SKIN ELEMENTS LIMITED — Interim / Quarterly Report 2018

Oct 31, 2018

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31 October 2018

Quarterly Activity Report - Period ending 30 September 2018

Australian natural skin care company Skin Elements Limited (ASX: SKN) (Skin Elements, the Company) is pleased to present its Quarterly Activities Report for the period ending 30 September 2018.

SKNLife Launched - Three New Brands Completed with Soleo Organics Brand Extension

Skin Elements has increased its range of all natural and organic products with the launch of its PapayaAvtivs range, Complete Esscience range, Elizabeth Jane Natural Cosmetics range and the extension to its internationally award winning Soleo Organics natural sunscreen range:

• Launch of PapayaActivs natural therapeutic range with the highest percentage of PapayaActive extract with five new products – eczema cream, psoriasis dermatitis and rashes cream, arthritis cream, wounds and burns cream, and muscle aches and pain cream.

• Launch of the Complete Esscience natural skincare range of body and haircare products including complete skincare cream, hydrating facial cream, complete skincare soap, complete skincare bodywash, complete scalpcare shampoo and conditioner, and complete replenishing shampoo and conditioner.

• Launch of Elizabeth Jane Natural Cosmetics range with the first four products being age defy renewal cream, snow white brightening essence, delicate eyes rejuvenation gel and intensive recovery night cream.

• Soleo Organics 100% natural and organic sunscreen range extension including Baby sensitive, Everyday lite, Everyday lite (ED) coconut, and Face extra sensitive.

Sales Positioned for Growth Momentum

All new products are in progress with manufacturing commenced with our two laboratories Baxter Laboratories in Victoria and Tripak Laboratories in Queensland. The Company has also increased working capital by $340,000 to underwrite the sales growth.

Skin Elements Executive Chairman Mr Peter Malone noted “With 38 different skincare products developed Skin Elements is positioned for strong sales growth. ”

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Peter Malone Media and Investor Inquiries Executive Chairman James Moses Skin Elements Limited Mandate Corporate T: +61 439 430 770 T: +61 420 991 574 E: peter@senatural.com E: james@manadatecorporate.com.au

About Skin Elements

Skin Elements is an Australian owned and operated ASX-listed skin care company focused on the development of natural and organic skin care products, as an alternative to current chemical-based products. It has developed a portfolio of products which includes its lead product, the Soléo Organics 100% natural and organic sunscreen, PapayaActivs natural therapeutics, Complete Esscience natural skincare, and the Elizabeth Jane Natural Cosmetics brand. The Company has completed a highly successful test marketing phase in major international markets for Soléo Organics and has regulatory approval with the USA FDA, TGA and other significant regulators. Skin Elements aims to become the number one recognised national and international sunscreen brand.

Further information is available via the Company website: http://skinelementslimited.com

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity
Skin Elements Limited
ABN		Quarter ended (“current quarter”)
90 608 047 794		30 September 2018

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers 101 101
1.2 Payments for
(a) research and development ( note 4 ) (516) (516)
(b) product manufacturing and
operating costs (66) (66)
(c) advertising and marketing (70) (70)
(d) leased assets (24) (24)
(e) staff costs (187) (187)
(f) administration and corporate costs (158) (158)
1.3 Dividends received - -
1.4 Interest received - -
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - -
1.9 Net cash from / (used in) operating (920) (920)
activities
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• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment - -
(b) businesses (see note 5 ) - -
(c) investments - -
(d) intellectual property - -
(e) other non-current assets - -
2.2 Proceeds from disposal of:
(a) property, plant and equipment - -
(b) businesses (see item 10) - -
(c) investments - -
(d) intellectual property - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing - -
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares 1,043 1,043
3.2 Proceeds from issue of convertible - -
notes
3.3 Proceeds from exercise of share -
options
3.4 Transaction costs related to issues of
shares, convertible notes or options (106) (106)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(3 months)
$A’000
3.7 Transaction costs related to loans and
borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing 937 937
activities
4. Net increase / (decrease) in cash and cash
equivalents for the period
4.1 Cash and cash equivalents at beginning
of quarter/year to date 196 196
4.2 Net cash from / (used in) operating
activities (item 1.9 above) (920) (920)
4.3 Net cash from / (used in) investing
activities (item 2.6 above) - -
4.4 Net cash from / (used in) financing
activities (item 3.10 above) 937 937
4.5 Effect of movement in exchange rates
on cash held - -
4.6 Cash and cash equivalents at end of
quarter 213 213
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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in
the consolidated statement of cash
flows) to the related items in the
accounts
5.1 Bank balances 213 196
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of 213 196
quarter (should equal item 4.6 above)
6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in (190)
item 1.2
6.2 Aggregate amount of cash flow from loans to these parties
included in item 2.3 -
6.3 Include below any explanation necessary to understand the transactions included
in items 6.1 and 6.2
Directors remuneration (per the service agreements) (190)
7. Payments to related entities of the entity and their associates Current quarter
$A'000
7.1 Aggregate amount of payments to these parties included in -
item 1.2
7.2 Aggregate amount of cash flow from loans to these parties
included in item 2.3 -
7.3 Include below any explanation necessary to understand the transactions included
in items 7.1 and 7.2
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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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8. Financing facilities available Total facility Amount drawn at
Add notes as necessary for an amount at quarter quarter end
understanding of the position end $A’000
$A’000
8.1 Loan facilities - -
8.2 Credit standby arrangements - -
8.3 Other
October Placement 340 -
R&D Tax Rebate 490 -
8.4 Include below a description of each facility above, including the lender, interest
rate and whether it is secured or unsecured. If any additional facilities have been
entered into or are proposed to be entered into after quarter end, include details
of those facilities as well.
October Placement: On 4 October 2018 the Company completed a share and option
placement raising $340,000 working capital.
R&D Tax Rebate: Subsidiary SE Operations Pty Ltd has lodged R& Tax Rebate claim of
$490,000 expected to be received in December 2018 quarter.
9. Estimated cash outflows for next quarter $A’000
9.1 Research and development (90)
9.2 Product manufacturing and operating costs (125)
9.3 Advertising and marketing (72)
9.4 Leased assets (25)
9.5 Staff costs (140)
9.6 Administration and corporate costs (50)
9.7 Other (provide details if material) -
9.8 Total estimated cash outflows (502)
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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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10. Acquisitions and disposals of Acquisitions Disposals
business entities
(items 2.1(b) and 2.2(b) above)
10.1 Name of entity N/A N/A
10.2 Place of incorporation or N/A N/A
registration
10.3 Consideration for acquisition or N/A N/A
disposal
10.4 Total net assets N/A N/A
10.5 Nature of business N/A N/A
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Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................ (Company Secretary) Print name: Craig Piercy

Date: 31 October 2018

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position.

2. This quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report with the exception of the additional detail presented in item 1.2 above.

3. The Group comprises parent entity Skin Elements Limited (ACN 608 047 794) and wholly owned subsidiary Skin Elements Operations Pty Ltd (ACN 110 352 424) acquired on 31 December 2016.

4. The Group has undertaken research and development activities as part of its on-going operations. The costs associated with the research and development process have been identified and disclosed separately from the additional cost categories such as lease, staff and administration costs.

5. See chapter 19 for defined terms 1 September 2016

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