AEROMETREX LIMITED - Interim / Quarterly Report 2021

ASX Code: AMX ACN: 153 103 925

Appendix 4D & Financial Statements for the half year ended 31 December 2020

Reporting Period

Reporting period (Current Period): For the half year ended 31 December 2020 Previous corresponding period (PCP): For the half year ended 31 December 2019 Release date: 25 February 2021

Results for announcement to the market

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Change
Dec 2020 Dec 2019 % Change on in Value
Key Information $’000 $’000 PCP $’000
Revenues from ordinary activities 8,574 10,097 (15.1%) (1,523)
Profit / (Loss) from ordinary activities after tax attributable to members (2,908) (249) + 1067.9% (2,659)
Profit / (Loss) for the reporting period attributable to members (2,908) (249) + 1067.9% (2,659)
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Overview of operating results

Refer to the review of operations within the Directors’ Report for a commentary on the results of Aerometrex.

Dividends

No dividends have been paid during the period and it is not proposed that any dividends be paid.

No dividends were paid during the previous corresponding period.

NTA Backing

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HR Dec 2020 Dec 2019
Net tangible asset backing per ordinary security $0.30 $0.36
Total number of shares on issue at period end 94,400,000 94,400,000
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Entities over which control has been gained or lost during the period

There are no entities over which control has been gained or lost during the reporting period.

Associates and joint venture entities

There are no associates or joint venture entities.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Independent Audit Review

The financial statements were subject to an independent audit review by Grant Thornton Audit Pty Ltd. The independent audit review report is attached as part of the Interim Report.

This half year report should be read in conjunction with any public announcements made by Aerometrex Limited and its controlled entities during the half year ended 31 December 2020 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001 [Cth] and ASX listing rules.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Directors’ Report

The directors present their report, together with the consolidated interim financial statements of Aerometrex Limited (referred to hereafter as ‘Aerometrex’), comprising of the company and its controlled entities, for the half year ended 31 December 2020.

Directors

The Directors of Aerometrex Limited during the half year ended 31 December 2020 and up to the date of this report are set out below:

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Name Role Status
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Mr Mark Llewellyn Lindh	Non-Executive Director and Chair	Independent
Dr Peter Graham Foster	Non-Executive Director	Independent
Mr Matthew Duval White	Non-Executive Director	Not Independent
Mr Mark John Deuter	Managing Director	Not Independent
Mr David Michael Byrne	Executive Director	Not Independent

Company Secretary

Name Ms Kaitlin Louise Smith

Review of Operations

For the six months ended 31 December 2020, Aerometrex reported a decline in operating revenue of 15% to $8.574m (2019: $10.097m).

During this period however, Aerometrex focused on the development and investment into MetroMap, its subscription service offering to customers, shifting the revenue mix from project-based model to one of recurring subscription revenue. This focus on MetroMap saw a significant increase in subscription revenue of 727% to $1.51m (2019: $182k) and contracted revenue in advance increase to $1.69m (June 2020: $1.02m). Annual recurring revenue (ARR) continued its quarter on quarter growth increasing to $3.314m at December 2020, up 99% on June 2020 which was $1.663m.

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Subscription Revenue Annual Recurring Revenue (ARR)
Calculation: Monthly Revenue x12
1H 2H
3,500
1,600
3,000 2,770 3,314
1,400 1,506
2,500
1,200
+99%
1,000 +727% 2,000
800 1,500 1,663
600 523
1,000
400
856
200 242 500 548
357
0 102 182 0
FY19 FY20 FY21 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020
AUD ($'000)
AUD ($'000)
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Project revenue was down across the three divisions of 3D, LiDAR and Photomapping reflecting the cyclical nature of project work, delays due to uncertainty around COVID-19 against a backdrop of record growth in the reporting period last year. Significant projects that had been undertaken in the prior reporting period such as the Western Sydney digital twin (3D), Pau in France (3D) and some LiDAR projects had not been replaced in the current period as business and Government put some of their larger projects on hold during the uncertainty of COVID-19 outbreaks. Overall, the company was just as busy during this reporting period completing more projects than the prior year however the size of the projects were smaller.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

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Operating Revenue
FY 1H 2H
25.0
20.0
10.0
15.0
9.2
10.0
10.1
8.6
5.0 7.0
0.0
FY18 FY19 FY20 FY21
Revenue ($ millions)
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During the reporting period, the company continued to invest for growth by undertaking several initiatives, placing the company in a strong position to capitalise on future opportunities. These initiatives included:

Continued investment in the MetroMap capture program
Investment in IT systems to improve production capacity and drive technological efficiencies
Continued investment into people scaling for the growth opportunities ahead
Investment into sensors via a new Riegl LiDAR sensor and Vexcel UltraCam
Upgrade of existing LiDAR sensors to the latest technology
Took delivery of a new VulcanAir P68C aircraft which was deployed into operations in December 2020
Branding campaign for MetroMap using television media on SBS and SBS on demand during key events such as the Tour de France cycle race and the US Open tennis event
Continued investment into research and development activities such as validation of bushfire fuel load mapping to enable governments to make informed decisions based on their interpretation of the underlying data
Continued investment into the establishment of the US operations

The company continued its investment into the establishment of the US operations with the employment of key sales staff across the country, the capture and processing of 3D data to showcase our skills and capabilities and the continued building of relationships with potential customers. Data has been captured over the central business district (downtown) of the City of Denver (CO), Centennial (CO), Orlando (FL) and Miami (FL). Whilst the operating environment has been challenging during this period driven by recent events in the US surrounding COVID-19, bushfires, elections, economic uncertainty, and social unrest we are confident that the US operations will contribute to group revenue in the second half of FY21.

The company has continued to strategically invest in its Research & Development (R&D) activities throughout the period in both staff and the R&D activities undertaken. These initiatives have contributed to product development, machine learning and workflow advantages including:

environmental applications such as the validation of bushfire load mapping to enable governments to make informed decisions based on their analysis and interpretation of the underlying data
environmental applications in urban forest management including canopy change detection providing value insight towards environmental targets and impacts
environmental applications in the identification of permeable versus impermeable surfaces
the application of our world leading high resolution 3D models to leverage digital twins, infrastructure projects, consultation, tourism, gaming, VR and AR applications with almost unlimited potential as the business use cases continue to develop for this technology
the application of our substantial data archive into training data for AI and machine learning to drive insights and downstream applications to benefit customers
the use of machine learning to drive process efficiency gains of reduction in processing times leading to a reduction in manual QA time
introduction of improved workflows such as ‘Pixel cruncher’ which has led to improved orthophoto production speeds of up to 800%
continuing to research and leverage new improvements in camera technology

The impact of COVID-19 had both positive and negative effects on the company. From a positive perspective, the company enjoyed unprecedented access to air space over major capital cities due to the lack of commercial air traffic during this time. This was evidenced through the continued investment in the MetroMap capture program. Through the market branding campaigns there was increased awareness of Aerometrex and more importantly, MetroMap, as the various state shutdowns meant that many businesses needed to look for alternative ways to work. The negative impacts of COVID-19 were felt in the logistical operations as border closures impacted decisions on when, where and how to deploy aircraft and sensors including staff to capture data as required. In some cases, this required air operations staff to remain in the field longer before returning home, being in quarantine either when arriving into a state or returning home. Throughout this period the safety and welfare of our staff was critical adding to the logistical complexity due to the fluid nature of COVID-19 and various state government responses during the reporting period.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Aerometrex operations delivered an EBITDA loss of $142k (2019: $1.48m profit) reflecting the investment in scaling the business for anticipated growth in MetroMap subscriptions, US expansion and project work as business adapts to the new operating environment in a post pandemic world. The Australian operations contributed positive EBITDA of $433k while the US operations recorded a loss of EBITDA of $575k due to the start-up phase of the business.

The company remains in a strong financial position with $16.28m available in cash and additional debt facilities of $4.1m which had not been drawn at balance date. Contract liabilities (revenue in advance) continued to grow being $1.96m at December 2020, up 47% from June 2020 ($1.33m).

During the period, 60,200,000 shares were released from escrow. These shares were released on 10 December 2020 following a twelve month voluntary escrow period entered into by the founding shareholders prior to listing on the ASX. To date, only 943,229 shares (1.5%) have been traded.

Changes in state of affairs

There were no significant changes in the state of affairs of the Group during the financial period.

Company Segments

Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the allocation of resources to operating segments and assessing their performance

Aerometrex operates in two geographical regions being Australia and the US.

Aerometrex recognises its revenue across four operating segments being aerial photography and mapping, aerial LiDAR surveys, 3D modelling, and MetroMap. The tracking of revenue into operating segments is used for the internal assessment of company revenue performance and future planning however the expenditure is not recorded into the same revenue streams as a significant portion of the costs are shared. That is, the aviation and production resources are available as a whole of company resource within a geographical location and allocated to undertake work as required including dependency on external factors such as weather. The gross margin is therefore an aggregated result based on the mixed revenue stream nature of the company (project or on demand revenue and subscription- based revenue).

The detailed revenue from the four operating segments within a geographical region are then combined with a whole of company expense analysis which is reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers (CODM)) in assessing performance and in determining the allocation of resources.

The CODM reviews geographical location and segment revenue with EBITDA (earnings before interest, tax, depreciation and amortisation) at a whole of business level. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

The assets and liabilities (Statement of Financial Position) of the company are reported and reviewed by the CODM at a whole of company level as this is not allocated to individual operating segments.

Events subsequent to the statement of financial position date

Subsequent to balance date, announcement was made to the market on 9 February 2021 providing an update on the company’s US operations. This update included details of 3D data captures and the sale of the first dataset in the US. While the sale value was immaterial it was an important strategic milestone for the company. This aligns with the intended use of funds as outlined in the IPO from December 2019.

The impact of the coronavirus (COVID-19) pandemic is ongoing which has resulted in delays or deferrals of some project work. The current economic uncertainty makes it difficult to estimate the potential impact, positive or negative, after the reporting date. The group considers that the demand for our quality products and services is likely to be strong once clients return to normal spending patterns following stabilising of economic conditions.

There were no other matters or circumstances that have arisen since 31 December 2020 that has significantly affected, or may significantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future financial years.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Rounding off

The company is of a kind referred to in Corporations Instrument 2016/191 (Rounding in Financial/Directors’ Reports), issued by the Australian Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars unless specifically stated otherwise.

Auditors’ independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors’ report.

This report is made in accordance with a resolution of Directors.

On behalf of the Directors

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Mr Mark Lindh Chair of the Board

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Mr Mark Deuter Managing Director

Adelaide 24 February 2021

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Auditor’s Independence Declaration

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Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For half year ended 31 December 2020

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Year Dec 2020 Dec 2019
Value Notes $’000 $’000
Revenue from ordinary activities 5 8,574 10,097
Other income 179 108
Total operating revenue 8,753 10,205
Aircraft and project - project and processing costs (1,814) (3,682)
Employee benefits expense (4,377) (2,800)
Share based payments (840) (69)
Depreciation of property, plant and equipment (1,290) (947)
Amortisation of intangible assets (2,013) (513)
Advertising and marketing (323) (126)
Consulting, professional services (337) (75)
IT and telecommunications (379) (330)
Occupancy (164) (125)
Travel & accommodation (2) (103)
IPO and Capital Raising Costs expensed - (543)
Refinance costs - (198)
Other expenses (659) (673)
Finance costs 6 (43) (313)
Finance income 6 56 47
Loss before income tax (3,432) (245)
Income tax benefit / (expense) 544 8
Loss for the year after income tax (2,888) (237)
Loss attributable to:
Equity holders of the parent (2,908) (249)
Non-controlling interests 20 12
Loss for the year after income tax (2,888) (237)
Earnings per share:
Title Dec 2020 Dec 2019
HY Notes $’000 $’000
Basic, loss for the year attributable to ordinary equity holders of
(0.031) (0.004)
the parent
Diluted, loss for the year attributable to ordinary equity holders
(0.031) (0.004)
of the parent
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To be read in conjunction with the accompanying notes.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Consolidated Statement of Financial Position

For half year ended 31 December 2020

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Year Dec 2020 Jun 2020
Value Notes $’000 $’000
Assets
Current
Cash and cash equivalents 7 16,280 22,239
Trade and other receivables 2,738 2,512
Contract Assets 925 563
Other Assets 484 459
Total current assets 20,427 25,773
Non-current
Property, plant and equipment 8 16,889 16,364
Intangibles 9 6,806 6,572
Deferred tax assets 2,733 1,418
Total non-current assets 26,428 24,354
Total assets 46,855 50,127
Liabilities
Current
Trade and other payables 1,714 4,267
Contract liabilities 1,962 1,334
Other Financial liabilities 335 400
Employee benefits 1,524 1,295
Other Liabilities 750 750
Total current liabilities 6,285 8,046
Non-current
Other Financial liabilities 2,547 2,731
Employee benefits 204 157
Deferred tax liabilities 2,337 1,588
Total non-current liabilities 5,088 4,476
Total liabilities 11,373 12,522
Net assets 35,482 37,605
Equity
Equity attributable to owners of the parent:
Share capital 10 32,892 32,892
Share based payment reserve 1,327 487
Other reserves (73) -
Retained earnings 919 3,829
Non-controlling interest 417 397
Total equity 35,482 37,605
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To be read in conjunction with the accompanying notes.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Consolidated Statement of Changes in Equity

For half year ended 31 December 2020

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Share Total
based attributable Non-
Share payment Retained Other to owners of controlling Total
capital reserve earnings reserves parent interest equity
Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance as at 1 July 2020 32,892 487 3,829 - 37,208 397 37,605
(Loss) after income tax for the - - (2,910) - (2,910) 20 (2,890)
year
Fair Value of options recognised - 840 - - 840 - 840
during the period
Exchange differences on - - - -
(73) (73) (73)
translation of foreign operations
Balance as at 31 December 2020 32,892 1,327 919 (73) 35,065 417 35,482
Share Total
based attributable Non-
Share payment Retained Other to owners of controlling Total
capital reserve earnings reserves parent interest equity
Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance as at 1 July 2019 2,377 - 4,122 - 6,499 370 6,869
(Loss) after income tax for the - - (293) - (293) 27 (266)
year
Proceeds from issue of ordinary - - - -
25,000 25,000 25,000
shares - IPO
Share based payment reserve - - - - -
(124) (124) (124)
broker options
IPO costs (1,661) - - - (1,661) - (1,661)
Tax effect of IPO costs 457 - - - 457 - 457
Net proceeds from share issue - - - -
23,672 23,672 23,672
(IPO)
Proceeds from issue of Series ‘A’ - - - -
7,000 7,000 7,000
convertible notes
Convertible note costs (420) - - - (420) - (420)
Tax effect of convertible notes 86 - - - 86 - 86
costs
Finance cost of convertible notes 177 - - - 177 - 177
now expensed
Net proceeds from conversion
of Convertible notes to Issued 6,843 - - - 6,843 - 6,843
Equity
Fair Value of options recognised 11 - 487 - - 487 - 487
during the year
Balance as at 30 June 2020 32,892 487 3,829 - 37,208 397 37,605
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To be read in conjunction with the accompanying notes.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Consolidated Statement of Cash Flows

For half year ended 31 December 2020

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Year Dec 2020 Dec 2019
Value Notes $’000 $’000
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Operating activities
Receipts from customers		10,012	9,924
Payments to suppliers and employees		(7,565)	(8,044)
Income taxes paid		(121)	(136)
Interest received		56	47
Interest paid		(43)	(137)
Net cash generated from operating activities		2,339	1,654
Investing activities
Purchase of property, plant and equipment		(5,490)	(3,792)
Deposits paid for property, plant and equipment		(302)	(701)
Purchase of other intangible assets		(2,305)	(1,016)
Net cash generated used in investing activities		(8,097)	(5,509)
Financing activities
Proceeds from borrowings		-	7,633
Proceeds from issue of shares - IPO		-	25,000
Proceeds from issue of convertible notes		-	1,500
IPO costs incurred		-	(2,204)
Repayment of borrowings		(201)	(11,128)
Net cash generated from fnancing activities		(201)	20,801
Net increase/(decrease)in cash and cash equivalents		(5,959)	16,946
Cash and cash equivalents at the beginning of the period		22,239	5,110
Cash and cash equivalents at the end of the period	7	16,280	22,056

To be read in conjunction with the accompanying notes.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Notes to the Consolidated Financial Statements

For the half year ended 31 December 2020

1. Reporting entity and general information

Aerometrex Limited (the Company) is a for profit company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange (ASX: AMX). The consolidated financial statements comprise the Company and its controlled entities (the Group).

The Company’s registered office and principal place of business is 51-53 Glynburn Road, Glynde SA 5070.

The Company is a professional aerial mapping business specialising in aerial photography, photogrammetry, LiDAR, 3D modelling and aerial imagery subscription services. These activities are grouped into the following service lines:

Aerial photography and mapping: flying, processing and delivering two dimensional digital maps on a project basis
Aerial LiDAR surveys: flying, processing and delivering full waveform LiDAR products on a project basis
3D modelling: flying, processing and delivering high resolution 3D models on a project basis
MetroMap: online aerial imagery delivery service (DaaS subscription service)

The consolidated interim financial statements for the period ended 31 December 2020 were approved and authorised for issue by the Board of Directors.

2. Basis of preparation

These consolidated financial statements for the half year reporting period ended 31 December 2020 have been prepared in accordance with Australian Accounting Standard AASB 134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

These consolidated interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in connection with the audited fnancial statements for the year ended 30 June 2020 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The financial statements are presented in Australian dollars with all values rounded to the nearest thousand unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.

Other than where stated below, or in the notes, the consolidated financial statements have been prepared on a going concern basis using the historical cost convention.

The principal accounting policies adopted are consistent with those of the previous financial year, except for the policies stated below.

New accounting standards and interpretations

The Group has adopted the following new or amended standards which became applicable on 1 January 2020:

AASB 2019- Amendments to Australian Accounting Standards – References to the Conceptual Framework
AASB 2018-6 Amendments to Australia Accounting Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issues in Australia
AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform

The adoption of these amended standards has no material impact on the financial results of the Group. Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the Group for the half-year ended 31 December 2020. The impact of these new standards or amendments to the standards (to the extent relevant to the Group) and interpretation is as follows:

AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (effective from 1 January 2022)

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

This amends AASB 10 – Consolidated Financial Statements and AASB 128 – Investments in Associates and Joint Ventures to address an inconsistency between the requirements of AASB 10 and AASB128 in dealing with the sale or contribution of assets between an Investor and its associate or joint venture. This amendment is not expected to have a significant impact on the financial statements on application.

AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Noncurrent (effective from 1 January 2022)

This amends AASB 101 – Presentation of Financial Statements to clarify the requirements for classifying liabilities as current or non-current. This amendment is not expected to have a significant impact on the financial statements on application.

3. Judgements and estimates

In preparing these consolidated interim financial statements, management makes judgements, estimates and assumptions 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 applied to the consolidated financial statements for the year ended 30 June 2020.

4. Segment Information

Aerometrex operates in two geographical regions being Australia and the US.

Aerometrex recognises its revenue across four operating segments being aerial photography and mapping, aerial LiDAR surveys, 3D modelling, and MetroMap. The tracking of revenue into operating segments is used for the internal assessment of company revenue performance and future planning however the expenditure is not recorded into the same revenue streams as a significant portion of the costs are shared. That is, the aviation and production resources are available as a whole of company resource within a geographical location and allocated to undertake work as required including dependency on external factors such as weather. The gross margin is therefore an accumulative result based on the mixed revenue stream nature of the company (project or on demand revenue and subscription- based revenue).

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

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Region Australia US Total
Y Geographical Segments Notes Dec 2020 Dec 2020 Dec 2020
Value $’000 $’000 $’000
Revenue from ordinary activities 5 8,574 - 8,574
Other income 171 8 179
Total operating revenue 8,745 8 8,753
Aircraft and project - project and processing costs (1,809) (5) (1,814)
Employee benefits expense (4,052) (325) (4,377)
Share based payments (840) - (840)
Depreciation of property, plant and equipment (1,283) (7) (1,290)
-
Amortisation of intangible assets (2,013) (2,013)
Advertising and marketing (285) (38) (323)
Consulting, professional services (217) (120) (337)
IT and telecommunications (377) (2) (379)
Occupancy (145) (19) (164)
Travel & accommodation 4 (6) (2)
Other expenses (591) (68) (659)
Finance costs (43) - (43)
Finance income 56 - 56
Loss before income tax (2,850) (582) (3,432)
Income tax expense 399 145 544
Loss for the year after income tax (2,451) (437) (2,888)
Region Australia US Total
Year Notes Dec 2019 Dec 2019 Dec 2019
Value $’000 $’000 $’000
Revenue from ordinary activities 5 10,097 - 10,097
Other income 108 - 108
-
Total operating revenue 10,205 10,205
-
Aircraft and project - project and processing costs (3,682) (3,682)
-
Employee benefits expense (2,800) (2,800)
Share based payments (69) - (69)
Depreciation of property, plant and equipment (947) - (947)
Amortisation of intangible assets (513) - (513)
Advertising and marketing (126) - (126)
Consulting, professional services (75) - (75)
IT and telecommunications (330) - (330)
Occupancy (125) - (125)
Travel & accommodation (103) - (103)
IPO and Capital Raising Costs expensed (543) - (543)
Refinance costs (198) - (198)
Other expenses (673) - (673)
Finance costs (313) - (313)
Finance income 47 - 47
Loss before income tax (245) - (245)
Income tax expense 8 - 8
-
Loss for the year after income tax (237) (237)
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As the US operations commenced in February 2020, there is no comparative data for December 2019.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

5. Revenue

Aerometrex generates revenue from two principle sources:

Subscription revenue from MetroMap aerial imagery subscription service or “Data as a Service” (DaaS); and 2. Project based contracts to undertake LiDAR surveys, aerial imagery and mapping and 3D modelling (on demand).

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Aerial photography Aerial LiDAR surveys 3D modelling MetroMap
and mapping
Services The key products Aerometrex provides Aerometrex has Aerometrex provides an
from this activity are an aerial LiDAR developed a online imagery web-
aerial photographs, surveying service, sophisticated 3D serving application,
orthophotography an advanced aerial modelling and MetroMap, which
(scale corrected 2D surveying technique mapping system offers Aerometrex’s
aerial imagery maps), which accurately maps derived from oblique high-quality, accurate
Digital Terrain Models the ground surface aerial photographs. It imagery to a subscriber
(DTMs), Digital Surface using airborne lasers. offers 3D models of base. MetroMap fulfils
Models (DSMs) and the highest resolution all the quality and
digitised 3D feature (1cm-2cm pixel) and accuracy requirements of
data for Geographic absolute accuracy sophisticated geospatial
Information Systems. (5cm in the XY & Z data users and provides
dimensions) derived easy to consume product
from aerial platforms. for the corporate market,
via a web browser
interface.
Revenue Project based revenue Project based revenue Project based revenue Subscription revenue
Model from “Data as a Service”
(DaaS)
Revenue On demand revenue On demand revenue On demand revenue Subscription revenue
Recognition (transferred over time)
(transferred over time) (transferred over time) (transferred over time)
Or
On demand revenue
(projects delivered via
MetroMap) (transferred
over time)
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Project based (on demand revenue) : relates to revenue to be recognised over time as the project is being completed in accordance with percentage of completion method.

Subscription revenue : Revenue from subscription services is recognised over time, over the contract term beginning on the date the services are made available to the customer. The contract terms may vary in accordance with the individual terms of the subscription agreement. Revenue from the subscription service represents a single promise to provide continuous access to the company’s digital aerial imagery. As each day of providing access to the data is substantially the same and the customer simultaneously receives and consumes the benefit as access is provided, the Group has determined that its subscription service arrangement include a single performance obligation comprised of a series of distinct services.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

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Dec 2020 Dec 2019
Operating Revenue
$’000 $’000
3D 711 1,695
LiDAR 3,645 4,224
MetroMap 1,824 758
Photo Contracting 2,394 3,420
Total revenue from contracts with customers 8,574 10,097
Dec 2020 Dec 2019
Timing of recognition of operating revenue
$’000 $’000
3D 711 1,695
LiDAR 3,645 4,224
MetroMap 318 576
Photo Contracting 2,394 3,420
Transferred over time (on demand revenue) 7,068 9,915
MetroMap 1,506 182
Transferred over time (subscription revenue) 1,506 182
Total revenue from contracts with customers 8,574 10,097
Dec 2020 Dec 2019
Operating revenue by geographic location
$’000 $’000
Australia 8,574 9,591
Europe [1] - 506
Total revenue from contracts with customers 8,574 10,097
1 Customers were serviced from the Australian operations
Dec 2020 Dec 2019
Other Income
$’000 $’000
COVID-19 related grants and credits 50 -
Export grants 36 -
Other income 93 108
Total other income 179 108
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Government grants

Government grants are recognised as income when received or when the Company complies with any conditions such that it becomes to entitled to the grant (either before or after year end).

COVID-19 related grants and credits

Coronavirus (COVID-19) related grants consist of the temporary Cash Flow Boost scheme that was introduced to support business during the economic downturn associated with COVID-19. Under the Cash Flow Boost payment scheme, eligible businesses who employ staff will receive a cash flow boost in the form of a credit when lodging their business activity statement. The activity statement must be lodged to receive the entitlement to the cash flow boost.

No other government support, e.g. JobKeeper, has been received.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

6. Finance costs and finance income

value 2	Dec 2020 $’000	Dec 2019 $’000
Interest income from cash and cash equivalents	56	47
Total fnance income	56	47

Finance income comprises interest on cash and cash equivalents and short term deposits. Interest income is reported on an accrual basis using the effecting interest method.

value	Dec 2020 $’000	Dec 2019 $’000
Interest expenses for chattel mortgage arrangements	23	104
Interest expenses on other facilities	20	32
Finance costs on pre-IPO Convertible Notes	-	177
Total fnance costs	43	313

7. Cash and cash equivalents

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Dec 2020 Jun 2020
Value
$’000 $’000
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Cash at bank and in hand:
Cash at bank and on hand	672	3,631
Short term deposits at call	15,608	18,608
Cash and cash equivalents total	16,280	22,239

Short term deposits at call represent deposits with a maturity date of less than twelve months.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

8. Property, Plant & Equipment

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Plant & Capital Work
Land Buildings Equipment in Progress Total
$’000 $’000 $’000 $’000 $’000
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As at 31 Dec 2020
Cost	794	2,395	21,117	692	24,998
Less Accumulated Depreciation	-	(256)	(7,853)	-	(8,109)
Carrying amount at the end of the year	794	2,139	13,264	692	16,889
Reconciled as:
Cost as at 1 July2020	794	2,395	16,121	3,876	23,186
Additions	-	-	1,812	-	1,812
Transfer to /(from)capital work inprogress	-	-	3,184	(3,184)	-
Cost as at 31 Dec 2020	794	2,395	17,933	3,876	24,998
Accumulated Depreciation as at 1 July2020	-	(214)	(6,608)	-	(6,822)
Adjustment	-	-	3	-	3
Depreciation	-	(42)	(1,248)	-	(1,290)
Accumulated Depreciation as at 31 Dec 2020	-	(256)	(7,853)	-	(8,109)
Net carrying value as at 31 Dec 2020	794	2,139	10,080	3,876	16,889
Reconciliation of carrying amount at 31 Dec 2020
Carrying amount at the beginning of theyear	794	2,181	9,513	3,876	16,364
Additions	-	-	1,812	-	1,812
Transfer to /(from)capital work inprogress	-	-	3,184	(3,184)	-
Adjustment	-	-	5	-	5
Depreciation	-	(42)	(1,250)	-	(1,292)
Carrying amount at the end of the period	794	2,139	13,264	692	16,889

Capital work in progress represents progress payments on the build of the MetroCam.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

9. Intangible assets

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Computer Contractual
Datasets Software Other Goodwill Rights Total
$’000 $’000 $’000 $’000 $’000 $’000
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As at 31 Dec 2020
Cost	9,556	25	36	1,785	364	11,766
Less Accumulated Amortisation	(4,779)	(1)	-	-	(180)	(4,960)
Carrying amount at the end of the year	4,777	24	36	1,785	184	6,806
Reconciled as:
Cost as at 1 July2020	7,339	-	32	1,785	364	9,520
Additions	2,217	25	4	-	-	2,246
Cost as at 31 Dec 2020	9,556	25	36	1,785	364	11,766
Accumulated Amortisation as at 1 July2020	(2,915)	-	-	-	(33)	(2,948)
Amortisation	(1,864)	(1)	-	-	(147)	(2,012)
Accumulated Amortisation as at 31 Dec 2020	(4,779)	(1)	-	-	(180)	(4,960)
Net carrying value as at 31 Dec 2020	4,777	24	36	1,785	184	6,806
Reconciliation of carrying amount at 31 Dec 2020
Carrying amount at the beginning of theyear	4,424	-	32	1,785	331	6,572
Additions	2,217	25	4	-	-	2,246
Amortisation	(1,864)	(1)	-	-	(147)	(2,012)
Carrying amount at the end of the period	4,777	24	36	1,785	184	6,806

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

10. Share capital

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HY FY HY FY
Value Dec 2020 Jun 2020 Dec 2020 Jun 2020
Shares Shares $’000 $’000
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Shares issued and fully paid:
Opening Balance 1 July	94,400,000	1,786,009	32,892	2,377
Restructure of Existing Securities(a)	-	58,413,991	-	-
Restructured number of shares prior to IPO / note conversion	94,400,000	60,200,000	32,892	2,377
Issue of Securities (prospectus)(b)	-	25,000,000	-	25,000
Convertible notes (conversion)(c)	-	9,200,000	-	7,000
Closing balance	94,400,000	94,400,000	32,892	32,892

Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits.

There were no transactions during the current reporting period.

During the prior reporting period, the following security transactions were undertaken:

a) The number of shares on issue at 1 July 2019 was 1,786,009 fully paid A class shares which were restructured following a 1 for 32.706 split on 9 September 2019 and became 60,200,000 ordinary shares.
b) 25,000,000 ordinary shares were issued from a fully underwritten IPO prospectus which was lodged with ASIC on 1 November 2019.
c) 7,000,000 series ‘A’ convertible notes were converted into ordinary shares at the rate of 1 convertible note for
1.31428 ordinary shares and became 9,200,000 ordinary shares.

11. Share based payments

300,000 options were issued to Directors following approval at the AGM in November 2020 during the current reporting period.

Total options on issue is as follows:

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Fair value
Options Exercise at grant
granted Beneficiary Number Grant date Vesting date Expiry date price date
# $ $
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10	Dec	2019	Non-executive directors	1,000,000	10 Dec 2019	10 Dec 2019	10 Dec 2021	1.25	0.069
10	Dec	2019	Lead manager and underwriter	944,000	10 Dec 2019	10 Dec 2021	10 Dec 2023	1.25	0.132
05	May	2020	Employees via ESOP	1,127,500 (2019: 1,277,500)	05 May 2020	05 May 2021	05 May 2023	1.25	1.001
05	May	2020	Employees via ESOP	1,127,500 (2019: 1,277,500)	05 May 2020	05 May 2022	05 May 2023	1.25	1.001
04	Nov	2020	Directors via ESOP	150,000	04 Nov 2020	05 May 2021	05 May 2023	1.25	0.335
04	Nov	2020	Directors via ESOP	150,000	04 Nov 2020	05 May 2022	05 May 2023	1.25	0.335

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Dec 2020 Jun 2020
Options Options
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Non-executive directors	1,300,000	1,000,000
Employees via ESOP	2,255,000	2,555,000
Expensed to the Consolidated Statement of Proft & Loss	3,555,000	3,555,000
Lead manager and underwriter	944,000	944,000
Total options issued at end of reporting period	4,499,000	4,499,000

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Employee share option plan (ESOP) – during the prior reporting year 2,555,000 options were granted to staff under an employee share option plan to align staff with long term interests of shareholders. These options were issued for nil consideration with no performance obligations in relation to the options however there is a staged vesting based on employment with 50% vesting 12 months after issue and the remaining 50% vesting two years from issue. The options expiry date is set as three years from the offer date and have an exercise price of $1.25 per option. As the vesting condition is based on time served during employment, the value of the options granted are recognised over the vesting condition service period (based on days).

The granting of 100,000 options (each) to three directors (Mark Deuter, David Byrne and Peter Foster) was approved at the company’s annual general meeting on 4 November 2020. The initial accounting treatment for these options was included in the calculations of options to employees under the ESOP granted 5 May 2020 as the director options have same terms and conditions. This has been reclassified in the current reporting period to reflect the valuation at the time of the approval date, being the company’s AGM.

Fair value of share options granted

The fair value of the options granted was determined using the Black-Scholes Valuation Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option and the assumed volatility.

Movement in share options during the reporting period was as follows:

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Non-executive
Valuation input - Black Scholes Lead Manager directors ESOP Directors
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Grant Date	10 Dec 2019	10 Dec 2019	05 May2020	04 Nov 2020
Strike price (nominal value)	$1.25	$1.25	$1.25	$1.25
Price at time of valuation	$1.00	$1.00	$1.62	$1.26
Time to expiration (years)	4.0	2.0	3.0	2.5
Risk free rate	1.070%	1.070%	0.239%	0.110%
Dividend yield	0.000%	0.000%	0.000%	0.000%
Volatility (assumed)	25.00%	25.00%	89.32%	42.00%
Number of units	944,000	1,000,000	2,255,000	300,000
Black-Scholes valuation (per option)	$0.132	$0.069	$1.001	$0.335
Total Valuation	$124,353	$68,602	$2,257,881	$100,594

		Dec 2020		Jun 2020
	Dec 2020	Average	Jun 2020	Average
	Options #	exercise price $	Options #	exercise price $
Options
Number of options outstanding at 1 July	4,499,000	1.25	-	-
Options granted during the period	300,000	1.25	4,499,000	1.25
Options reclassifed	(300,000)	1.25	-	-
Total options at end of period	4,499,000	1.25	4,499,000	1.25

Accounting policy

The Group implemented an employee share option plan during the prior reporting period to enable share based compensation benefits (equity-settled) to be provided to employees. The fair value of the shares granted is recognised as an employee benefits expense with a corresponding increase in equity (share based payments reserve). The fair value is measured at the grant date and is recognised over the period in which employees become unconditionally entitled to the shares (vesting conditions are met).

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

The Company adopts a Black-Scholes valuation methodology to determine the fair value of the shares at the grant date. The valuation methodology considers the current share price at grant date, risk free rate, volatility, expected dividend yield, the risk free interest rate for the term and any restrictions that may apply. The fair valuation of the shares granted excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of shares that are expected to vest. At each reporting date, the Company reviews and revises, if necessary, its estimate of the number of shares that expected to vest. The employee benefit expense recognised in each period takes into account management’s latest estimate. The impact of a revision of the original estimate is recognised in the profit or loss statement with a corresponding adjustment to equity (share based payments reserve).

Critical accounting estimate – non-market vesting conditions

Non-market vesting conditions are included in assumptions about the number of shares that are expected to vest. At each reporting date, the Company reviews and revises, if necessary, its estimate of the number of shares that expected to vest. The employee benefit expense recognised in each period takes into account management’s latest estimate.

12. Interest in subsidiaries (controlled entities)

Name of the entity	Country of incorporation and principal place of business	Proportion of ownership interests held by the Group Dec 2020 Dec 2019	Proportion of ownership interests held by the Group Dec 2020 Dec 2019
Atlass- Aerometrex Pty Ltd	Australia	100%	100%
Aerometrex Ltd	USA	100%	100%
MetroMap Pty Ltd	Australia	100%	100%
AMX LAMS Pty Ltd	Australia	100%	100%
AMX Capital Pty Ltd	Australia	64.4%	64.4%
Spookfsh Australia Pty Ltd	Australia	100%	100%

13. Related party transactions

Equity instruments issued to directors

The following equity instruments were issued to directors during the period:

Options issued during the period under the terms and conditions as described in Note 11 Share based payments as follows:

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Director Position Options # Grant Date Vesting Date Vesting Date
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Mr Mark Deuter	Managing Director	100,000	04 Nov 2020	05 May 2021	05 May 2022
Mr David Byrne	Chief Operating Ofcer, Executive Director	100,000	04 Nov 2020	05 May 2021	05 May 2022
Dr Peter Foster	Non-Executive Director	100,000	04 Nov 2020	05 May 2021	05 May 2022

Transactions with director-related entities

During the reporting period, the company used the taxation services (2019: Accounting, taxation and financial controlling services) of Matthew White and the accounting firm over which he exercises significant influence. The amounts billed in relation to the provision of services during the period and totalled $19,246 (December 2019: $175,477) were based on normal market rates and were fully paid as of the reporting date. A significant portion of the prior year expense related to services provided in respect of the prospectus and preparing the company for becoming a public company limited by shares.

Mark Lindh is a director of Adelaide Equity Partners and a beneficiary of a trust for which shares in Adelaide Equity Partners are held. The company entered into an agreement with Adelaide Equity Partners on 22 October 2020 to provide corporate advisory services in relation to merger and acquisition (M&A) advice, assessment and support. The amounts billed related to the provision of services during the period and totalled $65,000 were based on normal market rates and were fully paid as of the reporting date.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

In the prior reporting period (December 2019), Adelaide Equity Partners were paid $37,500 for the provision of corporate advisory and investor relations services under a mandate dated June 2018. In addition, Adelaide Equity Partners received $250,000 as a success fee in relation to the listing of the company on the Australian Securities Exchange on 10 December 2019.

AE Administrative Services Pty Ltd provided company secretarial services during the reporting period. Total payments made during the period were $14,240 (December 2019: $2,240).

14. Earnings per share

Basic earnings per share (EPS) is calculated by dividing the net profit or loss after income tax attributable to equity holders of the parent entity divided by the weighted average number of ordinary shares outstanding during the reporting period.

Dilutes EPS is calculated by dividing the net profit or loss after income tax attributable to equity holders of the parent entity divided by the weighted average number of ordinary shares outstanding during the reporting period plus the weighted average number of ordinary shares that would be issued on conversion if all of the share options were exercised and converted into ordinary shares.

The following table reflects the data used in the calculation of the EPS computations:

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Dec 2020 Dec 2019
Value
$’000 $’000
(Loss) or profit attributable to equity holders of the parent (2,908) (249)
Dec 2020 Dec 2019
Value
# #
Weighted average number of ordinary shares on issue used in the calculation of basic
earnings per share 94,400,000 64,124,590
Effects of dilution from:
Allotment of options to lead manager 944,000 108,328
Allotment of options to non-executive directors 1,000,000 114,754
Allotment of options under employee share option plan (ESOP) 2,255,000 -
Allotment of options to Directors under employee share option plan (ESOP) 93,443 -
Weighted average number of ordinary shares on issue used in the calculation of
98,692,443 64,347,672
diluted earnings per share
Year 2 Dec 2020 Dec 2019
Value 2 $ $
Basic earnings per share (0.031) (0.004)
Diluted earnings per share (0.029) (0.004)
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Total number of shares used in the calculation for the prior year has been adjusted to account for the share split of 1:32.7 which occurred on 9 September 2019 to enable comparison with the current period.

15. Contingent liabilities

The Group has bank guarantees totalling $10,467 held with Westpac as at 31 December 2020 (June 2020: $10,467). There are no other contingent liabilities recorded as at reporting date.

16. Subsequent events

There were no other significant events between the balance date and the date that these financial statements were approved for release.

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Directors’ Declaration

In the opinion of the Directors of Aerometrex Limited:

a) the consolidated financial statements and notes set out on pages 8 to 23 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and its performance for the half year ended on that date; and
b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Directors.

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Mark Lindh Chair of the Board

Adelaide 24 February 2021

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

Independent Auditor’s Report

Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

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Aerometrex Limited - Interim financial report for the half year ended 31 December 2020

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AEROMETREX LIMITED — Interim / Quarterly Report 2021

64382_rns_2021-02-24_3442ca01-3f2d-4f79-b1ed-309a6f8cbc6f.pdf

Appendix 4D & Financial Statements for the half year ended 31 December 2020

Reporting Period

Results for announcement to the market

Overview of operating results

Dividends

NTA Backing

Entities over which control has been gained or lost during the period

Associates and joint venture entities

Independent Audit Review

Directors’ Report

Directors

Company Secretary

Review of Operations

Changes in state of affairs

Company Segments

Events subsequent to the statement of financial position date

Rounding off

Auditors’ independence declaration

Auditor’s Independence Declaration

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

1. Reporting entity and general information

2. Basis of preparation

New accounting standards and interpretations

3. Judgements and estimates

4. Segment Information

5. Revenue

Government grants

COVID-19 related grants and credits

6. Finance costs and finance income

7. Cash and cash equivalents

8. Property, Plant & Equipment

9. Intangible assets

10. Share capital

11. Share based payments

Fair value of share options granted

Accounting policy

Critical accounting estimate – non-market vesting conditions

12. Interest in subsidiaries (controlled entities)

13. Related party transactions

Transactions with director-related entities

14. Earnings per share

15. Contingent liabilities

16. Subsequent events

Directors’ Declaration

Independent Auditor’s Report

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AEROMETREX LIMITED Interim / Quarterly Report 2021