SPRINTEX LIMITED — Annual Report 2021

Aug 30, 2021

Appendix 4E

(Rule 4.3A)

Preliminary final report

Name of entity

Sprintex Limited

ABN: 38 106 337 599

1. Details of the Reporting Period and the Previous Corresponding Period

Financialperiod ended(“currentperiod”)	Financialperiod ended(“previousperiod”)
30 June 2021	30 June 2020

2. Results for Announcement to the Market

			$’000	%		$’000
2.1	Revenue from ordinary activities	down	556	49%	to	575
2.2	Loss from ordinary activities after taxattributable to members	down	2,962	105%	to	128 profit
2.3	Net loss for the period attributable tomembers	down	2,962	105%	to	128 profit
2.4	Loss per share	down	2.9	103%	at	0.1 centgain
2.5	Brief explanation of results
	Highlights for the year were:Re-admission to the Official List of the ASX and Recapitalisation:During the year a recapitalisation of the Company and re-admission to the Official List of theAustralian Securities Exchange Limited were completed.75,581,395 ordinary shares were issued at $0.086 per share to raise $6,500,000 before costs.Acquisition of Remaining 50% interest in the Malaysian Production Facility:The remaining 50% interest in its joint ventured production facility in Malaysia for the issue of3,805,940 ordinary shares. This facility is now 100% owned by Sprintex.Change of Board:As part of the recapitalisation and re-admission to the Official List of the ASX, the Board ofthe Company was changed and now comprises of:•Mr Wayne Knight – Non-executive Chairman•Mr Jude (Jay) Upton – Managing Director•Mr Li Chen – Non-executive Director

• Mr Steven Apedaile – Non-executive Director

• Restructuring of Loans:

On 28 October 2020, the Company issued securities to a number of investors in satisfaction of its obligations under a number of recapitalisation agreements including:

• 5,755,814 shares to Lidx Technology Limited (an entity controlled by Director, Li Chen) (Lidx) in lieu of a financing charge payable to Lidx and in lieu of repayment of $440,000 owing under the loan agreement entered into between the Company and Lidx; and

• 10,146,790 shares to Wilson’s Pipe Fabrication Pty Ltd (WPF) in lieu of part conversion of the amount owing to WPF of $1,462,642. The balance of $930,000 was repaid during the year.

• On 22 December 2020, the Company issued 18,681,395 shares to Ganado Investments Corporation Limited (GICL) in full and final repayment of the total amount of US $1,110,000 owing to GICL.

A loan from China Automotive Holdings Limited (“CAHL”) a related party by way of a common former director, was extinguished by way of a debt settlement agreement, resulting in a reduction in borrowings of $2,822,406, a reduction of $809,314 in accrued interest and fees recorded in other payables and the recognition of other income loan forgiveness for $3,631,720. COVID-19

Beginning in February 2020, governments worldwide issued increasingly stringent orders to contain the spread of COVID-19, including shelter-in-place orders and travel bans. In response to this travel was ceased for all employees. Operations were impacted by COVID-19 restrictions with production not being possible from the facility in Malaysia and access to the facility in the US also being restricted at times. These restrictions did impact the ability of the Group to manufacture and assemble products. Additionally, the supply chain was impacted with part shortages and freight restrictions at times.

Commencement of Development of a Toyota Tacoma Supercharger System: Following the continued success of the Company’s industry leading composite supercharger systems to suit the very popular Jeep Wrangler range of lifestyle oriented on and off-road vehicles, the Company commenced development of a new supercharger system to suit the Toyota Tacoma 3.5 V6 pickup truck range to meet rising demand in the USA, Middle East and Asian markets.

The Tacoma 3.5 V6 model was introduced in the USA and is produced in similar volume to the Jeep Wrangler in USA, at approximately 250,000 units p.a. It is a popular choice for off-road and overland recreational lifestyle applications.

With a similar engine configuration to the Jeep 3.6 V6, the Toyota Tacoma 3.5 V6 supercharger system will share many common parts with the Company’s latest Jeep supercharger system to suit Jeep Wrangler vehicles from 2019 on, leveraging off the Company’s expertise and success with technically superior nylon composite manifolding and its highly efficient S5-335 front entry supercharger, which when combined, offer industry leading low speed torque that is essential to vehicles equipped with larger wheel and tyre packages and raised suspension for off-roading and rock climbing.

China Subsidiary Established

The Company established Sprintex Energy Technology (Suzhou) Co., Ltd (Sprintex China). Sprintex China will be the engineering centre and production base for Sprintex in China. Chinese operations will be centred in the newly refurbished building which provides a floor area of 1,500 sqm for the office and factory, providing production capacity of 50,000 units per - - annum of high speed electric compressors. High speed electric compressors have rapidly

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Sprintex Limited Appendix 4E 30 June 2021

increasing demands in clean emission transportation, clean energy/hydrogen fuel cell, and industrial applications.

The facility was established with the support of a series of subsidies from the Chinese Government for its high-tech operations and clean energy profile, including three years of free rental subsidised by local government, additional long term project grant incentives, and local tax exemption of up to 80%.

Sprintex China has recruited an experienced and resourceful operation and technical team from leading turbomachinery, electric motor and car manufacturers, to ensure swift development and production of products. One of Sprintex’s directors, Mr. Li Chen, is based in Shanghai and leads the operations of Sprintex China. Li is a China registered senior engineer with a MEng degree in Mechanical Engineering from University College London.

Several expressions of interest from qualified customers and potential corporate partners have been received by Sprintex China.

For further details, please refer to the financial report.

3. NTA Backing

	Current period	Previous correspondingperiod
Net tangible asset backing per ordinary security	$0.0133	($0.0755)

4 Control gained or lost over entities having material effect

The Group’s previous jointly controlled entity, Proreka Sprintex Sdn. Bhd, became a 100% owned subsidiary during the year.

5. Dividends

There were no dividends declared or paid during the period and the do not recommend that any dividends be paid.

6. Dividend Reinvestment Plans

Not applicable.

7. Material interest in entities which are not controlled entities

The Group’s previous jointly controlled entity, Proreka Sprintex Sdn. Bhd, became a 100% owned subsidiary during the year.

8.

Foreign Entities

This report includes the following foreign subsidiaries:

• Sprintex USA Inc., registered in the Unites States

• Proreka Sprintex Sdn. Bhd., registered in Malaysia

• Sprintex Energy Technology (Suzhou) Co., Ltd, registered in China

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Sprintex Limited Appendix 4E 30 June 2021

9. Annual Report

Refer to the attached Annual Report for the year ended 30 June 2021 for further details. The financial statements contained in the annual report have been audited.

This report should be read in conjunction with the attached Annual Report for the year ended 30 June 2021.

Signed by: Date: 31[st] August 2021 Name: Jay Upton Managing Director

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Sprintex Limited Appendix 4E 30 June 2021