NEXTED GROUP LIMITED — Annual Report 2020

Aug 30, 2020

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ICOLLEGE LIMITED

ABN 75 105 012 066 and its controlled entities

APPENDIX 4E Preliminary Final Report 30 June 2020

ICOLLEGE LIMITED

APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Corporate directory

Current Directors

Simon Tolhurst Non-executive Chairman Ashish Katta Managing Director Badri Gosavi CFO & Executive Director

Company Secretary

Stuart Usher

Registered Office

Street + Postal: 205 North Quay

Brisbane City QLD 4000 Telephone: +61 (0)7 3229 6000 Email: investors@icollege.edu.au Website: http://www.icollege.net

Auditors

Bentleys Audit & Corporate (WA) Pty Ltd Level 3, 216 St Georges Terrace PERTH WA 6000 Telephone: +61 (0)8 9226 4500

Solicitors

Andrew Lindfoot Suite 5, 531 Hay Street, Subiaco, Western Australia

Share Registry

Link Market Services Limited Street + Postal: Level 12, QV1 Building

250 St Georges Terrace, PERTH WA 6000 Telephone: 1300 554 474 (within Australia) +61 (0)8 9211 6670 (International) Facsimile: +61 (0)8 9287 0303 Email: registrars@linkmarketservices.com.au Website: https://www.linkmarketservices.com.au

Securities Exchange

Australian Securities Exchange Level 40, Central Park, 152-158 St Georges Terrace Perth WA 6000

Telephone: 131 ASX (131 279) (within Australia) Telephone: +61 (0)2 9338 0000 Facsimile: +61 (0)2 9227 0885 Website: www.asx.com.au ASX Code ICT

Bankers

Commonwealth Bank Limited Ground Floor, 50 St Georges Terrace PERTH WA 6000

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ICOLLEGE LIMITED AND CONTROLLED ENTITIES

APPENDIX 4E

Preliminary final report 30 June 2020

ABN 75 105 012 066

Contents

Company Update ................................................................................................................................................................... 1 Results for announcement to the Market ............................................................................................................................. 4 Consolidated statement of profit or loss and other comprehensive income ........................................................................ 7 Consolidated statement of financial position ....................................................................................................................... 8 Consolidated statement of changes in equity ....................................................................................................................... 9 Consolidated statement of cash flows ................................................................................................................................. 10 Notes to the Appendix 4E preliminary final report .............................................................................................................. 11

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ICOLLEGE LIMITED

APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Company Update

1. Operating and financial review

1.1. Nature of Operations and Principal Activities

iCollege Limited is a leading vocational training provider that comprises of six businesses which deliver accredited and nonaccredited vocational education and training solutions throughout Australia and internationally. iCollege currently has four registered training organisations (RTOs) based in Australia, an India-based specialist IT Training business focussed on the delivery of intensive Boot Camp style training in coding and an English language testing business partnered with Cambridge Assessment English.

The iCollege training scope assists people looking to develop essential skills and knowledge required to gain employment or advance their careers across a range of industry sectors including construction, aged care, disability, hospitality, business, information technology, English language and health & fitness.

iCollege is approved to train both domestic and international students throughout Australia. iCollege currently provides training to a range of existing workers, job seekers and school leavers throughout our seven campuses in Sydney, Brisbane, Gold Coast, Perth, Adelaide and Canberra.

1.2. Financial Review

The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group incurred a loss for the year of $2,640,237 (2019: $13,495,185 loss).

The Group’s revenue for the year ended 30 June 2020 was recorded at $10,806,163 as compared with the previous year ended 30 June 2019 which recorded $8,542,536.

The net liabilities of the Group have increased from 30 June 2019 by $2,605,237 to $(3,650,533) at 30 June 2020 (2019: $(1,045,296)).

As at 30 June 2020, the Group's cash and cash equivalents increased from 30 June 2019 by $709,901 to $844,890 at 30 June 2020 (2019: $134,989) and had a working capital deficit of $5,995,785 (2019: $(3,726,185) working capital deficit).Please refer to the Operations Review below for additional business segment performance.

FY 2020 Financial Results

	FY2020	FY2019
Revenue from operations	$ 10,806,163	$ 8,542,536
EBITDA (Loss)	-$ 1,044,180	-$ 2,749,082
Net Loss After Tax	-$ 2,640,237	-$ 13,495,184
Positive/Negative cash flows
from operations	$ 191,982	-$ 1,539,547

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ICOLLEGE LIMITED AND CONTROLLED ENTITIES

APPENDIX 4E Preliminary final report 30 June 2020

ABN 75 105 012 066

Company Update

• 1.3. Operations Review

iCollege’s financial performance for the first nine months of the year was strong, however the performance for Q4 was affected by the COVID-19 Pandemic. The business recorded earnings before interest, tax, depreciation and amortization (EBITDA) of $673,712 for the half year and until March 2020 was on track to report a full year profit.

Disruptions in operations caused by COVID-19 Pandemic during Q4 resulted in the temporary closure of campuses and the rapid implementation of course delivery online. This necessitated a rescheduling of course delivery with all theory based coursework being moved to the front end of the curriculum and compulsory face to face training and assessments being rescheduled for later in the curriculum pending a relaxation of government requirements. Student payments have historically been based on individual contracts agreed by the student. Given that course progression has been affected by the unavailability of physical classroom and practical facilities, the directors of the company made the decision not to recognise close to $1,500,000 of the total recorded $2,609,268 of unearned revenues during FY2020 and to defer revenue recognition into the new financial year subject to the students' course progression. In July 2020, all campuses and training facilities were re- opened and remain fully operational. Students have returned to face-to-face learning including the completion of compulsory face to face training and assessments. This has resulted in unaudited revenues being recognised for July 2020 of $1.01m.

Despite the impact of COVID-19 Pandemic, the company’s cash collections for the FYE20 was a record $11,629,362 including job keeper and ATO cash flow boost (compared to $9,172,093 in FY19). The company recorded maiden positive cash flows of $191,982 for FY20 (compared to -$1,539,547 in FY19).

Covid-19 impact

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• The impact from COVID-19 is reflected in Q4 results with all training facilities temporarily closed in the interest of health and safety of all students and staff. All training was moved to on-line classes and practical training classes were suspended to later in the year.

• In July 2020 all campuses were re- opened and are now fully operational.

• The company provides bespoke training to inmates inside correctional facilities in Queensland. During the month of April, the company was forced to suspend all training due to a COVID-19 outbreak at one of the correctional facilities. In the month immediately preceding the forced suspension, the company had recorded its highest ever earnings from this training of $224,000for the month of March 2020. The company recommenced training inside the correctional facilities during the second half of June 2020. This has resulted in unaudited revenues being recognised for July 2020 of $117,000 and August of $127,000 from the delivery of this training.

• iCollege's revenues are generally split 50/50 between domestic and international student enrolments. Of its international student enrolments, over 95% are sourced from onshore, meaning that the students enrolling in iCollege courses are already in Australia. There are currently over 229,000 international students enrolled in the VET sector and over 81,000 international students enrolled in English language courses (ELICOS currently resident in Australia). * This has resulted in a significantly lesser impact on iCollege's international student enrolments due to international border closures than those of its competitors, who have structured their business model on recruiting its international students from off-shore sources.

While iCollege's international student enrolments were down in April and May 2020, enrolment numbers have since slowly returned to pre-COVID-19 levels. iCollege remains cautiously optimistic regarding its international student enrolments but is mindful of the fact that if the border restrictions remain in place for longer than 12 months, the pipeline of on-shore international student numbers from which iCollege draws its enrolments, will be materially impacted. iCollege has planned to address this risk by directing significant resources to its domestic student enrolments as outlined below.

• *(source:https://internationaleducation.gov.au/research/International-Student-

Data/Documents/MONTHLY%20SUMMARIES/2020/Jun%202020%20MonthlyInfographic.pdf

Covid 19 response

In response to the COVID-19 Pandemic, iCollege’s directors implemented measures to protect the health and safety of all staff and students as well as diligently manage the financial position of the company. These measures included:

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• Temporary closure of campuses and moving to 100% online delivery until it was safe to re-open;

• Reducing non-academic staff count and reduced working hours for non-essential staff;

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ICOLLEGE LIMITED

APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Company Update

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• Applying for rental relief from landlords and suspending all temporary venue hire arrangements;

• Participating in government initiatives such as job keeper, and successful application for subsidized QRIDA loan for $223,960 (2.5% interest rate and 10-year loan term);

• Renegotiation of agreements with service providers at reduced rates; and

• Deferring any offshore projects until further notice.

The Company recognizes that there may be lasting effects from the COVID-19 Pandemic beyond 2020 and has made some strategic decisions to ensure business continuity and growth. Below are some of the strategic priorities being implemented by the Company:

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• To counter any stagnation or reduction of international student enrolments in the future, the Company has directed the focus of its resources towards domestic student enrolments and expansion of domestic course offerings.

• Through its four registered training organizations, iCollege has State Government Funding Contracts in Queensland, South Australia, New South Wales, Australian Capital Territory and Western Australia.

• These State Government Funding Contracts allow iCollege to deliver state funded training to students across a broad range of subjects including Aged Care, Business, Hospitality, Disability Care, Corrections and Information Technology.

• iCollege is currently the only ASX listed company that holds State Government Funding Contracts in all the above states. The contracts place iCollege in a unique position to take advantage of the newly announced $1 Billion Job Trainer Initiative announced by the Prime Minister earlier in the year.

• iCollege has already commenced enrolments in, and delivery of courses as part of this initiative in the area of Infection Control Skill set, and as announced on 25 August 2020, has partnered with the Pharmacy Guild of Australia to deliver this skill set training to the Guild's members' front line staff. The Infection Control Skill Set, as announced by Minister Cash, is designed to ensure that staff on the front line are fully equipped to perform their duties as essential workers during the pandemic. Funding of $80 million has been allocated for this training with $40 million being provided by the Federal government and an additional $40 million being provided by the various state government.

• iCollege is well advanced in its preparations for delivery of both full qualifications and short courses in other areas of focus of the Federal and state governments as and when the detail of the scheme is rolled out later this financial year. The funding for courses will be administered by each individual state.

• Extending the lifetime value of the student. Currently, iCollege delivers training from certificate I to Advanced diploma levels in various disciplines. As part of its planning, iCollege intends to deliver Bachelor and Master level programs in partnership with universities/ higher education providers and is in early stage discussions with several potential partners in this regard.

• Generating revenue growth from the newly acquired coding bootcamp business. The Hacking School has recently launched The Coding Factory. This part of the business is focussed on providing coding training to younger students 7-17 years on coding and is facilitated on a custom platform and delivered by live teachers. First revenues commenced in August 2020.

With recent growth initiatives put in place, a greater focus on domestic operation in the near-term, and by working with federal and state governments to deliver courses that assist Australia manage its way through this pandemic, the board and executive are confident that iCollege is well positioned for the remainder of fiscal 2021 and is poised to fully capitalise on all opportunities when conditions return to normal.

• 1.4. Future Developments, Prospects and Business Strategies

• Likely developments in the operations of the Group have been disclosed in the Operating and Financial Review section of this report.

Likely developments, future prospects and business strategies of the operations of the Group and the expected results of those operations have not been included in this report as the Directors believe that the inclusion of such information would be likely to result in unreasonable prejudice to the Group.

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ICOLLEGE LIMITED

APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Results for announcement to the Market for the year ended 30 June 2020

Results for announcement to the Market for the year ended 30 June 2020
1 REPORTING PERIOD(item 1)	30 June 2020 30 June 2019
Report for the financial year ended: Previous corresponding period is the year months ended:
2 RESULTS FOR ANNOUNCEMENT TO THE MARKET	Movement	Percentage Amount
		% $
Increase in revenues from ordinary activities (item 2.1) Decrease in loss from ordinary activities after tax attributable to members (item 2.2) Decrease in loss from after tax attributable to members (item 2.3)
	↑	26.50 to 10,806,163
	↓	(80.44) to (2,640,237)
	↓
		(80.44) to (2,640,237)
a. Dividends(item 2.4)		Amount per Franked amount
		Security per security
		₵ %
Interim dividend nil n/a Final dividend nil n/a Record date for determining entitlements to the dividend (item 2.5) n/a b. Brief explanation of any of the figures reported above necessary to enable the figures to be understood(item 2.6): Refer toOperations Reviewon page 2 of this report.		nil n/a
		nil n/a
3 PRELIMINARY FINAL REPORT a. Statement of comprehensive income(item 3): Refer to Consolidated statement of profit or loss and other comprehensive income on page 7 b. Statement of financial position(item 4): Refer to Consolidated statement of financial position on page 8 c. Statement of cash flows(item 5): Refer to Consolidated statement of cash flows on page 10 d. Statement of changes in equity(item 6): Refer to Consolidated statement of changes in equity on page 9

4 DIVIDENDS (item 7) AND RETURNS TO SHAREHOLDERS INCLUDING DISTRIBUTIONS AND BUY BACKS (item 14.2)

DIVI	DENDS(item 7)AND RETURNS TO SHAREHOLDERS INCLUDING DISTRIBUTIONS AND BUY BACKS (
Nil.
a.	Details of dividend or distribution reinvestment plans in operation are described below(item 8):
	Not applicable

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Results for announcement to the Market for the year ended 30 June 2020

Results for announcement to the Market for the year ended 30 June 2020
5 RATIOS	Previous
	Current corresponding
	period period
a. Financial Information relating to 5b and 5c: $ $ Earnings for the period attributable to owners of the parent (2,640,237) (13,495,185) Net assets (3,650,533) (1,045,296) Less: Intangible assets (including net deferred tax balances) (2,855,550) (3,461,216) Net tangible assets (6,506,083) (4,506,512) No. No. Fully paid ordinary shares 526,564,649 525,687,456 Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 526,201,755 508,382,584 ₵ ₵ b. Net tangible assets backing per share (cents) (item 9): (1.236) (0.857) c. Earnings per share attributable to owners of the parent (cents) (item 14.1): (0.502) (2.655) The Group does not report diluted earnings per share, as dilution is not applied to annual losses generated by the Group. During the 2020 financial year the Group had 27,500,000 unissued shares under option which are anti-dilutive.	$ $ (2,640,237) (13,495,185) (3,650,533) (1,045,296) (2,855,550) (3,461,216)
6 DETAILS OF ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD:(item 10)
a. Control gained over entities Name of entities (item 10.1) Nil Date(s) of gain of control (item 10.2) b. Loss of control of entities Name of entities (item 10.1) Nil Date(s) of loss of control (item 10.2) N/A c. Contribution to consolidated profit (loss) from ordinary activities after tax by the controlled entities to the date(s) in the current period when control was gained / lost (item 10.3). Nil d. Profit (loss) from ordinary activities after tax of the controlled entities for the whole of the previous corresponding period (item 10.3) Nil
7 DETAILS OF ASSOCIATES AND JOINT VENTURE:(item 11)
Name of entities (item 11.1) Nil Percentage holding in each of these entities (item 11.2) n/a
	Previous
	corresponding
	Current period Period
	$ $
Aggregate share of profits (losses) of these entities (item 11.3)	N/A N/A

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ICOLLEGE LIMITED AND CONTROLLED ENTITIES

APPENDIX 4E Preliminary final report 30 June 2020

ABN 75 105 012 066

Results for announcement to the Market for the year ended 30 June 2020

• 8 Any other significant information needed by an investor to make an informed assessment of the entity’s financial performance and financial position. (item 12):

Refer to commentary update accompanying this 4E

• 9 The financial information provided in the Appendix 4E is based on the preliminary final report (attached), which has been prepared in accordance with Australian Accounting Standards (item 13)

• 10 A COMMENTARY ON THE RESULTS FOR THE PERIOD (item 14)

Refer to Company Update on page 1 . The Group had revenue of $10,806,163 (2019: $8,542,536) for the period.

• 11 The preliminary final report has been prepared based on the 30 June 2020 accounts which are in the process of being audited by an independent Audit Firm in accordance with the requirements of s.302 of the Corporations Act 2001 (Cth). (item 15)

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ICOLLEGE LIMITED

APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2020

for the year ended 30 June 2020
Note	2020 2019
	$ $
Continuing operations Revenue 1.1 Cost of sales Gross profit Other income 1.2 Gain on disposal of subsidiary Audit and tax expenses Compliance Consultant fees Depreciation and amortisation Amortisation of Intangible assets Directors fees Doubtful Debts Employment expenses Interest expense Gain on settlement of liability 2.1 Impairment of Intangible Assets - Goodwill 2.2 Legal fees Marketing expenses Occupancy expenses Travel expenses Other expenses Loss before tax Income tax benefit Net loss for the year Other comprehensive income for the year, net of tax Total comprehensive income attributable to members of the parent entity Profit/(loss) for the period attributable to:  Non-controlling interest  Owners of the parent Earnings per share: Basic and diluted loss per share (cents per share)	10,806,163 8,542,536 (3,828,159) (2,539,817)
	6,978,004 6,002,719 632,683 2,729 - 100,671 (81,575) (75,706) (100,878) (133,563) (727,992) (585,942) (770,047) (61,294) (615,666) (615,665) (47,500) (75,918) (677,404) (48,680) (5,227,237) (4,514,764) (379,652) (130,860) - 1,500,000 - (11,607,592) (88,994) (402,687) (224,550) (259,528) (587,515) (1,589,848) (169,831) (292,391) (721,391) (876,174)
	(2,809,545) (13,664,493) 169,308 169,308
	(2,640,237) (13,495,185)
	- -
	(2,640,237) (13,495,185)
	- - (2,640,237) (13,495,185)
	(0.502) (2.655)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES

ABN 75 105 012 066

Consolidated statement of financial position

as at 30 June 2020

Consolidated statement of financial position as at 30 June 2020
Note	2020 2019
	$ $
Current assets Cash and cash equivalents 3.1 Trade and other receivables 3.2 Inventories 4.1 Other current assets 3.3 Total current assets Non-current assets Property, plant, and equipment Right of use asset 4.2 Intangible assets 4.3 Total non-current assets Total assets Current liabilities Trade and other payables 3.4 Unearned revenues 3.5 Borrowings 3.6 Leases 4.2 Short-term provisions 4.4 Total current liabilities Non-current liabilities Borrowings 3.6 Deferred tax liabilities Leases 4.2 Total non-current liabilities Total liabilities Net deficiency Equity Issued capital 5.1 Reserves 5.3 Accumulated losses Total equity	844,890 134,989 523,239 515,003 216,275 - 257,182 162,057
	1,841,586 812,049
	151,990 171,507 1,425,159 - 2,855,550 3,461,216
	4,432,699 3,632,723
	6,274,285 4,444,772
	3,238,467 2,730,129 2,694,588 922,604 1,145,640 712,485 529,651 - 229,025 173,016
	7,837,371 4,538,234
	223,960 - 782,526 951,834 1,080,961 -
	2,087,447 951,834
	9,924,818 5,490,068
	(3,650,533) (1,045,296)
	- - 29,986,452 29,951,452 1,957,234 1,957,234 (35,594,219) (32,953,982)
	(3,650,533) (1,045,296)

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES

ABN 75 105 012 066

Consolidated statement of changes in equity

for the year ended 30 June 2020

for the year ended 30 June 2020
Note Balance at 1 July 2018 Loss for the year attributable owners of the parent Other comprehensive income for the year attributable owners of the parent Total comprehensive income for the year attributable owners of the parent Transaction with owners, directly in equity	Share-based
	Contributed Accumulated Payments Total
	equity Losses Reserve equity
	$ $ $ $
	27,278,641 (19,458,797) 1,747,029 9,566,873 - (13,495,185) - (13,495,185) - - - -
	- (13,495,185) - (13,495,185)
Shares issued during the year (net of costs) 5.1.1	2,672,811 - - 2,672,811
Options granted during the year	- - 210,205 210,205
Balance at 30 June 2019 Balance at 1 July 2019 Loss for the year attributable owners of the parent Other comprehensive income for the year attributable owners of the parent Total comprehensive income for the year attributable owners of the parent Transaction with owners, directly in equity Shares issued during the year (net of costs) 5.1.1 Balance at 30 June 2020	29,951,452 (32,953,982) 1,957,234 (1,045,296)
	29,951,452 (32,953,982) 1,957,234 (1,045,296)
	- (2,640,237) - (2,640,237)
	- - - -
	- (2,640,237) - (2,640,237)
	35,000 - - 35,000
	29,986,452 (35,594,219) 1,957,234 (3,650,533)

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

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APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

ICOLLEGE LIMITED

Consolidated statement of cash flows

for the year ended 30 June 2020

Consolidated statement of cash flows for the year ended 30 June 2020
Note	2020 2019
	$ $
Cash flows from operating activities Receipts from customers Interest received Interest paid Payments to suppliers and employees Job Keeper & ATO Cashflow Boost Net cash provided by / (used in) operating activities 3.1.2a Cash flows from investing activities Payments for subsidiary, net of cash acquired Purchase of plant, and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from loans Repayment of loans Proceeds from issue of shares Payment of share issue costs Proceeds from issue of convertible notes Net cash provided by financing activities Net increase in cash and cash equivalents held Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year - 3.1	11,233,208 9,172,093 1,495 5,611 (108,454) (207,361) (11,330,421) (10,509,890) 396,154 -
	191,982 (1,539,547)
	(50,000) - (16,763) (71,566)
	(66,763) (71,566)
	434,090 269,195 (334,408) (630,307) - 1,900,000 (15,000) (132,000) 500,000 -
	584,682 1,406,888
	709,901 (204,225) 134,989 339,214
	844,890 134,989

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES

ABN 75 105 012 066

Notes to the Appendix 4E preliminary final report

for the year ended 30 June 2020

Note 1 Revenue and other income	2020 2019
	$ $
1.1 Revenue Course income 1.2 Other Income Interest income ATO cash boost Job keeper subsidy DIS Grant	10,806,163 8,542,536
	10,806,163 8,542,536
	1,495 2,729 135,886 - 309,000 - 186,302 -
	632,683 2,729
Note 2 Loss before income tax	2020 2019
	$ $
The following significant revenue and expense items are relevant in explaining the financial performance: 2.1 Gain on settlement of liability Gain on settlement of liability 2.1.1 - 1,500,000 2.1.1 On 11 October 2018, the Company announced to ASX that the Supreme Court litigation with Walker Enterprises (Australia) Pty Ltd and Walker had been settled. The terms of settlement included the sale of Walker’s 6,666,667 shares to buyers nominated by iCollege through off-market transfers, with the proceeds of $385,000 (being the settlement sum) paid to Walker. On settlement of the case there was a gain on settlement of the liability of $1,500,000. 2.2 Impairment of Intangible Assets - Goodwill Impairment of Intangible Assets - Goodwill 2.2.1 - 11,607,592	- 1,500,000

2.2.1 During the 2019-year, management tested the Group’s assets for impairment resulting in an impairment loss of 11,607,592 being the entirety of the goodwill recognised on acquisition of the business. The Company determined the recoverable amount using the value-in use method being a discounted cash flow forecast for a period of 7 years with a pre-tax discount rate of 13.79%.

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Notes to the Appendix 4E preliminary final report

for the year ended 30 June 2020

Note 3 Financial assets and financial liabilities
3.1 Cash and cash equivalents	2020 2019
	$ $
Cash at bank 3.1.1	844,890 134,989
	844,890 134,989
3.1.2 Cash Flow Information	(2,640,237) (13,495,185) 1,384,854 676,959 - 48,680 35,000 475,358 - 11,607,592 - (1,500,000) - (100,671) (274,096) (23,712) 2,016,035 1,018,935 - (76,501) (216,275) - 56,009 5,160 - (6,854) (169,308) (169,308)
a. Reconciliation of cash flow from operations to loss after income tax Loss after income tax Cash flows excluded from loss attributable to operating activities Non-cash flows in (loss)/profit from ordinary activities: Depreciation and amortisation Doubtful debts Net share-based payments expensed Impairment of assets Gain on settlement of liability Profit from sale of subsidiary Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: Increase in receivables Increase in payables Decrease in accrued interest Decrease in accrued interest Increase in employee provision Decrease in income tax provision Decrease in deferred tax liabilities Cash flow from / (used in) operations -
	191,982 (1,539,547)
	~~-~~ ~~-~~
3.2 Trade and other receivables	2020 2019
	$ $
3.2.1 Current Trade receivables Less: Doubtful debts GST receivable Accrued income Other receivables	545,756 531,562 (234,000) (157,623)
	311,756 373,939 69,982 26,555 95,279 - 46,222 114,509
	523,239 515,003

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Notes to the Appendix 4E preliminary final report

for the year ended 30 June 2020

Note 3 Financial assets and financial liabilities (cont.)
3.3 Other assets	2020 2019
	$ $
3.3.1 Current Bank guarantees and bonds Prepayments Other	158,794 136,375 97,525 19,263 863 6,419
	257,182 162,057
3.4 Trade and other payables	2020 2019
	$ $
3.4.1 Current Unsecured Trade payables Sundry payables and accrued expenses Accrued interest on convertible notes	1,481,988 1,485,065 1,755,246 1,241,324 1,233 3,740
	3,238,467 2,730,129
3.5 Unearned revenue	2020 2019
	$ $
3.5.1 Current Unsecured Unearned revenue	2,694,588 922,604
	2,694,588 922,604
3.6 Borrowings	2020 2019
	$ $
3.6.1 Current Convertible notes Loan Short term loans Related Party Loan 3.6.2 Non-current Loan	650,000 150,000 81,833 62,426 87,492 356,798 326,315 143,261
	1,145,640 712,485
	223,960 -
	223,960 -

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APPENDIX 4E Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

ICOLLEGE LIMITED

Notes to the Appendix 4E preliminary final report

for the year ended 30 June 2020

Note 4 Non-financial assets and financial liabilities
4.1 Inventories	2020 2019
	$ $
Linguaskill bundles	216,275 -
	216,275 -
4.2 Leases	2020 2019
	$ $
4.2.1 Right of use assets Properties 4.2.2 Lease liabilities Current Non-current	1,425,159 -
	1,425,159 -
	529,651 - 1,080,961 -
	1,610,612 -
4.3 Intangible assets	2020 2019
	$ $
Licenced operations Accumulated amortisation	5,295,344 4,309,653 (2,439,794) (848,437)
	2,855,550 3,461,216
4.4 Provisions	2020 2019
	$ $
4.4.1 Current Provision for annual leave Provision for long service leave	224,801 145,516 4,224 27,500
	229,025 173,016

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ICOLLEGE LIMITED

APPENDIX 4E

Preliminary final report 30 June 2020

AND CONTROLLED ENTITIES ABN 75 105 012 066

Notes to the Appendix 4E preliminary final report

for the year ended 30 June 2020

Note 5 Equity
5.1 Issued capital	2020 2019	2020 2019
	No. No.	$ $
Fully paid ordinary shares at no par value 5.1.1 Ordinary shares At the beginning of the year Shares issued during the year: Shares placement @$0.05 To Chairman for services as director @$0.069 On conversion of convertible note @$0.03 In lieu of services @ $0.05 In lieu of services @ $0.055 In lieu of cash payment for director fees @$0.057 Transaction costs relating to share issues At reporting date	526,564,649 525,687,456	29,986,452 29,951,452
		29,951,452 27,278,641 - 2,200,000 - 112,100 - 549,863 - 71,053 - 82,000 50,000 - (15,000) (342,205)
	525,687,456 458,822,084
	- 44,000,000 - 1,624,637 - 18,328,767 - 1,421,060 - 1,490,908 877,193 - - -
	526,564,649 525,687,456	29,986,452 29,951,452
5.2 Options	2020 2019	2020 2019
	No. No.	$ $
5.2.1 Options At the beginning of the period Options issued/(lapsed) during the year: Issued to broker – Ex. Date 03.07.2020, Ex. Price: $0.08 At reporting date	27,500,000 27,500,000	1,957,234 1,957,234
	27,500,000 20,000,000 - 7,500,000	1,957,234 1,747,029 - 210,205
	27,500,000 27,500,000	1,957,234 1,957,234
5.3 Reserves		2020 2019
		$ $
Share-based payment reserve		1,957,234 1,957,234
		1,957,234 1,957,234
Note 6 Share-based payments		2020 2019
		$ $
6.1 Share-based payments: Recognised in Consultancy and professional services Gross share-based payments
		- 210,205
		- 210,205

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