SPACETALK LTD — Annual Report 2024

Aug 28, 2024

Spacetalk Limited Appendix 4E Preliminary final report

1. Company details

Name of entity:	Spacetalk Limited
ABN:	93 091 351 530
Reporting period:	For the year ended 30 June 2024
Previous period:	For the year ended 30 June 2023

2. Resultsfor announcement to the market

	Year ended30 June 2024	Change onYear endedprevious30 June 2023period		Change onpreviousperiod
	$	$	$	%
Revenuesfrom ordinary activities	18,487,858	15,534,194	2,953,664	19%
Loss from ordinary activities after tax attributable to the ownersof Spacetalk Limited	(5,131,872)	(14,684,760)	9,552,888	(65%)
Loss for the year attributable to the owners of Spacetalk Limited	(5,131,872)	(14,684,760)	9,552,888	(65%)

Dividends

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

Brief Explanation on Results

Please refer to the Preliminary Financial Statements, Review of Operations on pages 2 to 5.

3. Net tangible assets

	ReportingperiodCents	PreviousperiodCents
Net tangible assets per ordinary security	(1.18)	(0.86)

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

6. Dividends

Current period

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

Previous period

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

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

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

Not applicable.

10. Audit qualification or review

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

The accounts are in the process of being audited.

11. Attachments

Details of attachments(if any):

The Preliminary Financial Statements of Spacetalk Limited for the year ended 30 June 2024 are attached.

12. Signed

Georg Chmiel

Chairman Date: 29 August 2024

ABN 93 091 351 530

Preliminary Financial Statements

For the year ended 30 June 2024

Spacetalk Limited Contents Preliminary final report

Review of operations & financial results	2
Consolidated statement of profit or loss and other comprehensive income	6 - 7
Consolidated statement of financial position	8
Consolidated statement of changes in equity	9
Consolidated statement of cash flows	10
Notes to the consolidated financialstatements	11 - 31
Corporate directory	32

PRINCIPAL ACTIVITIES

Spacetalk Limited is a software services and wearables hardware product developer. As a package, our technology platform provides a complete digital communication solution that supports safety and security for families across their life stages and for employees working in remote settings. Our unique proprietary ecosystem, which has continued to evolve over time, is today recognised as a leader in family safety and the connected wearables industry.

The Spacetalk technology platform comprises both market-leading hardware and a trusted, client-controlled software platform that provides safety and security to users via the benefits of mobile technology. The multi-functional SaaS Spacetalk App can be customised, giving clients the ability to enable or disable individual features. Parents are empowered to block their kids access to the open internet, social media, and inappropriate adult content while simultaneously blocking calls and messages from unknown senders. The app can also monitor the location of vulnerable family members, including children and seniors, bringing enhanced peace of mind for the entire family.

KEY PERFORMANCE HIGHLIGHTS

Income Statement ($'000)	FY24	FY23
Revenue from continuing operations	17,901	13,455
Revenue growth %	33%	(10%)
Gross Profit from continuing operations	9,202	6,834
Gross Margin (%)	51%	51%
Operating Expenses from continuing operations	(12,605)	(15,250)
EBITDA from continuing operations	(3,403)	(8,416)
Discontinued operations	(318)	(3,621)
Loss after income tax attributable to the owners of Spacetalk	(5,132)	(14,685)

FINANCIAL PERFORMANCE

Revenue & Segment Performance

For the year ended 30 June 2024 the total reported revenue from continuing operations was $17.9m, up 33% compared with the prior year. This was primarily driven by $1.9m in hardware device sales and $2.5m in net revenue growth across all other revenue streams, particularly our Spacetalk Mobile (MVNO) business segment.

Annual recurring revenue (ARR) was $9.7m, up 17% compared with prior year. The increase in ARR demonstrates our execution capability and the successful delivery of our strategic plan towards a subscription-based business model. The focus on growth of Spacetalk Mobile since FY23 has been pivotal in our transition to a mobile-centric strategy and demonstrates our ability to create a sustainable ecosystem that fosters long-term customer loyalty, engagement and lifetime value. Our total paid mobile subscribers grew to 14.7k in FY23 (first year of launch) and has since grown by 110% in FY24 to 30.9k paid subscribers.

The business has two primary revenue streams: device sales and recurring revenue.

Recurring revenue is then further segmented into Schools' subscriptions, App subscriptions, and MVNO (Mobile) subscriptions.

Segment Performance	FY24
	Total SegmentRevenue	Other Revenue	Gross Profit
Devices	7,879,682	-	7,879,682	2,174,499
Schools	2,060,620	-	2,060,620	1,991,468
MVNO	4,572,607	-	4,572,607	2,416,580
Apps	2,964,952	-	2,964,952	2,196,865
Corporate	-	422,696	422,696	422,465
Total segment revenues	17,477,861	422,696	17,900,557	9,201,877

Segment Performance	FY23
	Total SegmentRevenue	Other Revenue	Revenue fromExternalCustomers	Gross Profit
Devices	6,082,372	-	6,082,372	1,091,210
Schools	2,096,715	-	2,096,715	1,977,891
MVNO	1,361,879	-	1,361,879	726,716
Apps	3,812,515	-	3,812,515	2,935,962
Corporate	-	102,002	102,002	102,002
Total segment revenues	13,353,481	102,002	13,455,483	6,833,781

Gross Profit & Margins

Gross profit increased by $2.4m, up 34% in line with revenue growth to $9.2m (FY23: $6.8m) and the gross profit margin remained consistent at 51% (FY23: 51%).

Operating Expenses

Our strong revenue growth and efficient operating model continues to unlock operating leverage, with operating expenses down 18% to $12.6m (FY23: $15.3m). The company restructuring and cost-out in 2H24 has streamlined our operations, efficiency and allows us to remain agile as we navigate the dynamic market environment.

We will continue to maintain a vigilant cost management approach and further scale back cost levers if needed. This provides us with a solid foundation for continued future profitability, positive cash generation and increased financial stability.

Cash Flow

Summary Cash Flow Statement ($'000)	FY24	FY23
Receipts from customers	17,442	17,803
Net cash used in operations	(2,730)	(2,761)
Net cash used in operating activities	(3,101)	(3,455)
Purchase of intangible assets	(1,143)	(1,661)
Cash used in investing activities	(1,176)	(1,668)
Cash Flow before financing activities	(4,276)	(5,123)
Cashflow from financing activities	3,021	2,495
Net decrease (increase) in cash and cash equivalents	(1,256)	(2,551)
Cash and cash equivalents at year end	1,770	3,026

Over the last five quarters, we have seen a significant turnaround in our business, reflected in the steady improvement in cash flow before financing activities. This improvement is directly tied to our strategic shift towards higher quality, recurring revenue streams and a focused effort on operational efficiency.

Positive cash flow before financing activities of $373k was achieved in 4Q24 vs PCP (4Q23: -$2.2m) due to:

• Recurring Revenue: FY24 ARR increased to $9.7m (FY23: $8.3m), significantly boosting cash flow.
• Receivables Management: FY24 debtor days improved to 30 days (FY23: 45 days), releasing $0.5m in cash inflows due to more efficient collections.
• Inventory Reduction: FY24 inventory reduced to $2.3m (FY23: $3.5m), freeing up significant cash.
• Cost Efficiencies: Operational costs were reduced to $4.8m (FY23: $5.6m) resulting in $800k in cost savings. This was achieved through focused business process improvements and efficiency initiatives.

GROWTH STRATEGY

Our strategic focus on core business areas has already yielded tangible results, including significant cost reductions and improved annual recurring revenue (ARR). Having successfully stabilised the business, we are now entering a growth phase. This phase will involve disciplined exploration of international expansion opportunities, alongside the development and growth of our product offerings. These efforts are designed to build on our solid foundation and drive sustainable growth moving forward.

EVENTS AFTER THE REPORTING DATE

Since the period end, we have successfully negotiated re-financing and extension of our loan facility with Pure Asset Management, which gives us significant financial flexibility and supports our strategic growth initiatives. Refer to notes 14 and 33 in the financial statements for further details of this arrangement.

SUMMARY OF KEY BUSINESS RISKS

The Group operates in a highly competitive and rapidly changing sector, which provides both opportunities and challenges. While some of these challenges and risks may be out of the Group's control, we have made, and continue to make investments in our risk management and control frameworks to ensure we can respond to and mitigate the impact of these risks as they arise, whether they result from regulatory changes, shifts in the competitive environment, or other circumstances over which the Group has no control.

MATERIAL RISK AREAS	WHAT WE ARE DOING TO MANAGE THE RISK
Capital and fundingChallenges in securing sufficient debt and equityfunding could impact our ability to effectively executeour strategy.	•Regular communications and close relationship with debt funder.•Close management of cash flow.•Actively engaging with shareholders and the broader equity market.
StrategicStaying responsive to shifts in the competitivelandscape is essential. Ensuring our strategic actions arewell-aligned with these changes will help maintain ourmarket position.	•Regular discussions of strategy and strategic initiatives with the Board.•Periodic measurement of results against targets.•Strengthen capability with experts who possess a good command ofthe environment.
TechnologyUnderinvesting in developing and maintaining systemswhich support innovation and growth.	•Clear definition of technology roadmap.•Understanding changing customer needs and responding with thenecessary technology improvements.
PeopleAttracting and retaining staff who align with our cultureand can drive innovation and customer-focused solutions.	•Remuneration and benefits structure to retain and attract top talent.•Clear and consistent on our culture and values.
MacroeconomicStaying attuned to broader economic and retail trends isimportant to ensure our strategy remains relevant andeffective.	•Analyse and monitor economic and retail conditions, at a minimum, toidentify shifts and take stepsto manage potential impacts.
Environment and climate:Proactively understanding and addressing environmentalrisks and impacts will be vital to our long-termsustainability.	•Review processes and practicesto reduce impact on the environment.•Develop reporting on our environmental footprint.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Statement of Profit or Loss and Other Comprehensive Income

Figures in $	Notes	2024	2023
Revenue from continuing operations	1	17,900,557	13,455,483
Cost of sales	2	(8,698,680)	(6,621,702)
Gross profit		9,201,877	6,833,781
Expenses from continuing operations
Allowance for expected credit loss		(117,462)	-
Corporate and administration		(3,690,782)	(3,902,201)
Advertising and marketing		(1,391,376)	(703,969)
Employee benefits expense		(8,223,824)	(5,706,284)
Impairment of assets	2	(29,175)	(3,230,415)
Cost relating to debt restructuring		(191,954)	(3,376,275)
Fair value gain on fair value of derivatives		689,810	1,714,052
Gain/(loss) on foreign exchange		349,981	(45,163)
Total expenses from continuing operations		(12,604,782)	(15,250,255)
Loss from continuing operations before depreciation and amortisation, interest
and income tax expense		(3,402,905)	(8,416,474)
Depreciation and amortisation expense	2	(922,445)	(1,782,751)
Loss from continuing operations before interest and income tax expense		(4,325,350)	(10,199,225)
Interest expense		(488,657)	(614,965)
Loss from continuing operations before income tax expense		(4,814,007)	(10,814,190)
Income tax expense	3	-	(249,976)
Loss after income tax expense from continuing operations		(4,814,007)	(11,064,166)
Loss after income tax expense from discontinued operations	18	(317,865)	(3,620,594)
Loss after income tax expense for the year attributable to the owners
of Spacetalk Limited		(5,131,872)	(14,684,760)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation		(108,301)	59,967
Other comprehensive loss/(profit) for the year, net of tax		(108,301)	59,967
Total comprehensive loss for the year attributable to the owners
of Spacetalk Limited		(5,240,173)	(14,624,793)
Total comprehensive loss for the year is attributable to:
Continuing operations		(4,922,308)	(11,004,199)
Discontinued operations		(317,865)	(3,620,594)
		(5,240,173)	(14,624,793)
Earnings per share from continuing and discontinuing operations attributable to
owners of Spacetalk Limited
Basic earnings per share
Basic loss per share from continuing operations	4	(1.12)	(4.29)
Basic loss per share from discontinuing operations		(0.07)	(1.40)
Total basic loss per share		(1.19)	(5.69)

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Statement of Profit or Loss and Other Comprehensive Income

Figures in $	Notes	2024	2023
Diluted earnings per share
Basic loss per share from continuing operations	4	(1.12)	(4.29)
Diluted loss per share from continuing operations		(0.07)	(1.40)
Total diluted loss per share		(1.19)	(5.69)

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the attached notes.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Consolidated Statement of Financial Position as at 30 June 2024

Figures in $	Notes	2024	2023
Assets
Current assets
Cash and cash equivalents	14	1,770,292	3,026,165
Trade and other receivables	15	842,759	2,765,019
Inventories	16	1,516,742	2,592,650
Other current assets	17	965,473	581,094
Total current assets		5,095,266	8,964,928
Non-current assets
Property, plant and equipment	20	112,005	102,148
Right-of-use assets	21	197,660	322,884
Intangible assets	22	2,228,500	1,584,903
Total non-current assets		2,538,165	2,009,935
Total assets		7,633,431	10,974,863
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables	26	2,090,971	2,280,496
Contract liabilities	27	1,678,965	1,409,440
Provisions	28	1,404,514	2,110,642
Current tax liabilities		142,612	7,832
Derivative liabilities	29	342,000	946,605
Lease liabilities	30	128,753	98,949
Borrowings	31	5,000,000	-
Total current liabilities		10,787,815	6,853,964
Non-current liabilities
Derivative liabilities	29	106,749	-
Lease liabilities	30	78,936	228,372
Borrowings	31	-	5,000,000
Total non-current liabilities		185,685	5,228,372
Total liabilities		10,973,500	12,082,336
Net liabilities		3,340,069	1,107,473
Equity
Issued capital	23	40,775,834	37,892,503
Accumulated losses		(44,435,014)	(39,303,142)
Reserves	24	319,111	303,166
Total equity attributable to owners of the parent		(3,340,069)	(1,107,473)
Total equity and liabilities		7,633,431	10,974,863

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Statement of Changes in Equity

		Foreigncurrency	Share based
		translation	payment	Accumulated
Figures in $	Issued capital	reserve	reserve	loss	Total
Balance at 1 July 2022	28,064,477	94,038	6,816,803	(24,618,382)	10,356,936
Changes in equity
Loss for the year	-	-	-	(14,684,760)	(14,684,760)
Other comprehensive income	-	59,967	-	-	59,967
Total comprehensive income for the year	-	59,967	-	(14,684,760)	(14,624,793)
Shares issued	2,777,309	-	-	-	2,777,309
Conversion of rights to shares	319,632	-	(319,632)	-	-
Cost of shares issued	(139,160)	-	-	-	(139,160)
Transfer of vested expired options to share capital	6,290,131	-	(6,290,131)	-	-
Options issued	-	-	21,357	-	21,357
Exercise warrants to equity	580,114	-	-	-	580,114
Employee rights expense	-	-	(79,236)	-	(79,236)
Balance at 30 June 2023	37,892,503	154,005	149,161	(39,303,142)	(1,107,473)
Balance at 1 July 2023	37,892,503	154,005	149,161	(39,303,142)	(1,107,473)
Changes in equity
Loss for the year	-	-	-	(5,131,872)	(5,131,872)
Other comprehensive income	-	(108,301)	-	-	(108,301)
Total comprehensive income for the year	-	(108,301)	-	(5,131,872)	(5,240,173)
Shares issued	3,390,007	-	-	-	3,390,007
Conversion of rights to shares	120,017	-	(120,017)	-	-
Capital raising costs	(626,693)	-	341,559	-	(285,134)
Employee rights expense	-	-	358,422	-	358,422
Cost of share issued	-	(455,718)		-	(455,718)
Balance at 30 June 2024	40,775,834	(410,014)	729,125	(44,435,014)	(3,340,069)

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Statement of Cash Flows

Figures in $	Notes	2024	2023
Cash flows from operations
Cash receipts from customers		17,442,025	17,803,467
Cash paid to suppliers and employees		(20,172,511)	(20,564,833)
Net cash flows used in operations	6	(2,730,486)	(2,761,366)
Interest paid		(368,931)	(693,647)
Income taxes paid		(1,219)	-
Net cash flows used in operating activities		(3,100,636)	(3,455,013)
Cash flows used in investing activities
Purchase of property, plant and equipment		(32,997)	(7,081)
Purchase of intangible assets		(1,142,847)	(1,660,899)
Cash flows used in investing activities		(1,175,844)	(1,667,980)
Cash flows from financing activities
Proceeds from issue of shares	24	3,140,239	2,777,309
Costs associated with issue of shares		-	(117,802)
Repayments of lease liabilities		(119,632)	(164,375)
Cash flows from financing activities		3,020,607	2,495,132
Net decrease in cash and cash equivalents before effect of exchange rate changes		(1,255,873)	(2,627,861)
Effect of exchange rate changes on cash and cash equivalents		-	76,938
Net decrease in cash and cash equivalents		(1,255,873)	(2,550,923)
Cash and cash equivalents at beginning of the year		3,026,165	5,577,088
Cash and cash equivalents at end of the year	14	1,770,292	3,026,165

The Group has elected to present a statement of cash flows that analyses all cash flows in total - i.e. including both continuing and discontinuing operations. Refer to note 18 for details on cash flows from discontinuing operations.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Significant accounting policies Statement of compliance

The Appendix 4E preliminary final report has been prepared in accordance with ASX listing rules and the recognition and measurement criteria of Accounting Standards and interpretations. Accounting Standards include Australian equivalents to International Financial Reporting Standards.

Basis of preparation

The Appendix 4E has been prepared on the basis of historical cost. The accounting policies and methods of computation adopted in the preparation of the Appendix 4E are consistent with those adopted and disclosed in the Group's 30 June 2023 annual financial report.

Going concern

The Company's financial statements are prepared on a going concern basis, which contemplates the realisation of assets and the satisfaction of obligations in the normal course of business. The Directors believe that sufficient funds will be raised in the ongoing capital raise to ensure that the Company has adequate resources to meet its obligations in the foreseeable future.

Discontinued operations

Prior year comparatives have been reclassified where applicable, for the disclosure of discontinued operations. These adjustments have been separately disclosed below. Refer to note 18 for further details.

1. Revenue

1.1 Revenue comprises:

1.2 Timing of revenue recognition
Total revenue	17,900,557	13,455,483
Schools' revenue	2,060,620	2,096,715
Mobile virtual network operator income	4,572,607	1,361,879
Grants received	410,656	32,945
Sundry income	12,040	69,057
App subscriptions revenue	2,964,952	3,812,515
Device sales	7,879,682	6,082,372

Recognised at a point in time	8,321,759	6,184,374
Recognised over time	9,578,798	7,271,109
	17,900,557	13,455,483

Refer to note 5 (segmental note) for further details on the disaggregation of revenue.

2. Expenses

Expenses comprise:

Loss before income tax from continuing operations includes the following

specific expenses:
Cost of sales	8,698,680	6,621,702

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023
Expenses continued
Depreciation
Leasehold improvements	401	3,996
Plant and equipment	22,739	24,251
Building right-of-use assets	125,224	155,393
Total depreciation	148,364	183,640
Amortisation
Distribution rights	-	1,586,690
Capitalised development costs	774,081	12,421
Total amortisation	774,081	1,599,111
Total depreciation and amortisation	922,445	1,782,751
Impairment
Property, plant and equipment	-	98,657
Intangible assets	28,755	2,245,682
Inventory	420	886,076
Total impairment	29,175	3,230,415
Leases
Short-term lease payments	-	29,430
Superannuation expense
Defined contribution superannuation expense	629,088	498,955
Share-based payments expense
Share-based payments expense	358,422	(79,236)
3. Income tax expense
Income tax recognised in profit or loss:
Current tax
Current year	-	249,976
Total current tax	-	249,976
4. Earnings per share
Basic earnings per share
The earnings and weighted average number of ordinary shares used in the calculation ofbasic earnings per share are as follows:
Profit for the year attributable to owners of the company for continuing operations	(4,814,007)	(11,064,166)
Profit for the year from discontinued operations	(317,865)	(3,620,594)

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023
Earnings per share continued
Weighted average number of ordinary shares used in the calculation of basic earnings pershare	429,984,754	257,940,241
Adjustment for calculation of diluted earnings per share	-	-
Weighted average number of ordinary shares used in calculating diluted earnings pershare	429,984,754	257,940,241
Earnings per share from continuing operationsattributable to owners of Spacetalk Limited
Basic earnings per share
Basic loss per share from continuing operations	(1.12)	(4.29)
Diluted loss per share from continuing operations	(1.12)	(4.29)
Earnings per share from discontinuing operationsattributable to owners of Spacetalk Limited
Basic loss per share from discontinuing operations	(0.07)	(1.40)
Diluted loss per share from discontinuing operations	(0.07)	(1.40)
Earnings per share for loss
Basic loss per share from continuing operations	(1.19)	(5.69)
Diluted loss per share from continuing operations	(1.19)	(5.69)

Performance rights granted to employees under the Company's incentive are considered to be potential ordinary shares. They have not been included in the determination of diluted earnings per share because their conversion to ordinary shares would not increase loss per share, being antidilutive in nature.

5. Segment revenues and results

5.1 Products and services from which reportable segments derive their revenues

Factors used to identify the entity's reportable segments, including the basis of organisation (for example, whether management has chosen to organise the entity around differences in products and services, geographical areas, regulatory environments, or a combination of factors and whether operating segments have been aggregated)

The Group operates predominately in five business segments, defined by the Group's different product and service offerings.

The Group's reportable segments under AASB 8 are therefore as follows:

- Devices	Devicesegmentssupplythe'Spacetalk'smartwatchesthroughretaildistributionnetworks and online sales.
- Schools	The schools segment provides school messaging services and licence fees to variousschools.
- MVNO	MVNO (Mobile Virtual Network Operator) segment sells mobile services under the'Spacetalk' brand name using the network of a licensed mobile operator.
- Apps	Apps segment supply the 'Spacetalk' smartwatches customers the device agnostic(open) mobile application products.
- Corporate	'Corporate' is the aggregation of the Group's other various sundry income andexpenses in the corporate level.

This is the basis by which management controls and reviews the operations of the Group. Segment results are routinely reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance on the same basis. No operating segments have been aggregated in arriving at the reportable segments of the group.

Information regarding these segments is presented below. The accounting policies of the reportable segments are the same as the Group's accounting policies.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

			Notes to the Financial Statements
--	--	--	-----------------------------------

Figures in $	2024	2023

Segment revenues and results continued...

Refer to note 18 for details of discontinued operations during the current financial year.

5.2 Segment revenues and results

The following is an analysis of the Group's revenue and results from continuing operations by reportable segment:

	Total segment		Revenue fromexternal
	revenue	Other revenue	customers
Year ended 30 June 2024
Devices	7,879,682	-	7,879,682
Schools	2,060,620	-	2,060,620
MVNO	4,572,607	-	4,572,607
Apps	2,964,952	-	2,964,952
Corporate	-	422,696	422,696
Total segment revenues	17,477,861	422,696	17,900,557
Year ended 30 June 2023
Devices	6,082,372	-	6,082,372
Schools	2,096,715	-	2,096,715
MVNO	1,361,879	-	1,361,879
Apps	3,812,515	-	3,812,515
Corporate		102,002	102,002
Total segment revenues	13,353,481	102,002	13,455,483

5.3 Gross profit

	Gross profitfor the year	Gross profitfor the year
	2024	2023
Year ended 30 June
Devices	2,174,499	1,091,210
Schools	1,991,468	1,977,891
MVNO	2,416,580	726,716
Apps	2,196,865	2,935,962
Corporate	422,465	102,002
Total gross profit	9,201,877	6,833,781

Segment revenue reported above represents revenue generated from external customers by each service or product. There were no intersegment sales in the current year (2023: nil).

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023
6. Cash flows from operating activities
Loss for the year	(5,131,872)	(14,684,760)
Adjustments for:
Income tax expense	135,992	169,264
Finance costs	368,931	693,647
Depreciation and amortisation expense	922,445	1,782,751
Impairment losses and reversal of impairment losses
recognised in profit or loss	29,175	2,659,180
Fair value gains and losses	(689,810)	(625,029)
Cost relating to debt restructure	-	3,376,275
Gains and losses on foreign exchange realised in profit
or loss	(349,981)	-
Share based payment	-	(79,236)
Change in operating assets and liabilities:
Adjustments for decrease in inventories	1,075,488	2,763,409
Adjustments for decrease in trade accounts
receivable	1,744,997	798,027
Adjustments for decrease in other operating
receivables	59,801	11,453
Adjustments for decrease in trade accounts payable	(784,284)	-
Adjustments for increase / (decrease) in other
operating payables	594,760	(315,187)
Adjustments for provisions	(706,128)	688,840
Net cash flows from operations	(2,730,486)	(2,761,366)

7. Financial instruments

Capital management

Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the Group can fund its operations and continue as a going concern.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of expenditure and debt levels and share and option issues.

There have been no changes in the strategy adopted by management to control capital of the Group since the prior year.

Gearing ratio

The gearing ration at the end of the period was as follows:

Net debt to equity ratio	-169%	-567%
Equity	(3,340,069)	(1,107,473)
Net Debt	5,656,438	6,273,926
Warrant liability	448,749	946,605
Borrowings	5,000,000	5,000,000
Lease liabilities	207,689	327,321

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $ 2024 2023

Financial instruments continued...

Financial risk management Management

The Group's principal financial instruments comprise borrowings, derivatives, receivables, payables, cash and short-term deposits. The Group manages its exposure to key financial risks in accordance with the Group's financial risk management policy. The objective of the policy is to support the delivery of the Group's financial targets while protecting future financial security.

The main risks arising from the Group's financial instruments are interest rate risk, credit risk, liquidity risk and foreign currency risk. The Group does not speculate in the trading of derivative instruments. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts for interest rates. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board reviews and agrees policies for managing each of these risks as summarised below.

Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow forecast projections.

Interest rate risk

The Company's exposure to risks of changes in market interest rates relates primarily to the Company's cash balances. The Company constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing positions and the mix of fixed and variable interest rates.

Its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits. The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

Cash and cash equivalents (interest-bearing accounts)	1,770,292	3,026,165

The sensitivity analysis has been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. A 50-basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

Post tax profit - higher/(lower)	8,851	15,130
Equity - higher/(lower)	8,851	15,130

Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group's short- medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by;

• monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained,

• continuously monitoring forecast and actual cash flows, and

• matching the maturity profiles of financial assets and liabilities based on management's expectations.

The risk implied from the values shown in the table below reflects a balanced view of cash inflows and outflows within the 2024 financial period.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Financial instruments continued...

2024	Weighted averageinterest rate	1 year or less	Between 1 and 2years	Between 2 and 5years	Over 5 years	Remainingcontractualmaturities
	%	$	$	$	$	$
Non-derivativesNon-interest		-	-	-	-	-
bearing
Trade payables	-	2,090,972	-	-	-	2,090,972
Interest bearing -fixed rate
Other loans	5.90%	5,000,000	-	-	-	5,000,000
Lease liabilities	3.70%	128,753	78,936	-	-	207,689
Total nonderivatives	0	7,219,725	78,936	-	-	7,298,661
Derivatives
Warrants	-	342,000	106,749	-	-	448,749
Total derivatives	-	342,000	106,749	-	-	448,749
2023	Weighted averageinterest rate	1 year or less	Between 1 and 2years	Between 2 and 5years	Over 5 years	Remainingcontractualmaturities
	%	$	$
Non-derivatives				$	$	$
Non-interestbearing
Trade payablesInterest bearing -fixed rate	-	2,245,616	-	-	-	2,245,616
Other loans	5.90%%	-	2,000,000	3,000,000	-	5,000,000
Lease liabilities	3.70%	98,949	149,437	78,935	-	327,335
Total nonderivatives		2,344,565	2,149,437	3,078,935	-	7,572,951
Derivatives
Warrants	-	946,605	-	-	-	946,605

The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

Credit risk

Credit risk arises from the financial assets of the Company, which comprise deposits with banks and trade and other receivables. The Company's exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments. The carrying amount of financial assets included in the Statement of Financial Position represents the Company's maximum exposure to credit risk in relation to those assets.

The Company does not hold any credit derivatives to offset its credit exposure.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

Financial instruments continued...

The Company trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it the Company's policy to securitise it trade and other receivables.

Receivable balances are monitored on an ongoing basis with the result that the Company does not have a significant exposure to bad debts. Trade and other receivables are expected to have a maturity of less than 12 months, for both year-ends.

There are no significant concentrations of credit risk within the Company.

Foreign currency risk

As a result of operations in the USA, being denominated in USD, operations in New Zealand being denominated in NZD, and operations in the United Kingdom being denominated in GBP, the Group's balance sheet can be affected by movements in the respective AUD exchange rates. The Company does not hedge this exposure.

In the reporting period the Group's volume of transactions in NZ currency was low and immaterial. The US and UK operations were discontinued during the year ended 30 June 2024.

The Group manages its foreign exchange risk by constantly reviewing its exposure to commitments payable in foreign currency and ensuring appropriate cash balances are maintained in USD, NZD and GBP, to meet current operational commitments.

Management believes the balance date risk exposures are representative of the risk exposure inherent in financial instruments.

Fair value

The methods of estimating fair value are outlined in the relevant notes to the financial statements. All financial assets and liabilities recognised in the Statement of financial position, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair values unless otherwise stated in the applicable notes.

8. Key management personnel disclosures

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

	1,375,682	1,642,190
Share-based payments	107,386	(129,465)
Termination benefits	-	322,740
Post-employment benefits	88,445	111,331
Short-term benefits	1,179,851	1,337,584

Loans with key personnel

There were no loans to key management personnel or their related entities during the current or previous financial year.

9. Related party transactions

Subsidiaries

The consolidated financial statements include the financial statements of Spacetalk Limited and the subsidiaries that are listed in the table in note 19.

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 19.

Investments in subsidiaries, associates and joint ventures are accounted for at cost. Dividends received from subsidiaries, associates and joint ventures are recognised in profit or loss when a right to receive the dividend is established (provided that it is probable that the economic benefits will flow to the Parent and the amount of income can be measured reliably).

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $ 2024 2023

Related party transactions continued...

Tax consolidation

The Company and its wholly owned Australian resident entities are members of a tax consolidated group under Australian tax law. The Company is the head entity within the tax consolidated group. In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group.

Amounts payable or receivable under the tax-funding arrangement between the Company and the entities in the tax consolidated group are determined using a 'separate taxpayer within group' approach to determine the tax contribution amounts payable or receivable by each member of the tax-consolidated group. This approach results in the tax effect of transactions being recognised in the legal entity where that transaction occurred and does not tax effect transactions that have no tax consequences to the group. The same basis is used for tax allocation within the tax-consolidated group.

Other equity interests

There are no equity interests in associates, joint ventures or other related parties.

Transactions with related parties

As at 30 June 2024, all transactions that have occurred among the subsidiaries within the Group have been eliminated for consolidation purposes.

During the period, there were no related party transactions (2023: $93,253).

The terms and conditions of the transactions with Directors and Director-related entities were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm's length basis.

10. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Profit after income tax	-	-
Total comprehensive income	-	-
Statement of financial position
Total current assets	-	-
Total non-current assets	30,081,068	30,081,068
Total assets	30,081,068	30,081,068
Total current liabilities	-	-
Total liabilities	-	-
Equity
Issued capital	37,892,503	37,892,503
Accumulated losses	(7,811,435)	(7,811,435)
Total equity	30,081,068	30,081,068

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries.

There are no guarantees entered into in relation to debt for any subsidiaries.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Parent entity information continued...

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, and as per the 2023 annual financial statements, except for the following:

• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

11. Remuneration of the auditors

During the financial year the following fees were paid or payable for services provided by William Buck (SA), the auditor of the company:

Audit and review of financial statements	55,000	64,000
------------------------------------------	--------	--------

12. Events after the reporting period

The following material event occurred after year end.

Restructure of the debt facility

On 31 July 2024, Spacetalk successfully refinanced and extended the loan facility.

The revised terms include an extension of the loan maturity date by two years to March 2027. This extension provides Spacetalk with significant financial flexibility and supports the Company's strategic growth initiatives.

Key terms:

• Interest Rate: remains at 9.50%
• Maturity Date: Extended to March 2027

Amortisation Schedule:

• March 2025: Repay $1,000,000, leaving a total loan balance of $4,000,000.
• September 2025: Repay $750,000, leaving a total loan balance of $3,250,000.
• March 2026: Repay $1,000,000, leaving a total loan balance of $2,250,000.
• March 2027: Repay $2,250,000, fully repaying the loan.

Other than the matter outlined above, no other matters or circumstances have arisen since 30 June 2024 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in the future financial years.

13. Approval of financial statements

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

		Ordinary shares		Options over ordinary shares
	Number of	% of total	Number of	% of total
	shareholders	shares issued	shareholders	shares issued
1 to 1,000	98	0.01	10	0.00
1,001 to 5,000	266	0.18	39	0.00
5,001 to 10,000	209	0.35	15	0.00
10,001 to 100,000	695	5.62	63	0.05
100,001 and over	381	93.83	55	0.94
	1,649	100.00	182	100%

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Approval of financial statements continued...

All issued ordinary shares carry one vote per share. Each member present in person, or by proxy, representative or attorney, has one vote on a show of hands and one vote per share on a poll for each share held. Each member is entitled to notice of, and to attend and vote at, general meetings. Options do not carry a right to vote.

Equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

	Ordinary shares
		% of total
	Number held	shares issued
UBS NOMINEES
PTY LTD	107,390,410	22.63
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	14,969,484	3.15
MR STANISLAV MICHAEL KOLENC	11,536,638	2.43
MR PETER COSSETTO & MRS ANNAMARIA STEFANIA COSSETTO	10,000,000	2.11
DR MATTHEW PAYNE	9,269,646	1.95
MR CHRISTOPHER JAMES CAMERON	9,100,000	1.92
YAVERN CREEK HOLDINGS PTY LTD	8,700,000	1.83
MR GEORG JOHANN CHMIEL	8,500,000	1.79
COZ-E PTY LTD	8,000,000	1.69
MR MALCOLM JOHN KAFER	7,045,146	1.48
SANDHURST TRUSTEES LTD	6,841,240	1.44
COZ-E PTY LIMITED <cossetto 2="" a="" c="" family="" no="">	6,600,000	1.39
SPELIZA INVESTMENTS PTY LTD	6,288,134	1.32
CHRIS CAMERON SUPER PTY LTD	5,800,000	1.22
MR SAVVAS IOANNOU & MRS MARIA IOANNOU	5,470,063	1.15
BNP PARIBAS NOMS PTY LTD	5,381,834	1.13
MRS REBECCA GLASSPOOL	5,347,725	1.13
CHMIEL SUPER PTY LTD	5,000,000	1.05
HOME LOANS PRONTO PTY LIMITED	4,725,000	1.00
MR CHARLES MORPHY	4,630,462	0.98
	250,595,782	52.79
	Number onissue	Number ofholders
Options over ordinary shares issued	43,275,962	182

No person holds 20% or more of unquoted equity securities.

Substantial holders

There are no substantial holders in the company.

Restricted securities

There are no restricted securities.

On-market buy-back

Currently there is no on-market buyback of the Company's securities.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

14. Cash and cash equivalents

14.1 Cash and cash equivalents included in current assets:

Cash and bank balances 1,770,292 3,026,165

For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows:

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

14.2 Reconciliation of cash flows from operating activities

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less, net of outstanding bank overdrafts. The carrying amount of these assets is approximately equal to their fair value. Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash flows can be reconciled to the related items in the consolidated reporting position as shown above.

15. Trade and other receivables

15.1 Trade and other receivables comprise:

Trade receivables	881,343	2,703,360
Less: Allowance for expected credit losses	(51,442)	(11,000)
Trade receivables - net	829,901	2,692,360
Other receivables	12,858	72,659
Total trade and other receivables	842,759	2,765,019
15.2 Trade receivables - past due
Past due 0-30 days	212,204	34,963
Past due 31-60 days	16,178	34,972
Past due 61-90 days	32,007	14,544
Past due over 90 days	34,529	229,427
	294,918	313,906
Total trade and other receivables excluding nonfinancial assets included in trade and other
receivables	547,841	-
Total trade and other receivables	842,759	2,765,019
15.3 Movement in loss allowance
At the beginning of the year	(11,000)	(67,252)
Decrease/(Increase) in allowance attributable to new sales	(40,442)	56,252
At the end of the year	(51,442)	(11,000)
16. Inventories
Finished goods	1,516,742	2,592,650

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Inventories continued...

The cost of inventories recognised as an expense during the year in respect of continuing operations was $5,518,045 (2023: $5,009,114). The key assumptions, which require the use of management judgement, are the variables affecting costs recognised in bringing the inventory to their location and condition for sale, estimated costs to sell and the expected selling price. These key assumptions are reviewed at least annually.

No inventory was written off during the current year.

17. Other current assets

Prepayments	965,473	581,094
Total	965,473	581,094

18. Discontinued operations

During the previous financial year, the Company wound down overseas operations in the UK, Europe, and the USA. Device sales ceased with the USA MVNO segment revenue in run off. The full FY24 financial results, other than the MVNO revenue, has been classified as discontinued operations. It is expected that the MVNO revenue will gradually decline through customer attrition in the future.

Financial information relating to the discontinued operation is disclosed below:

Device sales	587,301	2,038,244
Grants received	-	40,000
Sundry income	-	467
Total revenue	587,301	2,078,711
Cost of sales	(260,984)	(1,391,365)
Gross profit	326,317	687,346
Loss on disposal of assets	7,177	(10,658)
Corporate and administration expenses	(514,549)	(925,647)
Advertising & Marketing	(818)	(789,994)
Employee expenses	-	(1,541,137)
Foreign exchange gain/(loss)	-	10,944
Impairment of inventory	-	(1,132,160)
Loss before tax	(181,873)	(3,701,306)
Income tax	(135,992)	80,712
Loss for the year	(317,865)	(3,620,594)
Cash flows from discontinued operations
Net cash flows from (used in) operating activities	(845,957)	(246,110)
Net cash flows from (used in) financing activities	-	694,036

Net increase in cash and cash equivalents from discontinued operations (845,957) 447,926

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

19. Interests in subsidiaries

Information about the composition of the Group at the end of the reporting period is as follows:

	Country of	Date of acquisition
Unlisted controlled entity	Incorporation	or incorporation	Class of shares	30 June 2024	30 June 2023
MGM Wireless Holdings Pty Ltd	Australia	08/10/2003	Ordinary	100%	100%
Message You LLC1	USA	11/09/2006	Ordinary	100%	100%
MGM Wireless (NZ) Pty Ltd	Australia	18/05/2010	Ordinary	100%	100%
Spacetalkwatch UK Ltd	United Kingdom	25/02/2019	Ordinary	100%	100%
Spacetalk Holdings Pty Ltd	Australia	29/06/2015	Ordinary	100%	100%
Spacetalk USA Pty Ltd	Australia	29/06/2015	Ordinary	100%	100%
Spacetalk LLC	USA	29/04/2021	Ordinary	100%	100%
Spacetalk Inc	USA	29/04/2021	Ordinary	100%	100%

The investments have been eliminated on consolidation.

20. Property, plant and equipment

Balances at year end and movements for the year

	Leaseholdproperty	Plant andequipment	Total
Reconciliation for the year ended 30 June 2024
Balance at 1 July 2023
At cost	9,215	183,772	192,987
Accumulated depreciation	(3,985)	(86,854)	(90,839)
Carrying amount	5,230	96,918	102,148
Movements for the year ended 30 June 2024
Additions from acquisitions	-	32,997	32,997
Depreciation	(401)	(22,739)	(23,140)
Property, plant and equipment at the end of the year	4,829	107,176	112,005
Closing balance at 30 June 2024
At cost	9,215	216,769	225,984
Accumulated depreciation	(4,386)	(109,593)	(113,979)
Carrying amount	4,829	107,176	112,005
Reconciliation for the year ended 30 June 2023
Balance at 1 July 2022
At cost	217,601	518,789	736,390
Accumulated depreciation	(143,740)	(370,679)	(514,419)
Carrying amount	73,861	148,110	221,971
Movements for the year ended 30 June 2023
Additions from acquisitions	-	7,081	7,081
Depreciation	(3,996)	(24,251)	(28,247)
Impairment loss recognised in profit or loss	(64,635)	(34,022)	(98,657)
Property, plant and equipment at the end of the year	5,230	96,918	102,148

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

Property, plant and equipment continued...

Closing balance at 30 June 2023
At cost	9,215	183,772	192,987
Accumulated depreciation	(3,985)	(86,854)	(90,839)
Carrying amount	5,230	96,918	102,148
21. Right-of-use assets
		Vehicles	Buildings
Balance at 1 July 2023
At cost		-	726,562
Accumulated depreciation		-	(403,678)
Carrying amount		-	322,884
Movements for the year ended 30 June 2024
Depreciation		-	(125,224)
Impairment loss recognised in profit or loss
Closing balance at 30 June 2024		-	197,660
At cost		-	375,116
Accumulated depreciation		-	(177,456)
Carrying amount		-	197,660
Balance at 1 July 2022
At cost		33,176	691,379
Accumulated depreciation		(33,176)	(587,327)
Carrying amount		-	104,052
Movements for the year ended 30 June 2023
Additions from acquisitions		-	374,225
Acquisitions through business combinations		-
Increase (decrease) through net exchange differences
Depreciation		-	(155,393)
Impairment loss recognised in profit or loss
Closing balance at 30 June 2023		-	322,884
At cost		-	726,562
Accumulated depreciation		-	(403,678)
Carrying amount		-	322,884

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

22. Intangible assets

22.1 Reconciliation of changes in intangible assets

	Development	Distribution
Reconciliation for the year ended 30 June 2024	costs	rights	Total
Balance at 1 July 2023
At cost	22,460,737	441,017	22,901,754
Accumulated amortisation	(20,875,834)	(441,017)	(21,316,851)
Carrying amount	1,584,903	-	1,584,903
Movements for the year ended 30 June 2024
Acquisitions through internal development	1,665,174	-	1,665,174
Disposals	(218,741)	-	(218,741)
Amortisation	(774,081)	-	(774,081)
Impairment loss recognised in profit or loss	(28,755)	-	(28,755)
Intangible assets at the end of the year	2,228,500	-	2,228,500
Closing balance at 30 June 2024
At cost	24,289,910	-	24,289,910
Accumulated amortisation	(22,061,410)	-	(22,061,410)
Carrying amount	2,228,500	-	2,228,500
Reconciliation for the year ended 30 June 2023
Balance at 1 July 2022
At cost	20,799,837	441,017	21,240,854
Accumulated amortisation	(17,075,150)	(396,907)	(17,472,057)
Carrying amount	3,724,687	44,110	3,768,797
Movements for the year ended 30 June 2023
Acquisitions through internal development	1,660,899	-	1,660,899
Amortisation	(1,586,690)	(12,421)	(1,599,111)
Impairment loss recognised in profit or loss	(2,213,993)	(31,689)	(2,245,682)
Intangible assets at the end of the year	1,584,903	-	1,584,903
Closing balance at 30 June 2023
At cost	22,460,737	441,017	22,901,754
Accumulated amortisation	(20,875,834)	(441,017)	(21,316,851)
Carrying amount	1,584,903	-	1,584,903

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

23. Issued capital

Authorised and issued share capital

Movement in ordinary share capital

Details	Shares	$
Balance at 1 July 2022	216,355,749	28,064,477
Exercise of performance rights	4,510,266	319,632
Capital raised	79,376,924	2,777,309
Transfer of vested expired options to share
capital	-	6,290,131
Warrant exercised	11,000,000	580,114
Share issue costs	-	(139,160)
Balance at 1 July 2023	311,242,939	37,892,503
Exercise of performance rights	5,687,194	120,017
Capital raised	154,091,276	3,140,239
Transfer of vested expired options to share
capital
Securities
Share issue costs	-	(376,925)
Balance at 30 June 2024	471,021,409	40,775,834

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holders to one vote, either in person or by proxy, at a meeting of the Group.

24. Reserves

24.1 Classification of reserves

Share based payment reserve	729,125	149,161
Foreign currency translation reserve	(410,014)	154,005
Total reserves	319,111	303,166

24.2 Movement in reserves

	Foreign currencytranslation	Share basedpayment
	reserve	reserve
Balance at 1 July 2022	94,038	6,816,803
Foreign currency translation	59,967	-
Conversion of rights to shares	-	(319,632)
Transfer of vested expired options to share capital	-	(6,290,131)
Share based payments expense	-	(79,236)
Options issued	-	21,357
Balance at 30 June 2023	154,005	149,161
Balance at 1 July 2023	154,005	149,161
Foreign currency translation	(564,019)	-
Conversion of rights to shares	-	(120,017)
Capital raising costs	-	341,559
Share based payments expense	-	358,422
Balance at 30 June 2024	(410,014)	729,125

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023

Reserves continued...

24.3 Nature and purpose of reserves

The share-based payments reserve is used to accumulate amounts related to the issue of options and performance rights and records items recognised as expenses on valuation of incentive-based share options and rights.

The foreign currency translation reserve is used to record exchange rate differences arising from the translation of the financial statements of foreign subsidiaries and are recognised directly in the total comprehensive Income for the year.

25. Dividends

No dividends have been declared in respect of the 2024 financial year. (2023: Nil)

26. Trade and other payables

Trade and other payables comprise:

Total trade and other payables	2,090,971	2,280,496
Other payables	451,483	-
Accrued audit fees	69,321	-
Accrued SMS charges	108,836	34,880
Trade payables	1,461,331	2,245,616

27. Contract liabilities

Contract liabilities comprise:

Unearned income	1,678,965	1,409,440

Reconciliation

Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out below:

Opening balance	1,409,440	709,209
Payments received in advance	5,252,543	2,862,202
Transfers to revenue - included in the opening balance	(102,801)	(709,209)
Transfers to revenue - other balances	(4,880,217)	(1,452,762)
Closing balance	1,678,965	1,409,440
28. Provisions
28.1 Provisions comprise:

	1,404,514	2,110,642
Other provisions	787,813	1,852,070
Provisions for employee benefits	616,701	258,572

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $

Provisions continued...

28.2 Provisions for employee benefits

	Leave payprovision	Employeebenefitprovision	Total
Balance at 1 July 2023	-	258,572	258,572
Other changes through other comprehensive income	288,431	69,698	358,129
Total changes	288,431	69,698	358,129
Balance at 30 June 2024	288,431	328,270	616,701

28.3 Other provisions

			Provision salesdiscount/
	Provision for	Provision for	returns/marketing
	sales rebate	warranty	fund	Total
Balance at 1 July 2023	503,007	848,969	500,094	1,852,070
Reversed	-	(308,476)	-	(308,476)
Utilised	-	-	(2,705,715)	(2,705,715)
Raised	731,125	-	2,435,193	3,166,318
Paid	(1,216,384)	-	-	(1,216,384)
Total changes	(485,259)	(308,476)	(270,522)	(1,064,257)
Balance at 30 June 2024	17,748	540,493	229,572	787,813
Balance at 1 July 2022	-	960,031	326,887	1,286,918
Expensed	-	446,658	-	446,658
Reversed	-	(312,424)	-	(312,424)
Utilised	-	(245,296)	(1,976,549)	(2,221,845)
Raised	1,109,527	-	2,149,756	3,259,283
Paid	(606,520)	-	-	(606,520)
Balance at 30 June 2023	503,007	848,969	500,094	1,852,070

The provision for employee benefits represents annual leave and long service leave entitlements accrued.

The provision for warranty represents the estimation of the warranty claims expected to be materialised.

The provision for sales rebate, return and discount represents the sales rebate, return and discount accrued. The provision for sales rebate in the comparative period has been disclosed in trade and other payables. No amounts were recognised in prior year for sales discounts provisions.

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

	Notes to the Financial Statements

Figures in $	2024	2023
29. Derivative liabilities
Derivatives	448,749	946,605
Non-current portion of derivative liabilities	106,749	-
Current portion of derivative liabilities	342,000	946,605

As part of the loan facility disclosed in note 31, the Company issued additional warrants to Pure Asset Management (Pure AM) that can be exercised for a total of 20 million fully paid-up shares. The warrants can be exercised at any point of time up to 31 December 2026. The warrant liabilities are measured at fair value through profit or loss and have an exercise price of $0.05.

448,749 946,605

Existing warrants issued as part of the original loan facility with Pure AM could be exercised for a total of 90 million fully paidup shares. The warrants have been fair values as at 31 December 2023.

Key assumptions used in determining the fair value of the warrants at 30 June 2024:

30 June 2024
0.017
0.05 - 0.227
92.97%
0.72 - 2.5 years
0.0038 - 0.0053
110,000,000
448,749

Existing warrants issued as part of the original loan facility with Pure AM could be exercised for a total of 11 million fully paidup shares. The warrants could be exercised at any point of time up to 11 March 2025. During the period, the warrants exercise price was adjusted from $0.2169 to $0.034 resulting from the Company's November 2022 capital raising and share purchase plan, which triggered a repricing clause within the Warrant Deed.

On 6th February 2023, Pure AM exercised 11 million warrants. The fair value of the warrants on the date of exercise was $0.0527 per warrant. On exercise of the warrant, the liability was extinguished and recognised in equity.

Key assumptions used in determining the fair value of the warrants at 30 June 2023:

0.027
0.06
117%
1.7 years
0.0105
90,000,000
946,605

Preliminary Consolidated Financial Statements for the year ended 30 June 2024

Notes to the Financial Statements

Figures in $	2024	2023
30. Lease liabilities
Lease liabilities comprise:
Lease obligation	207,689	327,321
Non-current liabilities	78,936	228,372
Current liabilities	128,753	98,949
	207,689	327,321
31. Borrowings
Borrowings comprise:
Term loan	5,000,000	5,000,000
Non-current portion of borrowings	-	5,000,000
Current portion of borrowings	5,000,000	-
	5,000,000	5,000,000

As at 30 June 2024

Facility in place is a term loan with 2 tranches from Pure Asset Management with the following terms:

• Secured
• First Loan interest rate 9.50% pa
• Second Loan interest rate 9.50% pa

Maturity dates

• First Loan ($3m) 20 March 2025
• Second Loan ($2m) 20 March 2025

On 31 July 2024, Spacetalk successfully refinanced and extended the loan facility

The revised terms include an extension of the loan maturity date by two years to March 2027. This extension provides Spacetalk with significant financial flexibility and supports the Company's strategic growth initiatives.

Key terms:

• Interest Rate: remains at 9.50%
• Maturity Date: Extended to March 2027

Amortisation Schedule:

• March 2025: Repay $1,000,000, leaving a total loan balance of $4,000,000.
• September 2025: Repay $750,000, leaving a total loan balance of $3,250,000.
• March 2026: Repay $1,000,000, leaving a total loan balance of $2,250,000.
• March 2027: Repay $2,250,000, fully repaying the loan.

Corporate Directory

30 June 2024

Company Secretary Ms Kim Clark

Registered Office

Level 2 104 Frome Road Adelaide SA 5000 Australia

Principal place of business

Suite 13, The Parks 154 Fullarton Road Rose Park SA 5067 Australia Telephone: +61 (08) 8104 9555 Facsimile: +61 (08) 8431 2400

Share registry

BoardRoom Pty Ltd Level 8, 210 George Street Sydney NSW 2000 Australia Telephone:1300 737 760 Overseas Callers:+61 2 9290 9600 Email: enquiries@boardroomlimited.com.au

Auditors

William Buck (SA)

Stock exchange listing

Spacetalk Limited shares are listed on the Australian Securities Exchange (ASX code: SPA)

Website

https://spacetalk.co/