VINYL GROUP LTD — Interim / Quarterly Report 2018

Jul 30, 2018

ASX CODE: MBO

ASX ANNOUNCEMENT AND MEDIA RELEASE

Date: 31 July 2018

Mobilarm finishes year strong and ready to complete its reorganisation

• Receipts from customers of $4.9M for the quarter.

Global marine safety equipment provider Mobilarm Limited (ASX: MBO) today reported quarterly and annual receipts from customers of $1.3M and $4.9M, respectively.

Mobilarm Chief Executive Officer Ken Gaunt commented: “Our man overboard business had an exciting quarter, with renewed interest in the Oil and Gas sector. This will allow us to focus on the completion the divestiture of MRT and the acquisition of Jaxsta in the next three months as announced to shareholders”

Mobilarm Chief Financial Officer Jorge Nigaglioni commented: “We had increased cash requirements as we prepared for the upcoming MRT and Jaxsta transactions. Our Canadian order collections occurred in the month of July so they are not reflected in the reported quarter ended 30 June 2018. Had those receipts been in the results, we would have had a cash flow positive quarter.”

-Ends-

Further details Ken Gaunt Email: keng@mrtsos.com Chief Executive Officer Tel.: +61 417 961 770 Tel.: +44 782 731 4442 www.mobilarm.com

Mobilarm Limited (ASX: MBO) and its 100% owned subsidiary MRT (UK) is involved in the development, manufacturing and sale of a Man Overboard Safety Systems provided to the offshore oil & gas industries, commercial marine industries, defence, and government & regulatory agencies internationally. MBO currently operates in the UK, Australia, Nigeria and USA.

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

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

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

Name of entity

Name of entity	Name of entity	Name of entity
Mobilarm Limited
Mobilarm Limited
ABN 15 106 513 580	Quarter ended (“current quarter”)
15 106 513 580	30 June 2018

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (12
		$A’000	months)
			$A’000
1.	Cash flows from operating activities
1.1	Receipts from customers	1,280	4,851
1.2	Payments for
	(a) research and development	-	(14)
	(b) product manufacturing and operating	(353)	(1,348)
	costs
	(c) advertising and marketing	-	(1)
	(d) leased assets	-	-
	(e) staff costs	(467)	(1,755)
	(f) administration and corporate costs	(939)	(2,779)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	-	1
1.5	Interest and other costs of finance paid	(25)	(96)
1.6	Income taxes paid	(128)	(151)
1.7	Government grants and tax incentives	-	204
1.8	Other (provide details if material)	-	-
1.9	Net cash from / (used in) operating	(632)	(1,088)
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a) property, plant and equipment	-	-
	(b) businesses (see item 10)	-	-
	(c) investments	-	-

• See chapter 19 for defined terms

1 September 2016

Page 1

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (12
		$A’000	months)
			$A’000
	(d) intellectual property	-	-
	(e) other non-current assets	-	-
2.2	Proceeds from disposal of:
	(a) property, plant and equipment	-	-
	(b) businesses (see item 10)	-	-
	(c) investments	-	-
	(d) intellectual property	-	-
	(e) other non-current assets	-	-
2.3	Cash flows from loans to other entities	(210)	249
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investing	(210)	249
	activities
3.	Cash flows from financing activities
3.1	Proceeds from issues of shares	-	-
3.2	Proceeds from issue of convertible notes	-	500
3.3	Proceeds from exercise of share options	-	-
3.4	Transaction costs related to issues of	-	-
	shares, convertible notes or options
3.5	Proceeds from borrowings	187	325
3.6	Repayment of borrowings	-	(350)
3.7	Transaction costs related to loans and	-	-
	borrowings
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	-
3.10	Net cash from / (used in) financing	187	475
	activities
4.	Net increase / (decrease) in cash and
	cash equivalents for the period
4.1	Cash and cash equivalents at beginning of
	quarter/year to date	1,035	743
4.2	Net cash from / (used in) operating	(632)	(1,088)
	activities (item 1.9 above)
4.3	Net cash from / (used in) investing activities	(210)	249
	(item 2.6 above)
4.4	Net cash from / (used in) financing activities	187	476
	(item 3.10 above)

• See chapter 19 for defined terms 1 September 2016

Page 2

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter		Year to date (12
		$A’000		months)
				$A’000
4.5	Effect of movement in exchange rates on	-		-
	cash held
4.6	Cash and cash equivalents at end of	380		380
	quarter
5.	Reconciliation of cash and cash	Current quarter		Previous quarter
	equivalents	$A’000		$A’000
	at the end of the quarter (as shown in the
	consolidated statement of cash flows) to the
	related items in the accounts
5.1	Bank balances	380		1,035
5.2	Call deposits	-		-
5.3	Bank overdrafts	-		-
5.4	Other (provide details)	-		-
5.5	Cash and cash equivalents at end of	380		1,035
	quarter (should equal item 4.6 above)

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2	143
6.2	Aggregate amount of cash flow from loans to these parties included	-
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2

Payments were for salaries or director fees and travel expenses.

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

Page 3

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

8.	Financing facilities available	Total facility amount	Amount drawn at
	Add notes as necessary for an	at quarter end	quarter end
	understanding of the position	$A’000	$A’000
8.1	Loan facilities	$4,430	$4,305
8.2	Credit standby arrangements
8.3	Other (please specify)
8.4	Include below a description of each facility above, including the lender, interest rate and
	whether it is secured or unsecured. If any additional facilities have been entered into or are
	proposed to be entered into after quarter end, include details of those		facilities as well.

The Company also has an additional $971,525 in convertible debt, convertible that expires on the 7th of March 2017 and carries an interest rate of 6.0%. The Company also increased the size of the facility by a further $700,000 convertible at the Company’s option at the price of $0.007 per share. The Company has drawn $700,000 of this facility. The notes is convertible by the noteholder upon giving the Company thirty days notice or by the Company providing the Noteholder thirty days notice, both at the price of $0.007 per share. As part of the Jaxsta acquisition, the Noteholder has agreed to convert at $0.0125 per share if the transaction is approved by shareholders and completed as set out in the Notice of Meeting sent on 16 July 2018.

The Company entered into a $2,000,000 convertible note facility on the 30th of September 2016. The facility carries a 12% interest rate and is convertible at the lower of $0.04 per share or the price of any future capital transaction during the term of the note. The Company has drawn $1,920,000 of this facility. As part of the Jaxsta acquisition, the Noteholder has agreed to convert at $0.0125 per share if the transaction is approved by shareholders and completed as set out in the Notice of Meeting sent on 16 July 2018.

The Company entered into a £210,000 export finance loan in February 2018 to fund the build a customer order. The loan is secured by secured by the UK Export Finance group as well as the customer order. The Company drew down £184,502 and repaid the loan on 26 July 2018.

9.	Estimated cash outflows for next quarter	$A’000
9.1	Research and development		(75)
9.2	Product manufacturing and operating costs		(300)
9.3	Advertising and marketing		(5)
9.4	Leased assets		-
9.5	Staff costs		(425)
9.6	Administration and corporate costs		(850)
9.7	Other		(70)
9.8	Total estimated cash outflows		(1,725)

10.	Acquisitions and disposals of	Acquisitions	Disposals
	business entities
	(items 2.1(b) and 2.2(b) above)
10.1	Name of entity
10.2	Place of incorporation or
	registration
10.3	Consideration for acquisition or
	disposal
10.4	Total net assets
10.5	Nature of business

• See chapter 19 for defined terms

1 September 2016

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

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

31 July 2018 Sign here: ............................................................ Date: ............................................. (Director) Jorge Nigaglioni Print name: .........................................................

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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