Integrated Media Technology Ltd 6-K, filed Nov 20, 2020
Integrated Media Technology Ltd (IMTE)
About this 6-K
Integrated Media Technology Ltd filed this 6-K on November 20, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________
FORM 6-K
______________________________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
Dated November 19, 2020
Commission File Number: 001-38018
______________________________________________
Integrated Media Technology Limited
(Exact Nameas Specified in its Charter)
______________________________________________
N/A
(Translationof Registrant’s Name)
Level 7, 420King William Street
Adelaide SA5000
(Address ofprincipal executive office)
______________________________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (7): ☐
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No ☒
If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 19, 2020
| Integrated Media Technology Limited | |
|---|---|
| By: | /s/ Mr. Con Unerkov |
| Name: | Mr. Con Unerkov |
| Title: | Executive Chairman and Chief Executive Officer |
EXHIBITINDEX
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Interim Report - For the Six Months Ended June 30, 2020 |
Safe Harbor Statement and Legal Disclaimer
This Form 6-K contains certain statements that describe our management's beliefs concerning future business conditions and prospects, growth opportunities and the outlook for our business, including our business in air filter, electronic glass and the 3D autostereoscopic or ASD display, based upon information currently available. Such statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Wherever possible, we have identified these forward-looking statements by words such as "anticipates," "believes," "intends," "estimates," "expects," "projects" and similar phrases. These forward-looking statements are based upon assumptions our management believes are reasonable. Such forward-looking statements are subject to risks and uncertainties which could cause our actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements, including, among other things, the risks and uncertainties disclosed in our annual report on Form 20-F filed with the Securities and Exchange Commission from time to time.
Because our forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different and any or all of our forward-looking statements may turn out to be wrong. They speak only as of the date made and can be affected by assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in this Form 6-K and in our annual reports will be important in determining future results. Consequently, we cannot assure you that our expectations or forecasts expressed in such forward-looking statements will be achieved. Actual future results may vary materially. Except as required by law, we undertake no obligation to publicly update any of our forward-looking or other statements, whether as a result of new information, future events, or otherwise.
Nasdaq/Media Release (NASDAQ: IMTE)
November 19, 2020
Half Year Report - For the Six Months Ended June 30, 2020
Integrated Media Technology Limited (NASDAQ: IMTE) ("IMTE" or the "Company") announces the release of its Interim Report for the six months ended June 30, 2020.
Presented In Australian dollars (A$)
| Key Information | For the Six Months Ended | ||
|---|---|---|---|
| June 30, 2020A$ | June 30, 2019A$ | % of Increase/ (Decrease) | |
| Revenue from operating activities | 444,663 | 339,451 | 31% |
| Earnings before interest, tax, depreciation and amortization ("EBITDA") | (3,451,089) | (4,784,559) | (28%) |
| Loss from ordinary activities after tax attributable to members | (4,655,833) | (10,207,840) | (54%) |
| Total comprehensive loss attributable to members | (4,530,186) | (10,049,297) | (55%) |
| Basic and diluted loss per share | (1.32) | (3.14) | (58%) |
| Interim dividend | N/A | N/A | N/A |
The revenue from operating activities increased by 31% from A$339,451 for the six months ended June 30, 2019 to A$444,663 for the six months ended June 30, 2020, primarily from the increase in sale of display products.
During the six months ended June 30, 2020, IMTE has recorded a loss of A$4,835,240 (2019: loss of A$10,771,946). The decrease was mainly due to curtailment operating costs compared to the prior period and the provision for impairment loss of goodwill in the prior period.
Please refer to Exhibit 99.1 for full text of our Interim Report for the six months ended June 30, 2020.
About Integrated Media Technology Limited ("IMTE")
IMTE is an Australia company engaged in the business of glasses-free 3D (also known as autostereoscopic 3D) display, the manufacture / sale of nano coated plates for air filters and the sale of electronic glass. These two new business operations in air filters and electronic glass, form the foundation of our future growth strategy. IMTE has offices in Australia, China, and Hong Kong. IMTE is traded on the Nasdaq under the symbol "IMTE". For more information, please visit www.imtechltd.com.
U.S Investor Relations Contact:
Email: info@imtechltd.com
Phone: +61 8 7324 6018
Exhibit | Integrated Media Technology Limited
Contents
| Pages | |
|---|---|
| Directors'<br> Report | 1-2 |
| Financial<br> Report | 3 |
| Condensed<br> Consolidated Statements of Profit or Loss and Other Comprehensive Income (Loss) | 4 |
| Condensed<br> Consolidated Statements of Financial Position | 5 |
| Condensed<br> Consolidated Statements of Changes in Equity | 6 |
| Condensed<br> Consolidated Statements of Cash Flows | 7 |
| Notes<br> to the Condensed Consolidated Financial Statements | 8-27 |
| Integrated<br>Media Technology Limited | Interim Report | For the six months ended June 30, 2020 |
|---|
Directors' Report
The directors present their report together with the condensed consolidated financial statements on the consolidated entity (referred to hereinafter as the "Group") consisting of Integrated Media Technology Limited (referred to hereinafter as "IMTE" or "Company") and the entities it controlled as of and for the six months ended June 30, 2020.
Directors
The names of the directors in office at any time during the period from January 1, 2020 to June 30, 2020, and up to the date of this report are:
| Director | Position | |
|---|---|---|
| Mr.<br> Con UNERKOV | Chairman<br> and Chief Executive Officer | |
| Dr.<br> Man Chung CHAN | Independent<br> Non-executive Director | |
| Mr.<br> Wuhua ZHANG | Non-executive<br> Director | |
| Mr.<br> Uwe Von PARPART | Independent<br> Non-executive Director | |
| Dr.<br> Heming CUI | Independent<br> Non-executive Director | (Appointed<br> on June 12, 2020) |
PrincipalActivities
IMTE is an Australia company engaged in the business of glasses-free 3D (also known as autostereoscopic 3D) display, the manufacture / sale of nano coated plates for air filters and the sale electronic glass. These two new business operations in air filters and electronic glass, form the foundation of our future growth strategy.
Reviewof Operations and Future Development
General review
The Group's principal activities during the financial period under review was the development, sale and distribution of 3D autostereoscopic display and 3D video wall.
Financial review
During the financial period under review, the Group has recorded revenue from operations of A$444,663 (2019: A$339,451) and recorded losses for the period of A$4,835,240 (2019: loss of A$10,771,946). The slight increase in revenue of the display business for the six months ended June 30, 2020 was primarily due to more contracts concluded and completed in respect of the sales of displays, and a decrease in net loss for the six month ended June 30, 2020 approximately 55.1% from A$10,771,946 loss in 2019 to A$4,835,240 loss for the period was due to no provision for impairment loss of goodwill in 2020 (2019: A$4,486,301, which had been fully impaired in the prior period).
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>1 of 27 |
|---|
Directors' Report (Continued)
As of June 30, 2020, the Group has net liabilities of A$2,842,598. The non-current assets amounting to A$5,760,324 consist of fixed assets of A$358,379, intangible assets of A$4,358,825 and development projects A$1,043,120.
During the period, the Company continued to pursue the research of ASD technology in support of our sales of 3D ASD products. Most of our operating expenditures incurred during the period were for research and product development which did not contribute any positive return to our bottom line. With the manufacturing issues of our subcontractors, we were not able to conclude many sales or pursue any media and advertising projects involving sizeable orders for 3D ASD displays. These factors contributed the loss incurred by the Company during the period.
Going forward, the Company will seek to diversify from its 3D ASD business to switchable electronic glass. The Company will seek funding to build or rent a manufacturing facility for our electronic glass lamination lines in 2020 & 2021. If we are successful in securing the funding in second half of 2020, then the Company will be positioned to deliver operational results in the switchable electronic glass business in the near future. The Company will also conduct an overall review of our existing operations with a view to reduce operational costs and to focus on committing operating funds to businesses operations that can deliver consistent sales and profit to the Group.
During the period under review and up to the date of this report, the Company has successfully raised funds by selling shares and convertible bonds in the Company. The Company has also converted certain debts into shares in the Company to decrease its debt burden. In the short term, the Company will continue to raise funds from the equity market to strengthen our capital base. In the longer term, the Company will need to seek funding from both the capital and equity markets to support our capital expenditures and operations.
The Company will be reviewing potential acquisitions that can add value to the Group or bring in steady revenue profit streams. The future development is dependent on the ability to have sufficient resources in funding, technology and human capital to execute our business plans.
On behalf of the Directors,
/S/Con Unerkov
________________________
Con Unerkov
Director
November 19, 2020
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>2 of 27 |
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Financial Report
The financial report covers Integrated Media Technology Limited (“IMTE”) as a consolidated entity, consisting of Integrated Media Technology Limited and the entities it controlled. The financial report is presented in Australian dollars which is IMTE's functional currency.
The financial report consists of the condensed consolidated financial statements, notes to the condensed consolidated financial statements and the directors' declaration.
Integrated Media Technology Limited is a Nasdaq listed public company limited by shares, incorporated and domiciled in Australia, its registered office and the principal place of business are:
RegisteredOffice and Principal Place of Business
Level 7, 420 King William Street
Adelaide SA 5000 Australia
PrincipalPlace of Business
7/F,Siu On Center, 188 Lockhart Road,
Wanchai, Hong Kong
A description of the nature of the Group’s operations and its principal activities are included in the directors' report, which is not part of the financial report.
The financial report was authorized for issue, in accordance with a resolution of directors on November 19, 2020.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>3 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
CONDENSEDConsolidated StatementS of Profit or Loss and Other Comprehensive Income/ (LOSS)
FORTHE SIX MONTHS ENDED jUNE 30, 2020 AND 2019
| Group | |||
|---|---|---|---|
| June<br> 30<br><br> <br>2020 | June<br> 30<br><br> <br>2019 | ||
| Notes | A$ | A$ | |
| Revenue,<br> net | 4 | 444,663 | 339,451 |
| Cost<br> of goods sold | (331,663) | (232,137) | |
| 113,000 | 107,314 | ||
| Interest<br> income | - | 90,406 | |
| Other<br> income | 5 | 82,561 | 90,111 |
| 195,561 | 287,831 | ||
| EXPENSES | |||
| Employee<br> benefit expenses | (1,426,738) | (2,010,474) | |
| Depreciation<br> and amortization | (1,384,151) | (1,696,130) | |
| Professional<br> and consulting expenses | (831,396) | (1,255,335) | |
| Travel<br> and accommodation expenses | (33,829) | (188,365) | |
| Office<br> expenses and supplies | (195,787) | (364,112) | |
| Rental<br> costs | (194,049) | (399,190) | |
| Other<br> operating expenses | (385,143) | (60,683) | |
| Finance<br> costs | 6 | (487,871) | (703,825) |
| Provision<br> for impairment loss of goodwill | - | (4,486,301) | |
| Exchange<br> losses | (62,847) | - | |
| Loss<br> on disposal of subsidiaries | 24 | (28,990) | - |
| Total<br> expenses | (5,030,801) | (11,164,415) | |
| LOSS<br> BEFORE INCOME TAX | (4,835,240) | (10,876,584) | |
| Income<br> tax credit | 7(a) | - | 104,638 |
| LOSS<br> FOR THE PERIOD | (4,835,240) | (10,771,946) | |
| OTHER<br> COMPREHENSIVE INCOME | |||
| Items<br> that may be reclassified subsequently to profit or loss: | |||
| Exchange<br> difference on translation of financial statements of overseas subsidiaries | 248,419 | 171,542 | |
| Other<br> comprehensive income for the period, net of tax | 248,419 | 171,542 | |
| TOTAL<br> COMPREHENSIVE LOSS FOR THE PERIOD | (4,586,821) | (10,600,404) | |
| Loss<br> for the period attributable to: | |||
| Owners<br> of the Company | (4,655,833) | (10,207,840) | |
| Non-controlling<br> interests | (179,407) | (564,106) | |
| (4,835,240) | (10,771,946) | ||
| Total<br> comprehensive loss for the period attributable to: | |||
| Owners<br> of the Company | (4,530,186) | (10,049,297) | |
| Non-controlling<br> interests | (56,635) | (551,107) | |
| (4,586,821) | (10,600,404) | ||
| Loss<br> per share | |||
| Basic<br> and diluted | 9 | (1.32) | (3.14) |
The accompanying notes form part of these condensed consolidated financial statements.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>4 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
CONDENSEDCONSOLIDATED STATEMENTS OF FINANCIAL POSITION
asof June 30, 2020 and December 31, 2019
| Group | |||
|---|---|---|---|
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> <br>2019 | ||
| Notes | A$ | A$ | |
| ASSETS | |||
| CURRENT<br> ASSETS | |||
| Cash<br> and bank balances | 139,174 | 735,724 | |
| Inventories | 10 | 497,315 | 749,173 |
| Right<br> of use assets | 19 | - | 682,119 |
| Trade<br> and other receivables | 11 | 191,563 | 770,958 |
| Other<br> assets | 12 | 746,244 | 2,291,273 |
| Total<br> current assets | 1,574,296 | 5,229,247 | |
| NON-CURRENT<br> ASSETS | |||
| Plant<br> and equipment | 13 | 358,379 | 729,117 |
| Right<br> of use assets | 19 | - | 425,773 |
| Intangible<br> assets and goodwill | 14 | 4,358,825 | 9,950,803 |
| Development<br> projects | 15 | 1,043,120 | 3,611,336 |
| Total<br> non-current assets | 5,760,324 | 14,717,029 | |
| TOTAL<br> ASSETS | 7,334,620 | 19,946,276 | |
| LIABILITIES | |||
| CURRENT<br> LIABILITIES | |||
| Trade<br> and other liabilities | 16 | 6,824,662 | 4,338,495 |
| Provision<br> for employee benefits | - | 64,135 | |
| Amounts<br> due to related companies | 17 | 593,150 | 6,684,682 |
| Borrowings | 18 | - | 1,817,782 |
| Lease<br> liabilities | 19 | - | 666,868 |
| Derivative<br> financial instruments | 20 | - | - |
| Convertible<br> bonds | 21 | - | 4,420,899 |
| Total<br> current liabilities | 7,417,812 | 17,992,861 | |
| NON-CURRENT<br> LIABILITIES | |||
| Lease<br> liabilities | 19 | - | 501,739 |
| Deferred<br> tax liabilities | 7(b) | 15,325 | 1,372,653 |
| Derivative<br> financial instruments | 20 | - | - |
| Convertible<br> promissory note | 22 | 2,744,081 | - |
| Total<br> non-current liabilities | 2,759,406 | 1,874,392 | |
| TOTAL<br> LIABILITIES | 10,177,218 | 19,867,253 | |
| NET<br> CURRENT LIABILITIES | (5,843,516) | (12,763,614) | |
| NET<br> (LIABILITIES)/ASSETS | (2,842,598) | 79,023 | |
| CAPITAL AND RESERVES | |||
| Issued<br> capital (no par value, 3,663,100 ordinary shares issued and outstanding as of June 30, 2020 and 3,377,386 ordinary shares<br> of December 31, 2019) | 23 | 20,309,687 | 18,902,029 |
| Foreign<br> currency translation reserves | 25 | 860,860 | 735,213 |
| Other<br> reserves | 25 | 2,704,452 | 4,423,141 |
| Accumulated<br> losses | (28,724,056) | (25,786,912) | |
| Equity<br> attributable to owners of the Company | (4,849,057) | (1,726,529) | |
| Non-controlling<br> interests | 2,006,459 | 1,805,552 | |
| TOTAL<br> EQUITY | (2,842,598) | 79,023 |
The accompanying notes form part of these condensed consolidated financial statements.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>5 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
CONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Attributable<br> to Owners of the Company | Non-Controlling<br> Interests | Total<br> Equity | |||||
|---|---|---|---|---|---|---|---|
| GROUP | Issued<br> Capital | Retained<br> Earnings / (Accumulated<br><br> <br>Losses) | Foreign<br> Currency Translation Reserve<br><br> <br>(Note<br> 25(a)) | Other<br> reserves<br><br> <br>(Note<br> 25(b)) | Total | ||
| A$ | A$ | A$ | A$ | A$ | A$ | A$ | |
| Balance<br> at January 1, 2019 | 18,902,029 | (10,676,713) | 629,383 | 4,959,089 | 13,813,788 | 2,807,963 | 16,621,751 |
| Loss<br> for the period | - | (10,207,840) | - | - | (10,207,840) | (564,106) | (10,771,946) |
| Other<br> comprehensive income, net of tax | - | - | 158,543 | - | 158,543 | 12,999 | 171,542 |
| Total<br> comprehensive income / (loss) for the period | - | (10,207,840) | 158,543 | - | (10,049,297) | (551,107) | (10,600,404) |
| Balance<br> at June 30, 2019 | 18,902,029 | (20,884,553) | 787,926 | 4,959,089 | (3,764,491) | 2,256,856 | 6,021,347 |
| Balance<br> at January 1, 2020 | 18,902,029 | (25,786,912) | 735,213 | 4,423,141 | (1,726,529) | 1,805,552 | 79,023 |
| Loss<br> for the period | - | (4,655,833) | - | - | (4,655,833) | (179,407) | (4,835,240) |
| Other<br> comprehensive income, net of tax | - | - | 125,647 | - | 125,647 | 122,772 | 248,419 |
| Total<br> comprehensive income / (loss) for the period | - | (4,655,833) | 125,647 | - | (4,530,186) | (56,635) | (4,586,821) |
| Transfer<br> convertible bond reserve to accumulated loss | - | 1,718,689 | - | (1,718,689) | - | - | - |
| Disposal<br> of subsidiaries | - | - | - | - | - | 257,542 | 257,542 |
| Issuance<br> of new ordinary shares | 1,407,658 | - | - | - | 1,407,658 | - | 1,407,658 |
| Balance<br> at June 30, 2020 | 20,309,687 | (28,724,056) | 860,860 | 2,704,452 | (4,849,057) | 2,006,459 | (2,842,598) |
The accompanying notes form part of these condensed consolidated financial statements.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
forthe six months ended June 30, 2020 and 2019
| Group | |||
|---|---|---|---|
| June<br> 30<br><br> <br>2020 | June<br> 30<br><br> <br>2019 | ||
| Notes | A$ | A$ | |
| CASH<br> FLOWS FROM OPERATING ACTIVITIES | |||
| Net<br> loss before tax | (4,835,240) | (10,876,584) | |
| Adjustments<br> to reconcile net loss to net cash used in operating activities: | |||
| Depreciation<br> and amortization | 1,384,151 | 1,696,130 | |
| Loss<br> on disposal of subsidiaries | 28,990 | - | |
| Interest<br> accrued for lease liabilities | 32,526 | 57,556 | |
| Interest<br> accrued for convertible notes | 122,660 | - | |
| Interest<br> accrued for convertible bonds | - | 608,386 | |
| Net<br> cash flows from changes in working capital | 29 | 796,857 | 244,813 |
| Provision<br> for impairment loss of goodwill | - | 4,486,301 | |
| NET<br> CASH OUTFLOW USED IN OPERATING ACTIVITIES | (2,470,056) | (3,783,398) | |
| CASH<br> FLOWS FROM INVESTING ACTIVITIES | |||
| Disposal<br> of subsidiaries, net of cash disposal of | 24 | 855,506 | - |
| Development<br> expenditures | (125,520) | (471,497) | |
| Payments<br> for intangible assets | - | (7,283) | |
| Payments<br> for plant and equipment | (2,064) | (1,193,474) | |
| NET<br> CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES | 727,922 | (1,672,254) | |
| CASH<br> FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds<br> of advances from related parties | 602,834 | 4,003,072 | |
| Proceeds<br> of advances from other payables | 2,357,112 | - | |
| Proceeds<br> from issuance of convertible notes | 2,626,400 | - | |
| Proceeds<br> from bank borrowings | - | 90,049 | |
| Repayment<br> of obligation under finance lease | - | (8,934) | |
| Payment<br> of lease liabilities | (320,851) | - | |
| Repayment<br> for convertible bonds | (4,668,195) | - | |
| Proceeds<br> from shares issued | 1,407,658 | - | |
| NET<br> CASH INFLOW PROVIDED BY FINANCING ACTIVITIES | 2,004,958 | 4,084,187 | |
| NET<br>INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS | 262,824 | (1,371,465) | |
| CASH<br> AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD | (166,758) | 619,705 | |
| Effect<br> of exchange rate changes on cash and cash equivalents | 43,108 | 10,934 | |
| CASH<br> AND CASH EQUIVALENTS AT END OF PERIOD | 139,174 | (740,826) | |
| Analysis of cash and cash equivalents: | |||
| Cash<br> and bank balances | 139,174 | 142,381 | |
| Bank<br> overdraft | - | (883,207) | |
| Cash<br> and cash equivalents | 139,174 | (740,826) |
The accompanying notes form part of these condensed consolidated financial statements.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | BASIS OF PREPARATION OF CONDENSED<br>CONSOLIDATED FINANCIAL STATEMENTS |
|---|
The 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 condensed consolidated financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these condensed consolidated financial statements are to be read in conjunction with the annual report for the financial year ended December 31, 2019 and any public announcements made by Integrated Media Technology Limited during the interim reporting period.
The 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 Group incurred a net loss of A$4,835,240 (2019: loss of A$10,771,946) during the six months ended June 30, 2020 and, as of that date, the Group's current liabilities exceeded its current assets by A$5,843,516. These conditions indicate 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 Company’s 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 Company 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, 2020, the Company had accumulated losses of A$28,724,056 and generated a net loss for the six months ended June 30, 2020 of A$4,835,240 and used cash in operating activities in the amount of A$2,470,056. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company 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 Company has successfully raised a total of A$5.6 million from the selling of new shares and convertible bonds, and have converted A$3.9 million of debts to equity in the Company. These corporate actions have stabilized the Company’s cashflow in the short term, but the Company will need to continue to build its capital base to fund its business plans.
In order to continue as a going concern, the Company will need continual short-term borrowings for our working and operating capital. In the longer term, the Company is dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations.
There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern.
.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | BASIS OF PREPARATION OF CONDENSED CONSOLIDATED FINANCIAL<br>STATEMENTS (Continued) |
|---|
Based on the Company’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 Company’s plans with respect to its liquidity issues include, but are not limited to, the following:
| 1) | Continue to raise financing<br>through the sale of its equity and/or debt securities; |
|---|---|
| 2) | Seek additional capital<br>in the public equity markets to continue its operations as it rolls out its current products in development, respond to competitive<br>pressures, develop new products and services, and support new strategic partnerships. The Company is currently evaluating additional<br>equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can<br>consummate such a transaction, or consummate a transaction at favorable pricing. |
| --- | --- |
The ability of the Company 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 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 consolidated financial statements of the Group are presented in Australian Dollars (“A$”), unless otherwise stated.
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:
| IFRS<br> 3 Amendments | Definition of a Business |
|---|---|
| IAS<br> 1 and IAS 8 | Definition of Material |
| IFRS<br> 9, IAS 39 and IFRS 7 Amendments | Interest Rate Benchmark Reform |
| IFRS<br> 16 Amendments | COVID-19 Related Rent Concession |
The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | BASIS<br> OF PREPARATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) |
|---|
IFRS 3 Amendments clarify and provide additional guidance on the definition of a business. The amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. A business can exist without including all the inputs and processes needed to create outputs. The amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on whether acquired inputs and substantive processes together significantly contribute to the ability to create outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. The Group has implemented IFRS 3 since January 1, 2020 with no material impact on the consolidated financial statement of the Group, nor is there expected to be any future impact to the Group.
Amendments to IAS 1 and IAS 8 provide a new definition of materiality. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions made by the primary users of general purpose financial statements based on those financial statements. The amendments clarify that materiality depends on the nature or magnitude of information. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. The Group has implemented IAS 1 and IAS 8 since January 1, 2020 with no material impact on the consolidated financial statement of the Group, nor is there expected to be any future impact to the Group.
The amendments to IFRS 9, IAS 39 and IFRS 7 modify some specific hedge accounting requirements. During the period of uncertainty arising from phasing-out of interest-rate benchmarks with an alternative nearly risk-free interest rate (“RFR”), the entities that apply these hedge accounting requirements can assume that the interest rate benchmarks on which the hedged cash flows and cash flows of the hedging instrument are based are not altered as a result of interest rate benchmark reform. The amendments applied retrospectively. The Group has implemented IFRS 9, IAS 39 and IFRS 7 since January 1, 2020 with no material impact on the consolidated financial statement of the Group, nor is there expected to be any future impact to the Group as it does not have any interest rate hedge accounting requirement.
IFRS 16 Amendment provides for rent relief during COVID-19, which provides an exemption for lessees. For lease payments due before June 2021, lessees are not required to apply the guidance on accounting treatment of lease changes in IFRS 16 for rent relief granted due to the impact of COVID-19. The amendment is applicable for annual reporting periods beginning on or after 1 June 2020, and earlier adoption is permitted. The Group has adopted the amendments from 1 January 2020 with no material impact on the consolidated financial statement of the Group, nor is there expected to be any future impact to the Group as the Group has no existing lease due before June 2021.
| 2. | USE OF JUDGEMENTS AND ESTIMATES |
|---|
In preparing these interim 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.
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.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE 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 three operating segments for the period ended June 30, 2020 (2019: three), being (1) the development, sale and distribution of autostereoscopic 3D displays, conversion equipment, software and provision of technology solutions, (2) provision of consultancy services, and (3) 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 condensed consolidated financial statements.
The information reported to the executive director is on at least a monthly basis.
Intersegmenttransaction
There are no intersegment transactions. There are no intersegment sales, receivables, payables and loans.
Operatingsegment information
| <br><br> <br> | Sales<br> and<br><br> <br>distribution<br> of<br><br> <br>3D<br> displays<br><br> <br>(Remark<br> 1) | Consultancy<br> services | Corporate | Total |
|---|---|---|---|---|
| Consolidated – 2020 | A$ | A$ | A$ | A$ |
| For the six months ended June 30, 2020 | ||||
| Revenue | ||||
| Sales<br> to external customers | 444,663 | - | - | 444,663 |
| Intersegment<br> sales | - | - | - | - |
| Total<br> sales revenue | 444,663 | - | - | 444,663 |
| Other<br> revenue | 82,561 | - | - | 82,561 |
| Total<br> revenue | 527,224 | - | - | 527,224 |
| EBITDA | (3,451,089) | |||
| Depreciation<br> and amortization | (1,384,151) | |||
| Loss before income tax | (4,835,240) | |||
| Income<br> tax credit | - | |||
| Loss after income tax | (4,835,240) | |||
| As at June 30, 2020 | ||||
| Assets | ||||
| Segment assets | 7,134,056 | 23,988 | 176,576 | 7,334,620 |
| Liabilities | ||||
| Segment liabilities | 5,820,139 | 3,477,146 | 879,933 | 10,177,218 |
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|---|
INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 3. | OPERATING SEGMENTS (Continued) | |||
|---|---|---|---|---|
| <br><br> <br> | Sales<br> and<br><br> <br>distribution<br> of<br><br> <br>3D<br> displays<br><br> <br>(Remark<br> 1) | Consultancy<br> services | Corporate | Total |
| --- | --- | --- | --- | --- |
| Consolidated – 2019 | A$ | A$ | A$ | A$ |
| For the six months ended June 30, 2019 | ||||
| Revenue | ||||
| Sales<br> to external customers | 322,210 | 17,241 | - | 339,451 |
| Intersegment<br> sales | - | - | - | - |
| Total<br> sales revenue | 322,210 | 17,241 | - | 339,451 |
| Other<br> revenue | 17,903 | - | 162,614 | 180,517 |
| Total<br> revenue | 340,113 | 17,241 | 162,614 | 519,968 |
| EBITDA | (4,784,559) | |||
| Depreciation<br> and amortization | (1,696,130) | |||
| Provision<br> for impairment loss of goodwill | (4,486,301) | |||
| Interest<br> income | 90,406 | |||
| Lossbefore income tax | (10,876,584) | |||
| Income<br> tax credit | 104,638 | |||
| Loss after income tax | (10,771,946) | |||
| As at June 30, 2019 | ||||
| Assets | ||||
| Segment assets | 22,962,813 | (7,066) | (957,609) | 21,998,138 |
| Liabilities | ||||
| Segment liabilities | 10,521,695 | 26,600 | 5,428,496 | 15,976,791 |
Remark
1. Development, sale and distribution of 3D displays, conversion equipment, software and provision of technology solutions.
| 4. | REVENUE | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| Period<br> Ended<br><br> June 30<br><br> <br>2020 | Period<br> Ended<br><br> June 30<br><br> <br>2019 | |
| A$ | A$ | |
| Development,<br> sales and distribution of autostereoscopic 3D products and conversion equipment | 444,663 | 322,210 |
| Consultancy<br> and other services income | - | 17,241 |
| 444,663 | 339,451 | |
| 5. | OTHER INCOME | |
| --- | --- | |
| Group | ||
| --- | --- | --- |
| Period<br> Ended<br><br> June 30<br><br> <br>2020 | Period<br> Ended<br><br> June 30<br><br> <br>2019 | |
| A$ | A$ | |
| Government<br> grant | 82,082 | 72,269 |
| Sundry<br> income | 479 | 17,842 |
| 82,561 | 90,111 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 6. | FINANCE COSTS | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| Period<br> Ended<br><br> June 30<br><br> <br>2020 | Period<br> Ended<br><br> June 30<br><br> <br>2019 | |
| A$ | A$ | |
| Bank<br> overdraft and borrowing interest | 37,091 | 36,640 |
| Interest<br> on lease liabilities | - | 57,556 |
| Interest<br> on finance lease liabilities | 32,526 | 1,243 |
| Interest<br> on revolving loan | 109,811 | - |
| Interest<br> on convertible bonds | 185,783 | 608,386 |
| Interest<br> on convertible promissory note | 122,660 | - |
| 487,871 | 703,825 | |
| 7. | INCOME TAX CREDIT | |
| --- | --- | |
| Group | ||
| --- | --- | --- |
| Period<br> Ended<br><br> June 30<br><br> <br>2020 | Period<br> Ended<br><br> June 30<br><br> <br>2019 | |
| A$ | A$ | |
| Current<br> tax expense | - | - |
| Deferred<br> tax benefit | - | 104,638 |
| Income<br> tax credit – Note 7(a) | - | 104,638 |
(a) The prima-facie tax on loss before income tax is reconciled to the income tax benefit / (expense) as follows:
| Period<br> Ended<br><br> June 30<br><br> <br>2020 | Period<br> Ended<br><br> June 30<br><br> <br>2019 | |
|---|---|---|
| A$ | A$ | |
| Numerical<br> reconciliation of income tax benefit / (expense) to prima facie tax payable | ||
| Loss<br> before income tax | (4,835,240) | (10,876,584) |
| Income<br> tax benefit on loss before income tax at 30% | 1,450,572 | 3,262,975 |
| Difference<br> in overseas tax rates | (564,245) | (1,845,460) |
| Add<br> / (less) the tax effect of: | ||
| Tax<br> losses and temporary differences for the period for which no deferred tax is recognized | (886,327) | (1,312,877) |
| Income<br> tax expense | - | 104,638 |
| (b) | Deferred<br> tax assets / (liabilities) arising from temporary differences and unused tax losses can<br> be summarized as follows: | |
| --- | --- | |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> <br>2019 | |
| --- | --- | --- |
| A$ | A$ | |
| Balance<br> brought forward | (1,372,653) | (1,244,814) |
| Temporary<br> differences derecognized | - | (117,322) |
| Release<br> of disposal of subsidiaries | 1,380,402 | - |
| Exchange<br> rate difference | (23,074) | (10,517) |
| Total | (15,325) | (1,372,653) |
| 8. | DIVIDENDS | |
| --- | --- |
No dividends were declared and paid during the six months ended June 30, 2020 (2019: Nil).
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 9. | LOSS PER SHARE | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| 2020 | 2019 | |
| A$ | A$ | |
| Basic<br> and diluted earnings/ (loss) per share | (1.32) | (3.14) |
| Loss<br> after income tax attributable to shareholders | (4,655,833) | (10,207,840) |
| 2020 | 2019 | |
| No.<br> of shares | No.<br> of shares | |
| Weighted<br> average number of ordinary shares as at January 1 | 3,377,386 | 3,377,386 |
| Effect<br> of shares issued | 142,334 | - |
| Weighted<br> average number of ordinary shares adjusted as at June 30 | 3,519,720 | 3,377,386 |
The loss per share was calculated based on the weighted average of 3,519,720 (2019: 3,377,386) shares outstanding during the financial period.
| 10. | INVENTORIES |
|---|
Inventories consist of the following:
| Group | ||
|---|---|---|
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Raw<br> materials | 465,472 | 843,686 |
| Finished<br> goods – displays and other products | 766,084 | 789,984 |
| Provision<br> for inventories obsolescence | (734,241) | (884,497) |
| Total,<br> net of allowance for inventories | 497,315 | 749,173 |
| 11. | TRADE AND OTHER RECEIVABLES | |
| --- | --- | |
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Trade<br> receivables | 178,191 | 892,488 |
| Other<br> receivables | 30,238 | 2,390 |
| 208,429 | 894,878 | |
| Less: <br> Allowances for doubtful debts | (16,866) | (123,920) |
| Total <br> net of allowance for inventories | 191,563 | 770,958 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 12. | OTHER ASSETS | ||
|---|---|---|---|
| Group | |||
| --- | --- | --- | |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | ||
| A$ | A$ | ||
| Prepayments | 111,245 | 311,710 | |
| Trade<br> deposits | 634,867 | 1,522,976 | |
| Other<br> deposits | - | 262,228 | |
| VAT<br> receivable | 132 | 194,359 | |
| 746,244 | 2,291,273 | ||
| 13. | PROPERTY, PLANT AND EQUIPMENT | ||
| --- | --- | ||
| Group | Leasehold<br> Improvement | Office<br> Furniture and Equipment | Total |
| --- | --- | --- | --- |
| A$ | A$ | A$ | |
| At December 31, 2019 | |||
| Cost | 826,997 | 2,888,508 | 3,715,505 |
| Accumulated<br> depreciation | (743,048) | (2,243,340) | (2,986,388) |
| Net<br> book amount | 83,949 | 645,168 | 729,117 |
| Sixmonths ended June 30, 2020 | |||
| Opening<br> net book amount | 83,949 | 645,168 | 729,117 |
| Additions | 2,064 | - | 2,064 |
| Disposals | (80,455) | (203,785) | (284,240) |
| Depreciation<br> expense | (10,068) | (110,559) | (120,627) |
| Exchange<br> difference | 4,968 | 27,097 | 32,065 |
| Closing<br> net book amount | 458 | 357,921 | 358,379 |
| At June 30, 2020 | |||
| Cost | 401,261 | 793,857 | 1,195,118 |
| Accumulated<br> depreciation | (400,803) | (435,936) | (836,739) |
| Net<br> book amount | 458 | 357,921 | 358,379 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 14. | INTANGIBLE ASSETS AND GOODWILL | ||||
|---|---|---|---|---|---|
| Group | Goodwill | Autostereo-<br> scopic 3D Display Technologies and Knowhow | Patents<br> and Trademark | Software<br><br> <br>and<br> Licence | Total |
| --- | --- | --- | --- | --- | --- |
| A$ | A$ | A$ | A$ | A$ | |
| At December 31, 2019 | |||||
| Cost | 14,578,707 | 14,880,322 | 1,283,700 | 531,471 | 31,274,200 |
| Accumulated<br> amortization | - | (6,157,872) | (390,491) | (196,327) | (6,744,690) |
| Provision<br> for impairment | (14,578,707) | - | - | - | (14,578,707) |
| At<br> December 31, 2019 | - | 8,722,450 | 893,209 | 335,144 | 9,950,803 |
| Six months ended June 30, 2020 | |||||
| Opening<br> net book amount | - | 8,722,450 | 893,209 | 335,144 | 9,950,803 |
| Additions | - | - | - | - | - |
| Amortization<br> expense | - | (860,280) | (58,136) | (45,127) | (963,543) |
| Provision<br> for impairment | - | - | - | - | - |
| Disposal | - | (4,127,645) | (654,889) | (8,250) | (4,790,784) |
| Exchange<br> difference | - | 205,318 | (62,570) | 19,601 | 162,349 |
| Closing<br> net book amount | - | 3,939,843 | 117,614 | 301,368 | 4,358,825 |
| At June 30, 2020 | |||||
| Cost | - | 6,971,455 | 265,197 | 545,874 | 7,782,526 |
| Accumulated<br> amortization | - | (3,031,612) | (147,583) | (244,506) | (3,423,701) |
| Provision<br> for impairment | - | - | - | - | - |
| Net<br> book amount | - | 3,939,843 | 117,614 | 301,368 | 4,358,825 |
In 2019, the management considered that the goodwill and certain intangible assets have suffered an impairment loss and record a provision of impairment for goodwill in the amount of A$4,486,301 which then impaired the full value of the goodwill of A$14,578,707.
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 15. | DEVELOPMENT PROJECTS |
|---|---|
| Group | |
| --- | --- |
| A$ | |
| At December 31, 2019 | |
| Cost | 3,611,336 |
| Accumulated<br> impairment losses | - |
| At<br> December 31, 2019 | 3,611,336 |
| Six months ended June 30, 2020 | |
| Opening<br> net book amount | 3,611,336 |
| Additions | 125,520 |
| Disposal | (2,864,052) |
| Exchange<br> difference | 170,316 |
| Closing<br> net book amount | 1,043,120 |
| At June 30, 2020 | |
| Cost | 1,043,120 |
| Accumulated<br> impairment losses | - |
| Net<br> book amount | 1,043,120 |
Development projects represent the development costs directly attributable to and incurred for several internal technology projects of the Group which are in cooperation with the universities and professional technology institutions in Hong Kong for developing innovative technologies to be applied in the existing and new 3D related products of the Group. The cost model is applied for development projects which require these assets to be carried at cost less any accumulated impairment losses. The Group had performed impairment review for the development projects at the reporting period end and there was no indication that the development projects have suffered an impairment loss.
| 16. | TRADE AND OTHER LIABILITIES | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Trade<br> payables | 8,847 | 109,746 |
| Accruals | 480,058 | 328,071 |
| Trade<br> deposits | 561,548 | 900,740 |
| Other<br> borrowings | 4,118,421 | 1,761,308 |
| Other<br> payables | 1,655,788 | 1,238,630 |
| 6,824,662 | 4,338,495 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 17. | AMOUNTS DUE TO RELATED COMPANIES | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Amounts<br> due to related companies (i) | 10,318 | 6,101,850 |
| Amounts<br> due to ultimate holding company - net (ii) | 582,832 | 582,832 |
| 593,150 | 6,684,682 | |
| (i) | The<br> amounts due to related companies are unsecured, non-interest bearing and repayable on<br> demand. | |
| --- | --- | |
| (ii) | The<br> amounts due to ultimate holding company is unsecured non-interest bearing and repayable<br> on demand. | |
| --- | --- | |
| 18. | BORROWINGS | |
| --- | --- | |
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Bank<br> overdraft, unsecured | - | 902,482 |
| Bank<br> borrowings, unsecured | - | 915,300 |
| - | 1,817,782 |
During the period, the Group restructured and disposed of certain subsidiaries which had the bank overdraft and bank borrowings. The details of disposal are listed out in Note 24.
| 19. | LEASE |
|---|
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 | |||
|---|---|---|---|
| Lease<br> Properties<br><br> <br>A$ | Motor<br> Vehicle<br><br> <br>A$ | Total<br><br> <br>A$ | |
| As<br> at January 1, 2020 | 1,064,986 | 42,906 | 1,107,892 |
| Additions | - | - | - |
| Depreciation<br> expenses | (287,557) | (12,427) | (299,984) |
| Disposal | (862,109) | (3,887) | (865,996) |
| Exchange<br> difference | 84,680 | (26,592) | 58,088 |
| As<br> at June 30, 2020 | - | - | - |
| Analyzed<br> into: | A$ | ||
| Current<br> portion | - | ||
| Non-current<br> portion | - | ||
| - |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 19. | LEASE(continued) | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Within<br> one year | - | 666,868 |
| Two<br> to five years | - | 501,739 |
| - | 1,168,607 | |
| Less:<br> Amount due within one year shown under current liabilities | - | (666,868) |
| Amount<br> due after one year | - | 501,739 |
| Analyzed<br> into: | - | 666,868 |
| Current<br> portion | - | 501,739 |
| Non-current<br> portion | - | 1,168,607 |
Obligations under finance lease carry interest rates of 2.5% per annum.
| 20. | DERIVATIVE FINANCIAL INSTRUMENTS | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Derivative<br> financial liabilities | ||
| -<br> Put option liability embedded in the convertible bonds issued (Note 21) | - | 126,095 |
| -<br> Fair value change in derivative financial instruments during the six months ended June 30, 2020 / year ended December 31,<br> 2019 | - | (127,551) |
| -<br> Exchange difference | - | 1,456 |
| Carrying<br> value as at period end | - | - |
In connection with the Convertible Bonds as disclosed in Note 21, a Put Option was entered into between the Company and the Bondholder whereby the Bondholder can exercise an option, during the Put Option Exercise Period (means the period of seven days commencing from the day immediately after the date falling two years from the conversion date of the Convertible Bonds or such other date as agreed by the Company and the Bondholder in writing), to have the Company repurchase the MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds.
As at December 31, 2019, the management has determined that the option would not be executed and have written off the derivative financial instruments to the consolidated statement of profit or loss and other comprehensive income (loss).
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 21. | CONVERTIBLE BONDS | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | |
| A$ | A$ | |
| Face<br> value of convertible bonds issued on January 3, 2018 | - | 3,769,470 |
| Equity<br> component | - | (535,948) |
| Derivatives<br> embedded in the Convertible Bonds issued (Note 20) | - | (772,112) |
| Liability<br> component on initial recognition at January 3, 2018 | - | 2,461,410 |
| Interest<br> accrued but not yet paid for the year ended 2019 | - | 536,216 |
| Interest<br> accrued at effective interest rate during the six months ended June 30, 2020 / year ended December 31, 2019 | - | 1,316,702 |
| Interest<br> paid during the six months ended June 30, 2020 / year ended December 31, 2019 | - | (209,392) |
| Exchange<br> difference | - | 315,963 |
| Carrying<br> value as at period end | - | 4,420,899 |
On January 3, 2018, the Group entered into the following agreements in connection with the issue of HK$23million (equivalent to approximately A$3.8million) Convertible Bonds (“Convertible Bonds”): (i) Subscription Agreement between Marvel Digital Limited, a wholly-owned subsidiary of the Company (the “Issuer” or “MDL”) and an independent third party entity (“Bondholder”) for the Convertible Bonds, (ii) Deed of Guarantee between the Company and the Bondholder to guarantee the payment obligations under the Convertible Bonds and (iii) Put Option between the Company and the Bondholder to repurchase any converted MDL Shares as described below. On the same date, pursuant to the Subscription Agreement, the Convertible Bonds were issued by MDL to the Bondholder as all the terms and conditions in respect of the subscription of the Convertible Bonds were complied with and fulfilled.
Pursuant to the terms of the Convertible Bonds, the Convertible Bonds are convertible in the circumstances set out therein into 75,000 ordinary shares of MDL (“MDL Shares”) at a conversion price of HK$306.67 per share, which is equivalent to 20% of the enlarged issued share capital of MDL as of the date of the above Subscription Agreement. The Bondholder will have the right to convert the whole of their Convertible Bonds into ordinary shares of MDL at any time during the period from January 3, 2018 to January 2, 2020. The period may be extended to a further twelve months subject to the mutual agreement among MDL, the Company and Bondholder. Unless previously redeemed or converted, the Convertible Bonds will be redeemed at 100% of their principal amount on the maturity date which is two years from the Convertible Bonds issue date.
In connection with the Convertible Bonds, the Company also entered into a Deed of Guarantee to guarantee the due and punctual performance and observance by the Issuer of its payment obligations of the bond principal and interest under the Convertible Bonds until all the guaranteed obligations have been fully satisfied, discharged or paid in full. A Put Option was also entered into between the Company and the Bondholder whereby the Bondholder can exercise an option, during the Put Option Exercise Period as defined in Note 20, to have IMTE repurchase the MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds.
In 2020, the Company has repaid the Convertible Bonds in full.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>20 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 22. | CONVERTIBLE PROMISSORY NOTE | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| June<br> 30<br><br> <br>2020<br><br> <br>A$ | December 31<br> 2019<br> A$ | |
| Face value of convertible<br> promissory note issued on January 20, 2020 | 2,621,360 | - |
| Equity component | - | - |
| Liability component<br> on initial recognition at January 20,2020 | 2,621,360 | - |
| Interest<br> accrued but not yet paid for the period (Note 6) | 122,660 | - |
| Interest<br> paid during the period | - | - |
| Exchange differences | 61 | - |
| Carrying value as<br> at end of period | 2,744,081 | - |
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 will purchase 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$5.00, subject to adjustment, per share over the term of the Promissory Note.
In October 2020, the Group settled the interest accrued of A$174,811 by issuing 46,741 shares to the Noteholder.
| 23. | ISSUED CAPITAL | |||
|---|---|---|---|---|
| (a) | Share<br> capital | |||
| --- | --- | |||
| Company | **** | |||
| --- | --- | --- | --- | --- |
| June<br> 30, 2020 | December<br> 31, 2019 | |||
| Number<br> of shares | A$ | Number<br> of shares | A$ | |
| Ordinary<br> Shares fully paid | 3,663,100 | 20,309,687 | 3,377,386 | 18,902,029 |
| (b) | Movements<br> in share capital | |||
| --- | --- | |||
| Number<br> of Shares | A$ | |||
| --- | --- | --- | ||
| December<br> 31, 2019 and January 1, 2020 | 3,377,386 | 18,902,029 | ||
| Issue<br> of shares during the period | 285,714 | 1,407,658 | ||
| June<br> 30, 2020 | 3,663,100 | 20,309,687 |
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.
Subsequent to the period ended and up to the date of this financial report, the Group has issued 2,228,593 shares in a value of A$9,565,096. The material transactions are listed in Note 31.
(c) Options on issue
There were no share options issued and outstanding during and at the end of the financial period.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>21 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 24. | DISPOSAL OF SUBSIDIARIES |
|---|
The detail of the net gain/(loss) on the subsidiaries disposal during the period are set out below:
| 2020 | 2019 | |
|---|---|---|
| A$ | A$ | |
| Total<br> disposal consideration | 25,129 | - |
| - | ||
| Carrying<br> amount of net asset sold (note(i) below) | (230,294) | - |
| Gain<br> on sales before income tax and reclassification of foreign currency translation reserve | 255,423 | - |
| Reclassification<br> of foreign currency transaction reserve | (26,871) | - |
| Non-controlling<br> interest | (257,542) | - |
| Loss<br> on disposal after income tax | (28,990) | - |
| (i) | Net<br> asset disposal: | |
| --- | --- | |
| 2020 | 2019 | |
| --- | --- | --- |
| A$ | A$ | |
| Plant<br> and equipment | 284,240 | - |
| Development<br> projects | 2,864,052 | - |
| Intangible<br> assets | 4,790,784 | - |
| Right<br> of use assets | 865,996 | - |
| Cash<br> and bank balances | 99,061 | - |
| Inventories | 400,806 | - |
| Trade<br> and others receivable | 603,923 | - |
| Other<br> deposit and prepayment | 1,664,343 | - |
| Trade<br> and other liabilities | (912,580) | - |
| Amount<br> due to a related company | (6,689,290) | - |
| Bank<br> overdraft | (929,438) | |
| Bank<br> loan | (966,747) | |
| Lease<br> liabilities | (925,042) | - |
| Deferred<br> tax liabilities | (1,380,402) | - |
| (230,294) | - | |
| (ii) | Net<br> cash flows from disposal of subsidiaries | |
| --- | --- | |
| 2020 | 2019 | |
| --- | --- | --- |
| A$ | A$ | |
| Consideration<br> received, satisfied in cash | 25,129 | - |
| Cash<br> and cash equivalents of subsidiaries disposed of (included cash at bank and bank overdraft) | 830,377 | - |
| 855,506 | - | |
| 25. | RESERVES | |
| --- | --- | |
| (a) | The<br> translation reserve comprises all foreign currency differences arising from the translation<br> of the financial statements of foreign operations to Australian dollars. | |
| --- | --- | |
| (b) | Other<br> reserves represent reserve on the capital injection by non-controlling interest. | |
| --- | --- |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 26. | CAPITAL COMMITMENTS |
|---|
As of June 30, 2020, the Group had internal capital commitments for the investments in one People’s Republic of China (“P.R.C.”) subsidiaries of RMB9,620,859 (approximately A$1,978,177) (2019: A$1,755,456).
| 27. | CONTROLLED ENTITIES | ||
|---|---|---|---|
| Country<br><br> <br>of Incorporation | Percentage<br><br> <br>Owned | ||
| --- | --- | --- | --- |
| June<br> 30<br><br> <br>2020 | December<br> 31<br><br> 2019 | ||
| Parent<br> Entity:<br><br> <br>Integrated<br> Media Technology Limited | Australia | ||
| Subsidiaries of Integrated Media Technology Limited: | |||
| CIMC<br> Marketing Pty. Limited | Australia | 100% | 100% |
| Smartglass<br> Limited (formerly known as Dragon Creative Limited) | Hong<br> Kong | 100% | 100% |
| Marvel<br> Digital Limited * | Hong<br> Kong | - | 95%<br> (indirect) |
| Cystar<br> International Limited<br><br> <br>(Formerly<br> known as Visumotion International Limited) | Hong<br> Kong | 100%<br> (indirect) | 95%<br> (indirect) |
| GOXD<br> Technology Limited * | Hong<br> Kong | - | 76%<br> (indirect) |
| Binario<br> Limited | British<br> Virgin Islands | 100% | 100% |
| Digital<br> Media Technology Limited | Malaysia | 100%<br> (indirect) | 100%<br> (indirect) |
| GOXD<br> Dongguan Limited * | P.R.C. | - | 76%<br> (indirect) |
| Marvel<br> Display Technology (Shenzhen) Limited * | P.R.C. | - | 95%<br> (indirect) |
| Cystar<br> International (Shenzhen) Limited | P.R.C | 100%<br> (indirect) | - |
| Color<br> Investment Limited | Hong<br> Kong | 100% | - |
| GOXD<br> International Limited | Hong<br> Kong | 80%<br> (indirect) | - |
| *<br> Disposed during the period |
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>23 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE 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<br> Ended<br><br> <br>June<br> 30<br><br> <br>2020 | Period<br> Ended<br><br> <br>June<br> 30<br><br> <br>2019 | |
| A$ | A$ | |
| Short<br> term benefits ^(Remark 1)^ | 791,742 | 400,119 |
| Post-employment<br> benefits | 3,532 | - |
| 795,274 | 400,119 | |
| Remark 1: | Included in short term benefits for directors and officers included payments of A$319,772 (US$210,000) to a service company owned by the Company Secretary for the provision of Chief Executive Officer and Chief Financial Officer services during the period. | |
| --- | --- |
(b) Other related party transactions
During the period, the Group has the following material transactions with its related parties:
| Group | ||
|---|---|---|
| Period<br> Ended<br><br> <br>June<br> 30<br><br> <br>2020 | Period<br> Ended<br><br> <br>June<br> 30<br><br> <br>2019 | |
| A$ | A$ | |
| General<br> consultancy and management fees paid to a related party ^(Remark 1)^ | 282,971 | (281,978) |
| Purchase<br> of products from related parties ^(Remark 1)^ | 8,689 | - |
| Purchase<br> of plant and equipment from related parties ^(Remark 1)^ | - | 90,334 |
| Company<br> Secretarial, taxation service and CFO fee paid to a related party ^(Remark 2)^ | 319,772 | - |
| Purchase<br> of products from a related party ^(Remark 3)^ | 274,417 | - |
| Remark 1: | Entities controlled over by former director, Dr. Herbert Ying Chiu LEE. The consultancy and management services transactions are carried at the current market value in the ordinary course of business. | |
| --- | --- | |
| Remark 2: | An entity controlled by Mr. Cecil Ho, Company Secretary and CFO for providing professional services. | |
| Remark 3: | An entity controlled by Mr. Zhang Wuhua, our director of the Company. The transactions are carried at the current market value in the ordinary course of business. |
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>24 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 29. | CASH FLOW INFORMATION | |
|---|---|---|
| Group | ||
| --- | --- | --- |
| Period<br> Ended<br><br> <br>June<br> 30<br><br> <br>2020 | Period<br> Ended<br><br> <br>June<br> 30<br><br> <br>2019 | |
| A$ | A$ | |
| CASH<br> FLOWS FROM CHANGES IN WORKING CAPITAL | ||
| (Increase)<br> / Decrease in assets: | ||
| Other<br> assets | 11,029 | 466,799 |
| Inventories | (117,956) | (462,531) |
| Trade<br> and other receivables | (7,001) | 218,000 |
| Increase<br> in liabilities: | ||
| Trade<br> and other liabilities | 910,785 | 10,164 |
| Provision<br> for annual leave | - | 4,097 |
| Trade<br> deposits received | - | 8,284 |
| NET<br> CASH FLOWS FROM CHANGES IN WORKING CAPITAL | 796,857 | 244,813 |
| 30. | RECLASSIFICATION | |
| --- | --- |
Certain amounts in the prior period condensed consolidated financial statements have been reclassified to conform to the presentation of the current period condensed consolidated financial statements. These reclassifications had no effect on the previously reported net loss.
| 31. | EVENTS OCCURRING AFTER THE REPORTING<br>DATE |
|---|---|
| (a) | Compliance<br> with the minimum US$2,500,000 stockholders’ equity requirement for continued listing<br> on The Nasdaq Capital Market |
| --- | --- |
On June 19, 2020, Integrated Media Technology Limited (the "Company") received a letter from the Listing Qualifications Staff (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it no longer complied with Nasdaq Listing Rule 5550(b)(1) due to the Company's failure to maintain a minimum of US$2,500,000 in stockholders' equity (or meet the alternatives of market value of listed securities of $35 million or US$500,000 in net income from continuing operations). The notification also stated that the Company would be provided 45 days to submit a plan to regain compliance with the listing requirement. If the plan is accepted, the Company can be granted up to 180 calendar days from the date of the Notice to evidence compliance.
On September 28, the Company announced in a Form 6-K, that it believes that it was compliant as its Shareholders Equity of US$4.5 million. The Company received a letter from Nasdaq dated September 28, 2020 in which it states that the Staff has determined that the Company complies with the Rule. However, if the Company fails to evidence compliance upon filing its next periodic report it may be subject to delisting. At that time, Staff will provide written notification to the Company, which may then appeal Staff’s determination to a Hearings Panel.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>25 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 31. | EVENTS OCCURRING AFTER THE REPORTING<br>DATE (Continued) |
|---|---|
| (b) | Debt<br> Conversion Agreement and Convertible Note with CIMB Limited ("CIMB") for a<br> total of US$2,825,000 |
| --- | --- |
On July 25, 2020, the Company entered into two transactions with CIMB Limited ("CIMB"), an independent third party, to convert a total of US$2,825,000 of debts owed to CIMB into shares in the Company. The first transaction is a conversion of debt of US$2,100,000 at a price of US$3.00 for a total issuance of 700,000 shares in the Company. The second transaction is the issuance of a convertible note of US$725,000. The Note (the “Note”) is non-interest bearing, cannot be pre-paid and has a term of 2 years from the date of the issuance of the Note. The holder of the Note or the Company can convert the Note at any time into shares in the Company at US$3.00 per share. There is a downward adjustment for any issuance of shares at price lower than the Conversion Price in the next 12 months following the issue of the Note, subject to a floor price of US$1.50 per share. Furthermore, there is a conversion limitation such that no conversion can be effected if after such conversion CIMB would own more than 19.99% in the Company.
On July 28, 2020, the first transaction of issuance of 700,000 shares was completed. The convertible note of US$725,000 was converted into 241,667 shares on October 6, 2020.
| (c) | US$3<br> million funding with Nextglass Technologies Corp ("Nextglass") |
|---|
On August 6, 2020, the Company entered into two agreements with Nextglass, an independent third party, to raise a total of US$3,000,000. The first agreement is a placement of 450,000 shares at a share price of US$3.00 per share to raise US$1,350,000. The second agreement is a Convertible Note Purchase Agreement (the "Purchase Agreement"), which Nextglass will invest US$1,650,000 under a convertible note (the "Note") without interest, maturing in two years from the date of the Note. The holder of the Note or the Company has the right to convert the principal into ordinary shares of the Company at a conversion price of US$3.00 per share over the term of the 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 Note. The Note cannot be prepaid. The holder of the Note is also entitled to piggyback registration rights. Furthermore, there is a conversion limitation such that no conversion can be effected if after such conversion Nextglass would own more than 19.99% equity interest in the Company.
On September 8, 2020, the placement to Nextglass of 450,000 shares at a price of US$3.00 per share raising US$1,350,000 was closed. Concurrently, the Company has agreed with Nextglass to extend the closing of the US$1,650,000 Convertible Note to September 30, 2020 and this date was further extended to October 20, 2020.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>26 of 27 |
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INTEGRATEDMEDIA TECHNOLOGY LIMITED
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 31. | EVENTS OCCURRING AFTER THE REPORTING<br>DATE (Continued) |
|---|---|
| (d) | Sale<br> and Purchase Agreements ("SP Agreements") to purchase a total of 51% interests<br> in Sunup Holdings Limited ("Sunup") for a total of US$1.5 million. |
| --- | --- |
On August 6, 2020, the Company entered into two conditional SP Agreements to buy 25.5% equity interest in Sunup from each of Nextglass and Teko International Limited ("Teko") for US$750,000 each for a total consideration of US$1,500,000. The two (2) SP Agreements are identical and are summarized below:
The consideration for each of the 25.5% of Sunup is US$750,000 for each of Nextglass and Teko, and each of them will be paid by the issuance of 250,000 shares in the Company (the "Consideration Shares") at US$3.00 per share. There is also a deferred consideration based on 5 times the annualized earnings for the next 2 years less the initial consideration of US$750,000.
From the commencement of the SP Agreements to until the deferred consideration is determined, Nextglass and Teko (individually the "Vendor") shall have the right to purchase the 25% Sunup equity interests back from the Company with their Consideration Shares if the Purchaser and Sunup terminates the directors and officers of Sunup without cause and without the consent of the Vendor, as applicable.
Sunup is engaged in the manufacturing and sale of nano coating plates used in air filters ("Plates"). Sunup has set up its equipment and is expected to be in commercial production in September 2020. Pursuant to an existing Manufacturing and Supply Agreement between Sunup and Nextglass, Nextglass will provide manufacturing services to Sunup under a pre agreed budget every 6 months period. Nextglass also undertakes to provide a minimum sales order to Sunup until certain conditions are met.
On September 12, 2020, the Company completed the acquisition of 25.5% of Sunup from each of Nextglass and Teko for US$750,000 each, for a total acquisition of 51% of Sunup for a total consideration of US$1,500,000 which was paid by the issuance of a total of 500,000 shares at a price of US$3.00 per share.
| (e) | Issuing<br> shares on settlement of Interest on Convertible Promissory Note |
|---|
In October 2020, the Group settled the interest accrued of A$174,811 by issuing 46,741 shares to the Noteholder of Convertible Promissory Note. The detail of the transaction is set out in Note 22.
| Integrated<br>Media Technology Limited | Interim Report | June 30, 2020 | Page<br>27 of 27 |
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