ADSLOT LTD. — Interim / Quarterly Report 2017

Oct 29, 2017

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

Appendix 4C - Quarterly report

Commentary for the quarter ending 30 September 2017

Cash receipts from customers for the September 2017 quarter were $1.79m, down on the previous quarter’s receipts of $2.6m. An underlying driver of the reduction in cash receipts over recent months is attributable to a decrease in media transactions where Adslot bill the cost of the media to the media buyer. As referenced in previous quarters, this trend is expected to continue as the Company focuses sales efforts on larger agencies, the majority of which prefer to retain direct billing relationships with publishers. Publishers direct billing media buyers for media transacted via Adslot does not negatively impact the Company’s revenue.

A further $0.14k not included in the quarterly receipts was received on the first working day of October.

Payments during the quarter of $5.26m were down on last quarter of $5.80m, largely also due to a corresponding reduction in outgoing payments to publishers where Adslot acts as a clearing house for payment. All other cash outflows were at similar levels to previous quarters except for research & development expenditure, which increased by $0.24m and remains within budget levels as per the operating plan.

The net cash used in operating activities for the quarter was $3.44m.

The company notes that increased cash outflows in recent quarters relate to significantly increased investment in product development, sales and marketing as identified in the operating plan associated with the October 2016 capital raising. The company has seen material benefits arising from this increased investment and believes it is now in a position to moderate costs going forward. A cost reduction plan has been identified and is being activated which will realise a 2% reduction in outgoing payments for the current (December) quarter and larger reductions in subsequent periods.

Cash at the end of the September 2017 quarter was $10.8m. Based on R&D expenditure incurred between July 2016 and June 2017, an additional cash inflow of approximately $2.7m is anticipated within the next two to three months.

More information on the Company’s performance is available via the Company’s Trading Update issued earlier today.

• See chapter 19 for defined terms 1 September 2016

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

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Name of entity

Name of entity
ADSLOT LTD ABN	Quarter ended (“current quarter”)
70 001 287 510	30 September 2017

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers 1,787 1,787
1.2 Payments for
(a) staff costs (2,545) (2,545)
(b) research and development (1,584) (1,584)
(c) publishers (183) (183)
(d) other cost of sales (158) (158)
(e) advertising and marketing (78) (78)
(f) leased assets (1) (1)
(g) other working capital/overheads (712) (712)
1.3 Dividends received (see note 3) - -
1.4 Interest received 31 31
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other (provide details if material) - -
1.9 Net cash from / (used in) operating (3,443) (3,443)
activities
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• See chapter 19 for defined terms 1 September 2016

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

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
- -
(a) property, plant and equipment
- -
(b) businesses (see item 10)
- -
(c) investments
- -
(d) intellectual property
(e) other non-current assets (63) (63)
2.2 Proceeds from disposal of:
- -
(a) property, plant and equipment
- -
(b) businesses (see item 10)
- -
(c) investments
- -
(d) intellectual property
- -
(e) other non-current assets
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing (63) (63)
activities
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
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• See chapter 19 for defined terms 1 September 2016

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

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
quarter/year to date 14,320 14,320
4.2 Net cash from / (used in) operating (3,443) (3,443)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities (63) (63)
(item 2.6 above)
4.4 Net cash from / (used in) financing activities - -
(item 3.10 above)
4.5 Effect of movement in exchange rates on (17) (17)
cash held
4.6 Cash and cash equivalents at end of 10,797 14,320
quarter
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 858 1,663
5.2 Call deposits 9,939 12,657
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of 10,797 14,320
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 52
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
Directors Fees
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• See chapter 19 for defined terms 1 September 2016

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

7. Payments to related entities of the entity and their associates 7.1 Aggregate amount of payments to these parties included in item 1.2 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3	Current quarter $A'000 - -

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

8. Financing facilities available Add notes as necessary for an understanding of the position

8.1 Loan facilities 8.2 Credit standby arrangements 8.3 Other (please specify)

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Total facility amount Amount drawn at
at quarter end quarter end
$A’000 $A’000
- -
- -
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• 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.

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9. Estimated cash outflows for next quarter $A’000
9.1 staff costs 2,516
9.2 research and development 1,574
9.3 Publishers 181
9.4 other cost of sales 163
9.5 advertising and marketing 53
9.6 leased assets 1
9.7 other working capital/overheads 681
9.8 Total estimated cash outflows from operating activities 5,169
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• See chapter 19 for defined terms 1 September 2016

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

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10. Acquisitions and disposals of Acquisitions Disposals
business entities
(items 2.1(b) and 2.2(b) above)
10.1 Name of entity
10.2 Place of incorporation or
registration
10.3 Consideration for acquisition or
disposal
10.4 Total net assets
10.5 Nature of business
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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.

P

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Sign here: ............................................................ Date: 30[th] October 2017 (Company secretary)

Print name: Felicity Conlan

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

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

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

4. See chapter 19 for defined terms 1 September 2016

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