REG - Seeing Machines Ltd - Half year results and financial report
06/03/2023 07:00
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RNS Number : 9298R Seeing Machines Limited 06 March 2023
Seeing Machines Limited ("Seeing Machines" or the "Company")
6 March 2023
Half year results and financial report
Record revenue with significant growth in high margin automotive royalty
revenue
Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the
advanced computer vision technology company that designs AI-powered operator
monitoring systems to improve transport safety, today published its unaudited
results and financial report for the six months to 31 December 2022 ("H1
2023").
As a result of the proportion of revenue and funding being derived in US
Dollars, the Company has changed its reporting currency from Australian
Dollars to US Dollars, in order to give a clearer understanding of its
financial performance. All figures provided below, along with comparative
information, are therefore provided in US Dollars.
Financial Highlights:
- Total operational revenue of US$24.4m (H1 2022: US$15.8m) reflecting
comparative growth of 54% on the previous period
o OEM (Automotive and Aviation) revenue up by 268% year on year to US$14.0m
(H1 2022: US$3.8m)
§ Higher margin royalty revenue, derived from cars on road, increased by 102%
to US$3.1m (H1 2022: US$1.5m)
§ Revenue of US$5.4m from license fees earned from the exclusive
collaboration agreement with Magna (2021: nil)
o Annual Recurring Revenue(1) increased to US$11.9m (H1 2022: US$10.2m)
o Aftermarket (Fleet and Off-Road) revenue was US$10.3m (H1 2022: US$12.0m)
- Gross profit of US$15.5m, up 109% year on year (H1 2022: US$7.4m)
- Net loss reduced by 47% to US$5.4m (H1 2022: US$10.1m)
- Strong balance sheet, with cash at 31 December 2022 of US$52.2m (30
June 2022: US$40.5m)
Operational Highlights:
- Entered into an exclusive collaboration with Magna International, to
pursue driver and occupant monitoring system business targeting the vehicle's
interior rear-view mirror
- Magna also provided additional investment in the Company through a
Convertible Note of up to US$47.5m, maturing in October 2026 with a conversion
rate per ordinary share of 11 British pence. To date, Seeing Machines has
drawn down US$30m of the US$47.5m
- Seeing Machines continues to grow as an automotive technology leader
in driver and occupant monitoring system technology and was appointed to an
additional program with an existing large European-based global automotive
group (OEM) customer, carrying an initial lifetime value of US$32m
- The Company has now won a total of 15 automotive programs spanning
10 individual OEMs, covering more than 160 distinct vehicle models,
underpinned by over 11bn km of driving data and delivered with proven global
automotive Tier-1 customers and partners
- Cumulative initial lifetime value of all awarded Automotive OEM
programs now stands at US$321m
- The Company reported a total of 701,049 cars on road as at 31
December 2022, representing an increase of 188% over the 12 months period (H1
FY2022: 243,722) spanning six individual programs with four global OEMs
- Guardian, Seeing Machines' Aftermarket driver distraction and
fatigue technology, is now installed into and monitoring 46,018 individual
vehicles, compared to 36,933 in December 2021 representing a 25% increase over
the 12-month period
- As at 31 December 2022, there were 6,085 Guardian units sold and yet
to be connected
- Martin Ive, a highly experienced finance professional and chartered
accountant, was appointed to the position of CFO in November 2022
- Seeing Machines' balance sheet was significantly strengthened
following the receipt of financing through a Convertible Note from Magna
International and the Company is now fully funded to deliver on its current
business plan for the foreseeable future
Outlook and current trading
- Seeing Machines' total addressable market is expanding, underpinned
by compelling structural drivers and regulatory tailwinds which present an
exciting opportunity to grow market share and deliver long-term growth
- Company financial performance for FY2023 is expected to be in line
with consensus expectations(2)
Paul McGlone, CEO of Seeing Machines, said: "We are pleased with the continued
progress made during the first half of the year and I'd like to thank all
colleagues for their hard work. Transport safety has moved meaningfully up the
regulatory agenda around the world and our market leadership, scalability and
balance sheet strength means we are ideally positioned to deliver on our
business objectives. Whether inside the car, cabin or cockpit, our
mission-critical technology is achieving strong take-up by a range of
customers. Whilst we have contended with some industry wide supply chain
challenges relating to automotive manufacturing, we expect the impact of these
to ease on our Aftermarket business in the second half of the year, and are
confident of meeting FY2023 expectations."
1 The definition of Annual Recurring Revenue has been refined to include
only the annualised value of revenues recurring through an ongoing service
provision and excludes values related to one-time purchases such as hardware
royalties
(2) Consensus expectations for FY2023 are for revenue of US$53.9m and EBITDA
of US$(12.7m)
Earnings call
The Company will host a presentation via Investor Meet Company platform on
Tuesday 7 March 2023.
To register for the Investor Meet Company presentation, please visit
www.investormeetcompany.com (http://www.investormeetcompany.com) .
Enquiries:
Seeing Machines Limited +61 2 6103 4700
Paul McGlone - CEO
Sophie Nicoll - Corporate Communications
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker) +44 20 7710 7600
Alex Price
Fred Walsh
Nick Adams
Ben Burnett
Dentons Global Advisors (Media Enquiries) +44 20 7664 5095
James Styles
Jonathon Brill
seeingmachines@dentonsglobaladvisors.com
(mailto:seeingmachines@dentonsglobaladvisors.com)
About Seeing Machines (AIM: SEE), a global company founded in 2000 and
headquartered in Australia, is an industry leader in vision-based monitoring
technology that enable machines to see, understand and assist people. Seeing
Machines is revolutionizing global transport safety. Its technology portfolio
of AI algorithms, embedded processing and optics, power products that need to
deliver reliable real-time understanding of vehicle operators. The technology
spans the critical measurement of where a driver is looking, through to
classification of their cognitive state as it applies to accident risk.
Reliable "driver state" measurement is the end-goal of Driver Monitoring
Systems (DMS) technology. Seeing Machines develops DMS technology to drive
safety for Automotive, Commercial Fleet, Off-road and Aviation. The company
has offices in Australia, USA, Europe and Asia, and supplies technology
solutions and services to industry leaders in each market vertical.
www.seeingmachines.com (http://www.seeingmachines.com)
Review of Operations
Overview
The Company achieved a record result for the six months to 31 December 2022 as
well as securing significant additional investment through a Convertible Note.
Revenue increased by 54% and cash balances increased to US$52.2m with a
remaining US$17.5m of funding available.
As a result of the increasing proportion of revenue and funding being derived
in US dollars, the Company has changed the functional currency of the parent
entity of the group, Seeing Machines Limited, to US dollars.
Financial Results
The Company's total sales revenue for H1 FY2023 (excluding foreign exchange
gains and finance income) increased by 54% to US$24.4m (H1 FY2022: US$15.8m).
Business unit 31 Dec 2022 31 Dec 2021 Variance
US$'000 US$'000 %
OEM 14,037 3,832 266%
Aftermarket 10,346 11,982 (14%)
Sales Revenue 24,383 15,814 54%
OEM revenue more than doubled compared to the previous corresponding period in
line with the early stage ramp up of vehicle production for a number of
Automotive OEM programs. Royalty revenue, derived from installation of Seeing
Machines' Driver Monitoring System (DMS) technology, increased by 102% to
US$3.1m compared to the same period last year (H1 FY2022: US$1.5m). In
addition to production royalties, revenue of US$5.4m from license fees was
earned from the exclusive collaboration agreement with Magna (2021: nil).
The growth in royalty revenues in the OEM business has resulted in the revenue
mix moving to a greater proportion of higher margin revenue streams, which is
expected to continue as Automotive programs become the dominant source of
revenue for this business unit.
Limited hardware supply in the half-year restricted potential revenue growth
in the Aftermarket business. Guardian hardware sales generally constitute a
majority of Aftermarket revenue, however, they were limited to 1,536 units
compared to 4,285 units for the prior corresponding period resulting in an
overall revenue decline in the Aftermarket business for the half-year. Supply
of the reengineered Guardian 2 units commenced towards the end of the period
and will enable pent-up demand to be met for the remainder of the financial
year. Connected Guardian units increased to 46,018 units in December 2022
representing 15% growth from 39,892 in June 2022 and 25% annual growth from
December 2021. As a result of this growth monitoring services revenue
increased by 7% to US$5.2m for the half-year, compared to US$4.9m for the same
period last year, continuing the accumulation of recurring revenue from the
Guardian connections.
The Company continued to invest in its core technology development to further
strengthen its competitive moat, rapidly expand features and leverage systems
approach across global OEM and Aftermarket industries. As a result, Seeing
Machines incurred total research and development expenses of US$17.2m during
the six-months ended 31 December 2022 (2021: US$13.2m), of which US$11.1m
(2021: US$8.6m) was capitalised.
Customer support and operations cost categories increased to US$3.3m (2021:
US$3.2m) and US$5.4m (2021: US$4.2m) respectively in line with strengthening
of business pursuit and emerging markets activities to support increased
pipeline and channel market expansion.
On 4 October 2022, Seeing Machines received funding of US$47.5m from Magna
International in the form of a non-transferable 4-year convertible note
maturing in October 2026 (the "Convertible Note"). Details of the Convertible
Note can be found in Note 12 to the Financial Statements. The proceeds of the
Convertible Note are being used to meet technology demands, for general
working capital and corporate purposes, as well as to strengthen the Company's
balance sheet so that it is fully funded to deliver on its current business
plan.
Cash and cash equivalents as at 31 December 2022 totalled US$52.2m (2022:
US$40.4m) with an additional US$17.5m being available as part of an undrawn
Convertible Note facility.
We highlight this report is unaudited. There is no requirement for the interim
financial statements to be subject to review by the external auditor.
Interim Consolidated Statement of Financial Position - Unaudited
Consolidated
31 Dec 30 Jun 31 Dec
AS AT Notes 2022 2022 2021
Unaudited Audited Unaudited
US$000 US$000 US$000
(Restated) (Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 (#_bookmark15) 52,186 40,470 57,564
Other short-term deposits 321 325 343
Trade and other receivables 6 (#_bookmark14) 14,843 18,586 12,806
Inventories 7 (#_bookmark13) 5,742 933 5,112
Other current assets 8,756 5,676 3,883
TOTAL CURRENT ASSETS 81,848 65,990 79,708
NON-CURRENT ASSETS
Property, plant & equipment 8 (#_bookmark12) 3,152 3,033 2,431
Intangible assets 9 33,581 23,610 15,597
Right-of-use assets 2,114 2,376 2,794
TOTAL NON-CURRENT ASSETS 38,847 29,019 20,822
TOTAL ASSETS 120,695 95,009 100,530
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1 (#_bookmark14) 0 7,692 11,290 6,697
Lease liabilities 1 (#_bookmark14) 1 686 653 725
Provisions 4,012 3,511 4,052
Contract liabilities 5,734 2,495 1,258
TOTAL CURRENT LIABILITIES 18,124 17,949 12,732
NON-CURRENT LIABILITIES
Provisions 212 245 189
Lease liabilities 1 (#_bookmark14) 1 2,620 3,000 3,465
Borrowings 1 (#_bookmark14) 2 22,955 - -
Financial liability at fair value through profit or loss 1 (#_bookmark14) 3 7,389 - -
TOTAL NON-CURRENT LIABILITIES 33,176 3,245 3,654
TOTAL LIABILITIES 51,300 21,194 16,386
NET ASSETS 69,395 73,815 84,144
EQUITY 1 (#_bookmark14) 6 240,948 240,948
Contributed equity 240,805
Accumulated losses (175,396) (169,973) (161,533)
Other reserves 3,843 2,840 4,872
Equity attributable to the owners of the parent 69,395 73,815 84,144
TOTAL EQUITY 69,395 73,815 84,144
The above interim consolidated statement of financial position should be read
in conjunction with the accompanying notes.
Interim Consolidated Statement of Comprehensive Income - Unaudited
Consolidated
2022 2021
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Notes Unaudited Unaudited
US$000 US$000
(Restated)
Sale of goods 2,322 5,489
Services revenue 12,193 7,335
Royalty and license fees 9,868 2,990
Revenue 3 (#_bookmark9) 24,383 15,814
Cost of sales (8,901) (8,416)
Gross profit 15,482 7,398
Net gain in foreign exchange 1,942 95
Finance income 369 160
Net change in fair value of financial liability (loss) (804) -
Other (expense) / income (81) (7)
Expenses
Research and development expenses 4 (#_bookmark11) (6,090) (4,634)
Customer support and marketing expenses (3,325) (3,155)
Operations expenses (5,447) (4,230)
General and administration expenses (6,470) (5,498)
Finance costs (876) (175)
Loss before tax (5,300) (10,046)
Income tax expense (123) (82)
Loss after income tax (5,423) (10,128)
Loss for the period attributable to:
Equity holders of the parent (5,423) (10,128)
Other comprehensive loss
Exchange differences on translation of foreign operations (2) (1,447)
Other comprehensive loss net of tax (2) (1,447)
Total comprehensive loss (5,425) (11,575)
Total comprehensive loss attributable to: (11,575)
Equity holders of the parent (5,425)
Total comprehensive loss for the period (5,425) (11,575)
Loss per share for loss attributable to the ordinary equity holders of
the parent:
Basic loss per share 15 (#_bookmark11) (0.001) (0.002)
Diluted loss per share 15 (#_bookmark11) (0.001) (0.002)
The above interim consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
Interim Consolidated Statement of Changes in Equity - Unaudited
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Contributed Equity Accumulated Losses Foreign Currency Translation Reserve Employee Equity Benefits & Other Reserve Total Equity
US$000 US$000 US$000 US$000 US$000
As at 1 July 2021 (Restated) 200,558 (151,405) (8,457) 13,334 54,030
Loss for the period (Restated) - (10,128) - - (10,128)
Other comprehensive loss (Restated) - - (1,447) - (1,447)
Total comprehensive loss (Restated) - (10.128) (1,447) - (11,575)
Transactions with owners in their capacity as owners:
Issue of new shares (Restated) 41,275 - - - 41,275
Share issue costs (Restated) (1,028) - - - (1,028)
Share-based payments (Restated) - - - 1,442 1,442
At 31 December 2021 - Unaudited (Restated) 240,805 (161,533) (9,904) 14,776 84,144
As at 1 July 2022 240,948 (169,973) (14,128) 16,968 73,815
Loss for the period - (5,423) - - (5,423)
Other comprehensive loss - - (2) - (2)
Total comprehensive loss - (5,423) (2) - (5,425)
Transactions with owners in their capacity as owners:
Issue of new shares - - - - -
Capital raising costs - - - - -
Share-based payments - - - 1,005 1,005
At 31 December 2022 - Unaudited 240,948 (175,396) (14,130) 17,973 69,395
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Interim Consolidated Statement of Cash Flows - Unaudited
FOR THE SIX-MONTH PERIOD ENDED 2022 2021
31 DECEMBER Notes Unaudited Unaudited
US$000 US$000
(Restated)
Operating activities
Receipts from customers 32,398 18,967
Payments to suppliers (39,476) (26,813)
Interest received 369 160
Interest paid - (175)
Income tax paid (123) (83)
Net cash flows used in operating activities (6,832) (7,944)
Investing activities
Proceeds from sale of property, plant and equipment 48 -
Purchase of property, plant and equipment 8 (524) (222)
Payments for intangible assets (patents, licences and trademarks) 9 (91) (132)
Payments for intangible assets (capitalised development costs) 4, 9 (11,146) (8,623)
Net cash flows used in investing activities (11,712) (8,977)
Financing activities
Proceeds from issue of new shares - 41,275
Cost of capital raising - (1,028)
Proceeds from issue of Convertible Note (net of arrangement fee) 12 28,798
Principal repayment of lease liabilities (481) (308)
Net cash flows from financing activities 28,317 39,939
Net increase in cash and cash equivalents 9,772 23,018
Net increase/(decrease) due to foreign exchange difference 1,944 (995)
Cash and cash equivalents at 1 July 40,470 35,541
Cash and cash equivalents at 31 December 5 (#_bookmark15) 52,186 57,564
The above interim consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Notes to the Interim Consolidated Financial Statements - Unaudited
1 Corporate information
Seeing Machines Limited (the "Company" or the "Group") is a limited liability
company incorporated and domiciled in Australia and listed on the AIM market
of the London Stock Exchange. The address of the Company's registered office
is 80 Mildura Street, Fyshwick, Australian Capital Territory, Australia.
Seeing Machines Limited and its subsidiaries (the "Group") provide operator
monitoring and intervention sensing technologies and services for the
automotive, mining, transport and aviation industries.
The interim consolidated financial report of the Group (the "interim financial
report") for the six-month period ended 31 December 2022 was authorised for
issue in accordance with a resolution of the Directors on 3 March 2023.
2 Basis of preparation and changes to the Group's accounting policies
(a) Basis of preparation
The interim financial report for the six-month period ended 31 December 2022
has been prepared in accordance with AASB 134 Interim Financial Reporting in
order to fulfil the reporting requirements of Rule 18 of the London Stock
Exchange's AIM Rules for Companies issued July 2016.
The interim financial report does not include all the information and
disclosures required in the annual financial report and should be read in
conjunction with the Group's annual consolidated financial statements as at 30
June 2022. The interim financial report has also been prepared on a historical
cost basis, except for derivative financial instruments which have been
measured at fair value.
There is no requirement for the interim financial report to be subject to
audit or review by the external auditor and accordingly no audit or review has
been conducted.
(b) Accounting policies
The accounting policies applied are consistent with those of the consolidated
financial statements for the year ended 30 June 2022, except for the change in
accounting policy in relating to change in presentation currency from
Australian Dollars ("AU$") to United States Dollars ("US$"), as set out below:
Effective 1 July 2022, the Group's functional currency has changed from AU$ to
US$. This change in functional currency is primarily indicated by the
following factors:
(i) Sales and cash inflows: The currency that mainly
influences sales prices for goods and services. This will often be the
currency in which sales prices for goods and services are denominated and
settled. During the financial year ended 30 June 2022, approximately 65% of
the Group's revenue were denominated in US$. This proportion of revenue
denominated in US$ is expected to significantly increase for the financial
year ending 30 June 2023 and thereafter. Therefore, change in functional
currency for periods commencing 1 July 2022 is considered appropriate.
(ii) Financing Activities: The Group's share capital is
denominated in Great Britain Pounds ("GBP") as the Company's shares are listed
on the AIM market of the London Stock Exchange. However, a significant funding
arrangement and a significant exclusive collaboration arrangement, totalling
to US$ 65 million with Magna International were in the final stages of
execution on 1 July 2022. These arrangements were executed on 4 October 2022.
Considering the materiality of these arrangements to the Group's financial
position, together with the stage of execution on 1 July 2022, change in
functional currency to US$ for periods commencing 1 July 2022 is considered
appropriate.
(iii) Expenses and cash outflows: The Group's expenses are
primarily comprised of salaries and wages for employees who are mostly
domiciled in Australia and these expenses are incurred and settled in AU$.
However, majority of other expenses for the Group are incurred and settled in
US$. During the financial year ended 30 June 2022, approximately 30% of the
Group's expenses were denominated in US$. This proportion of expenses
denominated in US$ is expected to significantly increase for the financial
year ending 30 June 2023 and thereafter. Further, all of the Group's
inventories are purchased and denominated in US$, with the Group having
significant commitments to make these purchases in US$. Therefore, change in
functional currency for periods commencing 1 July 2022 is considered
appropriate.
The change in functional currency will significantly reduce the volatility of
the Group's earnings due to foreign exchange movements, in particular due to
translation of foreign currency balances.
Notes to the Interim Consolidated Financial Statements - Unaudited
2 Basis of preparation and changes to the Group's accounting
policies (continued)
(b) Accounting policies (continued)
Applying the guidance provided in AASB 121: The Effects of Changes in Foreign
Exchange Rates ("AASB 121"), the change in functional currency to US$ has been
effected on 1 July 2022 using the following procedures:
i) All items of assets and liabilities were
translated from AU$ to US$ using the US$/ AU$ exchange rate prevailing on the
date of change, i.e. start of 1 July 2022. The exchange rate used was US$
0.68879/ AU$. As all assets and liabilities are translated using the exchange
rate at the date of change, the resulting translated amounts for non-monetary
items are treated as their historical cost.
ii) Equity items were translated from AU$ to US$ using
the historical rate at the date of the transactions.
iii) Resulting differences in the historical rates and
rate on date of change is recognized in the Foreign Currency Translation
Reserve.
In line with the change in functional currency from AU$ to US$, and to provide
investors and other stakeholders a clearer understanding of the Group's
performance over time, the Directors have elected to change the Group's
presentation currency from AU$ to US$. The change in presentation currency is
a voluntary change which is accounted for retrospectively and comparatives in
the interim financial report have been restated accordingly. Applying the
guidance provided in AASB 121, the Group's interim financial report has been
restated to US$ using the procedures outlined below:
i) Interim Consolidated Statement of Comprehensive
Income and Interim Consolidated Statement of Cash Flows have been translated
into US dollars using average foreign currency rates prevailing for the
relevant period.
ii) Assets and liabilities in the Interim Consolidated
Statement of Financial Position have been translated into US$ at the closing
foreign currency rates on the relevant balance sheet dates.
iii) The equity section of the Interim Consolidated
Statement of Financial Position, including foreign currency translation
reserve, retained earnings, share capital and the other reserves, have been
translated into US$ using historical rates.
iv) Earnings per share and dividend disclosures have
also been restated to US$ to reflect the change in presentation currency.
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2022 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the Group in the current or future reporting periods and on
foreseeable future transactions.
3 Segment information
a. Segment revenue based on operating segment
The following table presents revenue and net loss information for the Group's
operating segments for the six-month periods ended 31 December 2022 and 2021,
respectively:
Segment Revenue Segment Loss
FOR THE SIX-MONTH PERIOD ENDED 2022 2021 2022 2021
31 US$000 US$000 US$000
DECEMBER
US$000 (Restated) (Restated)
Unaudited
OEM 14,037 3,832 (2,282) (6,805)
Aftermarket 10,346 11,982 (3,141) (3,323)
Total 24,383 15,814 (5,423) (10,128)
b.
Notes to the Interim Consolidated Financial Statements - Unaudited
3 Segment information (continued)
b. Revenue from contracts with customers
In the following tables, revenue segments have been disaggregated by type of
goods or services which also reflects the timing of revenue recognition.
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2022 OEM US$000 Aftermarket US$000 Total US$000
Unaudited
Revenue Types
Sales at a point in time
Consulting - - -
Hardware and Installations 436 1,971 2,407
Royalties - 1,012 1,012
Sales over time
Driver Monitoring - 5,249 5,249
Non-recurring Engineering 4,745 2,114 6,859
Royalties 3,116 - 3,116
Licensing 5,740 - 5,740
Total revenue 14,037 10,346 24,383
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2021 OEM US$000 Aftermarket US$000 Total US$000
Unaudited (Restated) (Restated) (Restated)
Revenue Types
Sales at a point in time
Consulting - 613 613
Hardware and Installations 377 5,019 5,396
Royalties - 1,448 1,448
Sales over time
Driver Monitoring - 4,902 4,902
Non-recurring Engineering 1,913 - 1,912
Royalties 1,542 - 1,542
Total revenue 3,832 11,982 15,814
c. Geographic information
FOR THE SIX-MONTH PERIOD 2021
ENDED
2022 US$000
31 (Restated)
DECEMBER
US$000
Unaudited
Revenues from external customers 4,153 5,452
Australia
North America 15,117 7,253
Asia-Pacific (excluding Australia) 1,763 1,340
Europe 2,198 849
Other 1,152 920
Total revenue from external customers 24,383 15,814
The revenue information above is based on the locations of the customers.
3
Notes to the Interim Consolidated Financial Statements - Unaudited
4 Research and development expenses
Research and development expense relates to ongoing investment in the Group's
core technology.
The Group incurred total research and development expenses of US$17,236,000
during the six-months ended 31 December 2022 (2021: US$13,191,000 (Restated)),
of which US$11,146,000 (2021: US$8,623,000 (Restated)) were capitalised.
As part of the assessment of research and development expenses at 30 June
2022, total costs of US$16,558,000 (Restated) were capitalised for the year
ended 30 June 2022, of which US$8,623,000 (Restated) pertained to the
six-month period ended 31 December 2021.
5 Cash and cash equivalents
For the purpose of the interim consolidated statement of cash flows, cash and
cash equivalents are comprised of the following:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Cash at bank 22,570 40,470
Term deposits maturing in less than 3 months 29,616 -
Total cash and cash equivalents 52,186 40,470
6 Trade and other receivables
Current 31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Trade receivables (net of provisions) 14,289 18,138
Deferred finance income (89) (105)
14,200 18,033
Other receivables 643 553
Total trade and other receivables - current 14,843 18,586
7 Inventories
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Finished goods (at lower of cost and net realisable value) 5,758 949
Provision for obsolescence (15) (16)
Total inventories at the lower of cost and net realisable value 5,742 933
7
Notes to the Interim Consolidated Financial Statements - Unaudited
8 Property, plant and equipment
Acquisitions and disposals
During the six-month period ended 31 December 2022, the Group acquired assets
with a cost of US$524,000 (2021: US$222,000 (Restated)).
Assets costing US$17,000 (2021: nil) relating to plant and equipment were
disposed by the Group during the six-month period ended 31 December 2022.
9 Intangible assets
During the six-month period ended 31 December 2022, the Group incurred
expenditure of US$11,237,000 (2021: US$8,755,000 (Restated)) related to
intangibles. US$91,000 (2021: US$132,000 (Restated)) of this expenditure
related to patent and trademark applications and licenses. US$11,146,000
(2021: US$8,623,000 (Restated)) related to capitalised development costs.
No intangible assets were disposed by the Group during the six-month period
ended 31 December 2022 (2021: US$1,000).
10 Trade payables
At 31 December 2022, the balance of the trade payables was US$7,692,000 (30
June 2022: US$11,290,000 (Restated)), of which an amount of US$7,659,000 (30
June 2022: US$11,264,000 (Restated)) was aged less than 60 days; and an amount
of US$33,000 (30 June 2022: US$26,000 (Restated)) was aged over 60 days.
11 Lease liabilities
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Current
Lease liabilities 686 653
Non-current
Lease liabilities 2,620 3,000
Total lease liabilities 3,306 3,653
The table below summarises the maturity profile of the Group's liabilities
based on contractual undiscounted payments:
<=6 6-12 >1
AT 31 DEC 2022 months US$000 months US$000 year US$000 Total US$000 Carrying Value US$000
Lease liabilities 447 456 3,002 3,905 3,306
<=6 6-12 >1
AT 30 JUN 2022 (Restated) months US$000 months US$000 year US$000 Total US$000 Carrying Value US$000
Lease liabilities 446 452 3,478 4,376 3,653
Notes to the Interim Consolidated Financial Statements - Unaudited
12 Borrowings - Non-Current
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Convertible Note - Tranche 1 at amortised cost 22,955 -
Total 22,955 -
Movements during the period:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Opening balance - -
Drawdown during the period 30,000 -
Adjustment of arrangement fees to effective interest rate (1,202) -
Reclassification to Financial liability at fair value through profit or loss (6,585) -
Interest amortised during the period 742 -
Closing balance at amortised cost 22,955 -
On 4 October 2022, Seeing Machines received funding of US$47.5m from Magna
International in the form of a non-transferable 4-year convertible note
maturing in October 2026 (the "Convertible Note"). The Convertible Note can be
drawn down in two tranches across the 4-year term. The Convertible Note has an
all-in yield of 8%, inclusive of fees. The Convertible Note contains standard
covenants, and anti-dilution provisions. The interest due at the end of the
facility can be paid in cash or converted into equity at Seeing Machines'
election.
The first tranche ("Convertible Note - Tranche 1) of US$30m, was drawn on 5
October 2022 and the remainder is available until December 2024. The
Convertible Note - Tranche 1 is valued at amortised cost in accordance with
AASB 9 Financial Instruments ("AASB 9") and has an effective interest rate as
per AASB 9 of 14.4643% per annum inclusive of all fees.
Magna may elect to convert the principal and at Seeing Machines' election,
interest outstanding under the Convertible Note at any time during its term,
up to a maximum of 349,650,350 shares which, when added to Magna's existing
shareholding in the Company, will represent approximately 9.9% of the fully
diluted share capital of the Company. The conversion will be at a price of 11
British pence per share. The option provided to Magna is deemed to be an
embedded derivative and is accounted for as a financial liability at fair
value through profit or loss. Refer to Note 13 below.
13 Financial liability at fair value through profit or loss
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Option component of Convertible Note - Tranche 1 7,389 -
Total 7,389 -
Movements during the period:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Opening balance - -
Reclassification from Borrowings - Non-Current 6,585 -
Movement in fair value 804 -
Closing balance 7,389 -
Notes to the Interim Consolidated Financial Statements - Unaudited
14 Dividends paid
No interim dividends or distributions have been made to members during the
six-month period ended 31 December 2022 (2021: nil) and no interim dividends
or distributions have been recommended or declared by the directors in respect
of the six-month period ended 31 December 2022 (2021: nil).
15 Earnings per share
The following table reflects the income and share data used in the basic and
diluted earnings per share computations:
Earnings used in calculating earnings per share
Consolidated
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2022 2021
US$000 US$000
(Restated)
For basic and diluted earnings per share:
Net loss (5,423) (10,128)
Net loss attributable to ordinary equity holders of the Company (5,423) (10,128)
Weighted average number of shares
AT 31 DECEMBER 2022 2021
Thousands Thousands
Weighted average number of ordinary shares for basic earnings per share 4,156,019 3,931,717
Weighted average number of ordinary shares adjusted for the effect of
dilution
4,156,019 3,931,717
16 Share capital
Consolidated
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
Ordinary shares 240,948 240,948
Total contributed equity 240,948 240,948
Number of ordinary shares
Consolidated
31 Dec 30 June
2022 2022
Unaudited Audited
Thousands Thousands
Issued and fully paid 4,156,019 4,156,019
Fully paid shares carry one vote per share and carry the right to dividends.
The Company has no set authorised share capital and shares have no par value.
14
Notes to the Interim Consolidated Financial Statements - Unaudited
17 Share-based payments
LTI 2021 - Performance rights or share options offers - Executive and key staff
From 1 July 2015, senior staff and other key staff are offered long term
incentive (LTI) performance rights or share options. Under this structure, the
staff are only able to exercise the rights, and have new ordinary shares
issued to them, if any performance, market and vesting conditions are met.
These conditions typically include a performance condition requiring the staff
member to achieve a minimum "meets expectations" rating and some rights have
included a market condition in the form of a minimum Target Share Price (TSP).
The vesting period ranges from 9 months to 5 years from the end of the
relevant financial year or grant date. Performance rights or options are often
offered as part of the annual remuneration review and may be offered at other
times. Any offer of performance rights or options requires Board approval and,
when granted, is announced to the market.
In November 2021 the Company awarded a total of 64,996,414 performance rights
in respect of ordinary shares to Executive and key staff to be issued at nil
cost.
14,845,702 of the performance rights under the LTI have been awarded in
recognition of the past achievement of the Company's objectives in FY2021. The
rights were valued at the spot rate of the shares at grant date, and the value
is amortised over the vesting period. The rights vest annually over 3 years in
equal tranches with the first vesting date being 1 July 2022 and require the
employee to remain continuously employed by the Company until each relevant
vesting date. If an employee leaves before the rights vest and the service
condition is therefore not met, the rights lapse.
In some cases, for 'good leavers', determined on a discretionary basis by
management, options are prorated for service in the current period and that
portion are vested on termination, and the remaining rights are cancelled.
The remaining 50,150,712 performance rights have been granted under Key Person
Agreements in respect of a total of 27 nominated key people. These people have
been identified as having key roles directly related to the Company's
long-term success and the allocation of accelerated performance rights has
been implemented by the Board to successfully retain these employees and
affirm successful delivery on a range of projects and customer commitments.
These awards have an accelerated grant with delayed vesting taking place on 1
July 2024 and require the employee to remain continuously employed by the
Company until the vesting date. If an employee leaves before the rights vest
and the service condition is therefore not met, the rights lapse.
In October 2022 the Company awarded a total of 11,151,003 performance rights
in respect of ordinary shares to Executive and key staff to be issued at no
cost. These rights have been awarded in recognition of the past achievement of
the Company's objectives in FY2022. The rights were valued at the spot rate of
the shares at grant date, and the value is amortised over the vesting period.
The rights vest annually over 3 years in equal tranches with the first vesting
date being 1 July 2023 and require the employee to remain continuously
employed by the Company until each relevant vesting date. If an employee
leaves before the rights vest and the service condition is therefore not met,
the rights lapse.
There is no cash settlement of the rights. The Group accounts for the
Executive Share Plan as an equity-settled plan.
18 Related party disclosures
The following table provides the total amount of transactions that have been
entered into with related parties during the six-month period ended 31
December 2022 and 2021:
Balance Granted as Remuneration Acquired or sold for cash Balance 31-Dec
1-Jul
Thousands Thousands Thousands Thousands
Director shares: 2022 6,552 - - 6,552
Directors' securities
Directors' securities 2021 5,714 - 238 5,952
19 Commitments
As at 31 December 2022, the group had commitments of US$15,289,000 (31
December 2021: US$23,673,000 (Restated)) relating to the manufacturing
contract for the Group's Guardian 2.1 product for the period January 2023 to
June 2023.
Notes to the Interim Consolidated Financial Statements - Unaudited
20 Events after the reporting period
There have been no matters that have occurred subsequent to the reporting
date, which have significantly affected, or may significantly affect, the
Group's operations, results or state of affairs in future periods.
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