ASSET VISION CO LTD — Management Reports 2022

Nov 17, 2022

Suite 4, 799 Springvale Road Mulgrave, Victoria Australia, 3170

www.futurefirsttech.io

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+61 3 9566 7600

18 November 2022

ASX ANNOUNCEMENT

I would like to start by saying thank you to the shareholders of Future First Technologies Limited (FFT) for your continued support and loyalty as the Company continues to evolve rapidly, focussing on the commercialisation and growth of its digital assets.

From early in FY22 it was clear that the global economic opportunity created from Government infrastructure investment presented an enormous opportunity for FFT with Asset Vision in particular.

During the course of FY22, the success of these businesses has been outstanding and FFT enters FY23 with an almost singular focus on this global market opportunity.

To achieve this focus a number of key structural changes have been made, new appointments made and ongoing, significant cost savings realised.

We entered FY23 with the right focus, the right team and on a solid financial base.

Software As-A-Service Focus

The Asset Vision acquisition in FY21 was clearly strategic and FY22 has seen significant success for this marketleading Asset Maintenance platform which continues in FY23.

The traditional market in Road Asset Owners and Maintainers continues to grow with strategic wins in Western Australia and Queensland. Commercial relationships with key Australian and New Zealand maintenance contractors also continue to grow.

Beyond this traditional market, Asset Vision has seen new growth in the Local Government marketplace. This is a substantial marketplace in the region with further growth in FY23 being core to our growth expectations.

Asset Vision is an excellent “Software-as-a-service” business with strong growth opportunities both locally and internationally.

With continued strong leadership from its co-founder Damian Smith, Asset Vision and its market opportunity is core to FFT’s future.

The more recent acquisition of the EagleSoft Video and AI-based asset assessment technology has also shown the opportunity for this technology in the market. We are accelerating our focus on leveraging this capability within the Asset Vision product line with exciting new products coming to market in 2023.

The opportunity for accelerating the growth of the Asset Vision business with the technology has also allowed us to refocus our R&D and operational expenditure with significant cost reductions to be realised commencing in Q2.

Exiting media in order to focus

Recognising the size of the Asset Maintenance opportunity the decision was taken in late 2021 to divest the farmbuy.com assets. Farmbuy.com was beginning to perform well but was still a drain on working capital and as a media platform a potential distraction for the business.

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On 30 June 2022, we signed a binding term sheet with the sale completing on 1 September 2022. The sale of the business assets will generate $800K in cash in FY23 and an improvement in cashflow of around $80K/month.

As a consequence of this sale we have also reduced corporate overheads by closing our Melbourne corporate offices further reducing the cost base by around $500K/annum.

1derful Investment

In July 2020 FFT made a strategic investment in The 1deful Group Pty Ltd ( 1derful ), a Fin-Tech start-up. We invested a total of $2.5 million in FY21 in 1derful via convertible notes that were subsequently converted into an 8.8% equity stake. The value of the holding in 1derful remains unchanged.

1derful continues to show great potential and we look forward to the business realising tangible growth in FY23.

Aligning the team with the business

In May 2022, I joined FFT as Chief Executive Officer. Having worked with the management team of FFT for many months previously I am very excited by the opportunity to leverage my background in the Australian “Software-as-a-service” industry to see FFT seize the burgeoning market opportunity.

I replaced Keith Falconer at this time and the board would like to thank Keith for the important role he played during his time as CEO. We wish Keith well in his future endeavours.

As FFT pivoted away from the media space Nick Chan also elected to leave the board, effective 16 May 2022. The board thanks Nick for his contribution and wishes him well for the future.

Financial position

In December 2021 we raised $2.35 million in working capital through sophisticated and institutional investors to accelerate growth. This represented excellent support from the market for our vision which was again validated in May 2022.

In May 2022 we raised a further $2.5 million of working capital in an over-subscribed placement to predominantly institutional investors.

In May 2022 we also restructured the completion payments terms with the EagleSoft vendors to further improve our medium-term cashflow position.

In FY22, our core and continuing operations generated sales revenue of $2,991,493 with farmbuy.com contributing a further $427,971 to the FY22 result. Revenue from continuing operations was up from $1,482,383 or 103% in FY21. The net loss for the period was $14,007,591 which included $8.4 million of noncash impairment to goodwill and depreciation and amortisation; $2.1 million loss from discontinued operations and approximately $1.2 million of research and development costs for SaaS and IDC platforms.

The Company ended FY22 with net cash at bank of $2.7 million (down from $5.9 million at 30 June 2021). Our balance sheet will provide significant scope for the company to continue to ramp up our sales through FY23 and drive significant top line revenue growth.

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The “road” ahead

We enter FY23 with the right focus, the right team and with the right financial strength.

Our investment in sales resource in FY21 have produced a strong pipeline for FY23 and we will recruit further sales resources to continue this trend and to realise this asset.

We have new products ready for launch in FY23 from both our core businesses, all with strong customer demand. This is important to maximise the revenue opportunity from our core markets.

Importantly, we are building relationships with strategic partners to accelerate our growth in new markets. These partners love our technology, our people and our story.

FY22 has seen considerable change for FFT but our core businesses have remained focused. With this focus now extending to the entire FFT business, we look forward to significant revenue growth in FY23.

We would like to thank the entire team for their dedicated efforts during FY22.

Finally, we would like to thank you, our shareholders, for your continued support and we look forward to updating you on our continued progress over the course of FY23.

I will now move to the formal business of the meeting.

END

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