PainChek : Quarterly Update and Appendix 4C

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ASX ANNOUNCEMENT 28 JANUARY 2022

31 December 2021 Quarterly Update and Appendix 4C

PainChek Adult App positive progress in Australian market implementation and overseas market sales expansion, Infant App uniquely positioned for new global market opportunity

PainChek Ltd (ASX: PCK) ("PainChek" or "the Company"), developer of the world's first smart phone-based pain assessment and monitoring application, is pleased to report the strengthening of its core business with continued transition of clients onto commercial terms, as well as expansion into new markets, during the quarter ended 31 December 2021. This document provides a summary of the quarterly performance and the 4C. Investors should refer to the posted PowerPoint quarterly presentation for additional information.

Core Residential Aged Care (RAC) Market

• RAC market penetration goals continue to be achieved: There are 125,167 approved beds contracted under annual PainChek® license across 1509 RAC facilities as at 31 December 2021, representing 80% and 64% growth respectively over the previous year and ~60% domestic RAC market share. Over 50% of the contracted clients have been implemented and are using PainChek in their clinical pain assessments.
• Annualised Recurring Revenue (ARR): Projected ARR from current customers (normalised post government trial) has increased 87% for the year to $5.73M. Australian customers who contracted under the government grant received a 12-month funded trial of the PainChek® application. There are now commercial paying customers with ARR of $1M after transitioning off the Australian government grant after their first 12 months. Clients representing 75% of contracted beds have entered into agreements that have second year commercial terms post completion of the government grant period. Normalised ARR is post completion of the government grant reflecting contracted or standard pricing on completion of the trial. It assumes all clients fully implement the PainChek App and enter a standard PainChek contract after the initial 12-month grant period.
• PainChek utility continues significant growth in line with implemented beds: More than 850,000 PainChek clinical assessments have been conducted in aged care as of 31 December 2021, an increase of 224% over the previous year and 31% over the prior quarter, reflecting strong clinical utility and continued implementation progress within Australian RAC Facilities.
• RAC Implementation and User Training successfully delivered remotely during COVID pandemic: The PainChek clinical team has continued to use the PainChek digital capability to deliver training remotely, through the COVID-19 restrictions that have been in place, supplementing the PainChek online learning curriculum. Over 8,000 users have been trained, with over 1,700 during the December quarter. While the recent COVID-19 outbreaks in Aged Care have delayed some implementations, the team has scheduled training for the majority of the outstanding contracted clients during the remainder of FY'22 to maintain the client transition to standard PainChek contracts post the government paid period.

ABN 21 146 035 127	P: [phone]
401, 35 Lime Street,	E: [e-mail]	PainChek Limited (ASX: PCK) | PG 1
Sydney, NSW, 2000	W: painchek.com

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Broadening Adult App Markets

• UK RAC progress extends into Scotland, Wales and Ireland: New agreements with Care South provides a strong growth platform opportunity (up to 1,700 beds), while Scottish and Welsh market pilot opportunities and new opportunities with Care UK and Hansdale are part of a rapidly growing pipeline building on our current direct sales base. PainChek is now integrated with four major CMS partners, Person Centred Software, Access Health, Nourish, Care Vision and VCare in Ireland. This provides a strong growth potential as these partners have more than 175,000 aged care bed coverage in UK and Ireland.
• New Zealand: Summerset Care, the third largest RAC provider in New Zealand has confirmed a successful pilot completion. There is an agreement in principle to expand the agreement across its full 1200 NZ-based aged care beds with the contract scheduled to be completed in February 2022 for roll out prior to end FY22.
• Home care - fully integrated pain management partnership: PainChek announced entry into the Australian Home Care market, establishing a first direct sale into Home Care and an integrated medication and pain management solution, in partnership with Sigma Healthcare subsidiary MPS Connect. The MPS Connect MediSphere™ Electronic Medication Management (EMM) System is the first EMM to fully integrate with the PainChek Universal App to provide full pain management, monitoring effectiveness for pain relief. The first MPS led commercial sale was achieved in January 2022 with Forest Lake Lodge Aged Care in Brisbane, and Home Care sales are projected to commence in Q1 CY2022. MPS Connect currently services over 800 preferred pharmacy clients and 1400 RAC facilities, and we are planning a joint promotional roadshow to all major clients in Q1 CY2022.
• Hospital and Disability markets continue to progress: Clinical studies continue at Ramsay Hospital Research Foundation to introduce PainChek® Universal as standard care in the geriatric and rehabilitation wards at the hospital. PainChek Universal continues in clinical use with the Nulsen Disability group in Western Australia and a commercial agreement is being finalised prior to a broader launch into the NDIS community.

Strategic New Product and Global Market Entries

PainChek Infant unique global market opportunity with COVID-19 Infant Vaccination programme: PainChek Infant is the world's first automated procedural pain assessment tool for infants. It has been designed for use by both healthcare professionals and home consumers such as parents. Initial market entry in post vaccination and post- surgical intervention is in progress with local healthcare professionals and Australian government. PainChek Infant has received multiple market regulatory clearances including Australian TGA and CE Mark (Europe) and the clinical study has now been published in Lancet Digital Health.

The COVID-19 vaccination programme continues to shift to the younger age groups, with the COVID-19 Infant (1 month to 1 year of age) programme scheduled to commence globally in Q2 2022. With the infant population, there are likely to be additional documented issues that may impact achieving the 90%+ vaccination target, including:

• Parental risk aversion: While adult parents are more open to be self-vaccinated, it is likely they will be more hesitant with their young children.

ABN 21 146 035 127	P: [phone]
401, 35 Lime Street,	E: [e-mail]	PainChek Limited (ASX: PCK) | PG 2
Sydney, NSW, 2000	W: painchek.com

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• Infant vaccination programme: Infants can receive up to 5 different vaccinations in their first year of life and in countries such as Australia over 95% of infants are vaccinated annually. The addition of the COVID- 19 vaccine may result in increased additional adverse reactions and the need to understand and manage these effects, including pain.
• Infants cannot self-report their pain and may experience higher rates of pain: Assessing and documenting pain with an objective measure for infants is a current gap in the global roll out plan and an important measure of adverse effects reporting within the Covid-19 and other future vaccination programmes.

PainChek has proposed to work with governments and the healthcare community as the vaccine programme extends to the younger groups. The PainChek Infant App is available to support the provision of better post- vaccine care for infants by generating medication safety data about the incidence, intensity and duration of post- immunisation pain, addressing parental satisfaction with post-immunisations pain management and minimising parents' level of immunisation hesitancy. Good pain management can also see a reduction in hospital and doctor office visits post-vaccination.

USA - FDA regulatory clearance progress with Adult and Infant Apps: The Company submitted the pre- submission supplement in Q4 CY2021, with FDA response is expected end of Q1 CY2022. The Company is progressing a potential application for the PainChek Infant App to be registered in the US as a Clinical Decision Support device to support the US-basedCOVID-19 infant vaccination roll out plan. In the meantime, PainChek already has TGA, CE Mark, HSA Singapore and Health Canada clearances that covers approximately 40% of the global market for the Adult and Infant App. With FDA clearance the Company will effectively have access to more than 70% of the global medical device market.

Cashflow

• Cash balance: PainChek's consolidated cash balance at 31 December 2021 was $6.5M.
• A one-off payment of $1,321,059 for a payroll tax assessment relating to 2017 was included in the quarter. PainChek is currently objecting to the assessment. Excluding this one-off adjustment, PainChek has cash reserves for three quarters based on current activities.
• In accordance with ASX Listing Rule 4.7C.3, the amount of $103,000 stated in section 6.1 of the Appendix 4C paid to related parties and their associates related to director fees and salaries for the quarter.

Investor Presentation Webinar

PainChek will hold an investor webinar & Q&A for all shareholders and interested parties at 11am AEDT on Monday 31 January 2022. Managing Director and CEO Philip Daffas will discuss recent business updates and progress during the webinar.

Please register for the webinar at:https://us02web.zoom.us/webinar/register/WN_lfK7wgcsR8-kFCZ6-qf_cw

After registering, you will receive a confirmation email containing information about joining the webinar as well

ABN 21 146 035 127	P: [phone]
401, 35 Lime Street,	E: [e-mail]	PainChek Limited (ASX: PCK) | PG 3
Sydney, NSW, 2000	W: painchek.com

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as dial-in details for those that would prefer to join by phone.

For the Q&A session, investors are invited to send questions prior to the webinar to [e-mail]

Please note a replay of the webinar will be available at the above-mentioned Zoom link shortly following the conclusion of the live session.

This announcement has been approved for release by the Board.

For more information:
Sally McDow	Philip Daffas
Company Secretary, PainChek	CEO, PainChek
[e-mail]	[e-mail]
0420 213 035	0406 537 235

About PainChek®

PainChek® Ltd is an Australian based company that develops pain assessment technologies.

PainChek® is a smart phone based medical device using artificial intelligence to assess and score pain levels in real time and update medical records in the cloud. PainChek® records a short video of the person's face and analyses the images that indicate pain and records them.

Next, the caregiver uses PainChek® to record their observations of other pain related behaviours that complete the assessment. Finally, PainChek® calculates an overall pain score and stores the result allowing the caregiver to monitor the effect of medication and treatment over time.

PainChek® is being rolled out globally in two phases: first, PainChek® for adults who are unable to effectively verbalise their pain such as people with dementia, and second, PainChek® for Children who have not yet learnt to speak.

The PainChek® Shared Care Program is a PainChek® licensing model which enables a professional carer to share their resident or patient data securely with other healthcare professionals or designated homebased family carers for ongoing pain assessments or clinical data review.

To find out more, visit www.painchek.com

ABN 21 146 035 127	P: [phone]
401, 35 Lime Street,	E: [e-mail]	PainChek Limited (ASX: PCK) | PG 4
Sydney, NSW, 2000	W: painchek.com

For personal use only

Rule 4.7B

	Appendix 4C
Quarterly cash flow report for entities
subject to Listing Rule 4.7B
Name of entity
	PAINCHEK LTD
ABN	Quarter ended ("current quarter")
21146035127	31/12/2021
Consolidated statement of cash flows	Current quarter $A'000	Year to date
(6 months) $A'000

1.0 Cash flows from operating activities

1.1

Receipts from customers

101

284

1.2 Payments for

	(a) research and development	(329)	(652)
	(b) product manufacturing and operating costs
	(c) advertising and marketing	(199)	(326)
	(d) leased assets
	(e) staff costs	(1,012)	(2,067)
	(f) administration and corporate costs (see also Note 1)	(1,774)	(2,318)
1.3	Dividends received (see note 3)
1.4	Interest received	3	4
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Government grants and tax incentives	0	79
1.8	Other (GST)	7	(95)
1.9	Net cash from / (used in) operating activities	(3,203)	(5,092)

2.0 Cash flows from investing activities

2.1 Payments to acquire:

1. entities
2. businesses

(c) property, plant and equipment

(20)

(37)

1. 1. investments
   2. intellectual property
   3. other non-current assets
2. Proceeds from disposal of:
3. 1. entities
   2. businesses
   3. property, plant and equipment
   4. investments
   5. intellectual property
   6. other non-current assets
4. Cash flows from loans to other entities
5. Dividends received (see note 3)

ASX Listing Rules Appendix 4C (17/07/20)

+ See chapter 19 of the ASX Listing Rules for defined terms.

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