3D Metalforge : December 2021 Quarter Activities Report and Appendix 4C

ASX ANNOUNCEMENT

For personal use only

3MF CONTINUES TO ADVANCE FIELD TRIALS

AND INTERNATIONAL EXPANSION IN

DECEMBER QUARTER

HIGHLIGHTS

• Revenue of A$340k for Q4 FY21 (up 13.7% on Q3 FY21 revenue of A$299k).
• Advancing field trials, with conversions to full production orders, and successfully delivered AM parts to Shell and ConocoPhillips.
• Progress in key hubs with expansion in Australia entering the resources sector and strengthened collaboration with UNSW following successful completion of Stage 1 Proof of Concept Study.
• Technology progress with increase of polymer printers to 33, capable of printing in up to 25 different materials and working with Hitachi Metals to identify applications of their MAT21 high performing metal alloy.
• Growing adoption of AM services, driven by rise in long term sustainability goals and short term pandemic linked challenges, resulting in encouraging outlook entering H1 FY22.
• Cash balance of A$2.7m as at 31 December 2021.

31st January 2022: 3D Metalforge Limited (ASX: 3MF) ("3D Metalforge" or the "Company"), a global revenue generating Additive Manufacturing ("AM") company, is pleased to release its Appendix 4C cash flow statement and associated activities report for the quarter ended 31 December 2021.

Financial Performance

3D Metalforge continued to see positive sales during the December quarter, achieving revenue of A$340k, up 13.7% on Q3 FY21 revenue of A$299k. Revenue growth was driven by the Company building its presence in Australia, Houston and Singapore.

Targeted cash spend was in-line with the investment in building the business with cash expenditure of A$1.6m. The Company remains cognisant of its cash burn and expects the gap between expenditure and cash inflows to narrow over time as its investments in growth pay off.

"The December quarter was a period of intense activity for 3D Metalforge, expanding our presence in the Australian resources sector with an agreement with Intercast Australia, commencing the promotion of our services to their customers, alongside the advancements in our collaboration with the University of New South Wales.

3D Metalforge Limited (ACN 644 780 281)│ASX:3MF

16 Ord Street, West Perth│[phone] www.3dmetalforge.com

For personal use only

"Our field trials are progressing, with a number of these converted into full production orders. By supplying AM services, what we offer clients is more than just a printer, and the projects delivered for global firms Shell and ConocoPhilips validate our approach of delivering critical spare parts faster and more cost effectively, to ultimately green clients' supply chains.

"Our pipeline of customers remains solid, underpinned by the technological progress we've made during the year, and our encouraging business prospects provide us confidence entering Financial Year 2022", commented Matthew Waterhouse, 3D

Metalforge Limited Managing Director.

Main Activities

Progress in key hubs

Australia

Following first orders received in the country, 3D Metalforge has made progress with its strategic expansion in Australia, including signing a channel partner agreement with leading foundry Intercast Australia, whose clients include BGC, Mineral Resources Limited, Water Corporation and Bradken. This is an initial 18 month agreement whereby Intercast Australia will promote 3D Metalforge's services to customers in Australia.

A number of discussions are currently underway in the resources and energy sectors as large companies in the COVID-19 landscape are looking to adopt AM as a solution to bypass sustainability challenges, following the rise in global shipping costs and transportation delays, and as part of their longer term sustainability goals.

The Company also commenced an initial 12-month Memorandum of Understanding with the University of New South Wales (UNSW), Sydney, for AM research and development collaboration. In the first six months since inception, a stage 1 Proof of Concept study was successfully conducted. The study consisted in establishing a new machine learning based additive manufacturing process to guide the additive manufacturing process of In718 and other alloys to achieve high quality printed parts (relative density ≥99.5% without cracks). The results are encouraging and will greatly remove the existing burdens associated with the costly and time-consuming process optimisation for In718 or other new alloys. This represents a further step in 3MF's continued engagement in the Australian market.

On a corporate front, Srikrishnan (Sri) Vaidyanathan, was appointed as new Chief Finance Officer post period end. Mr Vaidyanathan brings a wealth of Australian industrial and engineering expertise and will continue to be based in Perth, Western Australia, in order to be in proximity of the key resources market and the Company's investor base.

Houston

3D Metalforge's 20,000 sq.ft USA flagship facility is up and running in Houston with first parts produced, new business with new customers such as Cooper Machinery and expanding business with longer term customers such as NOV. The Company's first H-WAAM printer outside Singapore is being installed in early Q1 2022.

3D Metalforge Limited (ACN 644 780 281)│ASX:3MF

16 Ord Street, West Perth│[phone] www.3dmetalforge.com

For personal use only

The Company is well advanced in field trials with a number of major US companies including Par Pacific that are being led out of the Company's new Houston facility.

Matthew Waterhouse was very pleased to join the Manufacturing and Logistics committee of Greater Houston Partnership to support the Company's outreach program in Houston.

Singapore

A number of projects have shifted from engineering through testing and to full production. Encouragingly, the Company's main production equipment reached >80% utilisation in the December quarter.

3D Metalforge continued to work with numerous industry leaders including PSA, Bureau Veritas, Lloyds Register and ABS on the Joint Industry Projects organised by Singapore's Maritime Port Authority.

3D Metalforge also continues developments with its on-site production facility at PSA (Port of Singapore).

Advancing field trials and delivery of AM parts to Shell and ConocoPhillips

Having parts on field testing and trials with existing and potential customers brings the Company a step closer to securing contracts and growing its customer base.

During the quarter, parts were delivered to Shell Jurong Island, a site owned by one of the world's largest energy companies Shell, in a considerably shorter timeframe. The AM heat exchanger parts were used to accelerate the required lead time to manufacture heat exchanger tube components. The parts were delivered in a record two weeks, faster and more cost effectively, allowing Shell to reduce equipment downtime and not affect the client's operations. The Company provided a full range of AM services including the creation of a

digital file for the parts prior to printing and testing. 3D Printed Component in Heat Exchanger

After installing AM produced parts on-board ConocoPhillips' Endeavour oil tanker in February 2021, these parts were checked and found to be working well in November 2021. Three AM parts were fabricated and installed to improve supply chain efficiencies and sustainability challenges. The project was led with multi-national firms ABS Group, ConocoPhillips Polar Tankers and Sembcorp Marine.

Technology Advancements - increasing fleet of printers and printing in new metal powders

The Company completed testing and commissioning of a range of customised polymer printers, increasing its fleet of polymer printers to 33 capable of printing in up to 25 different materials.

These printers are part of 3D Metalforge's strategy of expanding into high end polymers for defence, maritime and oil & gas applications, as the Company believes that high performing polymers will be increasingly demanded by customers in these sectors.

3D Metalforge Limited (ACN 644 780 281)│ASX:3MF

16 Ord Street, West Perth│[phone] www.3dmetalforge.com

For personal use only

	Progress was also made extending 3D printing capability
	in new high performance metal powders, and the
	Company has been working with Hitachi Metals Singapore
	to widen its range of 3D metal powders. Metal powders
	customised for AM processes are an emerging technology
	which can improve the performance of printed parts, and
	provide a significant competitive advantage in servicing
	clients. To this extent, 3D Metalforge delivered a customer
	print job with a new material customised for
3MF Impeller printing in Hastelloy	additive manufacturing - MAT21.

MAT21 is an alloy which has superior properties than stainless steel, with high corrosion resistance under various conditions. Companies operating in the oil & gas sector have previously struggled to find a solution for their additively manufactured Hastelloy requirements, and the availability of the MAT21 powder and printability of this powder is an advantage going forward.

Outlook

3D Metalforge continues to execute its commercialisation strategy, with a focus on deepening traction and accelerating sales in existing markets via its core hubs, and ultimately shift clients from field trials to full production.

In addition, 3D Metalforge is actively seeking opportunities to embed its solutions right into client facilities, with its 'shop in a shop' solution, to improve customer supply chains and offer a tangible competitive advantage.

The Company continues to consider inorganic growth opportunities as and when deemed appropriate for the Company's strategy.

Financial Summary

The attached Appendix 4C provides details on the cashflows for the quarter ended 31 December 2021. The Company's net cash used in operating activities for the quarter amounts to A$1.615m, which included research and development (A$0.045m), product manufacturing and operating costs

(A$0.334m), staff costs (A$0.656m), administration and corporate costs including interest paid (A$0.605m), leased assets costs (A$0.226m), and advertising and marketing (A$0.049m). Staff costs and administration and corporate costs included expenditure in relation to international expansion.

Use of Funds

3D Metalforge was admitted to the official list of the ASX on 25 February 2021 following completion of an IPO raising A$10m. The December 2021 quarter is included in a period covered by a use of funds statement in the IPO prospectus lodged with ASX under Listing rule 1.1 condition 3.

A comparison of the Company's actual expenditure since admission to 31 December 2021 against the estimated expenditure in the use of funds statement is set out below as required by ASX Listing Rule 4.7C.2.

3D Metalforge Limited (ACN 644 780 281)│ASX:3MF

16 Ord Street, West Perth│[phone] www.3dmetalforge.com

For personal use only

Description	Prospectus	Actual to Date
	A$	(25 February - 31 December 2021)
		A$
Equipment	1,500,000	726,985
International expansion	4,000,000	1,312,414
Research and Development	500,000	231,612
Loan repayment	1,000,000	600,887
General administration and working capital	3,074,672	3,411,002
Expenses of the Public Offer	997,621	1,130,727
Total	11,072,293	7,413,626

The Company notes:

1. For the quarter, 3D Metalforge received total cash receipts from customers of approximately A$266k.
2. The Company also received total government grants and tax incentives of approximately A$34k.
3. In addition to the table above, during the December quarter the Company cash spent approximately A$334k in relation to product manufacturing and operating costs.
4. General administration and working capital have exceeded the budgetary use of IPO funds estimates in the prospectus. This is due to lower-than-expected cashflow from sales growth due to the challenging market conditions.

Related Party Transactions

Payments in the December quarter to related parties of approximately A$73k included at item 6 in the attached Appendix C comprised of directors' fees and salary.

- ENDS -

This announcement has been approved for release by the Board of 3D Metalforge Limited.

For more information please contact:
Company enquiries	Media enquiries
Matthew Waterhouse	Elodie Castagna
Managing Director	FTI Consulting
[e-mail]	[phone]
	[e-mail]

3D Metalforge Limited (ACN 644 780 281)│ASX:3MF

16 Ord Street, West Perth│[phone] www.3dmetalforge.com