ADSLOT LTD. — Interim / Quarterly Report 2011

Oct 27, 2011

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Company Commentary on activities during the quarter

1. Webfirm Group:

• Resignation of CEO (David Burden) in August and appointment of acting CEO (Adslot Co Founder and largest shareholder, Andrew Barlow);

• Investor Update released to the market on 15 September 2011;

• Strategically shifting from being a bespoke software solutions developer to a product-­‐driven sales organisation.

2. Webfirm Division:

• The focus on Search Engine Marketing services and reduction in web development work, is starting to reap rewards; and

• We continue our strategic review of this division, and plan to finalise this review during the next quarter.

**3.

Adslot Division:**

• Adslot achieved two significant milestones for the quarter:

  • SeLoger Launch -­‐ announced on 4 October 2011, demonstrates Adslot's capability to: ◦ Integrate the three different technologies acquired by Webfirm in the past 18 months, thereby, delivering a fully-­‐automated, end-­‐to-­‐end, self-­‐serve ad sales platform to a major classifieds publisher;

    • Deliver the product to an international customer in a foreign language; and

    • ◦ Create a platform for SeLoger, which underpins the commercial product focus moving forward.

  • Carsales Contract – announced on 11 October 2011: ◦ Provides further commercial endorsement of the new end-­‐to-­‐end, self-­‐serve product; and

    • Carsales is the first Asia Pacific customer to buy the platform, following the launch of the platform for SeLoger in Europe.

**4.

Financials**

• This Appendix 4C is consistent with management expectations;

• Cash at bank is $17.1M; and

• We anticipate further net operating cash outflows for the next 3 quarters.

• See chapter 19 for defined terms.

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Appendix 4C Page 1

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Name of entity

WEBFIRM GROUP LIMITED

ABN70 001 287 510	Quarter ended (“current quarter”)
70 001 287 510	30 SEPTEMBER 2011

Consolidated statement of cash flows

Consolidated statement of cash flows
Cash flows related to operating activities1.1Receipts from customers1.2Payments for:(a) staff costs(b) advertising and marketing(c) research and development(d) leased assets(e) website publisher payments(f) other cost of sales(g) other working capital/overheads1.3Dividends received1.4Interest and other items of a similar nature received1.5Interest and other costs of finance paid1.6Income taxes paid1.7Other – Government grants	Current quarter$A’000	Year to date(3 months)$A’000
	983(1,520)(22)-(2)(76)(292)(728)-402-(3)22	983(1,520)(22)-(2)(76)(292)(728)402-(3)22
Net operating cash flows	(1,236)	(1,236)

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter$A’000	Year to date(3 months)$A’000
1.8Net operating cash flows (carried forward)	(1,236)	(1,236)
Cash flows related to investing activities1.9Payment for acquisition of:(a) businesses(b) equity investments(c) intellectual property(d) physical non-current assets(e) other non-current assets1.10Proceeds from disposal of:(a) businesses(b) equity investments(c) intellectual property(d) physical non-current assets(e) other non-current assets1.11Loans to other entities1.12Loans repaid by other entities1.13Other (provide details if material)Net investing cash flows1.14Total operating and investing cash flows	----(75)---18----	----(75)---18---
	(57)	(57)
	(1,293)	(1,293)
Cash flows related to financing activities1.15Proceeds from issues of shares, options, etc.1.16Proceeds from sale of forfeited shares1.17Proceeds from borrowings1.18Repayment of borrowings1.19Dividends paid1.20Other – Costs relating to issues of sharesNet financing cash flows	------	------
	-	-
Net increase (decrease) in cash held1.21Cash at beginning of quarter/year to date1.22Exchange rate adjustments –Note 2	(1,293)18,35332	(1,293)18,35332
1.23Cash at end of quarter	17,092	17,092

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

		Current quarter$A'000
1.24	Aggregate amount of payments to the parties included in item 1.2	116
1.25	Aggregate amount of loans to the parties included in item 1.11	-
1.26Explanation necessary for an understanding of the transactionsDirectors Fees of $97kConsultancy Fees paid to entity associated with Director of $19kIn addition, item 1.1 includes receipts from trading with entity associated with Director of $14k

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity hasntity hastity hasity hasty has hasas an interestn interestterestrestest N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity hasntity hastity hasity hasty has hasas an interestn interestterestrestest

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

		Amount available$A’000	Amount used$A’000
3.1	Loan facilities	-	-
3.2	Credit standby arrangements	-	-

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown inthe consolidated statement of cash flows) to the related itemsinthe accountsis asfollows.	Current quarter$A’000	Previous quarter$A’000
4.1Cash on hand and at bank4.2Deposits at call4.3Bank overdraft4.4Other – Held in solicitor’s trust account	2,084	1,545
	15,008	16,808
	-	-
	-	-
Total: cash at end of quarter(item 1.23)	17,092	18,353

Acquisitions and disposals of business entities

5.1Name of entity5.2Place of incorporation orregistration5.3Consideration foracquisition or disposal5.4Total net assets5.5Nature of business	Acquisitions(Item 1.9(a))	Disposals(Item 1.10(a))
	N/A	N/A
	-	-
	-	-
	-	-
	-	-

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

==> picture [102 x 65] intentionally omitted <==

Sign here: ............................................................ Date: 28 October 2011 Company Secretary Print name: Brendan Maher

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.

   • 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss

   • • 9.2 - itemised disclosure relating to acquisitions • 9.4 - itemised disclosure relating to disposals • 12.1(a) - policy for classification of cash items • 12.3 - disclosure of restrictions on use of cash • 13.1 - comparative information

2. Exchange Rate Adjustment. Represents accounting adjustment related to conversion of US dollar and GB pound bank account balances to local currency.

• See chapter 19 for defined terms.

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