27 November 2020

COVID-19 Sales Update

The Board has been informed by our US distributor that over 50% of its original 180T stock holdings in XP powder has been sold in the past 4 months. Also, the distributorwill start ordering new stocks of dispersions in December.New orders for Europe are down 55% based on the previous corresponding 5 months to November 30, as a consequence of restrictions relating to the second and third waves in ourkeyoverseas marketswe do anticipate only a small profit result for the first half FY21.

Based on feedback from our distributors, and the anticipated licence approval from the TGA,in February/March 2021,to manufacture and supply bulk intermediate sunscreens and finished bulk sunscreens for manufacturers,who lack the necessary equipment to manufacture sunscreens using our ZinClear XP powders and dispersions,to test their respective markets.

We are optimistic of a much improved profit result for the second half FY21.ANO already has stock in US and Europe to meet the anticipated increase in demand for products, with further shipments to continue throughout December.

7 February 2020

The Licence for the Brisbane Laboratory Approved

The Board confirms today that they have received notification that the TGA have completed the approval process of our Brisbane laboratory licence and once the formalit ies are completed the licence should be issued next week.

The Board confirms that there is an anticipated saving of approximately $100,000 per month in external testing costs, with an annualised saving of in excess of $1 million.

Interim Financial Statements

For the Half Year Ended 31 December 2019

Advance Nano Tek Limited result for the half year ended 31 December 2019 was net profit after tax of $3.366 million. The Company has recorded a profit before tax of $4.818 million which is 2.77 times greater than the corresponding half year ended 31 December 2018. Sales revenue for the 6 months to December 2019 is $11.307 million compared to $4.743 million for 6 months to December 2018. ZinClear XP powder sales are up 4.6 times compared to 6 months December 2018.

During the past 6 months, the Advance Nano Tek Limited has received TGA approval on the Brisbane manufacturing facility.

The tax expense of $1.452 million for the half year ended 31 December 2019 is not payable in cash due to the utilisation of prior year tax losses.

ANO is in the early stages of a feasibility study to leverage the capture of its CO² emissions from its zinc oxide productionequipment and convert the CO² into oxygen through the growth in hydroponics, on site at Shettleston Street Rocklea. We are witnessing a reduction in our energy consumption with the installation of our solar panels completed in December 2019. We will look to utilise this solar energy and battery storage as part of our hydroponics feasibility study.

Review of financial position

The net assets of the Group have increased by $3,361,168 from 30 June 2019 to $21,689,857 at 31 December 2019. A loan was obtained from entities associated with Mr Lev Mizikovsky totalling $1.1 million during the half year ended 31 December 2019to assist the group with working capital requirements and has been repaid in full subsequent to 31 December 2019.

Directors' Report For the Half Year Ended 31 December 2019

The Group has adopted AASB 16 Leases from 1 July 2019. This has resulted in right of use assets of $3.170 million and $3.191 million in lease liabilities being recognised on the balance sheet at 31 December 2019. 

Significant changes in state of affairs

There have been no significant changes in the state of affairs of entities in the Group during the half year.

Dividends paid or recommended

No dividends have been paid or declared during the financial half year.(31 December 2018: Nil)

Events after the reporting date

The loan owing to entities associated with Mr Lev Mizikovsky totalling $1.1 million was repaid subsequent to 31 December 2019.

Advance NanoTek Limited has completed a capital raising on 17 January 2020. The Company raised $3.945 millionandissued 682,444 shares on 24 January 2020.

On 2 January 2020, the company completed a share buy-back of 6,678 shares for $37,797.48 from employees no longer entitled to these shares in accordance with the terms of the company’s employee share scheme.

Except as above, no matters or circumstances have arisen since the end of the financial half year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.