26/10/16: Independent Expert’s Report

ALLEGRA ORTHOPEADICS LIMITED ISSUE OF SHARES TO ROBINWOOD INVESTMENTS PTY LTD‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

Independent Expert's Report pursuant to Section 611 of the Corporations Act‌‌‌‌‌‌‌‌

17 OCTOBER 2016‌ Glossary

Abbreviated Term	Definition
AMT	Allegra Orthopaedics Limited
AFSL	Australian Financial Services Licence
APES 225	Accounting Professional and Ethical Standards Board professional standard 225 - Valuation Services
ASIC	Australian Securities and Investment Commission
Asset Based Approach	The asset-based approach involves separating the business into components that can be readily sold or represented individually
ASX	Australian Securities Exchange
AU$	Australian Dollar
Company	Allegra Orthopaedics Limited
Book Value	The value of a security or asset as entered on a firm's statement of financial position (also referred to as Carrying Value)
CME	Capitalisation of Maintainable Earnings
Company	Allegra Orthopaedics Limited
Directors	Directors of the Company
EBIT	Earnings Before Interest and Tax
EBITDA	Earnings Before Interest, Tax, Depreciation and Amortisation
AGM	Annual General Meeting
Escrowed Proceeds	Proceeds held in escrow until some future event
EV	Enterprise Value
Issue Price	$0.08 per Share
Moore Stephens	Moore Stephens (Vic) Pty Ltd - AFSL Holder 247362
MVE	Market Value of Equity
NAV	Net Asset Value
Net Debt	Debt minus cash held by the operating entity
NOM	Notice of Meeting

Abbreviated Term	Definition
Non-Associated Shareholders	AMT Shareholders not associated with the Proposed Transaction
NPAT	Net Profit After Tax
NTAV	Net Tangible Asset Valuation
Placement Shares	Proposed placement of 9.56 million new fully paid ordinary shares in AMT at an issue price of $0.08 per Share
Proposal	The proposed transaction the subject of this IER
Proposed Transaction	The raising of approximately $764,415 in capital by a Placement of Shares to Robinwood
QMV / QMP	Quoted Market Value/Price
Report	This Independent Expert Report prepared by Moore Stephens in relation to the Proposal
Robinwood	Robinwood Investments Pty Ltd
Robinwood Loan	Robinwood provided a loan facility of $1 million on commercial terms to AMT in June 2016, which is currently drawn down to $700,000, and is due for full repayment in December 2016.
RG 74	ASIC Regulatory Guide 74 - Acquisitions Approved by Members
RG 111	ASIC Regulatory Guide 111 - Content of Experts Reports
RG 112	ASIC Regulatory Guide 112 - Independence of Experts
RG 170	ASIC Regulatory Guide 170 - Prospective Financial Information
Shares	Fully paid ordinary shares in the Company
VWAP	Volume-Weighted Average Price

INDEX

1. INTRODUCTION 1

2. BACKGROUND 1

3. PURPOSE AND SCOPE OF THIS REPORT 2

4. EXECUTIVE SUMMARY OPINION 3

5. BASIS OF ASSESSMENT 3

6. FAIRNESS ASSESSMENT 4

7. REASONABLENESS ASSESSMENT 4

8. SUMMARY OF OPINION 5

9. GENERAL DISCLOSURES AND LIMITATIONS 6

10. DISCLOSURES AND LIMITATIONS 7

11. REGULATORY FRAMEWORK 7

12. CORPORATIONS ACT - TAKEOVER PROVISIONS 7

13. CORPORATIONS ACT - GIVING A FNANCIAL BENEFIT TO A RELATED PARTY 7

14. GUIDELINES ISSUED BY ASIC ON ISSUES OF SHARES 8

15. GUIDELINES ON VALUATION ENGAGEMENTS 8

16. PROFILE OF AMT 9

17. COMPANY OVERVIEW 9

18. SENIOR MANAGEMENT AND BOARD OF DIRECTORS 9

19. SHARE CAPITAL 10

20. FINANCIAL PERFORMANCE 11

21. FINANCIAL POSITION 13

22. SHARE PRICE 14

23. RECENT COMPANY ANNOUNCEMENTS 15

24. BASIS OF ASSESSMENT OF THE PROPOSED TRANSACTION 15

25. FAIRNESS ASSESSMENT OF THE PROPOSED TRANSACTION 17

26. VALUE DEFINITION OVERVIEW 17

27. VALUATION METHODOLOGY FOR AMT 17

28. NET TANGIBLE ASSET VALUATION OF AMT - BEFORE THE PROPOSED TRANSACTION 18

29. NET TANGIBLE ASSET VALUATION OF AMT - FOLLOWING THE PROPOSED TRANSACTION 19

30. CONCLUSION OF FAIRNESS ASSESSMENT 20

31. ASSESSMENT OF THE ADVANTAGES AND DISADVANTAGES OF THE PROPOSED TRANSACTION 20

32. OPINION ON THE PROPOSED TRANSACTION 21

33. APPENDIX A 21

    APPENDIX B 24

    APPENDIX C 26

    APPENDIX D 27