28 February 2018 Manager Announcements Company Announcements Office Australian Stock Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir or Madam, Release of OpenDNA Limited’s financial results for the half-year ended 31 December 2017 In accordance with the ASX Listing Rules, I enclose the following for release: 1. Appendix 4D – half yearly report; 2. Half year financial report for the half year ended 31 December 2017 including the Directors’ Report. Yours faithfully On behalf of the Board of OpenDNA Limited Peter Torre Company Secretary opendna.ai Unit B9, 1st Floor 431 Roberts Rd Subiaco WA 6008 Registered as: OpenDNA Limited ACN: 613 410 398 OpenDNA Limited Appendix 4D Half-year report Period ended 31 December 2017 OpenDNA Limited Appendix 4D Half-year report for the half-year ended 31 December 2017 Name of entity: OpenDNA Limited ACN: 613 410 398 Current Reporting Period Half Year ended 31 December 2017 Previous Reporting Period Half Year ended 31 December 2016 Results for announcement to the market. Item 1 6 months ending 6 months ending 31 Dec 2017 31 Dec 2016 Operating Performance $ $ Revenue from continuing activities 72,447 13,169 Loss from continuing activities after income tax (2,388,604) (2,605,155) Net loss for the half year attributable to members (2,388,604) (2,605,155) Item 2 Dividends It is not proposed to pay dividends. There are no dividend or distribution reinvestment plans in operation and there has been no dividend or distribution payments during the financial half year ended 31 December 2017. Item 3 – Brief Explanation OpenDNA is an artificial intelligence platform that empowers businesses to better understand their individual customers and in turn use the psychographic profiles developed to better target and personalize their customer’s experiences automatically and in real-time. 1 OpenDNA Limited Appendix 4D Half-year report Period ended 31 December 2017 OpenDNA generates revenue by charging a user license fee for its technology use as well as a secondary component comprising of either data connection charges (each time a business powered by OpenDNA requests information about one of its customers) or a share of the uplift of revenue produced by the use of its technology. Our business model is completely aligned with the success of our clients. Further details are set out in the Review of Operations section of the Directors’ Report and half yearly accounts attached to this Appendix 4D. Item 4 31 Dec 2017 31 Dec 2016 Net Tangible Assets $ $ Net tangible assets per security $0.017 $0.064 Item 5 Control gained or lost over entities during the period None. Item 6 Ownership interest as at 31 Dec 2017 31 Dec 2016 Controlled entities and joint ventures % % Parent entity: OpenDNA Limited Controlled entities: OpenDNA (UK) Limited 100 100 OpenDNA (Singapore) Pte Ltd 100 100 OpenDNA Inc 100 - Item 7 Accounting Standards The condensed interim consolidated financial statements (the interim financial statements) are general purpose interim financial statements and have been have prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 Interim Financial Reporting, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’). Compliance with AASB 134 ensures compliance with IAS 34 ‘Interim Financial Reporting’. Item 8 Auditor’s review report The half-year report is based on the interim financial report of OpenDNA Limited for the half-year ended 31 December 2017, which has been reviewed by HLB Mann Judd. Refer to the 31 December 2017 half-year financial report for the independent auditor’s review report provided to the members of OpenDNA Limited. 2 OpenDNA Limited Appendix 4D Half-year report Period ended 31 December 2017 Appendix 4D Requirements Reference 1. Reporting period and the previous corresponding Refer to page 1 of this report. period. 2. Results for announcement to the market. Refer to page 1 of this report “Results for announcement to the market” and Items 1, 2 and 3 of this report. 3. Net tangible assets per security. Refer to Item 4 of this report. 4. Details of entities where control has been gained or Refer to Item 5 of this report. lost during the period. 5. Details of individual and total dividends or Refer to Item 2 of this report. distributions and dividend or distribution payments. 6. Details of dividend or distribution reinvestment Refer to Item 2 of this report. plans in operation and the last date for the receipt of an election notice for participation in a dividend or distribution reinvestment plan. 7. Details of joint venture and associated entities. Refer to Item 6 of this report. 8. For foreign entities, accounting standards used in Not applicable. compiling reports. 9. If the accounts are subject to audit dispute or Refer to Item 8 of this report. qualification, a description of the dispute or qualification. 3 OpenDNA Limited ABN 14 613 410 398 Interim Report 31 December 2017 Contents Directors’ report ......................................................................................................................................................1 Auditor’s independence declaration .......................................................................................................................3 Condensed consolidated statement of profit or loss and other comprehensive income ........................................4 Condensed consolidated statement of financial position .......................................................................................5 Condensed consolidated statement of changes in equity ......................................................................................6 Condensed consolidated statement of cash flows .................................................................................................7 Notes to the condensed consolidated financial statements ...................................................................................8 Directors’ declaration ........................................................................................................................................... 17 Independent auditor’s review report .................................................................................................................... 18 OpenDNA Limited Directors’ report Your Directors submit their Interim Report on the consolidated entity (referred to hereafter as the ‘Group’), consisting of OpenDNA Limited (‘OpenDNA’ or the ‘Company’) and entities it controlled at the end of, or during, the half-year ended 31 December 2017. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: Directors The names of Directors who held office during or since the end of the interim period and until the date of this report are noted below. Directors were in office for the entire period unless otherwise stated. G Pestell Non-Executive Chairman J Shah Managing Director and Chief Executive Officer E Cross Non-Executive Director L Sciambi Non-Executive Director (retired 30 November 2017) Review of Operations Key focuses: Global expansion of customer base and leveraging of key partnerships; expansion of product offering; scaling of the team and technology to support new client implementation; strengthening of business development pipeline. Key developments The half-year ended 31 December 2017 was a build out period for OpenDNA, transitioning from pure development to revenue generation. This was highlighted by the successful on-boarding of a number of customers across Publishing, E-commerce, Media, Mobile and Gaming sectors. This includes major US Publisher Epoch Times, which supports over 20 million users per month and 105 million page-views and Endeavour Drinks Group, the largest drinks retailer in Australia, operated by Woolworths Limited. In the period, relationships were also advanced and solidified with Future More Technology (“FMT”), the manufacturer and provider of the “Netsurfer” range of mobile devices. As announced on 31 January 2018, FMT aims to sell over 500,000 Netsurfer phones onto the market by end of 2018, with each phone pre-loaded with OpenDNA’s Jottr App – a personalized content App available on Google’s Play Store hosting over 2,000 sources of rich content. In addition to providing potential additional revenues streams in the form of advertising revenue for both FMT and OpenDNA, it is also viewed by the Company as an opportunity to leverage its Artificial Intelligence (“AI”) driven personalization into the lucrative mobile hardware sector. From a technological perspective, the period was used to build out the Application Programming Interface (“API”) and Software Development Kits (“SDK”) to allow easier integration of OpenDNA’s technology into businesses existing platforms. The development has allowed OpenDNA to be deployed onto websites, mobile applications and also to enable server to server integrations. The Company also launched its proprietary data visualisation system, Synapse, an easy to use dashboard that draws in complex data and converts it to display very clear and efficient information in a more intuitive way. The information being displayed helps businesses better understand their individual users as the user’s interests, behavioral and personality profiles are mapped. This in turn allows any business to view their customers as individuals rather than as a group or category, as is traditionally done. OpenDNA’s technology provides any business with a true Single Customer View as the reporting functionality within Synapse provides powerful insights into an individual and how they engage with information presented to them, including products, content and videos etc. Such insights can eliminate redundant data, allow a business to make more intelligent and informed decisions and ultimately enable a business to provide its customers with more relevant and personalized experiences. In addition to expanding its product offerings with the launch of Synapse, the Company also provides data connectors into existing Business Intelligence (“BI”) and Customer Relationship Management (“CRM”) platforms often used by customers to ensure the seamless integration into business processes, lowering any barriers to adoption. The evolution of the Company's AI technology continued to progress with the completion of the IRIS Computer vision software, which further improves the accuracy of content analysis and user profiling to extend OpenDNA's unique product offering. IRIS is a proprietary technology developed by OpenDNA that accurately extracts the core content of a web page that is then used for further analysis by the AI engine. With the transition from pure development to revenue generation, efforts were also focused on scaling the team to support the successful integration of OpenDNA's technology with customer’s existing platforms, with a view to generating meaningful revenue for the business in 2018. 1 OpenDNA Limited Directors’ report (continued) Review of Operations (continued) Technology platform overview OpenDNA’s technology has the capacity to revolutionise the way in which brands and organisations interact with targeted individuals on a global scale. This has been demonstrated through the Company’s AI and machine-learning platform, which enables the real-time tracking and profiling of individuals to gauge their interests, opinions, behavior, personality as well as their propensity to engage. This psychographic profile of an individual drives much deeper, informed relationships between businesses and their customers, delivering in turn better business outcomes by enabling them to deliver highly personalised experiences for their users in turn helping to reducing churn and increasing engagement while delivering detailed customer segmentation. As noted above, part of OpenDNA’s suite of services includes a data visualisation tool called Synapse, which provides clear transparency and depth across the insights and performance of its technology, allowing businesses to confidently track the Return of Investment (“ROI”) generated through the use of AI. The technology is highly scalable and can deliver significant benefits to any organisation, brand or movement that demands next-generation end-user engagement. The Company's technology is industry agnostic and has been designed in such a way that it can be easily integrated into a multitude of environments both mobile and web based, to overcome barriers of entry and support the rapid on-boarding of new clients into its expanding ecosystem. OpenDNA’s technology can be used to optimise internal business processes, optimize marketing processes and decision- making scenarios related to a business’s customer base. When a technology allows a business to better understand their customers and a powerful single customer view, the possibilities become endless. Near-term catalysts OpenDNA’s existing customers provides an opportunity to begin significant revenue generation and the opportunity to leverage on their success to further expand its global customer base. With the heightened appetite within the market for AI technologies that offer such significant ROI opportunities, OpenDNA is positioning itself and building a strong pipeline to take advantage of these trends and become a market leader in providing personalisation technologies to industries. The Company continues to expand its channel partnerships, which include Looker, BBDO, Columbus Agency and Pugh Morgan, each of whom continue to offer a pool of potential customers for OpenDNA's services across a multitude of sectors. Auditor’s Independence Declaration Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 3 and forms part of this Directors’ report for the half-year ended 31 December 2017. This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306(3) of the Corporations Act 2001. ___________________________ Jay Shah Director 28 February 2018 2 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the review of the consolidated financial report of OpenDNA Limited for the half-year ended 31 December 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and b) any applicable code of professional conduct in relation to the review. Perth, Western Australia L Di Giallonardo 28 February 2018 Partner HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533 Email: [email protected] | Website: www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers 3 OpenDNA Limited Condensed consolidated statement of profit or loss and other comprehensive income For the half-year ended 31 December 2017 6-months to 6-months to 31 December 31 December 2017 2016 Notes $ $ Continuing operations Revenue 72,447 13,169 Interest income 8,779 6,614 Depreciation and amortisation expense (152,921) (6,418) Share based payments expense (45,430) (580,660) Consulting fees (303,653) (609,697) Employee costs (1,386,384) (689,555) Legal fees (97,459) (151,664) Travel and accommodation costs (81,764) (239,970) Other expenses (403,009) (340,791) Loss before income tax (2,389,394) (2,598,972) Income tax benefit / (expense) 790 (6,183) Net loss for the period (2,388,604) (2,605,155) Other comprehensive loss, net of income tax Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations (8,267) (63,026) Other comprehensive loss for the period, net of income tax (8,267) (63,026) Total comprehensive loss for the period (2,396,871) (2,668,181) Basic loss per share (cents per share) 3 (2.27) (4.42) Diluted loss per share (cents per share) 3 (2.27) (4.42) The accompanying notes form part of these financial statements 4