ECHOIQ LIMITED — Annual Report 2020

Aug 30, 2020

APPENDIX 4E

For the year ended 30 June 2020

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1. Company information

Name of entity: Houston We Have Limited ABN: 48 124 302 932 Reporting period: For the year ended 30 June 2020 Previous period: For the year ended 30 June 2019

2. Results for announcement to the market

2. Results for announcement to the market
			% change
		30 June	from year	30 June
		2020	ended 30	2019
		$’000	June 2019	$’000
Revenue from ordinary activities	down	740,989	10%	824,530
Profit from ordinary activities after tax	down	(2,722,636)	473%	(474,916)
Net profit attributable to members of the parent	down	(2,722,636)	473%	(474,916)

3. Consolidated statement of profit or loss and other comprehensive income

Refer to appendix.

4. Consolidated statement of financial position

Refer to appendix.

5. Consolidated statement of cash flows

Refer to appendix.

6. Consolidated statement of changes in equity

Refer to appendix.

7. Dividend information

7. Dividend information
	Amount per security Franked amount per security
Final dividend Interim dividend Total dividends per share for the year	- - - -
	- -

8. Details of dividend reinvestment plans

Nil.

9. Net Tangible Assets Per Security

Net tangible assets per security (cents)	30 June 2020 cents 30 June 2019 cents
	0.98 (0.63)

Net tangible assets are defined as the Net Assets of the Houston We Have Limited group less any intangible assets. The number of securities used in the calculation reflects the 10:1 share consolidation that took place on 15 August 2019, including the restatement of the prior comparative period.

Houston We Have Limited – Appendix 4E

APPENDIX 4E For the year ended 30 June 2020

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10. Details of entities over which control has been gained or lost during the period

On 31 October 2019, the Consolidated Entity finalised the acquisition of its wholly owned subsidiary, Prometheus Information Pty Ltd. This occurred due to a strategic decision to invest in product development, marketing and commercialisation of software, products and services in Australia.

11. Details of associates and joint venture entities

Company Name	Place of Incorporation	% Ownership 31 December 2019	% Ownership 30 June 2019
HWH Software PtyLtd	Australia	100%	100%
St Nicholas Mines PtyLtd	Australia	100%	100%
Prometheus Information PtyLtd	Australia	100%	-
Data DistilleryPtyLtd	Australia	50%	-
Niquaero LLC	Mongolia	100%	100%

12. Any other significant information

Capital Raising and Reinstatement to Official Quotation

In March 2019, the Consolidated Entity received commitments from several sophisticated and professional investors for an aggregate of $500,000 financing by way of a short-term convertible note facility (Facility) which was entered into on 28 March 2019. As at 30 June 2019 the Facility was drawn to $430,000. The convertible notes issued are convertible on or before 28 March 2020 at a conversion price of not less than $0.002 (preconsolidation price – on 15 August 2019 the Company effected a consolidation of its issued capital on a 10:1 basis). Conversion was subject to obtaining shareholder approval and this was received at the Annual General Meeting on 9 August 2019. The funds were fully repaid during the period.

On 24 July 2019 the Consolidated Entity resolved to enter into a lead manager and corporate advisory mandate with Taurus Capital Group Pty Ltd for Taurus Capital to act as lead manager of the capital raising. This Company issued a prospectus dated 26 July 2019 (as supplemented by a supplementary prospectus dated 30 August 2018) for the capital raising, and the raising was approved by shareholders at the Annual General Meeting on 9 August 2019. The Company closed the capital raising offer on 3 September 2019 after issuing 180 million shares at 3 cents raising the maximum subscription of $5,400,000. The Consolidated Entity’s securities were reinstated to official quotation and trading on ASX Limited on 9 September 2019.

Key Business Activities

During the financial year, the Consolidated Entity extended its services with the Australian Department of Defence to provide hardware as a service in support, and delivery, of training courses being conducted at numerous sites across Australia.

The Consolidated Entity also established Data Distillery Pty Ltd (Data Distillery) in conjunction with Potentiate Pty Ltd (Potentiate) as a special purpose joint venture company, with a 50% interest shared by each party. Data Distillery has been established to provide insights around customer behaviour to help industries such as banking, telecommunications, and automotive better interact with their customers. For the year ended 30 June 2020 there is no material impact on the financial results of the Consolidated Entity, though the consolidated entity is pleased with progress being made in developing a pipeline of opportunities.

Houston We Have has entered into an arrangement with GenVic to resell, in the British market, the G2G Pass mobile app that allows for easy display and verification of temporary travel permits.

Subsequent to year end, the Consolidated Entity secured a Master Terms & Conditions Agreement with the Australian arm of Accenture. Under the agreement, Accenture will sell Houston We Have’s proprietary prescriptive AI technology to blue chip and government clients.

Houston We Have Limited – Appendix 4E

APPENDIX 4E

For the year ended 30 June 2020

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12. Any other significant information (continued)

Business Acquisition

In October 2019, the Consolidated Entity acquired 100% of the shares in Prometheus Information Pty Ltd, a company that provides professional services and software to the health insurance sector. The consideration paid for Prometheus was $500,000 in cash, $100,000 in shares, and contingent consideration of $73,099 payable not before 30 June 2020 subject to certain milestones being achieved. The milestones were achieved and payment of the contingent consideration was made in July 2020.

13. Foreign entities

There are no transactions or balances to consolidate into the group in relation to foreign entities. The financial statements of the Group are general purpose financial statements and are prepared with Australian Accounting Standard and the Corporations Act 2001.

14. Commentary of results for the period

Earnings per security

	30 June 2020 cents 30 June 2019 cents
Basic loss per share Diluted loss per share Net loss attributable to ordinaryshareholders	(1.21) (0.67) (1.21) (0.67)
	(2,722,636) (474,916)
	30 June 2020 No. of shares 30 June 2019 No. of shares
Weighted average number of ordinary shares used in the calculation of basic loss per share Weighted average number of ordinary shares used in the calculation of diluted loss per share	225,271,385 70,414,582 225,271,385 70,414,582

The calculation of the weighted average number of shares has taken into consideration the 10:1 consolidation that occurred on 15 August 2019. The comparative figures have also been adjusted on a 10:1 basis.

Returns to shareholders

Not applicable.

Results overview

The Consolidated Entity reported a loss for the year ended 30 June 2020 of $2,722,636 (30 June 2019: loss of $474,916). Included in the loss for the year were non-cash Share Based Payments expenses of $1,338,058, for performance shares and options issued.

Operating revenue for the year totalled $740,989 (30 June 2019: $824,530). By segment, operating revenue was:

• Houston We Have: $296,238 (30 June 2019: $824,530, including upfront one-off license fees)

• Prometheus Information: $444,751 (30 June 2019: $nil).

The consolidated entity is navigating various challenges presented by the COVID-19 impacted environment, but remains in a strong cash position, with a closing cash balance at 30 June 2020 of $3,477,104 (30 June 2019: $714,039).

This report is based on accounts which are in the process of being audited by KPMG.

Houston We Have Limited – Appendix 4E

APPENDIX 4E

For the year ended 30 June 2020

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Appendix: Consolidated statement of profit or loss and other comprehensive income

	Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $
Revenue Government grant income Other income Audit fees Consulting and professional fees Employee costs Finance expenses Non-Executive Directors fees Depreciation and amortisation Other expenses Share based payments expenses – Directors and consultants fees Share of net profits/(losses) of equity accounted associates and joint ventures Share registry and listing fees Acquisition costs Voluntary administration credit/(expense) Loss before tax Income tax benefit/(expense) Net loss for the year Other comprehensive income Total comprehensive loss for the year Basic loss per share (cents) Diluted loss per share (cents)	740,989 824,530 - 54,810 192,672 183 (139,460) (89,725) (296,663) (307,857) (1,181,134) (568,900) (16,217) (104,941) (76,325) (134,082) (142,693) - (286,208) (68,071) (1,338,058) (78,955) 117 2,140 (94,882) (34,022) (84,775) - - 29,974
	(2,722,636) (474,916) - -
	(2,722,636) (474,916)
	- -
	(2,722,636) (474,916)
	(1.21) (0.67) (1.21) (0.67)

Houston We Have Limited – Appendix 4E

APPENDIX 4E

For the year ended 30 June 2020

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Appendix: Consolidated statement of financial position

	Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $
ASSETS Current Assets Cash and cash equivalents Trade and other receivables Other assets Total Current Assets Non-Current Assets Investments in associates and joint ventures Plant and equipment Right of use asset Intangible assets and goodwill Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables Borrowings Lease liability Employee benefits Contract liabilities – unearned income Total Current Liabilities Non-Current Liabilities Lease liability Employee benefits Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Contributed equity Reserves Accumulated losses Total Equity	3,477,104 714,039 352,886 157,192 894 764
	3,830,884 871,995
	4,346 3,961 62,381 153 32,870 - 494,575 -
	594,172 4,114
	4,425,056 876,109
	501,915 427,265 - 782,746 32,076 - 173,594 116,106 570,949 -
	1,278,534 1,326,117
	11,750 - 2,910 14,686
	14,660 14,686
	1,293,194 1,340,803
	3,131,862 (464,694)
	20,356,670 15,530,264 1,543,077 63,400 (18,767,885) (16,058,358)
	3,131,862 (464,694)

Houston We Have Limited – Appendix 4E

APPENDIX 4E

For the year ended 30 June 2020

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Appendix: Consolidated statement of cash flows

	Consolidated Entity 30 June 2020 $ Consolidated Entity 30 June 2019 $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Receipts from grants & subsidies Net cash from / (used in) operating activities Cash flows from investing activities Purchase of plant and equipment Acquisition of subsidiary Acquired cash Investment in associate Net cash from / (used in) investing activities Cash flows from financing activities Proceeds from equity issues Payment for costs of equity issues Proceeds from/(repayment of) convertible notes Proceeds from related party borrowings Repayment of lease liabilities Repayment of borrowings Net cash provided from / (used in) financing activities Net increase/(decrease) in cash held Cash and cash equivalents at beginning of the period Cash and cash equivalents at period end	889,836 774,530 (2,182,400) (1,186,969) 16,456 183 (15,720) (5,615) 188,138 215,659
	(1,103,690) (202,212)
	(88,540) - (500,000) - 245,740 - (1) -
	(342,801) -
	5,400,000 67,612 (407,698) - (520,300) 430,000 - 29 - - (262,446) (55,245)
	4,209,556 442,396
	2,763,065 240,184 714,039 473,855
	3,477,104 714,039

Houston We Have Limited – Appendix 4E

APPENDIX 4E

For the year ended 30 June 2020

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Appendix: Consolidated statement of changes in equity

		Contributed Equity $	Share Based Payments Reserve $ Accumulated Losses $ Total $
Balance at 1 July 2019		15,530,264	63,400 (16,058,358) (464,694)
Equity issues		5,513,104	- - 5,513,104
Capital raising costs		(686,698)	- - (686,698)
Share based payments		-	1,479,677 13,109 1,492,786
Loss for the period		-	- (2,722,636) (2,722,636)
Other comprehensive income		-	- - -
Total comprehensive loss for the year		-	- (2,722,636) (2,722,636)
Balance at 30 June 2020		20,356,670	1,543,077 (18,767,885) 3,131,862
Consolidated Entity		Contributed Equity $	Share Based Payments Reserve $ Accumulated Losses $ Total $
Balance at 1 July 2018 Equity issues Share based payments Loss for the period Other comprehensive income		15,410,653 119,611 - - -	25,400 (15,583,442) (147,389) - - 119,611 38,000 - 38,000 - (474,916) (474,916) - - -
Total comprehensive loss for the period		-	- (474,916) (474,916)
Balance at 30 June 2019		15,530,264	63,400 (16,058,358) (464,694)

Houston We Have Limited – Appendix 4E