SKIN ELEMENTS LIMITED — Annual Report 2023

Aug 30, 2023

SKIN ELEMENTS LIMITED ABN 90 608 047 794 and its controlled entities

Appendix 4E Preliminary Final Report 2023

Corporate directory

Current Directors

Peter Malone	Executive Chairman
Filippo (Phil) Giglia	Non-Executive Director
Stuart Usher	Non-Executive Director

Company Secretary

Stuart Usher

Registered Office		Share Registry
Street:	1242 Hay Street		Link Market Services Limited
	WEST PERTH WA 6005	Street:	Level 12, QV1 Building, 250 St Georges Terrace
Postal:	1242 Hay Street		PERTH WA 6000
	WEST PERTH WA 6005	Telephone:	1300 554 474 (within Australia)
Telephone:	+61 (0)8 6311 1900		+61 1300 554 474 (International)
Facsimile:	+61 (0)8 6311 1999	Facsimile:	+61 (0)8 6370 4203
Email:	info@skinelementslimited.com	Email:	registrars@linkmarketservices.com.au
Website:	www.skinelementslimited.com	Website:	www.linkmarketservices.com.au

	5 Spring Street		Perth WA 6000
	Perth WA 6000	Telephone:	131 ASX (131 279) (within Australia)
Telephone:	+61 (0)8 6382 4600	Telephone:	+61 (0)2 9338 0000
Facsimile:	+61 (0)8 6382 4601	Facsimile:	+61 (0)2 9227 0885

Auditors Securities Exchange

BDO Audit (WA) Pty Ltd Australian Securities Exchange

Street:	Mia Yellagonga Tower 2	Street:	Level 40, Central Park, 152-158 St Georges Terrace
	5 Spring Street		Perth WA 6000
	Perth WA 6000	Telephone:	131 ASX (131 279) (within Australia)
Telephone:	+61 (0)8 6382 4600	Telephone:	+61 (0)2 9338 0000
Facsimile:	+61 (0)8 6382 4601	Facsimile:	+61 (0)2 9227 0885
Website:	www.bdo.com.au	Website:	www.asx.com.au
		ASX Code:	SKN

30 June 2023

ABN 90 608 047 794

Contents

1 2 Company update
all Results for announcement to the Market
Consolidated statement of profit or loss and other comprehensive income
Let Consolidated statement of financial position
Consolidated statement of changes in equity
1 Consolidated statement of cash flows
Notes to the preliminary final report

Company update

1. Operating and financial review

1.1. Nature of Operations and Principal Activities

Skin Elements Limited is a researcher and developer of its leading proprietary all-natural anti-microbial SE FormulaTMBiotechnology. The SE FormulaTM Biotechnology is used as a base in the Company's proprietary skincare formulas including the natural disinfectant hygiene cleaner SuprCuvr and Eco Nurture formulas, the Soleo Organics natural sunscreen, the PapayaActivs therapeutic skincare, and the Elizabeth Jane Natural Cosmetics.

1.2. Operations Review

1.2.1. Development of Eco Nurture Plant Bio Stimulant

Eco Nurture is the latest product developed from the SE Formula biotechnology research and development program.

Eco Nurture is a sustainable, horticultural-specific plant-based bio stimulant product which is an effective alternative to chemical-based bactericides and fungicides currently used in crop protection globally. This represents a major opportunity in the massive agriscience market.

Skin Elements uses a three-phase research and development process to come up with a product formula for the desired field and purpose. This process is as follows:

• Research Phase 1 Investigation into ingredients and processes to prepare prototype formulations to achieve specific criteria for a specific purpose
• Development Phase 2 Produce test batches and undertake product trails, test marketing and regulatory certifications.
• Development Phase 3 Commence scale up production and launch into commercialistion seeking distribution agreements to create large scale regular orders.

With Eco Nurture, the research phase 1 investigations and prototype formulation during the year has delivered a positive outcome, with the Eco Nurture crop sample testing delivering improved stress tolerance, wellness and natural resilience levels in a number of fruit crops. The progress achieved to date reinforces the ability of Eco Nurture as a replacement to harmful chemicals, including copper sulphates, used in crop production and is now planning to undertake development phase 2 testing.

1.2.2. SuprCuvr - Development Phase 2 Market Testing

SuprCuvr is a TGA registered hospital-grade disinfectant made from a 100% plant-based formula. Independent laboratory tests have confirmed that SuprCuvr has a 7-log reduction (99.99999%) effectiveness against bacteria and viruses. It combines an exceptionally high level of efficacy with a 100% plant-based formula to present a significant market opportunity for a chemical-free disinfectant in large-scale settings where disinfectants are deployed.

The Company continued the development of the SuprCuvr product range, with the development of SuprCuvr biodegradable and compostable wipes. This product has potential to address a significant market need, and is consistent with community-wide efforts to cut-down on non-biodegradable waste.

SKN and Pacific Health Care Pty Ltd (Pacific Health) has continued to work together to evaluate the initial market responses and update the formula potency, packaging presentation and competitive pricing structure.

During the previous period, the Company had received orders and invoiced Pacific Health for SuprCuvr products totalling $1,266,354 (of which $210,786 has been received). Due to the uncertainty of timing of receipt of the balance, the Company has recognised a provision for impairment of $527,784 in the current period, as detailed in note 4.2.2.

1.2.3. Cosmetic Skincare – Soleo Organics

Soléo Organics has completed development phase 2 and is now commencing development phase 3 with the initial engagement of a leading health and wellbeing retail chain in the UK and investigations into scale manufacturing of white label ranges.

Soléo Organics was the first application borne out of the SE Formula research & development program that resulted in a major advancement in sun protection technology, and has been independently recognised as one of the world's best sun protection formulas.

1.2.4. Cosmetic Skincare – PapayaActivs

PapayaActivs is currently in development phase 2 with improvements in the formulations and expansion of the product range.

PapayaActivs combines a high concentration of natural pawpaw extract with other active natural ingredients to help relieve the symptoms of skin conditions, like psoriasis, eczema, assist in healing of minor burns and wounds, and relieve mild muscle, joint and arthritic pain. PapayaActivs is listed on the TGAs Australian Register of Therapeutic Goods.

Company update

The above opportunities are all ongoing, but there is no certainty that any sales or distribution agreements will be entered into. Skin Elements will update the market on any material progress on these, or any other, sales or distribution opportunities. The Company's product range is available through the Company's updated and optimised online store websites www.soleoorganics.com and www.sknlife.com.

1.2.5. Appointment of New Director and Company Secretary

On 17 January 2023, SKN appointed Mr Stuart Usher to the Board as a Non-Executive Director. Mr Usher's appointment brings broad experience and skills to the Board, assisting the Company develop its corporate strategy and governance as it transitions from research & development to commercial operations.

Mr Usher's appointment follows the resignation of Mr Lee Christensen as a Non-Executive Director.

Mr Usher is also appointed as Company Secretary on 17 January 2023 replacing Mr Phil Giglia in this role.

1.2.6. Research & Development Rebate (R&D)

The Company's commitment to the research and development of its natural SE Formula Biotechnology saw it record R&D Rebate of $1.13 million for the R&D expenditure invested in the 2023 financial year.

The Company has received advance funding of $538k of this R&D Rebate under a facility with Radium Capital during the 2023 financial year with the balance received after 30 June 2023.

1.2.7. Placement raises $750,000

On 4 November 2022 the Company advised it had finalised a private placement to sophisticated investors raising $750,000 in cash (before costs). The Company issued 30,000,000 ordinary fully paid shares at $0.025 each (under the Company's ASX LR7.1A placement capacity) with one attaching option exercisable at $0.05 on or before 31 October 2025 for each new share (under the Company's ASX LR7.1 capacity) to the subscribers in the placement.

1.2.8. Entitlement Issue raises $1.022 million

The Company announced on 22 June 2023 the successful completion of its non-renounceable pro-rata entitlement issue on the basis of one new share for every five ordinary shares held on the record date at an issue price of $0.01 for each new share with one attaching option (exercisable at $0.025 three years from date of issue) for each new share issued.

The issue was oversubscribed with the issue of 97,198,217 ordinary fully paid shares and 97,198,217 attaching options (exercisable at $0.025 three years from date of issue) raising $971,982 in cash.

The entitlement issue was fully underwritten by 708 Capital Pty Ltd, with 6,152,981 ordinary fully paid shares and 6,152,981 attaching options (exercisable at $0.025 three years from date of issue) issued to 708 Capital Pty Ltd for underwriter fee of $61,530. A further 10 million options ((exercisable at $0.025 three years from date of issue) were issued to 708 Capital Pty Ltd for Lead Manager Fee valued at $58K.

1.2.9. LDA Capital $20 million equity funding facility

On 6 April 2021 SKN announced it had entered into an equity funding facility agreement (Agreement) with LDA Capital, under which LDA Capital has agreed to provide Skin Elements with up to $20 million in committed equity capital over the next 36 months (ASX announcement, 6 April 2021).

The Agreement enables Skin Elements to issue shares to LDA Capital over the next three years at the Company's discretion at a floor price to be determined by Skin Elements and receive funds for the issue of those shares.

The Agreement allows Skin Elements to access committed equity capital on a flexible basis by managing the timing and size of each capital drawdown. The Agreement ensures that Company has access to additional equity capital as required to support its growth into new markets, support existing sales channels and fund the anticipated commercial scale sales and distribution opportunities for SuprCuvr and the Company's other product 0lines.

As part consideration for entering into a Put Option Agreement (POA), the Company issued to LDA Capital 26,000,000 unlisted options all expiring on 15 March 2024 which were initially recognised using a fair value assessment of $604,000 as a prepayment (asset) and derivative liability. At each balance date, the fair value of the derivative liability was reassessed and the movement in value recognised as a fair value gain or loss to P&L in the period.

As the timing of the drawdowns under the POA is uncertain, the Directors have taken a prudent view and expensed the remaining balance of the prepayment carrying value of $837,942 and the remaining fair value of the derivative laibility of $53,000.

The Company was also required to pay a commitment fee of A$300,000 to LDA Capital which has been paid subsequent to year end.

Company update

The Company also has on issue to LDA Capital 25,500,000 shares (Collateral Shares) for nil consideration. LDA Capital will hold these shares until such time that the Company issues the initial call notice. At that time, and subject to certain limitations set out in the POA, LDA Capital may sell collateral shares on market. Under the POA, unused Collateral Shares may be used for a subsequent call, bought back by the Company for nominal consideration or transferred to a trustee or nominee of the Company for nominal consideration.

As at the date of this report the Company has not made a drawdown under this facility.

1.3. Financial Review

1.3.1. Key profit and loss measures

	Movement(increase/decrease)	Movement$	2023$	2022$
Revenues from ordinary activities	decreased	1,214,199	194,131	1,408,330
Loss from ordinary activities after tax	increased	2,523,285	(4,104,195)	(1,580,910)
EBITDA Loss	increased	(2,788,556)	(3,949,927)	(1,161,371)

1.3.2. Key net asset measures

	Movement(increase/decrease)	Movement$	2023$	2022$
Cash and cash equivalents	decreased	389,618	358,432	748,050
Working capital (excluding prepayments)	decreased	708,318	533,136	1,241,454
Net tangible assets	decreased	1,557,136	604,803	2,161,939
Net assets	decreased	1,957,216	8,094,793	10,052,009

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.

1.4. Future Developments, Prospects, and Business Strategies

Likely developments in the operations, business strategies and prospects of the Group include:

• The Company will undertake future capital raising through either equity placement facility, private placement or entitlement issue, and the consideration of other equity and debt proposals
• The Company will continue to focus on development and commercialisation of its natural anti-microbial technology as set out in its review of operations.

Other likely developments, future prospects and business strategies of the operations of the Group and the expected results of those operations have not been included in this report particularly given the early stage of the Company's commercial operations with its new expanded range of natural and organic products. The Directors believe that the inclusion of such information would be likely to be unreasonably prejudicial to the Group.

1.5. Environmental Regulations

The Group's operations are not subject to significant environmental regulations in the jurisdictions it operates in, namely Australia.

The Directors have considered the enacted National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduced a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the Directors have determined that the NGER Act has no effect on the Company for the current, nor subsequent, financial year. The Directors will reassess this position as and when the need arises.

Results for announcement to the Market

1.	Reporting period (item 1)
	Report for the financial year ended:	30 June 2023
	Previous corresponding period is the year months ended:	30 June 2022
2.	Results for announcement to the market	Movement	Percentage%		Amount$
	Decrease in revenues from ordinary activities (item 2.1)		(86.22)	to	194,131
	Increase in loss from ordinary activities after tax attributableto members (item 2.2)		159.61	to	(4,104,195)
	Increase in loss after tax attributable to members (item 2.3)		159.61	to	(4,104,195)
2.1.	Dividends (item 2.4)		Amount perSecurity	₵	Franked amountper security%
	Interim dividend			nil	n/a
	Final dividend			nil	n/a
	Record date for determining entitlements to the dividend (item 2.5)	n/a
2.2.	Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6):Refer to Company update on page 1 of this report.
3.	Preliminary Final Report
3.1.	Statement of comprehensive income (item 3):Refer to Consolidated statement of profit or loss and other comprehensive income on page 6
3.2.	Statement of financial position (item 4):Refer to Consolidated statement of financial position on page 7
3.3.	Statement of cash flows (item 5):Refer to Consolidated statement of cash flows on page 9
3.4.	Statement of changes in equity (item 6):Refer to Consolidated statement of changes in equity on page 8
4.	Dividends (item 7) and Returns to shareholders including distributions and buy backs (item 14.2)Nil.
4.1.	Details of dividend or distribution reinvestment plans in operation are described below (item 8):Not applicable
5.	Ratios		CurrentPeriod	$	PreviouscorrespondingPeriod$
5.1.	Financial Information relating to 5.2 and 5.3:
	Earnings for the period attributable to owners of the parent		(4,104,195)		(1,580,910)
	Net assets		8,094,793		10,052,009
	Less: Intangible assets (including net deferred tax balances)		(7,489,990)		(7,890,070)
	Net tangible assets		604,803		2,161,939

Results for announcement to the Market

for the year ended 30 June 2023

5	Ratios (cont.)	CurrentPeriodNo.	PreviouscorrespondingPeriodNo.
	Fully paid ordinary shares	543,986,095	407,727,266
	Weighted average number of ordinary shares outstanding during the period usedin calculation of basic EPS	437,027,832	399,923,157
		₵	₵
5.2.	Net tangible assets backing per share (item 9):	0.111	0.530
5.3.	Earnings per share attributable to owners of the parent (item 14.1):	(0.939)	(0.395)

As at 30 June 2023 the Group has 197,351,198 unissued shares under options (2022: 26,000,000) and 209,000,000 performance shares on issue (2022: 209,000,000). The Group does not report diluted earnings per share on losses generated by the Group. During the year, the Group's unissued shares under option and performance shares were anti-dilutive.

6.	Details of entities over which control has been gained or lost during the period (item 10):
6.1.	Control gained over entities
	Name of entities (item 10.1)	Nil
	Date(s) of gain of control (item 10.2)
6.2.	Loss of control of entities
	Name of entities (item 10.1)	Nil
	Date(s) of loss of control (item 10.2)	N/A
6.3.	Contribution to consolidated profit (loss) from ordinary activities after tax bythe controlled entities to the date(s) in the current period when control wasgained / lost (item 10.3).	Nil
6.4.	Profit (loss) from ordinary activities after tax of the controlled entities for thewhole of the previous corresponding period (item 10.3)	Nil
7.	Details of associates and joint venture (item 11):
	NilName of entities (item 11.1)
	Percentage holding in each of these entities (item 11.2)n/a
				Previous
			CurrentPeriod	correspondingPeriod
			$	$
	Aggregate share of profits (losses) of these entities (item 11.3)		N/A	N/A
8.	Any other significant information needed by an investor to make an informed assessment of the entity's financialperformance and financial position (item 12):Refer to Company update on page 1 of this report.
9.	The financial information provided in the Appendix 4E is based on the preliminary final report (attached), which hasbeen prepared in accordance with Australian Accounting Standards (item 13).
10.	Commentary on the results for the period (item 14):
	Refer to Company update on page 1.
11.	The preliminary final report has been prepared based on the 30 June 2023 accounts which are in the process of being auditedby an independent Audit Firm in accordance with the requirements of s.302 of the Corporations Act 2001 (Cth). (item 15)

Consolidated statement of profit or loss and other comprehensive income

for the year ended 30 June 2023

Note		2023	2022
		$	$
Continuing operations
Revenue1.1		194,131	1,408,330
Cost of sales		(99,014)	(365,174)
Gross profit		95,117	1,043,156
Other income1.2		1,183,463	1,476,671
Administrative and other costs		(2,124,896)	(1,637,954)
Research and development costs		(1,690,254)	(2,024,235)
Selling and distribution costs		(143,647)	(425,183)
Operating loss		(2,680,217)	(1,567,545)
Interest and finance costs		(58,252)	(13,365)
Impairment expense	4.2.2	(527,784)	-
Put option agreement fees expensed		(837,942)	-
Loss before tax2.1		(4,104,195)	(1,580,910)
Income tax benefit3.1		-	-
Net loss for the year		(4,104,195)	(1,580,910)
Other comprehensive income, net of income tax		-	-
Other comprehensive income for the period, net of tax		-	-
Total comprehensive income attributable to members of the parent entity		(4,104,195)	(1,580,910)
Earnings per share:		₵	₵
Basic and diluted loss per share (cents per share)		(0.94)	(0.40)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

ABN 90 608 047 794 30 June 2023

Consolidated statement of financial position

as at 30 June 2023

	Note	2023	2022
Current assets		$	$
Cash and cash equivalents	4.1	358,432	748,050
Trade and other receivables	4.2.1	1,172,336	1,357,892
Inventories	5.1	83,845	154,274
Other current assets	4.3.1	57,207	88,489
Financial Assets	4.6.1	-	502,000
Total current assets		1,671,820	2,850,705
Non-current assets
Right of use asset - property, plant, and equipment		14,460	20,554
Financial Assets	4.6.1	-	335,942
Intangible assets	5.2	7,489,990	7,890,070
Total non-current assets		7,504,450	8,246,566
Total assets		9,176,270	11,097,271
Current liabilities
Trade and other payables	4.4.1	1,063,725	767,733
Borrowings	4.5.1	17,752	24,529
Derivative liabilities	4.6.2	-	26,500
Total current liabilities		1,081,477	818,762
Non-current liabilities
Trade and other payables	4.4.2	-	200,000
Derivative liabilities	4.6.2	-	26,500
Total non-current liabilities		-	226,500
Total liabilities		1,081,477	1,045,262
Net assets		8,094,793	10,052,009
Equity		-	-
Issued capital	6.1.1	24,244,454	22,871,096
Reserves	6.4	1,002,715	229,094
Accumulated losses		(17,152,376)	(13,048,181)
Total equity		8,094,793	10,052,009

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

Consolidated statement of changes in equity

for the year ended 30 June 2023

	Note			Share-based
		Contributedequity	Accumulatedlosses	paymentreserve	Totalequity
		$	$	$	$
Balance at 1 July 2021		20,978,594	(11,467,271)	91,252	9,602,575
Loss for the year attributable to the owners of theparent		-	(1,580,910)	-	(1,580,910)
Other comprehensive income for the yearattributable to the owners of the parent		-	-	-	-
Total comprehensive income for the yearattributable to the owners of the parent		-	(1,580,910)	-	(1,580,910)
Transaction with owners, directly in equity
Shares issued during the year (net of costs)	6.1.1	1,892,502	-	-	1,892,502
Share-based payments during the year	6.3	-	-	137,842	137,842
Balance at 30 June 2022		22,871,096	(13,048,181)	229,094	10,052,009
Balance at 1 July 2022		22,871,096	(13,048,181)	229,094	10,052,009
Loss for the year attributable to the owners of theparent		-	(4,104,195)	-	(4,104,195)
Other comprehensive loss for the year attributableto the owners of the parent		-	-	-	-
Total comprehensive loss for the year attributable tothe owners of the parent		-	(4,104,195)	-	(4,104,195)
Transaction with owners, directly in equity
Shares issued during the year (net of costs)	6.1.1	1,397,358	-	-	1,397,358
Share-based payments during the year	6.3	-	-	773,621	773,621
Balance at 30 June 2023		24,268,454	(17,152,376)	1,002,715	8,118,793

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

PAGE | 8

Consolidated statement of cash flows

for the year ended 30 June 2023

	Note	2023	2022
		$	$
Cash flows from operating activities
Receipts from customers		193,326	358,355
Payments to suppliers and employees		(2,955,997)	(3,566,046)
Receipt of research and development tax incentive		984,992	801,078
Interest paid and facility fees		(58,252)	(13,365)
Net cash used in operating activities		(1,835,931)	(2,419,978)
Cash flows from investing activities
Purchase of intangibles		-	-
Net cash used in investing activities		-	-
Cash flows from financing activities
Proceeds from issue of shares	6.1.1	1,772,102	2,100,000
Share issue costs		(129,837)	(141,440)
Proceeds of borrowings		638,251	1,710,507
Repayments of borrowings		(834,203)	(788,671)
Net cash provided by financing activities		1,446,313	2,880,396
Net increase in cash and cash equivalents held		(389,618)	460,418
Cash and cash equivalents at the beginning of the year		748,050	287,632
Cash and cash equivalents at the end of the year-	4.1	358,432	748,050

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

Notes to the preliminary final report

Note 1		Revenue and other incomeNote	2023$	2022$
1.1	Revenue
		Sales to customers	194,131	1,408,330
			194,131	1,408,330
1.2		Other Income
		Research and development tax incentives grant income	1,129,934	984,463
		Fair value adjustment of fee options	53,000	492,208
		Interest income	529	-
			1,183,463	1,476,671

Note 2	ExpensesNote	2023$	2022$
2.1	Expenses by nature
	Administration expenses2.2	462,142	340,506
	Advertising and marketing expenses	143,647	425,183
	Amortisation5.2	406,174	406,174
	Corporate expenses2.3	230,753	294,985
	Employee benefits expense2.4	976,642	510,500
	Impairment expense4.2.2	527,784	-
	Occupancy costs	107,437	99,154
	Manufacturing, purchasing, and distribution costs	99,014	365,174
	Put Option Agreement fees expensed	837,942	-
	Research and development expenses	1,690,254	2,024,235
	Total expenses by nature	5,481,789	4,465,911
2.1.1	Reconciliation to net profit or loss before tax
	Total revenue and other income	1,377,594	2,885,001
	Less: Total expenses by nature	(5,481,789)	(4,465,911)
	Net profit before tax	(4,104,195)	(1,580,910)
2.2	Administration expenses	-	-
	Accounting expenses	157,709	144,756
	External consulting fees	81,892	40,000
	Travel expenses	13,898	1,808
	Interest expenses and finance facility costs	58,252	13,365
	Other expenses	150,391	140,577
		462,142	340,506
2.3	Corporate expenses
	ASX fees	51,545	60,238
	Audit expenses	71,376	66,345
	Filing fees	-	20,505
	Legal expenses	61,444	125,444
	Share Registry and shareholder communications	46,388	22,453
		230,753	294,985

Notes to the preliminary final report

for the year ended 30 June 2023

			2023	2022
Note 2	Expenses (cont.)		$	$
2.4	Employee benefits expense
	Directors' fees		106,510	106,000
	Executive services contracts		241,749	212,182
	Wages and salaries – non-R&D		190,589	54,476
	Share-based performance rights: amortisation		437,794	137,842
			976,642	510,500
Note 3	Income tax	Note	2023$	2022$
3.1	Income tax expense
	Current tax		-	-
	Deferred tax		-	-
			-	-
Note 4	Financial assets and financial liabilities
4.1	Cash and cash equivalents		2023$	2022$
	Cash at bank		358,432	748,050
			358,432	748,050
4.2	Trade and other receivables	Note	2023$	2022$
4.2.1	Current
	Trade receivables	4.2.2	1,074,847	1,074,042
	Less: Provision for impairment	4.2.2	(527,784)	-
	Research and Development rebate receivable		1,129,934	984,463
	Less: R&D Rebate Advance Facility Terms		(538,251)	(734,203)
	Net Research and Development rebate receivable		591,683	250,260
	Other receivables		33,590	33,590
			1,172,336	1,357,892

4.2.2 Trade receivables of $1,055,568 relate to an order from Pacific Health. The Company has provided extended payment term for this order to facilitate entry into markets for its SuprCuvr products and generate cashflows that may facilitate payments and orders in the near future. Under the Agreement with Pacific Health, the principals of Pacific Health have provided personal guarantees that the obligations under the Agreement will be fulfilled. However, due to the uncertainty of the timing of the receipt of the balance of the amounts outstanding, the Company has recognised a provision for impairment of $527,784 as at 30 June 2023 (30 June 2022: Nil).

4.3	Other assets	Note	2023$	2022$
4.3.1	Current
	Prepayments – Raw materials		57,207	88,489
			57,207	88,489

Notes to the preliminary final report

Note 4	Financial assets and financial liabilities (cont.)
4.4	Trade and other payables	2023	2022
		$	$
4.4.1	Current
	Unsecured
	Trade payables	233,664	187,885
	Key management personnel related	428,925	325,776
	Sundry payables and accrued expenses	102,218	121,066
	Net Goods and Services Tax (receivable) / payable	(1,082)	33,006
	Commitment Fee payable	300,000	100,000
		1,063,725	767,733
4.4.2	Non-Current
	Unsecured
	Commitment Fee payable	-	200,000
		-	200,000
4.5	Borrowings	2023	2022
		$	$
4.5.1	Current
	Leases – motor vehicle	17,752	24,529
		17,752	24,529
		2023	2022
4.6	Derivative assets and liabilities	$	$
4.6.1	Financial assets
	Prepaid commitment fee – current	-	502,000
	Prepaid commitment fee – non-current	-	335,942
		-	837,942
4.6.2	Derivative liabilities
	LDA Commitment fee liability – current	-	26,500
	LDA Commitment fee liability – non-current	-	26,500
		-	53,000
Note 5	Non-financial assets and financial liabilities
5.1	Inventories	2023$	2022$
	Finished goods	83,845	154,274
		83,845	154,274

Notes to the preliminary final report

for the year ended 30 June 2023

Note 5	Non-financial assets and financial liabilities (cont.)
5.2	Intangible assets			2023$	2022$
	SE FormulaTM			9,859,296	9,859,296
	Accumulated amortisation			(2,379,486)	(1,990,482)
				7,479,810	7,868,814
	Website development costs			55,410	55,410
	Accumulated amortisation			(45,230)	(34,154)
				10,180	21,256
	Total intangibles			7,489,990	7,890,070
Note 6	Equity
6.1	Issued capital	2023No.	2022No.	2023$	2022$
	Fully paid ordinary shares at no parvalue	543,986,095	407,727,266	24,244,454	22,871,096
6.1.1	Ordinary shares
	At the beginning of the year	407,727,266	379,477,266	22,871,096	20,978,594
	Shares issued during the year:
	06.10.21 Placement		26,250,000		2,100,000
	15.11.21 Collateral Sharesallocated for fees		2,000,000		100,000
	26.10.22 Consultancy fees	2,907,631	-	114,849	-
	04.11.22 Placement	30,000,000	-	750,000	-
	31.05.23 Entitlement issue	93,226,979	-	932,270	-
	20.06.23 Shortfall placement	3,971,238	-	39,712	-
	30.06.23 Underwriting fee	6,152,981	-	61,530	-
	Unplaced applications	-	-	26,120	-
	Share issue transaction costs	-	-	(551,123)	(307,498)

6.1.2 Treasury shares 2023

	No.	No.
At beginning of the year	25,500,000	27,500,000
Ordinary shares allocated for fees	-	(2,000,000)
At end of the year	25,500,000	25,500,000

At end of the year 543,986,095 407,727,266 24,244,454 22,871,096

2022

Notes to the preliminary final report

Note 6	Equity (cont.)
6.2	Options	2023	2022	2023	2022
		No.	No.	$	$
	Options on issue	197,351,198	26,000,000	335,827	-
6.2.1	Options
	At the beginning of the year	26,000,000	26,000,000	-	-
	Options movement during the year:
	04.11.22 Free options issued toPlacement shares	30,000,000	-	-	-
	17.02.23 Lead manager fee	28,000,000	-	277,827	-
	31.05.23 Free options issued toEntitlement shares	93,226,979	-	-	-
	20.06.23 Free options issued toshortfall shares	3,971,238	-	-	-
	30.06.23 Underwriter fees	6,152,981	-	-	-
	30.06.23 Lead manager fee	10,000,000	-	58,000	-
	At end of the year	197,351,198	26,000,000	335,827	-
6.3	Performance rights	2023No.	2022No.	2023$	2022$
	Performance rights	209,000,000	209,000,000	666,888	229,094
	At the beginning of the year	209,000,000	47,000,000	229,094	91,252
	Performance rights movementduring the year:
	Issued	-	162,000,000	-	88,204
	Amortisation of rights	-	-	437,794	49,638
	At reporting date	209,000,000	209,000,000	666,888	229,094
6.4	Reserves			2023$	2022$
	Share-based payment reserve			1,002,715	229,094
				1,002,715	229,094
Note 7	Share-based payments			2023	2022
7.1	Share-based payments:			$	$
	Recognised in profit and loss (expenses)			443,621	137,842
	Recognised in equity (transaction costs)			335,827	-
	Gross share-based payments			779,448	137,842

Skin Elements Limited (ASX:SKN) 1242 Hay Street West Perth, Western Australia, 6005 Australia P 08 6311 1900 F 08 6311 1999 www.skinelementslimited.com info@skinelementslimited.com www.sknlife.com.au