FIRSTWAVE CLOUD TECHNOLOGY LIMITED — Investor Presentation 2016

Sep 11, 2016

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Cloud Security Solutions for the Enterprise

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Innovate • Create • Execute September 2016

Important information

Summary of information: This presentation has been prepared by and contains general and background information about FirstWave Cloud Technology Limited ACN 144 733 595 ( FirstWave ). This presentation has been prepared for information purposes. This presentation does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in FirstWave nor does it contain all the information which would be required in a prospectus prepared in accordance with the requirement of the Corporation Act. It should be read solely in conjunction with the oral briefing provided by FirstWave and all other documents provided to you by FirstWave. FirstWave are not responsible for providing updated information and assumes no responsibility to do so.

Not financial product advice: This presentation is not a financial product, investment advice or a recommendation to acquire FirstWave securities and has been prepared without taking into account the objectives, financial situation or needs of any person or entity. Before making an investment decision prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. FirstWave are not licensed to provide financial product advice in respect of its securities or any other financial products. Cooling off rights do not apply to the acquisition of FirstWave securities. FirstWave assume that the recipient is capable of making its own independent assessment, without reliance on this document, of the information and any potential investment and will conduct its own investigation.

Disclaimer: FirstWave have made every effort to ensure the accuracy of information contained in this presentation. FirstWave and their respective related bodies corporate and each of their respective directors, agents, officers, employees and advisers expressly disclaim, to the maximum extent permitted by law, all liabilities (however caused, including negligence) in respect of, make no representations regarding, and take no responsibility for, any part of this presentation and make no representation or warranty as to the currency, accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of FirstWave.

Future performance: This presentation contain certain ‘forward looking statements’ and opinions. The forward-looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. These statements reflect views only as of the date of this Presentation. The actual results of FirstWave may differ materially from the anticipated results, performance or achievement expressed, project or implied by these forward looking statements. While FirstWave believes that the expectations reflected in the forward looking statements in this Presentation are reasonable, neither FirstWave nor any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this Presentation will actually occur and you are cautioned not to place undue reliance on those forward looking statements.

Risks: An investment in FirstWave securities is subject to investment and other known and unknown risks, some of which are beyond the control of FirstWave. You should have regard to the ‘Key Risks’ section of this presentation which outlines some of these risks.

Not an offer: This presentation is not, and should not be considered as, an offer or an invitation to acquire securities in FirstWave or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. This presentation is not a prospectus.

Sophisticated and professional investor: By attending this presentation, you represent and warrant that (i) if you are in Australia, you are a person to whom an offer of securities may be made without a disclosure document (as defined in the Corporations Act 2001 (Cth) (“Corporations Act”)) on the basis that you are exempt from the disclosure requirements of Part 6D.2 in accordance with Section 708(8) or 708(11) of the Corporations Act (ii) if you are outside Australia and , you are a person to whom an offer and issue of securities can be made outside Australia without registration, lodgement or approval of a formal disclosure document or other filing in accordance with the laws of that foreign jurisdiction. If you are not such a person, you are not entitled to attend this presentation.

No distribution: Distribution of this presentation may be restricted by law. Persons who come into possession of this presentation should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

Confidential: This document contains information that is strictly confidential. By attending this presentation, you agree not to directly or indirectly disclose to any person or copy, use, publish or record in any form any part of this document.

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Agenda

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FirstWave Business Execute, Innovate, Create
Results Priorities
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FirstWave

WHO WE ARE

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Single viewing portal that
Security as a Service Catalogue of cloud
normalises multiple
Cloud Platform services for Telcos
vendor interfaces
A SaaS Telco grade, virtual cloud & vendor agnostic platform.
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Catalogue of cloud
services for Telcos
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Status

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Proven
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Profitable Growing
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FirstWave paradigm

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Execute to deliver capability
and capacity
Built on FirstWave
Proprietary Cloud
Technology
Innovate to become renowned
as platform of choice for
Inn ovate
carriers to deliver their SAAS
solutions
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Bring FirstWave to Global Telco and Cloud providers by creating an international gateway footprint

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A quick look

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Financial Year Financial Year
2015 2016
Services 2 4
Carriers
Countries
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+ 50%
+ 0%
+ 0%
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New Customer
Acquisition
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+ 42%
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• International Phase1 Delivery - Delivering international services but billed through Telstra Australia

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The multiplier effect

FIRSTWAVE BUSINESS

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	FY’16	FY’17	FY’18	FY’19
Carriers	1	4	7	10
Customers	300	700	1,500	3,000
Services	1	2	3	3.5
Services in Operation	300	1,400	4,500	10,500

NOTE: The above growth scenario is illustrative only and is based on hypothetical assumptions. These statements do not constitute a forecast or projections nor do they represent revenue but service in operation by number. These statements reflect views only as of the date of this Presentation. Firstwave Platform License

NRC: Non Recurring Charge MRC: Monthly Recurring charge PS: Professional Services

• Platform as a Service – Platform currently provided by Telstra in current engagement

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1

Innovate to be renowned as a carrier platform of choice for SAAS

• Create an international gateway footprint for Global Telcos and Cloud Providers

2 Create 3 Execute to deliver capability and capacity

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Innovate

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Innovate

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New Security Services delivered Multi-Vendor, Multi-Cloud, Multi-Tenancy

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One-Touch Orchestration of services Cyber Security Operations Centre

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The ability for FirstWave to be able to orchestrate a suite of SAAS security services using a variety of vendors while still delivering a single unified view, using a proprietary management system makes it unique to this marketplace.

FirstWave is enabling Telcos with a catalogue of security services while removing all of the complications.

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• Partner relationships & innovation BRINGING SAAS CAPABILITY TO THE PARTNER PROGRAM

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• Which forges deeper relationships with Telcos and Cloud providers.

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Create

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Create

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Global Addressable Engagement
Telstra Global
Market with international telcos
In 2016 FirstWave moved to increase its gateway footprint by engaging the international
market. FirstWave is using a two-pronged approach leveraging the existing Telstra
relationship and engaging new Global Telcos and Cloud Providers.
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Gateway presence

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4 existing Public

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2 existing Private

Potential

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Execute

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Execute

OPERATION

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Implementation of new vendor technologies

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MSSP pricing relationship with vendors

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Industry training and certification Building capability and capacity (41 people)

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FirstWave continues to acquire new customers and increase the number of services associated with each customer in association with long time partner Telstra. Next Generation Firewall, Advanced Malware for Email, Bogus Boss email filter, are all incremental revenue services which broadens the addressable customer base. In FY 2016 FirstWave built the capability and capacity to deliver on a 3-year plan which will see its SaaS platform become the Gateway of choice for Telco’s and Cloud Providers.

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• Telstra live with Gateway Protection Advanced

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FirstWave SaaS enables ‘worlds first’ accelerated Telco delivery.

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The FirstWave team

Drew Kelton Steve O’Brien Murray Scott Simon Ryan Chairman of the Board Managing Director Chief Financial Officer Chief Technology Officer Andrew Chamberlain Greg Maren JP Burgess Paul Noble Roger Carvosso Sales Director Telstra Client Executive Services Director Strategic Execution Director Portfolio Marketing Director

Steve O’Brien has assembled a strong management team to drive FirstWave’s success in taking a proven technology platform into the international market. The management team, complemented by Chairman Drew Kelton, have extensive international experience and will continue talent acquisition plan based on the growth and success of the company.

Paul Noble appointed July 2016, will drive the execution for FirstWave’s international deployments and management of existing platforms.

FirstWave will maintain its solid investment in R&D, specifically focused around the development team led by Simon Ryan. The team's software development continues to be ground breaking and agile to address ever changing threats.

Proven leadership from industry sectors including: Telecommunications Cloud Services Data Centres Security Services Mobility IT Integration Distribution Vendor Relationships

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Execute

BUSINESS INDICATORS

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Q4 FY’16 best quarter
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Successful IPO 3-Year Telstra PSA
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Rapid growth

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July 2016 Sept 2016
NGFW tenders 40+ 75+
22 July 2016 8 September 2016 ASX
ASX announcement announcement
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• Continued growth in complimentary email, web & other cloud security services with approximately $1.0 million worth of new contracts secured in the period 1 July 2016 - 31 August 2016, noting this normally is a seasonally low sales period.

• In July 2016 FirstWave announced conversion of tenders into new recurring revenue with 15 NGFW enterprise customers secured and $2.4 million in TCV with contracts up to 3 years, updating the growth in the pipeline in September 2016.

• Introduction and cross-sell of new services to existing customers creating new revenue streams.

• FirstWave believes quarterly reporting is more reflective noting that in the early part of the financial year the lower data volume enterprise opportunities will convert before the higher volume complex enterprises NGFW opportunities. Targeting 20,000+ Telstra Enterprise and Government customers (NGFW is volume not user based pricing).

• Currently experiencing high conversion rate of pipeline opportunities, Telco productisation has made NGFW easy to buy.

• Customer churn is less than 3% which results in extremely high Lifetime Customer Values (LTCV).

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Additional growth drivers

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• Establishment of cyber security centres – opportunities worldwide.

• Provision of web, email and cloud security services to Telstra’s enterprise and government customer base. A significant addressable market domestically.

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• Broaden Cloud Security offering to Global Telcos and Cloud Providers.

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• Expansion into international markets with new Telco and Cloud Provider partnerships and potential contracts with data centres.

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Historical Financials

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Balance sheet

Item	FY 2016 (unaudited)
	$’000s
Current Assets Cash and cash equivalents	5,772
Trade and other receivables	2,659
Other current assets	760
Total Current Assets	9,191
Non-Current Assets
PP&E	710
Intangibles	2,088
Deferred tax	612
Prepayments	430
Total Non-Current Assets	3,840
Total Assets	13,031
Current Liabilities Trade and other payables	1,901
Borrowings	293
Employee benefits	371
Other current liabilities	564
Total Current Liabilities Non-Current Liabilities	3,129
Borrowings	287
Employee benefits	60
Provisions	152
Other non-current liabilities	674
Total Non-Current Liabilities	1,173
Total Liabilities	4,302
Net Assets	8,729

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FirstWave has sound working capital to fund growth plans based on existing organic and announced service offers.

We note other liabilities also contain material unearned income amounts which are essentially amortising future cash flows from existing customers to be recognised in future periods.

See Appendix 4E – Preliminary Financial Report for further details (released 30 August 2016).

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Profit and loss

	FY 2016
Item	(unaudited)
	$’000s
Sales revenue Cost of sales	6,401 (1,702)
Gross profit	4,699
Other income	233
Expenses1 Profit/(loss) before tax	(10,089) (5,157)
Income tax (expense)/benefit Profit/(loss) after tax	502 (4,655)
1. Includes c.$2.9 million in listing costs

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Consolidated revenue for FY 2016 of $6.4 million, 37% growth over the previous year with a strong gross margin of 73%.

Significant investment in 2016 relating to expansion of capability and capacity for future growth which was expensed in the period.

See Appendix 4E – Preliminary Financial Report for further details (released 30 August 2016).

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Capital structure

Item	On issue (M)	Ownership %
Shares on issue
Non-escrowed	122.8	68.3%
Escrowed	57.0	31.7%
Total shares on issue1	179.8	100.0%
Options on issue
Vesting < 12 months2	7.3
Vesting > 12 months3	14.8
Total options on issue	22.1
Total shares and options on issue	201.9

1. Fully diluted share capital — first options vest in May 2017 subject to satisfaction of vesting conditions

2. Fully diluted share capital — first options vest in May 2017 subject to satisfaction of vesting conditions 2. ESOP and Director options vest May 2017 - 6.26m at $0.25, 800,000 at $0.30, 270,000 at $0.35

3. ESOP and Director options with vesting dates greater than 12 months — 3.46m at $0.25, 800,000 at $0.30, 5.04m at $0.35, 4.0m at $0.40, 1.44m at $0.45

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Priorities

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Company Focus

1 Execute on the opportunity with Telstra 2 Innovate an expansive platform 3 Grow an international footprint 4 Exploit FirstWave’s I.P.

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Innovate • Create • Execute

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