SIMBLE SOLUTIONS LIMITED — Annual Report 2019

Mar 1, 2020

Simble Solutions Limited and its controlled entities Appendix 4E Preliminary final report

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1. Company details

Name of entity: Simble Solutions Limited ABN: 17 608 419 656 Reporting period: For the year ended 31 December 2019 Previous period: For the year ended 31 December 2018

2. Results for announcement to the market

The Group has adopted Accounting Standards AASB 16 ‘Leases’ for the year ended 31 December 2019. The Accounting Standard has been applied using the modified retrospective method and comparatives have not been restated.

			$
Revenues from ordinary activities	up	4.7%to	2,465,711
Loss from ordinary activities after tax attributable to the owners of Simble
Solutions Limited	down	51.7%to	(3,728,919)
Loss for the year attributable to the owners of Simble Solutions Limited	down	51.7%to	(3,728,919)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the Group after providing for income tax amounted to $3,728,919 (31 December 2018: $7,719,698).

For the year ended 31 December 2019, total revenues increased by 5% to $2,465,711 from $2,354,725 in the prior year. Sales revenue declined 16% year-on-year to $1,782,685 whilst other income increased 206% to $660,712.

Revenues from the Company’s energy division increased by 1% to $795,490, compared to $784,529 in the previous corresponding period. There was an 18% decline in revenues from the mobility division to $917,335 during the financial year compared to $1,114,863 in 2018. Other income relates mainly to Research and Development grant income.

Software-as- a- Service ('SaaS') sales revenue increased by 11% to $1,513,268, up from $1,359,907 in 2018. Energy SaaS revenue grew by 93% to $719,755 and mobility SaaS declined by 18% to $917,335.

Simble Solutions Limited and its controlled entities Appendix 4E Preliminary final report

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Underlying EBITDA is a key measurement used by management and the board to assess and review business performance. Underlying EBITDA for the 12 months ended 31 December 2019 was a loss of $2,399,146. This represents a 32% improvement in underlying EBITDA on the prior year. The table below provides a reconciliation between statutory net loss and underlying EBITDA:

Statutory Net Loss for the year Add back: Interest Tax Depreciation Amortisation Impairment of goodwill Statutory EBITDA Add non-recurring items: IPO expenses Underlying EBITDA	Consolidated Unaudited 2019 2018 $ $ (3,728,919) (7,719,698) 269,036 261,185 7,953 - 291,848 25,750 760,936 2,359,145 - 820,000	Consolidated Unaudited 2019 2018 $ $ (3,728,919) (7,719,698) 269,036 261,185 7,953 - 291,848 25,750 760,936 2,359,145 - 820,000
	(2,399,146) -	(4,253,618) 742,780
	(2,399,146)	(3,510,838)

Net cash used in operating activities decreased by 44% to $3,295,634 compared to $5,874,972 in 2018. The cash balance at 31 December 2019 was $705,452 (31 December 2018: $849,438).

In the second half of 2019 the Board implemented significant financial and capital restructuring initiatives, including a combination of refocused revenue generation activities, operational realignments and substantial cost cutting measures. These adjustments have been in response to delays in expected revenues despite substantial ongoing business development activities.

The Board and Management continue to monitor costs and closely manage cash, and assess all options and opportunities to improve shareholder value.

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents (0.84)	Previous period Cents (0.54)

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

Simble Solutions Limited and its controlled entities Appendix 4E Preliminary final report

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6. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements are in the process of being audited.

11. Attachments

Details of attachments (if any):

The Preliminary Financial Report of Simble Solutions Limited for the year ended 31 December 2019 is attached.

12. Signed

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Signed _________

Date: 28 February 2020

Fadi Geha Director Sydney

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Simble Solutions Limited and its controlled entities ABN 17 608 419 656

Preliminary Financial Report - 31 December 2019

Simble Solutions Limited and its controlled entities Contents 31 December 2019

2 3 4 5 6

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Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements

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Simble Solutions Limited and its controlled entities Statement of profit or loss and other comprehensive income For the year ended 31 December 2019

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Note Revenue Revenue Cost of sales Gross margin Other income Interest revenue calculated using the effective interest method Total revenue Expenses Marketing Administration 3 Impairment of goodwill 5 Impairment of receivables Initial Public Offering expenses Finance costs 3 Loss before income tax expense Income tax expense Loss after income tax expense for the year attributable to the owners of Simble Solutions Limited Other comprehensive loss Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive loss for the year, net of tax Total comprehensive loss for the year attributable to the owners of Simble Solutions Limited Basic loss per share 8 Diluted loss per share 8	Consolidated Unaudited 2019 2018 $ $ 1,782,685 2,131,695 (644,790) (947,308) 1,137,895 1,184,387 660,712 214,314 22,314 8,716 2,465,711 2,354,725 (54,167) (296,135) (5,175,089) (6,962,260) - (820,000) (21,281) (44,755) - (742,780) (291,350) (261,185) (3,720,966) (7,719,698) (7,953) - (3,728,919) (7,719,698) (32,942) (81,790) (32,942) (81,790) (3,761,861) (7,801,488) Cents Cents (3.09) (9.01) (3.09) (9.01)
	1,137,895
	660,712 22,314
	2,465,711
	(54,167) (5,175,089) - (21,281) - (291,350)
	(3,720,966) (7,953)
	(3,728,919) (32,942)
	(32,942)
	(3,761,861)
	Cents (3.09) (3.09)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

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Simble Solutions Limited and its controlled entities Statement of financial position As at 31 December 2019

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Note Assets Current assets Cash and cash equivalents 4 Trade and other receivables Inventories Financial assets at fair value through profit or loss Other Total current assets Non-current assets Property, plant and equipment Right-of-use assets Intangibles 5 Deferred tax Other deposits Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Contract liabilities Borrowings 6 Lease liabilities Income tax Employee benefits Deferred grant liabilities Total current liabilities Non-current liabilities Contract liabilities Lease liabilities Deferred tax Employee benefits Deferred grant liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital 7 Shareholder capital Reserves Accumulated losses Total equity	Consolidated Unaudited 2019 2018 $ $ 705,452 849,438 834,228 589,164 122,975 30,335 24,651 76,773 222,671 325,675 1,909,977 1,871,385 - 46,349 313,046 - 4,205,959 3,906,538 19,413 - 143,162 143,162 4,681,580 4,096,049 6,591,557 5,967,434 1,401,809 1,235,649 472,861 831,273 1,242,777 - 292,913 - 17,126 8,565 96,648 123,569 - 94,591 3,524,134 2,293,647 196,838 179,322 223,695 - 20,401 - - 55,752 - 94,591 440,934 329,665 3,965,068 2,623,312 2,626,489 3,344,122 21,544,095 18,553,963 122,100 - 2,850,575 2,883,517 (21,890,281) (18,093,358) 2,626,489 3,344,122
	1,909,977
	- 313,046 4,205,959 19,413 143,162
	4,681,580
	6,591,557
	1,401,809 472,861 1,242,777 292,913 17,126 96,648 -
	3,524,134
	196,838 223,695 20,401 - -
	440,934
	3,965,068
	2,626,489
	21,544,095 122,100 2,850,575 (21,890,281)
	2,626,489

The above statement of financial position should be read in conjunction with the accompanying notes

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Simble Solutions Limited and its controlled entities Statement of changes in equity For the year ended 31 December 2019

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Consolidated Balance at 1 January 2018 Loss after income tax expense for the year Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 7) Balance at 31 December 2018 Consolidated Balance at 1 January 2019 Adjustment to retained earnings on adoption of AASB 16 Balance at 1 January 2019 - restated Loss after income tax expense for the year Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 7) Shares to be issued Balance at 31 December 2019	Issued capital $ 4,200,100 - -	Share- holder capital $ - - -	Common control reserve $ 250,836 - -	Foreign currency translation reserve $ (36,529) - (81,790)	Share- based payments reserve $ 3,125,050 - -	Accumu- lated losses $ (10,373,660) (7,719,698) -	Total equity $ (2,834,203) (7,719,698) (81,790)
	- 14,353,863	- -	- -	(81,790) -	- (374,050)	(7,719,698) -	(7,801,488) 13,979,813
	18,553,963	-	250,836	(118,319)	2,751,000	(18,093,358)	3,344,122
	Issued capital $ 18,553,963 -	Share- holder capital $ - -	Common control reserve $ 250,836 -	Foreign currency translation reserve $ (118,319) -	Share- based payments reserve $ 2,751,000 -	Accumu- lated losses $ (18,093,358) (68,004)	Total equity $ 3,344,122 (68,004)
	18,553,963 - -	- - -	250,836 - -	(118,319) - (32,942)	2,751,000 - -	(18,161,362) (3,728,919) -	3,276,118 (3,728,919) (32,942)
	- 2,990,132 -	- - 122,100	- - -	(32,942) - -	- - -	(3,728,919) - -	(3,761,861) 2,990,132 122,100
	21,544,095	122,100	250,836	(151,261)	2,751,000	(21,890,281)	2,626,489

The above statement of changes in equity should be read in conjunction with the accompanying notes

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Simble Solutions Limited and its controlled entities Statement of cash flows For the year ended 31 December 2019

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Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Payments for research and development costs expensed Interest received Research and development tax offset recovered Interest and other finance costs paid Income taxes refunded Income taxes paid Net cash used in operating activities Cash flows from investing activities Payments for investments Payments for property, plant and equipment Payments for software development capitalised 5 Payments for security deposits Proceeds from disposal of investments Proceeds from disposal of intangibles Proceeds from release of security deposits Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares, net of transaction costs 7 Proceeds from trade finance Repayment of trade finance Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Share issue costs expensed Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 4	Consolidated Unaudited 2019 2018 $ $ 1,628,443 2,283,057 (4,246,524) (6,928,582) (935,627) (809,032) (3,553,708) (5,454,557) 22,314 8,716 439,651 310,378 (205,487) (659,707) 1,596 - - (79,802) (3,295,634) (5,874,972) - (46,358) - (13,862) (1,060,357) (1,550,752) - (35,234) 52,122 - - 401 33,620 - (974,615) (1,645,805) 3,112,232 9,229,482 240,000 - (100,000) - 1,102,777 - - (80,000) (195,804) - - (742,780) 4,159,205 8,406,702 (111,044) 885,925 849,438 45,303 (32,942) (81,790) 705,452 849,438
	(3,553,708) 22,314 439,651 (205,487) 1,596 -
	(3,295,634)
	- - (1,060,357) - 52,122 - 33,620
	(974,615)
	3,112,232 240,000 (100,000) 1,102,777 - (195,804) -
	4,159,205
	(111,044) 849,438 (32,942)
	705,452

The above statement of cash flows should be read in conjunction with the accompanying notes

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Simble Solutions Limited and its controlled entities Notes to the financial statements 31 December 2019

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Note 1. General information

The preliminary financial statements cover Simble Solutions Limited as a Group consisting of Simble Solutions Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Simble Solutions Limited's functional and presentation currency.

Simble Solutions Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are:

Registered office Principal place of business C/O Boardroom Pty Limited Level 2 Level 12 383 George Street 225 George Street Sydney NSW 2000 Sydney NSW 2000

Note 2. Significant accounting policies

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The following Accounting Standards and Interpretations are most relevant to the Group:

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. AASB 16 replaces AASB 117 'Leases' and sets out a comprehensive model for identifying lease arrangement and the subsequent measurement. A contract contains a lease if it conveys the right to control the use of an identified asset for a period of time. The majority of leases from the lessee perspective within the scope of AASB 16 will require the recognition of ‘right-of-use’ asset and a related lease liability, being present value of future lease payments. This will result in an increase in the recognised assets and liabilities in the statement of financial position as well as a change in expense recognition, with interest and depreciation replacing lease expense, with the exception of leases of low value assets and leases with a term of 12 months or less.

The primary impact from adoption of AASB 16 by the Group was the treatment of office premises and leased office equipment with terms of 12 months or more across the Group. The adoption of AASB 16 increased both assets and liabilities due to the recognition of right-of-use assets and lease liabilities respectively and expense relating to minimum lease payments reduced with an increase in interest expense.

Impact of adoption

AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated. The impact of adoption on opening retained profits as at 1 January 2019 was as follows:

Extract Operating lease commitments as at 1 January 2019 (AASB 117) Discount based on the weighted average incremental borrowing rate Lease liabilities - recognised as at 1 January 2019 Right-of-use assets (AASB 16) Lease liabilities - current (AASB 16) Lease liabilities - non-current (AASB 16) Increase in opening accumulated losses as at 1 January 2019	1 January 2019 $ 811,226 753,002 753,002 684,998 (252,739) (500,263) (68,004)

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Simble Solutions Limited and its controlled entities Notes to the financial statements 31 December 2019

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Note 2. Significant accounting policies (continued)

On 1 January 2019, the right-of-use asset was recorded under AASB 16. On 1 March 2019 the Group entered into a sublease with an independent third party. The sub-lease is classified as a finance lease receivable in accordance with AASB 16 'Leases'. Accordingly, on 1 March 2019 the right-of-use asset was derecognised and a finance lease receivable recorded in the statement of financial position to reflect the transaction.

Note 3. Expenses

Loss before income tax includes the following specific expenses: Administration Minimum lease payments Employee benefits expense Superannuation Depreciation Amortisation General administration and other Total administration Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed	Consolidated Unaudited 2019 2018 $ $ - 462,323 2,252,954 1,656,270 133,676 197,154 291,848 25,750 760,936 2,359,145 1,735,675 2,261,618 5,175,089 6,962,260 276,950 261,185 14,400 - 291,350 261,185
	5,175,089
	276,950 14,400
	291,350

Note 4. Current assets - cash and cash equivalents

Cash at bank Cash on deposit	Consolidated Unaudited 2019 2018 $ $ 654,088 799,438 51,364 50,000 705,452 849,438
	705,452

The above figures are reconciled to cash and cash equivalents at the end of the financial period in the statement of cash flows as shown above.

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Simble Solutions Limited and its controlled entities Notes to the financial statements 31 December 2019

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Note 5. Non-current assets - intangibles

Goodwill - at cost Less: Impairment Trademarks - at cost Customer relationships - at cost Less: Accumulated amortisation Software development - at cost Less: Accumulated amortisation	Consolidated Unaudited 2019 2018 $ $ 1,671,578 1,671,578 (820,000) (820,000) 851,578 851,578 8,151 8,151 840,000 840,000 (560,000) (392,000) 280,000 448,000 6,212,158 5,971,801 (3,145,928) (3,372,992) 3,066,230 2,598,809 4,205,959 3,906,538
	851,578
	8,151
	840,000 (560,000)
	280,000
	6,212,158 (3,145,928)
	3,066,230
	4,205,959

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 January 2018 Additions Disposals Impairment of assets Amortisation expense Balance at 31 December 2018 Additions Amortisation expense Balance at 31 December 2019	Goodwill $ 1,671,578 - - (820,000) -	Trademarks $ 8,552 - (401) - -	Customer relationships $ 616,000 - - - (168,000)	Software development $ 3,239,202 1,550,752 - - (2,191,145)	Total $ 5,535,332 1,550,752 (401) (820,000) (2,359,145) 3,906,538 1,060,357 (760,936) 4,205,959
	851,578 - -	8,151 - -	448,000 - (168,000)	2,598,809 1,060,357 (592,936)
	851,578	8,151	280,000	3,066,230

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Simble Solutions Limited and its controlled entities Notes to the financial statements 31 December 2019

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Note 6. Current liabilities - borrowings

Trade finance Convertible notes - at fair value	Consolidated Unaudited 2019 2018 $ $ 140,000 - 1,102,777 - 1,242,777 -
	1,242,777

Convertible notes - at fair value

During the year, the Company issued convertible notes.

The notes can be converted to ordinary shares by the noteholder delivering a conversion notice to the Company and may convert all or part of the notes between the date of issue and 31 December 2021. A noteholder has no right to convert the notes unless and until the issuer obtains shareholder approval. If approved, the number of shares to be issued on conversion of the notes will be calculated by dividing the number of notes to be converted by $0.15. Interest is payable on the notes at a rate of 10% per annum with interest accruing daily.

Note 7. Equity - issued capital

Unaudited 2019 Shares Ordinary shares - fully paid 163,060,417 Movements in ordinary share capital Details Date Balance 1 January 2018 Issue of shares on Initial Public Offering 22 February 2018 Issue of shares on conversion of convertible notes 22 February 2018 Salary sacrifice shares 22 February 2018 Shares issued to promoters of the Offer 22 February 2018 Issue of shares on capital raising 10 August 2018 Share issue transaction costs Balance 31 December 2018 Issue of shares 1 August 2019 Issue of shares 24 September 2019 Issue of shares 5 November 2019 Share issue transaction costs Balance 31 December 2019	Unaudited 2019 Shares 163,060,417		Consolidated 2018 Unaudited 2019 Shares $ 103,248,334 21,544,095	Consolidated 2018 Unaudited 2019 Shares $ 103,248,334 21,544,095	2018 $ 18,553,963 $ 4,200,100 7,500,000 4,750,332 374,050 483,000 2,000,000 (753,519) 18,553,963 1,290,604 600,000 1,100,000 (472) 21,544,095
			Shares 24,406,218 37,500,000 23,751,656 1,842,126 2,415,000 13,333,334 -	Issue price $0.20 $0.20 $0.20 $0.20 $0.15 $0.00 $0.05 $0.05 $0.05 $0.00
			103,248,334 25,812,083 12,000,000 22,000,000 -
			163,060,417

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Simble Solutions Limited and its controlled entities Notes to the financial statements 31 December 2019

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Note 8. Loss per share

Loss after income tax attributable to the owners of Simble Solutions Limited Weighted average number of ordinary shares used in calculating basic loss per share Weighted average number of ordinary shares used in calculating diluted loss per share Basic loss per share Diluted loss per share No dilution has been included as losses were incurred in the current and previous period.	Consolidated Unaudited 2019 2018 $ $ (3,728,919) (7,719,698) Number Number 120,710,762 85,674,657 120,710,762 85,674,657 Cents Cents (3.09) (9.01) (3.09) (9.01)
	Number 120,710,762
	120,710,762
	Cents (3.09) (3.09)

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