2022
ANNUAL
REPORT
Financial Statements
For the Year Ended 30 June 2022
Firstwave Cloud Technology Limited
ABN 35 144 733 595
Contents
Chairman’s Letter
CEO’s Letter
Directors’ Report and Remuneration Report
Auditor’s Independence Declaration
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
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Chairman’s Letter
2022 was a year in which your Company asked for
continuing patience from shareholders as it reset
its product strategy and its path forward with the
acquisition of Opmantek Ltd.
Key aspects of the year:
— In July, a change in leadership with CEO Neil
Pollock standing down and my taking the role in
the interim to appointing a replacement
— In July, informing shareholders in the FY21 Q4
Update that, while the strategic rationale for
FirstWave’s long term success remained intact,
a review of operations had indicated there was
a lack of organizational focus and ‘friction’ in the
product to adoption at scale for both the service
provider and end user and that, until this was
removed toward the end of Q3 in a new version
of the software, we would not engage in new
partner sales
— In October, following a review of international
contracts, two African based partners requested
a pause in their contracts to review key terms
related to their payments to FirstWave prior to
receiving payments from their customers. The
two contracts represented AU$1.95m of the
AU$3.01m International Annualised Recurring
Revenue (IARR) reported at FirstWave’s Q4 FY21
update. After careful consideration of its options,
the Company agreed to pause the contracts and
accept the revised terms in principle, believing
this to be in the best interests of shareholders
and partners
— In November, the launch of CyberCision
Phase I, the most transformational technology
upgrade in FirstWave’s history aimed primarily at
service providers and providing higher levels of
automation and integration
— In November, announcement of the intended
acquisition of Opmantek Ltd via the issue of
FirstWave shares and a $14m capital raise
as growth capital. The acquisition delivered
new software – Network Management and
Information System (NMIS) and Open-AudIT –
doubling the current portfolio, a new channel
to market in the US and Latin America led by
US based Chief Revenue Officer, Craig Nelson,
the opportunity to merge the two businesses
to deliver significant cost-out, a new CEO,
Managing Director and major shareholder,
Danny Maher, and an additional Non-Executive
Director, Ray Kiley
— In March, extension of FirstWave’s contract
with Telstra for an additional two years with a
further two-year option, expansion of its scope
to include additional cybersecurity services
provided through FirstWave’s CyberCision
platform, together with prioritising Telstra as a
key account for FirstWave and improving the
sales enablement process with key account
management to open significant new revenue
streams, and
— In June, launching CyberCision Phase II,
including real-time cybersecurity visibility via
a mobile app for end-users, and frictionless
email protection delivering speed and scale of
adoption for service providers.
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In Closing:
FY22 has been a transformative year for FirstWave
with:
— Normalised cash burn reducing from $1m per
month to near $0.5m per month
— Cash on hand increasing from $9.96m to
$10.41m
— Annualised Recurring Revenue (ARR) of $10.92m
up from $9.32m
— Saleable product IP expanding significantly
to add software providing network audit,
management and intelligence to cybersecurity
— New channels to market into the US and Latin
America and a reduction in emphasis on the
Middle East, Africa, Europe, Asia and India.
The FY23 year shows more promise for revenue
growth at higher margins and lower costs than any
in the past. The challenge for the management team
under Danny Maher is to realise this promise.
The directors and management team will continue to
apply the Company’s resources in a way we believe
is in shareholders’ best interests and, once again,
we give our sincere thanks to both long-term and
new shareholders for their continued support for the
Company.
My sincere thanks also go to our full team who
continue to deliver to their best ability under
pressure – FirstWave is a very hard-working
Company – and to my fellow directors for their
commitment, contribution and support.
Kind regards
John Grant
Chairman
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CEO’s Letter
I was thrilled to join the company in January as part
of the acquisition of Opmantek Ltd. As part of this
transaction I became one of the major shareholders
in the company and brought across a group of
shareholders who I have known and have enjoyed
their support over a long period of time. I have
seen this acquisition transform the company and I
commend the chair and the board for initiating it. As
a major shareholder myself, and with a commitment
to returns for all shareholders, I can say that every
month that has passed during my time as CEO I
have seen the company move forward – reducing
cash burn, growing the pipeline and enhancing key
customer and partner relationships. I believe we
have transformed the company and after integrating
the two company’s products and cultures we can
focus on the significant opportunities to grow our
revenues.
Resetting Strategic Direction:
Our goal is to increase shareholder returns.
In February we adopted 3 key strategic principles
to guide the company towards this goal:
1. Be capital efficient (principally focused on
reducing costs)
2. Adopt a sales-led culture
3. Grow Faster
Off the back of these 3 strategic objectives a full
strategic plan was developed which was approved
by the board in June and communicated to all staff
in July.
The impacts of resetting this strategy are significant.
In terms of capital efficiency, we have seen our
norrmalised cash burn move from around $1m per
month to under $0.6m a month and approaching
the $0.5m per month which was targeted post the
acquisition of Opmantek. As revenue grows, we will
see this cash burn reduce further. Significantly, our
company’s total operational costs are lower than
they were in December 2021 even though we have
acquired and absorbed another company which
doubled our Gross Profit. I feel the company is fit,
operating with higher efficiency, and still investing
appropriately in growth.
In terms of adopting a sales-led culture, I am
extremely pleased in how the organisation has
embraced this shift. We are seeing the majority of
the people in the company understand that they are
part of increasing sales and making decisions that
are focused on increasing sales. We have seen multi-
level and multi-faceted relationships building with
our key partners – it is critical that we all engage
with our customers and partners to help deliver
success. We have seen decisions on our product
development reviewed with a view to whether they
will increase sales (or reduce churn) in addition to
whether they increase functionality.
In relation to growing faster, we have seen increases
in our gross margins, some very helpful once off
revenues, and our pipeline grow to a level that
has never been seen before (either by FirstWave
or Opmantek). With our strategy set and having a
positive impact, our costs under control and our
people focused on sales growth, we now need
to see these deals transition from pipeline to
customers. Noting that the deals in the pipeline
were not there 6 months ago, I am very pleased also
with our growth initiatives. We have managed to
maintain our Annual Recurring Revenues with some
growth while integrating Opmantek and resetting
this strategy.
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Outlook:
The integration of Opmantek has gone very well and
is complete.
We have good levels of cash to invest in our growth,
stabilised and reducing cash burn, and an excellent
and growing pipeline.
The company is in a very different and highly
positive place compared to 12 months ago. Our
focus and challenge now is the conversion of the
pipeline we have built during a time in which we
have reduced costs, reset our strategy and absorbed
a company of similar size to ourselves. Conversion of
the pipeline will deliver clients that provide ongoing
growth – commercial relationships that grow over
time and therefore also underpin future growth.
CyberCision will take another leap forward as we
integrate some of the Opmantek IP into the platform
– this is IP the company now owns wholly (does
not have to develop) and as a result we are going
to see some significant product enhancements
quickly without significant R&D efforts and we will
see increased product margins. The product team
is working on the integration of this IP within our
three guiding strategic principles, and I have been
impressed with their work so far. We should see the
first impact of this work in Q3 of the FY23 year.
We have diversified our revenues geographically
and from a product perspective which de-risks the
business and also allows us to put an increased
strategic focus on the Telstra relationship. We have
the ability to grow within our existing client base and
from new clients currently in the pipeline. While we
are investing in our growth by leveraging the good
levels of cash that we have, we are conscious that
we also have to manage associated risks and on
that front I am also very pleased that we have many
levers to pull and many ways to navigate this next
period of time depending on the levels of growth
that we achieve – be it higher or lower than planned,
we have sufficient capital and sufficient flexibility to
continue to execute and reach cash flow break even.
FirstWave is in a very exciting and growing space
being a provider of software for Cybersecurity and
Network Management. We have exceptional clients
such as Telstra, NASA, Microsoft and Nextlink who
continue to extend and expand their agreements
with us. We have an exceptional pipeline created
off the back of exceptional products and we see
revenues and margins growing and cash burn
continuing to decrease.
I am a happy, optimistic MD and shareholder at
this point in time, and I look forward to the next
financial year.
Kind regards
Danny Maher
Managing Director and Chief Executive Officer
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Directors’ report
30 June 2022
The directors present their report, together with
the financial statements, on the consolidated
entity (referred to hereafter as the ‘consolidated
entity’ or ‘FirstWave’) consisting of FirstWave Cloud
Technology Limited (referred to hereafter as the
‘company’, or ‘parent entity’) and the entities it
controlled at the end of, or during, the year ended
30 June 2022.
Directors
The following persons were directors of FirstWave
Cloud Technology Limited during the whole of the
financial year and up to the date of this report,
unless otherwise stated:
John Grant – Non-Executive Chairman
(Executive Chairman until 27 January 2022)
Paul MacRae – Non-Executive Director
Euh (David) Hwang – Non-Executive Director
Danny Maher – Managing Director
(appointed on 27 January 2022)
Ray Kiley – Non-Executive Director
(appointed on 27 January 2022)
Principal activities
During the financial year, the principal continuing
activities of the consolidated entity comprise
of development and sale of internet security
software and with the acquisition of Opmantek Ltd
(‘Opmantek’) on 14 January 2022 have expanded
to include the development and sale of network
monitoring software.
Dividends
There were no dividends paid, recommended or
declared during the current or previous financial year.
Review of operations
FirstWave Cloud Technology Limited, provides the
following review of its operations for the Financial
Year 2022 (‘FY22’).
FY22 saw some significant changes for the company
starting in July with the departure of the CEO Neil
Pollock that resulted in the Chairman John Grant
taking on an interim CEO role while an executive
search exercise was run looking for a suitable
replacement.
In this interim role John undertook a review of the
business that resulted in two significant events:
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— An announcement in the FY21 Q4 investor
update that ‘friction’ existed in the product and
that new partner sales would not be actively
pursued until this ‘friction’ was removed; and
— An ASX announcement on 19 October 2021
noting two material contracts that represented
$1.95 million of the $3.01 million international
annualised recurring revenue (‘IARR’) reported
in the company’s FY21 Q4 update needed to
be paused while contract issues involving end-
customer usage and payments were resolved.
On 27 October 2021 the company announced the
launch of CyberCision Phase I which marked the
start of an upgrade to the company’s products to
remove the ‘friction’ noted in John’s review. There
was a subsequent ASX announcement on 1 June
2022 for CyberCision Phase II that detailed the
launch of a new mobile app and frictionless email
protection. The most significant event in the year
was the acquisition of Opmantek Ltd. An initial
announcement was made on 29 November 2021
stating the intended acquisition of Opmantek Ltd
via the issue of FirstWave shares and a $14,000,000
capital raise (which comprised of a $7,000,000
two-tranche placement, and a fully underwritten
$7,000,000 non-renounceable entitlement offer)
surrounding the acquisition to provide future growth
capital.
On 7 December 2021, the company issued
40,000,000 new shares from the first tranche of the
two-tranche placement announced by the company
on 29 November 2021 at an offer price of $0.07 per
new share raising a total of $2,800,000 (before costs).
On 21 December 2021, the company issued
99,398,468 new shares from the fully underwritten
entitlement offer announced by the company on 29
November 2021 to subscribe 3 new shares for every
23 existing shares of the company at an offer price
of $0.07 per new share raising a total of $6,957,893
(before costs).
On 10 January 2022, Danny Maher was appointed as
Chief Executive Officer of the company.
On 14 January 2022, the acquisition was completed
with 100% acceptance from Opmantek shareholders
and a new Key Management Personnel, Craig
Nelson, was appointed as Chief Revenue Officer
with immediate effect.
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On 20 January 2022, the company issued
60,000,000 new shares from the second tranche
of the two-tranche placement announced by the
company on 29 November 2021 at an offer price of
$0.07 per new share raising a total of $4,200,000
before issue costs.
On 27 January 2022, Danny Maher was appointed as
Managing Director and Ray Kiley was appointed as
non-executive director.
From 14 January 2022, the combined business
focused on performance, integration and cost
reduction. The combined business also announced
a new Microsoft deal for network management,
extended the Telstra relationship for further two
years and announced a five-year Macquarie Cloud
Services deal.
Financial review
Profit or loss performance
FirstWave’s revenue for the year was $9,351,497
(2021: $7,975,182), which represents an increase
of 17.3% over the prior comparative period (‘PCP’).
Revenue from the product lines from acquisition of
Opmantek from 14 January 2022 to 30 June 2022
was $1,999,207. The reduction in revenues from
the Firstwave products was mainly due to the loss
of revenue in the African region as discussed in the
ASX announcement on 19 October 2021.
FirstWave’s total comprehensive loss after income
tax was $13,455,494 (2021: loss $10,812,108),
representing a 24.4% worsening on the PCP. This
result includes $2,173,410 (2021: $nil) one-off
transaction costs in relation to the acquisition of
Opmantek Ltd. The loss excluding the transaction
costs was $11,282,084 representing a 4.3%
worsening on PCP. This result also includes the
impact of the recognition of non-cash share-based
payment expenses of $860,004 (2021: $3,078,902),
resulting from share rights and options being
granted to employees and directors. These are
reported in divisional expense classifications, e.g.,
sales and marketing, product and development and
hence align with where the recipient’s employment
costs have been recognised in the statement of
profit or loss and other comprehensive income.
FirstWave continued its focus on disciplined cost
management of ‘cash-settled’ expenses (those
that the company pays for in cash and hence
excludes share-based payments, depreciation and
amortisation) which were $4,601,704 higher than the
previous year at $16,488,444 (2021: $11,886,740).
The higher ‘cash-settled’ expenses were mainly due
to $2,173,410 (2021: nil) one-off transaction costs
in relation to the acquisition of Opmantek Ltd and
combined business costs from 14 January
2022 onwards.
With the experience that FirstWave has developed
in estimating R&D returns and the fact that an
R&D rebate has been granted consistently over
several years, FirstWave recognised R&D income
on an accrual basis in FY22 ($1,358,122) and FY21
($2,239,577). However, FY21 was the first year that
the R&D income was recognised on an accrual
basis. The Research and Development (R&D)
tax incentive of $2,061,928 relating to FY20 was
recognised as income on its receipt in January 2021
(i.e., FY21). Therefore, the financial results for FY21
include R&D income from both the prior period of
$2,061,928 and FY21 accrued income estimated
at $1,275,017. Total R&D income recognised in
FY21 was $2,239,577, which is less than the total
of $3,336,945 referenced above due to the work
undertaken to earn this R&D grant being capitalised,
and the majority of the funds, therefore, being
recognised in the statement of financial position.
Refer to note 5 ‘Other income’ for further information.
Statement of financial position
Cash and cash equivalents increased by $446,723
which was largely because of a successful
equity raise (which comprised of a placement to
institutional and sophisticated investors, and a fully
underwritten non-renounceable entitlement offer) in
December 2021 and January 2022, of $13,957,893
(before costs) by issuing 199,398,468 shares at
$0.07 per share. This equity raise was completed to
support the acquisition of Opmantek after allowing
for payments for $2,717,781 in transaction costs,
repayment of loans and warrants of $2,282,136 and
payment of brokerage fees of $1,050,862. There
were net cash outflows of $3,084,626 relating to
further investment into FirstWave’s technology
platform and a net cash outflow of $8,003,571
to support operating activities. Net cash used
in operating activities was lower than PCP by
$43,102 (0.5%). Cash receipts from customers were
$11,156,706 (2021: $4,070,181).
FirstWave has significant intangible assets of
$61,830,141 in the statement of financial position,
the majority of which relates to the goodwill on
acquisition of Opmantek Ltd of $49,493,774, the
development of the FirstWave CyberCision platform,
and the development of the Network Management
Information System (‘NMIS’) and Open-AudIT suite
of software products. FirstWave continues to invest
in the CyberCision platform and the NMIS and
Open-AudIT suite of software products through the
capitalisation of applicable development projects.
Liquidity
The directors consider that the consolidated entity
will continue as a going concern, as explained in
note 1 to the financial statements.
Business risks
The following is a summary of material business risks
that could adversely affect the consolidated entity’s
financial performance and growth potential in future
years and how the consolidated entity propose to
mitigate such risks.
8
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Macroeconomic risks
As the products sold by the consolidated entity are
discretionary for many customers, the consolidated
entity’s financial performance can be impacted
by current and future economic conditions which
it cannot control, such as increases in interest
rates, inflation and its customers’ operating costs.
The consolidated entity stays abreast of these
conditions, focuses on its internal debtor controls
and is diversifying its customer base to help manage
these risks.
Competitive market and changes to
market trends
The consolidated entity operates in a highly
competitive market. Innovation is constant and
new, competitive products could result in pricing
pressures and result in unfavourable product
positioning within the market. This risk is managed
through maintaining product development teams
that are highly experienced and remain abreast of
the latest technological advances and implications
for our current and future products. The company
also continue to invest in its brand which continues
to be well regarded within Australia and USA.
Revenue concentration
FirstWave’s globally unique CyberCision platform
provides best-in-class cybersecurity technologies,
enabling FirstWave’s Partners, including some of the
world’s largest telcos and managed service providers
(MSPs), to protect their customers from cyber-
attack, while rapidly growing cybersecurity services
revenues at scale. In previous financial periods there
was a concentration risk due to a focus on a single
significant customer. In January 2022, FirstWave
acquired Opmantek Limited (‘Opmantek’), a leading
provider of enterprise-grade network management,
automation and IT audit software, with 150,000
organisations using their software across 178
countries and enterprise clients including Microsoft,
Telmex, Claro, NextLink and NASA. CyberCision
together with Opmantek’s flagship Network
Management Information System (‘NMIS’) and
Open-AudIT product enables FirstWave to provide
a comprehensive end-to-end solution for network
discovery, management and cybersecurity for its
Partners globally. The acquisition and subsequent
integration of the two businesses has reduced
the revenue concentration risk with the combined
business now having an expanded product offering
and a geographically distributed range of customers.
Cybersecurity and Information technology (‘IT’)
infrastructure
The executive has directed substantial effort
into ensuring that the risk and security controls
safeguarding the combined entity continue to
meet best practice. The controls guarantee that
the combined entity can meet the high assurance
requirements demanded by our partners and the
requirements of our ISO 27001 certified Information
Security Management System (‘ISMS’). The entity
9
has extended its proactive monitoring of trends
and vulnerabilities, utilising subscriptions to Threat
Intelligence services, the Australian Cyber Security
Centre as well as regular internal vulnerability
assessments, external penetration testing, security
awareness training, Phishing simulation tests
and (desktop based) BCP/DR tests. The robust
ISO certified ISMS, resilient systems, continuous
review and testing and high level of staff security
awareness all contribute to safeguard and protect
the company’s people and systems.
Significant changes in the state
of affairs
The remaining 15,288,373 sub-underwriter options
from the May 2020 capital raise were exercised in
July and August 2021, adding a further $764,419 to
cash reserves.
On 7 December 2021, the company issued
40,000,000 new shares from the first tranche of the
two-tranche placement announced by the company
on 29 November 2021 at an offer price of $0.07
per new share raising a total of $2,800,000 (before
costs).
On 21 December 2021, the company issued
99,398,468 new shares from the fully underwritten
entitlement offer announced by the company on 29
November 2021 to subscribe 3 new shares for every
23 existing shares of the company at an offer price
of $0.07 per new share raising a total of $6,957,893
(before costs).
On 10 January 2022, Danny Maher, the Opmantek
Executive Chairman was appointed CEO of the
company.
On 14 January 2022, the company completed the
acquisition of Opmantek Ltd (‘Opmantek’) with the
acceptance by Opmantek’s shareholders of the offer
to acquire 100% of the issued capital of Opmantek
through the issuance of 691,265,824 new shares in
the company. The acquisition was undertaken as
a 100% scrip for scrip acquisition. A fast-growing
provider of enterprise-grade network management,
automation and IT audit software to Managed
Service Providers (‘MSP’) and medium to large
businesses worldwide, Opmantek was acquired to
bring substantial operational, financial and strategic
benefits to the consolidated entity including product
expansion, new global channels, access to the US
market and a strengthened leadership team.
On 17 January 2022, the 691,265,824 new shares of
the company were issued. The issue of the shares
has resulted in:
— Opmantek becoming a wholly owned subsidiary
of the company; and
— Opmantek shareholders owning approximately
42% of the company’s issued shares.
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On 20 January 2022, the company issued
60,000,000 new shares from the second tranche
of the two-tranche placement announced by the
company on 29 November 2021 at an offer price of
$0.07 per new share raising a total of $4,200,000
(before costs).
Matters subsequent to the end of the
financial year
No matter or circumstance has arisen since 30
June 2022 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.
Likely developments and expected
results of operations
The consolidated entity’s priorities for FY23 are to:
Increase capital efficiency;
— Restructuring and cost reductions have been
substantially completed and gains will be fully
realised in FY23.
— Further efficiencies will be achieved through
the rationalisation of the cloud platforms that
are deployed to support CyberCision and
streamlining partner programs to focus on
those partners and customers that represent the
greatest commercial opportunity.
Grow revenues faster;
— A greater percentage of the company’s spend
will be on sales and marketing.
— A new website will be launched which
incorporates marketing automation tools to
accelerate and automate lead generation.
— Geographically the company will focus primarily
on USA, Latin America and Australia while
continuing to engage with service providers
from anywhere in the world where it makes
commercial sense.
— The company’s growth focus from a product
perspective is spearheaded by CyberCision
email protection and NMIS.
— The company will accelerate cross selling
initiatives.
— The company will leverage the IP acquired
with the Opmantek acquisition to enhance
the CyberCision platform and to increase
Gross Margins.
Environmental regulation
The consolidated entity is not subject to any
significant environmental regulation under Australian
Commonwealth or State law.
Information on current directors
Information on the directors of the company as at 30
June 2022 and up to the date of this annual report is
set out below:
Name:
Title:
John Grant
Non-Executive Director and
Chairman (Executive Chairman
until 27 January 2022)
Qualifications:
John has a degree in
Engineering with Honours
Experience and
expertise:
Other current
directorships:
Former
directorships
(last 3 years):
Special
responsibilities:
Interests in
shares:
Interests in
options:
Interests in
rights:
John has an extensive
career spanning technology,
engineering and construction,
and sports administration. He
has held leadership positions
including Managing Director
and CEO of ASX listed
technology company, Data#3
Limited, and inaugural Chair of
the Australian Rugby League
Commission. He has also
chaired or been a member
of various industry and
government advisory groups
and industry associations.
None
None
Member of the Remuneration
and Nomination Committee
and member of the Audit, Risk
and Compliance Committee
3,995,400 ordinary shares
directly held
4,200,000 options over
ordinary shares
7,769,983 service rights
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Paul MacRae
Non-Executive Director
Name:
Title:
Euh (David) Hwang
Non-Executive Director
(appointed on 7 June 2021)
Name:
Title:
Qualifications:
Experience and
expertise:
Paul is a Graduate of the
Australian Institute of
Company Directors and
holds Business qualifications
and a Bachelor of Science in
Chemistry from The University
of Glasgow. He is an active
advisory board member and
mentor across several sectors.
Paul has a successful history
of setting up and running
businesses in the IT industry
in Australia and overseas.
Paul’s background includes
having run divisions of
TechnologyOne Limited. Paul
has a strong background in IT
security, application software,
software development,
outsourcing, cloud computing
and transactional systems.
His roles have included
establishing MessageLabs
in Australia & NZ (which was
acquired by Symantec to
establish its cloud business).
He set up the Global
reservation system Galileo in
New Zealand. He was involved
in selling his successful SAP
Consultancy and has been
instrumental in growing
business at several leading
software companies.
Other current
directorships:
Former
directorships
(last 3 years):
None
None
Special
responsibilities:
Chairman of the Remuneration
and Nomination Committee
Interests in
shares:
Interests in
options:
Interests in
rights:
3,682,084 ordinary shares
directly held
None
2,525,690 restricted rights
1 1
Qualifications:
Bachelor of Laws from UNSW
Experience and
expertise:
David is an experienced
executive and corporate
lawyer (with particular
expertise in ECM and ASX
Listing Rules) and a trusted
adviser to ASX Boards and
management of businesses
across a range of industries.
Most recently, David was the
Managing Principal (Legal
and Company Secretarial) at
Automic Group, which, under
his leadership, developed
into Australia’s largest and
premier service provider in
the outsourced company
secretarial space for pre-IPO
and ASX listed entities. He is
also a Notary Public.
Other current
directorships:
Former
directorships
(last 3 years):
None
None
Special
responsibilities:
Member of the Audit, Risk and
Compliance Committee
Interests in
shares:
Interests in
options:
Interests in
rights:
None
None
None
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Name:
Title:
Qualifications:
Experience and
expertise:
Other current
directorships:
Former
directorships
(last 3 years):
Special
responsibilities:
Danny Maher
Managing Director (appointed
on 27 January 2022)
Bachelor of Computing Studies,
University of Canberra 1992 –
awarded the University Prize.
Danny has over 25 years’
experience In the IT Industry
across the USA, Asia, UK
and Australian markets.
He was the only executive
shareholder of the NetStar
Group which he led and
built into a global Managed
Services business servicing
clients in 42 countries
eventuating in its sale to
Logicalis in 2009. Danny
also founded Opmantek, a
developer of cloud-enabled
automated enterprise network
management and IT audit
software, on 29 October 2010.
Opmantek was acquired by
FirstWave Cloud Technology
Limited on 14 January 2022.
At the time of acquisition
Opmantek operated offices in
Australia, the US and Mexico,
with the software being used
around the world by service
providers and enterprise
customers that include
Microsoft, Telmex, NASA and
NextLink. Danny is a graduate
of the University of Canberra
where he studied a double
major in Computing and a
minor in Marketing and won
the prestigious University Prize.
None
None
Name:
Title:
Qualifications:
Experience and
expertise:
Ray Kiley
Non-Executive Director
(appointed on 27 January 2022)
Bachelor of Laws (Hons) and
Bachelor of Science from ANU
Ray is an experienced advisor
to technology start-ups and
scale-ups. Previously he
was CEO of Intelledox – an
Australian enterprise software
scale up that was successfully
sold to SmartCommunications,
an AKKR company. Mr Kiley
began his career as a lawyer
with Baker & McKenzie and
later with Telstra where he
was a Divisional General
Counsel. He has since held
senior management roles
with Telstra, Medibank and
CoreLogic before joining
Intelledox. Mr Kiley has a
Bachelor of Laws (Hons) and a
Bachelor of Science majoring
in Computer Science from the
Australian National University.
Other current
directorships:
Former
directorships
(last 3 years):
None
None
Special
responsibilities:
Chairman of the Audit, Risk
and Compliance Committee
Interests in
shares:
Interests in
options:
Interests in
rights:
1,044,762 ordinary shares
directly held
None
438,730 service rights. It
should be noted that Ray’s
service rights will be subject
to approval at the next
shareholder’s meeting.
Member of the Audit, Risk and
Compliance Committee and
member of the Remuneration
and Nomination Committee
‘Other current directorships’ quoted above are current directorships
for listed entities only and excludes directorships of all other types
of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships
held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Interests in
shares:
50,922,171 ordinary shares
directly held
201,233 570 ordinary shares
indirectly held
Interests in
options:
Interests in
rights:
None
None
1 2
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Company secretary
Iain Bartram studied at Cambridge University, United Kingdom and has a Master’s degree in Computer and
Management Science and a post graduate diploma in Design and Manufacturing. Iain went on to train as an
accountant with PwC in London and holds an ACA and is a member of the Institute of Chartered Accountants
Australia. He was appointed as company secretary on 9 November 2020. Iain has over 20 years’ experience as
a strategic CFO with international experience in high growth, listed and unlisted technology businesses. Iain’s
previous experience includes CFO of Jaxsta Limited (ASX:JXT).
Meetings of directors
The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held
during the year ended 30 June 2022, and the number of meetings attended by each director were:
Full Board
Remuneration and
Nomination Committee
Audit, Risk and
Compliance Committee
Attended
Held
Attended
Held
Attended
Held
17
17
17
4
5
17
17
17
5
5
4
4
3
-
1
4
4
3
-
1
5
4
5
1
1
5
4
5
1
1
John Grant
Paul MacRae*
Euh (David)
Hwang**
Ray Kiley
(appointed on 27
January 2022)***
Danny Maher
(appointed on 27
January 2022)****
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
* Paul MacRae resigned as an Audit, Risk and Compliance Committee (ARCC) member and was appointed as a member and Chair of the
Remuneration and Nomination Committee on 22 February 2022.
** Euh (David) Hwang resigned as a Remuneration and Nomination Committee member on 22 February 2022.
*** Ray Kiley was appointed as an ARCC member and Chair on 22 February 2022.
**** Danny Maher was appointed as an ARCC and Remuneration and Nomination Committee member on 22 February 2022.
Remuneration report (audited)
The remuneration report details the key management personnel (‘KMP’) remuneration arrangements for the
consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
— Principles used to determine the nature and amount of remuneration
— Details of remuneration
— Service agreements
— Share-based compensation
— Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
A major contributor to the performance of the consolidated entity is the quality of its directors and executives,
and the Board is responsible for determining and reviewing their remuneration arrangements.
The consolidated entity’s remuneration framework aims to attract, motivate, reward and retain high performing
and high-quality personnel, and consists of a level of fixed remuneration that is market competitive and
appropriate in recognition of the role and the candidate’s experience, and a level of variable remuneration that
aligns with sustained increase in shareholder value and rewards performance for results delivered.
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The Board of Directors is also cognisant of
remuneration being within reasonable shareholder
expectations and to best practice levels of
transparency.
Non-executive directors’ remuneration
Fees and payments to non-executive directors
(‘NEDs’) reflect the demands and responsibilities
of their role. Non-executive directors’ fees and
payments are reviewed annually by the Board. The
Board may, from time to time, receive advice from
independent remuneration consultants to ensure
non-executive directors’ remuneration and payments
are appropriate and in line with the market.
The maximum amount of fees that can be paid
to NEDs is capped by a pool approved by
shareholders. At a General Meeting, held on 15 April
2016, shareholders approved the current fee pool of
$400,000 per annum which is recorded on an accrual
basis. The fee pool and the base directors’ fees did
not change in FY2022. Grants of options approved
by shareholders do not count towards this limit.
Executive remuneration
The consolidated entity aims to reward executives
based on their position and responsibility, with a
level and mix of remuneration which has both fixed
and variable components.
The executive remuneration framework has four
components:
— base pay and non-monetary benefits;
— short-term performance incentives (STI);
— long term incentives (LTI) in the form of options
and share rights; and
— other remuneration such as superannuation and
long service leave.
The combination of these comprises the executive’s
total remuneration.
Fixed remuneration, consisting of base salary,
superannuation and non-monetary benefits,
is reviewed annually by the Board based on
individual and business unit performance, the
overall performance of the consolidated entity and
comparable market remuneration.
Executives may receive their fixed remuneration
in the form of cash or other fringe benefits (for
example motor vehicle benefits) where it does not
create any additional costs to the consolidated entity
and provides additional value to the executive.
The short-term incentive program is designed to
align the targets of the business units with the
targets of those executives responsible for meeting
those business unit targets. STI payments are
granted to executives based on specific annual
targets and key performance indicators (KPI’s) being
achieved. KPI’s relate to qualitative and quantitative
leadership performance and are subject to Board
discretion.
The long-term incentives are in the form of options
and share rights. The Board reviewed the long-term
equity-linked performance incentives specifically for
executives during the year ended 30 June 2022.
The chairman’s remuneration is determined
independently to the remuneration of the non-
executive directors based on comparative roles in
the external market. The chairman is not present at
any discussions relating to the determination of his
own remuneration.
Consolidated entity performance and link to
remuneration
STIs were linked directly to performance with any
payment requiring measurable achievement against
the consolidated entity and individual targets.
Any STIs and LTIs granted are at the discretion
of the Board.
Voting and comments made at the company’s 2020
Annual General Meeting (‘AGM’)
At the 9 December 2021 AGM, 99.24% of the
votes received supported the adoption of the
remuneration report for the year ended 30 June
2021. The company did not receive any specific
feedback at the AGM regarding its remuneration
practices.
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U
O
L
C
E
V
A
W
T
S
R
I
F
1 4
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Details of remuneration
The KMP of the consolidated entity consisted of the
directors of FirstWave Cloud Technology Limited
and the following persons:
— Simon Ryan – Chief Technology Officer
— Iain Bartram – Chief Financial Officer
— Craig Nelson – Chief Revenue Officer
(joined 14 January 2022)
— Neil Pollock – Chief Executive Officer
(resigned on 8 July 2021)
In the second half of FY22 and as the incoming
CEO, Danny Maher was tasked with combining the
Opmantek and FirstWave businesses as quickly and
efficiently as possible and positioning the business
for future growth. This involved setting a fresh
strategic direction for the combined business and
reducing the cash burn through cost reductions
while simultaneously maintaining, and where
possible growing, the overall company revenues.
Danny’s Key Performance Indicators (KPIs) therefore
covered targets for the integration, cash reserves
and revenues. Danny’s contract for the six months
was split between a fixed $180,000 base plus
superannuation, and a variable $180,000 Short Term
Incentive (STI). Assessment of performance against
those targets by the Board resulted in Danny being
awarded the full $180,000 bonus which will be paid
in cash in Q1 FY23.
Craig Nelson joined the FirstWave senior
management team as Chief Revenue Officer and as
part of his new contract he requested to sacrifice his
first 6 months of salary i.e. 2H FY22, as well as other
components of his remuneration, for Share Service
Rights. This resulted in the issue of 4,292,506
service rights as covered in the ASX announcement
on 8 April 2022. For FY22 Craig was also paid
USD $11,765 for health care and USD $18,297 for
commission against sales in FY22 H2.
In FY22 Iain Bartram agreed that his STI and LTI be
combined and structured as SARs for the next 3
years to conserve the company’s cash and to align
him with shareholders focused on maximizing longer
term returns. The SARs plan was outlined in the ASX
announcement on 11 Nov 2021 with 3 tranches of
SARs being 2,796,610, 3,113,208 and 3,367,347
at exercise prices of $0.18, $0.27 and $0.36
respectively and to vest based on continued service
over FY22, FY23 and FY24.
During the year an opportunity presented itself in
the acquisition of Opmantek in which Iain Bartram
played a significant role resulting in the award of a
$45,000 cash bonus for his part in the negotiation
and completion of this transformational deal and the
integration.
In FY23 the Board believes the business must
capitalise on the opportunity to leverage the gains
made through the acquisition of Opmantek to drive
significant growth in revenue and positive cashflows.
To do so it as critical to retain and appropriately
incentivize the key people in the business.
FirstWave CEO Danny Maher has agreed that for
the FY23 and FY24 years, his contract will be split
between a fixed $360,000 base plus superannuation,
an STI against achievement of annualised revenue
and EBITDA targets in each of the two financial years
of $180,000 in cash, and a Long-Term Incentive
(LTI) equivalent to $180,000 awarded in Share
Appreciation Rights (SARs) to align his remuneration
with the rest of the management team.
FirstWave CRO Craig Nelson has agreed that for
the FY23 and FY24 years, his contract will be split
between a fixed US$275,000 base plus contribution
to healthcare of US$25,000, an STI against
achievement of growth in annualised revenue targets
in each of the two financial years of US$206,250 in
cash, and a Long-Term Incentive (LTI) equivalent
to US$68,750 awarded in SARs to align his
remuneration with the rest of the management team.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
1 5
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Details of the remuneration of KMP of the consolidated entity are set out in the following tables:
Short-term benefits
Termination
benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
Cash
bonus
Super-
annuation
Long service
leave
Equity-
settled
options/
rights
2022
$
$
$
$
$
$
Total
$
Non-Executive
Directors:
John Grant
Paul MacRae
Euh (David)
Hwang
Ray Kiley*
204,845-
29,000
48,000
-
-
-
-
-
Executive Director:
Danny Maher**
172,857
180,000
Other Key
Management
Personnel:
Simon Ryan
Iain Bartram
Craig
Nelson***
Neil
Pollock****
355,000
330,000
-
45,000
16,354
25,434
-
-
1,156,056
250,434
149,357
149,357
-
-
-
-
-
-
-
-
19,853
5,800
-
2,900
-
-
-
-
106,355
331,053
51,405
86,205
-
25,885
48,000
28,785
9,498
2,868
-
365,223
23,568
23,568
10,590
35,005
1,827
157,693
424,163
558,088
-
20,603
-
-
326,230
368,018
332
170,292
105,790
15,285
702,905
2,379,827
* Represents remuneration from the date of appointment to 30 June 2022. It should be noted that Ray’s service rights will be subject to
approval at the next shareholder’s meeting.
** Represents remuneration from the date of appointment to 30 June 2022.
*** Represents remuneration from the date of appointment to 30 June 2022. Craig’s H2 FY22 base salary and his H2 FY22 STI were salary
sacrificed and converted into share settled equity-based payments.
**** Represents remuneration from 1 July 2021 the date of resignation of 7 July 2021, which was his effective last date of employment.
1 6
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
Short-term benefits
Termination
benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
Cash
bonus
Super-
annuation
Long service
leave
Equity-
settled
options/
rights
2021
$
$
$
$
$
$
Total
$
Non-Executive
Directors:
Paul MacRae
Euh (David)
Hwang*
Scott Lidgett**
-
-
-
David Acton**
55,382
Executive Director:
John Grant
(Executive
Chairman)
Other Key
Management
Personnel:
Simon Ryan
Iain Bartram***
Neil Pollock
248,306
283,556
262,692
356,061
1,205,997
-
-
-
-
-
-
-
41,141
41,141
-
-
-
-
-
-
-
-
-
5,510
-
3,673
5,261
21,694
-
-
-
-
-
135,333
140,843
-
-
135,333
139,006
-
60,643
394,582
664,582
21,694
19,851
-
15,169
292
-
339,126
306,958
659,545
589,793
218,564
615,766
77,683
15,461
1,529,896
2,870,178
* Euh (David) Hwang did not receive any remuneration from his date of appointment as KMP on 7 June 2021 until 30 June 2021.
** Represents remuneration up to the date of resignation as KMP for Scott Lidgett on 4 February 2021 and David Acton on 7 June 2021.
*** Represents remuneration from the date of appointment as KMP for Iain Bartram on 17 August 2020.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
1 7
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
2022
2021
2022
2021
2022
2021
Fixed remuneration
STI
LTI
Non-Executive Directors:
John Grant
Paul MacRae
Euh (David) Hwang
Ray Kiley
Scott Lidgett
David Acton
Executive Director
Danny Maher
Other Key Management
Personnel:
Simon Ryan
Iain Bartram
Craig Nelson
Neil Pollock
Service agreements
68%
40%
100%
10%
-
-
41%
4%
-
-
3%
100%
-
-
-
-
-
-
51%
–
49%
92%
64%
4%
100%
49%
48%
-
58%
-
8%
7%
-
-
-
-
-
-
-
-
-
-
-
7%
32%
60%
-
90%
-
-
59%
96%
-
-
97%
-
–
–
8%
28%
89%
-
51%
52%
-
35%
The consolidated entity enters into employment agreements with each KMP. The employment agreements
with the KMP are continuous (i.e., not of fixed duration) and includes a minimum of 4 weeks’ notice on the
part of the employee and the consolidated entity. The employment agreements contain substantially the
same terms which include the usual statutory entitlements, typical confidentiality and intellectual property
provisions intended to protect the consolidated entity’s intellectual property rights and other proprietary
information and non-compete clauses. KMP have no entitlement to termination payments in the event
of removal for misconduct.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
1 8
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Share-based compensation
Issue of shares
There were no shares issued to directors and other KMP as part of compensation during the year ended
30 June 2022.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and
other KMP in this financial year or future reporting years are as follows:
Number
of options
granted
Grant
date
Vesting
date and
exercisable
date
Expiry
date
Exercise
price
1,400,000
20/11/2019
01/07/2021
30/06/2024
1,400,000
20/11/2019
01/07/2022
30/06/2025
Fair value
per share
right at
grant date
$0.087
$0.093
$0.092
$0.425
$0.547
$0.520
Neil Pollock
1,333,334
09/11/2018
01/07/2021
30/06/2026
Name
John Grant
John Grant
Options granted carry no dividend or voting rights. Vesting of the options are subject to service conditions
(continuous employment) and there are no performance conditions.
The number of options over ordinary shares granted to and vested in directors and other KMP as part of
compensation is set out below:
Name
John Grant
Neil Pollock
Number of options
granted during the
year 2022
Number of options
granted during the
year 2021
Number of options
vested during the
year 2022
Number of options
vested during the
year 2021
-
-
-
-
1,400,000
1,333,334
1,400,000
1,333,334
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management
personnel as part of compensation during the year ended 30 June 2022 are set out below:
Value of options
granted during
the year
Value of options
exercised during
the year
Value of options
lapsed during
the year
Remuneration
consisting of options
for the year
$
$
$
%
-
-
-
-
-
-
133,200
69,750
-
–
-
0.2%
Name
Paul MacRae
Simon Ryan
Neil Pollock
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
1 9
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Share rights
The terms and conditions of each grant of share rights over ordinary shares affecting remuneration of directors
and other key management personnel in this financial year or future reporting years are as follows:
Number
of rights
granted
Grant
date
Vesting
date and
exercisable
date
Expiry
date
Exercise
price
952,270
01/06/2020
30/06/2022
30/06/2035
367,340
03/09/2021
02/10/2021
02/09/2024
155,121
03/09/2021
02/12/2021
02/09/2024
Name
Simon Ryan
Simon Ryan
Simon Ryan
Iain Bartram
2,796,610
11/11/2021
30/06/2024
30/06/2027
Iain Bartram
3,113,208
11/11/2021
30/06/2024
30/06/2027
Iain Bartram
3,367,347
11/11/2021
30/06/2024
30/06/2027
John Grant
1,003,345
04/03/2022
31/12/2021
30/06/2035
Paul
MacRae*
484,950
04/03/2022
31/12/2021
30/06/2035
Ray Kiley**
438,730
07/03/2022
30/06/2022
30/06/2027
Craig Nelson
4,292,506
08/04/2022
30/06/2022
30/06/2027
Fair value
per right
at grant
date
$0.105
$0.067
$0.067
$0.057
$0.051
$0.046
$0.106
$0.106
$0.059
$0.076
$0.000
$0.000
$0.000
$0.180
$0.270
$0.360
$0.000
$0.000
$0.000
$0.000
* Restricted rights to NEDs vest on grant date and are not forfeited on resignation. The exercise of the rights is restricted to the earlier of 30
June 2023 or date of resignation as per the restricted rights invitation letter to Paul MacRae.
** Ray’s service rights will be subject to approval at the next shareholder’s meeting.
*** all service rights issued in FY22 only had a time served criteria and did not have any performance based criteria.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
2 0
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Share rights granted carry no dividend or voting rights.
Iain Bartram was granted 2,796,610, 3,113,208 and 3,367,347 Share Appreciation Rights (‘SARs’) with an
exercise price of $0.18, $0.27 and $0.36 respectively per right under the company’s share rights plan. These
rights were issued 11 November 2021 and vest in 3 years time being 30 June 2024 and expire 30 June 2027.
Craig Nelson sacrificed $329,477 value of remuneration and was granted 4,292,506 Service Rights.
It is also noted that Ray Kiley sacrificed his director’s fees for H2 FY22 totalling $29,000 and was granted and
subject to shareholder approval will be issued with 438,730 service rights.
The number of share rights over ordinary shares granted to and vested in directors and other key management
personnel as part of compensation during the year ended 30 June 2022 are set out below:
Name
John Grant
Paul MacRae
Ray Kiley*
Simon Ryan
Iain Bartram
Craig Nelson
Neil Pollock
Number of rights
granted during the
year 2022
Number of rights
granted during the
year 2021
Number of rights
vested during the
year 2022
Number of rights
vested during the
year 2021
1,003,345
484,950
438,730
522,461
9,277,165
4,292,506
-
-
-
-
-
3,083,804
-
-
1,003,345
484,950
438,730
1,475,231
-
4,292,506
3,349,996
-
-
2,373,141
508,065
-
-
1,903,296
* Ray’s service rights will be subject to approval at the next shareholder’s meeting
Values of share rights over ordinary shares granted, vested and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2022 are set out below:
Value of rights
granted during
the year
Value of rights
vested during
the year
Value of rights
lapsed during
the year
Remuneration
consisting of rights
for the year
$
$
$
%
106,355
51,405
25,885
35,005
473,078
326,230
106,355
51,405
25,885
135,046
-
326,230
-
-
-
-
-
-
32.0%
60.0%
90.0%
8.0%
28.0%
89.0%
Name
John Grant
Paul MacRae
Ray Kiley*
Simon Ryan
Iain Bartram
Craig Nelson
* Ray’s service rights will be subject to approval at the next shareholder’s meeting.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
2 1
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Balance at the
start of the year
Received
as part of
remuneration
Purchased
during the
year
Other
Balance at the
end of the year
Ordinary shares
John Grant
Paul MacRae
Ray Kiley*
Danny Maher*
Simon Ryan
Iain Bartram
Craig Nelson*
Neil Pollock**
3,995,400
3,682,084
-
-
4,024,800
-
-
1,804,236
13,506,520
-
-
-
-
367,340
508,065
-
-
-
-
-
-
294,762
750,000
3,995,400
3,682,084
1,044,762
-
-
-
-
-
252,155,741
252,155,741
-
-
19,523,897
(1,804,236)
4,392,140
508,065
19,523,897
-
875,405
294,762
270,625,402
285,302,089
* Other ordinary shares for Danny, Ray, Craig relate to the equity holding at the time of the Opmantek Ltd acquisition.
** Neil Pollock’s date of resignation was 7 July 2021 which was his effective last date of employment.
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and
other members of key management personnel of the consolidated entity, including their personally related
parties, is set out below:
Balance at the
start of the year
Granted
Lapsed
Other*
Balance at the
end of the year
Options over
ordinary shares
John Grant
Paul MacRae
Simon Ryan
Neil Pollock
4,200,000
1,200,000
750,000
4,000,000
10,150,000
-
-
-
-
-
-
(1,200,000)
(750,000)
-
-
-
-
(4,000,000)
4,200,000
-
-
-
(1,950,000)
(4,000,000)
4,200,000
* Others represents Neil Pollock’s options held on resignation date 7 July 2021 which was his effective last date of employment.
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O
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E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
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O
N
H
C
E
T
D
U
O
L
C
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V
A
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2 2
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O
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E
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D
I
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E
C
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O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Share rights holding
The number of share rights over ordinary shares in the company held during the financial year by each director
and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Balance at the
start of the year
Granted
Expired/
forfeited/other
Balance at the end
of the year
Share rights over
ordinary shares
John Grant
Paul MacRae
Ray Kiley*
Simon Ryan
Iain Bartram
Craig Nelson
Neil Pollock**
6,766,638
2,040,740
-
4,278,681
3,083,804
-
439,222
1,003,345
484,950
438,730
522,461
9,277,165
4,292,506
-
-
-
(367,340)
(508,065)
-
-
(439,222)
7,769,983
2,525,690
438,730
4,433,802
11,852,904
4,292,506
-
16,609,085
16,019,157
(1,314,627)
31,313,615
* Ray’s service rights will be subject to approval at the next shareholder’s meeting.
** Represents Neil Pollock’s share rights held on resignation date 7 July 2021 which was his effective last date of employment.
Vested and
exercisable
Vested and
unexercisable
Other**
Balance at the end
of the year
Share rights
holding over
ordinary shares
(vested at 30 June
2022
John Grant
Paul MacRae
Ray Kiley*
Simon Ryan
Craig Nelson
Neil Pollock**
Total vested
share rights over
ordinary shares
7,769,983
-
-
2,525,690
438,730
4,433,802
4,292,506
439,222
-
-
-
-
-
-
-
-
-
(439,222)
7,769,983
2,525,690
438,730
4,433,802
4,292,506
-
17,374,243
2,525,690
(439,222)
19,460,711
* Ray’s service rights will be subject to approval at the next shareholder’s meeting.
** Represents Neil Pollock’s share rights held on resignation date 7 July 2021 which was his effective last date of employment.
Loans to key management personnel and their related parties
There was no loans to key management personnel and their related parties as at 30 June 2022.
This concludes the remuneration report, which has been
audited.
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A
U
N
N
A
2
2
0
2
–
Y
G
O
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U
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I
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P
O
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F
I
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A
N
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A
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P
O
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A
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O
L
D
E
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I
N
F
O
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A
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I
O
N
C
O
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O
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A
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E
D
I
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E
C
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O
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Y
Shares under option
Indemnity and insurance of auditor
There were 22,766,000 unissued ordinary shares of
FirstWave Cloud Technology Limited under option
outstanding at the date of this report. The options
are exercisable at a weighted average exercise price
of $0.42 per option.
No person entitled to exercise the options had or
has any right by virtue of the option to participate
in any share issue of the company or of any other
body corporate.
Shares under share rights
There were 36,786,717 unissued ordinary shares of
FirstWave Cloud Technology Limited under share
rights outstanding at the date of this report. This
includes 2,575,739 PSARs that have an exercise
price of $0.119. The remaining 34,210,978 share
rights have no exercise price.
Shares issued on the exercise of options
15,288,373 ordinary shares of FirstWave Cloud
Technology Limited were issued on the exercise
of options during the year ended 30 June 2022
and up to the date of this report. The options were
exercised at an exercise price of $0.05 per share.
Shares issued on the exercise of
share rights
9,010,917 ordinary shares of FirstWave Cloud
Technology Limited were issued on the exercise of
share rights during the year ended 30 June 2022
and up to the date of this report. Share rights were
exercised at an exercise price of $nil.
Indemnity and insurance of officers
The company has indemnified the directors and
executives of the company for costs incurred, in their
capacity as a director or executive, for which they
may be held personally liable, except where there is
a lack of good faith.
During the financial year, the company paid a
premium in respect of a contract to insure the
directors and executives of the company against a
liability to the extent permitted by the Corporations
Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the
amount of the premium.
The company has not, during or since the end of the
financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity
against a liability incurred by the auditor.
During the financial year, the company has not paid
a premium in respect of a contract to insure the
auditor of the company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the company, or to
intervene in any proceedings to which the company
is a party for the purpose of taking responsibility
on behalf of the company for all or part of those
proceedings.
Non-audit services
Details of the amounts paid or payable to the
auditor for non-audit services provided during the
financial year by the auditor are outlined in note 26
to the financial statements.
The directors are satisfied that the provision of
non-audit services during the financial year, by the
auditor (or by another person or firm on the auditor’s
behalf), is compatible with the general standard
of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as
disclosed in note 26 to the financial statements do
not compromise the external auditor’s independence
requirements of the Corporations Act 2001 for the
following reasons:
— all non-audit services have been reviewed and
approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
— none of the services undermine the general
principles relating to auditor independence
as set out in APES 110 Code of Ethics
for Professional Accountants (including
Independence Standards) issued by the
Accounting Professional and Ethical Standards
Board, including reviewing or auditing the
auditor’s own work, acting in a management or
decision-making capacity for the company, acting
as advocate for the company or jointly sharing
economic risks and rewards.
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D
I
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Officers of the company who are former partners of Grant Thornton
There are no officers of the company who are former partners of Grant Thornton.
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 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
John Grant
Chairman
30 August 2022
Sydney
Ray Kiley
Director
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I
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I
O
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C
O
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O
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A
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D
I
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C
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O
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Y
Auditor’s independence declaration
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A
U
N
N
A
2
2
0
2
–
Y
G
O
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O
N
H
C
E
T
D
U
O
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C
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V
A
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I
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2 6
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C
H
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A
A
I
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M
A
A
N
N
’
’
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S
L
L
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T
T
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’
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’
’
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P
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I
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A
A
N
N
C
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I
I
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A
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D
D
I
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Y
Auditor’s Independence Declaration To the Directors of Firstwave Cloud Technology Limited Grant Thornton Audit Pty Ltd Level 17 383 Kent Street Sydney NSW 2000 Locked Bag Q800 Queen Victoria Building NSW 1230 T +61 2 8297 2400 In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Firstwave Cloud Technology Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants R J Isbell Partner – Audit & Assurance Sydney, 30 August 2022 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. 20
FINANCIAL
REPORT
A description of the nature of the consolidated
entity’s operations and its principal activities are
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
30 August 2022. The directors have the power to
amend and reissue the financial statements.
General information
The financial statements cover Firstwave Cloud
Technology Limited (referred to as the ‘company’
or ‘parent’) as a consolidated entity consisting
of Firstwave Cloud Technology Limited and the
entities it controlled at the end of, or during, the
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, incorporated
and domiciled in Australia. Its registered office and
principal place of business is:
Level 14, 132 Arthur Street
North Sydney, NSW 2060
Australia
T
T
R
R
O
O
P
P
E
E
R
R
L
L
A
A
U
U
N
N
N
N
A
A
2
2
2
2
0
0
2
2
–
–
Y
Y
G
G
O
O
L
L
O
O
N
N
H
H
C
C
E
E
T
T
D
D
U
U
O
O
L
L
C
C
E
E
V
V
A
A
W
W
T
T
S
S
R
R
I
I
F
F
2 7
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H
A
I
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M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Statement of profit or loss and other
comprehensive income
For the year ended 30 June 2022
Revenue
Revenue from contracts with customers
Cost of sales
Gross profit
Other income
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
Total expenses
Loss before income tax expense
Income tax expense
Consolidated
2022
$
2021
$
Note
4
6
5
6
7
9,351,497
7,975,182
(3,164,155)
(3,672,032)
6,187,342
4,303,150
1,391,018
2,427,485
13,495
91,660
(5,074,454)
(5,169,266)
(4,724,761)
(3,246,854)
(1,856,924)
(2,884,306)
(7,157,028)
(6,280,826)
(2,173,410)
-
(60,772)
(53,151)
(21,047,349)
(17,634,403)
(13,455,494)
(10,812,108)
–
–
Loss after income tax expense for the year attributable to the
owners of FirstWave Cloud Technology Limited
(13,455,494)
(10,812,108)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the
owners of FirstWave Cloud Technology Limited
Basic earnings per share
Diluted earnings per share
99,954
99,954
4,180
4,180
(13,355,540)
(10,807,928)
Cents
(1.14)
(1.14)
Cents
(1.61)
(1.61)
35
35
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
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A
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2 8
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A
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A
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E
T
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E
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C
E
O
’
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L
E
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D
I
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C
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O
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S
’
R
E
P
O
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T
F
I
N
A
N
C
I
A
L
R
E
P
O
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T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Term deposits
Trade and other receivables
Contract assets
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Employee benefits
Lease liabilities
Deferred research and development income
Total current liabilities
Non-current liabilities
Contract liabilities
Employee benefits
Provisions
Lease liabilities
Deferred research and development income
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
Consolidated
2022
$
2021
$
Note
8
9
10
11
12
13
14
15
16
18
19
15
16
17
18
19
21
22
10,408,589
9,961,866
133,776
133,776
3,083,004
2,843,953
168,417
552,697
639,081
1,139,701
14,432,867
14,631,993
167,484
308,730
126,206
622,149
61,830,141
9,503,305
62,306,355
10,251,660
76,739,222
24,883,653
3,917,913
4,258,988
3,060,533
901,819
1,410,549
1,266,539
107,145
945,979
176,758
832,128
9,442,119
7,436,232
153,782
108,860
26,406
260,426
121,231
155,445
105,000
456,230
1,590,156
1,739,171
2,139,630
2,577,077
11,581,749
10,013,309
65,157,473
14,870,344
128,426,284
63,760,506
5,736,129
7,611,200
(69,004,940)
(56,501,362)
65,157,473
14,870,344
The above statement of financial position should be read in conjunction with the accompanying notes.
2 9
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Statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2020
54,667,525
6,386,579
(45,699,152)
15,354,952
Loss after income tax expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
-
-
-
-
(10,812,108)
(10,812,108)
4,180
-
4,180
4,180
(10,812,108)
(10,807,928)
Contributions of equity, net of transaction
costs (note 21)
6,505,518
Share-based payments (note 36)
Transfer to retained earnings
-
-
-
3,078,902
(9,898)
-
-
9,898
6,505,518
3,078,902
-
Share issue on exercise of options
2,587,463
(1,848,563)
-
738,900
Balance at 30 June 2021
63,760,506
7,611,200
(56,501,362)
14,870,344
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2021
63,760,506
7,611,200
(56,501,362)
14,870,344
-
-
-
-
(13,455,494)
(13,455,494)
99,954
-
99,954
99,954
(13,455,494)
(13,355,540)
Loss after income tax expense for the year
Other comprehensive income f
or the year, net of tax
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs (note 21)
Share-based payment expense (note 36)
-
860,004
62,036,737
-
Share issue on exercise of options
and service rights (note 21)
Transfer to retained earnings
2,629,041
(1,873,113)
-
(961,916)
951,916
-
-
-
62,036,737
860,004
755,928
(10,000)
Balance at 30 June 2022
128,426,284
5,736,129
(69,004,940)
65,157,473
The above statement of changes in equity should be read in conjunction with the accompanying notes
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Statement of cash flows
For the year ended 30 June 2022
Consolidated
Note
2022
$
2021
$
Cash flows from operating activities
Receipts from customers (inclusive of GST)
11,156,706
4,070,181
Payments to suppliers and employees (inclusive of GST)
(17,912,327)
(14,432,542)
Transaction cost payments (inclusive of GST)
Interest received
Other income
Interest and other finance costs paid
Income taxes paid
(2,717,781)
-
17,700
66,182
1,661,314
2,287,248
(183)
(37,742)
(209,000)
-
Net cash used in operating activities
34
(8,003,571)
(8,046,673)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
(121,000)
(100,058)
(3,084,626)
(3,727,130)
Opening cash balance of the acquired entity
33
958,938
-
Net cash used in investing activities
(2,246,688)
(3,827,188)
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from exercise of options
Share issue transaction costs
13,957,893
6,441,238
761,163
738,900
(1,051,445)
(348,029)
Repayment of receivables from key management personnel
-
221,500
Settlement of Opmantek Ltd borrowings
Borrowings to Opmantek Ltd
Repayment of lease liabilities
Net cash from financing activities
33
33
34
(2,282,136)
(500,000)
-
-
(188,493)
(499,220)
10,696,982
6,554,389
Net increase/(decrease) in cash and cash equivalents
446,723
(5,319,472)
Cash and cash equivalents at the beginning of the financial year
9,961,866
15,281,338
Cash and cash equivalents at the end of the financial year
8
10,408,589
9,961,866
Net cash used in operating activities
Transaction cost payments (inclusive of GST)
Net cash used in operating activities before transaction
costs (inclusive of GST)
(8,003,571)
(8,046,673)
2,717,781
-
(5,285,790)
(8,046,673)
The above statement of cash flows should be read in conjunction with the accompanying notes
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Notes to the financial statements
30 June 2021
Note 1. Significant accounting
policies
The principal accounting policies adopted in the
preparation of the financial statements are set
out below. These policies have been consistently
applied to all the years presented, 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.
Going concern
During the year ended 30 June 2022, the
consolidated entity incurred a net loss after tax of
$13,455,494 (2021: loss of $10,812,108 and net cash
outflows used in operating activities of $8,003,571
( 2021 : operating cash outflow of $8,046,673). 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.
The directors determined that the use of the going
concern basis of accounting is appropriate in
preparing the financial statements. The assessment
of going concern is based on cash flow projections.
The preparation of these projections incorporates
a number of key assumptions and judgements
particularly related to the level of anticipated
revenue growth the business can achieve and the
level of investment to support this.
Given the significant pipeline of recurring revenue
opportunities the consolidated entity has developed
since the acquisition of Opmantek Ltd, the level
of current cash reserves, and the reduced level of
cash burn, the board considers it in shareholders’
best interests to continue to invest in converting
the pipeline to increase recurring revenues. This is
clearly not without risk. However, the consolidated
entity’s management has advised the directors that if
it becomes clear that the above assumptions are not
being realised, the consolidated entity has the ability
to significantly reduce its operating costs and adjust
its investments and has sufficient time to make these
adjustments to realise a cash flow neutral business
within the existing funding reserves.
Basis of preparation
These general purpose financial statements have
been prepared in accordance with Australian
Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial
statements also comply with International Financial
Reporting Standards (‘IFRS’) as issued by the
International Accounting Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under
the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires
the use of certain critical accounting estimates. It
also requires management to exercise its judgement
in the process of applying the consolidated entity’s
accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where
assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001,
these financial statements present the results of the
consolidated entity only. Supplementary information
about the parent entity is disclosed in note 32.
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Principles of consolidation
Foreign currency translation
The consolidated financial statements incorporate
the assets and liabilities of all subsidiaries of
FirstWave Cloud Technology Limited (‘company’ or
‘parent entity’) as at 30 June 2022 and the results of
all subsidiaries for the year then ended. FirstWave
Cloud Technology Limited and its subsidiaries
together are referred to in these financial statements
as the ‘consolidated entity’.
Subsidiaries are all those entities over which the
consolidated entity has control. The consolidated
entity controls an entity when the consolidated
entity is exposed to, or has rights to, variable returns
from its involvement with the entity and has the
ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is
transferred to the consolidated entity. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised
gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses
are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using
the acquisition method of accounting. A change in
ownership interest, without the loss of control, is
accounted for as an equity transaction, where the
difference between the consideration transferred
and the book value of the share of the non-
controlling interest acquired is recognised directly in
equity attributable to the parent.
Where the consolidated entity loses control over
a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest
in the subsidiary together with any cumulative
translation differences recognised in equity. The
consolidated entity recognises the fair value of the
consideration received and the fair value of any
investment retained together with any gain or loss in
profit or loss.
Operating segments
Operating segments are presented using the
‘management approach’, where the information
presented is on the same basis as the internal
reports provided to the Chief Operating Decision
Makers (‘CODM’). The CODM is responsible for the
allocation of resources to operating segments and
assessing their performance.
The financial statements are presented in Australian
dollars, which is FirstWave Cloud Technology
Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into
the entity’s functional currency using the exchange
rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from
the settlement of such transactions and from the
translation at financial year-end exchange rates
of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations
are translated into Australian dollars using the
exchange rates at the reporting date. The revenues
and expenses of foreign operations are translated
into Australian dollars using the average exchange
rates, which approximate the rates at the dates of
the transactions, for the period. All resulting foreign
exchange differences are recognised in other
comprehensive income through the foreign currency
reserve in equity.
The foreign currency reserve is recognised in profit
or loss when the foreign operation or net investment
is disposed of.
Revenue recognition
The consolidated entity recognises revenue
as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects
the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring
goods or services to a customer. For each contract
with a customer, the consolidated entity: identifies
the contract with a customer; identifies the
performance obligations in the contract; determines
the transaction price which takes into account
estimates of variable consideration and the time
value of money; allocates the transaction price to
the separate performance obligations on the basis of
the relative stand-alone selling price of each distinct
good or service to be delivered; and recognises
revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the
customer of the goods or services promised.
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Variable consideration within the transaction
price, if any, reflects concessions provided to the
customer such as discounts, rebates and refunds,
any potential bonuses receivable from the customer
and any other contingent events. Such estimates
are determined using either the ‘expected value’ or
‘most likely amount’ method. The measurement of
variable consideration is subject to a constraining
principle whereby revenue will only be recognised
to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint
continues until the uncertainty associated with the
variable consideration is subsequently resolved.
Amounts received that are subject to the constraining
principle are recognised as a refund liability.
Disaggregation of revenue
Recurring revenue relates to the provisioning of
licensing, support, and professional services revenue
provided over the contracted service period and
where revenue is recognised over a period of time.
Non-recurring revenue relates to professional
services revenue that is ad hoc in nature and where
revenue is recognised at a point in time.
Licensing and support revenue
(recurring revenue)
Recognition of licensing and support revenue
commences upon provisioning of the contracted
service. Provisioning entails the setting up of the
customer on the entity’s infrastructure and the
rendering of prescribed professional services to the
customer to enable the provision of the contracted
service. As licensing is subscription based, license
revenue and the related support service revenue
is recognised over the term of the contract,
commencing on the date of service activation.
Interest
Interest income is recognised as interest accrues
using the effective interest method. This is a
method of calculating the amortised cost of a
financial asset and allocating the interest income
over the relevant period using the effective interest
rate, which is the rate that exactly discounts
estimated future cash receipts through the
expected life of the financial asset to the net
carrying amount of the financial asset.
Government grants
Government grants are recognised at fair value
where there is a reasonable certainty that the grant
will be received upon meeting all grant terms
and conditions. Grants that are meant to fund
expenditure on research and development are
recognised over the periods when these costs are
written off to profit or loss. Grants related to assets
are carried forward as deferred income at fair value
and are credited to other income over the expected
useful life of the asset on a straight line basis.
Prepayments
Prepayments are largely made up of back to back
cost of licenses procured from upstream security
vendors/channel partners. These prepayments
are charged to profit and loss over a term that is
between 12 and 48 months, co-terming with related
license revenue recognised per revenue recognition
policy stated above.
Income tax
The income tax expense or benefit for the period
is the tax payable on that period’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised
for temporary differences at the tax rates expected
to be applied when the assets are recovered or
liabilities are settled, based on those tax rates that
are enacted or substantively enacted, except for:
— when the deferred income tax asset or liability
arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a
business combination and that, at the time of the
transaction, affects neither the accounting nor
taxable profits; or
— when the taxable temporary difference is
associated with interests in subsidiaries and the
timing of the reversal can be controlled and it is
probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will be
available to utilise those temporary differences
and losses.
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The carrying amount of recognised and
unrecognised deferred tax assets are reviewed at
each reporting date. Deferred tax assets recognised
are reduced to the extent that it is no longer
probable that future taxable profits will be available
for the carrying amount to be recovered. Previously
unrecognised deferred tax assets are recognised to
the extent that it is probable that there are future
taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only
where there is a legally enforceable right to offset
current tax assets against current tax liabilities and
deferred tax assets against deferred tax liabilities;
and they relate to the same taxable authority on
either the same taxable entity or different taxable
entities which intend to settle simultaneously.
FirstWave Cloud Technology Limited (the ‘head
entity’) and its wholly-owned Australian subsidiaries
have formed an income tax consolidated group
under the tax consolidation regime. The head
entity and each subsidiary in the tax consolidated
group continue to account for their own current and
deferred tax amounts. The tax consolidated group
has applied the ‘separate taxpayer within group’
approach in determining the appropriate amount
of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax
amounts, the head entity also recognises the current
tax liabilities (or assets) and the deferred tax assets
arising from unused tax losses and unused tax
credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding
agreements with the tax consolidated entities are
recognised as amounts receivable from or payable
to other entities in the tax consolidated group.
The tax funding arrangement ensures that the
intercompany charge equals the current tax liability
or benefit of each tax consolidated group member,
resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the
subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement
of financial position based on current and non-
current classification.
An asset is classified as current when: it is either
expected to be realised or intended to be sold
or consumed in the consolidated entity’s normal
operating cycle; it is held primarily for the purpose
of trading; it is expected to be realised within 12
months after the reporting period; or the asset is
cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets
are classified as non-current.
A liability is classified as current when: it is either
expected to be settled in the consolidated entity’s
normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no
unconditional right to defer the settlement of the
liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always
classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other
short-term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value
and subsequently measured at amortised cost using
the effective interest method, less any allowance
for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The consolidated entity has applied the simplified
approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure
the expected credit losses, trade receivables have
been grouped based on days overdue.
Other receivables are recognised at amortised cost,
less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the
consolidated entity has transferred goods or
services to the customer but where the consolidated
entity is yet to establish an unconditional right
to consideration. Contract assets are treated as
financial assets for impairment purposes.
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Other financial assets
Other financial assets are initially measured at fair
value. Transaction costs are included as part of the
initial measurement, except for financial assets at
fair value through profit or loss. Such assets are
subsequently measured at either amortised cost
or fair value depending on their classification.
Classification is determined based on both the
business model within which such assets are held
and the contractual cash flow characteristics of
the financial asset unless, an accounting mismatch
is being avoided.
Financial assets are derecognised when the
rights to receive cash flows have expired or have
been transferred and the consolidated entity has
transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation
of recovering part or all of a financial asset, its
carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only
if both of the following conditions are met: (i) it is
held within a business model whose objective is
to hold assets in order to collect contractual cash
flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely
payments of principal and interest.
Property, plant and equipment
Plant and equipment is stated at historical cost less
accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable
to the acquisition of the items.
Depreciation is calculated on a straight line basis
to write off the net cost of each item of property,
plant and equipment over their expected useful
lives as follows:
Leasehold improvements
Computer equipment
Computer platform
Website
3 years
3-5 years
2-3 years
5 years
The residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate,
at each reporting date.
Leasehold improvements are depreciated over the
unexpired period of the lease or the estimated
useful life of the assets, whichever is shorter.
An item of property, plant and equipment is
derecognised upon disposal or when there is no
future economic benefit to the consolidated entity.
Gains and losses between the carrying amount and
the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the
commencement date of a lease. The right-of-use
asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as
applicable, any lease payments made at or before
the commencement date net of any lease incentives
received, any initial direct costs incurred, and,
except where included in the cost of inventories,
an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-
line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is
the shorter. Where the consolidated entity expects
to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject
to impairment or adjusted for any remeasurement of
lease liabilities.
The consolidated entity has elected not to recognise
a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less
and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss
as incurred.
Intangible assets
Intangible assets acquired are initially recognised at
cost. Finite life intangible assets are subsequently
measured at cost less amortisation and any
impairment. The gains or losses recognised in profit
or loss arising from the derecognition of intangible
assets are measured as the difference between net
disposal proceeds and the carrying amount of the
intangible asset. The method and useful lives of
finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption
or useful life are accounted for prospectively by
changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business.
Goodwill is not amortised. Instead, goodwill is
tested annually for impairment, or more frequently
if events or changes in circumstances indicate that
it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses
on goodwill are taken to profit or loss and are not
subsequently reversed.
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Capitalised development costs
Expenditure on research activities is recognised
as an expense in the period in which it is incurred.
Expenditure relating to an internally-generated
intangible asset arising from development is
capitalised when: it is probable that the project
will be a success considering its commercial and
technical feasibility; the consolidated entity is able
to use or sell the asset; the consolidated entity
has sufficient resources and intent to complete
the internal development; and its costs can be
measured reliably.
The amount initially recognised for internally-
generated intangible assets is the sum of the
expenditure incurred from the date when the
intangible asset first meets the recognition criteria
listed above. Where no internally-generated
intangible asset can be recognised, development
expenditure is recognised in profit or loss in the
period in which it is incurred. Subsequent to initial
recognition, internally-generated intangible assets
are reported at cost less accumulated amortisation
and accumulated impairment losses on the same
basis as intangible assets that are
acquired separately.
Capitalised development costs are amortised on a
straight-line basis over the period of their expected
benefit, being their finite useful lives of 5 years.
Brand name
Brand name acquired in a business combination is
not amortised but tested annually for impairment,
or more frequently if events or changes in
circumstances indicate that it might be impaired,
and is carried at cost less accumulated impairment
losses. Brand names are considered to be indefinite
life assets because there is no foreseeable limit to
the cash flows generated by them.
Customer list
Customer list acquired in a business combination are
amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 5 years.
Patents
Significant costs associated with patents are
deferred and amortised on a straight-line basis over
the period of their expected benefit, being their
finite useful lives of 5 years.
Information systems
Significant costs associated with information systems
are deferred and amortised on a straight-line basis
over the period of their expected benefit, being
their finite life of 5 years.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair
value less costs of disposal and value-in-use. The
fair value less costs of disposal has been determined
with reference to the market capitalisation of
the Company discounted for estimated costs
of disposal.
Trade and other payables
Trade and other payables represent liabilities for
goods and services provided to the consolidated
entity prior to the end of the financial year and which
are unpaid. Due to their short-term nature, they are
measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid
within 30 days of recognition.
Contract liabilities
Contract liabilities represent the consolidated
entity’s obligation to transfer goods or services to
a customer and are recognised when a customer
pays consideration, or when the consolidated entity
recognises a receivable to reflect its unconditional
right to consideration (whichever is earlier) before
the consolidated entity has transferred the goods or
services to the customer.
Lease liabilities
A lease liability is recognised at the commencement
date of a lease. The lease liability is initially
recognised at the present value of the lease
payments to be made over the term of the lease,
discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined,
the consolidated entity’s incremental borrowing
rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease
payments that depend on an index or a rate,
amounts expected to be paid under residual value
guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain
to occur, and any anticipated termination penalties.
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Lease liabilities are measured at amortised cost
using the effective interest method. The carrying
amounts are remeasured if there is a change in
the following: future lease payments arising from
a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is
fully written down.
Finance costs
Finance costs are expensed in the period in which
they are incurred.
Provisions
Provisions are recognised when the consolidated
entity has a present (legal or constructive) obligation
as a result of a past event, it is probable the
consolidated entity will be required to settle the
obligation, and a reliable estimate can be made
of the amount of the obligation. The amount
recognised as a provision is the best estimate of
the consideration required to settle the present
obligation at the reporting date, taking into
account the risks and uncertainties surrounding the
obligation. If the time value of money is material,
provisions are discounted using a current pre-tax
rate specific to the liability. The increase in the
provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months
of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave
not expected to be settled within 12 months of the
reporting date is measured as the present value of
expected future payments to be made in respect of
services provided by employees up to the reporting
date. Consideration is given to expected future
wage and salary levels, experience of employee
departures and periods of service. Expected future
payments are discounted using market yields at the
reporting date on high-quality corporate bonds with
terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution
superannuation plans are expensed in the period in
which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits
are provided to employees.
Equity-settled transactions are awards of shares, or
options over shares, that are provided to employees
in exchange for the rendering of services.
The cost of equity-settled transactions is measured
at fair value on grant date. Fair value is determined
using either the Binomial, Black-Scholes or Monte
Carlo option pricing model that takes into account
the exercise price, the term of the option, the
impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the
expected dividend yield and the risk free interest
rate for the term of the option, together with non-
vesting conditions that do not determine whether
the consolidated entity receives the services that
entitle the employees to receive payment.
The cost of equity-settled transactions is recognised
as an expense with a corresponding increase in
equity over the vesting period. The cumulative
charge to profit or loss is calculated based on the
grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the
expired portion of the vesting period. The amount
recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
Market conditions are taken into consideration
in determining fair value. Therefore, any awards
subject to market conditions are considered to
vest irrespective of whether or not that market
condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum
an expense is recognised as if the modification has
not been made. An additional expense is recognised,
over the remaining vesting period, for any modification
that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of
the consolidated entity or employee, the failure to
satisfy the condition is treated as a cancellation.
If the condition is not within the control of the
consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense
for the award is recognised over the remaining
vesting period, unless the award is forfeited.
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If equity-settled awards are cancelled, it is treated
as if it has vested on the date of cancellation, and
any remaining expense is recognised immediately.
If a new replacement award is substituted for the
cancelled award, the cancelled and new award is
treated as if they were a modification.
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.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Business combinations
The acquisition method of accounting is used
to account for business combinations regardless
of whether equity instruments or other assets
are acquired.
The consideration transferred is the sum of the
acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred
by the acquirer to former owners of the acquiree
and the amount of any non-controlling interest in
the acquiree. For each business combination, the
non-controlling interest in the acquiree is measured
at either fair value or at the proportionate share of
the acquiree’s identifiable net assets. All acquisition
costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated
entity assesses the financial assets acquired and
liabilities assumed for appropriate classification
and designation in accordance with the contractual
terms, economic conditions, the consolidated entity’s
operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in
stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at
the acquisition-date fair value and the difference
between the fair value and the previous carrying
amount is recognised in profit or loss.
Contingent consideration to be transferred by the
acquirer is recognised at the acquisition-date fair
value. Subsequent changes in the fair value of the
contingent consideration classified as an asset or
liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for
within equity.
The difference between the acquisition-date fair
value of assets acquired, liabilities assumed and any
non-controlling interest in the acquiree and the fair
value of the consideration transferred and the fair
value of any pre-existing investment in the acquiree
is recognised as goodwill. If the consideration
transferred and the pre-existing fair value is less
than the fair value of the identifiable net assets
acquired, being a bargain purchase to the acquirer,
the difference is recognised as a gain directly in
profit or loss by the acquirer on the acquisition-date,
but only after a reassessment of the identification
and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any,
the consideration transferred and the acquirer’s
previously held equity interest in the acquirer.
Business combinations are initially accounted for
on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also
recognises additional assets or liabilities during the
measurement period, based on new information
obtained about the facts and circumstances that
existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the
acquirer receives all the information possible to
determine fair value.
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Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to the owners of FirstWave
Cloud Technology Limited, excluding any costs
of servicing equity other than ordinary shares, by
the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during
the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share
to take into account the after income tax effect of
interest and other financing costs associated with
dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that
would have been outstanding assuming conversion
of all dilutive potential ordinary shares.
Goods and Services Tax (‘GST’) and
other similar taxes
Revenues, expenses and assets are recognised net
of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In
this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the
tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing
or financing activities which are recoverable from,
or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net
of the amount of GST recoverable from, or payable
to, the tax authority.
New Accounting Standards and
Interpretations not yet mandatory
or early adopted
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted
by the consolidated entity for the annual reporting
period ended 30 June 2022. The adoption of these
Accounting Standards and Interpretations is not
expected to have any significant impact on the
consolidated entity’s financial statements.
Note 2. Critical accounting
judgements, estimates and
assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in
the financial statements. Management continually
evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements,
estimates and assumptions on historical experience
and on various other factors, including expectations
of future events, management believes to be
reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom
equal the related actual results. The judgements,
estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the
respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The consolidated entity measures the cost of equity-
settled transactions with employees by reference to
the fair value of the equity instruments at the date at
which they are granted. The fair value is determined
by using either the Binomial or Black-Scholes model
taking into account the terms and conditions upon
which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled
share-based payments would have no impact on the
carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit
or loss and equity. Refer to note 36 for information
regarding key assumptions.
Allowance for expected credit losses
The allowance for expected credit losses assessment
requires a degree of estimation and judgement. It is
based on the lifetime expected credit loss, grouped
based on days overdue, and makes assumptions
to allocate an overall expected credit loss rate for
each group. These assumptions include recent sales
experience, historical collection rates, the impact of
the Coronavirus (COVID-19) pandemic and forward-
looking information that is available. The allowance
for expected credit losses, as disclosed in note 9, is
calculated based on the information available at the
time of preparation. The actual credit losses in future
years may be higher or lower.
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Capitalised development costs
Distinguishing the research and development phases
of a new customised product and determining
whether the recognition requirements for the
capitalisation of development costs are met requires
judgement. After capitalisation, management
monitors whether the recognition requirements
continue to be met and whether there are any
indicators that capitalised costs may be impaired.
Estimation of useful lives of assets
The consolidated entity determines the estimated
useful lives and related depreciation and
amortisation charges for its property, plant and
equipment and finite life intangible assets. The
useful lives could change significantly as a result
of technical innovations or some other event. The
depreciation and amortisation charge will increase
where the useful lives are less than the previously
estimated lives, or technically obsolete or non-
strategic assets that have been abandoned or sold
will be written off or written down.
Goodwill and other indefinite life
intangible assets
Management has assessed that goodwill cannot be
allocated on a non-arbitrary basis to individual cash
generating units (‘CGUs’), and has been allocated
to a group of CGUs. The group of CGUs represents
the lowest level at which management captures
information, for internal management reporting
purposes, about the benefits of the goodwill. The
combined CGUs are not larger than an operating
segment. Impairment testing is therefore performed
at the consolidated group level using fair value less
costs of disposal (‘FVLCD’) with reference to the
market capitalisation of the Company less estimated
disposal costs.
Income tax
The consolidated entity is subject to income taxes
in the jurisdictions in which it operates. Significant
judgement is required in determining the provision
for income tax. There are many transactions and
calculations undertaken during the ordinary course
of business for which the ultimate tax determination
is uncertain. The consolidated entity recognises
liabilities for anticipated tax audit issues based on
the consolidated entity’s current understanding of
the tax law. Where the final tax outcome of these
matters is different from the carrying amounts, such
differences will impact the current and deferred tax
provisions in the period in which such determination
is made.
Lease term
The lease term is a significant component in the
measurement of both the right-of-use asset and
lease liability. Judgement is exercised in determining
whether there is reasonable certainty that an option
to extend the lease or purchase the underlying asset
will be exercised, or an option to terminate the lease
will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the
lease term, all facts and circumstances that create
an economical incentive to exercise an extension
option, or not to exercise a termination option,
are considered at the lease commencement date.
Factors considered may include the importance of
the asset to the consolidated entity’s operations;
comparison of terms and conditions to prevailing
market rates; incurrence of significant penalties;
existence of significant leasehold improvements;
and the costs and disruption to replace the asset.
The consolidated entity reassesses whether it
is reasonably certain to exercise an extension
option, or not exercise a termination option, if
there is a significant event or significant change in
circumstances.
Business combinations
As discussed in note 1, business combinations are
initially accounted for on a provisional basis, the
amounts disclosed in note 33 are final. The fair
value of assets acquired, liabilities and contingent
liabilities assumed are initially estimated by the
consolidated entity taking into consideration all
available information at the reporting date. Fair
value adjustments on the finalisation of the business
combination accounting is retrospective, where
applicable, to the period the combination occurred
and may have an impact on the assets and liabilities,
depreciation and amortisation reported.
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S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 3. 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 Makers (‘CODM’)) in assessing performance
and in determining the allocation of resources.
Following the acquisition of Opmantek Ltd during the financial year, refer to note 33, the consolidated
entity only has one reportable segment being the development and sale of internet security 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.
Major customers
During the year ended 30 June 2022, there was one major external customer (2021: one customer) where
revenue exceeded 10% of the consolidated revenue. Total revenue from the customer for the year ended 30
June 2022 amounted to $6,234,304 (2021: $6,487,157).
Note 4. Revenue from contracts with customers
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
2022
$
2021
$
7,352,290
1,999,207
7,975,182
-
9,351,497
7,975,182
6,781,065
2,570,432
6,728,796
1,246,386
9,351,497
7,975,182
9,131,206
220,291
7,595,067
380,115
9,351,497
7,975,182
Major service lines
CyberCision
Network monitoring
Geographical regions
Australia
International
Timing of revenue recognition
Recurring revenue (over a period of time)
Non-recurring revenue (at a point in time)
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 2
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 5. Other income
Disaggregation of revenue
Research and development grant income*
Other income**
Other income
Consolidated
2022
$
2021
$
1,358,122
2,239,577
32,896
32,896
1,391,018
2,427,485
* The consolidated entity recognised R&D income on an accrual basis. FY21 was the first year that the consolidated entity started recognising
R&D income on an accruals basis. In FY21, the Research and Development (R&D) tax incentive of $2,061,928 relating to FY20 was recognised as
income on its receipt in January 2021 (i.e., FY21). Therefore, the financial results for FY21 include both R&D income from FY20 of $2,061,928 and
FY21 accrued income estimated at $1,275,017. Total R&D income recognised in FY21 was $2,239,577, which is less than the total of $3,336,945
referenced above due to the work undertaken to earn this R&D grant being capitalised, and the majority of the funds, therefore, being
recognised in the statement of financial position. There are no unfulfilled conditions or other contingencies attached to the grant.
** Includes $26,260 (2021: $8,696) Singapore Government job support grant and $nil (2021: $100,000) Export Market Development Grant (‘EMDG’).
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 3
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Cost of sales
Cost of licenses
Depreciation
Leasehold improvements
Computer equipment
Website
Computer platform
Right-of-use assets
Total depreciation
Amortisation
Capitalised development costs
Customer list
Patents
Total amortisation
Consolidated
2022
$
2021
$
3,164,165
3,672,032
46,546
43,395
410
2,280
202,750
295,381
122,758
47,013
-
2,757
369,075
541,603
3,279,236
2,113,634
6,875
27,410
-
13,522
3,313,521
2,127,156
Total depreciation and amortisation
3,608,902
2,668,759
Impairment
Information systems
Finance costs
90,000
-
Interest and finance charges paid/payable on lease liabilities
60,772
53,151
Net foreign exchange variance
Net foreign exchange variance
Employee benefit expenses
Employee salaries and other benefits*
Defined contribution superannuation expense
Share-based payments expenses
38,178
(12,122)
11,420,218
11,621,907
774,676
860,004
700,747
3,078,902
Total employee benefit expenses
13,054,898
15,401,556
* Includes a salary sacrifice amount of $538,539 (2021: $1,160,422). Share rights have been granted for cash forgone.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 4
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 7. Income tax
Consolidated
2022
$
2021
$
Numerical reconciliation of income tax expense and tax
at the statutory rate
Loss before income tax expense
(13,455,494)
(10,812,108)
Tax at the statutory tax rate of 25% (2021: 26%)
(3,363,874)
(2,811,148)
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Amortisation of intangibles
Entertainment expenses
Non-deductible research and development incentive expenditure
Development costs
Deferred income
Tax losses not recognised (including reversal
of previously recognised tax losses)
Current year temporary differences not recognised
Income tax expense
Tax losses not recognised
Unused tax losses for which no deferred tax asset
has been recognised
749,666
603
669,570
(857,314)
(339,530)
534,873
1,429
762,079
(1,083,272)
(626,490)
(3,140,879)
(3,222,529)
2,658,303
482,576
2,685,819
536,710
-
-
Consolidated
2022
$
2021
$
50,098,496
38,618,225
Potential tax benefit at statutory tax rates
12,524,624
10,040,739
The above potential tax benefit for tax losses has not been recognised in the statement of financial position.
These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that,
the same business test is passed.
Note 8. Cash and cash equivalents
Cash at bank
Consolidated
2022
$
2021
$
10,408,589
9,961,866
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 5
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 9. Trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Consolidated
2022
$
1,691,107
(260,123)
1,430,984
2021
$
1,553,923
(210,224)
1,343,699
Research and development tax incentive receivable
1,397,219
1,275,017
Other receivables
GST receivable
34,685
220,116
86,122
139,115
3,083,004
2,843,953
Allowance for expected credit losses
The consolidated entity has recognised a loss of $667,906 (2021: $156,741) in profit or loss in respect of
impairment of receivables for the year ended 30 June 2022.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
6 to 12 months overdue
Over 12 months overdue
Expected credit
loss rate
Carrying
amount
Allowance for
expected credit losses
2022
%
-
9.20%
12.37%
36.78%
-
2021
%
2022
$
-
1,172,563
3.63%
227,960
14.28%
18.59%
89.12%
25,034
46,670
-
2021
$
764,652
327,670
148,980
160,036
48,534
2022
$
2021
$
-
20,982
3,098
17,163
-
-
11,894
21,274
29,751
43,254
Special provision
100.00%
100.00%
218,880
104,051
218,880
104,051
1,691,107
1,553,923
260,123
210,224
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2022
$
2021
$
210,224
667,906
(618,007)
260,123
95,934
156,741
(42,451)
210,224
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 6
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 10. Other assets
Current assets
Prepayments
Security deposits
Note 11. Property, plant and equipment
Leasehold improvements – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Computer platform – at cost
Less: Accumulated depreciation
Website – at cost
Less: Accumulated depreciation
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 7
Consolidated
2022
$
2021
$
605,900
33,181
1,106,520
33,181
639,081
1,139,701
Consolidated
2022
$
2021
$
685,863
(574,202)
111,661
565,443
(536,729)
28,714
259,871
(244,638)
15,233
12,286
(410)
11,876
680,827
(612,020)
68,807
505,529
(451,247)
54,282
245,475
(242,358)
3,117
-
-
-
167,484
126,206
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Leasehold
improvements
$
Computer
equipment
$
Computer
platform
$
Website
$
Total
$
Consolidated
Balance at 1 July 2020
Additions
158,248
33,317
66,345
34,950
Depreciation expense
(122,758)
(47,013)
Balance at 30 June 2021
Additions
Additions through business
combinations (note 33)
Disposals
Depreciation expense
68,807
87,533
20,806
(18,939)
(46,546)
54,282
19,855
-
(2,028)
(43,395)
4,335
1,539
(2,757)
3,117
14,396
-
-
-
-
-
-
12,286
-
-
(2,280)
(410)
228,928
69,806
(172,528)
126,206
134,070
20,806
(20,967)
(92,631)
Balance at 30 June 2022
111,661
28,714
15,233
11,876
167,484
Note 12. Property, plant and equipment
Non-current assets
Right-of-use assets – office premises
Less: Accumulated depreciation
Consolidated
2022
$
2021
$
1,022,455
(713,725)
1,268,277
(646,128)
308,730
622,149
The consolidated entity has leased office premises under operating leases expiring in two to four years, with in
certain instances options to extend. The leases have various escalation clauses. On renewal, the terms of the
leases are renegotiated.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
4 8
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Office
premises
$
382,165
663,016
(6,308)
(47,649)
(369,075)
622,149
(110,669)
(202,750)
308,730
Consolidated
Balance at 1 July 2020
Additions
Exchange differences
Other changes – adjustments to lease make-good provisions
Depreciation expense
Balance at 30 June 2021
Disposals
Depreciation expense
Balance at 30 June 2022
For other AASB 16 lease-related disclosures refer to the following:
— note 6 for details of interest on lease liabilities and other lease expenses;
— note 18 for details of lease liabilities at the beginning and end of the reporting period;
— note 24 for the maturity analysis of lease liabilities; and
— statement of cash flows for repayment of lease liabilities.
Note 13. Intangibles
Goodwill – at cost
Capitalised development costs – at cost
Less: Accumulated amortisation
Brand name – at cost
Customer list – at cost
Less: Accumulated amortisation
Patents – at cost
Less: Accumulated amortisation
Information systems – at cost
Less: Accumulated impairment
4 9
Consolidated
2022
$
2021
$
49,493,774
-
26,248,860
21,170,160
(15,091,772)
(15,091,772)
11,157,088
9,346,067
971,000
165,000
(6,875)
158,125
212,805
(162,651
50,154
90,000
(90,000)
-
-
-
-
-
202,479
(135,241)
67,238
90,000
-
90,000
61,830,141
9,503,305
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Goodwill
$
Capitalised
development
$
Brand
name
$
Customer
list
$
Patents
$
Information
systems
$
Total
$
Consolidated
Balance at
1 July 2020
Additions
Amortisation
expense
Balance at
30 June 2021
Additions
Additions
through
business
combinations
(note 33)
Amortisation
expense
Impairment
expense
Balance at
30 June 2022
-
-
-
-
-
6,520,680
4,939,021
(2,113,634)
9,346,067
3,429,257
-
-
-
-
-
-
-
-
-
-
56,839
23,921
(13,522)
67,238
10,326
49,493,774
1,661,000
971,000
165,000
-
90,000
6,667,519
-
-
4,962,942
(2,127,156)
90,000
9,503,305
-
-
-
3,439,583
52,290,774
(3,313,521)
-
-
(3,279,236)
-
-
-
(6,875)
(27,410)
-
-
(90,000)
(90,000)
49,493,774
11,157,088
971,000
158,125
158,125
-
61,830,141
Impairment tests for goodwill and all other intangibles
Goodwill acquired through business combinations has been allocated to and is tested at the level of their
respective cash generating units (‘CGUs’), or, where appropriate, Groups of CGUs, for impairment testing.
For the purpose of impairment testing of goodwill and other intangible assets, management has assessed that
goodwill cannot be allocated on a non-arbitrary basis to individual CGUs, and should be allocated to a single
group of CGUs. This group comprises the Cloud Content Security Platform, Network Management Information
System and Open-AudIT.
This allocation has been undertaken on the basis that management monitors the performance of the business
at a corporate level, with management reporting reflecting individual revenue from product lines and
consolidated expenses. Expenses are not able to be disaggregated into specific product lines.
While cash inflows are nominally independent, actual independent net benefits are not monitored. Therefore,
net benefits are measured at the group of CGUs rather than the individual products.
Goodwill was therefore tested for impairment by aggregating the CGUs identified above. The combined
CGUs are not larger than an operating segment.
5 0
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
The recoverable amount of the group of cash-generating units has been determined by measuring the fair
value less cost of disposal (‘FVLCOD’) of the group of CGUs. This was calculated with reference to the market
capitalisation of the Company on the Australian Stock Exchange (ASX: FCT) as a measure of fair value that
maximises observable inputs and minimises the use of unobservable inputs.
As at 30 June 2022, the Group’s market capitalisation value of $78,130,634, when adjusted for estimated costs
of disposal of 5%, was greater than the carrying amount of the net assets of the Group of $65,157,473. The
FVLCD is therefore $9,066,629 higher than the carrying amount of the Group and that indicates no impairment
exists as at 30 June 2022.
Sensitivity to changes in assumptions
Management has considered sensitivity to changes in assumptions by looking at the movement in the Group’s
ASX share price over the last 12 months. At the lowest point, the share price was $0.044, equalling a market
capitalisation value of $73,143,573. This is greater than the carrying value by $7,986,100.
Assuming costs of disposal of 5% of total consideration received, the market capitalisation would need to
decline a further 6.2% from the lowest share price of $0.044 in order for the group of cash-generating units’
recoverable amount to be equal to its carrying amount. Management do not consider this to be a reasonably
possible scenario given that the business has recently completed the integration of Opmantek Limited as at 30
June 22 and can now expect synergy benefits to be realised in full from FY23 onwards.
Note 14. Trade and other payables
Current liabilities
Trade payables
Accrued expenses
Other payables
Refer to note 24 for further information on financial instruments.
Consolidated
2022
$
2021
$
1,124,190
2,793,723
-
1,028,096
3,020,645
210,247
3,917,913
4,258,988
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 1
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 15. Contract liabilities
Current liabilities
Contract liabilities
Non-current liabilities
Contract liabilities
Reconciliation
Consolidated
2022
$
2021
$
3,060,533
901,819
153,782
121,231
3,214,315
1,023,050
The contract liabilities relate to sales of term-based contracts that have been prepaid and hence the entity is
obligated to provide the services agreed under the contract. Reconciliation of the contract liabilities (current
and non-current) during the current financial year are set out below:
Opening balance
Payments received in advance
Additions through business combination (note 33)
Transfer to revenue – included in the opening balance
Transfer to revenue – other balances
Consolidated
2022
$
1,023,050
959,040
2,631,918
(901,819)
(497,874)
2021
$
3,639,390
1,639,893
-
(3,309,329)
(946,904)
Closing balance
3,214,315
1,023,050
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied
at the end of the reporting period was $3,214,315 as at 30 June 2022 ($1,023,050 as at 30 June 2021) and is
expected to be recognised as revenue in future periods as follows:
Within 12 months
12 to 24 months
Consolidated
2022
$
3,060,533
153,782
2021
$
901,819
121,231
3,214,315
1,023,050
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 2
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 16. Employee benefits
Current liabilities
Annual leave
Long service leave
Non-current liabilities
Long service leave
Note 17. Provisions
Non-current liabilities
Lease make-good
Lease make-good
Consolidated
2022
$
2021
$
1,064,686
345,863
1,020,264
246,275
1,410,549
1,266,539
108,860
155,445
1,519,409
1,421,984
Consolidated
2022
$
2021
$
26,406
105,000
The provision represents the present value of the estimated costs to make good the premises leased by the
consolidated entity at the end of the respective lease terms.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set
out below:
Consolidated – 2022
Carrying amount at the start of the year
Amounts used
Carrying amount at the end of the year
Lease
make-good
$
105,000
(78,594)
26,406
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 3
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 18. Lease liabilities
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Consolidated
2022
$
2021
$
107,145
176,758
260,426
367,571
456,230
632,988
Note 19. Deferred research and development income
Consolidated
2022
$
2021
$
Current liabilities
Deferred research and development income
945,979
832,128
Non-current liabilities
Deferred research and development income
1,590,156
1,739,171
2,536,135
2,571,299
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 4
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 20. Borrowings
National Australia Bank (‘NAB’) lease facility
The consolidated entity has an asset leasing facility for $300,000 with NAB. The facility is available on a
revolving basis with repayment terms ranging from 1 to 3 years from the draw-down date.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
NAB lease facility
Corporate credit card facility
AMEX credit card facility
Used at the reporting date
NAB lease facility
Corporate credit card facility
AMEX credit card facility
Unused at the reporting date
NAB lease facility
Corporate credit card facility
AMEX credit card facility
Note 21. Issued capital
Consolidated
2022
$
2021
$
300,000
70,000
-
370,000
-
-
-
-
300,000
70,000
-
370,000
300,000
70,000
208,000
578,000
-
-
207,876
207,876
300,000
70,000
124
370,124
Consolidated
2022
Shares
2021
Shares
2022
$
2021
$
Ordinary shares – fully paid
1,662,353,921
747,390,339
128,426,284
63,760,506
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 5
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Movements in ordinary share capital
Details
Balance
Date
Shares
$
1 July 2020
647,625,092
54,667,525
Issue of shares on exercise of options
17 September 2020
Issue of shares on exercise of options
15 October 2020
Issue of shares on exercise of options
23 November 2020
Issue of shares on exercise of rights
25 November 2020
Issue of shares on exercise of options
24 December 2020
Issue of shares on exercise of options
10 February 2021
Issue of shares on exercise of rights
10 February 2021
Issue of shares on exercise of options
11 March 2021
Issue of shares from placement
6 May 2021
Issue of shares on exercise of options
6 May 2021
Issue of shares from placement
7 June 2021
Issue of shares on exercise of rights
7 June 2021
Issue of shares from placement
3 June 2021
Share issue transaction costs, net of tax
Issue of shares on exercise of options
30 June 2021
Issue of shares on exercise of rights
6 May 2021
989,650
4,900,767
4,110,242
2,939,185
668,318
377,368
2,894,149
3,094,568
66,666,667
333,654
4,911,158
1,361,445
4,413,430
-
237,060
1,867,586
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
109,851
543,985
456,237
308,614
74,183
41,888
303,886
343,497
6,000,000
37,036
442,004
142,952
414,862
(348,029)
26,314
195,701
Balance
30 June 2021
747,390,339
63,760,506
Issue of shares on exercise of options
16 July 2021
Issue of shares on exercise of rights
19 July 2021
Issue of shares on exercise of rights
2 August 2021
Issue of shares on exercise of rights
2 August 2021
Issue of shares on exercise of options
2 August 2021
Issue of shares on exercise of options
19 August 2021
Issue of shares on exercise of rights
6 September 2021
Issue of shares on exercise of rights
6 September 2021
Issue of shares on exercise of rights
6 September 2021
418,751
960,000
4,178,060
27,588
6,155,118
8,714,504
1,130,432
55,176
367,340
Issue of shares from placement
7 December 2021
40,000,000
Issue of shares on exercise of rights
7 December 2021
508,065
Issue of shares from entitlement offer
21 December 2021
99,398,468
Issue of shares on exercise of rights
24 December 2021
Issue of shares on exercise of rights
24 December 2021
Issue of shares on exercise of rights
24 December 2021
111,358
55,679
59,556
Issue of shares – business combination
(note 33)
17 January 2022
691,265,824
Issue of shares from placement
20 January 2022
Issue of shares on exercise of rights
14 April 2022
Issue of shares on exercise of rights
14 April 2022
Issue of shares on exercise of rights
14 April 2022
Share issue transaction costs, net of tax
60,000,000
1,374,481
48,279
134,903
-
$0.110
$0.110
$0.110
$0.140
$0.110
$0.110
$0.110
$0.140
$0.070
$0.070
$0.120
$0.070
$0.110
$0.120
$0.130
$0.068
$0.070
$0.110
$0.140
$0.070
$0.000
46,482
100,800
438,696
3,807
683,218
967,310
118,695
7,614
24,612
2,800,000
60,460
6,957,893
11,693
6,626
7,498
49,079,874
4,200,000
144,321
6,662
9,039
(1,009,522)
Balance
30 June 2022
1,662,353,921
128,426,284
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 6
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to
shareholders should the company be wound up, in proportions that consider both the number of shares held
and the extent to which those shares are paid up. 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.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going
concern while balancing its ability to provide returns for shareholders and benefits for other stakeholders, and
to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity will raise capital to support its growth strategy and to fund value adding projects that
it deems necessary to maintain and enhance shareholder value. Any funds raised will be utilized in adherence
with the governance principles underlying the consolidated entity’s capital management policy under the
authority of the board.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
Note 22. Reserves
Foreign currency reserve
Share-based payments reserve
Foreign currency reserve
Consolidated
2022
$
2021
$
97,789
(2,165)
5,638,340
7,613,365
5,736,129
7,611,200
The reserve is used to recognise exchange differences arising from the translation of the financial statements
of foreign operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of
their remuneration, and other parties as part of their compensation for services.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 7
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Foreign currency translation
Share-based payment expense
Transfer to issued capital
Transfer to retained earnings
Balance at 30 June 2021
Foreign currency translation
Share-based payment expense
Transfer to issued capital
Transfer to retained earnings
Foreign
currency
reserve
$
Share-based
payments
$
Total
$
(6,345)
4,180
-
-
-
(2,165)
99,954
-
-
6,392,924
6,386,579
-
4,180
3,078,902
3,078,902
(1,848,563)
(1,848,563)
(9,898)
(9,898)
7,613,365
7,611,200
-
860,004
99,954
860,004
(1,873,113)
(1,873,113)
(961,916)
(961,916)
Balance at 30 June 2022
97,789
5,638,340
5,736,129
Note 23. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 24. Financial instruments
Financial risk management objectives
The consolidated entity’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity
risk. The consolidated entity’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the consolidated
entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest rate risk and foreign exchange risk and
ageing analysis for credit risk.
Risk management is carried out by senior finance executives (‘finance’) under policies approved by the Board of
Directors (‘the Board’). These policies include identification and analysis of the risk exposure of the consolidated
entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial
risks within the consolidated entity’s operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity is not exposed to any significant foreign currency risk.
Price risk
The consolidated entity is not exposed to any significant price risk.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 8
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Interest rate risk
The consolidated entity’s main interest rate risk arises from cash at bank. Bank balance at variable rates expose
the consolidated entity to interest rate risk.
An official increase/decrease in interest rates of 50 (2021: 50) basis points would have a favourable/adverse
effect on the loss before tax of $52,043 (2021: $49,809) per annum. The percentage change is based on the
expected volatility of interest rates using market data and analysts’ forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency
credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit risk. 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 consolidated
entity does not hold any collateral.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses
to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These
provisions are considered representative across all customers of the consolidated entity based on recent sales
experience, historical collection rates and forward-looking information that is available.
The consolidated entity has a credit risk exposure with one major customer, which as at 30 June 2022 owed
the consolidated entity
$544,256 (32% of trade receivables) (2021: $433,717 (28% of trade receivables)). Despite the impact that the
Coronavirus (COVID-19) pandemic has had on this major Australian retailer, this balance was within its terms
of trade and no impairment was made as at 30 June 2022 and 30 June 2021. There are no guarantees against
this receivable, but management closely monitors the receivable balance on a monthly basis and is in regular
contact with this customer to mitigate risk.
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
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly
cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they
become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
NAB lease facility
Corporate credit card facility
AMEX credit card facility
Consolidated
2022
$
2021
$
300,000
70,000
-
70,000
70,000
124
370,000
370,124
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
5 9
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Remaining contractual maturities
The following tables detail the consolidated entity’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
%
1 year or
less
$
Between
1 and 2
years
$
Between
2 and 5
years
$
Over 5
years
$
Remaining
contractual
maturities
$
Consolidated – 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
– fixed rate
Lease liability
-
-
1,124,190
-
-
-
-
-
Total non-derivatives
1,231,335
3.50%
107,145
118,568
118,568
141,857
141,857
Weighted
average
interest
rate
%
1 year or
less
$
Between
1 and 2
years
$
Between
2 and 5
years
$
Over 5
years
$
-
-
1,028,096
210,247
-
-
-
-
3.50%
176,758
217,236
238,994
Consolidated – 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
– fixed rate
Lease liability
Total non-derivatives
1,415,101
217,236
238,994
-
-
-
-
-
-
-
-
1,124,190
-
367,570
1,491,760
Remaining
contractual
maturities
$
1,028,096
210,247
632,988
1,871,331
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Note 25. Fair value measurement
The carrying amounts of trade and other receivables and trade and other payable approximate their fair values
due to their short term nature. 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.
6 0
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
Note 26. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the
auditor of the company:
Audit services – Grant Thornton
Audit or review of the financial statements
Other services – Grant Thornton
Taxation services
Consolidated
2022
$
2021
$
227,601
131,480
40,000
22,798
267,601
154,278
Note 27. Contingent liabilities
The consolidated entity has given bank guarantees as at 30 June 2022 of $133,776 (2021: $133,776)
to various landlords.
Note 28. Commitments
The consolidated entity had no commitments as at 30 June 2022 and 30 June 2021.
Note 29. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payments
Consolidated
2022
$
2021
$
1,406,490
1,247,138
105,790
15,285
149,357
702,905
77,683
15,461
-
1,529,896
2,379,827
2,870,178
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 1
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 1:
Name
FirstWave Technology Pty Ltd
FirstWave Global Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
FirstWave Cloud Technology Inc.
The United States of America
FirstWave Cloud Technology (Singapore) Pte Ltd
Singapore
FirstWave Share Rights Pty Ltd
Opmantek Ltd
Opmantek Software Pty Ltd
Australia
Australia
Australia
Ownership interest
2022
%
2021
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
Note 31. Related party transactions
Parent entity
FirstWave Cloud Technology Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 29.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2022
$
2021
$
Other income:
Interest received from key management personnel
-
1,662
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current
and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 2
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 32. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2022
$
2021
$
(46,861,042)
(11,631,006)
(46,861,042)
(11,631,006)
Parent
2022
$
2021
$
126,949
678,019
65,300,008
49,473,554
142,535
145,792
142,535
145,792
128,426,284
63,760,506
5,638,340
7,613,365
(68,907,151)
(22,046,109)
65,157,473
49,327,762
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022
and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022
and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed
in note 1, except for the following:
— Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
— Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
6 3
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
Note 33. Business combinations
On 14 January 2022, the company completed the acquisition of Opmantek Ltd (‘Opmantek’) upon the
acceptance of Opmantek’s shareholders of the offer to acquire 100% of the issued capital of Opmantek by the
issuance of 691,265,824 new shares of the company for a total consideration of $49,079,874. The acquisition
was undertaken as a 100% scrip for scrip acquisition. As part of the transaction 675,700,387 shares were
subject to voluntary escrow. 202,010,388 shares will be released from escrow on release of the FY22 Appendix
4E, 202,010,361 shares will be released from escrow on release of the FY23 Appendix 4D, 135,839,820 shares
will be released from escrow on release of the FY23 Appendix 4E and the remaining 135,839,818 shares will
be released from escrow on release of the FY24 Appendix 4D. The remaining 15,565,437 shares, that were not
subject to escrow, were sold on the open market as they represented shares held by foreign shareholders who
under the terms of the transaction were paid in cash to avoid compliance restrictions around issuing shares to
overseas parties.
Opmantek is a fast-growing provider of enterprise-grade network management, automation and IT audit
software to Managed Service Providers (‘MSP’) and medium to large businesses worldwide. Opmantek was
acquired to bring substantial operation, financial and strategic benefits to the consolidated entity including
product expansion, new global channels, access to the US market and a strengthened leadership team.
The acquired business contributed revenues of $1,999,207 from 14 January 2022 to 30 June 2022. If the
acquisition occurred on 1 July 2021, the full year contributions would have been revenues of $4,381,006. The
values identified in relation to the acquisition of Opmantek are final as at 30 June 2022.
The profit or loss before tax of the acquired business from the date of acquisition and for the year are not
disclosed. The contribution of the acquired entity to the results of the consolidated entity cannot be quantified
due to shared cost of the combined businesses after the business combination.
The assets and liabilities recognsied as a result of the acquisition were based on fair value. The purchased
assets identified as intangibles were brand names, capitalised development software, and customer list.
The brand names and software were fair valued using the “Relief from Royalty” approach which considers
the market royalty rate that would have had been paid to utilise the assets if they were not owned by the
company considering Opmantek Ltd’s forecast revenues. The customer list was valued using the Multi period
excess earnings method (‘MEEM’) which looks to estimate the present value of the benefits anticipated from
ownership of the intangible asset in excess of the ongoing required investment in the intangible asset.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 4
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Details of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
GST receivable
Other assets
Property, plant and equipment
Capitalised development cost
Brand name
Customer list
Trade and other payables
Contract liabilities
Employee benefits
Other liabilities
Net liabilities assumed
Goodwill*
Acquisition-date fair value of the total consideration transferred
Representing:
Fair value
$
958,938
2,576,475
255,699
49,355
20,806
1,661,000
971,000
165,000
(1,403,947)
(2,631,918)
(254,172)
(2,782,136)
(413,900)
49,493,774
49,079,874
FirstWave Cloud Technology Limited shares issued to vendor**
49,079,874
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: shares issued by company as part of consideration
Net cash received
49,079,874
(958,938)
(49,079,874)
(958,938)
* The goodwill is attributable to the expected synergies of the combined business.
** The fair value of the 691,265,824 shares issued as part of the consideration paid for Opmantek Ltd was based on the published closing
share price on 14 January 2022 of $0.071 per share.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 5
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 34. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(13,455,494)
(10,812,108)
Consolidated
2022
$
2021
$
Adjustments for:
Depreciation and amortisation
Impairment expense – information systems
Share-based payments – employees
Other non-cash adjustments
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in contract assets
Decrease in prepayments
Increase in other operating assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in contract liabilities
Increase in employee benefits
Increase/(decrease) in other operating liabilities
3,608,902
2,668,759
90,000
860,004
8,645
-
3,078,902
(335,986)
(239,052)
(1,014,393)
384,280
500,620
(100,045)
184,414
(1,408,509)
(1,275,017)
(341,075)
2,191,265
97,425
(300,582)
1,191,111
(2,616,340)
329,403
654,627
Net cash used in operating activities
(8,003,571)
(8,046,673)
Non-cash investing and financing activities
Additions to the right-of-use assets
Shares issued in relation to business combinations
Shares issued for non-cash consideration
Consolidated
2022
$
2021
$
-
663,016
49,079,874
-
2,637,532
2,242,081
51,717,406
2,905,097
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 6
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2020
Net cash used in financing activities
Acquisition of leases
Other changes
Balance at 30 June 2021
Net cash used in financing activities
Other changes
Balance at 30 June 2022
Note 35. Earnings per share
Lease
liability
$
464,271
(499,220)
663,016
4,921
632,988
(188,493)
(76,924)
367,571
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
2022
$
2021
$
(13,455,494)
(10,812,108)
Number
Number
1,181,688,234
669,990,763
1,181,688,234
669,990,763
Cents
Cents
(1.14)
(1.14)
(1.61)
(1.61)
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.
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
–
Y
G
O
L
O
N
H
C
E
T
D
U
O
L
C
E
V
A
W
T
S
R
I
F
6 7
C
H
A
I
R
M
A
N
’
S
L
E
T
T
E
R
C
E
O
’
S
L
E
T
T
E
R
D
I
R
E
C
T
O
R
S
’
R
E
P
O
R
T
F
I
N
A
N
C
I
A
L
R
E
P
O
R
T
S
H
A
R
E
H
O
L
D
E
R
I
N
F
O
R
M
A
T
I
O
N
C
O
R
P
O
R
A
T
E
D
I
R
E
C
T
O
R
Y
Note 36. Share-based payments
The consolidated entity has a share option plan and a share rights plan to incentivise certain employees and key
management personnel (‘KMP’). Shareholders approved the Rights Plan at an Extraordinary General Meeting
held on 29 July 2020. The Board have the discretion to invite employees to apply for share rights, which have
been designed to deliver long term variable remuneration opportunities, which has a service based vesting
condition, that assist in aligning the interests of the employees, with shareholders of the company.
During the financial year no options and 16,585,111 share rights were granted (2021: no options and
4,308,845 share rights). The share-based payment expense for the year was $860,004 (2021: $3,078,902), out
of which $538,539 (2021: $1,160,422) was offset by the employees agreeing to salary sacrifice in lieu of service
rights and hence saving the consolidated entity cash costs.
Movements in share awards during the year
The following table illustrates the number of awards and weighted average exercise prices (‘WAEP’) of, and
movements in, share awards during the current and previous year:
Number
30 June 2022
Number
30 June 2021
WAEP
30 June 2022
WAEP
30 June 2021
Movement in share options
including share rights
Balance at the beginning of the year
76,426,895
100,142,768
Share rights granted during the year
16,585,111
Forfeited during the year
Exercised during the year
Expired during the year
4,308,845
(640,726)
-
(24,299,290)
(23,773,992)
(9,159,999)
(3,610,000)
$0.190
$0.000
$0.000
$0.031
$0.000
$0.150
$0.000
$0.000
$0.031
$0.000
Balance at the end of the year
59,552,717
76,426,895
21,116,000 options and 24,933,813 share rights were vested and exercisable as at 30 June 2022 (2021:
40,281,036 options and 25,684,014 share rights).
The weighted average share price of the company during the financial year was $0.07 (2021: $0.12).
The weighted average remaining contractual life of options and share rights outstanding at the end of the
financial year was 6.17 years (2021: 5.80 years).
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Share rights
During the year 1,088,415 restricted rights were issued to key personnel in lieu of cash bonuses with nil
exercise price and expiry 30 June 2027 and 9,277,165 share appreciation rights (SARs) were issued to Iain
Bartram in three tranches 2,796,610, 3,113,208 and 3,367,347 at exercise prices of $0.18, $0.27 and $0.36
respectively vesting over 3 years from 1 July 2021 to 30 June 2024 and expiring 30 June 2027.
There were also 6,219,531 share rights granted in lieu of salary and fees. 484,950 were granted to Paul
MacRae and 1,003,345 to John Grant in lieu of directors fees expiring 30 June 2035, and 4,292,506 to Craig
Nelson in lieu of salary and commission with nil exercise price and expiring 30 June 2027. 438,730 were
granted to Ray Kiley in lieu of Director’s fees and are subject to shareholder approval which will be sought at
the company’s upcoming AGM.
All share rights issued are only subject to service conditions for vesting.
For the service rights and restricted service rights granted during the current financial year, the valuation
model inputs used to determine their fair value at the grant date are as follows:
Grant date
Expiry date
03/09/2021
02/09/2024
11/11/2021
30/06/2027
11/11/2021
30/06/2027
11/11/2021
30/06/2027
22/12/2021
22/12/2024
04/03/2022
30/06/2035
07/03/2022
30/06/2027
08/04/2022
30/06/2027
Share
price at
grant
date
$0.070
$0.090
$0.090
$0.090
$0.070
$0.106
$0.060
$0.080
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest
rate
Fair value
at grant
date
%
72.00%
92.00%
92.00%
92.00%
99.00%
126.13%
81.80%
79.20%
$0.00
$0.18
$0.27
$0.36
$0.00
$0.00
$0.00
$0.00
%
0.02%
0.10%
0.10%
0.10%
0.10%
0.09%
1.81%
2.77%
-
-
-
-
-
-
-
-
$0.067
$0.057
$0.051
$0.046
$0.068
$0.106
$0.059
$0.076
Note 37. Events after the reporting period
No matter or circumstance has arisen since 30 June 2022 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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Directors’ declaration
30 June 2022
In the directors’ opinion:
— the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
— the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 1 to the financial statements;
— the attached financial statements and notes give a true and fair view of the consolidated entity’s financial
position as at 30 June 2022 and of its performance for the financial 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.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
On behalf of the directors
John Grant
Chairman
30 August 2022
Sydney
Ray Kiley
Director
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Independent auditor’s report to the members
of Firstwave Cloud Technology Limited
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57 Independent Auditor’s Report To the Members of Firstwave Cloud Technology Limited Report on the audit of the financial report Grant Thornton Audit Pty Ltd Level 17 383 Kent Street Sydney NSW 2000 Locked Bag Q800 Queen Victoria Building NSW 1230 T +61 2 8297 2400 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 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 Limited 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 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Opinion We have audited the financial report of Firstwave Cloud Technology Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, 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 year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group 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 financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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Grant Thornton Australia Limited 58 Material uncertainty related to going concern We draw attention to Note 1 in the financial statements, which indicates that the Group incurred a net loss of $13,455,494 and net cash outflows from operating activities of $8,003,571 during the year ended 30 June 2022. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Key audit matter How our audit addressed the key audit matter Capitalisation of product development costs - Note 13 Capitalised product development costs had a net carrying value of $11,157,088 at 30 June 2022. During the year, the Group capitalised $3,429,257 of costs related to product development (excluding additions through business combinations). These intangible assets are being amortised over their finite life of 5 years. AASB 138 Intangible Assets sets out the specific requirements to be met to capitalise development costs. Intangible assets should be amortised over their useful economic lives in accordance with AASB 138. This area is a key audit matter due to the subjectivity and management judgement applied in assessing whether costs meet the development phase criteria described in AASB 138. Our procedures included, amongst others: (cid:149)Assessing the Group’s accounting policy in respectof product development costs for compliance withAASB 138;(cid:149)Evaluating management’s assessment of eachproject for compliance with the recognition criteria setout in AASB 138, including discussing project planswith management and project leaders to develop anunderstanding of the nature and feasibility of keyprojects;(cid:149)Testing a sample of costs capitalised by tracing tounderlying support, including timesheets,employment contracts, payroll reports, and invoicesfrom external suppliers and assessing whether theexpenditure was attributable to the development ofthe assets;(cid:149)Assessing the reasonableness of the useful livesattributed to capitalised development costs andwhether amortisation expense was recorded basedupon the assigned useful lives; andAssessing the adequacy of the disclosures relating to intangible assets in the financial statements. Impairment of Intangible assets – Note 13 AASB 136: Impairment of Assets requires entities to perform an annual impairment test on goodwill and all intangible assets with an indefinite useful life. In principle, an asset is impaired when an entity cannot recover the carrying value of that asset on the balance sheet, either through its use or sale. The business has changed significantly from the previous year-end, with the acquisition and integration of the Ommantek businesses during this financial year. As a result of the business combination, goodwill has Our procedures included, amongst others: (cid:149)Obtaining management's assessment of impairmentindicators under AASB 136 and reviewing forreasonableness;(cid:149)Assessing management’s determination of theGroup’s CGUs based on our understanding of howmanagement monitors the entity's operations andmakes decisions about groups of assets thatgenerate independent cash inflows;
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Grant Thornton Australia Limited 59 been recognised. Management has identified that the goodwill is allocated to the group of cash-generating units (CGUs) based on management’s monitoring activities. A fair value less cost of disposal approach has been adopted to assess determine whether the assets are impaired. Due to the significant judgements in applying the fair value less cost of disposal approach, this has been identified as a key audit matter. (cid:149) Assessing the mathematical accuracy of the fair value less cost of disposal approach used by management to calculate the recoverable value; (cid:149) Reviewing the ASX stock price up to date of the audit report; (cid:149) Consulting with our internal specialists to ensure key judgements were compliant with both the Australian auditing and accounting standards; and (cid:149) Assessing the adequacy of disclosures in the financial report. Acquisition accounting - Note 33 On 14 January 2022, the Group acquired all the shares Our procedures included, amongst others: in Opmantek Ltd (‘Opmantek’) and its controlled entity. The purchase consideration of $49,079,874 was settled by the issuance of 691,265,824 new shares in the Company. When an acquisition meets the definition of a business combination, AASB 3 Business Combinations requires management to exercise judgement to determine the fair value of the purchase consideration, the fair value of acquired assets and liabilities, and the allocation of purchase consideration to separately identifiable intangible assets and goodwill. The Group has engaged an independent expert to assist them in determining the appropriate asset values. This area is a key audit matter due to the size of the acquisition and its materiality to the Group, the level of judgement required in evaluating the Group’s purchase price allocation, including the assessment of identifiable intangible assets arising from the acquisition. (cid:149) Obtaining an understanding of the transaction from the purchase price allocation report and management’s paper on the acquisition; (cid:149) Assessing whether the acquisition met the definition of a business in accordance with AASB 3; (cid:149) Assessing management’s determination of the fair value of both the purchase consideration and the fair value of assets and liabilities acquired; (cid:149) Tracing the fair value of net assets acquired at the acquisition date to supporting schedules and testing a sample of items by agreeing to supporting documentation; (cid:149) Evaluating the competence, capability and objectivity of the management’s expert and performing a detailed review of their reports to understand the scope of their engagement and any limitations in the report; (cid:149) With the assistance of our valuation experts: - Assessing the identification of intangible assets acquired, including brand names, software and customer relationships, and the valuation methodologies used by management’s expert to value these assets; - Testing the mathematical accuracy of the cash flow models; - Assessing the accuracy of the underlying data, including agreeing key inputs to supporting documentation; - Challenging the associated underlying forecast cash flows for the software and customer assets intangible asset valuations and comparing key assumptions to historical results;
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Grant Thornton Australia Limited 60 - Evaluating discount rates used by assessing the cost of capital applied in each valuation by comparing them to market data and industry research; and (cid:149) Testing the Group’s accounting for the transactions, including checking the mathematical accuracy of the calculations and associated journal entries; and Assessing the adequacy of related disclosures in the financial statements. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors’ for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report.
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Grant Thornton Australia Limited 61 Report on the remuneration report Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Grant Thornton Audit Pty Ltd Chartered Accountants R J Isbell Partner – Audit & Assurance Sydney, 30 August 2022 Opinion on the remuneration report We have audited the Remuneration Report included in pages 13 to 23 of the Directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Firstwave Cloud Technology Limited, for the year ended 30 June 2022 complies with section 300A of the Corporations Act 2001.
Shareholder information
30 June 2022
The shareholder information set out below is applicable as at 12 October 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Ordinary shares
Number
of holders
% of total
shares issued
1,630
197
232
907
894
3,860
2,000
0.00%
0.04%
0.11%
2.28%
97.57%
100.00%
0.11
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Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number
held
% of total
shares issued
NATIONAL NOMINEES LIMITED
SUPER FLI PTY LTD
ERIC HAROLD GREENWOOD
DANIEL PATRICK MAHER
ANNA WILKINSON
INU SANGYO PTY LTD
SINCLAIR INTERNETWORKING SERVICES PTY LIMITED
NEW INSIGHTS AUSTRALIA PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TIMOTHY FRANKLIN
MR SCOTT LIDGETT & MRS KATHERINE LIDGETT
MR DAVID ROTHWELL
MR GREGORY VYTAS MAREN & MRS GERALDINE MARGARET
MACLEAN MAREN
INDIGENOUS CAPITAL LIMITED
ROGER ALLEN AND MAGGIE GRAY PTY LIMITED
RPA PROPERTIES PTY LTD
BRUXNER PACIFIC PTY LTD
KEEVA SPEYER
PATAGORANG SUPERANNUATION PTY LTD
TRANSTEMPO PTY LTD
236,244,895
201,233,570
58,284,274
50,922,171
29,086,831
28,789,750
28,278,444
24,459,594
20,791,995
19,523,897
17,470,147
16,892,501
16,316,718
13,789,796
13,789,796
13,394,875
12,244,576
11,400,741
10,714,286
10,573,347
14.21%
12.11%
3.51%
3.06%
1.75%
1.73%
1.70%
1.47%
1.25%
1.17%
1.05%
1.02%
0.98%
0.83%
0.83%
0.81%
0.74%
0.69%
0.64%
0.64%
834,202,204
50.18%
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Unquoted equity securities
Options over ordinary shares
Share rights over ordinary shares
Substantial holders
Substantial holders in the company are set out below:
DANIEL MAHER
PERENNIAL VALUE MANAGEMENT LIMITED (PVM)
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number on issue
22,766,000
62,870,822
Ordinary shares
Number
held
% of total
shares issued
252,155,741
236,810,448
15.75
14.25
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.
There are no other classes of equity securities.
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Corporate directory
30 June 2022
Directors
John Grant – Chairman
Paul MacRae – Non-Executive Director
Euh (David) Hwang – Non-Executive Director
Danny Maher – Managing Director
Ray Kiley – Non-Executive Director
Company secretary
Iain Bartram
Registered office
Level 14, 132 Arthur Street
Share register
North Sydney, NSW 2060
Australia
Tel: +61 (02) 9409 7000
Automic Registry Services
Level 5, 126 Philip Street
Sydney NSW 2000
Australia
Tel: 1300 288 664
Auditor
Grant Thornton Audit Pty Ltd.
Level 17, 383 Kent Street
Sydney, NSW 2000
Stock exchange listing
FirstWave Cloud Technology Limited shares are listed on the Australian
Securities Exchange (ASX code: FCT)
Website
www.firstwave.com
Corporate Governance
Statement
The directors and management are committed to conducting the
business of FirstWave Cloud Technology Limited in an ethical manner
and in accordance with the highest standards of corporate governance.
FirstWave Cloud Technology Limited has adopted and has substantially
complied with the ASX Corporate Governance Principles and
Recommendations (Fourth Edition) (‘Recommendations’) to the extent
appropriate to the size and nature of its operations.
The consolidated entity’s Corporate Governance Statement, which sets
out the corporate governance practices that were in operation during the
financial year and identifies and explains any Recommendations that have
not been followed and ASX Appendix 4G are released to the ASX on
the same day the Annual Report is released. The Corporate Governance
Statement and Corporate Governance Compliance Manual can be found
on the company’s website at https://firstwave.com/investor/.
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Head Office
Level 14, 132 Arthur Street,
North Sydney NSW 2060
+61 2 9409 7000
www.firstwave.com
Firstwave Cloud Technology Limited
ABN 35 144 733 595