Notes to the Unaudited Condensed Consolidated Financial Statements | 5-26 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page i |
INTEGRATED MEDIA TECHNOLOGY LIMITED
UNAUDITED Condensed Consolidated StatementS of PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
Group | ||||||||||
June 30 2022 |
June 30 2021 | |||||||||
Notes | A$ | A$ | ||||||||
Revenue, net | 4 | - | 3,294 | |||||||
Cost of goods sold | - | (2,202 | ) | |||||||
- | 1,092 | |||||||||
Interest income | 398,797 | 9,848 | ||||||||
Fair value gain/(loss) on derivative financial instruments | 2,321,003 | (2,914,034 | ) | |||||||
Gain on deemed disposal of subsidiary | 24(a) | 48,374 | - | |||||||
Other income | 5 | 2,878 | 25,000 | |||||||
2,771,052 | (2,878,094 | ) | ||||||||
EXPENSES | ||||||||||
Employee benefit expenses | (1,005,898 | ) | (1,058,535 | ) | ||||||
Depreciation and amortization | (1,002,985 | ) | (653,226 | ) | ||||||
Professional and consulting expenses | (719,821 | ) | (1,103,185 | ) | ||||||
Travel and accommodation expenses | (50,271 | ) | (29,801 | ) | ||||||
Office expenses and supplies | (37,777 | ) | (41,065 | ) | ||||||
Rental costs | (17,076 | ) | (63,039 | ) | ||||||
Other operating expenses | (107,925 | ) | (168,741 | ) | ||||||
Finance costs | 6 | (2,080,845 | ) | (1,089,514 | ) | |||||
Exchange gain/(losses) | 144,361 | (45,657 | ) | |||||||
Gain on Disposal of Subsidiary | 96,453 | - | ||||||||
Share of losses of associates | (98,032 | ) | - | |||||||
Total expenses | (4,879,816 | ) | (4,252,763 | ) | ||||||
LOSS BEFORE INCOME TAX | (2,108,764 | ) | (7,130,857 | ) | ||||||
Income tax expense | 7(a) | - | - | |||||||
LOSS FOR THE PERIOD | (2,108,764 | ) | (7,130,857 | ) | ||||||
OTHER COMPREHENSIVE INCOME | ||||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||
Exchange difference on translation of financial statements of overseas subsidiaries | 2,010,272 | 417,589 | ||||||||
Share of other comprehensive income of associates | 16,269 | - | ||||||||
Items that will not be reclassified to profit or loss: | ||||||||||
Change in value of a financial asset at fair value through other comprehensive income | (380,000 | ) | - | |||||||
Other comprehensive income for the period, net of tax | 1,646,541 | 417,589 | ||||||||
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD | (462,223 | ) | (6,713,268 | ) | ||||||
Loss for the period attributable to: | ||||||||||
Owners of the Company | (1,347,401 | ) | (6,680,453 | ) | ||||||
Non-controlling interests | (761,363 | ) | (450,404 | ) | ||||||
(2,108,764 | ) | (7,130,857 | ) | |||||||
Total comprehensive loss for the period attributable to: | ||||||||||
Owners of the Company | 236,094 | (6,414,078 | ) | |||||||
Non-controlling interests | (698,317 | ) | (299,190 | ) | ||||||
(462,223 | ) | (6,713,268 | ) | |||||||
Loss per share | ||||||||||
- Basic and diluted | 9 | (0.10 | ) | (0.88 | ) |
The accompanying notes form part of these unaudited condensed consolidated financial statements.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 1 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
UNAUDITED Condensed Consolidated StatementS of Financial POSITION
AS OF JUNE 30, 2022 AND DECEMBER 31, 2021
Group | ||||||||||
June 30 2022 |
December 31 2021 | |||||||||
Notes | A$ | A$ | ||||||||
ASSETS | ||||||||||
CURRENT ASSETS | ||||||||||
Cash and bank balances | 348,521 | 274,767 | ||||||||
Inventories | 10 | 6,673,350 | - | |||||||
Right of use assets | 18 | 438,821 | 513,942 | |||||||
Trade and other receivables | 11 | 485,835 | 486,121 | |||||||
Other assets | 12 | 3,158,028 | 2,006,636 | |||||||
Total current assets | 11,104,555 | 3,281,466 | ||||||||
NON-CURRENT ASSETS | ||||||||||
Plant and equipment | 13 | 6,188,326 | 6,441,734 | |||||||
Intangible assets | 14 | 515,167 | 1,900,589 | |||||||
Financial asset at fair value through other comprehensive income | 15 | 182,500 | 562,500 | |||||||
Investment in an associate | 16 | 482,207 | - | |||||||
Other assets - equipment deposits | 12 | 28,510,382 | 11,459,195 | |||||||
Amount due from an associate | 17 | 170,507 | - | |||||||
Right of use assets | 18 | 1,120,084 | 1,444,927 | |||||||
Total non-current assets | 37,169,173 | 21,808,945 | ||||||||
TOTAL ASSETS | 48,273,728 | 25,090,411 | ||||||||
LIABILITIES | ||||||||||
CURRENT LIABILITIES | ||||||||||
Trade and other liabilities | 19 | 1,147,197 | 2,424,717 | |||||||
Amounts due to related companies | 20 | - | 247,406 | |||||||
Derivative financial instruments | 21 | - | 2,321,003 | |||||||
Convertible promissory notes | 22 | - | 4,311,416 | |||||||
Lease liabilities | 18 | 372,883 | 425,567 | |||||||
Total current liabilities | 1,520,080 | 9,730,109 | ||||||||
NON-CURRENT LIABILITIES | ||||||||||
Lease liabilities | 18 | 1,284,460 | 1,403,932 | |||||||
Warrant liabilities | 1,208,494 | - | ||||||||
Total non-current liabilities | 2,492,954 | 1,403,932 | ||||||||
TOTAL LIABILITIES | 4,013,034 | 11,134,041 | ||||||||
NET CURRENT ASSETS/(LIABILITIES) | 9,584,475 | (6,448,643 | ) | |||||||
NET ASSETS | 44,260,694 | 13,956,370 | ||||||||
CAPITAL AND RESERVES | ||||||||||
Issued capital (no par value, 15,785,072 ordinary shares issued and outstanding as of June 30, 2022 and 9,329,420 ordinary shares as of December 31, 2021) | 23 | 79,979,235 | 48,144,406 | |||||||
Foreign currency translation reserves | 25 | 2,709,574 | 762,347 | |||||||
Other reserves | 25 | (1,108,131 | ) | 62,500 | ||||||
Accumulated losses | (38,516,759 | ) | (37,169,357 | ) | ||||||
Equity attributable to owners of the Company | 43,063,919 | 11,799,896 | ||||||||
Non-controlling interests | 1,196,775 | 2,156,474 | ||||||||
TOTAL EQUITY | 44,260,694 | 13,956,370 |
The accompanying notes form part of these unaudited condensed consolidated financial statements.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 2 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to Owners of the Company |
Non- Controlling Interests |
Total Equity | ||||||||||||||||||||||||||
Group |
Issued Capital |
Retained Earnings / (Accumulated Losses) |
Foreign Currency Translation Reserve (Note 25(a)) |
Other reserves (Note 25(b)) | Total | |||||||||||||||||||||||
A$ | A$ | A$ | A$ | A$ | A$ | A$ | ||||||||||||||||||||||
Balance as of January 1, 2021 | 32,089,997 | (34,102,300 | ) | 883,878 | 2,704,452 | 1,576,027 | 3,329,825 | 4,905,852 | ||||||||||||||||||||
Loss for the period | - | (6,680,453 | ) | - | - | (6,680,453 | ) | (450,404 | ) | (7,130,857 | ) | |||||||||||||||||
Other comprehensive income, net of tax | - | - | 266,375 | - | 266,375 | 151,214 | 417,589 | |||||||||||||||||||||
Total comprehensive income / (loss) for the period | - | (6,680,453 | ) | 266,375 | - | (6,414,078 | ) | (299,190 | ) | (6,713,268 | ) | |||||||||||||||||
Acquisition of subsidiary | - | - | - | - | - | 441,041 | 441,041 | |||||||||||||||||||||
Issuance of new ordinary shares | 12,228,148 | - | - | - | 12,228,148 | - | 12,228,148 | |||||||||||||||||||||
Balance as of June 30, 2021 | 44,318,145 | (40,782,753 | ) | 1,150,253 | 2,704,452 | 7,390,097 | 3,471,676 | 10,861,773 | ||||||||||||||||||||
Balance as of January 1, 2022 | 48,144,406 | (37,169,358 | ) | 762,348 | 62,500 | 11,799,896 | 2,156,474 | 13,956,370 | ||||||||||||||||||||
Loss for the period | - | (1,347,401 | ) | - | - | (1,347,401 | ) | (761,363 | ) | (2,108,764 | ) | |||||||||||||||||
Change in value of a financial asset at fair value through other comprehensive income | - | - | - | (1,170,631 | ) | (1,170,631 | ) | - | (1,170,631 | ) | ||||||||||||||||||
Other comprehensive income, net of tax | - | - | 1,947,226 | - | 1,947,226 | 63,046 | 2,010,272 | |||||||||||||||||||||
Total comprehensive income / (loss) for the period | - | (1,347,401 | ) | 1,947,226 | (1,170,631 | ) | (570,806 | ) | (698,317 | ) | (1,269,123 | ) | ||||||||||||||||
Capital injection of subsidiary | - | - | - | - | - | 1,109,130 | 1,109,130 | |||||||||||||||||||||
Acquisition of subsidiary | - | - | - | - | - | 419,521 | 419,521 | |||||||||||||||||||||
Deemed disposal of subsidiary | - | - | - | - | - | (1,790,033 | ) | (1,790,033 | ) | |||||||||||||||||||
Issuance of new ordinary shares | 31,834,829 | - | - | - | 31,834,829 | - | 31,834,829 | |||||||||||||||||||||
Balance as of June 30, 2022 | 79,979,235 | (38,516,759 | ) | 2,709,574 | (1,108,131 | ) | 43,063,919 | 1,196,775 | 44,260,694 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 3 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
Group | ||||||||||
For the Six Months Ended June 30 2022 |
For the Six Months Ended June 30 2021 | |||||||||
Notes | A$ | A$ | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net loss before tax | (2,108,764 | ) | (7,130,857 | ) | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Depreciation and amortization | 1,002,985 | 653,226 | ||||||||
Change in fair value of warrants | 1,208,494 | - | ||||||||
Gain on deemed disposal of a subsidiary | (96,453 | ) | - | |||||||
(Gain)/Loss on fair value change of derivative on financial instruments | (2,321,003 | ) | 2,914,034 | |||||||
Share of losses of an associate | 98,032 | - | ||||||||
Interest accrued for lease liabilities | 97,086 | 8,475 | ||||||||
Interest accrued for convertible notes | 324,419 | 1,072,311 | ||||||||
Interest income from short term loan | (398,797 | ) | - | |||||||
Provision for inventories obsolescence | - | (230 | ) | |||||||
Net cash flows from changes in working capital | 29 | (7,781,253 | ) | (1,059,016 | ) | |||||
NET CASH OUTFLOW USED IN OPERATING ACTIVITIES | (9,975,254 | ) | (3,542,057 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Deemed disposal of subsidiaries, net of cash disposal of | 24 | (14,892 | ) | - | ||||||
Payment for investment | - | (500,000 | ) | |||||||
Deposit paid for lamination production equipment | (16,467,808 | ) | (6,663,401 | ) | ||||||
Payments for plant and equipment | (2,500 | ) | (61,552 | ) | ||||||
NET CASH OUTFLOW FROM INVESTING ACTIVITIES | (16,485,200 | ) | (7,224,953 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Proceeds of advances from other payables | - | 224,291 | ||||||||
Payment of lease liabilities - principal portion | (178,767 | ) | (48,708 | ) | ||||||
Payment of lease liabilities - interest portion | (97,086 | ) | - | |||||||
Proceeds from shares issued | 26,795,590 | 12,228,148 | ||||||||
NET CASH INFLOW PROVIDED BY FINANCING ACTIVITIES | 26,519,737 | 12,403,731 | ||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 59,283 | 1,636,721 | ||||||||
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD | 274,767 | 2,194,084 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 14,471 | 165,918 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 348,521 | 3,996,723 | ||||||||
Analysis of cash and cash equivalents: | ||||||||||
Cash and bank balances | 348,521 | 3,996,723 |
The accompanying notes form part of these unaudited condensed consolidated financial statements.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 4 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
The unaudited condensed consolidated financial statements are general purpose financial statements, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs") IAS 34 "Interim Financial Reporting".
The unaudited condensed consolidated financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these unaudited condensed consolidated financial statements are to be read in conjunction with the annual report for the financial year ended December 31, 2021 and any public announcements made by Integrated Media Technology Limited during the interim reporting period.
The unaudited condensed consolidated financial statements have been prepared on the accrual basis and are based on historical cost modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
The Company and its subsidiaries are referred to as the "Group".
The Group incurred a net loss of A$2,108,764 (2021: loss of A$7,130,857) during the six months ended June 30, 2022. This condition indicates the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.
Going Concern
The Group's unaudited consolidated financial statements are prepared using International Financial Reporting Standards as issued by the International Accounting Standards Board applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Group has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of June 30, 2022, the Group had accumulated losses of A$38,516,759 and generated a net loss for the six months ended June 30, 2022 of A$2,108,764 and used cash in operating activities in the amount of A$9,975,254. The ability of the Group to continue as a going concern is dependent on the Group obtaining adequate capital to fund operating losses until it becomes profitable. If the Group is unable to obtain adequate capital, it could be forced to cease or reduce its operations.
For the period under review until the date of this report, the Group has raised a total of A$26,795,590 from the selling of new shares for its operation. However, the Group will be required to generate revenues and profits to sustain ongoing operation cash requirements; short of which the Group will need to continue to build its capital base to fund its business plans.
To continue as a going concern, the Group will need continual short-term borrowings for our working and operating capital. In the longer term, the Group is dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing until the Group can earn revenue and realize positive cash flow from its operations.
There are no assurances that the Group will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Group will continue as a going concern.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 5 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) |
Based on the Group's current rate of cash outflows, cash on hand and short term borrowings, management believes that its current cash may not be sufficient to meet the anticipated cash needs for working capital for the next twelve months.
The Group's plans with respect to its liquidity issues include, but are not limited to, the following:
(a) | Continue to raise financing through the sale of its equity and/or debt securities; |
(b) | Seek additional capital in the public equity markets to continue its operations as it rolls out its current products in development, respond to competitive pressures, develop new products and services, and support new strategic partnerships. The Group is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Group can consummate such a transaction, or consummate a transaction at favorable pricing. |
The ability of the Group to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraphs and eventually secure other sources of financing and achieve profitable operations. These unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.
The unaudited consolidated financial statements of the Group are presented in Australian Dollars ("A$"), unless otherwise stated.
Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5.
Under the equity method, an investment in an associate is recognised initially in the unaudited consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate. When the Group's share of losses of an associate exceeds the Group's interest in that associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 6 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) |
An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.
If there is objective evidence that the Group's net investment in an associate is impaired, the requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate. When the Group retains an interest in the former associate and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with IFRS 9. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the associate is disposed of.
When the Group reduces its ownership interest in an associate but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.
When a Group entity transacts with an associate of the Group, profits and losses resulting from the transactions with the associate are recognised in the Group's unaudited consolidated financial statements only to the extent of interests in the associate that are not related to the Group.
The Group applies IFRS 9, including the impairment requirements, to long-term interests in an associate to which the equity method is not applied and which form part of the net investment in the investee. Furthermore, in applying IFRS 9 to long-term interests, the Group does not take into account adjustments to their carrying amount required by IAS 28 Investments in Associates and Joint Ventures (i.e. adjustments to the carrying amount of long-term interests arising from the allocation of losses of the investee or assessment of impairment in accordance with IAS 28).
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 7 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) |
New, revised or amended Accounting Standards and Interpretations adopted
The IASB has issued a number of new IFRSs and amendments to IFRSs that are first effective for the current accounting period of the Group. Of these, the following developments are relevant to the Group's financial statements:
Property, Plant and Equipment: Proceeds before intended use - Amendments to IAS 16
The amendment prohibits entities from deducting from the cost of an item of property, plant and equipment, any proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.
These amendments had no impact on the interim unaudited condensed consolidated financial statements of the Group as there were no sales of such items produced by property, plant and equipment made available for use on or after the beginning of the earliest period presented.
Reference to the Conceptual Framework - Amendments to IFRS 3
The amendments replace a reference to a previous version of the IASB's Conceptual Framework with a reference to the current version issued in March 2018 without significantly changing its requirements.
The amendments add an exception to the recognition principle of IFRS 3 Business Combinations to avoid the issue of potential 'day 2' gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date.
The amendments also add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date.
These amendments had no impact on the interim unaudited condensed consolidated financial statements of the Group as there were no contingent assets, liabilities and contingent liabilities within the scope of these amendments arisen during the period.
Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Group cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
The amendments specify that when assessing whether a contract is onerous or loss-making, an entity needs to include costs that relate directly to a contract to provide goods or services include both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly related to contract activities (e.g., depreciation of equipment used to fulfil the contract as well as costs of contract management and supervision). General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counter party under the contract.
These amendments had no impact on the interim unaudited condensed consolidated financial statements of the Group as there were no onerous contract within the scope of these amendments arisen during the period.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 8 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) |
IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time adopter
The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported in the parent's unaudited consolidated financial statements, based on the parent's date of transition to IFRS, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.
These amendments had no impact on the interim unaudited condensed consolidated financial statements of the Group as it is not a first-time adopter.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. There is no similar amendment proposed for IAS 39 Financial Instruments: Recognition and Measurement.
These amendments had no impact on the interim unaudited condensed consolidated financial statements of the Group as there were no modifications of the Group's financial instruments during the period.
2. | USE OF JUDGEMENTS AND ESTIMATES |
In preparing these interim unaudited condensed consolidated financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
Inventory - Inventory is valued at the lower of cost and net realizable value. Cost of inventory includes cost of purchase (purchase price, import duties, transport, handling, and other costs directly attributable to the acquisition of inventories), cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. Net realizable value for inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Provisions are made in profit or loss of the current period on any difference between book value and net realizable value.
Associated company -The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 9 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. | OPERATING SEGMENTS |
Operating segments have been determined on the basis of reports reviewed by the executive director. The executive director is considered to be the chief operating decision maker of the Group. The executive director considers that the Group has assessed and allocated resources on this basis. The executive director considers that the Group has seven operating segments for the period ended June 30, 2022 (2021: six), being (1) the sale of electronic glass, (2)sale of nano coated plates and air filters, (3) sales of Halal products, (4) provision of credit risk analysis, (5) provide consultancy service, (6) NFT and (7) Corporate.
The executive director reviews Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). The accounting policies adopted for internal reporting to the executive director are consistent with those adopted in the unaudited condensed consolidated financial statements.
The information reported to the executive director is on at least a monthly basis.
Intersegment transaction
There are no intersegment transactions. There are no intersegment sales, receivables, payables and loans.
Operating segment information
Sales of electronic glass (Remark 2) |
Sales of air-filter products (Remark 3) |
Sales of Halal products (Remark 5) |
Provision of credit risk analysis (Remark 4&6) |
Provision of consultancy service (Remark 5) |
NFT (Remark 5) | Corporate | Total | |||||||||||||||||||||||||
A$ | A$ | A$ | A$ | A$ | A$ | A$ | A$ | |||||||||||||||||||||||||
Unaudited Consolidated - 2022 | ||||||||||||||||||||||||||||||||
For the six months ended June 30, 2022 Revenue | ||||||||||||||||||||||||||||||||
Sales to external customers | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Intersegment sales | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total sales revenue | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Other revenue | - | - | - | 1 | 2,878 | - | 398,796 | 401,675 | ||||||||||||||||||||||||
Gain on deemed disposal of a subsidiary | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Gain on fair value change in derivative financial instruments | - | - | - | - | - | - | 2,321,003 | 2,321,003 | ||||||||||||||||||||||||
Total revenue | - | - | - | 1 | 2,878 | - | 2,719,799 | 2,722,678 | ||||||||||||||||||||||||
EBITDA | 1,073,098 | |||||||||||||||||||||||||||||||
Depreciation and amortization | (1,002,985 | ) | ||||||||||||||||||||||||||||||
Finance costs | (2,080,845 | ) | ||||||||||||||||||||||||||||||
Share of losses of associates | (98,032 | ) | ||||||||||||||||||||||||||||||
Loss before income tax | (2,108,764 | ) | ||||||||||||||||||||||||||||||
Income tax credit | - | |||||||||||||||||||||||||||||||
Loss after income tax | (2,108,764 | ) | ||||||||||||||||||||||||||||||
As of June 30, 2022 Assets | ||||||||||||||||||||||||||||||||
Segment assets | 30,119,394 | 6,163,068 | 463,209 | 2,196,488 | 2,461,939 | 1,284,874 | 5,584,756 | 48,273,728 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Segment liabilities | (1,582,540 | ) | (474,404 | ) | - | - | (394,429 | ) | (527 | ) | (1,561,134 | ) | (4,013,034 | ) |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 10 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. | OPERATING SEGMENTS (Continued) |
Operating segment information (Continued)
Sales and distribution of 3D displays (Remark 1) |
Sales of electronic glass (Remark 2) |
Sales of air-filter products (Remark 3) |
Provision of credit risk analysis (Remark 4&6) |
NFT (Remark 5) | Corporate | Total | ||||||||||||||||||||||
A$ | A$ | A$ | A$ | A$ | A$ | A$ | ||||||||||||||||||||||
Unaudited Consolidated - 2021 | ||||||||||||||||||||||||||||
For the six months ended June 30, 2021 | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Sales to external customers | 3,294 | - | - | - | - | - | 3,294 | |||||||||||||||||||||
Intersegment sales | - | - | - | - | - | - | - | |||||||||||||||||||||
Total sales revenue | 3,294 | - | - | - | - | - | 3,294 | |||||||||||||||||||||
Other revenue | 9,848 | - | - | - | - | 25,000 | 34,848 | |||||||||||||||||||||
Total revenue | 13,142 | - | - | - | - | 25,000 | 38,142 | |||||||||||||||||||||
EBITDA | (5,388,117 | ) | ||||||||||||||||||||||||||
Depreciation and amortization | (653,226 | ) | ||||||||||||||||||||||||||
Finance costs | (1,089,514 | ) | ||||||||||||||||||||||||||
Loss before income tax | (7,130,857 | ) | ||||||||||||||||||||||||||
Income tax expense | - | |||||||||||||||||||||||||||
Loss after income tax | (7,130,857 | ) | ||||||||||||||||||||||||||
As of June 30, 2021 Assets | ||||||||||||||||||||||||||||
Segment assets | - | 15,645,858 | 6,417,042 | 2,049,261 | 767,670 | 210,580 | 25,090,411 | |||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Segment liabilities | - | (1,737,509 | ) | (457,741 | ) | (808,980 | ) | (287,802 | ) | (7,842,009 | ) | (11,134,041 | ) |
Remark 1: Disposed in 2H 2021.
Remark 2: Commenced in 1H-2020.
Remark 3: Commenced in 2H-2020
Remark 4: Commenced in 1H-2021.
Remark 5: Commenced in 1H 2022
Remark 6: Disposed in 1H-20222 and account for as investment in associates.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 11 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. | REVENUE |
Group | |||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | ||||||
A$ | A$ | ||||||
Development, sales and distribution of autostereoscopic 3D products and conversion equipment | - | 3,294 |
5. | OTHER INCOME |
Group | ||||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Sundry income | 2,878 | 25,000 |
6. | FINANCE COSTS |
Group | ||||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Change in fair value of warrants | 1,208,494 | - | ||||||
Interest on short-term loan | 17,640 | - | ||||||
Interest on finance lease liabilities | 97,086 | 8,475 | ||||||
Interest on revolving loan | - | 8,728 | ||||||
Interest on convertible promissory note | 757,625 | 1,072,311 | ||||||
2,080,845 | 1,089,514 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 12 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. | INCOME TAX EXPENSE |
Group | ||||||||
Period Ended 2022 |
Period Ended 2021 | |||||||
A$ | A$ | |||||||
Current tax expense | - | - | ||||||
Income tax expense - Note 7(a) | - | - |
(a) | The prima-facie tax on loss before income tax is reconciled to the income tax expense as follows: |
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Numerical reconciliation of income tax expense to prima-facie tax payable | ||||||||
Loss before income tax | (2,108,764 | ) | (7,130,857 | ) | ||||
Income tax benefit on loss before income tax at 30% | 632,629 | (2,139,257 | ) | |||||
Difference in overseas tax rates | 1,386,943 | (439,376 | ) | |||||
Less the tax effect of: | ||||||||
Temporary differences for the period for which no deferred tax is recognized | (2,019,572 | ) | 2,578,633 | |||||
Income tax expense | - | - |
(b) | Deferred tax assets / (liabilities) arising from temporary differences and unused tax losses can be summarized as follows: |
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Balance brought forward | - | (13,668 | ) | |||||
Exchange rate difference | - | 13,668 | ||||||
Balance carried forward | - | - |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 13 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. | DIVIDENDS |
No dividends were declared and paid during the six months ended June 30, 2022 (2021: Nil).
9. | LOSS PER SHARE |
Group | ||||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Basic and diluted loss per share | (0.10 | ) | (0.88 | ) | ||||
Loss after income tax attributable to shareholders | (1,347,401 | ) | (6,680,453 | ) |
2022 | 2021 | |||||||
No. of shares | No. of shares | |||||||
Weighted average number of ordinary shares as of January 1 | 9,329,420 | 6,513,671 | ||||||
Effect of shares issued | 4,541,559 | 1,055,396 | ||||||
Weighted average number of ordinary shares adjusted as of June 30 | 13,870,979 | 7,569,067 |
The loss per share was calculated based on the weighted average of 13,870,979 (2021: 7,569,067) shares outstanding during the financial period.
10. | INVENTORIES |
Inventories consist of the following:
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Finished goods | 6,673,350 | - | ||||||
Provision for inventories obsolescence | - | - | ||||||
Total, net of allowance for inventories | 6,673,350 | - |
11. | TRADE AND OTHER RECEIVABLES |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Trade receivables | 480,576 | 480,095 | ||||||
Other receivables | 19,715 | 20,482 | ||||||
500,291 | 500,577 | |||||||
Less: Allowances for doubtful debts | (14,456 | ) | (14,456 | ) | ||||
Total net of allowance for inventories | 485,835 | 486,121 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 14 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. | OTHER ASSETS |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Prepayments | 273 | - | ||||||
Trade deposits | 915,803 | 432,236 | ||||||
Other deposits | 2,241,952 | 1,574,128 | ||||||
VAT receivable | - | 272 | ||||||
3,158,028 | 2,006,636 |
As at June 30, 2022, the Group placed deposits of A$28,510,382 (US$19,651,490) (2021: A$11,459,195 (US$8,322,460)) for purchasing lamination production lines. The deposit was classified as a non-current asset.
13. | PLANT AND EQUIPMENT |
Group |
Leasehold Improvements |
Office Furniture and Equipment | Machinery | Total | ||||||||||||
A$ | A$ | A$ | A$ | |||||||||||||
As of December 31, 2021 | ||||||||||||||||
Cost | 42,392 | 199,798 | 7,655,465 | 7,897,655 | ||||||||||||
Accumulated depreciation | (19,430 | ) | (177,086 | ) | (1,259,405 | ) | (1,455,921 | ) | ||||||||
As of December 31, 2021 | 22,962 | 22,712 | 6,396,060 | 6,441,734 | ||||||||||||
Six months ended June 30, 2022 | ||||||||||||||||
As of December 31, 2021 | 22,962 | 22,712 | 6,396,060 | 6,441,734 | ||||||||||||
Additions | - | 2,500 | - | 2,500 | ||||||||||||
Disposals | - | - | - | - | ||||||||||||
Depreciation | (10,727 | ) | (6,039 | ) | (548,663 | ) | (565,429 | ) | ||||||||
Exchange difference | 711 | 502 | 308,308 | 309,521 | ||||||||||||
As of June 30, 2022 | 12,946 | 19,675 | 6,155,705 | 6,188,326 | ||||||||||||
As of June 30, 2022 | ||||||||||||||||
Cost | 44,387 | 211,701 | 8,051,417 | 8,307,505 | ||||||||||||
Accumulated depreciation | (31,441 | ) | (192,026 | ) | (1,895,712 | ) | (2,119,179 | ) | ||||||||
As of June 30, 2022 | 12,946 | 19,675 | 6,155,705 | 6,188,326 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 15 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. | INTANGIBLE ASSETS |
Group | ||||||||||||||||
Technologies and Knowhow |
Patents and Trademark |
Software and License | Total | |||||||||||||
A$ | A$ | A$ | A$ | |||||||||||||
As of December 31, 2021 | ||||||||||||||||
Cost | 8,118,413 | - | - | 8,118,413 | ||||||||||||
Accumulated amortization | (6,217,824 | ) | - | - | (6,217,824 | ) | ||||||||||
As of December 31, 2021 | 1,900,589 | - | - | 1,900,589 | ||||||||||||
Six months ended June 30, 2022 | ||||||||||||||||
As of December 31, 2021 | 1,900,589 | - | - | 1,900,589 | ||||||||||||
Additions | 648,684 | - | 515,167 | 1,163,851 | ||||||||||||
Amortization | (33,213 | ) | - | - | (33,213 | ) | ||||||||||
Disposal of a subsidiary | (2,545,193 | ) | - | - | (2,545,193 | ) | ||||||||||
Exchange difference | 29,133 | - | - | 29,133 | ||||||||||||
As of June 30, 2022 | - | - | 515,167 | 515,167 | ||||||||||||
As of June 30, 2022 | ||||||||||||||||
Cost | - | - | 515,167 | 515,167 | ||||||||||||
Accumulated amortization | - | - | - | - | ||||||||||||
Provision for impairment | - | - | - | - | ||||||||||||
As of June 30, 2022 | - | - | 515,167 | 515,167 |
15. | FINANCIAL ASSET AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Investment in equity instrument designated as at FVOCI | ||||||||
Ordinary Shares | ||||||||
Balance as of beginning of period/year | 562,500 | - | ||||||
Acquisition during year | 500,000 | |||||||
Fair value gain/(loss) on revaluation recognised in other comprehensive income | (380,000 | ) | 62,500 | |||||
Balance as of end of period/year | 182,500 | 562,500 |
On February 25, 2021, the Group completed the underwriting in Oakridge International Limited ("Oakridge"), a company listed on the Australian Securities Exchange, for 500 million shares at a subscription price of A$0.001 per share for a total subscription amount of A$500,000 or equivalent to US$381,000. The 500 million shares represent approximately 15% of then total outstanding shares in Oakridge.
This investment in equity instrument is not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the directors of the Company have elected to designate this investment in equity instrument as at Fair Value Through Other Comprehensive Income (FVTOCI) as they believe that recognising short-term fluctuations in this investment's fair value in profit or loss would not be consistent with the Group's strategy of holding this investment for long-term purposes and realising their performance potential in the long run.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 16 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15. | INVESTMENT (Continued) |
The fair value of the investment was based on the market value quoted from Australian Stock Exchange (ASX) as at the reporting date. As at June 30, 2022, the fair value of the investment was A$185,000 (2021: 562,500).
Subsequent to the balance sheet date, the Company disposed this investment for A$275,000 and recorded a gain of A$90,000
16. | INVESTMENT IN AN ASSOCIATE |
The following information contains only the particulars of a material associate and its subsidiaries, which are unlisted corporate entity whose quoted market price is not available:
Portion of ownership interest | ||||||||||||||||
Name of associate | Form of business structure | Place of incorporation and business | Particulars of issued and paid up capital |
Group's effective interest |
Held by the company | Principal activity | ||||||||||
Greifenberg Digital Limited ("Greifenberg Group") | Incorporation | Canada | 2,087,000 ordinary shares of USD1 each | 23.96 | % | 23.96 | % |
Investment holding company | ||||||||
Greifenberg Capital Limited | Incorporation | Hong Kong | 1,227,000 ordinary shares of USD1 each | 23.96 | % | - |
Analytic financial research services | |||||||||
Greifenberg Analytics Limited | Incorporation | Canada | 1 ordinary shares of USD1 each | 23.96 | % | - |
Analytic financial research services |
The Group's interest in Greifenberg Group is accounted for using the equity method in the interim unaudited condensed consolidated financial statements.
Summarised financial information in respect of Greifenberg Group is set out below. The summarized financial information below represents amounts in associates' financial statements prepared in accordance with IFRS Accounting Standard:
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Current assets | 53,326 | - | ||||||
Non-current assets | 2,536,463 | - | ||||||
Current liabilities | (577,055 | ) | - | |||||
Non-current liabilities | - | - | ||||||
Equity | 2,012,734 | - | ||||||
Revenue | 27,931 | - | ||||||
Loss from continuing operations | (409,183 | ) | - | |||||
Loss for the period | (381,252 | ) | - | |||||
Other comprehensive income | 67,911 | - | ||||||
Total comprehensive loss | (313,341 | ) | - | |||||
Dividend received from the associate | - | - |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 17 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
16. | INVESTMENT IN AN ASSOCIATE (Continued) |
Reconciliation of the above summarised financial information to the carrying amount of the interest in Greifenberg Group is recognised in the unaudited consolidated financial statements:
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Gross amounts of net assets of the associate | 2,012,734 | - | ||||||
Group's effective interest | 23.96 | % | - | |||||
Group's share of net assets of the associate | 482,207 | - | ||||||
Carrying amount | 482,207 | - |
17. | AMOUNT DUE FROM AN ASSOCIATE |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Amount due from an associate | 170,507 | - |
The amount due from an associate is non-trade in nature, unsecured, non-interest bearing and is not expected to be repayable in the next 12 months.
18. | LEASES |
Right of use assets
The carrying amount of the Group's right of use assets and the movements during the period are as follows:
Group | ||||
Leased Property | ||||
A$ | ||||
As of January 1, 2022 | 1,958,869 | |||
Additions | - | |||
Depreciation | (404,343 | ) | ||
Exchange differences | 4,379 | |||
As of June 30, 2022 | 1,558,905 | |||
Analyzed into: | ||||
Current portion | 438,821 | |||
Non-current portion | 1,120,084 | |||
1,558,905 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 18 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
18. | LEASES (Continued) |
Lease liabilities
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Within one year | 372,883 | 425,567 | ||||||
Two to five years | 1,284,460 | 1,403,932 | ||||||
1,657,343 | 1,829,499 | |||||||
Less: Amount due within one year shown under current liabilities | (372,883 | ) | (425,567 | ) | ||||
Amount due after one year | 1,284,460 | 1,403,932 | ||||||
Analyzed into: | ||||||||
Current portion | 372,883 | 425,567 | ||||||
Non-current portion | 1,284,460 | 1,403,932 | ||||||
1,657,343 | 1,829,499 |
Obligations under operating lease are accounted for using weighted average cost of capital of 12.0% per annum.
19. | TRADE AND OTHER LIABILITIES |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Trade payables | 141,630 | 142,325 | ||||||
Accruals | 108,490 | 1,014,368 | ||||||
Other payables | 897,077 | 1,268,024 | ||||||
1,147,197 | 2,424,717 |
20. | AMOUNTS DUE TO RELATED COMPANIES |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Amounts due to related companies | - | 247,406 |
The amounts due to related companies is unsecured, non-interest bearing and repayable on demand.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 19 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
21. | DERIVATIVE FINANCIAL INSTRUMENTS |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Derivative financial liabilities | ||||||||
- Carrying value as at beginning of period/year | 2,321,003 | 1,478,540 | ||||||
- Fair value change in derivative financial instruments during the six months ended June 30, 2022 / year ended December 31, 2021 | (2,321,003 | ) | 842,463 | |||||
Carrying value as at period/year | - | 2,321,003 | ||||||
Analyzed into: | ||||||||
Current portion | - | 2,321,003 | ||||||
Non-current portion | - | - | ||||||
- | 2,321,003 |
As at December 31, 2021, the derivatives related to two convertible promissory notes entered into during 2020 (details are set out in Note 22) were revalued using the weighted average assumptions: volatility 90.8%, the weighted expected term of two years, a discount rate of 3.51% and a dividend yield of 0%. The two convertible notes were converted in the current period.
In the prior year, the Group departed from IFRS 9 for certain disclosures of the note issued January 20, 2020 as not doing so would be misleading to the readers of consolidated financial statements as it would greatly inflate the activity on the 2020 consolidated statement of activity but have no effect on the consolidated balance sheet or on the net loss of the Group. As such, the Group determined it was appropriate to present the change in fair value of this derivative instrument, net of interest expense recorded at the time of issuance.
22. | CONVERTIBLE PROMISSORY NOTES |
Group | ||||||||
June 30 2022 |
December 31 2021 | |||||||
A$ | A$ | |||||||
Face value of convertible promissory note issued on January 20, 2020 (note i) | 2,621,360 | 2,621,360 | ||||||
Face value of convertible promissory note issued on August 6, 2020 (note ii) | 2,291,740 | 2,291,740 | ||||||
Equity component | (3,790,737 | ) | (3,790,737 | ) | ||||
Liability component on initial recognition at January 20,2020 | 1,122,363 | 1,122,363 | ||||||
Interest accrued but not yet paid for the period (Note 6) | 3,795,449 | 3,587,588 | ||||||
Interest paid during the period | (185,469 | ) | (185,469 | ) | ||||
Converted to share capital on Jan 19, 2022 - principal portion (note iii) | (2,501,283 | ) | - | |||||
Converted to share capital on Jan 19, 2022 - interest portion (note iv) | (324,419 | ) | - | |||||
Converted to share capital on Apr 13, 2022 - principal portion (note v) | (2,213,537 | ) | - | |||||
Exchange differences | 306,896 | (213,066 | ) | |||||
Carrying value as at end of period | - | 4,311,416 | ||||||
Analyzed into: | ||||||||
Current portion | - | 4,311,416 | ||||||
Non-current portion | - | - | ||||||
- | 4,311,416 |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 20 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
22. | CONVERTIBLE PROMISSORY NOTES (Continued) |
The two convertible notes were converted in the current period.
Note (i)
On January 20, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement the ("CN Agreement"), with an independent third party ("Noteholder"). Pursuant to CN Agreement, the Noteholder purchased from the Company a 10% convertible promissory note (the "Promissory Note") in the principal amount of HK$14 million (equivalent to approximately A$2.6 million) maturing in two (2) years from the date of the agreement. The Noteholder has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$3.00, subject to adjustment, per share over the term of the Promissory Note.
In October 2020, the Group settled the interest accrued of A$174,811 by issuing 46,741 shares to the Noteholder.
Note (ii)
On August 6, 2020, the Company entered into a second Convertible Promissory Note Agreement ("the Second CN Agreement") with a third party ("Second Noteholder"). Pursuant to the Second CN Agreement, the holder invested USD 1,650,000 under a convertible note (the "Second Note") without interest, maturing in two years from the date of the Second Note. The Second Noteholder or the Company has the right to convert the principal into ordinary shares of the Company at a conversion price of US$ 3.25 per share over the term of the Second Note. The conversion price is subject to downward adjustment and has a floor price of US$ 1.50 if the Company sells ordinary shares below the conversion price within 12 months after the date of the Second Note. The Second Note cannot be prepaid. The Second Noteholder agreed to waive piggyback registration rights.
The conversion feature in convertible promissory notes were derivative liabilities based on the fact the conversion into shares could result in a variable number of shares to be issued.
Note (iii)
On January 19, 2022, the convertible note of A$2,501,283 was converted to 599,828 shares in the Company.
Note (iv)
On January 19, 2022, the Group settled the interest accrued of A$324,419 by issuing 65,043 shares to the Noteholder.
Note (v)
On April 13, 2022, the convertible note of A$2,213,537 was converted to 507,692 shares in the Company.
23. | ISSUED CAPITAL |
(a) | Share capital |
Company |
June 30, 2022 |
December 31, 2021 | ||||||||||||
Number of shares | A$ | Number of shares | A$ | ||||||||||
Ordinary Shares fully paid | 15,785,072 | 79,979,235 | 9,329,420 | 48,144,406 |
(b) Movements in share capital
Number of Shares | A$ | |||||||
December 31, 2021 and January 1, 2022 | 9,329,420 | 48,144,406 | ||||||
Issuance of shares for redemption of convertible notes | 1,172,563 | 5,039,239 | ||||||
Issuance of shares for cash | 5,283,089 | 26,795,590 | ||||||
June 30, 2022 | 15,785,072 | 79,979,235 |
There is only one class of share on issue being ordinary fully paid shares. Holders of ordinary shares are treated equally in all respects regarding voting rights and with respect to the participation in dividends and in the distribution of surplus assets upon a winding up. The fully paid ordinary shares have no par value.
(c) Options on issue
There were no share options issued and outstanding during and at the end of the financial period.
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 21 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
24. | DEEMED DISPOSAL OF SUBSIDIARIES |
On February 15, 2022, IMTE shareholding in the equity of Greifenberg was reduced from 40.75% to 23.96% as a result of investors subscripting for shares in Greifenberg Digital Limited ("Greifenberg Deemed Disposal"). From this date onwards, the investment in Greifenberg was accounted as an Investment in Associates (note 16)
(a) | Details of the disposal were as follows: |
A$ | ||||
Fair value of retained interest held by the Group | 563,970 | |||
Net assets disposed of | (2,354,006 | ) | ||
Non-controlling interest | 1,790,036 | |||
Cumulative exchange difference in respect of the net assets of Greifenberg reclassified from equity to profit or loss | 48,374 | |||
Gain on deemed disposal | 48,374 |
(b) | The carrying amounts of assets and liabilities as at the date of which control was lost were as follows: |
A$ | ||||
Intangible assets | 2,545,193 | |||
Cash and bank balances | 14,892 | |||
Amount due to a related company | 127,597 | |||
Other deposit and prepayment | 51,050 | |||
Total assets | 2,738,732 | |||
Trade and other liabilities | (384,726 | ) | ||
Total liabilities | (384,726 | ) | ||
Net assets | 2,354,006 |
(c) | An analysis of the net cash outflow of cash and cash equivalents in respect of deemed disposal of a subsidiary is as follows: |
A$ | ||||
Consideration received, satisfied in cash | - | |||
Cash and cash equivalents of subsidiaries disposed of (included cash at bank and bank overdraft) | (14,892 | ) | ||
Net cash outflow on deemed disposal | (14,892 | ) |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 22 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
25. | RESERVES |
(a) | The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations to Australian dollars. |
(b) | Other reserves represent reserve on the capital injection by non-controlling interest. |
26. | COMMITMENTS |
(a) | On April 29, 2019, the Company and Teko International Limited ("Teko") entered into a distribution rights agreement for the territory of Hong Kong and Guangzhou Province, China ("Territories") for a proprietary conductive film and 3rd generation Polymer Dispersed Liquid Crystal ("PDLC") film. Pursuant to the Agreement, the Company shall pay 50,000 IMTE shares upon the commissioning of one (i) lamination line, (ii) for each of the next 3 years after the commissioning of the manufacturing line, IMTE shall pay Teko 50,000 IMTE shares should the annual revenue reach US$10 million or 100,000 IMTE shares should the revenue reach US$20 million, and (iii) 50,000 IMTE shares for each additional lamination line installed. In addition, for managing the operations, the Company will pay to Teko 25% of the net profits from the sale of the PDLC film products and the lamination operations. The agreement was extended for a further 3 months and on September 15, 2022, the investment in the distribution rights held by Smartglass Limited was disposed (note 31a) |
(b) | As of June 30, 2022, the Group had internal capital commitments for the investments in the People's Republic of China ("P.R.C.") subsidiaries of A$ 18,017,920 (approximately US$ 12,419,300)(2021: A$19,277,746 (approximately US$12,983,813) |
(c) | As of June 30, 2022, the Group had internal commitment for purchasing lamination productions lines of A$ [6,659,950 ](approximately US$ 5,000,000) (2021:A$ 6,659,950). |
(d) | The Group has entered operating lease commitments for property management expenses under lease agreements of total A$1,292,986 (2021: nil) for rental office. |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 23 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
27. | CONTROLLED ENTITIES |
Country of Incorporation | Percentage Owned | |||||||||
June 30, 2022 |
December 31, 2021 | |||||||||
Parent Entity: Integrated Media Technology Limited | Australia | |||||||||
Subsidiaries of Integrated Media Technology Limited: | ||||||||||
Ace Corporation Limited* | Hong Kong | 60% (Indirect | ) | - | ||||||
CIMC Marketing Pty. Limited | Australia | 100 | % | 100 | % | |||||
eGlass Technologies Ltd* | Australia | 100 | % | - | ||||||
Grand Dynasty Limited | Hong Kong | 100 | % | 100 | % | |||||
Grand Dynasty (Zhejiang) Co., Limited | P.R.C | 100% (indirect | ) | 100% (indirect | ) | |||||
Greifenberg Digital Limited | Canada | - | 40.75 | % | ||||||
Greifenberg Capital Limited | Hong Kong | - | 40.75% (indirect) | |||||||
Greifenbery Analytics Limited | Canada | - | 40.75% (indirect) | |||||||
IMTE Limited (Formerly known as: Great Gold Investment Limited) | Hong Kong | 100 | % | 100 | % | |||||
IMTE Asia Limited | Hong Kong | 100 | % | 100 | % | |||||
Itana Holdings Limited | Canada | 100 | % | 100 | % | |||||
Joint Investment Limited | Hong Kong | 100 | % | |||||||
Renfrew International Limited | United State | 100 | % | 100 | % | |||||
Lonsdale International Limited | United State | 100 | % | 100 | % | |||||
Smart (Zhenjiang) Intelligent Technology Co., Limited (Formerly known as: Smart (Shenzhen) Technology Limited) | P.R.C | 100% (indirect | ) | 100% (indirect | ) | |||||
Smartglass Limited | Hong Kong | 100 | % | 100 | % | |||||
Sunup Holdings Limited | Hong Kong | 51 | % | 51 | % | |||||
Sunup Korea Limited | Hong Kong | 51% (indirect | ) | 51% (indirect | ) | |||||
World IntergratedSupply Sdn. Bhd.* | Malaysia | 60 % (indirect | ) | - |
* | Acquired during the period |
# | Disposed during the period |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 24 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
28. | RELATED PARTY TRANSACTIONS |
Transactions with related parties include the following:
(a) Transactions with key management personnel
The total remuneration paid or payable to the directors and senior management of the Group during the period are as follows:
Group | ||||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Short term benefits | 683,932 | 923,321 | ||||||
Post-employment benefits | - | 3,027 | ||||||
683,932 | 926,348 |
(b) | Other related party transactions |
During the period, the Group has the following material transactions with its related parties:
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
Company Secretarial and CFO fee paid to a related party (Remark 1) | - | 274,155 |
Remark 1: An entity controlled by Mr. Cecil Ho, former Company Secretary and CFO for providing professional services.
29. | CASH FLOW INFORMATION |
Group | ||||||||
Period Ended June 30 2022 |
Period Ended June 30 2021 | |||||||
A$ | A$ | |||||||
CASH FLOWS FROM CHANGES IN WORKING CAPITAL | ||||||||
(Increase) / Decrease in assets: | ||||||||
Other assets | (551,967 | ) | (197,222 | ) | ||||
Inventories | (6,512,192 | ) | 1,517 | |||||
Trade and other receivables | 390,749 | 32,946 | ||||||
Amount due from an associate | (293,792 | ) | - | |||||
Decrease in liabilities: | ||||||||
Trade and other liabilities | (559,555 | ) | (896,257 | ) | ||||
Amounts due to related companies | (254,496 | ) | - | |||||
NET CASH FLOWS FROM CHANGES IN WORKING CAPITAL | (7,781,253 | ) | (1,059,016 | ) |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 25 of 26 |
INTEGRATED MEDIA TECHNOLOGY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
30. | RECLASSIFICATION |
Certain amounts in the prior period unaudited condensed consolidated financial statements have been reclassified to conform to the presentation of the current period unaudited condensed consolidated financial statements. These reclassifications had no effect on the previously reported net loss.
31. | EVENTS OCCURRING AFTER THE REPORTING DATE |
Save as disclosed below, there is no other matter or circumstance arisen since June 30, 2022, which has significantly affected, or may significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years.
(a) | As announced in Form 6K on 12 July 2022, on 11 July 2022, the Company entered into the Sales and Purchase Agreement ("SP Agreement") with Capital Stone Holdings Limited ("Purchaser"), a corporation incorporated in British Virgin Islands, pursuant to which the Company has conditionally agreed to sell to the Purchaser 100% equity interest in eGlass Technologies Ltd ("eGlass"), a wholly-owned subsidiary of the Company holding all the assets of our electronic glass business in China (the "Disposal") for US$6.8 million ("Consideration"). |
The Purchaser shall pay the Consideration by issuance to IMTE a debt instrument ("Loan Agreement") which bears interests of 5% per annum, repayable in 2 years and secured against the shares of eGlass.
The Purchaser has the intention to list eGlass on the Australia Securities Exchange ("ASX") within the next 2 years. Pursuant to the SP Agreement, the Purchaser has the right to pay the Loan by giving IMTE the number of shares in eGlass calculated by dividing the amount of outstanding loan by 10% discount to the then 5 days volume weighted average closing price ("VWAP") provided that such price shall not be greater than the 120% of the IPO Price. Alternatively, the Company has the right to have the Purchaser pay the Loan by transferring to IMTE the number of shares in eGlass calculated by dividing the amount of outstanding loan by the IPO Price. Any outstanding loan which could not be fully repaid by the eGlass shares above will be settled by cash.
(b) | In connection with the transaction described in (a) above, on and around 11 July 2022, IMTE approved to raise up to US$10 million in relation to the above disposal. IMTE will entered into Subscription Agreements ("Subscription Agreements") where each Subscriber will subscribe to a convertible note ("Note"). The Note is interest free, unsecured and convertible into eGlass shares on the date eGlass receives notice from ASX that it will be admitted to the official list of ASX, at a conversion price equal to 25% discount to the IPO Price. |
However, if by the first anniversary of the date of the Agreement, eGlass has not received notice from ASX that it will be admitted to the official list of ASX, all Notes will convert to IMTE shares based on then 30-day VWAP multiplied by 90% per Note.
In addition, each Subscriber shall receive warrants ("Warrant") equal to the amount of the Note. Each Warrant can subscribe, provided that eGlass is listed on the ASX, for one share in eGlass at the IPO Price for a period of one year after the IPO. The Warrants are assignable and transferable prior to the IPO. If eGlass is not listed on the ASX, the Warrants will automatically expire.
As at the date of this Report, the Company has signed Subscription Agreements for US$5.2million.
(c) | As announced in Form 6K on 2 August 2022, on July 29, 2022, the Board of the Company approved the fund raising of US$3.2 million for the development of Halal projects, air filter operation and working capital. In this connection, on August 2, 2022, the Company entered into private placing agreements to sell a total of 2,539,682 shares in the Company at a price of US$1.26 per share for a total raise of US$3.2 million. |
In addition, the investor will also receive a warrant representing 100% of the subscription amount, raising an additional US$3.2 million if all the warrants are exercised. The warrants are for a term of 2 years from the date of the Agreement and can be exercised at US$1.26 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company.
(d) | As announced in Form S-8 on 17 August 2022, the Company filed in accordance with the requirements under the Securities Act of 1933, as amended, in order to register 2,200,000 ordinary shares, no par value per share, issuable pursuant to the Integrated Media Technology Limited 2021 Employee Share Option Plan adopted by the Board of Directors of the Company. |
Integrated Media Technology Limited | Interim Report | June 30, 2022 | Page 26 of 26 |
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IMT - Integrated Media Technology Ltd. published this content on 16 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 December 2022 21:42:03 UTC.