SPACETALK LTD — Regulatory Filings 2021

Aug 18, 2021

Appendix 4E

Preliminary Final Report Under Listing Rule 4.3A

SPACETALK LTD ABN 93 091 351 530

Year Ending 30 June 2021 (Previous corresponding period – Year Ending 30 June 2020)

Appendix 4E

SPACETALK LTD

ABN 93 091 351 530

Preliminary Final Report

Year Ending 30 June 2021

(Previous corresponding period – Year Ending 30 June 2020)

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Revenue from ordinary activities	Up by 44%	to	15,121,573
Profit/(loss) from ordinary activities after tax attributable to members	Down by 58%	to	(1,792,029)
Net Profit/(loss) for period attributable to members	Down by 58%	to	(1,780,148)

$

Dividends (distributions)	Amount per security	Franked amountper security
Final dividend	Nil¢	Nil¢
Previous corresponding period	Nil¢	Nil¢
Record date for determining entitlements to dividends	Not applicable
Payment date	Not applicable

Net tangible asset backing	30 June 2021	30 June 2020
Net tangible asset backing per ordinary security	$0.04	$0.03
Control gained or lost over entities during the period
Name of entity	Not applicable
Date of gaining or losing control	Not applicable
Dividend or distribution reinvestment plan details
There is no conduit foreign income for this dividend.
Joint venture and associate details	Not applicable
Foreign entities' accounting standards used	Not applicable
Status of Audit	The accounts are in the process ofbeing audited. The accounts are not subjectto dispute or qualification.

All growth rates in this Appendix 4E are provided in comparison to the prior corresponding period (year ending 30 June 2020) unless otherwise stated.

Certain values in this Report are rounded to the reported decimal place and may impact aggregation representations.

Financial Statements

For the Year Ended 30 June 2021

(Previous corresponding period – Year Ended 30 June 2020)

CONNECTED FAMILIES • CONFIDENT KIDS • SAFE SENIORS

Preliminary Final Report

Year Ended 30 June 2021

Contents

• 03 Corporate Directory
• 04 Review of Operations & Financial Results
• 09 Financial Statements

Corporate Directory

Registered Office	Suite 13, The Parks154 Fullarton RoadRose Park SA 5067
Principal Office	Suite 13, The Parks154 Fullarton RoadRose Park SA 5067Telephone: (08) 8104 9555Facsimile: (08) 8431 2400
Auditor*	Ian G McDonaldTelephone: 0419 620 906
Share Registry	Computershare Investor Services Pty LtdLevel 5115 Grenfell StreetAdelaide SA 5000Telephone: 1300 556 161Overseas Callers: +61 3 9415 4000Facsimile: 1300 534 987
Stock Exchange	The securities of Spacetalk Ltd. are listed on the AustralianSecurities Exchange.
ASX Code	SPAordinary fully paid shares

*This Appendix 4E is based on unaudited accounts which are in the process of being audited. The accounts are not subject to dispute or qualification.

Review of Operations & Financial Results for the Year Ending 30 June 2021

Operational Highlights

• 2 new devices brought to market the next-generation Spacetalk Adventurer for kids and Spacetalk LIFE for seniors.

  • Adventurer is the market's leading connected kids wearable device; packed with cool features, it is designed to give kids the confidence to go explore and seek out new adventures, and their parents more peace of mind. It marks a significant advancement for the kids smartphone watch category, incorporating major mobile technology, industrial design and software engineering breakthroughs into a high-quality device.
  • LIFE is a new seniors connected wearable device designed for the unique needs of older Australians to support them to live independently, safely and to improve quality of life for themselves and their carers

• Telstra and Vodafone in Australia, and Telefonica (O2) and Virgin Mobile in the UK. Commenced selling with Vodafone on monthly plans, with Telstra, O2 and Virgin to roll-out plans in August and September 2021

• Increase in mass market retail bricks and mortar ranging from 902 to 1,288 stores globally, with tier-1 retailers (JB Hi-Fi, Officeworks, The Good Guys, Harvey Norman, Currys PC World) in ANZ and the UK staging Spacetalk's product suite across their national footprints

• Complete new-build of the Spacetalk App, featuring an updated UI/UX, group Family Chat with pictures and video sharing, advanced health and fitness, and enhanced parent controls. The app can be installed on multiple devices so parents, grandparents – the whole family and approved friends – can know that their loved ones are safe and stay connected in engaging ways.

• Fall Detection rolled-out to LIFE seniors devices via a free overthe-air upgrade, introduced groundbreaking new technology, incorporating real time data recording and triangulation, AI, and machine learning. Falls among the elderly is one of the most important public health issues in today's aging society, and the roll-out of Fall Detection considerably broadens usecase and marketability of LIFE as an assistive device

• Launched B2B2C channel for LIFE seniors device. Targets aged/home care, NDIS operators and Occupational Therapists ('OTs'). Registered as an Approved NDIS Provider. Pricing for LIFE repositioned to enable 100% Government funding via the NDIS, CHSP, HCP

• Enhanced people presence in the UK and in the USA in preparation for a CY2021 launch; new Country Managers, sales and customer support staff. Advanced go-to-market and partner engagement for USA launch in CY2021

• Company name changed to Spacetalk Ltd. (ASX ticker: SPA) from MGM Wireless Limited (ASX ticker: MWR). Unifies and simplifies corporate, product and marketing communication. Reflects the tremendous growth in the Spacetalk Wearables division to more than 4x the size of the Schools business, and the larger business opportunity it presents going forward

Financial Highlights

2021 FINANCIAL RESULTS SUMMARY

2021 Key results
Twelve months ending 30 June	2021	2020	Change
$ million unless otherwise specified
Total Revenue	15.12	10.49	increased by 44%
Wearables Revenue	12.75	7.70	increased by 65%
School Communication Business Revenue	2.25	2.74	decreased by 18%
EBITDA*	1.08	(0.21)	increased by 615%
Net Loss	(1.78)	(4.27)	decreased by 58%
EBITDA margin*	7%	(2%)	increased by 450%
Net cash from operating activities	(1.18)	0.94	decreased by 226%
Cash balance	4.19	3.17	increased by 32%
Net cash/(debt)	1.27	3.17	decreased by 60%
Earnings per share (basic) cents	(1.09)	(3.10)	increased by 65%

*Excluding non-cash options and share expenses.

HIGHLIGHTS

• Highest ever year of Group Revenue of $15.1m +44%
• Device Revenue grew 65% to $10.6m
• App Annualised Recurring Revenue (ARR) grew 87% pcp to $2.8m
• App Revenue grew 76% to $2.2m
• Schools Business Revenue of $2.25m was down 18% (reflecting a one-off SMS revenue spike in FY2020 due to increased COVID-19 demand)
• Group EBITDA (excluding non-cash options and share expenses), improved 615% to $1.1m
• Cash at Bank at June 30, 2020 $4.2m, including $3m of drawn debt (with an additional $2.0m of committed credit available to the Company)

WEARABLES DIVISION – MULTI-PRODUCT, STRONG REVENUE GROWTH

DEVICES SALES

The Company recorded its best ever year of revenue of $15.1 million (+44%) and positive EBITDA of $1.1 million (+615%), largely attributable to continuing strong device sales of $10.6 million (+65%). ANZ device sales grew by 85% to $9.1 million, and the UK was flat at $1.5m impacted by a particularly prolonged lockdown for COVID-19, a net-negative for tracking and communication products.

Devices sales benefited from –

• 1. More than one Spacetalk device being offered in the same category for the first time in the Company's history – specifically, the original Spacetalk Kids and Spacetalk Adventurer devices for children, and Spacetalk LIFE creating a new category of seniors connected wearables.
• 1. Strong in-fill demand from existing and new channel partners, both in ANZ, where Spacetalk continues to grow our market leading position, and in the UK, with the onboarding of new tier-1 MNOs: Telefonica UK (O2) and Virgin Mobile, and Sky UK investing further to expand its ranging of our products to include Adventurer. Bricks-and-mortar distribution expanded from 902 to 1,288 stores globally, with selected tier-1 retailers ranging Spacetalk products across their national footprints.

Confidence from new and existing retail and MNO partners to range our products contributed to $8.8 million (+66%) of device sales, with the Company's e-commerce site contributing $1.8 million (+63%).

Spacetalk Adventurer has been a particular success since its launch in December 2020 and is our flagship device, accounting for 41% of device sales revenue achieved in just over six months of the year ended 30 June 2021 (versus 55% for Spacetalk Kids and 4% for Spacetalk LIFE, which sold for the whole year). The next generation 4G all-in-one smartphone watch and GPS for kids is fun, fashionable, safe and technologically advanced, and is redefining the category. Spacetalk Adventurer is the first and presently sole offering in the category of leading new MNO partners, including Telstra and Telefonica UK (O2) – a strong worldwide endorsement of the quality, reliability and customer brand appeal of our devices and App.

Finally, contributing to the business' considerable expansion over the year ended 30 June 2021, albeit still presently in the infancy of its buildout, was the roll-out of a new strategic business model for Spacetalk LIFE for seniors, involving:

• 1. Registration as an NDIS provider and our engagement with Aged and Home Care providers, NDIS providers and OTs as channels to market for the devices via a B2B2C arrangement
• 1. A significant technological advancement for the Spacetalk LIFE seniors device, with the rollout of Fall Detection. Fall Detection introduced ground-breaking new technology, incorporating real time data recording and triangulation, Artificial Intelligence (AI), and machine learning; continually enhancing its high accuracy in real time as more people use the devices.

The strong global growth in the kids smartphone watch category, and the urgent focus of retailer and MNOs, has enabled us to increase sales while decreasing our Customer Acquisition Costs1 ("CAC") to $1.5 million (-14%), as the Company increasingly benefits from operating leverage.

• Adventurer for Kids: launched in Dec-20 exclusively via JB Hi-Fi

• Life for Seniors: ranging for sales from Jul-20 (e-com, then retailer)

1 Customer Acquisition Cost = Advertising and Marketing expenses. 2 MNO = Mobile Network Operators

LEADER IN AUSTRALIA UK COVID-19 LOCKDOWN IMPACTED

$8.8m $1.8m

Retail + MNO2 partners Company e-com

NEW SPACETALK APP

App Revenue +76% to $2.2 million and App Annual Recurring Revenue (ARR or monthly Spacetalk App subscription revenue) +87% to $2.8 million, continue to build strongly.

In December 2020, the Company released the new Spacetalk App, replacing the AllMyTribe App and providing new functionality beyond parental controls; featuring group Family Chat with pictures and video, advanced health and fitness, and enhanced parent controls. Every linked contact, regardless of device or age, can now stay connected in the more fun, engaging and secure Spacetalk ecosystem.

The business relevance of the new Spacetalk App is as significant as the continuing strong revenue growth in sales from the Company's suite of devices. The introduction of the Family Chat function (with video and picture sharing) is expected to engender a much stronger and 'sticky' network effect for customer adoption. Similar to the WhatsApp² messaging platform, Spacetalk Family Chat enables family members and friends that are contacts of Spacetalk devices to keep connected via group chats; where uniquely however, the privacy and security of the "family" is secured by each Family Chat group being only accessible to the Spacetalk device's list of approved contacts. A viral network effect is created as more and more family and friends are linked and become part of the chat group, which not only increases the user base of the Spacetalk ecosystem, but also grows brand awareness and reach to potential new acquirers of Spacetalk devices and the new networks created thereof.

SCHOOL BUSINESS

The Schools Business revenue was $2.25 million (-18%), reflecting a one-off SMS revenue spike in FY2020 due to increased COVID-19 demand.

The Schools business continues to deliver steady profit performance, with multi-year State Government contracts providing stable recurring cash flows.

GROUP – STRONG CAPITAL MANAGEMENT

Group gross profit of $9.4 million (+26%) at a healthy gross margin of 62% was positively impacted by increasing sales, and despite higher operating costs of $8.3 million (+9%) the Company generated a healthy EBITDA of $1.1 million (+615%).

Gross profit of $9.4 million (+26%) was positively impacted by increasing sales and gross margins.

Corporate and administrative expenses increased slightly to $3.3 million (+4%); selling and distribution costs grew in line with increased sales volumes, however costs were contained with reductions in corporate consulting fees, warranty costs, travel expenditure, and fees from Apple and Google platforms.

A Foreign Exchange loss of $0.4 million was incurred due to movements in the AUD:USD hedge and exchange rate at the time of inventory delivery.

Advertising and marketing costs decreased to $1.5m (-14%), benefiting from operating leverage of partner marketing. These included promotions over the most important shopping days leading up to Christmas and television advertising in Australia and the UK.

Employee costs increased to $3.0 million from $2.8 million (includes 650K COVID related payroll subsidy credits received for the year ending 30 June 2021, and 166K for the year ending 30 June 2020). The Company significantly strengthened the management team, with multiple senior appointments in marketing, sales, logistics, customer after sale service and product development in ANZ, the UK and USA, and team builds of our operations, customer service and sales teams in the UK and USA. At 30 June 2021, the Company employed 49 staff.

Significant once-off non-cash expenses included options and share issue costs of $0.3 million, down from $2.5 million, and depreciation and amortisation of $2.99 million (+22).

At 30 June 2021 the Group held cash of $4.2 million (including $3.0m of drawn debt and an additional $2.0 million undrawn line of credit available), $1.2 million in prepayments of outstanding inventory, an R&D tax incentive of $0.5 million and $2.2 million in receivables.

Despite the global COVID related chip shortages and supply chain challenges, the company successfully navigated its way to meet its MNO and Mass Market Retailer inventory demands.

BUSINESS & STRATEGY UPDATE

FY2022 has started strong, with O2 successfully launching in August 2021.

Adventurer continues to grow market share with increased distribution and sell-through, continuing to consolidate its position as the market leading connected kids wearable device.

The Company is working with several NDIS, aged care and home care service providers to pilot a mass market, scalable go-tomarket strategy to enable over 39,000 Aged Care and NDIS service providers in Australia to promote and sell Spacetalk LIFE to their clients.

The Company is committed to the following objectives for FY2022:

• 1. Growing the top-line with our expanded product suite original Kids, Adventurer and LIFE – and channels – bricks and mortar retail, MNO and new geographies, with funding in place to pursue growth
• 1. Expanding Spacetalk LIFE for seniors distribution to a B2B2C model, where we are seeing strong interest from aged care and home care providers
• 1. Advancing our Spacetalk Device/App/Server Ecosystem through new, engaging functionality, multi-language support and creating new subscription/ARR business models and revenue streams
• 1. Expanding our global market penetration, in the UK and pan-Europe by advancing new bricks and mortar launches and onboarding new MNOs, and in the USA by rolling out more broadly the go-to-market planned for CY2021
• 1. Improving operating cost efficiencies as we grow, with the aim of acquiring new customers at a lower cost as we scale in ANZ and take a disciplined approach to capital management with our international expansion.

MARK FORTUNATOW EXECUTIVE CHAIRMAN

Rose Park, 18th August 2021

Consolidated Statement of Profit or Loss and Other Comprehensive Income

	Group Year Ending
	Notes	30/06/2021	30/06/2020
		$	$
Continuing Operations
Revenue	2	15,121,573	10,486,518
Cost of sales		(5,759,779)	(3,049,807)
Doubtful debts		(75,170)	(14,544)
Interest expense		(172,128)	(127,632)
Amortisation & depreciation		(2,993,992)	(2,458,697)
Options and share issue costs		(351,342)	(2,477,662)
Corporate and administration		(3,292,530)	(3,167,824)
Advertising and marketing		(1,491,229)	(1,741,184)
Employee costs		(3,029,154)	(2,762,209)
(Loss)/ Gain on foreign exchange		(391,968)	41,696
(Loss)/ profit before tax		(2,435,719)	(5,271,345)
Income tax benefit	3	655,571	1,005,893
Net loss for the period attributable to owners of the Company		(1,780,148)	(4,265,452)
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations		(11,881)	(4,485)
Other comprehensive income for the period (net of tax)		(11,881)	(4,485)
Total comprehensive income for the period attributable to owners of the Company		(1,792,029)	(4,269,937)
(Loss)/profit attributable to:
Owners of the Company		(1,792,029)	(4,269,937)
Earnings per share
Basic (cents per share)	4	(1.09)	(3.10)
Diluted (cents per share)	4	(1.03)	(3.03)

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

Consolidated Statement of Financial Position

	Group As At
	Notes	30/06/2021	30/06/2020
		$	$
ASSETS
Current Assets
Cash and cash equivalents	5	4,185,033	3,165,125
Trade and other receivables	6	2,218,826	1,049,580
Inventories		1,736,994	977,851
Other current assets	7	2,774,845	1,061,566
Total Current Assets		10,915,698	6,254,122
Non-Current Assets
Property, plant and equipment	9	205,911	182,731
Intangibles	10	3,941,220	3,713,004
Right-of-use assets	11	289,016	134,111
Deferred tax assets		655,661	458,488
Total Non-Current Assets		5,091,808	4,488,334
Total Assets		16,007,506	10,742,456
LIABILITIES
Current Liabilities
Trade and other payables	12	1,944,348	2,084,841
Provisions		418,494	208,790
Lease liabilities	11	183,539	135,642
Current tax liabilities		51,379
Total Current Liabilities		2,597,760	2,429,273
Non-Current Liabilities
Borrowings	15	1,538,125	-
Warrants	15	2,409,726	-
Lease liabilities	11	109,304	-
Deferred Tax Liabilities		1,046	-
Total Non-Current Liabilities		4,058,201	-
Total Liabilities		6,655,961	2,429,273
Net Assets		9,351,545	8,313,183
EQUITY
Issued capital	13	18,686,099	16,124,617
Reserves	14	6,442,745	6,185,717
Accumulated losses		(15,777,299)	(13,997,151)
Total Equity		9,351,545	8,313,183

The above Consolidated Statement of Financial Position should be read in conjunction with the attached notes.

Consolidated Statement of Changes in Equity

	Issued Capital	AccumulatedLosses	Share basedpaymentReserve	ForeignCurrencyTranslationReserve	Total Equity
Consolidation	$	$	$	$	$
At 1 July 2019	10,806,726	(9,731,699)	3,756,515	(26,544)	4,804,998
Loss attributable to members	-	(4,265,452)	-	-	(4,265,452)
Currency translation differences	-	-	-	(4,485)	(4,485)
Total comprehensive income	-	(4,265,452)	-	(4,485)	(4,269,937)
Transaction with owners Contributionsand distributions
Shares issued	5,581,525	-	-	-	5,581,525
Options exercised	14,000	-	-	-	14,000
Cost of share issued	(289,224)	-	-	-	(289,224)
Options/rights issued	11,590	-	2,460,231	-	2,471,821
Transactions with owners	5,317,891	-	2,460,231	-	7,778,122
At 30 June 2020	16,124,617	(13,997,151)	6,216,746	(31,029)	8,313,183
Loss attributable to members	-	(1,780,148)	-	-	(1,780,148)
Currency translation differences	-	-	-	(11,881)	(11,881)
Total comprehensive income	-	(1,780,148)	-	(11,881)	(1,792,029)
Transaction with owners Contributionsand distributions
Share issued	2,505,047	-	-	-	2,505,047
Options exercised	-	-	-	-	-
Cost of share issued	(29,095)	-	-	-	(29,095)
Options/rights issued	85,530	-	268,909	-	354,439
Transactions with owners	2,561,482	-	268,909	-	2,830,391
At 30 June 2021	18,686,099	(15,777,299)	6,485,655	(42,910)	9,351,545

The above Consolidated Statement of Changes in Equity should be read in conjunction with the attached notes.

Consolidated Statement of Cash Flows

	Group Year Ending
	30/06/2021	30/06/2020
	$	$
Cash flows from operating activities
Receipts from customers	15,264,873	10,175,388
Payments to suppliers	(16,842,403)	(10,065,525)
Tax receipts	650,612	955,103
Interest payments	(257,596)	(127,632)
Net cash provided by operating activities	(1,184,514)	937,334
Cash flows from investing activities
Payments for plant and equipment	(48,089)	(42,044)
Payment for development	(2,997,639)	(3,101,983)
Net cash (used in)/provided by investing activities	(3,045,728)	(3,144,027)
Cash flows from financing activities
Proceeds from issue of shares	2,495,047	5,500,003
Costs associated with issue of shares	(35,653)	(289,224)
Proceeds from options exercised	-	14,000
Proceeds from borrowings	3,000,000	-
Issue of convertible note	-	500,000
Payment of lease liabilities	(197,363)	(234,348)
Repayment of convertible notes	-	(1,750,000)
Net cash provided by/(used in) financing activities	5,262,031	3,740,431
Net increase/(decrease) in cash held	1,031,789	1,533,738
Cash at the beginning of the year	3,165,125	1,635,872
Effect of exchange rate changes	(11,881)	(4,485)
Cash at the end of the year	4,185,033	3,165,125

The above Consolidated Statement of Cash Flows should be read in conjunction with the attached notes.

Notes to the Financial Statements for the Year Ending 30 June 2021

1. 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 2020 annual financial report.

2. REVENUE

	Group
The following is an analysis of the Group's revenue	Year Ending
	30/06/2021	30/06/2020
	$	$
Schools sales	2,245,288	2,740,975
SPACETALK sales	12,686,980	7,672,471
Grants received	15,300	-
Other SPACETALK income	64,503	31,309
Sundry income	109,502	41,763
Total sales reven]ue	15,121,573	10,486,518

Other SPACETALK income relates to repairs, refurbished sales and shipping charges.

3. INCOME TAX

	Group
	Year Ending
Income tax benefit	30/06/2021	30/06/2020
The income tax benefit for the year can be reconciled to the accounting profit or lossas follows:	$	$
(Loss)/profit for the year	(2,435,719)	(5,271,345)
Prima facie tax benefit at 26% (2020: 27.5%)	(633,287)	(1,449,620)
Non-deductible items
Other	43,329	678,179
Research and development tax offset	(173,167)	(239,304)
Adjustments recognised in the current year in relation to the current tax of prior year	-	4,852
Adjustments recognised in the current year in relation to the deferred tax of prior year	56,319	-
Adjustments recognised in the current year in relation to change in tax rates	51,235
	(655,571)	(1,005,893)

4. EARNINGS PER SHARE

	Group
	Year Ending
	30/06/2021	30/06/2020
	$	$
Basic earnings per share
Total basic earnings per share (cents per share)	(1.09)	(3.10)
Diluted earnings per share
Total diluted earnings per share (cents per share)	(1.03)	(3.03)

4.1 BASIC EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per shares are as follows:

Net(loss)/profit for the year attributable to owners of the Company	(1,780,147)	(4,265,452)
Earnings used in the calculation of total basic earnings per share	(1,780,147)	(4,265,452)
Weighted average number of ordinary shares for the purpose of basic earnings pershare (all measures)	163,699,515	137,595,734
4.2 DILUTED EARNINGS PER SHARE
The earnings and weighted average number of ordinary shares used in the calculationof diluted earnings per shares are as follows:
Net(loss)/profit for the year attributable to owners of the Company	(1,780,147)	(4,265,452)
Earnings used in the calculation of total diluted earnings per share	(1,780,147)	(4,265,452)
Weighted average number of ordinary shares for the purpose of diluted earnings pershare (all measures)	175,454,882	140,706,043

5. CASH & CASH EQUIVALENT

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

	Group
	Year Ending
	30/06/2021	30/06/2020
	$	$
Cash and bank balances	4,185,033	3,165,125

6. TRADE AND OTHER RECEIVABLES

	GroupYear Ending
	30/06/2021	30/06/2020
	$	$
Trade receivables	2,287,874	1,139,911
Loss allowance	(69,048)	(90,331)
	2,218,826	1,049,580

7. OTHER CURRENT ASSETS

	GroupYear Ending
	30/06/2021	30/06/2020
	$	$
R&D tax incentives	517,380	650,612
Prepayments	1,224,146	410,954
Loan commitment asset	1,033,319	-
	2,774,845	1,061,566

8. PARENT ENTITY INVESTMENTS

Unlisted controlled entity	Date ofacquisition	County ofincorporation	Class of shares	Cost of ParentEntity'sInvestment	Cost of ParentEntity'sInvestment
				30/06/2021	30/06/2020
				$	$
MGM Wireless Holdings Pty Ltd	08/10/2003	Australia	Ordinary	767,000	767,000
Message You LLC	11/09/2006	USA	Ordinary	124,440	124,440
MGM Wireless (NZ) Pty Ltd	18/05/2010	Australia	Ordinary	80	80
Spacetalkwatch UK Ltd	25/02/2019	United Kingdom	Ordinary	186	1
Spacetalk Holdings Pty Ltd	29/06/2015	Australia	Ordinary	1	1
Spacetalk Inc	29/04/2021	USA	Ordinary	1,340	-
Spacetalk LLC	29/04/2021	USA	Ordinary	1,340	-
Spacetalk USA Pty Ltd	29/06/2015	Australia	Ordinary	100	-
				894,487	891,522

9. PLANT, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

		Leasehold
	Plant and equipment	improvements	Total
	$	$	$
Cost
Balance as at 30 June 2019	377,950	208,499	586,449
Additions	36,377	3,480	39,857
Balance as at 30 June 2020	414,327	211,979	626,306
Additions	52,515	1,364	53,879
Balance as at 30 June 2021	466,842	213,343	680,185
Accumulated depreciation and impairment
Balance as at 30 June 2019	(286,278)	(112,188)	(398,466)
Depreciation	(30,113)	(14,996)	(45,109)
Balance as at 30 June 2020	(316,391)	(127,184)	(443,575)
Depreciation	(22,188)	(8,511)	(30,699)
Balance as at 30 June 2021	(338,579)	(135,695)	(474,274)
Written down value at 30 June 2020	97,936	84,795	182,731
Written down value at 30 June 2021	128,263	77,648	205,911

10. INTANGIBLE ASSETS

		Group
		Year Ending
		30/06/2021	30/06/2020
		$	$
At cost		17,951,941	14,954,301
Accumulated amortisation and impairment		(14,010,721)	(11,241,297)
Carrying value		3,941,220	3,713,004
	Distribution Rights	CapitalisedDevelopment Costs	Total
Cost	$	$	$
Balance as at 30 June 2019	441,017	11,409,231	11,850,248
Additions from internal developments	-	3,104,053	3,104,053
Balance as at 30 June 2020	441,017	14,513,284	14,954,301
Additions from internal developments	-	2,997,640	2,997,640
Balance as at 30 June 2021	441,017	17,510,924	17,951,941

Accumulated amortisation and impairment
Balance as at 30 June 2019	(264,607)	(8,799,100)	(9,063,707)
Amortisation	(44,100)	(2,133,490)	(2,177,590)
Balance as at 30 June 2020	(308,707)	(10,932,590)	(11,241,297)
Amortisation	(44,100)	(2,725,324)	(2,769,424)
Balance as at 30 June 2021	(352,807)	(13,657,914)	(14,010,721)
Carrying value at 30 June 2021	88,210	3,853,010	3,941,220

11. LEASES

11.1 RIGHT-OF-USE

	Building	Vehicle	Total
Cost	$	$	$
Balance at 1 July 2019	262,904	33,176	296,080
Additions	73,912	-	73,912
Balance at 30 June 2020	336,816	33,176	369,992
Additions	354,563	-	354,563
Balance at 30 June 2021	691,379	33,176	724,555
Accumulated amortisation and impairment
Balance at 1 July 2019	-	-	-
Amortisation	(211,668)	(24,213)	(235,881)
Balance at 30 June 2020	(211,668)	(24,213)	(235,881)
Amortisation	(190,695)	(8,963)	(199,658)
Balance at 30 June 2021	(402,363)	(33,176)	(435,539)
Carrying Value 30 June 2021	289,016	-	289,016

11.2 LEASE LIABILITIES

		Group
		Year ending
	30/6/2021	30/06/2020
Maturity analysis	$	$
Less than one year	197,578	137,295
1-5 years	111,254	-
	308,832	137,295
Less: unearned interest	(15,989)	(1,653)
	292,843	135,642
Analysed as:
Current	183,539	135,642
Non-current	109,304	-
Balance as at 30 June	292,843	135,642

12. TRADE AND OTHER PAYABLES

	GroupYear Ending
	30/06/2021	30/06/2020
	$	$
Trade payables	1,744,968	1,598,784
Indirect tax liability	171,275	411,723
Accrued SMS charges	28,105	74,334
	1,944,348	2,084,841

13. SHARE CAPITAL

	Group
	Year Ending
	30/6/2021	30/6/2020
13.1 ISSUED AND PAID UP CAPITAL	$	$
Ordinary shares, fully paid	18,686,099	16,124,617

(30 June 2021: 165,381,445, 30 June 2020: 141,750,051)

13.2 FULLY PAID ORDINARY SHARES	Number of shares	Share capital
		$
Balance at 30 June 2020	141,750,051	16,124,617
Share Purchase Plan	23,256,425	2,469,394
Shares issued on employee incentive rights vesting during the year	285,000	88,530
Share issued to contractor	89,969	10,000
Balance at 30 June 2021	165,381,445	18,679,541

During the year, the Company issued 285,000 ordinary shares under the employee incentive plan (2020: 88,530). 23,256,425 shares were issued pursuant to a share purchase plan and 89,969 shares were issued to a contractor as consideration for services provided.

14. RESERVES

	Group
	Year Ending
	30/06/2021	30/06/2020
	$	$
Option issue reserve	6,476,016	6,216,746
Foreign currency translation reserve	(42,910)	(31,029)
	6,433,106	6,185,717
	Option issue reserve	Foreign currencytranslation reserve
	$	$
Balance as at 30 June 2019	3,756,515	(26,544)
Options/rights issued	2,460,231	-
Currency translation differences	-	(4,485)
Balance as at 30 June 2020	6,216,746	(31,029)
Options/rights issued	259,270	-
Currency translation differences	-	(11,881)
Balance as at 30 June 2021	6,476,016	(42,910)

NATURE AND PURPOSE OF RESERVE

The option issue reserve is used to accumulate amounts received on the issue of options and records items recognised as an expense on valuation of incentive based share options.

The foreign currency translation reserve is used to record exchange rate differences arising from the translation of the financial statements of foreign subsidiaries and is recognised directly in the Statement of Profit or Loss and Other Comprehensive Income before accumulation in this reserve.

15. BORROWINGS

	GroupYear Ending
	30/06/2021	30/06/2020
	$	$
Loan from Pure Asset Management	1,538,125	-
	1,538,125	-

During the year, the Company entered into a facility agreement with Pure Asset Management Pty Ltd (Pure AM) for a total of $5 million that is drawn in 2 tranches. The first tranche is $3 million while the second tranche is $2 million. The first tranche has been drawn and the second tranche is yet to be drawn. A loan commitment asset of $1.03 million is recognised in relation to the potential draw down of the second loan. The loan commitment assets comprise of transaction costs, including cost of warrant issued to Pure AM, allocated between the first loan and the second loan.

As part of this facility, the Company has issued a warrant to Pure AM that can be exercised for a total of 11 million fully paid-up shares. The warrant can be exercised at any point of time within 48 months of the first drawdown. The warrants were issued at zero cost, so the fair value of the warrants is deducted from the loan from Pure AM (debt liability). These warrants are recognised at fair value using the Black Sholes model.

15. SUBSEQUENT EVENTS

There has not been any matter or circumstance that has arisen since 30 June 2021, which has significantly affected, or may significantly affect, the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.

Mark Fortunatow Director