SIMBLE SOLUTIONS LIMITED — Interim / Quarterly Report 2018

Aug 30, 2018

1. Company details

Name of entity:	Simble Solutions Limited
ABN:	17 608 419 656
Reporting period:	For the half-year ended 30 June 2018
Previous period:	For the half-year ended 30 June 2017

2. Results for announcement to the market

The Group has adopted Accounting Standards AASB 9 'Financial Instruments' and AASB 15 'Revenue from Contracts with Customers' for the half-year ended 30 June 2018. The Accounting Standards have been applied retrospectively and comparatives have been restated, where applicable.

			\$
Revenues from ordinary activities	down	0.9% to	1,146,977
Loss from ordinary activities after tax attributable to the owners of Simble Solutions Limited	up	198.8% to	(4,291,194)
Loss for the half-year attributable to the owners of Simble Solutions Limited	up	198.8% to	(4,291,194)

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 \$4,291,194 (30 June 2017: \$1,436,029).

During the half-year, the Company completed its Initial Public Offering ('IPO') on the Australian Securities Exchange ('ASX'). The offer was oversubscribed raising the maximum \$7.5million, principally from ten institutional investors. Proceeds were used to strengthen the Company's balance sheet and accelerate commercialisation of the Simble Energy Platform. Simble delivered these key prospectus targets, reducing total balance sheet liabilities by \$6.5million whilst announcing channel partnerships with Optus, Synnex Australia, and Powercor UK to take the Simble Energy Platform to market.

With onboarded customer sites growing at a compound annual growth rate exceeding 100%, Simble is the fastest growing energy SaaS company listed on the ASX. Subsequent to end of the half year period, the Company has received additional orders for the Simble Energy Platform totalling \$0.66million.

However, as the Simble Energy Platform represents a new revenue stream, the Company's financial performance during the half was principally driven by its mobility unit and Federal Government R&D rebates.

Total revenue was \$1.15million, a decline of 0.9% due to lower mobility sales as the Company focused resources on commercialisation of the Simble Energy Platform. Gross margin declined from 69% to 55% as revenue recognition was aligned with the Company's recently implemented distributor model of supply chain.

The distributor model is a capital efficient mechanism to meet growing demand for the Simble Energy Platform. It provides Simble the logistical capacity to service a step change in sales volumes without having to invest and develop the required infrastructure itself. Its implementation requires all hardware componentry associated with the Simble Energy Platform to be recognised upfront, rather than just the Company's margin, as was previously advised in Simble's prospectus.

As a result, the Company has commenced booking all hardware componentry associated with the Simble Energy Platform upfront. The remaining contract value will continue to be recognised on a pro rata basis over the contract life as a support and service component, thereby generating recurring revenue. As hardware carries a lower margin than our software, this shift in revenue recognition practices has impacted gross margin.

The loss after tax widened from \$1.44million to \$4.29million. Approximately a quarter of this increased loss was attributable to non recurring IPO costs (\$0.74million). The balance of the widened loss was due to increased sales and marketing expenses and increased overhead associated with the transition to a public company structure.

Simble Solutions Limited and its controlled entities Appendix 4D Half-year report

The results for the year ended 30 June 2018 were impacted by a non-recurring item attributable to the IPO. Underlying earnings before interest, tax, depreciation and amortisation ('EBITDA') is a key measurement used by management and the board to assess and review business performance, and accordingly the table below provides a reconciliation between statutory net loss and underlying EBITDA.

	Consolidated 30 Jun 2018 \$
Loss after income tax benefit	(4,291,194)
Add back:
Interest	187,731
Depreciation	14,368
Amortisation	1,313,747
Statutory EBITDA	(2,775,348)
Add non-recurring items:
IPO expenses *	742,780
Underlying EBITDA	(2,032,568)

* IPO expenses represent costs associated with the listing of Simble Solutions Limited on the ASX.

The financial information in the table above has been derived from the audited financial statements. The underlying EBITDA is non-IFRS financial information and as such has not been audited in accordance with Australian Accounting Standards.

3. Net tangible assets

	Reporting period Cents	Previous period Cents
Net tangible assets per ordinary security	0.30	(19.91)

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

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.

Simble Solutions Limited and its controlled entities Appendix 4D Half-year report

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 were subject to a review by the auditors and the review report is attached as part of the Interim Report.

11. Attachments

Details of attachments (if any):

The Interim Report of Simble Solutions Limited for the half-year ended 30 June 2018 is attached.

12. Signed

Signed ___________________________ Date: 31 August 2018

Fadi Geha Director Sydney

Simble Solutions Limited and its controlled entities

ABN 17 608 419 656

Interim Report - 30 June 2018

Simble Solutions Limited and its controlled entities Contents 30 June 2018

Directors' report 2 Auditor's independence declaration 4 Consolidated statement of profit or loss and other comprehensive income 5 Consolidated statement of financial position 6 Consolidated statement of changes in equity 7 Consolidated statement of cash flows 8 Notes to the consolidated financial statements 9 Directors' declaration 20 Independent auditor's review report to the members of Simble Solutions Limited 21

Simble Solutions Limited and its controlled entities Directors' report 30 June 2018

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Simble Solutions Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2018.

Directors

The following persons were directors of Simble Solutions Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Philip Tye (Chairman) David Lawrence Astill Fadi Geha

Phillip Said Shamieh (Resigned 16 May 2018)

Principal activities

During the financial half-year, the principal continuing activities of the Group consisted of providing and developing Software as a Service ('SaaS') for businesses and organisations seeking mobility and energy management solutions.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Review of operations

The loss for the Group after providing for income tax amounted to \$4,291,194 (30 June 2017: \$1,436,029).

During the half-year, the Company completed its Initial Public Offering ('IPO') on the Australian Securities Exchange ('ASX'). The offer was oversubscribed raising the maximum \$7.5million, principally from ten institutional investors. Proceeds were used to strengthen the Company's balance sheet and accelerate commercialisation of the Simble Energy Platform. Simble delivered these key prospectus targets, reducing total balance sheet liabilities by \$6.5million whilst announcing channel partnerships with Optus, Synnex Australia, and Powercor UK to take the Simble Energy Platform to market.

With onboarded customer sites growing at a compound annual growth rate exceeding 100%, Simble is the fastest growing energy SaaS company listed on the ASX. Subsequent to end of the half year period, the Company has received additional orders for the Simble Energy Platform totalling \$0.66million.

However, as the Simble Energy Platform represents a new revenue stream, the Company's financial performance during the half was principally driven by its mobility unit and Federal Government R&D rebates.

Total revenue was \$1.15million, a decline of 0.9% due to lower mobility sales as the Company focused resources on commercialisation of the Simble Energy Platform. Gross margin declined from 69% to 55% as revenue recognition was aligned with the Company's recently implemented distributor model of supply chain.

The distributor model is a capital efficient mechanism to meet growing demand for the Simble Energy Platform. It provides Simble the logistical capacity to service a step change in sales volumes without having to invest and develop the required infrastructure itself. Its implementation requires all hardware componentry associated with the Simble Energy Platform to be recognised upfront, rather than just the Company's margin, as was previously advised in Simble's prospectus.

As a result, the Company has commenced booking all hardware componentry associated with the Simble Energy Platform upfront. The remaining contract value will continue to be recognised on a pro rata basis over the contract life as a support and service component, thereby generating recurring revenue. As hardware carries a lower margin than our software, this shift in revenue recognition practices has impacted gross margin.

The loss after tax widened from \$1.44million to \$4.29million. Approximately a quarter of this increased loss was attributable to non recurring IPO costs (\$0.74million). The balance of the widened loss was due to increased sales and marketing expenses and increased overhead associated with the transition to a public company structure.

Simble Solutions Limited and its controlled entities Directors' report 30 June 2018

The results for the year ended 30 June 2018 were impacted by a non-recurring item attributable to the IPO. Underlying earnings before interest, tax, depreciation and amortisation ('EBITDA') is a key measurement used by management and the board to assess and review business performance, and accordingly the table below provides a reconciliation between statutory net loss and underlying EBITDA.

	Consolidated 30 Jun 2018 \$
Loss after income tax benefit	(4,291,194)
Add back: Interest Depreciation Amortisation	187,731 14,368 1,313,747
Statutory EBITDA Add non-recurring items:	(2,775,348)
IPO expenses *	742,780
Underlying EBITDA	(2,032,568)

* IPO expenses represent costs associated with the listing of Simble Solutions Limited on the ASX.

The financial information in the table above has been derived from the audited financial statements. The underlying EBITDA is non-IFRS financial information and as such has not been audited in accordance with Australian Accounting Standards.

Significant changes in the state of affairs

On 22 February 2018, after a successful Initial Public Offering ('IPO'), the Company was admitted to the official list of the Australian Securities Exchange (ASX: SIS). Under the IPO, the Company issued 37,500,000 ordinary shares, raising \$7,500,000 before costs. In addition, all convertible notes were converted into 23,751,656 ordinary shares.

There were no other significant changes in the state of affairs of the Group during the financial half-year.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors.

On behalf of the directors

___________________________ Fadi Geha Director

31 August 2018 Sydney

Simble Solutions Limited and its controlled entities Consolidated statement of profit or loss and other comprehensive income For the half-year ended 30 June 2018

		Consolidated
	Note	30 Jun 2018 \$	30 Jun 2017 \$ Restated
Revenue Revenue Cost of sales	5	1,146,977 (520,370)	1,157,974 (359,326)
Gross margin		626,607	798,648
Other income Interest revenue calculated using the effective interest method Reversal of impairment of receivables	6	231,812 4,083 -	348,016 2,059 7,480
Expenses Marketing Administration Initial Public Offering expenses Finance costs	7	(90,350) (4,132,835) (742,780) (187,731)	(62,116) (2,324,028) - (205,823)
Loss before income tax expense		(4,291,194)	(1,435,764)
Income tax expense		-	(265)
Loss after income tax expense for the half-year attributable to the owners of Simble Solutions Limited		(4,291,194)	(1,436,029)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss Foreign currency translation		(37,888)	10,776
Other comprehensive income/(loss) for the half-year, net of tax		(37,888)	10,776
Total comprehensive loss for the half-year attributable to the owners of Simble Solutions Limited		(4,329,082)	(1,425,253)
		Cents	Cents
Basic loss per share Diluted loss per share	18 18	(6.06) (6.06)	(5.70) (5.70)

Refer to note 3 for detailed information on Restatement of comparatives.

Simble Solutions Limited and its controlled entities Consolidated statement of financial position As at 30 June 2018

			Consolidated
	Note	30 Jun 2018 \$	31 Dec 2017 \$ Restated
Assets
Current assets
Cash and cash equivalents		1,429,356	45,303
Trade and other receivables	8	1,446,286	576,978
Other	9	385,287	476,482
Total current assets		3,260,929	1,098,763
Non-current assets
Financial assets at fair value through profit or loss	10	-	30,415
Property, plant and equipment	11	55,358	58,237
Intangibles	12	4,701,685	5,535,332
Other deposits		143,162	143,162
Total non-current assets		4,900,205	5,767,146
Total assets		8,161,134	6,865,909
Liabilities
Current liabilities
Trade and other payables	13	1,303,379	2,912,310
Accrued expenses		411,898	701,817
Borrowings		-	80,000
Income tax		8,565	88,367
Provisions		186,106	200,818
Other financial liabilities	14	-	4,750,332
Contract liabilities Total current liabilities		1,194,775 3,104,723	885,288 9,618,932
Non-current liabilities Provisions		84,563	81,180
Total non-current liabilities		84,563	81,180
Total liabilities		3,189,286	9,700,112
Net assets/(liabilities)		4,971,848	(2,834,203)
Equity
Issued capital	15	16,691,636	4,200,100
Reserves		2,945,066	3,339,357
Accumulated losses		(14,664,854)	(10,373,660)
Total equity/(deficiency)		4,971,848	(2,834,203)

Refer to note 3 for detailed information on Restatement of comparatives.

Simble Solutions Limited and its controlled entities Consolidated statement of changes in equity For the half-year ended 30 June 2018

Consolidated	Issued capital \$	Shares to be issued \$	Common control reserve \$	Foreign currency translation reserve \$	Share based payments reserve \$	Accumu lated losses \$	Total equity \$
Balance at 1 January 2017	100	4,200,000	250,836	(15,018)	-	(2,729,582)	1,706,336
Loss after income tax expense for the half-year Other comprehensive income	-	-	-	-	-	(1,436,029)	(1,436,029)
for the half-year, net of tax	-	-	-	10,776	-	-	10,776
Total comprehensive income/(loss) for the half-year	-	-	-	10,776	-	(1,436,029)	(1,425,253)
Transactions with owners in their capacity as owners: Common control transaction	-	-	6,178	-	-	-	6,178
Balance at 30 June 2017	100	4,200,000	257,014	(4,242)	-	(4,165,611)	287,261

Consolidated	Issued capital \$	Shares to be issued \$	Common control reserve \$	Foreign currency translation reserve \$	Share based payments reserve \$	Accumu lated losses \$	Total equity \$
Balance at 1 January 2018	4,200,100	-	250,836	(36,529)		3,125,050 (10,373,660)	(2,834,203)
Loss after income tax expense for the half-year Other comprehensive loss for	-	-	-	-	-	(4,291,194)	(4,291,194)
the half-year, net of tax	-	-	-	(37,888)	-	-	(37,888)
Total comprehensive loss for the half-year	-	-	-	(37,888)	-	(4,291,194)	(4,329,082)
Transactions with owners in their capacity as owners: Contributions of equity, net of
transaction costs (note 15) Share-based payments	12,491,536 -	- -	- -	- -	- (374,050)	- -	12,491,536 (374,050)
Common control transaction	-	-	17,647	-	-	-	17,647
Balance at 30 June 2018	16,691,636	-	268,483	(74,417)		2,751,000 (14,664,854)	4,971,848

Simble Solutions Limited and its controlled entities Consolidated statement of cash flows For the half-year ended 30 June 2018

			Consolidated
	Note	30 Jun 2018	30 Jun 2017
		\$	\$
Cash flows from operating activities
Receipts from customers (inclusive of GST)		784,163	817,749
Payments to suppliers and employees (inclusive of GST)		(4,552,162)	(1,856,318)
		(3,767,999)	(1,038,569)
Interest received		4,083	2,059
Research and development incentive received		41,000	321,739
Interest and other finance costs paid		(645,984)	(205,823)
Income taxes paid		(88,553)	(7,087)
Net cash used in operating activities		(4,457,453)	(927,681)
Cash flows from investing activities
Payments for property, plant and equipment	11	(11,489)	(5,255)
Payments for intangibles	12	(480,501)	(747,860)
Payments for security deposits		(9,285)	-
Proceeds from disposal of investments		29,865	62,641
Proceeds from release of security deposits		-	54,560
Net cash used in investing activities		(471,410)	(635,914)
Cash flows from financing activities
Proceeds from issue of shares		7,500,000	-
Share issue transaction costs		(1,069,296)	-
Proceeds from issue of convertible notes		-	1,460,133
Repayment of borrowings		(80,000)	-
Net cash from financing activities		6,350,704	1,460,133
Net increase/(decrease) in cash and cash equivalents		1,421,841	(103,462)
Cash and cash equivalents at the beginning of the financial half-year		45,303	275,064
Effects of exchange rate changes on cash and cash equivalents		(37,788)	10,776
Cash and cash equivalents at the end of the financial half-year		1,429,356	182,378

Note 1. General information

The 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 half-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 is:

Level 12 6-10 O'Connell Street Sydney NSW 2000

A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2018.

Note 2. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 30 June 2018 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The same accounting policies and methods of computation have been followed in this interim financial report and were applied in the most recent annual financial statements.

New or amended Accounting Standards and Interpretations adopted

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 9 Financial Instruments

The Group has adopted AASB 9 from 1 January 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available.

Note 2. Significant accounting policies (continued)

AASB 9 'Financial Instruments' is not considered to have a material impact on the financial statements. The impact on disclosure of comparative financial information is presented in note 3.

AASB 15 Revenue from Contracts with Customers

The Group has adopted AASB 15 from 1 January 2018. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period.

Historically the Group provided services which were recognised over a period of time, and consequently the application of AASB 15 has had no impact on the opening balance of equity as it was in line with the requirements of AASB 15. The impact on disclosures of comparative financial information is presented in note 3.

In the current half-year period, the Group commenced selling its Simble Energy Platform services which include a hardware component. Revenue recognised in relation to the hosting of the Simble Energy Platform is recognised over a period of time, whilst the sale of hardware is recognised at a point in time.

Revenue recognition

The Group recognises revenue as follows:

Revenue from contracts with customers

Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in the form of a separate refund liability.

Rendering of services

Revenue from the rendering of services is recognised on a straight-line basis over the period that services are provided.

Consulting revenue is recognised by reference to completion of deliverables.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Note 2. Significant accounting policies (continued)

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.

Contract liabilities

Contract liabilities are recognised when a customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier), before the Group has transferred the goods or services to the customer. The liability is the Group's obligation to transfer goods or services to a customer from which it has received consideration.

Going concern

The consolidated statement of profit or loss and other comprehensive income for the half-year financial period ended 30 June 2018 reflects a loss after income tax of \$4.29 million and the consolidated statement of cash flows reflects net cash outflows from operations of \$4.46 million. The directors have reviewed the cash flow forecast prepared by management for the period through to 31 August 2019. The cash flow forecast indicates that the Group will have sufficient funding to operate as a going concern during the forecast period, and on this basis the directors have prepared the financial statements on the going concern basis.

The cash flow forecast is predicated on the Group achieving its anticipated rate of cash inflows from conversion and delivery of sales pipeline opportunities over the forecast period. The directors believe that the actions currently being undertaken will support achieving these outcomes.

Note 3. Restatement of comparatives

Change in accounting policy

As a result of the change in accounting policies as described in note 2, the impacts, by line item, on the consolidated statement of profit or loss and other comprehensive income for the period ended 30 June 2017 and the consolidated statement of financial position as at 31 December 2017 are set out below.

Statement of profit or loss and other comprehensive income

	Consolidated
	30 Jun 2017		30 Jun 2017
	\$	\$	\$
	Reported	Adjustment	Restated
Revenue
Revenue	1,160,033	(2,059)	1,157,974
Cost of sales	(359,326)	-	(359,326)
Gross margin	800,707	(2,059)	798,648
Other income	348,016	-	348,016
Interest revenue calculated using the effective interest method	-	2,059	2,059
Reversal of impairment of receivables	-	7,480	7,480
Expenses
Marketing	(62,116)	-	(62,116)
Administration	(2,316,548)	(7,480)	(2,324,028)
Finance costs	(205,823)	-	(205,823)
Loss before income tax expense	(1,435,764)	-	(1,435,764)
Income tax expense	(265)	-	(265)
Loss after income tax expense for the half-year attributable to the owners of Simble Solutions Limited	(1,436,029)	-	(1,436,029)
Other comprehensive income
Foreign currency translation	10,776	-	10,776
Other comprehensive income for the half-year, net of tax	10,776	-	10,776
Total comprehensive loss for the half-year attributable to the owners of Simble Solutions Limited	(1,425,253)	-	(1,425,253)
	Cents Reported	Cents Adjustment	Cents Restated
Basic loss per share	(5.70)	-	(5.70)
Diluted loss per share	(5.70)	-	(5.70)

Note 3. Restatement of comparatives (continued)

Statement of financial position at the end of the earliest comparative period

		Consolidated
	31 Dec 2017 \$	\$	31 Dec 2017 \$
	Reported	Adjustment	Restated
Assets
Current assets
Cash and cash equivalents	45,303	-	45,303
Trade and other receivables	576,978	-	576,978
Other	476,482	-	476,482
Total current assets	1,098,763	-	1,098,763
Non-current assets
Financial assets at fair value through profit or loss	-	30,415	30,415
Available-for-sale financial assets	30,415	(30,415)	-
Property, plant and equipment	58,237	-	58,237
Intangibles Other deposits	5,535,332 143,162	- -	5,535,332 143,162
Total non-current assets	5,767,146	-	5,767,146
Total assets	6,865,909	-	6,865,909
Liabilities
Current liabilities
Trade and other payables	2,912,310	-	2,912,310
Accrued expenses	701,817	-	701,817
Borrowings	80,000	-	80,000
Income tax	88,367	-	88,367
Provisions Other financial liabilities	200,818 4,750,332	- -	200,818 4,750,332
Contract liabilities	-	885,288	885,288
Deferred revenue	885,288	(885,288)	-
Total current liabilities	9,618,932	-	9,618,932
Non-current liabilities
Provisions	81,180	-	81,180
Total non-current liabilities	81,180	-	81,180
Total liabilities	9,700,112	-	9,700,112
Net liabilities	(2,834,203)	-	(2,834,203)
Equity Issued capital	4,200,100	-	4,200,100
Reserves	3,339,357	-	3,339,357
Accumulated losses	(10,373,660)	-	(10,373,660)
Total deficiency in equity	(2,834,203)	-	(2,834,203)

Note 4. Operating segments

Identification of reportable operating segments

The Group operates in one segment, based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

As a result, the operating segment information is disclosed in the statement and notes to the financial statements.

Note 5. Revenue

		Consolidated
	30 Jun 2018 \$	30 Jun 2017 \$
Rendering of services	1,146,977	1,157,974
Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows:
		Consolidated
	30 Jun 2018 \$	30 Jun 2017 \$
Geographical regions Australia United Kingdom	1,085,693 36,787	1,117,889 -
New Zealand Vietnam	24,497 -	39,857 228
	1,146,977	1,157,974
Timing of revenue recognition Goods transferred over time Goods transferred at a point in time	877,253 269,724	1,157,974 -
	1,146,977	1,157,974
Note 6. Other income
		Consolidated
	30 Jun 2018 \$	30 Jun 2017 \$
Net gain on disposal of investments Research and development tax incentive	- 231,812	26,277 321,739
Other income	231,812	348,016

		Consolidated
	30 Jun 2018	30 Jun 2017
	\$	\$
Administration
Minimum lease payments	184,417	192,121
Employee benefits expense	1,066,422	645,714
Superannuation	99,770	104,108
Depreciation	14,368	9,491
Amortisation	1,313,747	1,281,151
Research and development expenses	255,684	-
General administration and other	1,198,427	91,443
	4,132,835	2,324,028

Note 8. Current assets - trade and other receivables

		Consolidated
	30 Jun 2018	31 Dec 2017
	\$	\$
Trade receivables	1,076,881	365,472
Other receivables	10,014	14,345
Goods and services tax recoverable	15,345	43,927
Research and development tax incentive recoverable	344,046	153,234
	1,446,286	576,978

Note 9. Current assets - other

		Consolidated
	30 Jun 2018 \$	31 Dec 2017 \$
Prepayments Security deposits Other current assets	354,129 31,158 -	294,442 21,873 160,167
	385,287	476,482

As at 31 December 2017, other current assets comprised share issue costs associated with the IPO of \$160,167. These costs were transferred to equity and netted against issued capital on the IPO date.

Note 10. Non-current assets - financial assets at fair value through profit or loss

	Consolidated
	30 Jun 2018 \$	31 Dec 2017 \$
Listed investments	-	30,415
Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial period are set out below:
Opening fair value Additions Disposals	30,415 - (30,415)	38,059 66,000 (73,644)
Closing fair value	-	30,415

Note 11. Non-current assets - property, plant and equipment

	Consolidated
	30 Jun 2018	31 Dec 2017
	\$	\$
Leasehold improvements - at cost	48,087	48,087
Less: Accumulated depreciation	(15,552)	(10,743)
	32,535	37,344
Computer equipment - at cost	19,676	14,957
Less: Accumulated depreciation	(14,062)	(12,431)
	5,614	2,526
Office equipment - at cost	39,904	33,134
Less: Accumulated depreciation	(22,695)	(14,767)
	17,209	18,367
	55,358	58,237

Reconciliations

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

Consolidated	Leasehold improvements \$	Computer equipment \$	Office equipment \$	Total \$
Balance at 1 January 2018 Additions Depreciation expense	37,344 - (4,809)	2,526 4,719 (1,631)	18,367 6,770 (7,928)	58,237 11,489 (14,368)
Balance at 30 June 2018	32,535	5,614	17,209	55,358

Note 12. Non-current assets - intangibles

		Consolidated
	30 Jun 2018	31 Dec 2017
	\$	\$
Goodwill - at cost	1,671,578	1,671,578
Trademarks - at cost	8,151	8,552
Customer relationships - at cost	840,000	840,000
Less: Accumulated amortisation	(308,000)	(224,000)
	532,000	616,000
Software development - at cost	4,901,550	4,421,049
Less: Accumulated amortisation	(2,411,594)	(1,181,847)
	2,489,956	3,239,202
	4,701,685	5,535,332

Reconciliations

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

Consolidated	Goodwill \$	Trademarks \$	Customer relationships \$	Software development \$	Total \$
Balance at 1 January 2018	1,671,578	8,552	616,000	3,239,202	5,535,332
Additions	-	-	-	480,501	480,501
Disposals	-	(401)	-	-	(401)
Amortisation expense	-	-	(84,000)	(1,229,747)	(1,313,747)
Balance at 30 June 2018	1,671,578	8,151	532,000	2,489,956	4,701,685

Note 13. Current liabilities - trade and other payables

		Consolidated
	30 Jun 2018	31 Dec 2017
	\$	\$
Trade payables	861,187	1,060,816
Other payables	442,192	1,851,494
	1,303,379	2,912,310
Note 14. Current liabilities - other financial liabilities

	Consolidated
	30 Jun 2018 31 Dec 2017
	\$	\$
Convertible notes - at fair value	-	4,750,332

All convertible notes were converted into 23,751,656 ordinary shares on the successful IPO (refer note 15).

Note 15. Equity - issued capital

		Consolidated
		30 Jun 2018 Shares	31 Dec 2017 Shares	30 Jun 2018 \$	31 Dec 2017 \$
Ordinary shares - fully paid		89,915,000	24,406,218	16,691,636	4,200,100
Movements in ordinary share capital
Details	Date		Shares	Issue price	\$
Balance Issue of shares on Initial Public Offering Issue of shares on conversion of convertible notes	1 January 2018	22 February 2018	24,406,218 37,500,000	\$0.20	4,200,100 7,500,000
(note 14) Salary sacrifice shares Shares to be issued to promoters of the Offer Share issue transaction costs		22 February 2018 22 February 2018 22 February 2018	23,751,656 1,842,126 2,415,000	\$0.20 \$0.20 \$0.20	4,750,331 374,051 483,000 (615,846)
Balance	30 June 2018		89,915,000		16,691,636

Note 16. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Note 17. Contingent liabilities

The Group has no contingent liabilities at 30 June 2018 and 31 December 2017.

Note 18. Loss per share

	Consolidated
	30 Jun 2018 \$	30 Jun 2017 \$
Loss after income tax attributable to the owners of Simble Solutions Limited	(4,291,194)	(1,436,029)
	Number	Number
Weighted average number of ordinary shares used in calculating basic loss per share	70,838,267	25,194,302
Weighted average number of ordinary shares used in calculating diluted loss per share	70,838,267	25,194,302
	Cents	Cents
Basic loss per share Diluted loss per share	(6.06) (6.06)	(5.70) (5.70)

No dilution has been included as losses were incurred in the current and previous period.

Note 19. Events after the reporting period

On 3 August 2018, the Company announced the successful completion of a \$2 million oversubscribed placement of 13.3 million ordinary shares to institutional and sophisticated shareholders conducted under the Company's existing 15% placement capacity. The placement was subscribed at \$0.15, representing a 3% discount on the 5 day volume weighted average price. The placement will rank equally with existing Company shares.

On 22 August 2018, 23,100,250 ordinary shares were released from voluntary escrow as part of the Company's listing on the ASX and are already quoted in accordance with ASX listing rules.

No other matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

Simble Solutions Limited and its controlled entities Directors' declaration 30 June 2018

In the directors' opinion:

• the attached financial statements and notes comply with Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2018 and of its performance for the financial half-year ended on that date; and
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors.

On behalf of the directors

___________________________

Fadi Geha Director

31 August 2018 Sydney