Wrkr : Quarterly Activity Report and Appendix 4C

Quarterly Activity Report - March 2022

Monday 11 April 2022

Wrkr Ltd (formerly Integrated Payment Technologies Limited) (ASX: WRK, Wrkr or Company), is pleased to announce its Quarterly Activity Report and Appendix 4C (Quarterly Cash Flow report) for the quarter ending 31 March 2022.

Wrkr has a clear mission to deliver on the compliance moments for employers and their workers (employees/contractors) from hire to retire. At Wrkr, we make Compliance Simple. We collaborate closely with Payrolls, Super Funds and the ATO to achieve this mission.

As Wrkr continues to grow in volume of workers and their compliance moments such as identity, TFN, pay, super and work credentials, we are set to go beyond compliance and connect our community of Wrkrs to value.

Today we serve 4 APRA Funds, 29 Payrolls, over 70,000 Employers, 300 Accountant Advisors, 22,000 SMSF Trustees and over 2.8 M workers.

Wrkr services the market with a highly secure software platform offered as a service (PaaS), software as a service (SaaS) applications, and transaction processing offerings. Our products are Wrkr PAY, Wrkr Ready, Wrkr SMSF Hub and the Wrkr PLATFORM.

HIGHLIGHTS for Q3 FY22

• ● As stated in our recent announcement we have seen delays in our large deal progression primarily due to availability of technical resources from our major prospective customer. The delays are reasonable given the size, scope and implementation risks. While the overall deal continues to be negotiated we are scoping packages of work targeted to be delivered this financial year. Together with our prospective client, Wrkr is expected to be tasked with designing the best practice solution and implementation approaches for Super Funds as they and their customers navigate the many regulatory and structural changes in the industry.

• ● Our cash and working capital position has improved dramatically over the last quarter with 5 Quarters of estimated funding available. This position is in part the conclusion of work in progress and billings as well as an unsecured loan from Directors. The Directors loan is an indication of the confidence in our current pipeline and commercial negotiations and has yet to be utilised with any drawdowns.

• ● High impact social presence with the renewed Wrkr brand - Several successful social campaigns have been run over the quarter connecting Wrkr to 700

Accountants & Advisors (converting over 300 Accountants), Connecting Wrkr Executives to Payrolls and Super Funds (high engagement on stapling approach from Superfund Executives and Onboarding compliance from Payroll operators). Our social media coverage marketing has achieved over 74,000 impressions in our target markets.

• ● Continued success of Wrkr SMSF Hub product with 3,500 new registered SMSFs (taking our Trustees to 7,500, 100 new Accounting and Advisors onboarded this quarter taking us to 300 with 500 more to process). This base is expected to swell significantly as we convert our 16,000 unpaid to paid subscribers in the last quarter.

• ● A Memorandum of Understanding (MoU) has been signed with PayGroup and their associated companies (Astute, Payroll HQ, iWS and PayAsia) . The MoU forms a collaboration to explore the use of Wrkr PAY across the group starting with Astute as well as the co-selling and delivery of Wrkr READY to add onboarding compliance services for their customer base, starting with iWS as a pilot. While our objectives are to serve the approximate 270,000 employees represented, our initial goal is on developing a shared proposition, pricing and achieving market success via initial pilots. We are taking advantage of our Consortio collaboration which has integrated Wrkr READY into the Astute platform.

• ● Completion of a market leading stapling solution for a marquee Superfund client that brings a digital stapling solution for employers and their employees which we believe will set an early standard in the market when it is launched in the coming weeks.

• ● Sales pipeline progression continues with the maturing of our Retail connections with several large format retail organisations taking an active interest in the Wrkr READY product. This activity has increased our software demonstration and pricing activity over the quarter. We are expecting this activity to yield results in FY23.

The quarter end financials are in the process of being finalised, however we note the following financial highlights:

• ● Q3 FY22 Cash Receipts from customers of $1,152k (+24% on previous year Q3

  FY21 of $932k)

• ● Q3 YTD FY22 Cash Receipts from customers of $3,085k (+96% on previous Q3

  YTD FY21 of $1,573k)

• ● Q3 FY22 Cash payments for operating activities of $1,443k (-15% on previous

  quarter Q2 FY22 of $1,653k)

• ● Q3 FY22 Net Cash Outflow of $298k (-66% on previous quarter Q2 FY22 of $873k)

• ● Cash at bank as at 31-Mar-22 is $869k (31-Dec-21 $1,167k).

The cash expenditure incurred on the activities of the business in the quarter are summarised as follows:

• ● $1,012k Staff costs

• ● $313k Administration and corporate costs

• ● $105k Operating costs

• ● $13k Advertising and marketing

Other

As required to be disclosed under ASX Listing Rules, payments to related parties in the

current quarter amounted to $124,000. This amount is shown in Appendix 4C under Section

6. Payments to related parties of the entity and their associates relate to directors' fees and

the salary of the Chief Executive Officer.

COVID 19

The business has had minimal internal interruption due to COVID-19 as we remained with a

flexible working model with full support for working from home. We have experienced delays

in our dealings with prospects and customers with COVID-19 impacting availability of key

staff and decision makers. Our policies are aligned to Government guidelines and we wil

adjust as required.

The business strength

The business continues to deliver on our strategy for FY22

• ● Integrate the business (Complete)

• ● Increase our reach in the (compliance) ecosystem

• ● Enable higher value compliance moments

• ● Innovate and partner for future value

With the transformation of the business to 'one integrated brand, team and technology footprint' the focus of the business has been balanced between a focus on operational improvement from our finance, risk and support functions with a heavy focus on building out the brand and delivering on the growth objectives.

From an operational perspective we have focused on streamlining our compliance processes in line with our single DevOps environment. Notably we have concluded our GNGB accreditation and have finalised work required for our continued ISO accreditation. An extensive review of our AFSL and associated processes has been concluded with improvements across the board. Expenses continue to be monitored and removed where deemed non critical or not aligned to growth.

In terms of brand and growth, our focus has been a balance between delivering on revenue targets of $5m this financial year and investing in the larger potential deals that could deliver strong growth in FY23. The current pipeline has increased and while the buying cycle is slow we are yet to see any contraction in our sales funnel. The current pipeline of Payrolls and Super Funds has the business on track to achieve our strategy of servicing over 5m Australians.

The plan for the next quarter is:

• ● Concluding our pilots with PayGroup

• ● Concluding negotiations with additional Payrolls for Wrkr READY roll out

• ● Progressing our largest negotiation through final approvals

• ● Successful launch of our Super Fund Stapling solution in market

• ● Launching a co-funded STP2 solution to market

• ● Successful conversion of our 16,000 SMSF customers to SMSF Hub

This Quarterly Activity Report and the attached Appendix 4C (Quarterly Cash Flow report) have been authorised by the Board of Wrkr.

For further information, please contact:

Emma Dobson

Chairman

E:[e-mail]

About Wrkr Ltd.

Wrkr Ltd (Wrkr) (ASX: WRK) is an Australian financial technology company founded and listed on the ASX in 2016.

Wrkr provides compliance and payment software solutions to create efficiencies for Superfunds, payroll service providers and both large and small Australian employers.

The company has four core offerings:

• ● Wrkr PLATFORM, a modern cloud-based compliance platform for handling messaging with ATO (SuperStream, STP 2.0, PEPPOL, SBR and State authorities) and orchestrating payment processing for worker pay and super contributions for Fund Administrators

• ● Wrkr PAY, a superannuation gateway and clearinghouse and payment handling solution for secure processing of employee pay and super contributions for Payrolls and Superfunds. This product includes Wrkr SMSF Hub providing ATO messaging and contributions compliance for SMSFs

• ● Wrkr READY, a white label employee onboarding solution to manage the compliant onboarding of full-time and casual workers

• ● Wrkr Benefits, the secure connection of workers to employer and external benefit providers

Wrkr Ltd holds payment processing patents in Australia, the USA, China, Japan, Singapore, Hong Kong, South Africa and New Zealand.

Investors should be aware that certain financial measures included in this announcement are 'non-IFRS financial information' under ASIC Regulatory Guide 230: 'Disclosing non-IFRS financial information' published by ASIC and also 'non-GAAP' financial measures within the meaning of Regulation G under the U.S. Securities Exchange Act of 1934, as amended, and are not recognised under Australian Accounting Standards (AAS) and International Financial Reporting Standards (IFRS). The non-IFRS financial information / non-GAAP financial measures include EBITDA and EBIT. The Company believes the non-IFRS financial information / non-GAAP measures provide useful information to users in measuring the financial performance and conditions of the Company. The non-IFRS financial information / non-GAAP financial measures do not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS financial information is not a measure of financial performance, liquidity or value under the IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Investors are cautioned, therefore, not to place undue reliance on any non-IFRS financial information / non-GAAP financial measures included in this presentation.

This release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements of Wrkr Ltd to be materially different from those expressed or implied in this release including, amongst others, changes in general economic and business conditions, regulatory environment, results of advertising and sales activities, competition, and the availability of resources. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release. Except as required by law, Wrkr Ltd assumes no obligation to update or correct the information in this release. To the maximum extent permitted by law, Wrkr Ltd and its subsidiaries and officers do not make any representation or warranty as to the likelihood of fulfilment of any forward-looking statements and disclaim responsibility and liability for any forward-looking statements or other information in this release. This release should be read in conjunction with Wrkr Ltd's ASX announcements and releases.