VINYL GROUP LTD — Annual Report 2021

Aug 30, 2021

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ASX ANNOUNCEMENT

Jaxsta Preliminary Final Report

Sydney, Australia, 31 August 2021 : Jaxsta Limited ACN 106 513 580 (Jaxsta or the Company, ASX: JXT) the world’s largest public-facing, dedicated database of official music credits, is pleased to release its preliminary final report and appendix 4E for the year ending 30 June 2021.

The Company will be providing its quarterly investor update on Wednesday 8th September at 11am AEDT . Registration details to be made available on the Jaxsta website prior to the event.

ABOUT JAXSTA

Jaxsta is the world’s largest public-facing and most connected music credits database and technology. Partnered with the industry’s leading major and independent record companies, as well as publishers, distributors, royalty agencies and industry associations, Jaxsta is the go-to authoritative source of official music credits information. The Company’s core platform, Jaxsta.com, is a free and paid subscription service and provides B2B data-solutions for the music and related media industries. Jaxsta Pro, the Company’s subscription service, harnesses the power of Jaxsta’s data to help music industry professionals connect, save time, and advance their businesses and careers.

Authorisation & Additional Information:

This announcement was authorised by the Board of Directors of Jaxsta Limited

Jaxsta Investor Relations:

E: jaxstainvestors@jaxsta.com P: +61 2 8097 1201

Level 1, 113-115 Oxford Street, Darlinghurst 2010 NSW Australia

-Ends-

Jaxsta Ltd. Level 1, 113-115 Oxford Street, DARLINGHURST, NSW, 2010 , AUSTRALIA Ph: +61 2 8317 1000 Jaxsta.com ABN 15 106 513 580

Jaxsta Ltd Appendix 4E Preliminary final report

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1. Company details

Name of entity: Jaxsta Ltd ABN: 15 106 513 580 Reporting period: For the year ended 30 June 2021 Previous period: For the year ended 30 June 2020

2. Results for announcement to the market

				$
Revenues from ordinary activities	down	49.2%	to	4,840
Other income and interest revenue	down	35.5%	to	1,372,463
Loss from ordinary activities after tax attributable to the owners of Jaxsta
Ltd	down	45.3%	to	(5,709,673)
Loss for the year attributable to the owners of Jaxsta Ltd	down	45.3%	to	(5,709,673)

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 $5,709,673 (30 June 2020: $10,438,665).

Refer to Market announcement, which precedes the Appendix 4E, for further commentary on the results for the year ended 30 June 2021.

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 0.60	Previous period Cents 1.21

Net tangible assets per ordinary security has been calculated by including the net right-of-use assets of $17,613 (2020: Not applicable).

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

Jaxsta Ltd 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 auditor's report is expected to contain a paragraph addressing material uncertainty related to going concern.

11. Attachments

Details of attachments (if any):

The Preliminary Financial Report of Jaxsta Ltd for the year ended 30 June 2021 is attached.

12. Signed

Signed _________

Date: 31 August 2021

Jacqueline Louez Schoorl Executive Director & Chief Executive Officer Sydney

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Jaxsta Ltd

ABN 15 106 513 580

Preliminary Financial Report - 30 June 2021

Jaxsta Ltd Contents 30 June 2021 Statement of profit or loss and other comprehensive income 2 Statement of financial position 3 Statement of changes in equity 4 Statement of cash flows 5 Notes to the financial statements 6

General information

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

Jaxsta Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 1 / 113-115 Oxford Street Darlinghurst, NSW 2010

1

Jaxsta Ltd Statement of profit or loss and other comprehensive income For the year ended 30 June 2021

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Note Revenue Other income 2 Interest revenue calculated using the effective interest method Expenses Raw materials and consumables used Employee benefits expense 3 Product development expense 3 Depreciation and amortisation expense 3 Impairment of assets 3,6 Professional fees Marketing expense Occupancy expense Fair value movement on financial assets Other expenses 3 Finance costs 3 Loss before income tax expense Income tax expense Loss after income tax expense for the year attributable to the owners of Jaxsta Ltd Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Jaxsta Ltd Basic earnings per share 10 Diluted earnings per share 10	Consolidated 2021 2020 $ $ 4,840 9,520 1,371,154 2,123,872 1,309 4,465 (7) (234) (3,388,838) (3,808,769) (1,601,881) (2,055,583) (169,693) (83,427) (16,251) (4,025,904) (446,372) (618,289) (569,113) (571,245) (94,440) (119,877) - (573,000) (683,365) (688,946) (117,016) (31,248) (5,709,673) (10,438,665) - - (5,709,673) (10,438,665) - - (5,709,673) (10,438,665) Cents Cents (2.17) (4.35) (2.17) (4.35)
	(5,709,673) -
	(5,709,673) -
	(5,709,673)
	Cents (2.17) (2.17)

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

2

Jaxsta Ltd Statement of financial position As at 30 June 2021

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Note Assets Current assets Cash and cash equivalents Trade and other receivables 4 Other assets Total current assets Non-current assets Property, plant and equipment Right-of-use assets 5 Intangibles 6 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Contract liabilities 7 Borrowings 8 Lease liabilities Employee benefits Lease make good provision Total current liabilities Non-current liabilities Contract liabilities 7 Borrowings 8 Lease liabilities Employee benefits Total non-current liabilities Total liabilities Net assets Equity Issued capital 9 Reserves Accumulated losses Total equity	Consolidated 2021 2020 $ $ 3,461,427 2,404,848 876,611 1,518,106 146,020 223,414 4,484,058 4,146,368 51,503 47,880 230,653 - 245,241 336,534 527,397 384,414 5,011,455 4,530,782 520,341 571,033 25,000 - 26,778 390,009 70,209 - 176,136 206,669 24,462 - 842,926 1,167,711 475,000 - 1,448,638 - 142,831 - 37,876 32,314 2,104,345 32,314 2,947,271 1,200,025 2,064,184 3,330,757 36,454,852 32,792,654 2,241,375 1,460,473 (36,632,043) (30,922,370) 2,064,184 3,330,757
	4,484,058
	51,503 230,653 245,241
	527,397
	5,011,455
	520,341 25,000 26,778 70,209 176,136 24,462
	842,926
	475,000 1,448,638 142,831 37,876
	2,104,345
	2,947,271
	2,064,184
	36,454,852 2,241,375 (36,632,043)
	2,064,184

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

3

Jaxsta Ltd Statement of changes in equity For the year ended 30 June 2021

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Consolidated Balance at 1 July 2019 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 9) Share-based payments Options exercised Balance at 30 June 2020 Consolidated Balance at 1 July 2020 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 9) share-based payments Convertible note issuance equity component (note 9) Balance at 30 June 2021	Issued capital $ 29,969,770 - -	Reserves $ 596,816 - -	Retained profits $ (20,483,705) (10,438,665) -	Total equity $ 10,082,881 (10,438,665) - (10,438,665) 2,495,284 1,191,257 - 3,330,757 Total equity $ 3,330,757 (5,709,673) - (5,709,673) 3,604,448 780,902 57,750 2,064,184
	- 2,495,284 - 327,600	- - 1,191,257 (327,600)	(10,438,665) - - -
	32,792,654	1,460,473	(30,922,370)
	Issued capital $ 32,792,654 - -	Reserves $ 1,460,473 - -	Retained profits $ (30,922,370) (5,709,673) -
	- 3,604,448 - 57,750	- - 780,902 -	(5,709,673) - - -
	36,454,852	2,241,375	(36,632,043)

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

4

Jaxsta Ltd Statement of cash flows For the year ended 30 June 2021

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Note Cash flows from operating activities Receipts from customers (inclusive of GST) Receipts from grants - research and development (inclusive of GST) Government grants received - COVID-19 support Payments to suppliers and employees (inclusive of GST) Interest received Interest and other finance costs paid Net cash used in operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles 6 Proceeds from disposal of Marine Rescue Technologies ('MRT') brand Proceeds from disposal of property, plant and equipment Net cash from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares 9 Share issue transaction costs Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year	Consolidated 2021 2020 $ $ 20 31,476 1,108,176 810,877 488,800 176,000 (5,055,737) (6,686,289) (3,458,741) (5,667,936) 1,309 4,465 (117,016) (6,712) (3,574,448) (5,670,183) (25,930) (29,471) (24,960) (28,411) - 2,845,143 482 - (50,408) 2,787,261 4,086,775 2,704,222 (424,577) (208,938) 1,420,000 446,528 (334,593) (106,802) (66,170) - 4,681,435 2,835,010 1,056,579 (47,912) 2,404,848 2,452,760 3,461,427 2,404,848
	(3,458,741) 1,309 (117,016)
	(3,574,448)
	(25,930) (24,960) - 482
	(50,408)
	4,086,775 (424,577) 1,420,000 (334,593) (66,170)
	4,681,435
	1,056,579 2,404,848
	3,461,427

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

5

Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 1. Operating segments

Identification of reportable operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Management identifies one operating segment based on the Group’s service lines, therefore the operating segment information is as disclosed throughout these financial statements.

The Group’s segment operating loss reconciles to the Group’s loss before tax as presented in its financial statements.

The information reported to the CODM is on a monthly basis.

Major customers

During the year ended 30 June 2021 there were no major customers (2020: none). A customer is considered major if its revenues are 10% or more of the Group's revenue.

All of the Group's revenues during the year ended 30 June 2021 and 2020 were generated in Australia.

Note 2. Other income

Net foreign exchange gain Government grants - COVID-19 support * Research and development tax incentive Other income Other income	Consolidated 2021 2020 $ $ 9,919 4,018 514,800 176,000 842,435 1,936,146 4,000 7,708	Consolidated 2021 2020 $ $ 9,919 4,018 514,800 176,000 842,435 1,936,146 4,000 7,708
	1,371,154	2,123,872

• During the year the Group received payments from the Australian Government amounting to $67,500 (2020: $50,000) and $447,300 (2020: $126,000) as part of its ‘Boosting Cash Flow for Employers’ and 'JobKeeper' schemes, respectively, in response to the Coronavirus (‘COVID-19’) pandemic. These non-tax amounts have been recognised as government grants and recognised as income once there is reasonable assurance that the Group will comply with any conditions attached.

Note 3. Expenses

Loss before income tax includes the following specific expenses: Cost of sales Cost of sales Depreciation Computer equipment Office equipment Buildings right-of-use assets Total depreciation	Consolidated 2021 2020 $ $ 7 234	Consolidated 2021 2020 $ $ 7 234
	14,235 6,781 48,675	17,005 6,604 -
	69,691	23,609

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 3. Expenses (continued)

Amortisation Platform development Trademarks Total amortisation Total depreciation and amortisation Impairment Goodwill (note 6) Trademarks (note 6) Total impairment Employee benefits expense Salary and wages Share-based payments expense Defined contribution superannuation expense Total employee benefits expense Product development expense Product development cash expenses Product development equity based payments Total product development expense Other expenses including the following material expenses: Board fees Insurance Audit fees Filing fees Other Other expenses Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed Net fair value loss Net fair value loss on financial assets	Consolidated 2021 2020 $ $ 59,660 59,818 40,342 -	Consolidated 2021 2020 $ $ 59,660 59,818 40,342 -
	100,002	59,818
	169,693	83,427
	- 16,251	4,025,904 -
	16,251	4,025,904
	2,815,098 325,765 247,975	3,181,051 374,754 252,964
	3,388,838	3,808,769
	1,329,580 272,301	1,239,080 816,503
	1,601,881	2,055,583
	220,085 105,546 114,383 123,627 119,724	196,399 102,264 86,778 72,441 231,064
	683,365	688,946
	103,229 13,787	31,248 -
	117,016	31,248
	-	573,000

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 4. Trade and other receivables

Current assets Trade receivables Research and development incentive receivable Other receivables * GST receivable	Consolidated 2021 2020 $ $ 6,573 - 842,432 1,125,323 1,995 384,470 25,611 8,313 876,611 1,518,106
	876,611

• Other receivables include deferred compensation of $nil (2020: $382,500) in relation to the sale of the MRT business. The amount was due from Secure2Go Group Ltd on or before 28 December 2020. The proceeds from the sale were completely received as of 2 December 2020.

Note 5. Right-of-use assets

Non-current assets Buildings - right-of-use Less: Accumulated depreciation	Consolidated 2021 2020 $ $ 303,554 - (72,901) - 230,653 -
	230,653

The Group leases buildings for its offices under agreements of between 2 to 3 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.

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 July 2019 Balance at 30 June 2020 Additions Depreciation expense Balance at 30 June 2021	Buildings $ - - 279,328 (48,675) 230,653

For other AASB 16 Lease disclosures, refer to:

• note 3 for depreciation on right-of-use assets;

• note 3 for interest on lease liabilities;

• statement of financial position for lease liabilities; and

• statement of cash flows for repayment of lease liabilities.

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 6. Intangibles

Non-current assets Goodwill - at cost Less: Impairment Platform development - at cost Less: Accumulated amortisation Trademarks - at cost Less: Accumulated amortisation Less: Impairment	Consolidated 2021 2020 $ $ - 4,025,904 - (4,025,904) - - 178,963 178,963 (122,256) (62,596) 56,707 116,367 245,127 220,167 (40,342) - (16,251) - 188,534 220,167 245,241 336,534
	-
	178,963 (122,256)
	56,707
	245,127 (40,342) (16,251)
	188,534
	245,241

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 July 2019 Additions Impairment of assets Amortisation expense Balance at 30 June 2020 Additions Impairment of assets Amortisation expense Balance at 30 June 2021	Goodwill $ 4,025,904 - (4,025,904) -	Platform development $ 176,185 - - (59,818)	Trademarks $ 191,756 28,411 - -	Total $ 4,393,845 28,411 (4,025,904) (59,818) 336,534 24,960 (16,251) (100,002) 245,241
	- - - -	116,367 - - (59,660)	220,167 24,960 (16,251) (40,342)
	-	56,707	188,534

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 7. Contract liabilities

Current liabilities Contract liabilities Non-current liabilities Contract liabilities Reconciliation Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out below: Opening balance Payments received in advance Closing balance	Consolidated 2021 2020 $ $ 25,000 -	Consolidated 2021 2020 $ $ 25,000 -
	475,000	-
	- 500,000	- -
	500,000	-

On 10 September 2020, the Group entered into a five year commercial agreement with Songtradr to deliver an end-to-end integrated platform solution for Jaxsta Pro members to use Songtradr’s neighbouring rights collection service, powered by Jaxsta’s global performer metadata. The Group completed the integration in March 2021. The agreement includes an upfront license fee of $500,000 paid by Songtradr to Jaxsta (the 'License Fee') and provides Jaxsta with 20% of net neighbouring rights revenues received by Songtradr from Jaxsta users adopting the service after recoupment of the License Fee. Revenues recognised during the five year period will be reduced from the License Fee until it has been fully utilised.

Unsatisfied performance obligations

The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting period was $500,000 as at 30 June 2021 ($nil as at 30 June 2020) and is expected to be recognised as revenue in future periods as follows:

Within 6 months 6 to 12 months 12 to 18 months 18 to 24 months beyond 24 months	Consolidated 2021 2020 $ $ 2,500 - 22,500 - 33,000 - 43,500 - 398,500 -	Consolidated 2021 2020 $ $ 2,500 - 22,500 - 33,000 - 43,500 - 398,500 -
	500,000	-

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 8. Borrowings

Current liabilities Research and development rebate financing Insurance financing Non-current liabilities Convertible notes payable	Consolidated 2021 2020 $ $ - 365,037 26,778 24,972	Consolidated 2021 2020 $ $ - 365,037 26,778 24,972
	26,778	390,009
	1,448,638	-

Research and development rebate financing

The Group entered into an agreement with Radium Capital (Innovation Structured Finance LLC) to get an advance of their estimated research and development tax incentive for the financial year. The facility carries an interest rate of 15% and is secured by the Group’s research and development tax incentive claim. The loan was repaid on 31 October 2020.

Insurance financing

Insurance funding is a ten months short term loan with a fixed interest rate of 5.49% (2020: 5.85%).

Convertible notes payable

On 10 September 2020, the Company entered into a convertible note agreement with Songtradr Inc. for a principal value of $1,420,000. Conversion would result in the issue of 40,571,429 fully paid ordinary Jaxsta shares at a price of $0.035 per share for the principal value of the note. The conversion is at the right of the noteholder, except if:

• the Company registers a full year net profit of $5,000,000 at which time 100% of the note is converted automatically; or

• the Company registers a full year net profit of $2,500,000 at which time 50% of the note is converted automatically.

The noteholder can convert or seek repayment of the note at the expiration of the term of the note. The note has a term of up to 3 years and carries a coupon rate of 7.5% which will be accrued and paid at the end of the term or capitalised and converted at the time of conversion or repayment. The note is secured by a first ranking security over the assets of the Company and its subsidiaries.

The note is considered a compound financial instrument and equity component has been estimated for the conversion into ordinary shares (refer note 9).

Note 9. Issued capital

Ordinary shares - fully paid Equity component of convertible notes	2021 Shares 300,910,430 -	Consolidated 2020 2021 Shares $ 247,190,330 36,397,102 - 57,750	Consolidated 2020 2021 Shares $ 247,190,330 36,397,102 - 57,750	2020 $ 32,792,654 -
	300,910,430	247,190,330	36,454,852	32,792,654

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Jaxsta Ltd Notes to the financial statements 30 June 2021

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Note 9. Issued capital (continued)

Movements in ordinary share capital

Details Date Balance 1 July 2019 Shares issued on exercise of employee options 10 October 2019 Shares issued on capital raising 18 December 2019 Shares issued in cleansing statement 18 December 2019 Shares issued on exercise of employee options 13 March 2020 Shares issue transaction costs Balance 30 June 2020 Equity component of convertible notes 10 September 2020 Shares issued on capital raising 24 March 2021 Shares issue transaction costs Balance 30 June 2021	Shares Issue price 231,326,901 445,000 $0.390 15,023,329 $0.180 100 $0.180 395,000 $0.390 - $0.000 247,190,330 - $0.000 53,720,100 $0.075 - $0.000 300,910,430	$ 29,969,770 173,550 2,704,199 23 154,050 (208,938)
		32,792,654 57,750 4,029,025 (424,577)
		36,454,852

Note 10. Earnings per share

Loss after income tax attributable to the owners of Jaxsta Ltd Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share	Consolidated 2021 2020 $ $ (5,709,673) (10,438,665)	Consolidated 2021 2020 $ $ (5,709,673) (10,438,665)
	Number 263,018,574	Number 239,869,594
	263,018,574	239,869,594
	Cents (2.17) (2.17)	Cents (4.35) (4.35)

48,302,223 options over ordinary shares are not included in the calculation of diluted earnings per share because they are anti-dilutive. These options could potentially dilute basic earnings per share in the future.

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