Audited results for the year ended 30 June 2022

RNS Number : 1325B

CAP-XX Limited

29 September 2022

 

Dissemination of a Regulatory Announcement that contains inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 .

29 September 2022

 

CAP-XX Limited

("CAP-XX" or the "Company")

Audited results for the year ended 30 June 2022

CAP-XX Limited, a world leader in the design and manufacture of supercapacitors and energy management systems, is pleased to announce its audited results for the year ended 30 June 2022.

Key highlights

· Product sales revenue up 44% on last year

· Total revenue up 36% on last year

· Gross margin up 43% on last year

· Adjusted EBITDA loss* of A$0.5 million, is on par with the previous year (A$0.4 million)

· Sales pipeline** increased by US$10 million to over US$60 million p.a.

· Successful ramp up of ex-Murata lines - manufacturing costs per unit, yield and capacity fast approaching ex-Murata levels of operational performance despite limited time in situ

· CAP-XX continues to pursue patent infringement action against Maxwell Technologies (which is still a wholly owned subsidiary of Tesla Inc.) and other parties. Operating expenses were negatively impacted by A$2.3 million of associated legal expenditure, up A$1.9 million on last year

· Royalty contribution is primarily from AVX with court proceedings in place to ensure payments reflect what is properly owed

· CAP-XX continues to develop new IP around supercapacitors and energy storage with a number of new patent applications

· CAPXX had cash reserves (excluding any legal funding) as at 30 June 2022 of A$1.6 million and was debt free.  A further R&D A$2.0m tax rebate is anticipated later this calendar year. Litigation funding approved, pending completion of due diligence process

* Adjusted to exclude legal expenses for patent infringement and the amortisation of share-based payment expenses.

** Sale Pipeline is the total potential annual sales revenue of all known projects which are curently under evaluation by CAP-XX. This total is not risk weighted.

Anthony Kongats, Chief Executive of CAP-XX, said:

"The major focus for CAP-XX continues to be to become profitable and cashflow positive as soon as possible by increasing product sales from the newly installed former Murata production equipment, other new product families the Company recently launched and new products and intellectual property the Company is currently developing. We look forward to the future with increasing confidence."

Electronic copies of CAP-XX's audited annual report and accounts for the year ended 30 June 2022 will shortly be available from the Company's website: www.cap-xx.com

For further information contact:

CAP-XX Limited

Anthony Kongats (Chief Executive Officer)  [phone]

Kreab (Financial PR)

Robert Speed  [phone]

Allenby Capital (Nominated Adviser and Joint Broker)

David Hart / Alex Brearley (Corporate Finance)  [phone]

Tony Quirke (Equity Sales)

Cenkos Securities plc (Joint Broker) Neil McDonald / Pete Lynch

[phone]

More information is available at www.cap-xx.com

Notes to Editors:

CAP-XX (LSE: CPX) is a world leader in the design and manufacture of supercapacitors and energy management systems used in portable and small-scale electronic devices, and to an increasing extent, in larger applications such as automotive and renewable energy. The unique feature of CAP-XX supercapacitors is their very high-power density and high energy storage capacity in a space-efficient prismatic package. These attributes are essential in power-hungry consumer and industrial electronics and deliver similar benefits in automotive and other transportation applications. For more information about CAP-XX, visit www.cap-xx.com

Chairman's Report

It has been another successful year for CAP-XX, with progress in a broad range of areas setting the Company on a path to achieving sustained and growing profitability. I am pleased to report that revenue has continued to grow substantially. The efforts, previously reported to build sales are bearing fruit, with product sales up 44% year-on-year following on from a 30% increase in product sales the year before. All of this was achieved against a backdrop of a very challenging global environment as we work hard to mitigate the negative impact of the COVID-19 pandemic and global supply shortages.

The pipeline of sales opportunities** has grown to more than US$60 million which greatly exceeds the full annual capacity of the current production lines at the Seven Hills facility. Interest and shipments for these products continue to increase. As the Board expected, the early product shipments have been to former Murata customers. While full production capacity of the coating, DMF and DMT production lines has not yet been reached, the Board is very pleased with the demand expressed by both previous Murata customers, new customers, and new applications. The Board still expects that more than 75% of Murata's former customers by value will be retained.

Importantly, we are increasing new business in the internet of things (IoT) devices, medical devices, asset tracking devices and wearables markets. As demand builds, the Board will look at how to best continue the Company's sales growth, potentially by adding new capacity and new product lines, in line with the Company's plans. This includes the DMH line which is scheduled to be commissioned around Q3 2023, subject to customer pull and available CAP-XX resources. Customer's interest in DMH products are primarily for new applications in development such as gaming, tracking, electronic shelf labels, medical devices, IoT sensors and smart credit cards.

During the year ended 30 June 2022 and subsequently, CAP-XX announced a number of new sales wins, including Spire Health, RGM, Kessler, Fiio, Xtel, MCCI, Continental, Powerfilm and Ioxus. CAP-XX also launched a number of new product families including CAPMOD high voltage modules for renewable energy applications, CAPSTART for truck and car engine starting and Lithium-Ion Capacitors (LICs) for applications requiring very low leakage current. A number of new distributors were also added to our sales network.  The Company was also able to implement a price increase across the portfolio of product lines which was effective from 30 June 2022.

The Board remains of the view that the installation of the additional production facilities at the Seven Hills facility is transformational for the Company's sales and profitability.  The capacity of the Seven Hills plant is around 4.8 million DMF or DMT products per year and more than 2.4 million DMH products per year. Operations at Seven Hills have continued to improve in yield, costs and output as expected. Production costs are currently more than 50% lower than the prismatic parts which the Company manufactures in Malaysia. These production costs are expected to decrease further as further improvements are commissioned. At Seven Hills, the Company is well advanced in obtaining the German automotive quality accreditation VDA6.3 which the Board considers necessary for expanding sales in automotive applications.

As previously reported, production efficiency and output from Malaysia was impacted by COVID-19. The ban on CAP-XX engineers travelling to Malaysia; the compulsory shut down of businesses there and a ban on bringing additional labour into the country, have negatively impacted the Company's output. With the reopening of Malaysia these impediments have been removed and the Malaysian operational performance has started to improve. We are already seeing the benefits from the time we are investing with the current staff at NTS, our contract manufacturing partner in Malaysia, in terms of output and yield.

With regard to new products, the Company has made excellent progress in developing 3V products to run on the Seven Hills production lines; a low cost fully Surface Mount Device (SMD) high power supercapacitor and a very thin and low cost prismatic supercapacitor. The Company is currently in discussions with key customers about when to bring these new products and the DMH product to market. These new products are protected by various new patents and the Company continues to further develop new intellectual property concerning supercapacitors and energy storage devices. We remain committed to ensuring that CAP-XX's technology is well ahead of competing technologies wherever possible. This involves a major investment with some 18 R&D and engineering personnel and an eligible R&D expenditure of $4.7 million, which has been expensed for FY22 but is offset by the A$2.0 million R&D rebate that is anticipated to be receive later this calendar year.

Licensing also remains an important revenue stream for CAP-XX and the Company continues to vigorously defend its intellectual property. During the year, the Company successfully settled its dispute with the new owner of the Ioxus assets. In return for granting CAP-XX an exclusive licence for the sale of Ioxus products outside of the USA, Canada and Japan, CAP-XX agreed not to pursue the new owner for damages. CAP-XX continues to pursue a similar patent infringement action against Maxwell Technologies, still  a wholly owned subsidiary of Tesla Inc. The Board is pleased with recent decisions handed down by the judge hearing this matter and remains confident of a favourable outcome. CAP-XX is also in dispute with AVX over its performance in relation to the licence agreement granted by CAP-XX to AVX. The Company is steadfast in its goal to be paid the royalties that it believes it is entitled to and will continue to pursue payment as an integral part of vigorously defending its intellectual property. Litigation funding has been approved subject to completion of the due diligence process.

Total Company sales revenue for the year to 30 June 2022 increased by 36% to A$5.6 million (2021: A$4.1 million). Pleasingly, product sales were up 44% from FY 2021, which is a direct result of the Company starting to convert part of its pipeline of opportunities which has been commented on previously. Licensing and royalty revenues were down for the reasons mentioned above. Gross margin increased by 43% to A$2.5 million (2021: A$1.8 million). All product segments have shown a year-on-year increase in reported gross margin due to improved production efficiencies, the highlight being the ex-Murata products.

The EBITDA loss for the year to 30 June 2022 was a loss of A$2.8 million (2021: loss of A$2.5 million), which includes legal expenses for patent infringement of A$2.3 million (2021: A$0.4 million).  When adjusted for this one-off factor, the like for like comparison is an adjusted EBITDA loss of A$0.5 million (2021: loss of A$0.4 million).

As previously reported, the Company raised £2.6 million (net of expenses) in August 2021 through a placing of additional shares. The funds from this placing are being used to commission the DMH line, for new product development, new supply chain capability and legal fees associated with patent infringement and licencing.

The Board is confident that the growth of sales from the former Murata production lines and other new products is transforming the Company's sales, and its cash flow position will therefore be strong in the new financial year.   Due to a very strong last quarter, which depleted the order book ahead of our year-end price increases, combined with a global shortage of integrated circuits and ongoing COVID related manufacturing bottlenecks especially in Asia, the new financial year is expected to be second-half weighted. The Board is confident that the growth of sales from the former Murata production lines and other new products is transforming the Company's sales and cash flow position. 

Patrick Elliott

Chairman

29 September 2022

 

Business Review

Review of Operations and Activities

The EBITDA loss for the year to 30 June 2022 was a loss of A$2.8 million (2021: loss of A$2.5 million), which includes legal expenses for patent infringement. When adjusted for this one-off factor, the like for like comparison was an adjusted EBITDA loss of A$0.45 million (2021: loss of A$0.40 million).

Cash reserves as at 30 June 2022 were A$1.61 million, up from A$0.18 million as at 30 June 2021.

The cash reserves reflect the A$2.34 million paid in legal expenses for patent infringement. The 2022 year end cash position also includes the proceeds after expenses of the 2021 capital raise (£2.6 million net of expenses) and cash receipts following the exercise of employee share options (£0.4 million).  In addition, the Board anticipates that the Company will be in receipt of a Federal Government R&D tax rebate of approximately A$2.0 million, with these funds expected to be received before the end of the current calendar year. The Company has secured litigation funding, subject to the completion of due diligence and continues to explore options to use a debt facility to fund the Company's growth. However, in the current climate the Board considers that many available debt-funding options are too expensive. The Company does have a revolving line of credit secured by the R&D tax rebate.

The current sales pipeline** has grown to over US$60m with many of the opportunities being converted to sales orders. Total product sales revenue for the year to 30 June 2022 was A$5.1 million (2021: A$3.5 million) which represents a 44% year-on-year increase. This follows a 30% increase in year-on-year product sales in the previous year. The contributing factors underlying this increase were sales of DMF and DMT products manufactured by CAP-XX at Seven Hills and with a small contribution from new product families recently introduced by the Company. These increases offset the contribution from Licensing and Royalties which was down from the previous year.

Operational expenditure, excluding the legal costs for patent infringement and direct costs of the Murata project, increased by 14% from A$5.4 million to A$6.3 million. The increase in expenditure is primarily attributable to the transition of engineering staff from the installation and commissioning of the ex-Murata plant (project expenditure) to operations . 

Business Environment

The Board believes that CAP-XX's technology provides a significant competitive advantage over existing supercapacitor manufacturers such as TDK Corporation, Skeleton, Eaton, LSMtron, Nippon Chemicon Corporation and other Chinese and Korean competitors. The Board believes that these companies are unable to match the CAP-XX technology in terms of thinness, power density, energy density and reliability. Most of the Company's competitors only manufacture higher-capacity cylindrical cells used in large package modules and focus on applications where the combination of thinness, energy density and power density are not important considerations for the customer. These competitor products usually prove unsuitable for the various markets collectively labelled the Internet of Things (IoT) market, which is the key area that CAP-XX is targeting with the former Murata products and CAP-XX's existing prismatic products.

As reported previously, IoT applications, one of the fastest growing segments of the electronics market, provide one of the greatest opportunities for CAP-XX's products.  Driven by customer requests, manufacturers are constantly moving to new wireless protocols and adding to the functions and applications available on IoT enabled devices. Some of these new functions require high electrical power within the actual IoT device. Examples are e-locks, drug dispensing, facial recognition, and haptic feedback. Other devices are powered by energy harvesting and are battery-less. Others use low power batteries such as 3 Volt coin cell batteries. All of this means that power management continues to be an increasingly important consideration. The other important factor is size, as devices have tended to become smaller whilst their electrical power demands have increased. The Company continues to be successful in winning new business from a range of these markets, such as industrial actuators, e-locks, agricultural sensors, wireless displays, smart-meters, payment and handheld terminals, medical wearables, automotive dashcams and communication systems.

In the past, CAP-XX has faced competition in various markets from cheaper cylindrical supercapacitors where our thin form factor, high power and long life are not valued as highly as lower initial cost components from competitors. To counteract this, the Company released a range of cylindrical cells. Modest sales revenue for these products was first recorded during FY 2019. Since then, sales have continued to grow strongly, with the Company being successful in winning significant large volume orders. Several new large volume opportunities are currently being evaluated by customers.

As previously articulated, automotive applications such as TruckStart, Stop-Start systems, regenerative energy capture or KERS (Kinetic Energy Recovery Systems), distributed power, hybrid electric vehicles and electric vehicles still present substantial opportunities for large supercapacitors. A number of CAP-XX's competitors are active in these markets, and the Board believes that the Company has significant advantages over the competition in certain applications. However, because of the significant resources that each project requires and the long time-lag between product evaluation and mass production, the Board took the decision to focus the Company's engineering resources on IoT applications and take a lower risk, longer-term, more patient approach to the opportunities for large supercapacitors with the focus being on a small number of key automotive projects. Consistent with this strategy, the Board took the opportunity to sign an exclusive distribution agreement with Ioxus's new owners who have a suite of qualified automotive products ready to market. These products are sold under the CAP-XX brand and are known as CAPMOD and TruckStart. CAPMOD is a range of large high voltage modules intended to support a multitude of large automotive, transportation and renewable energy applications such as wind farms and solar installations. TruckStart is a relaunched version of our previous truckstart product.

During the year we also launched a new range of Lithium-ion supercapacitors which is a hybrid device- part lithium ion and part supercapacitor - that have excellent cycle life and very low leakage current. This makes these products an attractive alternative to lithium-ion batteries and are used where high power and long life are needed.

Opportunities

The overall direct sales pipeline** for CAP-XX's supercapacitors continues to grow and is now in excess of US$60m in sales per annum up from US$50 million the year before. Within this pipeline the largest end market applications are IoT devices, medical devices, asset tracking and wearables. While many applications are strictly confidential and cannot be disclosed, the Company has, over the last year, announced details of several customers' applications with the approval of those customers.

Our customers' markets are constantly evolving as new products and technologies threaten the incumbents. In this environment, CAP-XX needs to always remain alert and be flexible to changing business conditions and market needs. This creates opportunities to offer products that address what our markets want.

CAP-XX is continuing to refine the products that it offers for the various IoT applications and other markets. The Company has introduced the Murata range of DMF and DMT thin prismatic supercapacitors to address the space-constrained and/or power-hungry needs of many IoT products. These products are already being shipped from the Company's new Seven Hills factory. The Company plans to commission and commence shipments of the very thin DMH supercapacitor around Q3 2023. At only 400 microns in thickness, the Board believes that this is the best performing supercapacitor in its class.

The Company also plans to use its 3 Volt chemistry in the DMF products made at Seven Hills. The Company had previously planned to produce 3 Volt products at NTS in Malaysia but the ongoing disruptions and travel restrictions caused by COVID made this impractical. The first 3 Volt products from Seven Hills are expected to ship to customers by the end of this calendar year. The development of the 3 Volt product has been targeted to meet demand for small, inexpensive, energy efficient power solutions for thin wearables, key FOBs and other IoT devices, especially those using 3 Volt coin cell lithium ion batteries, such as the CR2032 battery.

In the future, there is an opportunity to migrate this same 3 Volt technology into larger prismatic supercapacitors, automotive modules and other products for high-energy, high-power applications. As already noted, CAP-XX is concentrating on a small number of automotive opportunities. To further increase the Company's likelihood of success, the Board is investigating a strategy of partnering with automotive and military Tier-1/Tier-2 suppliers, through either a new license agreement or a joint venture, to supply the automotive markets. The Board believes that such partnerships will be beneficial for all parties involved.

The Company intends to continue using its intellectual property to develop additional substantial and recurring income. A significant benefit of the existing licencing agreements is that they validate CAP-XX's technology leadership in the field of supercapacitors and energy storage, and the potential for supercapacitors as a mainstream consumer electronics technology. Our licensees' product lines and sales activities are also increasing our exposure to markets and customers that were previously beyond the Company's reach. It is also important to note that the strategy of our licensees is to offer product ranges targeted at certain end markets. As such, none of them meet the product type or size requirements for all markets and all applications, leaving scope for CAP-XX to supply these other markets directly using products made by CAP-XX and its contract manufacturers.

There remain several additional opportunities for the Company to pursue new licencing arrangements. Some of these are at differing stages of discussions. Others may require the Company to enforce its patent rights through court action, as already noted in the Chairman's statement.

Strategies for Growth

Given the increasing levels of market interest in CAP-XX's technology and its high-performance supercapacitors, the Company believes that the IoT markets, in particular, offer significant opportunities for growth and to reach the key strategic objective of CAP-XX achieving profitability and positive cashflow.

The Company continues to engage in discussions aimed at securing business in the IoT space with a significant number of global original equipment manufacturers (OEMs). CAP-XX is strengthening its relationships with these organisations and has regular engineering meetings with design teams, manufacturing groups and contract manufacturers. The Company is unable to comment on specific clients, but the Board is pleased with the overall progress and is confident that the available market for supercapacitors is increasing as manufacturers become more familiar with the technology.

Over the last year, the Company has aligned its marketing activities to specifically focus on a number of different IoT markets, such as asset tracking, automotive, e-locks, medical devices, handheld terminals, smart meters, wearables and wireless sensors. The efforts to date have produced a significant increase in visits to the Company's webpages and sales enquiries. The Board expects for this growth to continue. CAP-XX's strong environmental credentials, which have been recognised by the London Stock Exchange providing the Company with its Green Economy Mark, are consistent with this strategy.

The Company will continue to monitor new opportunities to increase its sales, through its current distributors, via direct sales to customers and new product offerings. These offerings may take the form of complementary energy storage devices and modules. The Company is also increasing the size of its own sales force and adding new distributors to ensure that global coverage and penetration is maximised.

It is important that the Company is able to benefit from the large investment made over many years in building its patent portfolio. Where third parties are found to be infringing these patent rights, the Company has and will continue to vigorously defend its rights, even if this means pursuing legal action as it did successfully against Ioxus. 

Research and Development

The markets in which the Company operates are competitive and are characterised by rapid technological change. CAP-XX has a strong competitive position in prismatic supercapacitors in all of its target markets as a result of its capability to produce supercapacitors with a high energy and power density in a small, conveniently sized, flat package. CAP-XX's devices are also lightweight, work over a broad temperature range and have an operating lifetime measured in years.

To stay ahead of the competition, the Company is developing a strong pipeline of new products to follow the DMH and 3 Volt products already discussed. CAP-XX's R&D efforts are focused on a mix of short, medium and long-term opportunities, covering new products, cost reductions and improved product performance. CAP-XX has a research facility within its Seven Hills site in Sydney, Australia, where a team of six scientists work to maintain CAP-XX's leading technology position in electrodes, separators and electrolyte materials and their assembly into supercapacitor devices. This team is supported by 12 engineers. During 2021, significant progress has been made in a number of key areas including improvements on the ex-Murata coating, DMF and DMT lines, new cell chemistries, improving the life of cells, developing new packaging concepts, reducing the cost per cell and developing new electronics to optimise the performance of the Company's modules. CAP-XX has also signed numerous collaboration agreements with leading research institutions, such as the announced joint venture agreement with Ionic Industries, where work to progress the conditions precedent continues, whilst the Company's Scientific Advisory Board provides CAP-XX with clear direction on commercially relevant technologies for its ongoing R&D programme.

The Company's success depends on its ability to protect and prevent any infringements of its intellectual property. To protect this important asset, the Company has considerable intellectual property embodied in its patents covering the design, manufacture and use of its high-performance supercapacitors. The CAP-XX patent portfolio currently consists of seven patent families, with seven granted national patents with an additional two patent applications pending in various jurisdictions. The Company's intellectual property strategy has been to build value by focusing on opportunities to capture market share and exclude competition, with an IP portfolio capable of generating licensing revenue. The Directors believe that comprehensive embodiments and interlocking patent groups, combined with a 'quick to file, quick to abandon' policy, have given the Company a strong and focused IP portfolio.

Outlook

The major focus for CAP-XX continues to be to become profitable and cashflow positive as soon as possible by increasing product sales from the newly installed former Murata production equipment, other new product families the Company recently launched and new products and intellectual property the Company is currently developing.

 

CAP-XX Limited

Consolidated statement of profit or loss

For the year ended 30 June 2022

		Consolidated
		2022		2021
Currency: Australian Dollars	Notes	$		$
Revenue from continuing operations	1	5,557,260		4,100,853
Cost of sales	2	(3,032,921)		(2,341,474)
Gross Profit		2,524,339		1,759,379
Other revenue	1	3,894		522
Other income	3	2,272,442		3,435,402
General and administrative expenses		(4,478,616)		(2,385,905)
Process and engineering expenses		(1,222,409)		(576,825)
Selling and marketing expenses		(886,494)		(902,950)
Research and development expenses		(1,572,421)		(1,484,203)
Project expenses		-		(2,766,537)
Share based payments expense		(1,133,399)		(105,113)
Other expenses	4	(446,196)		(504,588)
Loss before income tax		(4,938,860)		(3,530,818)
Income tax benefit		-		-
Net loss for the year		(4,938,860)		(3,530,818)
Loss attributable to owners of CAP-XX Limited		(4,938,860)		(3,530,818)
Earnings per share for loss attributable to the ordinary equity holders of the Company		Cents	Cents
Basic loss per share	5	(1.0)	(0.8)
Diluted loss per share	5	(1.0)	(0.8)

CAP-XX Limited

Consolidated statement of comprehensive income

For the year ended 30 June 2022

		Consolidated
		2022	2021
Currency: Australian Dollars	Notes	$	$
Loss for the year		(4,938,860)	(3,530,818)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		(53,490)	38,766
Other comprehensive loss for the year, net of tax		(53,490)	38,766
Total comprehensive loss for the year attributable to owners of CAP-XX Limited		(4,992,350)	(3,492,052)

CAP-XX Limited

Consolidated statement of financial position

As at 30 June 2022

		Consolidated
		June 30, 2022	June 30, 2021
Currency: Australian Dollars	Notes	$	$
ASSETS
Current assets
Cash and cash equivalents		1,614,714	182,601
Receivables		1,116,902	802,299
Inventories		1,836,148	1,066,265
Other		2,143,011	3,196,976
Total current assets		6,710,775	5,248,141
Non-current assets
Property, plant and equipment		2,696,120	3,039,208
Right of use assets		2,549,276	2,906,473
Other		204,808	204,808
Total non-current assets		5,450,204	6,150,489
Total assets		12,160,979	11,398,630
LIABILITIES
Current liabilities
Payables		1,281,367	980,708
Lease liabilities		193,261	165,852
Provisions		868,096	734,051
Interest bearing liabilities		-	1,400,000
Total current liabilities		2,342,724	3,280,611
Non-current liabilities
Lease liabilities		2,218,062	2,414,646
Provisions		757,245	746,734
Total non-current liabilities		2,975,307	3,161,380
Total liabilities		5,318,031	6,441,991
Net assets		6,842,948	4,956,639
EQUITY
Contributed equity		114,511,790	108,766,530
Reserves		7,513,773	6,433,864
Accumulated losses		(115,182,615)	(110,243,755)
TOTAL EQUITY		6,842,948	4,956,639

Consolidated statement of cash flows

For the year ended 30 June 2022

		Consolidated
		2022	2021
Currency: Australian Dollars		$	$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		5,122,173	3,892,287
Payments to suppliers and employees (inclusive of goods and services tax)		(10,604,235)	(10,044,227)
		(5,482,062)	(6,1551,940)
Tax credit received		3,200,660	3,142,561
Grants Received		-	387,902
Interest paid on lease liabilities		(290,873)	(229,010)
Interest received		3,894	522
Net cash (outflow) from operating activities		(2,568,381)	(2,849,965)
Cash flows from investing activities
Payments for property, plant and equipment		(189,902)	(1,708,614)
Contributions from lessor		163,000
Net cash (outflow) from investing activities		(26,902)	(1,708,614)
Cash flows from financing activities
Proceeds from issue of shares (net of costs)		5,650,531	613,224
(Repayment)/ Proceeds from borrowings		(1,400,000)	1,329,530
Principal repayments for lease liability		(169,175)	(134,822)
Net cash inflow from financing activities		4,081,356	1,806,932
Net increase/(decrease) in cash and cash equivalents		1,486,073	(2,751,647)
Cash and cash equivalents at the beginning of the financial year		182,601	2,895,482
Effects of exchange rate changes on cash and cash equivalents		(53,960)	38,766
Cash and cash equivalents at the end of the financial year		1,614,714	182,601

Notes to the financial statements

Basis of preparation

The financial information included in this announcement does not constitute statutory accounts within the meaning of the Australian Corporations Act 2001.  Whilst the financial information has been computed in accordance with Australian equivalents to International Financial Reporting standards and other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001, this announcement does not itself contain sufficient information to comply with those requirements.

Note 1  Revenue			Consolidated
			2022	2021
			$	$
Sale of Goods			5,069,186	3,516,344
License Fees & Royalties			488,074	584,509
			5,557,260	4,100,853
Other revenue
Interest			3,894	523
			3,894	523

Note 2   Cost of Sale of Goods				Consolidated
				2022	2021
				$	$
Direct materials and labour				2,685,204	2,155,076
Indirect manufacturing expenses				347,717	186,398
				3,032,921	2,341,474

Note 3  Other income		Consolidated
		2022	2021
		$	$
Foreign Exchange Gains - (net) R&D Tax Incentive		199,308 2,073,134	- 3,047,500
Miscellaneous Income		-	387,902
		2,272,442	3,435,402

Note 4  Other Expenses		Consolidated
		2021		2020
		$		$
Provision for Withholding Tax Diminution		31,268	16,615
Foreign Exchange Losses - (net)		-	24,923
Provision for expected credit loss		120,484	103,664
Provision for make good on premises		-	-
Interest - lease liabilities		225,151	232,666
Interest - R&D Advance		69,293	126,720
		446,196	504,588

Note 5  Loss per share		Consolidated
		2022		2021
		$		$
Net loss		(4,938,860)	(3,530,818)
Loss per share - undiluted		($0.010)	($0.008)
Weighted Average Shares in Issue during the year		502,535,625	449,700,290

Note 6  AASB16 Reconciliation		Consolidated
		2022		2021
		$		$
Balance from previous year		2,580,498	2,659,829
Additions		-	56,491
Interest on lease liabilities		221,580	229,010
Repayments on lease liabilities		(390,755)	(364,832)
Balance as at 30 June 2021		2,411,323	2,580,498

Note 7  EBITDA Calculation			Consolidated
			2022	2021
			$	$
Net loss - Reported			(4,938,860)	(3,530,818)
Depreciation			726,155	574,779
Interest Expense			294,444	359,386
Share Based payments			1,133,399	105,113
Interest Income			(3,894)	(522)
EBITDA			(2,788,756)	(2,492,062)
Net Project Expenditure			-	1,563,093
Bad Debt Provision				210,000
Patent Infringement expense			2,338,322	315,421
Adjusted EBITDA			(450,434)	(403,548)

 

END

 

 

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