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Rule 4.7B Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16 Name of entity Mesoblast Limited ABN Quarter ended ("current quarter") 6

Key Takeaway: Quarterly report for entities subject to Listing Rule 4.7B Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16 Consolidated statement of cash flows Current quarter Year to date (6 months) US$ '000 US$ '000 1 Cash flows from operating activities

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Quarterly report for entities subject to Listing Rule 4.7B
Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16
Consolidated statement of cash flows
Current quarter Year to date (6 months)
US$ '000 US$ '000
1 Cash flows from operating activities
1.1 Receipts from customers 6,731 7,205
- includes an upfront payment from TiGenix NV pursuant to a license agreement entered into during the quarter
1.2 Payments for:
(a) research and development (13,771 ) (27,274 )
- includes the costs of the three Tier 1 Phase 3 programs in advanced chronic heart failure, chronic low back pain and acute graft vs host disease.
(b) manufacturing commercialisation (436 ) (1,323 )
(c) advertising and marketing - -
(d) leased assets - -
(e) staff costs (2,915 ) (6,130 )
(f) other expenses from ordinary activities (3,515 ) (5,947 )
(g) other:
- intellectual property portfolio expenses (1,064 ) (1,919 )
1.3 Dividends received (see note 3) - -
1.4 Interest received 129 192
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid (24 ) (25 )
1.7 Government grants and tax incentives - -
1.8 Other (provide details if material) - -
1.9 Net cash from / (used in) operating activities (14,865 ) (35,221 )
Quarterly report for entities subject to Listing Rule 4.7B
Current quarter Year to date (6 months)
US$ '000 US$ '000
2 Cash flows from investing activities
2.1 Payment to acquire:
(a) property, plant and equipment (54 ) (137 )
(b) businesses (see item 10) - -
(c) investments - -
(d) intellectual property - -
(e) other non-current assets - -
2.2 Proceeds from disposal of:
(a) property, plant and equipment - -
(b) businesses (see item 10) - -
(c) investments - -
(d) intellectual property - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
(a) Payments for contingent consideration - (543 )
2.6 Net cash from / (used in) investing activities (54 ) (680 )
Current quarter Year to date (6 months)
US$ '000 US$ '000
3 Cash flows related to financing activities
3.1 Proceeds from issues of shares 83 40,532
3.2 Proceeds from issue of convertible notes - -
3.3 Proceeds from exercise of share options - -
3.4 Transaction costs related to issues of shares, convertible notes or options (602 ) (2,603 )
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing activities (519 ) 37,929
Current quarter Year to date (6 months)
US$ '000 US$ '000
4 Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of quarter/year to date 62,941 45,761
4.2 Net cash from / (used in) operating activities (item 1.9 above) (14,865 ) (35,221 )
4.3 Net cash from / (used in) investing activities (item 2.6 above) (54 ) (680 )
4.4 Net cash from / (used in) financing activities (item 3.10 above) (519 ) 37,929
4.5 Effect of movement in exchange rates on cash held (117 ) (403 )
4.6 Cash and cash equivalents at end of quarter 47,386 47,386
+ See chapter 19 for defined terms.
01/09/2016 Appendix 4C Page 2
Quarterly report for entities subject to Listing Rule 4.7B
Current quarter Previous quarter
US$ '000 US$ '000
5 Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
5.1 Bank balances 7,911 27,847
5.2 Call deposits 39,007 34,624
5.3 Bank overdrafts - -
5.4 Other (Term deposits) 468 470
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 47,386 62,941
Current quarter
US$ '000
6 Payments to directors of the entity and their associates
6.1 Aggregate amount of payments to these parties included in item 1.2 386
6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 -
6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
Payment to directors (for the current quarter) = $386k
Current quarter
US$ '000
7 Payments to related entities of the entity and their associates
7.1 Aggregate amount of payments to these parties included in item 1.2 -
7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 -
7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2
not applicable
Total facility amount at quarter end Amount drawn at quarter end
US$ '000 US$ '000
8 Financing facilities available
Add notes as necessary for an understanding of the position
8.1 Loan facilities - -
8.2 Credit standby arrangements - -
8.3 Other (please specify) - -
8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.
not applicable
+ See chapter 19 for defined terms.
01/09/2016Appendix 4C Page 3
Quarterly report for entities subject to Listing Rule 4.7B
US$ '000
9 Estimated cash outflows for next quarter
9.1 Research and development (13,109 )
9.2 Manufacturing commercialisation (1,980 )
9.3 Advertising and marketing -
9.4 Leased assets -
9.5 Staff costs (2,011 )
9.6 Other expenses from ordinary activities (3,312 )
9.7 Other (provide details if material):
(a) Intellectual property portfolio expenses (1,038 )
9.8 Total estimated cash outflows (21,450 )
* Mesoblast cash and cash equivalents will be augmented by its royalty and milestone income earned on sales of TEMCELL HS Inj. in Japan; as well as interest income receipts.
Mesoblast is in advanced negotiations with selected pharmaceutical companies with respect to potential partnering of certain Tier 1 product candidates. If Mesoblast enters into a binding transaction in the next quarter, Mesoblast expects that one effect of the transaction is that its cash reserves are likely to increase. Mesoblast does not make any representation or give any assurance that such a binding transaction will be concluded.
Mesoblast has established an equity facility with Kentgrove Capital for up to A$120 million/US$90 million to be used at its discretion to provide additional funds as required. In accordance with contractual obligations to maintain this facility for the next 18 months, 2 million reserve shares (which can only be sold at the Company's direction) and 1.5 million incentive rights were recently issued to Kentgrove.
Acquisitions Disposals
US$ '000 US$ '000
10 Acquisitions and disposals of business entities
(items 2.1(b) and 2.2(b) above)
10.1 Name of entity - -
10.2 Place of incorporation or registration - -
10.3 Consideration for acquisition or disposal - -
10.4 Total net assets - -
10.5 Nature of business - -
+ See chapter 19 for defined terms.
01/09/2016 Appendix 4C Page 4
Quarterly report for entities subject to Listing Rule 4.7B
Compliance statement
Sign here:/s/ Charlie HarrisonDate: 31 January 2018
Print name:Charlie Harrison
+ See chapter 19 for defined terms.
01/09/2016Appendix 4C Page 5
Last updated: Feb 7, 2018