Collaborate : 21/10/20 - September 2020 Quarterly Activities Report and Appendix 4C

ASX ANNOUNCEMENT

21 OCTOBER 2020

SEPTEMBER 2020 QUARTERLY ACTIVITIES REPORT

Collaborate Corporation Limited (ASX:CL8) is pleased to present its consolidated cash flow report and business update for the quarter ended 30 September 2020.

Key highlights include:

• 64% increase in Subscription Transaction Value vs. June 2020 Quarter and 218% increase vs. September 2019 Quarter
• 28% increase in Live Subscriptions at 30 September 2020 vs. 30 June 2020 and 221% increase vs. 30 September 2019
• Carly Subscription increased to 58% of Rental & Subscription Receipts in the September 2020 Quarter vs. 45% in June 2020 Quarter
• 28% increase in Subscription & Rental Transaction Value vs. June 2020 Quarter as rental and rideshare rental revenue start to rebound from COVID-19 induced declines
• 18% increase in Total Gross Revenue vs. June 2020 Quarter
• 32% increase in Net Rental Days Realised vs. June 2020 Quarter and 22% increase vs. September 2019 Quarter
• 35% increase in Receipts from Customers vs. June 2020 Quarter
• 15% decrease in Advertising and Marketing costs vs. June 2020 Quarter
• 13% decrease in Product and Operating costs vs. June 2020 Quarter
• 18% decrease in Admin and Corporate costs vs. June 2020 Quarter
• 11% decrease in Staff costs vs. June 2020 Quarter
• 29% decrease in Net Cash used vs. June 2020 Quarter
• Favourable Product Ruling secured from the Australian Taxation Office
• Turners Subscription, powered by Carly, launched in New Zealand.

Collaborate continued to rebound from the impact of COVID-19, with all revenue streams recovering and notably car subscription transaction value increasing 64% vs. the June 2020 Quarter, to reach 58% of total transaction value. This performance validates Collaborate's decision to shift focus towards the high potential car subscription market and positions the Company well to benefit from the generational shift in car use and access preferences, which continues to accelerate in the current recessionary economic climate.

Suite 3, Level 7, 189 Kent Street, Sydney NSW 2000 Tel: [phone]

E: [e-mail] W: www.collaboratecorp.com

ACN 066 153 982

On 27 August 2020, Collaborate announced that Carly car subscription secured a product ruling from the Australian Taxation Office (ATO) that provides a clear framework for Carly subscribers using cars for business or work purposes to claim tax deductions. The ATO Product Ruling is exclusive to Carly and sets the benchmark for the car subscription category. It does not provide coverage to any other car subscription offering. As a result, Carly is the only car subscription offering that can currently provide certainty of tax deductibility on car subscription payments. Because Carly's subscription model differs from a traditional finance or purchase model, the Company worked with the ATO to obtain a product ruling on its car subscription service. The ATO Product Ruling (PR 2020/11), which applies from 26 August 2020, ensures subscribers can claim the car subscription payments as a tax deduction when the subscription is used for business or work purposes. Importantly, the ruling covers individuals as well as businesses, which will be critical as Carly extends its offering into the significant business market. The ATO Product Ruling is specific to Carly and provides a number of benefits for individuals and businesses.

On 23 September 2020, Collaborate announced that Turners Automotive Group (ASX: TRA;

NZX: TRA), Collaborate's third largest shareholder, launched Turners Subscription in New Zealand. The car subscription proposition is supported by the Carly subscription platform under a licensing agreement and follows Turners' $1 million strategic investment in Collaborate in July 2019. Turners has committed to supply a minimum of 200 vehicles to the Turners Subscription fleet within six months of launch, sourced from their own stock and from partners including automotive dealers, manufacturers and fleet managers. Carly will generate income from a platform licence fee based on subscription revenue, and from custom technology development and the provision of customer service assistance to Turners Subscription. Turners Subscription has also received a NZ Government co-funding boost of almost $100,000, which will allow it to add a fleet of ten electric vehicles to its new subscription offer. The subscription proposition is branded 'Turners Subscription' to leverage the strong brand recognition in New Zealand and reflect the increasing importance of flexible mobility solutions to Turners Automotive's revenue streams. Through the licensing agreement with Turners and its own Carly-branded offering in Australia, Carly is the only car subscription service provider operational in Australia and New Zealand. The licensing arrangement and launch in New Zealand enables Collaborate to leverage its existing

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investment in the technology platform supporting Carly, and access a substantial new market with the support of Turners.

Consolidated Cash Flows

Receipts from Customers increased 35% in the September 2020 Quarter vs. the June 2020 Quarter, supported by strong growth of Carly car subscription. This result compares favourably with the December 2019 Quarter, which benefited from peak holiday season car rental demand and the March 2020 Quarter, which included the receipt of a lump sum payment from Turners Automotive for the development of the subscription proposition in New Zealand and a payment from Hyundai Australia.

Material reductions in Advertising & Marketing, Product & Manufacturing, Admin & Corporate and Staff costs resulted in a 29% decrease in Net Cash Used in Operating Activities.

Payments to related parties and their associates in the September 2020 quarter of $67,000 related to remuneration of executive and non-executive directors for the period.

Corporate

On 31 August 2020, Collaborate announced a non-renounceable entitlement issue to shareholders of up to 383,917,498 new fully paid ordinary shares at an issue price of $0.009 each, together with free attaching options on a one-for-five basis, with an exercise price of $0.015 per option and expiry date of 31 October 2022 to raise up to approximately $3,455,257, before costs. The Company lodged a prospectus for the Offer (Prospectus) with ASIC and ASX on 14 September 2020. The Offer is partially underwritten up to $2,080,000 by existing shareholders of the Company, namely SG Fleet Management Pty Ltd and Willoughby Capital Pty Ltd as trustee for the Willoughby Capital Trust, a related party of director Stephen Abolakian, alongside directors of the Company, namely Adrian Bunter and Chris Noone, and Chief Operating Officer, Ben Hershman. No fees are payable to the Underwriters for the underwriting commitments. In relation to Willoughby Capital, the $850,000 Financing Facility provided by Willoughby Capital to the Company, together with accrued interest of $125,782 to 30 October 2020, will be used to offset its underwriting commitments under the Entitlement Issue. Upon completion of the Entitlement Issue, the Company will have nil debt. The funds raised from the Offer are currently intended to be used towards funding for customer acquisition, sales and marketing activities, and marketplace growth, working capital and general corporate purposes and expenses of the Offer.

Collaborate announced the closing of a Small Holdings Sale Facility announced on 6 July 2020. The Facility was provided to enable shareholders with Small Holdings to sell their shares at a price of $0.009 per share without having to use a broker or pay brokerage or handling costs. In accordance with the Company's Constitution and the ASX Listing Rules, Small Holdings, with a market value of less than $500, were determined to be any registered shareholding of less than 71,429 shares based on the closing price of CL8 Shares of $0.007 on the Record Date. The Record Date, for the purposes of determining shareholders who were eligible to sell their Small Holdings through the Facility (Eligible Shareholders), was 5:00 pm (AEST) on 15 May 2020. Existing shareholders of the Company agreed to purchase the Small Holdings from Eligible Shareholders under the Facility, namely SG Fleet, alongside CEO and Director, Chris Noone. Following completion of the Small Holdings Sale Facility, the Company had 769 shareholders and expects a reduction in administrative costs, including printing and mailing costs and share registry expenses.

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Cash Balance at Quarter End and Funding

At the end of the September 2020 Quarter, the Company maintained a cash balance of $711,000.

As noted above, the Company is presently undertaking an Entitlement Issue to raise up to $3.455 million, which is partially underwritten up to $2.080 million by existing shareholders and officers of the Company (including offset of the $850,000 Financing Facility, together with accrued interest of $125,782 to 30 October 2020 by Willoughby Capital against commitments under the offer). The Entitlement Issue is due to close on 23 October 2020 and securities are expected to be issued on or around 30 October 2020.

The Directors closely monitor cash flows and funding requirements and are assessing all funding alternatives, which may include a placement to strategic and/or high-net-worth investors to ensure that the Company can continue to pursue the growth opportunities of the businesses. In response to the potential impact of COVID-19, Collaborate has taken a prudent approach to cash management and proactively implemented a range of cost saving measures.

Subsequent Events

On 20 October 2020, Collaborate announced the intention to change the Company's name to 'Carly Holdings Limited' and consolidate the Company's issued capital. Both proposals are subject to shareholder approval at its Annual General Meeting (AGM), to be held on 19 November 2020. The Directors hold the view that the new company name better reflects the core operations of the business. The Company's ASX listing code "CL8" will remain unchanged. The Board also proposes to seek approval from shareholders at the AGM for a consolidation of the issued capital of the Company through the conversion of every twenty five (25) existing securities into one (1) security (Consolidation). The purpose of the Consolidation is to implement a more appropriate capital structure for the Company going forward. The Company has a large number of shares on issue due to the long history of the listed entity prior to it acquiring the DriveMyCar business and historical equity-based capital raisings that have provided working capital to-date. The Board considers that the Consolidation is important and necessary to provide the best platform for growth, with a capital structure that is more reflective of the Company's size and a share price level that is more attractive to investors.

The Company lodged the Notice of Meeting for the AGM with ASX on 20 October 2020. The Notice of Meeting can be viewed and downloaded from the Company's website at https://collaboratecorp.com/investor-relations/asx-announcements/. The Company strongly encourages Shareholders who are not able to attend the AGM in person to lodge a directed proxy form prior to the Meeting.

On 19 October 2020, Collaborate announced that it signed an agreement with Genesis Motors Australia to offer the luxury Genesis range of vehicles on the Carly and DriveMyCar Platforms. The vehicles will be available for premium rideshare rental and car subscription customers from the newly opened Genesis Test Drive Centre in Parramatta. The collaboration with Genesis will initially launch with G80 models, with plans to expand the model range in the future.

Strategic Direction

While many businesses continue to be severely impacted by COVID-19, Collaborate's efforts to reposition itself over the past 12 months have prepared it well to deal with the

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