USCOM LIMITED — Interim / Quarterly Report 2018

Jul 30, 2018

ASX MEDIA RELEASE

4C Quarterly Cash Report to 30 June 2018

Five-year compound annual growth in cash receipts – 27% per year Cash on hand – $2.49M Q4 cash receipts – $0.53M Q4 net operating cash consumption - $0.55M China Expansion and seven new products progressing to market

SYDNEY, Australia, Tuesday 31[st] July 2018: Uscom Limited (ASX code: UCM) (the Company or Uscom ) a cardiovascular and pulmonary medical device company, is pleased to release its Appendix 4C – Quarterly Cash flow report for the quarter ended 30 June 2018 (the Quarter ). The results disclosed in the attached Appendix 4C are in Australian dollars.

Summary

Cash on hand – $2.49M from $1.66M on prior corresponding period (pcp) Q4 cash receipts – $0.53M down from $0.65M on pcp Q4 net operating cash consumption - $0.55M up from $0.41M on pcp Annual cash receipts - $2,08M down from $2,81M on pcp Five-year compound annual growth in cash receipts (including 2018) – 27% per year

Commentary

Uscom has achieved a compound annual growth rate (CAGR) of 27% per year for the five years including 2018. Despite a more than four month interruption to manufacturing due to head office relocation, expansion and re-approval of the company’s manufacturing facility and an accompanying dip in sales, cash receipts have grown at 27% compound over the last five years including 2018.

This relocation increased non-recurring costs (>$200K) and delayed revenue during the four month relocation and re-approval process. The cost of our rolling product regulatory certifications, approximately $100K for each device and jurisdiction, for our seven products into China, Europe and the US markets was also absorbed.

Changing Chinese policy and sales conditions and the implementation of Uscom’s new China strategy also disrupted distribution and sales into the region. In response Uscom has established Uscom China to expand and stabilises our distribution and sales activities, and anticipates trend growth to be restored over the next twelve months. Uscom China will provide a new platform for Uscom growth over the coming years.

Additional non-recurring costs for the period included updating the company’s quality system to comply with new manufacturing requirements for device sales into the USA and ensure access to future revenue and prepare for BP+ and SpiroSonic sales in the USA.

Government grant payments of approximately $200K AUD to Uscom Budapest for works completed were also delayed for the period and impacted cash flow. These payments are expected imminently.

Executive Chairman of Uscom, Associate Professor Rob Phillips said “ This year we continued investing in future growth, and received the first regulatory approval for our new generation products, CE for the BP+. During the year we absorbed the costs of expanding and updating our manufacturing facilities, and the accompanying delay in sales. This expansion was vital to prepare for the anticipated increase in demand from China, and to prepare for BP+ manufacturing. We also met the significant non-recurring

Uscom Limited (ABN 35 091 028 090) Suite 2, Level 8 99 Clarence Street, Sydney NSW 2000 Australia T: +612 9247 4144 E: info@uscom.com.au W: www.uscom.com.au

ASX MEDIA RELEASE

costs of regulatory applications for seven products in multiple jurisdictions. We also established Uscom China to directly steer the growth of China operations and rationalise and support distribution and sales. These changes have positioned Uscom ideally for long term growth as our additional products proceed through regulatory certification to the final stages of approval. That we now have strong China partners and capital support will only further drive our success. Uscom has built strong global fundamentals to drive operations in FY 2019 and beyond.”

About Uscom

Uscom Limited (UCM) : An ASX listed innovative medical technology company specialising in development and marketing of premium non-invasive cardiovascular and pulmonary medical devices. Uscom has a mission to demonstrate leadership in science and create noninvasive devices that assist clinicians improve clinical outcomes. Uscom has three practice leading suites of devices in the field of cardiac, vascular and pulmonary monitoring; the USCOM 1A advanced haemodynamic monitor, Uscom BP+ central blood pressure monitor, and the Uscom SpiroSonic digital ultrasonic spirometers. Uscom devices are premium resolution, noninvasive devices which deploy innovative and practice leading technologies approved or submitted for FDA, CE, CFDA and TGA regulatory approval and marketing into global distribution networks.

The USCOM 1A : A simple to use, cost-effective and non-invasive advanced haemodynamic monitor that measures cardiovascular function, detects irregularities and is used to guide treatment. The USCOM 1A device has major applications in Paediatrics, Emergency, Intensive Care Medicine and Anaesthesia, and is the device of choice for management of adult and paediatric sepsis, hypertension, heart failure and for the guidance of fluid, inotropes and vasoactive cardiovascular therapy.

The Uscom BP+ : A supra-systolic oscillometric central blood pressure monitor which measures blood pressure and blood pressure waveforms at the heart, as well as in the arm, information only previously available using invasive cardiac catheterisation. The Uscom BP+ replaces conventional and more widespread sub-systolic blood pressure monitors, and is the emerging standard of care measurement in hypertension, heart failure and vascular health. The Uscom BP+ provides a highly accurate and repeatable measurement of central and brachial blood pressure and pulse pressure waveforms using a familiar upper arm cuff. The BP+ is simple to use and requires no complex training with applications in hypertension and pre-eclampsia, heart failure, intensive care, general practice and home care. The Uscom BP+ is supported by the proprietary BP+ Reporter , an innovative stand alone software solution that provides a digital platform to archive patient examinations and images, trend measure progress over time, analyse pulse pressure waves and generate summary reports.

Uscom SpiroSonic digital multi-path ultrasonic spirometers : High fidelity, digital, pulmonary function testing devices based on multi path ultrasound technology. They require no calibration, are simple to disinfect, and are simple and accurate to use providing research quality pulmonary function testing in small hand held devices that can be used in research, clinical and home care environments. The devices can be coupled with mobile phone applications and proprietary SpiroSonic software platforms with wireless interfacing to provide remote telemonitoring of pulmonary disease. The devices are specialised for assessment of COPD, sleep disordered breathing, asthma, industrial lung disease and monitoring of pulmonary therapeutic compliance. The SpiroSonic devices are supported by the proprietary SpiroReporter , an innovative stand alone software solution that provides a digital platform to archive patient examinations and images, trend measure progress over time, analyse spirometry outputs and generate summary reports.

For more information, please visit: www.uscom.com.au

Uscom Contacts

Rob Phillips Executive Chairman rob@uscom.com.au

Brett Crowley Company Secretary secretary@uscom.com.au

Uscom Limited (ABN 35 091 028 090) Suite 2, Level 8 99 Clarence Street, Sydney NSW 2000 Australia T: +612 9247 4144 E: info@uscom.com.au W: www.uscom.com.au

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

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

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

Name of entity

Name of entity	Name of entity
USCOM LIMITED
ABN 35 091 028 090	Quarter ended (“current quarter”)
35 091 028 090	30 June 2018

Consolidated statement of cash flows	Current quarter $A	Year to date (12 months) $A
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	527,155 (203,694) (194,181) (171,865) (40,358) (342,535) (117,934) (7,991) (1,810) 5,269	2,082,922 (844,614) (656,504) (478,924) (167,302) (1,440,803) (828,732) 8,743 (3,406) 629,852 -
	(547,944)	(1,698,768)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10)	3,349 -	(169,695) (60,000)

• See chapter 19 for defined terms 1 September 2016

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

Consolidated statement of cash flows	Current quarter $A	Year to date (12 months) $A
(c) investments (d) intellectual property (e) other non-current assets-term deposit 2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	(31,020) - (1,588)	(65,025) (41,888) -
	(29,259)	(336,608)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- (1,839)	3,030,800 (166,184)
	(1,839)	2,864,616
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	3,075,145 (547,944) (29,259) (1,839)	1,663,565 (1,698,768) (336,608) 2,864,616

• See chapter 19 for defined terms

1 September 2016

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

Consolidated statement of cash flows	Current quarter $A	Year to date (12 months) $A
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	(2,528)	770
	2,493,575	2,493,575
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A	Previous quarter $A
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) – Term Deposit 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	510,026 1,983,549	523,182 2,551,963
	2,493,575	3,075,145
6. Payments to directors of the entity and their associates Current quarter $A 6.1 Aggregate amount of payments to these parties included in item 1.2 91,432 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A
		91,432
7. Payments to related entities of the entity and their associates Current quarter $A 7.1 Aggregate amount of payments to these parties included in item 1.2 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2
		Current quarter $A

• See chapter 19 for defined terms 1 September 2016

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

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

9. Estimated cash outflows for next quarter	$A
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) 9.8 Total estimated cash outflows	203,000 195,000 140,000 40,000 325,000 175,000
	1,078,000

Note: Average quarterly receipts for 2018 is $678,194.

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1
10.2
10.3
10.4
10.5

• See chapter 19 for defined terms 1 September 2016

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

Compliance statement

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

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

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Sign here: ............................................................ Date: 31/07/2018 (Director)

Print name: Rob Phillips

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

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

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

4. See chapter 19 for defined terms 1 September 2016

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