ActivePort : ATV Quarterly Activities Report and Appendix 4C Jun-22

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28 July 2022

Quarterly Activities Report

For the quarter ending 30 June 2022

ActivePort Group Ltd ("ActivePort" or "the Company"), (ASX:ATV) is pleased to report a strong finish to FY22 with revenue increasing in its services business and software sales growing rapidly to make a positive cash contribution to reserves.

Highlights:

• FY22 (unaudited) ActivePort Group revenue is $13.3M, up 60.2% on FY21;
• H2 software revenue grew by 482% from H1;
• Our first enterprise-scale customer installation is complete and a second has signed-on;
• Net cash reserves expected to grow in the coming quarter.

Group Revenue

ActivePort has two distinct revenue streams from our traditional managed services business and our relatively new ActivePortal software product. Software revenue is highly profitable, so our focus is on scaling up our software business globally whilst leveraging our managed services group for support and delivery. This strategy is working. Group revenue, up 60.2% to $13.3M for the full year was accelerated by new software sales on top of solid growth in managed services revenue.

The FY21 revenue shown in the chart above are proforma and assume

the consolidated group was in place during all of FY21. The effective date of consolidation was 27 September 2021.

Although still a small part of Group revenue, the software license revenue is growing rapidly. Software license sales generate very high gross margins and so the software contribution to cash as a percentage of revenue is much higher than our traditional managed services business. In H1FY22, 2.4%

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($161K) of ActivePort Group revenue was generated by our core software. For the full year, that percentage increased to 8.3% ($1.098M) of total revenue.

This chart sets out the H1 revenue for ActivePort Group compared to full year

and the increase in revenue contribution of

ActivePort software increasing from 2.4% at the half to 8.3% full year.

In FY22 we executed two campaigns to promote our software product. Our sales team worked indirectly via channel partners globally to sell SD-WAN and we worked directly with larger customers that are using our software for specific enterprise projects. Pleasingly, this has been successful on both fronts with software revenue increasing 482% from H1FY22 to H2FY22.

This chart sets out the H1 ActivePort software revenue as compared to H2,

demonstrating an increase of 482% H1 versus H2.

A revenue reclassification of $290K (from software to other revenue)

has occurred subsequent to the ATV Activities Update announced on 14 June 2022.

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Software Revenue

Our channel market is building globally with orders from the banking, utility, and retail sectors, proving the value of ActivePort's innovative multi-vendor Orchestration platform. In Q4FY22, ActivePort's MSP and ISP partner sales exceeded expectations with new sites signed across Australia, Asia and Africa. In Australia, our channel partners have identified a large sales pipeline of more than 1,000 SD-WAN ports and deployed ActivePort to new customers including DecoRug Holdings Pty Ltd, Pharmacy 4 Less Pty Ltd, Assembly Label Retail Pty Ltd, and Mr Toy's Toyworld. In Africa, we have a commitment to proceed with two banks and one large utility operator with over 350 sites and 1,200 devices that will use ActivePort's SD-WAN and Orchestration solutions with contract value in excess of $2M.

Lightstorm

Lightstorm signed with ActivePort in Q4FY22 with a total contract value exceeding $1M. Lightstorm is building a resilient and future-ready telecom network in India initially, delivering a high availability fibre-basedcarrier-neutral platform. ActivePort is also working closely with Lightstorm to support their expansion plans into Indonesia and across several other Asian markets.

The CEO of Lightstorm Telecom Ventures Amajit Gupta said:

"Our partnership with ActivePort software is instrumental in enabling software-defined capabilities for Lightstorm in key markets of interest beyond India. We look forward to our continued success and collaboration with ActivePort, together delivering to LightStorm's customers across the Asian region."

Radian Arc

We announced a circa. $8.65M deal with Radian Arc in Q3 (4 April 2022, ATV signs agreement with Radian Arc for private cloud) to deliver 11 private cloud infrastructure and hardware orchestration software instances to Radian Arc's global customer base of telecommunications providers. Radian Arc has successfully signed 36 carriers and as that roll-out progresses, we expect revenue to far exceed initial forecasts.

During FY22 ActivePort implemented sites for Radian Arc in the USA, Indonesia, Netherlands, Brazil, Malaysia, Vietnam, Macau, and Singapore. In Q1FY23, this roll-out will expand to the Middle East, North and South America, Asia, and Europe.

The majority of the revenue from the Radian Arc contract is software and related services in the form of monthly recurring charges.

Global Edge Platform

The third pillar supporting our sales strategy is a software-as-service instance of ActivePort and a global network of Edge aggregation points called Global Edge. The Global Edge platform will deliver an edge-to-cloud secure SD-WAN orchestration portal, allowing customers to instantly build a data network that connects all their branches and cloud services in minutes. A key feature of Global Edge allows customers to order last-mile fibre services to connect from Edge to Cloud. To build our capability in last-mile automation, ActivePort acquired Future Broadband in a 100% scrip swap. The acquisition of Future Broadband and integration of its core automation technology into the Global Edge platform has been completed and the ActivePort team are on track for launch in early FY23.

The Radian Arc agreements were announced on 4 April 2022 and the acquisition of Future Broadband was announced on 19 April 2022. Other individual contracts referred to in this announcement are not material on their own, however their combined effect demonstrates continued growth.

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Capital Consumption

ActivePort executives remain confident in reaching a positive cash-flow position by the end of Q1FY23. A number of large cash receipts are pending that will result in a stronger cash position at the end of Q1FY23.

IPO Use of funds reconciliation

Pursuant to Listing Rule 4.7C2, the Company confirms that during the period since listing on the ASX on 20th October 2021, its expenditure incurred is in line with the Use of Funds as set out in its Prospectus, with a summary as shown in the table below:

	Funds allocated under	Funds expended to 30
Use of Funds under Prospectus1	the Prospectus	June 2022
Business growth and acquisitions	1,700,000	1,463,000
Global sales development	4,200,000	2,133,000
Product engineering and tech support	2,400,000	2,854,000
Capital raising and listing costs	870,000	899,000
Administration and other corporate costs	375,000	524,000
Working capital	2,595,000	1,561,000
	12,140,000	9,435,000

In accordance with Listing Rule 4.7C, payments made to related parties and their associates included in item 6.1 of the Appendix 4C include Director fees, salary and superannuation for the CEO, non- executive Chairman and non-executive Directors, consistent with disclosures in the Prospectus.

About ActivePort Group Ltd

ActivePort Group Ltd is an Australian software company that engineers, delivers and supports a network and cloud orchestration product. ActivePort software lets customers manage all their cloud hosting and networking technology end-to-end, from one single screen. Using ActivePort's unique software, customers can create network connections, deliver cloud services, and manage their data at a local, national, or global scale. The result is simplicity, agility, speed, and lower costs. ActivePort also delivers information technology managed services to enterprise customers.

For more information, please visit www.activeport.com.au

Investor relations	Media relations
ActivePort Group Ltd	Lisa Jones, ActivePort Group
[e-mail]	[e-mail]

www.linkedin.com/company/activeport-group-ltd

ActivePort Group Ltd

Suite 3, level 4, 46 Colin Street

West Perth, Western Australia 6005

ABN: 24 636 569 634

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This announcement has been authorised for release by the Board of ActivePort Group Ltd.

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Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

ACTIVEPORT GROUP LTD
ABN	Quarter ended ("current quarter")
24 636 569 634	30 JUNE 2022

Consolidated statement of cash flows	Current quarter	Year to date
			$A'000	(12 months)
				$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	3,441	11,030
1.2	Payments for
	(a)	research and development	(455)	(2,047)
	(b) product manufacturing and operating	(1,398)	(7,169)
		costs
	(c)	advertising and marketing	(48)	(172)
	(d)	leased assets	-	(15)
	(e)	staff costs	(1,997)	(6,388)
	(f) administration and corporate costs	(1,157)	(3,793)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	1	1
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	-
1.8	Other (provide details if material)	-	-
1.9	Net cash from / (used in) operating	(1,613)	(8,553)
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)	entities	(259)	(259)
	(b)	businesses	-	-
	(c) property, plant and equipment	(51)	(56)
	(d)	investments	-	-
	(e)	intellectual property	-	-
ASX Listing Rules Appendix 4C (17/07/20)		Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.