First Growth Funds Limited — Interim / Quarterly Report 2022

Nov 16, 2021

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

Contents	Page
1.1 – Date and Basis of Discussion & Analysis	2
1.2 – Corporate information	2
1.3 – Selected Annual Information	4
1.4 – Results of Operations	4
1.5 – Summary of Quarterly Financial Position	5
1.6 – Liquidity and Capital Resources	6
1.7 – Off Balance Sheet Arrangements	6
1.8 – Transactions with Related Parties	7
1.9 - Fourth Quarter – not applicable for this interim report	7
1.10 – Proposed Transactions	7
1.11 – Critical Accounting Estimates	7
1.12 – Changes in Accounting Policies – International Financial Reporting Standards (“IFRS”)	7
1.13 – Financial Instruments and Other Instruments	7
1.14 – Other MD&A Requirements	8
1.15– Subsequent events	8
RISK FACTORS AND UNCERTAINTIES	9
DISCLAIMER FOR FORWARD-LOOKING INFORMATION	12
APPROVAL	12

1

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

1.1 – Date and Basis of Discussion & Analysis

This management discussion and analysis (“MD&A”) is dated as of 16 November 2021 and should be read in conjunction with the audited annual financial statements of First Growth Funds Limited for the year ended June 30, 2021 (“the Financial Statements”). The Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"). Unless expressly stated otherwise, all financial information is presented in Australian dollars.

1.2 – Corporate information

Business Structure

The Company was incorporated on 14 October 1986 under the Corporations Act (Australia) with Australian company number (“ACN”) 006 648 835 It went through several name changes: and on 29 March 2011 the name was changed to the current name, First Growth Funds Limited. Its head office and registered offices are located at Level 14, 440 Collins Street Melbourne, Victoria 3000, Australia.

Wholly owned Subsidiary companies:

• 1) ICO-AN Pty Ltd., incorporated on 17 November 2017 pursuant to the Corporations Act (Australia).

• 2) First Growth Advisory Pty Ltd., (“FGA”) incorporated 8 December 2018 pursuant to the Corporations Act (Australia).

Nature of Business

First Growth Funds Limited invests across a broad range of asset classes including listed equities, private equity, blockchain and digital assets. The company also operates an advisory business providing corporate advisory, capital raising and capital markets support to its portfolio.

Bankruptcy, Receivership, Receiverships, Restructuring

There have not been any bankruptcy, receivership or similar proceedings against the Company or any of its subsidiaries, or any voluntary bankruptcy, receivership or similar proceedings, material restructuring transactions by the Company or any of its subsidiaries, any within the two most recently completed financial years.

Social, Environmental Polices, Seasonal Issues

There are no social and environmental policies or seasonal and environmental issues that have or are expected to affect the Company and its business.

Material Restructurings

There have not been any material restructuring of the Company in the last three years.

Acquisitions

See “ Description of the Business” including the asset allocation section

Trends

See “ 1.3 Selected Annual Information”

2

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

DESCRIPTION OF THE BUSINESS

Overview

First Growth Funds Limited invests across a broad range of asset classes including listed equities, private equity, blockchain and digital assets. The company also operates an advisory business providing corporate advisory, capital raising and capital markets support to its portfolio.

Under Australian Corporations Law, any company engaged in dealing with securities needs to either (i) hold an AFSL license or (ii) be registered as a Corporate Authorized Representative of an AFSL holder. The Company presents investment opportunities to accredited investors in Australia for which it earns commission fees and is licensed for this activity pursuant to its arms-length agreement dated 31 December 2018 with SLM Corporate Pty. Ltd.

Investment portfolio

The Company manages an active portfolio listed and unlisted securities across international borders and various industries including technology, medical, mining and oil and gas sectors. Investments actions include on-market trading and participation in pre or post IPO placements. In some cases the Company earns placement facilitation advisory fees.

Asset Allocation

Set out below is the asset allocations as at 30 June 2020, as at 30 June 2021 and 30 September 2021.

Asset type	Note	As at 30 Jun	2020	As at 30 June 2021	As at 30 June 2021	As at 30 2021	September
		$	%	$	%	$	%
Cash		4,349,321	47.7%	856,169	7.96%	810,548	11.20%
Current financial assets (listed)		3,126,095	34.2%	7,452,658	69.32%	5,108,651	70.60%
Current financial assets (unlisted)	i	-	0.00%	500,921	4.66%	501,022	6.92%
Non-current financial assets (unlisted)		1,608,557	17.6%	1,941,246	18.06%	815,370	11.27%
Inventories	ii	47,200	0.5%	-	0.00%	-	0.00%
Total		9,131,173	100.0%	10,750,994	100.00%	7,235,591	100.00%

Notes

i. Current financial assets unlisted include convertible notes issued by YPB Systems Limited (ASX:YPB) expiring on 18 November 2021.

ii. Inventories comprised Cryptocurrency (Ethereum tokens) held for resale and carried at cost. The Ethereum tokens were sold during the June 2021 quarter

Material Agreements

No new material agreements were entered into during the quarter ending 30 September 2021.

3

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

1.3– Selected Annual Information - NA

1.4 – Results of Operations

Quarters Ended 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 Income (Loss) from continuing operations Revenue - 911,752 47,000 56,000 2,800 259,835 - 45,455 Direct costs - (47,200) - - - (251,705) - - Net income (loss) from continuing operations - 864,552 47,000 56,000 2,800 8,130 - 45,455 Income (Loss) from investments Interest revenue 12,616 12,554 12,727 14,111 15,723 23,588 23,577 25,712 Dividend revenue - - - - - - - - Financial assets at fair value through profit or loss (3,221,410) 1,171,968 1,546,470 (766,778) (204,130) 1,744,558 534,666 (56,649)	Quarters Ended 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 Income (Loss) from continuing operations Revenue - 911,752 47,000 56,000 2,800 259,835 - 45,455 Direct costs - (47,200) - - - (251,705) - - Net income (loss) from continuing operations - 864,552 47,000 56,000 2,800 8,130 - 45,455 Income (Loss) from investments Interest revenue 12,616 12,554 12,727 14,111 15,723 23,588 23,577 25,712 Dividend revenue - - - - - - - - Financial assets at fair value through profit or loss (3,221,410) 1,171,968 1,546,470 (766,778) (204,130) 1,744,558 534,666 (56,649)
Asset impairments Other gains and losses Net income (loss) from investments Net income (loss)	- - 100,243 3,194 - (638,252) - - 1,180 (16,196) (3,275) (10,286) (6,955) (18,809) 3,182 -
	(3,207,614) 1,168,326 1,656,165 (759,759) (195,362) 1,111,085 561,425 (30,937)
	(3,207,614) 2,032,878 1,703,165 (703,759) (192,562) 1,119,215 561,425 14,518
Operating expenses AFSL support fees 9,000 9,000 9,000 9,000 9,000 9,000 8,568 9,185 Director related costs 92,500 92,500 112,500 117,500 120,000 120,000 120,000 118,558 Director- share based payments - - - - - - Insurance and professional fees 112,337 161,175 152,355 133,410 116,652 159,012 104,478 189,110 Listing and share registry fees 11,676 11,120 10,615 39,215 14,749 52,147 - 13,304 Travel expenses - 13,832 - - - (431) - 17,539 Other expenses 13,747 11,644 12,081 14,416 11,954 6,364 35,165 45,081 Total operating expenses 239,260 299,271 296,551 313,541 272,355 346,092 268,211 392,777 Comprehensive Income (Loss) (3,446,874) 1,733,607 1,406,614 (1,017,300) (464,917) 773,123 293,214 (378,259) Basic and diluted earnings cents per share (adjusted) (4.431) 2.228 1.808 (1.308) (0.598) 0.969 0.402 (0.486) Weighted average number of ordinary shares (adjusted) 77,798,218 77,798,218 77,798,218 77,798,218 77,798,218 77,798,218 77,798,218 77,798,218 ** On December 2 2019, the company completed a share consolidation of 1 new ordinary share for every 20 shares on issue	9,000 9,000 9,000 9,000 9,000 9,000 8,568 9,185 92,500 92,500 112,500 117,500 120,000 120,000 120,000 118,558 - - - - - - 112,337 161,175 152,355 133,410 116,652 159,012 104,478 189,110 11,676 11,120 10,615 39,215 14,749 52,147 - 13,304 - 13,832 - - - (431) - 17,539 13,747 11,644 12,081 14,416 11,954 6,364 35,165 45,081
	239,260 299,271 296,551 313,541 272,355 346,092 268,211 392,777
	(3,446,874) 1,733,607 1,406,614 (1,017,300) (464,917) 773,123 293,214 (378,259)

Three months ended June 30, 2021

Net comprehensive loss after income tax was $3,446,874 (2020: $464,917).

During the three months ended 30 June 2021, the Group:

• recorded net income from continuing operations of $Nil (2020: $2,800).

• recorded net investment losses of $3,207,614 (2020: $192,562). The net loss for the current quarter includes:

• fair value losses:

  • $3,599,000 attributable to the investment in Magnum Mining and Exploration Limited (ASX:MGU) shares and options,

  • $166,000 attributable to the investment in Constellation Technologies Limited (ASX:CT1) shares and options,

4

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

• fair value gains

  • $130,000 attributable to the investment in SportsHero Limited (ASX:SHO) shares and options,

  • $116,000 attributable to the investment in Kleos Space SA (ASX:KSS) shares issued upon conversion of options held

  • $97,000 fair value gains from the investment in the NASDAQ listed Helbiz Inc, (HLBZ)

  • $95,000 attributable to the investment in Jadar Resources Limited (ASX:JDR) shares

• incurred operating expenses of $229,360 (2020: $272,355) The decrease over the prior corresponding period largely relates to lower overall professional fees and a reduction in director related costs following the retirement of the external directors in First Growth Advisory Pty Ltd during the previous fiscal year. It should also be noted that in the previous fiscal year director Athan Lekkas remuneration changed from a mix of director and consulting fees to consulting fees only.

1.5 – Summary of Quarterly Financial Position

As at Current Assets Cash and cash equivalents Trade and other receivables Inventory (cryptocurrencies) Financial assets Intangible assets Other current assets Total Current Assets Non-Current Assets Financial assets Intangible assets Goodwill Total Non-current Assets Total Assets ( Note 1) Liabilities Current Liabilities Accounts payable Total Current Liabilities Total Liabilities Net Assets Equity Share Capital Reserves Retained Earnings Total Equity	30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 30-Sep-19 810,548 856,169 1,046,661 2,297,952 3,468,203 4,349,767 2,793,980 3,221,037 3,095,294 26,029 10,600 5,069 5,071 13,229 12,704 4,342 12,319 15,862 - 0 47,200 47,200 47,200 47,200 937,156 685,452 685,452 5,609,673 8,535,220 6,227,547 2,998,421 3,680,251 3,126,095 2,999,964 1,559,547 2,049,695 - - - - - - 109,217 109,217 109,217 50,541 0 15,160 28,496 47,301 11,328 21,418 32,663 32,956
	6,496,791 9,401,989 7,341,637 5,377,140 7,256,184 7,547,094 6,866,077 5,620,235 5,988,476
	815,370 1,359,605 1,660,949 2,221,171 1,427,635 1,608,567 1,460,783 2,448,057 2,484,162 - - - - - - - - - - - - - - - - - -
	815,370 1,359,605 1,660,949 2,221,171 1,427,635 1,608,567 1,460,783 2,448,057 2,484,162
	7,312,161 10,761,594 9,002,586 7,598,311 8,683,819 9,155,661 8,326,860 8,068,292 8,472,638
	73,051 75,610 50,209 52,548 120,756 127,681 72,003 106,649 132,736
	73,051 75,610 50,209 52,548 120,756 127,681 72,003 106,649 132,736
	73,051 75,610 50,209 52,548 120,756 127,681 72,003 106,649 132,736
	7,239,110 10,685,984 8,952,377 7,545,763 8,563,063 9,027,980 8,254,857 7,961,643 8,339,902
	67,635,788 67,635,788 67,635,788 67,635,788 67,635,788 67,635,788 67,635,788 67,635,788 67,635,788 - - - - - - 0 19,156 19,156 (60,396,678) (56,949,804) (58,683,411) (60,090,025) (59,072,725) (58,607,808) (59,380,931) (59,693,301) (59,315,042)
	7,239,110 10,685,984 8,952,377 7,545,763 8,563,063 9,027,980 8,254,857 7,961,643 8,339,902
Note 1 Total assets reconciled to portfolio investments 30-Sep-21 30-Jun-21 30-Jun-21 31-Mar-21 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 30-Sep-19 Net assets 7,312,161 10,761,594 9,002,586 7,598,311 8,683,819 9,155,661 8,326,860 8,068,292 8,472,638 Other current assets 50,541) ( 0 (15,160) (28,496) (47,301) 11,328) ( (21,418) (32,663) (32,956) Receivables (26,029) (10,600) (5,069) (5,071) (13,229) (12,704) (4,342) (12,319) (15,862) Accounts payable 73,051 75,610 50,209 52,548 120,756 127,681 72,003 106,649 132,736 Portfolio investments 7,308,642 10,826,604 9,032,566 7,617,292 8,744,045 9,259,310 8,373,103 8,129,959 8,556,556
	7,308,642 10,826,604 9,032,566 7,617,292 8,744,045 9,259,310 8,373,103 8,129,959 8,556,556

5

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

During the quarter cash balances decreased by $45,621 to $810,548. The movement includes $334,048 proceeds from the sale ASX listed shares, new ASX listed investments totalling $85,575 and overall operating costs of $314,094. The operating cost outflows are higher in the first quarter as a result of insurance and audit fees paid.

1.6 – Liquidity and Capital Resources

As at 30 Sept 2021:

• the Company had current assets totalling $6,496,791 (30 June 2021: $9,401,989) and

• shareholder's equity of $7,239,110 (30 June 2021: $10,685,984).

The decrease in capital resources is attributable to the net fair value losses described above.

1.7 – Off Balance Sheet Arrangements

As at 30 September 2021, there were no off-balance sheet arrangements to which the Group was committed.

1.8 – Transactions with Related Parties

The Company has identified its directors and senior officers as its key management personnel. The following table provides the total amount of related party transactions and balances.

Transactions Director fees (Parent)* Anoosh Manzoori Geoff Barnes Michael Clarke Athan Lekkas Other director fees (wholly owned subsidiaries) Advisory - Dalext Pty Ltd.(2	Three months ended Sept 30 2021 $ Sept 30 2020 $ 60,000 60,000 15,000 15,000 15,000 15,000 - 15,000 2,500 15,000
	92,500 120,000
	52,500 22,500

Advisory - Dalext Pty Ltd.[(2]

• ** Director fees and Director related advisory fees are included in the Consolidated Statements of Comprehensive Income (Loss) included under the respective headings of Director Related Costs and Insurance and Professional fees.

*** Director fees are paid to director-controlled entities

No post-employment benefits, other long-term benefits and termination benefits were paid.

	30 Sept	30 June
	2021	2021
Balances	$	$
Accounts Payable and accruals
Geoff Barnes	5,000	-
Polygon Fund Pty Ltd.(1)	-	20,000
Dalext Pty Ltd.(2	5,000	5,000

(1) Polygon Funds Pty Ltd is a company controlled by Anoosh Manzoori, a FGF director.

6

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

(2) Dalext Pty Ltd. is a company controlled by Athan Lekkas, a FGF director.

Ordinary shares held by directors

	Opening		Balance as
Name**	balance	Movements	at June 30
			2021
Geoff Barnes	6,400,000	-	6,400,000
Michael Clarke	751,516	-	751,516
Athan Lekkas	2,037,274	-	2,037,274
Anoosh Manzoori	4,846,756	-	4,846,756
	14,035,546		14,035,546

** Balances held by directors and/or director-controlled entities. The directors do not hold any options.

Other director positions held by directors

			Other
Director	Other directorships held	FGFL Relationship	transactions
			or balances
Michael Clarke	SQID Technologies Limited (CSE:SQID)	FGFL holds a 14.2% interest in	Nil
Athan Lekkas	SQID Technologies Limited (CSE:SQID)	SQID_(see subsequent events)_
Michael Clarke Athan Lekkas	Icon Esports Pty Ltd Icon Esports Pty Ltd	SQID holds a 100% interest in ICON (see subsequent events)	Nil
Anoosh Manzoori	Constellation Technologies Limited (ASX:CT1)	FGFL holds a less than 5% interest in CT1 comprising shares and options	Nil

1.9 Fourth Quarter – not applicable

1.10 – Proposed Transactions

The Group has no proposed transactions as at the date of this document.

1.11 – Critical Accounting Estimates

Refer to the Audited Financial Statements for the year ended 30 June 2021 - Note 2. Critical accounting judgements, estimates and assumptions.

1.12 – Changes in Accounting Policies – International Financial Reporting Standards (“IFRS”)

There have been no changes in accounting policies during the reporting period.

1.13 – Financial Instruments and Other Instruments

Part A Financial Risk Management

Refer to the Unaudited Condensed Interim Financial Statements for the period ended 30 September 2021- Note 5. Financial risk management.

Part B Fair Value Measurement

Refer to the Unaudited Condensed Interim Financial Statements for the period ended 30 September 2021 - Note 6. Fair value measurement.

7

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

1.14 – Other MD&A Requirements

Share Capital

There were no changes in Share Capital during the reporting period.

Share Options –NIL

1.15– Subsequent events

1. On 25 October 2021 investee company SQID Technologies Limited (CSE:SQID) announced that the execution of a share purchase agreement to increase its holding in ICON Esports Pty Ltd (ICON) from 50% to 100%. As consideration, SQID will issue the ICON shareholders 3,333,333 SQID Technology ordinary shares valued at CAD$0.30 each being the same price applicable to the current private share placement. As a result the Group’s interest in SQID will reduce from 14.4% to 10.2%.

2. As at 15 November 2021, the fair value of the Group's interest in Magnum Mining and Exploration Limited (ASX:MGU) shares and options was $2,872,200. This represents an fair value increase of $1,013,200 (54.5%) since the end of the reporting period.

No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

8

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

RISK FACTORS AND UNCERTAINTIES

An investment in the Ordinary Shares of the Company should only be made by persons who can afford a significant or total loss of their investment.

Risk of No Return on Investment: There is no assurance that the business of the Company will continue to be operated successfully, or that the business will continue to generate sufficient or any income to meet its obligations. There is no assurance that an investment in the Ordinary Shares will earn a specified rate of return or any return over the life of the Company.

Global Financial Conditions: Global financial conditions over the last few years have been characterized by volatility and the bankruptcy of several financial institutions or the rescue thereof by governmental authorities. These factors may affect the ability of the Company to obtain equity or debt financing in the future on terms favorable to it. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. If such levels of volatility and market turmoil continue, the operations of the Company may suffer adverse impact and the price of the Ordinary Shares may be adversely affected

Risks Specific to the Company

Reliance on the Directors and Officers: The Company has a small management team composed of the directors and the unexpected loss of any of these individuals would have a serious impact on the business. They are responsible for the successful operation of the Company. At present, there is no key-man insurance in place for any members of the management team. The loss of services of any of these personnel to develop the business and make appropriate decisions in respect of the management thereof could have a material adverse effect on the business of the Company.

Covid 19 Virus Disruption: The Company operates in three areas: (i) it provides advisory services to listed and unlisted companies, (ii) it is licensed in Australia to present investment opportunities to accredited investors in Australia and earn commission fees and invests across a diversified portfolio of different asset classes. These three items are all affected as the companies involved in each area are likely to be negatively affected directly or indirectly by the Covid 19 Virus.

Conflicts of Interest: The directors and officers of the Company are not in any way limited or affected in their ability to carry on other transactions or business ventures for their own account or for the account of others, and may be engaged in the ownership, acquisition and operation of businesses, which compete with the Company. Investment in the Company will not carry with it the right for either the Company or an investor to invest in any investment or venture of the directors and officers of the Company, or to any profit therefrom or to any interest therein. The directors have a responsibility to identify and acquire suitable investments on behalf of the Company. To the extent that an opportunity arises to enter into such an agreement, the directors of the Company have the discretion to determine whether the Company will avail itself of the investment opportunity and, if it does not, any of the directors of the Company will be able to decide amongst themselves whether to pursue the opportunity for their respective accounts. If the investment opportunity did not arise solely from their activities on behalf of the Company, the directors of the Company have no obligation to offer an investment opportunity to the Company. Future conflicts of interest will be dealt with in accordance with applicable laws, statutes and regulations.

RISK FACTORS AND UNCERTAINTIES (cont.)

Operational Risks: The Company will be affected by several operational risks against which it may not be adequately insured or for which insurance is not available including catastrophic accidents; fires; changes in the regulatory environment; impact of non-compliance with laws and regulations; labour disputes; natural phenomena such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, the Company’s premises, personal injury or

9

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

death, environmental damage, resulting in adverse impacts on the Company’s operations, costs, monetary losses, potential legal liability and future cash flows, earnings and financial condition. The Company may also be subject to or affected by liability or sustain loss risks and hazards against which it cannot insure or which it may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.

Technology Risk: T he Company’s, assets, may be susceptible to rapid technological change and there is no assurance that adequate responses will be made in a timely manner t.

Management of Growth: The Company may experience a period of significant growth that will place a strain upon its management systems and resources. Its future will depend in part on the ability of its officers and directors to implement and improve financial and management controls, reporting systems and procedures on a timely basis and to expand, train motivate and manage additional future staff. The Company’s current and planned personnel, systems, procedures and controls may be inadequate to support its future operations. There are no plans to hire additional staff at this time.

Increases in Competition: There is significant competition from other much larger well-established successful investment companies with larger staff and resources to evaluate investment opportunities, in particular established financial institution such as banks. There is no assurance that the Company’s investment strategy will be successful or more successful that its competition. Any material deterioration in the Company’s competitive position could materially adversely affect the Company’s business, operating and financial performance.

Exposure to Adverse Macroeconomic Conditions: The Company is exposed to changes in general economic conditions in Australia and internationally and is affected by macroeconomic conditions such as tariffs and other trade barriers, economic recessions, downturns or extended periods of uncertainty or volatility all of which may materially adversely affect the Company’s business, operating and financial performance.

Acquisition Risk and Associated Risk of Dilution: The Company’s possible expansion strategy includes pursuing acquisitions. The successful implementation of acquisitions will depend on a range of factors including acquisition costs, funding arrangements, business cultural compatibility and operational integration. To the extent acquisitions are not successfully integrated with the Company’s existing business, the financial performance of the Company could be materially adversely affected. Future acquisitions may involve the issue of Ordinary Shares for consideration. In this event, Shareholders’ interests will be diluted. Ordinary Shares may also be issued for other purposes such as debt reduction. Effective due diligence by the Company is ongoing to minimize the risk in integrating acquisition targets although this cannot be guaranteed. There are no specific acquisitions proposed at this time.

Currency Exchange Risk: The Company is exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. In particular, exchange rate fluctuations may affect the value of its assets located in North America and Cryptocurrencies are generally sold in U.S. dollars.

Unforeseen Expenses: All expenses that the Company is aware of are taken into account. There is a risk that unforeseen expenses may develop which could materially negatively affect the business operations.

Permits and Government Regulations: There are currently no permits or government regulations in Australia that affect the Company’s operations beyond business license requirement and the requirements of the Corporations Act, 2001.

Environmental and Safety Regulations and Risks, Climate Change: There are currently no environmental laws and regulations affect the operations of the Company. None are anticipated as the Company’s does not have physical operations other than business offices. The Company, like all other businesses and persons in the world is exposed to the effects of climate change. The direct effects on the Company’s business is not foreseeable at this time.

List Not Exhaustive: The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by Shareholders. The above factors and others not specifically referred to above may in the future materially affect the financial performance of the Company and the value of the shares.

10

FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

RISK FACTORS AND UNCERTAINTIES (cont.)

Previously noted Blockchain and digital currency risks.

The Company currently has no exposure to this asset class.

Digital Assets Risks : Lack of regulation, acceptance, price stability and volatility.

Lack of Regulation: Cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure To the extent that Cryptocurrency exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, this could result in a reduction in Cryptocurrency prices. Cryptocurrency market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, derivatives and other currencies. In the past several years, a number of Cryptocurrency exchanges have been closed due to fraud, business failure or security breaches. In many of these instances, the customers of the closed exchanges were not compensated or made whole for the partial or complete losses of their account balances in such exchanges. While smaller exchanges are less likely to have the infrastructure and capitalization that provide larger exchanges with additional stability, larger exchanges may be more likely to be appealing targets for hackers and “malware” (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information or gain access to private computer systems) and may be more likely to be targets of regulatory enforcement action.

Lack of Acceptance: Traditional banks and banking services may limit or refuse the provision of banking services to businesses that supply Cryptographic or Cryptocurrencies as payment and may refuse to accept money derived from Cryptocurrency-related businesses. This may make management of bank accounts held by companies operating in the field difficult.

Competition: All aspects of the Digital Currency and Blockchain industries – in particular the development of pre-ICO, ICOs, digital currency security providers and digital currency exchanges face significant competition. The rapid pace of innovation and development within the industry, together with the high number of competitors and relatively low barriers to market entry mean there is no guarantee the Company’s ventures in these industries will be effective or profitable. Refer to the Company’s prospectus to which this MD&A is attached for a list of competitors.

Legal and Regulatory Risk: A key concern often raised about digital currency is its ability to hinder or evade law enforcement and facilitate criminal activity due to users being anonymous and the transactions are outside the usual channels of international finance and government regulation. It is unclear what the regulatory response will be and whether that response will seriously impact the digital current market.

Valuation and Price Volatility of Cryptocurrencies: Cryptocurrency prices are highly volatile, can fluctuate substantially and are affected by numerous factors beyond the Company’s control, including hacking, demand, inflation and expectations with respect to the rate of inflation, global or regional political or economic events. Cryptocurrencies may be subject to momentum pricing, which is typically associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value. Cryptocurrency market prices are determined primarily using data from various exchanges, over-thecounter markets, and derivative platforms. Momentum pricing may have resulted, and may continue to result, in speculation regarding future appreciation in the value of Cryptocurrencies, inflating and making their market prices more volatile. As a result, they may be more likely to fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely affect the value of the Company’s investments.

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FIRST GROWTH FUNDS LIMITED (CSE:FGFL) Management Discussion and Analysis For the three months ended September 30, 2021

(All values are expressed in Australian dollars unless otherwise specified)

DISCLAIMER FOR FORWARD-LOOKING INFORMATION

This MD&A contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. The forward-looking statements and information are based on certain key expectations and assumptions made by management of the Company.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward-looking statements and information address future events and conditions, by their very nature they involve risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Accordingly, readers should not place undue reliance on the forward-looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.

The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

APPROVAL

The Board of Directors of the Company approved the disclosure contained in this MD&A on 16 November 2021.

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