AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Annual Report 2023

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Contents Chairman’s and Chief Executive Offcer’s Report 3 Board 6 Directors’ Report 8 Renumeration Report 12 Auditor Independence Declaration 23 Audit Report 24 Financial Statements 29 Directors’ Declaration 52 Additional Shareholder Information 53 Corporate Directory 54

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Chairman’s & Chief Executive Officer’s Report

Dear Shareholders,

It is our pleasure to present to you AML3D Limited’s (‘AML3D’ or the ‘Company’) Annual Report for the year ended 30 June 2023. During the year AML3D refocused its growth strategy to supplying the Company’s proprietary ARCEMY[®] metal 3D printing technology as a point-of-need manufacturing solution, with a focus on industrial manufacturers in the US Defence, Marine and Aerospace industries. This shift in focus delivered contracts for AML3D’s large scale ARCEMY[®] X edition 6700 system (ARCEMY[®] X), to support the US Navy’s submarine industrial base in February and post year end in July of 2023, bookending the contract for an Enterprise level ARCEMY[®] system to Curtin University in Perth. The combination of AML3D’s focus on scaling up in the US and delivering aligned R&D and contract manufacturing sales has delivered $6 million of work in progress and orders in hand at the time of this report, which will make it possible for a record revenue year in FY24. Some key milestones achieved include:

Contracts for ARCEMY[®] ‘X – Edition 6700’ systems for use at the US Navy’s Danville Additive Manufacturing Centre of Excellence in Virginia and the Oak Ridge National Laboratory in Tennessee.
Contract for enterprise-level ARCEMY[®] system to Curtin University with aligned R&D support and creation of a satellite AML3D demonstration facility.
Contracts for the continuation of alloy testing and validation of metal 3D printed components for the US Navy.
US value added reseller agreement signed with Phillips Corp, a leading US Federal Government sales partner.
Contract with Chevron Australia for high strength corrosion resistant subsea steel pipeline fittings and subsequent expansion of order scope.
Contract to supply prototype parts to BAE Systems Australia to support the Australian Department of Defence’s Hunter class frigates program.
Expanding the scope of a 3D metal printed Aluminium prototype components contract with existing Aerospace client Boeing.
• Receiving a world first Additive Manufacturing facility accreditation from DNV, the world’s leading Marine and Industrial manufacturing classification society.

AML3D’s growth strategy remains to realise the value of our proven, proprietary, metal 3D-printing technology as a disruptor of traditional manufacturing and fabrication across multiple sectors and time horizons. During 2023 AML3D’s success in winning contracts in support of the US Navy and Department of Defence has accelerated interest in the Company’s ARCEMY[®] technology across the US Defence, Marine and Aerospace industries. AML3D’s US sales pipeline is strong and growing, with several additional opportunities for ARCEMY[®] sales having been identified and progressed. The sale of the ARCEMY[®] X for use at the US Navy’s Danville Centre

of Additive Manufacturing Excellence, completed post year end on July 20, and contracts for the continuation of alloy testing and validation of metal 3D printed components signed mid August, reflects the growing momentum in AML3D’s US operations.

In addition, AML3D retains the capacity to deliver contract manufacturing and prototyping for the Company’s Global Tier 1 clients, including Chevron, Boeing and BAE Systems. AML3D’s contract manufacturing relationships deliver revenues today and are creating opportunities to deliver additional ARCEMY[®] sales in the future. The Company has identified the supply of ARCEMY[®] systems as a point of need solution for industrial manufacturers as a key growth driver within the overarching strategy to generate shareholder value through the commercialisation of AML3D’s proprietary Wire-arc Additive Manufacturing (WAM[®] ) technology.

AML3D believes our disruptive technology is fundamentally transforming metal manufacturing and is key to rebuilding sovereign manufacturing capabilities. The Company’s ARCEMY[®] technology can be deployed at the point of need and delivers a wide range of high-quality, large-scale, custom-built components with significantly shorter lead times and at competitive prices. AML3D’s technology also minimises material waste and significantly reduces emissions and electricity consumption, when compared with traditional casting and forging technology, which are key sustainability considerations within the context of the global climate crisis.

Financial Results

Revenue for the financial year was $0.6 million, a 69% decrease on the prior year as the Company refocused the business to the supply of ARCEMY[®] systems. Revenue from the printing of parts continued to support our performance, contributing $0.5 million, up 59% on the prior year. While no revenue was recognised during the 2023 year from the sale of ARCEMY[®] systems (prior corresponding period $1.7 million), current orders in hand exceed $3 million pointing to a record revenue year in FY24.

Central to underpinning an ongoing improvement in AML3D’s financial performance is an ongoing investment program to maintain AML3D’s technology leadership, which is driving the demand for ARCEMY[®] systems as a point of need manufacturing solution. During FY23 AML3D continued to invest in software engineering resources, industry Awarding certifications and IP protections to ensure AML3D maintains its position at the forefront of advanced metal additive manufacturing. In turn our position as a market leader is helping build strong momentum within our sales pipeline, which is expected to underpin progressive revenue growth into the future.

Immediate term value drivers – ARCEMY[®] sales

AML3D has refocused our growth strategy to place greater emphasis on ARCEMY[®] system sales, particularly to the US Defence, Aerospace and Marine sectors, as a driver of revenue growth. During FY23 the Company signed and progressed contracts to sell, install and commission two ARCEMY[®] systems. The first, in February 2023, was

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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the sale of $1.0 million of a large-scale, industrial ARCEMY[®] ‘X-Edition 6700’ Wire-arc Additive Manufacturing metal 3D printing system to support the US Navy’s submarine industrial base. The ARCEMY[®] order has been placed by BlueForge Alliance, a US Department of Defence intermediary supporting the acceleration of advanced manufacturing technologies across the US Defence industrial base. The ARCEMY[®] X system was shipped to the Oak Ridge national Laboratory in July 2023 for installation and commissioning.

A second $1.0 million ARCEMY[®] system was sold to Curtain University in Perth in June 2023. The medium level enterprise ARCEMY[®] system will be located in the Curtin additive manufacturing microfactory and will be available for use as a satellite manufacturing facility to demonstrate ARCEMY[®] ’s capabilities to potential customers across Western Australia’s Mining, Agriculture, Oil & Gas and Defence Maritime industries. In addition, AML3D has agree to invest $100,000 a year over three years in an ARCEMY[®] research and development program at Curtin, with one objective being the development of materials and processes to enhance the ability of ARCEMY[®] systems to support Defence manufacturing.

AML3D also signed a $264,000 alloy characterisation and testing program in March 2023, with further contracts totaling $2.4 million signed subsequent to year end, to support the deployment of the ARCEMY[®] X unit at the Oak Ridge national Laboratory and demonstrate its capabilities as a manufacturing solution for the US Navy’s submarine industrial base. AML3D’s opportunity to sign additional contracts to support ARCEMY[®] systems is key to developing recurring revenues from the deployment of the Company’s technology. These recurring revenues will include software licensing and support contracts that are expected to build a long, recurring revenue tail for each ARCEMY[®] deployment.

In April 2023, AML3D signed an 18-month value-added reseller agreement with Phillips Corporation, a leading service provider and manufacturing reseller partner to the United States Federal Government, to complement the Company’s direct US sales capability. Phillips has extensive reach into the United States Federal Government, including the US Navy, Airforce and Army. AML3D has worked closely with Phillips to upskill their federal sales division and co sell ARCEMY[®] systems. Post year end, this work delivered a second ARCEMY[®] sale in support of the US Navy. A $1.1 million contract for the sale of an ARCEMY[®] X system to be located at the US Navy’s Additive Manufacturing Center of Excellence in Danville, Virginia was received on 20 July 2023. In total AML3D has sold 8 ARCEMY[®] units and the Company is confident ARCEMY[®] sales momentum will continue to build.

Immediate term value drivers

– Contract manufacturing

During 2023 AML3D’s contract manufacturing division secured several contracts that contributed a total of $0.5 million of revenues. In addition to providing an additional revenue stream, AML3D’s contract manufacturing relationships with Global Tier 1 clients is also creating awareness of and opportunities to secure additional sales of ARCEMY[®] systems.

AML3D identified the Oil & Gas sector as a key target industry to drive immediate term value creation. Consistent with the Company’s focus on Oil & Gas, in November 2022, AML3D signed a purchase contract with Chevron Corporation to produce several subsea pipeline fittings using AML3D’s WAM[®] technology. The $0.25 million contract was extended to include the production of additional piping for comprehensive independent testing,

following a site visit by Chevron Australia during the June quarter. AML3D’s expanded presence in the global Oil and Gas sector represents an opportunity to target additional, non-US Defence revenues, through ARCEMY[®] at the point of need sales. AML3D’s contract manufacturing is also supporting the Companies ambitions across the Defence and marine sectors. In October 2022, AML3D signed a purchase contract with BAE Systems Australia, and its subsidiary ASC Shipbuilding, to deliver prototype components to support ASC’s contract to design and build nine Hunter class frigates for the Australian Navy. This purchase contract followed a commercial validation testing program in October 2022.

The Company also expanded its presence in the aerospace market with an additional purchase contract signed in September 2022 to produce 3D printed components for the Boeing Company. The initial 3D components order was placed in July of 2022 and followed a site visit by Boeing’s Director of Global Additive Manufacturing in March 2022. AML3D’s relationship with Boeing was established in June 2021 with a 3D printed tooling component order.

Medium and longer-term value drivers

– Maintaining Technology Leadership

Central to AML3D’s refocused growth strategy to accelerate revenue generation through sale of ARCEMY[®] systems to industrial manufacturers over the medium term is maintaining the Company’s position on the leading edge of advanced additive manufacturing. To support this medium-term ambition AML3D expanded the Companies software development capability with the appointment of three new full time software engineers to develop additional software features to maintain AML3D’s position as a technology leader. ARCEMY[®] systems are now available as large scale ARCEMY[®] X, medium-level ARCEMY[®] Enterprise, entry level ARCEMY[®] Essential and small scale ARCEMY[®] Education.

In addition, the Company has helped create an ARCEMY[®] research and development eco-system, encompassing several leading Australian Universities. The sale of an enterprise level ARCEMY[®] system to Curtin University in June 2023, with a 3-year R&D program part funded by AML3D, expanded this R&D eco-system, which includes ARCEMY[®] systems that have already been installed at the Royal Melbourne Institute of technology (RMIT), University of Queensland and the Flinders University ‘Factory of the Future’ joint venture in Adelaide.

Alongside directly funding R&D at the Curtin ARCEMY[®] system the company is also working closely to support R&D projects underway across the ARCEMY[®] University eco-system. Supporting the use of ARCEMY[®] systems in Australian Universities will drive creation of new ARCEMY[®] products and processes to support the AML3D’s growth ambitions; accelerate the adoption of ARCEMY[®] systems by the next generation of engineers in digital manufacturing and ensure AML3D’s technology remains on the leading edge of Advanced Additive Manufacturing and a preferred partner for customers across the Marine, Defence, Aerospace and Resource sectors.

AML3D is also working to expand international patent protection for the intellectual property in the Company’s proprietary WAM[®] process. In June 2021 AML3D was granted an Australian patent to protect is Wire-arc Additive Manufacturing process. During 2023 the Company progressed its European Process Patent application and in July 2023, post FY23 year end, that work resulted in the grant of a European Process Patent. Securing patent protection for AML3D’s technology in Europe will support the Company’s medium-term ambition to initiate sales of ARCEMY[®] systems to industrial manufacturers that

support the European Defence, Aerospace and Marine industries. In parallel with continuous development of AML3D’s software stack and securing patent protection for AML3D’s valuable IP, the company continues to work to expand the range of industry certifications for the Company’s WAM[®] technology. During FY23 AML3D was awarded the first Additive Manufacturing facility accreditation with wirefeedstock, with an ‘Approval to Manufacture’ certificate, from DNV, the world’s leading Marine and Industrial Classification Society. This accreditation demonstrates AML3D’s technology meets the enhance ‘Class certification’ for critical components in the Oil & Gas and Marine industry. The DNV Additive Manufacturing facility accreditation follows AML3D being granted the first wire-arc manufacturing facility certification by Lloyd’s Register, a leading provider of classification and compliance services to the Marine and Offshore industries.

AML3D also focused on progressing work to implement the Aerospace Quality Management System, AS9100D:2016 Accreditation during FY2023. This accreditation would enable the Company to manufacture ‘fly parts’ for use in aircraft. Once implemented, AML3D would become only the second 3D wire feedstock additive manufacturing company in the world to achieve the standard, which would be a significant competitive advantage when bidding for Aerospace contracts.

Capital Management

The Company remains debt free and finished the financial year with a cash balance of $4.5 million.

In July 2022 AML3D successfully completed an equity issue to raise an additional $2.7 million (before costs), from the placement of 37,605,038 new shares. A second successful equity issue in February 2023 raise $3 million (before costs), from the placement of 41,666.667 new shares. An additional $0.4 million was raised from the issuance of 5,555,555 new shares in April 2023 following a substantially oversubscribed Share Purchase Plan.

The proceeds from these capital raises are being used to:

Accelerate our growth initiatives by establishing a presence at Key US bases;
Expanding a US sales team to build the US sales and marketing pipeline;
Invest in the ARCEMY[®] platform software development to maintain technology leadership; and
Meet the working capital demands of an upscaling business.

Management changes

Mr Ryan Millar, stepped down from the role of Chief Executive Officer of AML3D in June 2023, having successfully reoriented AML3D’s business strategy towards growing ARCEMY[®] sales, with a focus on U.S. Defence, Oil & Gas and aerospace markets. Non-Executive Director, Mr Sean Ebert, assumed the role of interim Chief Executive. AML3D’s strategy remains the sale of ARCEMY[®] systems as a point-of need manufacturing solution for industrial Manufacturers, particularly targeting the US defence, Oil & Gas and aerospace markets.

Events subsequent to FY2023

On 20 July 2023, AML3D announced the sale of an industrial-scale ARCEMY[®] ‘X-Edition 6700’ Wire-arc Additive Manufacturing metal 3D printing system to be located at the US Navy’s Additive Manufacturing Center of Excellence in Danville, Virginia. The order was received from AML3D’s US value added reseller Philips Corporation and validates the Company’s strategic focus on delivering ARCEMY[®] systems to the US maritime and defence industries.AML3D’s second ARCEMY[®] sale in support of the US Navy was followed, in July 2023, by the

granting of a European process patent for the Company’s Wire-arc Additive Manufacturing process. While AML3D’s immediate focus is on scaling up sales of its ARCEMY[®] systems within the US Defence, Marine and Aerospace industries, the Company plans, over the medium term, to leverage its European technology leadership and US scale up playbook to target sales to industrial manufacturers supporting the European Defence, Marine and Aerospace industries. In mid August 2023, AML3D announced the signing of $2.4 million in additional contracts for the continuation of alloy testing and validation of metal 3D printed components, reflects the growing momentum in AML3D’s US operations.

Board and Governance

In October 2022, the Board announced the appointment of Noel Cornish AM as a Non-Executive Director and the New Chairman. Sean Ebert, who has acted as the interim Chairman since November 2021, remains on the Board as an Executive Director.

The Chairman appointment process included a review of the composition of AML3D’s Board to ensure the Company’s leadership and governance has the appropriate mix and depth of skills and experience to achieve its strategy and growth ambitions.

Outlook

AML3D’s success delivering ARCEMY[®] system sales to support the US Navy’s submarine industrial base, with related ARCEMY[®] alloy characterising and testing contracts, and to Curtin University’s Additive Manufacturing Microfactory has led to an expansion of the Companies ARCEMY[®] sales pipeline, particularly in the US, with the support of AML3D’s VAR partner Philips Corp. AML3D is confident of converting this ARCEMY[®] sales pipeline into firm contracts that will expand on the $6m in confirmed orders to be delivered during FY24. AML3D’s contract manufacturing facility continues to deliver on the Company’s current order book and retains the capacity to support additional contract manufacturing orders.

In addition, our work to secure the additional AS9100D:2016 industry certification, build out of the software features across our ARCEMY[®] systems and advance R&D projects on new materials and applications for ARCEMY[®] will enhance AML3D’s technology solution to create more opportunities to win clients across the Defence, Marine and Aerospace industry, particularly in the US and become more embedded with existing clients by meeting more of their advanced additive manufacturing needs.

We would like to thank our very capable team that continues to work tirelessly through these challenging times to ensure AML3D remains on its path to further success and growth. They have demonstrated resilience and dedication throughout this growth phase. We operate as one team and have not wavered from our overarching goal of becoming a leading diversified large-scale metal fabrication company globally.

Finally, to our shareholders, thank you for supporting AML3D. Your Board and management team are committed to pursuing profitable and sustainable growth for the benefit of all stakeholders, as we build upon the foundation created to date.

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Noel Cornish AM Sean Ebert Chairman Interim CEO

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Board

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Noel Cornish AM //

Andrew Sales //

Sean Ebert //

Kaitlin Smith //

B.Sc, M.Eng.Sc., FAICD FUOW Chairman

MEng, MSc, CEng, CMatP Executive Director

BEng Hons(Electrical), MAICD

B.Com (Acc), CA, FGIA Company Secretary Appointed 30 November 2022

Executive Director

Chairman of the Remuneration Committee Chairman of the Audit & Risk Committee Appointed as Chairman 5 October 2022

Member of Audit & Risk Committee Appointed as Director 30 August 2019 Chairman from 18 November 2021 to 5 October 2022

Appointed as Director 14 November 2014 Former Managing Director, appointed as CTO 26 September 2022

Kaitlin Smith was appointed to the position of Company Secretary on 30 November 2022. Kaitlin provides company secretarial and accounting services to various public and proprietary companies. She is a Chartered Accountant, a fellow member of the Governance Institute of Australia and holds a Bachelor of Commerce (Accounting). The Company Secretary is accountable to the Board, through the Chair, on all matters to do with the effective functioning of the Board. All directors have direct access to the Company Secretary.

Noel Cornish joined the Board of AML3D as a Non-executive Director and Chairman in October 2022. His former roles include Chief Executive of BlueScope Limited’s Australian and New Zealand steel manufacturing businesses, Deputy Chancellor University of Wollongong, President Northstar BHP LLC in Ohio USA, Chairman of Snowy Hydro Limited and IMB Bank, as well as past National President Ai Group. Noel is currently Chairman of the Hunter Valley Coal Chain and a Non-executive Director of the University of Wollongong Global Enterprises.

Andrew is a Chartered Engineer with a Master of Engineering and Master of Science and is a renowned expert in welding technology with over 28 years of global experience (Australia, Europe, South America, Africa and Asia). Andrew has held varying roles across upper management and senior leadership within the oil and gas, resources and mining sectors as well as advanced manufacturing, heavy engineering and fabrication.

Appointed as Interim CEO 15 June 2023

Sean has 25 years of executive experience in both public and private sectors across high growth companies within the engineering, FMCG and emerging technologies sectors in Australia, China, US and Europe. Sean is currently a Non-Executive Director of listed company Mighty Craft (ASX:MCL, appointed 19 July 2021), as well as Non-Executive Director on a range of privately owned Australian growth companies and Executive Director of Venture Corporate Advisory. Sean was previously the Chief Executive Officer (CEO) of Beston Global Food (ASX:BFC), Global Director M&A of Worley, CEO of Camms Pty Ltd and CEO of Profit Impact Pty Ltd. Sean brings listed company and international experience to AML3D, is a Member of the Institute of Company Directors and holds a Bachelor Degree in Engineering with honours.

He is also the author of numerous technical papers in the field of welding high strength corrosion resistant alloys. In addition to Science and Engineering qualifications at Masters level, he also holds a Diploma in Quality Management and Auditing. He is a Chartered Engineer through ECUK and TWI (UK), a professional member of Materials Australia holding a CMatP, and also sits on two Standards Australia committees including the newly established committee for Additive Manufacturing.

Noel was appointed a Member of the Order of Australia in 2017 for his business leadership and community service.

The Board considers that Mr Cornish is an independent director.

The Board considers that Mr Ebert is not an independent Director.

Andrew founded AML Technologies in 2014 and has been Managing Director since that time.

The Board considers that Mr Sales is not an independent Director.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Directors’ Report

produce near-net shape metal components. WAM[®] technology provides an alternative manufacturing and fabrication method for the production of components in industry sectors such as aerospace, marine, defence, oil and gas, mining and general manufacturing which vary from high-end aerospace parts to general engineering, with the value proposition being significant in the case of larger scale industrial grade and complex parts.

The Directors of AML3D Limited (AML3D or the Company) present their report, together with the financial statements of the Company and its controlled entities (the Group) for the financial year ended 30 June 2023.

Directors

The following persons were Directors of the Company during the financial year and to the date of this report:

In conjunction with its WAM[®] technology, AML3D has developed its own proprietary software, WAMSoft[ ®] , which combines metallurgical science and engineering design to automate the 3D printing process utilising advanced robotics technology. The WAMSoft[ ®] software enables a highly tailored approach to the needs of each client by enabling different pathways and welding operations for different products and materials. Depending on material type, thickness of part, geometry and final size, the software identifies optimal path models using an extensive library of weld bead geometries.

Non-executive Chairman Noel Cornish Appointed 5 October 2022 Executive Director Chairman to 5 October 2022 Sean Ebert Non-executive Director to 15 June 2023 Andrew Sales Executive Director Non-executive Director Leonard Piro Resigned 23 November 2022

Principal Activities

The principal activities of AML3D during the financial year were to:

a. Design and construct ARCEMY[ ®] 3D printing modules for sale or right to use with an option to buy;

Directors have been in office since the start of the financial period to the date of this report unless otherwise stated.

b. Design and construct 3D parts using Wire-arc Additive Manufacturing technology and to develop that technology;

Information Relating to Directors and Company Secretary

c. Research and development into the refinement of the companies products, including alternative applications.

Details of each Director’s experience, qualifications and responsibilities are set out on pages 6 to 7. This includes information on other listed company directorships in the last three years. The Company Secretary is Kaitlin Smith. Details of her experience and qualifications are set out on page 7.

No significant changes in the nature of the Company’s activity occurred during the financial year.

Operating and Financial Review

Review of Operations

Company Overview

The Company’s revenue is derived from:

AML3D is an Australian public company incorporated on 14 November 2014. The Company was admitted to the Official List of ASX on 16 April 2020 and commenced trading on ASX on 20 April 2020. AML3D is a welding, robotics, metallurgy and software business which uses automated wirefed 3D printing in a large free-form environment to produce metal components and structures for commercial use.

a. ARCEMY[®] sales with customers acquiring the ARCEMY[®]
3D printing modules for their own fabrication needs or research and learning purposes; or
b. Contract manufacturing, which is fulfilling manufacturing orders for customers using our ARCEMY[®] 3D printing module; and
c. Licensing, service and technical support for customers using our ARCEMY[®] 3D printing module.

AML3D has commercialised its wire arc additive manufacturing technology (under the trademark WAM[®] ), an innovative metal additive manufacturing technology for the cost-effective production of large, high performance metal components and structures.

Throughout the year, the Company has sought out new customers and markets and developed a pipeline of opportunities which will be built on in FY24.

AML3D’s proprietary WAM[®] process is part of the spectrum of 3D metal printing that focuses on larger industrial applications with flexibility across multiple classes of metals including titanium alloys, nickel alloys and steel alloys.

AML3D has maintained its focus on executing the US ‘Scale up’ strategy and developing the Company’s position as supplier of ARCEMY[®] industrial scale, advanced Wire-arc Additive Manufacturing (WAM[®] ) metal 3D printing systems. The US ‘Scale up’ strategy is designed to create a sustainable

AML3D’s WAM[®] technology combines electric arc as a heat source with wire as a feedstock and welds sequential layers of metal to

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AML3D currently has the only diversified large-scale WAM[®] metal fabrication facility in the Southern Hemisphere that can produce finished parts and components to a certified standard under an accredited Quality Management System. With the granting of patents in Australian, Europe, India, Japan, New Zealand, Republic of Korea and Singapore this protection validates the Company’s market leadership in advanced 3D printing solutions and opens up new markets for our technology. These are the advantage that the Company will look to leverage.

business with a reliable, predictable and expanding revenue base that can also generate additional earnings by accessing aligned R&D and contract manufacturing opportunities.

Despite there being no revenue recognised form the sale of ARCEMY[®] system during the year, the Company is preparing for a record revenue year in FY24 with the first of two ARCEMY[®] X-edition 6700 systems to support the US Navy shipped post year end, the second scheduled for delivery in Q3 of FY24. In addition, the Company has signed a contract with Curtin University for an enterprise level ARCEMY[®] system to support R&D at Curtin, also scheduled for delivery in Q3 of FY24.

Material Business Risks

The Company has continued to develop its technology including the printing of a range of metal pieces for use in a variety of industries such as defence, oil and gas, marine and aerospace. Over 50% of revenue for the year was obtained through key target markets in the United States of America.

There are a number of material business risks which could affect the Company’s ability to achieve its business strategies as follows.

Market Acceptance of New Technology

AML3D has commercialised its WAM[®] technology and has established a number of important relationships and research collaborations. However, there can be no assurances that the market will accept the WAM[®] technology, given that it is challenging traditional and well-tried processes such as machining, casting and forging. WAM[®] is a disruptive technology in traditional manufacturing industries where many potential users of WAM[®] have existing sunk investments in existing processes.

Financial Results and Position

Revenue for the year was $634,422, down 69% on the Prior Corresponding Period (PCP). While orders were received during the year for ARCEMY[®] systems, revenue will not be recognised until delivery and commissioning in FY24. Revenue for the year was derived from the printing of parts and customer support, with over 50% generated from the key target market of the US.

Wire arc additive manufacturing is a new technology in a relatively young industry of 3D metal printing. Widespread awarenessraising of the advantages and value proposition associated with the Company’s WAM[®] technology will be required to lift the profile of the technology and educate the market.

EBITDA was a loss of $4,793,053 (PCP: $4,158,702). Overhead expenses of $5,281,800 were $40,491 lower on PCP with the Company dedicating additional resources to the US scale up. The net loss after tax for the year was $5,436,253 (PCP: $4,897,028) with carried forward tax losses not brought to account.

Customer Conversion

At present, the Company is at a paid trial stage with a number of potential clients. There can be no guarantee that any of these paid trial customers will convert into regular customer contracts. Although the Company’s client base is expected to diversify as a result of the expansion of the Company’s revenue streams, the Company will initially be substantially reliant on a select number of clients. The loss of any of these clients may have a negative impact on the Company’s revenues and profits unless they can be replaced with new clients.

At the end of the financial year, the Company had $4,533,957 in cash and cash equivalents on hand. During the year $3,642,885 of cash was used in operating activities, down $159,618 on cash consumed during the PCP.

Business Strategies and Prospects

The Company plans to build on the successes achieved in FY23. The main areas of focus in FY24 will be to:

The Company’s future activities are specifically designed around further business development activities in order to grow the client base in Australia, US, and other markets.

Pursue global business opportunities, focusing initially on creating customer and industry partnerships in high margin sectors such as defence, oil and gas, and marine;

Reliance on Key Personnel

Build ARCEMY[®] modules for customers looking to establish in-house 3D printing capability;

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management, technical experts and its Directors. The Company has reduced this risk by the appointment of additional technical staff.

Grow recurring revenue through annual software licensing, service and maintenance agreements;
Continue with our research and development activities to refine and broaden our range of products and processes, further developing our environmental sustainability credentials by reviewing options for use of renewable energy and lowering energy inputs with the aim of reducing the carbon footprint of the WAM[®] process; and

Access to Raw Materials

The Company requires access to markets for its raw materials including titanium alloys, nickel alloys, stainless steel, aluminium alloys and bronze alloys in order to manufacture components. If the Company is unable to secure these materials, this would likely have a material adverse effect on the business and financial performance of the Company.

Build the global profile of AML3D and its products through collaborations with universities and key industry players.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Accreditation

The reputation of AML3D’s products and services is largely dependent on retaining Lloyd’s Register and ISO 9001 accreditation. The loss of these accreditations would significantly impact the demand for AML3D’s products and services.

Climate Change Risk

The Board is not aware of any current material exposure to risks brought about, or likely to be brought about, by climate change.

Research & Development and Technical Risk

The Company’s products and technology are the subject of continuous research and development which will likely need to be developed further in order to enable the Company to remain competitive, increase sales and improve the scalability of products and technology. There are no guarantees that the Company will be able to undertake such research and development successfully. Failure to successfully undertake such research and development, anticipate technical problems, or estimate research and development costs or time frames accurately will adversely affect the Company’s results.

Intellectual Property

The Company has been granted patent in Australian, Europe, India, Japan, New Zealand, Republic of Korea and Singapore, which provides coverage over the method and apparatus for manufacturing 3D metal parts. Despite the granting of the patent, it may not be of commercial benefit to the Company, or may not afford the Company adequate protection from competing products.

Data Loss and Cyber Security

The Company is reliant on the security of its network environment, vendor environments and websites. Breaches of security including hacking, denial of service attacks, malicious software use, internal Intellectual Property theft, data theft or other external or internal security threats could put the integrity and privacy of customers’ data and business systems used by the Company at risk which could impact technology operations and ultimately customer satisfaction with the Company’s products and services, leading to lost customers and revenue.

The Company has implemented a Cyber Security system and will continue to monitor its effectiveness.

Environmental and Sustainability Risk

The Board is not aware of any material exposure to economic, environmental or social sustainability risks to which the Company may be subject.

Risk Management

The Board determines the Company’s risk profile and is responsible for establishing, overseeing and approving the Company’s risk management framework, strategy and policies, internal compliance and internal control. The Board has delegated to the Audit and Risk Committee the responsibility for overseeing the risk management system. The Company’s risk management policy sets out the requirements for the Company’s risk management framework, the process for identification and management of risks and regular reviews.

Sustainability

AML3D is committed to developing and maintaining sustainable and environmentally conscious operations. One of the benefits of AML3D’s manufacturing process is that it generates considerably less waste material than traditional casting and machining

processes. Additive Manufacturing, with wire feedstock, has also been shown to have a lower carbon foot-print and use less energy when compared to conventional manufacturing processes.

Environmental Regulation

The Group’s activities are subject to general environmental laws and regulations relating to manufacturing operations, in particular for the disposal and storage of scrap and hazardous materials. No breaches of environmental regulation occurred during the financial year and to the date of this report.

Significant Changes in the State of Affairs

The following significant changes in the state of affairs of the Company occurred during the financial year:

i. On 20 July 2022, the Company issued 37,605,038 ordinary shares at $0.0714 per share via a private placement for a total consideration of $2,685,000.
ii. On 13 February 2023, the Company issued 41,666,667 shares at $0.072 per share via a private placement for a total consideration of $3,000,000
iii. On 27 March 2023, the Company established a wholly owned subsidiary in the United States of America, AML3D USA Inc.
iv. On 12 April 2023, the Company issued 5,555,555 ordinary shares at $0.072 per share via a share purchase plan for a total consideration of $400,000.
v. On 26 June 2023, the company issued 268,067 ordinary shares for nil consideration on the exercise of performance rights.

Significant Events after the Balance Date

No matters or circumstances have arisen since the end of the financial 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, except for:

i. On 20 of July 2023, AML3D announced the sale of an industrial-scale ARCEMY[®] ‘X-Edition 6700’ Wire-arc Additive Manufacturing metal 3D printing system for 1.1 million to be located at the US Navy’s Additive Manufacturing Center of Excellence in Danville, Virginia.
ii. In mid August 2023, AML3D announced the signing of $2.4 million in additional contracts for the continuation of alloy testing and validation of metal 3D printed components for the US Navy.

Dividends

No dividends were declared or paid during the year.

Corporate Governance

The Board oversees the Company’s business and is responsible for the overall corporate governance of the Company. It monitors the operations, financial position and performance of the Company and oversees its business strategy, including approving the strategy and performance objectives of the Company.

The Board is committed to maximising performance and generating value and financial returns for Shareholders. To further these objectives, the Board has created a framework for managing the Company, including the adoption of relevant internal controls, risk management processes and corporate governance policies and practices which the Board believes

are appropriate for the business and which are designed to promote the responsible management and conduct of the Company. To the extent relevant and practical, the Company has adopted a corporate governance framework that is consistent with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th Edition).

The Company’s Corporate Governance Plan, including key policies, is available on the Company’s website at www.aml3d.com

Directors’ Meetings

During the financial year, 25 meetings of Directors, including Committees of Directors, were held. Attendances by each Director during the year were as follows:

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Board Audit and Risk Remuneration
Meetings Committee Meetings Committee Meeting
Directors
Eligible to Meetings Eligible to Meetings Eligible to Meetings
attend attended attend attended attend attended
Noel Cornish 15 15 2 2 1 1
Sean Ebert 19 19 5 5 1 1
Andrew Sales 19 19 - - -
Leonard Piro 8 7 3 3 - -
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Directors’ Shareholdings

The following table sets out each Director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the Company or a related body corporate, including securities held directly, indirectly or by related parties, as at the date of this report:

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Fully paid
Director Share Options
ordinary shares
Noel Cornish 700,280 2,000,000
Sean Ebert 1,087,499 2,000,000
Andrew Sales 35,559,850 -
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Further details of Directors’ security holdings, including the numbers subject to escrow restrictions, are provided in the Remuneration Report commencing on page 12.

Directors’ and Senior Executives’ Remuneration

Details of the Company’s remuneration policies and the nature and amount of the remuneration for the Directors and senior management (including shares, options and rights granted during the financial year) are set out in the Remuneration Report commencing on page 12 and in Notes 9 and 10 to the financial statements. The Directors of the Company present this Remuneration Report for the Group for the year ended 30 June 2023. The information provided in this Report has been audited as required by s308(3C) of the Corporations Act 2001 (Cth) (Corporations Act) and forms part of the Director’s Report.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Remuneration Report (audited)

1. Remuneration Governance

The Remuneration Report outlines the Company’s key remuneration activities during the financial year ended 30 June 2023 and remuneration information pertaining to the Company’s Directors and senior management personnel who are the Key Management Personnel (KMP) of the Group for the purpose of the Corporations Act and Accounting Standards. These are the personnel who have authority and responsibility for planning, directing and controlling the activities of the Company.

Consistent with the Board’s Charter, the Board has established a Remuneration and Nomination Committee. The functions of the Committee are described in the Committee Charter. Where appropriate, these functions are undertaken by Non-executive Directors only, without the presence or participation of any Executive Director.

Functions

The report is structured as follows:

The Committee reviews any matters of significance affecting the remuneration of the Board and employees of the Company.

Remuneration Governance
Directors and Key Management Personnel (KMP)

The primary remuneration purpose of the Committee is to fulfil its responsibilities to shareholders, including by:

Remuneration Policy
Remuneration Components
Relationship between Remuneration and Group Performance
a. Ensuring that the approach to executive remuneration demonstrates a clear relationship between key executive performance and remuneration;
Details of Directors’ and KMP Remuneration
Key Terms of Employment Contracts
b. Fairly and responsibly rewarding executives, having regard to the performance of the Company, the performance of the executive and the prevailing remuneration expectations in the market;
Terms and Conditions of Share-based Payment Arrangements
Directors’ and KMP Equity Holdings
c. Reviewing the Company’s remuneration, recruitment, retention and termination policies and procedures for senior management;
Other Transactions with Directors and KMP
d. Reviewing and approving any equity-based plans and other incentive schemes;
e. Clearly distinguishing the structure of Non-executive Director (NED) remuneration from that of executive directors and senior executives, and recommending NED remuneration to the Board;
f. Arranging the performance evaluation of the Board, its Committees, individual Directors and senior executives on an annual basis; and
g. Overseeing the annual remuneration and performance evaluation of the senior executive team.

The Board has adopted protocols for engaging and seeking advice from independent remuneration consultants.

Further information about remuneration structures and the relationship between remuneration policy and company performance is set out below.

The Board Charter and the Remuneration and Nomination Committee Charter, which outline the terms of reference under which the Committee operates, are available in the Corporate Governance Plan at www.aml3d.com/investors.

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2. Directors and Key Management Personnel (KMP)

out the key terms and conditions of appointment for each Non-executive Director. Non-executive Directors receive statutory superannuation guarantee payments and do not receive any other retirement benefits.

The directors and KMP of the Group during the year were:

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Period of
Responsibility in FY23 Position
Non-executives
Noel Independent Non-
From 5 October 2022
Cornish executive Chairman
Leonard Independent Non-
To 23 November 2022
Piro executive Director
Sean Independent Non-
To 15 June 2023
Ebert executive Director
Executives
Sean Interim Chief Executive
From 15 June 2023
Ebert Officer (CEO)
Managing Director, Chief
To 26 September 2022
Andrew Executive Officer (CEO)
Sales From 26 September Chief Technology
2022 Officer (CTO)
Ryan From 26 September Chief Executive
Millar 2022 to 15 June 2023 Officer (CEO)
Hamish Chief Financial
Full year
McEwin Officer (CFO)
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Executive Remuneration

The Board reviews the executive structure and framework on an annual basis to ensure that the remuneration framework remains aligned to business needs. The Board aims to ensure that remuneration practices are:

Competitive and reasonable, enabling the Company to attract and retain key talent; and
Aligned to the Company’s strategic and business objectives and the creation of shareholder value.

4. Remuneration Components

Non-Executive Directors

Non-executive Directors receive a fixed fee for their participation on the Board. No additional fee is paid for service on Board sub-committees. Directors do not receive performance-based incentives but they are eligible, subject to shareholder approval, for the grant of options that do not include performance-based vesting criteria.

Non-Executive Director fees are determined by the Board within an aggregate fee pool limit as approved by shareholders. The current aggregate fee pool, as set out in the Constitution in Rule 14.8 detailing initial fees to Directors, is $400,000.

3. Remuneration Policy

The Company’s remuneration framework for Directors and senior executives has been designed to remunerate fairly and responsibly, balancing the need to attract and retain key personnel with a prudent approach to management of costs.

In addition, Directors are eligible to participate in the Concessional Incentive Option Plan and the Performance Rights and Option Plan, subject to approval by shareholders.

Executives

The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the Company is as follows:

Executive remuneration comprises fixed remuneration (salary) and may include short-term and long-term incentive plan components. These are set with reference to the Company’s performance and the market. Fixed remuneration, which reflects the individual’s role and responsibility as well as their experience and skills, includes base pay and statutory superannuation. Remuneration at risk may be provided through short-term and long-term incentive plan components, linked to performance measured against operational and financial targets set by the Company, designed to achieve operational and strategic targets for the sustainable growth of the Company and long-term shareholder value. Shortterm or long-term incentive elements for KMP’s are detailed in section 7 of this report. The Board will continue to review the remuneration framework during the coming year.

Non-Executive Director Remuneration

The Board aims to remunerate each Non-executive Director (NED) for their time, commitment and responsibilities at market rates for comparable companies. The Board determines and reviews the level of fees payable to Non-executive Directors annually, based on market practice, duties and accountability and subject to the maximum aggregate amount per annum as approved by shareholders. Fees for Non-executive Directors are not linked to the performance of the Group, other than participation in share options (refer to section 8 for share option plans).

The Board approves a letter of appointment setting

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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5. Relationship between Remuneration and Group Performance

fixed remuneration in the context of balancing the requirements of a rapidly growing and newly ASX-listed company and focussing on strategic and business objectives to ensure shareholder value. There are currently no short-term or long-term incentives on foot.

The Board aims to align executive remuneration to the Company’s strategic and business objectives and the creation of shareholder wealth. The table below sets out key metrics in respect of the Group’s performance over the past five years. The remuneration framework is designed to take account of a suitable level for the

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2023 2022 2021 2020 2019
$ $ $ $ $
Cash and cash equivalents 4,533,957 2,933,482 7,200,707 8,227,986 1,158,109
Net assets/equity 6,925,158 6,631,120 11,528,148 9,712,920 (113,666)
Revenue 634,422 2,014,828 644,486 288,516 36,057
EBITDA (4,793,053) (4,158,702) (5,108,666) (3,008,192) (595,966)
Loss from ordinary activities after
(5,436,253) (4,897,029) (5,515,272) (3,094,021) (680,836)
income tax expense
No of issued shares 235,553,713 150,458,386 150,458,386 132,366,163 12,320,250
Basic earnings per share (cents) [2] (2.3) (3.3) (3.8) (3.8) (1.3)
Diluted earnings per share (cents) [2] (2.3) (3.3) (3.8) (3.8) (1.3)
Share price at start of year (cents) [1] 0.052 0.205 0.155 0.20 N/A
Share price at end of year (cents) 0.048 0.052 0.205 0.155 N/A
Market capitalisation (Undiluted) 11,306,578 7,823,836 30,843,969 20,516,755 N/A
Interim and final dividend (cents) N/A N/A N/A N/A N/A
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6. Directors’ and KMP Remuneration

Remuneration for the financial year ended 30 June 2023

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Post- Share-based
Short-term employee benefits
employment payments
$ $ $ $ $ $ $ $ $ $ $ %
Non-executive Directors
Noel
- - - - - - -
75,000 7,875 58,000 58,000 140,875
Cornish [1]
Leonard
- - - - - - - - -
20,000 2,100 22,100
Piro [2]
Subtotal 95,000 - - - 9,975 - 58,000 58,000 - - 162,975 -
Executives
Sean
- - - - - - - - -
77,000 8,085 85,085
Ebert [3]
Andrew
- - - - - - -
236,154 14,942 14,300 24,796 290,192
Sales
Ryan - - - -
339,484 25,500 31,314 14,433 7,658 22,091 79,290 497,678
Millar [4]
Hamish
- - - - - - - -
228,311 7,441 23,973 259,724
McEwin
Subtotal 880,948 25,500 22,383 14,300 88,167 14,433 7,658 22,091 79,290 - 1,132,679 -
TOTAL 975,948 25,500 22,383 14,300 98,142 14,433 65,658 80,091 79,290 - 1,295,654 -
Salary & Fees Short-term incentive Annual leave Long Service Leave Super- annuation Shares Options or Rights Total share- based payments Termination Other long-term benefits Total Total ‘at risk’
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The Company was incorporated in 2014 as a proprietary company and was changed to an unlisted public company on 5 December 2019. Share price at start of FY20 is shown as at commencement of ASX quotation on 20 April 2020 following admission to the official list of ASX on 16 April 2020, based on the value of shares taken up pursuant to the prospectus.
Basic earnings per share and diluted earnings per share have been retrospectively restated to account for a capital restructure of shares. A capital reconstruction was undertaken on 29 July 2019 and 4.2348 shares were issued for every 1 share. The number of shares issued in the previous financial periods have been multiplied by 4.2348 for the purpose of EPS calculation.
Appointed as Chairman 5 October 2022.
Resigned 23 November 2022.
Appointed as Interim CEO 15 June 2023
Appointed as CEO 26 September
Resigned 15 June 2023. Prior to his appointment as CEO, Mr Millar received $99,000 for consulting services during the months of July, August and September 2022.

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14
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Chief Technology Officer

7. Key Terms of Employment Contracts

The Company has entered into an executive services agreement with Andrew Sales, whereby he was engaged as the Chief Technology Officer (CTO) of the Company. Mr Sales receives a base salary of $240,000 per annum (exclusive of superannuation) for services rendered under the executive services agreement. The Company will also, subject to certain conditions, reimburse Mr Sales for all reasonable travelling intra/interstate or overseas, accommodation and general expenses incurred in the performance of all duties in connection with the business of the Company. There is no short-term or long-term incentive component to his remuneration.

Non-Executive Directors

The Company has entered into Non-Executive Director letters of appointment with each of Noel Cornish, Leonard Piro and Sean Ebert (Letters of Appointment). Each of the Letters of Appointment provide that amongst other things, in consideration for their services, the Company will pay the following fees, exclusive of statutory superannuation: Chairman: $100,000 per annum

$60,000 per annum

Non-Executive Directors:

Each Non-Executive Director is also entitled to be reimbursed reasonable expenses incurred in performing their duties.

The termination provisions in the executive services agreement are on standard commercial terms and generally require a minimum period of notice prior to termination. In the event that the Company elects to terminate the executive services agreement without reason, it must pay Mr Sales the salary payable over a six-month period.

The appointment of the Non-Executive Directors is subject to the provisions of the Constitution and the ASX Listing Rules relating to retirement by rotation and re-election of directors. The appointment of a Non-Executive Director will automatically cease at the end of any meeting at which the relevant Director is not re-elected as a Director by shareholders. A Director may terminate their directorship at any time by advising the Board in writing.

Chief Financial Officer

The Company has entered into an executive services agreement with Hamish McEwin, whereby he was engaged as the Chief Financial Officer (CFO) of the Company. Mr McEwin receives a base salary of $250,000 per annum (exclusive of superannuation) for services rendered under the executive services agreement. The Company will also, subject to certain conditions, reimburse Mr McEwin for all reasonable travelling intra/interstate or overseas, accommodation and general expenses incurred in the performance of all duties in connection with the business of the Company. There is no short-term or long-term incentive component to his remuneration.

The Letters of Appointment otherwise contain terms and conditions that are considered standard for agreements of this nature and are in accordance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th Ed).

Remuneration for the financial year ended 30 June 2022

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Post-
Short-term employee benefits Share-based payments
employment
$ $ $ $ $ $ $ $ $ $ $ %
Non-executive Directors
Sean
- - - - - - - - -
51,667 5,167 56,834
Ebert [1]
Leonard
- - - - - - - - -
40,000 4,000 44,000
Piro
Stephen - - - - - - - - -
25,000 2,500 27,500
Gerlach [2]
Kevin
- - - - - - - - -
16,667 1,667 18,334
Reid [3]
Subtotal 133,334 - - - 13,334 - - - - - 146,668 -
Executives
Andrew
- - - - - - -
220,042 (7,714) 24,739 21,900 258,967
Sales
Hamish
- - - - - - - -
228,311 7,465 22,831 258,607
McEwin
Subtotal 448,353 - (249) 24,739 44,731 - - - - - 517.574 -
TOTAL 581,687 - (249) 24,739 58,065 - - - - - 664,242 -
Salary & Fees Short-term incentive Annual leave Long Service Leave Super- annuation Shares Options or Rights Total share- based payments Termination Other long-term benefits Total Total ‘at risk’
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Executives

Interim Chief Executive Officer

Up to 15 June 2015, Sean Ebert was engaged as a NonExecutive Director. The Company entered into an executive services agreement with Mr Ebert 15 June 2015, whereby he was engaged as the Interim Chief Executive Officer (CEO) of the Company. Mr Ebert receives a base salary of $400,000 per annum (exclusive of superannuation) for services rendered under the executive services agreement. The Company will also, subject to certain conditions, reimburse Mr Ebert for all reasonable travelling intra/interstate or overseas, accommodation and general expenses incurred in the performance of all duties in connection with the business of the Company. There is no short-term or long-term incentive component to his remuneration.

The termination provisions in the executive services agreement are on standard commercial terms and generally require a minimum period of notice prior to termination. In the event that the Company elects to terminate the executive services agreement without reason, it must pay the Mr Ebert the salary payable over a one-month period.

Appointed as Chairman 18 November 2021.
Resigned 18 November 2021.
Resigned 18 November 2021

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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8. Terms and Conditions of Share-based Payment Arrangements

Concessional Incentive Option Plan

The key terms of the Concessional Incentive Option Plan are as follows:

The following share-based payments were made during the current financial year (2022: Nil):

Eligibility Employees, contractors or directors (Participants) The Board may in its absolute discretion make a written offer to any Participant to apply for options Offers upon the terms set out in the Concessional Incentive Option Plan and upon such additional terms and conditions as the Board determines. Options may be made subject to vesting conditions. Options will only vest while the Participant remains employed, engaged or is an officer of the Company. Where a Participant becomes a:

i. On 22 December 2022 the Company issued 2,000,000 fully vested options to the Non-executive Chairman, Mr Noel Cornish. The options are exercisable at $0.30 each on or before five years from the date of issue. The Black Scholes valuation method determined a fair value of $58,000 which has been expensed as a share-based payment.

ii. On 22 December 2022 the Company issued 1,700,000 unvested performance rights to the Chief Executive Officer, Mr Ryan Millar. The number of performance rights granted to Mr Millar was determined using the ‘face value’ methodology, that is, by dividing an amount equivalent to 40% of Mr Millar’s current total fixed remuneration of $340,000 by a share price of $0.12 for the base Long-term Incentive award, with a further 20% to be allocated as a significant stretch target. The Binominal valuation method has been applied to determine a fair value of $40,796 which is being expensed as a share-based payment proportionally from grant date to expiry. The performance rights have an ending date of 25 September 2025 with vesting conditions as follows:

Good Leaver, unless the Board in its sole and absolute discretion determines
Vesting otherwise, unvested options will lapse Conditions and vested options that have not been exercised will remain exercisable for a period of three months;
1,133,333 performance rights: Achievement of a Total Shareholder Return (TSR) Compound Annual Growth Rate (CAGR) of 30%.
Bad Leaver, unvested options will lapse and subject to the discretion of the Board, vested options that have not been exercised will lapse on the date of cessation of employment, engagement or office of the Participant.
Disposal restrictions apply, including either
Disposal three years after the date of issue of the option or when the option holder ceases to be a Participant.
566,667 performance rights: Achievement of TSR CAGR of 60%.

At the Board’s discretion vesting may occur at the time of achievement of each performance condition within the performance period.

iii. On 26 June 2023 the Company issued 268,067 fully paid ordinary shares to the former Chief Executive Officer, Mr Ryan Millar, following the conversion of vested performance rights. The share price on the date of issue of $0.054 was used to determine a fair value of $14,433 which has been expensed as a share-based payment.

Details of the Concessional Incentive Option Plan were included in the Company’s Prospectus and a copy of the Plan was released to the ASX market announcements platform on 16 April 2020. A copy of the Concessional Incentive Option Plan is available on the Company’s website at www.aml3d.com/investors.

Performance Rights and Option Plan

A Performance Rights and Option Plan is also in place to accommodate future long-term remuneration incentives but as at the date of this report no grants of performance rights or options have been made pursuant to this plan. Details of the Performance Rights and Option Plan were included in the Company’s Prospectus and a copy of the Plan was released to the ASX market announcements platform on 16 April 2020. A copy of the Performance Rights and Option Plan is available on the Company’s website at www.aml3d.com/investors.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Left to Right: AML3D Interim CEO, Sean Ebert, Hon. Nick Champion MP
– Minister for Trade and Investment Government of South Australia, AML3D VP of Global Sales, Kerrye Owen.
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9. Directors’ and KMP Equity Holdings

Details of the number of ordinary shares held by Directors and KMP in the Company are set out below. This includes shares held directly, indirectly or beneficially by Directors and KMP, including related party holdings.

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Balance at Balance at
Purchased Sold Other Changes
1 Jul 2022 30 June 2023
Non-executive Directors
Noel Cornish - 700,280 - - 700,280
Leonard Piro [1] 850,000 - - (850,000) -
Executives
Sean Ebert 1,024,999 - - 62,500 1,087,499
Andrew Sales 40,311,250 550,000 (5,301,400) - 35,559,850
- - -
Ryan Millar [2] 268,067 (268,067)
TOTAL 42,186,249 1,518,347 (5,301,400) (1,118,067) 37,347,629
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Resigned 23 November 2022 2. Appointed 26 September 2022. Resigned 15 June 2023

Details of the number of options held by Directors and KMP in the Company are set out below. This includes options held directly, indirectly or beneficially by Directors and KMP, including their related parties.

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Balance at
Balance at Options Expired/ Other
Granted Purchased 30 June Vested Unvested
1 July 2022 Exercised Lapsed Changes
2023
Non-executive Directors
Noel Cornish - 2,000,000 - - - - 2,000,000 2,000,000 -
Leonard Piro [1] 2,000,000 - - - - (2,000,000) - - -
Executives
Sean Ebert 2,000,000 - - - - - 2,000,000 2,000,000 -
TOTAL 4,000,000 2,000,000 - - - (2,000,000) 4,000,000 4,000,000 -
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Resigned 23 November 2022

Terms of the options granted to Directors are provided in section 8 of this report, above.

Details of the number of performance rights held by Directors and KMP in the Company are set out below. This includes performance rights held directly, indirectly or beneficially by Directors and KMP, including their related parties.

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Balance at
Balance at Rights Expired/ Other
Granted Purchased 30 June Vested Unvested
1 July 2022 Exercised Lapsed Changes
2023
Executives
- - - - - -
Ryan Millar [1] 1,700,000 268,067 1,431,933
TOTAL - 1,700,000 - 268,067 1,431,933 - - - -
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Appointed 26 September 2022. Resigned 15 June 2023

10. Other Transactions with Directors and KMP

There have been no transactions with Directors and KMP other than those described in this Remuneration Report.

Related Party Transactions

Details of transactions with related parties including KMP are provided at Note 26 to the financial statements.

-- End of Remuneration Report --

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20
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Options and Performance Rights

Holders of options and performance rights do not have any rights to participate in any issue of shares or other interests of the Company or any other entity.

During the financial year ended 30 June 2023, 2,000,000 options were issued (2022: nil). No shares were issued on the exercise of options during the financial year ended 30 June 2023 (2022: Nil).

1,700,000 performance rights were issued during the financial year ended 30 June 2023 (2022: Nil). 1,431,933 of these rights lapsed as the conditions had not been, or became incapable of being satisfied. 268,067 fully paid ordinary shares were issued on the conversion of the remaining vested performance rights.

As at the date of this report, the unissued ordinary shares of the Company under option are as follows.

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Exercise Number of
Grant date Expiry Date
Price Options
4 December 4 December
$0.30 7,500,000
2019 2024
23 November 22 December
$0.30 2,000,000
2022 2027
Total 9,500,000
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Comprises 2,000,000 options issued to Directors,

5,000,000 options issued to former Directors and 500,000 options issued to the former Company Secretary

There have been no options or share rights granted over unissued shares or interests of the controlled entities within the Group during or since the reporting period.

Proceedings on behalf of the Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The Company was not a party to any such proceedings during the financial year.

Indemnification and Insurance of Officers or Auditor

During the financial year, in accordance with the provisions of the Company’s Constitution, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretary and all Executive Officers of the Company against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001 (Cth). The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

In accordance with the Constitution, the Company has entered into Deeds of Indemnity in favour of each of the current Directors and Company Secretary. The indemnities operate to the full extent permitted by law. The Company is not aware of any liability having arisen, and no claims have been made during or since the financial year ending 30 June 2023 under the Deeds of Indemnity.

The Company’s subsidiaries, AML Technologies (Asia) Pte Limited and AML3D USA Inc has provided letters of indemnity to its Company Secretary.

The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnity an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Non-Audit Services

The Board is satisfied that the provision of non-audit services by its auditor, William Buck, during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the non-audit services provided by the auditors during the year did not compromise the external auditor’s independence. The fees paid or payable to William Buck for non-audit services are set out in Note 11 of the financial report. The non-audit services provided were tax compliance services.

Auditor’s Independence Declaration

The Auditor’s Independence Declaration is included on page 23, of this annual report.

This Directors’ Report is signed in accordance with a resolution of Directors made pursuant to s298(2) of the Corporations Act 2001.

On behalf of the Directors

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Noel Cornish Chairman 23 August 2023

Auditor Independence Declaration

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AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF AML3D LIMITED

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

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William Buck (SA) ABN: 38 280 203 274

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M.D. King

Partner

Dated this 23[rd] day of August, 2023 in Adelaide, South Australia.

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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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AML3D Limited

Independent auditor’s report to members

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of AML3D Limited (the Company) and its subsidiary (together, the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001 , including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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KEY AUDIT MATTER

Research and development expenditure - existence and valuation. Refer also to notes 3(i) and 12.

How our audit addressed it

	KEY AUDIT MATTER	KEY AUDIT MATTER	KEY AUDIT MATTER
	Research and development expenditure - existence and valuation. Refer also to notes 3(i) and 12.	How our audit addressed it

	The Group incurs significant amounts of research and development costs each year. In	Our audit procedures included: ‒ A detailed evaluation of the Group’s research and
	2023 these costs amounted to $729,518. Each year the Group makes an assessment as	development strategy;
	to the amount it expects to claim from the Australian Government by the way of a	‒ Testing the costs incurred; ‒ Engaging our own taxation specialists to consider
	Research & Development Tax Offset Refund. At 30 Jn 2023 th mnt dild rrnt	the appropriateness of the Group's substantiation for the claim;
	ue e aou scose as a cue trade and other receivable in relation to the	‒ Reviewing the historical accuracy by comparing
	refund is $171,204. Overall due to the high level of judgement	actual Tax offset refunds with the original estimations.
	involved, and the significant carrying amount involved, we have determined that this is a key	We assessed the adequacy of the Group's disclosures
	auditmatterarea that ouraudit concentrated on.	in respect of the transactions.
	KEY AUDIT MATTER

	Revenue recognition. Refer also to notes	How our audit addressed it
	2(j) and 6.
	The Group derives income from the following:	Our audit procedures included:
	- Sale of the ARCEMY 3D printing module	—determining whether revenue recognised is in accordance with the Group’s accounting policies;
	- Contract manufacturing for customers using owned ARCEMY 3D printing	—Identifying and verifying the achievement of
	modules - Contract service or technical support for	performance milestones and recognition of revenue relative to that achievement;
	customers using owned ARCEMY 3D printing modules	—Examining the existence of revenue by testing both th tt d bt it f iii f
	Each revenue stream requires a bespoke	e conrac an susequen recep o nvocng o the revenue to the customer;
	revenue recognition model to ensure that —The performance obligations for each	—Substantively testing revenue cut-off and the income in advance balance to ensure revenue has
	revenue contract are identified;	been recognised in the correct period.
	—The correct determination of whether performance obligations are satisfied over	We also assessed the appropriateness of disclosures attached to revenues as required by Accounting
	time or at a point in time; and —Revenue is onl reconised when a	Standard_AASB 15 Revenue from Contracts with_ Customers.
	y g performance obligation is satisfied.
	The application of_AASB 15 Revenue from_ _Contracts with Customers_can require
	judgement, thus we considered this area to be a key auditmatter.

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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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KEY AUDIT MATTER

Liquidity and capital management How our audit addressed it Refer also to note 2(r).

We assessed the main assumptions in the Group’s cash flow forecast for at least 12 months from the date of signing the auditor’s report, by performing the following procedures, amongst others:

To support the basis of preparation of the financial statements, the Group has prepared a forecast of its cash flows, which includes a number of significant assumptions about sales and production and estimates of cash outflows.

— Evaluating the assumptions used in management’s cash flow forecasts including an analysis of committed customer orders;

The Group has incurred significant losses in the current and prior financial year. As a result, our assessment of liquidity and capital management as it relates to the basis of preparation of the financial statements is considered a key audit matter.

Compared actual revenue and cost outcomes for the prior period and the current year to date to Group forecasts;
Ensuring that all committed capital purchases and future capital raising initiatives are taken into consideration.
Evaluating management’s ability to reduce expenditure if necessary.

We also considered the appropriateness of the liquidity risk disclosures included within the financial statements.

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Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of these financial statements is located at the Auditing and Assurance Standards Board website at:

https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf

Other Information

This description forms part of our independent auditor’s report.

The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and the auditor’s report thereon.

Report on the Remuneration Report

Opinion on the Remuneration Report

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the year ended 30 June 2023.

In our opinion, the Remuneration Report of AML3D Limited, for the year ended 30 June 2023, complies with section 300A of the Corporations Act 2001 .

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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Financial Statements

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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William Buck (SA) ABN: 38 280 203 274

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M.D. King

Partner

Consolidated Statement of Loss and Other Comprehensive Income 30

Consolidated Statement of Financial Position 31 Consolidated Statement of Changes in Equity 32 Consolidated Statement of Cashflows 32 Notes to Financial Statements 33 Directors Declaration 52

Dated this 23[rd] day of August, 2023 in Adelaide, South Australia.

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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Consolidated Statement of Loss and Other Comprehensive Income

For the year ended 30 June 2023

Consolidated Statement of Financial Position

As at 30 June 2023

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2023 2022
Note
$ $
Revenue 6 634,422 2,014,828
Cost of goods sold (329,686) (1,478,626)
Gross profit 304,736 536,202
R&D Tax Offset 178,422 565,425
Government grants - 24,096
Gain on disposal of property, plant and equipment 5,589 37,865
Interest received 64,902 6,972
Depreciation and amortisation 7 (688,594) (721,119)
Director and employee benefits (2,372,876) (1,792,048)
Interest expense (19,508) (24,179)
Marketing expenses (40,306) (148,176)
Occupancy costs (113,808) (126,884)
Professional fees expense (953,818) (873,541)
Research and development (729,518) (1,559,617)
Workshop expenses (273,525) (207,882)
Equity settled share based payments 10 (80,091) -
Other expenses (717,858) (614,142)
Loss before income tax expense 7 (5,436,253) (4,897,028)
Income tax 8 - -
Loss after tax attributable to the owners of the Company (5,436,253) (4,897,028)
- -
Other comprehensive (loss) net of tax
Total comprehensive loss for the year attributable to the
(5,436,253) (4,897,028)
owners of the Company
Basic and diluted loss per share (cents) 25 (2.7) (3.3)
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The Consolidated Statement of Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes, which form an integral part of the financial report.

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----- Start of picture text -----

2023 2022
Note
$ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 30(a) 4,533,957 2,933,482
Trade and other receivables 12 580,829 771,534
Inventory 13 1,031,404 905,985
Other financial assets 14 56,000 56,000
Other assets 15 222,550 221,404
TOTAL CURRENT ASSETS 6,424,740 4,888,405
NON-CURRENT ASSETS
Property, plant and equipment 16 2,221,916 2,575,201
Right of use assets 17 158,116 347,836
Intangible assets 18 32,113 47,479
TOTAL NON-CURRENT ASSETS 2,412,145 2,970,516
TOTAL ASSETS 8,836,885 7,858,921
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 19 469,901 510,239
Contract liabilities 20 867,700 5,624
Borrowings 35 178,608 189,062
Lease liabilities 21 169,507 175,025
Employee benefits 22 167,409 128,907
TOTAL CURRENT LIABILITIES 1,853,125 1,008,857
NON-CURRENT LIABILITIES
Lease Liabilities 21 - 185,818
Employee benefits 22 58,602 33,126
TOTAL NON-CURRENT LIABILITIES 58,602 218,994
TOTAL LIABILITIES 1,911,727 1,227,801
NET ASSETS 6,925,158 6,631,120
EQUITY
Issued capital 23(a) 26,305,905 20,641,272
Accumulated losses 24 (20,119,370) (14,683,117)
Reserves 23(d) 738,623 672,965
TOTAL EQUITY 6,925,158 6,631,120
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The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes, which form an integral part of the financial report.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Consolidated Statement of Changes in Equity

For the year ended 30 June 2023

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----- Start of picture text -----

Share Options Accumulated
Issued Capital Total Equity
Reserve Losses
$ $
$ $
Balance at 1 July 2021 20,641,272 672,965 (9,786,089) 11,528,148
- -
Loss after income tax expense for the year (4,897,028) (4,897,029)
- - - -
Shares issued during the year, net of transaction costs
- - - -
Options exercised during the year
Balance at 30 June 2022 20,641,272 672,965 (14,683,117) 6,631,120
Balance at 1 July 2022 20,641,272 672,965 (14,683,117) 6,631,120
- -
Loss after income tax expense for the year (5,436,253) (5,436,253)
- -
Shares issued during the year, net of transaction costs 5,664,633 5,664,633
- -
Options and performance rights issued during the year 65,658 65,658
Balance at 30 June 2023 26,305,905 738,623 (20,119,370) 6,925,158
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The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes, which form an integral part of the financial report.

Consolidated Statement of Cash Flows

For the year ended 30 June 2023

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2023 2022
Note
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,409,143 1,453,591
Receipts from Government grants - 29,049
Receipts from R&D tax incentive 469,592 512,850
Payments to suppliers and employees (5,563,286) (5,779,930)
Interest received 61,173 6,117
Finance costs (19,508) (24,179)
Net cash (used in) operating activities 30(b) (3,642,885) (3,802,503)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of property, plant and equipment 102,399 58,500
Payments for intangible assets (10,605) (9,315)
Purchase of plant and equipment (70,935) (321,207)
Net cash provided by (used in) investing activities 20,859 (272,022)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issues of shares, net of costs 5,650,201 10,000
Repayment of borrowings (236,364) (23,633)
Repayment of lease liabilities (191,336) (179,067)
Net cash provided by (used in) financing activities 5,222,501 (192,700)
Net increase (decrease) in cash and cash equivalents held 1,600.475 (4,267,225)
Cash and cash equivalents at the beginning of year 2,933,482 7,200,707
Cash and cash equivalents at end of financial year 30(a) 4,533,957 2,933,482
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The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes, which form an integral part of the financial report.

Notes to the Financial Statements

For the year ended 30 June 2023

1. General Information

AML3D Limited (AML3D or the Company) is a limited liability company incorporated in Australia, whose shares are listed on the ASX.

The financial statements were authorised for issue by the directors on 23 August 2023. The Directors have the power to amend and reissue the financial statements.

The financial statements comprise the consolidated financial statements of the Company and its controlled entity (the Group). The principle accounting policies adopted in the preparation of these consolidated financial statements are set out below or included in the accompanying notes. Unless otherwise stated, these policies have been consistently applied to all the years presented.

2. Statement of Significant Accounting Policies

a. Basis of Preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and the Corporations Act 2001 (Cth). The Company is a for profit entity for the purpose of preparing the financial statements.

The consolidated financial statements of AML3D comply with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB).

The consolidated financial statements have been prepared on an accruals basis, except for cashflow information and are based on historical costs, except for the circumstances where the fair value method has been applied as detailed in these accounting policies.

The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Comparatives are consistent with prior years, unless otherwise stated.

b. Principles of Consolidation

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

i. Subsidiaries

Subsidiaries are entities controlled by the Group. A list of subsidiaries is provided in Note 5.

ii. Transactions eliminated on consolidation

All intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

c. Taxation

i. Income Tax

The income tax expense/(income) of the year comprises current income tax expense/(income) and deferred tax expense/(income).

Current income tax expense/(income) charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax assets and deferred tax liabilities during the year as well as unused tax losses.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit and loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantially enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future tax amounts will be available to utilise those temporary differences and losses.

Current tax assets and liabilities are offset where a legally enforceable right of offset exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

ii. Goods and Services Tax (GST)

Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as a current asset or liability in the Statement of Financial Position.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows included in cash inflows from operations or payments to suppliers and employees.

d. Plant and Equipment

i. Recognition and Measurement

Items of plant and equipment are measured on the cost basis and carried at cost less accumulated depreciation and impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present.

Cost includes expenditure that is directly attributable to the acquisition of the asset.

The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not more than the recoverable amount from these assets. The recoverable amount is assessed based on the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

ii. Subsequent Costs

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. Any costs of the day-to-day servicing of plant and equipment are recognised in the Statement of Profit or Loss and Other Comprehensive Income as an expense as incurred.

iii. Depreciation

Depreciation is charged to the Statement of Profit or Loss and Other Comprehensive Income on a straight-line basis over the asset’s useful life to the Group commencing from the time the asset is held ready for use.

Depreciation rates and methods are reviewed annually for appropriateness. The straight-line depreciation rates used

for the current period are as follows:

Class of fxed asset	Depreciation rate (%)
Offce and Computer equipment	20 - 33
Plant and Equipment	10 - 20
Motor Vehicles	22.5
Leasehold improvements	Over the term of the lease

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of plant and equipment and are recognised net within “other income” in the Statement of Profit or Loss and Other Comprehensive Income.

e. Impairment of Non-Financial Assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets (see accounting policy 2(c)) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and asset groups. Impairment losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income, unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through the Statement of Profit or Loss and Other Comprehensive Income. Impairment losses recognised in respect of cashgenerating units are allocated to the other assets in the unit on a prorata basis.

The recoverable amount of an asset or cash generating unit is the greater of its fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been recognised.

f. Financial Instruments

i. Initial Recognition and Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the entity commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Trade receivables are initially measured at the transaction price. Trade receivables do not contain a significant financing component.

ii. Classification and Subsequent Measurement

Financial Liabilities

A financial liability is measured at fair value through profit and loss if the financial liability is:

A contingent consideration of an acquirer in a business combination to which AASB 3: Business Combinations applies;
Held for trading; or
Initially designated as “at fair value through profit or loss”.

All other financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

The effective interest rate method is a method of calculating the amortised cost of a debt instrument and of allocating interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset or liability. That is, it is the rate that discounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at initial recognition.

Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent they are not part of a designated hedging relationship are recognised in profit or loss.

The change in fair value of the financial liability attributable to changes in the issuer’s credit risk is taken to other comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred to retained earnings upon derecognition of the financial liability. If taking the change in credit risk in other comprehensive income enlarges or creates an accounting mismatch, then these gains or losses should be taken to profit or loss rather than other comprehensive income.

A financial liability is derecognised when it is extinguished (i.e. when the obligation in the contact is discharged, cancelled or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability and recognition of new

financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of Profit or Loss, and other comprehensive income.

Other Financial Assets

A financial asset that meets the following conditions is subsequently measured at amortised cost:

The financial asset is managed solely to collect contractual cash flows; and
The contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates.

A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income:

The contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified; and
The business model for managing the financial assets comprises both contractual cash flows’ collection and the selling of the financial asset.

By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other comprehensive income are subsequently measured at fair value through profit or loss.

The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on initial classification and is irrevocable until the financial asset is derecognised.

A financial asset is derecognised when the holder’s contractual rights to its cash flows expires, or the asset is transferred in such a way that all the risks and rewards of ownership are substantially transferred. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts, if any, are shown within short-term borrowings in current liabilities on the Statement of Financial Position.

Trade and Other Receivables

Receivables are usually settled within 60 days. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Collectability of trade and other receivables are reviewed on an ongoing basis.

Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid and stated at their amortised cost. The amounts are unsecured and are generally settled on 30 day terms.

iii. Impairment of Financial Assets

Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:

Financial assets measured at amortised cost
Debt investments measured at FVOCI

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment and including forward looking information.

The Group uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk.

The Group uses the presumption that a financial asset is in default when:

The other party is unlikely to pay its credit obligations to the Group in full, without recourse to the Group to actions such as realising security (if any is held); or
The financial asset is more than 90 days past due.

Impairment of trade receivables is determined using the simplified approach in AASB 9 which uses an estimation of lifetime expected losses.

For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account.

When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Group recognises the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered.

iv. Finance Income and Expenses

Finance income comprises interest income on funds invested, gains on the disposal of financial assets and changes in the fair value of financial assets at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

g. Employee Benefits

i. Short-term Employee Benefits

Provision for employee benefits for wages, salaries, annual leave and long service leave that are expected to be settled wholly within 12 months of the reporting date represent obligations resulting from the employee’s services provided to the reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay at the reporting date including related payroll on-costs, such as worker’s compensation insurance and payroll tax.

ii. Other Long-Term Employee Benefits

The Group’s obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs; that benefit is discounted to determine its present value. The discount rate applied is determined by reference to market yields on high quality corporate bonds at the reporting date that have maturity dates approximating the terms of the Group’s obligations.

iii. Retirement benefit Obligations: Defined contribution

superannuation funds

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the Statement of Profit or Loss and Other Comprehensive Income as incurred.

iv. Equity-settled Compensation

The Group operates an employee share option plan. The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes pricing model, considering the terms and conditions upon which the options were granted. The amount recognised is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to market conditions not being met.

h. Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amount required to settle the obligation at the end of the reporting period.

i. Leases

The Group as Lessee

At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right of use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee. However, all contracts that are classified as short term leases (i.e. a lease with a remaining lease term of 12-months or less) and leases of low value assets are recognised as an operating expense on a straight line basis over the term of the lease.

Initially the lease liability is measured at the present value of the lease payments still to be paid at the commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses the incremental borrowing rate.

Lease payments included in the measurement of the lease liability are as follows:

Fixed lease payments less any lease incentives;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
Lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The right of use assets are recognised at an amount equal to the lease liability at the initial date of application, adjusted for previously recognised prepaid or accrued lease payments. The subsequent measurement of the right of use asset is at cost less accumulated depreciation and impairment losses.

Right of use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.

Where a lease transfers ownership of an underlying asset or the cost of the right of use asset reflects that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.

j. Revenue and Other Income

i. Revenue from Contracts with Customers

The core principle of AASB 15: Revenue from Contracts with Customers is that revenue is recognised on a basis that reflects the transfer of promised goods or service to customers at an amount that reflects the consideration the Group expects to receive in exchange for those goods or services. Revenue is recognised by applying a five-step process outlined in ASSB 15 which is as follows:

Step 1: Identify the contract with a customer;

Step 2: Identify the performance obligations in the contract and determine at what point they are satisfied;

Step 3: Determine the transaction price;

Step 4: Allocate the transaction price to the performance obligations;

Step 5: Recognise revenue as the performance obligations are satisfied.

Following the adoption of AASB 15 the Group’s revenue recognition accounting policy is that:

The Group derives revenue from the sale of 3D printed metal structures and the sale or right to use 3D metal printing machines. Revenue from the sale of manufactured metal structures and sale of 3D metal printing machines is recognised upon delivery to the customer. Revenue from right to use 3D metal printing machines is recognised once performance obligations in the contract are satisfied. Broadly, these obligations relate to the delivery of software, training and the machine itself.

ii. Service or Technical Support Contracts

For service or technical support contracts where the services provided are substantially the same, for example maintenance and technical support, which are transferred with the same pattern of consumption over time and whose consideration consists of a recurring fixed amount over the term of the contract (e.g. monthly or annual payment), in such a way that the customer receives and consumes the benefits of the services as the Group provides them, the revenue recognition model is based on the time elapsed output method. Under this method, revenue is recognised on a straight-line basis over the term of the contract.

iii. Grant Revenue

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

All revenue is stated net of the amount of GST.

k. Segment Reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. Currently, the Group t comprises one operating segment. Further details of the segment reporting are disclosed in Note 28.

l. Intangible Assets

i. Patents and Trademarks

Costs incurred for patents and trademarks are capitalised and amortised over the life of the patent or trademark. The residual value and useful life are reviewed at each balance date and adjusted if appropriate. Amortisation is calculated on a straight-line basis over periods ranging from one to five years.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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ii. Software and Website Development Costs

Costs incurred in acquiring software and licences that will contribute to future period financial benefits through revenue generation and or cost reduction are capitalised. Amortisation is calculated on a straight-line basis over periods ranging from one to three years.

m. Foreign Currency Translation

i. Functional and Presentation Currency

Items included in the financial statement of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is AML3D’s functional and presentation currency.

ii. Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement or deferred in equity if the gain or loss relates to a qualifying cash flow hedge.

iii. Foreign Operations

The results and financial position of all the foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

a. Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
b. Income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
c. All resulting exchange differences are recognised in other comprehensive income.

n. Inventory

Inventories consists of finished goods, work in progress and raw materials which are measured at the lower of cost and net realisable value.

Cost comprises direct materials, direct labour and an appropriate portion of variable and fixed overhead expenditure.

o. Earnings per Share

Both the basic and diluted earnings per share have been calculated using the loss attributable to shareholders of the parent company as the numerator, i.e. no adjustments to loss were

necessary in respect of the reported figures, which is divided by the weighted average number or ordinary shares outstanding during the year.

p. Share-based Payments

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.

Where employees are rewarded using share-based payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and earnings per share growth targets and performance conditions).

q. Research and Development Expenditure

Research and development costs are expensed in the period in which they are incurred. Development costs are not capitalised as there is uncertainty on whether the costs will provide a future economic benefit to the consolidated group.

r. Going Concern

As at 30 June 2023, the Group had a net asset position of $6,925,158 (2022: $6,631,120) and cash and cash equivalents of $4,533,957 (2022: $2,933,482).

The Group expects that cash and cash equivalents, supported by $6m in work in progress and orders recived to the date of this report, in conjunction with stringent controls over the net cash outflows from operating activities will be sufficient to cover ongoing operations for at least 12 months from the date of this report.

Moreover, the directors have proactively sought to improved cash performance via the following initiatives:

continued focus on expanding revenue; and
continued focus on cost containment in all areas of business.

As a result of the above matters, the Directors are of the view that the consolidated entity will continue as a going concern and, therefore, will realise its assets and liabilities and commitments in the normal course of business and at the amounts stated in the financial statements. The Directors remain confident about the successful achievement of projected targets and therefore no adjustments have been made to these financial statements relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

3. Critical Accounting Estimates and Assumptions

The Group makes estimates and assumptions in preparing the financial statements. The resulting accounting estimates will, by definition, seldom equal the related actual results. This note provides an overview of the areas that involve a higher degree of judgement or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions differing to actual outcomes. The areas involving significant estimates and assumptions are:

i. Key Estimate – R&D Tax Incentive

Where the Group expects to receive the Australian Government’s Research and Development Tax Incentive, the Group accounts for the amount refundable on an accruals basis. In determining the amount of the R&D Tax Offset Incentive at year end, there is an estimation process to determine what expenditure will qualify for the incentive. External advice is sought to provide assurance that the estimates are reasonable.

ii. Key Estimate – Lease Term

The lease term is defined as the non-cancellable period of a lease together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and also periods covered by an option to terminate the lease where the lessee is reasonably certain not to exercise that option. The decision on whether or not the options to extend are reasonably going to be exercised is a key management judgement that the entity will make. The Group determines the likelihood to exercise on a lease-by-lease basis looking at various factors such as which assets are strategic and which are key to the future strategy of the entity.

iii. Key Estimate – Share-based Payments

The Group operates equity-settled share-based payment and option schemes. The fair value of the equity to which option holders become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using the Black-Scholes pricing model, which incorporates all market vesting conditions. The amount to be expensed is determined by reference to the fair value of the options or shares granted. This expense takes in account any market performance conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market performance vesting conditions.

Non-market vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimates of the number of options which are expected to vest based on the non-market vesting conditions. Revisions to prior period estimate are recognised in profit or loss and equity.

Any changes to the estimation are adjusted in the subsequent financial year.

Fair value of options issued for services from suppliers is determined with reference to the supplier’s invoice value.

iv. Key Judgements – Performance obligations relating to revenue recognition under AASB 15

To identify a performance obligation under AASB 15, the promise must be sufficiently specific to be able to determine when the obligation is satisfied. Management exercises judgement to determine whether the promise is sufficiently specific by taking into account any conditions specified in the arrangement, explicit or implicit, regarding the promised goods and services. In making this assessment, management includes the nature/type, cost/value, quantity and the period of transfer related to the goods or services promised.

4. New, Revised or Amended Accounting Standards

The Group has adopted all the new, revised or amended Accounting Standards issued by the Australian Accounting Standards Board (AASB) which are effective for the current reporting period with no material impact to the financial statements.

5. Interest in Controlled Entities

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:

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Country of Percentage Owned
Name of entity
incorporation
2023 2022
AML Technologies
Singapore 100% 100%
(Asia) Pte Ltd
AML3D USA Inc United States 100% -
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6. Revenue

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2023 2022
$ $
Revenue from contracts
634,422 2,014,828
with customers
Timing of revenue recognition:
- At a point in time 579,133 1,964,828
- Over time 55,289 50,000
634,422 2,014,828
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7. Expenses

Loss before income tax has been arrived at after charging the following losses and expenses from continuing operations:

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2023 2022
$ $
Depreciation of non-
473,867 507,412
current assets
Amortisation of intangible assets 25,007 23,987
Depreciation of right
189,720 189,720
of use assets
688,594 721,119
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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The taxation benefits of utilised tax losses and temporary difference not brought to account will only be obtained if:

8. Income Tax

a. Income Tax Expense

The Group derives assessable income of a nature and an amount sufficient for tax losses and future deductions to be offset against;

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2023 2022
$ $
- -
Current tax expense
- -
Deferred tax expense
- -
Total tax benefit
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The Group continues to comply with the condition for utilisation of tax loses imposed by law; and
No change in tax legislation affecting the availability of utilisation losses.

9. Key Management Personnel Disclosures

b. The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax expense as follows:

a. Details of Key Management Personnel (KMP’s)

The directors and KMP’s of AML3D Limited during the financial year were:

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2023 2022 year were:
$ $
Names Appointed Resigned
Prima facie tax payable on (loss) Directors
from ordinary activities before (1,401,434) (1,394,021)
Noel Cornish 5 October
-
income tax at 25% (2022: 25%)
(Chairman) 2022
Add tax effect of: Sean Ebert 30 August -
Permanent Differences 68,429 124,426 (Executive Director) 2019
Less tax effect of: Andrew Sales 14 November -
(Executive Director) 2014
Temporary Differences 194,852 (45,423)
30 August 23 November
Add: Tax losses not recognised 1,138,154 1,315,017 Leonard Piro 2019 2022
- -
Income Tax Expense/(Benefit)
Key Management Personnel
Ryan Millar 26 September
Tax Losses and Unrecognised 15 June 2023
(Chief Executive Officer) 2022
Temporary Differences
Hamish McEwin 1 March
-
Due to inherent uncertainty surrounding forward forecasts, (Chief Financial Officer) 2021
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Due to inherent uncertainty surrounding forward forecasts, and therefore the Group’s ability to fully utilise tax losses in the future, a deferred tax asset for tax losses and deferred tax assets for temporary differences have only been recognised to the extent that they offset deferred tax liabilities. The tax losses and temporary differences for which no deferred tax assets have been recognised are as follows:

b. Key Management Personnel Compensation

The aggregate compensation made to Key Management Personnel of the company is set out below:

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2023 2022
$ $
Short-term employee benefits 1,038,131 606,177
Post-employment benefits 98,142 58,065
-
Share-based payments 80,091
-
Termination benefits 79,290
Total 1,295,654 664,242
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2023 2022
$ $
Available tax losses for which
no deferred tax asset is 14,948,176 10,495,245
recognised
Potential tax benefit at 25%
3,737,044 2,623,811
(2022: 25%)
Net deductible temporary
differences for which no deferred 1,684,631 817,919
tax asset has been recognised
Potential tax benefit at 25%
421,158 204,480
(2022: 25%)
- -
Income Tax Expense/(Benefit)
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The compensation of each member of the Key Management Personnel of the Company is set out in the Remuneration Report.

10. Equity Settled Share-based Payments

During the year, the Company issued the following options and performance rights.

1,133,333 performance rights: Achievement of a Total Shareholder Return (TSR) Compound Annual Growth Rate (CAGR) of 30%.
566,667 performance rights: Achievement of TSR CAGR of 60%.

At the Board’s discretion vesting may occur at the time of achievement of each performance condition within the performance period.

iii. On 15 June 2023, 1,431,933 performance rights issued to Mr Ryan Millar lapsed as the conditions had not been, or became incapable of being satisfied.

iv. On 26 June 2023 the Company issued 268,067 fully paid ordinary shares to the former Chief Executive Officer, Mr Ryan Millar, following the conversion of vested performance rights. The share price on the date of issue of $0.054 was used to determine a fair value of $14,433 which has been expensed as a share-based payment.

11. Remuneration of Auditors

During the year, the following fees were paid or payable for services provided by the auditor of the parent entity and nonrelated audit firms:

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2023 2022
$ $
a. William Buck Adelaide
i. Audit and other assurance services
Audit and review of
34,550 42,850
the financial report
ii. Taxation services
Tax compliance and advisory
25,745 32,275
services
b. Fiducia LLP audit fees
Audit and review of
3,210 3,168
subsidiary financial report
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12. Trade and Other Receivables

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2023 2022
$ $
Trade receivables 444,391 316,675
Less: Allowance for
(40,000) (9,020)
expected credit loss
Sub Total 404,391 307,655
R&D Tax Offset Refund Due 171,204 462,374
Other receivables 5,234 1,505
Total 580,829 771,534
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Trade receivables are non-interest bearing and generally on terms of 14-45 days. The receivables at reporting date have been reviewed to determine whether there are any expected credit losses. An allowance for credit loss is included for any receivable where the entire balance is not considered collectible.

Additional information in relation to financial risks concerning or with a potential impact on financial assets and liabilities is disclosed in Note 31 – Financial Risk Management.

13. Inventory

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2023 2022
$ $
Finished goods 405,250 741,888
Work in progress 572,430 28,421
Raw materials 53,724 135,676
Total 1,031,404 905,985
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14. Other Financial Assets

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2023 2022
$ $
Term deposit (current) 56,000 56,000
Total 56,000 56,000
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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15. Other Assets

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2023 2022
$ $
Prepayments 222,550 221,404
Total 222,550 221,404
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16. Plant and Equipment

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Office and
Plant and Motor Leasehold
Computer Total
Cost Equipment Vehicles Improvements
Equipment $
$ $ $
$
Balance 1 July 2021 163,823 2,668,520 120,571 211,441 3,164,355
Additions 79,532 541,473 57,254 6,225 684,484
- -
Disposals (331,587) (40,923) (372,510)
Balance 1 July 2022 243,355 2,878,406 136,902 217,666 3,476,329
Additions 8,280 228,133 - - 236,413
-
Disposals (10.600) (23,271) (114,429) (148,300)
- - -
Net transfers to Inventory (4,497) (4,497)
Balance at 30 June 2023 241,035 3,078,771 22,473 217,666 3,559,945
Office and
Plant and Leasehold
Accumulated depreciation Computer Motor Vehicles Total
Equipment Improvements
and impairment Equipment $ $
$ $
$
Balance 1 July 2021 31,725 332,681 24,538 4,772 393,716
Depreciation expense 49,256 423,848 5,156 29,152 507,412
Balance 1 July 2022 80,981 756,529 29,694 33,924 901,128
Depreciation expense 68,641 366,052 7,507 31,667 473,867
Depreciation written back on -
(4,402) (7,448) (25,116) (36,966)
disposal
Balance at 30 June 2023 145,220 1,115,133 12,085 65,591 1,338,029
Net book value
At 30 June 2022 162,374 2,121,877 107,208 183,742 2,575,201
At 30 June 2023 95,815 1,963,638 10,388 152,075 2,221,916
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i. AASB 16 related amounts recognised in the statement of financial position:

17. Right of Use Assets

The Group’s lease portfolio comprises a single leased building. The lease has an remaining term of ten months.

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2023 2022
Right-of-use assets
$ $
Leased buildings 584,986 584,986
Accumulated depreciation (426,870) (237,150)
Net carrying amount 158,116 347,836
Movement in carrying amounts
Leased buildings:
Opening balance 347,836 537,556
Depreciation expense for
(189,720) (189,720)
the year ended
Net carrying amount 158,116 347,836
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An option to extend or terminate is contained in the lease agreement. These clauses provide the Group opportunities to manage the lease in order to align with its strategies. All the extension or termination options are only exercisable by the Group. The extension options, which management were reasonably certain to be exercised, have been included in the calculation of the lease liability.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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20. Contract Liabilities

ii. AASB 16 related amounts recognised in the statement of loss:

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2023 2022
2023 2022
$ $
$ $
Customer deposits 867,700 5,624
Depreciation charge related
189,720 189,720 Total 867,700 5,624
to right of use assets
Interest expense on
13,696 22,929 Contract liabilities represent non-interest bearing customers
lease liabilities
deposits for which not all contractual performance obligations
have been met.
18. Intangible Assets
Reconciliation of movements 2023 2022
2023 2022
in Contract Liabilities: $ $
$ $
Patents and Trademarks Balance at the beginning
34,550 34,550 5,624 451,028
– at cost of the year
– accumulated amortisation (28,154) (21,225) Payments received in advance 1,232,428 390,599
Net carrying value 6,395 13,325 Transfer to revenue -
performance obligations (370,352) (836,003)
Software – at cost 134,694 134,694
satisfied
– accumulated amortisation (118,617) (100,540)
Balance at the end of the year 867,700 5,624
Net carrying value 16,077 34,154
21. Lease Liabilities
Website – at cost 26,210 16,569
– accumulated amortisation (16,569) (16,569)
2023 2022
Net carrying value 9,641 - $ $
Total intangibles 32,113 47,479
Lease liability (current) 169,507 175,025
Reconciliation of movements 2023 2022 Lease liability
- 185,818
in Intangible Assets: $ $ (non-current)
Total 169,507 360,843
Balance at the beginning
47,479 62,151
of the year
22. Employee Benefits
Additions to intangible assets 9,641 9,315
2023 2022
Amortisation charged to Current
(25,007) (23,987) $ $
intangible assets
Balance at the end of the year 32,113 47,479 Annual Leave 146,135 120,680
RDO Accrual 21,274 8,227
Intangible assets have finite useful lives. The current amortisation
Total 167,409 128,907
charges for intangible assets are included under depreciation and
amortisation expense in the statement of profit and loss and other
comprehensive income. 2023 2022
Non-current
At each reporting date the directors review intangible assets for $ $
impairment. No impairment was assessed as necessary in the
Long Service Leave 58,602 33,126
2023 financial year (2022: Nil).
Total 58,602 33,126
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19. Trade and Other Payables

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----- Start of picture text -----

2023 2022
$ $
Trade payables 231,249 187,025
Other payables and
238,652 323,214
accrued expenses
Total 469,901 510,239
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Trade and other payables are unsecured, non-interest bearing and normally settled within 30 days.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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23. Equity

a. Issued Capital

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----- Start of picture text -----

2023 2022
$ $
235,553,713 fully
paid ordinary
26,305,905 20,641,272
shares (2022:
150,458,386)
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Ordinary shares participate in dividends and the proceeds on winding of the Company in proportion to the number of shares held.

On a show of hands, every holder of ordinary shares present at a meeting or by proxy is entitled to one vote, and on a poll each share is entitled to one vote.

The Company does not have authorised capital or par value in respect of its shares.

i. The Company issued 37,605,038 shares on 20 July 2022 via a private placement at an issue price of $0.0714 per share for a total consideration of $2,685,000.

ii. The Company issued 41,666,667 shares on 13 February 2023 via a private placement at an issue price of $0.072 per share for a total consideration of $3,000,000.
iii. On 12 April 2023, the Company issued 5,555,555 ordinary shares at $0.072 per share via a share purchase plan for a total consideration of $400,000.
iv. On 26 June 2023, the company issued 268,067
ordinary shares for nil consideration on the exercise
of performance rights.

c. Capital Management

Management controls the capital of the Company in order to generate long-term shareholder value and ensure that the Company can fund its operations and continue as a going concern.

The Company is subject to externally imposed capital requirements.

The following table details the tranches of options outstanding as at 30 June 2023.

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----- Start of picture text -----

Number of Grant Expiry Share Price Exercise Fair value Value
Options Date Date at Grant Date Price at Grant Date $
2,000,000 30 July 2019 30 July 2023 $0.10 $0.30 $0.02 49,474
7,500,000 4 December 2019 4 December 2024 $0.15 $0.30 $0.06 451,408
22 December 22 December
2,000,000 $0.074 $0.30 $0.029 58,000
2022 2027
11,500,000 558,882
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The following table details the tranches of performance rights issued during the year ended 30 June 2023.

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----- Start of picture text -----

Share Price at Fair Value at
Number of Performance Rights Grant Date Expiry Date Value
Grant Date Grant Date
22 December 25 September
1,133,333 $0.074 $0.0235 $31,333
2022 2025
22 December 25 September
566,667 $0.074 $0.0167 $9,463
2022 2025
1,700,000 $40,796
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b. Movement in Ordinary Shares:

The Binomal valuation method was applied to determine the fair value of the performance rights. The value was being expensed as a share-based payment proportionally from grant date to expiry.

There have been no changes in the strategy adopted by management to control the capital of the Group since the issue of the prospectus.

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2023 management to control the capital of the Group since the share-based payment proportionally from grant date to expiry.
Number $ issue of the prospectus.
As at 30 June 2023 there were no outstanding performance rights. 1,431,933 of the performance rights issued during the year lapsed as
Balance at beginning d. Reserves the conditions had not been, or became incapable of being satisfied. The remaining 268,067 vested with an equivalent number of fully
150,458,386 20,641,272
of financial year paid ordinary shares issued.
The Group’s reserves comprise a share-based payments reserve.
Shares issued during the year 84,827,260 6,085,000 A summary of the movements in the reserve is as follows:
Movement in Options on Issue
Performance Rights exercised
268,067 14,433
during the year Current 2023 2022 2023 2022 25. Loss per Share
Total shares issued 85,095,327 6,099,433 $ $
Number of Options Number of Options
Costs of the Balance at beginning 2023 2022
shares issued (434,800) of financial year 672,965 672,965 Balance at $ $
Balance at end of 235,553,713 26,305,905 Share-based payment 58,000 - beginning of financial year 9,500,000 9,500,000 Basic (loss) per share (cents): (2.7) (3.3)
financial year expense - Options issued
- Loss used in calculating basic
Share-based payment Options issued 2,000,000 (5,436,253) (4,897,028)
2022 earnings per share
expense - Performance Rights 7,658 - Balance at end
11,500,000 9,500,000
Number $ issued of financial year
Balance at beginning 2023 2022
of financial year 132,366,163 13,310,772 Balance end of financial year 738,623 672,965 24. Accumulated Losses No. No.
The reserve records the value of share-based payments provided.
Shares issued during the year 15,555,557 7,000,001 2023 2022 Weighted average number
Options exercised during of ordinary shares for the
2,536,666 761,000 $ $ 202,950,544 150,458,386
the year purposes of basic earnings
Total shares issued 18,092,223 7,761,001 Balance at beginning per share
(14,683,117) (9,786,089)
Costs of the of financial year
(430,501) The rights of options are non-dilutive as the Company has incurred
shares issued
Loss attributable to members a loss for the year.
Balance at end of (5,436,253) (4,897,028)
150,458,386 20,641,272 of the entity
financial year
Balance at end of
(20,119,370) (14,683,117)
financial year
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The rights of options are non-dilutive as the Company has incurred a loss for the year.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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26. Related Party Disclosures

The following paragraphs provide details of transactions and balances with related parties.

a. Compensation of Key Management Personnel

Details of Key Management Personnel compensation are recorded in Note 9(b).

b. Other transactions with Key Management Personnel

i. Mr Andrew Sales

During the financial year, the Company engaged the services of a company controlled by Mr Sales’ sister to provide IT services. These services were conducted on standard commercial terms. The value of the services for the financial year was $1,728 (2022: $7,733).

ii. Mr Sean Ebert

Venture Corporate Advisory Pty Ltd (VCA) acted as Corporate Adviser for the Placement of shares 20 July 2022. Mr Sean Ebert is a director and part-owner of VCA. These services were conducted on standard commercial terms. The value of these services totalled $164,250 (2022: Nil).

There were no outstanding related party balances as at 30 June 2023.

c. Controlled Entities

During the financial year, the Company provided loan funds to its Singaporean and United States subsidiaries, AML Technologies (Asia) Pte Ltd and AML3D USA Inc, to enable its subsidiaries to meet start-up expenses. The transactions were conducted on commercial terms and conditions.

With the change in the Company’s focus to US markets, the decision has been made to service South East Asia through Australian operations. As a result, the Singaporean subsidiary will be wound up during the coming financial year. Accordingly the loan from the Parent entity of $555,648 has been forgiven as at 30 June 2023.

27. Contingencies

In the opinion of the Directors, besides the guarantees disclosed in Note 33, the Group did not have any contingent liabilities or assets as 30 June 2023.

28. Segment Reporting

i. Operating segments

The Company operates in the additive manufacturing sector in Australia, United States and South East Asia. For management purposes, the Group has one main operating segment which involves the provision of 3D printing services and machinery sales in all territories in which it operates. All of the Group’s activities are interrelated and discrete financial information is reported to the (Chief Operating Decision Maker), being the Chief Executive Officer, as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results for this segment are equivalent to the financial statements of the Group as a whole.

All amounts reported to the Chief Executive Officer, being the chief operating decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

ii. Geographic area

Revenues from external customers attributed to Australia and other countries is as follows:

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2023 2022
$ $
Australia 195,455 1,552,661
United States 347,795 78,669
Singapore 91,173 383,498
Total Revenue 634,422 2,014,828
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iii. Major customers

The Group has certain customers which represent more than 10% of the Group’s revenue from contracts with customers. Each customer is a customer of the 3D printing services and machine sales operating segment. Revenue for those customers is as follows:

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----- Start of picture text -----

2023 2022
% %
1 Customer 55% -
4 Customers - 83%
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29. Subsequent Events

i. On 20 July 2023, AML3D announced the sale of an industrial-scale ARCEMY[®] ‘X-Edition 6700’ Wire-arc Additive Manufacturing metal 3D printing system for 1.1 million to be located at the US Navy’s Additive Manufacturing Center of Excellence in Danville, Virginia.
ii. In mid August 2023, AML3D announced the signing of $2.4 million in additional contracts for the continuation of alloy testing and validation of metal 3D printed components for the US Navy.

30. Notes to the Statements of Cashflows

a. Reconciliation of Cash and Cash Equivalents

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----- Start of picture text -----

2023 2022
$ $
Cash and cash at bank 4,533,957 2,933,482
b. Reconciliation of loss for the year to net cash flows
used in operating activities
2023 2022
$ $
(Loss) for the year after
(5,436,253) (4,897,028)
income tax
Non-cash items
Depreciation and amortisation of
688,594 721,119
non-current assets
Expected credit losses 30,980 -
-
Share based payments 80,091
Gain on disposal of property,
(5,589) (37,865)
plant and equipment
Changes in assets and liabilities
Decrease / (increase) in trade
163,954 (165,609)
and other receivables
Decrease in prepayments and
199,280 5,013
other assets
Decrease / (increase) in
(269,917) 1,108,270
inventories
(Decrease) in trade and other
(41,834) (261,101)
payables
Increase / (decrease) in
883,831 (540,404)
contract liabilities
-
Increase in financial liabilities 212,695
Increase in employee benefits 63,978 52,407
Net cash (used) in
(3,642,885) (3,802,503)
operating activities
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31. Financial Risk Management

The Group’s financial risk management is predominantly controlled by the Managing Director and Chief Financial Officer with the oversight of the Board and the Audit and Risk Committee.

a. Financial Risk Management

The Group enters into financial instruments which consist of deposits with banks, accounts receivable and payables. The totals for each category of financial instrument is shown in this Note. The Group has not entered into any derivative financial instruments.

b. Significant Accounting Policies

Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.

c. Interest Rate Risk Management

The Group is exposed to interest rate risk as it places funds at floating interest rates. In the current low interest environment, the Group is exposed to minimal interest rate risk.

d. Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of dealing only with creditworthy counterparties (where such information is available) and obtaining sufficient collateral (such as up front deposits before commencing work), as a means of mitigating the risk of financial loss from defaults. The Group’s exposure is constantly monitored.

Except for one customer, the Group does not have any significant credit risk exposure to any one single counterparty or any group of counterparties having similar characteristics. Sales to that customer are denominated in Singapore dollars and the Group has not hedged the receivable.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

The quality of debtors is monitored by the ageing of open invoices in accounts receivable. Trade receivables are analysed as follows:

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2023 2022
$ $
Not impaired
- Within trade terms 269,792 199,923
- Past due but not impaired 131,600 107,632
Impaired
- Past due and impaired 40,000 9,020
Total trade receivables 441,392 316,675
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Receivables that are past due but not impaired comprise customers which do not have any objective evidence that the receivable may be impaired. The Company knows why certain customers are past due and expects that they will be paid.

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

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An allowance for expected credit losses has however been recognised at 30 June 2023 for balances past due.

Analysis of trade receivables:

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----- Start of picture text -----

Not past Due 60-90 days >90 days Total
Per aged debtors report
$ $ $ $
2023
Trade receivables 269,791 - 171,600 441,391
Total 269,791 - 171,600 441,391
2022
Trade receivables 199,923 80,861 35,891 316,675
Total 199,923 80,861 35,891 316,675
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For the year ended 30 June 2023, an expense has been recognised during the financial year then ended for the allowance for expected credit losses of $30,980 (2022: Nil).

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Maturity profile of financial instruments
Expected Maturity dates
Weighted Interest Bearing
average interest Non interest
rate (%) Less than 1 year 1 - 5 years Total
bearing
$ $ $
$
2023
Financial Assets
Other financial assets 4% 56,000 - - 56,000
Cash and cash equivalents 2% 4,533,957 - - 4,533,957
Trade and other receivables - - 580,839 580,839
Total 4,589,957 - 580,839 5,170,796
Financial Liabilities
- -
Trade and other payables 469,901 469,901
Contract liabilities - - 867,700 867,700
Borrowings 5% 178,608 - - 178,608
Lease liabilities 5% 169,507 - - 169,507
Total 348,115 - 1,337,601 1,685,716
2022
Financial Assets
Other financial assets 1% 56,000 - - 56,000
Cash and cash equivalents 1% 2,933,482 - - 2,933,482
Trade and other receivables - - 771,534 771,534
Total 2,989,482 - 771,534 3,761,016
Financial Liabilities
- -
Trade and other payables 415,239 415,239
Contract Liabilities - - 5,624 5,624
Borrowings 4% 189,062 - - 189,062
Lease liabilities 5% 175,025 185,818 - 360,843
Total 364,087 185,818 420,863 970,768
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The amounts listed above equate to fair value. The cashflows in the maturity analysis above are not expected to occur significantly earlier than disclosed.

e. Liquidity Risk Management

Liquidity risk arises from the possibility that the Group may encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities.

The Group manages liquidity risk by maintaining adequate cash reserves and monitoring its actual and forecast cashflows and financial obligations. The Group endeavours to pay its creditors within agreed trade terms.

f. Currency Risk

The Group operates in international markets, however, products and services are invoiced in Australian dollars where possible, in order to eliminate the risk of exposure to foreign currency rate risks.

32. Information relating to AML3D Limited (the Parent)

The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards.

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----- Start of picture text -----

Statement of Financial Position
2023 2022
$ $
Assets
Current assets 6,410,291 5,427,220
Non-current assets 2,468,145 2,970,516
Total assets 8,878,436 8,397,736
Liabilities
Current liabilities 1,853,087 1,005,945
Non-current liabilities 58,602 218,994
Total liabilities 1,911,689 1,224,939
Net assets 6,966,747 7,172,797
Equity
Issued capital 26,305,906 20,641,272
Reserves 738,623 672,965
Accumulated losses (20,077,782) (14,141,440)
Total equity 6,966,747 7,172,797
Statement of Profit or Loss
and Other Comprehensive Income
2023 2022
$ $
Total loss for the year 5,936,342 4,652,918
Total comprehensive
5,936,342 4,652,918
loss for the year
----- End of picture text -----

The parent entity has entered into two bank guarantees represented by term deposits, the first for $36,000 in respect of the leased premises at Edinburgh, Adelaide, and the second for $20,000 in respect of a corporate credit card facility provided by the Group’s banker Commonwealth Bank of Australia. Other than these guarantees, the parent entity had no contingent liabilities at 30 June 2023.

33. Guarantees

AML3D has the following guarantee in place:

A guarantee secured by a bank term deposit of $36,000 for the lease of its premises at 35 Woomera Avenue, Edinburgh SA 5111.
A guarantee secured by a bank term deposit of $20,000 for a corporate credit card facility provided by the Group’s banker Commonwealth Bank of Australia.

34. Capital Commitments

At 30 June 2023, AML3D had no commitments for capital equipment ordered but not yet received (2022: Nil).

35. Borrowings

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----- Start of picture text -----

2023 2022
$ $
Insurance premium funding 178,608 189,062
Total borrowings 178,608 189,062
Reconciliation of movements in borrowings
Balance at the beginning -
189,062
of the year
Additional borrowings 225,910 212,695
Repayment of borrowings (236,364) (23,633)
Balance at the end of the year 178,608 189,062
----- End of picture text -----

AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Directors’ Declaration

In accordance with a resolution of the Directors of AML3D Limited (Company), the Directors of the Company declare that:

In the opinion of the Directors, the financial statements and notes for the year ended 30 June 2023 are in accordance with the Corporations Act 2001 and:
a. Comply with Accounting Standards, which, as stated in basis of preparation Note 2 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and
b. Give a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and its performance for the year ended on that date;
In the opinion of the Directors, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer.

==> picture [79 x 32] intentionally omitted <==

Noel Cornish AM Chairman

Dated this 23rd day of August 2023

Additional Shareholder Information

The following information is current as at 21 August 2023:

Stock Exchange Listing

Admitted to the Official List of ASX on 16 April 2020; quotation commenced on 20 April 2020.

Shareholding

Following are details of fully paid ordinary shares on issue:

ASX:AL3

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----- Start of picture text -----

Fully Paid Number of Number of 20 Largest Shareholders – Ordinary Shares
Ordinary Shares on Issue holders shares
Number of
Name %
Quoted on ASX 3,040 235,553,713 Shares held
MR ANDREW MICHAEL
1 34,949,850 14.84
There are 6 holders of 9,500,000 unquoted options each of which CLAYTON SALES
converts to 1 share upon exercise. KYLIE MARIE COLLUM
2 7,002,801 2.97

Distribution of Shareholders DEOR CAPITAL AND
2 INVESTMENTS PTY LTD 7,002,801 2.97
Number of Percentage of
Range of Units
Holders total securities
4 GLOBAL ASSET SOLUTIONS\C 6,987,420 2.97
1 – 1,000 100 0.03%
MR KENNETH JOSEPH HALL
5 6,534,516 2.77
1,001 – 5,000 926 1.17%
TOBIAS LEE KLINE
5,001 – 10,000 555 1.86% 6 3,501,400 1.49

10,001 – 100,000 1,155 17.48% RICKY JAMES LEGG
6 3,501,400 1.49
100,001 and over 304 79.46%
CITICORP NOMINEES
Total 3,040 100.00% 8 3,212,082 1.36
PTY LIMITED
FLODOR PTY LTD
Unmarketable Parcels 9 3,123,365 1.33

The number of shareholders holding less than a marketable MEWTWO GLOBAL
10 3,000,000 1.27
parcel is 1,204. INVESTMENTS
ARETZIS COMMERCIAL PTY
Substantial Shareholders 11 LTD Substantial shareholders as disclosed by notices received by the FUND A/C>
Company as at 21 August 2023 are: 12 SCINTILLA STRATEGIC 2,800,000 1.19
INVESTMENTS LIMITED
INSTANT EXPERT PTY LIMITED
Number of 13 2,777,777 1.18
Shareholder

ordinary shares
14 MR BENJAMIN FEGAN 2,192,250 0.93
Andrew Michael Clayton Sales 36,199,850
MR CRAIG GRAEME CHAPMAN
15 2,158,612 0.92
Voting Rights
TOBIAS LEE KLINE + PRUE
The voting rights attached to each class of equity security 16 LOUISE KLINE are as follows: SUPERANNUATION A/C>
Ordinary Shares: 16 TRIHOLM INVESTMENTS 2,100,840 0.89
PTY LTD
• Each ordinary share is entitled to one vote when a poll is
called, otherwise each member at a meeting or by proxy AV&RV PTY LTD
18 1,740,000 0.74
has one vote on a show of hands.
Other:
19 MR DANIEL FISHER 1,500,000 0.64
• Options do not confer upon the holder an entitlement to vote
on any resolutions proposed by the Company except as 19 HACKETT CP NOMINEES PTY LTD 1,500,000 0.64

required by law.
Total 100,487,074 42.66
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AML3D Limited // ASX: AL3 // ABN 55 602 857 983

Corporate Directory

AML3D Limited

ABN 55 602 857 983

Directors

Noel Cornish Non-Executive Chairman Sean Ebert Executive Director Andrew Sales Executive Director

Company Secretary

Kaitlin Smith

Registered Office and Principal Place of Business

35 Woomera Avenue Edinburgh SA 5111 Ph: +61 8 8258 2658

Share Register

Computershare Investor Services – Australia

Level 5, 115 Grenfell Street Adelaide SA 5000

Ph: (08) 8236 2300 / 1300 850 505 Website: www.computershare.com.au

Auditor

William Buck (SA)

Level 6, 211 Victoria Square Adelaide SA 5000

Australia

35 Woomera Avenue, Edinburgh SA 5111 Australia +61 8 8258 2658

[email protected] www.aml3d.com

Australian Patent 2019251514 Japan Patent 7225501 European Patent 3781344

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----- Start of picture text -----

DNV.COM/AF ADDITIVE MANUFACTURING FACILITY QUALIFICATION Quality Certified AU1769B-QC
PPROVEDMARITIMEMANUFACTURE
CERTIFIED ISO 9001:2015
A R
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WAM[ ®] : Wire Additive Manufacturing. AML3D[ ®] , WAM[ ®] , WAMSoft[ ®] , ARCEMY[ ®] are all registered trademarks for AML3D[ ®] .

AI assistant

AML3D LIMITED — Annual Report 2023

64357_rns_2023-08-23_5dbf0980-6285-44a7-baaf-d0a7b1479c24.pdf

Annual Report 2023

Chairman’s & Chief Executive Officer’s Report

Dear Shareholders,

Financial Results

Immediate term value drivers – ARCEMY[®] sales

Immediate term value drivers

– Contract manufacturing

Medium and longer-term value drivers

– Maintaining Technology Leadership

Capital Management

Management changes

Events subsequent to FY2023

Board and Governance

Outlook

Board

Noel Cornish AM //

Andrew Sales //

Sean Ebert //

Kaitlin Smith //

Directors’ Report

Directors

Principal Activities

The principal activities of AML3D during the financial year were to:

Information Relating to Directors and Company Secretary

Operating and Financial Review

Review of Operations

Company Overview

Material Business Risks

Market Acceptance of New Technology

Financial Results and Position

Customer Conversion

Business Strategies and Prospects

Reliance on Key Personnel

Access to Raw Materials

Accreditation

Climate Change Risk

Research & Development and Technical Risk

Intellectual Property

Data Loss and Cyber Security

Environmental and Sustainability Risk

Risk Management

Sustainability

Environmental Regulation

Significant Changes in the State of Affairs

Significant Events after the Balance Date

Dividends

Corporate Governance

Directors’ Meetings

Directors’ Shareholdings

Directors’ and Senior Executives’ Remuneration

Remuneration Report (audited)

1. Remuneration Governance

Functions

2. Directors and Key Management Personnel (KMP)

Executive Remuneration

4. Remuneration Components

Non-Executive Directors

3. Remuneration Policy

Executives

Non-Executive Director Remuneration

5. Relationship between Remuneration and Group Performance

6. Directors’ and KMP Remuneration

Remuneration for the financial year ended 30 June 2023

Chief Technology Officer

7. Key Terms of Employment Contracts

Non-Executive Directors

Chief Financial Officer

Remuneration for the financial year ended 30 June 2022

Executives

Interim Chief Executive Officer

8. Terms and Conditions of Share-based Payment Arrangements

Concessional Incentive Option Plan

Performance Rights and Option Plan

9. Directors’ and KMP Equity Holdings

10. Other Transactions with Directors and KMP

Related Party Transactions

Options and Performance Rights

AML3D LIMITED Annual Report 2023