FIRSTWAVE CLOUD TECHNOLOGY LIMITED — Interim / Quarterly Report 2016

May 17, 2016

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First Wave Technology Pty Ltd
ABN 99 098 940 544
Registered Office: Business Address:
755 Hunter Street Suite 1402, Lvl 14
Newcastle NSW 2300 132 Arthur Street
North Sydney NSW 2060
INTERIM FINANCIAL STATEMENTS
For the half year ended 31 December 2015
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First Wave Technology Pty. Limited. ABN: 99 098 940 544

Financial statements for the half-year ended 31 December 2015

Table of contents	Page
Statement of profit or loss and other comprehensive income	3
Statement of financial position	4
Statement of changes in equity	5
Statement of cash flows	6
Notes to the financial statements	7
Directors' declaration	11
Independent auditors' review report	12
Approval of financial statements
These financial statements were approved by the board of directors and authorised
for issue on 23 March 2016.

Page 2 of 10

First Wave Technology Pty. Limited. ABN: 99 098 940 544

Statement of profit or loss and other comprehensive income

For the half-year ended 31 December 2015

For the half-year ended 31 December 2015
Notes Sales revenue 5 Cost of sales Gross profit Other revenue Sales & marketing expenses Engineering and development expenses General & administrative expenses Finance costs Profit / (Loss) before tax Income tax benefit / (expense) Profit / (Loss) for the year from continuing operations Other comprehensive income: Items that will not be reclassified subsequently into profit and loss: Total comprehensive income for the half-year	Half year to 31 Dec 2015 $ 2,599,283 (873,325)
	1,725,958 120,552 (1,098,394) (611,217) (1,714,081) (59,757)
	(1,636,939) 45,750
	(1,591,189) -
	(1,591,189)

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

Statement of financial position As at 31 December 2015

Notes ASSETS Current assets Cash and cash equivalents 6 Trade and other receivables 7 Share monies receivable Work in progress 8 Other assets 9 Non-current assets Property, plant & equipment 16a Intangible assets 16b Deferred tax assets Other assets 9 Total assets LIABILITIES Current liabilities Loans 15 Trade payables 11 Other payables 12 Income in advance 13 Provisions 14 Non-current liabilities Deferred tax liability Loans 15 Income in advance 13 Provisions 14 Total liabilities Net assets Equity Share capital 10 Share option reserves Retained earnings Total equity	31-Dec-15 $ 1,093,142 1,335,483 - 616,671 431,626
	3,476,922
	184,642 1,893,756 466,236 466,246
	3,010,880
	6,487,801
	153,127 592,979 792,986 644,021 344,018
	2,527,131
	448,162 871,701 881,829 62,673
	2,264,365
	4,791,496
	1,696,305
	5,837,261 237,966 (4,378,922)
	1,696,305

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

Statement of Changes in Equity

Statement of Changes in Equity
		Share
	Issued	Option	Retained	Total
For the half-year ended 31 December 2015	Capital	Reserve	Earnings	Equity
	$	$	$	$
Balance At 01 July 2015	4,436,261	237,966	(2,787,733)	1,886,494
Profit / (Loss) for the period	-	-	(1,591,189)	(1,591,189)
Other Comprehensive Income for the period	-	-	-	-
Total Comprehensive Income for the period	-	-	(1,591,189)	(1,591,189)
Transactions with owners in their capacity as owners:	-	-	-	-
Issue of share capital net of transaction costs	1,401,000	-	-	1,401,000
Balance At 31 December 2015	5,837,261	237,966	(4,378,922)	1,696,305

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

Statement of cash flows For the half-year ended 31 December 2015

Notes Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Net cash from operating activities Cash flows from investing activities Purchases of property, plant & equipment Investments in intangible assets Net cash from investing activities Cash flows from financing activities Proceeds from share issue Share issue costs Interest paid Repayment of finance lease Net cash from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the half year Cash and cash equivalents at end of the half-year 6	$ 2,471,203 (3,978,493) 12,612
	(1,494,678)
	(62,849) (361,138)
	(423,987)
	3,000,000 (234,000) (59,757) (83,691)
	2,622,552
	703,887 389,255
	1,093,142

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

1. Nature of operations

Firstwave Technology Pty Limited is a limited liability company ("the company") incorporated in Australia. The company's principal business activities are the development and sale of internet security software and related professional services to business and enterprise.

2. General information and basis of preparation

The condensed interim financial statements (‘the interim financial statements’) of the Company are for the six (6) months ended 31 December 2015 and are presented in Australian Dollar ($AUD), which is the functional currency of the Company. These interim financial statements have been prepared in order to meet the needs of the Members, and are therefore not in accordance with the requirements of the Corporations Act 2001. Whilst these interim financial statements have been prepared in accordance with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations, the disclosures are not in accordance with the requirements of AASB 134 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with Australian Accounting Standards, and should be read in conjunction with the financial statements of the Company for the year ended 30 June 2015. No comparative financial information has been presented on the basis that the Members do not require this information to be included.

The interim financial statements have been approved and authorised for issue by the Board of Directors on 23 March 2016.

3. Significant accounting policies

The interim financial statements have been prepared in accordance with the same accounting policies adopted in the Company’s last annual financial statements for the year ended 30 June 2015. The accounting policies have been applied consistently throughout the Company for the purposes of preparation of these interim financial statements.

4. Estimates

When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company’s last annual financial statements for the year ended 30 June 2015.

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

5. Revenue Licensing Income Support Income Professional Services Income 6. Cash and cash equivalents Cash on hand Cash at bank 7. Trade and other receivables Trade debtors Other debtors Income tax receivable 8. Work in progress Accrued income Debtors - professional services 9. Other Assets Current Prepayments Term Deposits - Security for bank guarantee Deposits & Payment in Advance Non-Current Prepayments 10. Share capital As at the beginning of the half-year Shares issued during the half-year (net of transaction costs) As at the close of the period (83,030,252 Ordinary shares each fully paid)	Half year to 31 Dec 2015 $ 1,483,144 336,000 780,139
	2,599,283
	31-Dec-15 $ 1,000 1,092,142
	1,093,142
	1,166,746 22,747 145,990
	1,335,483
	592,585 24,086
	616,671
	384,866 46,310 450
	431,626
	466,245
	466,245
	Half year to 31 Dec 2015 4,436,261 1,401,000
	5,837,261

Ordinary shares participate in dividends and the proceeds on winding up of the company in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

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First Wave Technology Pty. Limited.

ABN: 99 098 940 544

11. Trade payables Trade payables Sundry creditors, no amounts due to related parties 12. Other Payables Accrued Expenses Payroll Tax Finge Benefits Tax ATO payables Superannuation payable Lease Liabilities Provision for Staff Bonuses Provision for License - Ironport	31-Dec-15 $ 592,979 -
	592,979
	157,034 12,088 - 112,380 92,195 13,919 310,033 95,337
	792,986

13. Income in advance Current Income in advance Deferred R&D Income Non-Current Income in advance Deferred R&D Income 14. Provisions Current Provision for LSL - Current Provision for Annual Leave Non Current Provision for LSL - Non Current 15. Loans Current Cisco finance loan Insurance liability Accrued Interest Non-current, Unsecured Convertible Notes Non-current, Secured Hire purchase loans	436,078 207,943
	644,021
	425,979 455,850
	881,829
	149,577 194,441
	344,018
	62,673
	62,673
	127,511 5,703 19,913
	153,127
	647,126 224,575
	871,701

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First Wave Technology Pty. Limited. ABN: 99 098 940 544

16a. Property, Plant & Equipment at 31 December 2015

			Leasehold		Furniture &
	IT Equipment	Other Equipment	Improvements	Website	Fittings	Total
	$	$	$	$	$	$
Gross carrying amount
Balance 1 July 2015	570,892	214,621	13,445	11,557	14,915	825,430
Additions	64,823	19,724	-	-	-	84,547
Disposals	-	-	-	-	-	-
Balance 31 December 2015	635,715	234,345	13,445	11,557	14,915	909,977
Depreciation and impairment
Balance 1 July 2015	473,285	212,074	341	8,850	9,087	703,637
Disposals	-	-	-	-	-	-
Depreciation	19,812	899	168	294	525	21,697
Balance 31 December 2015	493,097	212,973	509	9,144	9,612	725,335
Carrying amount 31 December 2015	142,618	21,372	12,936	2,413	5,303	184,642

16b. Intangible Assets at 31 December 2015

	Acquired software	Internally developed
	licenses	software	Total
	$	$	$
Gross carrying amount
Balance at 1 July 2015	62,666	6,576,693	6,639,359
Additions	7,622	361,138	368,760
Balance at 31 December 2015	70,288	6,937,831	7,008,119
Amortisation and impairment
Balance at 1 July 2015	12,535	4,822,380	4,834,915
Amortisation	10,900	268,548	279,448
Impairment losses	-	-	-
Disposals	-	-	-
Balance at 31 December 2015	23,435	5,090,928	5,114,363
Carrying amount 31 December 2015	46,853	1,846,903	1,893,756

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Level 17, 383 Kent Street Sydney NSW 2000

Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230

T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Review Report To the Members of First Wave Technology Pty Ltd

We have reviewed the accompanying half-year financial report of First Wave Technology Pty Ltd (“Company”), which comprises the statement of financial position as at 31 December 2015, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies, other explanatory information and the directors’ declaration.

Directors’ responsibility for the half-year financial report

The directors of First Wave Technology Pty Limited are responsible for the preparation and fair presentation of the half-year financial report and have determined that the accounting policies used and described in note 3 to the financial report are appropriate to meet the needs of the Members. This responsibility includes such internal controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report does not comply with Accounting Policies as described in note 3. As the auditor of First Wave Technology Pty Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the applicable independence requirements of the Accounting Professional and Ethical Standards Board.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of First Wave Technology Pty Limited does not:

• a present fairly the Company’s financial position as at 31 December 2015 and of its performance for the half-year ended on that date; and

• b comply with Accounting Policies as described in note 3.

Basis of accounting

Without modifying our opinion, we draw attention to note 2 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the needs of the Members. As a result, the financial report may not be suitable for another purpose.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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C F Farley Partner - Audit & Assurance

Sydney, 23 March 2016