MOTIO LTD — Annual Report 2017

Aug 31, 2017

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31 August 2017

Market Announcements Platform ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000

XTD Preliminary Final Report FY2017

Cross‐track digital advertising system owner and operator XTD Limited (ASX: XTD) ( XTD or the Company ) is pleased to lodge its FY2017 Appendix 4E and Preliminary Final Report.

Financial Highlights:

• Operating revenue of $2,931,352 for the year, a decrease of 15% on FY2016 operating revenue ($3,452,991)

• Accelerated development, seeding and launch of subsidiary Contact Light Pty Ltd to focus on designing and marketing mobile platforms for transport environments

• Contact Light completed a capital raising during the period with the result that XTD’s interest has been diluted to 45%

• Basic loss per share decreased by 12% to 1.7 cents per share (FY2016 1.9 cents per share)

• Net Asset Position at 30 June 2017 is $4,315,220

• Cash and cash equivalents at 30 June 2017 is $1,830,292

Operational Highlights:

• Agrees more extensive partnership with APN Outdoor

• Installs XTD system trial in New Delhi, India

• Welcomes two new Board Directors

• Successful technology trial of ‘ Nearcast’ for communications between digital screens and mobile devices

XTD CEO Steve Wildisen said he was “ pleased with progress in the year, with a focus on core skills in digital transit communications and on expanding the Company’s technology skills. The financial result for 2016/17 was disappointing however XTD is pleased to have finalised our new and more extensive agreement with APN Outdoor. This is a clear signal of the strength of digital out‐of‐home, the uniqueness of the Cross Track product and its favoured status on the media schedules for big brands .”

He said the Company is finalising the trialling of its Cross Track system within the Delhi Metro Rail network with a view to determining whether the Indian opportunity meets the strict ROI criteria XTD applies to all its projects. An update will be provided to shareholders in the coming weeks.

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The Company also welcomed new Board Directors Joe Copley and Quentin Gracanin. Mr Wildisen said that both Executives are highly respected and successful business leaders, with their experiences and perspectives from diverse business backgrounds being highly valuable in planning the future for XTD.

“ I’d like to make special mention of XTD’s innovation division, Contact Light ,” said Mr Wildisen. “ In the past year, Contact Light has successfully proved its Nearcast technology platform that allows interaction between digital OOH screens and people’s mobile devices. Also, Contact Light’s patented app, EMBARK, which now has 130,000 users and the benefit of 14 months of data.”

FY 2018 Outlook

XTD is currently progressing a number of potential transactions within the Australian OOH industry. These opportunities are being pursued to further showcase XTD`s unique ability to combine leading OOH screen networks with connectivity to mobile devices via Contact Light’s Nearcast technology. Together, the businesses create a unique partnership focussed on the future of data‐led and data‐ informed communications. This is where the two fastest growing media sectors of Out‐of‐Home and Mobile come together.

Mr Wildisen further commented that after a less than budgeted 2H 2016/17 result, the September quarter now underway is performing significantly better and in line with XTD’s expectations for the quarter and in line with the forecast improvement required in 2017/18 financial year.

For more information, contact:

Steve Wildisen

Chief Executive 0413 204 400 steve.wildisen@xtd.tv

Nathan Ryan

Investor relations and media +61 420 580 887 nathan.ryan@nwrcommunications.com.au

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XTD LTD PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

XTD Ltd

ABN 43 147 799 951

Appendix 4E

Preliminary Final Report

Results for announcement to the market

for the year ended 30 June 2017

				30 June 2017
				$A
Revenue	Down	14%	to	3,384,854
Loss after tax attributable to members	Down	13%	to	(2,187,909)
Loss for the period attributable to members	Down	13%	to	(2,187,909)
	30	June 2017		30 June 2016
		Cents		Cents
Net Tangible Assets per security		3.02		3.52

Dividends (distributions)	Amount per security	Franked amount per security
Final dividend	Nil	Nil
Interim dividend	Nil	Nil
Previous corresponding period	Nil	Nil
Record date for determining entitlements to the dividend.	No dividends are proposed

Control gained over entities having material effect

Name of entity (or group of entities)	n/a
Date from which such profit has been calculated	n/a
Contribution to the reporting entity’s result	n/a

XTD LTD PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

Dividend

The Directors recommend that no dividend be paid. No dividends have been paid or declared during the year.

Status of Audit

The report is based on financial accounts which have not been audited.

This preliminary final report does not include all the notes of the type normally included in an annual financial report. Accordingly, this should be read in conjunction with the annual report for the year ended 30 June 2017 and any public announcements made by XTD Ltd during the reporting period in accordance with the continuous disclosure requirements of the ASX Listing Rules and Corporations Act 2001 (Cth).

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Stuart Richardson Director

XTD LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

Note Revenue from continuing operations Other income Amortisation of intangibles Commission expense Consultancy fees Depreciation expense Personnel expenses Occupancy expenses Professional fees Share based payments Travelling expenses Other expenses Loss from continuing operations before income tax Income tax benefit Loss from continuing operations after income tax Items that may be reclassified to profit or loss Foreign currency translation of subsidiary, net of tax Total comprehensive loss for the year Loss for the year is attributable to: Owners of the company Non‐controlling interests Total comprehensive loss for the year attributable to: Owners of the company Non‐controlling interests Loss per share from continuing operations attributable to the ordinary equity holders of the Company: Basic and diluted loss per share 7	30‐Jun‐17 $ 30‐Jun‐16 $	30‐Jun‐17 $ 30‐Jun‐16 $	30‐Jun‐17 $ 30‐Jun‐16 $
	2,931,352 3,452,991 453,502 487,803 (124,470) (124,470) (884,831) (1,009,910) (348,852) (373,229) (858,350) (1,162,649) (2,003,020) (2,752,485) (51,686) (70,564) (436,254) (319,932) (212,774) ‐ (266,323) (277,198) (820,359) (745,877)
	(2,622,065) (2,895,520) 37,340 37,340
	(2,584,725) (2,858,180)
	(3,920) ‐
	(2,588,645) (2,858,180)
	(2,187,099) (2,515,909) (397,626) (342,271)
	(2,584,725) (2,858,180)
	(2,191,014) (2,515,909) (397,626) (342,271)
	(2,588,645) (2,858,180)
		Cents (1.7)	Cents (1.9)

XTD LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

Current Assets Notes Cash & cash equivalents Trade & other receivables Total Current Assets Non‐Current Assets Plant & equipment 2 Intangibles 3 Total Non‐Current Assets TOTAL ASSETS Current Liabilities Trade & other payables Provisions Total Current Liabilities Non‐Current Liabilities Deferred tax liability Total Non‐Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves 4 Accumulated losses Capital and reserves attributable to owners of the company Non‐Controlling interests TOTAL EQUITY	30‐Jun‐17 $ 30‐Jun‐16 $
	1,830,292 2,208,980 150,927 247,117
	1,981,219 2,456,097
	2,296,282 2,850,447 497,875 622,345
	2,794,157 3,472,792
	4,775,376 5,928,889
	265,146 571,856 45,645 54,745
	310,791 626,601
	149,365 186,705
	149,365 186,705
	460,156 813,306
	4,315,220 5,115,583
	15,891,009 15,891,009 2,487,241 1,412,879 (13,143,387) (11,734,652)
	5,234,863 5,569,236 (919,643) (453,653)
	4,315,220 5,115,583

XTD LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

At 1 July 2016 Loss for the year Exchange differences on translation of foreign operations Total comprehensive loss for the year Transactions with owners in their capacity as owners: Share‐based payment ‐ performance shares Share‐based payment Disposal of shares in subsidiary At 30 June 2017 At 1 July 2015 Loss for the year Total comprehensive loss for the year Transactions with owners in their capacity as owners: Share‐based payment ‐ performance shares Disposal of shares in subsidiary Vesting of performance shares – Tranche A Vesting of performance shares – Tranche B At 30 June 2016	Issued Capital $ Share‐ based Payment Reserve $ Options Premium Reserve $ Foreign Currency Translation Reserve $ Accumulated Losses $ Total $ Non‐ controlling interests $ Total Equity $ 15,891,009 1,412,879 ‐ ‐ (11,734,652) 5,569,236 (453,653) 5,115,583 ‐ ‐ ‐ ‐ (2,187,099) (2,187,099) (397,626) (2,584,725) ‐ ‐ ‐ (3,920) ‐ (3,920) ‐ (3,920) ‐ ‐ ‐ (3,920) (2,187,099) (2,191,019) (397,626) (2,588,645) ‐ 865,508 ‐ ‐ ‐ 865,508 ‐ 865,508 212,774 ‐ ‐ 212,774 ‐ 212,774 ‐ ‐ ‐ ‐ 778,364 778,364 (68,364) 710,000 15,891,009 2,278,387 212,774 (3,920) (13,143,387) 5,234,863 (919,643) 4,315,220 Issued Capital $ Share‐ based Payment Reserve $ Options Premium Reserve $ Foreign Currency Translation Reserve $ Accumulated Losses $ Total $ Non‐ controlling interests $ Total Equity $
	14,091,003 1,617,539 ‐ ‐ (10,830,125) 4,878,417 ‐ 4,878,417 ‐ ‐ ‐ ‐ (2,515,909) (2,515,909) (342,271) (2,858,180)
	‐ ‐ ‐ ‐ (2,515,909) (2,515,909) (342,271) (2,858,180) ‐ 1,595,346 ‐ ‐ ‐ 1,595,346 ‐ 1,595,346 ‐ ‐ ‐ ‐ 1,611,382 1,611,382 (111,382) 1,500,000 900,003 (900,003) ‐ ‐ ‐ ‐ ‐ ‐ 900,003 (900,003) ‐ ‐ ‐ ‐ ‐ ‐
	15,891,009 $1,412,879 ‐ ‐ (11,734,652) 5,569,236 (453,653) 5,115,583

XTD LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017

Note Cash flows from operating activities Receipt from customers Payment to suppliers and employees Interest received Research and development grant Export market development grant Net cash inflow/(outflow) from operating activities Cash flows from investing activities Payment for property, plant and equipment Proceeds from disposal equity investments Net cash outflow/(inflow) from investing activities Cash flows from financing activities Issue of shares and options Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange rate adjustments Cash and cash equivalents at end of year	30‐Jun‐17 $ 30‐Jun‐16 $
	3,071,727 3,342,707 (4,225,055) (3,652,059) 7,889 13,826 354,469 399,488 91,143 49,489
	(699,827) 153,451
	(373,650) (390,400) 720,000 1,490,000
	346,350 1,099,600
	‐ ‐
	‐ ‐
	(353,477) 1,253,051 2,208,980 955,929 (25,211) ‐
	1,830,292 2,208,980

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

1. SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The segments are consistent with the internal management reporting information that is regularly reviewed by the chief operating decision maker.

The Group engages in one business in Australia, activity from which it earns revenues, and its results are analyzed as a whole by the chief operating decision maker. Consequently revenue, profit and net assets for the operating segment and geographical segment are reflected in this annual report.

30 June 2017 Income Expenses Income tax expense Operating loss Other significant items: Amortisation of intangibles Net loss before tax Assets Cash and cash equivalents Trade and other receivables Plant & equipment Intangibles Liabilities Trade and other payables Provisions Deferred tax liability	XTD Ltd $ Contact Light $ Total $ 3,009,712 365,142 3,384,854 (4,695,886) (1,186,563) (5,882,449) 37,340 ‐ 37,340
	(1,648,834) (821,421) (2,460,255)
	(124,470) ‐ (124,470)
	(1,763,304) (821,421) (2,584,725)
	1,585,331 244,961 1,830,292 124,854 26,073 150,927 2,288,893 7,389 2,296,282 497,875 ‐ 497,875
	4,496,953 278,424 4,775,376
	197,260 67,886 265,146 19,846 25,799 45,645 149,365 ‐ 149,365
	366,470 93,686 460,156

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

1. SEGMENT INFORMATION (continued)

30 June 2016 Income Expenses Income tax expense Operating loss Other significant items: Amortisation of intangibles Net loss before tax Assets Cash and cash equivalents Trade and other receivables Plant & equipment Intangibles Liabilities Trade and other payables Provisions Deferred tax liability	XTD Ltd $ Contact Light $ Total $ 3,870,924 69,870 3,940,794 (5,574,951) (1,136,893) (6,711,844) 37,340 ‐ 37,340
	(1,666,687) (1,067,023) (2,733,710)
	(124,470) ‐ (124,470)
	(1,791,157) (1,067,023) (2,858,180)
	1,786,074 422,906 2,208,980 236,417 10,700 247,117 2,834,206 16,241 2,850,447 622,345 ‐ 622,345
	5,479,042 449,847 5,928,889
	452,144 119,712 571,856 20,769 33,976 54,745 186,705 ‐ 186,705
	659,618 153,688 813,306

2. PLANT AND EQUIPMENT

Plant and equipment Reconciliation: Balance at the beginning of the year Additions Depreciation expense Balance at the end of the year	30‐Jun‐17 $ 30‐Jun‐16 $ 2,296,282 2,850,447
	2,296,282 2,850,447
	2,850,447 3,772,244 304,185 240,852 (858,350) (1,162,649)
	2,296,282 2,850,447

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

3. INTANGIBLES

. INTANGIBLES
Contract rights (a) At cost Accumulated amortisation	30‐Jun‐17 $ 30‐Jun‐16 $ 871,285 871,285 (373,410) (248,940)
	497,875 622,345

(a) Business combination – Outdoor Digital Solutions Pty Ltd

On 2 January 2013, the Company acquired 100% of the issued capital of Outdoor Digital Solutions Pty Ltd. The consideration for the acquisition was made up of a $90,000 cash deposit and a $520,000 cash payment on settlement. Outdoor Digital Solutions owns the rights to each of the Melbourne and Queensland rail advertising contracts. The commencement date of the contract was 1 July 2014. A deferred tax liability of $261,385 was recognised in respect of this acquisition. The contract is being amortised on a straight line basis over the contract term (7 years).

4. RESERVES

4. RESERVES
	30‐Jun‐17	30‐Jun‐16
	$	$
Share‐based payments reserve	2,278,387	1,412,879
Options premium reserve	212,774	‐
Foreign currency translation reserve	(3,920)	‐
Balance at the end of the year	2,487,241	1,412,879
	30‐Jun‐17	30‐Jun‐16
	$	$
Share‐based payments reserve
Balance at the beginning of the year	1,412,879	1,617,539
Valuation of performance shares issued 19 December 2014	865,508	1,595,346
Conversion of Tranche A and B performance shares to ordinary	‐	(1,800,006)
shares
Balance at the end of the year	2,278,387	1,412,879
Refer to note 5 for further details on the performance shares issued.

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

4. RESERVES (continued)

Options premium reserve Balance at the beginning of the year Valuation of options issued 28 June 2017 Balance at the end of the year Refer to note 5 for further details on the options issued. Foreign currency translation reserve Balance at the beginning of the year Exchange difference arising on translation of foreign operations Balance at the end of the year	30‐Jun‐17 $ 30‐Jun‐16 $ ‐ ‐ 212,774 ‐
	212,774 ‐
	30‐Jun‐17 $ 30‐Jun‐16 $ ‐ ‐ (3,920) ‐
	(3,920) ‐

(a) Nature and Purposes of Reserves

(i) Share‐based Payment and Options Premium Reserves

This reserve is used to record the value of equity benefits to employees, management personnel, chairman, non‐executive directors and consultants as part of their remuneration. When the performance shares vest the amount recorded in the Share‐based Payment Reserve relevant to those performance shares is transferred to share capital.

(ii) Foreign Currency Translation Reserve

The foreign currency translation reserve records exchange differences arising on translation of foreign controlled entities. The exchange differences arising are recognised in other comprehensive income as and accumulated within a separate reserve within equity. The cumulative amount is reclassified to the statement of profit or loss and other comprehensive income when the net investment is disposed of.

5. SHARE‐BASED PAYMENTS

(a) Performance shares

As part of the Lunalite acquisition on 19 December 2014, XTD Ltd issued 28,500,076 performance shares to management personnel, the Chairman and a non‐executive director. These performance shares were issued in four classes, each with different performance milestones. Each performance share will convert into 1 ordinary share of XTD Ltd upon achievement of the performance milestone.

The company has assessed each class as being probable of being achieved and have therefore recognised an expense over the expected vesting period. Class A and Class B Performance milestones was however achieved during the year. Accordingly, the full expense was recognised recognised for 30 June 2016.

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

5. SHARE‐BASED PAYMENTS (continued)

The details of each class are tabled below:

Class	Number	Grant Date	Exercise Price	Expiry Date of Milestone Achievements	Underlying Share Price	Total Fair Value
A	4,500,013	19/12/14	Nil	19/12/16	$0.20	$900,003
B	4,500,013	19/12/14	Nil	19/12/16	$0.20	$900,003
C	4,500,013	19/12/14	Nil	19/12/17	$0.20	$900,003
D	15,000,037	19/12/14	Nil	19/12/19	$0.20	$3,000,007

(a) Performance shares (continued)

Performance Milestones:

• A. First revenue to Lunalite from Queensland Contract. This milestone expires two years from completion of the acquisition (19 December 2014).

• B. Security mobile application being developed and either being adopted by one rail operator, or achieving a minimum of 200,000 subscribers. This milestone expires two years from completion of the acquisition (19 December 2014).

• C. Lunalite generating total revenue of at least $5 million in any 12 month period. This milestone expires three years from completion of the acquisition (19 December 2014).

• D. Lunalite being awarded an offshore XTD contract of at least 40 screens and that contract being successfully installed and generating revenue to Lunalite. This milestone expires within five years from completion of the acquisition (19 December 2014).

The total expense arising from share based payment transactions recognised during the period in relation to the performance shares issued was $865,508 (2016: $1,595,346).

(b) Shares Issued to Other Parties

No shares were granted to brokers during 2017 (2016: $nil).

(c) Options

There have been no options issued to current directors and executives as part of their remuneration.

5,000,000 listed options were issued during the year to Asenna Capital. The options have an exercise price of 22 cents each and expire on 28 June 2020. The option value was calculated using the Black‐Scholes Model. The value of the options has been determined using the Black‐Scholes Model as they were issued in accordance with an agreement rather than on receipt of a vendor invoice. The option reserve records items recognised on valuation of director, employee and contractor share options as well as share options issued during the course of a business combination.

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

5. SHARE‐BASED PAYMENTS (continued)

The assessed fair values of the options were determined using a Black‐Scholes option pricing model, taking into account the exercise price, term of option, the share price at grant date and expected price volatility of the underlying share, expected dividend yield and the risk‐free interest rate for the term of the option. The inputs to the model used were:

Dividend Yield ‐ Expected volatility (%) 94 Risk‐free interest rate (%) 1.5 Expected life of options (years) 3.0 Option exercise price 0.22 Share price at grant date 0.010 Value of option ($) 0.0425

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

6. NON‐CONTROLLING INTERESTS

. NON‐CONTROLLING INTERESTS
Balance at the beginning of the year Interest in: Fair value of net assets acquired by the minority Share of the loss for the current period Balance at the end of the year	30‐Jun‐17 30‐Jun‐16 $ $ (453,653) ‐ (68,364) (111,382) (397,626) (342,271)
	(577,372) (453,653)

A subsidiary of the group, Contact Light Pty Ltd (Contact Light), raised funds via a private placement to unrelated parties during the period. Contact Light raised a total of $710,000 on 8 June 2017. As a result, XTD’s ownership of Contact Light has been diluted to 45.16% at reporting date. The non‐controlling interest’s share of the net operating loss of Contact Light Pty Ltd between 1 July 2016 and 30 June 2017 is $397,626. The fair value of net liabilities acquired by the minority in 2017 totals $68,364 and the excess paid by the minority for the issued shares totalling $778,364 has been transferred to accumulated losses attributable to the owners of XTD Ltd.

XTD LIMITED NOTES TO THE PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

7. EARNINGS PER SHARE

Basic loss per share

The calculation of basic loss per share at 30 June 2017 was based on the loss attributable to ordinary shareholders of $2,515,909 and a weighted average number of ordinary shares outstanding during the year ended 30 June 2016 of 129,555,739 calculated as follows:

	30‐Jun‐17	30‐Jun‐16
	$	$
Loss attributable to ordinary shareholders	(2,187,099)	(2,515,909)
Weighted average number of ordinary shares	132,986,077	129,555,739
Basic loss per share (cents per share)	(1.7)	(1.9)

Diluted loss per share

Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per share.

8. EVENTS OCCURRING AFTER THE REPORTING PERIOD

Subsequent to the Period on 17 July 2017, XTD advised it had signed a new reseller agreement with Australia’s largest outdoor media companies, APN Outdoor. The new agreement will see APN Outdoor continue to act as the content sales agency for XTD’s digital screen networks in the Melbourne and Brisbane metro rail networks. The new agreement with APN Outdoor increases the scope of the partnership with XTD, with the new term set to run for the next 18 months, with considerations for an additional extension term of 18 months.

No other matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect:

• (i) the Group’s operations in future financial years, or

• (ii) the results of those operations in future financial years, or

• (iii) the Group’s state of affairs in future financial years.