Quarterly Activities Report

xReality Group Limited (ASX:XRG) (xReality) is pleased to provide the following Quarterly Activities Report and Appendix 4C for the quarter ending 31 December 2023 together with an Operational Update.

Key Highlights

• Receipts from customers for the quarter totalled $2,795,969.
• Consistent retail trading with positive cashflow in the Entertainment Sector Cash position at end of quarter $2.89m
• Aggressive Sales and Marketing Activity in the US
• Sale of Operator XR system to Clark County School District Operator XR secures trial with Los Angeles SWAT
• Successful and strongly supported Capital Raise completed in November.

Operational Update by Business Sector:

Operator XR Global Enterprise Software and Technology

The company made significant progress in the United States Law Enforcement and Military markets over the past 3 months and continues to achieve major milestones in line with the global expansion strategy.

Momentum in the US Markets

• Delivery of equipment Sheriff's Department in November 2023
  • The recent delivery and training of the Operator XR equipment for the Garfield County Sheriff's Department in Colorado has been a resounding success. This cutting-edge technology, now fully operational, is a significant addition to the department's resources. The comprehensive training provided ensured that the officers are well-equipped to utilize the full potential of the Operator XR system. The feedback from the department has been overwhelmingly positive, with reports highlighting enhanced operational capabilities and improved training efficiency to enhance public safety within the region.
• Los Angeles SWAT trial
  • Operator XR LLC has recently secured a trial with one of the highest profile departments in the US. LA SWAT will trial Operator XR exclusively for a period of 3 months during which they will utilise the tactical trainer and the de-escalation systems. They will also have access to the operational planning tool, where they can rehearse scenarios and live situations including active shooter and de-escalation scenarios in any location.
• Law Enforcement Forensics Sale
  • Clark County School district comprising 380 schools and serves more than 300,000 students recently acquired a single Operator XR Law Enforcement System to the value of $53,000 AUD. Students receiving forensics education will utilise the technology to understand crime scenes, with a focus on forensic skills and techniques. This opens a new market of student education in the USA which includes federally funded grants to develop STEM skills. There are over 35,000 high schools in the US alone.
• Final Stages of US Dept of Defence proposal with an expected contract value of c. $5m
  • Operator XR LLC, is in the final stages of negotiation with the US Department of Defence for the development of a major new XR training application.¹
• Marketing Activities
  • During the last 3 months Operator XR has conducted over 26 new customer hosted demonstrations and attended 5 major conferences including one of the world's largest Police and Military conferences held in Las Vegas, Nevada - Shot Show. The show served an excellent platform to promote Operator XR's brand amongst the US and international police, military, security, and firearms industries. The event captured over 200 notable leads with over 50 of those leads being US police departments as well as multiple US federal agencies.

Operator XR Australia and APAC:

• Defence and Police paid trial and evaluation programs remain underway across the region, including the Australian Defence Force, and the trials are progressing well with positive feedback to date. Completion of the evaluation process is expected to occur between Q3 and Q4 FY24. The expected next steps with these customers will be significant purchases through formal procurement processes occurring late FY24 into FY25.
• The Western Australia Police Force is now 9 months into the 5 year, $1.7M contract, training new recruits at the Police Academy and providing the company with valuable feedback which is driving cutting edge development of the products.

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