RightCrowd : Quarterly Activies Report and Appendix 4C

29th of July 2022

RightCrowd FY22 Q4 Quarterly Activities Report, Business Update and Appendix 4C:

RightCrowd Limited ("RightCrowd") or ("Company"), a leading global developer of physical security, safety, and compliance software, is pleased to provide its Quarterly Activities Report in conjunction with the release of the Appendix 4C - Quarterly Cash Flow Report for the period ended 30 June 2022.

Summary:(All figures are unaudited and are expressed in Australian dollars unless stated otherwise):

• Quarterly sales revenue of $3.7m in Q4 FY22 was in line with prior Quarter (Q3 FY22: $3.7m)
  but down 33% versus prior comparison period (Q4 FY21: $5.5m). The reduction reflects a drop in demand for the Company's contact tracing and social distancing product, Presence Control, with the accelerated easing of COVID-19 restrictions across the globe.
• FY22 revenue (unaudited) was $15.1m, broadly in line with prior year (FY21: $15.2m). New sales and contracts for Workforce Management and Access Analytics solutions helped to offset a drop in new sales and contract renewals for Presence Control software solutions.
• Contracted Annual Recurring Revenue (ARR)1 at 30 June 2022 closed at $8.5m which has reduced by $0.3m since the end of the last Quarter (FY22 Q3: $8.8m) but is up $0.4m on prior year (Q4 FY21: $8.1m). The reduction on prior Quarter was driven by a drop in renewals for Presence Control products, which was partially offset by new customers added and contract renewal increases for Workforce Management and Access Analytics solutions. Workforce Management solutions generate $6.8m of ARR (up 24% from $5.5m at end of FY21)
• As of 30 June 2022, RightCrowd's cash and cash equivalent balance closed at $4.7m, reducing from $6.9m in the prior Quarter primarily driven by $2.0m of quarterly operating cash outflows. The Company expects cash outflows to reduce over the next few quarters with customer and grant receipts expected to largely off-set operational expenses.
• Demand for RightCrowd Workforce Management solutions is building with strong pipeline addition during the Quarter and further upsell opportunities to existing global top-100 customers are at contract stage.
• RightCrowd launched a brand awareness campaign for RightCrowd solutions titled Access Chaos to generate new leads during the Quarter. Targeted campaigns to specific industry verticals are also being currently rolled out to continue recent pipeline build.
• Work continues with external advisors to identify appropriate capital sources to fund anticipated revenue growth in FY23 and to provide sufficient buffer to ongoing operations.
• Preparations are underway for RightCrowd to exhibit at the Global Security Exchange (GSX) exposition in Orlando, USA in September.

1 ARR is measured as the total annualised value of active customer contracts for annual subscription, support, and maintenance services as at 30th of June 2022.

Financial Commentary:

Sales Revenue: RightCrowd generated $3.7m of revenue in Q4, a drop of 33% on the prior year

corresponding period (Q4 FY22: $5.5m) driven primarily by a reduction in demand for Presence Control solutions, which in the prior year were in high demand for meeting the contact tracing and social distancing use-cases related to the COVID-19 pandemic.

Although progress in establishing channel distribution partnerships continues to be made, there is still further work to complete to strengthen current and new partners' ability to sell RightCrowd solutions. As part of the Company's efforts to build partnerships, RightCrowd is pleased to be supporting Johnson Controls at the upcoming GSX conference in the JCI Innovation Lab to showcase integrated Presence Control software solutions. This partnership is likely to provide access to many thousands of potential customers. RightCrowd expects that the revenue uplift from effective channel distribution will largely now begin to be visible in FY23 financial results.

Marketing efforts continue to focus on the Company's Access Chaos campaign which has been picked up by several industry publications including Securityinfowatch.com and Security Journal Americas.

(https://www.securityinfowatch.com/access-identity/access-control/article/21270430/how-to-define-and-overcome-access-chaos)

Overall, the company continues to receive very positive signs from the market for its solutions and expects demand to return in FY23 as companies deal with the challenges of managing an effective return of their staff to the workplace. RightCrowd also expects companies to need support in managing potential economic slowdowns which may bring with it loss of staff and a resultant increased physical security challenges and associated access risks.

Total unaudited sales revenue for FY22 was $15.1m, largely in line with prior year and at the lower end of the $15m to $16m range communicated by the Company in April with some key new enterprise license deals slipping from FY22 into a projected early FY23 close. Although the contract pipeline remains strong, the revised FY23 outlook will be confirmed at the AGM in November 2022 when the

Company will have a clearer view of market conditions and lead generation across its entire product suite.

Annual Recurring Revenues (ARR): Annual Recurring Revenue has reduced to $8.5m at the end of the Quarter, down from $8.8m reported at the end of Q3 FY22. Most of this reduction is pandemic related due to customers not renewing their Presence Control subscription contracts as contract tracing restrictions ease. Workforce Management solutions now generate $6.8m of ARR (up 24% from $5.5m at end of FY21), while presence control reduced to $1.7m of ARR (down 35% from $2.6m at end of FY21).

FY22 customer churn (as measured by ARR) moved up as a result of the changed market conditions for Presence Control solutions to 21.5%. The majority of the churn relates to customers either not renewing or placing subscriptions for contact tracing related Presence Control solutions on hold as the pandemic subsides. Churn across the Workforce Management portfolio continues to remain very low at 1.1% for FY22, while Access Analytics is in an early growth phase.

The Company has set ARR growth as its primary focus and is forecasting ARR to resume its strong growth in FY23.

Cash Position: RightCrowd closed the Quarter with a cash & cash equivalent balance of $4.7m, a

reduction of $2.0m from prior Quarter (FY22 Q3: $6.9m) which was driven primarily by operating cash outflows.

Operating cash outflows in the Quarter were driven by a shortfall between receipts from customers and ongoing expenditure on staff and administration / corporate costs. During the Quarter, the Company reclassed some of its product manufacturing and operating costs to be recorded as administration and corporate costs to reflect the underlying nature of these cashflows. This resulted in annual product manufacturing and operating cash outflows totaling $1.8m which represents the expenditure directly related to building inventory during the period. With the current slow-down in demand for Presence Control solutions, this cash outflow for product manufacturing is forecast to be minimal over the next few Quarters as the company now has sufficient inventory by which to meet forecast sales.

RightCrowd is well positioned to submit its annual R&D tax claim earlier than previous years, which is likely to bring forward receipt of those funds to earlier in FY23 compared to when funds were received in FY22. The estimated receipt for R&D activities completed in FY22 is forecast to be approximately $2.8m.

The Company has completed some restructuring and cost-cutting initiatives to ensure that the FY23 expenditure will remain below FY22 expenditure, without impacting its growth aspirations. Structural changes have included streamlining the executive management of the Company with Brian McIlravey now taking responsibility for all of customer operations including sales and marketing, Bart Vansevenant assuming the Chief Product Officer role and overseeing the combined product and engineering divisions, and James Stewart continuing as Company CFO and maintaining responsibility for all the Company's corporate functions.

The Company is also working with its external advisors to identify appropriate sources of capital to fund its continued growth.

Business Update:

RightCrowd Workforce Management: Work continues generating new sales and servicing RightCrowd's enterprise customers. The Company has been encouraged by the demand from our customers for extending their current rollouts which are generating extensions to current engagements.

Pipeline build continues to be strong as the Company receives requests from companies to safely manage the return of their workforces to the workplace. RightCrowd has developed a number of specific marketing campaigns which are being rolled out that is driving particular interest in solutions for Visitor and Workforce Management.

Two new customers were added during the Quarter with a resources company and utility based in Australia selecting RightCrowd products. The company also expanded subscription agreements with one of its major US enterprise customers during the Quarter.

RightCrowd Presence Control: Although there has been a slow-down in revenue generation over the last two Quarters, Presence Control badge-holder unit sales continue with 1,155 units sold during Q4, mostly to existing customers who are extending their use of the solution. Current Quarter sales were down from the 3,106 units sold in Q3, and 7,557 units sold in the prior corresponding period of Q4 FY21.

This trend is expected to continue in the short-term given the swiftly growing relaxation of COVID19 measures globally, however the Presence Control solution has developed a broader set of security use- cases required by customers including evacuation management. RightCrowd will also be releasing visitor tethering as a new use case for Presence Control which is expected to generate growth for the Company in FY23. A total of 18,720 badge holder units have been sold during FY22.

No new customers were added during the Quarter.

RightCrowd Access Analytics: The Company continues to focus on Access Analytics as a critical tool for customers to manage and identify gaps in and across their access control systems.

RightCrowd Access Analytics added two new customers during the Quarter, both in the Australian market. RightCrowd also went live with the solution at a global mining company during the Quarter.

RightCrowd CEO and Managing Director, Peter Hill, said:

"Q4 brings an end to a challenging year for RightCrowd. Expectations for overall continued growth did not materialize with difficult market conditions in the second half of the year for pandemic related

sales of our Presence Control solution, impacting our full-year results. We have also been navigating a number of delays in new sales of large Workforce Management projects and the completion of a number of project deployments.

That being said, as much as we see the pandemic related slow-down in Presence Control sales, we are seeing a material increase in opportunities for our large Workforce Management solution and growing activity in our recently launched Access Analytics product. Our sales pipeline has continued to grow, with new projects expecting to be won this half, along with several major customers increasing their use of the RightCrowd platform and commercial engagement.

Deploying over 45,000 Presence Control badgeholders at major enterprise sites throughout the pandemic has enabled RightCrowd to prove this new technology platform in real commercial environments at scale. It also provided the company valuable end-user feedback to innovate and release an improved second generation badgeholder. This experience now provides RightCrowd with the opportunity to work closely with several partners on the wider commercialisation of the Presence Control platform focusing on the core security use cases of visual authorization, evacuation management, presence reporting and visitor tethering.

We also expect to resume revenue growth in FY23 with a particular focus on continued healthy growth in Annual Recurring Revenue (ARR) as we focus on achieving a cashflow breakeven state as quickly as possible."

Related Entities: Payments to related entities during the Quarter was $0.1m which represented fees paid to the Board of Directors and Key Management Personnel (KMP) of RightCrowd.

Note to Market:

None of the information included in this announcement should be considered individually material, unless specifically stated. All figures in this announcement are provided on an unaudited basis.

This Company presentation may include certain statements, estimates or projections with respect to the anticipated future performance of the Company, the projects or both. Those statements, estimates or projections are based on assumptions about future events and management actions that may not necessarily take place and are subject to significant uncertainties, many of which are outside the control of the Company. Those assumptions may, or may not, prove correct. No representation is made as to the accuracy of those statements, estimates or projections.

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Investor contact:

Peter Hill	James Stewart
Chief Executive Officer	Chief Financial Officer
[e-mail]	[e-mail]
[phone]	[phone]

The release of this announcement was authorised by the Board of Directors.