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Ava Group and Mining3 sign contract for development and deployment of revolutionary new conveyor monitoring system

Ava Risk Group Limited (ASX:AVA) has today announced the signing of a development and commercialisation agreement with Mining3 which will see the launch of an innovative new performance management solution aiming to revolutionise the condition monitoring of conveyors.

The agreement will strengthen the recently announced strategic alliance between Future Fibre Technologies (FFT), an Ava Group division, and Mining3, the leading global mining research and innovation company.

Conveyor maintenance is a significant daily problem for the mining, cement, pulp and paper and agriculture sectors. Conventional methods of advanced detection of failure in conveyors are unreliable, time-consuming and labour intensive.

Under the 3 year agreement, FFT will use its Aura Ai-2 advanced fibre optic sensing platform combined with Mining3’s signal processing algorithms to bring to market a new FFT product that provides the world’s most advanced predictive conveyor condition monitoring system for the global mining industry. Importantly, the product will provide wear detection to pre-empt roller failure using FFT’s ultra-reliable fibre optic solutions. FFT will invest up to $250,000 to develop and market the new jointly created product and will have worldwide rights to the commercialisation of the technology.

This game-changing risk assurance solution is expected to launch in Q2 FY2019 and provides a first mover advantage for the Ava Group, in a potential total addressable market of up to $300 million.

Ava Group CEO, Chris Fergus, said: “Mining companies are striving to realise the full benefits of evolving digital capabilities to sustain and enhance improvements in productivity, including looking at ways of using data more effectively to enhance asset management, improve reliability and introduce predictive capability.

“This partnership is a result of our focus towards providing innovative solutions to clients in key strategic sectors. The potential opportunity for Ava Group is transformational as we begin to execute and leverage on our strong portfolio of Intellectual Property to address our adjacent market solution strategy”.

Prof Paul Lever, CEO of Mining3 added: “We believe that partnerships such as this will drive the industry forward, building trust with suppliers by turning vendors into partners. Ava Group’s approach to collaborative innovation with service companies and suppliers is to be commended and we look forward to working with the FFT team to extend the application of their world-class technology beyond the initial solution.”

About Ava Group

The Ava Group is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including intrusion detection for perimeters, pipelines and data networks, biometrics, card access control and locking as well as secure international logistics, storage of high value assets and risk consulting services. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to

deliver first class services and technologies that surpass the expectations of our partners and end users.

About Mining3

Mining3 is a world-leading research organisation, directed by its global mining industry members to develop and deliver transformational technology to improve the productivity, sustainability, and safety of the mining industry.

Our world-class researchers and engineers develop tangible solutions to industry-identified challenges using both fundamental and applied research, while leveraging our extensive history and acquired knowledge.

By bringing industry and research expertise together, we collaboratively accelerate the delivery of real-world solutions from our research, ensuring they are available to the market as rapidly and effectively as possible.

www.mining3.com

FFT celebrates 100th controller sale in India and thanks Austrade for its assistance in penetrating the market

FFT, the market leader in leader fibre optic intrusion detection and location products, is proud to announce the successful supply of its 100th premium high sensitivity intrusion detection controller by its Indian-based subsidiary, FFT India Pvt. Ltd. In marking the occasion, the company has also taken the opportunity to offer its considerable gratitude to Austrade (The Australian Trade and Investment Commission) for its diplomatic and introductory assistance across a number of vital project tenders.

FFT_India PR photo

The occasion has been marked by a cake-cutting ceremony held on 17th December in the presence of the FFT team and Leonie Muldoon, Senior Trade and Investment Commissioner-South Asia at Austrade. The ceremony also recognised the continued assistance of Austrade – including direct support from the Senior Trade Commissioner herself, who recently took part in face-to-face meetings and championed FFT’s solutions as part of a successful tender.

Sanjay Oberoi, Country Manager – India, for FFT commented, “We are excited and very proud to have reached this considerable milestone in FFT’s penetration of the Indian market. Our high-end controllers provide premium long-range solutions for some of the most demanding and security-conscious installations in the world. This success is in no small part thanks to the continued high levels of support from Austrade, which has whole-heartedly demonstrated its ongoing commitment to assisting Australian manufacturing and development businesses as they trade around the world. We are immensely grateful to the Austrade team for their support.”

Leonie Muldoon at Austrade also commented, “FFT is a great example of an Australian business that is flourishing in the Indian market by providing the very best solutions to its customers. We are proud to assist Australian businesses by leveraging our local relationships and commercial knowledge in markets such as India to ensure there are no unnecessary barriers to effective trade. We congratulate FFT on this impressive landmark achievement.”

Having developed and manufactured fibre optic based sensing systems for security applications since 1994, FFT’s market-leading solutions deliver performance levels and cost advantages unavailable with other sensing technologies. FFT’s fibre optic systems boast long range (up to 80km for perimeter fences or 110km for pipelines, on selected controllers), highly accurate event location, powerful Artificial Intelligence (Ai) Analysis and low installation costs, along with impressive safety and reliability, and seamless integration with third party systems and equipment. FFT’s technology is unique and proven time and again.

FFT India Pvt. Ltd. has traded in India for the last six years, having been registered with the Indian Registrar of Companies on 26th September 2012. It has a locally-based expert team of trained and certified engineers in the country which provide solution design, installation guidance, commissioning, training and on-site technical support (both under warranty and post warranty). The company has so far won over 50,000 kms of intrusion detection for perimeter, NLD backbone and pipeline intrusion detection.

Projects that FFT India Pvt. Ltd. has completed in India include: pipelines, military facilities, refineries, power sub-stations, multinational HQ perimeters and even international country borders. Key sectors in the region also include: air bases (including Indian Air Force, Navy and Army), commercial airports, DRDO laboratories, defense establishments, oil and gas pipelines/assets, the Dedicated Freight Corridor Corporation of India, thermal power generating plants and sub stations.

FFT India Pvt. Ltd. is a wholly owned subsidiary and part of its Australian parent Ava Risk Group Ltd (ASX: AVA), since FFT became part of the new group earlier this year. Being part of Ava Risk Group Ltd has enabled the company to leverage a wider network and more breadth of knowledge and expertise, to fully capitalise on market opportunities and grow its market share in India and other territories around the world.

About Ava Group

The Ava Group is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including intrusion detection for perimeters, pipelines and data networks, biometric and card access control as well as the secure international logistics, storage of high value assets and risk consulting services. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.

BQT Solutions launches Orca – New industry-leading high-strength, waterproof and fully integrated lock

AUCKLAND, Jan. 10 – BQT Solutions, a market leader in high security card and biometric readers and locks, has launched its new Orca weatherproof lock which provides industry-leading strength, unparalleled environmental durability and seamless access control integration for securing gates, roller doors, shipping containers, and any other large door or entryway.

Matthew Nye-Hingston, CTO of BQT Solutions Locking division commented, “Orca is the ultimate weatherproof lock, providing the complete combination of strength, security and convenience in one solution. It encompasses the features found in premium electronic locks, with the physical strength and function required to secure doors of any shape, whatever size.”

Orca lock is the latest generation of roller lock from BQT Solutions, building on an impressive portfolio that includes the YG10 – winner of the SIA New Product Showcase Award in the Lock Systems and Secure Storage Containers category presented at ISC West 2018.

Along with its highly impressive physical attributes, Orca’s ability to integrate into an access control system is what elevates its abilities well beyond anything else on the market. Orca is fully monitored and user-configurable, whilst being impervious to weather or environmental challenges making it perfect for deployment indoors or outdoors.

Orca’s standout features include:

  • High Security Performance – With a holding force in excess of 50,000N, 18mm diameter stainless steel bolt pin and reinforced strike design, the Orca lock ensures the most sensitive sites remain protected from even the most vigorous methods of attack.
  • Fully Weatherproof – Key features such as an IP67 rated design and built-in heater enable the Orca to withstand extreme weather environments including hot and cold climates, marine and desert conditions.
  • Highly Configurable – Orca can be adapted to suit a wide range of application requirements, with user selectable fail safe / fail secure modes and three user selectable control methods.
  • Complete Monitoring – Orca can truly become a part of the access control system, with a range of output signals including: bolt locked and unlocked position, door position, and tamper detection.
  • Versatile Installation – A symmetrical design means Orca can be installed both horizontally and vertically, giving greater flexibility to installers looking for optimum positioning.
  • Low Cost Running – With the heater disabled, Orca offers low current consumption, drawing as little as 30mA in standby and only 300mA in operation at 12VDC.
  • Long-term reliability – A high quality low voltage motor is the key to the Orca’s reliability while stainless steel and wear resistant plastic components ensure complete peace of mind for any security operator.

Matthew added, “Orca is the perfect heavy-duty monitored lock for any integrated security solution. Our highly-skilled team in New Zealand has worked hard to ensure we bring a product to the market that we truly believe is the best of its kind. With several exhibitions lined up in the new year we are looking forward to showing more customers how Orca can secure their installations.”

An Ava Group company, BQT Solutions is a specialist in the development, manufacture and supply of high quality, high security card and biometric readers, electromechanical locks and related electronic security products. The company provides a wide range of both off-the-shelf solutions and purpose tailored solutions.

Working with major system integrators, security consultants and end users, BQT Solutions develops tailored access control solutions to fulfil a range of access control requirements. From standalone units to fully integrated enterprise solutions, BQT access control systems are designed to provide maximum security, maximum value – and a migration path to meet present and future needs.

About the Ava Group

The Ava Group is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including intrusion detection for perimeters, pipelines and data networks, biometric and card access control as well as the secure international logistics, storage of high value assets and risk consulting services. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.

Future Fibre Technologies (FFT) perimeter technology selected for $2.2m award in Asia

Ava Risk Group Limited (ASX: AVA), a market leader in the provision of risk management services and technologies, announced today that it has received purchase orders for A$2.2m in respect of the upgrade of security at several military airbases in Asia. This is the first phase of a wider program to enhance security at a number of critical military locations.

Ava Group Chief Executive Officer, Chris Fergus states: “We are pleased that Ava Group’s FFT market leading perimeter intrusion detection solution was selected for this critical project and that our Aura Ai-2 next generation
controller’s ability to provide both fence mounted and buried detection from a single platform were key in the selection decision. Other key criteria included FFT’s ability to provide seamless integration with all layers of
command and control systems, along with a rugged and highly reliable product.

Reflecting our investment in international growth, a further reason for the award to Ava Group was our experienced in country team that will provide long term technical support through installation, commissioning and warranty. This is reflective of Ava Group’s strategy of being close to our customers.”

The contract award follows extensive competitive testing by the end user at various sites, including on different fence types and soil conditions. Our products proved their advanced capabilities for detection accuracy and high Probability of Detection, with the ability to detect climbing, cutting, walking, crawling, running, movement of light vehicle and heavy vehicles, as well as manual and mechanized digging and tunneling.

Testing was also undertaken to confirm the integration of FFT’s products with third party video and Physical Security Information Management systems. FFT Aura Ai-2 met and exceeded the customers specifications and expectations in all testing.”

The initial award is valued at A$2.2m for the first phase of the upgrade program and is expected to be fulfilled in Q3 of FY2019. The second phase is estimated at A$900k and is expected in early FY2020.

Mr Fergus continued “Ava has participated in a number of trials and competitive shoot-outs for its FFT fence and covert buried capabilities with Aura Ai-2 in the last 6 months, and in every test we have demonstrated outstanding and world leading performance for both detection and ability to minimise nuisance alarms in challenging installations. We are delighted to now see the contracts associated with these trials starting to be released.”

About the Ava Group

The Ava Group is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including Future Fibre Technologies (FFT) intrusion detection for perimeters, pipelines and data networks, BQT Solutions biometric and card access control as well as
the secure international logistics and storage of high value assets. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.

Ava Group Unveils Latest Enhancements to its Powerful Market-Leading Aura Ai-2 Advanced Fibre Optic Intrusion Detection and Location Solution

Ava Group is proud to announce new enhancements to its market-leading FFT Aura Ai-2 advanced fibre optic detection controller, which offers superior intrusion detection location accuracy together with extended range performance. The system is perfect for monitoring pipelines, perimeters and communications networks.

Mark Horton, Global Sales and Marketing Director at Ava Group comments, “The Aura Ai-2 is our next generation controller and was released to industry acclaim last year, being recognized for its ground-breaking performance. However, the system has had further performance upgrades and now offers monitoring of optical distances of 80km for perimeter fence detection or 110km for pipeline or covert buried detection. Accuracy has also been enhanced, the system can now pinpoint an intrusion location down to within within ± 2m metres on a fence mounted application. The controller is also able to cover different applications simultaneously, for example fence mounted and covert buried detection. This essentially offers two units in one, saving on both procurement and operational costs.”

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Ava Group to Demonstrate Latest Innovations at International Security Expo, London Olympia – November 28-29, 2018

Ava Group will be presenting its portfolio of security solutions at International Security Expo, stand E74. The expo also hosts a range of certified conferences and workshops covering every major sector of the security industry. Taking place over two days at London Olympia, the event focuses on the needs of government and CNI amongst other key sectors.

Ava Group will be showcasing the latest solutions from its technology division – incorporating Future Fibre Technologies and BQT Solutions. The Ava Group is a market leader of risk management services and technologies, offering a portfolio of complementary solutions encompassing both fibre optic intrusion detection and high security access control and locking.

Mark Horton, Global Sales & Marketing Director – Technology commented, “Our brands have a strong pedigree in some of the expo’s key sectors including government and CNI, and we’re very much looking forward to discussing with visitors how Ava’s solutions can be applied to protect their organisations. Ava Group has had some major project wins in recent months including a major military closed data network, who have selected our data network infrastructure protection solution to secure their network against tapping and tampering. It is projects such as this that demonstrates Ava Group’s expertise in security risk management and protection of client’s assets and infrastructure.”

Ava Group’s CTO – Technology, Dr Jim Katsifolis will be presenting in the Perimeter Security & Intrusion Detection Technology Workshop on ‘Security within security in a converged perimeter intrusion detection solution’ on the first morning of the exhibition. An accomplished R&D professional, Jim will explore the latest generation of PIDS technologies, the convergence of intrusion detection and cybersecurity as well as addressing some common myths in this field.

Featured on the stand will be the enhanced Aura Ai-2 controller from Future Fibre Technologies. This market leading product offers unrivalled high-sensitivity detection, location accuracy, cut resilience capability and the industry’s longest linear range. New ultra-low noise optical detection electronics ensure a single controller can cover a distance up to 110 kilometres and can accurately detect, locate and report multiple disturbances to +/- 2 metres.

Ava Group is also previewing its Small Site Assurance range, which is designed to protect remote unmanned locations through a holistic security management solution. The solution incorporates intrusion detection, access control and locking as well as environmental monitoring – all controlled remotely from a simple graphical user interface. The Small Site Assurance range is particularly suited for utilities, telecoms, energy, oil & gas and data centres that are at risk from threats such as vandalism, opportunistic and targeted theft, terrorist attack, trespass, system failure, accident or injury.

From BQT Solutions, Ava Group will be demonstrating the Orca lock. Building on the success of the award winning YG10, the Orca lock is a high-strength lock designed for securing gates, roller doors, shipping containers, and any other large door or entryway. Alongside the Orca’s impressive physical attributes, its ability to integrate into an access control system is what elevates it beyond anything available in the market. Fully monitored, weatherproof, and user configurable, the Orca is the perfect indoor and outdoor locking solution.

BQT will also demonstrate the latest software integration between their miPASS Access TMS software and Paxton’s Net2 access control software. The integration enables the seamless addition of BQT biometric readers to new or existing Net2 systems, facilitating a smooth transition from less secure card technologies to more robust options like fingerprint biometrics and BQT’s own miPASS credentials.

About the Ava Group

The Ava Group is a market leader of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including intrusion detection and location for perimeters, pipelines and data networks, biometric and card access control as well as secure international logistics, storage of high value assets and risk consultancy services. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.

Ava Group announces strategic partnership with Mining3 to deliver Innovative Predictive Asset Maintenance Solutions to the Global Mining Sector

Ava Group (AVA), a market leader in the provision of risk management services and technologies, is pleased to announce a transformational technical and commercial partnership with a global industry leader in mining research and innovation, Mining3. The partnership represents a technical collaboration on the final form development and the rapid commercialisation of a predictive asset condition monitoring solution for the mining industry, to be launched in Q1, 2019.

Andrew Hames, Group Head of Extractives and Energy for Ava Group comments, “At Ava Group we continue to explore new ways to support our customers to solve every day business challenges with the application of our marketing leading technologies. Mining companies are fostering innovation by adopting the right systems, technologies and culture to take their businesses forward. Mining3 is a global industry leader in research and innovation for the development and delivery of transformational technology in the mining industry, and the collaboration with Mining3 will support Ava Group’s expansion to serve a broader range of applications for this sector.

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Ava Group Selected to Safeguard the Indian Ministry of Defence Closed Data Network with Fibre Optic Intrusion Detection

Ava Group (ASX: AVA), a market leader in the provision of risk management services and technologies, has announced that an Ava Group Company solution has been selected to protect a major military closed data network from the threat of tampering and tapping. The project to deploy its fibre optic intrusion detection and location solution is valued at around US$11m and asserts Ava Group’s status as a world leader in data network protection.

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Ava Group to Showcase Security Risk Management Solutions at GSX, Las Vegas – September 25-27, 2018

Ava Group (AVA), a market leader in security risk management technology is pleased to announce it will be exhibiting at GSX, booth 3830. Global Security Exchange (GSX), formerly the Annual Seminar and Exhibits and powered by ASIS claims to be the most comprehensive security event in the world. The event is focused on networking and education with a range of in-show features and a comprehensive conference schedule all taking place at the Las Vegas Convention Center.

Ava Group will be presenting the latest solutions from its technology division with a brand new booth, incorporating Future Fibre Technologies and BQT Solutions. The Ava Group is a market leader of risk management services and technologies, offering a portfolio of complementary solutions encompassing both fibre optic intrusion detection and biometric and card access control.

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AVA receives confirmation of Letter of Intent for a major military project

 Ava Risk Group Limited (ASX: AVA) announced today that a data network security solution developed by its Technology Division has been selected to protect one of the world’s largest closed user group data networks for the exclusive use of more than one million military personnel.

 A Letter of Intent to manufacture FFT network security technology, under licence, has been issued to Ava Group’s in-country manufacturing partner, SFO Technologies Private Limited (SFO).

  • The value of the licence fee is estimated at to be between US$10.5m and US$11.1m (A$14.4m and A$15.2m) and expected to be delivered over a 15 month period.
  • While the final value and timing of licence fee revenue to Ava Group are dependent upon final cost of goods and delivery schedules, it is anticipated that approximately US$5.84m (A$8m) revenue will be generated in FY2019 with the remaining revenue expected in FY2020. The LOI estimates that SFO will receive the formal purchase order by the end of September 2018.
  • Given the licence fee nature of the project and no working capital requirement, the project is expected to be highly profitable. Moreover, it’s expected that the project win should lead to further opportunities in the secure data network market.
  • In addition, there is expected to be additional revenue after the initial 3 year warranty period from a subsequent 7 year spares and maintenance contract, which will be quantified at a later date.

Following an extensive tender process, this award underlines the quality and competitiveness of Ava Group’s  data network security solution and its superior ability to locate interference and intrusions on a highly secure data network.

Of importance to the end user, was the implementation of a solution that included ease of deployment and a unique level of enhanced security provided by its real-time early warning of unauthorised access, with no impact on data throughput. This not only improves network efficiency, but also reduces the cost of deployment compared to traditional solutions.

Ava Group Chief Executive, Chris Fergus said that:

“With cybersecurity breaches a seemingly daily occurrence, we are presented with a significant opportunity to expand the application of our intrusion detection technology to the protection of sensitive data network cables. Our Ava Group intrusion detection solutions have previously been selected to protect sensitive military, government and utility data networks in the United States, Australia, and the Middle East, providing advance warning of attempted breaches and enables asset owners to quickly take preventative action. This project win not only introduces a new major customer to Ava Group, but also provides us with another opportunity to demonstrate the breadth of our risk management solutions into adjacent markets and is further supported by the recent launch of our Cybersecurity Centre of Excellence.

For the purposes of this project, Ava Group has licenced the manufacturing of its FFT technology to SFO, a major in-country manufacturing partner. This manufacturing partner will take on all of the manufacturing cost (and associated working capital) and delivery risk under the award. The manufacturing partner will pay Ava Group a licence fee for each system supplied for the project, generating estimated revenue of between US$10.5m and US$11.1m (A$14.4m and A$15.2m).

Ava Group Chairman, David Cronin said:

“the selection of Ava Group’s FFT technology to protect a large scale telecommunications network is reflective of the growing threat to the worlds data. Government, military and commercial end users are increasingly becoming aware of the potential for illegal tapping, and physical disruption, of their sensitive data. With an increasing suite of products and risk management services, Ava is at the forefront of this large and growing market segment. This deployment is an important milestone for the Company, showing a clear return for shareholders on the investment we have made in increasing our geographic and market segment reach”.

*This announcement should be read in conjunction with the further information that is contained in Appendix A.

 Ava Group will provide further updates as more information is provided or when the assumptions underlying this announcement materially change.

About the Ava Group

The Ava Group is a market leader in the provision of risk management services and technologies, trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

The Group features a range of complementary solutions including intrusion detection for perimeters, pipelines and data networks, biometric and card access control as well as the secure international logistics and storage of high value assets. Through decades of innovation, the Ava Group continues to build upon a comprehensive portfolio of premium services and technologies for the most complex and demanding markets.

Our business truly serves a global market, with our knowledgeable team spread across six continents, providing market and industry expertise directly to customers. With thousands of sites protected, the Ava Group is proven to deliver first class services and technologies that surpass the expectations of our partners and end users.

Contact

For more information on this announcement please contact Leigh Davis, CFO leigh.davis@theavagroup.com

About SFO Technologies

SFO Technologies, is the flagship company of NeST Group, incorporated in 1990, and provides Original Design Manufacturer (ODM) and Original Equipment Manufacturing (OEM)  to diverse industries such as Aerospace & Defence, Communications, Energy & Industrial, Healthcare and Transportation.

The group has development centres, factories and front-end offices in over 32 global locations, across the USA, Canada, Europe, Middle East, South East Asia, Japan, Australia, and India.

SFO has provided various types of ODM and OEM services and solutions to a host of customers – ranging from suppliers to Indian Government defence contracts, Fortune 500 companies to SMBs (Small & Medium Business).

Appendix A:

  1. Forward Looking Statements

Information in this release is for general information purposes only. Certain statements in this document regarding the Company’s financial position, business strategy and objectives, contain forward-looking statements (rather than being based on historical or current facts) and as such, are not able to be verified.

All forward-looking statements are based on the current views of the Company’s management as well as reasonable assumptions made by, and information currently available to the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that some or all of the underlying assumptions will prove to be valid. If assumptions are invalid this is likely to have an impact on the accuracy of the statement itself.

All data presented in this document reflects the current views of the Company with respect to future events.  Forward-looking statements are subject to a variety of risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Forward looking statements are also subject to external matters outside the control of the Company.

To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward looking statements) in this presentation to reflect any change to expectations or assumptions; and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.

  1. Summary of Original Equipment Manufacturer and Value Added Reseller Agreement (SFO Agreement) between Ava Group and SFO

The SFO Agreement sets out the rights of the parties to jointly bid Ava Group’s FFT Secure Link technology, and associated software solutions (the FFT Hardware and FFT Software) by leveraging SFO’s local Indian manufacturing, operational and technology capabilities for the purpose of an Indian Ministry of Defence tender (MOD Tender).

The agreement is governed by the laws of Victoria, Australia.

Under the agreement, Ava Group appoints SFO as a value added reseller of the FFT Hardware and FFT Software for the purpose of the MOD Tender.

  • License

Under the agreement, Ava Group grants SFO the following rights:

  • An exclusive license to manufacture the FFT Hardware for the marketing, promotion and sale of goods and services pursuant to the MOD Tender or any related tender (the Purpose);
  • The right to brand the FFT Hardware and FFT Software and any bundled product (being a combination of FFT Hardware and FFT Software) with SFO branding;
  • The right to use Ava Group’s FFT Secure Link trademark within the agreed branding;
  • An exclusive license to distribute the FFT Software for the Purpose, within India, but only when bundled with FFT hardware;
  • An exclusive license to distribute any spare or replacement parts for the FFT Hardware or FFT Software within India;
  • The right to reproduce, abridge, condense or translate all or portions of the Ava Group FFT user documentation in accordance with the agreement; and
  • The right to distribute the Ava Group FFT user documentation solely in conjunction with the distribution of a bundled product.

Ava Group’s rights to distribute any of its products anywhere within India is not limited and it may also appoint any other third party to distribute Ava Group products within India, (except for supply under the MOD Tender).

SFO also has incidental rights under the agreement to use executable code for the purposes of reproducing copies of the FFT Software or for providing support as required by the agreement, and Ava Group will provide SFO with licence keys to unlock the FFT Software.

  • Term

The term of the agreement is the entire period of contractual obligations under the MOD Tender.

  • Sub-licensing

Under the agreement SFO is prohibited from giving any other reseller or dealer the right to manufacture or distribute the FFT Hardware or FFT Software, or any bundled product, unless Ava Group gives written consent. Ava Group can withhold its consent at its discretion.

  • Specific obligations of Ava Group

Ava Group must:

  • Provide SFO with reasonable required support to enable SFO to respond to the technical aspects of the MOD Tender;
  • Provide all reasonably required training required for SFO to successfully manufacture, test, install and integrate FFT Software with SFO software, or to commission and support the FFT Hardware or any bundled product;
  • Provide reasonable technical support; and
  • Provide, free of cost, support to SFO to identify alternative suppliers for any obsolete parts recommended by Ava Group.
    • Intellectual Property

Each party retains their existing intellectual property rights and specifically, Ava Group retains all intellectual property rights in the FFT Hardware, FFT Software and any bundled product. Further, any intellectual property rights that arise during the integration process are the sole property of Ava Group.

  • Termination
  • Events of termination include:
  • Either party defaulting on any of its obligations under the agreement;
  • Either party becoming insolvent;
  • Either party ceasing to carry on business;
  • Either party may terminate the agreement without cause on the expiry date of the existing Term.
    • Non-Compete

During the term of the agreement and for not less than 12 months after the agreement, SFO (or any of its affiliates) must not distribute or develop any product that is substantially competitive with the FFT Hardware, FFT Software or any bundled product.

Further, SFO must not during the term of the agreement and for not less than 18 months after the agreement distribute or develop a product that is similar with the products of Ava Group (not limited to those the subject of the agreement) or supply or offer to supply any other product except for the FFT hardware, software and bundled product, to any party for the purpose of supply under the MOD Tender.

  • Liability and indemnities

Express, implied or statutory warranties or expressly excluded with respect to the condition, quality, quantity, merchantability, fitness or suitability of the FFT Software, the FFT Hardware or any bundled product or the SFO software.

  1. Risk Factors and important investment considerations

There are a number of risks, some specific to Ava Group and some of a general nature, which may either individually or in combination materially and adversely affect the future operating and financial performance of Ava Group, its investment returns and the value of the shares. Many of these risks are outside the control of Ava Group.

Below are the material risks Ava Group has identified that are specific to the terms within the SFO Agreement that relate to the matters disclosed in this announcement:

Letter of Intent (LOI)

Under the terms of the LOI, a formal Purchase Order (PO) is expected to be released by the end of September 2018.This date may vary. Final delivery clearance is subject to successful completion of factory acceptance test/consignee inspection at factory. Final quantity may vary at the time of the PO release.

Cost of Goods Sold (COGS)

Under the terms of the SFO Agreement, SFO is responsible for placing direct orders on Ava Group’s nominated suppliers and for all COGS, along with other manufacturing costs. Under the terms of the SFO Agreement, the parties will share any positive or negative movement in the ratio of 50% Ava Group, 50% SFO. i.e. if COGS decreased by 10% Ava Group would receive 5% of the benefit as an increased licence fee. Conversely, if COGS rose by 10% Ava Group’s licencing fee would reduce by 5%.

Delay of delivery schedule

Based on the current delivery schedule, Ava Group believe that approximately 53% of revenue will occur in FY2019 and the balance in FY2020. There are significant risks associated with potential delays that are outside of the control of Ava Group. Based on our experience, there is a high degree of risk that large projects, such as the one that is subject of this announcement, could be delayed. Ava Group will update the market if changes to its assumptions are warranted.

Exchange rates

Ava Group operates internationally and in several currencies. Accordingly, fluctuations in prevailing exchange rates affect Ava Group’s profitability and financial position.

Under the SFO Agreement, Ava Group will be paid in US dollars. Ava Group’s financial statements are prepared and presented in Australian dollars, and any appreciation in the Australian dollar against the US dollar will adversely impact its financial performance and position under the SFO Agreement. A rate of 1 AUD to 0.73 USD has been used when preparing the forecasts contained in this announcement.

Revenue Recognition

Under the terms of the SFO Agreement, Ava Group revenue will be recognised when the payment obligation arises, being upon each supply of product from SFO (ex-works).

Payment Terms

The payment terms under the LOI are 70% at 120 days, 20% at 180 days and 10% at 365 days. Ava Group is currently negotiating with SFO appropriate mechanisms for progress payments.