XREF LIMITED — Interim / Quarterly Report 2021

Jan 18, 2021

==> picture [596 x 85] intentionally omitted <==

19th�January�2021

Q�a��e����U�da�e��S����g�Sa�e��G����h���Rec��d�Re�e��e�

• Re�e��e�� ��2�6�million���up�13�

• Sa�e���� ��2�7�million����up�18�5��

• Ca�h�Recei����f����Sa�e�� ���2�9�million���up�19��

• Ca�h�E��e��e�� ���3�million���down�44���

• Ca�h�Ba�a�ce� ���6�7�million�

Xref Limited �ASX�XF��� the human resources technology company�today reported a successful second quarter of trading�Group revenue was a record �2�6 million�sales reached �2�7 million and cash�receipts�from�sales�were�also�strong�at��2�9�million�for�the�quarter��

New clients acquired in the quarter contributed 15�of total sales achieved�New clients in Australia included Woolworths�The Department of Education �NSW��DHL Express and Think Childcare�In the United States �Canada�new clients included IRET�Cost�U�Less�Compugen Inc�and Friendship Public Charter Schools�In Europe�ByrneLooby�Luminate and Norwegian Air were introduced to the platform� Details�about�these�companies�can�be�found�in�the�appendix��

Rec��d�Re�e��e��C�edi��U�age���

Xref credits used during the quarter totalled �2�5 million and�together with a RapidID net revenue of �0�1 million�contributed to a record quarterly revenue of �2�6 million�Xref credit usage grew 13�� exceeding pre�COVID�19 levels and RapidID�s net revenue also grew 58�on the previous corresponding�quarter��Q2�FY20���

==> picture [525 x 251] intentionally omitted <==

• *��Xref�credits�are�recognised�as�revenue�when�used�

• **�RapidID�Net�Revenue�is�gross�revenue�less�the�cost�of�3rd�party�checks�

1

Xref�s ongoing focus on organisations within the �trust�economy has continued to underpin revenues and support growth�The recovery of non�essential service clients has resulted in growth of 112�since Q4�FY20��demonstrating�a�strong�recovery�back�to�pre�COVID�19�levels��

==> picture [525 x 262] intentionally omitted <==

Xref credits used via integration partners grew by 42��to �0�7 million�when compared to Q2 FY20 and represented�28��of�all�credits�used�during�the�quarter��

S����g�Sa�e��G����h�

COVID�19 has accelerated the global demand for remote working and�as a result�employers�desire to improve governance is increasing�Accordingly�organisations are seeking improved ways to perform candidate verification�Our reliance on outbound�direct sales activities are fast being replaced by inbound�marketing�led demand�As a result�Xref witnessed a rise in inbound leads from�in the most part�channel partner integrations�Xref�s improved global digital strategy and the network effect generated through the numerous sectors and global regions Xref�s services are used in�Xref can acquire clients via its self�serve platform�its in�house enterprise sales teams or via its 30 channel partners��

Group sales reached �2�7 million during the quarter�up 18�5�on the previous corresponding quarter �Q2 FY20��New clients accounted for 15�of sales�while 14�came from Xref�s international offices in Europe and North America and 14�from RapidID�Sales by Xref North America and RapidID grew by 40��and�206��respectively�when�compared�to�the�previous�corresponding�quarter��Q2�FY20���

==> picture [525 x 148] intentionally omitted <==

2

Clients who joined Xref prior to FY17 accounted for 41�of sales during Q2 FY21 despite significant sales growth since then�demonstrating Xref�s ability to retain and grow clients over time�Sales to new clients that joined within the quarter represented 15�of total sales�demonstrating Xref�s ability to acquire�new��high�value�clients���

==> picture [525 x 180] intentionally omitted <==

Red�ced�Ca�h�O��f������

Since December 2019�Xref has scaled back event costs�travel�development costs�and office leases and has reduced headcount from 98 to 60 people�This has driven a material reduction in cash expenses while continuing to support growth in sales�Cash outflows for the December quarter were down 44��to �2�97 million�from �5�3 million in Q2 FY20�Cash receipts from sales were up by 19�on the previous corresponding quarter�Together with the remaining government COVID�19 subsidy�Xref was�able�to�achieve�an�operating�cash�flow�surplus�of��127�000��

==> picture [525 x 267] intentionally omitted <==

• Government COVID�19 subsidy payments finished in early October 2021�Total subsidies were: Q4FY20 ��376k�Q1FY21 ��461k�Q2FY21 ��184k��

Due to its strong recovery during Q2 FY21�Xref will no longer be eligible for the Australian JobKeeper subsidy�The final subsidy of �184�000 was received in early October�Further growth in sales and revenues�are�expected�to�move�Xref�towards�cash�flow�break�even�in�H2�FY21��

3

Since November 2019�Xref�s primary focus has been on preserving cash and reaching cash flow break even��Key�initiatives�have�included:�

• redirecting marketing efforts from sales support to online lead generation has led to a 66� reduction�in�marketing�cost��

• building efficiencies in the acquisition�onboarding�support and growth of clients has led to a reduction�in�headcount�and�in�turn�a�34��reduction�in�wages�and�salaries��and�

• adopting a working from home policy has reduced occupancy costs by 44�currently and a further�24��reduction�is�expected�during�H2�FY2021��

Cash�on�hand�at�the�end�of�December��was��6�73�million�

P��d�c��I��e���e����

Although Xref�s European and North American markets are continuing to be adversely impacted by the effects of COVID�19�Xref is preparing for the growth that is anticipated to come from millions of returning workers globally�Xref is working with some of its largest global clients to expand the current platform to support their future requirements�The enhanced platform will dramatically increase the global addressable market through the provision of additional services�allow for 100�digital acquisition of new clients and add a subscription�based ARR to the current credit�based model�During the quarter�Xref capitalised a proportion of internal and external development costs related to these platform�features���

Ce�eb�a�i�g����Yea����f�B�i�di�g�T�����

==> picture [393 x 269] intentionally omitted <==

���������������������������������������������������������������������������������������������������������������������������Sydney��Australia�Xref�Team�during�10�year�celebrations��

Xref�celebrated�its�10th�anniversary�during�the�quarter��including�five�years�as�a�private�start�up�and� five�years�as�a�publicly�listed�entity��In�December��Xref�recognised�the�hard�work�of�its�team�and�made� a�record�number�of�promotions�across�the�global�business�to�help�lead�the�company�in�the�future�� More�about�the�Xref�journey�to�date�can�be�found here

4

M����High���Ra�ed�Refe�e�ce�Chec�i�g�P�a�f������G��ba����

During the quarter�Xref was named a leader by independent software review site��G2 appearing as its highest�rated and easiest to use reference checking solution�With a 4�7 star rating on �G2 Capterra and Google �Xref�is�ideally�placed�to�be�found�and�trusted�by�new�clients�globally���

==> picture [377 x 178] intentionally omitted <==

B��i�e���U�da�e���I��e�����Ca��������h�Ja��a���

Chief Executive Officer�Lee�Martin Seymour�will host an investor call to discuss Xref�s Q2 FY21 results on Tuesday�19th January 2021 at 11:00 am AEST�The number for Australian investors is 1800 093 431 and�for�international�investors�is��61�2�8047�9393��The�conference�ID�is�48770657��

Ma�age�e���C���e������

E�ec��i�e di�ec����CEO Lee�Ma��i�Se������aid� �The results this quarter are testament to the sheer determination and hard work of the whole Xref team during the past 12 months�Achieving an operating surplus while growing our sales is achievement enough but adding integrations�new client wins and platform development is exceptional�We celebrated our 10th anniversary in December and have started 2021 in our strongest position to date�We are now lean and keenly focused on bringing new�products�to�market�at�a�time�when�the�opportunity�is�expanding���

E�ec��i�e di�ec����CSO Ti�G�iffi�h��aid�� The strategic decisions we made years ago have helped Xref combat pressures brought about by COVID�19 in 2020 and have positioned us well for the opportunities it has created�Our platform features�credit model�integration strategy and global reach have held up well against one of the biggest disruptions to the global economy�A particular highlight has been the growth and success of RapidID which�this quarter�has delivered a material contribution in�both�sales�and�net�revenue���

B�ad R���e��Chai��a��aid� : �Staying focused on the core business has seen the Xref management team navigate the pandemic well�As the world returns to the new normal�Xref can take full advantage of�its�ability�to�scale�without�additional�cost�to�achieve�positive�operating�cash�flow���

A��e�di���C�i�e����e���a�a��������e�

As required by listing rule 4�7C�3 the amount of �222k shown at item 6 within this quarters 4C is payment�of�directors�fees���salaries�to�executive�directors�plus�statutory�entitlements��

I��e�����a�d��edia�e���i�ie���

Presentation:��xf1�com Investor�Centre:��xref�com�en�investor�centre

5

Twitter: xf1� Email: investors�xf1�com�

Authorised�by�the�Board:�Xref�Limited��ASX�:�XF1�� Xref�Limited��Suite�17��13�Hickson�Road��Dawes�Point��Sydney�NSW�2000�Australia��

Ke���i���ab���X�ef	Ke���i���ab���X�ef
Fi������e�ad�a��age	Xref provided the first automated solution for the candidate referencing process and it is capitalising on its first�mover advantagebyfocusingonandinvestingforinternationalgrowth�
B��i�e����de�	Under Xref�s business model�when clients purchase credits �credit sales�to use the candidate referencing platform�the value of their purchases is recognised as unearned income�When they pay for the credits�the cash is recognised as cash receipts�Once the credits are used by the client �usage��Xref recognises the value of thecreditsusedasrevenue�recognisedrevenue��
G��ba�add�e��ab�e�a��e�	Xref�s addressable market includes more than 180 million employees in North America�120 million employees in Europe and 15millionemployeesinAustraliaandNewZealand�

A��e�di����Ne��C�ie�����

A����a�ia�a�d�Ne��Zea�a�d�

The Department of Education �NSW��Early childhood�primary school�secondary school�vocational� adult��migrant�and�higher�education�in�the�state�of�New�South�Wales��Australia��

DHL Express �Founded in 1969�DHL is the world�s leading logistics company�Employing 380�000 people�in�over�220�countries�and�territories��

Think Childcare in Australia �provides fair value childcare with the benefits of corporate ownership in the rapid growth and consolidation phase of the childcare sector in Australia�It employs more than 2�000�people�across�78�Australian�childcare�centres��

Woolworths �Woolworths is an Australian chain of supermarkets and grocery stores owned by Woolworths�Group��Founded�in�1924�with�225�000�employees�across�1�024�locations��

The�U�i�ed�S�a�e��a�d�Ca�ada�

IRET �IRET is a real estate company focused on the ownership�management�acquisition� redevelopment�and development of apartment communities�As of March 31�2020�it owned interests in�70�apartment�communities�consisting�of�12�135�homes�.

6

Cost�U�Less � Cost�U�Less operates warehouse stores� offering discount food and general merchandise�products�to�island�communities�in�the�South�Pacific�and�the�Caribbean��

Compugen Inc��Compugen is a system integrator offering IT infrastructure products and services to medium�and large�sized corporations and government organisations�As of July 2020�Compugen employed�1�400�staff�across�Canada�and�the�United�States�in�11�offices�

Friendship Public Charter Schools �Friendship Public Charter School was founded in 1998 with a vision to provide families on the east side of Washington�DC with an opportunity for quality education�Today� Friendship�Public�Charter�School�has�11�campuses�and�serves�more�than�4�200�students��

E����e�

ByrneLooby �Founded in 1998�ByrneLooby is an international firm providing world�class engineering solutions�for�unique�and�challenging�construction�projects��

Luminate �Established in 2018�Luminate is a global philanthropic organisation with the goal of empowering people and institutions to work together to build just and fair societies�To date� Luminate�s global work has supported 296 organisations�in 17 countries with more than �378 million in funding���

Norwegian Air �is a Norwegian low�cost airline and Norway�s largest airline�It is the fourth largest low�cost�carrier�in�Europe�and�employs�more�than�10�000�people�

==> picture [596 x 37] intentionally omitted <==

7

==> picture [190 x 40] intentionally omitted <==

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Name of entity	Name of entity	Name of entity
Xref Limited
ABN 34 122 404 666	Quarter ended (“current quarter”)
	31 December 2020
Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) - Upfront annual subscriptions paid - GST for the period - Net foreign exchange 1.9 Net cash from / (used in) operating activities	2,915 (10) (379) (83) (126) (2,256) (118) - 5 - - 184 (98) (112) 20	5,390 (24) (764) (217) (290) (4,303) (469) - 7 - - 645 (258) (325) 14
	(58)	(594)

Xref Limited - December Quarter 2020 Appendix 4C Page 1

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

2. Cash flows from investing activities 2.1 Payments to acquire: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) other non-current assets - Website 2.2 Proceeds from disposal of: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - (4) - - (192) - - - - - - - - 1	- - (21) - - (230) - - - - - - - - 2
	(195)	(249)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 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 activities	- - - - - - - - (125)	- - - - 5,000 - (235) - (125)
	(125)	(4,640)

Xref Limited - December Quarter 2020 Appendix 4C Page 2

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

4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	7,112 (58) (195) (125) -	2,937 (594) (249) 4,640 -
	6,734	6,734
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	6,699 35 - -	7,037 75 - -
	6,734	7,112
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 6.2 Aggregate amount of payments to related parties and their associates included in item 2		188
		34

Xref Limited - December Quarter 2020 Appendix 4C Page 3

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

7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
7.1 Loan facilities 5,000 7.2 Credit standby arrangements - 7.3 Other (please specify) - 7.4 Total financing facilities 5,000 7.5 Unused financing facilities available at quarter end	5,000 - - 5,000	5,000 - - 5,000
		-
7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.

$5m fully drawn facility with PURE Asset Management. 4-year term. 9.95% interest rate, interest to be paid every 3 months. No principal amortisation, repayable at maturity. Secured against assets of Xref Limited & subsidiaries. ASX release 31 July 2020

8. Estimated cash available for future operating activities	$A’000
8.1 Net cash from / (used in) operating activities (Item 1.9) (58) 8.2 Cash and cash equivalents at quarter end (Item 4.6) 6,734 8.3 Unused finance facilities available at quarter end (Item 7.5) - 8.4 Total available funding (Item 8.2 + Item 8.3) 6,734 8.5 Estimated quarters of funding available (Item 8.4 divided by Item 8.1) 116.10 Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.5.	(58) 6,734 - 6,734
	116.10

8.6 If Item 8.5 is less than 2 quarters, please provide answers to the following questions:

8.6.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?

Answer: Not Applicable

• 8.6.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

Answer: Not Applicable

Xref Limited - December Quarter 2020 Appendix 4C Page 4

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

• 8.6.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: Not Applicable

Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered.

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.

Date: 19 January 2021

Authorised by: The Board of Directors of Xref Limited

Xref Limited - December Quarter 2020 Appendix 4C

Page 5