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1 ,.Rules 4.3A Name of entity Assemblebay Limited ABN or equivalent company reference Preliminary final report Financial year ended ( current period ) June For announcement to the market AUD Revenues from continuing operations Up 113% to 45,722 Loss from ordinary activities after tax attributable to members Down 35% to (395,427) Net loss for the period attributable to members Down 35% to (395,427) Dividends (distributions) Amount per security Franked amount per security Interim dividend Nil - Final dividend Nil - Previous corresponding period Nil - + Record date for determining entitlements to the dividend, N/A (in the case of a trust, distribution) Net Tangible Assets per share 30 June 30 June Net tangible asset backing per ordinary security (cents per share) The above results should be read in conjunction with the notes and commentary contained in this report. 30/06/ Page 1

2 MANAGEMENT DISCUSSION AND ANALYSIS During the financial year the Company concentrated on activities associated with conducting the AssembleBay business. The go-to market strategy was to focus on market assembly services, initially utilising a freemium business model until critical mass is achieved, being a pricing strategy by which a good or service is provided free but a premium is charged for proprietary features, functionality, or virtual goods. The Company concentrated on digital marketing strategies, which proved more effective than traditional advertising approaches in targeting assemblers (or Workers ) and Clients looking to have items assembled. These activities included Google Adwords, Search Engine Optimisation (SEO) and social media advertising. The digital marketing campaigns provided valuable data and statistics which were analysed continually with the campaigns being adjusted to ensure that the marketing efforts were focused and delivering cost effect results. The Company also made substantial improvements to the AssembleBay platform designed to increase usage and enhance user experience. While traffic to the AssembleBay platform steadily increased since its launch, the costs of acquiring users remained high when measured by cost per client or worker signup. In addition the Company also noticed that competition in the home services sectors has notably increased since the launch of AssembleBay. Both new start-ups and large established companies have begun rolling out campaigns targeting the home services market. Other existing competitors have also publicly announced initiatives targeting increased presence in the sector. In October, the Company tested the proposition that user activity to the site was being sustained exclusively through direct marketing expenditure and whether the Company could maintain active users without such expenditure. This was undertaken by gradually reducing direct marketing expenditure during that month. Site analytics show a direct correlation between expenditure and user activity. The Company also investigated the acquisition of a SaaS business, however was not able to complete the transaction on a timely basis and the parties to the transaction agreed to withdraw from the transaction. Following the withdrawal from the SaaS transaction the Company undertook a review of the AssembleBay business and platform. The outcome of that review was that the Company should maintain its presence in the assembly services market with a limited digital marketing expenditure program focusing on search engine optimisation (SEO) and Google AdWords in order to attempt to achieve a lower cost of user acquisitions. The Company is budgeting to spend 5,000-15,000 per month on these activities. This will enable the Company to monitor the impact of SEO and Google AdWords on its platform user numbers without significant capital outlay. It will also allow the Company to preserve capital whilst continuing to actively monitor market sentiment and competition in the assembly services market. After consulting with ASX on this proposal, ASX advised the Company that its securities, which were suspended during the period the Company was investigating the acquisition of the SaaS business, would remain suspended until such time as the ASX determines that the level of the Company s operations are appropriate for the securities of the Company to resume trading. The Company re-commenced its digital marketing activities in July. In addition to the above operations, the Company will continue to monitor the market generally and evaluate new strategic business acquisition opportunities. The Company will make announcements to the market in this regard as and when appropriate. 30/06/ Page 2

3 Consolidated Statement Profit or Loss and Other Comprehensive Income For the year Notes Operating revenue 3 45,722 21,438 Operating expenses 3 (441,149) (629,269) Loss from continuing operations before income tax (395,427) (607,831) Income tax benefit - - Net loss attributable to members of Assemblebay Limited (395,427) (607,831) Earnings per share Cents Cents Basic earnings/(loss) per share from continuing operations (0.17) (1) (0.45) (1) Diluted earnings/(loss) per share from continuing operations (0.17) (1) (0.45) (1) (1) Based on a weighted average number of shares totalling 237,982,218 (ordinary shares) as at 30 June (: 135,697,492 ordinary shares). The Company currently has 237,982,218 ordinary shares on issue. 30/06/ Page 3

4 Consolidated Statement of Financial Position As at 30 June Notes as at 30 June as at 30 June Current assets Cash and cash equivalents 1 2,660,676 3,038,145 Receivables 15,837 46,208 Total current assets 2,676,513 3,084,353 Total assets 2,676,513 3,084,353 Current liabilities Trade and other payables 39,547 51,960 Total current liabilities 39,547 51,960 Total liabilities 39,547 51,960 Net assets 2,636,966 3,032,393 Equity Issued capital 5 7,757,302 7,757,302 Share based payment reserve 458, ,222 Accumulated losses (5,578,558) (5,183,131) Total equity 2,636,966 3,032,393 30/06/ Page 4

5 Consolidated Statement of Cash Flows For the year Note s Cash flows from operating activities Payments to suppliers & employees (426,583) (345,810) Interest received 49,114 1,138 Net cash flows from / (used) in operating activities (377,469) (344,672) Cash flows from financing activities Proceeds from issue of shares and options Proceeds from borrowings convertible loan - - 3,374, ,000 Share issue costs - (201,312) Net cash flows from financing activities - 3,372,788 Net increase (decrease) in cash held (377,469) 3,028,116 Cash and cash equivalents at beginning of period 3,038,145 10,029 Cash and cash equivalents at end of period 1 2,660,676 3,038,145 30/06/ Page 5

6 Consolidated Statement of Changes in Equity For the year Issued Capital Share based payment reserve Accumulated losses Total equity At 30 June ,086, ,971 (4,575,300) (306,356) Issue of shares, net of costs 3,670, ,670,329 Share based payment reserve - 276, ,251 Loss - - (607,831) (607,831) At 30 June 7,757, ,222 (5,183,131) 3,032,393 Issue of shares, net of costs Share based payment reserve Loss - - (395,427) (395,427) At 30 June 7,757, ,222 (5,578,558) 2,636, Reconciliation of cash Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows: As at 30 June As at 30 June Cash at bank 2,660,676 3,038,145 Total cash at end of period 2,660,676 3,038, Non-cash financing and investing activities There were no non cash financing and investing activities. 30/06/ Page 6

7 3. Revenue and expenses Operating revenue Finance revenue - interest received 45,722 21,438 Total operating revenue 45,722 21,438 Operating expenses Corporate compliance costs Marketing and advertising Share based payments Depreciation Platform acquisition costs Administration expenses 170, , ,723 86,973 53,813 48, , ,682 Total operating expenses 441, , Dividends paid and proposed No dividends have been paid or proposed during the year. 30/06/ Page 7

8 5. Issued capital Ordinary shares (net of issue costs) 7,757,302 7,757,302 Number of shares At 30 June 237,982,218 7,757,302 At 30 June 237,982,218 7,757, Group structure Companies within the Assemblebay Group (all wholly owned) carry out designated activities: Assemble Holdings Pty Ltd Events after the reporting period. No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. 7. Annual meeting (Preliminary final report only) The annual meeting will be held as follows: Place TBA Date On or before 30 November Time Approximate date the + annual report will be available TBA On or before 30 October 30/06/ Page 8

9 Compliance statement 1 This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX. 2 This report, and the + accounts upon which the report is based (if separate), use the same accounting policies. 3 This report does give a true and fair view of the matters disclosed. 4 This report is based on + accounts to which one of the following applies. (Tick one) The + accounts have been audited. The + accounts have been subject to review. The + accounts are in the process of being audited or subject to review. The + accounts have not yet been audited or reviewed. Sign here: Date: 31 August (Director) Print name: Simon Robertson 30/06/ Page 9