First Growth Funds Limited — Interim / Quarterly Report 2022

Nov 16, 2021

First Growth Funds Limited

ABN 34 006 648 835

Condensed Interim Financial Report - 30 September 2021

First Growth Funds Limited Corporate directory 30 September 2021

Directors Mr Anoosh Manzoori (Executive Chairman & CEO) Mr Athan Lekkas - Non-executive Director Mr Geoff Barnes - Non-executive Director Mr Michael Clarke - Non-executive Director Company secretaries Mr Mark Pryn Mr Robert Kleine Registered office and principal Level 14 place of business 440 Collins Street Melbourne VIC 3000 Auditor Pitcher Partners Level 38, Central Plaza, 345 Queen Street Brisbane QLD 4000 Share register / Transfer Agent Odyssey Trust Company 1230-300 5 Ave SW Calgary, AB T2P 3C4 Website www.firstgrowthfunds.com Stock Exchange Listing Canadian Securities Exchange (CSE:FGFL) Corporate Governance Practices First Growth Funds Limited has published its Corporate Governance Statement on its and Conduct website. It can be found at: www.firstgrowthfunds.com/about/corporate-governance

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First Growth Funds Limited Contents 30 September 2021

Statement of financial position	3
Statement of profit or loss and other comprehensive income	4
Statement of changes in equity	5
Statement of cash flows	6
Notes to the financial statements	7

General information

The financial statements cover First Growth Funds Limited as a consolidated entity consisting of First Growth Funds Limited and the entities it controlled at the end of, or during, the quarter. The financial statements are presented in Australian dollars, which is First Growth Funds Limited's functional and presentation currency.

First Growth Funds Limited is a public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 14 440 Collins Street Melbourne Victoria 3000 Australia

A description of the nature of the consolidated entity's operations and its principal activities are included in the the financial statements note 1 'Nature and continuance of operations'

The financial statements were authorised for issue, in accordance with a resolution of Directors, on 16 October 2021.

2

First Growth Funds Limited Statement of financial position As at 30 September 2021

Note Assets Current assets Cash and cash equivalents Trade and other receivables Financial assets 3 Other assets Total current assets Non-current assets Financial assets 3 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Total current liabilities Total liabilities Net assets Equity Issued capital 4 Accumulated losses Total equity	Consolidated 30 Sep 2021 30 Jun 2021 $ $ 810,548 856,169 26,029 10,600 5,609,673 8,535,220 50,541 -	Consolidated 30 Sep 2021 30 Jun 2021 $ $ 810,548 856,169 26,029 10,600 5,609,673 8,535,220 50,541 -
	6,496,791	9,401,989
	815,370	1,359,605
	815,370	1,359,605
	7,312,161	10,761,594
	73,051	75,610
	73,051	75,610
	73,051	75,610
	7,239,110	10,685,984
	67,635,788 (60,396,678)	67,635,788 (56,949,804)
	7,239,110	10,685,984

Approved on behalf of the Board

"Anoosh Manzoori" Director and CEO

The above statement of financial position should be read in conjunction with the accompanying notes

3

First Growth Funds Limited Statement of profit or loss and other comprehensive income For the period ended 30 September 2021

Note Income Government grants Interest revenue Change in financial assets at fair value through profit and loss Other gains and losses Total revenue Operating expenses AFSL support Director related costs Insurance and professional fees Listing and share registry fees Other expenses Total operating expenses Loss before income tax expense Income tax expense Loss after income tax expense for the period Other comprehensive income for the period, net of tax Total comprehensive income for the period Basic earnings per share 7 Diluted earnings per share 7	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ - 2,800 12,616 15,723 (3,221,410) (204,130) 1,180 (6,955)	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ - 2,800 12,616 15,723 (3,221,410) (204,130) 1,180 (6,955)
	(3,207,614)	(192,562)
	(9,000) (92,500) (114,914) (11,676) (11,170)	(9,000) (120,000) (116,652) (14,749) (11,954)
	(239,260)	(272,355)
	(3,446,874) -	(464,917) -
	(3,446,874) -	(464,917) -
	(3,446,874)	(464,917)
	Cents (4.431) (4.431)	Cents (0.598) (0.598)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

4

First Growth Funds Limited Statement of changes in equity For the period ended 30 September 2021

Consolidated Balance at 1 July 2020 Loss after income tax expense for the period Other comprehensive income for the period, net of tax Total comprehensive income for the period Balance at 30 September 2020 Consolidated Balance at 1 July 2021 Loss after income tax expense for the period Other comprehensive income for the period, net of tax Total comprehensive income for the period Balance at 30 September 2021	Issued capital $ 67,635,788 - -	Share based payment reserve $ - - -	Retained profits $ (58,607,808) (464,917) -	Non- controlling interest $ - - -	Total equity $ 9,027,980 (464,917) -
	-	-	(464,917)	-	(464,917)
	67,635,788	-	(59,072,725)	-	8,563,063
	Issued capital $ 67,635,788 - -	Share based payment reserve $ - - -	Retained profits $ (56,949,804) (3,446,874) -	Non- controlling interest $ - - -	Total equity $ 10,685,984 (3,446,874) -
	-	-	(3,446,874)	-	(3,446,874)
	67,635,788	-	(60,396,678)	-	7,239,110

The above statement of changes in equity should be read in conjunction with the accompanying notes

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First Growth Funds Limited Statement of cash flows For the period ended 30 September 2021

Cash flows from operating activities Loss before income tax expense for the period Adjustments for: Fair value adjustments through profit and loss Change in operating assets and liabilities: Increase in trade and other receivables Decrease / (increase) financial assets Decrease / (increase) in other current assets Decrease in trade and other payables Net cash used in operating activities Net cash from investing activities Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period Cash and cash equivalents at the end of the financial period	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ (3,446,874) (464,917) 3,221,410 204,130	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ (3,446,874) (464,917) 3,221,410 204,130
	(225,464) (15,429) 248,372 (50,541) (2,559)	(260,787) (525) (577,354) (35,973) (6,925)
	(45,621)	(881,564)
	-	-
	-	-
	(45,621) 856,169	(881,564) 4,349,767
	810,548	3,468,203

The above statement of cash flows should be read in conjunction with the accompanying notes

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 1. Nature and continuance of operations

The Parent Entity, First Growth Funds Limited is incorporated under the Laws of Australia, specifically the Corporations Act 2001 . The registered office and principal place of business of First Growth Funds Limited is located at Level 14 440 Collins St Melbourne, Victoria, 3000, Australia The Parent Entity’s shares are listed on the Canadian Securities Exchange (CSE:FGFL).

The Consolidated Entity comprises First Growth Funds as the parent and two wholly owned controlled entities:

• ICO-AN Pty Ltd (incorporated in Australia)

• First Growth Advisory Pty Ltd (incorporated in Australia)

The Consolidated Entity may also be referred to as the “Group” and the Parent Entity may also be referred to as the “Company”.

Note 2. Significant accounting policies

These general purpose financial statements for the 3 month period ended 30 September 2019 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2021.

The principal accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Note 3. Financial assets

Current assets Listed securities at fair value through profit or loss Unlisted securities at fair value through profit or loss Unlisted convertible notes at amortised cost Non-current assets Unlisted securities at fair value through profit or loss	Consolidated 30 Sep 2021 30 Jun 2021 $ $ 4,539,624 7,452,658 69,027 81,641 1,001,022 1,000,921	Consolidated 30 Sep 2021 30 Jun 2021 $ $ 4,539,624 7,452,658 69,027 81,641 1,001,022 1,000,921
	5,609,673	8,535,220
	815,370	1,359,605
	6,425,043	9,894,825

Refer to note 6 for further information on fair value measurement.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 3. Financial assets (continued)

Balance as at 1 July 2021 Additions Disposal proceeds Fair value through profit or loss Income accrued Reclassification Balance as at 30 September 2021 Current Non-current	Listed securities 7,452,658 85,575 (334,048) (3,229,384) - 564,823	Convertible notes 1,000,921 - - - 101 -	Unlisted securities 1,441,246 - - 7,974 - (564,823)	Total 9,894,825 85,575 (334,048) (3,221,410) 101 -
	4,539,624	1,001,022	884,397	6,425,043
	4,539,624 -	1,001,022 -	69,027 815,370	5,609,673 815,370
	4,539,624	1,001,022	884,397	6,425,043

Note 4. Issued capital

Ordinary shares - fully paid	30 Sep 2021 Shares 77,798,218	Consolidated 30 Jun 2021 30 Sep 2021 Shares $ 77,798,218 67,635,788	30 Jun 2021 $ 67,635,788

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Note 5. Financial risk management

Financial risk management objectives

The Group’s activities expose it to a number of financial risks, including market risk, credit risk and liquidity risk. The Group's management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group, mindful of the cost of such measures and the competing demands of other investment. Risks are monitored through the use of sensitivity analysis for interest rate and foreign exchange risks and aging analysis for credit risk.

The Group identifies and evaluates mitigation activities for risk and to develop policy for risk management across all group operations pursuant to written risk management principles approved by the Board.

Market risk

Market risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

• Foreign currency risk

• Price risk

• Interest rate risk

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of financial instruments would fluctuate due to changes in foreign exchange rates. The Group's exposure to foreign currency risk arises from financial assets held in United States of America and Canadian dollars.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 5. Financial risk management (continued)

The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:

Consolidated US dollars Canadian dollars	Assets 30 Sep 2021 30 Jun 2021 $ $ 1,310,647 1,164,850 476,971 501,970	Assets 30 Sep 2021 30 Jun 2021 $ $ 1,310,647 1,164,850 476,971 501,970	Liabilities 30 Sep 2021 30 Jun 2021 $ $ - - - -	Liabilities 30 Sep 2021 30 Jun 2021 $ $ - - - -
	1,787,618	1,666,820	-	-

The Group had assets denominated in foreign currencies of $1,787,618 (June 2021: 1,666,820). The table below shows the Group profit before tax and equity impact of a 10% strengthening and 10% weakening of the Australian dollar as at the reporting date. The percentage change is the expected overall volatility of the significant currencies, which is based on an assessment of reasonable possible fluctuations taking into consideration movements over the previous 12 months and the spot rate as at reporting date.

	AUD strengthened	AUD strengthened	AUD strengthened	AUD weakened
		Effect on		Effect on
		profit before	Effect on	profit before	Effect on
Consolidated - 30 Sep 2021	% change	tax	equity	% change tax	equity
USD Assets	10%	(131,065)	(131,065)	10% 131,065	131,065
CAD Assets	10%	(47,697)	(47,697)	10% 47,697	47,697
		(178,762)	(178,762)	178,762	178,762
	AUD strengthened			AUD weakened
		Effect on		Effect on
		profit before	Effect on	profit before	Effect on
Consolidated - 30 Jun 2021	% change	tax	equity	% change tax	equity
USD Assets	10%	(115,536)	(115,536)	10% 115,536	115,536
CAD Assets	10%	(50,197)	(50,197)	10% 50,197	50,197
		(165,733)	(165,733)	165,733	165,733
Price risk
	Average price increase			Average price decrease
		Effect on		Effect on
		profit before	Effect on	profit before	Effect on
Consolidated - 30 Sep 2021	% change	tax	equity	% change tax	equity
Listed securities	10%	453,962	453,962	10% (453,962)	(453,962)

Interest rate risk

Interest rate risk arises from the Group's interest-bearing financial assets and liabilities. The Group carries cash balances with major Australian Banks which are exposed to variable interest rates. The major Australian Banks all have Standard & Poor’s credit ratings of AA-. The Australian Reserve Bank cash rate is less than 1%, accordingly the impact of a 10% movement in interest rates is deemed immaterial. The Group does not currently carry financial liabilities with variable interest rates.

Credit risk

Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument creating a financial loss. Credit risk arises from cash and cash equivalents, deposits with banks and through exposures to wholesale and retail customers.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 5. Financial risk management (continued)

The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.

The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables. These provisions are considered representative across Group customers based on recent sales experience, historical collection rates and forward-looking information that is available.

The Group has a total credit risk exposure of $1,001,022 (June 2020: $1,000,921) on its convertible notes invested with various parties at reporting date. The Group will seek, where appropriate, to hold collateral as security against such investments. The Group has not impaired convertible note investments during either the current or previous reporting period.

Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.

Liquidity risk

Liquidity risk is the risk that the Group's operational performance will be adversely affected through the failure to satisfy an obligation for settlement of a financial transaction within contractual terms or that operational decisions made to ensure sufficient funding is available to meet such settlement will adversely affect the value of financial assets (including sale of financial assets at values less than their fair market values). The Group's predominant exposure to liquidity risk is through investments in overseas start-up businesses which can experience significant volatility whilst in their infancy.

Remaining contractual maturities

The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

Weighted average interest rate Consolidated - 30 Sep 2021 % Non-derivatives Non-interest bearing Trade payables - Total non-derivatives Weighted average interest rate Consolidated - 30 Jun 2021 % Non-derivatives Non-interest bearing Trade payables - Total non-derivatives	1 year or less $ 73,051	Between 1 and 2 years $ -	Between 2 and 5 years $ -	Over 5 years $ -	Remaining contractual maturities $ 73,051
	73,051	-	-	-	73,051
	1 year or less $ 75,610	Between 1 and 2 years $ -	Between 2 and 5 years $ -	Over 5 years $ -	Remaining contractual maturities $ 75,610
	75,610	-	-	-	75,610

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 6. Fair value measurement

Fair value hierarchy

he following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

Consolidated - 30 Sep 2021 Financial assets at fair value through profit or loss Listed securities (i) Unlisted securities (ii) & (iii) Total assets Consolidated - 30 Jun 2021 Financial assets at fair value through profit or loss Listed securities (i) Unlisted securities (ii) & (iii) Total assets	Level 1 $ 4,205,685 -	Level 2 $ - -	Level 3 $ 333,939 884,397	Total $ 4,539,624 884,397
	4,205,685	-	1,218,336	5,424,021
	Level 1 $ 7,118,719 -	Level 2 $ - 15,090	Level 3 $ 333,939 1,426,156	Total $ 7,452,658 1,441,246
	7,118,719	15,090	1,760,095	8,893,904

(i) Quoted trading prices in active markets are not always available for listed securities. Where there are no observable valuation inputs, investments in listed securities are classified as Level 3 in the fair value hierarchy. To determine the enterprise value as an approximation of fair value of a listed security classified as Level 3, conservative revenue multiples were applied in previous reporting periods. However during the current reporting period the listed entity experienced a major revenue deterioration, accordingly, it was determined that net asset backing per share was a more appropriate method to determine the enterprise value of the investee company which operates in the payment processing sector.

The fair value of this level 3 investment includes unrealised fair value losses of $ Nil (30 June 2020: $1,450,910). The investee company, SQID Technologies Limited listed on the CSE in January 2020 and prior to listing the investment’s fair value represented the consideration transferred to acquire an interest in the investment. Since listing the volume of shares traded are considered too low to conclude that an active market existed as at reporting date, therefore an alternative fair value approach was adopted.

• (ii) Investments in unlisted securities valued at fair value and classified as Level 2 within the fair value hierarchy relate to unlisted options issued by listed entities. The fair value for the options is pegged to the trading prices for the related listed securities.

• (iii) For those investments in unlisted securities valued at fair value and classified as Level 3 within the fair value hierarchy, the Directors have considered the available information and believe it is appropriate to recognise a fair value of $884,397 (30 June 2021: $1,426,156) based on either consideration the Group has paid for recent acquisitions or where applicable recent consideration paid by other investors.

• (iv) Sensitivity tables

The table below sets out the potential impact to profit before tax and equity resulting from a 20% increase and 20% decrease in the fair values of investments categorised as Level 3 in the fair value hierarchy.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 6. Fair value measurement (continued)

Listed securities Unlisted securities Consolidated - 30 Sep 2021 Listed securities Unlisted securities Consolidated - 30 Jun 2021	Increase 20% Impact on profit before tax $ 66,788 176,879	Increase 20% Impact on equity $ 66,788 176,879	Decrease 20% Impact on profit before tax $ (66,788) (176,879)	Decrease 20% Impact on equity $ (66,788) (176,879)
	243,667	243,667	(243,667)	(243,667)
	66,788 285,231	66,788 285,231	(66,788) (285,231)	(66,788) (285,231)
	352,019	352,019	(352,019)	(352,019)

Movements in level three hierarchy assets

During the reporting period, the carrying value of investments classified as level 3 under the fair value hierarchy decreased by $541,759 to $1,218,336. Helbiz Inc which was valued at $564,823 at the beginning of the period was listed on NASDAQ and transferred level 1 under the fair value hierarchy. This was partly offset by fair value gains of $23,064.

Fair values of other financial assets and liabilities

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature. The carrying value of convertible notes at amortised cost is also considered to approximate their value.

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Accounting policy for fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

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First Growth Funds Limited Notes to the financial statements 30 September 2021

Note 7. Earnings per share

Loss after income tax Basic earnings per share Diluted earnings per share Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ (3,446,874) (464,917)	Consolidated Three months ended 30 Sep 2021 Three months ended 30 Sep 2020 $ $ (3,446,874) (464,917)
	Cents (4.431) (4.431) Number 77,798,218	Cents (0.598) (0.598) Number 77,798,218
	77,798,218	77,798,218

Note 8. Events after the reporting period

• (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 September 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

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