HOLISTA COLLTECH LIMITED — Interim / Quarterly Report 2021

Aug 26, 2021

Holista Colltech Limited Appendix 4D Half-year report

1. Company details

Name of entity: Holista Colltech Limited ABN: 24 094 515 992 Reporting period: For the half-year ended 30 June 2021 Previous period: For the half-year ended 30 June 2020

2. Results for announcement to the market

			$
Revenues from ordinary activities	up	29.7% to	3,580,946
Loss from ordinary activities after tax attributable to the owners of Holista
Colltech Limited	down	87.1% to	(629,052)
Loss for the half-year attributable to the owners of Holista Colltech
Limited	down	87.1% to	(629,052)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the Group after providing for income tax and non-controlling interest amounted to $629,052 (30 June 2020: $4,875,851).

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 1.27	Previous period Cents 1.63

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

6. 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.

Holista Colltech Limited Appendix 4D Half-year report

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report.

11. Attachments

Details of attachments (if any):

The Interim Report of Holista Colltech Limited for the half-year ended 30 June 2021 is attached.

12. Signed

Signed _________ DR RAJEN MANICKA Executive Chairman and Chief Executive Officer

Date: 26 August 2021

Holista Colltech Limited

ABN 24 094 515 992

Interim Report - 30 June 2021

Holista Colltech Limited Corporate directory 30 June 2021

Directors Dr Rajen Manicka Mr Walter Edward Joseph (Appointed 28 June 2021) Mrs Loren King (Appointed 31 July 2021) Mr Daniel Joseph O’Connor (Resigned 31 July 2021) Mr Chan Heng Fai (Resigned 28 June 2021) Mr Blair Michelson (Resigned 28 June 2021) Company secretary Mr Walter Edward Joseph (Appointed 28 June 2021) Registered office and Principal Australia: Malaysia: place of business Level 5, Unit 1201, 12th Floor, 126 Phillip Street, Amcorp Trade Centre, PJ Tower Sydney, NSW, 2000 No. 18, Persiaran Barat 46000 Petaling Jaya, Malaysia Telephone: +603 7965 2828 Facsimile: +603 7965 2777 Email: enquiries@holistaco.com Website: www.holistaco.com Share register Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000 Telephone: 1300 850 505 (investors within Australia) Telephone: +61 (0)3 9415 4000 Email: web.queries@computershare.com.au Website: www.investorcentre.com Auditor Stantons Level 2, 1 Walker Avenue West Perth WA 6005, Australia Telephone: +61(0)8 9481 3188 Facsimile: +61(0)8 9321 1204 Solicitors Edwards Mac Scovell Level 1/8, St.Georges Terrace Perth WA 6005, Australia Telephone: +61(0)8 6245 0222 Bankers National Australian Bank Stock exchange listing Holista Colltech Limited shares are listed on the Australian Securities Exchange (ASX code: HCT). Media Enquiries Australia and New Zealand: Global: Vantage Point Partners WeR1 Consultants Pte Ltd Email: 1 Raffles Place #02-01 One Raffles Place brendon@vantagepointpartners.com.au Mall, Suite 332 Telephone: +61 409 341 613 Singapore 048616 Telephone: +65 6721 7161 Email: holista@wer1.net

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Holista Colltech Limited Directors' report 30 June 2021

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Holista Colltech Limited (referred to hereafter as 'Holista', the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2021.

Directors

The following persons were directors of Holista Colltech Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Dr Rajen Manicka Executive Chairman and Chief Executive Officer Mr Walter Edward Joseph Non-Executive Director (Appointed 28 June 2021) Mrs Loren King Non-Executive Director (Appointed 31 July 2021) Mr Daniel Joseph O’Connor Non-Executive Chairman (Resigned 31 July 2021) Mr Chan Heng Fai Non-Executive Director (Resigned 28 June 2021) Mr Blair Michelson Non-Executive Director (Resigned 28 June 2021)

Principal activities

The principal activities of the Group are the manufacture and sale of health-style products, focusing on the following core areas:

• Dietary Supplements

• Healthy Food Ingredients

• Ovine Collagen

• Infection Control Solutions

Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Operating and financial review

Holista posted a significantly improved result for the six months to 30 June 2021, compared to 1H 2020 as all of the Group’s four divisions posted stronger sales revenue.

Total interim Group revenue increased by 30% to $3.6 million, while the loss for the Group after providing for income tax and non-controlling interest narrowed to $629,052 (30 June 2020: $4,875,851).

During the interim financial period, the Group focused on:

• Dietary Supplements

• Healthy Food Ingredients

• Ovine Collagen

• Infection Control Solutions

Dietary Supplements

Sales of Dietary Supplements increased by $57,000 to $2.5 million in 1H 2021 and continued to be the Group’s largest revenue contributor, accounting for 70% (2020: 89%) of total revenue for the period. The improved performance was partly due to easing COVID-19 disruptions that impacted on Holista’s sales channels and supply chains.

The Company also successfully capitalised on its market leading brands, LACTO-5® and Pristin®, at a time of growing consumer awareness and demand for vitamins to boost immunity and overall health during the pandemic. Additionally, the global market for health supplements continues to grow with Holista being well positioned to benefit from the trend as it is one of the largest supplement suppliers in Malaysia.

Holista aims to launch a new supplement product which is a water-soluble vitamin D later this year.

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Holista Colltech Limited Directors' report 30 June 2021

Healthy Food Ingredients

The Healthy Food Ingredients division recorded a $474,000 increase in revenue versus the previous corresponding period (pcp) to $771,000 in the first half of 2021.

The division’s sales are driven by Holista’s patented GI Lite[TM] premix and 80Less[TM] sugar substitute. US-based Costanzo’s Bakery, Inc. (Costanzo’s) signed a three-year agreement to purchase GI Lite[TM] for use in its new range of low Glycaemic Index (GI) white breads. Costanzo’s started supplying the breads to several US supermarket chains from April this year.

GI Lite[TM] is a non-GMO and clean label (all-natural) premix that has been independently tested by the University of Sydney and proven to lower the GI in foods by 30% to 40%. Foods with low GI are healthier as they release sugars in the body more slowly and helps with weight management, diabetes and other health issues. In contrast, foods with high GI are a key contributor to global obesity and heart disease. GI Lite[TM ] can be used to make healthier white breads, flat breads (e.g. chapatti and roti canai), muffins, tortillas, noodles and pasta without sacrificing taste or texture.

Meanwhile, Company's unique 80Less[TM] offering is sold to a handful of food and beverage companies, including Bursa Malaysia-listed company Rex Industries (“Rex”) 80Less[TM] is a low GI and low-calorie sugar replacement that lowers calories by 80% for the equivalent sweetness and is stable at all cooking temperatures. Unlike other sugar substitutes, 80Less[TM] does not have an artificial aftertaste and is ideal for desserts, tapioca pearls used in bubble tea, and sweetened drinks.

Drinks using 80Less[TM] can be labelled as “sugar free” and avoid paying potential sugar taxes in countries that apply such a tax. Holista is developing two new health products for Rex – a cocoa milk powder product and Ready-to-Drink cocoa formulation.

Ovine Collagen

Improving COVID-19 conditions were also behind the turnaround in Holista’s Ovine Collagen division. This division recorded the biggest percentage recovery among the four divisions with revenue from this business increasing to $128,000 in the period compared to $18,000 in 1H 2020 as Behn Meyer Thailand placed additional orders for the cosmetic ingredient. Demand for cosmetics in Thailand had been negatively impacted by the pandemic in 2020, before recovering this year.

Additionally, Holista also signed an agreement with Mutiara Seribumi Sdn Bhd in the first half of the year to allow Guangzhou Sinbio Cosmetic Co Ltd to undertake trials of the Company’s ovine collagen. Guangzhou Sinbio is a Chinese state-owned enterprise that exclusively represents leading cosmetic brands like Ceeture, Estee Lauder and SK-II in China. It sells cosmetics via a network of 45,000 direct-owned stores.

If the trials are successful and if regulatory approvals in China are granted, Guangzhou Sinbio will sign a binding agreement to purchase the entire production capacity of 48 tonnes in the first year from Holista’s collagen plant in Collie, Western Australia.

The Chinese customer, through Mutiara, will purchase 144 tonnes in year two, 288 tonnes in year three and 576 tonnes in years four and five. Holista will progressively expand production capacity at Collie to accommodate the growth in these orders, with the capital investment funded from the 50% deposits it receives from each order and from internal resources.

The agreed price for Holista’s unique collagen, which uses a patented extraction process, is $75 per kilogram, Free on Board (FOB) Perth, Australia. Holista can increase the price by providing a 90-day written notice to Mutiara.

Infection Control Solutions

The Infection Control Solutions division focuses on providing all-natural sanitising solutions to control viruses, including SARS-CoV-2 (the virus that causes COVID-19), for the consumer and industrial markets through the NatShield™ and M3® System product offerings. Holista also expanded its suite of products in June this year to include rapid test kits for SARSCoV-2.

The successful restructure of Holista’s global distribution, of iGalen, amid the global pandemic has resulted the division’s first half revenue of $179,000.

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Holista Colltech Limited Directors' report 30 June 2021

Holista is also looking to launch a nasal balm using Protectene® as an active ingredient later in 2021. Protectene®, which Holista acquired from Global Infection Control Consultants LLC (GICC), is a gentler version of PathAway® that can be used on sensitive parts of the body. Holista’s NatShield™ nasal balm is undergoing final tests ahead of its expected launch in the US, Malaysia and Singapore.

Outlook and Projects

The ongoing impact from COVID-19 will continue to create challenges for Holista, but the Group is in a good position to build on the growth momentum it achieved across all key areas of its business in the first half of 2021.

The outlook for the Infection Control Solutions division is positive as the pandemic will drive demand for all-natural sanitisers that are gentle on the skin despite repeated use. Further, the ongoing recovery in iGalen Inc is expected to contribute to further sales growth for NatShield™ hand sanitisers. Holista’s plans to launch a sanitising nasal balm and explore commercial opportunities for M3® is expected to support growth in the division as well.

The good traction achieved by Holista’s Healthy Food Ingredients division is expected to persist due to its unique value proposition to food and beverage manufacturers looking to offer healthy alternatives. Costanzo’s has only recently started selling its low GI white bread using GI Lite[TM] to major US supermarkets, which leaves the product room to grow over the short to long-term. The upcoming introduction of Holista’s new cocoa milk powder product and Ready-to-Drink cocoa formulation also provides another avenue for the division to expand sales and profits.

Meanwhile, the outlook for the Dietary Supplements division is expected to be underpinned by organic growth, strong market position and the addition of new vitamin products; while the Ovine Collagen division could experience a significant stepchange if the trials by Guangzhou Sinbio are successful and regulatory approvals are awarded. Holista should know the outcome by end of 2021 or early 2022.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during the financial half-year.

Events Subsequent to Reporting Date

On 31 July 2021, Mrs Loren King has been appointed as Non-Executive Director in line with the resignation of Mr Daniel Joseph O’Connor as the Non-Executive Director and Chairman to the Board, Dr Rajen Manicka has been appointed as Executive Chairman to the Board.

As mentioned in note 21, Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings on 5 August 2021. The Company has appointed lawyers to defend the proceedings and understands that Dr. Manicka has separately appointed lawyers to do likewise on his own behalf.

Apart from the above, no other matter or circumstance has arisen since 30 June 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.

Future Developments, Prospects and Business Strategies

There are no other likely developments, future prospects and business strategies not included in this Directors’ report.

Auditor's independence declaration

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

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Holista Colltech Limited Directors' report 30 June 2021

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

_________ DR RAJEN MANICKA

Executive Chairman and Chief Executive Officer

26 August 2021

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Holista Colltech Limited Auditor's independence declaration

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Holista Colltech Limited Contents 30 June 2021

Consolidated statement of profit or loss and other comprehensive income 8 Consolidated statement of financial position 9 Consolidated statement of changes in equity 10 Consolidated statement of cash flows 11 Notes to the consolidated financial statements 12 Directors' declaration 24 Independent auditor's review report to the members of Holista Colltech Limited 25

General information

The financial statements cover Holista Colltech Limited as a Group consisting of Holista Colltech Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is Holista Colltech Limited's functional and presentation currency.

Holista Colltech Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are:

Registered office

Principal place of business

Level 5, Unit 1201, 12th Floor, 126 Phillip Street, Amcorp Trade Centre, PJ Tower Sydney NSW 2000, No 18, Persiaran Barat, Australia 46000 Petaling Jaya, Malaysia

A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 August 2021.

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Holista Colltech Limited Consolidated statement of profit or loss and other comprehensive income For the half-year ended 30 June 2021

Note Revenue Revenue 3 Other income 4 Expenses Change in inventories of finished goods and work in progress Raw materials and consumables used Distribution costs and other costs of sales Advertising and promotion Consultancy and professional fees Depreciation and amortisation Employment costs Finance costs Foreign exchange loss Impairment 5 Research and development Share-based payments expense 5 Other expenses 5 Loss before income tax benefit/(expense) Income tax benefit/(expense) Loss after income tax benefit/(expense) for the half-year Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Loss for the half-year is attributable to: Non-controlling interest Owners of Holista Colltech Limited Total comprehensive income for the half-year is attributable to: Non-controlling interest Owners of Holista Colltech Limited Basic loss per share 24 Diluted loss per share 24	Consolidated 30 June 2021 30 June 2020 $ $ 3,580,946 2,760,966 44,770 36,739 217,048 342,568 (1,838,308) (1,590,776) (207,150) (138,131) (249,535) (187,511) (337,088) (384,934) (99,730) (162,924) (1,431,593) (1,586,532) (20,578) (38,682) (7,585) (323,621) (142,336) (3,068,694) (85,204) (169,118) 360,109 (45,136) (430,032) (373,408)	Consolidated 30 June 2021 30 June 2020 $ $ 3,580,946 2,760,966 44,770 36,739 217,048 342,568 (1,838,308) (1,590,776) (207,150) (138,131) (249,535) (187,511) (337,088) (384,934) (99,730) (162,924) (1,431,593) (1,586,532) (20,578) (38,682) (7,585) (323,621) (142,336) (3,068,694) (85,204) (169,118) 360,109 (45,136) (430,032) (373,408)
	(646,266) 6,575	(4,929,194) (92,425)
	(639,691) 1,601	(5,021,619) 320,686
	1,601	320,686
	(638,090)	(4,700,933)
	(10,639) (629,052)	(145,768) (4,875,851)
	(639,691)	(5,021,619)
	13,101 (651,191)	22,182 (4,723,115)
	(638,090)	(4,700,933)
	Cents (0.23) (0.23)	Cents (1.86) (1.86)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

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Holista Colltech Limited Consolidated statement of financial position As at 30 June 2021

Note Assets Current assets Cash and cash equivalents 6 Trade and other receivables 7 Inventories 8 Other current assets 9 Total current assets Non-current assets Property, plant, and equipment 10 Right-of-use assets Intangible assets 11 Deferred tax assets 12 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 13 Contract liabilities 14 Borrowings 15 Lease liabilities 16 Income tax Provisions 17 Total current liabilities Non-current liabilities Trade and other payables 13 Borrowings 15 Provisions 17 Lease liabilities 16 Total non-current liabilities Total liabilities Net assets Equity Issued capital 18 Reserves 19 Accumulated losses Equity attributable to the owners of Holista Colltech Limited Non-controlling interest Total equity	Consolidated 30 June 2021 31 December 2020 $ $ 2,116,670 2,725,237 1,023,969 1,558,007 1,154,679 1,108,346 953,375 1,201,977 5,248,693 6,593,567 1,038,155 1,112,490 108,894 124,824 137,506 146,471 142,835 75,412 1,427,390 1,459,197 6,676,083 8,052,764 1,866,374 1,719,277 - 458,729 226,039 401,173 20,660 28,155 465 - 13,414 13,414 2,126,952 2,620,748 135,054 - 417,384 430,605 275,000 275,000 76,245 82,764 903,683 788,369 3,030,635 3,409,117 3,645,448 4,643,647 21,707,478 21,707,478 (519,592) (137,344) (16,778,175) (16,149,123) 4,409,711 5,421,011 (764,263) (777,364) 3,645,448 4,643,647
	5,248,693
	1,038,155 108,894 137,506 142,835
	1,427,390
	6,676,083
	1,866,374 - 226,039 20,660 465 13,414
	2,126,952
	135,054 417,384 275,000 76,245
	903,683
	3,030,635
	3,645,448
	21,707,478 (519,592) (16,778,175)
	4,409,711 (764,263)
	3,645,448

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

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Holista Colltech Limited Consolidated statement of changes in equity For the half-year ended 30 June 2021

Consolidated Balance at 1 January 2020 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments Exercise of performance rights Transfer of expired options balance Balance at 30 June 2020 Consolidated Balance at 1 January 2021 Loss after income tax benefit for the half-year Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Reversal of share-based payments expense (note 5) Balance at 30 June 2021	Issued capital $ 14,548,515 - -	Options reserve $ 2,642,722 - -	Foreign exchange translation reserve $ (313,283) - 152,736	Accumulated losses $ (12,455,239) (4,875,851) -	Non- controlling interest $ (853,113) (145,768) 167,950	Total equity $ 3,569,602 (5,021,619) 320,686
	- 6,497,463 - 661,500 -	- - 45,138 (945,000) (1,066,922)	152,736 - - - -	(4,875,851) - - 283,500 1,066,922	22,182 - - - -	(4,700,933) 6,497,463 45,138 - -
	21,707,478	675,938	(160,547)	(15,980,668)	(830,931)	5,411,270
	Issued capital $ 21,707,478 - -	Options reserve $ 360,109 - -	Foreign exchange translation reserves $ (497,453) - (22,139)	Accumulated losses $ (16,149,123) (629,052) -	Non- controlling interest $ (777,364) (10,639) 23,740	Total equity $ 4,643,647 (639,691) 1,601
	- -	- (360,109)	(22,139) -	(629,052) -	13,101 -	(638,090) (360,109)
	21,707,478	-	(519,592)	(16,778,175)	(764,263)	3,645,448

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

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Holista Colltech Limited Consolidated statement of cash flows For the half-year ended 30 June 2021

Note Cash flows from operating activities Receipts from customers Payments to suppliers (inclusive of GST) and employees Interest received Finance costs Net Income tax paid Grant received Net cash (used) in operating activities Cash flows from investing activities Purchase of intellectual property Purchase of property, plant, and equipment Deposits and investments Net cash (used) in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Proceeds from issue of shares 18 Share issue transaction costs Repayment of lease liabilities Net cash (used) in/generated from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Change in foreign currency held Cash and cash equivalents at the end of the financial half-year	Consolidated 30 June 2021 30 June 2020 $ $ 3,861,288 2,988,171 (4,244,892) (5,605,581) 6,873 4,336 (5,595) (38,682) (24,021) (20,832) 9,600 32,403	Consolidated 30 June 2021 30 June 2020 $ $ 3,861,288 2,988,171 (4,244,892) (5,605,581) 6,873 4,336 (5,595) (38,682) (24,021) (20,832) 9,600 32,403
	(396,747)	(2,640,185)
	- (11,651) -	(6,229) (8,730) (4,353)
	(11,651)	(19,312)
	611,947 (795,337) - - (8,494)	249,881 (291,662) 6,527,337 (29,874) (63,319)
	(191,884)	6,392,363
	(600,282) 2,725,237 (8,285)	3,732,866 101,400 (1,813)
	2,116,670	3,832,453

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 1. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 30 June 2021 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 31 December 2020 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The financial report has 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.

The Group incurred a loss after tax for the period of $639,691 (June 2020: $5,021,619 loss) and a net cash outflow from operating activities of $396,747 (30 June 2020: $2,640,185 outflow). As at 30 June 2021, the Group has generated a working capital of $3,121,741 (31 December 2020: $3,972,819 working capital).

This financial report is prepared on the going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the Group's ability to generate positive cash flows through its existing business and/or raising of further equity.

While the Group is optimistic that its Malaysian and Australian revenue will continue to grow and contribute positively in the future, it does realise the risk should the Group fail to generate sufficient positive cash flows and/or obtain funding when required. There is significant uncertainty as to whether the Group will continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Note 2. Operating segments

Identification of reportable operating segments

The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors (the Board) on a monthly basis and in determining the allocation of resources. Management has identified the operating segments based on the principal activities – Supplements; Ovine Collagen; Infection Control Solutions; Food Ingredients; and Corporate.

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 2. Operating segments (continued)

Segment Performance

Half-year ended 30 June 2021 Revenue External sales Other revenue Reconciliation of segment revenue to group revenue: Total group revenue and other income Segment (Loss) from continuing operations before tax Loss before Income tax expense Half-Year ended 30 June 2020 Revenue External sales Total segment revenue Reconciliation of segment revenue to group revenue: Total group revenue and other income Segment (Loss) from continuing operations before tax Loss before income tax	Supplements $ 2,502,272 -	Ovine Collagen $ 128,100 -	Food ingredients $ 771,091 -	Infection Control Solutions $ 179,483 -	Corporate $ - 44,770	Total $ 3,580,946 44,770
	2,502,272	128,100	771,091	179,483	44,770	3,625,716
	-	-	-	-	-	3,625,716
	(15,332) -	(223,979) -	(35,172) -	(116,493) -	(255,290) -	(646,266) (646,266)
	Supplements $ 2,445,685 -	Ovine Collagen $ 18,000 -	Food Ingredients $ 297,281 -	Infection Control Solutions $ - -	Corporate $ - 36,739	Total 2,760,966 36,739
	2,445,685	18,000	297,281	-	36,739	2,797,705
	-	-	-	-	-	2,797,705
	(2,488,517) -	(204,433) -	(265,402) -	- -	(1,970,842) -	(4,929,194) (4,929,194)

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 2. Operating segments (continued)

Segment Financial Position

As at 30 June 2021 Segment Assets Intra-segment eliminations Total assets Segment liabilities Intra-segment eliminations Total liabilities Total net assets/(liabilities) As at 31 December 2020 Segment Assets Intra-segment eliminations Total assets Segment Liabilities Intra-segment eliminations Total liabilities Total net assets/(liabilities)	Supplements $ 2,261,308 -	Ovine Collagen $ 5,053,937 -	Food Ingredients $ 2,481,333 -	Infection Control Solutions $ 194,383 -	Corporate $ - (3,314,878)	Total $ 9,990,961 (3,314,878)
	2,261,308	5,053,937	2,481,333	194,383	(3,314,878)	6,676,083
	(1,101,876) -	(502,748) -	(4,367,586) -	(627,111) -	- 3,568,686	(6,599,321) 3,568,686
	(1,101,876)	(502,748)	(4,367,586)	(627,111)	3,568,686	(3,030,635)
	1,159,432	4,551,189	(1,886,253)	(432,728)	253,808	3,645,448
	Supplements $ 2,891,061 -	Ovine Collagen $ 5,734,695 -	Food Ingredients $ 2,178,633 -	Infection Control Solutions $ 125,509 -	Corporate $ - (2,877,134)	Total $ 10,929,898 (2,877,134)
	2,891,061	5,734,695	2,178,633	125,509	(2,877,134)	8,052,764
	(1,344,937) -	(487,690) -	(4,440,377) -	(722,947) -	- 3,586,834	(6,995,951) 3,586,834
	(1,344,937)	(487,690)	(4,440,377)	(722,947)	3,586,834	(3,409,117)
	1,546,124	5,247,005	(2,261,744)	(597,438)	709,700	4,643,647

Note 3. Revenue

Sale of goods

	Consolidated
30	June 2021 30 June 2020
	$ $
	3,580,946 2,760,966

Note 4. Other income

US COVID-19 Subsidy Interest income ATO COVID-19 JobKeeper Subsidy Other income

Consolidated 30 June 2021 30 June 2020 $ $ 27,045 - 8,125 4,336 9,600 32,403	Consolidated 30 June 2021 30 June 2020 $ $ 27,045 - 8,125 4,336 9,600 32,403
44,770	36,739

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 5. Loss before income tax

Loss before income tax includes the following specific expenses: Impairment Impairment of goodwill (note 11) Impairment on credit losses (note 7) Impairment on other assets (note 9) Total impairment Other expenses Compliance and regulatory costs Insurance Other expenses Collie factory maintenance costs Audit fees Office rental expense and occupancy costs Share-based payments expense (Reversal)/Recognition of Share based payment expenses *	Consolidated 30 June 2021 30 June 2020 $ $ - 584,305 142,336 2,042,070 - 442,319	Consolidated 30 June 2021 30 June 2020 $ $ - 584,305 142,336 2,042,070 - 442,319
	142,336	3,068,694
	143,910 52,895 47,743 40,235 43,064 102,185	134,801 36,716 9,441 45,738 43,286 103,426
	430,032	373,408
	(360,109)	45,138

• As approved by shareholders on 9 January 2017, the Company issued 2,700,000 performance rights to Dr Rajen Manicka with non-market performance conditions attached. The milestone date of these performance conditions is on or before 30 June 2021 and as at 30 June 2021, the performance conditions were not achieved. Consequently, the share-based expenses previously recognised in relation to the performance rights were fully reversed.

Note 6. Cash and cash equivalents

Current assets Cash at bank Term deposits at call	Consolidated 30 June 2021 31 December 2020 $ $ 305,687 310,191 1,810,983 2,415,046	Consolidated 30 June 2021 31 December 2020 $ $ 305,687 310,191 1,810,983 2,415,046
	2,116,670	2,725,237

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 7. Trade and other receivables

Current assets Trade receivables Less: Allowance for expected credit losses Other receivables Amounts advanced to a related party Amounts advanced to a third party Less: Allowance for expected credit losses Interest receivable	Consolidated 30 June 2021 31 December 2020 $ $ 2,840,411 3,138,830 (1,878,944) (1,751,581)	Consolidated 30 June 2021 31 December 2020 $ $ 2,840,411 3,138,830 (1,878,944) (1,751,581)
	961,467	1,387,249
	10,126 180,623 294,534 (475,157) 52,376	119,634 180,623 294,534 (475,157) 51,124
	1,023,969	1,558,007

The average credit period on sales of goods ranges from 30 to 240 days. Interest is not charged. During the period ended 30 June 2021 an allowance of $127,363 has been made for estimated irrecoverable trade receivable amounts arising from past sale of goods, determined by reference to past default experience. Amounts are considered as ‘past due’ when the debt has not been settled, within the terms and conditions agreed between the Group and the customer or counter party to the transaction.

The amounts advanced to related party were fully impaired during the financial year ended 31 December 2020.

Note 8. Inventories

Current assets Raw materials - at cost Finished goods - at cost Stock in transit - at cost	Consolidated 30 June 2021 31 December 2020 $ $ 1,131,330 948,667 17,267 33,336 6,082 126,343	Consolidated 30 June 2021 31 December 2020 $ $ 1,131,330 948,667 17,267 33,336 6,082 126,343
	1,154,679	1,108,346

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 9. Other current assets

Current assets Prepayments Security deposits Other deposits Loan to a related party Right of return assets Other current assets	Consolidated 30 June 2021 31 December 2020 $ $ 304,530 239,412 32,033 320,463 23,289 21,566 493,429 481,641 100,094 101,134 - 37,761	Consolidated 30 June 2021 31 December 2020 $ $ 304,530 239,412 32,033 320,463 23,289 21,566 493,429 481,641 100,094 101,134 - 37,761
	953,375	1,201,977

Included in prepayment is an amount of $442,319 for deposit and advances previously made to Proimmune Company LLC for supply contract. As disclosed in December 2020 annual report, Proimmune Company LLC filed for purported breached of supply contracts by the Company in February 2020. As it is not practical to estimate when the decision of the court will be made, the prepayments has been fully impaired.

Security deposits are restricted cash. In order to obtain various financing facilities, banks in Malaysia require cash to be deposited if other collateral is not available. These deposits are interest bearing and the interest is compounded and added to the principal.

Loan to a related party as at 30 June 2021 is related to loan to Galen BioMedical Inc - related party. which is non-interest bearing and repayable upon demand.

Note 10. Property, plant, and equipment

Non-current assets Freehold land and buildings Accumulated depreciation Plant and equipment Accumulated depreciation	Consolidated 30 June 2021 31 December 2020 $ $ 1,007,225 1,017,689 (320,541) (314,367)	Consolidated 30 June 2021 31 December 2020 $ $ 1,007,225 1,017,689 (320,541) (314,367)
	686,684	703,322
	2,037,977 (1,686,506)	2,031,321 (1,622,153)
	351,471	409,168
	1,038,155	1,112,490

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 11. Intangible assets

Non-current assets Goodwill Patents and licences Accumulated amortisation	Consolidated 30 June 2021 31 December 2020 $ $ - -	Consolidated 30 June 2021 31 December 2020 $ $ - -
	214,414 (76,908)	216,788 (70,317)
	137,506	146,471
	137,506	146,471

Patents and licences

Patents and licenses relate to food ingredients for several countries.

Goodwill

Goodwill relates to the acquisition of the food ingredients business in the USA. Consequently, the carrying amount of goodwill was allocated to the food ingredients CGU.

Goodwill impairment testing

The recoverable amount of goodwill has been determined based on a value-in-use calculation using cash flow projections for the food ingredients business in the USA. Cash flows beyond the five year forecast are extrapolated using estimated terminal growth rates.

During the financial year ended 31 December 2020, there has been considerable volatility in the economic environment as a result of COVID-19. Management has carefully assessed the impact of COVID-19 and the implications of lower economic activity on its operations. Management has observed that there has been a significant impact in the performance of the food ingredients business in the USA in prior year.

Based on management's assessment, the carrying amount of the food ingredient's CGU exceeded its recoverable amount and consequently goodwill of $584,305 in relation to the food ingredient’s CGU was fully impaired in the previous financial year.

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Consolidated Balance at 1 January 2021 Revaluation decrements Amortisation expense Balance at 30 June 2021	Goodwill $ - - -	Patents and licences $ 146,471 (1,742) (7,223)	Total $ 146,471 (1,742) (7,223)
	-	137,506	137,506

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 12. Deferred tax assets

Non-current assets Tax losses (in Malaysia) Note 13. Trade and other payables Current liabilities Trade payables Accruals Amounts due to Directors Dividends payable Refund liability Other payables - current Non-current liabilities Other payables - non-current	Consolidated 30 June 2021 31 December 2020 $ $ 142,835 75,412	Consolidated 30 June 2021 31 December 2020 $ $ 142,835 75,412
	Consolidated 30 June 2021 31 December 2020 $ $ 751,482 829,857 258,313 433,102 39,588 21,588 22,907 22,360 318,761 368,905 475,323 43,465
	1,866,374	1,719,277
	135,054	-

Included in the accruals is deferred revenue amounting of $70,508 (2020: $71,241) which represents customer loyalty points and is estimated based on the amount of loyalty points outstanding at reporting date that are expected to be redeemed.

Other payables – current of $225,147 and other payables – non-current of $135,054 represent payables previously classified as contract liabilities. Refer to note 14 for more information.

Note 14. Contract liabilities

Current liabilities Contract liabilities	Consolidated 30 June 2021 31 December 2020 $ $ - 458,729

Contract liabilities represents advance deposits received from customers where performance obligations were not satisfied at the end of the reporting period.

During the half-year ended 30 June 2021 $360,201 that were previously classified as contract liabilities were transferred to Trade and other Payables (2020: $nil). This change was done as response to the impossibility of the Company to provide the goods for which the deposits have been made. Refund has been agreed with customers and the reimbursement of these funds will happen in the following two years. Refer to note 13 for more information on current and non-current portion of the payable.

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 15. Borrowings

Current liabilities Term loan Banker's acceptance Loan from related parties Non-current liabilities Term loan Note 16. Lease liabilities Current liabilities Lease Liabilities Non-current liabilities Lease liabilities Note 17. Provisions Current liabilities Provision for employee entitlements Non-current liabilities Make good provision	Consolidated 30 June 2021 31 December 2020 $ $ 19,975 29,027 192,197 358,611 13,867 13,535	Consolidated 30 June 2021 31 December 2020 $ $ 19,975 29,027 192,197 358,611 13,867 13,535
	226,039	401,173
	417,384	430,605
	Consolidated 30 June 2021 31 December 2020 $ $ 20,660 28,155
	76,245	82,764
	Consolidated 30 June 2021 31 December 2020 $ $ 13,414 13,414
	275,000	275,000

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 18. Issued capital

Fully paid ordinary shares	30 June 2021 Shares 275,349,087	Consolidated 31 December 2020 30 June 2021 Shares $ 275,349,087 21,707,478	31 December 2020 $ 21,707,478

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

Note 19. Reserves

Foreign currency translation reserve Share-based payments reserve	Consolidated 30 June 2021 31 December 2020 $ $ (519,592) (497,453) - 360,109	Consolidated 30 June 2021 31 December 2020 $ $ (519,592) (497,453) - 360,109
	(519,592)	(137,344)

Note 20. Dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

Note 21. Contingent liabilities

Gara Group, Inc. (“Gara Group”)

On 27 September 2019, iGalen (a related company and a customer of the Group), filed an action against Gara Group and others alleging breach of contract. This complaint stems from Gara Group’s failure to provide services including product fulfillment, software development and maintenance of non-site platform which manages the Company’s back office and managing the Company’s social media sites. Gara Group filed a complaint against the Company for breach of contract. The case is still progressing in Courts. The exposure to the Company always exists, however, management maintains its claims and anticipates recovering from Gara Group. It is too early in the case to determine amounts of recovery or exposure.

ProImmune Company LLC ("ProImmune")

The present lawsuit involves four claims brought by ProImmune against the Company for breach of four distinct contracts which seeks total damages of USD 2million. The Company has completed the discovery phase of the litigation where after attempting to seek dismissal of the claims brought against it, the Company has answered the complaint of ProImmune Company LLC and asserted its own counterclaims against ProImmune for breach of contract as well as one claim for breach of express warranty, both of which seeking monetary damages in excess of USD300,000 plus interest.

The discovery stage is over and each party have filed their own motions for summary judgment, which effectively seeks a judgment without trial on either sides’ respective claims and/or defences. The Company have filed a case for motion for summary judgment on its claims for breach of contract and breach of express warranties against ProImmune. Due to backlog of similar motions pending, a decision on the competing motions will likely be rendered in 2022.

At the date of this report, it is premature to estimate any material contingent liabilities for this case.

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 21. Contingent liabilities (continued)

Australian Securities and Investments Commission (“ASIC”)

On 5 August 2021, the Company has been served with Federal Court proceedings commenced by the (ASIC). The proceedings relate to allegedly false and misleading statements with respect to Holista’s sanitiser products and partnership with Global Infection Control Consultants LLC (GICC), which are said to have been disseminated by the Company in the period from January 2020 to July 2020. ASIC claims that between April and July 2020 the Company was in breach of its continuous disclosure obligations.

The proceedings also alleged that Dr Manicka, the Company’s Managing Director and CEO, breached his director’s duties to the Company by causing or permitting the Company to engage in the conduct complained of by ASIC.

The Company has appointed lawyers to defend the proceedings and understands that Dr Manicka has separately appointed lawyers to do likewise on his own behalf.

At this juncture, it is premature to estimate any material contingent liabilities for this case.

Note 22. Commitments

The Group has no capital commitments at 30 June 2021 (31 December 2020: $nil).

Note 23. Events after the reporting period

On 31 July 2021, Mrs Loren King has been appointed as Non-Executive Director in line with the resignation of Mr Daniel Joseph O’Connor as the Non-Executive Director and Chairman to the Board, Dr Rajen Manicka has been appointed as Executive Chairman to the Board.

As mentioned in note 21, Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings on 5 August 2021. The Company has appointed lawyers to defend the proceedings and understands that Dr. Manicka has separately appointed lawyers to do likewise on his own behalf.

Apart from the above, no other matter or circumstance has arisen since 30 June 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.

Note 24. Earnings per share

Loss after income tax Non-controlling interest Loss after income tax attributable to the owners of Holista Colltech Limited Weighted average number of ordinary shares outstanding during the period used in calculation of basic EPS Weighted average number of ordinary shares outstanding during the period used in calculation of basic EPS	Consolidated 30 June 2021 30 June 2020 $ $ (639,691) (5,021,619) 10,639 145,768	Consolidated 30 June 2021 30 June 2020 $ $ (639,691) (5,021,619) 10,639 145,768
	(629,052)	(4,875,851)
	Number 275,349,087	Number 262,247,457
	275,349,087	262,247,457

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Holista Colltech Limited Notes to the consolidated financial statements 30 June 2021

Note 24. Earnings per share (continued)

	Cents	Cents
Basic loss per share	(0.23)	(1.86)
Diluted loss per share	(0.23)	(1.86)

There are no options and performance rights outstanding as at the end of the financial period.

Note 25. Impact of COVID-19

The COVID-19 pandemic has adversely affected the global economy, including a decrease in consumer demand, interruptions in supply chains, and tight liquidity and credit conditions. This pandemic has created unprecedented uncertainty, in particular the measures taken by various governments to contain the virus have affected economic activities. Compared to same period last year, as consumers slowly adjusted to Government imposed restrictions and key economic activities and distribution channels slowly re-opened, the Group's exhibit the following positive business growth including:

• an increase in the sales in the Healthy Food Ingredients division due to orders of GI Lite[TM] from customer in the United States of America;

• an improvement in sales in Dietary Supplements along with higher demand from Holista's global distribution for Infection Control Solutions, and

• higher demand from Thai distributor of the Group's proprietary ovine collagen.

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Holista Colltech Limited Directors' declaration 30 June 2021

In the directors' opinion:

• the attached consolidated financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached consolidated financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the financial half-year ended on that date; and

• there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ DR RAJEN MANICKA Executive Chairman and Chief Executive Officer

26 August 2021

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Holista Colltech Limited Independent auditor's review report to the members of Holista Colltech Limited

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Holista Colltech Limited Independent auditor's review report to the members of Holista Colltech Limited

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