SQID Technologies Limited — Interim / Quarterly Report 2021

Apr 30, 2021

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

FINANCIAL REPORT FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES FINANCIAL REPORT FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021

TABLE OF CONTENTS

	Page
Directors’ Report	3
National Instrument 51-102 statement	6
Financial Report for the Three-Month period ended 31 March 2021
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 Financial Statements	11
Directors’ Declaration	21

The above statement should be read in conjunction with the accompanying notes. - 2 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

DIRECTORS’ REPORT

The directors present their report together with the financial report of the consolidated entity consisting of SQID Technologies Limited (the company) and the entities it controlled (the Group), for the financial three-month period ended 31 March 2021.

Directors

The names of directors in office at any time during the three-month period are:

Andrew Sterling appointed 5 August 2013

John O’Connor appointed 18 July 2019, resigned 2 March 2021 Michael Clarke appointed 6 August 2019

Athan Lekkas appointed 20 February 2020

The directors have been in office since the start of the three-month period and up to the date of this report unless otherwise stated.

Principal activities

The principal activities of the Group during the three-month period were the processing of credit card payments and direct debits on behalf of Australian e-commerce merchants and related businesses.

There has been no significant change in the nature of these activities during the three-month period.

Results

The consolidated profit / (loss) after income tax attributable to the members of the Group was ($315,733) (2019: $216,795).

Review of operations

A review of the operations of the Group during the three-month period and the results of those operations are as follows:

• The Group’s operations

• Processing credit card transactions for ecommerce merchants and deducting a fee from these transactions.

• Processed transactions volume has grown since last period and margins have remained consistent.

• The underlying drivers of and reasons for the Group’s performance remain the same as last year, with no key developments in the reporting period, and no significant factors affecting the Group’s results.

• There is one key operating segment of the business.

• The financial position of the Group

• The wholesale rate that the Group acquires transaction at and the retail rate that is received for the processing of transactions remains consistent with prior periods.

• The accounting information and other details relevant to an understanding of the financial position of the Group are:

  • ➢ There have been no significant changes in assets and liabilities as a result of major business acquisitions or disposals.

  • ➢ There have been no changes in the funding or dividend strategy of the Group.

  • ➢ There is no doubt about the Group to continue as a going concern.

  • ➢ There have been no impacts of any unrecognised assets and/or any exposures not recognised in the financial statements.

  • ➢ There have been no unusual contractual conditions.

  • ➢ There has been no modification by the Group’s auditor in the audit report.

Significant changes in the state of affairs

• The Group’s agreement with Merchant Warrior (see “Subsequent events” below), will allow the Group to build upon their platform offering whilst removing the need to maintain and develop its existing platform and legacy systems. The Group will be able to focus on new Sales and Marketing opportunities in the pipeline and reduce backend operations.

Subsequent events

• On 7 April 2021, the group sold the options for a gain of $119,996 in April 2021, $64,000 of which was

The above statement should be read in conjunction with the accompanying notes. - 3 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

recognised in 2020 as an unrealised gain.

• On 16 April 2021, the Group signed a new agreement with Merchant Warrior to provide a range of new payment solutions to its customers including the ability to offer ApplePay, GooglePay, BPAY and Electronic Funds Transfer.

Likely developments

There are no likely developments to disclose.

Environmental regulation

The Group’s operations are not subject to any significant environmental Commonwealth or State regulations or laws.

Dividend paid, recommended and declared

No dividends were paid, declared or recommended since the start of the period.

Information on directors and company secretary

The qualifications, experience and special responsibilities of each person who has been a director of the Group at any time during or since 1 January 2020 is provided below, together with details of company secretaries as at the period end.

• Andrew Sterling • Over 30 years of banking and finance experience including senior Cert IV in Financial positions at ANZ & Citibank. Services, Diploma of • Member of Audit & Remuneration Committees. Financial Services • No other directorships of listed companies were held at any time during the three years prior to 31 March 2021.

• John O’Connor • Over 35 years of professional management and business (resigned 2 March experience, across diverse industries, including private, ASX listed 2021) and multinationals. • Extensive company director experience for over 20 years. • Member of Audit & Remuneration Committees.

• Michael Clarke • Over 18 years of experience in the IT industry, company director across both private and public companies including with ASX listed companies.

• • During the three years prior to 31 March 2021, a Director of First Growth Funds Limited.

• • Member of Audit & Remuneration Committees.

• Athan Lekkas • Many years of investment banking experience and has advised on numerous cross border transactions including capital raisings, funding and structuring of acquisitions, joint ventures overseas and participated in a broad range of business and corporate advisory transactions.

• • During the three years prior to 31 March 2021, a Director of First Growth Funds Limited.

• Lee Horobin – • Over 20 years of experience in finance and governance roles across Company Secretary varied industries and organisation types. B.Bus (Acc), B.Bus (Acc) (Hons), MBA, CPA, GAICD, ACIS Mark Pryn – • Over 25 years’ corporate experience in senior finance and Company Secretary governance roles, including over 10 years as Company Secretary for B.Eco (Acc), CAANZ, entities listed on the Australian Stock Exchange. GAICD, ACIS

The above statement should be read in conjunction with the accompanying notes. - 4 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

Directors’ meetings

The number of meetings of the board of directors and of each board committee held during the period and the numbers of meetings attended by each director were:

	Board of	Directors	Audit Committee	Audit Committee
	Eligible to	Attended	Eligible to	Attended
	attend		attend
Andrew Sterling	3	3	1	1
Michael Clarke	3	3	1	1
Athan Lekkas	3	3	-	-

Directors’ interests in shares or options

Directors’ relevant interests in shares of SQID Technologies Ltd or options over shares in the company as at the date of signing this report are detailed below.

Directors’ relevant interests in:	Ordinary shares	Options over shares in
	of SQID Technologies Ltd	SQID Technologies Ltd
Andrew Sterling	903,300		-

Indemnification and insurance of directors, officers and auditors

The Group paid a premium insuring all the directors and the officers against any payment they shall become legally obligated to make (excluding fines, penalties or exemplary damages), legal costs and expenses arising out of any claims made against them jointly or severally by reason of wrongful acts including breach of duty or trust, neglect, error, misstatement or misleading statement, omission, breach of warranty of authority or other act done or wrongly attempted whilst acting in their capacity as director or officer of the nominated Group for the previous financial year. The Group has been unable to secure insurance beyond the expiry period of 14 January 2021 and has elected to defer this until June 2021.

The Group has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Group or any related entity against a liability incurred by the auditor. During the financial year, the Group has not paid a premium in respect of a contract to insure the auditor of the Group or any related entity.

Proceedings on behalf of the company

No person has applied for leave of Court to bring proceedings on behalf of the company or any of its subsidiaries.

Rounding of amounts

In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 , the amounts in the directors’ report and in the financial report have been rounded to the nearest dollar (where indicated).

==> picture [106 x 53] intentionally omitted <==

Athan Lekkas - Chair

Melbourne Date April 27, 2021

The above statement should be read in conjunction with the accompanying notes. - 5 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed interim financial statements of the Company have been prepared by, and are the responsibility of, the Company’s management.

The above statement should be read in conjunction with the accompanying notes. - 6 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

CONSOLIDATED CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021 WITH COMPARATIVE FIGURES FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021

Notes Revenue and other income Revenue from contracts with customers Interest income Other income Less: Expenses Direct transaction costs Employee benefits expense Depreciation and amortisation 9, 10 Consultancy fees 16 Director fees Professional fees Listing expenses IT & hosting costs Other expenses Profit / (loss) before income tax expense Income tax expense 4 Profit / (loss) for the period Other comprehensive income Total comprehensive income for the period Basic earnings per share 15 Diluted earnings per share 15	31 March 2021 31 March 2020 $ $ 158,997 2,069,179 9 11,160 73,825 -
	232,831 2,080,339
	68,269 1,254,666 57,912 120,898 - 19,062 137,799 150,240 30,000 33,333 94,624 145,552 - 11,765 71,051 19,621 88,907 38,531
	548,562 1,793,668
	(315,731) 286,671 - 71,717
	(315,731) 214,954 - -
	(315,731) 214,954
	(0.04) 0.03
	(0.04) 0.03

The above statement should be read in conjunction with the accompanying notes. - 7 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES ABN: 44 121 655 472

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

	Notes 31 March 2021	Notes 31 March 2021	31 December
			2020
		$	$
Current assets
Cash and cash equivalents	5	1,091,144	2,998,162
Receivables	6	205,145	285,483
Other financial assets	7	-	354,000
Security deposits	8	186,625	186,987
Other current assets		31,768	52,193
Total current assets		**1,514,682 **	3,876,825
Non-current assets
Property, plant and equipment	9	-	-
Intangible assets	10	-	-
Other financial assets	7	2,552,859	553,931
Security deposits	8	50,000	50,000
Deferred tax assets	4	121,442	121,442
Total non-current assets		2,724,301	725,373
Total assets		4,238,983	4,602,198
Current liabilities
Payables	11	153,157	213,525
Other liabilities	12	1,104,414	1,093,082
Employee provisions		70,782	69,685
Total current liabilities		1,328,353	**1,376,292 **
Non-current liabilities
Employee provisions		15,868	15,413
Total non-current liabilities		15,868	15,413
Total liabilities		1,344,222	1,391,706
Net assets		2,894,762	3,210,493
Equity
Share capital	13	6,855,020	6,855,020
Reserves		45,639	45,639
Accumulated losses		(4,005,897)	(3,690,166)
Total equity		2,894,762	3,210,493

The above statement should be read in conjunction with the accompanying notes. - 8 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021

Balance as at 1 October 2020 Share-based payments Profit for the three-month period ended December 31, 2020 Balance as at 31 December 2020 Balance as at 1 January 2021 Share-based payments Profit for the three-month period ended March 31, 2020 Balance as at 31 March 2021	Share capital Reserves Accumulated losses Total equity $ $ $ $ 6,855,020 (3,339,115) 3,515,905 45,639 45,639 (351,051) (351,051)
	6,855,020 45,639 (3,690,166) 3,210,493
	6,855,020 45,639 (3,690,166) 3,210,493 - - (315,731) (315,731)
	6,855,020 45,639 (4,005,897) **2,894,762 **

The above statement should be read in conjunction with the accompanying notes. - 9 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2021

Notes Cash flow from operating activities Receipts from customers Payments to suppliers and employees Interest received Net cash provided by operating activities 14(a) Cash flow used in investing activities Payment for plant and equipment Payment for investments Proceeds from investments Net cash used in investing activities Cash flow used in financing activities Net cash used in financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the three- month period 14(b) Cash and cash equivalents at end of the three- month period 5	31 March 2021 $ 172,542 (498,132) 9	31 March 2020 $ 2,340,888 (1,919,837) 23,517
	(325,581)	444,568
	- (2,150,000) 568,563	(5,964) (500,000) -
	(1,581,437)	(505,964)
	-	-
	(1,907,018) 2,998,162	(61,396) 1,166,321
	1,091,144	1,104,925

The above statement should be read in conjunction with the accompanying notes. - 10 -

Notes to the Financial Statements

Table of Contents

NOTE	1:	STATEMENT OF SIGNIFICANT ACCOUNTING POLICES	- 12 -
NOTE	2:	SIGNIFICANT ACCOUNTING POLICIES	- 13 -
NOTE	3:	FINANCIAL RISK MANAGEMENT	- 13 -
NOTE	4:	INCOME TAX	- 16 -
NOTE	5:	CASH AND CASH EQUIVALENTS	- 16 -
NOTE	6:	RECEIVABLES	- 16 -
NOTE	7:	OTHER FINANCIAL ASSETS	- 17 -
NOTE	8:	SECURITY DEPOSITS	- 17 -
NOTE	9:	PLANT AND EQUIPMENT	- 17 -
NOTE	10:	INTANGIBLE ASSETS	- 18 -
NOTE	11:	PAYABLES	- 18 -
NOTE	12:	OTHER LIABILITIES	- 18 -
NOTE	13:	SHARE CAPITAL	- 19 -
NOTE	14:	CASH FLOW INFORMATION	- 19 -
NOTE	16:	RELATED PARTY DISCLOSURES	- 20 -
NOTE	17:	SUBSEQUENT EVENTS	- 20 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS THREE-MONTH PERIOD ENDED 31 MARCH 2021

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICES

The following are the significant accounting policies adopted by SQID Technologies Ltd (the Company) and its controlled entities (the Group) in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of preparation of the financial report

Compliance with IFRS

These financial statements are prepared in compliance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"), have been omitted or condensed. These financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2020.

The financial report covers SQID Technologies Ltd and its controlled entities as a Group. SQID Technologies Ltd is a company limited by shares, incorporated and domiciled in Australia. The address of the Group’s registered office and principal place of business is Level 14, 440 Collins Street, Melbourne VIC 3000. The Group is a forprofit entity for the purpose of preparing the financial report.

The financial report was approved by the directors as at the date of the directors’ report.

In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 , the amounts in the directors’ report and in the financial report have been rounded to the nearest dollar (where indicated).

All amounts are presented in Australian dollars.

Historical cost convention

The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes of assets and liabilities as described in the accounting policies.

Fair value measurement

For financial reporting purposes, ‘fair value’ is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants (under current market conditions) at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

When estimating the fair value of an asset or liability, the entity uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Inputs to valuation techniques used to measure fair value are categorised into three levels according to the extent to which the inputs are observable:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 inputs are unobservable inputs for the asset or liability.

Significant accounting estimates and judgements

The preparation of the financial report requires the use of certain estimates and judgements in applying the Group’s accounting policies. Those estimates and judgements significant to the financial report are disclosed in Note 2 to the consolidated financial statements.

• 12 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

The policies applied in these unaudited condensed interim financial statements are based on IFRS issued and outstanding as of April 27 2021, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2020. Any subsequent changes to IFRS that are given effect in the Company's annual financial statements for the year ending December 31, 2020 could result in restatement of these unaudited condensed interim consolidated financial statements.

NOTE 3: FINANCIAL RISK MANAGEMENT

The Group is exposed to the following financial risks in respect to the financial instruments that it held at the end of the reporting period:

• Currency risk

• Interest rate risk

• • Credit risk - Liquidity risk
• • Other market risk

The board of directors has overall responsibility for identifying and managing operational and financial risks.

The Group holds the following financial instruments:

Financial assets Amortised cost: - Cash and cash equivalents (note 5) - Receivables (note 6) - Security deposits (note 8) Fair value through profit or loss: - Other financial assets (note 7) Total financial assets Financial liabilities Amortised cost: - Payables (note 11) - Other liabilities (note 12)	31 March 2021 31 December 2020 $ $ 1,091,144 2,998,162 205,145 285,483 186,625 186,987 1,482,914 3,470,632 2,552,859 907,931 2,552,859 907,931 4,035,773 4,378,563 153,157 213,525 1,104,414 1,093,082 1,257,571 1,306,607

(a) Interest rate risk

The Group is exposed to interest rate risk in relation to its other financial assets. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The Group does not actively manage interest rate risk.

• 13 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

(a) Interest rate risk (Cont’d)

The following table outlines the Group’s exposure to interest rate risk in relation to future cash flows and the effective weighted average interest rates on classes of financial assets and financial liabilities:

Financial instruments 31 March 2021 (i) Financial assets Cash and cash equivalents Receivables Security bonds Other financial assets Total financial assets (ii) Financial liabilities Payables Other liabilities Total financial liabilities 31 December 2020 (i) Financial assets Cash and cash equivalents Receivables Security bonds Other financial assets Total financial assets (ii) Financial liabilities Payables Other liabilities Total financial liabilities

Interest bearing Non-interest bearing Total carrying amount Weighted average effective interest rate Fixed / variable rate $ $ $ % 1,091,144 - 1,091,144 0.2% Variable - 205,145 205,145 0.0% n/a 186,625 - 186,625 0.01% Variable - 2,552,859 2,552,859 0.0% n/a 1,277,769 2,758,004 4,035,773 0.1% - 153,157 153,157 n/a n/a - 1,104,414 1,104,414 n/a n/a - 1,257,571 1,257,571 n/a 2,998,162 - 2,998,162 0.2% Variable - 285,483 285,483 0.0% n/a 186,987 - 186,987 0.01% Variable - 907,931 907,931 0.0% n/a 3,185,149 1,193,414 4,378,563 0.2% - 213,525 213,525 n/a n/a - 1,093,082 1,093,082 n/a n/a - 1,306,607 1,306,607 n/a

No other financial assets or financial liabilities are expected to be exposed to interest rate risk.

If interest rates were to increase/decrease by 1 basis point from the rates prevailing at the reporting date, assuming all other variables remain constant, then the impact on profit for the year and equity would be as follows:

follows:
	2021	2020
+/- 1 basis point	$	$
Impact on profit after tax	2	543
Impact on equity	1	393

• 14 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

(b) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the counterparty by failing to discharge an obligation.

The Group is exposed to credit risk to the extent that customers may incur chargeback volumes that exceed the funds to be settled to them, and the Group is subsequently unable to recover these funds.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at the reporting date of recognised financial assets is the carrying amount of those assets, net of any allowance for credit losses, as disclosed in consolidated statement of financial position and notes to the consolidated financial statements.

The Group has significant merchant concentration risks, however, each merchant is assessed prior to and during their relationship with the Group as to their perceived credit risk, and where necessary, a bond (other liabilities) is taken from the merchant. This merchant bond can be adjusted from time to time. The total value of merchant bonds held is $1,104,414 (2019: $641,717).

The Group does not have any material credit risk exposure to any single counterparty or Group of counterparties under financial instruments entered into by the Group.

i) Cash and cash equivalents and other financial assets

Credit risk for cash deposits is managed by holding all cash deposits with major Australian banks as well as having funds invested with Australia’s largest non-bank home loan lender.

• ii) Receivables from contracts with customers

Credit risk for receivables from contracts with customers is managed by transacting with as large number of customers as possible, undertaking credit checks for all new customers and setting credit limits for all customers commensurate with their assessed credit risk. Outstanding receivables are regularly monitored for payment in accordance with credit terms.

(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The Group maintains strong current and quick ratios to ensure the risk of illiquidity is minimal.

The following table outlines the Group’s remaining contractual maturities for non-derivative financial liabilities. The amounts presented in the table are the undiscounted contractual cash flows of the financial liabilities, allocated to time bands based on the earliest date on which the Group can be required to pay.

31 March 2021 Payables Other liabilities 31 December 2020 Payables Other liabilities	< 6 months 6-12 months 1-5 years Total contractual cash flows Carrying amount $ $ $ $ $ 153,157 - - 153,157 153,157 - 1,104,414 - 1,104,414 1,104,414
	153,157 1,104,414 - 1,257,571 1,257,571
	213,525 - - 213,525 213,525 - 1,093,082 - 1,093,082 1,093,082
	213,525 1,093,082 - 1,306,607 1,306,607

• 15 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

NOTE 4: INCOME TAX (a) Components of tax expense: Deferred tax (b) Income tax reconciliation The prima facie tax payable on profit before income tax at 27.5% (2020: 27.5%) is as follows: Income tax expense attributable to profit Less tax effect of: - Non-deductible expenses (c) Deferred tax Deferred tax relates to the following: Deferred tax assets The balance comprises: Tax losses carried forward Listing costs Accrued expenses Employee benefits Deferred tax liabilities The balance comprises: Prepayments Investments Net deferred tax assets NOTE 5: CASH AND CASH EQUIVALENTS CURRENT Cash at bank NOTE 6: RECEIVABLES CURRENT Receivables

31 March 2021 31 December 2020 $ $ - (7,152) - (7,152) - (7,152) - - - (7,152) 121,442 - - 127,112 - 11,568 - 23,402 121,442 196,212 - 1,875 72,875 74,740 121,442 121,442 1,091,144 2,998,162 1,091,144 2,998,162 205,145 285,483 205,145 285,483

NOTE 5: CASH AND CASH EQUIVALENTS

NOTE 6: RECEIVABLES

Receivables from contracts with customers represent the Group’s unconditional right to consideration arising from the transfer of goods or services to the customer. In the vast majority of instances, transactions fees are paid for during the process of settling funds to merchants.

Cash bonds are secured from merchants as collateral for their accounts, refer note 15. All receivables from contracts with customers can be recovered by drawing down on a merchant’s bond as and if required.

• 16 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

NOTE 7: OTHER FINANCIAL ASSETS CURRENT Shares listed securities(1) Options in listed securities(1) NON-CURRENT Financial assets at fair value through profit or loss: Shares in unlisted securities(2) Warrants in unlisted securities(2) Shares in unlisted securities(3)	31 March 2021 31 December 2020 $ $ - 304,000 - 50,000 - 354,000 402,859 402,859 - 151,072 2,150,000 - 2,552,859 553,931

• (1) The Group invested $240,000 in Cirralto Ltd on 7 December 2020. As part of this transaction, the Group received 1 free listed option for every 4 placement shares. These listed options have an exercise of $0.025 and had an expiry date of 28 July 2023. The Group sold the shares in January 2021 for $570,897 realising a profit of $330,897, $201,072 of which was recognised in 2020 as an unrealised gain. The group sold the options for a gain of $119,996 in April 2021, $64,000 of which was recognised in 2020 as an unrealised gain.

• (2) The Group invested $CAD380,000 in Vello Technologies Pty Ltd on 2 October 2020. The investment includes warrants which are valued at $CAD142,500 as at 31 December 2020.

• (3) The Group invested $2.15m in ICON Esports Pty Ltd on 1 February 2021, which is 50% of the issued capital. The Group also has two of three positions on the Board of ICON Esports Pty Ltd. ICON will be consolidated into the Group’s accounts upon completion of acquisition accounting.

NOTE 8: SECURITY DEPOSITS

CURRENT Westpac Banking Corporation NON-CURRENT Merchant Warrior NOTE 9: PLANT AND EQUIPMENT Plant & equipment At cost Accumulated depreciation Accumulated impairment loss Reconciliation Carrying amount at beginning of the period Additions Depreciation Impairment Carrying amount end of the period		186,625 186,987
		186,625 186,987
		50,000 50,000
		50,000 50,000
		17,135 17,135 (17,057) (17,057) (78) (78)
		- -
		- 1,099 - 5,965 - (6,986) - (78)
		- -

• 17 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

	31 March 2021	31 December
		2020
NOTE 10: INTANGIBLE ASSETS
Patents
At cost	153,393	153,393
Accumulated amortisation	(102,137)	(102,137)
Accumulated impairment loss	(51,256)	(51,256)
	-	-
Reconciliation
Carrying amount at beginning of the period	-	58,866
Amortisation	-	(7,610)
Impairment	-	(51,256)
Carrying amount end of the period	-	-
Capitalised Software Development
At cost	233,733	233,733
Accumulated amortisation	(160,954)	(160,954)
Accumulated impairment loss	(72,779)	(72,779)
	-	-
Reconciliation
Carrying amount at beginning of the period	-	139,825
Additions	-	-
Amortisation	-	(23,373)
Impairment	-	-
Carrying amount end of period	-	116,452
Total intangible assets	-	175,318
The impairment loss relates to the loss of customers. The impairment expense was recognised		as a
separate line item in the statement of consolidated profit or loss and other comprehensive income in the
audited financial statements for the year ended December 31 2020.
NOTE 11: PAYABLES
Trade payables	91,863	93,018
Merchant floats	51,875	34,433
Accrued transaction processing fees	4,969	30,491
Other payables	4,450	55,583
	153,157	213,525
NOTE 12: OTHER LIABILITIES
Merchant Bonds	674,752	663,420
Withheld GST(1)	429,662	429,662
	1,104,414	1,093,082

(1) During May – November 2020, the Group deducted $429,662 of GST from merchants who were deemed export customers by the Australian Taxation Office. These merchants have ceased trading with the Group effective November 2020. The funds were added to the merchants’ bond balance. The GST was withheld as extra security against possible chargebacks.

• 18 -

SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

31 March 2021 31 December 2020 NOTE 13: SHARE CAPITAL (a) Issued and paid up capital $ $ Ordinary shares opening balance 6,855,020 6,855,020

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

(b) Movements in shares on issue - nil

(c) Rights of each type of share

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings each ordinary share gives entitlement to one vote when a poll is called.

NOTE 14: CASH FLOW INFORMATION Profit from ordinary activities after income tax Non-Cash Items Amortisation Depreciation Impairment expense Changes in assets and liabilities (Increase)/decrease in receivables (Increase)/decrease in prepayments (Increase)/decrease in security bonds (Increase)/decrease in deferred taxes (Decrease)/increase in payables (Decrease)/increase in provisions (Decrease)/increase in other liabilities Net cash flow from operating activities (b) Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position is as follows: − Cash at bank and on hand Closing cash balance	Three Months Ended March 31, 2021 December 31, 2020 $ $ (315,731) (351,051) - 12,820 - 189 - 124,113 (9,257) (122,493) 3,409 17,771 362 (24) - 325,042 (64,208) (115,425) 48,512 125,771 11,332 427,855
	(325,581) 444,568
	1,091,144 2,998,162
	1,091,144 2,998,162

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SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

NOTE 15: EARNINGS PER SHARE Reconciliation of earnings used in calculating earnings per share: Profit from operations Profit used in calculating basic and diluted earnings per share Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of options over ordinary shares Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Basic diluted earnings per share	March 31, 2021 $ December 31, 2020 $ (315,731) (351,051) (315,731) (351,051) No of Shares No of Shares	March 31, 2021 $ December 31, 2020 $ (315,731) (351,051)
		(315,731) (351,051)
	7,973,456 7,973,456 100,000 -
	7,973,456 7,973,456
	(0.04) (0.04)
	(0.04) (0.04)

NOTE 16: RELATED PARTY DISCLOSURES

The Company has identified its directors and senior officers as its key management personnel. No postemployment benefits, other long-terms benefits and termination benefits were made during the interim threemonth periods ended March 30, 2021 and 2020. The following table provides the total amount of transactions with related parties for the three-month periods ended March 31, 2021 and 2020 and outstanding payables as at March 31, 2021 and December 31, 2020:

Entity	Transaction	Amount ($)	Amount ($)	Payables ($)	Payables ($)
		31.3.21	31.3.20	31.3.21	31.12.20
Sigrist Design Pty Ltd(1)	Other expenses	-	7,500	-	2,750
Senior Officers	Consultancy fees	137,799	150,240	50,813	49,218
Directors	Director fees	30,000	30,000	10,667	10,667
Director–John O’Connor(2)	Professional fees	20,000	20,000	-	11,000

(1) Director Peter Hall (resigned 21st February 2020) has a beneficial interest in Sigrist Design Pty Ltd, which rents out office space as well as being the registered office for the Group. This arrangement ceased March 2020.

(2) John O’Connor has a consulting contract to the board spanning February 2020 – March 2021 for to provide advisory services around KPIs, revenue targets, financial analysis, technology and staffing.

NOTE 17: SUBSEQUENT EVENTS

• On 7 April 2021, the group sold the options for a gain of $119,996 in April 2021, $64,000 of which was recognised in 2020 as an unrealised gain.

• On 16 April 2021, the Group signed a new agreement with Merchant Warrior to provide a range of new payment solutions to its customers including the ability to offer ApplePay, GooglePay, BPAY and Electronic Funds Transfer.

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SQID TECHNOLOGIES LIMITED AND ITS CONTROLLED ENTITIES

ABN: 44 121 655 472

DIRECTORS DECLARATION

The directors declare that:

1. In the directors’ opinion, the financial statements and notes thereto, as set out on pages 7 to 20:

2. (a) comply with International Financial Reporting Standards as stated in Note1(a)

3. (b) give a true and fair view of the financial position of the Group as at 31 March 2021 and of its performance for the year ended on that date.

4. In the directors’ opinion there are reasonable grounds to believe that SQID Technologies Ltd and its controlled entities will be able to pay its debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made by the chief executive officer and chief financial officer to the directors for the three-month period ending 31 March 2021.

This declaration is made in accordance with a resolution of the directors.

Athan Lekkas Director

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Melbourne Date April 27, 2021

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