ADSLOT LTD. — Interim / Quarterly Report 2017

Jan 29, 2017

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

Appendix 4C - Quarterly report

Commentary for the quarter ending 30 December 2016

Cash receipts from customers for the December 2016 quarter were $3.16m, an increase of 35% on the previous quarter’s receipts of $2.34m. The increase in cash receipts reflects a corresponding increase in the collection of Trading Technology revenues.

Payments during the quarter of $4.59m were broadly in line with the previous quarter of $4.49m, and lower than the forecasted $5.26m due to lower than expected working capital costs and timing of Publisher payments, which were delayed due to corresponding delays in receipts from agencies.

Staff costs and Research and Development costs increased in the December quarter as anticipated, as investment in these areas increased in line with the objectives of the recent capital raising.

The increased receipts and flat payments gave rise to significantly less net cash used in operating activities of $1.41m, compared to a $2.12m outflow in the prior quarter - an improvement of 50%.

The Company is forecasting $6.26m of payments for the March 2017 quarter (see item 9) compared to $4.59m paid in the December quarter. The quarter on quarter increase reflects further investment in product and development (R&D) as per the Company’s Operating Plan and as disclosed in our capital raising presentation, together with higher forecast publisher payments due to increased Trading Fee revenues.

During the December quarter, the Company finalised its Capital Raising with $6.86m (before transaction costs) collected from the fully underwritten Rights Issue.

Cash at the end of the December quarter was $17.98m.

The Company is yet to receive its $2.3m from the R&D Tax incentive scheme arising from its R&D activities for the year ended 30 June 2016. This is expected to occur in the current (March) quarter.

Further details outlining the Company’s performance for the December quarter are 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

ADSLOT LTD

ABN Quarter ended (“current quarter”) 70 001 287 510 31 December 2016

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date
		$A’000	(6 months)
			$A’000
1.	Cash flows from operating activities
1.1	Receipts from customers	3,158	5,498
1.2	Payments for
	(a) staff costs	(1,937)	(3,481)
	(b) research and development	(1,065)	(2,059)
	(c) publishers	(542)	(1,238)
	(d) other cost of sales	(193)	(546)
	(e) advertising and marketing	(52)	(75)
	(f) leased assets	(1)	(2)
	(g) other working capital/overheads	(803)	(1,682)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	22	48
1.5	Interest and other costs of finance paid	0	0
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	(1,413)	(3,537)
	activities

• 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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date
		$A’000	(6 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	(60)	(82)
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	(60)	(82)
	activities
3.	Cash flows from financing activities
3.1	Proceeds from issues of shares	6,846	18,055
3.2	Proceeds from issue of convertible notes	-	-
3.3	Proceeds from exercise of share options	-	-
3.4	Transaction costs related to issues of	(498)	(1,219)
	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	6,348	16,836
	activities

• 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

Consolidated statement of cash flows Current quarter $A’000 4. Net increase / (decrease) in cash and cash equivalents for the period 13,058 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) (1,413) 4.3 Net cash from / (used in) investing activities (item 2.6 above) (60) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 6,348 4.5 Effect of movement in exchange rates on cash held 44 4.6 Cash and cash equivalents at end of quarter 17,977	Year to date (6 months) $A’000 4,746 (3,537) (82) 16,836 14 17,977
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts Current quarter $A’000 5.1 Bank balances 1,399 5.2 Call deposits 16,578 5.3 Bank overdrafts - 5.4 Other (provide details) - 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 17,977	Previous quarter $A’000 1,032 12,026 13,058
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 68 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
	Current quarter $A'000 68 -

Directors Fees

• 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	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

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.

9.	Estimated cash outflows for next quarter	$A’000
9.1	staff costs	2,336
9.2	research and development	1,219
9.3	Publishers	1,586
9.4	other cost of sales	220
9.5	advertising and marketing	61
9.6	leased assets	1
9.7	other working capital/overheads	834
9.8	Total estimated cash outflows from operating activities	6,258

• 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

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

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.

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Sign here: ............................................................ Date: 30 January 2017 (Company secretary)

Print name: Brendan Maher

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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