FIRSTWAVE CLOUD TECHNOLOGY LIMITED - Interim / Quarterly Report 2024

FirstWave Cloud Technology Limited Appendix 4D Half-year report

1. Company details

Name of entity: FirstWave Cloud Technology Limited ABN: 35 144 733 595 Reporting period: For the half-year ended 31 December 2023 Previous period: For the half-year ended 31 December 2022

2. Results for announcement to the market

				$
Revenues from ordinary activities	down	11.9%	to	5,782,358
Gross profit	down	9.0%	to	4,656,322
Loss from ordinary activities after tax attributable to the owners of
FirstWave Cloud Technology Limited	improved	27.4%	to	(2,366,055)
Loss for the half-year attributable to the owners of FirstWave Cloud	improved	27.4%	to	(2,366,055)
Technology Limited

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the consolidated entity after providing for income tax improved to $2,366,055 (31 December 2022: $3,257,728).

The company incurred transaction costs in relation to the acquisition of the assets of Saisei Networks Inc. of $208,830 (31 December 2022: $23,938 in relation to the acquisition of Opmantek Limited).

Excluding these transaction costs, the company incurred a loss after income tax of $2,157,225 (31 December 2022: Loss of $3,233,790). The improved loss is attributed to the improved focus on the entity’s most profitable products and disciplined cost rationalisation.

The reduction in revenue and gross profit relates primarily to matters already disclosed to the market which include that there were some significant non-recurring revenues in the prior comparative period and a churn of a client with Telstra – both once off occurrences.

Refer to the 'Review of operations' section of the Directors' report within the Interim Report for further commentary on the results.

3. Net tangible assets/(liabilities)

Net tangible assets/(liabilities) per ordinary security	Reporting period Cents (0.22)	Previous period Cents 0.05

Net tangible assets/(liabilities) calculations include right-of-use assets and lease liabilities.

4. Foreign entities

There has been no change in foreign-owned subsidiaries to those reported for the year ended 30 June 2023. All group entities comply with International Financial Reporting Standards (‘IFRS’).

FirstWave Cloud Technology Limited Appendix 4D Half-year report

5. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report.

6. Attachments

Details of attachments (if any):

The Interim Report of FirstWave Cloud Technology Limited for the half-year ended 31 December 2023 is attached.

7. Signed

As authorised by the Board of Directors

Signed _________

Date: 28 February 2024

John Grant Chair

FirstWave Cloud Technology Limited ABN 35 144 733 595

Interim Report - 31 December 2023

FirstWave Cloud Technology Limited Directors' report 31 December 2023

The directors present their report, together with the financial statements of FirstWave Cloud Technology Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled (referred to hereafter as the 'consolidated entity') at the end of, or during, the half-year ended 31 December 2023.

Directors

The following persons were directors of FirstWave Cloud Technology Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

John Grant – Non-Executive Chair Danny Maher – Managing Director Ray Kiley – Non-Executive Director Paul MacRae – Non-Executive Director (retired on 23 November 2023) Euh (David) Hwang – Non-Executive Director (retired on 23 November 2023)

Principal activities

During the financial half- year, the principal continuing activities of the consolidated entity comprise the development and sale of network discovery, audit, monitoring, and internet security software.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Review of operations

Profit or loss performance

The consolidated entity’s revenue for the financial half-year was $5,782,358 (31 December 2022: $6,560,163) which represents a decrease of 11.9% over the prior comparative period (‘PCP’). Gross profit for the financial half-year was $4,656,322 (31 December 2022: $5,114,250) which represents a decrease of 9.0% over the PCP. Recurring revenue represented 93.1% (31 December 2022: 86.9%) of total revenue. The reduction in revenue and gross profit relates primarily to matters already disclosed to the market which include that there were some significant non-recurring revenues in the prior comparative period and a churn of a client with Telstra – both once off occurrences.

The consolidated entity’s loss after income tax amounted to $2,366,055 (31 December 2022: $3,257,728) which represents an improvement of 27.4%.

On 19 September 2023, FirstWave acquired 100% of the assets of Silicon Valley founded network automation software company Saisei Networks Inc. (www.saisei.com). FirstWave issued 40,571,428 new shares to Saisei as payment for the assets of the business. The transaction includes $200,000 in cash receivables.

Saisei’s software is a carrier-grade solution and provides network managers in telecommunications and enterprise (private network) customers with the ability to dynamically apply network controls based on pre-configured rule sets together with machine learning. This delivers a highly-automated solution that increases network capability while reducing operational expenditure.

The transaction is expected to bring a number of significant benefits to FirstWave, including:

Expanding the company’s IP through the acquisition of Saisei’s IP and patents;
Improving and expanding the functionality of the company’s NMIS network management offering;
Bringing over 50 new clients and adding approximately $AUD1 million to FirstWave’s annual revenue, 75% of which is derived from North America and Latin America;
Offsetting transaction costs and increasing the company’s cash reserves in total by approximately $200,000;
Delivering 6 new software engineers focussed exclusively on enhancing the company’s IP; and
● Expanding the company’s technical management.

John Harper, Saisei CTO, joined FirstWave to support a successful merger of intellectual property and solutions postacquisition, and the business moving forward.

With increasing opportunity for its network monitoring platform, the Company undertook a detailed review of its investment priorities during the period. This resulted in:

FirstWave Cloud Technology Limited Directors' report 31 December 2023

Repurposing its investment to where the Company sees its short to mid-term opportunities;
Making 11 positions redundant, mainly in the Company’s Australian-based CyberCision development team; and
Delivering annual savings of approximately $1.5 million without impacting its existing CyberCision customers or its North American operations.

The company also undertook a management restructure in line with its strategic objectives following the acquisition of Saisei. The major elements were:

Appointing Iain Bartram to the position of Chief Operating Officer, adding responsibility for customer support and software development to his existing role as Chief Financial Officer and Company Secretary;
Focusing the company´s CEO, Danny Maher, on sales and marketing, and the company’s strategic goals;
Extending the sales responsibilities of the Company’s Chief Revenue Officer (CRO), Dino Davanzo, to include the company's marketing and product functions globally; and
After leading FirstWave’s software development activities since the Company’s formation, the company’s current Chief Technology Officer (CTO), Simon Ryan, departed the business in December 2023.

Following the organisational restructure at the beginning of the period, the added focus to converting the Company’s strong pipeline to revenue saw several transactions close and several other opportunities move closer to completion. Significant amongst those that closed in the period were:

Extension of the Company’s NMIS agreement with the US Space Agency, NASA.
Extension of the Company’s NMIS agreement with Mexico’s largest telecommunications group, Telmex.
Securing the first sale of our technology as part of our reseller engagement with Telmex. Telmex has utilised a range of FirstWave products since 2011. Under the newly expanded relationship, Telmex has become a reseller of FirstWave’s industry-leading Network Management Information System (NMIS) platform by bundling the software with its network sales. This first successful sale was to a Mexican government client and the contract will deliver approximately A$1 million in revenue to FirstWave over the next three years with a minimum of A$400,000 in cash this financial year. The Company has since completed the implementation at the client and expects that, having proven the success of this sale and the use of NMIS as a point of differentiation when bundled with Telmex’s network offerings, more opportunities will follow.

The Company also released v5.0 of the Company’s Open AudIT software – FirstWave’s most popular ‘freemium’ product and most recently awarded ‘world’s best agent-less Discovery Tools for IT Asset Management’ by Comparitech. The V5.0 release is the most significant update to Open-AudIT in over three years. Open-AudIT is one of the world's leading IT audit platforms, with over 130,000 organisations using the software to scan their network intelligently and store the configurations of the discovered devices. The upgrade will allow FirstWave to add new features much faster and further cement Open-AudIT’s position as the number one tool in the market.

Statement of financial position

Cash and cash equivalents decreased by $3,661,427 to $1,945,992 (30 June 2023: $5,607,419). The decrease came after, $2,343,257 net cash outflows from operating activities and $1,238,362 in investing activities, reflecting continued development of the consolidated entity’s intellectual property. The net cash outflows from operating activities of $2,343,257 compares to $2,126,807 in the PCP which represents a 10.2% increase in net cash outflows.

Going concern

Based on its current commitments, the consolidated entity has sufficient funds to meet its debts as and when they fall due. Accordingly, the directors have determined that the consolidated entity will continue as a going concern, as explained in note 1 to the financial statements.

Significant changes in the state of affairs

On 19 September 2023, the company acquired 100% of the assets of Saisei Networks Inc. ('Saisei'). FirstWave issued 40,571,428 new shares to Saisei as payment for the assets of the business. Saisei is an innovative and established provider of patented network automation technology in North America. It was acquired to expand the consolidated entity's intellectual property ('IP') and patents and accelerate growth of the consolidated entity in its key target market of North American telecommunications providers. The effective date of the transaction was 1 September 2023. Refer to note 13 for further details.

There were no other significant changes in the state of affairs of the consolidated entity during the financial half-year.

FirstWave Cloud Technology Limited Directors' report 31 December 2023

Matters subsequent to the end of the financial half-year

On 22 February 2024, the company entered into a loan agreement with Formue Nord Fund and issued convertible notes for an amount of AU$2,500,000. The issue price is fixed at $0.036 which is a 28.6% premium to the 21 February 2024 closing share price of $0.028 at the time of signing the loan agreement. The convertible notes will have a maturity date of 18 months from the issue date unless previously redeemed or converted into shares. There is an establishment fee of 5% payable to Formue Nord Fund which will be deducted from the loan amount. The interest rate margin will be 8% per annum over the +3 month BBSW (currently 4.22%). The interest is payable quarterly in arrears on each interest payment date. Each convertible note entitles the noteholder to one share (subject to any adjustment for bonus shares, rights issues and capital reconstructions), or the cash equivalent (at the election of the company). Any convertible note not converted by the maturity date must be redeemed by the company at the issue price on the maturity date. The company has the option to redeem the convertible notes at any time prior to the maturity date without penalty. The convertible notes will be unsecured debt obligations of the company and rank equally with other ordinary unsecured creditors of the company in relation to repayment of principal and interest.

No other matter or circumstance has arisen since 31 December 2023 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.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

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_____ _______ John Grant Ray Kiley Chair Director

28 February 2024

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PKF Brisbane Audit ABN 33 873 151 348 Level 2, 66 Eagle Street Brisbane, QLD 4000 Australia

+61 7 3839 9733 [email protected] pkf.com.au

AUDITOR’S INDEPENDENCE DECLARATION

UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF FIRSTWAVE CLOUD TECHNOLOGY LIMITED

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2023, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of FirstWave Cloud Technology Limited and the entities it controlled during the half year.

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PKF BRISBANE AUDIT

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SHAUN LINDEMANN PARTNER

28 FEBRUARY 2024 BRISBANE

PKF Brisbane Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under Professional Standards Legislation.

FirstWave Cloud Technology Limited Contents 31 December 2023

Statement of profit or loss and other comprehensive income	6
Statement of financial position	7
Statement of changes in equity	8
Statement of cash flows	9
Notes to the financial statements	10
Directors' declaration	17
Independent auditor's review report to the members of FirstWave Cloud Technology Limited	18

General information

The financial statements cover FirstWave Cloud Technology Limited (referred to as the 'company' or 'parent') as a consolidated entity consisting of the company and the entities it controlled at the end of, or during, the half-year (referred to as the 'consolidated entity'). The financial statements are presented in Australian dollars, which is FirstWave Cloud Technology Limited 's functional and presentation currency.

FirstWave Cloud Technology Limited is a listed public company limited by shares and is incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 14 132 Arthur Street North Sydney NSW 2060

A description of the nature of the consolidated entity's operations and its principal activities is included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 February 2024. The directors have the power to amend and reissue the financial statements.

FirstWave Cloud Technology Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2023

Note Revenue Revenue from contracts with customers 3 Cost of sales Gross profit Other income 4 Interest income calculated using the effective interest method Expenses Sales and marketing Product and development Operations and support Corporate and administration Transaction costs Finance costs 5 Total expenses Loss before income tax expense Income tax expense Loss after income tax expense for the half-year attributable to the owners of FirstWave Cloud Technology Limited Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year attributable to the owners of FirstWave Cloud Technology Limited Basic earnings per share 14 Diluted earnings per share 14	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 5,782,358 6,560,163 (1,126,036) (1,445,913) 4,656,322 5,114,250 657,936 428,331 50,919 60,924 (2,697,299) (2,287,604) (1,266,218) (2,764,449) (526,207) (613,338) (3,020,730) (3,165,851) (208,830) (23,938) (4,613) (6,053) (7,723,897) (8,861,233) (2,358,720) (3,257,728) (7,335) - (2,366,055) (3,257,728) (1,323) 3,567 (1,323) 3,567 (2,367,378) (3,254,161) Cents Cents (0.14) (0.20) (0.14) (0.20)
	4,656,322
	657,936 50,919 (2,697,299) (1,266,218) (526,207) (3,020,730) (208,830) (4,613)
	(7,723,897)
	(2,358,720) (7,335)
	(2,366,055) (1,323)
	(1,323)
	(2,367,378)
	Cents (0.14) (0.14)

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

FirstWave Cloud Technology Limited Statement of financial position As at 31 December 2023

Note Assets Current assets Cash and cash equivalents Term deposits Trade and other receivables 6 Contract assets Other assets Total current assets Non-current assets Property, plant and equipment Right-of-use assets Intangible assets 7 Other assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Contract liabilities 8 Employee benefits Lease liabilities Deferred research and development income Total current liabilities Non-current liabilities Contract liabilities 8 Employee benefits Deferred tax 13 Provisions Lease liabilities Deferred research and development income Total non-current liabilities Total liabilities Net assets Equity Issued capital 9 Reserves 10 Accumulated losses Total equity	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 1,945,992 5,607,419 133,776 133,776 2,837,253 3,190,429 177,336 142,440 832,408 742,640 5,926,765 9,816,704 159,700 109,992 158,539 208,603 56,147,298 53,194,363 17,767 - 56,483,304 53,512,958 62,410,069 63,329,662 2,419,003 2,862,039 3,350,964 3,214,285 1,078,497 1,392,125 124,569 118,569 867,074 880,057 7,840,107 8,467,075 487,079 730,679 191,717 163,960 44,000 - 26,406 26,406 77,405 141,857 1,373,712 1,369,579 2,200,319 2,432,481 10,040,426 10,899,556 52,369,643 52,430,106 130,976,095 128,474,750 5,428,645 5,911,076 (84,035,097) (81,955,720) 52,369,643 52,430,106
	5,926,765
	159,700 158,539 56,147,298 17,767
	56,483,304
	62,410,069
	2,419,003 3,350,964 1,078,497 124,569 867,074
	7,840,107
	487,079 191,717 44,000 26,406 77,405 1,373,712
	2,200,319
	10,040,426
	52,369,643
	130,976,095 5,428,645 (84,035,097)
	52,369,643

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

FirstWave Cloud Technology Limited Statement of changes in equity For the half-year ended 31 December 2023

Issued capital $ 128,426,284 - -	Reserves $ 5,736,129 - 3,567	Accumulated losses $ (69,004,940) (3,257,728) -
- - 48,545 -	3,567 345,499 (51,761) (157,692)	(3,257,728) - - 157,692
128,474,829	5,875,742	(72,104,976)
Issued capital $ 128,474,750 - -	Reserves $ 5,911,076 - (1,323)	Accumulated losses $ (81,955,720) (2,366,055) -
- 1,985,302 - 516,043 -	(1,323) - 321,613 (516,043) (286,678)	(2,366,055) - - - 286,678
130,976,095	5,428,645	(84,035,097)

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

FirstWave Cloud Technology Limited Statement of cash flows For the half-year ended 31 December 2023

Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Transaction cost payments (inclusive of GST) Interest received Other income Interest and other finance costs paid Net cash used in operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangible assets Receipts from the acquisition of Saisei Net cash used in investing activities Cash flows from financing activities Share issue transaction costs Payment of principal portion of lease liabilities Net cash used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Cash and cash equivalents at the end of the financial half-year Net cash used in operating activities Transaction cost payments (inclusive of GST) Net cash used in operating activities before transaction costs (inclusive of GST)	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 6,672,892 6,017,111 (8,712,095) (8,494,200) (284,414) - 51,385 25,280 - 365,270 (71,025) (40,268) (2,343,257) (2,126,807) (33,346) (3,287) (1,405,016) (1,537,879) 200,000 - (1,238,362) (1,541,166) (14,405) (2,127) (65,403) (63,415) (79,808) (65,542) (3,661,427) (3,733,515) 5,607,419 10,408,588 1,945,992 6,675,073 (2,343,257) (2,126,807) 284,414 - (2,058,843) (2,126,807)
	(2,343,257)
	(33,346) (1,405,016) 200,000
	(1,238,362)
	(14,405) (65,403)
	(79,808)
	(3,661,427) 5,607,419
	1,945,992
	(2,343,257) 284,414
	(2,058,843)

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

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 1. Material accounting policy information

These general purpose financial statements for the interim half-year reporting period ended 31 December 2023 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 2023 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, 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. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity during the financial half-year ended 31 December 2023 and are not expected to have a significant impact for the full financial year ending 30 June 2024.

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

Going Concern

During the half-year ended 31 December 2023, the consolidated entity incurred a net loss after tax of $2,366,055 (31 December 2022: $3,257,728), generated net cash outflows from operating activities of $2,343,257 (31 December 2022: net cash outflows of $2,126,807) and had a net current liability of $1,913,342 (30 June 2023: net current assets of $1,349,629). The directors have prepared the financial statements on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Subsequent to the period end, the consolidated entity has entered into an agreement to issue convertible notes which will provide an additional AUD $2,375,000 to the entity’s existing working capital. Refer to note 15 for further information. The consolidated entity is also continuing to streamline its costs in order to reach a cash flow neutral position in the near term.

Based on cash flow projections, the consolidated entity has sufficient funds to meet its debts as and when they fall due. The preparation of these projections is based on several assumptions, judgements and other considerations (‘inputs’) in relation to the timing and quantum of income, expenses, and capital. Having regard to the range of possible outcomes utilising different inputs, the directors have concluded that none of the potential impacts to future cash flow outcomes give rise to material uncertainty which may cast significant doubt on the consolidated entity’s ability to continue as a going concern. Accordingly, the directors have determined that the use of the going concern basis of accounting is appropriate in preparing the financial statements.

Note 2. Operating segments

Identification of reportable operating segments

The consolidated entity's operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer (being the Chief Operating Decision Maker ('CODM')) in assessing performance and in determining the allocation of resources.

The consolidated entity only has one reportable segment being the development and sale of internet software. For information on the reportable segment refer to the statement of profit or loss and other income (for segment revenues and profit/loss) and statement of financial position (for total segment assets and liabilities) and notes to the financial statements. Refer to note 3 for geographical information. Whilst two cash-generating units have been identified for the purpose of internal impairment assessments at balance date, this level of information has not been compiled and provided internally to the CODM during the half-year.

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 3. Revenue

Disaggregation of revenue

The disaggregation of revenue from contracts with customers is as follows:

Internet security Network monitoring Network automation ('STM') Geographical regions Australia North America LATAM ROW** Timing of revenue recognition Recurring revenue (over a period of time) Non-recurring revenue (at a point in time)	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 2,895,907 3,776,202 2,542,275 2,783,961 344,176 - 5,782,358 6,560,163 3,030,017 3,985,345 1,788,483 1,262,668 610,787 992,456 353,071 319,694 5,782,358 6,560,163 5,381,127 5,697,607 401,231 862,556 5,782,358 6,560,163	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 2,895,907 3,776,202 2,542,275 2,783,961 344,176 - 5,782,358 6,560,163 3,030,017 3,985,345 1,788,483 1,262,668 610,787 992,456 353,071 319,694 5,782,358 6,560,163 5,381,127 5,697,607 401,231 862,556 5,782,358 6,560,163
	5,782,358	6,560,163
	3,030,017 1,788,483 610,787 353,071	3,985,345 1,262,668 992,456 319,694
	5,782,358	6,560,163
	5,381,127 401,231	5,697,607 862,556
	5,782,358	6,560,163

North America represents revenue from customers in United States of America and Canada

** Latin America ('LATAM') represents revenue from customers in Mexico, Central America and South America. *** Rest of the world ('ROW') represents the revenue from customers in the rest of the world.

Note 4. Other income

Research and development grant income* Other income	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 655,941 411,098 1,995 17,233 657,936 428,331	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 655,941 411,098 1,995 17,233 657,936 428,331
	657,936	428,331

There are no unfulfilled conditions or other contingencies attached to receipt of R&D grant income.

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 5. Expenses

Loss before income tax includes the following specific expenses: Depreciation Leasehold improvements Computer equipment Computer platform Website Furniture and fittings Right-of-use assets Total depreciation Amortisation Capitalised development costs Customer list Patents Total amortisation Total depreciation and amortisation Finance costs Interest and finance charges paid/payable on lease liabilities Net foreign exchange variance Net foreign exchange variance Employee benefit expenses Employee salaries and other benefits Defined contribution superannuation expense Share-based payments expenses Total Employee benefit expenses Note 6. Trade and other receivables Current assets Trade receivables Less: Allowance for expected credit losses Research and development tax incentive receivable Other receivables	Consolidated 31 Dec 2023 31 Dec 2022 $ $ 16,999 16,999 12,235 8,625 214 366 1,229 3,396 12 - 50,064 50,064 80,753 79,450 473,610 1,936,938 28,232 24,750 13,501 12,234 515,343 1,973,922 596,096 2,053,372 4,613 6,053 35,584 (82,172) 5,440,086 5,261,921 402,548 378,111 359,313 345,500 6,201,947 5,985,532 Consolidated 31 Dec 2023 30 Jun 2023 $ $ 1,422,634 2,496,008 (158,204) (160,109) 1,264,430 2,335,899 1,501,621 854,530 71,202 - 2,837,253 3,190,429
	1,264,430
	1,501,621 71,202
	2,837,253

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 7. Intangible assets

Non-current assets Goodwill - at cost Capitalised development costs - at cost Less: Accumulated amortisation Less: Impairment Brand name - at cost Customer list - at cost Less: Accumulated amortisation Patents - at cost Less: Accumulated amortisation Information systems - at cost Less: Impairment	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 50,495,774 49,493,774 31,430,031 29,157,582 (19,482,976) (19,009,367) (7,591,178) (7,591,178) 4,355,877 2,557,037 971,000 971,000 341,000 165,000 (76,357) (48,125) 264,643 116,875 259,364 241,536 (199,360) (185,859) 60,004 55,677 90,000 90,000 (90,000) (90,000) - - 56,147,298 53,194,363
	31,430,031 (19,482,976) (7,591,178)
	4,355,877
	971,000
	341,000 (76,357)
	264,643
	259,364 (199,360)
	60,004
	90,000 (90,000)
	-
	56,147,298

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Consolidated Balance at 1 July 2023 Additions Additions through acquisitions (note 13) Amortisation expense Balance at 31 December 2023	Goodwill $ 49,493,774 - 1,002,000 -	Capitalised development $ 2,557,037 1,357,450 915,000 (473,610)	Brand name $ 971,000 - - -	Customer list $ 116,875 - 176,000 (28,232)	Patents $ 55,677 17,828 - (13,501)	Information systems $ - - - -	Total $ 53,194,363 1,375,278 2,093,000 (515,343) 56,147,298
	50,495,774	4,355,877	971,000	264,643	60,004	-

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 8. Contract liabilities

Current liabilities Non-current liabilities Reconciliation Reconciliation of the written down values at the beginning and end of the current half-year and previous financial year are set out below: Opening balance Payments received in advance Transfer to revenue - included in the opening balance Transfer to revenue - other balances Closing balance	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 3,350,964 3,214,285 487,079 730,679 3,838,043 3,944,964 3,944,964 3,214,315 2,839,676 7,286,857 (2,039,185) (2,528,092) (907,412) (4,028,116) 3,838,043 3,944,964	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 3,350,964 3,214,285 487,079 730,679 3,838,043 3,944,964 3,944,964 3,214,315 2,839,676 7,286,857 (2,039,185) (2,528,092) (907,412) (4,028,116) 3,838,043 3,944,964
	487,079	730,679
	3,838,043	3,944,964
	3,944,964 2,839,676 (2,039,185) (907,412)	3,214,315 7,286,857 (2,528,092) (4,028,116)
	3,838,043	3,944,964

Note 9. Issued capital

31 Dec 2023 Shares Ordinary shares - fully paid 1,709,580,632 Movements in ordinary share capital Details Date Balance 1 July 2023 Issue of shares - business combination (note 13) 21 September 2023 Issue of shares on conversion of rights 18 October 2023 Share issue transaction costs, net of tax Balance 31 December 2023	31 Dec 2023 Shares 1,709,580,632	Consolidated 30 Jun 2023 31 Dec 2023 Shares $ 1,662,846,883 130,976,095	Consolidated 30 Jun 2023 31 Dec 2023 Shares $ 1,662,846,883 130,976,095	30 Jun 2023 $ 128,474,750
		Shares 1,662,846,883 40,571,428 6,162,321 1,709,580,632	$0.06 $0.05	$ 128,474,750 1,997,000 516,043 (11,698) 130,976,095

Note 10. Reserves

Foreign currency reserve Share-based payments reserve	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 115,866 117,189 5,312,779 5,793,887 5,428,645 5,911,076	Consolidated 31 Dec 2023 30 Jun 2023 $ $ 115,866 117,189 5,312,779 5,793,887 5,428,645 5,911,076
	5,428,645	5,911,076

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 10. Reserves (continued)

Movements in reserves

Movements in each class of reserve during the current financial half-year are set out below:

Consolidated Balance at 1 July 2023 Foreign currency translation Share-based payment expense Transfer to issued capital Transfer to retained earnings Balance at 31 December 2023	Foreign currency $ 117,189 (1,323) - - -	Share-based payments $ 5,793,887 - 321,613 (516,043) (286,678)	Total $ 5,911,076 (1,323) 321,613 (516,043) (286,678) 5,428,645
	115,866	5,312,779

Note 11. Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Note 12. Contingent liabilities

The consolidated entity has given bank guarantees as at 31 December 2023 of $133,776 (30 June 2023: $133,776) to one landlord.

Note 13. Business combination

On 19 September 2023, the company acquired 100% of the assets of Saisei Networks Inc. ('Saisei'). FirstWave issued 40,571,428 new shares to Saisei for the assets of the business. The effective date of the transaction is 1 September 2023. Saisei is an innovative and established provider of patented network automation technology in North America. It was acquired to expand the consolidated entity's intellectual property ('IP') and accelerate growth of the consolidated entity in its key target market of North American telecommunications providers. The transaction has been accounted for as a business combination. The acquired business contributed revenues of $344,176 from 1 September 2023 to 31 December 2023. If the acquisition occurred on 1 July 2023, the half-year contributions would have been revenues of $516,000. The values identified in relation to the acquisition of the assets of Saisei are final as at 31 December 2023. The profit or loss before tax of the acquired business from the date of acquisition and for the half-year are not disclosed. The contribution of the acquired business to the results of the consolidated entity cannot be quantified due to shared costs of the combined businesses after the business combination.

Details of the acquisition are as follows:

Other receivables Accrued revenue Capitalised development intangible assets Customer list intangible assets Contract liabilities Deferred tax liability Employee benefits Net assets acquired Goodwill Acquisition-date fair value of the total consideration transferred	Fair value $ 200,000 20,000 915,000 176,000 (200,000) (44,000) (72,000) 995,000 1,002,000 1,997,000

FirstWave Cloud Technology Limited Notes to the financial statements 31 December 2023

Note 13. Business combination (continued)

Representing: FirstWave Cloud Technology Limited shares issued to vendor Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred (shares issued) Less: shares issued by company as part of consideration Net cash used Note 14. Earnings per share Loss after income tax attributable to the owners of FirstWave Cloud Technology Limited 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 Basic earnings per share Diluted earnings per share	Consolidated half-year 31 Dec 2023 $ (2,366,055)		Fair value $ 1,997,000 1,997,000 (1,997,000) - Consolidated half-year 31 Dec 2022 $ (3,257,728) Number 1,662,404,825 1,662,404,825 Cents (0.20) (0.20)
	Number 1,705,896,636
	1,705,896,636
	Cents (0.14) (0.14)

Options and rights have been excluded in the weighted average number of shares used to calculate diluted earnings per share as they were anti-dilutive.

Note 15. Events after the reporting period

FirstWave Cloud Technology Limited Directors' declaration 31 December 2023

In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2023 and of its performance for the financial half-year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the directors

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_____ _______ John Grant Ray Kiley Chair Director 28 February 2024

PKF Brisbane Audit ABN 33 873 151 348 Level 2, 66 Eagle Street Brisbane, QLD 4000 Australia

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+61 7 3839 9733 [email protected] pkf.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF FIRSTWAVE CLOUD TECHNOLOGY LIMITED

Conclusion

We have reviewed the accompanying half-year financial report of FirstWave Cloud Technology Limited (“the company”), which comprises the consolidated statement of financial position as at 31 December 2023, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the half-year’s end or from time to time during the financial half-year.

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 FirstWave Cloud Technology Limited is not in accordance with the Corporations Act 2001 including:-

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023, and of its financial performance for the half-year ended on that date; and
(b) complying with the Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the consolidated entity in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Independence

In conducting our review, we have complied with the auditor independence requirements of the Corporations Act 2001 . In accordance with the Corporations Act 2001 , we have given the directors of the company a written Auditor’s Independence Declaration.

Responsibility of the Directors for the Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the

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Corporations Regulations 2001 and for such internal control 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 Responsibilities for the Review of the Financial Report

Our responsibility is to express a conclusion on the half year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and its performance for the half year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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.

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PKF BRISBANE AUDIT

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SHAUN LINDEMANN PARTNER

28 FEBRUARY 2024 BRISBANE

AI assistant

FIRSTWAVE CLOUD TECHNOLOGY LIMITED — Interim / Quarterly Report 2024

64905_rns_2024-02-27_205e6ca0-1129-40b6-a370-3cd9314b8151.pdf

1. Company details

2. Results for announcement to the market

Dividends

Comments

3. Net tangible assets/(liabilities)

4. Foreign entities

5. Audit qualification or review

6. Attachments

7. Signed

FirstWave Cloud Technology Limited ABN 35 144 733 595

Directors

Principal activities

Dividends

Review of operations

Profit or loss performance

Statement of financial position

Going concern

Significant changes in the state of affairs

Matters subsequent to the end of the financial half-year

Auditor's independence declaration

AUDITOR’S INDEPENDENCE DECLARATION

General information

FirstWave Cloud Technology Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2023

FirstWave Cloud Technology Limited Statement of changes in equity For the half-year ended 31 December 2023

FirstWave Cloud Technology Limited Statement of cash flows For the half-year ended 31 December 2023

Note 1. Material accounting policy information

New or amended Accounting Standards and Interpretations adopted

Going Concern

Note 2. Operating segments

Identification of reportable operating segments

Note 3. Revenue

Disaggregation of revenue

Note 4. Other income

Note 5. Expenses

Note 7. Intangible assets

Reconciliations

Note 8. Contract liabilities

Note 9. Issued capital

Note 10. Reserves

Note 10. Reserves (continued)

Movements in reserves

Note 11. Dividends

Note 12. Contingent liabilities

Note 13. Business combination

Note 13. Business combination (continued)

Note 15. Events after the reporting period

INDEPENDENT AUDITOR’S REVIEW REPORT

Conclusion

Basis for Conclusion

Independence

Responsibility of the Directors for the Financial Report

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FIRSTWAVE CLOUD TECHNOLOGY LIMITED Interim / Quarterly Report 2024