FOS CAPITAL LTD — M&A Activity 2023

Sep 24, 2023

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Transformative Acquisition KLIK Systems

ASX: FOS

Transformative Acquisition

• Acquisition of KLIK transformative for FOS

• Group revenues reach critical mass +$25M*

• Doubles EPS to 2.49c *

• Increases FOS market share in linear lighting

• Introduces new export markets

• Significant presence in US market

• KLIK USA have 70 agents across USA & Canada

• Identified opportunity to export FOS Megabay range into these markets

• Platform to drive cost restructure and reduction

• Post acquisition FOS order book will reach $10 million

• Unaudited Proforma 2023 assumes KLIK relocation and restructured business under FOS ownership

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KLIK Systems Overview

• 40+ years in operation

• Designs, manufactures & distributes quality LED linear & handrail lighting solutions

• Supplies into the commercial construction market

• Head office and factory in Sydney NSW, sales in QLD.

• Australian Distributors WA, VIC, TAS

• Export market (25%) USA, Middle East, Asia, Europe

• In house manufacturing, design and testing capabilities

• Employees 31

• Revenues $8M

• Order book +$4M

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KLIK Acquisition Terms

• Purchase price $3 million cash

• $2 million on completion

• $1 million 12 months from completion

• Funded from existing cash and facilities

• KLIK factory lease ends January 2024

• Under the terms of acquisition FOS is to relocate the business by December 2023

• Significant synergies with FOS sales & manufacturing business

• KLIK estimated EBITDA post relocation & restructuring $1.5 million

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Proforma P&L

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	FOS Capital FY23	KLIK Systems FY23pro-forma	Proforma Combined FY23
Revenue	17,120	8,159	25,279
Gross Profit	6,580	4,009	10,589
GP%	38%	49%	42%
Other Income	223	6	229
OPEX	5,867	2,565	8,433
EBITDA	936	1,500	2,385
Interest & Dep	193	442	635
PBT	743	1,007	1,750
Income tax	(159)	(252)	(411)
NPAT	584	755	1,339
EPS	1.09		2.49
Note: KLIK unaudited proforma 2023 assumes relocation and restructured business under FOS

Proforma Balance Sheet 30/6/23

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	FOS	KLIK	Acquisition Payment	Proforma Combined
Cash & Receivables	4,411			4,411
Inventory & other	4,532	900		5,432
Total current assets	8,943	900		9,843
Non-current assets	4,679	1,726	1,796	8,201
Total assets	13,622	2,626	1,796	18,044
Payables	1,940			1,940
Other current liabilities	1,621	2,422		4,043
Total current liabilities	3,561	2,422		5,983
Non-current liabilities	774			774
Bank debt			2,000	2,000
Total liabilities	4,335	2,422	2,000	8,757
Net Assets	9,287	204	(204)	9,287