4Dx - Series B Capital Raising IM

Download as pdf or txt
Download as pdf or txt
You are on page 1of 42

INFORMATION

MEMORANDUM
4Dx Limited | ACN 161 684 831
July 2018 – Updated from October 2017 IM

This Information Memorandum is for information purposes only and does not constitute an offer to sell or to solicit an offer to buy any interests in 4Dx Limited or any other securities.
IMPORTANT INFORMATION

DISCLAIMER The Company does not make any representation, express


No person is authorised to provide any information or to make or implied, in relation to forward-looking statements and
any representation, about the Company or in connection you are cautioned not to place undue reliance on these
with this Round, that is not contained in this Information statements. Except where required by law, the Company
Memorandum (IM). Potential investors should only rely on does not intend to update or revise forward-looking
the information contained in this IM. Any information or statements, or to publish prospective financial information
representation not contained in the IM may not be relied on as in the future, regardless of whether new information,
having been authorised by the Company, its Directors or any future events or any other factors affect the information
other person in connection with this Round. contained in this IM.

Neither the Company nor any other person associated These statements are subject to various risk factors
with the Company or this Round guarantees or warrants that could cause the Company’s actual results to differ
the future performance of the Company, the return on an materially from the results expressed or anticipated in
investment made under the IM, the repayment of capital these statements. Key risk factors are set out in section
or the payment of any dividends on the Shares. Before 4. These and other factors could cause actual results to
deciding to invest in the Company, investors should read differ materially from those expressed in any statement
the entire IM. contained in this IM.

FORWARD-LOOKING STATEMENTS ROUNDING


This IM contains forward-looking statements, which Some numerical figures included in this IM have been
include statements identified by use of the words subject to rounding adjustments. As a result, numerical
“believes”, “anticipates”, “expects”, “predicts”, “intends”, figures shown in totals in certain tables may not be an
“plans”, “aims”, “objective”, “potential”, “guidance”, “strive”, arithmetic aggregation of the figures that preceded them.
“may”, “will”, “would”, “could” or “should” and other similar
words that involve risks and uncertainties. PHOTOGRAPHS, DIAGRAMS, GRAPHS AND
TABLES
These statements are based on an assessment of present
Photographs and diagrams used in this IM that do not have
economic and operating conditions, and on a number of
descriptions are for illustrative purposes only and should
assumptions and contingencies that are subject to change
not be interpreted to mean that any person included in
without notice and involve known and unknown risks and
them endorses or authorises this IM, or its contents, or that
uncertainties and other factors which are beyond the
any assets shown in them are owned by 4Dx. Diagrams and
control of the Company, its Directors and its management.
graphs used in this IM are for illustrative purposes only
They are provided as a general guide only and should not
and may not be drawn to scale. Unless otherwise stated,
be relied upon as an indication or guarantee of future
all information contained in graphs, charts and tables are
performance. Any or all of the Company’s forward-looking
based on information available at the date of this IM.
statements may turn out to be inaccurate.

Page 2 | Important Information | 4Dx – Information Memorandum


CONTENTS

IMPORTANT INFORMATION 2 4. RISKS INVOLVED WITH INVESTMENT  30


4.1 Introduction 31
LETTER FROM THE CHAIR 4
4.2 Company risks 32
1. SERIES B FUNDRAISING ROUND 5 4.3 Investment specific risks  33
1.1 Key details  6
5. ADDITIONAL INFORMATION 34
1.2 Important dates  6
5.1 Consents and disclaimers of responsibility 35
1.3 Use of proceeds  7
5.2 Director shareholdings 35
1.4 No underwriting or listing  7
5.3 Takeover provisions of the corporations act apply 35
1.5 Allocation and allotment policy  7
5.4 Continuous disclosure applies 35
1.6 Dividend policy  7
5.5 Low-volume financial market 35
1.7 Privacy  7
5.6 Rights and liabilities attaching to shares  35
1.8 How to apply for shares  7
5.7 Miscellaneous 37
2. COMPANY OVERVIEW 8
6. GLOSSARY 39
2.1 Current capital structure  9
2.2 Background  9 7. CORPORATE DIRECTORY 41
2.3 Key milestones in the history of 4Dx  10
2.4 Business overview  11
2.5 Intellectual property 22
2.6 Competing technology overview 23

3. FINANCIAL INFORMATION 24
3.1 Financial statements 25
3.2 Financial forecasts 25
3.2.1 Use of funds 26
3.2.2 Revenue forecasts 27
3.2.3 Cash flow analysis 3 years 28
3.2.4 Sensitivity analysis 29

4Dx – Information Memorandum | Page 3


LETTER FROM THE CHAIR

On behalf of the Board, it is with great pleasure I introduce to you Funds from this Round will be used to take our first software
a unique global healthcare initiative – 4Dx Limited. The following product to market, including studies to validate the product, as
document outlines an opportunity to become a Shareholder, or for well as the development and submission of a clearance application
existing Shareholders to increase your investment in the Company. to the U.S. Food and Drug Administration (FDA). In conjunction
with initiatives directed to achieving FDA clearance, the Company
4Dx Limited is a software and technology company founded in
will continue to pursue strategic partnering opportunities in its
Melbourne, Australia, servicing the global respiratory healthcare
current markets and regions, including respiratory diagnostics
market, with our Melbourne office now joined by an office in
research and development, and hardware development of
Thousand Oaks, California.
dedicated scanners.
In modern medical facilities, respiratory diagnostics are
I am passionate about 4Dx and the opportunity to create a
dominated by three procedures: the pulmonary function test
positive impact on global healthcare. I hope that as you learn more
(invented in the 1860s), the X-ray (invented in the 1890s) and
about 4Dx, you will join us on our journey.
the CT (invented in the 1970s). 4Dx was founded to bring
modern digital technology to bear in lung health, creating a step
change in the capacity of physicians to diagnose and manage
Yours sincerely,
patients with diseases of the lung.

The potential to improve millions of lives also brings with


it financial opportunity. The respiratory diagnostic sector
represents a global market of over US$25 billion per annum, and
Andreas Fouras
4Dx has a clear plan to address this market, building the Company
Chairman and CEO
one product at a time.

Page 4 | Chairperson's Letter | 4Dx – Information Memorandum


1. SERIES B
FUNDRAISING ROUND

4Dx – Information Memorandum | 1. Series B fundraising round | Page 5


1. SERIES B FUNDRAISING ROUND

1.1 KEY DETAILS NO AGGREGATE MINIMUM SUBSCRIPTION AMOUNT


The Round under this IM is for the issue of ordinary shares in 4Dx to raise up to There is no minimum aggregate subscription amount which must be raised under this Round
AUD$10,000,000 (with the right of 4Dx to accept over-subscriptions). before this Round proceeds and Shares are issued.

In addition to this Round, 4Dx is concurrently raising funds from retail investors under an Often a minimum aggregate subscription amount is set to ensure that aggregate funds raised
Offer Information Statement (OIS) disclosure document as defined under the Corporations are sufficient to meet baseline funding commitments against major milestones. This is not
Act, as well as raising funds from grant applications and product sales. This is intended to appropriate in respect of this Round since 4Dx is also raising working capital from a number
provide working capital required to fund 4Dx’s ongoing operations, capital expenditure and of other sources.
anticipated FDA submission for 4Dx’s core 4DxV Software as a Medical Device product.
SHARE ISSUE TERMS
This Round is open to sophisticated, wholesale and overseas investors. The subscription
price for each Share is AUD$0.3700. There is no limit to the number of Shares that any Any Shares issued in connection with this IM will be fully paid ordinary shares in the capital
investor may apply for. of the Company. They will rank equally with and will have the same voting and other rights
as the existing issued ordinary shares of the Company. The rights attaching to the Company
Applicants are not required to pay any fee, commission, charge or other amount in order to shares are set out in the Company’s constitution (see section 5.6 for more information) and
acquire Shares. the Corporations Act.

The table below summarises the key terms of this Round, and its effect on the Company: At the date of this IM, the only class of shares on issue in 4Dx are ordinary shares.

COMPANY 4DX LTD (ACN 161 684 831) 1.2 IMPORTANT DATES
Issue price per Share AUD$0.3700
EVENT DATE
Aggregate Minimum Aggregate Maximum
subscription subscription* IM release date 9 October 2017

Total number of Shares to be issued under 0 (AUD$0) 27,027,027 Round closing date 17 August 2018
this Round (AUD$10,000,000)
Allotment of Shares Share Applications will be processed on a “first
Total number of Shares on issue immediately 114 Million 141 Million come, first served” basis subject to board approval.
following the completion of this Round **
Dispatch of holding statement (title document) Within a period of 7 business days following the
Inferred company value immediately AUD$42 Million AUD$52 Million relevant allotment of Shares.
following the completion of this Round
Gross proceeds from this Round AUD$0 AUD$10,000,000 The above dates are indicative only and are subject to change. The Company reserves the
right to vary the dates and times of this Round, including to close this Round early, extend
Series B raised @ July 2018 = AUD$ 5.5 Million
this Round or accept late Applications, without notifying any recipient of this IM or any
Series B remaining @ July 2018 = AUD$ 4.5 Million
Applicants. Applicants are encouraged to submit their Applications and Subscription
*Over-subscriptions may be accepted by the Company in its absolute discretion. Amount as early as possible.
** This amount does not account for any Shares which may be issued during this period as a result of, or in connection with,
the Employee Equity Plan (EEP) (refer to section 5.7).

Page 6 | 1. Series B fundraising round | 4Dx – Information Memorandum


1.3 USE OF PROCEEDS 1.7 PRIVACY
Funds raised under this IM will be applied towards the costs associated with each of the In completing the application form, Applicants will be required to provide certain personal
following: information to the Company (e.g. name, address, contact details). The Company will
• continuing studies to validate the accuracy and repeatability of software product; collect, hold and use any personal information to assess Applications and for general
• making FDA submissions of core Software; administration purposes. Personal information may be disclosed by the Company to its
• expanding the US office, with a focus on building market opportunity in that geography; agents and service providers on the basis that such information is dealt with in accordance
and with the Privacy Act 1988.
• providing working capital to meet ongoing operational costs of the Company.
Applicants are entitled to gain access to any of their personal information held by, or on
All advisory fees and costs and expenses arising in respect of this IM will be paid by the behalf of, the Company, by contacting the Company. Applicants should notify the Company
Company from its existing financial resources. of any changes to their personal information over time.

1.4 NO UNDERWRITING OR LISTING 1.8 HOW TO APPLY FOR SHARES


The Round is not underwritten. 4Dx enables the next generation of lung disease diagnosis, treatment and pharmaceutical
development. Its cutting edge technology, ease of implementation and innovative approach
4Dx Limited is not listed on any stock exchange. will change the way lung disease is managed across the globe. We are excited for the future
and hope to see you share this journey with us.
1.5 ALLOCATION AND ALLOTMENT POLICY
To participate in this investment opportunity*, you must:
It is currently expected that certain shareholders, directors and employees of the Company
1. Complete an application for ordinary shares
will be permitted to participate in this Round.
2. Make payment for the shares by EFT or cheque
The Company reserves the right in its absolute discretion to not issue Shares to Applicants
To request a personal invitation to apply for ordinary shares in the capital of 4Dx Limited, or
under this Round and may reject any Application or allocate a lesser number of Shares than
to continue this conversation with us, please email 4Dx at [email protected].
those applied for at its absolute discretion.
Or contact:
Application Monies paid by an Applicant will be held by the Company on trust for that
Julian Sutton
Applicant until the Shares applied for by that Applicant are issued. If an Application is
Director
rejected the relevant Application Monies will be refunded as soon as practicable, without
+61 427 717 210
interest.
[email protected]

1.6 DIVIDEND POLICY We look forward to hearing from you.


No dividends have been declared by the Company to date. The Company is not in a position *The full terms and conditions of subscription are listed in the application.
to predict when it will be in a position to pay a dividend, if at all, as its financial resources will Acceptance of applications are subject to approval by the Board and conditional of minimum parcel size and substantiation
of investor status.
be needed for product development, marketing, approvals and administration.

Any future dividend policy and payment will be subject to the Company’s ability to meet any
of its cash funding requirements for growth, after taking into account financial, capital and
trading requirements at that time.

4Dx – Information Memorandum | 1. Series B fundraising round | Page 7


2. COMPANY
OVERVIEW

Page 8 | 2. Company overview | 4Dx – Information Memorandum


2. COMPANY OVERVIEW

2.1 CURRENT CAPITAL STRUCTURE


The issued capital of the Company as at the start of this Round:

CLASS OF SECURITY NUMBER OF SECURITIES


Ordinary Shares 114 Million

The Company has established an Employee Equity Plan (EEP) to attract, retain and motivate
employees (refer to section 5.7).

2.2 BACKGROUND
Andreas Fouras first conceptualised a novel four-dimensional X-ray imaging technology to
study the function of the breathing lungs in 2005. He developed the subsequent technology
of the 4DxV platform in the years following with his research group, the Laboratory for
Dynamic Imaging at Monash University, Melbourne, Australia.

Having raised over AUD$10 million in research funding from agencies including Australia’s
National Health & Medical Research Council (NHMRC), the Australian Research Council
(ARC) and the American Asthma Foundation, Andreas, his collaborators and his research
team successfully translated the technology into the laboratory where it could be developed
for clinical use.

4Dx was incorporated in December 2012 to commercialise the technology and commenced
operations in July 2013 with key researchers involved in the technology’s research
development now engaged with its commercial development.

The technology has been extensively patented, with core patents granted in key jurisdictions
including the United States and Australia. The technology has been proven through
published preclinical studies over the past 10 years.

4Dx commenced with a prospective study in 2016. 4Dx is at advanced stages of planning for
three additional prospective clinical studies.

4Dx – Information Memorandum | 2. Company overview | Page 9


2.3 KEY MILESTONES IN THE HISTORY OF 4Dx


May-05
Andreas Fouras travels to SPring8 synchrotron (Japan)
and conceptualises 4D imaging using X-rays (later to

May-14
Presentation of 4DxV related research at the American
Thoracic Society 2014 International Conference.
• Mar-17
Released preliminary clinical study data for core
respiratory diagnostics product at the The 2017
become 4DxV). Oct-14 International Workshop on Pulmonary Imaging at the
May-08 • Human feasibility study with existing hospital equipment University of Pennsylvania.
• Very early 4DxV (developmental) software technology confirms software application with fluoroscopy, proving AUD$0.3700 per share*
first applied to imaging of breathing lungs. ability to apply technology in hospital environment. Apr-17


Sep-09
First patent is filed to protect 4DxV. • Feb-15
Initiated first clinical 4DxV in-human studies through
Institutional Review Board (IRB) application at leading


Agreement with major US hospital for paid clinical study.
Aug-17
Decision to withdraw 510(k) submission to FDA for
Jul-10
• Andreas Fouras and colleagues are the first Australian University affiliated hospital. radiotherapy product, to focus available resources in
research team to receive an American Asthma AUD$0.27 per share* gaining FDA clearance for 4DxV’s core product in the
Foundation Research Grant. Jul-15 field of respiratory diagnostics, to streamline 4DxV’s
• Clinical Advisory Board (CAB) formed bringing path to market.
Dec-11
• Successful synchrotron experiments using 4DxV to together key opinion leaders across radio-oncology and Sep-17
study Cystic Fibrosis. respiratory diagnostics. • All of Monash University’s intellectual property relating
Aug-15 to the Company’s 4DxV technology has been assigned to
Aug-12
• Partial relocation of 4Dx management team to the US. 4Dx Limited.
• Design completed for world-first laboratory-based
dynamic lung function imaging platform (Fouras lab at Sep-15 Jan - 18
Monash University). • Commercial collaboration agreement with first major US • 4Dx submitted its FDA 510(k) regulatory pre-submission
hospital. in January on its first respiratory product.
Dec-12
• Single beam construction of world-first lab-based
dynamic lung function imaging platform completed,
and successful proof of concept for use of technology
• Jan-16
Commercial collaboration agreement with second major
US hospital.

Mar - 18
4Dx met with the FDA in March in order to receive
feedback on the pre-submission.
without synchrotron radiation (Fouras’s Laboratory for AUD$0.3125 per share* Apr – 18
Dynamic Imaging at Monash University). • FDA reviewed and accepted 4Dx prepared minutes to
• Series A Wholesale Capital Raise AUD$4M Opened.
Jan-13 (Later closed over subscribed). the official administrative record. Importantly, the two
• Andreas Fouras and colleagues receive the largest outcomes clarified in the minutes were that 4Dx has a
NHMRC Development Grant awarded (at that time), to Feb-16 510(k) pathway to FDA clearance with a viable predicate
commercialise functional lung imaging technology. • Commercial collaboration agreement with third major device, and how 4Dx can successfully gain clearance with
US hospital. a relatively modest sized clinical study.
Apr-13
• Team constructs AUD$2M Advanced X-ray Facility to Apr-16 May-18
perform research to develop 4DxV. • Conversion from Australian proprietary company to • 4Dx attended this year’s ATS Conference held May 18-
unlisted public company limited by shares. 23 in San Diego. 4Dx received strong engagement from
Jun-13
Jun-16 visitors with quality collaboration interest shown from
• 4Dx secures a global exclusive license from Monash
• Initial OIS lodged with ASIC, and retail fundraising round targeted organisations.
University for use of patents.
opened. (Later closed over subscribed).


June - 18
Jul-13
Aug-16 • Second order for a preclinical scanner (US$600,000)
4Dx commences operations.
• First major purchase order received for a preclinical from The Cleveland Clinic. Australian National Imaging
AUD$0.10 per share* Facility commits to the establishment of 4Dx dedicated
scanner (US$600,000) from Cedars-Sinai Medical Center.
Dec-13 research eco-system in Adelaide (AUD$1m+).
Dec-16
• 4Dx receives payment for first commercial sale; • AUD$1m Victorian Government Future Industries Fund
Conducts imaging experiments using prototype 4DxV *4Dx completed a 1000:0 share split in October 2016. Original share
Sector Growth Program granted to Hydrix Services Pty prices of AUD$100.00, AUD$270.00 and AUD$312.50 have been
Pre-human scanner for Cystic Fibrosis lung disease Ltd, 4Dx and Monash University consortium, for 4Dx converted pro rata to an effective share price of $0.10, $0.27 and
research. Pre-clinical scanner project. $0.3125 respectively.

Page 10 | 2. Company overview | 4Dx – Information Memorandum


2.4 BUSINESS OVERVIEW

INTRODUCTION
4Dx is a software technology company founded to create a step change in the capacity of
physicians to diagnose and manage patients with diseases of the lung.

WHAT IS 4DXV?
4DxV is a four-dimensional imaging technology that maps regional lung motion and air flow
as the lungs breathe. A non-invasive software-based technology, 4DxV allows for a detailed
map of lung function to be created unique to each patient. The commercial applications
include monitoring and diagnostic applications for diseases including Chronic Obstructive A
Pulmonary Disease (COPD), Cystic Fibrosis, Lung Cancer and Asthma.

CURRENT TECHNOLOGIES
In general, current technologies do not provide quantitative functional information but
instead deliver static images or insensitive single measures of function. They can also
be invasive and expose the patient to significant doses of radiation. The vast majority of
respiratory diagnostic procedures fall into one of following three categories of diagnostics
currently in the market place.

A. SPIROMETRY
First developed in the 1860’s, spirometry measures the volume of air blown out of the lungs. B
It provides a measure of lung function in a single accumulated number. It is accurate but
insensitive.

B. X-RAY
Developed in the 1890’s, X-ray is an imaging test that provides two-dimensional visual
information on what is happening in different regions of your lung. Although inexpensive, it is
not a functional test like spirometry, and it is not as sensitive as a CT.

C. COMPUTED TOMOGRAPHY (CT)


The current gold standard technology is CT, which was invented in the 1970’s. CT is sensitive
but expensive and delivers a significant dose of radiation (about 100x the radiation of a chest
X-ray). C
4Dx seeks to provide a single platform diagnostic technology with the advantages of each A. Spirometry, B. X-ray, C. Computed Tomography (CT)
competing technology: the functional insight of spirometry, a dose and cost comparable to
X-ray with the resolution of CT.

FURTHER DETAILS ON COMPETING TECHNOLOGY CAN BE FOUND IN SECTION 2.6.

4Dx – Information Memorandum | 2. Company overview | Page 11


RESPIRATORY DIAGNOSTICS PROCEDURES
PERFORMED EACH YEAR
162 MILLION PROCEDURES IN SELECTED OECD COUNTRIES EACH YEAR
RESPIRATORY
RESPIRATORY DIAGNOSTIC
DIAGNOSTIC PROCEDURES
PROCEDURES

S
RE
S
PERFORMED EACH YEAR

RE

DU
PERFORMED EACH YEAR

DU

PR Y
CE
G N PROCYE
ON N
O
AN

LLI A
M
RM
O

8.4 ER
LLI
162 MILLION PROCEDURES GLOBALLY EACH YEAR

MI
162 MILLION PROCEDURES GLOBALLY EACH YEAR

GE
COUNTRY # PROCEDURES SPEND - $

MI
8.4
United States 72,776,294 $12,588,684,937
1 MILLION PROCEDURES
1 MILLION PROCEDURES Germany 8,465,949 $870,492,277
Turkey 4,838,450 $442,407,104
France 4,323,547 $322,303,553
S
S RE United Kingdom 2,700,391 $258,116,320
RE DU
DU OCE Y
E Y KE O CE P R Canada 2,579,602 $221,399,328
RK TUR
R N
N P LLIO COUNTRY # PROCEDURES SPEND - $
T U MI
IO
LL .8 M
4
I COUNTRY
KoreaUnited States
# PROCEDURES
2,484,025
72,776,294
SPEND - $
$225,182,693
$12,588,684,937
4 .8 United States 72,776,294 $12,588,684,937
SpainGermany
Germany
2,301,530
8,465,949
8,465,949 $173,927,376
$870,492,277
$870,492,277
Turkey
Australia 4,838,450
1,113,469 $442,407,104
$93,807,016
NE
W ICE
Turkey 4,838,450 $442,407,104
NE
W LICEL ZEA LAN France 4,323,547 $322,303,553
LUX ZEAUL XEAM N LA D Greece
France 809,269
4,323,547 $66,368,671
$322,303,553
EM AN BDO ND United Kingdom
United Kingdom 2,700,391
2,700,391 $258,116,320
$258,116,320
BO S D UR Portugal 595,513 $47,847,955
SLO URLGOVEN G Canada
Canada
2,579,602
2,579,602 $221,399,328
$221,399,328
VENFIN IA
FINL IALA AustriaKorea 533,487
2,484,025 $46,859,323
$225,182,693
AND ND Korea 2,484,025 $225,182,693

ESTO
ESTO
NIA
FCREMAILON CEREOSCEDURES Poland
Spain
Spain
2,301,530
2,301,530
527,770 $173,927,376
$46,573,231
$173,927,376
NIA
IRELAN
FRMAILN
LIO4.N3 PR
CEODNUPR
LI Belgium
Australia
Australia 1,113,469
515,452
1,113,469
$93,807,016
$51,784,083
$93,807,016
IRELAN D 4.3 Greece 809,269 $66,368,671
D Greece
Denmark 809,269
464,178 $66,368,671
$42,925,631
SLOV REPUBLI
SLOVAK REPUAK
UNITED
UNITED STATES
STATES OF AMERICA
OF AMERICA Portugal 595,513 $47,847,955

72.7 MILLION
C Portugal 595,513 $47,847,955

72.7 MILLION
BLIC ChileNetherlands 407,184 583,102 $32,121,636
$74,150,657
Netherlands 583,102 $74,150,657
IsraelAustria 392,094 533,487 $34,022,119
$46,859,323
HUNGARY

PROCEDURES
Austria 533,487 $46,859,323
HUNGARY

PROCEDURES
Poland 527,770 $46,573,231
Czech
Poland Republic 387,360
527,770 $35,327,922
$46,573,231
Belgium 515,452 $51,784,083
Belgium
Hungary 515,452
296,523 $51,784,083
$24,331,552
UBLIC $12.6 BILLION
UBHLIRCEP
ZEC
RCEP $12.6 BILLION SPENDSPEND UNITE2.U7DN ITE
Denmark 464,178 $42,925,631
MILLIO D KINGD
Denmark 464,178 $42,925,631
CZECH Slovak Republic 209,174 $17,597,884
LION PRKIN OM
NG Chile 407,184 $32,121,636
2.7 MIL PRD
EL O ODM
OCE URES
CEDURE
Chile
Ireland
407,184
173,651
$32,121,636
$15,679,863
EL ISRA S Israel 392,094 $34,022,119
ISRA
Israel 392,094 $34,022,119
EstoniaCzech Republic 129,006 387,360 $35,327,922
$10,098,781
Czech Republic 387,360 $35,327,922
ILE Finland
Hungary
106,762
296,523 $24,331,552
$10,370,032
ILE CH Hungary 296,523 $24,331,552
CH Slovak Republic 209,174 $17,597,884
Slovak Republic 209,174 $17,597,884
Slovenia 52,873173,651 $4,492,119
RK MA
R K
CA CA Ireland
Ireland
173,651
$15,679,863
$15,679,863
MA DEN 2 .6 NA2.6 MILN AD Luxembourg
Estonia
Estonia 50,357
129,006
129,006 $4,403,693
$10,098,781
$10,098,781
LLI DALION A
N
DE MI
ON PR Iceland
Finland
Finland 30,324
106,762
106,762 $10,370,032
$2,524,687
$10,370,032
UM P RO O CE
I UM LG
I CE
D
D UR Slovenia
Slovenia
52,873
52,873 $4,492,119
$4,492,119
LG BE
UR
ES
ES
BE
Luxembourg 50,357 $4,403,693
Luxembourg 50,357 $4,403,693
ND

New Zealand 43,357 $3,403,238


ND

Data for USA, Germany, France,


New Zealand 43,357 U.K and $3,403,238
Spain (over 90% of
LA
LA

KO2.5 MIL ROCED


PO

Iceland 30,324 $2,524,687


KO2.5 MIL
IA
PO

total
Icelandspend) Sourced from30,324 Market Assessment for Respiratory
$2,524,687
IA

RE LION
TR

RE LION

Rest of the World ≈ 54,400,998 ≈ $9,410,166,194


TR

Rest of the World ≈ 54,400,998 ≈ $9,410,166,194


A PRO

Diagnostics, Frost & Sullivan 2014.


AU

DS
S

A P
AU

NDS

TOTAL ≈ 162,291,692 ≈$ 25,177,369,874


L AN

GAL

TOTAL ≈ 162,291,692 ≈$ 25,177,369,874


GAL

Remaining markets sourced from a combination of above reference


CE
SP.3AMILLION
A

AUSILTLIORN PROCEDURES
GREECE

1.1 M

2
HER

SP.3AMILLION
ERL

PORTU

AUSILTLIORN PROCEDURES
GREECE

DU
1.1 M

and Health at a Glance 2013: OECD Indicators, OECD 2013.


PORTU

RE
UR
H

S
NET

IN PROC

ES
NET

IN PROC
ALIA
ALIA

Page 12 | 2. Company overview | 4Dx – Information Memorandum


DU
EDU

R
ES
RES
THE MARKET PRODUCT THREE: RDX3 (VASCULATURE)
4Dx intends to enter the market initially in the United States. Currently in the United 4Dx has developed a novel, noninvasive imaging technique that provides regional
States, there are over 72 million lung diagnostic procedures performed every year across measurements of the pulmonary vasculature – the blood vessels which carry oxygen from
all respiratory indications at an annual spend of US$12.6 billion dollars. In addition to this the lungs to the heart – enabling the evaluation of lung health through the blood network
current market demand, there are significant potential growth opportunities for respiratory instead of through airflow and ventilation as measured by the other 4Dx products, RDx1
diagnostics in response to new demand drivers such as preventative lung cancer screening and RDx2. Vascular analysis can be provided visually, numerically or both. This technique is
and disease caused by poor air quality of major cities. important to physicians, because it provides an often-required measure while eliminating the
need for contrast agents – known to be a major cause of kidney failure.
4Dx will apply 4DxV technology to the diagnosis and monitoring of common and debilitating RDx products are being designed to be fully compatible with existing hospital equipment,
respiratory conditions including asthma, COPD, lung cancer and cystic fibrosis. alleviating the requirement for the customer to purchase new imaging equipment in order to
utilise our SaaS products. This business model also enables 4Dx to deliver its technology at
PRODUCT PIPELINE low cost and to scale quickly to meet demand.
4Dx aims to produce both hardware and software products for commercial sale, with
a pipeline of six products currently under development. 4DxV, 4Dx’s patented four- DEDICATED HARDWARE PRODUCTS
dimensional imaging technology, is central to the Company’s product families, which 4Dx has two hardware products in its product pipeline. The most mature of these is a small
comprise software product lines for key respiratory market segments, as well as hardware animal ventilator that was developed out of necessity to support internal R&D activities.
product lines that support our software offering. While the small animal ventilator is a product in its own right, it is also a key sub-system in
4Dx’s primary hardware product, the dedicated Preclinical Scanner (mouse scanner). The
SOFTWARE PRODUCTS Preclinical Scanner has also directly evolved from 4Dx R&D activities and supports the 4DxV
platform by seamlessly integrating the 4Dx software technology into a dedicated piece of
4Dx aims to produce software as a service (SaaS) products for commercial sale, with a
machinery located at opinion-leading sites. This product is bringing significant early stage
pipeline of three respiratory diagnostic software products currently under development
revenue and expands the customer base for 4Dx software products.
built on 4DxV, 4Dx’s patented four-dimensional imaging technology platform.
In FY17, 4Dx secured an agreement with Cedars Sinai Medical Center in Los Angeles to
PRODUCT ONE: RDX1 (VENTILATION)
procure an instance of this hardware to support R&D activities within the hospital, as well
The 4Dx Ventilation product provides physicians and patients regional measurements of
as an AUD$1M Victorian Government Future Industries Fund Sector Growth Program
ventilation at each phase of the breath. Put simply, this product shows which parts of the
award, under a Consortium Agreement with Hydrix Services Pty Ltd and Monash University,
lungs are receiving air, and which are not, and to what extent. This is a key measurement
to facilitate a production line for Preclinical Scanner manufacturing. 4Dx completed
offering physicians functional data on lung health at unprecedented levels of detail. 4Dx
construction of the first unit in August 2017, ahead of compliance testing that will clear the
has chosen ventilation as the first market for 4DxV, as management believes it paves the
scanner for import into the USA. The long-term hardware pipeline includes a dedicated
most cost-effective pathway for technological validation of the 4DxV platform, while
Human Scanner.
simultaneously providing an opportunity for a rapid path to market, to ensure financial
sustainability of the Company and to reduce the risk to investors. This product has been
validated in small animals and has been in human trials for over a year.

PRODUCT TWO: RDX2 (AIRWAY-FLOW)


Airway-flow provides measurement of how much air flows through each airway in a patient’s
lung at each phase of the breath. 4Dx research has shown that this key metric is likely to be
particularly useful for diseases such as asthma – which causes certain airways to constrict
reducing airflow. The technology behind this product has been validated in small animals and
can be readily added to RDx1 (Ventilation), enabling increased market penetration.

4Dx – Information Memorandum | 2. Company overview | Page 13


4Dx PLANNED SOFTWARE AND HARDWARE DEVELOPMENT MILESTONES

Ventilation Clinical Trials FDA Clearance Commercialisation

RDx1

IP Group A IP Group B Early Stage Revenue - Paid Studies

Airway-flow Clinical Trials Data Validation FDA Clearance Commercialisation

RDx2

IP Group A IP Group C Early Stage Revenue - Paid Studies

Vasculature Clinical Trials Data Validation FDA Clearance Commercialisation

RDx3

IP Group A IP Group D Early Stage Revenue - Paid Studies

Preclinical PCS2 Delivered PCS3 Delivered PCS4 Delivered PCS5 Delivered PCS6 Delivered PCS7 Delivered
Scanner
Hardware
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2018 2019 2020

IP GROUP CAPABILITY PRODUCTS PATENT FAMILIES


A Platform Platform (all) 1,5,9,10
B Ventilation RDx1 1,5
C Airway-flow RDx2 1,10
D Vasculature RDx3 6,7

Page 14 | 2. Company overview | 4Dx – Information Memorandum


GO TO MARKET STRATEGY C. PENETRATE MARKET
The 4Dx ‘go to market’ strategy is being executed through a three-stage process. 4Dx is following an established MedTech methodology for commercialisation that addresses
the following go to market key success factors:
A. WIN THE SUPPORT OF KEY OPINION LEADERS (KOL’S)
4Dx aims to have the technology tested and utility verified by key opinion leaders and to • Obtaining regulatory clearance (FDA 510(k)) in the US market for core software products
invest in clinical studies that quickly and cost-effectively gather the data required. 4Dx is in the respiratory diagnostic space
engaged with three of the top thirty hospitals in the USA, with an ambitious target to have • Working with insurers to gain reimbursement codes, allowing price sensitive customers
formal engagement with ten of those institutions by the end of 2018. to gain access to 4Dx software products
• Leverage the capacity of the SaaS business model to rapidly scale product delivery to
B. GENERATE EARLY REVENUE meet market demand
4Dx will focus on hardware sales (especially the Preclinical Scanner) to build KOL support • Enable rapid uptake of a software only offering without the customer requirement to
and deliver early hardware and associated software (SaaS) revenue. On top of this purchase expensive equipment by using existing hospital infrastructure
contracted, long-term preclinical SaaS revenue, 4Dx will also generate early stage revenue • Partnering with patient advocacy groups in the US including the American Asthma
from paid studies to support KOL collaborators. Foundation (AAF) and the Cystic Fibrosis Foundation to raise awareness and support of
4Dx technology and the positive impact it can have on respiratory health.

SAAS BUSINESS MODEL

DOCTOR HOSPITAL IMAGE


OR PRIVATE CLINIC SEQUENCE

PATIENT 4Dx REPORT

4Dx – Information Memorandum | 2. Company overview | Page 15


DIRECTORS AND OFFICERS

ANDREAS FOURAS JOHN LIVINGSTON


Chairman and CEO Non-Executive Director
• PhD – Monash University • BApps Sci (Med Rad), Medical Radiation - RMIT University
• Master of Engineering Science (Research) – Monash University • GAICD, Graduate Member, Australian Institute of
• Bachelor of Engineering – University of Queensland Company Directors
• Australian Davos Connection Australian Leadership Award 2013
• MAICD, Member, Australian Institute of Company Directors Appointed non-executive director March 2018. Chair of the People & Remuneration
Committee.
Andreas conceived and developed numerous technologies, including 4DxV, during his time
as a researcher at Monash University. Completing a Masters and PhD, and then rapidly rising Mr John Livingston was previously one of the founding partners of Lake Imaging,
to the position of Professor and director of the Laboratory for Dynamic Imaging, Andreas subsequently becoming part of Integral Diagnostics Ltd where John was CEO and Managing
was recognised by various accolades from a wide range of premier research bodies including Director. John has a special interest in radiology efficiency and the enhancement of
the National Health and Medical Research Council and the American Asthma Foundation. Radiological experiences. He is considered an industry leader in the implementation of
PACS and RIS in a radiology setting. John was awarded the AGFA International award for
Andreas was also well respected as a leader in this field as evidenced by an ADC Australian Development of Digital Imaging Solutions in 2005. He has lectured in Australia and abroad
Leadership Award (2013), and through his service on the Executive of the Australian on the digital radiology environment, as well as business strategies and systems within
Academy of Science EMCR Forum. Andreas served as an infantry officer in the Australian the commercial sector. John has considerable commercial experience, having worked
Army Reserve. with the team at Lake Imaging and later Integral Diagnostics through acquisitions and
the establishment of Greenfield facilities across Australia. During his career at Integral
Andreas founded 4Dx in 2012 and has left other interests behind to fully dedicate himself to Diagnostics, John lead the group through Private Equity investment with Advent Partners
his roles at 4Dx. in 2014 and in 2015 John worked with Advent to list Integral Diagnostics on the Australian
Stock Exchange. John is a former director of VicWest Community Telco and United Way;
a current director at Comrad Medical Systems and Ballarat Clarendon College (Chair); a
member of The Australian Institute of Radiography and a graduate member of the AICD

Page 16 | 2. Company overview | 4Dx – Information Memorandum


HEATH LEE DR ROBERT A. FIGLIN
Non-Executive Director Non-Executive Director
• Monash University – Bachelor of Economics (Accounting Major) • MD, Doctor of Medicine – Medical College of Pennsylvania
• Institute of Chartered Accountants Australia – Chartered Accountant • FACP, Fellow of the American College of Physicians (ACP)
• Graduate Diploma of Applied Finance (Finsia)
• Fellow of the Financial Services Institute of Australasia (Finsia) Appointed non-executive director December 2016.
• GAICD, Graduate Member, Australian Institute of Company Directors
Robert A. Figlin, MD, FACP, is the Steven Spielberg Family Chair in Hematology Oncology,
Appointed non-executive director July 2016. Chair of the Finance Committee. Professor of Medicine and Biomedical Sciences, Director of the Division of Hematology/
Oncology, Deputy Director of the Samuel Oschin Comprehensive Cancer Institute and
Heath brings significant business acumen to 4Dx. Heath gained his Chartered Accountant Deputy Director of Integrated Oncology at Cedars-Sinai Medical Center in Los Angeles,
qualification working with KPMG before moving into investment banking with BZW (Barclay’s California. Dr. Figlin received his medical degree from the Medical College of Pennsylvania.
bank) which was later acquired by ABN AMRO. As a merger and acquisition professional Heath He completed his residency and chief residency in internal medicine at Cedars Sinai Medical
advised the Federal Government of Australia on the $4 billion Phase 1&2 privatisation of Center and a fellowship in hematology/oncology at the David Geffen School of Medicine at
Australia’s airports and CSR on its $6.7 billion demerger of Rinker Materials. With extensive UCLA.
experience advising companies in relation to trade sales, mergers & acquisitions and company
strategy, Heath left ABN AMRO to launch his own business. Over 9 years Heath as founder A nationally recognised leader in genitourinary and thoracic oncology, Dr. Figlin brings a
and CEO built OCIS from a startup contact centre and market research company with 10 staff wealth of clinical knowledge and medical expertise, critical to 4Dx’s commercial success.
in Melbourne to a business operating in Australia, New Zealand and Fiji with 637 staff servicing
Dr. Figlin serves as Editor for Kidney Cancer Journal, and his studies have appeared in
clients such as Optus, The Nielsen Company, Seek.com, Virgin Mobile and the New Zealand
Clinical Cancer Research, Journal of Clinical Oncology, New England Journal of Medicine,
Government before the business was sold in 2013.
Lancet, JNCI, Lancet Oncology, and Journal of Urology, among others. He has authored
As an active investor, advisor and non-executive board director, Heath holds a degree in over 350 peer reviewed articles, more than 70 book chapters, and has published as editor
Economics from Monash University and a Graduate Diploma in Applied Finance from Finsia. multiple books in kidney cancer. He is the Editor of the recently released book by Springer
Heath is also a Fellow of the Financial Services Institute of Australasia and a member of the Science entitled, Renal Cell Carcinoma: Translational Biology, Personalized Medicine, and
Australian Institute of Company Directors. Novel Therapeutic Targets.

4Dx – Information Memorandum | 2. Company overview | Page 17


JULIAN SUTTON LUSIA GUTHRIE
Non-Executive Director Non-Executive Director
• Bachelor of Science (Mathematics) – Monash University • Master of Science (Science and Technology Commercialisation) – University of Adelaide
• CFA Institute, CFA Charterholder • Bachelor of Applied Science (Medical Technology) – University of South Australia
• Member of the Australian Institute of Company Directors
Appointed non-executive director September 2017. Chair of the Investment Committee, and
member of the Due Diligence and People & Remuneration Committees. Appointed non-executive director December 2017. Chair of the Regulatory & Quality
Committee.
Julian started his career in 1995 as an actuarial analyst for Towers Perrin in Melbourne
where he consulted to some of Australia’s largest superannuation funds. After three years in With over 35 years in the pharmaceutical and bioscience industries, Lusia Guthrie is an
this role, he transferred with Towers Perrin to Brussels and then London, where he worked experienced executive and med-tech entrepreneur, with strong leadership skills and
predominantly in an asset consulting capacity. international industry networks. She started her career as a Medical Laboratory Scientist
In 2002, Julian joined Credit Suisse Asset Management in London as an assistant portfolio before joining the Manufacturing Division of pharmaceutical company FH Faulding & Co
manager in their Multi-Manager team. Driven by strong performance, the team grew assets where she attained the position of Director of Operations. Lusia then went on to co-found
under management ten-fold from GBP50m to GBP500m over the following two years. medical technology innovation company LBT Innovations Limited (ASX: LBT) where she
served as Chief Executive Officer and Managing Director until 2016.
In 2004, Julian joined Schroders Investment Management as a Senior Portfolio Manager in
the Multi-Asset team, responsible for the management of a suite of investment funds with Lusia has a passion and proven track record in bringing innovative products to global
assets under management in excess of USD1bn. These funds were invested on a global basis markets, embracing the entire process from company formation, capital raising and concept
and had exposure to a broad range of asset classes including private equity, hedge funds, development to product launch. She has particular experience and ongoing interest in the
property, commodities, equities, bonds and cash. development and commercialisation of new healthcare products that embrace automation,
robotics, machine learning and artificial intelligence.
After seven years with Schroders, Julian returned to Australia with entrepreneurial
ambitions. Using the contacts he made during his time in London, Julian established a sales
and marketing business that helps best-in-class international fund management companies
establish a presence in the Australian and New Zealand market. Currently, in partnership
with Copia Investment Partners, Julian is responsible for the sales and marketing function of
Odey Asset Management in the region.

Page 18 | 2. Company overview | 4Dx – Information Memorandum


CLINICAL ADVISOR

CHARLENE STAHR PROFESSOR GREGORY SNELL


Company Secretary, Operations Manager • MBBS - Bachelor of Medicine, Bachelor of Surgery
• Master of Engineering Science (Research) – Monash University • FRACP - Fellow the Royal Australian College of Physicians
• Bachelor of Engineering (Mechanical) – Monash University • MD - Doctor of Medicine
• Bachelor of Technology (Aerospace) – Monash University • OAM - Order of Australia Medal
• GIA(Cert), Certificated Member, Governance Institute of Australia
Greg is currently the Medical Head of the Lung Transplant Service at the Alfred Hospital and
• MAICD, Member, Australian Institute of Company Directors
Monash University. After completing his initial medical training at University of Melbourne,
he completed the Will Rogers Clinical Fellowship in Lung Transplantation at the University of
Appointed Company Secretary March 2016. Public Officer, Chair of the Due Diligence Toronto, Canada in 1992. He has been involved in the implementation of new techniques and
Committee, member of the Finance Committee. technologies in lung transplantation, in particular the use of Donation-after-circulatory-death
(DCD) lungs.
Charlene has 10 years’ experience in the engineering and biomedical research sectors,
where she developed strong technical and business skills across corporate administration,
finance and accounting, risk management, regulatory affairs and grant writing. Her 7 years at
Monash University saw core involvement in international research programs and technology
development, leading to publication of her own research and patented IP. Charlene has
extensive experience in administration management and auditing, with a strong focus on
compliance and governance, previously holding a number of official roles at the university.
Charlene has recently completed a Master of Engineering Science, which demonstrates the
application of 4DxV’s precursor preclinical research technology to a lung disease model.
Charlene has commenced a Graduate Diploma of Applied Corporate Governance with the
Governance Institute of Australia.

4Dx – Information Memorandum | 2. Company overview | Page 19


SENIOR LEADERSHIP TEAM

KAREN SIU
PAUL COOKE Vice President of Engineering
Senior Vice President & Vice President of Sales and Marketing
• PhD – Monash University
• General Manager, Notting Hill Devices Pty Ltd • Bachelor of Science (Hons) – Monash University
• Graduate Diploma, Business – RMIT • MAIP, Member, Australian Institute of Physics
• Bachelor Arts (Military Studies) – University of NSW/RMC Duntroon • MInstP, Member, Institute of Physics (UK)
• MAICD, Member, Australian Institute of Company Directors
Karen has over 15 years’ experience working in multidisciplinary research and research
Paul has more than 30 years of commercial expertise in business development, marketing, and development management. After obtaining her PhD from Monash University in 2003
international commercialisation and market entry strategies. Paul’s previous executive roles in X-ray Physics, Karen’s post-doctoral work, as an Australian Synchrotron Research
include Group CEO of Icon Agency Group, Director of The Fuel Agency, and Vice President Program Fellow, explored the use of synchrotrons (highly intense x-ray sources) to studying
of R.L. Polk. He currently holds non-executive directorships with PTSD Australia/New cancers of the brain and breast. Subsequent research focused on synchrotron imaging for
Zealand and an Executive Directorship of the Communications firm Effectus Marketing understanding the origins and development of lung disease, in particular cystic fibrosis
Group. and asthma. Karen established multidisciplinary national and international research
collaborations and attracted significant research funding in support of these efforts. She also
Paul’s experience in management consulting, data analytics, software development and has a keen interest in enabling uptake of novel technologies, having worked in this capacity at
marketing is leveraged by the 4Dx executive team to help frame the Company’s global both Monash Biomedical Imaging and the Australian Synchrotron.
communications messaging and assist in the international market entry strategy.
As Vice President of Engineering at 4Dx, Karen now leads the Company’s research and
development teams, providing a structured management program for these highly technical
teams to enable performance on time and on budget.

Page 20 | 2. Company overview | 4Dx – Information Memorandum


R. AIDAN JAMISON MICHAEL CURTIS CHAMINDA RAJEEV SAMARAGE
Vice President of Technology Chief Software Architect Director of Research
• Master of Laws (MIPLaw), Intellectual Property Law – • PhD – Monash University • PhD – Monash University
Melbourne University • Bachelor of Mechatronics, Robotics and Automation • Bachelor of Engineering (Mechanical) – Monash
• PhD – Monash University Engineering – University of Canterbury University
• Bachelor of Engineering (Mechanical) – Monash
University Michael joined 4Dx in 2013. In addition to his core Rajeev brings to 4Dx substantial expertise in analysis of
• Registered Patent Attorney (Australia) expertise in software engineering, Michael also brings biological images, having developed methods to derive
• IPTA, Member, Institute of Patent and Trade Mark a breadth of knowledge in hardware (mechanical and quantitative measures of physiological force and motion in
Attorneys of Australia electronic design) to his role. After undergraduate studies cardiovascular, neurological and pulmonary systems. He
at the University of Canterbury, Michael obtained his PhD obtained his PhD in Biomedical Engineering from Monash
Aidan has 10 years’ experience in the biomedical research from Monash University, examining real time studies of cell University in 2016, and this work led to an Outstanding
and intellectual property sectors. He is a registered mechanics in a fluidic environment. Paper Award and a special editorial in the prestigious
patent attorney and completed his Masters of Intellectual journal Developmental Cell.
Property Law while finishing a PhD in Biomedical Michael leads 4Dx’s Software team which is responsible
Engineering. As an author on the first 4DxV journal for the development of the Company’s products to highly Rajeev leads 4Dx’s Research team, developing the
publications, and as a former employee of one of the largest regulated medical device standards. methodologies underlying the Company’s core products.
intellectual property firms in Australia, Aidan brings a As part of this role, Rajeev ensures 4Dx’s products are
wealth of experience to 4Dx. clinically relevant through clinical and preclinical studies.

As Commercialisation Manager, Aidan drives the


Company’s IP strategy with an in-depth knowledge of both
4Dx’s technology and the IP landscape. As Production
Manager, Aidan leads the Company’s production team to
develop and deliver high quality products to our customers.

4Dx – Information Memorandum | 2. Company overview | Page 21


2.5 INTELLECTUAL PROPERTY 4 Trapping and Analysing Cells 17. Australia, 2012245075, granted
4Dx has built a strong intellectual property (IP) portfolio across ten patent families, with This patent describes a device capable of 18. Australia, 2017201561, pending
measuring stiffness properties of individual 19. USA, 14/112,914, pending
filings made in eight. A granted patent confers exclusive rights to exploit, and to authorise cells accurately, rapidly, and without physical
other persons to exploit, the invention in respect of which it is granted, during the term of the contact. This device has the potential to deliver
impact research into the biomechanics of
patent, in a specific territory. cells. Commercial use of this technology is
confidential.
Eight national phase patents have been granted within our 4DxV core patent family,
5 Low Dose Scan 20. Australia, 2015246630, pending
including three in the USA. If all twelve applications within our core patent family are This patent describes a method for significantly 21. Australia, 2017101313, pending
successful this will provide exclusive rights to our technology in the USA, Japan, India, reducing the radiation delivered to a patient 22. USA, 15/300,367, pending
during a scan, in addition to enabling more
Europe (potentially all 28 member states), Australia, New Zealand, Canada and Singapore. efficient analysis by the 4DxV algorithm. 23. Europe, 1577984.7, pending
24. Japan, 100105924, pending
Across the other nine patent families a further two patents have been granted, seventeen
are pending, and two are at an advanced stage of development. Full details for all patents are 6 Pulmonary Vascular Imaging 25. PCT application (PCT/
This patent describes a method for imaging AUD2017/000054) with provisional
found in the table below. and quantifying the pulmonary vasculature. protection in all 189 WIPO states
Further details are confidential at this time.
As the 4Dx technology will be deployed through a SaaS business model, intellectual
7 Pulmonary Vascular Imaging 26. Provisional patent (US 62/464,540)
property, and more specifically patents, is a key asset to our business. with provisional protection in all 189
This patent describes a method for imaging
and quantifying the pulmonary vasculature. WIPO states
FAMILY DESCRIPTION JURISDICTIONS, PATENT NUMBER, Further details are confidential at this time.
STATUS
8 Tissue Tracking 27. Provisional patent (AU 2017900695)
1 4DxV (Core Patent) 1. Australia, 2010295229, granted This patent describes a method of quantifying with provisional protection in all 189
A new approach for the use of X-ray imaging 2. USA, 9,036,887, granted tissue motion. Further details are confidential WIPO states
to deliver 3D and 4D (time resolved 3D) 3. USA, 9,025,849, granted at this time.
measurement of motion and structure, based 4. USA, 9,370,334, granted
on the concepts of holography and computed 9 Novel Implementation 28. Patent under development
tomography. This system has direct application 5. NZ, 599301, granted
4Dx is currently developing a patent based on
to the respiratory and cardiovascular systems 6. Singapore, 2012018305, granted a substantive improvement to the core 4DxV
where it can deliver highly sensitive and 7. Japan, 2014-121569, granted algorithm. Further details are confidential at
highly accurate 3D and 4D (time resolved 3D) this time.
measures of function with significantly lower 8. Japan, 2012-529063, granted
doses than traditional CT. Such a system may 9. India, 3226/CHENP/2012 A, pending 10 Novel Implementation 29. Patent under development
have applicability across the full spectrum from 10. Canada, 2,790,588, pending
research using pre-clinical models, to clinical trials 4Dx is currently developing a patent based in
11. Europe, 10816486.2, pending the space of our planned second-generation
of respiratory medicines and full clinical use as a
tool for screening, diagnosis and surveillance. 12. Europe, 14159245.1, pending respiratory diagnostic product. Further details
are confidential at this time.
2 Dynamic Lung Imaging Forced Oscillation 13. USA, 15/190,728, pending
The invention allows conventional lung testing 14. Europe, 13777686.0, pending 4Dx classifies its IP portfolio against product lines through the concept of IP groups. At this
techniques such as the forced oscillation
test to be combined with 4Dx’s lung imaging time, 4Dx has grouped IP into four groups: either the product platform or to one of the three
technology to provide regional functional specific products in our product pipeline (see section 2.4).
measurements across the entire lung.
3 Heart Imaging 15. Australia, 2012323829, pending
IP GROUP CAPABILITY PRODUCTS PATENT FAMILIES
A method to utilise lung image data to gain an 16. USA, 9,576,354, granted
increased understanding of cardiac function. A Platform Platform (all) 1,5,9,10
Building on our 4DxV Core Patent, this patent
may make available (without the requirement B Ventilation RDx1 1,5
for additional diagnostics - and concomitant
cost and/or X-ray dose) significant imaging data C Airway-flow RDx 2 1,10
on cardiac function. The method uses direct
imaging of the lung to measure the motion D Vasculature RDx3 6,7
of the heart. This may allow for new insights
into the behaviour of the heart and lung as
intimately connected organs.

Page 22 | 2. Company overview | 4Dx – Information Memorandum


2.6 COMPETING TECHNOLOGY OVERVIEW being lung aeration9. Furthermore, CT scans pose an increased radiation
In this section, we detail competing technology in mainstream clinical risk to the patient10 , with radiation effects being more significant in
usage. There are a number of other technologies, such as Forced younger patients in comparison to older patients11.
Oscillation Technique (FOT), Electrical Impedance Tomography (EIT)
4DCT
and Multi Breath Washouts. However, none of those technologies
are reimbursed in major jurisdictions such as Australia1 and are not Four-dimensional computed tomography (4DCT) is a specialised
considered to be mainstream. variation of CT that captures multiple CT images to deliver a CT movie
allowing clinicians to observe organ motion. As a 4DCT is in effect
PHYSICAL EXAMINATION / STETHOSCOPE multiple CT’s, the radiation dose from this procedure can be a major 1. Medicare Benefits Schedule 2016,
concern12. Clinically, 4DCT is almost exclusively used in the planning of Commonwealth of Australia
Diagnosis of respiratory disease starts with a physical examination. A
radiation therapy. 2. Pasterkamp, H. et al. (1997) American
typical physical exam follows a sequence starting with an inspection that Journal of Respiratory and Critical Care
may reveal cyanosis (discoloration of the skin due to poor oxygenation Medicine, 156, 974-987
MAGNETIC RESONANCE IMAGING (MRI) 3. Gurney, J. W. (1998) Radiologic Clinics
of blood), finger clubbing (deformities in fingers associated with lung
Magnetic resonance imaging (MRI) relies on the use of magnetic field and of North America, 36, 15–27
disease, interstitial lung disease or COPD) or abnormal breathing
pulses of radio waves to excite hydrogen atoms in the body. This allows 4. Aurora, P. et al. (2005) American
patterns. The stethoscope is used to listen to the heart and lungs. Journal of Respiratory and Critical Care
However, due to limitations in the frequency range perceived by the the capture of images of regions abundant in hydrogen in the body such Medicine, 171, 249–256
human ear, the use of the stethoscope is better positioned at detecting as water and fat. As a result, anatomical regions low in water and fat such 5. Bansal, G. J. (2006) Postgraduate
as the lungs have been much more challenging to image13. Medical Journal, 82(969), 425-428
abnormal patterns in heart rhythm than lung respiration2.
6. Cardinale, L. et al. (2012) Journal of
Thoracic Disease, 4(4), 398-407
SPIROMETRY HYPERPOLARISED GAS MRI
7. Reske, A.W. et al. (2011) Critical Care,
Spirometry is currently the most widely utilised pulmonary function A specialised variation of MRI: hyperpolarised gas MRI; allows for 15(6): R279
test and it allows for measures such as forced expiratory volume in the visualisation of the distribution of inhaled hyperpolarised gases 8. Roberts, H.R. et al. (2000) Thorax, 55:
within the lung, enabling the assessment of lung ventilation. Currently, 198-204
1-second (FEV1) and forced vital capacity (FVC). These parameters aid in
hyperpolarised helium is most commonly used in research settings 9. Gattinoni, L. et al. (2001) American
differentiating between restrictive and obstructive respiratory diseases. Journal of Respiratory and Critical Care
While spirometry is widely accepted, spirometry measures provide no even though global quantities of helium are very limited and expensive. Medicine, 164: 1701-1711
structural information3, are effort dependent and insensitive to early Hyperpolarised MRI has the ability to assess regional lung function. 10. Brenner, D.J. and Hall, E.J. (2007) New
However, it is restricted to research applications at specialised centres14 England Journal of Medicine, 357(22):
disease or subtle changes4. 2277-2284
and requires the use of specialist technical hardware further increasing
11. Mayo, J.R. et al. (2003) Radiology, 228:
X-RAY IMAGING the costs involved15. 15-21
Initial assessment of many clinical indications begins with a chest X-ray 12. Matsuzaki, Y. et al. (2013) Journal of
POSITRON EMISSION TOMOGRAPHY (PET) Radiation Research, 54(5): 962-970
radiograph to differentiate between pulmonary or cardiac symptoms.
PET is a functional imaging modality that has gained interest for use 13. Coxson, H.O. et al. (2009) American
The chest X-ray is a widely available, inexpensive and relatively low Journal of Respiratory and Critical Care
dose tool to examine the lungs5. Chest X-ray is effective at ruling out in radiation diagnostics and radiation therapy treatment planning16. Medicine, 180: 588-597
major disorders, as it gives a quick visualisation of the lungs where PET uses a gamma detector to image and reconstruct a 3D image of 14. Biederer, J. et al. (2012) Insights
the gamma rays emitted by an introduced radionuclide. PET is useful Imaging, 3(4): 355-371
large anomalies can be detected and localised. However, chest X-rays
in radiation treatment planning as it detects the location of a tumour 15. Lilburn, D.M.L. et al. (2013) PLoS One,
provide a 2D flat image of the still lung and hence do not provide any 8(8): e73468
functional information. Furthermore, significant experience is required due to increased metabolic activity, which is detected by an increase in
16. Mac Manus, M.P. et al. (2012) Seminars
by a radiologist to interpret the image where abnormalities are hard to radionuclide uptake at the site. in Nuclear Medicine, 42(5): 308-19
detect6. 17. Chen, D.L. and Kinahan, P.E. (2010)
However, respiratory motion leads to blurring of the image and loss of Journal of Magnetic Resonance
signal17. Through the use of alternate positron-emitting radionuclide Imaging, 32(6): 1409-1420
COMPUTED TOMOGRAPHY (CT)
gases, PET has allowed for ventilation perfusion imaging18 resulting in 18. Harris, R.S. et al. (2006) American
CT provides structural information and experienced radiologists are Journal of Respiratory and Critical Care
improved diagnoses of pulmonary emboli. However, increased cost and Medicine, 174: 24553
capable of identifying regions of the lung that are poorly aerated7, as
increased radiobiological burden limit the use of PET in patients19. 19. Caldarella, C. et al. (2013) Cancer
well as airways affected by mucus plugging8. However, measures of lung Management and Research, 5: 123-
stiffness and ventilation are not directly available, with key surrogates 131

4Dx – Information Memorandum | 2. Company overview | Page 23


3. FINANCIAL
INFORMATION

Page 24 | 3. Financial information | 4Dx – Information Memorandum


3.1 FINANCIAL STATEMENTS 3.2 FINANCIAL FORECASTS
4Dx Limited is an Australian public unlisted company limited by shares, and is a disclosing This subsection includes simulated forecasts based on financial models that represent the
entity as defined by Section 111AC of the Corporations Act. Pursuant to the Corporations Company’s assumptions and expectations in light of currently available information. Section
Act, the Company must prepare half-yearly financial reports and directors’ reports, and 3.2.1 includes estimates of quarterly operating expenses by type. Section 3.2.2 provides
audited annual financial reports and directors’ reports. The Company is subject to Australian quarterly revenue forecasts EBITDA and corresponding cash positions. Section 3.2.3
Account Standards Board (AASB) Tier 1 reporting requirements. provides the 3 year cash flow analysis. Section 3.2.4 provides a sensitivity analysis based on
three distinct scenarios (conservative, base and optimistic).
The Company’s appointed auditor is PKF Melbourne. Ernst and Young provides the
Company with master tax services, including management accounting, and is appointed as
the Company’s virtual CFO.

The Company’s audited condensed financial report for half-year ended 31 December 2017,
consisting of the Company’s consolidated financial statements, Directors’ declarations, and
independent auditor’s review, which are set out in 4Dx FY18A Half-Year Financial Report, is
available for view in the 4Dx Series B Data Room.

4Dx – Information Memorandum | 3. Financial information | Page 25


3.2.1 USE OF FUNDS
All figures are in Australian Dollars (AUD)

QUARTERLY OPERATING COSTS

FY 18/19 FY 19/20 FY 20/21

Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21

Go To Market $446,207 $427,207 $649,207 $836,207 $985,411 $798,073 $970,823 $1,118,948 $1,125,035 $881,495 $1,106,070 $1,298,632
Operations $406,578 $516,468 $404,743 $412,643 $443,617 $543,887 $424,743 $412,643 $510,160 $625,470 $488,455 $474,540
Engineering $220,434 $230,616 $285,516 $284,516 $326,524 $321,784 $337,506 $323,366 $473,460 $466,587 $489,383 $468,880
Regulatory $87,318 $111,451 $126,111 $80,480 $87,318 $111,451 $126,111 $80,480 $104,781 $133,741 $151,333 $96,576
Research $405,264 $397,464 $433,964 $345,668 $693,677 $735,030 $647,099 $448,803 $728,729 $776,285 $675,163 $447,123
IP $96,030 $124,830 $104,630 $56,080 $96,030 $124,830 $104,630 $56,080 $144,045 $187,245 $156,945 $84,120
Production $122,675 $166,502 $145,450 $169,000 $167,675 $211,502 $190,450 $214,000 $368,025 $499,505 $436,350 $507,000

Total operating costs $1,784,506 $1,974,537 $2,149,620 $2,184,594 $2,800,253 $2,846,557 $2,801,361 $2,654,320 $3,454,235 $3,570,328 $3,503,699 $3,376,872

Total spend $1,784,506 $3,759,043 $5,908,663 $8,093,257 $10,893,510 $13,740,067 $16,541,428 $19,195,748 $22,649,983 $26,220,311 $29,724,010 $33,100,882

KEY
Go To Market Reimbursement, Market Intelligence, Marketing, Chanel Engagement, Clincial Engagement
Operations Operations, Finance, Board of Directors, Company Secreterial, Advisory, IT,Admin
Engineering Software Development, Engineering, Hardware Support
Regulatory Regulatory Advisors, Regulatory agents, Quality, Submission fees
Research Clinical studies and Trials, Research, Clinical Research Organisations, Conferences
IP Patents and Trademarks
Production Platform, Cloud Infrastructure, Data Security

AUD to USD conversion rate: $0.75

Page 26 | 3. Financial information | 4Dx – Information Memorandum


3.2.2 REVENUE FORECASTS
All figures are in Australian Dollars (AUD)

QUARTERLY REVENUES

FY 18/19 FY 19/20 FY 20/21

Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21

Hardware - $1,533,333 $766,667 $40,000 $40,000 $846,667 $806,667 $40,000 $766,667 $1,693,333 $846,667 $40,000
Software $26,667 $146,667 $369,333 $690,000 $1,353,333 $2,110,667 $3,998,667 $6,088,000 $9,924,000 $14,481,333 $22,302,667 $31,109,333
Grants $1,200,000 $125,000 - - $1,400,000 $283,333 $300,000 $250,000 $1,850,000 $250,000 $250,000 $250,000
Gross revenue $1,226,667 $1,805,000 $1,136,000 $730,000 $2,793,333 $3,240,667 $5,105,333 $6,378,000 $12,540,667 $16,424,667 $23,399,333 $31,399,333

Cost of revenue $10,400 $1,058,200 $629,340 $249,350 $404,500 $1,162,060 $1,616,380 $1,771,520 $3,281,860 $5,316,420 $6,566,340 $8,575,440
Net revenue $1,216,267 $746,800 $506,660 $480,650 $2,388,833 $2,078,607 $3,488,953 $4,606,480 $9,258,807 $11,108,247 $16,832,993 $22,823,893

QUARTERLY OPERATING COSTS

Operating costs $1,784,506 $1,974,537 $2,149,620 $2,184,594 $2,800,253 $2,846,557 $2,801,361 $2,654,320 $3,454,235 $3,570,328 $3,503,699 $3,376,872

QUARTERLY EBITDA

EBITDA -$568,239 -$1,227,737 -$1,642,960 -$1,703,944 -$411,420 -$767,950 $687,592 $1,952,160 $5,804,572 $7,537,919 $13,329,294 $19,447,022

QUARTERLY CASH POSITION

Cash position $431,761 -$795,976 -$2,438,937 -$4,142,880 -$4,554,300 -$5,322,250 -$4,634,658 -$2,682,498 $3,122,074 $10,659,992 $23,989,286 $43,436,308

*Note: Cost of revenue relates to costs that are only incurred as a result of successful sales (e.g. on-demand computing resources, additional human resources, etc.). Net revenue therefore is the total of the revenue from SaaS clinical, SaaS B2B, Hardware and
Grants, less Cost of revenue.

4Dx – Information Memorandum | 3. Financial information | Page 27


3.2.3 CASH FLOW ANALYSIS 3 YEARS
BASE CASE

Cash at end of period


AUD$50 Million

The cash shortfall of the plan laid


out in this IM is just in excess of
AUD$5 Million. 4Dx intends to AUD$40 Million
conduct one further Pre-IPO capital
raising in late 2019 prior to becoming
Cash flow positive.
AUD$30 Million

AUD$20 Million

AUD$10Million

AUD$0 Million

AUD-$10 Million

FY 18/19 FY 19/20 FY 21/21

Page 28 | 3. Financial information | 4Dx – Information Memorandum


3.2.4 SENSITIVITY ANALYSIS
SUMMARY OF FINANCIAL FORECASTS

Sensitivity Analysis AUD$100 Million

- Gross Revenue
AUD$90 Million

Base Case
AUD$80 Million
Key Assumptions
The base case financials are based on 4Dx
gaining certain clearances from the FDA.
AUD$70 Million
The Directors have been working with our
regulatory agent to a timeline that suggests
they will submit for FDA clearance in 2018.
AUD$60 Million
Optimistic Case
Key Assumptions
The Directors believe that an Optimistic AUD$50 Million
Case scenario is based on a 30% increase
in the rate of hospital adoption of the
technology. The increased number of AUD$40 Million
hospitals drives higher SaaS revenues and
market penetration. This increased hospital
take-up results in a 18% increase in the
Year 3 Gross revenue from AUD AUD$30 Million
$31,399,333 to AUD $38,296,333.

Conservative Case AUD$20 Million


Key Assumptions
The Directors believe that a Conservative
Case scenario is based on a 30% decrease AUD$10 Million
in the rate of hospital adoption of the
Technology. This decreased hospital take-up
results in a 15 % decrease in Year 3 Gross
AUDS$0m
revenue from AUD $31,399,333 to
AUD $25,745,333

FY 18/19 FY 19/20 FY 20/21

4Dx – Information Memorandum | 3. Financial information | Page 29


4. RISKS INVOLVED
WITH INVESTMENT

Page 30 | 4. Risks involved with investment | 4Dx – Information Memorandum


4. RISKS INVOLVED WITH INVESTMENT

4.1 INTRODUCTION
Because the Company commenced operations in July 2013 and has not as yet reached break-
even or profit, investment in this Round should be considered speculative. In addition, as 4Dx
is not listed on any share exchange at present, there is no secondary market for the sale of
Shares. If you do not know the effect of this on your investment strategy, you should consult
your professional advisors for advice. Further, your ability to sell your Shares is not regulated
under specific provisions of 4Dx’s constitution (see clause 67 of the Company’s constitution).

You should carefully consider the risks involved in acquiring the Shares, including those risks
described below and all of the other information set out in this IM before deciding to invest in
the Company. If any of the events or developments described below occurs, the Company’s
business, financial condition or operations could be negatively impacted. In that case, the
value of the Shares could decline, and you could lose all or part of your investment. As with
any equity investment, substantial fluctuations in the value of that investment may and often
do occur.

This section, which is not exhaustive of all risks, identifies the risks that the Directors
regard as the major risks associated with the Company’s business, the industry in which
it operates and the risks associated with an investment in the Shares. You should read the
entire IM (with particular emphasis on this section) in order to fully appreciate the risks of an
investment in the Company and the manner in which the Company intends to operate before
any decision is made to subscribe for the Shares.

If you are considering an investment in the Company, you are also strongly advised to consider
whether the Shares are a suitable investment having regard to your personal investment
objectives and financial circumstances (and the risk factors set out in this section). If you
are in any doubt about the suitability of an investment in the Company, you should obtain
professional investment advice before making an application under this Round.

4Dx – Information Memorandum | 4. Risks involved with investment | Page 31


4.2 COMPANY RISKS
Risks specific to the Company’s business and industry in which it operates:
TYPE OF RISK DESCRIPTION OF RISK

Barrier to entry Key players in the medical imaging sector may attempt to block 4Dx from market penetration. As a SaaS cloud supplier, the key pathways for blocking (distribution, maintenance) are significantly
ameliorated. Furthermore, the 4Dx business strategy offers significant opportunities for one or more key players in the medical imaging industry to form special partnerships with 4Dx (e.g. for
an established manufacturer to manufacture dedicated 4Dx hardware under license). These partners will be selected (in part) for their capacity to grant 4Dx access to the market.

Regulatory Risk There is a risk that the relevant regulatory bodies (primarily the FDA in the US) will not grant 4Dx regulatory clearance to market its products, or will significantly delay the grant of such
clearances. Failure to receive regulatory clearance will have a negative impact on 4Dx’s future revenue streams, however the Company has developed significant market opportunities that do
not require regulatory clearance e.g. research products to the research sector and contract research services to the pharmaceutical sector.

Technology Supplier Risk As a SaaS product supplier, there is a risk that 4Dx’s cloud delivery partner could breach the delivery agreement and/or other relevant contractual arrangement. As the developer and owner
of the SaaS product, 4Dx is in a position to replace cloud suppliers at short notice. Alternate suppliers in the SaaS sector are well placed to rapidly and elastically scale to support demand with
minimal disruption to customers due to the change of cloud supplier.

Political Risk The legislative frameworks in key countries may vary without notice impacting the Company, in particular its operations and profitability.

Foreign- Exchange Risk 4Dx’s financial position might be negatively affected by exchange rate fluctuations. In particular, the majority of Company costs are Australian dollar denominated relating to Research &
Development staff based in Melbourne, whereas initial Company revenues are expected to be substantially all US dollar denominated. As a result, a weaker (stronger) US dollar versus the
Australian dollar will have a negative (positive) affect on the Company’s profitability.

Risk of Superseding This is the risk that new technology will be developed that will supersede 4Dx technology. 4DxV technology supersedes the pulmonary function test (invented in the 1850s), the X-ray (invented
Technology 1890s) and the CT (invented 1970s). In short, pulmonary diagnostic modalities are devised very infrequently. Additionally, new technologies have significant development and commercialisation
timelines.
In addition to the 20 years of monopoly rights granted by our extensive patent portfolio, 4Dx will continue to invest heavily in R&D to provide the greatest possible likelihood that any technology
that supersedes the current offering is developed by 4Dx and not our competition.

Key Man Risk This risk relates to an over-reliance on one or a few individuals, but in particular, 4Dx’s founder and CEO Andreas Fouras. In addition to key man insurance for the CEO, 4Dx internal management
and HR policies and procedures involve significant communication of company planning over all timeline horizons along with a structured succession plan for executive and other senior level
roles within the Company.

Intellectual Property 4Dx has developed and owns a range of proprietary items of intellectual property that the Company believes are novel and inventive. The granting of a patent does not guarantee that the rights
of others are not infringed or that competitors will not develop technology to avoid the patented technology, or that a competing company does not infringe on our patents.

Page 32 | 4. Risks involved with investment | 4Dx – Information Memorandum


4.3 INVESTMENT SPECIFIC RISKS
General risks associated with an investment in the Company are:

TYPE OF RISK DESCRIPTION OF RISK

Income and capital risk An investment in the Company is speculative in nature and any returns on capital contributed are not guaranteed by the Company, its Directors, officers or any other person. The speculative
nature of the investment poses a risk that capital may not be returned to investors. The value of investments may fluctuate and the investor may not get back the amount initially invested.

The Company cannot make any assurances in relation to its ability to obtain appropriate capital or funding, if or when, needed in the future. If the Company is not able to obtain funding as
needed, this could have a material adverse effect on the Company’s business operations and the commercialisation of its products, and may affect its ability to continue as a going concern.

Liquidity risk As Shares in the Company are not listed on any stock exchange, there is currently no liquid market for the Shares. Furthermore, the trading of Shares is also limited by the Company’s
Constitution (see section 5.5 for more details). Because there is a limited secondary market for the Shares, it might not be possible to sell the Shares at the prevailing price or at all. Therefore an
investment in the Company is only suitable for investors with a long-term investment horizon.

Dilution The Company may need to raise additional funds through a further capital raising or debt facility at some time in the future, after the capital raising being undertaken under the IM is completed.
Any such further capital raising is likely to have the effect of diluting the interests of Shareholders.

Litigation In the ordinary course of its business, the Company may be subject to the risk of litigation and other disputes with its employees, consultants, lessors, regulators and other third parties.
Proceedings may result in high legal costs, adverse monetary judgments and/or damage to the Company’s reputation, which ultimately is likely to have an adverse effect on the financial
performance of the Company.

General economic risks The performance of the Company, like all companies, is subject to general economic conditions. Movements in economic growth rates, interest and inflation rates, and currency exchange rates
may have an adverse effect on the Company’s activities, as well as its ability to fund those activities.

No minimum subscription There is no minimum subscription under this Round. Accordingly, the Company does not make any representation that the funds raised under this Round made in this IM will be sufficient to
achieve the objectives set out in clause 1.3.

Any funds raised under this Round will be pooled with funds being raised concurrently from retail investors, as well as grant applications and product sales in order to provide the working capital
required to fund 4Dx’s core operations and capital expenditure.

4Dx – Information Memorandum | 4. Risks involved with investment | Page 33


5. ADDITIONAL
INFORMATION

Page 34 | 5. Additional information | 4Dx – Information Memorandum


5. ADDITIONAL INFORMATION

5.1 CONSENTS AND DISCLAIMERS OF RESPONSIBILITY 5.5 LOW-VOLUME FINANCIAL MARKET


Each of the Directors has given, and has not withdrawn, their consent to the issue of both 4Dx is an unlisted public company, and its shares are not listed on any licensed market or
paper and electronic form in this IM. exchange, including the Australian Securities Exchange. 4Dx has sought legal advice about
potentially operating a low-volume financial market (LVFM) and amended the Company’s
5.2 DIRECTOR SHAREHOLDINGS constitution on 11 May 2017 to allow for the operation of a LVFM. If implemented, an LVFM
would provide 4Dx members with a platform of limited and conditional liquidity for their
As at the date of this IM, the Directors (either personally or through related companies or
shares.
trusts) hold the following shareholdings in the Company:
Subject to board approval, if 4Dx elects to operate a LVFM, 4Dx will be required to make
DIRECTOR SHAREHOLDING an application to ASIC, under which it will need to demonstrate that it can comply with
Andreas Fouras 64,838,000 ordinary shares the conditions set out in the Corporations (Low Volume Financial Markets) Instrument
Heath Lee 2,200,000 ordinary shares 2016/888.

Julian Sutton 640,000 ordinary shares At the date of this document, 4Dx has not applied to ASIC to operate a LVFM, and makes no
John Livingston 370,272 ordinary shares representations that it will operate a LVFM in the future.
Robert Figlin 244,162 ordinary shares
Lusia Guthrie 65,000 ordinary shares 5.6 RIGHTS AND LIABILITIES ATTACHING TO SHARES
Full details of the rights and liabilities attaching to Shares are set out in the Company’s
5.3 TAKEOVER PROVISIONS OF THE CORPORATIONS ACT APPLY constitution. The Company’s constitution has been lodged with ASIC. Any person may
request a copy of the constitution during the Fundraising Period, which the Company will
As the Company has more than 50 members, the takeover provisions of the Corporations
provide free of charge.
Act (Chapter 6) apply to the Company and to the acquisition of relevant interests in shares in
the Company. The following is a summary of the more significant rights and liabilities attaching to the
Shares. This summary is not exhaustive and does not constitute a definitive statement of the
In the context of this Round, no Shares will be issued to an Applicant if the issue of
rights and liabilities of shareholders. As the Shares are ordinary shares, the Shares have the
those Shares would result in any person (and its associates, as that term is defined in the
same rights and liabilities as all other ordinary shares. Therefore, unless specified otherwise
Corporations Act) acquiring an interest in greater than 20% of the issued voting shares
below, reference to “ordinary shares” shall include Shares issued under this IM.
of the Company, unless that person (and its associates) is permitted to do so under the
Corporations Act. (A) GENERAL MEETINGS
Shareholders are entitled to be present in person, or by proxy, attorney or representative to
5.4 CONTINUOUS DISCLOSURE APPLIES attend and vote at general meetings of the Company.
As at the date of this IM, the Company is a “disclosing entity” under the Corporations Act,
and is therefore subject to regular reporting and disclosure obligations.

4Dx – Information Memorandum | 5. Additional information | Page 35


(B) VOTING RIGHTS i) if the number of shares or securities to be transferred is below a threshold number
Subject to any rights or restrictions for the time being attached to any class or classes of calculated in accordance with the Company’s constitution, where the proposed
shares, at general meetings of shareholders or classes of shareholders: transferee is a shareholder of the Company, or an affiliate of a shareholder; and
i) each shareholder entitled to vote may vote in person or by proxy, attorney or ii) in any circumstances where the proposed transferee is not a shareholder of the
representative; Company, or an affiliate of an existing shareholder.
ii) on a show of hands, every person present who is a shareholder or a proxy, attorney or
Nothing in this section limits the directors from transferring to a deceased member’s legal
representative of a shareholder has one vote; and
representative, as outlined above.
iii) on a poll, every person present who is a shareholder or a proxy, attorney or
representative of a shareholder shall, in respect of each fully paid share held by him, LOW VOLUME FINANCIAL MARKET
or in respect of which he is appointed a proxy, attorney or representative, have one Subject to receipt of the Board’s approval and ASIC’s approval, in circumstances where the
vote for each fully paid share held. Company elects to operate an LVFM in the future, the Board may be permitted in its absolute
discretion to establish rules in respect of which a share or security may be transferred, sold
(C) MAJOR SHAREHOLDERS’ RESOLUTIONS or disposed of on the LVFM. At the date of this document, 4Dx has not applied to ASIC to
A Major Shareholders’ Resolution is required before the Company can undertake any of the operate a LVFM and makes no representations that it will operate a LVFM in the future.
following activities:
i) variation of rights to shares and securities; TAG-ALONG RIGHTS
If a shareholder wishes to sell 20% or more of all shares and does not wish to exercise a
ii) amending or repealing the Company’s constitution;
“drag-along” right, then each other shareholder may exercise a “tag-along” right to require
iii) divesting itself of all or a material part of its business or its assets or of any material the seller shareholder to cause the purchaser of its shares to also buy some or all of their
shareholding either by a single event or by two or more events within any 6-month securities at the same price as notified by the seller shareholder.
period;
iv) to voluntarily liquidate, wind up or merge its operations; or DRAG-ALONG RIGHTS
If a shareholder who holds 75% or more of all securities in the Company wishes to sell all of
v) take any action or on any other matter specified in the Company’s constitution to
its securities, then the seller shareholder has the right to require all other shareholders also
require a Major Shareholders’ Resolution.
to sell all their securities to the proposed purchaser on the same terms.
(D) DISPOSAL OF SHARES
(E) DIVIDEND RIGHTS
INTRODUCTION
Subject to the rights of any preference shareholders and to the rights of the holders of any
Subject to certain conditions in the Company’s constitution (in particular, the provisions
shares created or raised under special arrangement as to dividend, the Directors may from
below) a shareholder may transfer all or any of its shares as they see fit. The Directors
time to time declare a dividend to be paid to the shareholders entitled to the dividend.
may not refuse to register a transfer of shares, except where the Company’s constitution
expressly permits the directors to refuse to register the transfer. Dividends shall be payable on all shares according to the proportion that the amount paid
(not credited) is of the total amounts paid and payable (excluding amounts credited) in
LEGAL PERSONAL REPRESENTATIVES
respect of such Shares.
Directors are required to register a transfer or transmission of shares to the legal personal
representative of a deceased shareholder where the transferee is a member of the family Unless otherwise specified in the decision to pay a dividend, all dividends are payable to
of the deceased or an associate of the deceased, and is entitled to those shares under the shareholders on the register on the date fixed for payment.
deceased’s will, or at law.

RESTRICTIONS ON DISPOSAL
A shareholder must not dispose of shares or securities without the prior approval of the
directors in the following circumstances:

Page 36 | 5. Additional information | 4Dx – Information Memorandum


(F) WINDING UP 5.7 MISCELLANEOUS
If the Company is wound up, the holders of ordinary shares have the right to participate in (A) DIRECTORS
the division of any surplus assets or profits of the Company in proportion to the number of The number of directors must not be less than 1 nor more than 9. A share qualification
ordinary shares held, irrespective of the amount paid or credited as paid on those shares for directors may be fixed by the Company in general meeting. Unless and until so fixed, a
(except that, in the case of any shares that were partly paid up at the commencement of director is not required to hold any share in the Company.
the winding up, that the amount required to be paid to make them fully paid must first be
contributed to the Company). The Company in general meeting may by resolution, and the Directors may at any time,
appoint a person qualified to be a director.
(G) SHAREHOLDER LIABILITY
As the Shares issued will be fully paid shares, they will not be subject to any calls for money A director holds office until the occurrence of any of the following:
by the Directors and will therefore not become liable for forfeiture.
i) the shareholders, by resolution, remove the director;
(H) FUTURE INCREASE IN CAPITAL ii) shareholders holding shares which give them the right to a majority of votes at a
The issue of any new Shares is under the control of the Directors. Subject to any restrictions general meeting, removes the director by instrument in writing
on the issue or grant of securities contained in the Corporations Act (and without affecting iii) the director resigns; or
any special right previously conferred on the holder of an existing share or class of shares), iv) the director vacates his/her office as required under the Corporations Act or is
the Directors may issue Shares as they shall, in their absolute discretion, determine. deemed to have vacated his/her office in a range of circumstances specified in the
Company’s constitution.
(I) VARIATION OF RIGHTS
Under the Corporations Act, the Company may, with the sanction of a special resolution (B) EMPLOYEE EQUITY PLAN
passed at a meeting of the shareholders vary or abrogate the rights attaching to shares. The Company adopted an employee equity plan at a general meeting held on 28 October
Rights attached to shares in a class of shares may be varied or cancelled only by a special 2016 (EEP).
resolution of shareholders together with either a special resolution passed at a meeting of
the shareholders holding shares in that class, or with the written consent of shareholders Under the EEP, the Board may invite employees to participate in a grant of rights or options.
with at least 75% of votes in that class. Rights eventuate from employee performance whereas options are an entitlement to receive
a share. These rights and options entitle the beneficiary a right or option to acquire ordinary
shares in 4DX subject to certain performance and service related conditions determined by
the Board and, in the case of options, payment of the applicable exercise price.

The Board may make one or more of the below three offers to an employee under the EEP:
1. Salary Sacrifice Offer: under this offer employee may sacrifice a portion of their income
to purchase rights to shares (salary sacrifice rights). The purchase price of each salary
sacrifice right will set at a discounted rate on the market value of a share.
2. Special Award: The special awards offer is intended to be offered to employees
selected by the Board, in recognition of their ongoing performance and service to the
Company to deliver a portion of their short-term incentive in equity. Under the special
awards offer, participants will be granted rights to acquire shares.
3. Long Term Incentive Offer: The long-term incentive offer is intended to be offered
to employees selected by the Board, to provide an incentive and reward for meeting
certain performance conditions. Under the long-term incentive offer, participants will
be granted options to acquire shares.

4Dx – Information Memorandum | 5. Additional information | Page 37


Participants
Awards may be granted at the discretion of the Board to any person who is an employee
(including any executive director) of the Company (or any group entity), or any other person
so designated by the Board.

Vesting and exercise of rights/options


The rights/options held by an employee will vest in and become exercisable by that employee
upon the satisfaction of any vesting conditions specified in the invitation and in accordance
with the rules of the EEP. Awards will only vest once the Board, in its discretion, determines
any relevant conditions have been satisfied.

Rights/options on issue
As at the release of this IM, the following rights/options have been granted by the Company
(but not yet exercised):

TYPE QUANTITY
Vested options 18,000,241
Granted options 984,646
Vested rights 1,613,117
Granted rights 2,626,884

(C) ALTERATION OF CONSTITUTION

In accordance with the Corporations Act, the Company’s constitution can only be amended
by a special resolution passed by at least three quarters of shareholders present and entitled
to vote at the general meeting.

Page 38 | 5. Additional information | 4Dx – Information Memorandum


6. GLOSSARY

4Dx – Information Memorandum | 6. Glossary | Page 39


6. GLOSSARY

TERM DEFINITION
4DxV 4DxV is the core technology behind 4Dx’s product platform. The patented technology allows the measurement of lung motion in 4D.
Applicant A person who makes an Application for Shares under this IM.
Application An application to subscribe for Shares under this IM.
Application Monies The relevant Subscription Amount accompanying an application form submitted by an Applicant.
ASIC Australian Securities and Investments Commission.
Board The board of directors of the Company.
Company 4Dx Limited ACN 161 684 831.
Corporations Act Corporations Act 2001 (Cth) as amended from time to time.
Directors The directors of the Company, as disclosed on page 20 & 21.
EEP Any employee share option plan established by the Company.
Exit An IPO, trade sale or other sale, transfer or exchange of all or substantially all of the shares (including a share swap), a sale of substantially all of the assets of the
Company or a return of capital by the Company.
FDA The U.S federal agency responsible for monitoring trading and safety standards in the food and drug industries.
Fundraising Period The period during which investors may subscribe for Shares under this Round.
IM (Information Memorandum) This document (including the electronic copy of this IM) and any supplementary or replacement IM in relation to this document.
LVFM Low Volume Financial Market under the Corporations (Low Volume Financial Markets) Instrument 2016/288 from time to time.
Major Directors’ Resolution A directors’ resolution passed by a majority representing not less than 75% of all votes capable of being cast at a meeting of directors (as if that meeting was attended
by all directors).
Major Shareholders’ Resolution A resolution of shareholders of the Company passed by such number of shareholders voting in favour of the resolution that hold at least 75% of the number of shares
in the Company then on issue at the date of the resolution.
Patent A patent confers exclusive rights to exploit, and to authorise other persons to exploit, the invention in respect of which it is granted, during the term of the patent, in
a specific territory.
RDx (shorthand for Respiratory Diagnostics) is the designation of 4Dx products in the Respiratory Diagnostics sector. This line specifically relates to the measurement of
regional lung function (in 4D) for the diagnosis of lung disease and the monitoring on lung health.
Round The offer of 13,500,000 Shares under this Series B fundraising round.
(SaaS) Software-as-a-Service A software licensing model in which access to the software is provided on a subscription basis, with the software being located on external (cloud) servers rather
than on servers located in-house.
Share A fully paid ordinary share in the capital of the Company.
Shareholder A person registered from time to time on the Company’s register as a holder of one or more Shares.
Subscription Amount The amount of money payable by an Applicant for Shares.

Page 40 | 6. Glossary | 4Dx – Information Memorandum


7. CORPORATE
DIRECTORY

4Dx – Information Memorandum | 7. Corporate directory | Page 41


7. CORPORATE DIRECTORY

4DX LIMITED LEGAL


ACN 161 684 831 Norton Rose Fulbright
485 Bourke Street
REGISTERED OFFICE Melbourne VIC 3000, Australia

Level 5, 468 St Kilda Road, Ernst & Young


Melbourne 3004, Australia 8 Exhibition Street
Melbourne VIC 3000, Australia

PRINCIPAL PLACE OF BUSINESS


AUDITOR
Level 5, 468 St Kilda Road
Melbourne VIC 3004, Australia PKF Melbourne Pty Ltd
Audit & Assurance
Level 12, 440 Collins Street
WEBSITE
Melbourne VIC 3000, Australia
www.4Dx.com
SHARE REGISTRY
DIRECTORS
Link Market Services Limited
Andreas Fouras Chair Level 1, 333 Collins Street
Heath Lee Non-Executive Director Melbourne VIC 3000, Australia
Robert Figlin Non-Executive Director
Lusia Guthrie Non-Executive Director
John Livingston Non-Executive Director
Julian Sutton Non-Executive Director

COMPANY SECRETARY
Charlene Stahr

VIRTUAL CFO AND ACCOUNTING


Ernst & Young
8 Exhibition Street
Melbourne VIC 3000, Australia

Page 42 | 7. Corporate directory | 4Dx – Information Memorandum

You might also like