THIS IS A REPLACEMENT PROSPECTUS TO THE PROSPECTUS DATED 27 JULY 2004 RELATING TO SHARES IN M HEALTH LIMITED AND IS DATED 10 AUGUST 2004

M Health Limited

ABN 25 009 121 644

PROSPECTIIS

For an offer of:

• 1. 50,000,000 Shares to the Investment Group and third parties nominated by the Investment Group at an issue price of 0.25 cents per Share to raise \$125,000 (Ascent Offer).
• 1. 65,000,000 Shares to the Investment Group and third parties nominated by the Investment Group at an issue price of 0.5 cents per Share to raise \$325,000 (Investment Group Offer).
• 1. 130,000,000 Shares to the Investment Group and third parties nominated by the Investment Group at an issue price of 1 cent per Share to raise \$1,300,000 (General Offer).
• 1. 30,000,000 Options, each to acquire one Share, at an exercise price of 1 cent each to the Investment Group and third parties nominated by the Investment Group (Option Offer).

THE OFFERS ARE NOT UNDERWRITTEN

IMPORTANT NOTICE

This is an important document and investors should read the document in its entirety and are advised to consult with their professional advisers before deciding whether to apply for securities.

SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

SUMMARY OF IMPORTANT DATES

Lodgement of Prospectus with ASIC	10 August 2004
Opening Date	10 August 2004
Expected Closing Date	27 August 2004

The dates set out above are indicative only and may vary. The Company reserves the right to vary the Opening Date and Closing Date of the Offers without prior notice. This may impact on subsequent dates. Applicants are encouraged to apply as soon as possible after the Opening Date as the Offers may close earlier than the date specified above. The Company also reserves the right not to proceed with the Offers at any time before the allotment of Shares to successful Applicants.

The Directors reserve the right to allot to an Applicant a lesser number of securities than the number for which the Applicant applies, or to reject an Application. If the number of securities allotted is fewer than the number applied for, surplus Application Monies will be refunded in full. Interest will not be paid on monies refunded.

The allottees of the securities will be determined at the sole discretion of the Directors.

IMPORTANT NOTICE

This Replacement Prospectus (Prospectus) is dated 10 August 2004 and was lodged with the ASIC on that date. Neither the ASIC nor ASX take any responsibility for the contents of this Prospectus. The expiry date for this Prospectus is 13 months after lodgement (Expiry Date). No securities will be allotted or issued on the basis of this Prospectus later than the Expiry Date. Securities allotted or issued pursuant to this Prospectus will be allotted or issued on the terms and conditions set out in this Prospectus.

Application will be made to ASX within seven (7) days after the date of this Prospectus for Official Quotation of the Shares the subject of this Prospectus. The Company does not intend to seek quotation of the Options.

Before deciding to invest in the Company, potential investors should read the entire Prospectus and in particular, in considering the prospects for the Company, investors should consider the assumptions underlying the prospective financial information and the risk factors that could affect the financial performance of the Company. Investors should carefully consider these factors in light of personal circumstances (including financial and taxation issues) and seek professional advice from an accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.

No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus that is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an Offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws.

WER SITE - ELECTRONIC PROSPECTUS

A copy of this Prospectus can be downloaded from the website of the Company at www.ascentcapital.com.au/reports/mhealth.html. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an application form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Shares will only be issued upon receipt of an application form issued together with the Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

EXPOSURE PERIOD

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act.

Acceptances and applications for securities under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge acceptances and applications prior to the expiry of the Exposure Period.

NO FORECASTS

Revenue and profitability of the Company is reliant on, among other things, the ability of the Company to successfully market and sell its products and services. The ability of the Company to successfully sell its products and services is reliant on the level of market acceptance of the Company's products and services. The Company has recently been under external administration and its retail outlets have been closed with only the Subjaco Store being reopened. Much of the brand awareness may have been lost during this period. Accordingly, it is virtually impossible to forecast when and how much revenue the Company will generate.

In view of this, the Directors consider that they are unable to provide potential investors with reliable revenue or profit projections or forecasts.

INDEX

	1. CORPORATE DIRECTORY
2.77	DETAILS OF THE OFFER
	3. PURPOSE AND EFFECT OF THE ISSUE
4.11	RIGHTS ATTACHING TO SHARES AND TERMS AND CONDITIONS OF OPTIONS16
5.	RISK FACTORS
	6. ADDITIONAL INFORMATION

SECTION 1

$\mathbf{1}$ . CORPORATE DIRECTORY

Directors David C Steinepreis (Chairman) Hugh D Warner Gary C Steinepreis

Company Secretary Gary C Steinepreis

Registered Office

Level $1$ 33 Ord Street West Perth WA 6005

Telephone: (08) 9420 9300 Facsimile: (08) 9481 2690

Share Registry * Computershare Investor Services Pty Ltd Level 2, St Georges Terrace Perth WA 6000

Telephone: 1300 55 7010 Facsimile: (08) 9323 2033

Stock Exchange The Company's securities are quoted on the official list of Australian Stock Exchange Ltd, the home branch being Perth.

ASX Code: MHL (currently suspended)

* Name included for information purposes only.

$2.$ DETAILS OF THE OFFERS

$2.1$ Overview

Background

The Company was incorporated on 8 February 1985 as Ascot Mining NL. Since incorporation the Company has had a number of name changes and activities. Most recently the Company traded as Metabolism Health Limited, as a provider of proprietary services in the health, fitness and lifestyle industry. More specifically, the Company, through its subsidiary TMC, operated a weight loss business which utilised a model for identifying the presence of metabolic dysfunction and other causes of weight gain.

Whilst Metabolism Health Limited made progress on the development of its business model. continuing operating losses were sustained and the continuation of trading was dependant on the ability of the Company to restructure its business and to attract sufficient capital to fund activities in the future. Ultimately, these funds were not available to the Company and it was placed under external administration.

Suspension of Trading of Company Shares and Appointment of Administrator

The Company's securities were suspended from trading on ASX on 15 January 2004 following a request from the Company and the appointment of an external administrator to TMC, on the same date.

On 19 January 2004, the Directors of the Company appointed Brian McMaster of Ernst & Young, as Administrator of the Company under Section 436A of the Corporations Act.

At a meeting of creditors held on 1 April 2004, the Administrator proposed to the creditors of the Company that it was in the best interests of creditors to enter into a deed of company arrangement. At this meeting, creditors voted in favour of the Company entering into a deed of company arrangement with Ascent Capital so that Ascent Capital may recapitalise the Company. On 4 April 2004, the Deed of Company Arrangement was executed by the relevant parties, a summary of which is set out in this Memorandum and nominees of Ascent Capital, being David Steinepreis, Hugh Warner and Gary Steinepreis, were appointed Directors of the Company on 16 April 2004.

The Deed of Company Arrangement required that an amount of \$510,000 and certain assets of the Company be made available for satisfaction of the claims of creditors, to meet the costs of the Administrator and to acquire all intellectual property and certain assets from TMC. It also provided that the administration of the Company terminated following the passing of the resolutions at the Shareholders Meeting, payment of \$510,000, and the transfer of certain assets to the Trustee for creditors, all of which is more fully described at Section 6.2 below.

On 7 July 2004, Shareholders of M Health approved the Recapitalisation Proposal in its entirety and as a consequence, Ascent Capital arranged the Joint Venture Loans and Working Capital Loans to enable the Company to meet its obligations under the Deed of Company Arrangement. Accordingly, settlement of the Deed of Company Arrangement occurred on 8 July 2004 and the Company was released from external administration on the same date.

The Company changed its name to M Health Limited on 9 July 2004.

The Company has maintained its intellectual property, which primarily comprises know-how associated with its Business, and is continuing with the operation of the Subiaco Store. A description of the Business and the know-how is set out in Section 3.4 below.

Future of the Company

It is the present proposal of Ascent Capital to continue the Business of the Company and the purpose of this Prospectus is to give effect to the Deed of Company Arrangement and matters associated with the Deed of Company Arrangement, to allow the Company to continue the development of the Company's Business.

The Company has entered into the Future Health Joint Venture with Calchek to continue the activities of the Business. Calchek, through Healthy Attitudes which is the trading name of the Subiaco Store, will provide a range of fitness testing services to the active consumer including the measurement of the three energy systems (aerobic, glycolytic and phospho-creatine). Healthy Attitudes is a new business and has not currently provided these services in this demographic area. The Future Health Joint Venture relates only to the tests identifying the presence of metabolic dysfunction and other causes of weight gain as set out in section 3.4 and has no financial interest in, nor will it benefit from, the other service offerings of Healthy Attitudes.

As part of its contribution to the Future Health Joint Venture, the Company has negotiated a lease for the Subiaco Store, met the 2004 lease payments, contributed and will continue to contribute working capital and provided intellectual property and assets acquired from TMC, including the client database. The funds used by the Company to make these contributions were from the Joint Venture Loans and the Working Capital Loans. Repayment of the Joint Venture Loans and Working Capital Loans shall be in accordance with section 6.6. Calchek as part of its contribution to the Future Health Joint Venture will provide appropriately qualified personnel to operate the business of the Future Health Joint Venture from the Subiaco Store which comprises one testing room, a reception/waiting room and three consulting rooms. The initial working capital of \$20,000 (refer to the description of the Future Health Joint Venture in section 6.3) is being provided to allow for a contribution to personnel costs, business development and also marketing, which is at the discretion of Calchek. Ongoing management and financial operations and the marketing of the Business is the responsibility of Calchek and not Mr John (see below) whose proposed role is relating to the technical aspects of the Business only.

The proposed staffing levels to be provided by Calchek will be one administrative staff member and one technical person. It is proposed that the technical person be David John BPE (Hons), Med (refer to section 3.4). Mr John, a former director of the Company, developed the Business and has worked as an exercise physiologist since 1988. In the event that Mr John does not provide the technical services then Calchek, through Healthy Attitudes, will source other qualified personnel to undertake this role. At this stage, relevant qualified personnel are available in the market.

It is the intention of the Company to meet its obligations to the Future Health Joint Venture and for Calchek as manager of the Future Health Joint Venture to initially focus on the development of the Healthy Attitudes business which includes the Business of the Future Health Joint Venture at the Subiaco Store. The objective is to demonstrate the effectiveness of this business model prior to the Future Health Joint Venture making a decision on the future of the Business. A description of the activities of the Company and the use of this intellectual property and know-how in the Business is more fully described in Section 3.4 below.

A summary of the Future Health Joint Venture is set out in Section 6.3 of this Prospectus.

Details of the Directors and Calchek, the Company's joint venture partner, are set out in Section 3.4.

The Company proposes to raise sufficient working capital to carry out its activities and as part of the working capital budget, the Company intends to pursue new investments within Australia and overseas by way of acquisition, development and/or exploitation.

$2.2$ Offers of Shares and Options

The Offers are being made to give effect to the Recapitalisation Proposal.

The Offers are:

A 50,000,000 Shares to the Investment Group and third parties nominated by the Investment Group at an issue price of 0.25 cents per Share to raise \$125,000. The Investment Group proposed and entered into the Deed of Company Arrangement with the creditors of the Company and the Administrator to recapitalise the Company.

If you are nominated by the Investment Group and you wish to subscribe for Shares under the Ascent Offer, please only complete the ASCENT OFFER APPLICATION FORM.

$\mathbf{R}$ 65,000,000 Shares to the Investment Group and third parties nominated by the Investment Group at an issue price of 0.5 cents per Share to raise \$325,000. The Investment Group proposed and entered into the Deed of Company Arrangement with the creditors of the Company and the Administrator to recapitalise the Company.

If you are nominated by the Investment Group and you wish to subscribe for Shares under the Investment Group Offer, please only complete the INVESTMENT GROUP OFFER APPLICATION FORM.

$\subset$ 130,000,000 Shares to the Investment Group and third parties nominated by the Investment Group, at an issue price of 1 cent per Share to raise \$1,300,000.

The allottees of the Shares will be determined at the sole discretion of the Directors.

If you are nominated by the Investment Group and you wish to subscribe for Shares under the General Offer, please only complete the GENERAL OFFER APPLICATION FORM.

$\mathbf{D}$ 30,000,000 Options, each to acquire one Share, at an exercise price of 1 cent each to the Investment Group and third parties nominated by the Investment Group for nil consideration.

If you are nominated by the Investment Group and you wish to subscribe for Options under the Option Offer, please only complete the OPTION OFFER APPLICATION FORM.

The minimum General Offer Application is 100,000 Shares totalling \$1,000. The Directors reserve the right to allot to an Applicant a lesser number of Shares than the number for which the Applicant applies, or to reject an Application. If the number of Shares allotted is fewer than the number applied for, surplus Application Monies will be refunded in full. Interest will not be paid on monies refunded.

The allottees of the Shares and Options will be determined at the sole discretion of the Directors.

The rights attaching to the Shares and Options are summarised in Section 4 of this Prospectus.

The purpose of the Offers and the use of the funds raised is set out in Section 3 of this Prospectus.

At a meeting of shareholders held on 7 July 2004, the Company was authorised, amongst other things, to issue up to 115,000,000 Shares at an issue price of 1 cent per Share and up to an additional 40,000,000 Shares at an issue price of 1 cent per Share via an over-subscription facility. The General Offer referred to above is an offer to subscribe for up to 130.000,000 Shares at an issue price of 1 cent per Share which is the sum of 115,000,000 Shares and 15,000,000 from the over-subscription facility, as approved by Shareholders. The Directors have determined not to offer the balance of the approved over-subscription facility.

$2.3$ How to Accept

If you wish to participate in the Offers you must forward the completed Application Form, together with your cheque drawn on an Australian Bank or bank draft made payable in Australian currency to "M Health Limited - Share Offer Account" and crossed "Not Negotiable" for the appropriate amount to the Company:

By Hand Delivery: M Health Limited Level 1 33 Ord Street West Perth WA 6005 By Post: M Health Limited PO Box 637 West Perth WA 6872

Your completed Application Form and cheque must reach the Company by no later than 5pm WST on the Closing Date.

If an Application Form is not completed correctly (including where the party applying for Shares has set off moneys due to the Company against moneys owed to it by the Company) or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept an Application Form, and how to construe, amend or complete it, shall be final. An Application Form will not however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque.

$2.4$ Australian Stock Exchange Listing

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of the Prospectus, the Company will not issue any Shares and will repay all application monies for the Shares within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares and Options now offered for subscription.

The Company does not intend to seek quotation of the Options.

$2.5$ Allotment of Shares and Minimum Subscription

The minimum subscription pursuant to the Offers is \$1,750,000.

No Shares or Options will be allotted or issued until the minimum subscription has been received. If the minimum subscription is not achieved within 4 months after the date of issue of this Prospectus. the Company will either repay the application monies to the Applicants or issue a supplementary prospectus or replacement prospectus and allow Applicants one month to withdraw their Application and be repaid their Application monies.

Shares and Options issued pursuant to the Offers will be allotted within 5 Business Days after the Closing Date.

Where the number of Shares and Options granted is less than the number applied for, or where no allotment is made, surplus Application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.

Pending the issue and allotment of the Shares and Options or payment of refunds pursuant to this Prospectus, all Application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on such bank account and each Applicant waives the right to claim any such interest.

2.6 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities law. No action has been taken to register or qualify these Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia.

It is the responsibility of Applicants outside Australia to obtain all necessary approvals for the allotment and issue of Shares and Options pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained.

$2.7$ Taxation Implications

The Directors do not consider that it is appropriate to give potential Applicants advice regarding the taxation consequences of applying for Shares or Options under this Prospectus, as it is not possible to provide a comprehensive summary of the possible taxation positions of potential Applicants. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to potential Applicants to the Issue. Potential Applicants should, therefore, consult their own professional tax adviser in connection with the taxation implications of the Issue.

$2.8$ Underwriter

The Issue is not underwritten.

2.9 Placement Fees

The Company reserves the right to pay a placement and lodgement fee of up to 5% to any holder of a financial services licence with respect to any successful General Offer Applications bearing their stamp.

2.10 Privacy Disclosure Statement

The Company collects information about each Applicant from an Application Form for the purposes of processing the Application Form and, if the Applicant is successful, to administer the Applicant's security holding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the share registry, the Company's related bodies corporate, agents, contractors and third party service providers, (including mailing houses), ASX. ASIC and other regulatory authorities.

If an Applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's registers is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

2.11 Enauiries

Any questions concerning the Offers should be directed to Mr Gary Steinepreis on $+61894209300$ .

$\overline{3}$ . PURPOSE AND EFFECT OF THE OFFERS

$3.1$ Purpose of the Offers and Use of Funds

The purpose of the Offers is to:

• fund the Company's obligations under the Future Health Joint Venture;
• provide funds for the acquisition and development of additional opportunities in the health. fitness and lifestyle industry, as identified by the Company;
• provide funds for a review and evaluation of new projects, as identified by the Company;
• repay the Joint Venture Loans and Working Capital Loans; and
• meet the administration costs of the Company and the expenses of the recapitalisation of the Company.

A summary of the material terms of the Deed of Company Arrangement and the Future Health Joint Venture are included in Section 6.2 and 6.3 respectively of this Prospectus.

The expenditure budgets outlined below have been prepared to meet the commitments of the Company. It is noted that programs and budgets are dependant on results. These programs can therefore change depending on the results of the work.

In the event that the Company is successful in raising the minimum subscription, it is proposed that the funds raised will be applied as follows:

Сэс от 1 миня – Елеспаните Dинсел
	Year 1	Year 2
	S	\$
Total funds to be raised under the Capital Raisings	1,750,000
Utilised as follows:
Contribution to the Future Health Joint Venture, Business
development and repayment of Joint Venture Loans (Note 1)	242,500	200,000
Review and evaluation of new projects (Note 4)	250,000	150,000
Total general working capital budget	492,500	350,000
Repay Working Capital Loans
(Note 2)	365,986
Working capital including expenses associated with the	264,514	277,000
recapitalisation proposal (Note 3)
Total funds utilised	1.123,000	627,000

Use of Funds - Expenditure Budget

Notes:

The contribution to the Future Health Joint Venture comprises: $\mathbb{L}$

(i)	TMC Assets	\$185,000
(ii)	Establishment Costs	5.000
(iii)	Premises Costs	-2.500
	Repayment of Joint Venture Loans	\$192.500
(iv)	Initial Funding	\$20,000
(v)	Future premises costs (estimate)	\$30,000
		ድ242 SBA

Funding by the Company of its contribution to the Future Health Joint Venture has been by way of the Joint Venture Loans. Repayment of the Joint Venture Loans shall be in accordance with Section 6.6.

1. Working Capital Loans were applied by the Company in the following manner:

(i)	Payment to Administrator	\$325,000
(ii)	Gross rent for Term of Subjaco Store lease inclusive of GST	\$22.836
(iii)	Gross rent for Option of Subiaco Store lease inclusive of GST	\$18,150
		\$365.986

Repayment of the Working Capital Loans shall be in accordance with section 6.6.

• The expenses of the recapitalisation are estimated at \$75,000 (refer to the proforma statement of $3.$ financial position Section 3.6).
• The Company proposes to allocate capital towards the review and evaluation of new projects. $4.$ The Company will assess opportunities in the health, fitness and lifestyle industry for growth and revenue potential to complement the existing Business. These opportunities may be by way of direct investment, joint venture or staged investment based on the project meeting agreed hurdles or milestones. If no complementary opportunities are identified then the Directors reserve the right to allocate this capital towards other business sectors. In the event that a major acquisition is identified, the Company will seek shareholder approval to change the nature and scale of its activities. At this stage, the Directors have not identified nor given consideration to any other business sector.

$3.2$ Additional Capital

The development of the Company's assets will require additional funding in the future. Future funding requirements will be dependent on the success of the Company's existing assets and also the costs of acquiring additional projects or business opportunities for investment as and when identified.

$3.3$ Effect of the Issue

The principal effect of the Issue assuming the minimum subscription is raised will be to:

• increase cash reserves by approximately \$1.165.000 immediately after completion of the $(a)$ Issue and after estimated expenses of the Issue and recapitalisation of approximately \$75,000:
• increase the number of Shares on issue from 27.616,768 Shares (post consolidation and $(b)$ subject to rounding) as at the date of this Prospectus, to 272,616,768 Shares; and
• $(c)$ increase the number of Options on issue from 1,666,667 (post consolidation) to 31,666,667 Options.

Set out in Section 3.6 is an unaudited proforma statement of financial position as at 30 June 2004 incorporating the effect of the Issue.

3.4 The Business, Company, Management Team and Calchek

Between the date of the appointment of the Administrators of the Company and termination of the Deed of Company Arrangement, control of the Company has been with the Administrator. On 16 April 2004, David Steinepreis, Hugh Warner and Gary Steinepreis were appointed Directors and all previous office holders relinquished their positions. At the Shareholders Meeting, David Steinepreis, Gary Steinepreis and Hugh Warner were re-elected as Directors and on 8 July 2004, the Company was released from external administration and control of the Company was returned to the Directors and Shareholders. Each of the Directors is engaged in the day to day affairs and management of the Company. At the appropriate time, it is the intention of the Directors that the composition of the Board be changed so that it is in keeping with good corporate governance practice, that is, a majority of independent directors.

It is the intention of the Directors to continue with the development of the Company's Business and to also review potential business opportunities for investment. The Company has entered into the Future Health Joint Venture with Calchek. A summary of Calchek is included below and details of the Future Health Joint Venture are included in Section 6.3 of this Prospectus.

Details of the Directors are set out below:

Mr David Steinepreis

David Steinepreis is a Chartered Accountant and former partner of an international accounting firm where he specialised in strategic corporate advice and taxation for listed companies. He entered commerce as a director, adviser and major shareholder of a number of listed companies in the gold, diamonds, oil and new mining technology sectors. Mr Steinepreis is a director of Mokuti Mining Ltd, Q-Vis Limited, IM Medical Ltd, Fusia Limited, OBJ Limited and Black Range Minerals Ltd (subject to deed of company arrangement), being companies listed on ASX; Black Rock Oil & Gas PLC, an oil and gas exploration company listed on the London AIM market and MinRes Resources Inc, a company listed on the Canadian Venture Exchange. Mr Steinepreis is also chairman of Ascent Capital.

Mr Hugh Warner

Hugh Warner holds a Bachelor of Economics Degree from the University of Western Australia. Mr Warner has been involved with a number of private and publicly listed companies in Australia, UK and Canada involved in the oil and gas, gold, diamonds and technology sectors. He contributes general corporate and company secretarial management skills along with a strong knowledge of both the Australian and UK Stock Exchange requirements. Mr Warner is a director of Mokuti Mining Ltd. O-Vis Limited, IM Medical Ltd, Fusia Limited, OBJ Limited and Black Range Minerals Ltd (subject to deed of company arrangement), being companies listed on ASX and MinRes Resources Inc., a company listed on the Canadian Venture Exchange and Ascent Capital.

Mr Gary Steinepreis

Gary Steinepreis holds a Bachelor of Commerce degree from the University of Western Australia and is a Chartered Accountant. Mr Steinepreis provides corporate, management and accounting advice to a number of companies involved in the resource, technology and leisure industries. He is a director of Australian Development Capital Ltd, Mokuti Mining Ltd, O-Vis Limited, Fusia Limited, OBJ Limited and Black Range Minerals Ltd (subject to deed of company arrangement), being companies listed on ASX and Black Rock Oil & Gas PLC, an oil and gas exploration company listed on the London AIM market and Ascent Capital.

Calchek

Established in 2002, Calchek is an Australian owned company with offices located in Perth, Western Australia. With over 20 highly credentialed software and electronic engineers and a strong management team consisting of finance, business, marketing and medical professionals, the company was formed to design, manufacture and distribute indirect calorimetry equipment to the medical. weight loss and sport and fitness industries worldwide.

Calchek designed their calorimetry testing equipment and software in consultation with a Sports Physiologist and Respiratory Physiologist to ensure the equipment met their specific technical and cost requirements. Moreover, this collaboration between manufacturer (Calchek) and the consumer has resulted in a range of testing equipment capable of accurately measuring the three energy systems (aerobic, glycolytic and phospho-creatine). This has opened up the opportunity to utilise the scientific and assessment capabilities of indirect calorimetry across a wider range of health and wellness related issues that are of great prevalence and relevance in the world today. These issues include inter alia, the increasing incidence, at an alarming rate, of obesity and type II diabetes throughout the world's population.

Calchek has negotiated but not yet finalised a consulting arrangement with Mr David John, a former director of the Company, and the founder of the Company's Business. As part of this arrangement, it is proposed that Mr John will provide technical services to Calchek, through Healthy Attitudes, in relation to the Business know-how, which will benefit the Future Health Joint Venture. Mr John is assisting in the re-establishment of the Subiaco store. In the event that Mr John does not provide the technical services then Calchek, through Healthy Attitudes, will source other qualified personnel to undertake this role. At this stage, relevant qualified personnel are available in the market.

The Business - Metabolism Test and Intellectual Property Know-How

Metabolism, or metabolic rate, is a measure of the amount of energy the human body expends, both in maintaining its essential body functions and energy expended through exercise. Poor or inefficient metabolism may result in various health problems including:

• Weight gain or obesity
• Diabetes

The core of the Company's intellectual property know-how is the measurement of "resting metabolic rate" to determine metabolic status. That is, to determine whether a person's resting metabolism is low, normal or high when compared to a predicted metabolic rate. A "slow" metabolism indicates that the body is using less than the normal number of calories, whereas a "fast" metabolism is indicative of a higher than usual number of calories being used. When a person's metabolism is low, they tend to feel the cold more, feel fatigued and/or put on weight more easily. In contrast, a person with a high metabolic rate feels the cold less than others around them, possesses higher energy levels and can have difficulty putting on weight.

The Company's intellectual property know-how measures metabolic rate through indirect calorimetry, which is the measurement of the amount of oxygen used and carbon dioxide produced while breathing. Indirect calorimetry is a technique used to measure a person's actual metabolic rate. Calorimetry measurement can also determine what type of fuel the body is burning (fat vs carbohydrate), in addition to measuring the number of calories that the body is expending while at rest.

A person's metabolic rate can be substantially affected by hormone imbalances. Testosterone, progesterone and oestrogen are sex hormones that can affect the metabolic rate by up to 20% at rest. Hormone levels can be accurately tested from saliva samples.

Low hormone levels can be corrected through medically prescribed hormone supplements. These supplements include both synthetic hormone mimetics that are typically used in hormone replacement therapy and bio-identical hormone supplements which are identical to the natural hormones produced by the body.

Healthy Attitudes plans to offer its clients a range of services which will include the Company's intellectual property know-how. The Future Health Joint Venture and the Company will be operating in an existing and a competitive market, which includes major healthcare operators and weight loss services companies. As the Company's intellectual property know-how is not protected by patents there are no barriers to entry to the market which the Future Health Joint Venture is targeting.

As part of the Company's contribution to the Future Health Joint Venture, the Company has contributed the TMC client database it acquired as part of the Deed of Company Arrangement. Healthy Attitudes will review this database to assist in the future marketing of the Business.

The purpose of the metabolism program is to:

• Measure how many calories are expended and classify a client's metabolism as either slow, normal or fast:
• Provide clients with eating guidelines to facilitate weight loss and maintain a healthy nutritional status:
• Monitor the nutritional intake of each client.
• Determine whether a current diet or eating programme is causing weight gain;
• Measure the effect of medications on metabolism:
• Assess carbohydrate metabolism abnormalities, e.g. impaired glucose tolerance; and
• Provide early indications of sex hormone imbalance through pathology testing.

The standard metabolism program includes:

• An initial consultation with a metabolism consultant:
• A saliva test to determine hormonal levels: and
• Weekly appointments for one month to assess progress and provide health coaching.

The Company had established brand awareness prior to the external administration process and the Directors consider that most of this goodwill has been lost. The objective is to re-package the intellectual property and know-how with other complementary tests to expand the service offerings to clients. The Future Health Joint Venture allows the Company to test the effectiveness of this approach in conjunction with Calchek, through Healthy Attitudes.

$3.5$ Capital Structure

The capital structure of the Company following completion of the Issue is summarised below:

Shares Number	Issued and Paid Up	\$
27,616,768	Shares on issue (post the 1:2 consolidation of capital)
50,000,000	Shares to be issued at 0.25 cents each	125,000
65,000,000	Shares to be issued at 0.5 cents each	325,000
130,000,000	Shares to be issued at 1 cent each	1,300,000
272,616,768	Shares on issue after completion of the Offers	1,750,000
	Options
1,666,667	Unlisted 40 cent Options exercisable on or before 31 December 2005
30,000,000	Unlisted 1 cent Options exercisable on or before 31 December 2007
31,666,667	Total Options on Issue
	Convertible Cumulative Preference Shares (CCPS)
1,003	Series A
1,003	Series B
2.006	Total CCPS on Issue

3.6 Proforma Statement of Financial Position

Assumptions used in preparation of the Proforma Statement of Financial Position

The consolidated proforma statement of financial position has been prepared to reflect the financial position of the Company as if the following transactions had occurred at 30 June 2004:

• (a) the proposed issues of Shares and Options pursuant to this Prospectus; and
• (b) the costs of the proposed Issue and Recapitalisation Proposal of approximately \$75,000 have been shown as unsecured creditors and will, when paid, be offset against contributed equity.

M HEALTH LIMITED Statement of Financial Position as at 30 June 2004

	Notes	Proforma after capital raising and completion of Deed of Company Arrangement s
CURRENT ASSETS
Cash assets	1	1,240,000
TOTAL CURRENT ASSETS		1,240,000
NON-CURRENT ASSETS
Plant and equipment		185,000
TOTAL NON-CURRENT ASSETS		185,000
TOTAL ASSETS		1,425,000
CURRENT LIABILITIES
Unsecured creditors		75,000
TOTAL CURRENT LIABILITIES NET ASSETS		75,000 1,350,000
EQUITY
Contributed equity	$\overline{2}$	6,052,847
Options issue reserve Accumulated losses		1,274,293 (5,977,140)
TOTAL EQUITY		1,350,000
Note 1. Cash assets:		\$
Opening balance
Placement of Shares at 0.25 cents each		125,000
Placement of Shares at 0.5 cents each		325,000
Placement of Shares at 1 cent each		1,300,000
Payment to satisfy obligations under Deed of Company Arrangement Closing balance		(510,000) 1,240,000
2. Contributed equity:		\$
Opening balance		4,302,847
Placement of Shares at 0.25 cents each		125,000
Placement of Shares at 0.5 cents each		325,000
Placement of Shares at 1 cent each		1,300,000
Closing balance		6,052,847

SECTION 4

RIGHTS ATTACHING TO SHARES AND TERMS AND CONDITIONS OF $\overline{4}$ . OPTIONS AND CONVERTIBLE CUMULATIVE PREFERENCE SHARES

The following is a summary of the more significant rights attaching to Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Company's Constitution, a copy of which is available for inspection at the Company's registered office during normal business hours.

$4.1$ General Meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution of the Company.

$4.2$ Voting Rights

At general meetings of Shareholders:

• each Shareholder entitled to vote may vote in person or by proxy, attorney or $(a)$ representative:
• $(b)$ on a show of hands, every person present who is a Shareholder or a proxy or representative of a Shareholder has one vote; and
• $(c)$ on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share.

$4.3$ Dividend Rights

The Directors may from time to time declare a dividend to be paid to Shareholders entitled to the dividend. The dividend shall (subject to the rights of any preference shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividends) be payable on all Shares in accordance with the Corporations Act. The Directors may from time to time pay to the Shareholders such interim dividends as they may determine. No dividends shall be payable except out of profits. A determination by the Directors as to the profits of the Company shall be conclusive. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company such amounts as they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

4.4 Winding-Up

If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders. The liquidator may, with the authority of a special resolution, yest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

$4.5$ Transfer of Shares

Generally, Shares in the Company are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act and the Listing Rules.

4.6 Future Increase In Capital

The allotment and issue of any new Shares is under the control of the Directors of the Company. Subject to restrictions on the issue or grant of securities contained in the Listing Rules, the Constitution and the Corporations Act, the Directors may issue Shares as they shall, in their absolute discretion, determine.

4.7 Variation Of Rights

Under Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

4.8 Terms and conditions of Options

The material terms and conditions of the Options are as follows:

• $(a)$ each Option entitles the holder, when exercised, to one (1) Share;
• the Options are exercisable at any time on or before 31 December 2007; (b)
• the exercise price of the Options is 1 cent each (on a post-consolidation basis); $(c)$
• $(d)$ subject to the Corporations Act, the Constitution and the ASX Listing Rules, the Options are fully transferable;
• the Options are exercisable by delivering to the registered office of the Company a notice in $(e)$ writing stating the intention of the Option holder to exercise a specified number of Options, accompanied by an Option certificate, if applicable, and a cheque made payable to the Company for the subscription monies due, subject to the funds being duly cleared funds. The exercise of only a portion of the Options held does not affect the holder's right to exercise the balance of any Options remaining;
• all Shares issued upon exercise of the Options will rank pari pasu in all respects with the $(f)$ Company's then issued Shares. The Company does not intend to seek quotation of the Options:
• there are no participating rights or entitlements inherent in the Options and holders will not $(\mathfrak{g})$ be entitled to participate in new issues of Options to Shareholders during the currency of the Options. However, the Company will ensure that, for the purpose of determining entitlements to any issue. Option holders will be notified of the proposed issue at least seven (7) business days before the record date of any proposed issue. This will give Option holders the opportunity to exercise the Options prior to the date for determining entitlements to participate in any such issue;
• $(h)$ in the event of any reconstruction (including consolidation, subdivision, reduction or return of capital) of the issued capital of the Company prior to the expiry date of the Options, all rights of the Option holder will be varied in accordance with the ASX Listing Rules; and
• $(i)$ in the event the Company makes a pro rata issue of securities, the exercise price of the Options will change in accordance with the formula set out in ASX Listing Rule 6.22.2.

4.9 Terms And Conditions Of Converting Preference Shares

Definitions 4.9.1

In these terms and conditions:

"EBITDA" for the financial vears ending on 30 June 2004 and 2005 (as appropriate) means $A + B$ where:

$``A" = x$ the audited profit or loss before taxation expense (or benefit), interest expense, amortisation charges and depreciation charges of The Metabolism Centre for the financial year commencing on 1 July 2003 and 2004 (as appropriate) and ending on 30 June of the immediate following year.

$\mathbf{^{\alpha}R^{n}}$ $\infty$ the audited profit or loss before taxation expense (or benefit), interest expense, amortisation charges, depreciation charges and expenses associated with the claim by Barry Dorr of any related body corporate (as defined by the Corporations Act) for the period commencing on the day that it became a related body corporate and ending 30 June 2004 and 2005 (as appropriate).

"Issue Price" means A\$0.20.

"Completion" means completion of the share sale agreements.

"CCPS-A-Share" means a Series A Converting Cumulative Preference Share as referred to in Section 4.9.2.

"CCPS-B-Share" means a Series B Converting Cumulative Preference Share as referred to in Section 4.9.2.

"Preference Shares" mean the CCPS-A-Shares and CCPS-B-Shares.

"Preference Shareholder" mean the holder of a CCPS-A-Share or CCPS-B-Share.

4.9.2 Type and Price

The Company may issue preference shares which will be known as "Series A Converting Cumulative Preference Shares" and "Series B Converting Cumulative Preference Shares" each at the Issue Price and on the terms and conditions herein.

4.9.3 Dividend

Preference Share dividend

Preference Shareholders are entitled to receive the dividend specified in this Section 4.9.3.

Dividend rate

The dividend is fixed at 5% of the Issue Price of each Preference Share. The dividend will be computed from the issue to the conversion date of the Preference Share on the basis of a 365 day year and pro rata for part of a year.

Dividend entitlement

The time for the entitlement to a dividend is 5.00pm (WST) on 30 June of each vear during the period from the issue to the conversion date of the Preference Share.

Dividend date

Dividends shall be paid if the Company has funds legally available for the payment of dividends within 30 days after the Preference Shareholder becomes entitled to the dividend.

Books closing date

Dividends are payable to the registered holders of each Preference Share as they appear in the register for the Preference Shares at 5.00pm (WST) on 30 June of each year during the period from the issue to the conversion date of the Preference Share.

Method of payment

Dividends shall be deemed paid if paid by cheque or direct debit on (or as soon as practicable after) the date determined by the Directors that a dividend is to be paid to the account or address nominated by the Preference Shareholder.

Preferential

Dividends on the Preference Shares shall rank in priority to dividends on the Shares.

Cumulative

Dividends on the Preference Shareholders will be cumulative.

Pari Passu

Dividends on the Preference Shares shall rank pari passu with all other Preference Shares.

4.9.4 Redemption

The Preference Shares are not redeemable

4.9.5 Conversion

Conversion

The Preference Shares will convert into Shares in accordance with this Section 4.9.5.

Conversion formula for the CCPS-A Shares

The CCPS-A Shares each convert into Shares as follows:

• i. if the EBITDA is less than \$2,000,000 for the financial year ending 30 June 2004, then each CCPS-A Share converts into one Share;
• ii. if the EBITDA is more than \$4,000,000 for the financial year ending 30 June 2004. then each CCPS-A Share converts into 12,500 Shares; or
• iii. if the EBITDA is more than or equal to \$2,000,000, but less than \$4,000,000 for the financial year ending 30 June 2004, then each CCPS-A Share converts into the number of Shares as determined in accordance with the following formula:

$$
\left\langle \left[ \left( \frac{\text{EBITDA}-\$2,000,000}{\$2,000,000} \right) \right] *6,250 \right\rangle +6,250
$$

Conversion formula for the CCPS-B Shares

The CCPS-B Shares each convert into Shares as follows:

• i. if the EBITDA is less than \$5,000,000 for the financial year ending 30 June 2005. then each CCPS-B Share converts into one Share;
• ii. if the EBITDA is more than \$10,000,000 for the financial year ending 30 June 2005, then each CCPS-B Share converts into 12,500 Shares; or
• iii. if the EBITDA is more than or equal to $$5,000,000$ but less than $$10,000,000$ for the financial year ending 30 June 2005, then each CCPS-BA Share converts into the number of Shares as determined in accordance with the following formula:

$$
\left\langle \left[ \left(\frac{\text{EBITDA}-\$5,000,000}{\$5,000,000}\right)\right] * 6,250 \right\rangle + 6,250
$$

Automatic conversion

The CCPS-A-Shares and CCPS-B-Shares will automatically convert to Shares in accordance with this Section 4.9.5 within 15 Business Days after the release to ASX of the audited financial reports for the Company for the years ending 30 June 2004 and 2005 respectively.

Statements

As soon as practicable after conversion of any Preference Share, the Company shall dispatch statements or certificates in respect of the Shares issued as a result of the conversion.

After conversion

The Shares issued on conversion of any Preference Share will as and from 5.00pm (WST) on the date of allotment rank equally with and confer rights identical with all other Shares then on issue.

4.9.6 Issue of the Shares for no consideration

The Company shall not allot and issue the Shares for no consideration and shall record the allotment and issue in the manner required by the Corporations Act.

4.9.7 Reconstruction

In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of securities of the Shares the Preference Shares shall be reconstructed. consolidated or divided in the same proportion as the Shares are reconstructed, consolidated or divided and, in any event, in a manner which will not result in any additional benefits being conferred on the Preference Shareholders which are not conferred on the Company Shareholders

4.9.8 Winding up

If the Company is wound up prior to conversion of all of the Preference Shares into the Shares then the Preference Shareholders will have the right for each Preference Share held and not converted in the Shares to be paid cash for the Issue Price and any arrears of dividend in priority to the Company Shareholders but will have no right to participate beyond the extent specified in this Section 4.9.8 in surplus assets or profits of the Company on winding up.

4.9.9 Non-transferable

The Preference Shares are not transferable.

4.9.10 Copies of notices and reports

The Preference Shareholders have the same right as the Company Shareholders to receive notices, reports and audited accounts and to attend general meetings of the Company but are only entitled to vote in the circumstances referred to in Section 4.9.11.

4.9.11 Voting rights

The Preference Shareholders shall have no right to vote save for those circumstances listed in Listing Rule 6.3.

$\overline{\mathbf{5}}$ . RISK FACTORS

Introduction

This section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company involves many risks which may be much higher than the risks associated with an investment in other companies. The Company is at the very early stages of its development and the risks are therefore very substantial. The Shares and Options offered by the Prospectus should be considered highly speculative. The Shares and Options offered by this Prospectus carry no guarantee whatsoever with respect to return on capital investment, payment of dividends or the future value of the Shares and Options. Intending subscribers should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which the Company intends to operate before any decision is made to subscribe for Shares and Options. Investors should carefully consider these factors in light of personal circumstances (including financial and taxation issues) and seek professional advice from an accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.

There are numerous widespread risks associated with investing in any form of business and with investing in the share market generally. There are also a range of specific risks noted below and elsewhere in this Prospectus which may materially affect the financial performance of the Company and the market price of the Shares and Options.

Share Investment

Applicants should be aware that there are risks associated with any share investment. The prices at which the Company's Shares and Options trade may be above or below the issue price for the Shares and Options under this Prospectus. The trading price of the Shares and Options is likely to be highly volatile and could be subject to wide fluctuations in response to factors such as actual or anticipated variations in the Company's operating results or new services by the Company or its competitors. This is especially the case with companies involved in emerging technologies.

The Shares and Options allotted under this Prospectus carry no guarantee whatsoever in respect of profitability, dividends, return of capital, or the price at which they may trade on the ASX.

Competitors and Dependence on Market Acceptance of the Company's Proposed Services

The success of the Company's Business will depend on the acceptance of its weight loss products and services by the market, as well as the Company's ability to enhance its products and services to meet the evolving needs of customers on a timely basis. There can be no assurance of the market's acceptance of the Company's products and services or the Company's ability to meet customers' needs.

Managing Rapid Growth

Rapid growth of the Company will require preparedness for the deployment of management systems relating to financial monitoring and controls, human resources, corporate compliance, marketing, technical and creative production and changes in the competitive landscape. The Directors recognise the need to employ highly qualified people to fill expanding roles within the organisation and believe that such individuals can be attracted to the Company. Competition for such personnel may be strong.

Should there be a delay in attracting suitably qualified individuals to participate in the roll out of the Company's business model or to integrate company acquisitions, or a loss of key personnel, the financial prospects and performance of the Company may be materially affected.

Risks Associated with Future Acquisitions

The Company intends to investigate and consider selective acquisitions in the current business area and other industries. There are no assurances that the Company will be able to identify suitable acquisition candidates available for sale at reasonable prices, complete any acquisitions or successfully integrate any acquired business into the Company's operations.

Further, future acquisitions may be outside the scope of the Company's current business model and accordingly the Company may face the additional business risk of integrating disparate operations. Any acquisition will require financing which may create additional risks to the expansion of the Company's business if the allocation of the Company's limited cash resources is required to be varied.

General Economic Conditions

Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors that may contribute to that general economic climate include, the level of direct and indirect competition against the Company, industrial disruption, interest rates, the rate of inflation, currency fluctuations, the outbreak of hostilities and stock market conditions

Investment Speculative

The list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The risk factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the securities offered under this Prospectus.

Therefore, the securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for securities.

No Profit to Date and Uncertainty of Future Profitability

The Company has incurred losses and it is therefore not possible to evaluate the future prospects based on past performance. The Directors anticipate making further losses in the foreseeable future.

The Company's ability to operate profitably in the future will depend on the success of the Future Health Joint Venture. This will depend on the ultimate demand for the Future Health Joint Venture products by consumers which cannot be guaranteed. There is no certainty therefore that the Company can successfully commercialise its projects.

Other factors that will determine the Company's profitability are its ability to manage its costs, to execute its development and growth strategies, economic conditions in the markets the Company operates, competitive factors and regulatory developments. Accordingly, the extent of future profits, if any, and the time required to achieve a sustained profitability is uncertain. Moreover, the level of such profitability cannot be predicted and may vary significantly from quarter to quarter.

Additional Requirements for Capital

The Company's capital requirements depend on numerous factors. Depending on the Company's ability to generate income from its existing projects, the Company may require further financing in addition to amounts raised in the Offer. Any additional equity financing will be dilutive to shareholders, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and as a consequence reduce its technology development activity.

Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of or significant investments in complementary companies, products or technologies, although no such acquisitions or investments are currently being considered. Any such future transactions would be accompanied by the risks commonly encountered in making business acquisitions, products and technologies.

Research and Development

The Company can make no representations that any future research and development will be successful, that development milestones will be achieved or that the Company will develop products that are commercially exploitable.

There are many risks inherent in the development of novel technologies or businesses, particularly where these are in an early stage of development. Projects can be delayed or fail, or research may cease to be viable for a range of unexpected scientific and commercial reasons.

Reliance on Key Personnel and Need to Attract Qualified Staff

The Company is dependent on its management, the loss of whose services could materially and adversely affect the Company.

There can be no assurance that the Company will be able to attract or retain sufficiently qualified personnel on a timely basis, employ key information technology and management personnel, or establish relationships with key organisations.

Risk of Product Liability & Uninsured Risks

The Company's business exposes it to potential product liability risks that are inherent in the research and development, marketing and use of its technology products. It will be necessary for the Company and/or the Future Health Joint Venture to secure sufficient levels of insurance to cover various product liability risks in the course of maintaining its business.

However, there can be no assurance that adequate or necessary insurance coverage will be available at an acceptable cost or in sufficient amounts, if at all, or that product liability or other claims would not materially and adversely affect the Business or financial condition of the Company.

Joint Venture Parties, Agents and Contractors

The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which the Company is or may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used by the Company for any activity.

The Company is dependent on its joint venture partner, Calchek, to provide appropriately qualified personnel with the relevant experience to operate the equipment and processes for analysis management, the loss of key personnel could materially and adversely affect the Future Health Joint Venture.

There can be no assurance that Calchek will be able to attract or retain sufficiently qualified personnel on a timely basis, employ key information technology and management personnel, or establish relationships with key organisations to market the services being provided.

Competition

The Company and the Future Health Joint Venture competes with other companies, including major healthcare and/or weight loss services companies. Some of these companies have greater financial and other resources than the Company and the Future Health Joint Venture and as a result, may be in a better position to compete for future business opportunities. There can be no assurance that the Company and the Future Health Joint Venture can compete effectively with these companies. As the Company's intellectual property know-how is not protected by patents there are no barriers to entry to the market which the Future Health Joint Venture is targeting.

Potential investors should consider that an investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares or Options.

SECTION 6

6. ADDITIONAL INFORMATION

$6.1$ Continuous Disclosure Obligations

The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and Specifically, like all listed companies, the Company is required to disclosure obligations. continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company's securities.

The securities which will be issued pursuant to this Prospectus are not being issued pursuant to reliance on Section 713 of the Corporations Act pursuant to determination dated 13 July 2004. The determination is effective till 13 July 2005.

ASX maintains files containing publicly available information for all listed companies. The Company's file is available for inspection at ASX during normal hours.

In addition, the following documents are available for inspection for a period of 12 months after the date of issue of this Prospectus during normal business hours at the registered office of the Company:

• $(a)$ this Prospectus:
• $(b)$ the Constitution of the Company;
• the material contracts referred to in Sections 6.2 and 6.3. $(c)$

$6.2$ Material Contract -Deed of Company Arrangement and Trust Deed

The Deed of Company Arrangement was executed by the Company, Brian McMaster and Ascent Capital on 4 April 2004, following the approval of creditors of the Recapitalisation Proposal on 1 April 2004. The Deed of Company Arrangement incorporates the terms of the Recapitalisation Proposal.

Settlement and effectuation of the Deed of Company Arrangement occurred on 8 July 2004 as the conditions precedent had been satisfied. The conditions precedent were:

• $(a)$ TMC being placed into liquidation;
• $(b)$ ASX providing written confirmation that, after settlement, that it will lift the suspension on the trading of the securities of the Company without the need to re-comply with chapters 1 & 2 of the Listing Rules;
• The transaction documents being executed by all parties and taking effect which $(c)$ documents included the Deed of Company Arrangement, the Metabolism Health Limited Creditors Trust Deed, Sale Agreement evidencing the sale of the TMC Assets to the Company, Release and Discharge evidencing the release and discharge of all liabilities between the Company and TMC, the Loan Agreement evidencing a loan of \$510,000 arranged by Ascent Capital to the Company and any other documents contemplated by the Deed of Company Arrangement; and
• $(d)$ approval by Shareholders of the Resolutions.

At Settlement, the following occurred:

• The Liquidator of TMC transferred to the Company the TMC Assets in consideration for $(a)$ \$185,000;
• $(b)$ The Administrator of the Company and the Liquidator of TMC released and discharged each other from all claims (present or future, certain or contingent, liquidated and

unliquidated, ascertained or sounding only in damages) including under Section 588V of the Act:

• the Trustee on behalf of creditors received a payment of \$325,000 from the cash funds paid $(c)$ to the Deed Administrator (totalling \$510,000).
• the Administrator provided the Company with a certificate of effectuation and release the $(d)$ Company from Administration;
• the Company transferred, amongst others, the following assets to the Deed Administrator $(e)$ (referred to as the Trustee):
• cash at bank: $(i)$
• $(ii)$ debtors:
• $(iii)$ any GST refunds;
• $(iv)$ stock, inventory, plant, equipment and office furniture:
• $(v)$ shares and options in subsidiaries and shares and options in other investments; and
• $(v_i)$ any causes of action the Company currently has against a third party;

other than the TMC Assets.

In accordance with the Deed of Company Arrangement:

• $(a)$ Creditors of the Company must accept their entitlements under the Deed of Company Arrangement in full satisfaction and complete discharge of their debts and claims which they have or claim against the Company; and
• The Trustee will consider the claims of creditors which arose on or before the date of the (b) administration and will pay a dividend to creditors in accordance with the order of priority set out in the Corporations Act.

$6.3$ Material Contract - Future Health Joint Venture

The following is a summary of the material terms of the Future Health Joint Venture:

Ascent Capital and Calchek and/or its nominee has entered into a joint venture in relation to the intellectual property owned by the Company and related assets on the following terms:

• The joint venture shall take effect if the Recapitalisation Proposal occurs which expression shall $\ddot{\textbf{i}}$ be defined as creditor and Shareholder approval of Ascent Capital's Recapitalisation Proposal. the appointment of Ascent Capital's nominees as Directors of the Company, the removal of the Company from external administration and the re-instatement to trading of the Company's securities to ASX.
• ii) The Company shall have a 50% interest and Calchek and/or its nominee shall have a 50% interest in the joint venture.
• iii) The joint venture shall operate from premises at 239 Hay Street, Subiaco, Western Australia (the "Premises").
• iv) The Company will provide the following to the joint venture:
• (a) the Premises inclusive of operating outgoings such as electricity and telecommunications. including the funding for the lease on the Premises;

• (b) initial funding of $$20,000$ in eash;

• (c) all intellectual property owned by the Company which relates to the joint venture;

• (d) the TMC Assets which includes office and consulting rooms fit-out, computers, telephone system and metabolism testing equipment and other establishment costs of \$5,000; and
• (e) the right to acquire up to five (5) calorimeters from the liquidator of TMC, provided that Ascent Capital has been successful in negotiating this option.
• v) Calchek will provide the following to the joint venture:
• (a) appropriately qualified personnel with the relevant experience to operate the equipment and processes for analysis;
• (b) management of the financial operations of the joint venture and Premises to be conducted by Calchek and not Mr John whose proposed role is relating to the technical aspects of the Business only.
• vi) At the end of the first year of the joint venture the Company will have the option to subscribe a further \$100,000 in funding to retain its 50% interest in the joint venture. If the Company contributes these funds they shall again be used by agreement by the joint venture parties to further the exploitation of the intellectual property.
• vii) In the event that the Company elects not to contribute the extra \$100,000 its joint venture interest will be diluted to 10%.
• viii) After the second year of the joint venture the parties shall assess the commercial viability of the intellectual property and make a decision (with voting rights based on their proportional interest in the joint venture) whether to continue the joint venture or sell the joint venture assets. At this stage, the parties will be required to agree new terms and conditions for the basis of operating the Business. In the event that these terms and conditions can not be agreed, the joint venture will follow the procedures as detailed below in clauses (i), (ii) or (iii).

The Company also proposes, as part of its commitments, to review and evaluate other opportunities in the health, fitness and lifestyle industry to increase sales and market awareness of the Future Heath Joint Venture's services.

The joint venture is evidenced by a short form agreement. The parties will agree other terms and conditions as required from time to time.

Since the execution of the Future Health Joint Venture the parties have acted in good faith and agreed the following additional terms:

• In the event of a dispute, which includes a dispute in relation to clause viii) above with respect to $(i)$ the second year of joint venture operations, that the parties agree to use a professional arbitrator and be bound by the decision of the arbitrator. The costs for the arbitration will be paid for by the joint venture.
• (ii) If either party is in breach of any term of the joint venture the other shall be entitled to terminate if the breach is not cured within 30 days.
• (iii) The joint venture may be terminated by default or mutual agreement. Upon termination:
• the party intending to continue carrying on the business of the joint venture shall acquire $\mathbf{L}$ the interest in the assets held by the joint venture of the party not so continuing at a price agreed between the parties and in the event that this price can not be agreed then the dispute resolution procedure is followed; or
• $\overline{2}$ . in the event that both parties agree to terminate then the assets held by the joint venture will be sold and the proceeds will be split in accordance with voting rights based on their proportional interest in the joint venture, at that time.
• (iv) The position of "the right to acquire up to five (5) calorimeters from the liquidator of TMC, provided that Ascent Capital has been successful in negotiating this option." has been clarified.

This clause was included to facilitate an expansion of the Business, if determined by the Future Health Joint Venture. The purpose was to have a mechanism to acquire, for a reasonable cost, an important component of the Business know-how. There is no impact on the Company if the option is not negotiated or exercised as the calorimeters can be acquired from other parties, if required.

$6.4$ Subiaco Lease

TMC entered into a lease with P&N Enterprises Pty Ltd ("P&N") and Lintrak Pty Ltd ("Lintrak") dated 15 November 2002, commencing on 1 December 2002 for a period of two years with a two year option, with respect to premises described as situated at 241 Hay St Subiaco (the "Premises").

The lease was terminated by P&N and Lintrak following the appointment of an Administrator to the Company and TMC.

Pursuant to letter dated 20 April 2004 P&N offered to relet the Premises to the Company under the form of lease entered into by TMC subject to certain variations as set out therein (the "Letter of Offer"). This offer was accepted by Gary Steinepreis on behalf of the Company on 21 April 2004 by way of execution of an acceptance clause contained in the Letter of Offer.

The substantive terms of the current lease are as follows:

Authorised Use:	Provision of health related services.
Term:	23 April 2004 to 30 June 2004.
Premises area:	Approximately 90.10 $m2$
Gross Rent for Term:	\$20,760.00 (plus GST), paid in advance.
Option:	Six months. This option has been exercised.
Gross Rent for Option:	\$16,500.00 (plus GST), paid in advance.
Interest Rate:	18% per annum.
Description of Premises:	Amended to correctly refer to the address of the Premises as 239 Hay St Subiaco.
Variable Outgoings:	Pursuant to item 12 of Schedule 1 and clause 7 the Company is not required to pay or make contribution to Variable Outgoings, as defined.
Security Bond:	Nil.

$6.5$ Litigation and Administrative Actions

The Company is not involved in any actual litigation or administrative actions, which could have a material adverse effect on the Company but draws attention to the following matter:

The Company and its Directors have been served a direction pursuant to Sub-Section 1274(11) of the Corporations Act. In summary, ASIC noted that the Company has not lodged the financial report. director's report and auditors report for the half-year ended 31 December 2003 and provided a direction that the Company must lodge these reports by 17 June 2004. The Company has not, at the date of this Prospectus, complied with this direction. The Company has sought relief from this direction because the Company has been in administration and not under the control of the Directors.

Due to the failure of the Company to comply with the above direction, on 13 July 2004, ASIC made a determination against the Company that it may not rely on Section 713 of the Corporations Act for the period ending 13 July 2005. That is, the Company may not issue a short form prospectus during this period.

6.6 Repayment of Loans

Subject to the successful recapitalisation of the Company the Joint Venture Loans and the Working Capital Loans will be repaid to Ascent Capital and any parties who made advances to the Company either wholly in cash or partly in cash and partly by way of set off against moneys due to the Company in respect of Shares applied for pursuant to the Prospectus by Ascent Capital and any parties who made advances to the Company.

6.7. Directors' Interests

Other than as set out below or elsewhere in this Prospectus, no Director nor any firm in which such a Director is a partner, has or had within 2 years before the lodgement of this Prospectus with ASIC, any interest in:

• $(a)$ the promotion or formation of the Company: or
• property acquired or proposed to be acquired by the Company in connection with its $(b)$ formation or promotion or the Offer pursuant to this Prospectus; or
• $(c)$ the Offer pursuant to this Prospectus.

and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) to any Director or to any firm in which any such Director is a partner, either to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or by the firm in connection with the promotion or formation of the Company or the Offers pursuant to this Prospectus.

Each Directors' relevant interest in Shares and Options at the date of this Prospectus are:

Director	Shares	Options
Mr D Steinepreis	Nil	Nil
Mr H Warner	2.663	Nil
M G Steinepreis	Nil	Nil
Ascent Capital	Nil	Nil

Ascent Capital is a company owned equally by David Steinepreis, Hugh Warner and Gary Steinepreis and is the proponent of the Deed of Company Arrangement.

At the Shareholders Meeting, approval was granted for the Directors to acquire the below listed existing Shares and to participate in the Issue to the following maximum extent:

	No. of Shares currently held both directly & indirectly (post consolidation)	Maximum No. of Shares to be issued at $0.25$ cents	Maximum No. of Shares to be issued at $0.50$ cents	Maximum No. of Shares to be issued at 1 cent	Maximum No. of 1 Cent Options to be issued
David Steinepreis	$\overline{\phantom{a}}$	6.900,000	9.150.000	21,750,000	5,000,000
Hugh Warner	2.663	6.900.000	9.150,000	21,750,000	5,000,000
Gary Steinepreis	$\,$	6.900.000	9.150.000	21,750,000	5.000.000
Ascent Capital	۰	2,300,000	3.050.000	7.250.000	15.000.000
Total	2,663	23.000,000	30,500,000	72,500,000	30,000,000

The Constitution of the Company provides that the Directors may be paid for their services as Directors, a sum not exceeding such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Directors and in default of agreement then in equal shares.

In the last two years, no fees have been paid to the current Directors, companies associated with the Directors or their associates in their capacity as Directors, consultants or advisers other than as specified below:

Director	Emoluments
David Steinepreis	SNil
Hugh Warner	SNil
Gary Steinepreis	SNil

The Directors and companies associated with the Directors or their associates may also be reimbursed for all reasonable expenses incurred in the course of conducting their duties which include, but are not in any way limited to, out of pocket expenses, travelling expenses, disbursements made on behalf of the Company and other miscellaneous expenses. The Directors will each be paid an on-going consulting fee of \$5,000 per month following the successful reinstatement of the securities to trading on the ASX. These fees are not subject to a management contract and are on a monthly basis.

Ascent Capital has been funding many of the direct expenses of the Company during the period of the Deed of Company Arrangement to enable the Company's Business to continue. Ascent Capital will be reimbursed from the Company for these costs provided the Company is re-instated to trading on ASX and will also charge the Company a fee of \$50,000 plus GST for work performed in recapitalising the Company upon re-instatement.

Of the total Joint Venture Loans and Working Capital Loans, Ascent Capital provided \$300,000 and a company associated with Gary Steinepreis loaned a further \$70,000. Repayments of these amounts shall be in accordance with Section 6.6.

All Shares subscribed for by Ascent Capital and Gary Steinepreis shall be in accordance with the approvals given at the Shareholders Meeting.

6.8 Interests of Experts

Other than as set out below or elsewhere in this Prospectus, no person named in the Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus has or had within 2 years before the lodgement of this Prospectus with ASIC, any interest in:

• $(d)$ the promotion or formation of the Company; or
• property acquired or proposed to be acquired by the Company in connection with its $(e)$ formation or promotion or the Offers pursuant to this Prospectus; or
• $(f)$ the Offers of securities pursuant to this Prospectus,

and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) to any person named in the Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus for services rendered by him or by the firm in connection with the promotion or formation of the Company or the Offers pursuant to this Prospectus.

6.9 Estimated Expenses of Issue and Recapitalisation

The estimated expenses of the Issue and Recapitalisation Proposal, excluding any placement fees payable, are \$75,000.

6.10 Market Price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are quoted on ASX. The Shares are currently suspended and as such no market prices are available. There are no listed Options.

6.11 Consent

Calchek:

• $(a)$ does not make, or purport to make, any statement in this Prospectus or on which a statement made in this Prospectus is based, other than as specified in this section 6.11; and
• to the maximum extent permitted by law Calchek, expressly disclaims and takes no $(b)$ responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with their consent as specified below.

Calchek has given its written consent to the inclusion in this Prospectus of all statements made by them or attributed or derived from those statements in the form and context in which they are included and has not withdrawn such consent before lodgement of this Prospectus with the ASIC.

6.12 Directors' Consent

Each Director has consented to the lodgement of this Prospectus with the ASIC.

Signed by or on behalf of each Director of the Company, pursuant to a resolution of the Board of Directors of the Company.

G Gerinepreis
J

Gary Steinepreis Director

GLOSSARY

Application Form means the Ascent, Investment Group, General and Option Offer application forms accompanying this Prospectus, and "Applicant" and "Application" have comparative meanings.

ASIC means the Australian Securities and Investments Commission.

Ascent Capital means Ascent Capital Pty Ltd ABN 19 065 055 816.

ASX means Australian Stock Exchange Limited ABN 08 008 624 691.

Business means the business of the Company as set out in clause 3.4 of this Prospectus.

Business Day means a day on which trading takes place on the stock market of ASX.

Calchek means Calchek Pty Ltd ABN 26 102 665 378.

Closing Date means the closing date for receipt of Application Forms under this Prospectus, being 5.00 pm WST on 27 August 2004, or as extended.

Company or M Health means M Health Limited ABN 25 009 121 644.

Constitution means the Company's Constitution as at the date of this Prospectus.

Corporations Act means Corporations Act 2001 (Cth).

Directors means the directors of the Company at the date of this Prospectus.

Dollar or "\$" means Australian dollars.

Intellectual Property means all of the intellectual property owned by the Company.

Investment Group means Ascent Capital and its directors David Steinepreis, Gary Steinepreis, Hugh Warner and includes third parties nominated by them.

Issue means the issue of Shares offered by this Prospectus.

Administrator or Deed Administrator means Brian McMaster of Ernst & Young.

Joint Venture Loans means interest free, unsecured loans in the aggregate amount to date of \$192,500 arranged by Ascent Capital and provided to the Company for the purpose of settling its obligations under the Deed of Company Arrangement, and meeting its obligations under the Future Health Joint Venture.

Listing Rules or ASX Listing Rules means the Listing Rules of the ASX.

Offers means the offers of Shares and Options referred to in Section 2.2 of the "Details of the Offers" section of this Prospectus.

Official Ouetation means official quotation of Shares by ASX:

Opening Date means the opening date for receipt of Application Forms under this Prospectus, being 10 August 2004.

Option means an option to subscribe for a Share in the Company on the terms set out in Section 4.8 of this Prospectus.

Prospectus means this Prospectus.

Recapitalisation Proposal means the proposal to recapitalise the Company, as summarised in the Deed of Company Arrangement in Section 6.2 of this Prospectus.

Share means a fully paid ordinary share in the issued capital of the Company following the consolidation of capital and where the context permits means the Shares the subject of the Offers.

Shareholder means a holder of Shares.

Shareholders Meeting means a meeting of shareholders held on 7 July 2004 to consider the Recapitalisation Proposal.

Subiaco Store means the premises located at 239 Hay Street, Subiaco and leased by the Company.

TMC means The Metabolism Centre Pty Ltd (ACN 097 913 463) (Liquidator Appointed)

Trustee or Trustee for Creditors means Brian McMaster of Ernst & Young.

Working Capital Loans means interest free, unsecured loans in the aggregate amount to date of \$362.320 arranged by Ascent Capital and provided to the Company for the purpose of settling its obligations under the Deed of Company Arrangement and meeting its obligations under the Future Health Joint Venture.

WST means Western Standard Time.

M Health Limited ABN 25 009 121 644 Ascent Offer Application Form			Share Registrars use only
Please read all instructions on reverse of this form			Broker reference - stamp
TO BE COMPLETED BY PARTIES NOMINATED BY THE INVESTMENT GROUP Number of Shares applied for		Total amount payable cheque(s) to equal this amount	only
	at 0.25 cents per Share $=$	A\$	Broker code Adviser Code
you may be allocated all of the Shares above or a lesser number
Name of Applicant 1	Full name details title, given name(s) (no initials) and surname or Company name		Tax file number(s) Or. exemption category Applicant 1/Company
Name of joint Applicant 2 or			Joint Applicant 2/ trust
Full postal address Number/street			Contact details Contact name
			daytime telephone Contact number
Suburb/town		State/postcode	Contact email address
CHESS HIN (if applicable)
"M Health Limited - Share Offer Account"		Cheque payment details please fill out your cheque details and make your cheque payable to
Drawer	BSB number Cheque number	Account number	Total amount of cheque S

You should read the Prospectus carefully before completing this Application Form. The Corporations Act prohibits any person from passing on this Application Form unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus.

I/We declare that:

• this Application is completed according to the declaration/appropriate statements on the reverse of this form and agree $(a)$ to be bound by the Constitution of M Health Limited; and
• I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy $(b)$ of the Application Form or a direct derivative of the Application Form, before applying for Shares.

THIS FORM DOES NOT REQUIRE A SIGNATURE

$\overline{\mathcal{S}}$

INSTRUCTIONS TO APPLICANTS

Please post or deliver the completed Application Form together with a cheque to the share registry of the Company. If an Applicant has any questions on how to complete this Application Form, please telephone the Company on +61 8 9420 9300. The Form must be received by the Registry no later than 5.00pm (WST) on 27 August 2004.

Å. Application for Shares

The Application Form must only be completed in accordance with instructions included in Prospectus.

B. Contact Details

Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Application Form.

$\mathbf{C}$ Cheque Details

Make cheques payable to "M Health Limited - Share Offer Account" in Australian currency and cross them "Not Negotiable". Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown on the Application Form.

Declaration

Before completing the Application Form the Applicant(s) has read the Prospectus to which the application relates. The Applicant(s) agree(s) that this application is for Shares in M Health Limited upon and subject to the terms of the Prospectus, agree(s) to take any number of Shares equal to or less than the number of Shares indicated on the front of the form that may be allotted to the Applicant pursuant to the Prospectus and declare(s) that all details and statements made are complete and accurate. It is not necessary to sign the Application form.

If an Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept an Application Form, and how to construe, amend or complete it, shall be final. An Application Form will not however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque.

Forward your completed application together with the application money to:

M Health Limited Phone: $+61894209300$ Facsimile: + 61 8 9481 2690

$A$ $A$ $A$ mosoo $A$

nuutossa.
By Post	By Hand
M Health Limited	M Health Limited
PO Box 637	Level 1
WEST PERTH WA 6872	33 Ord Street
	WEST PERTH WA 6005

M Health Limited ABN 25 009 121 644				Share Registrars use only
Investment Group Offer Application Form Please read all instructions on reverse of this form				Broker reference - stamp
TO BE COMPLETED BY PARTIES NOMINATED BY THE INVESTMENT GROUP AND THE PUBLIC Number of Shares applied for		Total amount payable	cheque(s) to equal this amount	only
	at $0.5$ cents per Share =	A\$		Broker code Adviser Code
you may be allocated all of the Shares above or a lesser number
Name of Applicant 1	Full name details title, given name(s) (no initials) and surname or Company name			Tax file numbers) Оr exemption category Applicant 1/Company
Name of joint Applicant 2 or				Joint Applicant 2/ trust
Full postal address				Contact details
Number/street				Contact name
				Contact daytime telephone
Suburb/town		State/postcode		number Contact email address
CHESS HIN (if applicable)
"M Health Limited - Share Offer Account"	Cheque payment details please fill out your cheque details and make your cheque payable to
Drawer	BSB number Cheque number		Account number	Total amount of cheque
				S €

You should read the Prospectus carefully before completing this Application Form. The Corporations Act prohibits any person from passing on this Application Form unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus.

I/We declare that:

• this Application is completed according to the declaration/appropriate statements on the reverse of this form and agree $(a)$ to be bound by the Constitution of M Health Limited; and
• I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy $(b)$ of the Application Form or a direct derivative of the Application Form, before applying for Shares.

THIS FORM DOES NOT REQUIRE A SIGNATURE

INSTRUCTIONS TO APPLICANTS

Please post or deliver the completed Application Form together with a cheque to the share registry of the Company. If an Applicant has any questions on how to complete this Application Form, please telephone the Company on +61 8 9420 9300. The Form must be received by the Registry no later than 5.00pm (WST) on 27 August 2004.

Å. Application for Shares

The Application Form must only be completed in accordance with instructions included in Prospectus.

B. Contact Details

Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Application Form.

$\mathbf{C}$ Cheque Details

Make cheques payable to "M Health Limited - Share Offer Account" in Australian currency and cross them "Not Negotiable". Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown on the Application Form.

Declaration

Before completing the Application Form the Applicant(s) has read the Prospectus to which the application relates. The Applicant(s) agree(s) that this application is for Shares in M Health Limited upon and subject to the terms of the Prospectus, agree(s) to take any number of Shares equal to or less than the number of Shares indicated on the front of the form that may be allotted to the Applicant pursuant to the Prospectus and declare(s) that all details and statements made are complete and accurate. It is not necessary to sign the Application form.

If an Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept an Application Form, and how to construe, amend or complete it, shall be final. An Application Form will not however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque.

Forward your completed application together with the application money to:

M Health Limited Phone: $+61894209300$ Facsimile: + 61 8 9481 2690

A Advances

nuutossa.
By Post	By Hand
M Health Limited	M Health Limited
PO Box 637	Level 1
WEST PERTH WA 6872	33 Ord Street
	WEST PERTH WA 6005

M Health Limited ABN 25 009 121 644				Share Registrars use only
General Offer Application Form
Please read all instructions on reverse of this form				Broker reference - stamp only
TO BE COMPLETED BY PARTIES NOMINATED BY THE INVESTMENT GROUP AND THE PUBLIC
Number of Shares applied for		Total amount payable	cheque(s) to equal this amount
	at 1 cent per Share $=$	A\$		Broker code	Adviser Code
you may be allocated all of the Shares above or a lesser number
	Full name details title, given name(s) (no initials) and surname or Company name				Tax file numbers) Оr exemption category
Name of Applicant 1				Applicant 1/Company
Name of joint Applicant 2 or				Joint Applicant 2/ trust
Full postal address Contact details
Number/street				Contact name
				daytime Contact number	telephone
Suburb/town		State/postcode		Contact email address
CHESS HIN (if applicable)
Cheque payment details please fill out your cheque details and make your cheque payable to "M Health Limited - Share Offer Account"
Drawer	BSB number Cheque number		Account number	Total amount of cheque S
				S

You should read the Prospectus carefully before completing this Application Form. The Corporations Act prohibits any person from passing on this Application Form unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus.

I/We declare that:

• this Application is completed according to the declaration/appropriate statements on the reverse of this form and agree $(a)$ to be bound by the Constitution of M Health Limited; and
• I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy $(b)$ of the Application Form or a direct derivative of the Application Form, before applying for Shares.

THIS FORM DOES NOT REQUIRE A SIGNATURE

INSTRUCTIONS TO APPLICANTS

Please post or deliver the completed Application Form together with a cheque to the share registry of the Company. If an Applicant has any questions on how to complete this Application Form, please telephone the Company on $+618.9420.9300$ . The Form must be received by the Registry no later than 5.00pm (WST) on 27 August 2004.

A. Application for Shares

The Application Form must only be completed in accordance with instructions included in Prospectus.

B. Contact Details

Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Application Form.

$\mathbf{C}$ Cheque Details

Make cheques payable to "M Health Limited - Share Offer Account" in Australian currency and cross them "Not Negotiable". Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown on the Application Form.

Declaration

Before completing the Application Form the Applicants) has read the Prospectus to which the application relates. The Applicant(s) agree(s) that this application is for Shares in M Health Limited upon and subject to the terms of the Prospectus, agree(s) to take any number of Shares equal to or less than the number of Shares indicated on the front of the form that may be allotted to the Applicant pursuant to the Prospectus and declare(s) that all details and statements made are complete and accurate. It is not necessary to sign the Application form.

If an Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept an Application Form, and how to construe, amend or complete it, shall be final. An Application Form will not however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque.

Forward your completed application to:

M Health Limited Phone: $+61894209300$ Facsimile: + 61 8 9481 2690

Addresses:

By Post	By Hand
M Health Limited	M Health Limited
PO Box 637	Level 1
WEST PERTH WA 6872	33 Ord Street
	WEST PERTH WA 6005

M Health Limited ABN 25 009 121 644 Option Offer Application Form EXERCISE PRICE 1 CENT ON OR BEFORE 31 DECEMBER 2007 Please read all instructions on reverse of this form	Share Registrars use only Broker reference - stamp only
TO BE COMPLETED BY PARTIES NOMINATED BY THE INVESTMENT GROUP Number of Options applied for	Broker code Adviser Code
you may be allocated all of the Options above or a lesser number Full name details title, given name(s) (no initials) and surname or Company name Name of Applicant 1	Tax file number(s) Or exemption category Applicant 1/Company
Name of joint Applicant 2 or Joint Applicant 2/ trust
Full postal address Number/street	Contact details Contact name
	Cঌnt∰t telephone da sime i©mt®r…/
Suburb/town	Contact email address State/postcode
CHESS HIN (if applicable)

You should read the Prospectus carefully before completing this Application Form. The Corporations Act prohibits any person from passing on this Application Form unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus.

I/We declare that:

• $(a)$ this Application is completed according to the declaration/appropriate statements on the reverse of this form and agree to be bound by the Constitution of M Health Limited; and
• $(b)$ I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy of the Application Form or a direct derivative of the Application Form, before applying for Options.

THIS FORM DOES NOT REQUIRE A SIGNATURE

INSTRUCTIONS TO APPLICANTS

Please post or deliver the completed Application Form together with a cheque to the share registry of the Company. If an Applicant has any questions on how to complete this Application Form, please telephone the Company on +61 8 9420 9300. The Form must be received by the Registry no later than 5.00pm (WST) on 27 August 2004.

Application for Options A.

The Application Form must only be completed in accordance with instructions included in Prospectus.

B. Contact Details

Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an irregularity regarding the Application Form.

Declaration

Before completing the Application Form the Applicant(s) has read the Prospectus to which the application relates. The Applicant(s) agree(s) that this application is for Shares in M Health Limited upon and subject to the terms of the Prospectus, agree(s) to take any number of Options equal to or less than the number of Options indicated on the front of the form that may be allotted to the Applicant pursuant to the Prospectus and declare(s) that all details and statements made are complete and accurate. It is not necessary to sign the Application form.

Forward your completed application to: M Health Limited Phone: $+61894209300$ Facsimile: + 61 8 9481 2690

Addresses:
By Post	By Hand
M Health Limited PO Box 637 WEST PERTH WA 6872	M Health Limited Level 1 33 Ord Street
	WEST PERTH WA 6005