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CODEIFAI LIMITED — Annual Report 2021
Feb 27, 2022
64630_rns_2022-02-27_9fc41909-3bdb-4132-8185-654dd7976d32.pdf
Annual Report
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ASX ANNOUNCEMENT
ASX: YPB | 28 February 2022
Preliminary financial results FY2021 show improvements
-
Improved results despite COVID-19 impacts on operations
-
Revenue up 8% and Loss down 69% year on year
-
Enters 2022 debt free following retirement of Convertible Loan of $1.65m
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2021 set a powerful platform for 2022
Anti-counterfeit and consumer engagement solutions provider YPB Group Limited (ASX: YPB) presents highlights of preliminary financial results for the year ended 31 December 2021.
A full commentary will accompany the audited financial statements in March 2022.
Channel Partner and customer wins, patent grants, R&D breakthroughs and tight cost control in 2021 set the Company on a strong footing for 2022.
The Company’s revolutionary MotifMicro1 technology which is an invisible tracer readable by a smartphone is currently being trialled in USA, Australia, Asia and EMEA regions with commercial success as the next step towards meaningful revenues.
YPB Executive Chairman, John Houston said: “Despite COVID restrictions in 2021 severely hampering our progress we are pleased with the prospects for 2022. Our technologies are ready for a world requiring widespread anti-counterfeit solutions at smartphone level and we are ready to implement.”
This announcement has been authorised by the Board of YPB Group Limited.
Ends.
For further information please contact:
YPB investor enquiries Ben Jarvis [email protected] 0413 150 448 [email protected] Six Degrees Investor Relations
YPB Group Limited Suite 1, 295 Rokeby Road Subiaco, Western Australia 6008, AUSTRALIA
ypbsystems.com
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About YPB Group
YPB Group Limited (ASX:YPB) is an Australia-based product authentication and consumer engagement solutions provider. YPB's proprietary smartphone enabled technology suite allows consumers to confirm product authenticity and, for brands, that triggers consumers’ engagement.
The combination of YPB’s smartphone authentication solutions and its SaaS Connect platform, creates ‘smart’ product packaging, opening cost-effective, digital and direct marketing channels between brands and their consumers. Connect gathers actionable data on consumer preferences. It can then host tailored marketing campaigns directly back to the scanning smartphone.
YPB is currently focused on the rapidly growing Australian, South-East Asian, and Chinese markets. Its focus is dairy, cannabis, alcohol and cosmetics where the viral growth of fake products, particularly in Asia, affects brand value and endangers consumers. To learn more please visit: ypbsystems.com
YPB Group Limited Suite 1, 295 Rokeby Road Subiaco, Western Australia 6008, AUSTRALIA
ypbsystems.com
1. Company details
Name of entity: YPB Group Ltd
ACN: 108 649 421 Reporting period: For the year ended 31 December 2021 Previous period: For the year ended 31 December 2020
2. Results for announcement to the market
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| $’000 | % | $’000 | $’000 | |||
| Revenuesfromordinaryactivities | up | 48 | 7.8% | to | 664 | 616 |
| Lossfromordinaryactivitiesafter | ||||||
| taxfortheyearattributableto | ||||||
| theownersofYPBGroupLtd | down | 7,679 | 68.6% | to | (3,514) | (11,193) |
| Lossfortheyearattributableto | ||||||
| theownersofYPBGroupLtd | up | 7,679 | 68.6% | to | (3,514) | (11,193) |
Comments
The loss for the Consolidated Entity, after providing for income tax amounted to $3,514,000 (2020: $11,193,000). The operating loss includes a number of non � cash and significant items including impairment loss on intangible assets, fair value adjustments, share � based payments and foreign exchange losses which leave an underlying cash outflow from operations of $3,533,000 (2020: $3,449,000). Revenue for the year was $664,000 (2020: $616,000) which represents a 7.8% increase from the prior year.
3. Net tangible assets/(liabilities)
| . Nettangibleassets/(liabilities) | ||
|---|---|---|
| 2021 | 2020 | |
| Cents | Cents | |
| Nettangibleassets/(liabilities)perordinarysecurity | (0.001) | (0.02) |
The net tangible assets/(liabilities) backing per ordinary security of (0.001) cents presented above is inclusive of right � of � use assets and lease liabilities. As the right � of � use assets were fully depreciated during 2021 due to expiry of the office lease agreement in Thailand, and the new office lease agreement is for a period of 12 months, the net tangible asset/(liabilities) backing per security if excluding right � of � use assets and lease liabilities as at 31 December 2021, would remain as (0.001) cents.
Net tangible assets are showing a negative value for the reporting and comparative periods due to the majority of recorded assets being intangible.
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4. Gain and loss of control over entities
On 24 February 2021, the Consolidated Entity lost control of nTouch IP Pty Ltd, one non � operating
dormant entity domiciled in Australia, as it was deregistered with ASIC as of that date.
Another one of the non � operating dormant entities domiciled in Australia is currently under strike � off action with ASIC and the Consolidated Entity still maintains control over it.
Further details are contained in Note 15 to the financial statements.
5. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
6. Dividend reinvestment plans
There are no dividend reinvestment plans for the year ended 31 December 2021 (2020: Nil).
7. Details of associates and joint venture entities
No changes since the previous annual report was released.
8. Foreign entities
Details of origin of accounting standards used in compiling the report:
There has been no change in foreign � owned subsidiaries to those reported for the year ended 31 December 2021 other than as outlined in item 4 above. All group entities comply with International Financial Reporting Standards (‘IFRS’).
9. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements for the year ended 31 December 2021 are in the process of being audited.
10.Attachments
Details of attachment (if any):
Not applicable.
Signed
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John Houston
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Date: 28 February 2022
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YPB Group Ltd ACN: 108 649 421
Full Year Preliminary Report 31 December 2021
3
YPB Group Ltd Contents For the year � ended 31 December 2021
Contents
| Consolidatedstatementofprofitorlossandothercomprehensiveincome | 5 |
|---|---|
| Consolidatedstatementoffinancialposition | 6 |
| Consolidatedstatementofchangesinequity | 7 |
| Consolidatedstatementofcashflows | 9 |
| Notestotheconsolidatedfinancialstatements | 10 |
4
YPB Group Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 31 December 2021
| Note | 2021 | 2020 | |
|---|---|---|---|
| $’000 | $’000 | ||
| Revenue | 2 | 664 | 616 |
| Expenses | |||
| Consulting | (702) | (706) | |
| Depreciationandamortisationexpense | (101) | (225) | |
| Directors’fees | (80) | � | |
| Employeebenefitsexpense | (1,667) | (2,064) | |
| Financecosts | 3 | (227) | (367) |
| Impairmentofgoodwillandotherintangibleassets | (503) | (333) | |
| Marketingcosts | (43) | (89) | |
| InvestorRelations | (322) | (46) | |
| Productioncosts | (32) | (36) | |
| Professionalfees | (184) | (417) | |
| Rentalexpenses | (85) | (77) | |
| Researchanddevelopmentcosts | (384) | (355) | |
| Regulatoryexpenses | (190) | (96) | |
| Share�basedpayments | (8) | (161) | |
| Travellingexpenses | (39) | (65) | |
| Otherexpenses | (745) | (791) | |
| Gain/(loss)onextinguishmentoffinancialliabilitiesvia | |||
| equitysettlement | 46 | (4,828) | |
| Exchangeloss | 1,088 | (1,148) | |
| Lossbeforeincometax(expenses)/benefit | 4 | (3,514) | (11,188) |
| Incometax(expense)/benefit | � | (5) | |
| Lossafterincometax(expense)/benefitfromcontinuing | (3,514) | (11,193) | |
| operationsforthefull�yearattributabletotheownersof | |||
| YPBGroupLtd | |||
| Othercomprehensiveincome | |||
| Itemsthatmaybereclassifiedsubsequentlytoprofitorloss | |||
| Exchangedifferencesontranslationofforeignoperations | (749) | 1,011 | |
| Othercomprehensiveincomeforthefull�year,netoftax | (749) | 1,011 | |
| Totalcomprehensivelossfortheyearperiodattributable | |||
| totheownersofYPBGroupLtd | (4,263) | (10,182) | |
| Cents | Cents | ||
| Basicanddilutedearningspershare | 17 | (0.07) | (0.64) |
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
5
YPB Group Ltd Consolidated statement of financial position As at 31 December 2021
| Note | 2021 | 2020 | |
|---|---|---|---|
| $’000 | $’000 | ||
| Assets | |||
| Currentassets | |||
| Cashandcashequivalents | 5 | 531 | 1,559 |
| Tradeandotherreceivables | 6 | 321 | 312 |
| Otherassets | 7 | 330 | 385 |
| Inventories | 8 | 209 | 216 |
| 1,391 | 2,472 | ||
| Non�currentassets | |||
| Plantandequipment | 9 | 50 | 61 |
| Right�of�useassets | 9 | � | 78 |
| Intangibles | 10 | 5,420 | 5,580 |
| 5,470 | 5,719 | ||
| Totalassets | 6,861 | 8,191 | |
| Liabilities | |||
| Currentliabilities | |||
| Tradeandotherpayables | 11 | 1,476 | 1,862 |
| Leaseliabilities | � | 68 | |
| Financialliabilities | 12 | � | 1,598 |
| 1,476 | 3,528 | ||
| Totalliabilities | 1,476 | 3,528 | |
| Netassets | 5,385 | 4,663 | |
| Equity | |||
| Issuedcapital | 13 | 81,774 | 77,665 |
| Reserves | 14 | 3,040 | 4,981 |
| Accumulatedlosses | (79,429) | (77,983) | |
| Totalequity | 5,385 | 4,663 |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
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YPB Group Ltd
Consolidated statement of changes in equity For the year ended 31 December 2021
| PBGroupLtd onsolidatedstatementofchangesinequity ortheyearended31December2021 |
|||||||
|---|---|---|---|---|---|---|---|
| Foreign | Share� | ||||||
| currency | Issued | based | |||||
| Issued | translation | options | payment | Accumulated | Total | ||
| capital | reserve | reserve | reserve | losses | equity | ||
| Consolidated | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Balanceat1January2021 | 77,665 | 2,941 | 2,040 | � | (77,983) | 4,663 | |
| Priorperiodadjustment1 | � | � | � | � | 28 | 28 | |
| Adjustedbalanceat1January2021 | 77,665 | 2,941 | 2,040 | � | (77,955) | 4,691 | |
| Lossafterincometaxbenefitfortheyear | � | � | � | � | (3,514) | (3,514) | |
| Othercomprehensiveincome/(loss)fortheyear,netoftax | � | (749) | � | � | � | (749) | |
| Totalcomprehensivelossfortheyear | � | (749) | � | � | (3,514) | (4,263) | |
| Transactionswithownersintheircapacityasowners: | |||||||
| Sharesissued,netoftransactioncosts | 2,985 | � | � | � | � | 2,985 | |
| Performancerightsexercisedduringtheyear | � | � | � | � | � | � | |
| Performancerightsissuedduringtheyear | � | � | � | 81 | � | 81 | |
| Optionsgrantedduringtheyear | � | � | 767 | � | � | 767 | |
| Optionsexercisedduringtheyear | 750 | � | (1,275) | � | 1,275 | 750 | |
| Optionslapsedduringtheyear | � | � | (765) | � | 765 | � | |
| Share�basedpayments | 374 | � | � | � | � | 374 | |
| Balanceat31December2021 | 81,774 | 2,192 | 767 | 81 | (79,429) | 5,385 |
Note 1: The prior period adjustment arose from YPB Limited (“YPB HK”), a wholly � owned subsidiary of the Consolidated Entity, resulting from the audit of its financial statements for periods 1 April 2020 to 31 December 2020 completed during 2021.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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YPB Group Ltd Consolidated statement of changes in equity For the year ended 31 December 2021
| PBGroupLtd onsolidatedstatementofchangesinequity ortheyearended31December2021 |
||||||
|---|---|---|---|---|---|---|
| Foreign | Share� | |||||
| currency | Issued | based | ||||
| Issued | translation | options | payment | Accumulated | Total | |
| capital | reserve | reserve | reserve | losses | equity | |
| Consolidated | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 |
| Balanceat1January2020 | 69,126 | 1,139 | 960 | 400 | (66,950) | 4,675 |
| Reclassificationofpriorperiodsforeignexchangegain/(loss) | ||||||
| relatingtonetinvestmententities2 | � | 791 | � | � | (791) | � |
| Priorperiodadjustment3 | � | � | � | � | (9) | (9) |
| Adjustedbalanceat1January2020 | 69,126 | 1,930 | 960 | 400 | (67,750) | 4,666 |
| Lossafterincometaxbenefitfortheyear | � | � | � | � | (11,193) | (11,193) |
| Othercomprehensiveincomefortheyear,netoftax | � | 1,011 | � | � | � | 1,011 |
| Totalcomprehensivelossfortheyear | � | 1,011 | � | � | (11,193) | (10,182) |
| Transactionswithownersintheircapacityasowners: | ||||||
| Sharesissued,netoftransactioncosts | 7,978 | � | � | � | � | 7,978 |
| Performancerightsexercisedduringtheyear | 561 | � | � | (561) | � | � |
| Performancerightsissuedduringtheyear | � | � | � | 161 | � | 161 |
| Optionsgrantedduringtheyear | � | � | 2,040 | � | � | 2,040 |
| Optionslapsedduringtheyear | � | � | (960) | � | 960 | � |
| Balanceat31December2020 | 77,665 | 2,941 | 2,040 | � | (77,983) | 4,663 |
Note 2: This reclassification adjustment arose from a change in significant accounting policy to reclassify monetary items that are receivable from or payable to foreign operations as part of the Group’s net investment in those foreign operations. Consequently, foreign exchange gain/(loss) are classified as Other Comprehensive Income in the Statement of Profit or Loss, and Foreign Currency Translation Reserve in the Statement of Changes in Equity.
Note 3: The prior period adjustment arose from YPB Limited (“YPB HK”), a wholly � owned subsidiary of the Consolidated Entity, resulting from the audit of its financial statements for periods 1 April 2019 to 31 March 2020 completed during 2020.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
8
YPB Group Ltd Consolidated statement of cash flows For the year ended 31 December 2021
| 2021 | 2020 | ||
|---|---|---|---|
| Note | $’000 | $’000 | |
| Cashflowsfromoperatingactivities | |||
| Receiptsfromcustomers | 669 | 548 | |
| Paymentstosuppliersandemployees | (4,007) | (3,780) | |
| Interestreceived | 2 | 2 | |
| Financecosts | (197) | (219) | |
| Netcashusedinoperatingactivities | 16 | (3,533) | (3,449) |
| Cashflowsfrominvestingactivities | |||
| Paymentsforplantandequipment | (12) | (24) | |
| Proceedsfromdisposalofplantandequipment | 14 | � | |
| Fundsondepositinescrow | (70) | (130) | |
| Netcashusedininvestingactivities | (68) | (154) | |
| Cashflowsfromfinancingactivities | |||
| Proceedsfromissueofshares(netofcosts) | 3,518 | 3,949 | |
| Proceedsfromexerciseofoptions | 750 | � | |
| Proceedsfromborrowings | � | 1,200 | |
| Repaymentofborrowings | (1,615) | (600) | |
| Paymentofleaseliabilities | (69) | (148) | |
| Netcashfromfinancingactivities | 2,584 | 4,401 | |
| Net(decrease)/increaseincashandcash | |||
| equivalents | (1,017) | 798 | |
| Cashandcashequivalentsatthebeginningofthe | |||
| financialyear | 1,559 | 774 | |
| Effectofmovementsinexchangeratesoncashheld | (11) | (13) | |
| Cashandcashequivalentsattheendofthe | |||
| financialyear | 6 | 531 | 1,559 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 1. Operating segments
The Consolidated Entity is organised into operating segments as outlined below.
Management determines operating segments based on the internal reports that are reviewed and used by the Board of Directors, who are identified as the Chief Operating Decision Makers ('CODM'), in assessing performance and in determining the allocation of resources.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the consolidated financial statements.
Types of products and services
For the year ended 31 December 2021, management considers the company to offer its client base a complete end � to � end service and product offering, hence considering its main operations to be represented by one business segment.
The bundled “complete solution offering” encompasses a range of products and services which are available to customers, including:
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Digital engagement platform that provides brand engagement with end consumers to promote product authenticity;
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Covert forensic products which are invisible particles (‘tracers’) fused into a product or packaging during or after the manufacturing process and are detectable using YPB’s proprietary scanner or smartphone mobile devices;
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Forensic laboratory services for the examination of counterfeit products; and
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Security consulting services provided to governments, corporations and intellectual property owners for the deterrence of counterfeiting, grey markets, product diversions and fraud.
(a) Geographical information
| 2021 | Reportablesegments | Reportablesegments | |||
|---|---|---|---|---|---|
| Australia | People’s | Thailand United |
Total | ||
| Republicof | Statesof | ||||
| In$’000 | China | America | |||
| Externalrevenue | 317 | 323 | � | � | 640 |
| Interestincome | 1 | � | � | � | 1 |
| Otherincome | � | 6 | 17 | � | 23 |
| Totalrevenue | 318 | 329 | 17 | � | 664 |
| 2020 | Reportablesegments | ||||
| Australia | People’s | Thailand United |
Total | ||
| Republicof | Statesof | ||||
| In$’000 | China | America | |||
| Externalrevenue | 201 | 328 | 45 | � | 574 |
| Interestincome | 2 | 7 | � | � | 9 |
| Otherincome | 33 | � | � | � | 33 |
| Totalrevenue | 236 | 335 | 45 | � | 616 |
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
(b) Assets
| 2021 In$’000 Currentassets Non�currentassets Totalassets 2020 In$’000 Currentassets Non�currentassets Totalassets |
Reportablesegments Australia People’s Republicof China Thailand United Statesof America Total 755 307 329 1 1,392 � 12 30 5,427 5,469 |
|---|---|
| 755 319 359 5,428 6,861 |
|
| Reportablesegments Australia People’s Republicof China Thailand United Statesof America Total 1,808 345 318 1 2,472 � 7 118 5,594 5,719 |
|
| 1,808 352 436 5,595 8,191 |
Note 2. Revenue
| Consolidated | Consolidated | Consolidated | |
|---|---|---|---|
| 2021 | 2020 | ||
| $’000 | $’000 | ||
| Revenue | |||
| Saleofgoodsandservices | 640 | 574 | |
| Otherrevenue | |||
| Interest | 1 | 2 | |
| Otherincome | 23 | 40 | |
| 664 | 616 |
During the year, the Group received a total of $23,000 (2020: $40,000) as subsidies from the government of local jurisdictions relating to the various COVID � 19 financial assistance packages such as the social security insurance subsidies in China, and COVID � 19 financial support in Thailand.
Note 3. Finance cost
| Consolidated | Consolidated | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Note | $’000 | $’000 | |
| Interestandfinancechargespaid/payableforlease | |||
| liabilitiesandfinancialliabilitiesnotatfairvaluethrough | |||
| profitorloss | 4 | 227 | 367 |
| 227 | 367 |
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 4. Loss for the year
The loss for the year includes the following expenses:
| Consolidated | Consolidated | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Note | $’000 | $’000 | |
| Financecosts | 3 | 227 | 367 |
| Researchanddevelopmentcosts | 384 | 355 | |
| Depreciationandamortisation | 101 | 225 | |
| Inventorieswrittenoff | (2) | 13 | |
| Baddebtswrittenoff | � | 33 | |
| Impairmentofintangibleassets | 503 | 333 | |
| Rentalexpenseonoperatingleases–minimumlease | |||
| payments | 85 | 77 | |
| Loss/(gain)onextinguishmentoffinancialliabilitiesvia | |||
| equitysettlement | (46) | 4,828 | |
| 1,252 | 6,231 |
Note 5. Cash and cash equivalents
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Cashonhand | 2 | 2 |
| Cashatbank | 529 | 1,545 |
| Undepositedfunds | � | 12 |
| 531 | 1,559 |
Note 6. Trade and other receivables
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Tradereceivables | 130 | 137 |
| Less:allowancefordoubtfuldebts | (70) | (53) |
| 60 | 84 | |
| GST/VATreceivables | 167 | 205 |
| Otherreceivables | 94 | 23 |
| 321 | 312 |
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 7. Other assets
| Consolidated | Consolidated | Consolidated | |
|---|---|---|---|
| 2021 | 2020 | ||
| $’000 | $’000 | ||
| Escrowaccount–(i) | 200 | 130 | |
| Rentaldeposits | 34 | 58 | |
| Prepaidrent | 4 | 4 | |
| Prepayments | 90 | 192 | |
| Otherreceivables | 2 | 1 | |
| 330 | 385 |
(i): During the year, the Group deposited an additional $70,000 (2020: $130,000) into an escrow account for the purpose of a commercial dispute against an external party. The monies are placed in an interest � bearing account for a period of six months from the date of deposit.
Note 8. Inventories
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Finishedgoods–atcost | 209 | 218 |
| Less:provisionforslow�movingstock | � | (2) |
| 209 | 216 |
Note 9. Plant and equipment & Right � of � use assets
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Plantandequipment–atcost | 206 | 554 |
| Less:accumulateddepreciation | (156) | (493) |
| 50 | 61 | |
| Right�of�useasset–atcost | 387 | 381 |
| Less:accumulateddepreciation | (387) | (303) |
| � | 78 |
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial years are set out below:
| Right�of�use | Plantand | Total | |
|---|---|---|---|
| assets | equipment | ||
| Consolidated | $’000 | $’000 | $’000 |
| Balanceat1January2021 | 78 | 61 | 139 |
| Additions | � | 12 | 12 |
| Disposals | � | (18) | (18) |
| Depreciationexpense | (76) | (25) | (101) |
| Exchangedifferences | (2) | 20 | 18 |
| Balanceat31December2021 | � | 50 | 50 |
| Balanceat1January2020 | 234 | 119 | 353 |
| Additions | � | 24 | 24 |
| Depreciationexpense | (144) | (81) | (225) |
| Exchangedifferences | (12) | (1) | (13) |
| Balanceat31December2020 | 78 | 61 | 139 |
Note 10. Intangibles
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Goodwill–atcost | 3,089 | 3,089 |
| Less:Accumulatedimpairmentlosses | (3,089) | (3,089) |
| � | � | |
| Intellectualproperty–atcost | 16,250 | 16,250 |
| Less:Accumulatedamortisation | (4,942) | (4,942) |
| Less:Accumulatedimpairmentlosses | (11,308) | (11,308) |
| � | � | |
| Customerrelationships–atcost | 206 | 206 |
| Less:Accumulatedamortisation | (28) | (28) |
| Less:Accumulatedimpairmentlosses | (178) | (178) |
| � | � | |
| Patentlicencerights–atcost | 8,214 | 7,919 |
| Less:Accumulatedimpairmentlosses | (2,794) | (2,339) |
| 5,420 | 5,580 |
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YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial years are set out below:
| Patentlicence | ||
|---|---|---|
| Consolidated | rights | Total |
| $’000 | $’000 | |
| Balanceat31December2020 | 5,580 | 5,580 |
| Balanceat1January2021 | 5,580 | 5,580 |
| Impairmentloss | (503) | (503) |
| Effectofmovementinexchangerates | 343 | 343 |
| Balanceat31December2021 | 5,420 | 5,420 |
Intangible assets, other than goodwill, have finite useful lives. The current period amortisation charge for intangible assets is included under the depreciation and amortisation expense in the consolidated statement of profit or loss and other comprehensive income.
Patent Licence Rights
Effective in December 2017, the Group acquired MotifMicro’s patented licence rights to develop and commercialise its secure smartphone readable authentication technology. The non � replicable invisible micro � barcode technology works whereby the smartphone becomes the authentication device for uncopiable, invisible and indestructible physical marking technology.
In February 2018, a specific milestone under the agreement was successfully achieved with MotifMicro under which an additional $851,000 was payable to the vendors. The corresponding payable was settled via the issue of ordinary shares in October 2018.
As the technology is still in the development phase and not commercially available for use during the year ended 31 December 2021, the patent licence rights have not been amortised. The progress of the MotifMicro development in 2021 was advanced through a number of technological achievements together with two customers that signed paid trial agreements in 2021 to expedite its commercialisation in the market. The company is pursuing further opportunities to commercially release MotifMicro in the near future.
An independent expert valuation was conducted by Nexia Brisbane Forensics Pty Ltd (‘Nexia’) to perform a Value in Use (‘VIU’) valuation of the patent licence rights of MotifMicro. The independent expert provided a valuation of $5,420,000.
Management’s view is that there is a basis for their preferred valuation based on the opportunity pipeline of MotifMicro including the paid trial agreements signed in 2021. However, the global pandemic of COVID � 19 continues to impede on the business and therefore management has decided to adopt the carrying value provided by the independent expert of $5,420,000 which still reflects the intrinsic value of the licence rights. As a result, an impairment loss expense of $503,000 has been recognised to write � down the patent licence rights to $5,420,000. This loss can be reversed in future accounting periods to the extent that future recoverable amounts support a higher carrying value.
15
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
The following key assumptions and results arising from the VIU methodology applied are as follows:
-
Revenue growth from conversion of sales pipeline of $579,390 for FY2022 with an annual long � term growth rate of 12.5% until 2026 that follows the industry growth rate with a long � term annual growth rate of 2% thereafter;
-
EBITDA loss of $365,000 to be achieved by the end of FY2022;
-
Discounted cash flow modelling to 2033 with no terminal value;
-
A WACC of 25.77% (post � tax) assuming a long � term debt/equity ratio of nil; and
-
The group securing sufficient funding in future periods to continue as a going concern.
Note 11. Trade and other payables
Trade payables Other payables and accruals
| Consolidated | Consolidated |
|---|---|
| 2021 | 2020 |
| $’000 | $’000 |
| 658 | 972 |
| 818 | 890 |
| 1,476 | 1,862 |
Note 12. Financial liabilities
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Convertiblenotes(Sophisticatedinvestors)–(i) | � | 1,598 |
| � | 1,598 |
(i): On 17 November 2021, the Group made repayments totalling $1,649,000 as final payment of principal and interest to the convertible notes’ holders. The repayments discharged the Group from any further obligations.
16
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 13. Equity – Issued capital
| Consolidated 2021 2020 Shares Shares Ordinaryshares–fullypaid 6,117,833,701 4,228,358,979 Movementsinordinarysharecapital Details Date Balance 1January2021 Issuanceaspaymenttoserviceprovider 29January2021 Conversionofoptions 29January2021 Shareplacements 11March2021 Issuanceaspaymenttoserviceprovider 9April2021 Shareplacements 26October2021 Issuanceaspaymenttoserviceprovider 27October2021 Issuanceaspaymenttoemployee 29December2021 Less: Transaction costs on shares issued, net of tax Balance 31December2021 |
2021 2020 $’000 $’000 81,774 77,665 |
|---|---|
| Shares $’000 4,228,358,979 77,665 117,692,309 294 375,000,000 750 250,000,000 750 20,769,230 62 909,090,914 3,000 30,000,000 90 186,922,269 374 (1,211) |
|
| 6,117,833,701 81,774 |
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.
17
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 14. Equity – Reserves
| Consolidated | Consolidated | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Note | $’000 | $’000 | |
| Issuedoptionsreserve | (a) | 767 | 2,040 |
| Share�basedpaymentreserve | (b) | 81 | � |
| Foreigncurrencytranslationreserve | (c) | 2,192 | 2,941 |
| 3,040 | 4,981 |
- (a) Issued options reserve
The option reserve records items recognised as expenses on valuation of share options issued.
| Details Date Balance 1January2021 Optionsexercised 29January2021 Optionslapsed 29January2021 Optionsgranted 23February2021 Optionsgrantedtoinvestorsofcapitalraises 23February2021 Optionsgranted 9April2021 Optionsgrantedtoinvestorsofcapitalraise 9April2021 Optionsgrantedtoinvestorsofcapitalraise 29December2021 Balance 31December2021 |
Options $’000 664,000,000 2,040 (375,000,000) (1,275) (225,000,000) (765) 326,923,077 645 1,402,084,825 � 57,692,308 122 250,000,000 � 1,363,636,366 � |
|---|---|
| 3,464,336,576 767 |
- (b) Share � based payment reserve
The share � based payment reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services rendered.
| orservicesrendered. | ||
|---|---|---|
| Details | Date | $’000 |
| Balance | 1January2021 | � |
| PerformanceRightsissuedbutunvested | 30November2021 | 5 |
| PerformanceRightsissuedundershare�basedpayments | 23December2021 | 71 |
| PerformanceRightsissuedbutunvested | 31December2021 | 5 |
| Balance | 31December2021 | 81 |
- (c) Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
18
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 15. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries:
| ubsidiaries: | |||
|---|---|---|---|
| Ownership | Interest | ||
| PrincipalPlaceofBusiness/ | 2021 | 2020 | |
| Name | CountryofIncorporation | % | % |
| YPBLimited | HongKong | 100 | 100 |
| YPBTechnology(Beijing)Ltd | People’sRepublicofChina | 100 | 100 |
| ProductID&QualitySystems(Beijing)Ltd | People’sRepublicofChina | 100 | 100 |
| YPBGroup(USA)Inc. | USA | 100 | 100 |
| YPBIntellectualProductProtectionInc. | USA | 100 | 100 |
| YPBGroupInternationalCo.,Ltd | Thailand | 100 | 100 |
| YPBGroupCo.,Ltd | Thailand | 100 | 100 |
| nTouchAgencyPtyLtd | Australia | 100 | 100 |
| nTouchPtyLtd | Australia | 100 | 100 |
| YPBProductDevelopmentPtyLtd | Australia | 100 | 100 |
During the year, the Consolidated Entity restructured the legal entity organisation structure, and the following subsidiary was deregistered as a result:
| ollowingsubsidiarywa | sderegisteredasaresult: | |||
|---|---|---|---|---|
| PrincipalPlaceof | Ownership | Interest | ||
| Dateof | Business/Countryof | 2021 | 2020 | |
| Name | Deregistration | Incorporation | % | % |
| nTouchIPPtyLtd | 24February2021 | Australia | � | 100 |
19
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 16. Reconciliation of loss after income tax to net cash used in operating activities
| Consolidated | Consolidated | |
|---|---|---|
| 2021 | 2020 | |
| $’000 | $’000 | |
| Lossafterincometaxbenefitfortheyear | (3,514) | (11,193) |
| Adjustmentsfor: | ||
| Foreignexchangedifferences | (899) | 1,055 |
| Depreciationandamortisationexpense | 101 | 225 |
| Impairmentofintangibleassets | 503 | 333 |
| Share�basedpayments | 8 | 161 |
| Financecosts | 30 | 148 |
| Equity�settledtransactions | 617 | 285 |
| Net(gain)/lossonsettlementofdebts | (46) | 4,828 |
| Provisionforslow�movingstocks | (2) | � |
| Changeinoperatingassetsandliabilities,netoftheeffectsof | ||
| purchaseanddisposalsofsubsidiaries: | ||
| (Increase)/decreaseintradeandotherreceivables | (9) | (43) |
| (Increase)/decreaseinotherassets | 54 | (140) |
| Decrease/(increase)ininventories | 8 | 24 |
| Increase/(decrease)intradeandotherpayables | (384) | 868 |
| Netcashusedinoperatingactivities | (3,533) | (3,449) |
| ote17.Earningspershare | ||
| 2021 | 2020 | |
| $’000 | $’000 | |
| LossafterincometaxattributabletotheownersofYPBGroup | ||
| Limited | (3,514) | (11,193) |
| Number | Number | |
| Weightedaveragenumberofordinarysharesusedincalculating | ||
| basic/dilutedearningspershare | 5,069,846,859 | 1,755,907,764 |
| Cents | Cents | |
| Basic/Dilutedearningspershare | (0.07) | (0.64) |
Note 17. Earnings per share
There are 3,464,366,576 in share options issued but not included in diluted earnings per share as these would have an antidilutive effect on earnings per share. These potential ordinary shares are anti � dilutive as their conversion to ordinary shares would decrease loss per share. If these share options were included in the calculation of diluted earnings per share, the weighted average number of shares used in the denominator would be 8,534,213,435.
20
YPB Group Ltd Notes to the consolidated financial statements For the year ended 31 December 2021
Note 18. Subsequent events
The following events have occurred since 31 December 2021:
-
On 16 January 2022, as part of the Consolidated Entity restructuring of the legal entity organisation structure, the dormant entity, nTouch Agency Pty Ltd, was deregistered.
-
On 23 February 2022, 3,400,336,576 quoted options (ASX: YPBOB) exercisable at $0.005 each expired.
No other matter or circumstance has arisen since 31 December 2021 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years
21