Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

SKIN ELEMENTS LIMITED Interim / Quarterly Report 2022

Feb 28, 2022

65803_rns_2022-02-28_793e07fb-788e-49a0-8a8e-762d3718c360.pdf

Interim / Quarterly Report

Open in viewer

Opens in your device viewer

APPENDIX 4D Interim Financial Report 31 December 2021

SKIN ELEMENTS LIMITED A B N 9 0 6 0 8 0 4 7 7 9 4 and its controlled entities

INTERIM FINAL REPORT 31 December 2021

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

Corporate directory

Current Directors Peter Malone Executive Chairman Phil Giglia Non-Executive Director Lee Christensen Non-Executive Director

Company Secretary

Phil Giglia

Registered Office

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 (08) 6311 1900 +61 1300 554 474 (International) Facsimile: +61 (08) 6311 1999 Facsimile: +61 (08) 6370 4203 Email: [email protected] Email: [email protected] Website: www.skinelementslimited.com Website: www.linkmarketservices.com.au

Auditors

Securities Exchange

BDO Audit (WA) Pty Ltd Australian Securities Exchange Mia Yellagonga Tower 2 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 (08) 6382 4600 Telephone: +61 (02) 9338 0000 Facsimile: +61 (08) 6382 4601 Facsimile: +61 (02) 9227 0885 Website: www.bdo.com.au Website: www.asx.com.au ASX Code SKN

PAGE | i

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Contents

Results for announcement to the market .............................................................................................................................. 1 Directors' report ..................................................................................................................................................................... 3 Auditor’s declaration of independence .................................................................................................................................. 7 Condensed consolidated statement of profit or loss and other comprehensive income....................................................... 8 Condensed consolidated statement of financial position ..................................................................................................... 9 Condensed consolidated statement of changes in equity .................................................................................................... 10 Condensed consolidated statement of cash flows ............................................................................................................... 11 Notes to the condensed consolidated financial statements ................................................................................................ 12 Directors' declaration ........................................................................................................................................................... 28 Independent auditor's review report ................................................................................................................................... 29

PAGE | ii

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Results for announcement to the market

for the half-year ended 31 December 2021

1 REPORTING PERIOD (item 1)

Results for announcement to the market
for the half-year ended 31 December 2021		 Results for announcement to the market
for the half-year ended 31 December 2021
1
REPORTING PERIOD(item 1)
Report for the period ended:
31 December 2021
Previous corresponding period is half-year ended:
31 December 2020
2
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Movement		 Percentage
Amount
%
$
Revenues from ordinary activities (item 2.1)
Decrease
Loss from ordinary activities after tax attributable to members
(item 2.2)
Decrease
in loss
Loss after tax attributable to members (item 2.3)
Decrease
in loss		 (20.07)
to
118,457
(12.39)
to
(1,196,631)
(12.39)
to
(1,196,631)
a. Dividends(items 2.4 and 5) Amount per
Franked amount
Security
per security
₵
%
Interim dividend
nil
n/a
Final dividend
nil
n/a
Record date for determining entitlements to the dividend
(item 2.5)
n/a
b. Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6):
The revenue and losses for the period reflect continued focus on the development of the Company’s SE Formula
including the Invisi Shield® sanitiser and disinfectant range.		 nil
n/a
nil
n/a

b. Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6): The revenue and losses for the period reflect continued focus on the development of the Company’s SE Formula including the Invisi Shield® sanitiser and disinfectant range.

3 DIVIDENDS (item 6) AND RETURNS TO SHAREHOLDERS INCLUDING DISTRIBUTIONS AND BUY BACKS

Nil.

a. Details of dividend or distribution reinvestment plans in operation are described below (item 6): Not applicable

4
RATIOS		 Previous
Current
corresponding
period
period
a. Financial Information relating to 4b:
Earnings for the period attributable to owners of the parent
Net assets
Less: Intangible assets
Net tangible (liabilities)/assets
Fully paid ordinary shares
b. Net tangible (liability)/assets backing per share (cents)(item 3):		 $
$
(1,196,631)
(1,365,850)
10,509,527
9,602,575
(8,090,110)
(8,290,150)
2,419,417
1,312,425
No.
No.
407,727,266
379,477,266
₵
₵
0.593
0.346

PAGE | 1

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Results for announcement to the market

for the half-year ended 31 December 2021

5 DETAILS OF ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD:(item 4)
a. Control gained over entities
Name of entities (item 4.1) Nil
Date(s) of gain of control (item 4.2) n/a
b. Loss of control of entities
Name of entities (item 4.1) Nil
Date(s) of loss of control (item 4.2) n/a
c. Contribution to consolidated loss from ordinary activities after tax by n/a
the controlled entities to the date(s) in the current period when
control was gained / lost (item 4.3).
d. Loss from ordinary activities after tax of the controlled entities for the n/a
whole of the previous corresponding period (item 4.3)

6 DETAILS OF ASSOCIATES AND JOINT VENTURES: (item 7)

6
DETAILS OF ASSOCIATES AND JOINT VENTURES:(item 7)		 6
DETAILS OF ASSOCIATES AND JOINT VENTURES:(item 7)
Name of entities (item 7)
Nil
Percentage holding in each of these entities (item 7)
N/A
Current period
Previous
corresponding
period
Aggregate share of profits (losses) of these entities (item 7) N/A
N/A
  • 7 The financial information provided in the Appendix 4D is based on the interim final report (attached), which has been prepared in accordance with Australian Accounting Standards.

8 The Interim Financial Report is reviewed.

PAGE | 2

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Directors' report

Your directors present their report on the Group, consisting of Skin Elements Limited ( Skin Elements , SKN , or the Company ) and its controlled entities (collectively the Group ), for the half-year ended 31 December 2021.

Skin Elements is listed on the Australian Securities Exchange (ASX: SKN).

1. Directors

The names of Directors in office at any time during or since the end of the half-year are:

==> picture [11 x 10] intentionally omitted <==

Peter Malone Executive Chairman and Chief Executive Officer Phil Giglia Independent Non-Executive Director Lee Christensen Independent Non-Executive Director ( Appointed on 31 August 2021) John Poulsen Independent Non-Executive Director ( Resigned on 31 August 2021 )

==> picture [11 x 10] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

( the Directors or the Board )

Directors have been in office since the start of the half-year to the date of this report unless otherwise stated.

2. Operating and financial review

  • 2.1. Operations Review

SKN delivers SuprCuvr Hospital Grade Disinfectant withTGA Listing and Production Commenced

The Company formally launched its SuprCuvr hospital grade disinfectant following registration by the Therapeutic Goods Administration (TGA) achieving 99.99999% (7 log reduction) effectiveness against COVID 19 in independent laboratory testing.

SKN’s research indicates that this is the first and only approved disinfectant globally with such a high efficacy rating against COVID 19.

The TGA registration allows the Company to make detailed and specific product and label claims in respect to Invisi Shield SuprCuvr which paves the way for Skin Elements to commence its commercialization and growth strategy.

The Company has procured manufacturing and ingredients supply chain facilities with the ability to produce 100,000 litres per day of SuprCuvr hospital grade disinfectant in intermediate bulk containers (IBCs) on an ongoing and increasing basis. The Company is also assessing additional batching facilities to ensure availability of SuprCuvr products through Pacific Health Care (www.pacifichealthcare.com.au) and for sale through the Company’s online store (www.sknlife.com.au.)

Exclusive Australia and New Zealand SuprCuvr Distribution Agreement

On 17 January 2022 Skin Elements executed a binding Agreement with Pacific Health Care Pty Ltd (Pacific Health) a 35 year health distributor for the exclusive distribution of Skin Elements’ TGA registered SuprCuvr hospital grade disinfectant in Australia and New Zealand (Agreement).

The Agreement represents the next step in the commercialisation strategy for SuprCuvr. It will allow Skin Elements to leverage off Pacific Health’s existing health distribution networks and immediately drive sales into the Australian and New Zealand markets, and underpin the Company’s operations to further execute its global commercialisation strategy.

The Agreement is for an initial term of 12 months, which will be extended for up to an additional 48 months in total, subject to achievement of minimum sales volumes each year.

The Agreement targets sales volumes of 1.2 million litres of SuprCuvr in year one, and total sales volumes of 5.5692 million litres over the duration of the Agreement, subject to the achievement of annual sales targets.

Pacific Health Care was established in 1987, and has a successful track record of selling and distributing a range of consumable medical products into the Australian medical industry.

Its customers include, state governments (NSW Health, WA Health, Queensland Health and Tasmania Health), hospitals (St John of God Hospitals and Perth Children’s Hospital), clinics, aged care facilities, general practitioners and dentists, surgical and medical sub-distributors, veterinary clinics, and at home patients.

Further details of the Agreement were provided in ASX announcement of 17 January 2022.

PAGE | 3

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Directors' report

Appointment of New Director

On 31 August 2021, SKN appointed Mr Lee Christensen to the Board as a Non-Executive Director. Mr Christensen’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 Christensen’s appointment follows the resignation of Mr John Poulsen as a Non-Executive Director.

Research & Development Rebate

With the Company focus on development of its natural antimicrobial technologies, SKN has received approval and payment from AusIndustry for the 2021 R&D Rebate of $989k and accrued $466k R&D Rebate for the R&D expenditure invested in the six months to 31 December 2021.

Placement raises $2.1 million

During the period, the Company completed a placement of 26,250,000 ordinary fully paid shares at $0.08 each raising $2.1 million cash under the Company’s LR7.1 and 7.1A placement capacity. The funds will be used to fund its stated business plans including the launch of its new TGA registered SuprCuvr plant based hospital grade disinfectant and provided sufficient working capital for the Company to be reinstated to official quotation on ASX on 19 October 2021.

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 lines.

Skin Elements expects to issue the first initial drawdown notice and complete the first drawdown prior to 30 June 2022.

As part consideration for entering into 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 balance date the fair value of the derivative liability has been reassessed to $314,00 due to the time value of money and the amount of $231,208 is recognised as a fair value gain to P&L.

The Company also has on issue to LDA Capital 27,500,000 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.

The Company is also required to pay a commitment fee of A$400,000 to LDA Capital which is payable in cash in four equal instalments at closing of the Company’s first four capital calls. It was agreed between SKN and LDA Capital to release 2,000,000 SKN collateral shares held by LDA Capital in lieu of the first initial commitment fee of $100,000 cash (price of $0.05 each). This amount has been bought to account as a pre-paid capital raising cost.

Entitlement Issue to raise over $2 million

The Company has advised that it will be undertaking a non renounceable pro rata entitlement issue at an issue price of $0.08 per share on the basis of one (1) new share for every fifteen (15) ordinary shares held. Shareholders who subscribe for the entitlement issue will also receive one attaching listed option for every two new shares issued, exercisable at $0.10 and expiring on 15 March 2024.

Under the entitlement issue up to 25,298,484 shares and 12,649,242 attached options will be issued to raise up to $2,023,879 (before costs). An updated timetable has been announced with the issue of a prospectus and entitlement application forms in March 2022 with completion in April 2022.

PAGE | 4

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Directors' report

2.2. Financial Review

  • a. Key profit and loss measures
Movement
(increase/
decrease)
Movement
$		 6 months to
6 months to
31 December
31 December
2021
2020
$ $
Revenues from ordinary activities
decreased
29,743
Loss from ordinary activities after tax
decreased
169,219
EBITDA Loss
increased
172,872
b. Key net asset measures		 118,457
148,200
(1,196,631)
(1,365,850)
(993,544)
(1,166,416)
Movement
(increase/
decrease)
Movement
$		 31 December
30 June
2021
2021
$ $
Cash and cash equivalents
increased
1,277,589
Working capital_(excluding prepayments)
_increased
935,147
Net tangible assets
increased
1,106,992
Net assets
increased
906,952		 1,565,221
287,632
2,174,886
1,239,739
2,419,417
1,312,425
10,509,527
9,602,575

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.

2.3. Impact of COVID 19 Coronavirus

Whilst SKN has continued to operate from West Perth premises during the period, the impact of COVID-19 restrictions has seen delay of orders from national and international distributors, restrictions on travel and reduced ability to meet with distributors and new customers, increased costs and shipment timeframes for national and international freight, and delayed production and the delivery of inventories from its contract manufacturers in Victoria and Queensland.

2.4. Events Subsequent to Reporting Date

On 17 January 2022 SKN announced that it entered into a binding Agreement with Pacific Health Care Pty Ltd (Pacific Health) for the exclusive distribution of Skin Elements’ TGA registered SuprCuvr hospital grade disinfectant in Australia and New Zealand details of which are set out above.

There are no other significant after balance date events that are not covered in this Directors' Report or within the financial statements as disclosed in Note 7 Events subsequent to reporting date on page 22.

2.5. Future Developments, Prospects, and Business Strategies

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

==> picture [10 x 10] intentionally omitted <==

  • The Company will place equity and receive up to $20 million in committed equity capital over the next 36 months under the equity funding facility with LDA Capital.

==> picture [10 x 9] intentionally omitted <==

  • The Company will undertake future capital raising through an entitlement issue, and the consideration of other equity and debt proposals

==> picture [10 x 10] intentionally omitted <==

  • The Company will continue to focus on development and commercialisation of its natural skin care 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.

PAGE | 5

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

SKIN ELEMENTS LIMITED

Directors' report

3. Auditor's independence

The auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the half-year ended 31 December 2021 has been received and can be found on page 7 of the interim financial report.

==> picture [208 x 35] intentionally omitted <==

PETER MALONE

Executive Chairman

Dated this Monday, 28 February 2022

PAGE | 6

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

AUDITOR’S DECLARATION OF INDEPENDENCE

PAGE | 7

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

SKIN ELEMENTS LIMITED

Condensed consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2021

for the half-year ended 31 December 2021
Note 6 months to
6 months to
31 December
31 December
2021
2020
$ $
Continuing operations
Revenue
1.1
Cost of sales
Gross profit
Other income
1.2
Administration expenses
2.1
Advertising and marketing expenses
Amortisation
4.2
Corporate expenses
2.2
Consultants’ fees
2.3
Occupancy costs
Research and development expenses
Loss before tax
Income tax expense
Net loss for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss attributable to members of the parent entity
Loss per share:
Basic and diluted loss per share (cents per share)
10.4		 118,457
148,200
(46,372)
(60,019)
72,085
88,181
697,735
428,130
(546,228)
(495,772)
(206,570)
(155,995)
(203,087)
(199,434)
(246,074)
(182,507)
(64,350)
(112,849)
(58,850)
(47,511)
(641,292)
(688,093)
(1,196,631)
(1,365,850)
-
-
(1,196,631)
(1,365,850)
-
-
(1,196,631)
(1,365,850)
(0.310)
(0.420)
(993,544)
(1,166,416)

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

PAGE | 8

SKIN ELEMENTS LIMITED

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

Condensed consolidated statement of financial position

as at 31 December 2021

Condensed consolidated statement of financial position
as at 31 December 2021
Note 31 December
30 June
2021
2021
$ $
Current assets
Cash and cash equivalents
3.1
Trade and other receivables
3.2.1
Inventories
4.1
Other current assets
3.3.1
Financial Assets
3.6.1
Total current assets
Non-current assets
Right of use asset - property, plant, and equipment
Financial Assets
3.6.1
Intangible assets
4.2
Total non-current assets
Total assets
Current liabilities
Trade and other payables
3.4.1
Borrowings
3.5.1
Derivative liabilities
3.6.2
Total current liabilities
Non-current liabilities
Trade and other payables
3.4.2
Derivative liabilities
3.6.2
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
5.1.1
Reserves
5.4
Accumulated losses
Total equity		 1,565,221
287,632
525,236
1,122,891
231,859
223,225
75,930
72,225
502,000
502,000
2,900,246
2,207,973
23,601
26,648
502,000
502,000
8,090,110
8,290,150
8,615,711
8,818,798
11,515,957
11,026,771
464,626
647,998
27,804
30,990
157,000
272,604
649,430
951,592
200,000
200,000
157,000
272,604
357,000
472,604
1,006,430
1,424,196
10,509,527
9,602,575
-
-
23,057,154
20,978,594
116,275
91,252
(12,663,902)
(11,467,271)
10,509,527
9,602,575

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

PAGE | 9

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

Condensed consolidated statement of changes in equity

for the half-year ended 31 December 2021

for the half-year ended 31 December 2021
Note
Balance at 1 July 2020
Loss for the year attributable to the owners of the parent
Other comprehensive income for the year attributable to the
owners of the parent
Total comprehensive income for the year attributable to the
owners of the parent
Transaction with owners, directly in equity		 Share-based
Contributed
Accumulated
payment
Total
equity
losses
reserve
equity
$ $ $ $
17,607,998
(8,424,748)
29,103
9,212,353
-
(1,365,850)
-
(1,365,850)
-
-
-
-
-
(1,365,850)
-
(1,365,850)
Shares issued during the half-year (net of costs)
5.1.1		 2,137,739
-
-
2,137,739
Share based payments during the half-year
11		 -
-
37,534
37,534
Balance at 31 December 2020
Balance at 1 July 2021
Loss for the year attributable to the owners of the parent
Other comprehensive loss for the year attributable to the owners
of the parent
Total comprehensive loss for the year attributable to the owners
of the parent
Transaction with owners, directly in equity
Shares issued during the half-year (net of costs)
5.1.1
Share based payments during the half-year
11
Balance at 31 December 2021		 19,745,737
(9,790,598)
66,637
10,021,776
20,978,594
(11,467,271)
91,252
9,602,575
-
(1,196,631)
-
(1,196,631)
-
-
-
-
-
(1,196,631)
-
(1,196,631)
2,078,560
-
-
2,078,560
-
-
25,023
25,023
23,057,154
(12,663,902)
116,275
10,509,527

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

PAGE | 10

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Condensed consolidated statement of cash flows

for the half-year ended 31 December 2021

Condensed consolidated statement of cash flows
for the half-year ended 31 December 2021
Note 6 months to
6 months to
31 December
31 December
2021
2020
$ $
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Receipt of research and development tax incentive
Interest paid and facility fees
JobKeeper payment scheme and ATO cash flow boost
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Repayments of borrowings
Net cash provided by financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
-
3.1		 121,112
146,363
(1,799,746)
(1,709,454)
988,711
668,418
(11,048)
(88,359)
-
92,500
(700,971)
(890,532)
-
(36,410)
-
(36,410)
2,100,000
2,086,888
(121,440)
-
-
(500,000)
1,978,560
1,586,888
1,277,589
659,946
287,632
205,947
1,565,221
865,893

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

PAGE | 11

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

In preparing the December 2021 interim financial statements, Skin Elements Limited has grouped notes into sections under three key categories:

Section A: How the numbers are calculated ............................................................................................................................ 13 Section B: Unrecognised items ................................................................................................................................................ 22 Section C: Other Information ................................................................................................................................................... 23

The financial report is presented in Australian dollars, except where otherwise stated.

Company details

The registered office of the Company is:

Street + Postal: 1242 Hay Street WEST PERTH WA 6005

PAGE | 12

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

SECTION A. HOW THE NUMBERS ARE CALCULATED

This section provides additional information about those individual line items in the financial statements that the Directors consider most relevant in the context of the operations of the entity.

Note
1
Revenue and other income
Note		 6 months to
6 months to
31 December
31 December
2021
2020
$ $
1.1
Revenue
Sales to customers
1.2
Other Income
Research and development tax incentives grant income
JobKeeper Payment scheme_grant income
_ATO Cash flow boost_grant income
_Fair value adjustment of fee options
3.6.7		 118,457
148,200
118,457
148,200
466,527
335,630
-
67,500
-
25,000
231,208
-
697,735
428,130
Note
2
Loss before income tax
Note		 6 months to
6 months to
31 December
31 December
2021
2020
$ $
The following significant revenue and expense items are relevant in explaining
the financial performance:
2.1
Administration expenses
Accounting expenses
Wages and salaries
Travel expenses
Interest expenses and finance facility costs
Other expenses
2.2
Corporate expenses
ASX fees
Audit expenses
Directors’ fees
Filing fees
Legal expenses
Share registry and shareholder communications
2.3
Contract and consulting fees
Executive services contracts
Share-based performance rights
11.2.1
External consulting fees		 68,026
65,075
403,313
247,441
756
18,088
11,048
88,359
63,085
76,809
546,228
495,772
50,160
32,176
37,016
36,400
48,000
18,000
14,833
7,294
87,104
77,788
8,961
10,849
246,074
182,507
39,327
39,327
25,023
37,534
-
35,988
64,350
112,849

PAGE | 13

SKIN ELEMENTS LIMITED

APPENDIX 4D

AND CONTROLLED ENTITIES ABN 90 608 047 794

INTERIM FINANCIAL REPORT 31 December 2021

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
3
Financial assets and financial liabilities
3.1
Cash and cash equivalents		 31 December
30 June
2021
2021
$ $
Cash at bank 1,565,221
287,632
1,565,221
287,632
3.2
Trade and other receivables
Note		 31 December
30 June
2021
2021
$ $
3.2.1
Current
Trade receivables
21,412
24,068
Goods and Services Tax receivable
4,084
45,133
Research and Development Grant receivable
3.2.2
466,527
988,711
Other receivables
33,213
64,979
525,236
1,122,891
3.2.2
The Group continued its development program during the half-year ended 31 December 2021 resulting in a claim for
research and development tax incentive for the 2022 financial year, and is included as a receivable at half-year end.		 21,412
24,068
4,084
45,133
466,527
988,711
33,213
64,979
525,236
1,122,891
3.3
Other assets		 31 December
30 June
2021
2021
$ $
3.3.1
Current
Prepayments – Raw materials
Other deposits		 75,930
16,642
-
55,583
75,930
72,225
3.4
Trade and other payables
Note		 31 December
30 June
2021
2021
$ $
3.4.1
Current
Unsecured
Trade payables
Sundry payables and accrued expenses
Commitment Fee payable
3.6.6
3.4.2
Non-Current
Unsecured
Commitment Fee payable
3.6.6		 154,803
277,637
209,823
170,361
100,000
200,000
464,626
647,998
200,000
200,000
200,000
200,000

PAGE | 14

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
3
Financial assets and financial liabilities (cont.)
3.5
Borrowings		 31 December
30 June
2021
2021
$ $
3.5.1
Current
Leases – motor vehicle		 27,804
30,990
27,804
30,990
3.6
Derivative assets and liabilities		 31 December
30 June
2021
2021
$ $
3.6.1
Financial assets
Prepaid commitment fee - current
Prepaid commitment fee – non-current
3.6.2
Derivative liabilities
LDA Commitment fee liability – current
LDA Commitment fee liability – non-current		 502,000
502,000
502,000
502,000
1,004,000
1,004,000
157,000
272,604
157,000
272,604
314,000
545,208

3.6.3 LDA Capital Agreement

On 6 April 2021, the Company announced it had entered into a Put Option Agreement ( POA ) with LDA Capital Limited and LDA Capital LLC (together LDA Capital ), a United States based investment group, to provide the Company with up to A$20 million in committed equity capital over the next 36 months. The Company would control the timing and maximum amount of the draw down under this facility. The Company has committed to an Initial Drawdown with the size to be determined by the Company.

The effect of the key terms as described below gave rise to a derivative liability and prepaid asset held at fair value through profit and loss.

Key terms and conditions:

  • a. In accordance with the POA, as part consideration, the Company issued to LDA Capital 26,000,000 unlisted options all expiring on 15 March 2024 comprising:

==> picture [11 x 10] intentionally omitted <==

  • 10,000,000 unlisted options exercisable at A$0.12

==> picture [11 x 10] intentionally omitted <==

  • 10,000,000 unlisted options exercisable at A$0.15

==> picture [11 x 10] intentionally omitted <==

  • 4,000,000 unlisted options exercisable at A$0.18

==> picture [11 x 10] intentionally omitted <==

  • 2,000,000 unlisted options exercisable at A$0.22

These options were valued at $604,000 on issue using a Binomial options pricing model and classified as derivative liabilities. At balance date the fair value of the derivative liability has been reassessed using the same valuation methodology to $314,00 due to the time value of money. The amount of $231,208 is recognised as a fair value gain to P&L. Refer Note 3.6.8 for the valuation inputs.

  • b. On 18 May 2021 On 18 May 2021, the Company issued to LDA Capital 27,500,000 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.

  • c. Under the POA, the subscription price for the shares is set at 90% of the higher of the average VWAP of shares in the 30 trading day period after the issue of the capital call notice, and the minimum acceptable price notified to LDA Capital by the Company upon exercise of the put option. The VWAP calculation and the number of subscription shares is subject to adjustment as a result of certain events occurring including trading volumes falling below an agreed threshold level or a material adverse event occurring in relation to the Company.

PAGE | 15

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note 3 Financial assets and financial liabilities (cont.)

3.6 Derivative assets and liabilities (cont.)

  • d. The Company is also required to pay a commitment fee of A$400,000 to LDA Capital which is payable in cash in four equal instalments at closing of the Company’s first four capital calls. When each of the first four capital calls are closed, the Company will pay the $100,000 instalment, reduce the liability and the prepaid commitment fee, and recognise this amount to cost of capital. On 15 November 2021, it was agreed between SKN and LDA Capital to release 2,000,000 SKN collateral shares held by LDA Capital in lieu of the first initial commitment fee of $100,000 cash (price of $0.05 each). This amount has been bought to account as a pre-paid capital raising cost. The Company fully expects to drawdown the full amount of the $20 million equity facility and therefore the full amount of $1,004,000 is recoverable as prepaid share issue costs.

  • 3.6.4 Recognition and reduction in derivative liability and other payables

On entering the POA, the Company recognised a commitment fee payable of $400,000, and fair value of 26,000,000 unlisted options, recognised as a derivative liability totalling $604,000 determined using a Binomial option pricing model. Details of the assumptions used in the valuation of the options are summarised in Note 3.6.8.

The Company has not issued a Capital Call Notice under the POA to LDA Capital.

The derivative liability relating to the unlisted options issued to LDA Capital is revalued at each reporting date for the unexercised options. The remeasurement of the derivative liability resulted in a fair value gain of $231,208 in the current period. Refer to Note 1.2.

options. The remeasurement of the derivative liability resulted in a fair value gain of
Note 1.2.		 $231,208 in the current period. Refer to
6 months to
31 December
12 months to
2021
30 June 2021
$ $
3.6.5
Movement in prepaid assets
As at beginning of the period
Prepayment Commitment Fee (cash)- at inception
Fair value recognition of Fee Options – on issue
As reporting date
3.6.6
Movement in other payables
As at beginning of the period
Commitment Fee payable (cash)
Collateral Shares allocated (2,000,000)
As reporting date
3.6.7
Movement in derivative liabilities
As at beginning of the period
Derivative liability recognised on fee options issue
Re-measurement to fair value through profit or loss
1.2
As reporting date		 1,004,000
-
-
400,000
-
604,000
1,004,000
1,004,000
400,000
-
-
400,000
(100,000)
-
300,000
400,000
545,208
-
-
604,000
(231,208)
(58,792)
314,000
545,208

PAGE | 16

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note 3 Financial assets and financial liabilities (cont.)

3.6 Derivative assets and liabilities (cont.)

3.6.8

Fair value of options granted at report date

Fair value of optionsgranted at report date
Tranche 1
Tranche 2
Tranche 3		 Tranche 4
Grant date
1 March 2021
1 March 2021
1 March 2021		 1 March 2021
Expiry date
15 March 2024
15 March 2024
15 March 2024		 15 March 2024
Valuation date
31 December 2021
31 December 2021
31 December 2021		 31 December 2021
Number of options
10,000,000
10,000,000
4,000,000		 2,000,000
Share price on valuation date
$0.062
$0.062
$0.062		 $0.062
Exercise price
$0.12
$0.15
$0.18		 $0.22
Risk free interest rate
0.093%
0.093%
0.093%		 0.093%
Volatility
71%
71%
71%		 71%
Indicative Value per Option
$0.0147
$0.0116
$0.0093		 $0.007
Value per tranche
$147,000
$116,000
$39,000		 $14,000

3.6.9 Fair value hierarchy

The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement.

31 December 2021
Derivatives liabilities
LDA Commitment fee liability
Total derivative liabilities
30 June 2021
Derivatives liabilities
LDA Commitment fee liability
Total derivative liabilities		 Level 1
Level 2		 Level 3 Total
$ $ $ $
-
-		 314,000 314,000
-
-		 314,000 314,000
-
-		 545,208 545,208
-
-		 545,208 545,208

PAGE | 17

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
4
Non-financial assets and financial liabilities
4.1
Inventories		 6 months to
31 December
12 months to
2021
30 June 2021
$ $
Finished goods 231,859
223,225
231,859
223,225
4.2
Intangible assets		 6 months to
31 December
12 months to
2021
30 June 2021
$ $
SE FormulaTM
Accumulated amortisation
Website development costs
Accumulated amortisation
Total intangibles		 9,859,296
9,859,296
(1,795,980)
(1,601,478)
8,063,316
8,257,818
55,410
55,410
(28,616)
(23,078)
26,794
32,332
8,090,110
8,290,150

4.2.1 Key estimates

a. Impairment

The Group assesses the impairment of assets at each reporting date by evaluating conditions specific to the asset that may lead to impairment of the assets recoverable amount. The assessment of impairment is based on the best estimate of future cash flows available at the time of preparing the report. However, facts and circumstances may come to light in later periods which may change this assessment if these facts had been known at the time.

Directors are satisfied that no impairment is required in regards to intangibles.

PAGE | 18

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT

ABN 90 608 047 794

31 December 2021

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
5
Equity
5.1
Issued capital		 31 December
30 June		 31 December
30 June
2021
2021		 2021
2021
No.
No.		 $ $
Fully paid ordinary shares at no par value
5.1.1
Ordinary shares
At the beginning of the period
Shares issued during the period:
17.08.20 Options exercise
21.08.20 Share issue
19.09.20 Options exercise
30.09.20 Options exercise
30.11.20 Options exercise
11.12.20 Options exercise
23.12.20 Options exercise
31.12.20 Options exercise
31.12.20 Options exercise
22.01.21 Shortfall
25.02.21 Placement
06.10.21 Placement
15.11.21 Collateral Share
allocated for fees
3.6.3d
Share issue transaction costs
At reporting date		 407,727,266
379,477,266		 23,057,154
20,978,594
20,978,594
17,607,998
-
14,500
-
120,000
-
29,250
-
37,414
-
88,754
-
203,991
-
124,779
-
430,757
-
488,294
-
632,857
-
1,200,000
2,100,000
-
100,000
-
(121,440)
-
379,477,266
323,284,299
-
483,333
-
2,000,000
-
975,001
-
1,247,167
-
2,958,465
-
6,799,688
-
4,159,266
-
14,358,546
-
4,882,930
-
6,328,571
-
12,000,000
26,250,000
-
2,000,000
-
-
-
407,727,266
379,477,266		 23,057,154
20,978,594
5.1.2
Treasury shares		 Note 31 December
30 June
2021
2021
No.
No.
At beginning of the period
Ordinary shares issued to LDA Capital
consideration
Ordinary shares allocated for fees
At reporting date		 as Collateral Shares for nil
3.6.3		 27,500,000
-
-
27,500,000
(2,000,000)
-
25,500,000
27,500,000

PAGE | 19

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
5
Equity (cont.)
5.2
Options
Note		 31 December
30 June		 31 December
30 June
2021
2021		 2021
2021
No.
No.		 $ $
Options
At the beginning of the period
Options movement during the period:
17.08.20 Options exercise
21.08.20 option issue
19.09.20 Options exercise
30.09.20 Options exercise
30.11.20 Options exercise
11.12.20 Options exercise
23.12.20 Options exercise
31.12.20 Options exercise
31.12.20 Options exercise
31.12.20 Expiry of options
30.03.21 Fee options issued to
LDA Capital
3.6.3
At reporting date
Comprising the following options:
Unlisted, ex. price $0.12 exp.
date 15.03.24
Unlisted, ex. price $0.15 exp.
date 15.03.24
Unlisted, ex. price $0.18 exp.
date 15.03.24
Unlisted, ex. price $0.22 exp.
date 15.03.24
At reporting date		 26,000,000
26,000,000		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,000,000
126,004,034
-
(483,333)
-
200,000
-
(975,001)
-
(1,247,167)
-
(2,958,465)
-
(6,799,688)
-
(4,159,266)
-
(14,358,546)
-
(4,882,930)
-
(90,339,638)
-
26,000,000
26,000,000
26,000,000		 -
-
-
10,000,000
-
10,000,000
-
4,000,000
-
2,000,000		 -
-
-
-
-
-
-
-
-
26,000,000		 -
-

PAGE | 20

SKIN ELEMENTS LIMITED

APPENDIX 4D

INTERIM FINANCIAL REPORT

AND CONTROLLED ENTITIES

ABN 90 608 047 794

31 December 2021

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
5
Equity (cont.)
5.3
Performance rights
Note		 31 December
30 June		 31 December
30 June
2021
2021		 2021
2021
No.
No.		 $ $
Performance rights
At the beginning of the period
Amortisation of performance
shares issued
At reporting date		 47,000,000
47,000,000		 116,275
91,252
91,252
29,103
25,023
62,149
47,000,000
47,000,000
-
-
47,000,000
47,000,000		 116,275
91,252
5.4
Reserves		 31 December
30 June
2021
2021
$ $
Share-based payment reserve 116,275
91,252
116,275
91,252

PAGE | 21

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

SECTION B. UNRECOGNISED ITEMS

This section of the notes includes other information that must be disclosed to comply with the accounting standards and other pronouncements, but that is not immediately related to individual line items in the financial statements.

Note 6 Commitments

6.1 Capital commitments

The Group does not have any capital commitments. (30 June 2021: $nil)

Note 7 Events subsequent to reporting date

On 17 January 2022 SKN announced that it entered into a binding Agreement with Pacific Health Care Pty Ltd (Pacific Health) for the exclusive distribution of Skin Elements’ TGA registered SuprCuvr hospital grade disinfectant in Australia and New Zealand details of which are set out in the Directors’ report.

There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

Note 8 Contingent liabilities

There are no contingent liabilities as at 31 December 2021 (30 June 2021: Nil).

PAGE | 22

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

SECTION C. OTHER INFORMATION

This section of the notes includes other information that must be disclosed to comply with the accounting standards and other pronouncements, but that is not immediately related to individual line items in the financial statements.

Note 9 Related party transactions

Entity
Nature of
transactions
KMP		 Total Transactions Payable Balance
6 months to
6 months to		 6 months to
31 December
31 December		 31 December
12 months to
2021
2020		 2021
30 June 2021
$ $ $ $
Peter Malone
Executive services
Executive Chairman
Phil Giglia
Directors’ fees
Non-executive
Director
Lee Christensen1
Directors’ fees
Non-executive
Director
John Poulsen2
Directors’ fees
Non-executive
Director		 120,000
120,000
24,000
14,000
20,000
-
4,000
4,000		 1,768
64,102
5,500
45,400
11,000
-
2,200
2,200

  1. Appointed 31 August 2021.

  2. Resigned 31 August 2021.

Note
10
Loss per share (EPS)
Note		 6 months to
6 months to
31 December
31 December
2021
2020
$ $
10.1 Reconciliation of loss to profit or loss
Loss for the half-year
Loss used in the calculation of basic and diluted EPS		 (1,196,631)
(1,365,850)
(1,196,631)
(1,365,850)
6 months to
6 months to
31 December
31 December
2021
2020
No.
No.
10.2 Weighted average number of ordinary shares outstanding
during the half-year used in calculation of basic EPS
Weighted average number of dilutive equity instruments outstanding
10.5
10.3 Weighted average number of ordinary shares outstanding
during the half-year used in calculation of basic EPS		 391,746,288
327,630,920
N/A
N/A
391,746,288
327,630,920
10.4 Loss per share 6 months to
6 months to
31 December
31 December
2021
2020
₵
₵
Basic EPS (cents per share)
10.5
Diluted EPS (cents per share)
10.5		 (0.31)
(0.42)
N/A
N/A

10.5 As at 31 December 2021 the Group has 25,500,000 treasury shares, (31 December 2020: Nil), 26,000,000 unissued shares under options (31December 2020: Nil), and 47,000,000 performance shares on issue (31 December 2020: 47,000,000). The Group does not report diluted earnings per share on losses generated by the Group. During the half-year, the Group's unissued shares under option and performance shares were anti-dilutive.

PAGE | 23

SKIN ELEMENTS LIMITED

APPENDIX 4D

AND CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note
11
Share-based payments		 6 months to
6 months to
31 December
31 December
2021
2020
$ $
11.1 Share-based payments:
Recognised in profit and loss (expenses)
Gross share-based payments		 25,023
37,534
25,023
37,534

11.2 Share-based payment arrangements in effect during the half-year

11.2.1 Share-based payments recognised in profit or loss

  • a. Director and Consultants Performance Rights (2019)

At the Company's 2019 AGM, shareholder approval was obtained to issue performance rights that will convert into shares upon Performance Milestones being achieved, to incentivise the development of existing Australian and international distribution and online sales channels, and negotiations with major international customers including a major UK retail chemist chain and the development of a major online retailer in the USA, for the sale and delivery of its proprietary expanded natural skincare and suncare product ranges.

These performance rights are issued to Peter Malone, Executive Chairman, and to Palmer Wilson Associates Ltd ( PWA ), a United Kingdom based specialist business development consultancy and have been valued and issued on terms as detailed below and the fair value of the options granted is deemed to represent the value of the services received over the vesting period. A 40% probability is applied to non-market 2019 Performance Rights.:

Class of Performance Condition Performance rights Performance rights Milestone Expiry Performance
Performance No. Date Date Condition
Right Peter Malone PWA Satisfied
A The Company receiving revenue from 2,700,000 2,000,000 31 Dec 2023 4 years from No
the sale of its products to an aggregate the date of
value of $2,000,000 issue
B The Company receiving revenue from 5,400,000 4,000,000 31 Dec 2023 4 years from No
the sale of its products to an aggregate the date of
value of $6,000,000 issue
C The Company receiving revenue from 8,100,000 6,000,000 31 Dec 2023 4 years from No
the sale of its products to an aggregate the date of
value of $12,000,000 issue
D The Company receiving revenue from 10,800,000 8,000,000 31 Dec 2023 4 years from No
the sale of its products to an aggregate the date of
value of $20,000,000 issue

11.3 Fair value of options granted during the half-year

No options were granted during the half-year.

PAGE | 24

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D

INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note 12 Operating segments

12.1 Description of segments

12.1.1 Operations

This operating segment is involved in the designing and formulating natural, organic, health and wellness products.

12.2 Segment Financial Performance

Half-Year ended 31 December 2021
Revenue and other income
◼ External sales
◼ Other income
Total segment revenue and other income
Total group revenue and other income
Segment profit/(loss) before income tax
◼ Cost of sales
◼ Administration expenses
◼ Advertising and marketing expenses
◼ Amortisation
◼ Corporate expenses
◼ Consultants’ fees
◼ Share-based payments
◼ Occupancy costs
◼ Research and development expenses
Segment profit/(loss) from continuing operations before tax
Group loss before income tax
Half-Year ended 31 December 2020
Revenue and other income
◼ External sales
◼ Other income
Total segment revenue and other income
Total group revenue and other income
Segment profit/(loss) before income tax
◼ Cost of sales
◼ Administration expenses
◼ Advertising and marketing expenses
◼ Amortisation
◼ Corporate expenses
◼ Consultants’ fees
◼ Share-based payments
◼ Occupancy costs
◼ Research and development expenses
Segment profit/(loss) from continuing operations before tax
Group loss before income tax		 Corporate and
Operations
administration		 Total
$ $ $
118,457
-		 118,457
697,735
-		 697,735
816,192
-		 816,192
_ 816,192
(46,372)
-		 (46,372)
(484,145)
(62,083)		 (546,228)
(141,206)
(65,364)		 (206,570)
(203,087)
-		 (203,087)
(3,915)
(242,159)		 (246,074)
(39,327)
-		 (39,327)
-
(25,023)		 (25,023)
(34,270)
(24,580)		 (58,850)
(641,292)
-		 (641,292)
(777,422)
(419,209)		 (1,196,631)
_ (1,196,631)
148,200
-
428,130
-		 148,200
428,130
576,330
-

(60,019)
-
(346,108)
(149,664)
(55,972)
(100,023)
(199,434)
-
(17,211)
(165,296)
(39,327)
(35,988)
-
(37,534)
(38,004)
(9,507)
(688,093)
-
(867,838)
(498,012)
 576,330
576,330
(60,019)
(495,772)
(155,995)
(199,434)
(182,507)
(75,315)
(37,534)
(47,511)
(688,093)
(1,365,850)
(1,365,850)

PAGE | 25

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note 12 Operating segments (cont.)

12.3 Segment Financial Position

At as 31 December 2021
Segment Assets
Reconciliation of segment assets to group assets:
◼ Intra-segment eliminations
Total assets
Segment Liabilities
Reconciliation of segment liabilities to group liabilities
◼ Intra-segment eliminations
Total liabilities
As at 30 June 2021
Segment Assets
Reconciliation of segment assets to group assets:
◼ Intra-segment eliminations
Total assets
Segment Liabilities
Reconciliation of segment liabilities to group liabilities
◼ Intra-segment eliminations
Total liabilities		 Corporate and
Operations
administration		 Total
$ $ $
8,865,283
9,925,074		 18,790,357
-
(7,274,400)		 (7,274,400)
_ 11,515,957
7,106,130
1,174,701		 8,280,831
(7,274,401)
-		 (7,274,401)
_ 1,006,430
1,759,153
8,750,373
9,657,909
8,429,463		 10,509,527
18,087,372
-
(7,060,601)
_
7,066,888
1,417,909		 (7,060,601)
11,026,771
8,484,797
(7,060,601)
-
_		 (7,060,601)
1,424,196

PAGE | 26

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Notes to the condensed consolidated financial statements

for the half-year ended 31 December 2021

Note 13 Statement of significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to all the periods presented, unless otherwise stated.

13.1 Basis of preparation

13.1.1 Reporting Entity Skin Elements Limited ( Skin Elements or the Company ) is a listed public company limited by shares, domiciled and incorporated in Australia. This interim financial report is intended to provide users with an update on the latest annual financial statements of Skin Elements Limited and controlled entities (the Group ). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this financial report be read in combination with the annual financial statements of the Group for the year ended 30 June 2021, together with any public announcements made during the half-year. 13.1.2 Basis of accounting The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting . The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report. The financial statements were authorised for issue on 28 February 2022 by the Directors of the Company. 13.1.3 Comparative figures Where required by AASBs comparative figures have been adjusted to conform to changes in presentation for the current financial period. Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented. 13.1.4 New and Amended Standards Adopted by the Group The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group are: AASB 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions [AASB 16] AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 [AASB 4, AASB 7, AASB 9, AASB 16 & AASB 139]. 13.2 Use of estimates and judgments The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. 13.2.1 Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the COVID-19 pandemic.

PAGE | 27

SKIN ELEMENTS LIMITED

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

Directors' declaration

The Directors of the Company declare that:

  1. The financial statements and notes, as set out on pages 8 to 27, are in accordance with the Corporations Act 2001 (Cth) and:

  2. (a) comply with Accounting Standard AASB 134: Interim Financial Reporting ; and

  3. (b) give a true and fair view of the financial position as at 31 December 2021 and of the performance for the half-year ended on that date of the Company.

  4. in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

==> picture [208 x 35] intentionally omitted <==

PETER MALONE

Managing Director Dated this Monday, 28 February 2022

PAGE | 28

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

ABN 90 608 047 794

Independent auditor's review report

PAGE | 29

SKIN ELEMENTS LIMITED AND CONTROLLED ENTITIES ABN 90 608 047 794

APPENDIX 4D INTERIM FINANCIAL REPORT 31 December 2021

==> picture [503 x 711] intentionally omitted <==

PAGE | 30

SKIN ELEMENTS LIMITED

APPENDIX 4D

INTERIM FINANCIAL REPORT

31 December 2021

AND CONTROLLED ENTITIES ABN 90 608 047 794

==> picture [113 x 53] intentionally omitted <==

PAGE | 31

More from SKIN ELEMENTS LIMITED

Declaration of Voting Results & Voting Rights Announcements 2026
Jun 2
Legal Proceedings Report 2026
Jun 2
Major Shareholding Notification 2026
May 26
Legal Proceedings Report 2026
May 25
Regulatory Filings 2026
May 14
Proxy Solicitation & Information Statement 2026
May 13
Regulatory Filings 2026
May 7
Director's Dealing 2026
May 6
Interim / Quarterly Report 2026
Apr 29
Director's Dealing 2026
Apr 26
View all filings →