P R IME D F OR
GROWTH
A n n u A l R E P O R T 2 0 2 2
Over the past year, Micro‑X has established
the key building blocks to position itself for
the next critical part of its journey.
We continue to be focused on building four
distinct businesses with multiple commercial
products, providing us with the confidence
to realise our potential – strong, sustainable
growth and profitability.
C O nT E nT S
One company, four businesses
Mobile Digital Radiology
IED X‑Ray Camera
Checkpoints
Brain CT
Chair’s Letter
CEO’s Report
Environment, Social and Governance
Financial Report
Corporate Directory
02
04
06
08
10
12
14
18
20
IBC
W H O I S M I C R O ‑ X ?
Micro‑X Limited (ASX:MX1) is a hi‑tech
company developing and commercialising
a range of innovative products for global
health and security markets, based on
proprietary cold cathode, carbon nanotube
(CNT) emitter technology.
P R O V E n T E C H nO l O G Y P l A T F O R M
Our world‑leading technology revolutionises
the potential uses and applications of
x‑ray technology with its far smaller size,
reliability and quality digital images and is
the common platform for all our products.
With a vertically integrated design and
production facility in Adelaide, Australia
and a growing technical and commercial
team based in Seattle, we are rapidly
expanding our commercial operations.
Annual Report 2022
01
01
Our game‑changing
x‑ray technology
platform provides
key advantages
and has multiple
applications
02
We are focused on
four distinct product
lines, with total global
addressable markets
in excess of $US30b
03
Our technology
is internationally
recognised as
world‑leading,
generating new
opportunities
for further
commercialisation
04
Our commercialisation
of products will be
simultaneously in
healthcare and
security imaging
markets
05
Our technology
has now been proven
with over 3 years
in operation across
35 countries
MICRO-X Limited 02
O n E C O M P A n Y ,
F OuR B u S I n E S S E S
M O B I l E D R
I E D X ‑ R A Y C A M E R A
› Argus IED x‑ray camera
development nearing completion.
› Strong customer interest at
multiple security trade shows
– US State and Federal police
and military.
› Building product awareness
and customer interest ahead
of global launch.
› Tender submitted for Australian
Defence procurement Land 154.
› Delivered sales of $3.8m
and a growing global
distribution network.
› Growing brand recognition and
clinical support following global
radiology industry meetings –
RSNA, ECR and numerous
regional conferences.
› Established high‑quality sales
network – including top two
independent distributors in the
US – MXR and Medlink – with
a number of distributors for
EMEA and APAC.
› Growing sales of core
technology to enable further
commercialisation.
Annual Report 2022
03
over
uS$30B
addressable
markets
C H E C K P O I n T S
B R A I n C T
› CT baggage scanner and airport
security checkpoint funded under
two contracts by the US Department
of Homeland Security for US$4m.
› Key design milestones achieved
for both miniaturised CT baggage
scanner and passenger
self‑screening checkpoint.
› Prototype scanner due for
delivery in early 2023 with
preliminary commercial activities
progressed across a range of
airport and security markets.
› Brain CT scanner programme
funded with $8m from the
Australian Stroke Alliance.
› Technical progress on time and
on budget – met first milestones
in 2022.
› Early work with Johns Hopkins
University indicates imaging
performance will exceed initial
diagnostic objectives.
› Strong international interest
in airborne applications
with helicopter emergency
medical services.
MICRO‑X Limited
04
M O B I l E
D I G I T A l
R A D I O l O G Y
Micro‑X’s suite of Mobile DR imaging
products addresses the medical,
veterinary and OEM customer
segments. The Rover is Micro‑X’s
first fully integrated digital x‑ray
system for bedside imaging in
hospitals, private practices, home
care and temporary medical facilities.
In 2021, the Rover was listed on the
Australian Register of Therapeutic
Goods and gained FDA clearance,
with approval being sought for
the device’s sale in Europe.
Micro‑X has a multi‑channel
commercial strategy with OEM
suppliers continuing to sell
first‑generation Nano units for use
in hospitals around the world, while
a network of independent distributors
sell the proprietary Micro‑X Rover
system. This includes agreements
with the two largest independent
radiology distributors in the US
– Medlink and MXR. Micro‑X’s team is
looking for new ways to commercialise
its imaging technology, such as selling
imaging chain components to DMS
Imaging for incorporation in new
imaging products.
With the Rover’s key advantages
in field deployable health solutions,
mobile x‑ray systems were delivered
to Ukrainian hospitals, allowing point
of care imaging of wounded civilians.
In the US, Micro‑X entered the elite
sports market with the delivery of
a Rover to Major League Baseball
team the Seattle Mariners.
Future product evolution for the
Micro‑X Rover centres on the new
x‑ray tube and in‑house developed
generator, which extends the
Rover’s imaging capability into more
demanding x‑ray exams required
in emergency departments and
operating theatres. To be launched
as Rover Plus, this product is now
in the final stages of manufacturing
validation and preparations are
underway building stock to transition
production into the new model.
“Rovers will allow Ukrainian
doctors to run point of care
diagnostic procedures in a timely
manner, saving critical minutes
needed to treat wounded patients.”
Nova Ukraine’s Dr Olena Stadnyuk
Annual Report 2022
05
“The Rover is ideally
suited for use in
the professional
sports environment.
Having the ability to
produce high‑quality
images from such a
versatile and mobile
unit right in our
ballpark is a game
changer for our
medical team.”
Seattle Mariners Senior
Director of High Performance
Rob Scheidegger
MICRO-X Limited 06
I E D X ‑ R A Y
C A M E R A
Our x‑ray camera
provides for the first
time rapid assessment
of improvised explosive
devices. The Argus will
transform how bomb
disposal technicians
work, providing greater
safety by eliminating
the need to go down
range to place a
detector behind the
suspected bomb.
Micro‑X has named the IED camera
after Argus, a Greek mythological
character with 100 eyes who
was all‑seeing. Micro‑X’s Argus
combines NEX Technology with
unique backscatter imaging enabling
bomb disposal experts to deploy the
Argus unit and identify the possible
threat from a remote location.
Its design substantially reduces
or eliminates the critical time
over target.
We were asked to solve this bomb
imaging problem in a contract with
the Australian Defence Force’s
Counter‑IED Task Force, where
we successfully developed and
demonstrated proof‑of‑concept,
high‑resolution x‑ray imaging using
a self‑contained x‑ray camera.
To enable Argus to be small and
able to be deployed on a robot,
Micro‑X has pioneered the design
of smaller electronic x‑ray tubes,
unique backscatter imaging and
miniature high voltage generators
manufactured in Adelaide.
Commercial launch and
first sales expected FY2023
uS$1.8B
addressable market
with no similar
competing technology
Annual Report 2022
07
Successful testing
and images from an
integrated Argus
unit achieved
Argus enables scanning, allowing
a rapid bomb/no bomb assessment
to be made quickly by identifying the
presence of explosive material and
providing high definition imagery down
to component level. This technology
opens the way for many more
applications, including contraband
detection, maritime interdiction
and border protection operations.
With successful first imaging
of an integrated Argus system
now achieved, the final integration
of all the Argus sub‑systems
and refinement of high‑voltage
components are underway.
This will be followed by verification
and validation testing ahead
of Argus’ launch.
Demonstrations to defence,
security and police agencies
in coming months
MICRO-X Limited 08
C H E C K P O I n T S
Micro‑X is changing
the way passengers
experience airport
security, with our
revolutionary x‑ray
technology forming
part of a solution to
make checkpoints
easier, faster
and safer.
M I nI A T uR I S E D C T
B A G G A G E S C A n n E R
Micro‑X’s patented carbon nanotube
emitter technology is creating the
next generation of miniaturised CT
baggage scanners that will be able
to scan all of a passenger’s carry‑on
luggage, with no need to remove
items such as liquids and electronics.
The US Department of Homeland
Security (DHS) has funded the
development of the baggage scanner
programme, with delivery of two
prototype scanners planned for 2023.
The US Transportation Security
Administration (TSA) is an agency
within DHS that currently manages
approximately 2,200 conventional
airport x‑ray scanners for passenger
carry‑on luggage, deployed in
440 US airports.
Micro‑X’s miniaturised CT baggage
scanner is a small modular
self‑contained device, 15 times
shorter than a conventional x‑ray
conveyor system. The scanner
performs a rapid 20‑second scan
of all of a passenger’s luggage and
personal items (up to 3 roller bags
simultaneously) and produces
a high‑resolution dual‑energy CT
image that enables the application
of fully automated threat detection
algorithms. The combination of
automation and compact scanner
size enables multiple scanners to
replace a single conventional x‑ray
scanner, increasing passenger
throughput and improving security,
while also reducing the burden on
the operators.
First sales planned 2024
CT baggage
scanner
prototype
uS$24B
total addressable
market
Annual Report 2022
09
Development
to commercial
prototypes
funded
uS$4M
The small modular design of the
system enables flexible and scalable
deployment. This broadens the
application of the scanner to range
from large international airports
through to small regional airports;
additionally, the scalable design
enables deployment beyond the
airport to other applications such
as secure buildings, stadiums,
prisons, and other transportation
infrastructure such as trains,
metros, and buses.
We are already building customer
awareness of our scanner’s
capabilities for standalone airport
checkpoint screening and in other
potential applications outside the
aviation industry.
I n T E G R A T E D
S ElF ‑ S C R E E n I n G
A I R P O R T C H E C K P O I n T
Micro‑X is also leading a
consortium of global experts to
design a passenger self‑screening
airport checkpoint, funded by the
US Department of Homeland
Security. The checkpoint solution
will revolutionise the airport travel
experience, providing passengers
with the ability to be fully screened
for travel, with faster movement
through the carry‑on scanning
checkpoint while increasing
threat detection due to
three‑dimensional imaging.
The cornerstone of the checkpoint
portal is Micro‑X’s miniaturised
CT baggage scanner, which is then
combined with real‑time body
screening, passport or ID checking,
and automated threat detection
technologies. This total package will
allow airports to replace each of their
current, traditional airport checkpoint
lanes, with up to seven new Micro‑X
fully self‑service portals in the
same footprint.
In 2022, the US Department of
Homeland Security accepted
Micro‑X’s initial concept design for
the self‑service checkpoint solution.
Micro‑X has been working with a wide
range of stakeholders to ensure the
design meets the needs of airlines,
passengers and security agencies,
while building interest beyond
the United States.
MICRO-X Limited 10
B R A I n C T
Our ambition is for
every ambulance
on land or in the air,
to include a miniature
brain CT scanner
enabling point‑of‑care
stroke diagnosis to save
precious minutes for
stroke patients.
The CT scanner contract was
signed this year at the Royal
Flying Doctor Service in Adelaide.
The first two project milestones
for the development of the Brain
CT have been delivered on time,
and on budget, with the commercial
product launch to follow clinical trials
and regulatory approval in 2024.
This year significant progress
has been made to reduce core
technology risk, including the testing
of a novel curved x‑ray detector
supplied by partner Fujifilm, and
demonstrating the possibility of
achieving diagnostic quality images
from research conducted by partner
The Johns Hopkins University.
Using our proprietary NEX Technology,
Micro‑X is working with the Australian
Stroke Alliance to develop the world’s
first miniature brain CT scanner which
will deliver diagnostic quality images
in a unit that is small and light
enough to be mounted in any
road or air ambulance.
In stroke management, the goal
is to diagnose the type of stroke
and commence treatment within
the first hour of the event, known
as the Golden Hour. This faster
treatment significantly improves
patient outcomes, particularly
in remote or rural locations
where CT diagnosis is far away.
The CT scanner will use Micro‑X’s
core technology, downsizing it from
150mm in diameter to 40mm in
diameter. Unlike a large conventional
CT with a rotating x‑ray tube,
Micro‑X’s scanner will provide
three‑dimensional images courtesy
of a curved array of mini‑tubes
that are electronically directed
to operate in quick succession.
Funded by Australian Stroke Alliance with
partners Fujifilm, Johns Hopkins university
and Monash Design Health Collab
Annual Report 2022
11
* Early imaging results from
simulation and bench top
testing by Johns Hopkins
University demonstrate
the image quality of
Micro‑X’s Brain CT.
*
*
uS$5B
addressable
market
*
Development
funded with $8m
from the Australian
Medical Research
Future Fund
MICRO-X Limited 12
C H A I R ’ S
l E T T E R
We have
achieved significant
developmental growth
this year, with advances
in our product portfolio
complemented by
our strengthened
commercial and
sales capability.
The execution of our two development
contracts with DHS for airport
security is on time, and on budget,
with DHS approving Micro‑X’s
designs for the Baggage Scanner
and the Self‑Screening Checkpoint.
Likewise, our brain CT scanner
milestones have been met on
schedule and on budget, with
the first clinical trials due to
commence in 2024.
Beyond these projects, a number
of parties have expressed interest
in a strategic relationship to leverage
Micro‑X’s proprietary technology.
Under the leadership of our Managing
Director Peter Rowland, relationships
with key industry players have
remained strong, cementing our
excellent reputation among the
healthcare and security industries.
Looking back over the year, the
second in my role as Chair of the
board, Micro‑X has made progress
over all four of our business units,
with much more to be achieved
over the coming 12 months.
Our team in Seattle has grown with
the inclusion of a high‑quality sales
capability, driving engagement in the
target market, while collaborations
between the Tonsley and Seattle
engineering teams successfully
deliver milestones with our
Department of Homeland Security
contracts. Our strong presence in
Seattle is a strategic decision, led
by our manager of airport security,
to drive connections with US
customers and technology partners.
Our business has further matured
over the past 12 months, including
the formation of business units to
drive innovation and the delivery
of our world‑leading technologies.
Our next product to be launched,
the Argus IED x‑ray camera, is
in final integration testing, with
our compliant submission to an
Australian Department of Defence
Request for Tender providing
confirmation that Argus’ unique
capability meets the needs of
our target market.
Annual Report 2022
13
“Micro‑X has matured this year,
pivoting from a technology focus
to one of commercialisation.”
It was a difficult year globally for
companies, with instability in the
stock market driven by supply
constraints from China and the war
in Ukraine, along with rising inflation
and interest rates. Like most of our
peers, this instability has affected us.
While we expect this to be short‑term
pain, particularly with the delivery of
new products to the market over the
coming year, we have taken steps to
ensure we remain financially strong.
This year, management has cut
overhead costs by 20 per cent on a
like‑for‑like basis and will continue
tight cost management as new
products are developed and
brought to market.
The development of our innovative
technology continues, with new tube
designs in development for our four
business units and the successful
development of Micro‑X’s in‑house
high‑voltage technology, providing
generators for all our products.
This is a big achievement which
both underpins the next phase
of development of our technology
and reduces the costs of our
existing products.
Our board has continued to expand
its expertise and this year we were
pleased to have Ilona Meyer join
us as a non‑executive director,
with her wealth of experience in
the areas of governance, healthcare
and emerging technologies.
I would like to thank shareholders for
their support as the company pivots
from a technology development focus
to one of commercialisation. I would
also like to thank the entire team at
Micro‑X for continuing to innovate
our technology while focussing on
commercialisation and business
development. I expect the pace of
commercialisation to increase
markedly in the coming 12 months.
David Knox
Chair
MICRO-X Limited 14
C E O ’ S
R E P O R T
‘One company – four
businesses’ has been
the strategy driving our
focused execution this
year and we are thrilled
to be launching our
first security product
in the coming months.
I am pleased to report on another
year in which Micro‑X once again
achieved many technical and
commercial milestones which
have broadened and strengthened
the foundations of our business,
in turn positioning us for strong
future growth.
This has been the first full year
for the Micro‑X team operating in
the four business units which have
enabled customer‑centric focussed
development and growth in each.
Our core technology, which supports
all four business units, has also
advanced significantly with the
development of two new x‑ray tubes,
one for quadrupling the imaging
capability of the Rover and a radically
new x‑ray tube to power both the
Argus IED x‑ray camera and the
Miniature Baggage CT Scanner.
But perhaps the biggest advancement
in our core technology was bringing
in‑house the capability that led
us to successfully develop and
now manufacture, our own unique
high‑voltage generators.
This has given us our own high‑power
generator for the Micro‑X Rover
which is world‑leading in its small
size, efficiency and extended battery
life. This also enabled us to develop
an ultra‑miniature power generator
for our Argus, using state‑of‑the‑art
techniques to miniaturise a
160kV power supply into the small
form‑factor we needed for the
Argus camera package.
“This year laid the foundations
for our future growth, delivering
developmental pathways for our
next three products, which will
drive the future value in Micro‑X.”
Annual Report 2022
15
A F O u n D A T I O n A l
Y E A R F O R O u R n E W
P A T H In M O B I l E
D I G I T A l R A D I O l O G Y –
S u C C E S S F u l Gl O B A l
l A u nC H A T R S n A
The strategy of multiple, parallel
paths to market is critical to
achieving our targeted market
share in mobile digital radiology.
We see this as a mixture of
high‑profile, independent distributors
selling the Micro‑X branded entire
product, complemented by OEMs
selling Rover carts under their own
brand; imaging chain components
being incorporated into new OEM
products; and distribution partners
selling Rover with their own
software and detectors.
We carefully built a new, highly
experienced sales and management
team in the US and Europe, starting
with the key appointment of our new
Divisional Head, Charlie Hicks, in
late 2021. This team then built out
our own independent distribution
network which I am pleased to report
is almost complete. To achieve this,
the key turning point came with our
first corporate presence at the RSNA
industry conference last December
which provided the fillip in brand
recognition we needed with
customers and clinicians in global
radiology markets. Crucially, this
momentum enabled Micro‑X to
attract and engage much larger and
more capable distributors for the
Rover than was previously possible.
This was particularly true in North
America where, prior to RSNA, we
were envisaging a large number of
state‑by‑state dealers would be
needed to attain a comprehensive
geographic coverage.
Following RSNA and the radiology
industry’s new perception of Micro‑X
and the product’s capabilities, we
were able to sign up the two largest
national distributors in the United
States and we now have a truly
nationwide US sales footprint
which is not only more cost‑effective
to manage and support but much
more in keeping with the brand
positioning of the Rover.
Simultaneously in Europe, we
established local sales management
and now have five new distribution
channels for the EMEA region
signed up and waiting for, hopefully
imminent, EU regulatory clearance.
We initiated the process for
CE marking of the Rover in January
2021 but the new MDR application
process seems to be considerably
more demanding and protracted
than expected, as many medical
device manufacturers have reported.
Another seven European distributors
are ready to commence sales
of the Rover once CE marking is
granted and we have established
our first Asian distributors in
Vietnam and Thailand.
MICRO-X Limited 16
From a humanitarian and social
perspective, we were very proud
during the year to work with
non‑government organisations to
deliver eleven Rover units to hospitals
in Ukraine, to assist with treating
civilian war casualties and to help
rebuild medical capabilities in
that country.
While we have been working hard
to develop a network of distributors
this year in what has been a volatile
period globally, we are of course
impatient for more rapid sales
growth. I really do believe that we
now have laid the proper foundations
with the right strategy and the right
partners in place to deliver the
long‑term sales results for Rover.
We are confident in the success
of our new and still‑growing
distribution network.
C O u n T E R ‑ I E D X ‑ R A Y
C A M E R A ‘A R Gu S ’ S O O n
T O B E l A u nC H E D
Our Argus sales and business
development activities continue to
be led by two former bomb disposal
technicians in Australia and the US,
whose customer connections and
insights helped steer the development
of the Argus product invaluably
this year to increase features
and useability. When a senior
federal‑level bomb technician is
heard commenting on how long
authorities have been waiting for a
product like Argus, we feel confident
it will be the sales success we have
long hoped and planned for.
The engineering of the Argus program
accelerated during the year to meet
the challenges in development of
our first 160kV x‑ray system and
the ambitious small weight and size
targets for the product. At the time
of writing Argus units are in the final
stages of integration and refinement
of the high‑voltage components
ahead of verification testing of the
product. Pre‑production Argus
units will be made available for first
customer demonstrations with the
product sales to follow. A tender
submission prepared for the
Australian Department of Defence
during the year will, if successful,
provide a helpful launch customer for
international sales in the coming year.
D E S I G n S A P P R O V E D
F O R A I R P O R T
C H E C K P O I n T
S Ol u T I O n S
This year, our strategy was to
exceed DHS’ expectations of our
performance on the miniaturised
CT baggage scanner and passenger
self‑screening checkpoint contracts.
All our milestones have been
achieved on time and on budget
and with the design reviews passed,
we are now focused on delivering
a working prototype of the
miniaturised CT baggage scanner
and the next stage of modelling of the
self‑screening checkpoint design.
As a result, we are now seeing
greatly increased engagement
and commitment by the DHS to
this game‑changing objective.
We have long believed, and it
has now become clear, that our
miniaturised CT baggage scanner
has many applications outside
the self‑screening checkpoint at
US airports. There is interest in the
technology as a standalone security
CT scanner in airports and a growing
awareness in the broader aviation
community of how Micro‑X’s
technology can change the passenger
experience at airports, which bodes
well for planned future success.
Annual Report 2022
17
I n T E R nA T I O nA l
In T E R E S T In
AuS T R A l I A n
S T R O K E I M A G E R
The development of our revolutionary
Brain CT for pre‑hospital stroke
diagnosis continues to be funded by
the Australian Stroke Alliance and
progressed well during the year,
meeting all milestones on‑time and
on budget. Importantly, the major
Systems Imaging Architecture Review
was passed this year and research
work undertaken at The Johns Hopkins
University in Baltimore confirmed
that our design will achieve image
quality which meets or exceed
current diagnostic standards.
We are pleased to report that the
ASA remains confident that all of the
project objectives will be realised.
Our progress in this unique
and lifesaving product has also
drawn interest internationally.
The Norwegian helicopter air
ambulance service is expressing
interest to acquire early prototypes
which could be fitted to a helicopter
and gather data to assist with
regulatory approvals.
F u T u R E O u T l O O K
We remain committed to our
commercialisation plan to have
four high‑margin product lines in
manufacturing by 2026. During the
coming year, the second of those
four products will achieve first sales
and in the following year, so will our
third product, each underpinning our
strong security market credentials.
The scale of opportunities that
are within our grasp in airport
checkpoints and mobile stroke
diagnosis are truly enormous.
As the Micro‑X sales and
commercialisation capability
grows, I am confident we will
achieve this plan and transform the
scale of our business in the future.
In the coming year, our specific
priorities are for sustained growth in
sales of our Mobile DR range through an
enlarged distributor network and the
launch of the next generation Rover
Plus; the launch and first sales of
the Argus IED x‑ray camera and the
delivery to the DHS of the functioning
prototype of the miniaturised baggage
CT scanner. We have realigned our
resources and capital management
and believe we are well positioned to
deliver on these objectives in 2023.
Thank you for your ongoing support
for the company. We look forward
to engaging with you at our Annual
General Meeting, Investor Open
Days and quarterly investor calls to
update you on our progress over
the year ahead.
Peter Rowland
Managing Director
MICRO-X Limited 18
En V I R O n M En T ,
S O C I A l A n D
G O V E R n A nC E
D I V E R S I T Y A n D I nC l u S I O n
S A F E T Y
23%
female
employees
18
nationalities
represented
29% female directors
› Diversity and Inclusion Policy in place.
› Reconciliation Action Plan in development.
0
lost time injury cases
since December 2020
0
fatalities or serious injuries
since Micro‑X founded
SuS T A I n A B I l I T Y A n D E n V I R O n M E n T
34%
reduction in electricity
usage in x‑ray tube bakeout
27% reduction in electricity
usage for x‑ray component
processing furnaces
› Developed sustainable supply chain
initiatives and recycling of waste.
› Achieved reduction in usage of chemicals
through changes in process and suppliers.
› Lithium Iron Phosphate batteries
in our products are non‑polluting,
longer life, recyclable.
› Zero environmental incidents.
Annual Report 2022
19
T H In K , In n O V A T E ,
C R E A T E
At Micro‑X, our people and culture
are the key to our ongoing innovation
and success. Every day our team
develops, manufactures and sells
revolutionary technology and
is passionate about creating
high‑quality products that improve
and save lives. We are constantly
learning and growing, but our
customers remain at the heart
of what we do. Our customer‑led
design methodology, dedication
to high‑quality, vision for the future
and world‑leading manufacturing
principles are what set us apart.
As a proudly Australian manufacturer,
we work with local suppliers to
source materials for our products
wherever possible. Our new proprietary
generator is made in‑house, with
locally sourced materials to deliver
four times the output of our previously
imported unit. Our new design of a
lightweight and compact high‑voltage
generator platform has broader
commercial applications beyond
our x‑ray technology.
We have continued to invest in
developing a skilled workforce,
through recruitment of talented
engineers and mentoring students
and graduate engineers beginning
their career journey. Developing our
in‑house capability allows us to
control manufacturing costs, drive
innovation and build a sovereign
manufacturing capability that all
make Micro‑X a stronger company
and better positioned to pursue
opportunities in the future.
C O M Mu nI T Y
G O V E R n A n C E
Partnered with
non‑Government
Organisations to deliver
Rover x‑ray systems to
ukraine for humanitarian
use for rebuilding
medical capability
lead industrial partner
of STEM Fast Track to
encourage young people
interested in STEM careers
through industry experience
Partnered with CSIRO
to mentor STEM school
teachers and students
Strengthened and audited
IT and cybersecurity
protections
Expanded Audit and Risk
Committee capabilities with
new director appointment
ISO13485 QMS certification:
successfully passed annual
surveillance audit
no reportable product
safety or quality events
MICRO‑X Limited
20
F I N A N C I A L
R E P O R T
C O N T E N T S
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss
and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
21
39
40
41
42
44
45
71
72
75
Annual Report 2022
Annual Report 2022
21
21
D I R E C T O R S ’ R E P O R T
Micro-X Limited
Directors' report
For the year ended 30 June 2022
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Micro-X Limited (referred to hereafter as Micro-X, the 'Company' or 'parent entity') and the entities
it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The names of the Directors in office at any time during or since the end of the year are:
Peter Rowland (Managing Director)
David Knox (Non-Executive Chair)
Alexander Gosling (Non-Executive Director)
Yasmin King (Non-Executive Director)
Patrick O'Brien (Non-Executive Director)
James McDowell (Non-Executive Director)
Ilona Meyer (Non-Executive Director) - Appointed 7th March 2022
Directors have been in office since the start of the Financial Year to the date of this report unless otherwise stated.
Principal activities
Micro-X's principal activities are focused on the design, development, manufacturing and commercialisation of products for
the global healthcare and security markets utilising Micro-X’s proprietary cold cathode X-ray technology.
No significant changes in the nature of these activities occurred during the year.
Dividends
There were no dividends paid, recommended or declared during the current or previous Financial Year.
3
MICRO‑X Limited
MICRO‑X Limited
2222
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Review of operations
Micro-X Limited and its wholly owned subsidiaries (Micro-X or the Group) had four core areas of focus in the Financial Year
ended 30 June 2022 (the Financial Year):
•
Expanding its sales and commercialisation activities with respect to its Mobile Digital Radiology (Mobile DR) range of
products, including completing development of its in-house high powered generator and second generation Rover Plus;
Furthering the development and pre-launch commercialisation activities of the Argus IED X-ray Camera, including the
in-house designed and manufactured x-ray tube and high powered generator;
•
• Development of the Miniaturised CT Baggage Scanner and associated Airport Passenger Self-Screening Portal under
two contracts with US Department of Homeland Security; and
• Development of the mobile CT Brain Scanner under its contract with Australian Stroke Alliance.
At the commencement of the year, Micro-X re-organised its operations into four customer facing Business Units, each with
operational responsibility for its product line. The Business Units are:
• Mobile Digital Radiology;
•
• Checkpoints; and
•
X-ray Cameras;
Brain CT.
Commercialisation – Mobile DR Products
During the year Micro-X built a new, highly experienced sales and management team in the US and Europe, commencing
with the appointment of a new Divisional Head of Mobile DR. This sales team led a major launch at the Radiological Society
of North America (RSNA) where Micro-X was an exhibitor in its own right for the first time, displaying the Rover Mobile DR
product, together with its planned CT Stroke Imager. RSNA is the largest exhibition of its kind in the world and provided a
significant opportunity for Micro-X to launch its brand and technology globally.
Building on the larger industry profile subsequent to the RSNA meeting, Micro-X has re-aligned its North American distribution
strategy with the appointment of a network of highly qualified distributors, including the top two national distributors in the
US. One of these distributors, Medlink, has committed to minimum sales orders once a Rover unit incorporating their detector
and software receives regulatory approval from the U.S. Food and Drug Administration, expected in late 2022.
In addition, Micro-X continued to progress its MDR certification to allow it to sell Rover into the European market. A number
of pre launch activities were also undertaken with a number of distributors appointed to commence selling the Rover on
receipt of the CE mark accreditation.
Micro-X also completed the development of its in-house manufactured high powered generator this year, which produces
four times the energy of its imported predecessor at significantly lower cost, improving both the product and its operating
margins. This programme was announced in 2021 and funded with the proceeds of capital raised in March 2021. The high
powered generator has been incorporated into a second generation of the Rover, to be marketed as the Rover Plus, which
is expected to be launched commercially in 2022, following a self certification regulatory process.
Near term Commercialisation - Argus IED X-ray Camera
During the year, Micro-X continued to progress the development of its Argus X-ray Camera, including the in-house design
and manufacturing of its bespoke x-ray tube and high powered generator. This development is in the final stages of
completion with successful image testing of the integrated components of a prototype Argus X-ray camera. In the near term,
Micro-X will commence customer demonstrations of a prototype Argus X-ray camera
In parallel with the completion of the product’s development, Micro-X built industry and customer awareness in advance of
Argus’ global commercial launch by attending multiple trade shows and industry exhibitions with great interest from potential
customers. Micro-X has also lodged a compliant submission in response to the Australian Defence Force’s LAN 154 request
for tender, which is to supply 64 units for detection of improvised explosive devices.
Future Products in Development
Micro-X’s two future products in development, the Miniaturised CT Baggage Scanner and the Brain CT were both
underpinned by the formal execution of development contracts in the Financial Year.
Micro-X executed two development agreements with U.S. Department of Homeland Security (DHS) for up to US$4 million in
2021 and to date has met all milestones on time and on budget. These contracts provide for the design, testing and delivery
of prototypes of a miniature baggage scanner for screening of passenger carry on luggage at airports; and a Passenger Self-
Screening Checkpoint for the entire check in process including passenger identification and security screening. In August
4
Annual Report 2022
Annual Report 2022
23
23
Micro-X Limited
Directors' report
For the year ended 30 June 2022
2022 DHS formally extended the initial Airport Passenger Self-Screening Checkpoint contract, securing the balance of the
work and US$4 million contract amount.
Micro-X executed a development agreement with the Australian Stroke Alliance (ASA) for $8 million in September 2021 and
to date has met all milestones on time and on budget. The CT Brain Scanner is expected to commence clinical trials in 2024
and has received early commercial interest from a number of remote ambulance services in Australia and Europe.
Micro-X’s commercial and engineering team in Seattle grew throughout the year, as planned. This is to support key
development requirements of the DHS customer agreements and support the all four Micro-X products.
Environment, Social and Corporate Governance
Micro-X continued to develop its team of staff and management and foster a positive work environment throughout the
Financial Year. This is intended to help support the innovative culture to drive the necessary engineering and development
work and deliver life saving technology in healthcare and security with compassionate focus and on a highly ethical basis.
Micro-X has developed a range of ESG programmes and initiatives as part of a broad, company wide, commitment to these
principles:
Environment and Sustainability
Micro-X has developed a range of sustainable supply chain initiatives and recycling of waste. During the Financial Year, this
lead to a significant reduction in usage of chemicals through changes in process and suppliers, and a 27% reduction in
electricity usage for component processing furnace and a 34% reduction in electricity usage for bakeout furnace. The
manufacturing facility in Tonsley, Adelaide is located in a high tech precinct which uses majority renewable power. There
were also no environmental incidents or reportable incidents during the Financial Year.
The Micro-X product range are also being developed with recycling and sustainability objectives. The Rover Mobile DR
product range use less power than conventional mobile X-ray units and the Lithium Iron Phosphate batteries are non-
polluting, longer life and recyclable.
Social and Community
Micro-X has a Diversity and Inclusion Policy in place across all business units and a Reconciliation Action Plan is in
development. At the end of the Financial Year, Micro-X employees included 20 different nationalities and females comprised
23% of all staff and leadership roles and 29% of board. As part of a commitment to community engagement, Micro-X has
active programmes hosting school and university students, also partnering with the CSIRO to mentor STEM teachers and
students.
Micro-X has a strong culture of safety and maintained its record of no serious injuries or fatalities. There were no lost time
incidents during the Financial Year.
During the Financial Year, Micro-X worked with several non-government organisations to supply Rover Mobile DR units to
Ukraine for humanitarian use in treating non-combat civilians.
Governance
Micro-X has active governance programmes, polices and procedures across all of its activities, as overseen by the Audit and
Risk Committee of the Board of Directors. The experience of that Committee was enhanced during the Financial Year with
the appointment of a new director, highly experienced in legal, regulatory and compliance matters in Australia and
internationally.
The Mobile DR range of products are regulated as class two medical devices by the US FDA and the Australian TGA. In
conjunction with that, the Tonsley manufacturing facility and the procedures employed have been certified as compliant with
FDA good manufacturing practices; and have received TGA conformity assessment. Micro-X also holds ISO 13485 QMS
certification and passed another surveillance audit during the year. Micro-X maintains polices to ensure ethical marketing of
its medical products as well as post market surveillance. There were no product recalls or incidents reported during the
Financial Year.
Micro-X has a range of measures to ensure its technology and programmes which are used in defence and security
applications remain compliant and are protected from access, theft or destruction by unauthorised persons. IT auditing and
cyber security measures are in place and were actively managed during the Financial Year.
5
MICRO‑X LimitedMICRO-X Limited
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D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Financial Overview
The net loss for the Group for the Financial Year after providing for income tax was $17.01 million, compared with a loss in
the previous year of $14.73 million. This net loss for the Financial Year included:
•
•
$3.8 million from the sales of the Mobile DR units and associated spares;
$5.2 million from engineering contract services in relation to the contracts with the Australian Stroke Alliance and the
Department of Homeland Security.
$4.1 million of Other Income, including $3.7 million in relation to the R&D tax rebate;
$4 million in cost of sale of goods;
$3.15 million expenditure on research and development activity, related to development work on the Mobile DR high
powered generator; research and development related to the IED X-ray Camera; and development of the Miniaturised
CT Baggage Scanner and CT Brain Scanner;
$15.9 million was spent on employee, consulting and director costs. This represented a $5.4 million increase on the
prior period, driven by additional engineering, sales and commercial personnel.
$2 million in equity compensation included within Employee and Director expenses in relation to the Company’s
Employee Equity Plan which comprises an STI and LTI component, subject to achievement of hurdles.
•
•
•
•
•
Financial Position
Net assets of the Group decreased by $14.9 million from $34.2 million at 30 June 2021 to $19.3 million at 30 June 2022. Cash
on hand and at the bank decreased to $10.3 million at 30 June 2022 ($30.1 million at 30 June 2021).
Significant changes in the state of affairs
There were no 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 30 June 2022 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
The Group’s main focus moving forward will be the continued development of its four business lines, notably:
•
•
•
The continued growth in sales of its Mobile DR product lines through existing and new paths to market;
The commencement of customer trials and subsequent commercialisation of its IED X-ray Camera;
The ongoing development of its Miniaturised CT Baggage Scanner and associated Airport Passenger Self-Screening
Portal; and
The ongoing development of its Brain CT Scanner for mobile stroke imaging.
•
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
6
Annual Report 2022
Annual Report 2022
25
25
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
David Knox
Non-Executive Chair
BSc (Hons) Mechanical Engineering. MBA, FIE Aust, FTSE, GAICD
David is a highly experienced and respected business leader with senior leadership,
engineering and public markets expertise gained in multi-national, domestic and
Commonwealth companies. David was Managing Director & Chief Executive Officer of
Australian Naval Infrastructure, a Government Business Enterprise responsible for the
delivery of naval infrastructure required to support the Commonwealth’s continuous
shipbuilding programme. including the $535m Osborne South Shipyard. David was
previously Managing Director & Chief Executive Officer of Santos from March 2008
through until his retirement in December 2015.
David Knox is currently Chair of Snowy Hydro Limited and The Australian Centre for
Social Innovation (TACSI). He is also a board member of Commonwealth Scientific and
Industrial Research Organisation (CSIRO), Redflow Limited (ASX - RFX), Migration
Council of Australia, Adelaide Festival (AF) and the Royal Institution of Australia
(RiAUS). David Knox is originally from Edinburgh, Scotland and has a BSc (Hons) in
Mechanical Engineering (Edinburgh) and an MBA (Strathclyde). He is a Fellow of the
Australian Institute of Mechanical Engineering and the Australian Academy of
Technological Sciences and Engineering.
Redflow Ltd (ASX:RFX) - 2 March 2017 to Present
Chair of Board, and Member of Audit and Risk Committee and People and
Remuneration Committee
376,802 fully paid ordinary shares
92,593
Other current directorships:
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Peter Rowland
Managing Director
BSc., MBA, MIET, CEng, FAICD
Peter worked in the engineering design, development and project management of
innovative, high-technology military & scientific equipment in his early career in
Scotland. In Australia, Peter ran an engineering design consultancy group, was Director
of business development at BAE Systems and then was Managing Director of ASX-
listed Ellex Medical Lasers which designed and manufactured ophthalmic laser
equipment. More recently he was vice president of Asia-Pacific operations for Biolase
Technology Inc., a NASDAQ listed therapeutic medical device supplier. Peter was a
founder of Micro-X.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Interests in shares:
Interests in rights:
12,995,279 fully paid ordinary shares
2,648,948
7
MICRO‑X LimitedMICRO-X Limited
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D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Dr. Alexander Gosling AM
Non-Executive Director
MA (Hones), DEng, MAICD, FTSE
Alexander has been working in the field of process and product development and
related research and development for 50 years. He was a founding director of Invetech
and was part of the management team that led Invetech to a public listing (as Vision
Systems) and then to its acquisition by Danaher Corp for $800M. He currently works in
the area of technology commercialisation, advising universities, mentoring start-ups
and sitting on the Boards of early stage companies. Alexander is an engineer, with an
Honours degree from Cambridge University. He is a Fellow of the Academy of
Technology and Engineering, a Fellow of the Institute of Engineers Australia and a
Governor of the Warren Centre for Advanced Engineering. He was awarded an
Honorary Doctorate in Engineering from Swinburne University and made a Member of
The Order of Australia for services to engineering. He is a Member of the Australian
Institute of Company Directors.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Chair of People and Remuneration Committee
532,151 fully paid ordinary shares
60,186
Name:
Title:
Qualifications:
Experience and expertise:
Yasmin King
Non-Executive Director
BA (Econ)(Honours). MBA, FCPA, FAICD
Yasmin is Chief Executive of SkillsIQ Limited, the organisation that develops the
National Occupational Standards for vocational qualifications in the Services and
Health and Community services sectors. Yasmin was the inaugural NSW Small
Business Commissioner and an Associate Commissioner for the Australian Consumer
and Competition Commission, both positions leading to her detailed knowledge and
experience in the areas of compliance and regulation. Yasmin has extensive
experience in negotiation having run a successful consultancy in this area, including
acting as lead negotiator for numerous State and Federal Government procurement
contracts. She worked as a principal consultant for an international negotiation
organisation coaching major ASX companies and public sector agencies including
Department of Defence in contract negotiation. She has also served on both public
and private sector boards. She is a member of the Adjunct Faculty of the Australian
Graduate School of Management, delivering the conflict resolution and negotiation
component of the Women in Leadership program. Yasmin holds a Bachelor of
Economics (Honours) and a Master of Business Administration. She is a Fellow of the
Australian Institute of Company Directors and a Fellow Certified Practicing Accountant.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Chair of Audit and Risk Committee
228,673 fully paid ordinary shares
60,186
8
Annual Report 2022
Annual Report 2022
27
27
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Patrick O’Brien
Non-Executive Director
LLB, B.Com, Grad Dip Applied Finance, MBA, GAICD
Patrick is Managing Director of Patrick O’Brien & Associates and a director of Howjack
Holdings, The Water & Carbon Group and O’Brien Capital. He also chairs and is a
director of a number of not for profit organisations and foundations. Patrick has over 30
years’ business experience in Australia, the UK, Europe, Asia and the US including as
an executive director with Macquarie Group where he led teams in corporate finance
(Melbourne 1996-2005) and private equity (London 2005-2009). In this later role Patrick
was responsible for Macquarie’s controlling stakes in, and chaired, large unlisted
groups European Directories and National Grid Wireless. Prior to Macquarie, Patrick
was a strategy consultant with McKinsey & Company and a lawyer with Minter Ellison.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Member of Audit and Risk Committee
7,806,388
60,186
Name:
Title:
Qualifications:
Experience and expertise:
James McDowell
Non-Executive Director
LL.B (Hons) D.Univ (honoris causa)
Jim is Chief Executive of Nova Systems and has more than 30 years of experience in
international defence and aerospace sectors and has lived and worked in the UK, the
USA, Korea, Singapore, Hong Kong and Australia. Prior to this appointment Jim was
Chief Executive of South Australia’s Department of Premier and Cabinet. Jim joined
BAE Systems in 1996 and his last executive appointment with the Group was as Chief
Executive Officer of their A$5 billion annual turnover business operations in Saudi
Arabia. Prior to this he was Chief Executive Officer of BAE Systems Australia for 10
years. Based in Adelaide, he drove a major expansion program as the Group grew to
become Australia’s largest defence business. Prior to his time at BAE Systems Jim
worked for 18 years at aerospace Group Bombardier Shorts in legal, commercial and
marketing positions, making a major contribution to that Group’s growth into the USA.
In 2014, Jim was appointed by the Australian Federal Government to the team to
conduct the First Principles Review of the Australian Department of Defence. The
Team’s ‘One Defence’ recommendations included transformational changes to
structure, governance arrangements, accountabilities, processes and systems of
Defence. Jim was also Chair of the Australian Nuclear Science & Technology
Organisation which is a centre-of-excellence in Australia for radiation safety and
nuclear medicine research.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Member of People and Remuneration Committee
281,637 fully paid ordinary shares
60,186
9
MICRO‑X LimitedMICRO-X Limited
2828
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Ilona Meyer
Non-Executive Director
LLB., and LLM (QUT), GradDipLegPrac, GIA (Cert) GAICD
Ilona has over 25 years’ experience as a senior executive in healthcare, agriculture and
emerging technologies focusing on innovation and growth. Ilona is General Counsel for
Nuix Limited and prior to this role had held multiple executive roles with private and
public companies, including ASX-listed companies and high-growth start-ups, leading
business transformation initiatives, managing multiple stakeholders, influencing
industry bodies, as well as navigating complex litigation and regulatory disputes. Prior
to commencing her current role at Nuix, Ilona was General Counsel and Head of Legal
& Compliance of the Boehringer Ingelheim Group for the Australian and New Zealand
division. She has previously held senior legal and general counsel roles at ResMed
Limited, Ruralco Holdings Limited, Medtronic and 3M Australia.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Member of Audit and Risk Committee
50,000 fully paid ordinary shares
'Other current directorships' quoted above are current directorships for listed entities only and excludes 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 excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Kingsley Hall is a member of the Institute of Chartered Accountants and a holds a Bachelor of Economics. Kingsley has over
25 years of experience in finance and operations with a diverse background across both private and public companies,
private equity, media, tourism and education. His experience includes public markets, equity capital and debt raising activities
having led a variety of fundraising initiatives in public and private placements. Kingsley is also the Chief Financial Officer for
Micro-X and the Group.
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 30 June 2022, and the number of meetings attended by each director were:
Full Board
People and Remuneration
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Patrick O'Brien
Peter Rowland
Alexander Gosling
Yasmin King
David Knox
James McDowell
Ilona Meyer
8
9
9
9
9
8
2
9
9
9
9
9
9
2
-
-
2
-
2
1
-
-
-
2
-
2
1
-
5
-
1
5
5
-
1
5
-
1
5
5
-
1
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
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.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
10
Annual Report 2022
Annual Report 2022
29
29
Micro-X Limited
Directors' report
For the year ended 30 June 2022
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is 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 it is considered to conform to the market best practice for the delivery of reward. The Board
of Directors ('the Board') aims to ensure that executive reward satisfies the following key criteria for good reward governance
practices:
●
●
●
●
Competitiveness to attract, motivate and retain key talent;
performance linkage and alignment of executive compensation and corporate objectives;
transparency and reasonableness; and
alignment to, and acceptability by, shareholders.
The Group has a People and Remuneration Committee which is responsible for determining and reviewing remuneration
arrangements for directors, executives and all staff. 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
and accordingly the People and Remuneration Committee has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of the Company.
The remuneration framework which has been adopted, is designed to align executive reward to shareholders' interests by:
●
●
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and 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
●
Additionally, the remuneration framework should seek to align and incentivise 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
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive director 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 Nomination and Remuneration Committee. The Nomination and
Remuneration 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 his own remuneration.
ASX listing rules require the aggregate maximum non-executive directors' remuneration be determined periodically by a
general meeting. The most recent determination was at the Annual General Meeting held 19 November 2021, where the
shareholders approved the Company’s aggregate maximum Non Executive Directors’ remuneration of $700,000 per annum.
Executive remuneration
The Company aims to reward executives based on their responsibility and performance, with a level and mix of remuneration
which has both fixed and variable components.
11
MICRO‑X LimitedMICRO-X Limited
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D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
The executive remuneration and reward framework has five components:
●
●
●
●
●
base pay and non-monetary benefits;
short-term performance incentives, or STI;
long-term performance incentives, or LTI;
share-based payments; and
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the
People and Remuneration Committee based on individual and business unit performance, the overall performance of the
Group and comparable market remunerations.
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.
Shareholders approved at the November 2020 AGM the Micro-X Limited Employee Incentive Plan, the key objectives of
which are to:
· assist in the attraction and retention of high quality employees
· link the reward of key employees with the achievement of strategic goals and the long term performance of the Company;
and
· align the financial interest of all participants of the Plan with those of Shareholders.
Executives may be invited to participate in the Company’s Employee Equity Plan, where performance rights may be earned
subject to the achievement of short term objectives (Short Term Incentives or STI) and/or subject to the achievement of
longer term objectives (Long Term Incentives or LTI).
Company performance and link to remuneration
Remuneration of key management personnel is currently directly linked to the performance of the Company via the STI and
LTI awards available to Executives invited to participate in the Employee Equity Plan.
Short Term Incentives
STI award achievement is assessed on a Balanced Scorecard approach, where Executive performance is measured against
five key criteria, with weighting attached to each of criteria’s outcomes. For the year ended 30 June 2022 the five criteria
against which Executive performance was assessed were:
Criteria
Quality and Safety
Financial Performance
Commercial Activities
Project and Development Activities
Culture and Compliance
Long Term Incentives
There are two types of LTI awards made:
•
•
LTI Service Rights; and
LTI Performance Rights.
% of Total STI
10%
25%
25%
30%
10%
100%
12
Annual Report 2022
Annual Report 2022
31
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Micro-X Limited
Directors' report
For the year ended 30 June 2022
LTI Service Rights vest after a predetermined period of continuous service with the Company. For the initial grant of Service
Rights made in December 2020, one third of those rights granted vested on the twelve month anniversary of the date of
grant, a second third will vest on the second anniversary of the date of grant and the final third will vest on the third anniversary
of the date of grant. Subsequent and future grants of Service Rights will vest on the third anniversary of the date of the grant.
LTI Performance Rights vest upon the achievement of certain Total Shareholder Return (TSR) targets over the vesting
period. The relevant TSR target is a 10% Compound Annual Growth Rate for the LTI performance rights to vest at 50%. If
the TSR result met is a 20% Compond Annual Growth Rate then participants will be issued 100% of the relevant performance
rights.
The vesting periods for the initial December 2020 grant are one third of the rights were assessed on the first anniversary of
the grant, a second third will be assessed on the second anniversary of the grant and the final third will vest and be assessed
on the third anniversary of the grant. Subsequent and future grants of Performance Rights will be wholly assessed and vest
(if performance criteria is achieved) on the third anniversary of the date of those future grants.
Use of remuneration consultants
The Group retained the services of an independent, expert, remuneration consultant in February 2020 who provided advice
on the structure of the equity compensation framework, including quantum and the recommended hurdles.
The Company also engaged an independent, expert remuneration consultant in January 2021 to provide a market based
assessment of certain KMP remuneration. The engagement included a review of the remuneration of both Non Executive
Directors and Executives.
No remuneration consultants were engaged for the 2022 Financial Year.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Company consisted of the following directors and management of the Group:
●
●
●
●
●
●
●
●
●
●
●
●
●
David Knox (Non-Executive Chair)
Peter Rowland (Managing Director)
Alexander Gosling (Non-Executive Director)
Yasmin King (Non-Executive Director)
Patrick O'Brien (Non-Executive Director)
James McDowell (Non-Executive Director)
Ilona Meyer (Non-Executive Director) - Appointed 7 March 2022
Kingsley Hall (Company Secretary & Chief Financial Officer)
Anthony Skeats (Chief Engineer, General Manager Brain CT)
Brian Gonzales (Chief Imaging Scientist, General Manager Checkpoints)
Alexander Blackburn (Head of Strategy & Planning, General Manager X-ray Cameras)
Daniel Pini (General Manager Core Technology)
Charlie Hicks (General Manager Mobile Digital Radiology) - Appointed 17 September 2021
13
MICRO‑X LimitedMICRO-X Limited
3232
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Short-term benefits
Post-
employment
benefits
Long-term
benefits1
Share-
based
payments -
Rights2
Cash salary
Cash
Non-
Super-
Annual and Equity-
and fees
$
bonus
$
monetary
$
annuation
$
Long
Service
leave
$
settled
$
Total
$
75,100
56,540
62,194
62,194
62,194
18,802
332,559
294,310
250,096
294,310
200,864
172,849
260,888
2,142,900
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,510
5,654
-
-
-
1,880
-
-
-
-
-
-
1,326
862
862
862
862
-
83,936
63,056
63,056
63,056
63,056
20,682
-
33,256
18,889
242,019
626,723
-
-
-
-
-
-
-
29,431
12,016
29,431
20,086
17,285
8,562
165,111
544,970
199,094
22,135
432,581
156,613
13,856
519,274
198,678
(3,145)
370,302
135,662
13,690
304,580
110,273
4,173
19,145
477,856
189,261
88,743 1,236,374 3,633,128
2022
Non-Executive Directors:
D Knox
A Gosling
Y King
P O'Brien
J McDowell
I Meyer3
Executive Director:
P Rowland
Other Key Management
Personnel:
K Hall
B Gonzales4
A Skeats
A Blackburn
D Pini5
C Hicks6
1
2
3
4
5
6
Movement in provisions, does not have cash implication.
The share based payments above relate to the amortisation of the fair value of the grant of rights made to the KMP
during the year and do not necessarily reflect the cash value that may be realised upon vesting and exercising of the
rights.
I Meyer was appointed to the Board on 7 March 2022.
B Gonzales is employed by Micro-X Inc the Company’s wholly owned US subsidiary and is based in Seattle.
Remuneration and compulsory benefits have been translated from U.S. dollars to Australian dollars for the purpose
of this Remuneration Report.
D Pini was appointed to Key Management Personnel on 1 July 2021.
C Hicks was appointed to Key Management Personnel on 17 September 2021. He is employed by Micro-X Inc the
Company’s wholly owned US subsidiary and is based in New York. His remuneration and compulsory benefits have
been translated from US dollars to Australian dollars for the purposes of the Remuneration Report.
Subsequent to year end, the Board reviewed the achievement of the Executives' Short Term Incentive for the year ended 30
June 2022 and determined that the Short Term Incentive should be awarded at 75%.
Long Term Performance Rights achievement has been assumed at 50%, consistent with target.
Long Term Service Rights achievement has been assumed at 100%.
These levels of achievement are reflected in the share based payments amortisation in the table above.
14
Annual Report 2022
Annual Report 2022
33
33
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
Cash
Non-
Super-
and fees
$
bonus
$
monetary
$
annuation
$
Annual and
Long
Service
Leave
$
Share-
based
payments -
Rights
Equity-
settled
$
Total
$
54,795
58,448
62,482
76,500
26,484
308,872
-
-
-
-
-
-
267,529
210,868
266,861
182,235
1,515,074
-
66,507
-
-
66,507
-
-
-
-
-
-
-
-
-
-
-
5,205
5,552
1,518
-
2,516
-
-
-
-
-
-
-
-
-
-
60,000
64,000
64,000
76,500
29,000
29,343
12,800
360,249
711,264
25,415
20,421
25,352
17,312
132,634
7,521
-
9,904
8,435
557,444
256,979
470,227
172,431
531,970
229,853
347,373
139,391
38,660 1,158,903 2,911,778
2021
Non-Executive Directors:
D Knox1
A Gosling
Y King
P O'Brien1
J McDowell2
Executive Director:
P Rowland
Other Key Management
Personnel:
K Hall
B Gonzales3
A Skeats
A Blackburn
1
2
3
P O’Brien was Chair from 1 July 2020 until 19 January 2021 and he remains a Non-Executive Director. D Knox was
a Non-Executive Director until 19 January 2021 when he became Chair of the Board.
J McDowell was appointed to the Board on 1 January 2021.
B Gonzales is employed by Micro-X Inc the Company’s wholly owned US subsidiary and is based in Seattle.
Remuneration and compulsory benefits have been translated from U.S. dollars to Australian dollars for the purpose
of this Remuneration Report. Share based payments via the issue of rights have not yet been issued but the
expense has been recognised.
The share based payments above relate to the amortisation of the fair value of the grant of rights made to the KMP
during the year and do not necessarily reflect the cash value that may be realised upon vesting and exercising of the
rights.
Subsequent to year end, the Board reviewed the achievement of the Executives' Short Term Incentive for the year ended 30
June 2021 and determined that the Short Term Incentive should be awarded at 85%.
Long Term Performance Rights achievement has been assumed at 50%, consistent with target.
Long Term Service Rights achievement has been assumed at 100%.
These levels of achievement are reflected in the share based payments amortisation in the table above.
15
MICRO‑X LimitedMICRO-X Limited
3434
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
D Knox
A Gosling
P O'Brien
Y King
J McDowell
I Meyer1
Executive Director:
P Rowland
Other Key Management
Personnel:
K Hall
B Gonzales
A Skeats
A Blackburn
D Pini2
C Hicks3
Fixed remuneration
2021
2022
At risk - STI
At risk - LTI
2022
2021
2022
2021
98%
99%
99%
99%
99%
99%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
2%
1%
1%
1%
1%
1%
-
-
-
-
-
-
61%
49%
20%
43%
19%
8%
64%
64%
62%
64%
64%
66%
54%
49%
57%
60%
-
-
18%
18%
19%
18%
19%
19%
37%
42%
34%
30%
-
-
18%
18%
19%
18%
17%
15%
9%
9%
9%
10%
-
-
1
2
3
I Meyer was appointed to the Board on 7 March 2022.
D Pini was appointed to Key Management Personnel on 1 July 2021.
C Hicks was appointed to Key Management Personnel on 17 September 2021.
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Peter Rowland
Managing Director
1 September 2014
No fixed term. Micro-X or Mr Rowland may terminate the employment contract at any
time provided that either party gives 6 months’ notice.
Annual salary is $336,986.30 per annum plus 10.5% employer superannuation
contributions (subject to annual review).
Kingsley Hall
Chief Financial Officer
24 February 2020
No fixed term. Micro-X or Mr Hall may terminate the employment contract at any time
provide that either party gives 2 months' notice.
Annual salary is $302,054.55 per annum plus 10.5% employer superannuation
contributions (subject to annual review).
Brian Gonzales
Chief Imaging Scientist, General Manager of Checkpoints
1 January 2018
No fixed term. Micro-X or Mr Gonzales may terminate the employment contract at any
time provided that either party gives 4 weeks' notice.
Annual salary is US$184,473.38 per annum plus compulsory benefits.
16
Annual Report 2022
Annual Report 2022
35
35
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Anthony Skeats
Chief Engineer, General Manager of Brain CT
8 June 2017
No fixed term. Micro-X or Mr Skeats may terminate the employment contract at any
time provided that either party gives 2 months' notice.
Annual salary is $302,054.55 per annum plus 10.5% employer superannuation
contributions (subject to annual review).
Alexander Blackburn
Head of Strategy & Planning, General Manager X-ray Cameras
1 September 2015
No fixed term. Micro-X or Mr Blackburn may terminate the employment contract at any
time provided either party gives 2 months' notice.
Annual salary is $206,134.35 per annum plus 10.5% employer superannuation
contributions (subject to annual review).
Daniel Pini
General Manager Core Technology
4 April 2016
No fixed term. Micro-X or Mr Pini may terminate the employment contract at any time
provided that either party gives 4 weeks' notice
Annual salary is $177,397.50 per annum plus 10.5% employer superannuation
contributions (subject to annual review)
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Charlie Hicks
General Manager - Mobile Digital Radiology
17 September 2021
No fixed term. Micro-X or Mr Hicks may terminate the employment contract at any time
provided that either party gives 4 weeks' notice.
Annual salary is US$250,000 per annum plus compulsory benefits.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
17
MICRO‑X LimitedMICRO-X Limited
3636
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
Share-based compensation
Issue of shares
Details of shares and Performance Rights issued to directors and other key management personnel as part of compensation
during the year ended 30 June 2022 are set out below.
Performance Rights Held
The following table illustrates the movement of and closing balance of rights held by KMP during the Financial Year:
Held at 1 July
2021
Granted as
Remuneration
Exercised or
Lapsed
Held at 30 June
2022
Non-Executive Directors:
D Knox
A Gosling
P O'Brien
Y King
J McDowell
P Rowland
K Hall
A Skeats
B Gonzales
A Blackburn
D Pini1
C Hicks2
-
-
-
-
-
1,829,396
1,403,567
1,314,373
1,041,450
841,892
619,089
-
92,593
60,186
60,186
60,186
60,186
963,978
799,086
799,086
588,560
545,408
469,306
1,022,767
-
-
-
-
-
(144,426)
(99,075)
(86,255)
(562,386)
(50,513)
(28,573)
(456,620)
92,593
60,186
60,186
60,186
60,186
2,648,948
2,103,578
2,027,204
1,067,624
1,336,787
1,059,822
566,147
7,049,767
5,521,528
(1,427,848)
11,143,447
1. D Pini was appointed to Key Management Personnel on 1 July 2021 increasing the opening balance of rights held.
2. C Hicks was appointed to Key Management Personnel on 17 September 2021.
Issue of Performance Rights
The terms and conditions of each performance right affecting remuneration in the current or a future reporting period are as
follows:
Grant date
Vesting and
exercise date
Expiry date
Performance
criteria
23 December
2020
23 December
2020
23 December
2020
23 December
2020
23 December
2020
23 December
2020
23 December
2020
30 September
2021
30 September
2021
30 September
2021
22 December
2021
31 August
2021
30 November
2021
30 November
2022
30 November
2023
30 November
2021
30 November
2022
30 November
2023
31 August
2022
30 September
2024
30 September
2024
21 December
2024
23 December
2035
23 December
2035
23 December
2035
23 December
2035
23 December
2035
23 December
2035
23 December
2035
30 September
2036
30 September
2036
30 September
2036
22 December
2036
Short term
performance
Long term
performance
Long term
performance
Long term
performance
Long term
service
Long term
service
Long term
service
Short term
performance
Long term
performance
Long term
service
Long term
performance
18
Value per
right at grant
date
$0.370
Performance
achieved
% Vested
85% of target
85%
$0.219
200% of target
100%
$0.231
$0.243
$0.370
$0.370
$0.370
$0.330
$0.199
$0.330
$0.152
To be
determined
To be
determined
100%
To be
determined
To be
determined
To be
determined
To be
determined
To be
determined
To be
determined
N/A
N/A
100%
N/A
N/A
N/A
N/A
N/A
N/A
Annual Report 2022
Annual Report 2022
37
37
Micro-X Limited
Directors' report
For the year ended 30 June 2022
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 key
management personnel of the Group, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
D Knox1
A Gosling
Y King
P O'Brien
J McDowell1
I Meyer
P Rowland
K Hall
B Gonzales2
A Skeats
A Blackburn
D Pini3
C Hicks2
290,279
532,151
228,673
7,806,388
218,566
-
12,995,279
-
-
-
16,500
10,000
-
22,097,836
86,523
-
-
-
63,071
-
-
-
-
-
-
-
-
149,594
-
-
-
-
-
50,000
-
-
438,659
-
-
-
356,164
844,823
376,802
-
532,151
-
228,673
-
7,806,388
-
281,637
-
-
50,000
- 12,995,279
-
-
438,659
-
-
-
16,500
-
10,000
-
-
356,164
- 23,092,253
Transactions and balances with Key Management Personnel and their Related Parties
Details and terms and conditions of other transactions with KMP and their related parties:
Purchases
During the Financial Year, purchases totalling $50,000 at market prices have been made by the Company for marketing
services provided by companies of which Anthony Skeat's wife is a director.
During the Financial Year, purchases totalling $3,000 at market prices have been made by the Company for video and
photography services provided by a company of which Peter Rowland's son is a Trustee.
During the Financial Year, Yasmin King's son was employed by the company as an Engineer on a full-time basis at market
rates. He ceased employment on 9 May 2022.
This concludes the remuneration report, which has been audited.
Shares issued on the exercise of options
There were no ordinary shares of Micro-X Limited issued on the exercise of options during the year ended 30 June 2022 and
up to the date of this report.
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.
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.
19
MICRO‑X LimitedMICRO-X Limited
3838
D I R E C T O R S ’ R E P O R T C O N T ’ D
Micro-X Limited
Directors' report
For the year ended 30 June 2022
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 25 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 27 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 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 Grant Thornton Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton 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.
Auditor
Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
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 Knox
Non-Executive Chair
29 August 2022
20
A U D I T O R ’ S I N D E P E N D E N C E D E C L A R A T I O N
Annual Report 2022
39
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Micro-X Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Micro-X Ltd for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there
have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 29 August 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
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#7876861v2w
MICRO‑X Limited
40
S T A T E M E N T O F P R O F I T O R L O S S
A N D O T H E R C O M P R E H E N S I V E I N C O M E
Micro-X Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Revenue
Other Income
Expenses
Change in inventory/ raw materials and consumables
Employee and director expenses
Selling and Distribution expenses
Office and administrative expenses
Professional fees
Corporate expenses
Quality and regulatory expenses
Project development expenses
Depreciation and amortisation expense
Other expenses
Finance expenses
Total expenses
Loss before income tax expense
Income tax expense
Note
Consolidated
2022
$'000
2021
$'000
5
6
8,970
3,771
4,144
3,012
(3,970)
(15,894)
(856)
(779)
(749)
(360)
(253)
(4,444)
(1,432)
(1,170)
(296)
(30,203)
(3,911)
(10,493)
(210)
(304)
(759)
(341)
(132)
(1,225)
(2,329)
(1,130)
(680)
(17,603)
(17,089)
(14,731)
7
-
-
Loss after income tax expense for the year attributable to the owners of Micro-
X Limited
(17,089)
(14,731)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Micro-X
Limited
18
18
-
-
(17,071)
(14,731)
Cents
Cents
Basic earnings per share
Diluted earnings per share
32
32
(3.71)
(3.71)
(3.70)
(3.70)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
22
S T A T E M E N T O F F I N A N C I A L P O S I T I O N
Annual Report 2022
41
Micro-X Limited
Statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other Assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets and lease liabilities
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Foreign currency translation reserve
Convertible notes
Share based payments reserve
Accumulated losses
Total equity
Note
Consolidated
2022
$'000
2021
$'000
8
9
10
11
12
13
14
15
16
17
18
19
20
21
10,303
3,755
1,314
5,783
1,589
22,744
3,081
5,308
144
8,533
30,135
2,477
-
2,841
362
35,815
2,738
5,999
129
8,866
31,277
44,681
4,366
459
633
1,021
6,479
4,681
828
5,509
2,628
501
599
579
4,307
5,238
923
6,161
11,988
10,468
19,289
34,213
117,529
18
65
3,057
(101,380)
116,967
-
65
1,472
(84,291)
19,289
34,213
The above statement of financial position should be read in conjunction with the accompanying notes
23
MICRO‑X Limited
42
S T A T E M E N T O F C H A N G E S I N E Q U I T Y
Micro-X Limited
Statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$'000
Share based
payment
reserve
$'000
Foreign
currency
translation
reserve
$'000
Balance at 1 July 2020
84,297
417
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Conversion of convertible notes
(Note 19)
Issue of shares - placement
Capital raising costs
Issue of shares - share
placement
Transactions with owners in
their capacity as owners:
Share-based payments (Note
21)
Issue of rights under Employee
Equity Plan (Note 21)
Issue of shares under Employee
Gift Plan (Note 19)
-
-
-
600
30,500
(1,971)
3,500
-
-
-
-
-
-
-
-
-
41
(417)
1,472
-
Balance at 30 June 2021
116,967
1,472
-
-
-
-
-
-
-
-
-
-
-
-
Convertible
notes
$'000
Accumulated
losses
$'000
Total equity
$'000
165
(69,977)
14,902
-
-
-
(100)
-
-
-
-
-
-
(14,731)
(14,731)
-
-
(14,731)
(14,731)
-
-
-
-
500
30,500
(1,971)
3,500
417
-
-
-
1,472
41
65
(84,291)
34,213
The above statement of changes in equity should be read in conjunction with the accompanying notes
24
Annual Report 2022
Annual Report 2022
43
43
Micro-X Limited
Statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$'000
Share based
payment
reserve
$'000
Foreign
currency
translation
reserve
$'000
Balance at 1 July 2021
116,967
1,472
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners:
Issue of rights under Employee
Equity Plan (Note 21)
Exercise of Rights under
Employee Equity Plan (Note 19)
Issue of shares in lieu of Cash
Payments (Note 19)
Issue of shares under Employee
Gift Plan (Note 19)
-
-
-
-
-
-
-
2,047
462
(462)
27
73
-
-
-
-
18
18
-
-
-
-
Convertible
notes
$'000
Accumulated
losses
$'000
Total equity
$'000
65
(84,291)
34,213
-
-
-
-
-
-
-
(17,089)
(17,089)
-
18
(17,089)
(17,071)
-
-
-
-
2,047
-
27
73
Balance at 30 June 2022
117,529
3,057
18
65
(101,380)
19,289
The above statement of changes in equity should be read in conjunction with the accompanying notes
25
MICRO‑X LimitedMICRO-X Limited
44
S T A T E M E N T O F C A S H F L O W S
Micro-X Limited
Statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers
Interest received
R&D incentive tax refunds
Interest paid
Grant funding received
Receipts in relation to the ASA MRFF Program
Receipts in relation to the DHS Checkpoint Program
Lease interest payments
Note
Consolidated
2022
$'000
2021
$'000
4,099
(28,285)
20
2,079
-
378
1,413
2,468
(280)
5,251
(18,298)
4
1,955
(195)
1,426
-
-
(256)
Net cash used in operating activities
31
(18,108)
(10,113)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for capital raising costs
Repayment of borrowings
Repayment of Lease liabilities
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the Financial Year
Cash and cash equivalents at the end of the Financial Year
(1,056)
(56)
(1,112)
(783)
(118)
(901)
-
-
-
(612)
34,000
(1,994)
(8,191)
(984)
(612)
22,831
(19,832)
30,135
11,817
18,318
10,303
30,135
The above statement of cash flows should be read in conjunction with the accompanying notes
26
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Annual Report 2022
45
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 1. General information
The financial statements cover Micro-X Limited as a Group consisting of Micro-X Limited and the entities it controlled at the
end of, or during, the year. The financial statements are presented in Australian dollars, which is Micro-X Limited's functional
and presentation currency.
Registered office
Principal place of business
A14, 6 MAB Eastern Promenade
1284 South Road, Tonsley
SA 5042
A14, 6 MAB Eastern Promenade
1284 South Road, Tonsley
SA 5042
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 29 August 2022.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
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.
27
MICRO‑X Limited
4646
N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Going concern
The Group incurred a net loss after tax for the Financial Year ended 30 June 2022 of $17.1M (year ended June 2021:
$14.7M) and had net cash outflows from operating activities of $18.1M (year ended June 2021: $10.1M). The Group had net
assets for the Financial Year ended 30 June 2022 of $19.3M (year ended June 2021: $34.2M).
The directors believe that the Group will be able to continue as a going concern, which contemplates continuity of normal
business activities and the realisation of assets and settlement of liabilities in the ordinary course of business and as a result
the financial statements have been prepared on a going concern basis. The accounts have been prepared on the assumption
that the Group is a going concern for the following reasons:
•
•
•
•
•
•
the operating loss for the year ended 30 June 2022 included one off investment in the development of the in-house
manufactured high powered generator and associated x-ray tube and the Argus IED X-ray Camera which are largely
completed;
the Group has contracted revenues for development work due to be received in FY2023, subject to satisfaction of
milestones, under the contracts with the Australian Stroke Alliance for the CT Brain scanner and U.S. Department of
Homeland Security for the Miniature baggage scanner and Airport Self Service Portal;
the Group has invested in building its commercial infrastructure for the Mobile DR division where it expects to generate
increased product sales moving forward. The Group also expects to launch its Argus IED X-ray camera in the near term
and generate product sales;
the Group is due to receive approximately $3.5M from the R&D tax incentive scheme in relation to FY2022 during Q2
FY2023;
the Group completed a cost reduction programme in July 2022 to realign resources across all four business units and
better manage cash resources moving forward. This has resulted in a reduction in corporate overheads of $1.1M and
an overall reduction in cash expenditure (net of engineering contract income) in FY2023 of $4.5M, before any product
sales;
as the Group is an ASX-listed entity, it has the ability to seek to raise additional funds.
The Directors are of the opinion that no asset is likely to be realised for an amount less than the amount at which it is
recognised in the financial report as at 30 June 2022.
Accordingly, this financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities as might be necessary should the Group not continue as a
going concern.
Notwithstanding the above, there is a material uncertainty related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its
liabilities in the normal course of business.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Micro-X Ltd ('Company' or
'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Micro-X Ltd and its subsidiaries
together are referred to in these financial statements as the 'Group'.
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.
28
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47
47
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
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.
Revenue and Other income
The Group recognises revenue as follows:
Sale of goods
Revenue from sale of goods is recognised at the point in time when control of the asset is transferred to the customer,
generally when delivery is organised. The normal credit term is 30 days upon delivery.
Warranty obligations
The Group typically provides warranties for general repairs of defects that existed at the time of sale, as required by law.
These assurance-type warranties are accounted for as warranty provisions. Refer to the accounting policy on warranty
provisions at Note 3.
Engineering Contract Services
The Group recognises revenue from Engineering Contract Services over time.
For fixed-price contracts, such as with the Australian Stroke Alliance and the Department of Homeland Security, revenue is
recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be
provided. This is determined based on the actual labour hours spent relative to the total expected labour hours. The Group
uses an input method in measuring progress of the consulting services because there is a direct relationship between the
Group’s effort (i.e., based on the labour hours and project expenses incurred) and the transfer of service to the customer.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting
increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances
that give rise to the revision become known by management.
When payment for services performed is not due until completion of a relevant project milestone, a contract asset is
recognised over the period in which the services are performed representing the Group’s right toconsideration for the services
performed to date.
Government subsidies and Grants
Subsidies from the government such as R&D tax incentive rebate, AMGF and MMF Grants are recognised as other income
at their fair value where there is reasonable assurance that the grant will be received, the Company will comply with attached
conditions and the incentive is readily measurable.
In relation to R&D, as the estimate is reliably measurable, the R&D tax incentive is measured on an accruals basis. Grant
funds paid during the year are also being treated on an accruals basis.
Interest
Interest revenue 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.
29
MICRO‑X LimitedMICRO-X Limited
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N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
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.
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; or
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.
●
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
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Cash and cash equivalents
Cash and cash equivalents include 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
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on an average
cost 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.
30
Annual Report 2022
Annual Report 2022
49
49
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Property, plant and equipment
Fixed assets (leasehold improvements, plant & equipment, furniture & fittings and computer equipment) are 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 on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computer equipment
3-10 years
3-7 years
3-7 years
3-7 years
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
company. 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 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 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 useful life of the DRX Revolution capitalised development costs has been linked to
the life of the distribution contract.
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.
Intellectual property
Significant costs associated with intellectual property are capitalised and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
31
MICRO‑X LimitedMICRO-X Limited
5050
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I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Impairment of non-financial assets
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
These amounts 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
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
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.
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, considering 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 using the projected unit credit method. 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.
32
Annual Report 2022
Annual Report 2022
51
51
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, rights, 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
a Monte-Carlo 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 company
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.
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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Micro-X 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.
33
MICRO‑X LimitedMICRO-X Limited
5252
N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to consider the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to 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.
Foreign Currency Translation
Functional and presentation currency:
The financial statements are presented in Australian dollars, which is Micro-X Ltd's functional and presentation currency.
Foreign currency transactions and balances:
Foreign currency transactions are translated into the functional currency of Micro-X Ltd, using the exchange rates prevailing
at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of
such transactions and from the re-measurement of monetary items at year end exchange rates are recognised in profit or
loss. Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange
rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
Foreign operations:
Assets and liabilities of the foreign entity are translated into $AUD at the closing rate. Income and expenses have been
translated into $AUD at the average rate over the reporting period. Exchange differences are charged or credited to other
comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation the
cumulative translation differences recognised in equity are reclassified to profit or loss and recognised as part of the gain or
loss on disposal.
Comparatives
The consolidated financial statements provide comparative information in respect of the previous period. Comparative figures
have been adjusted to conform to changes in presentation for the current Financial Year.
The statement of profit of loss for the year ended 30 June 2022 includes selling and distribution costs. To provide consistent
presentation, expenses totalling $0.21M relating to selling and distribution activities for the year ended 30 June 2021 have
been reallocated from office and administrative expenses & other expenses. As a result, $0.11M and $0.1M has been
reclassified from office and administrative expenses and other expenses respectively.
The statement of cashflows for the year ended 30 June 2022 includes lease interest payments (cash flows from operating
activities). To provide consistent presentation, cash outflows totalling $0.26M relating to the lease interest payments for the
year ended 30 June 2021 have been reallocated from repayment of lease liabilities (cash flows from financing activities) to
lease interest payments (cashflows from operating activities).
In relation to Note 31, cash outflows totalling $0.26M relating to lease interest payments for the year ended 30 June 2021
have been reallocated from non-cash finance costs resulting in net cash used in operating activities for 2021 to be ($10,113.)
34
Annual Report 2022
Annual Report 2022
53
53
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
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
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on
or after 1 July 2022. The implementation of these standards did not have a material impact. The Group has not early adopted
any other standard, interpretation or amendment that has been issued but is not yet effective.
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 30 June 2022. The Group's assessment of
the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out
below.
Amendments to AASB 101: Classification of Liabilities as Current or Non-current
In January 2020, the AASB issued amendments to paragraphs 69 to 76 of AASB 1 to specify the requirements for classifying
liabilities as current or non-current.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied
retrospectively. The implementation of the standard is not expected to have a material impact on the Group.
Reference to the Conceptual Framework – Amendments to AASB 3
In May 2020, the AASB issued Amendments to AASB 3 Business Combinations - Reference to the Conceptual Framework.
The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018
without significantly changing its requirements
The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively
and are not expected to impact on the financial statements of the Group.
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to AASB 116
In May 2020, the AASB issued Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities
deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing
that asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied
retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest
period presented when the entity first applies the amendment. The amendments are not expected to have a material impact
on the Group.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to AASB 137
In May 2020, the AASB issued amendments to AASB 37 to specify which costs an entity needs to include when assessing
whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that relate
directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related
to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are
explicitly chargeable to the counterparty under the contract. The amendments are effective for annual reporting periods
beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled
all its obligations at the beginning of the annual reporting period in which it first applies the amendments
Definition of Accounting Estimates - Amendments to AASB 108
In February 2021, the AASB issued amendments to AASB 108, in which it introduces a definition of “accounting estimates”.
The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and
the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting
estimates. The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to
changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier
application is permitted as long as this fact is disclosed. The amendments are not expected to have a material impact on the
Group.
35
MICRO‑X LimitedMICRO-X Limited
5454
N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 2. Significant accounting policies (continued)
Disclosure of Accounting Policies - Amendments to AASB 101 and AASB Practice Statement 2
In February 2021, the AASB issued amendments to AASB 1 and AASB Practice Statement 2 Making Materiality Judgements,
in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures.
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement
for entities to disclose their “significant” accounting policies with a requirement to disclose their “material” accounting policies
and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to AASB 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application
permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the
definition of material to accounting policy information, an effective date for these amendments is not necessary. The Group
is currently assessing the impact of the amendments to determine the impact they will have on the Group’s accounting policy
disclosures
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.
Share-based payment transactions (Note 21)
The company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Monte-Carlo model considering
the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to
equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
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 fair value less costs of disposal
or value-in-use calculations, which incorporate a number of key estimates and assumptions.
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 and 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.
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.
36
Annual Report 2022
Annual Report 2022
55
55
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the Group's operations; comparison of terms and conditions to
prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option,
or not exercise a termination option, if there is a significant event or significant change in circumstances.
Research and development (R&D) tax incentive
The Group is entitled to claim R&D tax incentives in Australia. The R&D tax incentive is calculated using the estimated R&D
expenditure multiplied by a 43.5% refundable tax offset. The Group accounts for this incentive as other income within the
Statement of Profit or Loss and Other Comprehensive Income.
Warranty provision
The Group provides warranties for general repairs of defects that existed at the time of sale, as required by law. Provisions
related to these assurance-type warranties are recognised when the product is sold, or the service is provided to the
customer. Initial recognition is based on historical experience. The estimate of warranty-related costs is revised annually.
Note 4. Operating segments
The Group has operations in Australia and the United States (Micro-X Inc) and the UK (Micro-X UK Operation Limited).
The Executive Leadership Group is the Chief Operating Decision Maker (CODM) and monitors the operating results of its
business geographically for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated
financial statements.
Operating segment information
For management purposes, the Group has been split into geographical segments. Due to the fact it was established this
Financial Year, Micro-X UK Operations Limited has been aggregated into the Parent Company.
Revenue
Sales to external customers
Other revenue
Total revenue
Expenses
Depreciation and amortisation
Finance costs
Other expenses
Total expenses
Micro-X
Limited
Australia
$'000
Micro-X Inc
United States
$,000
Total
5,154
4,144
9,298
(1,258)
(264)
(22,996)
(24,518)
3,816
-
3,816
(174)
(32)
(5,479)
(5,685)
8,970
4,144
13,114
(1,432)
(296)
(28,475)
(30,203)
Loss before income tax expense
(15,220)
(1,869)
(17,089)
37
MICRO‑X LimitedMICRO-X Limited
5656
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 4. Operating segments (continued)
Total assets
Total Liabilities
Net Assets
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X
Limited
Australia
$'000
Micro-X Inc
United States
$'000
Total
27,685
(10,454)
3,592
(1,534)
31,277
(11,988)
17,231
2,058
19,289
Major customers
During the Financial Year ended 30 June 2022 approximately $2.5M being 28% (2021: N/A) was derived from engineering
contract services to the Australian Stroke Alliance (ASA) and $2.6M being 30% (2021: N/A) relating to engineering contract
services to the U.S Department of Homeland Security (DHS).
In addition, 2022 approximately $2.2M being 24% (2021: $2.2M being 59%) of the Group's external revenue was derived
from sales to Carestream Health.
In August 2022, Carestream announced it was voluntarily filing for reorganisation under Chapter 11 of the United States
Bankruptcy Code. Carestream has stated it expects to continue to trade and honour all existing terms and conditions
under its contract with the Company.
Note 5. Revenue
Sale of Goods
Engineering contract services
Other Engineering Consulting
Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
DRX Revolution Nano
Micro-X Rover
Engineering Contract Services
Engineering Consulting
Spare Parts
Geographical regions
United States
Asia-Pacific
Europe, Middle East & Africa
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
38
Consolidated
2022
$'000
2021
$'000
3,781
5,189
-
3,642
-
129
8,970
3,771
Consolidated
2022
$'000
2021
$'000
1,614
1,609
5,189
-
558
1,862
1,410
-
129
370
8,970
3,771
4,196
4,047
727
747
2,293
731
8,970
3,771
3,781
5,189
3,642
129
8,970
3,771
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
6. Other Income
Interest Received
Research & Development Tax Incentive Refund
Other Government Grants
Note 7. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25% (2021: 26%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
R&D tax incentive income
Feedstock adjustment
R&D expenditure
Current year tax losses not recognised
Current year temporary differences not recognised
Income tax expense
Annual Report 2022
Annual Report 2022
57
57
Consolidated
2022
$'000
2021
$'000
21
3,655
468
6
1,885
1,121
4,144
3,012
Consolidated
2022
$'000
2021
$'000
(17,089)
(14,731)
(4,272)
(3,830)
-
489
(914)
52
1,994
(2,651)
2,842
(191)
1
426
(490)
-
1,125
(2,768)
2,913
(145)
-
-
The Group has tax losses that arose of $40.3 million (2021: $28.5 million) that are available indefinitely for offsetting against
future taxable profits of the companies in which the tax losses arose.
Deferred tax assets have not been recognised in respect of these losses as the Group has been loss-making for some time,
and there is no evidence of recoverability in the near future.
Note 8. Current assets - trade and other receivables
Trade receivables
R&D tax incentive receivable
Other receivables
GST receivable
39
Consolidated
2022
$'000
2021
$'000
115
3,470
18
3,603
332
1,895
21
2,248
152
229
3,755
2,477
MICRO‑X LimitedMICRO-X Limited
I N A N C I A L S T A T E M E N T S C O N T ’ D
5858
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 9. Current assets - contract assets
Contract assets
Note 10. Current assets - inventories
Raw materials
Finished goods
Note 11. Current assets - Other Assets
Prepayments and deposits
Note 12. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Fixtures and fittings - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
Work in progress - at cost
Total property, plant and equipment
40
Consolidated
2022
$'000
2021
$'000
1,314
-
Consolidated
2022
$'000
2021
$'000
4,395
1,388
2,841
-
5,783
2,841
Consolidated
2022
$'000
2021
$'000
1,589
362
Consolidated
2022
$'000
2021
$'000
1,749
(535)
1,214
2,446
(1,195)
1,251
216
(74)
142
518
(234)
284
190
1,696
(362)
1,334
2,030
(885)
1,145
128
(52)
76
296
(113)
183
-
3,081
2,738
Annual Report 2022
Annual Report 2022
59
59
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 12. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Depreciation expense
Balance at 30 June 2021
Additions
Transfers in/(out)
Depreciation expense
Leasehold
improvement
s
$'000
Plant &
equipment
$'000
Fixtures &
fittings
$'000
Computer
Equipment
$'000
Work in
Progress
$'000
Total
$'000
1,443
55
(164)
1,334
55
-
(175)
1,073
534
(462)
1,145
508
(93)
(309)
17
70
(11)
76
89
-
(23)
145
105
(67)
183
221
-
(120)
284
-
-
-
-
190
-
-
190
2,678
764
(704)
2,738
1,063
(93)
(627)
3,081
Balance at 30 June 2022
1,214
1,251
142
Note 13. Non-current assets - Right-of-use assets and lease liabilities
The Group leases land and buildings for its offices and production facilities under agreements of between 5 to 10 years with,
in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated. The Group also leases machinery under agreements of between 1 to 5 years.
Right-of-use
Less: Accumulated depreciation
As at 1 July
Additions (United States)
Modification to Lease Agreement
Recognition of Make Good Provision
Depreciation
As at 30 June
Consolidated
2022
$'000
2021
$'000
6,458
(1,150)
6,434
(435)
5,308
5,999
Consolidated
2022
$'000
2021
$'000
5,999
-
24
-
(715)
4,582
646
695
505
(429)
5,308
5,999
Set out below are the carrying amounts of lease liabilities (disclosed as current and non-current lease liabilities) and the
movements during the period:
41
MICRO‑X LimitedMICRO-X Limited
6060
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
I N A N C I A L S T A T E M E N T S C O N T ’ D
Note 13. Non-current assets - Right-of-use assets and lease liabilities (continued)
As at 1 July
Additions/Exchange rate movements
Modification of lease terms
Accretion of interest
Payments
As at 30 June
Current
Non-Current
Factors considered in determining the life of lease liabilities is discussed at Note 3.
The following are the amounts recognised in profit & loss:
Depreciation expense - Right of use assets
Interest expense - lease liability
Note 14. Non-current assets - intangibles
Intellectual property - at cost
Patents and trademarks - at amortised value
Consolidated
2022
$'000
2021
$'000
5,837
52
24
281
(880)
5,314
633
4,681
4,854
646
816
265
(744)
5,837
599
5,238
Consolidated
2022
$'000
2021
$'000
715
281
996
602
265
867
Consolidated
2022
$'000
2021
$'000
59
85
144
-
129
129
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Amortisation expense
Balance at 30 June 2021
Additions
Amortisation expense
Balance at 30 June 2022
Capitalised
development
costs
$'000
Patents &
Trademarks
$'000
Total
$'000
840
-
(840)
-
59
-
59
197
115
(183)
129
-
(44)
85
1,037
115
(1,023)
129
59
(44)
144
42
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 15. Current liabilities - trade and other payables
Trade payables
Other payables and accrued expenses
Note 16. Current liabilities - contract liabilities
Grant funding in advance (AMGF & MMF)
Note 17. Current liabilities - provisions
Employee Entitlements
Note 18. Non-current liabilities - provisions
Long service leave
Lease make good
Warranties
Note 19. Equity - Issued capital
Annual Report 2022
Annual Report 2022
61
61
Consolidated
2022
$'000
2021
$'000
1,304
3,062
691
1,937
4,366
2,628
Consolidated
2022
$'000
2021
$'000
459
501
Consolidated
2022
$'000
2021
$'000
1,021
579
Consolidated
2022
$'000
2021
$'000
93
505
230
828
201
505
217
923
Ordinary shares - fully paid
461,454,266 459,701,740
117,529
116,967
Consolidated
2022
Shares
2021
Shares
2022
$'000
2021
$'000
43
MICRO‑X LimitedMICRO-X Limited
6262
N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 19. Equity - Issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
Issue of shares - conversion of convertible notes -
($0.23 represents conversion at floor price per terms
of security)
Issue of shares under Employee Gift Plan
Issue of Shares - Placement
Capital Raising Costs
Issue of shares - share placement
Issue of shares - conversion of convertible notes -
($0.4 represents conversion per terms of security)
Issue of shares - conversion of convertible notes -
($0.4 represents conversion per terms of security
1 July 2020
357,167,839
16 Nov 2020
23 Dec 2020
05 Feb 2021
05 Feb 2021
24 Feb 2021
2,173,914
110,003
89,705,883
-
10,294,101
$0.230
$0.370
$0.340
$0.000
$0.340
05 Mar 2021
125,000
$0.400
10 Mar 2021
125,000
$0.400
Balance
Issue of shares under Employee Gift Plan
Exercise of Rights under Employee Equity Plan
Exercise of Rights under Employee Equity Plan
Exercise of Rights under Employee Equity Plan
Issue of shares in lieu of cash payments for Directors
Fees
Exercise of Rights under Employee Equity Plan
30 June 2021
30 Sep 2021
06 Oct 2021
04 Jan 2022
15 Feb 2022
02 May 2022
02 May 2022
459,701,740
223,891
202,114
13,210
178,336
149,594
985,381
$0.326
$0.370
$0.370
$0.370
$0.180
$0.320
84,297
500
41
30,500
(1,971)
3,500
50
50
116,967
73
75
5
66
27
316
Balance
30 June 2022
461,454,266
117,529
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. 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.
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.
Note 20. Equity - Foreign currency translation reserve
Exchange differences on translating foreign operations
18
-
Note 21. Equity - Share based payments reserve
Consolidated
2022
$'000
2021
$'000
Share-based payments reserve
44
Consolidated
2022
$'000
2021
$'000
3,057
1,472
Annual Report 2022
Annual Report 2022
63
63
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 21. Equity - Share based payments reserve (continued)
Micro-X issued service rights to all staff and service rights and performance rights, inclusive of short term incentives (STI)
and long term incentives (LTI) to Leadership and a subset of other staff under its Employee Equity Plan on 30 September
2021. The rights hold various service and performance conditions which vest over 3 years to 30 September 2024.
Consistent with the Resolutions passed at its AGM on 19 November 2021, Micro-X issued performance rights to its Directors
on 22 December 2021. The rights hold various performance conditions which vest over 3 years to 22 December 2024.
The following assumptions have been used:
Valuation Inputs & Conclusions
Description
Valuation Date
Number of instruments issued
Spot Price
Exercise Price
Life (Years)
Volatility*
Dividend Yield
Risk Free Rate
Assessed Value
STI
Performance
Rights
LTI Service
Rights
LTI
Performance
Rights
30 Sep 2021
4,211,766
$0.330
Nil
0.9
70%
0.00%
0.03%
$0.330
30 Sep 2021
30 Sep 2021
1,911,907
2,636,035
$0.330
$0.330
Nil
Nil
3
3
70%
70%
0.00%
0.00%
0.03% to 0.25% 0.25%
$0.199
$0.330
Non-Executive
Director LTI
Performance
Rights
22 Dec 2021
333,337
$0.255
Nil
3
70%
0.00%
0.89%
$0.152
*Based on historical volatility of Micro-X shares and comparable companies.
The fair value of the rights expensed for the year ended June 2022 was $2.047 million.
Set out below are the movements of rights held by Non-Executive Directors and Key Management Personnel during the
Financial Year.
Held at 1 July
2021
Granted as
Remuneration
Exercised or
Expired
Held at 30 June
2022
Average Fair
Value per Right
at Grant Date
Rights issued under
Employee Equity Plan
7,049,7671
5,521,628
(1,427,848)
11,143,447
$0.298
1. D Pini was appointed to Key Management Personnel on 1 July 2021, increasing the opening value of rights held.
The following table illustrates the number and weighted average fair value (WAFV) at grant date of, and movement in, rights
held by all participants during the Financial Year:
Outstanding at 1 July
Granted during the Financial Year
Exercised during the Financial Year
Expired during the Financial year
Outstanding at 30 June
2022
Number
2022
WAFV
2021
Number
2022
WAFV
9,678,962
9,093,045
(1,379,041)
(1,723,818)
15,669,148
$0.319
$0.300
$0.334
$0.355
$0.308
9,678,962
-
-
-
9,678,962
$0.319
$0.000
$0.000
$0.000
$0.319
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and the directors as part of their
remuneration, and other parties as part of their compensation for services.
45
MICRO‑X LimitedMICRO-X Limited
6464
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
I N A N C I A L S T A T E M E N T S C O N T ’ D
Note 21. Equity - Share based payments reserve (continued)
Movements in reserves
Movements in each class of reserve during the current and previous Financial Year are set out below:
Consolidated
Balance at 1 July 2020
Share rights expense1
Share option equity movement2
Balance at 30 June 2021
Share rights expense1
Share right equity movement2
Balance at 30 June 2022
Share-based
payment
reserve
$'000
Total
$'000
417
1,472
(417)
1,472
2,047
(462)
417
1,472
(417)
1,472
2,047
(462)
3,057
3,057
1
2
Employee Equity Plan - amortisation expense of rights granted
Value of rights/options transferred to retained earnings on exercise or when lapsed due to expiry.
Note 22. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous Financial Year.
Note 23. Financial instruments
Financial risk management objectives
The company's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and
liquidity risk. The company'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 company. The company uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate
and other price risks and ageing analysis for credit risk.
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, evaluates and hedges financial risks within the Group's operating units. Finance
reports to the Board on a monthly basis.
Unless otherwise stated, there have been no changes from the previous reporting period in the Company's exposures to
risks related to financial instruments, or how those risks arise.
Market risk
Foreign currency risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in
a currency that is not the Company’s functional currency. The Company operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily with respect to the United States Dollar (USD).
Price risk
The Group is not exposed to any significant price risk.
46
Annual Report 2022
Annual Report 2022
65
65
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 23. Financial instruments (continued)
Interest rate risk
The Company’s exposure to the risk of changes in market interest rates relates primarily to the company’s cash deposits
with floating interest rates. These financial assets with variable rates expose the Company to interest rate risk.
All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Company does
not engage in any hedging or derivative transactions to manage interest rate risk.
In regard to its interest rate risk, the Company continuously analyses its exposure. Within this analysis consideration is given
to potential renewals of existing positions, alternative investments and the mix of fixed and variable interest rates.
At the balance date the company had the following financial assets and liabilities exposed to Australian variable interest rate
risk that are not designated in cash flow hedges:
Cash at bank of $10.3M (2021: $30.1M). The sensitivity of the cash at bank balance to changes in interest rate (of +/-1%)
equates to +/-$103,030 (2021: +/-$301,350). The sensitivity of 1% is based on reasonable, possible changes, over a
Financial Year, using the observed range of actual historical short-term deposit rate movements and management's
expectation of future movements.
Credit risk
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.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Credit risk arises from cash and cash equivalents and outstanding trade and other receivables.
The cash balances are held in financial institutions with high ratings and the trade and other receivables relate to:
(i) amounts receivable from a substantial trade debtor with a strong credit standing;
(ii) goods and services tax receivable from the Australian Tax Office (ATO);
(iii) estimated R&D tax incentive receivable from the ATO.
The company has assessed that there is minimal risk that the cash and trade and other receivables balances are impaired.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Trade payables are generally payable on 30-day terms.
47
MICRO‑X LimitedMICRO-X Limited
6666
N O T E S T O T H E F
I N A N C I A L S T A T E M E N T S C O N T ’ D
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 23. Financial instruments (continued)
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.
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or
less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Remaining
contractual
maturities
$'000
Over 5 years
$'000
-
1,304
-
-
-
1,304
5.00%
633
1,937
719
719
1,870
1,870
2,092
2,092
5,314
6,618
Weighted
average
interest rate
%
1 year or
less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Remaining
contractual
maturities
$'000
Over 5 years
$'000
-
691
-
-
-
691
5.00%
599
1,290
639
639
1,990
1,990
2,609
2,609
5,837
6,528
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the company is set
out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
48
Consolidated
2022
$
2021
$
2,142,900
253,854
1,236,374
1,581,580
171,296
1,158,902
3,633,128
2,911,778
Annual Report 2022
Annual Report 2022
67
67
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 24. Key management personnel disclosures (continued)
Consistent with the prior year. Key Management Personnel were granted rights under the Employee Equity Plan on 30
September 2021.
The Share-based payments above relate to the amortisation of the fair value of the grant of rights made to the KMP during
the year and do not necessarily reflect the cash value that may be realised upon vesting and exercising of the rights.
Note 25. Remuneration of auditors
During the Financial Year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the
Company:
Consolidated
2022
$
2021
$
100,395
118,757
-
12,965
100,395
131,722
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Other services
Note 26. Contingent liabilities
The company has no contingent liabilities as at 30 June 2022.
Note 27. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the
directors' report.
Transactions with related parties
There were no other transactions with related parties during the current and previous Financial Year.
Receivable from and payable to related parties
Noted as at reporting date, a $62,194 payable to Patrick O'Brien is included within trade payables for director fees invoiced
at 30 June 2022.
There were no other trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
49
MICRO‑X LimitedMICRO-X Limited
I N A N C I A L S T A T E M E N T S C O N T ’ D
6868
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Foreign currency translation reserve
Convertible notes
Share-based payments reserve
Accumulated losses
Total equity
Parent
2022
$'000
2021
$'000
(17,131)
(14,731)
(17,131)
(14,731)
Parent
2022
$'000
2021
$'000
18,916
35,815
27,674
44,681
7,309
4,307
8,348
10,468
117,529
97
65
3,057
(101,422)
116,967
-
65
1,472
(84,291)
19,326
34,213
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 2022 and 2021.
Capital commitments - Property, plant and equipment
The parent entity has no capital commitments for property, plant and equipment as at 2022.
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2.
Note 29. 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:
Name
Principal place of business /
Country of incorporation
Ownership interest
2021
2022
%
%
Micro-X Incorporated
Micro-X UK Operations Limited (Registered 2
September 2021)
USA
100%
100%
United Kingdom
100%
-
50
Annual Report 2022
Annual Report 2022
69
69
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 30. Events after the reporting period
No matter or circumstance has arisen since 30 June 2022 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.
Note 31. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Non-cash finance costs
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in employee benefits
Increase in inventories
Increase in unearned income
Consolidated
2022
$'000
2021
$'000
(17,089)
(14,731)
1,432
1,954
86
(2,592)
709
320
(2,887)
(41)
2,294
1,678
164
2,433
(1,585)
782
(1,026)
(122)
Net cash used in operating activities
(18,108)
(10,113)
The statement of cashflows for the year ended 30 June 2022 includes lease interest payments (cash flows from operating
activities). To provide consistent presentation, cash outflows totalling $0.26M relating to lease interest payments for the year
ended 30 June 2021 have been reallocated from non-cash finance costs resulting in net cash used in operating activities in
2021 being ($10,113).
Note 32. Earnings per share
Loss after income tax attributable to the owners of Micro-X Limited
(17,089)
(14,731)
Consolidated
2022
$'000
2021
$'000
Basic earnings per share
Diluted earnings per share
Cents
Cents
(3.71)
(3.71)
(3.70)
(3.70)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
460,277,186 398,120,343
Weighted average number of ordinary shares used in calculating diluted earnings per share 460,277,186 398,120,343
51
MICRO‑X LimitedMICRO-X Limited
I N A N C I A L S T A T E M E N T S C O N T ’ D
7070
N O T E S T O T H E F
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2022
Note 32. Earnings per share (continued)
The weighted average number of shares does not include the potential number of ordinary shares upon take-up of rights and
the conversion of the mandatorily convertible notes.
The potential number of shares on conversion of the April 2018 mandatorily convertible notes which are unconverted is
162,500 ordinary shares based on conversion prices of $0.40 (Ceiling Cap).
Basic EPS is calculated by dividing the loss for the year attributable to ordinary equity holders of the group by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the loss attributable to ordinary equity holders of the group by the weighted average
number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares into ordinary shares. It is noted that diluted EPS cannot be
calculated on the loss for the year and accordingly the diluted EPS equals the basic EPS.
52
D I R E C T O R S ’ D E C L A R A T I O N
Annual Report 2022
71
Micro-X Limited
Directors' declaration
For the year ended 30 June 2022
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 30 June
2022 and of its performance for the Financial Year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
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 Knox
Non-Executive Chair
29 August 2022
53
MICRO‑X Limited
72
I N D E P E N D E N T A U D I T O R ’ S R E P O R T
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Micro-X Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of Micro-X Ltd (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of
profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year ended on that date; and
b 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 auditor independence requirements
of 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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Annual Report 2022
Annual Report 2022
73
73
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group incurred a net loss of
$17,089,000 during the year ended 30 June 2022 and operating cash outflows of $18,108,000. As stated in Note
2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty
exists that may cast doubt on the Group’s ability to continue as a going concern. 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.
Key audit matter
How our audit addressed the key audit matter
Recognition of research and development tax incentive –
Notes 2, 3, 6 and 8
The Group receives a research and development
(R&D) refundable tax offset from the Australian
government, which represents 43.5 cents in each dollar
of eligible annual R&D expenditure if its turnover is less
than $20 million per annum. Registration of R&D
Activities Application is filed with AusIndustry in the
following financial year and, based on this filing, the
Group receives the incentive in cash.
Management reviewed the Group’s total R&D
expenditure to estimate the refundable tax offset
receivable under the R&D tax incentive legislation.
This area is a key audit matter due to the size of the
accrual and the degree of judgment and interpretation
of the R&D tax legislation required by management to
assess the eligibility of the R&D expenditure under the
scheme.
Our procedures included, amongst others:
• obtaining through discussions with management an
understanding of the process to estimate the claim;
• utilising an internal R&D tax specialist to;
−
review the expenditure methodology employed
by management for consistency with the R&D
tax offset rules; and
− consider the nature of the expenses against the
eligibility criteria of the R&D tax incentive
scheme to form a view about whether the
expenses included in the estimate were likely to
meet the eligibility criteria;
• comparing the nature of the R&D expenditure
included in the current year estimate to the prior
year’s claim;
•
testing a sample of R&D expenditure and agreeing
to supporting documentation to ensure appropriate
classification, the validity of the claimed amount and
eligibility against the R&D tax incentive scheme
criteria;
• assessing the appropriateness of the financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our
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.
Grant Thornton Australia Limited
2
(cid:3)
MICRO‑X LimitedMICRO-X Limited
7474
I N D E P E N D E N T A U D I T O R ’ S R E P O R T C O N T ’ D
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability 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 have no realistic
alternative but to do so.
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 at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.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 in the Directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Micro-X Ltd, for the year ended 30 June 2022 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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 29 August 2022
Grant Thornton Australia Limited
3
(cid:3)
S H A R E H O L D E R I N F O R M A T I O N
Annual Report 2022
75
Micro-X Limited
Shareholder information
For the year ended 30 June 2022
The shareholder information set out below was applicable as at 19 August 2022.
The total number of shareholders is 4,088 and there are 461,504,991 ordinary fully paid shares on issue.
There are a further 15,338,102 unquoted performance rights over fully paid ordinary shares issued under the Employee
Equity Plan, which are held by 65 participants. During the year ended 30 June 2022 the following grants of performance
rights were made:
Grant Date
Exercise
Price
Number of
Holders
Number on
Issue
Number of
Restricted
Securities
Release Data
(If
Applicable)
30 September 2021 - Employee1
22 December 2021 - Non-Executive Directors2
$0.000
$0.000
79
5
8,759,708
333,337
-
-
-
-
1. As part of the Employee Equity Plan including both short term incentives and long term incentives for employees, 8,759,708
rights (including performance rights and service rights) were issued on 30 September 2021. The rights hold various service
and performance conditions which will be assessed and potentially vest on 31 August 2022 (short term incentives) and 30
September 2024 (long term incentives).
2. Consistent with the Resolutions passed at the AGM on 19 November 2021, the Company issued 333,337 performance
rights to the five Non-Executive Directors who were appointed as at 22 December 2021 as part of the Employee Equity Plan.
These performance rights hold various performance conditions which will be assessed and potentially vest on 22 December
2024.
Accounting for previous grants, as well as conversion and expiry of 3,433,905 performance rights on issue, there are
15,338,102 unquoted rights over fully paid ordinary shares issued which are held by 65 participants as at 19 August 2022
There are 650 unlisted convertible notes of face value $100 per Note as follows:
Convertible Notes Maturity
Date
Note Conversion Price
Number of
Holders
Number on
Issue
Number of
Restricted
Securities
Release Date
(If Applicable)
Perpetuity
$0.400
3
650
-
-
Distribution of Securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
% of total
Options over ordinary
shares
% of total
Number
of holders
shares
issued
Number
of holders
shares
issued
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
86
1,088
675
1,753
486
-
0.72
1.17
14.21
83.90
4,088
100.00
Holding less than a marketable parcel
799
-
There are 799 holders (with a total of 1,699,500 shares) holding less than a marketable parcel.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57
MICRO‑X Limited
7676
S H A R E H O L D E R IN F O R M A T I O N C O N T ’ D
Micro-X Limited
Shareholder information
For the year ended 30 June 2022
Equity security holders
Twenty largest equity security holders
The names of the twenty largest security holders of equity securities are listed below:
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD (DRP)
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
MR PETER ROBIN ROWLAND
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LONSDALE NOMINEES PTY LTD (THE LONSDALE FUND A/C)
MR LENNIE FRANKLIN DAVID
HARMAN NOMINEES PTY LTD (HARMANIS INVESTMENT)
BRONTE INVESTMENTS PTY LTD (MCMAHON SUPERANNUATION A/C)
MEDDISCOPE PTY LTD (PODESTA FAMILY A/C)
ANGLESEA INVESTMENTS PTY LIMITED (DAMIEN OBRIEN FAMILY A/C)
GOWING BROS LIMITED
VABEN PTY LTD (THE VABEN SUPERANNUATION A/C)
KANAT NOMINEES PTY LTD (AARON KANAT ML A/C)
CHARLI JORDAN PTY LIMITED (MOLLOY SETTLEMENT A/C)
ANTIPODEAN NOMINEES PTY LTD (ANTIPODEAN FAMILY A/C)
COMO GROUP HOLDINGS PTY LED (KIRKWOOD SUPER FUND A/C)
Ordinary shares
% of total
shares
issued
Number held
50,916,440
39,698,006
35,506,627
22,775,429
22,445,512
18,277,935
11,950,000
9,067,620
5,904,601
4,966,867
4,816,556
4,600,279
3,244,565
2,766,379
2,752,858
2,565,931
2,420,828
2,400,000
2,168,237
2,090,000
11.03
8.60
7.69
4.94
4.86
3.96
2.59
1.97
1.28
1.08
1.04
1.00
0.70
0.60
0.60
0.56
0.52
0.52
0.47
0.45
251,334,670
54.46
Substantial holders in the company, as disclosed in substantial holding notices given to the company, are set out below:
Perennial Value Management Limited
TIGA Trading Pty Ltd and Thorney Technologies Limited
Acorn Capital Limited
AustralianSuper Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
Shares
issued
Number held
67,472,215
26,282,972
24,324,957
23,810,480
14.62
5.70
5.27
5.16
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.
Shares subject to escrow (Restricted Securities)
Voting rights relating to shares subject to escrow are the same as for ordinary shares except that, during a breach of the
ASX Listing Rules relating to Shares which are Restricted Securities, or a breach of a restriction agreement, the holder of
the relevant Restricted Securities is not entitled to any voting rights in respect of those Restricted Securities.
Performance Rights, Service Rights, Options and Convertible Notes
Performance Rights, Service Rights, Options and Convertible Notes do not have voting rights attached
There are no other classes of equity securities.
58
C O R P O R A T E
D I R E C T O R Y
A u D I T O R
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide SA 5000
Phone: +61 8 8372 6666
l E G A l
Thompson Geer
Level 14, 60 Martin Place
Sydney NSW 2000
S T O C K E X C H A nG E l I S T I nG
Micro‑X Ltd shares are listed on the Australian
Securities Exchange (ASX code: MX1)
W E B S I T E
www.micro‑x.com
D I R E C T O R S
David Knox (Chair)
Peter Rowland (Managing Director)
Alexander Gosling (Non‑Executive Director)
Yasmin King (Non‑Executive Director)
Patrick O’Brien (Non‑Executive Director)
James McDowell (Non‑Executive Director)
Ilona Meyer (Non‑Executive Director) –
Appointed 7 March 2022
C O M P A n Y S E C R E T A R Y
Kingsley Hall
R E G I S T E R E D O F F I C E
A14, 6 MAB Eastern Promenade
1284 South Road
Tonsley SA 5042
P R I nC I P A l P l A C E O F B u S I n E S S
A14, 6 MAB Eastern Promenade
1284 South Road
Tonsley SA 5042
S H A R E R E G I S T E R
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3067
Phone: 1300 555 159 (within Australia)
Phone: +61 3 9415 4000 (outside Australia)
M I C R O ‑X . C O M