8COMMON LIMITED — Interim / Quarterly Report 2019

Oct 30, 2018

8common

31 October 2018

ASX Release

Q1 September 2018 Quarterly Performance and Business Update

Fintech group 8common Limited ( 8common or the Company ) (ASX: 8CO ) is pleased to release consolidated Quarterly Cash Flow for the quarter ended 30 September 2018.

Key Company highlights for the quarter up till the date of this release include:

• Expense8 quarterly SaaS revenue +21% Year­on­Year to $465K;

• Expense8 cash receipts +11% Year­on­Year to $738K;

• Largest provider of Expense Management Solutions (EMS) to NSW Government to more than 60 Agencies and 66,000 users;

• 18 new NSW Government agencies go live on Expense8 EMS (Expense Management Solution);

• 1[st] NSW Government Agency goes live on the Travel platform, more agencies expected to follow suit;

• Federal Department of the House of Representatives sign up for Expense8 (EMS and Travel);

• Shares in Cloudaron Group Berhad received for settlement of sale of Realtors8 and $98K received from the disposal of Cloudaron Group Berhad Shares;

• $225K Research & Development tax credit was received;

Commenting on the September 2018 Quarter and sale of Realtors8, 8common Executive Chairman, Nic Lim said “This is an important milestone as we have completed the consolidation of our operating focus to become a focused fintech group. We look forward to supporting Realtors8 as a significant shareholder of Cloudaron. Expense8 is expected to continue growing cash receipts and drive the group to operational cash surplus. Payhero will deliver new opportunities in the B2B payments space leveraging Expense8.”

Cash flow performance

The Company recorded a net cash outflow of $374K for the period. Net operating cash outflow was $287K. Various one­off or annual payments related to the completion of the Realtors8 sale, advisory fees, annual audit costs, ASX fees and deferred directors fees were paid out during the quarter. Included within staff costs are payments totalling $84K during the quarter relating to a payment plan for historical tax liabilities of the Group. Operating costs are expected to lower significantly in the quarters ahead due to savings associated with the disposal of Realtors8.

The cash position decrease from $534K to $205K at the end of September 2018. The company intends to lodge a claim for the R&D tax incentive for FY18, These funds are expected to be received in the March or June 2018 Quarter. In addition, the Company has had discussions with a number option holders who have indicated their interest in the early conversion of their options, which would provide additional funding to the company. The Executive Chairman has indicated to the Board that he intends to convert at least half of his options by 15 November 2018, which would raise in excess $250K. $98K was realised from the sale of Cloudaron shares and approximately $1.4M worth Cloudaron shares remain available for sale.

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• See chapter 19 for defined terms , 1 September 2016

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Expense8

Record Q1 cash receipts of $738K were achieved, up 11% on a year on year basis.

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The core Expense8 SaaS (Software as a Service) revenue model is based on a combination monthly platform, per account and transaction fees. Q1 SaaS revenue grew 21% Year­on­Year) from $384K to $465K. During the quarter, 18 new NSW government agencies agreed to use the expense8 platform and commenced on­boarding. Usage from some of these agencies commenced during the quarter with the remaining ones being fully on­boarded during October. These agencies will further boost revenue growth over the coming quarters as they activate their employees and those employees engage with the platform.

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• *FY19 Figures calculated from Unaudited Management Accounts

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• • See chapter 19 for defined terms , 1 September 2016

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The 1[st] NSW Government agency went live on the Travel platform with more agencies expected to follow suit. Revenue models are similar across all platforms with implementation fees and SaaS based monthly platform and transaction fees.

Outlook

The Group expects customer receipts to continue to grow as new clients are on­boarded and both new and existing clients increase their usage of the various product platforms. Payhero has begun engaging clients and a number of strategic opportunities are being considered.

For further information please contact:

Nic Lim Executive Chairman E: nic@8common.com

About 8common Limited

8common is listed on the Australian Securities Exchange (ASX:8CO). With a focus on financial technology, the groups core product expense8 delivers Travel & Expense Management (TEM) and Card Application & Management to large Australian enterprises including Woolworths, Broadcast Australia, Amcor and State and Federal government agencies including the Federal Department of the Prime Minister and Cabinet and the NSW Department of Education.

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• See chapter 19 for defined terms , 1 September 2016

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8common

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity 8common Limited ABN 51 168 232 577 30 September 2018

	Consolidated statement of cash flows Current quarter $A’000 Year to date (3 months) $A’000 1. Cash flows from operating activities 751 751 1.1 Receipts from customers 1.2 Payments for ­ ­ (a) research and development (b) product manufacturing and operating costs (111) (111) (c) advertising and marketing ­ ­ (d) leased assets (e) staff costs (592) (592) (f) administration and corporate costs (647) (647) 1.3 Dividends received (see note 3) 1.4 Interest received ­ ­ 1.5 Interest and other costs of finance paid ­ ­ 1.6 Income taxes paid ­ ­ 1.7 Government grants and tax incentives 225 225 1.8 Other (provide details if material) ­ ­ 1.9 Net cash from / (used in) operating activities (374) (374)
	2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10)

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• See chapter 19 for defined terms , 1 September 2016

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	(c) investments (d) intellectual property (e) other non­current assets 2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments 98 98 (d) intellectual property (e) other non­current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) (53) (53) 2.6 Net cash from / (used in) investing activities 45 45
	3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities ­ ­

4.	Net increase / (decrease) in cash
	and cash equivalents for the period
4.1	Cash and cash equivalents at beginning of
	quarter/year to date	534	534
4.2	Net cash from / (used in) operating	(287)	(287)
	activities (item 1.9 above)
4.3	Net cash from / (used in) investing	45	45
	activities (item 2.6 above)
4.4	Net cash from / (used in) financing	(87)	(87)
	activities (item 3.10 above)
4.5	Effect of movement in exchange rates on	­	­
	cash held
4.6	Cash and cash equivalents at end of	205	205
	quarter

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• See chapter 19 for defined terms , 1 September 2016

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5. Reconciliation of cash and cash Current quarter Previous quarter equivalents $A’000 $A’000 at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

5.1 Bank balances 155 155 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) Term Deposit 50 50 5.5 Cash and cash equivalents at end of 205 205 quarter (should equal item 4.6 above)

6. Payments to directors of the entity and their associates Current quarter $A'000

6.1 Aggregate amount of payments to these parties included in item 1.2 130 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3

6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Payments represent deferred Directors wages and fees for the quarter.

7. Payments to related entities of the entity and their Current quarter associates $A'000

7.1 Aggregate amount of payments to these parties included in item 1.2 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3

7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

None

8. Financing facilities available Total facility amount Amount drawn at Add notes as necessary for an at quarter end quarter end understanding of the position $A’000 $A’000

8.1 Loan facilities 8.2 Credit standby arrangements 8.3 Other (please specify) 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

• See chapter 19 for defined terms , 1 September 2016

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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None

	None
	9. Estimated cash outflows for next quarter 9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) ATO Monthly Repayment Plan 9.8 Total estimated cash outflows		$A’000 ­ (110) (440) (360) (84) (994)
	10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above) Acquisitions 10.1 Name of entity 10.2 Place of incorporation or registration 10.3 Consideration for acquisition or disposal 10.4 Total net assets 10.5 Nature of business		Disposals
	Compliance statement 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. 2 This statement gives a true and fair view of the matters disclosed. Sign here: ............................................................ Date: .........31 October 2018........

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

Sign here: ............................................................ (Director/Company secretary)

Print name: ..........Zoran Grujic...................

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

• See chapter 19 for defined terms , 1 September 2016

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• disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

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

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

• See chapter 19 for defined terms , 1 September 2016

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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