TMT UPDATE (MIRA.L, OSI.L, NET.L, TEK.L, ECSC.L)

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1 Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid cap TMT sector as well as commentary on recent newsflow. TMT UPDATE (MIRA.L, OSI.L, NET.L, TEK.L, ECSC.L) Mirada plc (MIRA.L, 1.02p/ 1.4m) Finals: Sales pipeline growth ( ) Results: FY17 revenue +9.1% to 6.6m, gross profit +5.0% to 6.1m but adj. EBITDA reduced substanitally to 0.04m from 1.50m. Revenue was driven primarily by the deployment of the Iris multiscreen product across the five izzi Telecom (part of Televisa) networks in Mexico. Reported operating loss was 5.1m (FY16: 0.4m) that included an increased amortisation charge ( 2.1m vs 1.6m) and a 3.0m goodwill impairment. Net debt increased 0.7m to 4.2m. Cash was 0.2m (FY16: 0.7m) with additional invoice discounting facilities of 2.4m and unused short-term credit lines of 0.8m available. izzi Telecom: More than 670,000 STBs had been deployed by the end of March (>750k at June). As izzi has a customer base of >4m households in the cable market and several STBs per subscriber, there is a substantial growth opportunity. Iris has been well recevied by izzi and its subscribers. Increased pipeline: Investment is sales and marketing with local representatives in Latin America, India, South-East Asia and Eastern Europe. This has substantially increased the sales pipeline (aided by the izzi reference deployment) but decision cycles remain long (typically six to 18 months). Introduced a SaaS sales model that offers customers an opex rather than capex model. Lifetime values of SaaS contracts will be higher but there are revenue recognition and working capital considerations. ATNi contract: Post period end announced a contract with the US-based ATNi under the SaaS model for a deployment for the Caribbean region. Mirada is in discussions regarding the necessary working capital financing facilities with announcements to be made in due course. Allenby Capital comment: FY17 was dominated by the ongoing deployment across the five izz Telecom networks in Mexico. This has been Mirada's largest roll out to date and has provided an important reference customer but it has not been without complications. There was considerable economic uncertainty in Mexico post the US election and also some non Mirada-related network performance issues. As a result, the rate of deployment slowed during FY17 before picking up at year end. izzi continues to represent a considerable revenue opportunity and committed customer. Mirada has increased its sales and marketing function and the recent ATNi contract win will provide some welcome revenue diversification as well as increased visibility under the SaaS model. The balance sheet is in need to strengthening but the current enterprise value is merely 0.9x historic revenue. Allenby Capital acts as Nomad and broker to Mirada plc. Osirium Technologies plc (OSI.L, 140p/ 14.6m) Interims: Building sales and marketing channels ( )

2 Total bookings +393% to 445k and reported revenue of 262k (+59%), with SaaS revenue +29% to 207k and Professional Services of 54k (H1 FY16: 4k). Operating loss increased to 1.3m from 0.5m, reflecting the increased investment in sales and marketing since its IPO in April On top of this, 0.5m of development spend was capitalised (H1 FY16: 0.4m). Cash was 2.0m (H1 FY16: 4.5m; FY16: 3.6m). Eight new customers were secured in H1 across a number of sectors (including managed service and managed security service providers) and there were six upsells/renewals. This included the largest contract to date - a 12 month renewal with a leading asset management company. Senior sales and marketing now in place and Business Development Directors appointed in the Middle East, APAC and Germany. Distribution/reseller agreements include Distology (UK), ectacom (Germany, Austria, Switzerland and Poland), Spectrami (Middle East), CHJ Technologies (Singapore) and EB2BCOM (Singapore and Australia). Management has a track record in building an indirect channel. Named as 'Cool Vendor' industry analyst Gartner for Identity and Fraud Management. Allenby Capital comment: The market for Privileged Access Management software is gaining momentum (Gartner is forecasting a 27% CAGR) as companies look to secure their IT assets against attack. By targeting privileged access users, attackers are able to gain access to the widest range of IT systems. Osirium has developed a platform with a number of modules designed for the mid market with ease of use and deployment. There is also a task automation angle that helps to free up IT resource. Competitor products have been designed for larger companies and are more complicated to deploy and maintain. Company has been building up the direct and indirect sales channel since IPO and the contract win rate is encouraging though there needs to be an acceleration for the benefits of operational gearing to come through. Netcall plc (NET.L, 49.75p/ 71.0m) Finals: MatsSoft adds low-code development ( ) Revenue dropped 2.5% to 16.2m, as a result of the transition to a cloud revenue model, but annualised core revenue increased 8% to 11.8m and the order book of contracted future minimum revenue increased 13% to 17.0m. Adj. EBITDA increased 1% to 4.5m. Net cash of 12.7m (FY16: 14.1m) after payments of dividends of 4.2m. Post year end acquisition of MatsSoft, a cloud-based low-code software provider, for an initial consideration of 13.4m ( 11.1m cash) and performance-related deferred consideration of up to 2.3m cash and 9.5m shares. MatsSoft achieved revenue of 5.5m in FY16 with a small profit. The acquisition substantially broadens Netcall's product offering by enabling the rapid delivery of enterprise-grade business applications. It has c. 60 customers across the public and private sector. Allenby Capital comment: Finals were overshadowed by August's acquisition of MatsSoft that has significantly diversified the Netcall business into a much broader interpretation of customer engagement centre and experience management. Low-code development platforms where non-coders are able to build apps through drag and drop functionality are forecast substantial growth to 15.5bn in 2020 (Forrester) and MatsSoft was the only UK vendor to feature on Forrester's landscape. Netcall brings a larger sales resource as well as an existing customer base to upsell. That said, there needs to be evidence of the synergies between the businesses - shares have been somewhat weak over the past 12 months but is still trading on 23.1x FY18 and 19.1x FY19. Tekcapital plc (TEK.L, 21.5p/ 9.2m) Proposed fundraising by subsidiary ( )

3 Proposed Token Sale on October 17th of up to $10m by Lucyd pte ltd, a subsidiary of Lucyd ltd, where Tekcapital owns 100%. Lucyd was established by Tekcapital to exclusively license and commercialise a portfolio of 13 optical technology patents that Tekcapital acquired from the University of Central Florida that enable wearable augmented reality (AR) products. Lucyd has now built up a team as well as scientific advisors and is now at the stage to manufacture prototype AR glasses that incorporate see-through displays with eye tacking technology. The funds raised will be used to fund the development of the glasses and software apps. Tekcapital will be holding a briefing for investors and analysts on Tuesday October 3rd. Allenby Capital comment: ICOs (initial coin offerings) and Token Sales have rapidly emerged as a means of providing funds for the development of early stage companies, particularly those with a consumer angle. The cryptographically generated tokens are digital objects that represent something within a business e.g. free t-shirts on a t-shirt site or beers from a brewey, rather than equity in the company. Tekcapital has developed an innovaitve global university intellectual property (IP) investment and commercialisation model. The company is in the process of monetising its IP portfolio by out-licensing and bringing in external investors and the proposed development for Lucyd fits with the model. Allenby Capital acts as Nomad and broker to Tekcapital plc. Allenby Capital's research on Tekcapital plc is available here ECSC Group plc (ECSC.L, 130p/ 11.8m) Interims: Difficult FY17; expansion plan reversed ( ) Difficult first year as a plc with management reporting further slippage in the conversion of the Managed Security Services (MSS) pipeline into contracts. As a result, although there will be revenue growth, FY17 will be below market expectations that were revised downwards with the pre-closing statement ( ). Management believes that it underestimated the impact of its rapid expansion (headcount increased from 57 to 106) on the existing sales team but also a lengthening in decision making cycles. Cyber security has moved up the corporate agenda with the number of high profile data breaches and the looming GDPR regulation. This is good in the medium term but board level approval has necessitated additional layers of sign off. A number of cost savings have been identified with headcount reductions across sales, managed services, consultancy and G&A and total staff will drop back below 80. This more conservative growth strategy will hit the top and bottom line and the business is now forecast to be loss-making in FY18 (LBT 0.5m versus previous forecast of 0.2m) before returning to profit in Addition of a second Security Operations Centre (SOC) in Australia has enabled 24/7 MSS cover and a new office has been opened within the M25 to improve its incident response capability for London and the South East. Consultancy business continues to grow nicely with day rates sustainably in the top quartile. These customers should feed through to managed services. H1 revenue was +9% to 1.9m with Consulting revenue +14% to 1.1m and MSS recurring +13% to 0.4m. There was a 1.8m negative swing in EBITDA to a loss of 1.5m, reflecting the enlarged cost base - operating costs increased 169% to 2.6m. Cash outflow of 1.9m leaving cash of 3.1m. This is expected to drop to c. 1.6m in December. Allenby Capital comment: The market drivers for cyber security remain strong - high profile data breaches increasing and the looming GDPR regulations (mandatory reporting and fines up to 4% of global revenue) are focusing the minds of boards. There also ramifications for the wider IT service providers as they will share the

4 risks under GDPR. But converting pipeline into sales remains something of a challenge for many of the UK-listed IT security players. Security does need to be discussed at the board level but this has lengthened sales cycles (multiple layers of sign off and education). ECSC has grown consistently over the past 17 years and enjoyed high levels of staff retention in a sector that is characterised by churn. The need for a cost reduction programme is unfortunate and will need to be carefully managed to maintain the strong corporate culture and ensure this was only a stumble. DISCLAIMER This document is issued by Allenby Capital Limited (Incorporated in England No ), which is authorised and regulated by the Financial Conduct Authority ( FCA ) for designated investment business, (Reg No ) and is a member of the London Stock Exchange. This document is for information only and should not be regarded as an offer or solicitation to buy the securities or other instruments mentioned in it. It or any part of it do not form the basis of and should not be relied upon in connection with any contract. Allenby Capital Limited uses reasonable efforts to obtain information from sources which it believes to be reliable but the contents of this document have been prepared without any substantive analysis being undertaken into the companies concerned or their securities and it has not been independently verified. No representation or warranty, either express or implied, is made nor responsibility of any kind is accepted by Allenby Capital Limited, its directors or employees either as to the accuracy or completeness of any information stated in this document. This document is a marketing communication and has not been prepared in accordance with legal requirements designed to promote the independence of investment research; and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Opinions expressed are our current opinions as of the date appearing on this material only. The information and opinions are provided for the benefit of Allenby Capital Limited clients as at the date of this document and are subject to change without notice. There is no regular update series for research issued by Allenby Capital Limited. No personal recommendation is being made to you; the securities referred to may not be suitable for you and should not be relied upon in substitution for the exercise of independent judgement. Neither past performance nor forecasts are a reliable indication of future performance and investors may realise losses on any investments. Allenby Capital Limited and any company or persons connected with it (including its officers, directors and employees) may have a position of holding in any investment mentioned in this document or a related investment and may from time to time dispose of any such securities or instrument. Allenby Capital Limited may have been a manager in the underwriting or placement of securities to the issuers of securities mentioned in this document within the last 12 months, or have received compensation for investment banking services from such companies within the last 12 months, or expect to receive or may intend to seek compensation for investment banking services from such companies within the next 3 months. Accordingly recipients of this document should not rely on this document being impartial and information may be known to Allenby Capital Limited or persons connected with it which is not reflected in this material. Allenby Capital Limited has a policy in relation to the management of the firm s conflicts of interest which is available upon request.

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