000 Telephone: (02) 9225 2500

Share Registry

Computershare Investor Services Pty Limited Level 4 60 Carrington Street Sydney NSW 2000

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