NEXTED GROUP LIMITED — Interim / Quarterly Report 2014

Jan 30, 2014

DGI HOLDINGS LTD

Level 4 The Read Buildings 16 Milligan Street Perth WA 6000 Tel +61-8-93214000 ABN 75 105 012 066

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31 January 2014

ASX RELEASE

APPENDIX 4C – QUARTERLY CASH FLOW REPORT – DECEMBER 2013

DGI Holdings Ltd (ASX: DGI) (“DGI” or “the Company”) lodges the attached Appendix 4C Quarterly report for entities admitted on the basis of commitments for the quarter ended 31 December 2013.

Commentary is provided as follows:

• The Company held cash reserves of $832,000 at 31 December 2013.

• Net operating and investing cash outflows for the December quarter were $151,000.

• Net financing inflows for the December quarter were $135,613 resulting from the exercise of 13,561,250 unlisted options.

During the Quarter, the Company announced that it had exercised the option to purchase 100% of the issued capital of iCollege Pty Ltd (“iCollege”), a cloud based online education company.

iCollege is a spin out of a profitable existing online education business using a proven cloud based software platform to deliver self paced career and professional development courses worldwide.

The online education market is becoming one of the faster growing industries in the world. The ability to offer education online is scalable.

The iCollege Business

iCollege is a business developed by Victor Hawkins, a management consultant and business owner for the past 20 years, and who has spent the past 5 years successfully owning and operating a cloud based software platform selling other online education courses. It is this platform that is the subject of a perpetual exclusive licence to iCollege.

The key terms of the acquisition are as follows:

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1. The consideration is the issue of 250m ordinary fully paid shares with attaching 1 for 2 options (exercise price of minimum 20 cents each (post consolidation) and expiry date of 5 years) in DGI to the shareholders of iCollege.

2. As further consideration, DGI will issue performance shares (subject to the receipt of appropriate shareholder and ASX approvals) as follows:

3. (a) Performance Tranche 1 - 50m ordinary shares when sales revenue reaches $1.0 million within 2 years;

4. (b) Performance Tranche 2 - 50m ordinary shares when EBITDA reaches $500,000 within 2 years; and

5. (c) Performance Tranche 3 - 50m ordinary shares when EBITDA reaches

   • $2.5m within 3 years.

6. (d) For each tranche of shares issued, the Company has agreed to grant a 1 for 1 attaching option (exercise price of minimum 20 cents each (post consolidation) and expiry date of 5 years).

The completion of the transaction is subject to DGI shareholder approval and a number of other matters including a capital raising (sufficient to apply for reinstatement), compliance with Chapters 1 and 2 of the ASX Listing Rules and approval for re-admission to the official list of ASX.

At this time, and as part of the shareholder approval process, DGI will change its name to iCollege Limited. Mr Victor Hawkins will be appointed as the Managing Director on completion, and Mr Phil Re will be appointed as a non-executive director. There will be a need to appoint another non-executive director, as the existing board will resign at this time. That new non-executive director has not yet been identified.

Refer to the ASX release dated 23 December 2013 for more details.

About DGI Holdings Ltd

DGI Holdings Ltd securities were reinstated to the official list of ASX on 20 December 2012.

For more information, please contact Susan Hunter Company Secretary + 61 8 9321 4000

• 2 -

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10

Name of entity
DGI HOLDINGS LTD
ABN 75 105 012 066	Quarter ended (“current quarter”)
75 105 012 066	31 December 2013

Consolidated statement of cash flows

	Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Current quarter $A’000	Year to date (6 months) $A’000
		- - (11) - - (66) - 5 - - -	- - (32) - - (104) - 11 - - -
		(72)	(125)

• See chapter 19 for defined terms.

Appendix 4C Page 1

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date (6 months) $A’000
1.8 Net operating cash flows (carried forward)	(72)	(125)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (iCollege Pty Ltd Option Payment and associated costs) Net investing cash flows 1.14 Total operating and investing cash flows	- - (1) - - - - - - - - - (78)	- - (2) (2) - - - - - - - - (78)
	(79)	(82)
	(151)	(207)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (provide details if material) Net financing cash flows	135 - - - - -	135 - - - - -
	135	135
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end ofquarter	(16) 848 -	(72) 904 -
	832	832

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

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Current quarter
$A'000
1.24 Aggregate amount of payments to the parties included in item 1.2 19
1.25 Aggregate amount of loans to the parties included in item 1.11 -
1.26 Explanation necessary for an understanding of the transactions
Payment of consulting and legal fees (including reimbursement of expenses)
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Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details)	832	848
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.23)	832	848

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2

• This statement does give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 31 January 2014 (Company secretary)

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Print name: SUSAN HUNTER

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

2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.

3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

4. See chapter 19 for defined terms.

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