ADSLOT LTD. — Interim / Quarterly Report 2014

Oct 29, 2014

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

Appendix 4C - Quarterly report

Commentary on activities during the quarter ending 30 September 2014

The
Company
continues
to
make
good
progress
with
the
execution
of
its
strategy.
This
is
evident
in the
form
of:

1. Growth
   in
   the
   volume
   of
   media
   transactions
   captured
   via
   the
   Adslot
   platform;

2. Growth
   in
   the
   average
   value
   of
   media
   transactions
   captured
   via
   the
   Adslot
   platform,
   and

3. Assembling
   a
   community
   of
   Adslot
   partners
   through
   which
   the
   Company
   will
   further
   scale supply
   and
   demand
   within
   the
   Adslot
   platform.

Growth in the Volume and Value of Media Transactions

The
Company
continues
to
see
meaningful
increases
in
campaign
bookings
captured
via
the
Adslot platform.
In
the
September
quarter,
the
value
of
media
transactions
increased
by
more
than
200% over
the
June
quarter,
which
in
turn
was
an
increase
of
more
than
200%
over
the
March
quarter. Pleasing
to
note
is
that
this
growth
is
being
driven
by
transactions
emanating
from
large
media agencies,
which
is
the
primary
source
of
demand
Adslot
direct
sales
efforts
have
focused
on
in recent
months.

Whilst
in
strong
growth,
buyer
adoption
is
still
best
characterised
as
very
early
stage,
so
material future
growth
is
anticipated
as
this
adoption
builds
and
automation
of
the
forward
guaranteed display
advertising
market
grows
generally.

Revenue
generated
from
media
transactions
is
recognised
over
the
period
corresponding
to
the advertising
activity
purchased,
not
the
date
of
transaction.
This
is
typically
1
to
3
months
after
the media
transaction.
Cash
collections
on
large
media
agency
buys
occur
after
the
advertising
has
run, so
Adslot
will
start
to
see
the
full
cashflow
and
revenue
benefit
of
transactions
on
platform
in coming
quarters.

Adslot Partners

The
Company
continues
to
develop
partnership
opportunities
with
a
number
of
companies
that represent
supply
at
scale,
and/or
demand
at
scale.

As
this
is
a
key
component
of
Adslot’s
strategy,
and
the
vast
majority
of
partner
companies
are domiciled
in
USA,
Adslot
CEO
Ian
Lowe
is
working
from
the
Company’s
New
York
office
until
late November.

The
Company
has
successfully
progressed
a
number
of
key
partnership
opportunities,
and
has
also expanded
its
list
of
partner
candidates.
Major
developments
regarding
partnerships
will
be announced
as
appropriate.

• See
  chapter
  19
  for
  defined
  terms.

Appendix
4C
Page
1

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

Cashflows

Cash
receipts
from
customers
for
the
September
quarter
were
$1.52
million,
which
is:

• a
  decrease
  of
  $0.18
  million
  versus
  the
  June
  quarter
  of
  $1.70
  million;

• a
  decrease
  of
  $0.05
  million
  versus
  an
  adjusted
  June
  quarter
  ( adjusted meaning
  excluding amounts
  collected
  in
  the
  June
  and
  September
  quarters
  from
  outstanding
  aged
  debtors
  from the
  acquired
  Facilitate
  business);

• including
  amounts
  collected
  in
  October
  that
  the
  Company
  would
  in
  the
  normal
  course
  of business
  expect
  to
  collect
  in
  September,
  an
  increase
  of
  $0.08
  million
  versus
  the
  June
  quarter (adjusted);

• an
  increase
  of
  $0.12
  million
  versus
  the
  March
  quarter.

Net
operating
cash
outflows
for
the
quarter
increased
from
$1.62
million
in
the
June
quarter
to $2.17
million
for
the
September
quarter.

On
a
normalised
basis
(which
excludes
collection
of
outstanding
aged
debtors
from
the
acquired Facilitate
business
and
the
receipt
of
an
annual
export
market
development
government
grant),
the underlying
net
operating
cash
outflows
for
the
quarter
increased
by
14%
from
$1.91
million
last quarter
to
$2.20
million
this
quarter.
This
is
a
result
of
additional
investment
to
accelerate
product development,
including
further
integration
of
the
Adslot
and
Symphony
platforms,
and
is
within levels
projected
in
the
operating
plan
and
budget
implemented
following
the
capital
raising conducted
in
July
2014.

The
Company
anticipates
a
further
reduction
in
underlying
quarterly
net
cash
outflows,
the
quantum and
timing
of
which
will
largely
be
determined
by
the
speed
and
magnitude
of
agency
adoption
of the Adslot
Marketplace ,
and
also
by
the
speed
and
adoption
of
the integrated
Adslot
and Symphony
platforms ,
an
upgraded
version
of
which
is
due
for
release
in
the
March
quarter
(2015).

Cash
at
the
end
of
the
quarter
was
$7.35
million,
the
increased
cash
position
benefiting
from
the
July 2014
capital
raising
and
the
exercising
of
options
in
September
2014,
less
the
costs
associated
with issuing
these
shares.

As
previously
advised
the
Company
also
expects
to
receive
a
cash
benefit
in
the
order
of
$2.0
million in
December
2014
or
January
2015
relating
to
Research
&
Development
incentives.

• See
  chapter
  19
  for
  defined
  terms. Appendix
  4C
  Page
  2

24/10/2005

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

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Name of entity
ADSLOT LTD
ABN 70 001 287 510	Quarter ended (“current quarter”)
70 001 287 510	30 September 2014

**Consolidated

statement
of
cash
flows**

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for: (a) staff costs (Note 3) (b) advertising and marketing (c) research and development (Note 4) (d) leased assets (e) website publisher payments (f) other cost of sales (g) other working capital/overheads 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income and Other taxes paid 1.7 Other – R&D Tax Incentive – Government grant	Current quarter $A’000	Year to date (3 months) $A’000
	1,517 (1,610) (11) (919) - (67) (157) (930) - 17 - (6) - -	1,517 (1,610) (11) (919) - (67) (157) (930) - 17 - (6) - -
Net operating cash flows	(2,166)	(2,166)

• See
  chapter
  19
  for
  defined
  terms.

Appendix
4C
Page
3

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

Appendix 4C - Quarterly report for entities admitted on the basis of commitments
	Current quarter $A’000	Year to date (12 months) $A’000
1.8 Net operating cash flows (carried forward)	(2,166)	(2,166)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) – Note 5 Net investing cash flows 1.14 Total operating and investing cash flows	- - - - (21) - - - - - - - -	- - - - (21) - - - - - - - -
	(21)	(21)
	(2,187)	(2,187)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. –Note 3 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other – Costs relating to issues of shares Net financing cash flows	6,523 - - - - (364)	6,523 - - - - (364)
	6,159	6,159
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments – Note 2	3,972 3,354 19	3,972 3,354 19
1.23 Cash at end of quarter	7,345	7,345

• See
  chapter
  19
  for
  defined
  terms. Appendix
  4C
  Page
  4

24/10/2005

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**

entities	entities
		Current quarter $A'000
1.24	Aggregate amount of payments to the parties included in item 1.2	65
1.25	Aggregate amount of loans to the parties included in item 1.11	-
1.26 Explanation necessary for an understanding of the transactions Directors Fees of $65k.

**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

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest N/A

**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.

Appendix
4C
Page
5

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

**Reconciliation

of
cash**

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items inthe accountsis asfollows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other	519	1,128
	6,826	2,226
	-	-
	-	-
Total: cash at end of quarter(item 1.23)	7,345	3,354

**Acquisitions

and
disposals
of
business
entities**

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature 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 [74 x 46] intentionally omitted <==

• Sign
  here: ............................................................
  Date:
  30
  October
  2014 Company
  Secretary

Print
name: Brendan
Maher

• See
  chapter
  19
  for
  defined
  terms.

Appendix
4C
Page
6

24/10/2005

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.

2. 6.2 -­‐
   reconciliation
   of
   cash
   flows
   arising
   from
   operating
   activities
   to operating
   profit
   or
   loss

4. • 9.2 -­‐
     itemised
     disclosure
     relating
     to
     acquisitions

   • 9.4 -­‐
     itemised
     disclosure
     relating
     to
     disposals

5. 12.1(a)
   -­‐
   policy
   for
   classification
   of
   cash
   items

6. • 12.3 -­‐
   disclosure
   of
   restrictions
   on
   use
   of
   cash

7. • 13.1 -­‐
   comparative
   information

8. Exchange
   Rate
   Adjustment
   (1.22): Represents
   accounting
   adjustment
   related
   to conversion
   of
   US
   dollar,
   GB
   pound
   and
   Euro
   bank
   account
   balances
   to
   local
   currency.

9. Proceeds
   from
   issue
   of
   shares
   (1.2a
   &
   1.15) :
   Includes
   $6.5m
   funds
   raised
   from
   a
   share placement
   and
   $23k
   received
   from
   options
   exercised
   by
   an
   employee.

10. Research
    &
    Development
    (1.2c): Represents
    direct
    payroll
    and
    on-­‐costs
    related
    to on-­‐going
    technology
    development
    work
    compliant
    with
    R&D
    Grant
    regulations.

• See
  chapter
  19
  for
  defined
  terms.

Appendix
4C
Page
7