Ann: Annual Report 2020, page-2

I have been trawling through FTC 's latest Annual Report today and I am very interested in a discussion with other investors and I am looking to gain clarification around some of the points below. If any other investor has similar queries or new....I am happy to compose an email to the company. Let's focus on positives and then concerns. To be clear there are some very glaring concerns or sloppy report writing.

Positives:
1. First mention of international expansion .... Japan however seems very exploratory and nothing confirmed
2. Data mining opportunities - not explicitly mentioned previously. Understanding customer spending behaviour very valuable moving forward
3. Assisting the transition to open banking via T-Linx systems and hardware
4. B2C (business to customer options extended). Some of these have not been mentioned in any other previous FTC reports (underlined):

2-3 basis points off the top of all the following transactions:
"All daily consumption payments: cards, card installments, QR codes (WeChat Pay, Alipay, Union Pay), NFC (Union Pay, Apple Pay),Bank apps, Face recognition, Voice recognition, Photonics, Finger print coupons and loyalty points."

5. Consumer Coupon involvement by FTC: New and not previously mentioned post-covid Chinese boost to retail spending and confidence. Chinese Coupons summary explained below:

China’s retail sector made a slower than expected recovery in March, reporting a 15.8 percent drop from the previous year. To combat this, China has enabled local governments to issue consumption coupons and encourage shoppers to resume normal spending activities.As of April 8, nearly 50 cities across 16 Chinese provinces have issued vouchers that can be redeemed at participating dining, shopping, travel, cultural, and recreational enterprises.Vouchers may be a first step to instilling consumer confidence, but market watchers are still on the fence over their impact, and continue to press for more stimulus measures.

6. FTC assisting cash free development in hospital and pharmacy systems in China post COVID. Excellent potential new source of revenue expansion.

Concerns:
1. I understand the COVID situation but 700 banks has not changed past 6-9 months ... no growth even pre-covid. Expansion of banks seems to have slowed.
2. Major concern - lack of detailed attention in these reports. Page 1 claims of 4 million merchants using T-Linx and in the very same report Page 8 claims of 5 million merchants. This is a huge error in such a report to investors. With substantial revenue implications. Clarification is needed on the actual numbers.
3. Incredibly small profit 0.7 million given the risks of large net asset liabilities.
4. The total disappearance of blockchain portion of FTC revenue channel with no explanation as to why this has been dropped. Transparency is needed on an ASX listed company and for chair holder confidence.
5. Payment terms (I understand cultural differences etc.... but as an ASX listed company 12 month payment terms is excessive. This protracted payment length is merely addressed as "expects to reduce" ..... vague and no specific strategy or schedule mentioned which I expect to see as a shareholder.
6. Still "concerns of ongoing entity" I understand the risks in early phase fintechs however I now expect to see exponential revenue and business growth as "systems have now been successfully tested and rolled out". An assurance for further propping up by 2 board members is not particularly reassuring. This is the time to see results and growth. Admittedly net liability have improved since 2019 but still a huge amount of risk carried my shareholders.
7. Further clarification around the external auditor assessment of Convertible Bond Notes funding dropping from in some instance 0.80c /per share to 0.20c/per share. I am not an accountant but this seems like a drop in faith of the expected speed and revenue traction for the company moving forward. I may be misinterpreting this.

Overall I continue to hold but would definitely like more clarification, interest and exponential growth and delivery of a T-Linx system that should be gaining a lot of traction in banking and merchant worlds with successful sales team and marketing.

I am so keen for thoughts and discussion on all or any of these points.