UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Mesoblast Limited

/s/ Charlie Harrison

Charlie Harrison

Company Secretary

Item

99.1

Appendix 4C of Mesoblast Ltd, dated January 31, 2017.

ABN

Quarter ended (“current quarter”)

68 109 431 870

31 December 2016

Current quarter

Year to date

(6 months)

US$ '000

US$ '000

1

Cash flows from operating activities

1.1

Receipts from customers

218

579

1.2

Payments for:

     (a)  research and development

           - research and development

           expenditure includes the incremental

           costs of the MPC-150-IM phase 3 program

           in advanced chronic heart failure through to the interim        analysis as previously foreshadowed

(12,150

)

(21,554

)

     (b)  manufacturing commercialisation

(6,849

)

(12,587

)

     (c)  advertising and marketing

—

—

     (d)  leased assets

—

—

     (e)  staff costs

(2,013

)

(4,450

)

     (f)  other expenses from ordinary activities

(2,292

)

(5,699

)

     (g)  other:

            - intellectual property portfolio expenses

(579

)

(962

)

­ deposit with clinical research organisation in connection   with the conduct of the chronic heart failure phase 3 trial, to be returned to Mesoblast on completion of the trial

(2,000

)

(2,000

)

1.3

Dividends received (see note 3)

—

—

1.4

Interest received

128

309

1.5

Interest and other costs of finance paid

—

—

1.6

Income taxes paid

—

—

1.7

Government grants and tax incentives

—

—

1.8

Other (provide details if material)

—

—

1.9

Net cash from / (used in) operating activities

(25,537

)

(46,364

)

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

(2

)

(292

)

     (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)

—

—

2.6

Net cash from / (used in) investing activities

(2

)

(292

)

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

—

—

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

(5

)

(60

)

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

(5

)

(60

)

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

60,355

80,937

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(25,537

)

(46,364

)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

(2

)

(292

)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(5

)

(60

)

4.5

Exchange rate adjustments to item 1.21

(909

)

(319

)

4.6

Cash and cash equivalents at end of quarter

33,902*

33,902

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

7,035

7,194

5.2

Call deposits

21,368

43,096

5.3

Bank overdrafts

—

—

5.4

Other (Term deposits)

5,499

10,065

5.5

Cash and cash equivalents at end of quarter (should equal item 4.6 above)

33,902*

60,355

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

420

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) = $420k

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

Amount available

Amount used

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

US$ '000

9

Estimated cash outflows for next quarter

9.1

Research and development

- research and development expenditure includes the

   incremental costs of the MPC-150-IM phase 3

   program in advanced chronic heart failure through to

   the interim analysis as previously foreshadowed

(15,544

)

9.2

Manufacturing commercialisation

(3,013

)

9.3

Advertising and marketing

—

9.4

Leased assets

—

9.5

Staff costs

(2,419

)

9.6

Other expenses from ordinary activities

(3,264

)

9.7

Other (provide details if material):

(a) Intellectual property portfolio expenses

(586

)

(b) deposit with clinical research organisation in

connection with the conduct of the chronic heart

failure phase 3 trial, to be returned to Mesoblast on

completion of the trial

(2,000

)

9.8

Total estimated cash outflows

(26,826)*

-

the R&D tax incentive from the Australian Government;

-

royalty income earned on sales of TEMCELL^® HS Inj. in Japan, and

-

interest income.

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

—

—

1

This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2

This statement gives a true and fair view of the matters disclosed.

1.

The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2.

If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3.

Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.