VERILUMA : Quarterly Activities Report and Appendix 4C

Highlights:

• Leading Australian law firm Gilbert + Tobin commenced trial of Veriluma's legal prescriptive analytics solution for a range of legal case assessments

• Partnership to focus on USA Federal Government opportunities particularly in National Security, Anti Money Laundering, Counter-Terrorism Fraud, Trade Based Laundering

• Pilot progressing with Vice Chief of Defence Force and other agencies focusing on the impact of Climate Change. Completion anticipated by end of June.

• $500,000 Sale and Purchase agreement for Jaurdi Hills mining tenements.

• Significant progress made on business development

  Corporate

• Sale of West Australian Jaurdi Hills tenements completed subsequent to end of March Quarter: for $500,000 up front and $500,000 upon delineation of JORC resource from buyer

• Funds expected from current trial programs; $149,525

• Cash position as at 31st March 2017 (unaudited): $810,000 with $500,000 to be added from completion of sale of Jaurdi Hills mining tenements which is expected by the end of the quarter

Veriluma Limited (ASX: VRI, Veriluma or the Company) is Australia's leading prescriptive analytics software provider a participant in a market that Orbis Research on March 3rd 2017 valued at USD

4.64 billion in 2016 and predicted it to reach a value of USD 19.55 billion by the end of 2022, growing at a projected CAGR of 22.81% through 2017-2022.

During the March quarter the company made significant progress on multiple fronts towards an ultimate objective of becoming cash flow positive during the 2017-18 financial year. New partnerships have been announced, existing partnerships strengthened and new introductions initiated.

During the quarter, Veriluma commenced a trial with leading Australian corporate and commercial law firm Gilbert + Tobin, to improve client outcomes by predicting risks and offering greater insight earlier. The software can be applied across a range of legalapplications.

The trial is progressing well with the software being tested for a complex advice scenario that typically involves a team of solicitors. The goal is to produce advice earlier in the cycle to their clients. The company expects to know within the current quarter how this potentially leads to an ongoing revenue stream.

Veriluma announced its expansion into the United States through a partnership with John Cassara and Diamond Capture Associates, LLC. John Cassara is an expert in anti-money laundering and terrorist financing. John, together with Diamond Capture, will focus on building sales opportunities within primarily the US Federal Government agencies

Diamond Capture Associates is a US-based Software-as-a-Service (SaaS) solutions integrator focused on fraud detection and authentication, advanced analytics, enterprise solutions, cyber security and mobile security and business intelligence. Founder, Bailey Spencer, has many years of experience in building high performing sales teams for companies such as Oracle and SAS.

The Company's business development strategy continues to be focused on three core sector areas where Veriluma sees the greatest opportunity: Defence/National Security, Legal Services and Financial Services.

Government: Veriluma signed a contract in December with the Department of Defence to build a prototype "Indicators and Warnings" model for Australia's climate and disaster preparedness effort. The contract value for the pilot project amounted to $124,525 with this prototype nearing completion with the final report to be delivered in the June quarter.

At the successful completion of the pilot program, there is an opportunity to secure a larger project in regards to the "implications of climate change", thus adding further revenue.

The company is also in various stages of development with key law enforcement and counter terrorism government agencies and departments with progress to be reported when tangible and when prudent to disclose.

Veriluma's partnership with Legal Logix Holdings Pty Ltd (Legal Logix) combines technology and legal expertise to provide consumer-facing applications to drive early dispute resolution. The first application focuses on family law to provide an assessment of a property settlement. Legal Logix has engaged an Australian development team to complete the application build. The development of the application is currently on track for a July launch, which opens the product for consumers to

use creating a new revenue stream for the company. Other areas of focus include will (estate) disputes, personal injury, immigration, employment and beyond Australia.

Pipeline: The company is in various stages of development in providing a prescriptive solution to 2 notable legal firms in Australia and 1 overseas. Two solutions relate to the assessment of personal injury cases.

During the quarter, further progress has been made on the development and marketing of SAMI, Veriluma's prototype designed to monitor the advice of Australia's 23,000 financial planners and advisors to ensure their advice is in the best interests of their clients. This in turn will deliver greater consumer trust and confidence in the financial advice sector. SAMI was a finalist in the FinTech Awards in February.

Pipeline: The company is engaged with a leading global bank and 3 Australian financial institutions to assess the potential of its software for various scenarios including the mitigation of risk and assisting with compliance.

The company looks forward to communicating the results of partnerships negotiations with local and international software and consulting companies.

CORPORATE

Veriluma held several legacy exploration tenements in Western Australia. The sale of these mineral tenements was finalised subsequent to the end of the quarter for an initial payment of $500,000 with a further $500,000 due should the Jaurdi Hills project delineate a JORC Inferred Resource equating to or exceeding 300,000oz Gold. The transaction included a payment of $50,000 on signing of the initial term sheet with the balance $450,000 to be transferred on signing of the long form contract which the company fully expects to be achieved by the end of May.

Net operating cashflow was $585,000 during the quarter. The Net (decrease) for the quarter in expenditure as opposed to previously estimated ($970k) was due to the decision not to incur budgeted expenditure on the recruitment of additional business development and IT personnel. Additionally, a reduction in the budgeted Exploration and Evaluation expenditure occurred during the quarter, as all required committed expenditure had been met.

Estimated cash outflow for the next quarter is $651,000. Having received an amount of $52,048 relating to the Department of Defence (DoD) project in early April, expected funds from the sale of the legacy mineral tenements ($500,000) and invoiced progress payments from the DoD and current trials ($97,477), cash inflows totaling $649,500 are expected in the next quarter.

The Company's cash position at 31 March 2017 (unaudited) was $810,000. The Company anticipates it will receive a further $500,000 in total from the sale of the Jaurdi Hills mining tenements, as well as payments from DoD and current trials equating to $149,525. On this basis, the total cash available to the company for the Quarter is expected to be $1.459 million.

For more information, please contact:

Elizabeth Whitelock Peter Taylor

Chief Executive Officer Investor & Media Relations

elizabeth.whitelock@veriluma.com peter@nwrcommunications.com.au

+ 61 412 036 231

www.veriluma.com