Spirit Telecom : 2017-01-31 December Quarterly Activities Report 2016

31st January 2017 DECEMBER QUARTERLY ACTIVITIES REPORT 2016

ASX Symbol: ST1 REGISTERED OFFICE Level 4, 100 Albert Road South Melbourne VIC AUS 3205 PRINCIPAL PLACE OF BUSINESS Level 2 240 Chapel Street Prahran VIC AUS 3181 CONTACT P 1300 007 001 F 1300 887 813 www.spirit.com.au BOARD OF DIRECTORS Mr James Joughin (Chairman) Mr Terry Gray (Director) Mr Geoff Neate (Managing Director) ISSUED CAPITAL Shares on Issue: 920,251,253

Spirit is pleased to provide its December Quarterly activity report to our shareholders. The Spirit group finished our second quarter as a listed entity, with a cash balance of $1.7m and a total debt of $4.2m, resulting in a net debt position of $2.5m. Cash generated from operations during the quarter totalled $53,000. Significant cash items were incurred in the quarter relating to ongoing M&A activity (Legal, due diligence and corporate advisory) of The 32 'on-net' buildings added during the December quarter took our half year total to 59. Spirit's 'land-grab' strategy of maximising on-net buildings will yield future revenue, as customer penetration levels increase. Investment into these building fit-outs reached In line with our intention to make acquisitions that "…support and enhance the existing business", Spirit was pleased to finalise the acquisition of Phone Name Marketing Pty Ltd and Inbound Telecommunications Unit trust in Dec 2016. While its contribution to quarterly cash flows was minor, we are confident this acquisition will perform accordingly in the future. This was the third acquisition in Spirit's history and the first as a listed entity. As part of Spirit's ongoing strategy we continue to explore growth opportunities through acquisition. $235,000. In addition, we have made further investment in sales and marketing staff and customer service of approximately $80k, as we pursue our revenue growth objectives. $475,000. This represents an increase of $236,000 CAPEX on the prior period, due to the size and volume of larger building deployments.

Appendix 4C

+Rule 4.7B

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity
Spirit Telecom Limited
ABN	Quarter ended ("current quarter")
73 089 224 402	31 December 2016

Consolidated statement of cash flows		Current quarter $A'000	Year to Date (6 Months) $A'000
1.	Cash flows from operating activities	2,975	5,687
1.1	Receipts from customers
1.2	Payments for	-	-
(a) research and development
(b) product manufacturing and operating costs		-	-
(c) advertising and marketing		(77)	(163)
(d) leased assets		(690)	(1056)
(e) staff costs
(f) administration and corporate costs		(2,132)	(4,253)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	10	14
1.5	Interest and other costs of finance paid	(33)	(68)
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	-
1.8	Other (provide details if material)	-	-
1.9	Net cash from / (used in) operating activities	53	161

2.	Cash flows from investing activities
2.1	Payments to acquire:
(a) property, plant and equipment	(475)	(714)
(b) businesses (see item 10)	(4,400)	(4,400)

Consolidated statement of cash flows	Current quarter $A'000	Year to Date (6 Months) $A'000
(c) investments	-	-
(d) intellectual property	-	-
(e) other non-current assets	(136)	(136)
2.2 Proceeds from disposal of:
(a) property, plant and equipment	-	-
(b) businesses (see item 10)	-	-
(c) investments	-	-
(d) intellectual property	-	-
(e) other non-current assets	-	-
2.3 Cash flows from loans to other entities	-	-
2.4 Dividends received (see note 3)	-	-
2.5 Other (Cash acquired on acquisition)	310	310
2.6 Net cash from / (used in) investing	(4,701)	(4,940)
activities

Cash flows from financing activities Proceeds from issues of shares Proceeds from issue of convertible notes Proceeds from exercise of share options Transaction costs related to issues of shares, convertible notes or options Proceeds from borrowings Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) 3.10 Net cash from / (used in) financing activities	2,252 - - (81) 4,200 (2,097) - - -	2,252 - - (81) 4,200 (2,113) - - -
	4,274	4,258

4.	Net increase / (decrease) in cash and cash equivalents for the period
4.1	Cash and cash equivalents at beginning of quarter/year to date	2,107	2,254
4.2	Net cash from / (used in) operating activities (item 1.9 above)	53	161
4.3	Net cash from / (used in) investing activities (item 2.6 above)	(4,701)	(4,940)

Consolidated statement of cash flows		Current quarter $A'000	Year to Date (6 Months) $A'000
4.4	Net cash from / (used in) financing activities (item 3.10 above)	4,274	4,258
4.5	Effect of movement in exchange rates on cash held	-	-
4.6	Cash and cash equivalents at end of quarter	1,733	1,733

5.	Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A'000	Previous quarter $A'000
5.1	Bank balances	1,733	1,357
5.2	Call deposits	-	750
5.3	Bank overdrafts	-	-
5.4	Other (provide details)	-	-
5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,733	2,107

Current quarter $A'000

22

-

1. Payments to directors of the entity and their associates

2. Aggregate amount of payments to these parties included in item 1.2

3. Aggregate amount of cash flow from loans to these parties included in item 2.3

4. Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

   Our Chairman James Joughin receives remuneration of $5,000 per month and Director Terry Gray

   $2,500 per month.

   Current quarter $A'000

   27

   -

5. Payments to related entities of the entity and their associates

6. Aggregate amount of payments to these parties included in item 1.2

7. Aggregate amount of cash flow from loans to these parties included in item 2.3

8. Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

9. 7.1 - Total payments to Lodge Corporate Advisory services are $27,305. Terry Gray is a consultant with Lodge and a Director of Spirit Telecom Ltd.