NEXTED GROUP LIMITED — Interim / Quarterly Report 2018

Apr 30, 2018

30 April 2018

Australian Securities Exchange Limited Via e-lodgement ASX Code ICT

March Quarter Update

iCollege Ltd (“ICT” or “the Company”) (ASX: ICT) is pleased to provide commentary on its March quarter of operations, which saw the Company finalise a number of significant transactions. On 12 February 2018, iCollege completed the Manthano Limited (Manthano) acquisition, expanding the business' geographic scope as well as its revenue and course offering scale. The Manthano acquisition included, Sero Institute, Capital Training Institute and Incident Crises and Emergency Response Management (Singapore).

Immediately following the completion of the Manthano acquisition, the board and executive met to develop strategic priorities for iCollege. The following were decided upon as short to medium term goals:

• Increase on-shore demand through increased international delivery.

• Pursue vertical integration.

• Deliver relevant & current courses using up-to-date delivery methods.

• Develop appropriate government and industry relationships.

Under the leadership of the newly appointed managing director Mr. Ash Katta, the executive has focused on the delivery of the strategic goals set by the board during this planning session.

Following the Manthano transaction, iCollege finalised the deferred consideration with Mr. David Leigh-Ewers for the completion of the sale of Celtic Training & Consultancy Pty Ltd, fully satisfied by a cash payment of $250,000. Mr. Leigh-Ewers has now removed all security provisions over the Company.

A full restructure of staff across all divisions has been implemented to best leverage the shared services available to all businesses, this includes the implementation of a shared Student Management System (SMS) and a shared Learning Management System (LMS). This will help drive efficiencies and management reporting which will in turn lead to better informed decisions to be made regarding the business.

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Since the acquisition in February and in line with the strategic priorities set by the Board, iCollege has:

• completed the financial integration of the Manthano business into iCollege and commenced the process of addressing its on-going costs;

• announced the rollout of Information Technology Training ( ITT ), most specifically a joint venture to deliver Blockchain training at various levels of expertise. Marketing for this offering has commenced both in Australia and internationally; and

• announced an MOU with the Alard Charitable Trust in India. The initial intention of the MOU is to deliver Australian hospitality training at the Pune Campus. It is expected that following successful implementation further courses will be offered. Negotiations to move this to a formal joint venture continue. It is hoped that this joint venture will deliver both overseas revenue in the form of overseas delivery of course material by iCollege, and also a channel for overseas students from Pune to study at iCollege's Australian campus' and thereby increase revenue from the company's Australian based facilities.

- Quarterly Cash Flow Commentary

• The merged entity reflects the full operational activity of the Manthano acquisition with effect from 12[th] February, contributing $0.5M from receipts from customers. Cash acquired on acquisition totalled $1.3M;

• Paydown of the company’s creditors contributed to larger cash-outflows from operations post acquisition;

• Final Settlement payment of $250k on the final deferred consideration on the acquisition of Celtic Training & Consultancy Pty Ltd;

• Next quarter activities to include Manthano operations for the full quarter.

Post-quarter activity

• iCollege announced on 13[th] April the issue of new convertible notes to replace older convertible notes, issued on better terms and conditions. The new convertible notes provide iCollege with some time to build-upon the momentum gained to date, with a reasonable opportunity to pay-down the note prior to the conversion date;

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• On 18[th] April a non-binding Heads of Agreement (HOA) to establish iStudy Australia (India) was signed which will serve as a student recruitment arm for international students wishing to study with iCollege institutions in Australia. This HOA is the first step in iCollege's plan to vertically integrate its operations. It represents a focussed and targeted approach to student recruitment as a channel into iColleges' Australian campus' while at the same time, reducing the cost to iCollege of student recruitment; and

• On 26[th] April the Company announced the signing of an MOU with Birla Edutech which currently has 60 campuses across India. Birla Edutech is a subsidiary of the Yash Birla Group, one of India’s largest conglomerates. The MOU paves the way for a formal joint venture to be established by 30 June 2018. It is expected that the relationship with Birla Edutech will deliver overseas revenue in the form of overseas delivery of course material by iCollege, as well as providing a channel for overseas students from India to study in iCollege's Australian campus', thereby increasing revenue derived from the company's Australian based facilities. .

The board and executive of iCollege are looking forward to the formalisation of these agreements and extracting the benefits from the opportunities presented. iCollege will continue to focus on the strategic priorities, building a lasting and sustainable business and aim to demonstrate ongoing revenue growth quarter on quarter.

Ends –

For further Information:

Mr. Ashish Katta –

Managing Director iCollege Limited +61 8 9466 9008 ash.katta@icollege.edu.au

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

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

iCollege Limited
ABN 75 105 012 066	Quarter ended (“current quarter”)
75 105 012 066	31 March 2018

Consolidated statement of cash flows	Current quarter $A’000	Year to date $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (Costs of course delivery) 1.9 Net cash from / (used in) operating activities	771 - - - - (706) (397) - - (60) - - (208)	1,598 - - - - (1,044) (868) - - (71) - - (268)
	(600)	(653)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10) (c) investments	- - -	- - -

• 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	Year to date $A’000
(d) intellectual property (e) other non-current assets (Final deferred consideration (Celtic Training & Consultancy) 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 – (Cash acquired on acquisition of Manthano Limited) 2.6 Net cash from / (used in) investing activities	- (250) - - - - - - - 1,294	- (250) - - - - - - - 1,294
	1,044	1,044
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of 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 activities	- - - - - (22)	- - - - 305 (227)
	(22)	78
4. Net increase / (decrease) in cash and cash equivalents for the period 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) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	60 (600) 1,044 (22)	12 (652) 1,044 78

• 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	Year to date $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	-	-
	482	482
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	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (bank guarantees) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	326 156	60
	482	60
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 26 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
		26
		-
Director fees – Nil MD Salary - $26k

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

• 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

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $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.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (Costs of course delivery) 9.8 Total estimated cash outflows	450 400 400
	1,250

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1 Name of entity	Manthano Limited	Nil
10.2 Place of incorporation or registration	Queensland
10.3 Consideration for acquisition or disposal	$10M (Based on 250,000 shares at $0.04)
10.4 Total net assets	Indicative Unaudited $941,919
10.5 Nature of business	Vocational education and training business

• 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

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: ............................................................ Company Secretary

Date: 30 April 2018

Print name: Stuart Usher

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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