Wrkr : Quarterly Activity Report and Appendix 4C

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Quarterly Activity Report - June 2022

Tuesday 12 July 2022

Wrkr Ltd (ASX: WRK, Wrkr or Company), is pleased to announce its Quarterly Activity Report and Appendix 4C (Quarterly Cash Flow report) for the quarter ending 30 June 2022.

Wrkr's Chief Executive Officer (Trent Lund) and Chief Financial Officer (Karen Gilmour) will host an investor webinar to discuss the quarterly reports at 3.30pm (Sydney time) today. To register for the webinar, please see details at the end of this document.

HIGHLIGHTS for Q4 FY22

• Cash at bank 30 June 2022 is $1,277k (31 March 2022 $869k)
• FY22 revenue expectations in line with $5m forecast (based on preliminary unaudited accounts and subject to further review and finalisation)
• Executed Master Services Agreement (MSA) with Link Group and commenced first Statement of Work (SOW) under the agreement
• Wrkr PAY SMSF Hub take up exceeded management expectations
• Successful launch of our new Wrkr PAY STP2 solution
• Collaboration agreement with Equifax enabling customers to securely access their data for proof of income purposes
• Sales pipeline progression continues

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, 400 Accountant Advisors, 24,000 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.

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Further details on key activity for Q4 FY22

• Master Services Agreement (MSA) with Link Group to enable the provision of consulting services, Wrkr PLATFORM technology, Wrkr Ready SaaS licences and Wrkr PAY transactions for Link Group and their Super Fund clients. Link Group services some of Australia's largest Super Funds with approximately 5.5 million members. The initial agreed statement of work is underway and scoping activities continue for broader technology provision.
• Our cash position has continued to improve with a positive cash flow position in
  Q4 FY22 with Net Cash Inflow of $408k, including $556k of net inflows from R&D and Insurance Premium financing activities (+240% on previous quarter Q3 FY22 of Net Cash Outflow of $298k).
• Wrkr PAY SMSF Hub product has been a great success with over 8,000 new Trustees, 400 SMSF Advisers representing some 6,000 additional Trustees and the conversion of our own ~16,000 expected throughout July and August. The overall cash contribution has already reached $360k. Although we will only recognise ~$120k revenue in the FY22 financial statements, this product is set to continue to grow in FY23.
• Successful development, testing and launch of our new Wrkr PAY STP2 solution under Wrkr PAY which is expected to be rolled out to existing clients in Q1 FY23, enabling the decommissioning of ClickSuper technology. This new solution on our core platform will enable the low cost and rapid roll out of STP solutions for Super Funds and Payrolls.
• Wrkr entered into a collaboration agreement with Equifax enabling customers to securely access their data for proof of income purposes. This agreement includes income to Wrkr for the technology build, connectivity and data services. The income will be used to subsidise the marketing of our new Wrkr PAY STP2 solution providing an easy to use STP solution for Accountants, Freelancers and small businesses.
• Sales pipeline progression continues with the maturing of our industry connections with several large 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.

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

• Cash at bank as at 30-Jun-22 is $1,277k (31-Mar-21 $869k)
• Q4 FY22 Cash Receipts from customers of $1,482k (+124% on previous year Q4 FY21 of $663k)
• Q4 YTD FY22 Cash Receipts from customers of $4,562k (+104% on previous Q4 YTD FY21 of $2,236k)
• Q4 FY22 Cash payments for operating activities of $1,613k (-12% on previous quarter Q2 FY22 of $1,443k)
• Q4 FY22 Net Cash Increase of $408k (includes cash from financing activities of $589k). Previous quarter Q3 FY22 net cash outflow of $298k.
• Q4 FY22 Net Cash Outflow, excluding financing activities, of $148k (+50% on previous quarter Q3 FY22 of $298k)

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

• $1,145k Staff costs
• $236k Administration and corporate costs
• $210k Operating costs
• $20k 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 will adjust as required.

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The business strength

Having fundamentally transformed the business in FY22, the business continues to move from strength to strength with a goal of long term growth and financial stability. Our strategy ahead is clear:

• Grow our base of Australian workers
• Increase our compliance relevance with higher value moments
• Innovate and partner for future value

The aggressive targets of FY22 have served to propel Wrkr and lock in long term value with strong income annuity from our Platform as a Service (PaaS) and Software as a Service (SaaS) products. The business has seen considerable growth (50% YoY) from Wrkr PLATFORM. With continued innovation and development from Australian Retirement Trust (formerly Sunsuper) and our new MSA with Link Group, we expect this to promote financial stability through licence and transaction income streams.

Our two new products, Wrkr PAY SMSF Hub and Wrkr BENEFITS both generated new income in FY22 and a boost to cash of $500k. This growth is expected to continue in FY23 and beyond.

Our revenue diversity continues to be a strength and Wrkr READY is expected to underpin future growth as we increase our investment throughout FY23.

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]

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You are invited to a Zoom webinar.

When: Jul 12, 2022 03:30 PM Canberra, Melbourne, Sydney

Topic: Wrkr June FY23 Quarterly, 4C update and Q&A

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