Elixinol Wellness Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
Elixinol Wellness Limited
ABN:
34 621 479 794
Reporting period:
For the year ended 31 December 2024
Previous period:
For the year ended 31 December 2023
2. Results for announcement to the market
The directors present this Appendix 4E on the consolidated entity (referred to as the 'Group') consisting of Elixinol Wellness Limited
(referred to as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 31 December 2024.
$'000
Revenues from ordinary activities
up
80.9% to
14,956
Loss from ordinary activities after tax attributable to the owners of Elixinol
Wellness Limited
down
77.1% to
(1,722)
Loss for the year attributable to the owners of Elixinol Wellness Limited
down
77.1% to
(1,722)
2024
2023
Cents
Cents
Basic loss per share
(1.11)
(12.68)
Diluted loss per share
(1.11)
(12.68)
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The loss for the Group after providing for income tax amounted to $1,722,000 (31 December 2023: $7,507,000).
3. Net tangible assets
2024
2023
Cents
Cents
Net tangible assets per ordinary security
1.75
5.62
Calculated as follows:
Group
2024
2023
$'000
$'000
Net assets
10,026
6,462
Less: Right-of-use assets
(265)
(282)
Less: Intangibles
(6,177)
(2,297)
Add: Lease liabilities
273
559
Net tangible assets
3,857
4,442
Total shares issued (no.)*
220,820,137
79,092,313
*
Total shares issued for 2023 have been restated to account for the 1:8 share consolidation that occurred in the current year.
Elixinol Wellness Limited
Appendix 4E
Preliminary final report
4. Control gained over entities
Name of entities (or group of entities)
Ananda Food Pty Ltd
Date control gained
28 March 2024
$'000
Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during
the period (where material)
(275)
Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) for the whole of
the previous period (where material)
-
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
Reporting entity's percentage
holding
Contribution to profit/(loss)
(where material)
Reporting
period
Previous
period
Reporting
period
Previous
period
Name of associate / joint venture
%
%
$'000
$'000
Altmed Pets LLC ('Pet Releaf')
-
25.43%
-
293
Group's aggregate share of associates and joint venture entities'
profit/(loss) (where material)
Profit/(loss) from ordinary activities before income tax
-
293
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
Elixinol Wellness Limited
Appendix 4E
Preliminary final report
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements were subject to an audit by the auditors and the audit report is attached as part of the Annual Report. The audit
report contains a paragraph that draws attention to the use of the going concern basis for the preparation of the financial statements.
11. Attachments
Details of attachments (if any):
The Annual Report of Elixinol Wellness Limited for the year ended 31 December 2024 is attached.
12. Signed
Authorised for release by the Board of Directors
28 February 2025
Elixinol Wellness Limited
ABN 34 621 479 794
Annual Report - 31 December 2024
Elixinol Wellness Limited
Contents
31 December 2024
1
Directors' report
2
Auditor's independence declaration
23
Consolidated statement of profit or loss and other comprehensive income
24
Consolidated statement of financial position
25
Consolidated statement of changes in equity
26
Consolidated statement of cash flows
27
Notes to the consolidated financial statements
28
Note 1. General information
28
Note 2. Material accounting policy information
28
Note 3. Critical accounting judgements, estimates and assumptions
37
Note 4. Operating segments
38
Note 5. Revenue
41
Note 6. Other income
42
Note 7. Expenses
42
Note 8. Income tax
44
Note 9. Cash and cash equivalents
45
Note 10. Trade and other receivables
46
Note 11. Inventories
47
Note 12. Prepayments, deposits and other
47
Note 13. Non-current assets classified as held for sale
47
Note 14. Property, plant and equipment
48
Note 15. Right-of-use assets
49
Note 16. Intangibles
50
Note 17. Trade and other payables
53
Note 18. Contract liabilities
54
Note 19. Borrowings
54
Note 20. Lease liabilities
55
Note 21. Provisions
55
Note 22. Contingent consideration
56
Note 23. Issued capital
56
Note 24. Reserves
58
Note 25. Dividends
58
Note 26. Financial instruments
58
Note 27. Fair value measurement
61
Note 28. Remuneration of auditors
63
Note 29. Contingent liabilities
63
Note 30. Commitments
63
Note 31. Key management personnel disclosures
63
Note 32. Related party transactions
64
Note 33. Parent entity information
64
Note 34. Business combinations
65
Note 35. Interests in subsidiaries
69
Note 36. Deed of cross guarantee
69
Note 37. Cash flow information
70
Note 38. Earnings per share
71
Note 39. Share-based payments
71
Note 40. Events after the reporting period
73
Consolidated entity disclosure statement
74
Directors' declaration
75
Independent auditor's report to the members of Elixinol Wellness Limited
76
Shareholder information
80
Corporate directory
82
Elixinol Wellness Limited
Directors' report
31 December 2024
2
The Directors of Elixinol Wellness Limited ('Elixinol Wellness' or the 'Company') present this report, together with the financial
statements of the Company and its controlled entities ('Consolidated Entity' or 'Group') for the year ended 31 December 2024 ('FY24').
Directors
The Directors of the Company in office during the financial year and up to the date of this report are as follows. Directors were in office
for the entire period unless otherwise stated.
David Fenlon
Independent Non-Executive Chair
Pauline Gately
Non-Executive Director
Natalie Butler
Executive Director (appointed 28 March 2024)
Ronald Dufficy
Managing Director and Group Chief Executive Officer (resigned 28 March 2024)
Principal activities
The principal activities of the Company during the year relate to its operation as a holding company for each of, Elixinol Wellness (Byron
Bay) Pty Ltd, The Sustainable Nutrition Group Pty Ltd, The Sustainable Nutrition Group (Australia) Pty Ltd, and Ananda Food Pty Ltd
(together 'Australia'), Elixinol LLC ('Elixinol Americas'), as well as Elixinol BV and Elixinol Limited (together 'Rest of World').
The principal activities of the Group are:
Australia
Elixinol's Australian operations encompass a vertically integrated business that produces, manufactures, and distributes a range of highly
complementary products for health-conscious consumers across four verticals – human nutrition, human wellness, pet wellness and
superfood ingredients. These products are sold under brands including Hemp Foods Australia, Mt Elephant, The Healthy Chef (newly
acquired), Soul Foods, Ananda Equine, and Field Day, and are distributed through grocery, wholesale, and e-commerce channels. The
Australian Superfood Co also supplies Australian native ingredients to white label customers as well as food, beverage, and beauty
manufacturers while Australian Primary Hemp delivers quality hemp ingredients across white label customers and other manufacturers.
Elixinol Americas
Established in 2014, Elixinol Americas is based in the United States and specialises in marketing and distributing products made from
premium quality, predominantly 'whole plant' full spectrum CBD. During FY24, the Company operated exclusively as an e-commerce
business.
Rest of World
Established in 2018, Rest of World comprises Elixinol Europe specialising in the development, sourcing, marketing and distribution of
hemp-derived CBD products, including skincare. Having moved to a licensing business model several years ago, this segment now makes
a limited contribution to Elixinol's revenue.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Operating and financial review
FY24 was a transformative year and resilience for Elixinol Wellness, delivering significant revenue growth driven by acquisitions (The
Healthy Chef and Ananda Food) and organic growth (Hemp Foods Australia).
Although the Australian retail sector faced sustained headwinds during 2024, including persistent cost-of-living pressures, cautious
consumer spending, and nine consecutive quarters of declining per capita retail sales volumes, Elixinol maintained its focus of growth
and strategic innovation. With retailers tightening ranges, particularly in premium categories, the Company’s strategic initiatives and
diversified brand portfolio enabled it to deliver exceptional growth, demonstrating the strength of our strategy and operational
execution:
●
FY24 revenue hit $15.0 million, up $8.3 million on FY23, with proforma revenue of $17.7 million (i.e. including Ananda Food and
The Healthy Chef acquisitions on a full-year basis), reflecting strong acquisitions and the Company’s impressive portfolio expansion.
●
Australian sales displayed a robust performance throughout FY24 doubling year-on-year to $12.8 million in FY24 and $3.8 million
in the final quarter, fuelled by grocery expansion, high-impact promotions, and e-commerce success.
●
The Healthy Chef added $668,000 to FY24 Q4 revenue, accelerating the Group’s D2C strategy, while distributor revenue rose 59%
year-on-year, reinforcing our multi-channel approach.
●
Bulk Ingredients revenue soared 210% YoY, capitalising on B2B growth and product diversification.
Elixinol Wellness Limited
Directors' report
31 December 2024
3
Margin expansion and profitability
Gross margins in FY24 were impacted by a shift in channel mix, decreasing by 3 percentage points from an average of 41% in FY23 to
38% in FY24. This was primarily due to the significant expansion of the Australian business into the B2B channel, which grew by 123% in
FY24. Although margins in the B2B segment are typically lower than those in the eCommerce direct-to-consumer segment, the Group
managed to improve margins throughout the year despite supply chain cost pressures throughout the year. By Q4, gross margins rose
to 40% (up from an average of 38%), with Australian margins showing a notable improvement to 37%. While the business faced
challenges early on in FY24, it successfully navigated those pressures and saw margin recovery as the year progressed. The shift in channel
mix, while initially margin-dilutive, has contributed positively to growth, and the company's focus to control costs and improve efficiency
in the latter part of the year were effective.
Healthy Chef and Elixinol USA delivered positive earnings before interest, tax, depreciation and amortisation (‘EBITDA’), and the Group
approached EBITDA break-even by year-end, reinforcing our disciplined financial management.
Impressive growth amid transformation
Group revenue from continuing operations reached $15.0 million during FY24, up 80% on FY23 revenue of $8.3 million.
Robust revenue growth during the period was underpinned by contributions from the Company’s acquisitions (Ananda Food Pty Ltd in
March 2024 and The Healthy Chef business in October) as well as organic growth in its expanded brand portfolio and flagship Hemp
Foods Australia brand. The Company’s expanded market reach and enhanced product offerings in key growth segments are expected to
bolster further revenue gains in FY25.
Loss Reduction Driven by Efficiency
Although the Group reported losses in FY24, the net loss after tax decreased to $1.7 million compared to the previous year (FY23: $7.5
million).
EBITDA closing in on break-even
EBITDA from continuing operations including share of associates’ net loss and excluding impairment and share-based payments for the
period ended 31 December 2024 is detailed below. EBITDA and Adjusted EBITDA are not prescribed by Australian Accounting Standards
('AAS') and represent the Group’s statutory result under AAS, adjusted for certain items, Elixinol directors view these metrics as a reliable
indicator of the Group’s core earnings.
Notably, Adjusted EBITDA loss from continuing operations, excluding non-recuring items and other adjustments, improved significantly
by 41% to $2.8 million, compared with a loss of $4.6 million in FY23. This improvement reflects the positive impact of the Group’s cost
optimisation and efficiency initiatives, management’s focus on core business operations, economies of scale (especially for a reduction
in overhead corporate expenses of 27% (from $2.3m FY23 to $1.7m)), and a disciplined approach to cost management.
A reconciliation of Adjusted EBITDA from continuing operations to statutory loss is detailed below:
Group
2024
2023
$'000
$'000
Loss after income tax
(1,722)
(7,507)
Add back/(deduct):
Income tax (benefit)/expense
(3,589)
3
Finance costs
212
101
Interest income
(30)
(213)
Depreciation and amortisation
1,042
597
EBITDA
(4,087)
(7,019)
Add back/(deduct):
Impairment of other assets
371
1,718
Share-based payments
46
675
One-off transactions
914
-
Adjusted EBITDA
(2,756)
(4,626)
Elixinol Wellness Limited
Directors' report
31 December 2024
4
Cash Flow and Financial Position
While the Group utilised $3.5 million of operating cash during the year up by $0.7 million in FY23, this included $0.9 million of non-
recurring costs that supported the two acquisitions during the year, one-off product recall costs and acquisition integration costs.
Normalised cash burn (excluding one-off expenses) reduced throughout the year with operating cash burn reduced to $196,000 in the
final quarter in FY24, a 25% reduction from the prior quarter.
Impairment and Strategic Adjustments
Recognition of a non-cash impairment amounting to $371,000 also represents a significant reduction from $1,718,000 in FY23. This
reduced impairment, primarily related to the prior year impairment of the investment held for sale in Altmed Pets of $1,326,000, right-
of-use asset of $238,000 offset by $211,000 increase in inventory provision.
One-off transactions
Included transaction and restructuring costs of $717,000 and product recall costs of $197,000.
Segment results
Australia
Elixinol’s Australian business comprises Elixinol Wellness (Byron Bay) Pty Ltd, The Sustainable Nutrition Group Pty Ltd, The Sustainable
Nutrition Group (Australia) Pty Ltd and Ananda Food Pty Ltd (from 28 March 2024).
Record Australian revenue of $12.9 million during FY24 represents a 130% increase on FY23 sales of $5.6 million. Elixinol’s acquisitions
over the last 18 months -The Sustainable Nutrition Group Ltd (TSN), Ananda Food Pty Ltd (AF) and The Healthy Chef made significant
contributions to sales performance during the year.
Americas
The Americas segment comprised the trading results of Elixinol LLC. Elixinol Americas reported revenue of $2.1million during the period,
representing a 22% decline from FY23 of $2.6 million. However, Elixinol USA’s transition to an e-commerce business model significantly
reduced costs resulting in a positive contribution $80,000 to EBITDA, a significant improvement from an adjusted EBITDA loss of
$1,365,000 in FY23.
Share of associates' loss
Share of associates loss during the year ended 31 December 2024 was $nil (31 December 2023: $nil). The investment sale was finalised
on 13 May 2024.
Review of financial position
As at 31 December 2024, Group net assets were $10.0 million, including $1.1 million in cash and cash equivalents culminating in a total
comprehensive loss of $1.7 million.
The Directors consider that the Group will continue as a going concern, as explained in note 2 to the financial statements.
Business strategies and future prospects
The Group's business strategy encompasses building a Sustainable Nutrition Company that creates clean and healthy products and
ingredients. We deliver this through a diverse portfolio for health-conscious consumers.
Key strategic objectives for FY25
While FY24 closed on a strong note, early FY25 is expected be a period of recalibration as the Group focuses on further solidifying its
foundation for sustained long-term growth.
Since April 2024, our top priority has been resetting strong operation foundations:
●
Strengthening processes and procedures to ensure seamless operations.
●
Merging facilities post-Ananda acquisition for efficiency and scale.
●
Building a robust product pipeline, with 30+ products in development set to be ready for launch in H2 FY25.
●
Developing pivotal retail opportunities that will drive significant momentum later in the year.
As a result, Q1 FY25 is expected to be a flat quarter, as with a focus on quality, operational excellence, and margin improvements to
create a solid platform for exponential growth in the second half of the year.
Elixinol Wellness Limited
Directors' report
31 December 2024
5
With retail recovery expected mid-2025, Elixinol Wellness’ priorities include:
●
Product Innovation & Channel Diversification – Expanding into ready-to-eat health and supplement categories, while scaling the
Healthy Chef’s business to improve margins and reduce reliance on grocery.
●
Operational and Cost Efficiencies – Maximising synergies from acquisitions, improving supply chain efficiency, and enhancing
profitability.
●
Reinvigorating the USA Market – Deploying targeted marketing strategies to reignite sales in topicals and hemp-based health.
●
Strengthening Hemp Leadership – Investing in supply-chain partnerships that will supercharge growth.
We are now in the calm before the storm of growth. With strong fundamentals, strategic focus, and disciplined execution, Elixinol
Wellness is poised to deliver exceptional results in 2025.
Principal risks and uncertainties
Below are the material business risks that could impact the Group’s ability to achieve its strategic objectives and affect its operations,
along with key measures implemented to mitigate these risks. The risks are listed in no particular order and exclude general risks that
could significantly affect most businesses under normal operating conditions. These risks are continuously managed as part of our
ongoing risk management framework.
Agricultural risk and climate change risk
The Group is exposed to agricultural risk due to its reliance on agricultural products, making it vulnerable to the inherent risks of the
agriculture industry. These risks include pests, plant diseases, storms, fires, frost, floods, water availability and salinity, bird damage, and
force majeure events. Such risks could affect financial performance by increasing costs (due to low yields or higher prices from reduced
supply) or by limiting the availability of products needed to meet customer demand.
Supplier arrangements
The Group has arrangements with a number of key suppliers. To the extent that Group entities cannot secure and retain key suppliers,
their respective ability to maintain consistent production levels may be compromised, which in turn may have an adverse impact on the
financial performance and position of Elixinol Wellness.
Risk of adverse events, product liability or other safety issues
As with all food or nutraceutical products, there is a risk that the products sold by Elixinol Wellness could cause serious or unexpected
side effects, including risk or injury to consumers. Should any of Elixinol Wellness’ products be associated with safety risks such as misuse
or abuse, inadvertent mislabelling, tampering by unauthorised third parties, or product contamination or spoilage, several materially
adverse outcomes could occur, including:
●
Regulatory authorities may revoke any approvals that have been granted, impose more onerous facility standards or product
labelling requirements, or conduct a product recall;
●
The Group could be subject to regulatory action or be sued and held liable for any harm caused to customers; or
●
The Group’s brands and reputation could be damaged.
These may all impact the financial performance of the Group.
Systems, security and data privacy
While the Group has policies and procedures in place to address system security and data risks, there is a risk that these may not be
adequate, which could adversely affect the Group’s reputation and financial position. There is also a risk that systems are not scalable
or have the ability to leverage the synergies of the different businesses across the Group. This may lead to a financial impact and loss in
revenue and profitability.
Key management personnel and employees
The Group relies upon its ability to attract and retain experienced and high performing executives and other employees. The failure to
achieve this may impact upon the Group’s ability to develop and meet its strategies, and may lead to a loss in revenue and profitability.
Elixinol Wellness Limited
Directors' report
31 December 2024
6
Change to laws or regulations
The Group’s operations are highly regulated and could be adversely affected by changes in laws, regulations or regulatory policy in the
jurisdictions in which it operates. The operations and proposed operations of the Group are subject to a variety of laws, regulations and
guidelines related to the retail sale of hemp-derived products. The hemp-derived CBD industry is evolving globally, including in the USA,
the United Kingdom and Japan. It is likely that governments worldwide will continue to explore the benefits, risks and operations of
companies involved in the hemp sector. The Group’s business, prospects, reputation, performance and financial condition could all be
affected by changes to law and regulation, changes to policies, and changes in the supervisory activities and expectations of its regulators
across all of the jurisdictions in which it operates. In particular, the regulation of hemp is developing and, as a result, a change in
government or increase in political lobbying may result in a change in government policy and an amendment of legislation and/or
regulation. For example, there is a risk that the allowable levels of THC in hemp products sold in the US may change. This could potentially
result in additional processing costs and impact the overall financial performance of the Group.
There is a further risk that the US Food and Drug Administration ('FDA'), the regulator which regulates ingestible and topical products
including CBD products, may seek to change the laws and regulations governing the manufacturing and marketing of CBD products in
the US. This could include current ‘good manufacturing practice’ regulation, nutrition and allergen labelling, and label claim regulations
and safety requirements including, as applicable, ‘new dietary ingredient’ and ‘generally recognised as safe’ regulations.
In the US, given that many of the applicable laws and regulations are determined at the State level, there is also a risk that the regulatory
regime governing the Group’s US operations and distribution network becomes further fragmented and difficult to comply with. The
introduction of new legislation or amendments to existing legislation by governments, or the respective interpretation of the legal
requirements, in any of the legal jurisdictions which governs the operations or contractual obligations of the Group, could impact
adversely on the assets, operations, and the financial performance of the Group and the industry in general. Regulatory compliance and
the management of regulatory change are an important part of the Group’s planning processes.
The Group intends to continue to invest in compliance and the management and implementation of regulatory change and, at the same
time, significant management attention and resources will be required to update existing or implement new processes to comply with
new regulations (such as obligations to provide certain data and information to regulators) or new interpretations of existing laws or
regulations. Failure to appropriately manage and implement regulatory change, including failing to implement effective processes to
comply with new regulations, could in the future result in Elixinol Wellness failing to meet a compliance obligation, and this could in turn
lead to a financial impact and loss in revenue and profitability.
Loss of key relationships
The hemp-derived industry has undergoing rapid growth and change, which has resulted in increasing consolidation and formation of
strategic relationships. It is expected that this consolidation and strategic partnering will continue. Acquisitions or other consolidating
transactions could harm the Group in a number of ways. The Group may lose strategic relationships if third parties with whom the Group
has arrangements with are acquired by or enter into relationships with a competitor (which could cause the Group to lose access to
necessary resources). The Group’s current competitors could become stronger, or new competitors could form from consolidations. This
could cause the Group to lose access to markets or expend greater resources in order to stay competitive. Separately, the relationship
between the Group and third parties may deteriorate organically, which may have an adverse impact on the business of the Group.
Production risk
The ability for Group entities to cultivate and produce products is dependent on a number of key inputs and their related costs. These
key inputs include raw materials, electricity, water, other utilities and skilled labour. Any significant interruption or negative change in
the availability or cost of these inputs could materially impact the production of the business and subsequently, the operating results of
the Group. In particular, given the nature of the raw materials used by each of the Group entities, supply may be limited to a single or
limited number of suppliers, with access to these raw materials more competitive than conventional ingredients. As a result, there is an
enhanced risk of difficulties in securing the required supplies, or to do so on appropriate terms.
Reputational risk
There is a risk that incidents beyond the control of the Group entities could occur which would have the effect of reducing patient,
medical/scientific or regulatory confidence, or preferences for cannabis or medicinal cannabis products generally. This reputational risk
could result from incidents involving members of the Group or other non-related industry participants.
Elixinol Wellness Limited
Directors' report
31 December 2024
7
Protection of intellectual property
The Group’s success will depend on, in part, its ability to protect its intellectual property, including its trade marks, copyright, trade
secrets and know-how. To the extent the Group fails to protect its intellectual property or infringes a third party’s intellectual property,
the Group may face increased competition from similar products, have to cease using certain intellectual property or be liable for
damages. In the event that this occurs, there is a risk that it has a materially adverse impact on the Group’s operations, financial
performance and future prospects.
Competition risk
The industries in which the current Group entities are involved is subject to domestic and international competition. While the entities
will undertake all reasonable due diligence in their business decisions and operations, they will have no influence or control over the
activities or actions of their competitors, which activities or actions may, positively or negatively, affect the operating and financial
performance of the Group. Some of the Group’s competitors and potential competitors may have significantly more financial resources
and marketing experience than EXL which may lead to reduced margins and loss of revenue or loss of market share for the Group.
Further, Group revenues in the future may be reduced as the industry consolidates and seeks revenue accretion at the expense of profit
margin.
Uncontracted sales
A material proportion of the Group’s revenue is derived from uncontracted customer relationships, with sales made under standard
terms and conditions. There is a risk that these customer relationships may not be able to be maintained, or new relationships may not
be formed, on terms acceptable to the Group. Additionally, given the uncontracted nature of these relationships, it is not possible to
guarantee consistency of sales volumes, price or terms going forward. The Group’s financial performance could be materially and
adversely impacted by wholesale customers:
●
Materially changing their trading terms;
●
Promoting the products of one or more of the Group’s competitors; or
●
Refusing to promote or stock the Group’s products or significantly reducing orders for its products.
Contracts and agreements
There are a number of risks associated with the Group’s existing contracts and agreements, including those related to previous supply
arrangements and property leases. There is a risk that the Group’s existing contracts may be terminated, lost or impaired, or renewed
on less favourable terms. Some of the Group’s contracts can be terminated without cause or on short notice periods (depending on
events and circumstances), and although the relevant parties may continue to operate on existing commercial terms, a number of its
existing contracts have expired or will shortly expire. A loss of any of the Group’s contracts could have an adverse effect on its business,
operating and financial performance. Similarly, there is a risk that the Group may not meet its existing obligations under current contracts
and agreements. Should this be the case, the Group may be liable (to varying extents) under indemnity provisions in a number of contract
and agreements. Any failure to meet these obligations could adversely impact the financial position of the Group.
Counterparty risks
The Group has entered, and may enter, into several commercial agreements and arrangements (including licences) with third parties
that are, or could be, material to the financial performance and prospects of its business. There is a risk that counterparties may not
execute such agreements or, in respect of agreements that have been executed or are executed in the future, the counterparty may fail
to meet their obligations under those agreements and arrangements. Negative commercial consequences will, or are likely to, result
from the non-execution of such an agreement or any non-observance of obligations under such agreements. These consequences may
include preventing the relevant Group entity from executing a part, or parts, of its business plan. This in turn may result in an adverse
effect on the Group’s proposed activities and operations, financial performance and prospects.
Significant changes in the state of affairs
During FY24, the Company was proactive in driving growth through its strategic acquisition of Ananda Food and capital initiatives to
divest its non-core investment in Pet Releaf. On 12 February 2024, Elixinol Wellness entered into a Share Purchase Agreement with
Ecofibre Limited (ASX: EOF) to acquire wholly owned subsidiary Ananda Food Pty Ltd. The acquisition cements Elixinol‘s position as a
leader in Australia’s hemp industry.
To fund this strategic acquisition, Elixinol launched a fully underwritten non-renounceable rights issue to raise $3.16 million to complete
the Ananda Food acquisition, enhance the Company’s marketing efforts, and support expanded operations.
On 20 February 2024, Elixinol also entered into a binding purchase agreement to divest its minority interest in Altmed Pets, LLC. This
transaction generated approximately $2.3 million in cash, which has been reinvested to accelerate growth opportunities. This sale
completed on 15 May 2024.
Elixinol Wellness Limited
Directors' report
31 December 2024
8
On 28 March 2024, Ron Dufficy stepped down from the role of Group CEO and Natalie Butler was appointed to the Elixinol Board.
On 1 July 2024, the Company announced the appointment of Ms Melanie Leydin and Mr Tai Phan of Vistra (Australia) Pty Ltd as Joint
Company Secretaries. Subsequently, on 25 October 2024, Mr Thai Phan resigned as Joint Company Secretary leaving Ms Melanie Leydin
to continue as sole Company Secretary.
Ms Sarah Prince and Ms Josephine Lorenz resigned as Joint Company Secretaries, effective 1 July 2024.
On 3 October 2024, the Company announced it has signed a binding Business Sale Agreement to acquire The Healthy Chef
acquisition, premium lifestyle brand offering clean nutrition for women’s health, inner beauty, and wellbeing. The acquisition was
completed on 25 October 2024. The acquisition added a comprehensive branded business that will enhance revenue, margins, and
EBITDA. It complements Elixinol’s current business and brand portfolio, providing synergies for scaling and cost optimisation in both
Australia and the USA. To fund this strategic acquisition, Elixinol secured commitments for a capital raise of $1.1 million institutional
placement and launched a Share Purchase Plan ('SPP') that raised on additional $0.5 million. The SPP was completed on 30 October 2024
and raised approximately $420,000. These funds were be used to complete the Acquisition and support EXL with additional marketing
investment and working capital to drive near term growth initiatives.
On 9 December 2024, the Company undertook a share consolidation in the ratio of eight shares to convert to one ordinary share.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Elixinol Wellness remains positive on the long term market opportunity for hemp-derived and plant-based food products and its ability
to leverage its strong reputation for high quality products. Refer to the Financial and Operating Review for likely developments and
expected results of operations.
Also refer to 'Business strategies and future prospects' section above.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State/Territory laws.
Information on Directors
Name:
David Fenlon
Title:
Independent Non-Executive Chair (effective 30 September 2023
Independent Non-Executive Director (March 2022 to 29 September 2023)
Qualifications:
B.Bus
Experience and expertise:
David Fenlon has over 30 years of world-wide experience in the FMCG and consumer sectors.
David was previously CEO of The Platform Alliance Group, and Group CEO and Managing
Director of BWX Limited (ASX: BWX). He was also previously Non-Executive Chair of Nutritional
Growth Solutions (ASX: NGS). Prior to this, he was Managing Director for Australia and New
Zealand at Blackmores Limited (ASX: BKL). David has worked with leading retail brands both in
Australia and offshore, with a strong focus on strategic planning and business transformation
including in key positions with Tesco throughout Europe and Safeway in the UK. David was a
member of the Board of Directors for the Special Olympics from May 2017 until June 2019.
Other current directorships:
None
Former directorships (last 3 years):
Nutritional Growth Solutions (ASX: NGS) and BWX Ltd (ASX: BWX)
Special responsibilities:
Chair of Remuneration and Nomination Committee and Member of Audit and Risk Committee
Interests in shares:
1,563,381
Interests in options:
156,250
Interests in rights:
58,219 performance rights
Elixinol Wellness Limited
Directors' report
31 December 2024
9
Name:
Pauline Gately
Title:
Non-Executive Director (appointed 17 August 2023)
Qualifications:
Graduate and Member of the Australian Institute of Company Directors (GAICD), BA Hons
Economics and Graduate Diploma in Law and Financial Study: Accounting
Experience and expertise:
After leading the merger process of The Sustainable Nutrition Group Ltd, Pauline was
appointed a Non-Executive Director of Elixinol Wellness. She is currently Non-executive Chair
of Kalgoorlie Gold Mining Ltd (ASX: KAL) and a Non-Executive Director of Pioneer Credit Ltd
(ASX:PNC) Pauline is an experienced director who brings a sharp commercial focus to strategy
with demonstrated success in funding, business development, and strategic transformation
having led companies through IPO, business recalibration and mergers and acquisitions. Her
Board contributions are also underpinned by senior roles in international investment banking
across the Asia Pacific region.
Other current directorships:
Kalgoorlie Gold Mining Ltd (ASX:KAL) and Pioneer Credit Ltd (ASX: PNC)
Former directorships (last 3 years):
Ardiden Ltd (ASX: ADV)
Special responsibilities:
Chair of Audit and Risk Committee and Member of Remuneration and Nomination Committee
Interests in shares:
2,296,671
Interests in options:
None
Interests in rights:
None
Name:
Natalie Butler
Title:
Executive Director (appointed 28 March 2024)
Head of Marketing (appointed 28 March 2024)
Qualifications:
B.Bus
Experience and expertise:
Bringing over a decade of strategic marketing leadership to the table, Natalie boasts a proven
history of catalysing growth and innovation on both local and global brands. Having worked
closely with the Sustainable Nutrition Group marketing and product teams over the past year,
she is uniquely positioned to spearhead future growth opportunities for the Group. As General
Manager of Tom Organic, Natalie was instrumental in steering the company to success and also
direct major global initiatives with renowned brands within the L'Oréal Group. Her journey
underscores her ability to foster connections, drive results and fearlessly embrace diverse
challenges in dynamic environments.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
144,329
Interests in options:
None
Interests in rights:
72,833 performance rights
'Other current directorships' quoted above are current directorships for listed entities only and exclude directorships of all other types
of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and exclude
directorships of all other types of entities, unless otherwise stated.
Executives
Group Chief Financial Officer
Name:
Josephine Lorenz
Title:
Group Chief Financial Officer
Joint Company Secretary (effective 23 May 2023)
Qualifications:
BCom, Chartered Accountants Australia and New Zealand – Fellow
Experience and expertise:
Josephine has over 20 years' global finance experience, having held senior finance positions in
various sectors including the role of Group Financial Controller for Network Ten and Nine
Entertainment Co. (ASX: NEC). She was also formerly the Head of Finance at Independent
Television News Limited in London and has held various roles at Deloitte in both London and
Melbourne, Australia. Josephine joined Elixinol Wellness in November 2017.
Elixinol Wellness Limited
Directors' report
31 December 2024
10
Company secretary
Name:
Melanie Leydin
Title:
Company Secretary (appointed 1 July 2024)
Qualifications:
B.Bus (Acc. Corp Law), CA, FGIA
Experience and expertise:
Ms Leydin has over 27 years' experience in the accounting profession and over 15 years'
experience as a Company Secretary for ASX listed companies. Ms Leydin is a Chartered
Accountant and a Registered Company Auditor. Her experience in public company
responsibilities includes ASX and ASIC compliance, control and implementation of corporate
governance, statutory financial reporting, reorganisation of companies and shareholder
relations.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the year ended 31
December 2024, and the number of meetings attended by each Director were:
Full Board
Remuneration and Nomination
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
D Fenlon
12
12
2
2
5
5
P Gately
12
12
2
2
5
5
N Butler
10
10
-
-
3
3
R Dufficy
2
2
-
-
2
2
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee.
Elixinol Wellness Limited
Directors' report
31 December 2024
11
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the
requirements of the Corporations Act 2001 and its regulations.
The remuneration report is set out under the following main headings:
●
Key management personnel;
●
Principles used to determine the nature and amount of remuneration;
●
Linking remuneration and company performance;
●
Details of remuneration;
●
Service agreements;
●
Share-based compensation; and
●
Additional disclosures relating to key management personnel.
Key management personnel
Key management personnel ('KMP') are those persons having authority and responsibility for planning, directing and controlling the
major activities of the entity, directly or indirectly, including all directors.
The KMP of the Group consisted of the following directors of Elixinol Wellness Limited:
●
David Fenlon - Independent Non-Executive Director and Chair;
●
Pauline Gately - Non-Executive Director;
●
Natalie Butler - Executive Director and Head of Marketing (appointed effective 28 March 2024); and
●
Ronald Dufficy - Former Group Chief Executive Officer (resigned effective 28 March 2024).
And the following executive of Elixinol Wellness Limited:
●
Josephine Lorenz - Group Chief Financial Officer
Except if noted, the named persons held their current position for the whole of the financial year and since the end of the financial year.
Principles used to determine the nature and amount of remuneration
An executive reward framework has been developed to ensure reward for performance is competitive and appropriate for the results
delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders
and conforms to the market best practice and advice from independent external advisors for the delivery of reward.
The Board of Directors ('the Board') has ensured that executive reward satisfies the following key criteria for good reward governance
practices:
●
Competitiveness and reasonableness;
●
Acceptability to shareholders;
●
Performance linkage / alignment of executive compensation; and,
●
Transparency.
The Remuneration and Nomination Committee is responsible for determining and reviewing remuneration arrangements for its directors
and executives. The performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to
attract, motivate and retain high performance and high-quality personnel.
The Remuneration and Nomination Committee ensures the structure of the executive remuneration framework is market competitive
and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it enhances
shareholders' interests by:
●
Having economic profit and revenue growth as a core component of plan design;
●
Focusing on sustained growth in shareholder wealth, growth in share price, and delivering constant or increasing return on assets
as well as focusing the executive on key non-financial drivers of value; and,
●
Attracting and retaining high calibre executives.
Elixinol Wellness Limited
Directors' report
31 December 2024
12
Additionally, the reward framework enhances executives' interests by:
●
Rewarding capability and experience;
●
Reflecting competitive reward for contribution to growth in shareholder wealth; and,
●
Providing a clear structure for earning rewards.
Non-Executive Directors' remuneration
Fees and payments to Non-Executive Directors reflect the demands and responsibilities of their role. Non-Executive Directors' fees and
payments are reviewed annually by the Remuneration and Nomination Committee. The Remuneration and Nomination Committee may,
from time to time, receive advice from independent remuneration consultants to ensure Non-Executive Directors' fees and payments
are appropriate and in line with the market. The Chair's fees are determined independently to the fees of other Non-Executive Directors
based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of their own
remuneration.
The Constitution provides that Non-Executive Directors are entitled to total fixed remuneration not exceeding an aggregate maximum
sum determined by the Company in general meeting. The current amount has been fixed at $500,000 and was approved by shareholders
at the Annual General Meeting ('AGM') held on 17 May 2021. Remuneration of directors may be provided as a contribution to a
superannuation fund. Additionally, Non-Executive Directors can participate in the Company’s long-term incentive plan.
Executive remuneration
The Group rewards Executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and
variable components.
The Executive remuneration and reward framework has three components:
●
Fixed remuneration - to provide a fair and equitable fixed salary, which accurately reflects the skills and responsibilities of the role
and the experience of the individual fulfilling the position;
●
Short-term performance incentives - to encourage and reward for individual outperformance against annual key performance
indicators during the financial year; and,
●
Long-term incentive share-based payments - to drive long-term sustainable growth and facilitate alignment between the senior
executive team and the long-term interests of shareholders.
The combination of these comprises the Executive's total remuneration.
Fixed remuneration
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the Remuneration
and Nomination Committee for market competitiveness to attract and retain talent, to consider individual and business unit performance
as well as the overall performance of the Group.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where
it does not create any additional costs to the Group and provides additional value to the Executive.
Short-Term Incentive Plan ('STIP')
The Company has adopted a STIP which will enable it to assist in the attraction, motivation and retention of the Directors, executive
team and other selected employees of the Group and provide a direct link between remuneration and performance.
Its aim is to reward the Executive and management of the Group for achieving a combination of clearly defined Group and individual
targets.
The STIP is subject to annual review by the Remuneration and Nomination Committee. The structure, performance measures and
weightings may therefore vary from year to year.
The STIP is weighted 90% (90% in 2023) to Group financial measures and 10% (10% in 2023) to individual measures for Executive KMPs.
STIP Opportunity (at target) is 30-35% (25-50% for 2023) of Total Fixed remuneration for Executive KMPs.
Elixinol Wellness Limited
Directors' report
31 December 2024
13
Group financial measures are set out below:
●
Group Adjusted EBITDA (90% of the STIP);
●
Group Adjusted EBITDA was chosen to align executive performance with the key drivers of shareholder value and reflect the short-
term performance of the business. Group financial performance measures for future years will be determined annually; and,
●
Minimum threshold performance will be 100% of the on-target performance level of Group Adjusted EDITBA metrics.
Individual measures are set out below:
●
Executive KMPs are set individual objectives based on their specific area of responsibility. These objectives are directly aligned to
the Board approved financial, operational and strategic objectives and include quantitative measures where appropriate; and,
●
Payouts are based on a minimum of 80% achievement (80% for 2023).
Actual performance against Group financial and individual measures is assessed at the end of the financial year.
The Board determines the amount, if any, of the STIP to be paid to each Executive KMP, seeking recommendations from the
Remuneration and Nomination Committee.
Where performance is below threshold, payment of any STIP amount will be at the sole discretion of the Board. Where performance is
above the threshold, up to 150% of the target STIP amounts are payable.
The STIP amount on-target will be paid in cash or equity and equity will be issued as performance rights and will vest 75% following the
release of the relevant financial statements and 25%, 12 months later and will be subject to relevant local statutory and tax obligations.
The Board at its discretion, may elect to grant equity in lieu of payments in cash. Where performance is above the threshold, the STIP
will be paid in cash or equity, subject to Board discretion.
If a takeover or change of control event occurs or in the case of death, disability, bona fide redundancy or genuine retirement or another
reason (with the exception of resignation or dismissal), the Board at its discretion, may elect to pay whole or pro rata STIP amounts.
STIP payments granted as equity include the following conditions:
●
Any STIP outcome deferred into equity cannot be traded until after they have vested;
●
Any unvested share rights may be forfeited if the Executive ceases to be an employee before the vesting date; and,
●
Share rights which have vested can only be traded in accordance with the Company’s Securities Trading Policy.
Long-Term Incentive Plan ('LTIP')
The LTIP is an equity incentive plan used to align the Directors and Executive KMP’s remuneration to the returns generated for the
Group’s shareholders. The key features of the LTIP are outlined below.
Performance rights over ordinary shares in the Company were issued to KMPs for nil consideration. The nature, timing and structure of
the grant is detailed below.
Performance rights
Performance rights are awarded based on the fixed amount to which the individual is entitled. Upon satisfaction of vesting and
employment conditions, each performance right will, at the Company’s election, convert to a share on a one-for-one basis or entitle the
participant to receive in cash to the value of a share at the Board’s discretion in lieu of an allocation of shares. Where the Board makes
such an election, the amount payable will be as determined below:
Cash payable = (No. of Performance Rights x VWAP) - Applicable Withholding Tax (if any) - Amounts paid as superannuation
Where VWAP means the volume weighted average share price of the shares traded on the ASX in the 5 trading days immediately prior
to the relevant vesting date.
LTIP opportunity (at target)
LTIP opportunity has been determined by informed benchmarking.
Performance period
Share Rights granted during 2023 were issued in two equal tranches. The performance period for Tranche 1 is 18 months from 1 January
2023 to 30 June 2024 and the performance period for Tranche 2 is 3 years from 1 January 2023 to 31 December 2025.
Elixinol Wellness Limited
Directors' report
31 December 2024
14
Vesting dates
Share Rights granted in 2023:
Vesting date
Tranche 1 - 30 August 2024
Tranche 2 - 28 February 2026
There were no Share Right grants made during 2024 for the LTIP.
Vesting conditions
Share rights which have not lapsed will vest and become exercisable on the date on which any vesting conditions (and any employment
conditions) applicable to the share rights have been satisfied (or waived by the Board) or the date on which the share rights otherwise
vest in accordance with the Plan rules.
The share rights are subject to the following vesting conditions:
●
Satisfaction of absolute Total Shareholder Return ('TSR') performance hurdles for the relevant vesting period; and,
●
Participant must be employed (or continue to be a Director) of the Company or one of its wholly owned subsidiaries at the time
that audited financial statements are released to the ASX following the performance period.
The proportion of TSR share rights that will vest will be determined by reference to the absolute TSR of the Company during the relevant
performance period, in accordance with the following vesting schedule:
Company's TSR over the relevant
performance period
Percentage of TSR share rights vesting
Below 0%
0% of the TSR share rights will vest
Greater than 0% but less than 10%
Between 0% and 100% of the TSR share rights will vest
Greater than 10% but less than 20%
Between 100% and 200% of the TSR share rights will vest
Equal to or greater than 20%
200% of the TSR share rights will vest
Cessation of employment (Employment Conditions)
Subject to the Board determining otherwise (in its absolute discretion), should a participant cease to be an employee or Director of the
Group because of:
●
Resignation or dismissal: all unvested rights or options lapse;
●
Death, disability, bona fide redundancy, genuine retirement or another reason (with the exception of resignation or dismissal): a
pro rata number of unvested rights or options will not lapse, and any vested right or option will not lapse. All other rights or options
will lapse.
Disposal restrictions
When vesting occurs, restriction on disposal of shares will be subject to the Company’s Securities Trading Policy.
A participant may not enter into any arrangement for the purpose of hedging, or otherwise affecting their economic exposure to their
performance rights.
Change of control
In the event of a Takeover Event or Control Event, all unvested Share Rights will fully vest.
Use of remuneration consultants
During the financial period ended 31 December 2024, the Board did not consult or did not engage remuneration advisors for
benchmarking of executive remuneration.
Voting and comments made at the Company's 30 May 2024 AGM
At the 30 May 2024 AGM, 92.42% of the votes received supported the adoption of the remuneration report for the year ended 31
December 2023. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Elixinol Wellness Limited
Directors' report
31 December 2024
15
Linking remuneration and company performance
Impact of the Group’s 2024 performance on remuneration
With an expanded brand portfolio following the acquisition of Ananda Food Pty Ltd and The Healthy Chef business during the year,
Australian-based revenue increased by 130% compared with the prior year. The Americas business continued to face a challenging
environment with a lack of regulatory development impacting marketing on e-Commerce platforms. However, overall, Group revenue
grew 81%, and following a focus on cost reduction and margin improvement, the Group an improved adjusted EBITDA by 40%. The Group
also delivered numerous strategic objectives designed to position it for future growth, including the integration of the acquisition of The
Sustainable Nutrition Group Ltd. Despite these improvements, the results did not meet the targets set and therefore STIP and LTIP were
not awarded during the year to Executive Management.
The link between Executive KMP remuneration and Group financial performance is detailed below:
2024
2023
2022
2021
2020
$'000
$'000
$'000
$'000
$'000
Revenue
14,956
8,269
7,055
9,338
15,010
Adjusted EBITDA
(2,756)
(4,626)
(8,538)
(11,496)
(22,930)
Net loss after tax
(1,722)
(7,507)
(10,571)
(17,025)
(104,478)
Basic loss per share (cents per share)*
(1.11)
(12.68)
(3.34)
(5.41)
(58.25)
Diluted loss per share (cents per share)*
(1.11)
(12.68)
(3.34)
(5.41)
(58.25)
Opening share price
$0.076
$0.021
$0.072
$0.175
$0.570
Closing share price on 31 December
$0.038
$0.076
$0.021
$0.072
$0.175
*
Basic loss per share and diluted loss per share for 2024 and 2023 are stated above after taking account of the 8:1 share consolidation that occurred in the 2024 financial year. Prior to this, the figures
represent the signed Annual Reports of those years
There were no dividends declared or paid during the financial year.
Elixinol Wellness Limited
Directors' report
31 December 2024
16
Details of remuneration
Amounts of remuneration
Short-term benefits
Post-employment
benefits
Long-term benefits
Cash salary
and fees
Annual
leave
Super-
annuation
Terminat-
ion
benefits
Salary
sacrifice -
Equity
settled
perform-
ance rights
Issued
equity
Deferred
STI(c)
Equity
settled
perform-
ance rights
Total
2024
$
$
$
$
$
$
$
$
$
Non-Executive Directors:
D Fenlon
111,746
-
12,766
-
-
60,000
-
6,703
191,215
P Gately
97,964
-
11,193
-
-
45,000
-
(9,481)
144,676
209,710
-
23,959
-
-
105,000
-
(2,778)
335,891
Executive Directors:
N Butler(b)
195,833
-
20,971
-
-
-
-
2,353
219,157
R Dufficy(a)
70,591
37,901
7,765
175,616
-
-
-
(67,705)
224,168
266,424
37,901
28,736
175,616
-
-
-
(65,352)
443,325
Other KMP:
J Lorenz
235,000
-
26,438
-
-
-
-
(6,344)
255,094
711,134
37,901
79,133
175,616
-
105,000
-
(74,474) 1,034,310
(a)
Remuneration is from 1 January 2024 to date of cessation as Director or KMP.
(b)
Remuneration is from date of appointment at 28 March 2024 to 31 December 2024.
(c)
100% of the current year STI to be settled as Equity-settled Performance Rights with 75% vesting on 31 March 2024 and 25% with a vesting date on 31 March 2025.
Elixinol Wellness Limited
Directors' report
31 December 2024
17
Short-term benefits
Post-employment
benefits
Long-term benefits
Cash salary
and fees Cash bonus
Super-
annuation
Terminat-
ion
benefits
Salary
sacrifice -
Equity
settled
perform-
ance rights
Deferred
STI(c)
Equity
settled
perform-
ance rights
Total
2023
$
$
$
$
$
$
$
$
Non-Executive Directors:
D Fenlon
67,751
-
7,249
-
18,750
-
24,525
118,275
P Gately(b)
19,151
-
2,107
-
11,373
-
-
32,631
P Benhaim(a)
18,100
-
1,900
-
-
-
(15,658)
4,342
O Horn(a)
18,100
-
1,900
-
-
-
-
20,000
H Wiseman(a)
68,750
-
-
-
11,458
-
(25,754)
54,454
191,852
-
13,156
-
41,581
-
(16,887)
229,702
Executive Directors:
R Dufficy(d)
266,154
-
26,346
-
27,083
142,132
(40,471)
421,244
Other KMP:
J Lorenz
225,776
-
24,551
-
-
79,854
12,130
342,311
683,782
-
64,053
-
68,664
221,986
(45,228)
993,257
(a)
Remuneration is from 1 January 2023 to date of cessation as Director or KMP.
(b)
Remuneration is from date of appointment to 31 December 2023.
(c)
100% of the current year STI to be settled as Equity-settled Performance Rights with 75% vesting on 31 March 2024 and 25% with a vesting date on 31 March 2025. Ron Dufficy's STI is subject to
shareholder approval with a proposed vesting of 75% following shareholding approval and 25% with a vesting date on 31 March 2025.
(d)
R Dufficy changed from Key Management Personnel to Executive Director on 6 April 2023. Remuneration reflects whole year remuneration.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors:
D Fenlon
100%
79%
-
-
-
21%
P Gately
100%
100%
-
-
-
-
P Benhaim
-
100%
-
-
-
-
O Horn
-
100%
-
-
-
-
H Wiseman
-
100%
-
-
-
-
Executive Directors:
N Butler
100%
-
-
-
-
-
R Dufficy
100%
55%
-
-
-
45%
Other KMP:
J Lorenz
100%
73%
-
-
-
27%
Elixinol Wellness Limited
Directors' report
31 December 2024
18
The proportion of the cash bonus paid/payable or forfeited is as follows:
Cash bonus paid/payable
Cash bonus forfeited
Name
2024
2023
2024
2023
Executive Directors:
N Butler
-
-
100%
-
R Dufficy
-
-
-
100%
Other KMP:
J Lorenz
-
-
100%
100%
Service agreements
Remuneration and other terms of employment for KMP are formalised in service agreements.
The total fixed remuneration ('TFR') is subject to annual review.
Details of these agreements effective from 1 January 2025 are as follows:
Fixed
Notice Period
Notice Period
Restraint
Remuneration
Target STI
by Executive
by Company
Period
$ (a)
$
months
months
months
Natalie Butler (b)
300,000
90,000
1
1
3
Josephine Lorenz (b)
235,000
82,500
3
3
3
(a)
Fixed remuneration comprises base cash remuneration however excludes superannuation (superannuation equal to the minimum amount required to be paid to comply with the superannuation
guarantee legislation) and includes other benefits which can be sacrificed for cash at the employee's elections.
(b)
KMPs are entitled to participate in a long-term incentive plan, as discussed in this report.
KMP have no entitlement to termination payments in the event of removal for misconduct.
Any payments on termination will be subject to the termination benefits cap under the Corporations Act.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other KMP as part of compensation during the year ended 31 December 2024.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other key management
personnel in this financial year or future reporting years are as follows:
Number of
Fair value
options
Vesting date and
per option
Name
granted Grant date
exercisable date
Expiry date
Exercise price
at grant date
D Fenlon
625,000 31 August 2023
Various
31 August 2025
$0.160
$0.0368
D Fenlon
625,000 23 November 2023
Various
23 November 2025
$0.160
$0.0560
Options granted carry no dividend or voting rights.
Elixinol Wellness Limited
Directors' report
31 December 2024
19
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and other KMP
in this financial year or future reporting years are as follows:
Number of
Fair value
rights
Vesting date and
per right
Name
granted* Grant date
exercisable date
Expiry date
at grant date
D Fenlon
58,220 26 May 2022
28 February 2026
21 April 2027
$0.0570
J Lorenz
317,005 30 September 2023
31 March 2025
30 December 2028
$0.0090
J Lorenz
452,856 30 September 2023
28 February 2026
30 December 2028
$0.0110
N Butler
36,417 30 September 2023
31 March 2025
30 December 2028
$0.0090
N Butler
36,418 30 September 2023
28 February 2026
30 December 2028
$0.0110
*
Amounts restated to account for share consolidation of 8:1 shares during the year.
Performance rights granted carry no dividend or voting rights.
Other than outlined above, there were no other performance rights or options over ordinary shares granted to or vested in Directors
and other KMP as part of compensation during the year ended 31 December 2024.
Shares issued in the past financial year were approved under section 10.14 of the ASX Listing Rules.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of KMP of the Group, including
their personally related parties, is set out below:
Balance at
Received
Adjustment to
account for
share
Balance at
the start of
as part of
Disposals/
consolidation
the end of
the year
remuneration
Additions
other(b)
of 8:1
the year
Ordinary shares
D Fenlon
1,250,000
11,257,035
-
-
(10,943,654)
1,563,381
P Gately
9,930,583
8,442,776
-
-
(16,076,688)
2,296,671
N Butler(b)
-
874,000
280,625
-
(1,010,296)
144,329
R Dufficy(a)
7,920,391
-
-
(7,920,391)
-
-
J Lorenz
3,240,676
7,608,125
-
-
(9,492,700)
1,356,101
22,341,650
28,181,936
280,625
(7,920,391)
(37,523,338)
5,360,482
(a)
Disposal includes shares held on date ceased being a Director.
(b)
Addition of ordinary shares includes held on becoming Director on 28 March 2024.
Elixinol Wellness Limited
Directors' report
31 December 2024
20
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Adjustment to
account for
share
Balance at
the start of
forfeited/
consolidation
the end of
the year
Granted
Exercised
other(b)
of 8:1
the year
Options over ordinary shares
D Fenlon
1,250,000
-
-
-
(1,093,750)
156,250
R Dufficy(a)
2,361,112
-
-
(2,361,112)
-
-
3,611,112
-
-
(2,361,112)
(1,093,750)
156,250
(a)
Expired/forfeited/other includes options held on date ceased being a Director.
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each Director and other
members of KMP of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Adjustment to
account for
share
Balance at
the start of
forfeited/
consolidation
the end of
the year
Granted
Vested
other(b)
of 8:1
the year
Performance rights over ordinary
shares
D Fenlon
1,715,753
11,257,035
(11,257,035)
(1,250,000)
(407,534)
58,219
P Gately
-
8,442,776
(8,442,776)
-
-
-
N Butler(b)
-
1,748,000
(874,000)
(291,334)
(509,833)
72,833
R Dufficy(a)
3,171,994
-
-
(3,171,994)
-
-
J Lorenz
18,088,625
-
(7,608,125)
(4,321,542)
(5,389,088)
769,870
22,976,372
21,447,811
(28,181,936)
(9,034,870)
(6,306,455)
900,922
(a)
Expired/forfeited/other includes options held on date ceased being a Director.
(b)
Performance rights granted includes performance rights held on becoming KMP on 28 March 2024.
Loans to key management personnel and their related parties
There are no loans to key management personnel and their related parties.
This concludes the remuneration report, which has been audited.
Elixinol Wellness Limited
Directors' report
31 December 2024
21
Shares under option
Unissued ordinary shares of Elixinol Wellness Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
7 June 2023
7 June 2025
$0.160
16,375,097
31 August 2023
31 August 2025
$0.160
286,460
23 November 2023
23 November 2025
$0.160
190,973
22 March 2024
22 March 2027
$0.060
92,951,732
109,804,262
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company
or of any other body corporate.
Shares under performance rights
Unissued ordinary shares of Elixinol Wellness Limited under performance rights at the date of this report are as follows:
Number
Grant date
Expiry date
under rights
27 May 2022
27 August 2027
58,220
3 October 2023
31 August 2028
1,462,572
1,520,792
No person entitled to exercise the option or performance rights had or has any right by virtue of the option or performance right to
participate in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Elixinol Wellness Limited issued on the exercise of options during the year ended 31 December 2024
and up to the date of this report.
Shares issued on the exercise of performance rights
The following ordinary shares of Elixinol Wellness Limited were issued during the year ended 31 December 2024 and up to the date of
this report on the exercise of performance rights granted:
Exercise
Number of
Date performance rights granted
price
shares issued
3 October 2023
$0.009
35,330,829
31 May 2024
$0.009
13,541,667
31 May 2024
$0.005
19,699,811
68,572,307
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director or executive,
for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the Company
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
Elixinol Wellness Limited
Directors' report
31 December 2024
22
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or
any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any
related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined
in note 28 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm
on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 28 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
●
None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of BDO Audit Pty Ltd
There are no officers of the Company who are former partners of BDO Audit Pty Ltd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument
to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately
after this Directors' report.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
David Fenlon
Independent Non-Executive Director and Chair
28 February 2025
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050
110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are
members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
DECLARATION OF INDEPENDENCE BY LEAH RUSSELL TO THE DIRECTORS OF ELIXINOL WELLNESS
LIMITED
As lead auditor for the review of Elixinol for the full-year ended 31 December 2024, I declare that, to
the best of my knowledge and belief, the only contravention of:
1. The auditor independence requirements of the Corporations Act 2001 in relation to the audit;
or
2. Any applicable code of professional conduct in relation to the audit;
is set out below.
The contravention did not impact BDO Audit Pty Ltd’s or my independence as lead auditor.
BDO Audit Pty Ltd did not inform those charged with governance of permissible tax advisory and
compliance services provided to Elixinol Wellness Ltd (Elixinol) and one of it's subsidiaries, during the
year ended 31 December 2024 prior to the once-off or recurring services commencing to enable those
charged with governance of Elixinol to make an informed assessment on the impact of the provision of
the services on BDO Audit Pty Ltd’s independence in accordance with R600.23 of APES 110 Code of
Ethics for Professional Accountants (including Independence Standards).
BDO Audit Pty Ltd has subsequently provided the required information and those charged with
governance of Elixinol have concurred that the provision of the services does not impact BDO Pty Ltd’s
or my independence as lead auditor.
This declaration is in respect of Elixinol and the entities it controlled during the period.
Leah Russell
Director
BDO Audit Pty Ltd
Sydney, 28 February 2025
Elixinol Wellness Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2024
Group
Note
2024
2023
$'000
$'000
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
24
Revenue
5
14,956
8,269
Other income
6
348
564
Interest income calculated using the effective interest method
30
213
Expenses
Raw materials and consumables used and processing expenses
(9,314)
(4,849)
Employee benefits expenses and Directors' fees
(3,789)
(3,952)
Share-based payments
(46)
(675)
Depreciation and amortisation expense
7
(1,042)
(597)
Impairment of other assets
7
(371)
(1,718)
Professional services expenses
(953)
(1,271)
Sales and marketing expenses
(1,294)
(1,056)
Administrative expenses
(1,648)
(1,540)
Distribution costs
(1,095)
(762)
Other expenses
(881)
(29)
Finance costs
7
(212)
(101)
Loss before income tax benefit/(expense)
(5,311)
(7,504)
Income tax benefit/(expense)
8
3,589
(3)
Loss after income tax benefit/(expense) for the year attributable to the owners of Elixinol
Wellness Limited
(1,722)
(7,507)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
67
70
Other comprehensive income for the year, net of tax
67
70
Total comprehensive loss for the year attributable to the owners of Elixinol Wellness
Limited
(1,655)
(7,437)
Cents
Cents
Basic loss per share
38
(1.11)
(12.68)
Diluted loss per share
38
(1.11)
(12.68)
Elixinol Wellness Limited
Consolidated statement of financial position
As at 31 December 2024
Group
Note
2024
2023
$'000
$'000
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
25
Assets
Current assets
Cash and cash equivalents
9
1,078
708
Trade and other receivables
10
1,608
1,706
Inventories
11
3,890
3,664
Income tax refund due
8
14
13
Prepayments, deposits and other
12
586
558
7,176
6,649
Non-current assets classified as held for sale
13
-
1,526
Total current assets
7,176
8,175
Non-current assets
Property, plant and equipment
14
1,161
903
Right-of-use assets
15
265
282
Intangibles
16
6,177
2,297
Deferred tax
8
3,590
-
Prepayments, deposits and other
12
80
54
Total non-current assets
11,273
3,536
Total assets
18,449
11,711
Liabilities
Current liabilities
Trade and other payables
17
2,216
2,128
Contract liabilities
18
22
522
Borrowings
19
1,114
525
Lease liabilities
20
186
545
Employee benefits
337
289
Provisions
21
450
-
Accrued expenses
661
979
Total current liabilities
4,986
4,988
Non-current liabilities
Borrowings
19
543
178
Lease liabilities
20
97
14
Employee benefits
94
69
Contingent consideration
22
2,703
-
Total non-current liabilities
3,437
261
Total liabilities
8,423
5,249
Net assets
10,026
6,462
Equity
Issued capital
23
228,291
222,573
Reserves
24
9,610
10,042
Accumulated losses
(227,875)
(226,153)
Total equity
10,026
6,462
Elixinol Wellness Limited
Consolidated statement of changes in equity
For the year ended 31 December 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
26
Issued
Foreign
currency
translation
Share-based
payments
Accumulated
capital
reserve
reserve
losses
Total equity
Group
$'000
$'000
$'000
$'000
$'000
Balance at 1 January 2023
218,122
9,086
596
(218,646)
9,158
Loss after income tax expense for the year
-
-
-
(7,507)
(7,507)
Other comprehensive income for the year, net of
tax
-
70
-
-
70
Total comprehensive income/(loss) for the year
-
70
-
(7,507)
(7,437)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 23)
4,066
-
-
-
4,066
Share-based payments (note 39)
-
-
675
-
675
Vesting of share-based payments
385
-
(385)
-
-
Balance at 31 December 2023
222,573
9,156
886
(226,153)
6,462
Issued
Foreign
currency
translation
Share-based
payments
Accumulated
capital
reserve
reserve
losses
Total equity
Group
$'000
$'000
$'000
$'000
$'000
Balance at 1 January 2024
222,573
9,156
886
(226,153)
6,462
Loss after income tax benefit for the year
-
-
-
(1,722)
(1,722)
Other comprehensive income for the year, net of
tax
-
67
-
-
67
Total comprehensive income/(loss) for the year
-
67
-
(1,722)
(1,655)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 23)
5,173
-
-
-
5,173
Share-based payments (note 39)
-
-
46
-
46
Vesting of share-based payments
545
-
(545)
-
-
Balance at 31 December 2024
228,291
9,223
387
(227,875)
10,026
Elixinol Wellness Limited
Consolidated statement of cash flows
For the year ended 31 December 2024
Group
Note
2024
2023
$'000
$'000
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
27
Cash flows from operating activities
Receipts from customers (inclusive of GST)
15,158
7,949
Payments to suppliers and employees (inclusive of GST)
(18,523)
(12,232)
Government grants
6
73
1,451
Interest received
30
108
Interest and other finance costs paid
(204)
(81)
Income taxes refunded
-
47
Income taxes paid
(3)
-
Net cash used in operating activities
37
(3,469)
(2,758)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
34
(2,271)
192
Payments for property, plant and equipment
(60)
(12)
Payments for intangibles
-
(5)
Payments for loans in other entities
10
-
(1,251)
Proceeds from disposal of investments
2,265
-
Proceeds from disposal of property, plant and equipment
-
32
Net cash used in investing activities
(66)
(1,044)
Cash flows from financing activities
Proceeds from issue of shares
4,659
2,250
Share issue transaction costs
(564)
(199)
Proceeds from borrowings
861
300
Repayment of lease liabilities
(1,041)
(738)
Net cash from financing activities
3,915
1,613
Net increase/(decrease) in cash and cash equivalents
380
(2,189)
Cash and cash equivalents at the beginning of the financial year
708
2,864
Effects of exchange rate changes on cash and cash equivalents
(10)
33
Cash and cash equivalents at the end of the financial year
9
1,078
708
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
28
Note 1. General information
The financial statements cover Elixinol Wellness Limited as a group consisting of Elixinol Wellness Limited ('Company' or 'parent entity')
and the entities it controlled at the end of, or during, the period ('Group'). The financial statements are presented in Australian dollars,
which is Elixinol Wellness Limited's functional and presentation currency.
Elixinol Wellness Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Level 4
100 Albert Road
South Melbourne VIC 3025
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of
the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 28 February 2025. The Directors have
the power to amend and reissue the financial statements.
Note 2. Material accounting policy information
The accounting policies that are material to the Group are set out below. The accounting policies adopted are consistent with those of
the previous financial year, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the financial performance or position of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The annual financial statements have been prepared on a going concern basis, which contemplates the continuation of normal business
operations and the realisation of assets and settlement of liabilities in the normal course of business.
During the year ended 31 December 2024, the Group incurred a net loss before tax of $1,722,000 (31 December 2023: $7,507,000).
During the year, net cash outflows from operating activities were $3,469,000 (31 December 2023: $2,758,000).
The Directors believe that there are reasonable grounds to believe that the entity will continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the cashflow forecast
following:
●
As a result of the acquisitions of The Sustainable Nutrition Group ('TSN') and Ananda Food, the size and scale of the Australian
operations has increased and economies of scale are to be realised through the combined group.
●
Directors continue to monitor costs, and minimise where possible. Net loss before tax declined in FY24 compared with FY23.
Excluding one-off costs, net cash used in operating activities was $2,164,000 in FY24 and reduced significantly in the second half of
the year to $195,000 (excluding one-off costs) in Q4 FY24. Group also continues to demonstrate it can implement cost efficiencies,
reducing operating costs (excluding marketing) by 24% of revenue in Q4 FY24 from Q4 FY23. Elixinol America has transitioned to a
less capital-intensive e-commerce business model, and synergies from the Ananda Food and The Healthy Chef acquisitions are
being realised into FY25, further reducing the Group’s cost base and driving the Group forward to a cashflow positive path.
●
At year end the Group had net current assets of $2,190,000 including cash of $1,078,000, along with access to unused debt facilities.
●
Ability to raise funds as evidenced by successful capital raises during FY24 including a fully underwritten non-renounceable rights
issue raising $3.16 million in March 2024, $1.1 millon institutional placement in October 2024 and $0.4m Share Purchase Plan in
November 2024.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
29
●
Availability of additional financing in FY25 including growth in the Trade Debtor Finance facility of up to $1,500,000 and $300,000
of Trade Finance that was established with Scottish Pacific Business Finance Pty Ltd ('ScotPac'), the largest non-bank business lender
in Australia in December 2023 that supports the groups revenue growth strategies. As at 31 December 2024, $782,000 was drawn
down against these facilities and the total amount available to drawdown was $983,000 providing an additional $201,000 of unused
finance facilities. The Group also established e-Commerce finance facilities with Paypal and Shopify to provide early access to e-
Commerce revenues. Terms of these facilities range from 12-18 months and are secured against future e-Commerce receipts. There
are reasonable grounds to believe that these facilities will continue to be available.
The Directors regularly monitor the Group’s cash position on an ongoing basis and continues to explore debt funding and capital markets
to support the going concern and working capital requirements associated with its revenue base and growth strategies. There is a history
of successful capital raising and securing new financing facilities in FY24.
However, there is a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and
therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Based on the Group’s
forecasts and its ability to effectively manage expectations and cash flows from operations, the Directors believe that the Group’s existing
cash reserves are adequate to pay its liabilities in the ordinary course of business for at least twelve months from the date of this report
and that there is a reasonable basis to prepare the financial statements on a going concern basis.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to
the amount and classification of liabilities that may be necessary should the Group not continue as a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented
entities. These financial statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 33.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Elixinol Wellness Limited as at 31
December 2024 and the results of all subsidiaries for the period then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the
loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value
of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
30
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in
the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to
operating segments and assessing their performance. Refer to note 4.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into the individual entity's functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or
loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate
the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using
either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining
principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable
consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund
liability.
Sale of goods
Sale of goods revenue is recognised when its performance obligation to transfer control of the goods to the customer is satisfied which
occurs either at the point of sale or when delivery is completed by way of shipping the product to the location specified by the customer
and the ownership risks have therefore passed to the customer pursuant to the contract.
The Group sells a variety of hemp-based products in the wholesale and eCommerce market. These sales relate to both the manufacture
and distribution of hemp-derived finished products and hemp food based products manufactured by the Group. The Group does not act
in the capacity as agent in any customer contracts. General invoices are issued to customers on delivery with 30 day payment terms.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
31
Government grants
Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be received and
the consolidated entity will comply with all attached conditions. Government grants relating to costs are deferred and recognised in
profit or loss as other income over the periods necessary to match them with the costs that they are intended to compensate.
Interest
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial
asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Research activities
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax
losses and the adjustment recognised for prior periods, where applicable.
An income tax benefit will arise for the financial year where an income tax loss is incurred and, where permitted to do so, is carried-back
against a qualifying prior period’s tax payable to generate a refundable tax offset.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits
●
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of
the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to
be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable
profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entities which intend to settle simultaneously.
Elixinol Wellness Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under the tax consolidation regime. In addition, Elixinol Wellness Limited (the 'head entity') and its wholly-owned US subsidiaries have
also formed an income tax consolidation group within the US jurisdiction. Therefore, the head entity and each subsidiary (in both
Australian and the US) in each tax consolidated group continue to account for their own current and deferred tax amounts.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated groups.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
32
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from
or payable to other entities in the tax consolidated groups. The tax funding arrangement ensures that the intercompany charge equals
the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the
subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period;
or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no right at the end of the reporting
period to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-
current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method,
less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 - 45 days.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision
rates are based on days past due for groupings of various customers with similar loss patterns (i.e. by product type, country). The
calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is
available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, trade
receivables are written-off if past due for more than 90 days and are not subject to enforcement activity.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis.
Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable
and fixed overhead expenditure based on normal operating capacity. Costs of purchased inventory are determined after deducting
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value
less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for
immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair
value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets
and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
33
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable
to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the
face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current liabilities.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Depreciation is calculated using diminishing value bases, so as to write off the net cost over its expected useful life. The following bases
are used in the calculation of depreciation:
Leasehold improvements
over the unexpired period of the lease
Furniture, fittings and equipment
12 to 30%
Computer equipment
30 to 50%
Motor vehicles
17%
Machinery
20%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is
shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of
the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised
and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are
measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives
of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
34
Brand name
Significant costs associated with brand name are deferred and amortised on a straight-line basis over the period of their expected benefit,
being their finite life of 10 years.
Trademarks
Significant costs associated with trademarks are capitalised as an asset. These costs are not subsequently amortised as they are
considered to be indefinite life assets because there is no foreseeable limit to the cash flows generated by them and they have no legal,
contractual, regulatory, economic, or competitive limiting factors. Trademarks are tested annually for impairment.
Other intangible assets
Costs in relation to other intangible assets are capitalised as an asset. These costs are not subsequently amortised as they are considered
to be indefinite life assets because there is no foreseeable limit to the cash flows generated by them and they have no legal, contractual,
regulatory, economic, or competitive limiting factors. Other intangible assets are tested annually for impairment.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of
the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which
the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an
amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to
the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities
are recognised as revenue when the Group performs under the contract.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-
of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
35
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the
Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a
finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly
within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at
the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering
of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the Monte
Carlo option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term
of the option, together with non-vesting conditions that do not determine whether the Group receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The
cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of
awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional
expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation.
If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense
for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised
immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were
a modification.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
36
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is
based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence
of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in
their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For
each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of
the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting policies and other
pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the acquiree at the
acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the
fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired,
being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the
acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about
the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Elixinol Wellness Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the financial year.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policy information (continued)
37
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of
additional ordinary shares that would have been outstanding assuming conversion of all dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the
tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument
to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the Group for the annual reporting period ended 31 December 2024. The Group has not yet assessed the impact
of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year are discussed below.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience and historical collection rates.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is
assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory
obsolescence.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting
date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This involves assessing the value of the asset at fair value less costs of disposal
and using value-in-use models which incorporate a number of key estimates and assumptions. Refer to note 16.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 3. Critical accounting judgements, estimates and assumptions (continued)
38
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the
provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will
impact the current and deferred tax provisions in the period in which such determination is made. Refer to note 8.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable
amounts will be available to utilise those temporary differences and losses. Refer to note 8.
Deferred consideration
The deferred consideration liability is the difference between the total purchase consideration, usually on an acquisition of a business
combination, and the amounts paid or settled up to the reporting date, discounted to net present value. The Group applies provisional
accounting for any business combination. Any reassessment of the liability during the earlier of the finalisation of the provisional
accounting or 12 months from acquisition-date is adjusted for retrospectively as part of the provisional accounting rules in accordance
with AASB 3 'Business Combinations'. Thereafter, at each reporting date, the deferred consideration liability is reassessed against revised
estimates and any increase or decrease in the net present value of the liability will result in a corresponding gain or loss to profit or loss.
The increase in the liability resulting from the passage of time is recognised as a finance cost.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into three operating segments: Australia, Americas and Rest of World. There is one single business segment,
being the sale of nutraceutical and related hemp products. These operating segments are based on the internal reports that are reviewed
and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and
in determining the allocation of resources. There is no aggregation of operating segments.
The CODM reviews Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation), adjusted for impairment and share-
based payments. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
The information provided to the CODM is on a monthly basis.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Australia
This includes the results from operations of Elixinol Wellness (Byron Bay) Pty Ltd, The Sustainable
Nutrition Group Pty Ltd and its subsidiaries ('TSN') and Ananda Food Pty Ltd.
Americas
This includes the trading results of Elixinol LLC ('Elixinol Americas') in the US through the
manufacture and distribution of hemp-derived cannabidiol (‘CBD’) products.
Rest of World
This includes the results from the trading operations of Elixinol BV and Elixinol Ltd (together 'Elixinol
Europe') and through the manufacture and distribution of hemp-derived CBD products, and licencing
agreements in place across the rest of the world.
'Unallocated' represents corporate, being Elixinol Wellness Limited (corporate).
Intersegment transactions
Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or
incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on
consolidation.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 4. Operating segments (continued)
39
Major customers
During the year ended 31 December 2024, 24% of sales were derived from three major customers (31 December 2023: 22% of sales
were derived from three major customers).
Operating segment information - Continuing operations
Australia
Americas
Rest of World
Unallocated
Total
Group - 2024
$'000
$'000
$'000
$'000
$'000
Revenue
Sales to external customers
12,858
2,052
-
-
14,910
Licence revenue
-
-
46
-
46
Total revenue
12,858
2,052
46
-
14,956
Adjusted EBITDA
(1,143)
80
10
(1,703)
(2,756)
Depreciation and amortisation
(1,042)
Impairment of assets
(371)
Interest income
30
Finance costs
(212)
Share-based payments
(46)
Abnormal/One-off expenses
(914)
Loss before income tax benefit
(5,311)
Income tax benefit
3,589
Loss after income tax benefit
(1,722)
Assets
Segment assets
15,147
652
21
2,629
18,449
Total assets
18,449
Liabilities
Segment liabilities
3,571
308
72
4,472
8,423
Total liabilities
8,423
*
Refer to note 7 for details of CGU allocation of impairment
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 4. Operating segments (continued)
40
Australia
Americas
Rest of World
Unallocated
Total
Group - 2023
$'000
$'000
$'000
$'000
$'000
Revenue
Sales to external customers
5,587
2,638
-
-
8,225
Licence revenue
-
-
44
-
44
Total revenue
5,587
2,638
44
-
8,269
Adjusted EBITDA
(1,115)
(1,365)
172
(2,318)
(4,626)
Depreciation and amortisation
(597)
Impairment of assets*
(1,718)
Interest income
213
Finance costs
(101)
Share-based payments
(675)
Loss before income tax expense
(7,504)
Income tax expense
(3)
Loss after income tax expense
(7,507)
Assets
Segment assets
8,376
2,561
16
758
11,711
Total assets
11,711
Liabilities
Segment liabilities
3,203
867
67
1,112
5,249
Total liabilities
5,249
*
Refer to note 7 for details of CGU allocation of impairment
Geographical information
Sales to external customers
Geographical non-current
assets
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Australia
12,858
5,587
3,922
3,139
Americas
2,052
2,638
32
247
Rest of World
46
44
-
-
Unallocated
-
-
3,731
149
14,956
8,269
7,685
3,535
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-
employment benefits assets and rights under insurance contracts.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
41
Note 5. Revenue
Group
2024
2023
$'000
$'000
Sale of goods
14,910
8,225
Licence revenue
46
44
Revenue
14,956
8,269
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
eCommerce
Retail
Other *
Total
Group - 2024
$'000
$'000
$'000
$'000
Geographical regions
Australia
1,637
8,766
2,455
12,858
Americas
1,785
267
-
2,052
Rest of World
-
-
46
46
3,422
9,033
2,501
14,956
Timing of revenue recognition
Goods transferred at a point in time
3,422
9,033
2,455
14,910
Services transferred over time
-
-
46
46
3,422
9,033
2,501
14,956
* Other includes bulk and private label
eCommerce
Retail
Other *
Total
Group - 2023
$'000
$'000
$'000
$'000
Geographical regions
Australia
562
4,165
860
5,587
Americas
2,038
544
56
2,638
Rest of World
-
-
44
44
2,600
4,709
960
8,269
Timing of revenue recognition
Goods transferred at a point in time
2,600
4,709
916
8,225
Services transferred over time
-
-
44
44
2,600
4,709
960
8,269
* Other includes bulk and private label.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
42
Note 6. Other income
Group
2024
2023
$'000
$'000
Net foreign exchange gain/(loss)
10
(6)
Net loss on disposal of property, plant and equipment
(1)
(2)
Government grants
25
47
Other grants
23
-
Sub-lease income and other
291
525
348
564
Government grants
During the year, the Group received the Export Market Development Grant ('EMDG') of $24,600 (31 December 2023: $25,000). Grant
total over 3 years is $73,800 which was in relation to promotional activities for eligible products in foreign countries. This grant has been
recognised as government grants in the financial statements and recorded as other income. The grant is taxable.
During the year, the Group received a Business Growth Grant from the Australian Government amounting to $nil (31 December 2023:
$21,000) which was in relation to marketing and export of goods. This grant has been recognised as government grants in the financial
statements and recorded as other income. The grant is taxable.
Note 7. Expenses
Group
2024
2023
$'000
$'000
Loss before income tax includes the following specific expenses:
Cost of sales
Cost of sales
9,314
4,849
Depreciation and amortisation
Property, plant and equipment (note 14)
344
123
Right-of-use assets (note 15)
502
474
Intangibles (note 16)
196
-
Total depreciation and amortisation
1,042
597
Impairment of other assets
Inventory
285
154
Leasehold improvements
-
54
Land and buildings - right-of-use
-
184
Investments accounted for using the equity method
86
1,326
Total impairment of other assets*
371
1,718
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 7. Expenses (continued)
43
Group
2024
2023
$'000
$'000
Finance costs
Interest and finance charges paid/payable on borrowings
6
-
Interest and finance charges paid/payable on lease liabilities
35
33
Interest and finance charges paid/payable on Premium Funding
20
16
Interest and finance charges paid/payable on Trade Facility
151
22
Interest and finance charges paid/payable on TSN Loan
-
30
Finance costs expensed
212
101
Superannuation expense
Defined contribution superannuation expense
361
220
* Impairment allocation to CGUs
Group
2024
2023
$'000
$'000
Impairment of other assets is allocated to the following CGUs:
Australia
145
119
Americas
226
1,599
371
1,718
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
44
Note 8. Income tax
Group
2024
2023
$'000
$'000
Income tax (benefit)/expense
Current tax
23
311
Deferred tax - origination and reversal of temporary differences
(3,612)
(308)
Aggregate income tax (benefit)/expense
(3,589)
3
Deferred tax included in income tax (benefit)/expense comprises:
Increase in deferred tax assets
(3,612)
(308)
Numerical reconciliation of income tax (benefit)/expense and tax at the statutory rate
Loss before income tax benefit/(expense)
(5,311)
(7,504)
Tax at the statutory tax rate of 25%
(1,328)
(1,876)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Other non-deductible permanent differences
21
-
(1,307)
(1,876)
Current year tax losses not recognised
-
1,092
Current year temporary differences not recognised
-
632
Prior year temporary differences not recognised now recognised
(1,890)
-
Difference in overseas tax rates
(392)
155
Income tax (benefit)/expense
(3,589)
3
As a consequence of the application of anti-inversion rules in the USA applying to the Group, the Group is treated as a resident of the
USA for US tax purposes and a resident of Australia for Australian income tax purposes.
Tax losses not recognised
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which
the losses can be utilised.
The Group has $20,728,000 (31 December 2023: $25,130,000) of tax effected revenue losses which have not been brought to account
at 31 December 2024.
Group
2024
2023
$'000
$'000
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Allowance for expected credit losses
-
42
Employee benefits
-
137
Leases
-
157
Accrued expenses
-
244
Other payables
-
70
Inventories
-
150
Right-of-use assets
-
(71)
Total deferred tax assets not recognised
-
729
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 8. Income tax (continued)
45
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in the
statement of financial position as the recovery of this benefit is uncertain.
Group
2024
2023
$'000
$'000
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
1,082
-
Allowance for expected credit losses
5,344
-
Contract liabilities
5
-
Employee benefits
108
-
Leases
68
-
Other payables
47
-
Unrealised foreign exchange
(2,788)
-
Property, plant and equipment
(27)
-
Inventories
133
-
Intangible assets
(316)
-
Right-of-use assets
(66)
-
Deferred tax asset
3,590
-
Movements:
Opening balance
-
-
Credited to profit or loss
3,612
308
Additions through business combinations (note 34)
(22)
(308)
Closing balance
3,590
-
Group
2024
2023
$'000
$'000
Income tax refund due
Income tax refund due
14
13
Note 9. Cash and cash equivalents
Group
2024
2023
$'000
$'000
Current assets
Cash at bank
1,078
585
Cash on deposit
-
123
1,078
708
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
46
Note 10. Trade and other receivables
Group
2024
2023
$'000
$'000
Current assets
Trade receivables
1,514
1,644
Less: Allowance for expected credit losses
(213)
(168)
1,301
1,476
Other receivables
138
-
GST recoverable
169
148
Receivable from sub-lease
-
82
1,608
1,706
Allowance for expected credit losses
The Group has recognised a net loss of $45,000 (31 December 2023: net profit of $15,000) in profit or loss in respect of the expected
credit losses for the year ended 31 December 2024.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected credit
losses
2024
2023
2024
2023
2024
2023
Group
%
%
$'000
$'000
$'000
$'000
Not overdue
1%
1%
1,193
697
13
7
1 to 30 days overdue
1%
1%
29
202
-
2
31 to 60 days overdue
6%
6%
63
26
4
2
61 to 90 days overdue
8%
8%
14
32
1
3
Over 90 days overdue
95%
95%
215
687
195
154
1,514
1,644
213
168
Movements in the allowance for expected credit losses are as follows:
Group
2024
2023
$'000
$'000
Opening balance
168
140
Additional provisions recognised
42
10
Additions through business combinations
3
18
Closing balance
213
168
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
47
Note 11. Inventories
Group
2024
2023
$'000
$'000
Current assets
Raw materials - at cost
2,295
1,718
Less: Provision for impairment
(362)
(243)
1,933
1,475
Work in progress - at cost
5
513
Finished goods - at cost
2,159
1,771
Less: Provision for impairment
(396)
(357)
1,763
1,414
Stock in transit - at cost
189
262
3,890
3,664
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value. Net realisable values have
been reviewed taking into account estimated future demand of finished goods, expiration dates on inventory and current market prices.
Note 12. Prepayments, deposits and other
Group
2024
2023
$'000
$'000
Current assets
Prepayments
392
266
Security deposits
51
161
Other deposits
143
131
586
558
Non-current assets
Security deposits
8
8
Other deposits
72
46
80
54
Note 13. Non-current assets classified as held for sale
Group
2024
2023
$'000
$'000
Current assets
Investment in associate - Altmed Pets LLC
-
1,526
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 13. Non-current assets classified as held for sale (continued)
48
On 20 February 2024, Elixinol Wellness entered into a binding purchase agreement to divest the Group’s minority interest in Altmed
Pets, LLC. The agreement resulted in sale proceeds of US$1.5m recieved on 13 May 2024 and was be used to accelerate the Group’s
growth opportunities. The Investment held for sale in the prior year had an historical credit adjustment for Treasury shares held by
Altmed Pets LLC in Elixinol Wellness of $678,000. This was reversed against issued capital when the investment was disposed and was
non-cash and had have no impact on the statement of financial position.
Note 14. Property, plant and equipment
Group
2024
2023
$'000
$'000
Non-current assets
Leasehold improvements - at cost
37
363
Less: Accumulated depreciation
(37)
(195)
Less: Impairment
-
(124)
-
44
Furniture, fittings and equipment - at cost
105
185
Less: Accumulated depreciation
(70)
(148)
35
37
Motor vehicles - at cost
48
38
Less: Accumulated depreciation
(34)
(21)
14
17
Computer equipment - at cost
45
670
Less: Accumulated depreciation
(14)
(655)
31
15
Machinery - at cost
5,400
2,447
Less: Accumulated depreciation
(3,472)
(883)
Less: Impairment
(847)
(774)
1,081
790
1,161
903
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 14. Property, plant and equipment (continued)
49
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Leasehold
improve-
Furniture,
fittings and
Motor
Computer
ments
equipment
vehicles
equipment
Machinery
Total
Group
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 January 2023
28
15
-
14
318
375
Additions
54
51
-
1
-
106
Additions through business
combinations (note 34)
-
-
38
-
690
728
Disposals
-
-
-
-
(172)
(172)
Impairment of assets
-
-
-
-
(11)
(11)
Depreciation expense
(38)
(29)
(21)
-
(35)
(123)
Balance at 31 December 2023
44
37
17
15
790
903
Additions
-
7
-
27
23
57
Additions through business
combinations (note 34)
-
1
-
-
548
549
Disposals
-
-
-
-
(3)
(3)
Exchange differences
-
(2)
-
-
74
72
Impairment of assets
-
-
-
-
(73)
(73)
Depreciation expense
(44)
(8)
(3)
(11)
(278)
(344)
Balance at 31 December 2024
-
35
14
31
1,081
1,161
Note 15. Right-of-use assets
Group
2024
2023
$'000
$'000
Non-current assets
Land and buildings - right-of-use
767
3,049
Less: Accumulated depreciation
(502)
(2,063)
Less: Impairment
-
(704)
265
282
The Group leases land and buildings for its offices, warehouses and retail outlets under agreements of between 2 to 5 years with, in
some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 15. Right-of-use assets (continued)
50
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Land and
buildings -
right-
of-use
Group
$'000
Balance at 1 January 2023
737
Additions through business combinations (note 34)
82
Modification of lease assumptions
43
Disposals
(115)
Exchange differences
9
Depreciation expense
(474)
Balance at 31 December 2023
282
Additions
243
Additions through business combinations (note 34)
118
Modification of lease assumptions
124
Depreciation expense
(502)
Balance at 31 December 2024
265
For other AASB 16 and lease related disclosures refer to the following:
●
Refer to note 7 for interest on lease liabilities and other lease payments;
●
Refer to note 20 for lease liabilities at 31 December 2024;
●
Refer to note 26 for maturity analysis of lease liabilities; and
●
Refer to the consolidated statement of cash flows for repayment of lease liabilities.
Note 16. Intangibles
Group
2024
2023
$'000
$'000
Non-current assets
Goodwill - at cost
1,367
818
Brand name - at cost
988
1,232
Less: Accumulated amortisation
(169)
-
819
1,232
Trademarks - at cost
285
247
Less: Accumulated amortisation
(27)
-
258
247
Other intangible assets - at cost
3,733
-
6,177
2,297
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 16. Intangibles (continued)
51
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Other
intangible
Goodwill
Brand name
Trademarks
assets
Total
Group
$'000
$'000
$'000
$'000
$'000
Balance at 1 January 2023
-
-
152
-
152
Additions
-
-
3
5
8
Additions through business combinations (note 34)*
818
1,232
87
-
2,137
Transfers in/(out)
-
-
5
(5)
-
Balance at 31 December 2023
818
1,232
247
-
2,297
Additions through business combinations (note 34)
241
64
42
3,733
4,080
Disposals
-
-
(4)
-
(4)
Transfers in/(out)
308
(308)
-
-
-
Amortisation expense
-
(169)
(27)
-
(196)
Balance at 31 December 2024
1,367
819
258
3,733
6,177
*
Change over prior year report reflects the finalisation of business combination accounting during the current year for the acquisition in the prior year under AASB 3 'Business combinations'
Impairment testing
Determination of recoverable amount
The recoverable amount of the CGUs are determined based on value in use model using discounted cash flow projections based on
financial forecasts covering a five-year period with a terminal growth rate applied thereafter. As a result of the acquisitions resulting in
the recognition of Intangible assets, the Group performed its annual impairment test in December 2024. The cash flow projections which
are used in determining any impairment require management to make significant estimates and judgements. Key assumptions in
preparing the cash flow projections are set out below. Each of the assumptions is subject to significant judgement about future economic
conditions and the development of the industries in which the CGU’s operate in. Management has applied their best estimates to each
of these variables but cannot warrant their outcome. In determining if an impairment was required at 31 December 2024, Management
also took into consideration that the market capitalisation of the Group was roughly inline with book value of its equity, however this
was not the determining factor and at any particular point in time, the market capitalisation does not necessary determine the value of
the CGU’s.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 16. Intangibles (continued)
52
The CGU’s were determined to be based on the contribution of individual brands of the Group. Intangibles by CGU is below:
Brand name
and
Other
intangible
Goodwill
Trademarks
assets
Total
Summary by Brand
$'000
$'000
$'000
$'000
Healthy Chef*
-
-
3,733
3,733
Ananda Brands
241
106
-
347
Mt Elephant
273
367
-
640
The Australia Superfood
550
9
-
559
Australian Primary Hemp
292
420
-
712
Field Day
11
24
-
35
HFA and Elixinol
-
151
-
151
Total intangibles
1,367
1,077
3,733
6,177
*
Purchase price accounting ('PPA') has not yet been completed to allocate intangibles across categories.
Key assumptions
Mt Elephant
The key assumptions on which management based its cash flow projections when determining the value in calculations for Mt Elephant
are set out below. These assumptions were considered to be consistent with industry market participant expectations.
●
the revenue growth reflected management’s expectation of growth in the short to medium term based on expanded ranging, new
product development and increased customer loyalty;
●
the gross margins expected to improve as product changes and supply challenges have been addressed;
●
expenditure assumed to remain consistent as a % revenue, particularly with sales and marketing and distribution, decrease in
working capital as inventory levels are reduced and by operational efficiencies reducing cash burn; – limited capital expenditure as
manufacturing capabilities are outsourced to third parties;
●
terminal growth rate of 2.0% after 5 years; and
●
the pre-tax discount rate applied to cash flow projections was 18.7% which represents management’s best estimate of the average
of the rates of return required by providers of debt and equity capital to compensate for the time value of money and the perceived
risk or uncertainty of the cash flows, weighted in proportion to the market value of the debt; and equity capital provided.
The estimated recoverable amounts of Mt Elephant were above the carrying amounts of intangible and tangible assets of the CGU with
headroom of $426,000.
Australian Primary Hemp
The key assumptions on which management based its cash flow projections when determining the value in calculations for Australian
Primary Hemp are set out below. These assumptions were considered to be consistent with industry market participant expectations.
●
the revenue growth reflected management’s expectation of growth in the short to medium term based on existing supply contracts,
expanded ranging and moderate growth;
●
the gross margins expected to remain consistent based on secured supply;
●
operating expenditure assumed to decline as a % revenue, decrease in working capital as inventory levels are reduced and by
operational efficiencies reducing cash burn; – limited planned and committed capital expenditure to support production
capabilities;
●
terminal growth rate of 2.0% after 5 years; and
●
the pre-tax discount rate applied to cash flow projections was 18.7% which represents management’s best estimate of the average
of the rates of return required by providers of debt and equity capital to compensate for the time value of money and the perceived
risk or uncertainty of the cash flows, weighted in proportion to the market value of the debt; and equity capital provided.
The estimated recoverable amounts of Australian Primary Hemp were above the carrying amounts of intangible and tangible assets of
the CGU with headroom of $1,024,000.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 16. Intangibles (continued)
53
The Australian Superfoods Co
The key assumptions on which management based its cash flow projections when determining the value in calculations for The Australian
Superfoods are set out below. These assumptions were considered to be consistent with industry market participant expectations.
●
the revenue growth reflected management’s expectation of growth in the short to medium term based on existing supply contracts,
moderate e-commerce growth and focused sales strategy;
●
the gross margins expected to remain consistent based on secured supply;
●
operating expenditure assumed to decline as a % revenue, decrease in working capital as inventory levels are reduced and by
operational efficiencies reducing cash burn; – limited planned and committed capital expenditure to support production
capabilities;
●
terminal growth rate of 2.0% after 5 years; and
●
the pre-tax discount rate applied to cash flow projections was 18.7% which represents management’s best estimate of the average
of the rates of return required by providers of debt and equity capital to compensate for the time value of money and the perceived
risk or uncertainty of the cash flows, weighted in proportion to the market value of the debt; and equity capital provided.
The estimated recoverable amounts of The Australian Superfood Co were above the carrying amounts of intangible and tangible assets
of the CGU with headroom of $1,073,000.
Ananda Brands
The key assumptions on which management based its cash flow projections when determining the value in calculations for Ananda
Brands are set out below. These assumptions were considered to be consistent with industry market participant expectations.
●
the revenue growth reflected management’s expectation of growth in the short to medium term based on existing supply contracts,
new product development for the Soul Seeds brand, growth in grocery chain and focused sales strategy;
●
the gross margins expected to remain consistent based on secured;
●
operating expenditure assumed to decline as a % revenue limited planned and committed capital expenditure to support
production capabilities;
●
terminal growth rate of 2.0% after 5 years; and
●
the pre-tax discount rate applied to cash flow projections was 18.7% which represents management’s best estimate of the average
of the rates of return required by providers of debt and equity capital to compensate for the time value of money and the perceived
risk or uncertainty of the cash flows, weighted in proportion to the market value of the debt; and equity capital provided.
The estimated recoverable amounts of Ananda Brands were above the carrying amounts of intangible and tangible assets of the CGU
with headroom of $194,000.
Note 17. Trade and other payables
Group
2024
2023
$'000
$'000
Current liabilities
Trade payables
1,817
1,760
GST and sales tax payable
(4)
15
Credit cards
24
73
Other payables
379
280
2,216
2,128
Refer to note 26 for further information on financial instruments.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
54
Note 18. Contract liabilities
Group
2024
2023
$'000
$'000
Current liabilities
Contract liabilities
22
522
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
522
22
Payments received or invoiced in advance
65
521
Transfer to revenue - performance obligations satisfied in previous periods
(565)
(21)
Closing balance
22
522
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting
period was $22,000 as at 31 December 2024 ($522,000 as at 31 December 2023) and is expected to be recognised as revenue in future
periods as follows:
Group
2024
2023
$'000
$'000
Within 6 months
22
335
6 to 12 months
-
187
22
522
Note 19. Borrowings
Group
2024
2023
$'000
$'000
Current liabilities
Loans - Raw With Life
48
48
Insurance premium funding
217
155
Trade financing
849
322
1,114
525
Non-current liabilities
Loans - Raw With Life
142
178
Trade financing
401
-
543
178
Refer to note 26 for further information on financial instruments.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 19. Borrowings (continued)
55
Loans - Raw With Life
Prior to its acquisition by Elixinol Wellness Limited, Hemp Foods Australia entered into a Shareholder Loan Deed with Raw With Life, an
entity controlled by Mr Paul Benhaim, whereby Raw With Life agreed to lend $250,000 to Hemp Foods Australia. The loan is made on an
unsecured basis, with no interest currently payable. Hemp Foods Australia undertakes to repay the loan subject to achievement of
predefined performance milestones. The Group assessed the fair value of the loan at the reporting date and the amount is not materially
different from its carrying value. The loan is being repaid at $4,000 per month, subject to certain conditions.
Trade financing - Current liabilities
A Trade Debtor Finance facility of up to $1,500,000 and $300,000 for Trade finance was established with Scottish Pacific Business Finance
Pty Ltd ('ScotPac'), the largest non-bank business lender in Australia on 20 December 2023. As of 31 December 2024, $653,000 was
drawdown against the Trade Debtor facility and $129,000 against the Trade finance facility and the total amount available to drawdown
was $1,005,000. The interest rate of these facilities is 10.74% for any drawn-down facility and this is secured against the assets of the
Group’s subsidiary, Elixinol Wellness (Byron Bay) Pty Ltd. The term of this facility is for a minimum of two years from 20 December 2023.
On 18 October 2024, a Paypal Commerce Finance facility was established providing $120,000 of access to e-commerce revenue in
advance. As at 31 December 2024, the balance of this loan was $66,000 with a term of 12 months, or earlier with a repayment of 30%
of daily Paypal receipts. The interest rate is a fixed fee of 12.5% of the initial loan balance. This loan is secured against future Paypal
receipts.
Trade financing - Non-current liabilities
On 26 November 2024, a Shopify Commerce Finance facility was established providing $410,000 of access to e-commerce revenue in
advance. As at 31 December 2024, the balance of this loan was $401,000 with a term of 18 months, or earlier with a repayment of 17%
of daily Shopify sales. The interest rate is a fixed fee of 7.4% of the initial loan balance. This loan is secured against future Shopify receipts.
Note 20. Lease liabilities
Group
2024
2023
$'000
$'000
Current liabilities
Lease liability
186
545
Non-current liabilities
Lease liability
87
-
Lease make good provision
10
14
97
14
Refer to note 26 for further information on financial instruments.
Note 21. Provisions
Group
2024
2023
$'000
$'000
Current liabilities
Deferred consideration
450
-
Deferred consideration
The provision represents the obligation to pay contingent consideration following the acquisition of a business or assets. It is measured
at the present value of the estimated liability.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 21. Provisions (continued)
56
Refer to note 22 for further details in relation to deferred consideration.
Note 22. Contingent consideration
Group
2024
2023
$'000
$'000
Non-current liabilities
Contingent consideration
2,103
-
Contingent consideration (deferred)
600
-
2,703
-
Contingent consideration includes amounts payable to The Healthy Chef Trust for the acquisition of The Healthy Chef business and
assets.
The terms of the deferred consideration are as follows:
●
$450,000 in cash is due the 1st annual anniversary of Completion (25 October 2025);
●
$600,000 in cash is due the 2nd annual anniversary of Completion (25 October 2026);
Remainder of the Purchase Price in cash is due on Final Settlement date. The third and final Deferred Payment will be calculated on 1
March 2028 ('Calculation Date') and paid to the HC Trust in cash within 10 Business Days of the Calculation Date in accordance with the
following scale:
●
If Revenue for the period from 1 January 2027 to 31 December 2027 ('FY27') is less than $3,500,000, the Final Deferred Payment
will be $1,050,000, meaning the Total Purchase Price is $3,100,000; or
●
If FY27 Revenue exceeds $3,500,000 but is less than $6,000,000, the Final Deferred Payment will be $1,050,000 plus 50% of the
incremental Revenue over $3,500,000, meaning a Total Purchase Price of between $3,100,001 and $4,350,000.
In the preliminary acquisition accounting, the forecast revenue for FY27 is expected to be $7,500,000.
Security
In order to secure full and punctual payment by Elixinol Wellness of all contingent consideration amount (less any set off) due from
Elixinol Wellness to the HC Trust under this agreement and due and prompt performance by Elixinol Wellness of their obligations under
the agreement, Elixinol Wellness agrees to enter into the security document in the HC Trust’s favour under which, amongst other things,
Elixinol Wellness grants the HC Trust a security interest over all Healthy Chef IP necessary to enable HC Trust to obtain the benefit of the
contingent consideration amount, free of any other interest or encumbrance.
Note 23. Issued capital
Group
2024
2023
2024
2023
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
220,820,137
632,738,503
228,291
222,573
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 23. Issued capital (continued)
57
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
1 January 2023
316,132,461
218,122
Issue of shares - Placement
14 April 2023
69,444,445
$0.018
1,250
Issue of shares - Vested performance rights
27 April 2023
9,247,011
$0.020
185
Issue of shares - Share Purchase Plan offer
26 May 2023
38,055,603
$0.018
685
Issue of shares - Vested performance rights
31 May 2023
3,478,785
$0.015
52
Issue of shares - Underwritten
7 June 2023
17,499,953
$0.018
315
Issue of shares - Underwriting fee to Canaccord
7 June 2023
3,000,000
$0.018
54
Issue of shares - Acquisition of The Sustainable Nutrition
Group
17 August 2023
158,163,595
$0.012
1,898
Issue of shares - In lieu of cash consideration for
corporate advisory
17 August 2023
9,036,068
$0.013
117
Issue of shares - Director fee rights - Q3
31 August 2023
2,291,667
$0.015
34
Issue of shares - Vested performance rights
3 October 2023
3,561,137
$0.020
71
Issue of shares - Vested performance rights
3 October 2023
1,300,000
$0.015
20
Issue of shares - Director fee rights - Q4
23 November 2023
1,527,778
$0.015
23
Share issue transaction costs
(253)
Balance
31 December 2023
632,738,503
222,573
Issue of shares - Rights Issue Offer
22 March 2024
279,399,062
$0.005
1,397
Issue of shares - Rights Issue Offer shortfall shares
25 March 2024
353,532,551
$0.005
1,768
Issue of shares - Vested performance rights
8 April 2024
35,330,829
$0.009
318
Reversal of treasury shares held by Altmed Pets, LLC
13 May 2024
133,110
678
Issue of shares - Vested performance rights
31 May 2024
13,541,667
$0.009
122
Issue of shares - Director fee rights
31 May 2024
6,566,603
$0.005
35
Issue of shares - Placement
10 October 2024
238,888,889
$0.005
1,075
Issue of shares - SPP
21 November 2024
93,333,299
$0.005
420
Issue of shares - Healthy Chef acquisition
22 November 2024
100,000,000
$0.004
400
Share consolidation 1:8
9 December 2024
(1,534,286,028)
Issue of shares - Director fee rights
20 December 2024
1,641,652
$0.043
70
Share issue transaction costs
(565)
Balance
31 December 2024
220,820,137
228,291
Balance of issued capital reflects Treasury shares on acquisition of Altmed Pet LLC on 24 April 2019 of 133,110 shares. Treasury shares
are ordinary shares of the parent entity held by subsidiaries and /or associates
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders should the
Company be wound up, in proportions that consider both the number of shares held and the extent to which those shares are paid
up. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for
shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 23. Issued capital (continued)
58
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the
current Company's share price at the time of the investment.
The capital risk management policy remains unchanged from the 31 December 2023 Annual Report.
Note 24. Reserves
Group
2024
2023
$'000
$'000
Foreign currency translation reserve
9,223
9,156
Share-based payments reserve
387
886
9,610
10,042
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to
Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and
other parties as part of their compensation for services.
Note 25. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 26. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk),
credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board of Directors ('the Board').
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies and evaluates financial risks within the Group's operating units. Finance provides reports to the Board on a monthly
basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in
a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 26. Financial instruments (continued)
59
In addition, the Group is exposed to non-financial instrument risk on the translation of foreign subsidiaries from their functional currency
to the presentation currency. This presentation risk is separate to the foreign currency risk dealt with in this note.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date were as
follows:
Assets
Liabilities
2024
2023
2024
2023
Group
$'000
$'000
$'000
$'000
US dollars
-
146
124
1
The Group had net liabilities denominated in foreign currencies of $124,000 (assets of $nil less liabilities of $124,000) as at 31 December
2024 (31 December 2023: net assets of $145,000 (assets of $146,000 less liabilities of $1,000)). Based on this exposure, had the Australian
dollar weakened or strengthened against these foreign currencies with all other variables held constant, the Group's profit before tax
for the period would have been as follows.
The sensitivity analysis carried out by the Group considers the effects on its trade receivables and payables of 5% increase and decrease
between the relevant foreign currency and the Australian dollar (reporting currency).
AUD strengthened
AUD weakened
Group - 2024
% change
Effect on profit
before tax
$'000
Effect on
equity
$'000
% change
Effect on profit
before tax
$'000
Effect on
equity
$'000
US dollars
6%
6
6
6%
6
6
AUD strengthened
AUD weakened
Group - 2023
% change
Effect on profit
before tax
$'000
Effect on
equity
$'000
% change
Effect on profit
before tax
$'000
Effect on
equity
$'000
US dollars
5%
7
7
5%
7
7
The percentage change is the expected overall volatility of the significant currencies, which is based on management's assessment of
reasonable possible fluctuations taking into consideration movements over the last year and the spot rate at the reporting date. A
positive number indicates an increase in profit, a negative number indicates a decrease in profit. The actual foreign exchange gain for
the year ended 31 December 2024 was $10,000 (31 December 2023: loss of $6,000).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit
limits. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The
Group does not hold any collateral.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 26. Financial instruments (continued)
60
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a
provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the
Group based on recent sales experience, historical collection rates and forward-looking information that is available.
Consistent with our credit procedures we categorise our receivables based on days past due and we adjust our expected credit losses in
relation to those receivables as and when there is a change in days past due in expected receivables.
Expected credit loss is initially recognised in respect to a receivable when it is 30 days past due.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) to be able
to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash flows and
matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn
up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required
to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these
totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1 and
2 years
Between 2 and
5 years
Over 5 years
Remaining
contractual
maturities
Group - 2024
%
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
1,817
-
-
-
1,817
Other payables
-
379
-
-
-
379
Loans
-
48
142
-
-
190
Deferred consideration
-
450
-
-
-
450
Contingent consideration
-
-
600
2,739
-
3,339
Interest-bearing - variable
Trade financing
9.74%
849
401
-
-
1,250
Lease liability
8.02%
185
87
-
-
272
Interest-bearing - fixed rate
Credit cards*
23.99%
24
-
-
-
24
Insurance premium funding
5.10%
217
-
-
-
217
Total non-derivatives
3,969
1,230
2,739
-
7,938
*
Credit card balances are paid in full each month in accordance with their interest-free period and no interest has been charged during the year.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 26. Financial instruments (continued)
61
Weighted
average
interest rate
1 year or less
Between 1 and
2 years
Between 2 and
5 years
Over 5 years
Remaining
contractual
maturities
Group - 2023
%
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
1,760
-
-
-
1,760
Other payables
-
280
-
-
-
280
Loans
-
48
178
-
-
226
Interest-bearing - variable
Trade financing
10.74%
322
-
-
-
322
Lease liability
3.26%
545
14
-
-
559
Interest-bearing - fixed rate
Credit cards*
21.72%
73
-
-
-
73
Insurance premium funding
5.19%
155
-
-
-
155
Total non-derivatives
3,183
192
-
-
3,375
*
Credit card balances are paid in full each month in accordance with their interest-free period and no interest has been charged during the year.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Note 27. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on
the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1
Level 2
Level 3
Total
Group - 2024
$'000
$'000
$'000
$'000
Liabilities
Contingent consideration
-
-
2,703
2,703
Total liabilities
-
-
2,703
2,703
Assets and liabilities held for sale are measured at fair value on a non-recurring basis.
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to
their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate
that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Due to the nature of contingent consideration, it has been categorised as Level 3.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 27. Fair value measurement (continued)
62
Contingent consideration represents the obligation to pay additional amounts to vendors in respect of businesses acquired by the Group,
subject to certain conditions being met. It is measured at the present value of the estimated liability. The fair value of contingent
consideration is calculated on the expected future cash outflows. Generally, the contingent consideration is a performance based
payment. These are reviewed at the reporting date to provide the expected future cash outflows for each contract. Upon completion of
the review the future cash outflows are then discounted to present value using the Group's incremental borrowing rate.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Contingent
consideration
Group
$'000
Balance at 1 January 2023
-
Balance at 31 December 2023
-
Additions
3,339
Present value adjustment
(636)
Balance at 31 December 2024
2,703
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Range
Description
Unobservable inputs
(weighted average)
Sensitivity
Contingent consideration Risk adjusted discount
rate
7.5%
A change in the discount rate by 1% would
increase/decrease the fair value by $72,000.
Probability - weighted
estimated cash flows
Contingent consideration
has been estimated using
techniques by discounting
the probability - weighted
estimated cash flows.
A change in revenue delivered in FY27 by 10% would
increase/decrease the fair value by $154,000
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
63
Note 28. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Ltd, the auditor of the Company,
and its network firms:
Group
2024
2023
$
$
Audit services - BDO Audit Pty Ltd
Audit or review of the financial statements
246,500
221,500
Other services - BDO Audit Pty Ltd
Taxation compliance services
20,000
23,261
Other advisory services
45,373
6,560
65,373
29,821
311,873
251,321
Other services - network firms
Taxation services
95,124
84,108
Note 29. Contingent liabilities
The Group had no contingent liabilities as at 31 December 2024 and 31 December 2023.
Note 30. Commitments
Group
2024
2023
$'000
$'000
Inventory purchase commitments
Committed at the reporting date but not recognised as liabilities, payable:
Inventory purchases under contract
872
1,009
Note 31. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out below:
Group
2024
2023
$
$
Short-term employee benefits
749,035
683,782
Post-employment benefits
79,133
64,053
Termination benefits
175,616
-
Share-based payments
30,526
245,422
1,034,310
993,257
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
64
Note 32. Related party transactions
Parent entity
Elixinol Wellness Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 35.
Key management personnel
Disclosures relating to key management personnel are set out in note 31 and the remuneration report included in the Directors' report.
Transactions between the parent company, its subsidiaries and joint operations are eliminated on consolidation and are not disclosed in
this note.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Group
2024
2023
$
$
Current payables:
Superannuation payable to director, David Fenlon
5,501
-
Superannuation payable to director, Pauline Gateley
9,582
-
All transactions were made on normal commercial terms and conditions and at market rates.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 33. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$'000
$'000
Loss after income tax
(4,596)
(7,436)
Total comprehensive loss
(4,596)
(7,436)
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 33. Parent entity information (continued)
65
Statement of financial position
Parent
2024
2023
$'000
$'000
Total current assets
410
650
Total assets
3,594
7,577
Total current liabilities
1,234
1,099
Total liabilities
3,961
1,114
Equity
Issued capital
228,291
223,251
Share-based payments reserve
388
886
Accumulated losses
(229,046)
(217,674)
Total (deficiency)/equity
(367)
6,463
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Except for the deed of cross guarantee, as detailed in note 36, the parent entity had no other guarantees in relation to the debts of its
subsidiaries as at 31 December 2024 and 31 December 2023.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2024 and 31 December 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2024 and 31 December 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, 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
Note 34. Business combinations
31 December 2024
Ananda Food Pty Ltd (‘Ananda Food’)
On 12 February 2024, Elixinol Wellness announced that it entered into a Share Purchase Agreement ('Share Purchase Agreement') with
Ecofibre Limited ACN 140 245 263 (ASX: EOF) to purchase 100% of the ordinary shares of Ananda Food Pty Ltd ACN 107 362 863 (a wholly
owned subsidiary of Ecofibre) for consideration of $2,000,000 in cash and up to $1,000,000 contingent consideration subject to the cat
litter product sales between 1 April 2024 and 30 June 2025. The fair value estimated contingent consideration payable based on current
forecast is $109,000. The transaction completed on 28 March 2024.
Ananda Food Pty Ltd ('Ananda Food') is one of Australia’s largest hemp producers. Ananda Food is focused on low-cost, high-quality
production of hemp ingredients and products for bulk, branded and private label customers. Ananda Food produces a range of Australian
grown hemp-derived products and food which is complementary and expands on Elixinol Wellness’ own range of hemp products.
The acquired business contributed revenues of $140,000 and loss after tax of $275,000 to the Group for the period from 29 March 2024
to 31 December 2024. The values identified in relation to the acquisition of Ananda Food Pty Ltd are final as at 31 December 2024.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Business combinations (continued)
66
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
200
Trade receivables
390
Other receivables
161
Inventories
1,526
Plant and equipment
548
Right-of-use assets
118
Intangibles - Brand
64
Intangibles - Trademarks
42
Trade payables
(458)
Other payables
(500)
Deferred tax liability
(22)
Lease make good provision
(49)
Lease liability
(152)
Net assets acquired
1,868
Goodwill
241
Acquisition-date fair value of the total consideration transferred
2,109
Representing:
Cash paid or payable to vendor
2,000
Contingent consideration
109
2,109
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
2,109
Less: cash and cash equivalents
(200)
Less: contingent consideration
(109)
Net cash used
1,800
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Business combinations (continued)
67
The Healthy Chef Pty Ltd
On 25 October 2024, the Company executed a business purchase deed to acquire the business and assets of The Healthy Chef, Pty Ltd,
Healthy Chef Stock & Research Development and EHealth And Wellbeing Pty Ltd (collectively 'Healthy Chef'). This acquisition followed
the successful capital raise of $1.075 million (before costs) through an institutional placement. The Healthy Chef is a premium lifestyle
brand focussed on clean nutrition for women's health, inner beauty and overall wellbeing. The acquisition aligns with Elixinol's strategy
to build a 'House of Brands' that prioritises sustainable nutrition and growth across multiple revenue streams. The acquisition contributed
$694,000 to revenue and $215,000 to net profit after tax of the Group for the year ended 31 December 2024. The values identified in
relation to the acquisition are provisional as at 31 December 2024 whilst the fair value purchase price accounting is validated.
Details of the acquisition are as follows:
Fair value
$'000
Trade receivables
49
Inventories
431
Intangibles - Other
3,733
Trade payables
(68)
Employee benefits
(121)
Net assets acquired
4,024
Goodwill
-
Acquisition-date fair value of the total consideration transferred
4,024
Representing:
Cash paid or payable to vendor
471
Elixinol Wellness Limited shares issued to vendor
400
Deferred consideration
450
Contingent consideration
2,703
4,024
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
4,024
Less: contingent consideration
(2,703)
Less: deferred consideration
(450)
Less: shares issued by Company as part of consideration
(400)
Net cash used
471
31 December 2023
The Sustainable Nutrition Group Ltd
On 17 August 2023, Elixinol Wellness Limited acquired 100% of the ordinary shares of The Sustainable Nutrition Group Ltd ('TSN') for the
total consideration transferred of $1,898,000. The acquisition increased size and scale for both Elixinol Wellness and TSN and has seen
the Group expand to own and operate brands across four key verticals: plant-based food and nutrition, hemp-based nutraceuticals
(including cannabinoids such as CBD), pet nutritional supplements and skin health. TSN brands include Australian Primary Hemp, Mt
Elephant, Field Day and The Australian Superfood Company. The values identified in relation to the acquisition of The Sustainable
Nutrition Group were final as at 30 June 2024.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Business combinations (continued)
68
Details of the acquisition are as follows:
Fair value
$'000
Cash and cash equivalents
191
Trade and other receivables
201
Inventories
2,514
Property, plant and equipment - Motor vehicles
38
Property, plant and equipment - Machinery
690
Right-of-use assets
82
Intangibles - Brand name
1,232
Intangibles - Patents and trademarks
87
Security deposits
940
Trade and other payables
(936)
Deferred tax liability
(308)
Employee benefits
(117)
Loan to Elixinol Wellness Limited
(2,571)
Commercial loans
(880)
Lease liability
(83)
Net assets acquired
1,080
Goodwill
818
Acquisition-date fair value of the total consideration transferred
1,898
Representing:
Cash paid or payable to vendor
-
Elixinol Wellness Limited shares issued to vendor
1,898
1,898
Acquisition costs expensed to profit or loss
-
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
1,898
Less: cash and cash equivalents
(192)
Less: shares issued by Company as part of consideration
(1,898)
Net cash received
(192)
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
69
Note 35. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 2:
Principal place of
Ownership interest
business / Country of
2024
2023
Name
incorporation
%
%
Elixinol LLC
United States of America
100%
100%
EXL International Holdings LLC
United States of America
100%
100%
Elixinol Wellness (Corporate Services) Pty Ltd
Australia
100%
100%
Elixinol Wellness (Byron Bay) Pty Ltd
Australia
100%
100%
Elixinol BV
Netherlands
100%
100%
Elixinol Ltd
United Kingdom
100%
100%
The Sustainable Nutrition Group Pty Ltd
Australia
100%
100%
The Sustainable Nutrition Group (Australia) Pty Ltd
Australia
100%
100%
Alchemia Oncology Pty Ltd
Australia
100%
100%
Ananda Food Pty Ltd
Australia
100%
-
Note 36. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Elixinol Wellness Limited
Elixinol Wellness (Corporate Services) Pty Ltd
Elixinol Wellness (Byron Bay) Pty Ltd
Elixinol LLC
EXL International Holdings LLC
Elixinol BV
Elixinol Ltd
The Sustainable Nutrition Group Pty Ltd
The Sustainable Nutrition Group (Australia) Pty Ltd
Alchemia Oncology Pty Ltd
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties to
the deed of cross guarantee that are controlled by Elixinol Wellness Limited, they also represent the 'Extended Closed Group'.
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements and
directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.
The consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position are
substantially the same as the Group and therefore have not been separately disclosed.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
70
Note 37. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Group
2024
2023
$'000
$'000
Loss after income tax benefit/(expense) for the year
(1,722)
(7,507)
Adjustments for:
Depreciation and amortisation
1,042
597
Impairment of non-current assets
86
1,414
Impairment of right-of-use assets
-
184
Impairment of inventory
285
120
Net loss on disposal of property, plant and equipment
-
2
Share-based payments
46
675
Non-operating interest
-
(178)
Others
(119)
(33)
Change in operating assets and liabilities:
Decrease in trade and other receivables
537
1,321
Decrease in inventories
1,730
470
(Increase)/decrease in income tax refund due
(1)
46
Increase in deferred tax assets
(3,590)
-
Decrease/(increase) in prepayments, deposits and other
133
63
Decrease in trade and other payables
(460)
(493)
(Decrease)/increase in contract liabilities
(530)
530
(Decrease)/increase in other provisions
(196)
25
(Decrease)/increase in in accrued expenses
(710)
171
Decrease in premium funding
-
(165)
Net cash used in operating activities
(3,469)
(2,758)
Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's
consolidated statement of cash flows as cash flows from financing activities.
Loan with Raw
Trade financing
-
Trade financing
- Shopify and
Lease
With Life
Scot Pac
Paypal
liabilities
Total
Group
$'000
$'000
$'000
$'000
$'000
Balance at 1 January 2023
250
-
-
1,265
1,515
Net cash from/(used in) financing activities
-
300
-
(738)
(438)
Exchange differences
-
-
-
18
18
Other changes
(24)
22
-
-
(2)
Balance at 31 December 2023
226
322
-
545
1,093
Net cash from/(used in) financing activities
-
460
468
(1,041)
(113)
Other changes
(36)
-
-
769
733
Balance at 31 December 2024
190
782
468
273
1,713
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
71
Note 38. Earnings per share
Group
2024
2023
$'000
$'000
Loss after income tax attributable to the owners of Elixinol Wellness Limited
(1,722)
(7,507)
Number
Number*
Weighted average number of ordinary shares used in calculating basic earnings per share
154,552,184
59,226,508
Weighted average number of ordinary shares used in calculating diluted earnings per share
154,552,184
59,226,508
Cents
Cents
Basic loss per share
(1.11)
(12.68)
Diluted loss per share
(1.11)
(12.68)
*
Weighted average number of ordinary shares have been restated to account for the 1:8 share consolidation in the current year.
Performance rights (note 39) have not been included in the calculation diluted earnings per share as their inclusion would be anti-dilutive
to the Group as at 31 December 2024 and 31 December 2023.
Note 39. Share-based payments
The Group has established a long-term incentive share-based payment ('LTIP'). Under the LTIP, the Board at its absolute discretion can
issue options and performance rights over ordinary shares in the Company to directors, key management personnel and employees.
During the current year 33,241,478 performance rights were issued for $nil consideration and the share-based payment debit in profit
or loss was $46,000, that included $311,000 credit for forfeitures and $357,000 debit for current period expense. The equity movement
was a credit of $499,000 that included $545,000 credit for performance rights exercised as issued capital, and $46,000 movement in the
share-based payment reserve.
During the prior year 95,903,647 performance rights were issued for $nil consideration and the share-based payment debit in profit or
loss was $128,000, that included $212,000 credit for forfeitures and $340,000 debit for prior period expense. The equity movement was
a credit of $126,000 that included $64,000 credit for performance rights exercised as issued capital, and $331,000 movement in the
share-based payment reserve.
Performance rights are awarded based on the fixed amount to which the individual is entitled. Upon satisfaction of vesting and
employment conditions, each performance right will, at the Company’s election, convert to a share on a one-for-one basis or entitle the
participant to receive in cash to the value of a share at the Board’s discretion in lieu of an allocation of shares.
Share Rights granted during 2023 were issued in two equal tranches. The performance period for Tranche 1 is 18 months from 1 January
2023 to 30 June 2024 and the performance period for Tranche 2 is 3 years from 1 January 2023 to 31 December 2025.
The vesting dates are as follows:
Share Rights granted in 2023
Vesting date
Tranche 1 - 30 August 2024
Tranche 2 - 28 February 2026
There were no Share Right grants made during 2024 for the LTIP.
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 39. Share-based payments (continued)
72
Grant dates and details
2024
Exercise
Balance at
the end of
Expired/
forfeited/
Expired/
forfeited/
Adjustment to
account for
share
consolidation
Balance at
the end of
Grant date Expiry date
price
the year
Granted
Exercised
other
8:1
the year
07/06/2023 30/10/2025
$0.16
131,000,001
-
-
-
(114,624,904)
16,375,097
31/08/2023 07/10/2026
$0.16
2,291,667
-
-
-
(2,005,207)
286,460
23/11/2023 27/08/2027
$0.16
1,527,778
-
-
-
(1,336,805)
190,973
134,819,446
-
-
-
(117,966,916)
16,852,530
The weighted average share price during the financial year was $0.015.
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.67 years.
Set out below are summaries of performance rights granted:
2024
Balance at
the start of
Expired/
forfeited/
Adjustment to
account for
share
consolidation
Balance at
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
8:1
the year
30/07/2020
30/10/2025
62,271
-
-
(62,271)
-
-
07/07/2021
07/10/2026
1,547,376
-
-
(1,547,376)
-
-
27/05/2022
27/08/2027
4,842,305
-
-
(4,842,305)
-
-
21/01/2022
21/04/2027
280,879
-
-
(280,879)
-
-
27/05/2022
27/08/2027
1,166,027
-
-
(700,274)
(407,533)
58,220
31/05/2023
31/08/2028
5,347,223
-
-
(5,347,223)
-
-
03/10/2023
31/08/2028
67,128,638
-
(35,330,829)
(20,097,238)
(10,237,999)
1,462,572
31/05/2024
31/08/2029
-
13,541,667
(13,541,667)
-
-
-
31/05/2024
31/08/2029
-
19,699,811
(19,699,811)
-
-
-
80,374,719
33,241,478
(68,572,307)
(32,877,566)
(10,645,532)
1,520,792
2023
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
the year
30/07/2020
30/10/2025
62,271
-
-
-
62,271
07/07/2021
07/10/2026
2,210,204
-
-
(662,828)
1,547,376
27/05/2022
27/08/2027
7,756,755
-
-
(2,914,450)
4,842,305
21/01/2022
21/04/2027
467,692
-
-
(186,813)
280,879
27/05/2022
27/08/2027
1,631,780
-
-
(465,753)
1,166,027
21/04/2023
22/07/2028
-
9,247,011
(9,247,011)
-
-
21/04/2023
22/07/2028
-
5,582,545
(3,561,137)
(2,021,408)
-
31/05/2023
31/08/2028
-
4,778,785
(4,778,785)
-
-
31/05/2023
31/08/2028
-
9,166,668
(3,819,445)
-
5,347,223
03/10/2023
31/08/2028
-
67,128,638
-
-
67,128,638
12,128,702
95,903,647
(21,406,378)
(6,251,252)
80,374,719
Elixinol Wellness Limited
Notes to the consolidated financial statements
31 December 2024
Note 39. Share-based payments (continued)
73
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 3.04 years (31
December 2023: 2.39 years).
Valuation model inputs
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Share price
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant date
volatility*
yield
interest rate*
at grant date
31/05/2024
31/08/2029
$0.004
-
-
-
$0.0090
31/05/2024
31/08/2029
$0.004
-
-
-
$0.0050
*
Where no % is stated there are no market vesting conditions attached to the performance rights and vesting condition includes continuity of service.
Volatilities, betas and correlations (all using the equally weighted model) are calculated using the Stambaugh method, which handles
assets with short price histories (e.g. newly listed stocks) without truncating the histories of all the assets to match the number of prices
for the assets with the shortest history.
Note 40. Events after the reporting period
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
Elixinol Wellness Limited
Consolidated entity disclosure statement
As at 31 December 2024
74
Place formed / Country
of
Ownership
interest
Entity name
Entity type*
incorporation
% Tax residency
Elixinol Wellness Limited**
Body Corporate
Australia
Dual - Australia and United
States of America
Elixinol LLC
Body Corporate
United States of America
100.00% United States of America
EXL International Holdings LLC
Body Corporate
United States of America
100.00% United States of America
Elixinol Wellness (Corporate Services) Pty Ltd
Body Corporate
Australia
100.00% Australia
Elixinol Wellness (Byron Bay) Pty Ltd
Body Corporate
Australia
100.00% Australia
Elixinol BV
Body Corporate
Netherlands
100.00% Netherlands
Elixinol Ltd
Body Corporate
United Kingdom
100.00% United Kingdom
The Sustainable Nutrition Group Pty Ltd
Body Corporate
Australia
100.00% Australia
The Sustainable Nutrition Group (Australia)
Pty Ltd
Body Corporate
Australia
100.00% Australia
Alchemia Oncology Pty Ltd
Body Corporate
Australia
100.00% Australia
Ananda Food Pty Ltd
Body Corporate
Australia
100.00% Australia
*
None of the entities noted above were trustees of trusts within the Group, partners in a partnership within the Group or participants in a joint venture within the Group
**
Elixinol Wellness Limited is the head entity of the Group.
Basis of preparation
This consolidated entity disclosure statement ('CEDS') has been prepared in accordance with subsection 295(3A)(a) of the Corporations
Act 2001. The entities listed in the statement are Elixinol Wellness Limited and all the entities it controls as at 31 December 2024 in
accordance with AASB 10 'Consolidated Financial Statements'.
Elixinol Wellness Limited
Directors' declaration
31 December 2024
75
In the Directors' opinion:
●
The attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements
●
The attached financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 2 to the financial statements;
●
The attached financial statements and notes give a true and fair view of the Group's financial position as at 31 December 2024 and
of its performance for the financial year ended on that date;
●
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
and
●
At the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be
able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in note 36 to the financial statements.
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
David Fenlon
Independent Non-Executive Director and Chair
28 February 2025
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050
110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are
members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REPORT
To the members of Elixinol Wellness Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Elixinol Wellness Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 31 December 2024,
the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial report, including material accounting policy information, the consolidated
entity disclosure statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
2
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Acquisition Accounting
Key audit matter
How the matter was addressed in our audit
As disclosed in note 34 in the financial statements, the
Group completed the acquisition of Ananda Health and
Healthy Chef.
Given the significance of the transactions and the
complexities associated with accounting for the
acquisition in accordance with AASB 3 Business
Combinations, the acquisition accounting is a
significant area of focus for the audit.
Our procedures included but were not limited to:
•
Reviewing the purchase agreements in relation to
the acquisition;
•
Reviewing the accounting treatment for the
acquisition;
•
Confirming the date of acquisition;
•
Performing testing on the fair value of the net
assets acquired on acquisition date;
•
Assessing the fair value of consideration paid;
•
Confirming that the acquisition was a business
acquisition in accordance with AASB 3 Business
Combinations; and
•
Reviewing the purchase price allocation
Impairment of intangibles
Key audit matter
How the matter was addressed in our audit
As disclosed in note 16 in the financial statements, the
Group acquired a significant amount of intangible
assets and goodwill through acquisitions.
Our procedures included but were not limited to:
•
Obtain and review management’s detailed
impairment assessment, including considering the
3
Given the high degree of estimation and judgement
involved in forecasting cashflows and reviewing the
impairment models, impairment of intangibles is a
significant focus of the audit.
reasonableness of assumptions used and
conclusions reached.
•
Considered historic and projected performance to
ascertain any potential impairment required; and
•
Reviewed disclosure in the financial statements to
meet the requirements of AASB 136 Impairment of
assets
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2024, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a) the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i) the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error; and
ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
4
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included of the directors’ report for the year ended 31
December 2024.
In our opinion, the Remuneration Report of Elixinol Wellness Limited, for the year ended 31 December
2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Leah Russell
Director
Sydney 28 February 2025
Elixinol Wellness Limited
Shareholder information
31 December 2024
80
The shareholder information set out below was applicable as at 21 February 2025.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Unlisted options over ordinary
shares
Rights over ordinary shares
% of total
% of total
% of total
Number
shares
Number
shares
Number
shares
of holders
issued
of holders
issued
of holders
issued
1 to 1,000
5,534
0.58
-
-
-
-
1,001 to 5,000
1,826
1.79
-
-
-
-
5,001 to 10,000
398
1.29
60
2.47
-
-
10,001 to 100,000
874
12.73
78
14.37
9
29.86
100,001 and over
269
83.61
31
83.16
3
70.14
8,901
100.00
169
100.00
12
100.00
Holding less than a marketable
parcel
7,959
4.76
60
2.47
1
0.89
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
FREEDOM TRADER PTY LTD
14,692,194
6.65
MR STUART RESECK & MRS NICOLE DEANNE RESECK (RESECK SUPER FUND A/C)
13,333,334
6.04
CUTTER SUPER PTY LTD (CUTTER SF A/C)
12,500,000
5.66
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10,047,366
4.55
CG NOMINEES (AUSTRALIA) PTY LTD
9,574,074
4.34
UBS NOMINEES PTY LTD
7,838,694
3.55
10 BOLIVIANOS PTY LTD
6,011,427
2.72
G & A ESHUYS SUPERANNUATION PTY LTD (G & A ESHUYS S/F A/C)
4,318,665
1.96
GIDGELL PTY LTD (THE JAY-EM A/C)
4,256,887
1.93
BNP PARIBAS NOMS PTY LTD
4,228,987
1.92
ROSEDALE SUPER PTY LTD (ROSEDALE SUPER FUND A/C)
3,343,022
1.51
CITICORP NOMINEES PTY LIMITED
2,386,228
1.08
JASFORCE PTY LTD (ALEX WAISLITZ RETIRE A/C)
2,306,551
1.04
MS PAULINE THERESE GATELY
2,296,671
1.04
CAPITAL ACCRETION PTY LTD (THE FORTIFIED VALUE A/C)
2,233,798
1.01
INTERDALE PTY LTD (MAPLE SUPER A/C)
2,157,888
0.98
RAW WITH LIFE PTY LTD (BENHAIM TRADING A/C)
2,111,611
0.96
MR DAVID JOHN FENLON
1,563,381
0.71
MR KIERAN JOHN O'BRIEN
1,562,500
0.71
A&N MCINTOSH HOLDINGS PTY LTD (TIGER INVESTMENT A/C)
1,551,196
0.70
108,314,474
49.06
Elixinol Wellness Limited
Shareholder information
31 December 2024
81
Unquoted equity securities
Number
Number
on issue
of holders
Options over ordinary shares issued
16,852,530
169
There were no person that holds 20% or more of unquoted performance rights.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
% of total
shares
Number held*
issued**
CUTTER SUPER PTY LTD (Notice dated 2 December 2024)
12,500,000
5.70
MR STUART RESECK & MRS NICOLE DEANNE RESECK (Notice dated 14 October 2024)
12,500,000
6.40
FREEDOM TRADER PTY LTD (Notice dated 3 April 2024)
11,172,340
7.06
*
Number held has been adjusted for 8:1 share consolidation since notice was provided to Elixinol Wellness.
**
Percentage holding as noted on the date notice was given.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
There are no other classes of equity securities.
Elixinol Wellness Limited
Corporate directory
31 December 2024
82
Directors
David Fenlon - Independent Non-Executive Director and Chair
Pauline Gately - Non-Executive Director
Natalie Butler - Executive Director and Head of Marketing
Group Chief Financial Officer
Josephine Lorenz
Company secretary
Melanie Leydin
Registered office
Level 4
100 Albert Road
South Melbourne VIC 3205
Tel: (02) 4044 4585 (within Australia)
Tel: +61 (0) 2 4044 4585 (outside Australia)
Mailing address
Level 4
100 Albert Road
South Melbourne VIC 3205
Share register
Automic Pty Ltd
Level 5
126 Phillip Street
Sydney NSW 2000
Tel: 1300 288 664 (within Australia)
Tel: +61 (0) 2 9698 5414 (outside Australia)
Auditor
BDO Audit Pty Ltd
Level 11
1 Margaret Street
Sydney NSW 2000
Stock exchange listing
Elixinol Wellness Limited shares are listed on the Australian Securities Exchange (ASX code:
EXL)
Website
www.elixinolwellness.com
X (formerly known as Twitter)
EXLWellness
Corporate Governance Statement
The Company’s directors and management are committed to conducting the Group’s business
in an ethical manner and in accordance with the highest standards of corporate governance.
The Company has adopted and substantially complies with the ASX Corporate Governance
Principles and Recommendations (4th Edition) (‘Recommendations’) to the extent appropriate
to the size and nature of the Group’s operations.
The Company has prepared a Corporate Governance Statement which sets out the corporate
governance practices that were in operation throughout the financial year, identifies any
Recommendations that have not been followed, and provides reasons for not following such
Recommendations.
The Company’s Corporate Governance Statement and policies, which is approved at the same
time as the Annual Report, can be found on its website:
https://investorhub.elixinolwellness.com/governance