D R I V I N G
C O M M E R C I A L
F O C U S
Annual Report 2023
Who is Micro‑X?
Micro‑X creates revolutionary x‑ray imaging to better lives.
We are pioneers of a global revolution in medical and security imaging
using cold cathode x‑ray sources. Our proprietary technology removes
barriers to traditional x‑ray imaging and creates new opportunities for
industries across the world. We are re‑imagining the world of imaging
and changing lives for the better.
Our world‑leading Nano Electronic X‑ray (NEX) Technology is the
common platform for all our products, delivering reliability and
quality digital images through a small cold cathode x‑ray tube.
With a vertically integrated design and production facility in Adelaide,
Australia, and a global technical and commercial team, we are focused
on delivering exceptional innovative products to underpin our
commercial growth.
C O N T E N T S
2023 ACHIEVEMENTS
MICRO‑X AT A GLANCE
CHAIR’S LETTER
CEO’S REPORT
X‑RAY CAMERA
MOBILE DR
BRAIN CT
CHECKPOINTS
SUSTAINABILITY
FINANCIAL REPORT
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Micro‑X Limited
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M I C R O - X C R E A T E S R E V O L U T I O N A R Y
X - R A Y I M A G I N G T O B E T T E R L I V E S .
We have a proven technology
Micro‑X is more focused than ever
platform using proprietary Nano
on building advanced commercial
Electronic X‑ray Technology that
capabilities to accelerate our growth
is world‑leading.
into new and established markets
and increase shareholder value.
Annual Report 2023
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2 0 2 3
A C H I E V E M E N T S
Mobile DR
› Sales of $3.8m in FY2023.
› Expanded into sports medicine
market including debut
at Australian Grand Prix.
› Rover Plus approved for sale
in Australia and US.
› Humanitarian and defence
applications – Ukraine and
Australian Defence Force.
Argus X‑ray Camera
› Successful technical and
customer demonstrations.
› System integration and
verification underway.
› Exhibited at major
international events.
› Internationally recognised
with iF Design Award.
Micro‑X Limited
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U S $ 3 0 B+
A D D R E S S A B L E M A R K E T S
Checkpoints
› Two contracts with US Department
of Homeland Security for US$4.5m.
› Contract extension for second baggage
scanner prototype to fast‑track testing.
› Completed DHS critical design review
for the self‑screening checkpoint.
› Subsequently awarded up to US$14m
contract extension to build and
test in US airports.
Annual Report 2023
Brain CT Scanner
› MRFF funding of $8m in
collaboration with the ASA.
› Key milestones achieved include
build and demonstration of
imaging test bench.
› Presented phantom brain
images and full‑scale model
in Australian Parliament House.
› International interest from
multiple emergency services
to be first adopters.
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M I C R O - X
A T A G L A N C E
Micro‑X has a proven technology platform in our proprietary carbon nanotube
electronic x‑ray tubes. Known as NEX Technology, the tubes form the centre
of our innovations, delivering a world of possibilities across industries.
Our patented emitter contains millions of carbon
nanotubes that deliver a precisely controlled current
of electrons into an anode, making x‑rays without
the heat of a filament electron source. NEX tubes
have instant electrical switching on and off
and a controllable focal spot size for imaging.
Our NEX Technology allows us to move beyond large
conventional oil encased filament tubes, making
Micro‑X tubes smaller, simpler, and lighter without
compromising performance. The smaller size opens
new ways to solve problems, such as miniaturising
a CT scanner to enable stroke imaging outside
of hospitals.
Micro‑X’s first NEX Technology tubes were
commercially produced in 2019. This technology
has been significantly advanced by shrinking the
x‑ray tube, increasing its capability and combining
it with backscatter x‑ray technology.
2023 also saw Micro‑X commercialise its in‑house
manufactured high‑voltage generator platform
for use across Micro‑X products. Using a bespoke
epoxy resin to provide solid state high‑voltage
encapsulation allows the compact generator to
deliver 160,000 Volts DC.
Micro‑X Limited
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Micro‑X NEX Technology produces electrons with a narrower and more controllable
energy spectrum, allowing tubes to be miniaturised, with lower voltages required.
Micro‑X is pursuing large addressable
markets with limited competition,
combining technological prowess
with commercial excellence.
We continue to look for ways to further commercialise
our core technology, and in 2022 signed a $7.5m
collaboration agreement with Varex Imaging
Corporation for an exclusive licence to produce
multi‑beam x‑ray tubes. This agreement is
a testament to the value of our technology and
takes us one step closer to our goal of global
recognition as the future of x‑ray imaging.
P I L L A R S F O R S U C C E S S
› World leading carbon nanotube x‑ray
technology platform offering strong
product advantages.
› Quality manufacturing and delivery
with vertically integrated design
and production facility in Adelaide,
South Australia.
› Proven development capabilities with
a world‑class engineering, design
and software team.
› Strong and growing partner ecosystem
providing industry validation.
NEX Technology enables a more precisely controlled imaging
system through the use of millions of electronically switched
carbon nanotubes to generate x‑rays.
Annual Report 2023
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C H A I R ’ S
L E T T E R
Micro‑X’s purpose is to create revolutionary x‑ray imaging to better lives.
The past year has been one of significant change for
Micro‑X. The Company has met these challenges as it
continues to develop ground‑breaking ultra‑light x‑ray
technology. For the first 12 years Micro‑X has been led
by Peter Rowland who drove the value of the technology.
He has taken the technology of high‑voltage carbon
nanotube x‑rays from the lab bench to fully operational
Nano Electronic X‑ray Technology deployed in all our
products. This is a fantastic achievement, made all the
more so by the robustness of the tubes and supporting
generators once in service. The Rover mobile x‑ray
carts perform outstandingly whether in hospitals,
in support of top sports teams or on the battlefield
in Ukraine.
One of the hardest challenges of growing companies
is to recognise when different leadership skills
are required to successfully transition into a fully
functioning and self‑funded business. Peter recognised
the need for new leadership skills, and in handing over
to Kingsley, underpinned Micro‑X’s future.
Micro‑X is a company with a clear purpose; we seek to
better lives as we apply our technology in healthcare
settings, bomb disposal and airport passenger
screening. The future is exciting. It is based on the
technological foundations put in place under Peter’s
leadership and will now be relentlessly driven forward
with a commercial edge by Kingsley. In Kingsley’s
first few months he has simplified the organisation,
been clear on the purpose and reduced costs.
In his report he discusses the technical challenges.
Anyone who has developed disruptive technology will
recognise these challenges and I am confident that
under the technical leadership of Anthony and Brian,
Micro‑X will continue its track record of success.
This year we have also welcomed the partnership with
Varex, based in Salt Lake City, United States. They are
the largest supplier of x‑ray technology components
in the world. Through the deal to licence our multi
beam technology, Varex has invested in Micro‑X and
we have been pleased to welcome Andrew Hartmann
onto the Board. The Varex relationship is strategically
important to us. It has brought funding but more
importantly the opportunity to collaborate with a
world‑class partner who works in the field.
I would like to take the opportunity to thank Peter
and Micro‑X staff for their support of the transition
to Kingsley and the reshaping of the organisation.
I would like to acknowledge our long‑standing
shareholders who have supported the company
through the peaks and troughs. The Board is
committed to spending shareholder funds wisely
and rewarding your long‑term support.
David Knox
Chair
Micro‑X Limited
C E O ’ S
R E P O R T
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It is my pleasure to be providing shareholders with my first CEO Report,
having been appointed in May with a vision to drive strong commercial
outcomes from our world‑leading technology.
Since taking the reins it has been an incredibly busy
time as our new leadership team has undertaken a
deep operational review. We have examined every
aspect of our business – from our strategic priorities
and product plans, to our customers and partners,
our future priorities and capital allocation.
Management has met with key stakeholders,
including our shareholders, as we continue to
outline the vision for Micro‑X. As a truly innovative
company, we at Micro‑X are always looking to learn
and improve what we do, and I feel the outcome
of this process has been extremely positive.
Our company has strong, proprietary technical
foundations upon which we can build and leverage
value through a significantly enhanced commercial
focus on everything we do.
During this year we reduced our overheads
and simplified our operating model, allowing
us to focus resources on the key drivers of value
within our business – delivering on our development
milestones and bringing our technology to
market. Over the coming year we will continue
to improve our commercial profile, through
organic development but also via appropriate
partnering opportunities.
Turning now to the financial year just completed,
we were met with several challenges including a
difficult radiology market and technical hurdles in
the development of our first security product, the
Argus. Despite these challenges, we still achieved
key commercial and development milestones across
our four groundbreaking products, and we look
forward to continuing to deliver value and accelerate
our growth into new markets in the coming year.
Over the year we faced some unexpected
development challenges with Argus, including the
insulation of high‑voltage components which required
our development team to create a custom‑made
resin that is cured in a vacuum environment.
These challenges unfortunately pushed back the
commercial launch however we are now manufacturing
pre‑production units at Tonsley which we have
been showcasing with future customers at key
international defence and security events.
We were delighted to complete Argus’ first field
tests in May, successfully transmitting high‑definition
backscatter images to the operator who was more
than 1,500m from the target. Argus has exceeded
our expectations in testing, with impressive images
of shallow‑buried anti‑personnel mines and targets
imaged through car doors demonstrating the broad
potential use of our technology.
Annual Report 2023
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“We were delighted
to secure a contract
extension with the
DHS for up to $21m.”
This is providing our commercial team with valuable
insights as our development and manufacturing teams
work tirelessly to deliver the product to launch.
Our shift towards a distributor‑based sales model
for Mobile DR resulted in slower than expected sales
growth for the division which lead us to conducting
a comprehensive review of the sales process and
pipeline for the Rover Plus. Going forward we will
be placing greater emphasis on addressing our
end customers’ requirements and supporting
our distributors to ensure the Rover Plus stands
out amongst their suite of radiology products.
On a positive note we were pleased with the growing
applications for the Rover Plus in the elite sports
field as we sold units to multiple leading professional
sports teams in the US and were delighted to have our
Rover Plus used to image patients in the temporary
medical clinic at the Australian Formula 1 Grand Prix.
From a humanitarian perspective, we have continued
our support for Ukrainian citizens, with over a dozen
Rover units being actively used in Ukrainian hospitals.
I was heartened when a trauma doctor in Ukraine told
us the Rovers are being used extensively, every day,
to help save lives in front line surgical units.
We continue to work closely with the Department of
Homeland Security (DHS) and, after the year ended,
we were delighted to secure a contract extension with
the DHS for up to $21m, which funds us through to
developing a self‑screening passenger checkpoint
available for trial in live airport environments.
In parallel to this work stream we made strong
progress in the design of the associated CT baggage
scanner, and we will be submitting two prototypes
to the DHS for testing in the coming months.
Our technology’s ability to strike a balance
between safety and convenience positions
Micro‑X as a key player in the future of airport
security solutions.
Our CT Scanner for stroke imaging and diagnosis
has shown significant promise in advancing
early diagnosis and treatment of stroke. We have
successfully demonstrated the imaging test bench
to our partner, the Australian Stroke Alliance,
simulating the array of our mini x‑ray tubes.
This gave us the first look at what raw images will
look like in the final design and we were very pleased
with the quality of the images that were delivered.
From a leadership perspective, this year has
seen significant change with the retirement of
Peter. I am honoured to have been appointed to
succeed him as Chief Executive Officer, working
closely with Anthony Skeats who has been promoted
to Chief Operating Officer and Dr Brian Gonzales
as CEO Americas. I wish Peter all the best in his
retirement and thank him for his continued support
for Micro‑X.
Micro‑X Limited
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We have continued to tighten cost management
throughout the business, and in May reduced our
cash burn by identifying annualised cost savings
of $2m which became effective on 1 July 2023.
This represents 20% of company expenditure outside
of the externally funded projects and will be a key
strategy of mine as we seek to lower our cost base
and focus our resources.
Our strategy going forward will include a renewed
focus in leveraging the investment we have made
in our technology and exploring partnerships to
help us capture the large addressable markets we
are targeting. This year we licensed our technology
to Varex to produce multi‑beam emitters. We do
not plan to manufacture these at Micro‑X and it
does not compete with our four existing products.
The deal delivered a welcome $15m cash injection
to the company and demonstrates the significant
value in our unique technology.
While the past year has been challenging, I look
forward to the coming year bringing greater success
as we close in on launching Argus and advance the
development of our Checkpoints and Brain CT Scanner
products. I am confident that Micro‑X will continue
to lead the way in x‑ray technology, driving positive
change across the healthcare and security sectors.
Our entire team of very talented people continues
to work towards its goal of bringing our world leading
technology to market, and I take this opportunity
to thank them for their commitment and persistence.
I also thank you for your continued trust in Micro‑X.
Kingsley Hall
CEO
Annual Report 2023
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O P E R A T I O N S R E V I E W :
X - R A Y
C A M E R A
Argus is the only portable x‑ray system in the world capable of capturing
backscatter images while stationary, providing explosive ordnance disposal
technicians with a tool to rapidly assess threats from a safe distance.
Argus provides explosive ordnance disposal (EOD)
technicians with the ability to ‘see through’ suspect
packages without the need to place a separate imaging
panel behind the object, enabling robot deployment
which prevents the operator from putting their life
at risk by needing to approach the threat. While
traditional x‑ray detects hard and soft materials
by the variation in x‑ray intensity transmitted through
a target, Argus detects the radiation that reflects from
a target, bouncing the x‑ray back to the Argus unit and
transmitting the image to a separate handheld tablet.
Our Nano Electronic X‑ray (NEX) technology underpins
Argus’ unique capabilities, through the integration of
Wide Area Scattered Projection (WASP) backscatter
imaging capability into Micro‑X’s cold cathode x‑ray
tube technology. Our lightweight x‑ray tube and
generator mean Argus is small and light enough for
hand carry or robot deployment.
U S $ 1 . 8 B
A D D R E S S A B L E M A R K E T
Micro‑X Limited
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T H E A R G U S X - R A Y C A M E R A
P R O V I D E S W O R L D - L E A D I N G
S T A N D - O F F I M A G I N G C A P A B I L I T Y
2023 has seen the Argus team
overcome technical challenges
to deliver on the integration of
systems and refine the design
of high‑voltage components.
The first customer demonstrations
were delivered at the International
Association of Bomb Technicians
and Investigators Expo in Florida
in June.
Throughout the year, Micro‑X has
exhibited at major international
events, including partnering
with Team Defence Australia
at international expos, providing
access to potential customers.
This year, Argus was
internationally recognised
with an iF Design Award
thanks to its unique capability.
The next major milestone will
be the launch of Argus to global
markets, facilitating sales of the
unique system to law enforcement
and defence EOD teams.
Commercial Priorities
› Commercial launch
of Argus
› Secure first sales
with key customers
› Scaling of production
capacity
Annual Report 2023
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O P E R A T I O N S R E V I E W :
M O B I L E D R
Micro‑X is a leading innovator in medical imaging solutions, creating
mobile x‑ray systems that are lightweight and offer manoeuverability
without sacrificing image quality.
The company’s Mobile DR product range addresses
medical, veterinary and OEM customer segments,
with a fully integrated digital x‑ray system for imaging
in hospitals, private practices, home care and
temporary medical facilities
Micro‑X’s Mobile DR systems are highly portable,
allowing healthcare professionals to x‑ray patients
in any treatment area, reducing the need for patient
transfers and minimizing the risk of infection
transmission. This is particularly beneficial
in emergency situations, aged care facilities
or remote locations where access to medical
facilities may be limited.
With their portability, high image quality, and
emphasis on patient safety, these devices are
reshaping the landscape of diagnostic imaging
and empowering healthcare professionals
to provide accurate and timely care to patients
in a variety of clinical settings.
Micro‑X has been building sports medicine
applications for Mobile DR, selling its branded
x‑ray system, the Rover, into multiple US professional
sporting codes. In 2023 the next‑generation Rover
Plus was used in the temporary medical clinic
at the Australian Grand Prix.
This year saw the next‑generation Rover Plus listed
on the Australian Register for Therapeutic Goods
and the US Food and Drug Administration. Micro‑X’s
experienced commercialisation team is increasing
its focus on the Middle East and Asia‑Pacific countries,
including through the training of new distributors and
an increased presence at trade shows in the regions.
This year Micro‑X continued its partnership with
non‑government organisations, selling Rovers to be
used in Ukraine in civilian hospitals and temporary
hospitals on the frontline.
Commercial Priorities
› Increasing sales across the US
by supporting distributors
› Pursuing opportunities in Middle East
and Asia‑Pacific
› Obtaining approval to sell in Europe
Micro‑X Limited
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U S E D I N 3 5
C O U N T R I E S
O U R U L T R A M O B I L E X - R A Y
S Y S T E M S E M P O W E R H E A L T H C A R E
P R O F E S S I O N A L S T O P R O V I D E
T I M E L Y P A T I E N T I M A G I N G
I N A V A R I E T Y O F S E T T I N G S .
Annual Report 2023
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O P E R A T I O N S R E V I E W :
B R A I N C T
Micro‑X’s Brain CT Scanner will deliver diagnostic quality images from
a unit that is small enough to be mounted in any air or road ambulance.
In stroke, administering treatment within the first
hour can save lives or reduce disability. With around
85% of strokes occurring due to a blockage (ischaemic
stroke), being able to bring diagnosis to the patient
to enable the early administration of clot dissolving
medicine will save lives and deliver equality of
healthcare access to stroke patients in rural and
remote communities.
Unlike a large conventional CT with a rotating x‑ray
tube, Micro‑X’s Brain CT will use NEX Technology
inside 21 purpose‑designed mini x‑ray tubes. Three
dimensional images will be reconstructed, delivering
diagnostic quality images to doctors in real time.
By using miniaturised x‑ray tubes formed into a
curved array, the Brain CT Scanner will deliver
out of hospital stroke diagnosis, saving precious
minutes for patients.
Micro‑X Limited
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“ I F W E C O U L D T R E A T E V E R Y
S T R O K E W I T H I N T H E F I R S T F E W
M I N U T E S , O R W I T H I N T H E S O - C A L L E D
‘ G O L D E N H O U R ’ , M A N Y P E O P L E ’ S
L I V E S W O U L D R E T U R N T O N O R M A L . ”
Professor Geoffrey Donnan AO,
Australian Stroke Alliance
The Brain CT Scanner is being developed in
partnership with the Australian Stroke Alliance
(ASA), with $8m funding from the Australian Medical
Research Future Fund.
Technology development is on time and on budget,
with the past year including the milestone development
of a test bench capable of capturing phantom or
cadaver images that can be reconstructed using
the CT reconstruction framework.
Development of the Brain CT Scanner has been
presented to decision makers and emergency services
in Australia and overseas, including to lawmakers
in Parliament House, Canberra in 2023.
Commercial Priorities
› Complete product development
› Commence clinical trials
› Accelerate customer evaluations
through global collaborations with
emergency services
U S $ 5 B
A D D R E S S A B L E M A R K E T
Annual Report 2023
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O P E R A T I O N S R E V I E W :
C H E C K P O I N T S
Micro‑X is developing the next generation of passenger checkpoints, including
a compact CT baggage scanner that utilises NEX Technology.
Micro‑X received funding totalling $4.5m for two
different Department of Homeland Security projects
from September 2021.
The contracts include the development of a
compact modular CT baggage scanner that is
capable of scanning a passenger’s carry‑on luggage
simultaneously and the design of a self‑service
passenger checkpoint for airports.
The CT’s modular design means baggage scanners
could also be used to secure buildings, stadiums,
prisons and other transportation infrastructure.
Micro‑X is funded as the prime contractor for the
overall design of the entire self‑service checkpoint
and is leading a consortium of global experts to
combine advanced person screening technology and
a human‑centred design approach with Micro‑X’s
CT baggage scanner.
In 2023 Micro‑X completed the design phase of the
passenger checkpoint contract, with DHS extending
the contract by up to A$21m to allow for Micro‑X
checkpoint modules to be tested in US airports.
U S $ 2 4 B
T O T A L A D D R E S S A B L E
M A R K E T
Micro‑X Limited
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M I C R O - X I S C R E A T I N G A N E W W A Y
F O R P A S S E N G E R S T O E X P E R I E N C E
S E C U R I T Y C H E C K P O I N T S , M A K I N G
T H E M E A S I E R , F A S T E R A N D S A F E R .
Micro‑X’s checkpoint design replaces the conventional
conveyor belt‑based x‑ray and walk‑through on‑person
screening system with seven self‑screening stations,
placed in the same footprint.
This design allows for the complete screening of seven
passengers and their bags at the same time, rather
than one at a time like conventional systems, reducing
stress, improving safety and increasing throughput.
The checkpoint integrates different scanning
to a single security decision.
Annual Report 2023
Commercial Priorities
› Finalise and deliver two compact CT
baggage screening systems to DHS
› Build and test first self‑screening module
› Identify potential customers outside
of the US
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S U S T A I N A B I L I T Y
D I V E R S I T Y A N D I N C L U S I O N
S A F E T Y
24%
female
18
nationalities
employees
represented
› Launched first Reflect Reconciliation Action Plan
› Diversity and Inclusion Policy in place
0
lost time injury cases
since December 2020
0
fatalities or serious
injuries since
Micro‑X founded
E N V I R O N M E N T A L
› Reduction in materials consumption and waste
through refinement of manufacturing processes
› Sustainability Framework
in development
› Introduced oil free compressor for wet lab,
› Zero environmental
reducing nitrogen use by 50%
incidents
Micro‑X Limited
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STEM Engagement
Women in Engineering
ASA and Stroke Foundation
Welcome to Country
C O M M U N I T Y
G O V E R N A N C E
› Targeted support for
› Issue of ISO9001:2015 certification
› Strengthened and audited IT
and cybersecurity protections
› Passed Therapeutic Goods
Administration surveillance audit
under‑represented groups,
including the Women in STEM
program and Indigenous
student site visits
› School‑aged STEM program
includes participation in robotics
competitions, science events
and careers expos
Annual Report 2023
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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
DECLARATION OF INDEPENDENCE
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
CORPORATE DIRECTORY
21
39
40
41
42
44
45
71
72
76
79
Micro-X Limited
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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 2023
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 2023.
Directors
The names of the Directors in office at any time during or since the end of the year are:
David Knox (Non-Executive Chair)
Alexander Gosling (Non-Executive Director)
Patrick O'Brien (Non-Executive Director)
James McDowell (Non-Executive Director)
Ilona Meyer (Non-Executive Director)
Yasmin King (Non-Executive director) - Resigned 7 October 2022
Andrew Hartmann (Non-Executive Director) - Appointed 15 December 2022
Peter Rowland (Non-Executive Director) - Appointed to Non-Executive Director role on 1 May 2023
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.
Annual Report 2023
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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 2023
Operating and Financial Review
Micro-X Limited and its wholly owned subsidiaries (Micro-X or the Group) continued to focus its activities in the Financial
Year ended 30 June 2023 (the Financial Year) to advance the commercialisation and development of its range of next
generation products using its proprietary carbon nanotube X-ray technology for the health and security markets.
In May 2023, Micro-X appointed Kingsley Hall as Chief Executive Officer, following the retirement of the Company founder,
Mr Peter Rowland who joined the Board as a Non-Executive Director. This transition occurred with Micro-X seeking to
increase its commercial focus while maintaining its technical leadership, and transition from being a developer of high tech
X-ray products to a profitable business enterprise.
The leadership team commenced a detailed Operational Review of all aspects of the business, its customers, partnerships
and capital allocation and requirements, which was announced following the year end on 7 August 2023, in conjunction with
a Strategy Refresh. The goal of the Strategy Refresh being to create a profitable business utilising the Micro-X world class
technology through:
Further leveraging the technology for commercial benefit;
Targeting larger and less competitive markets;
De-risking the business and reducing the cost base;
Utilising effective partnerships to create value; and
Creating recurring revenue streams.
As a more focused business, Micro-X removed $2.0M in overhead costs towards the end of the Financial Year. As part of a
streamlining of reporting lines, the four individual business units were removed, with the activities of each of the four
product lines refocused across the sales, commercial and engineering disciplines. The Company’s progress with these
commercial and development opportunities are detailed below.
Commercialisation - Mobile DR Products
This Financial Year, Micro-X achieved $3.8M of sales (2022: $3.8M) from its range of mobile digital X-ray products, the
Rover, Rover Plus and the Nano.
The overall level of sales was below the expectations of Micro-X and as part of the Company’s Operational Review, a
streamlining of the business has been completed. A number of staff departed the business and approximately $1.5M in
recurring costs were removed, while greater focus was given to better understanding customer requirements and
supporting distributors.
X supported distributors to sell its range of Rover, Rover Plus and Nano products globally, with a particular focus on
Micro
disrupting the US markets through its key distributors MXR and Medlink. In September 2022, the next generation Rover
Plus system was launched to provide enhanced imaging capability. This Rover Plus system incorporates the proprietary in-
house designed and manufactured generator and extended capability X-ray tube.
-
Following this launch, Micro-X targeted markets such as sports medicine, with sales of Rover units into multiple US
professional sporting codes and urgent medical care organisations where the Rover Plus’ usability and portability is of
particular importance. Micro-X also continued to partner with non-government organisations through the sale of Rover units
for use in Ukrainian civilian and temporary hospitals on the frontline.
From a regulatory perspective the Rover Plus was listed on the Australian Register for Therapeutic Goods and the Rover
Plus with a flat panel detector sourced from Varex Imaging Corporation received 510(k) clearance for sale in the
US. Micro-X continued to progress its MDR (CE mark) European approval for its Rover and Rover Plus models, with a
final document review currently being carried out by its Notified Body. Micro-X has hired regulatory specialists to assist it in
mitigating the delays previously experienced in this process.
In July 2023, Micro-X delivered its first Rover Plus unit for military use under the Australian Defence Force’s JP2060 Phase
3 Deployable Health Capability Project.
Moving forward, Micro-X is focused on strategies to sell its existing $6.0M of inventory through its distribution channels
converting this inventory into cash.
Near Term Commercialisation - Argus X-ray Camera
During the Financial Year the planned launch of the Argus X-ray Camera was delayed with the engineering team
encountering late stage technical challenges in the design of the highly unique X-ray tube. Micro-X has overcome these
4
Micro-X Limited
2 3
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 2023
technical challenges and a pre-production Argus unit with specialised NEX X-ray tube, high power generator, power
components and software has moved to the process of verification.
In May 2023, Micro-X undertook successful field testing of the pre-production Argus unit, which demonstrated the capability
to capture useful high-definition backscatter images in real-life scenarios including through a car door, through common
shielding and shallow buried anti-personnel mines. Micro-X has since completed further field tests and demonstrations with
a range of technicians to demonstrate the rapid threat assessment capability of the product.
Micro-X continued to refine its Go To Market strategy for Argus and build customer engagement. This included exhibiting at
major bomb disposal events and partnering with Team Defence Australia to exhibit at international expos.
Development Products - Checkpoints & Brain CT
The Company made significant progress in developing its Security Checkpoints product including completing the
Passenger Self Screening Checkpoint Portal design contract with the Department of Homeland Security (DHS), with
successful delivery of the Critical Design Review representing the completion of the US$2.5M (A$3.8M) funded project on
time and on budget. After the year ended the DHS awarded the Company’s wholly owned subsidiary, Micro-X Inc. an
extension of its Passenger Self Screening Checkpoint contract worth up to US$14.0M (A$21.0M) across a 40-month
period. In addition, the Company is nearing completion of its Miniaturised CT baggage scanner contract with two
prototypes to be delivered to the DHS in the coming months.
The Brain CT team made strong progress during the Financial Year in developing its Brain CT system for stroke diagnosis,
in collaboration with the Australian Stroke Alliance (ASA) under the Golden Hour project. Micro-X successfully completed
Milestone 3 and part of Milestone 4 during the Financial Year as well as successfully delivering a Critical Design Review of
its Test Bench.
Corporate Activities
In September 2022, the Company entered into a strategic investment and technology collaboration with Varex Imaging
Corporation (Varex), the world’s largest manufacturer of X-ray technology components. The collaboration comprises an
exclusive global license for A$7.5M (US$5.0M) to use Micro-X’s proprietary NEX technology in multi-beam X-ray tubes as
well as an equity investment of A$7.5M (US$5.0M). As part of the collaboration agreement Mr Andrew Hartmann joined the
Micro-X board as a non-executive director in December 2022.
During the Financial Year, Micro-X delivered the first three of five milestones under the development agreement, which in
total, provided A$4.5M (US$3.0M) of non-dilutive development funding in addition to the A$7.5M (US$5.0M) equity
received in two tranches, following FIRB approval.
Environment, Social and Corporate Governance
Micro-X is developing a Sustainability Framework in line with internationally agreed standards to measure and report on its
performance across a range of initiatives which will include;
Environmental footprint and waste management;
Social impact through internal policies and external engagement with target groups; and
Governance reporting as overseen by the Audit and Risk Committee of the Board of Directors.
Governance
Micro-X has active governance programmes, policies 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 Chair, 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
and ISO 9001 QMS certification and passed another surveillance audit 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. Security
clearances are maintained by a number of personnel including those involved in development work for the DHS
programmes. IT auditing and cyber security measures are in place and were actively managed during the Financial Year.
Annual Report 2023
5
2 4
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 2023
Financial Overview
This Financial Year, Micro-X achieved Revenues of $15.005M (2022: $8.970M) and Total Income of $22.395M (2022:
$13.114M), comprised as follows:
$3.795M from the sales of the Mobile DR units and associated spares;
$11.210M from engineering contract services in relation to the contracts with the Australian Stroke Alliance, the
Department of Homeland Security and Varex Imaging Corporation; and
$7.390M of Other Income, including $6.647M in relation to the R&D tax rebate
The net loss for the Group for the Financial Year after providing for income tax was $10.754M, compared with a loss in the
previous year of $17.089M. This net loss for the Financial Year included:
$3.505M in cost of sale of goods;
$6.444M expenditure on research and development activity, related to the X-ray Camera, the Miniaturised CT Baggage
Scanner and CT Brain Scanner;
$17.019M spent on employee, consulting and director costs. This represented a $1.125M increase on the prior period,
driven by additional engineering personnel; and
$1.115M in non cash, 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 $2.096M from $19.289M at 30 June 2022 to $17.193M at 30 June 2023. Cash on
hand and at the bank decreased to $5.223M at 30 June 2023 ($10.303M at 30 June 2022).
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
Subsequent to year-end, the Company’s wholly owned subsidiary, Micro-X Inc, executed an extension to the existing contract
with the DHS for the Self-Screening Checkpoint Portal project. The contract extension has a number of phases of work and
milestones, and subject to successfully achieving these, will take the Self-Screening Checkpoint Portal product beyond
design to build and test fully integrated self-screening stations in live US airport environments with travelling passengers.
The contract extension represents funding worth up to US$14M (A$21M) over the life of the contract, with an initial contract
commitment of US$4.8M (A$7.25M).
No other matter or circumstance has arisen since 30 June 2023 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 product lines, notably:
Sale of existing Mobile DR units through existing distributors and other targeted markets;
Complete transfer to manufacturing of the Argus X-ray Camera and successful commercial launch through building
customer engagement;
Delivery of prototypes and formal completion of the Miniaturised CT Baggage Scanner contract and progress
development under extended contract with the DHS; and
The ongoing development of its Brain CT Scanner and delivery of prototypes for mobile stroke imaging.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
6
Micro-X Limited
2 5
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 2023
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 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). David is also Deputy Chair of Commonwealth Scientific and
Industrial Research Organisation (CSIRO), and a board member of 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.
Nil
Chair of Board, and Member of Audit and Risk Committee and People and
Remuneration Committee
988,075 fully paid ordinary shares
92,593
Other current directorships:
Former directorships (last 3 years): Redflow Ltd (ASX:RFX) - March 2017 to February 2023
Special responsibilities:
Interests in shares:
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Peter Rowland
Non-Executive Director
BSc., MBA, MIET, CEng, FAICD
Peter was the founder of Micro-X and Managing Director until his resignation and
subsequent appointment to Non-Executive Director on 1 May 2023. 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.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Interests in shares:
Interests in rights:
14,579,347 fully paid ordinary shares
1,597,800
Annual Report 2023
7
2 6
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 2023
Name:
Title:
Qualifications:
Experience and expertise:
Dr. Alexander Gosling AM
Non-Executive Director
MA (Hons), 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:
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 The
Water & Carbon Group and O’Brien Capital. He is also a Chairman/board member 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 a
Senior Managing Director with Macquarie Group where he led teams in corporate
finance (Melbourne 1996-2005) and private equity (London 2005-2009). In this latter
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.
Nil
Other current directorships:
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
8
Micro-X Limited
2 7
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 2023
Name:
Title:
Qualifications:
Experience and expertise:
James McDowell
Non-Executive Director
LL.B (Hons) D.Univ (honoris causa)
Jim is Deputy Secretary, Naval Shipbuilding and Sustainment - Australian Department
of Defence and prior to this role was Chief Executive of Nova Systems. Jim 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. 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. From 2018 to 2020 Jim was Chief Executive of South Australia's Department
of Premier and Cabinet.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in rights:
Member of People and Remuneration Committee
722,286 fully paid ordinary shares
60,186
Name:
Title:
Qualifications:
Experience and expertise:
Ilona Meyer
Non-Executive Director
LLB and LLM (QUT), GradDipLegPrac (ANU), GIA (Cert), GAICD, AMIIA.
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
and Company Secretary for Nuix Limited and prior to this role has 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, as well as navigating high profile 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 compliance 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:
Interests in rights:
Chair of Audit and Risk Committee
105,555 fully paid ordinary shares
127,877
Annual Report 2023
9
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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 2023
Experience and expertise:
Name:
Title:
Qualifications:
Andrew Hartmann
Non-Executive Director
Master of Business Administration and qualifications in Accounting and Electrical
Engineering
Andrew is the Senior Vice President and GM Imaging Solutions at Varex Imaging
Corporation and has worked overseas and in global senior roles for more than 30 years.
Andrew has significant business expertise in the field of medical imaging devices with
extensive experience working in global roles with a focus on sales, marketing and
business operations. Over his career he has been responsible for building brand,
market share and bottom-line gains through cost saving and efficiency improvements.
Andrew has held senior global management roles at Phillips, Carestream and Siemens,
after working in Australia that included building brands across the Asia Pacific region,
the United States and Europe.
Nil
Other current directorships:
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
Nil
Interests in shares:
Nil
Interests in rights:
'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 holds a Bachelor of Economics from Flinders University. 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 early stage commercialisation of companies and senior operational and sales leadership
roles. Kingsley previously held the position of Chief Financial Officer and was promoted to the role of Chief Executive Officer
on 1 May 2023 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 2023, and the number of meetings attended by each director were:
Patrick O'Brien
Peter Rowland
Alexander Gosling
Yasmin King
David Knox
James McDowell
Ilona Meyer
Andrew Hartmann
Full Board
People and Remuneration
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
11
11
11
6
10
11
11
3
11
11
11
6
11
11
11
3
-
-
2
-
2
2
-
-
-
-
2
-
2
2
-
-
6
-
-
2
6
-
6
-
6
-
-
2
6
-
6
-
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
Micro-X Limited
2 9
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 2023
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; and
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 People and Remuneration Committee. The People 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.
Annual Report 2023
11
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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 2023
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, annual 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 Company 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 2023 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%
20%
35%
25%
10%
100%
12
Micro-X Limited
3 1
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 2023
LTI Service Rights vest after three years of continuous service with the Company from the date of the grant.
For the initial tranche of Service Rights granted in December 2020, this three year period was split into 3 twelve-month
anniversaries. The final anniversary of this tranche will be November 2023. Subsequent tranches have a three year vesting
period as detailed above.
LTI Performance Rights vest upon the achievement of certain Total Shareholder Return (TSR) targets over a three year
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% Compound Annual Growth Rate then participants will be issued 100% of the relevant
performance rights.
The initial tranche of Performance Rights granted in December 2020 was split into 3 twelve-month periods. The final period
of this tranche will be assessed at November 2023. Subsequent tranches have a three year vesting period as detailed
above.
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 2023 to provide a market based
assessment of certain Executive KMP remuneration.
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)
Alexander Gosling (Non-Executive Director)
Patrick O'Brien (Non-Executive Director)
James McDowell (Non-Executive Director)
Ilona Meyer (Non-Executive Director)
Andrew Hartmann (Non-Executive Director) - Appointed 15 December 2022
Peter Rowland (Non-Executive Director) - Appointed 1 May 2023 was previously Managing Director
Kingsley Hall (Chief Executive Officer)
Anthony Skeats (Chief Operating Officer)
Brian Gonzales (CEO Americas & Chief Scientific Officer)
Annual Report 2023
13
3 2
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 2023
Short-term benefits
Post-
employment
benefits
Post-
employment
benefits
Long-term
benefits1
Share-
based
payments -
Rights2
Cash
salary
Cash
Non-
Super-
Retirement
and fees
$
bonus
$
monetary3
$
annuation
$
$
Annual and
Long
Service
leave
$
Equity-
settled
$
Total
$
-
59,091
65,295
-
59,091
-
353,264
324,433
284,707
316,761
1,462,642
-
-
-
-
-
-
-
-
-
-
-
90,909
-
-
63,744
-
-
-
9,545
6,204
-
1,551
6,204
-
29,799
-
-
-
-
-
-
274,751
-
-
-
-
-
-
-
2,538
1,650
1,650
1,650
1,274
-
157,044
102,992
66,945
66,945
66,945
66,569
-
814,858
-
27,696
-
36,100
131,442
519,671
-
-
154,653
11,386
27,327
119,712
-
-
274,751
678
14,729
51,507
415,711
118,940
131,322
490,139
547,510 2,610,775
2023
Non-Executive
Directors:
D Knox
A Gosling
P O'Brien
J McDowell
I Meyer
A Hartmann4
P Rowland5
Chief Executive
Officer:
K Hall6
Other Key
Management
Personnel:
B Gonzales7
A Skeats
1
2
3
4
5
6
7
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.
As approved at the 2022 Annual General Meeting, D Knox and J McDowell were issued shares in lieu of cash
Director fees.
A Hartmann was appointed to the Board on 15 December 2022 as a representative of Varex' Imaging Corporation.
As part of the agreement, A Hartmann is not paid a fee.
P Rowland was previously an Executive Director until he was appointed as a Non-Executive Director on 1 May 2023.
Post Employment benefits - Retirement relate to contractual Payment in Lieu of Notice ($119,833), Annual Leave
($92,005) and Long Service Leave ($62,913).
K Hall was previously the Chief Financial Officer and commenced as Chief Executive Officer on 1 May 2023.
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.
Subsequent to year end, the Board reviewed the achievement of the Executives' Short Term Incentive for the year ended 30
June 2023 and determined that the Short Term Incentive should be awarded at 65%.
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
Micro-X Limited
3 3
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 2023
Short-term benefits
Post-
employment
benefits
Long-term
benefits1
Share-
based
payments -
Rights2
Cash
salary
Cash
Non-
Super-
2022
and fees
$
bonus
$
monetary3
$
annuation
$
Annual and
Long Service
leave
$
Equity-
settled
$
Total
$
Non-Executive Directors:
D Knox
A Gosling
Y King7
P O'Brien
J McDowell
I Meyer4
Executive Director:
P Rowland
21,017
56,540
62,194
62,194
21,050
18,802
332,559
Other Key Management
Personnel:
K Hall
B Gonzales5
A Skeats
A Blackburn6
D Pini6
C Hicks6
294,310
250,096
294,310
200,864
172,849
260,888
2,047,673
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54,083
-
-
-
41,144
-
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
-
-
-
-
-
-
95,227
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
1
2
3
4
5
6
7
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.
As approved at the 2021 Annual General Meeting, D Knox and J McDowell were issued shares in lieu of cash
Director fees. This was disclosed in cash salary and fees in the prior year Directors’ Report
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.
A Blackburn, D Pini, C Hicks were no longer part of KMP during the 2023 Financial Year.
Y King resigned as Non-Executive Director during the 2023 Financial Year.
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.
Annual Report 2023
15
3 4
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 2023
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
J McDowell
I Meyer
P Rowland1
Chief Executive Officer:
K Hall2
Other Key Management
Personnel:
B Gonzales
A Skeats
Fixed remuneration
2022
2023
At risk - STI
2023
2022
At risk - LTI
2023
2022
98%
98%
98%
98%
98%
81%
98%
99%
99%
99%
99%
61%
-
-
-
-
-
10%
-
-
-
-
-
20%
2%
2%
2%
2%
2%
9%
2%
1%
1%
1%
1%
19%
75%
64%
13%
18%
12%
18%
71%
73%
64%
62%
15%
14%
18%
19%
14%
13%
18%
19%
1
2
P Rowland was previously an Executive Director, was appointed as a Non-Executive Director on 1 May 2023.
K Hall was previously in the role of Chief Financial Officer and commenced as the Chief Executive Officer on 1 May
2023.
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:
Kingsley Hall
Chief Executive Officer
1 May 2023
No fixed term. Micro-X or Mr Hall may terminate the employment contract at any time
provide that either party gives 6 months' notice.
Annual salary is $398,000 per annum inclusive of employer superannuation
contributions (subject to annual review).
Brian Gonzales
Chief Scientific Officer, CEO of Micro-X Inc.
1 May 2023
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$193,696.65 per annum plus compulsory benefits (subject to
annual review).
Anthony Skeats
Chief Operating Officer
1 May 2023
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 $360,000 per annum inclusive of employer superannuation
contributions (subject to annual review).
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
16
Micro-X Limited
3 5
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 2023
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 2023 are set out below:
Issue of Performance Rights
The following table illustrates the movement of and closing balance of rights held by KMP during the Financial Year:
Non-Executive Directors:
D Knox
A Gosling
P O'Brien
J McDowell
I Meyer
P Rowland
K Hall
A Skeats
B Gonzales
Held at 1
July 2022
Granted as
Remuneration
Exercised or
Lapsed
Held at 30
June 2023
Average Fair
Value per
Right at Grant
Date
92,593
60,186
60,186
60,186
-
2,648,948
2,103,578
2,027,204
1,067,624
-
-
-
-
127,877
2,319,834
1,969,923
1,969,923
1,746,567
-
-
-
-
-
(319,407)
(265,011)
(264,183)
(533,810)
92,593
60,186
60,186
60,186
127,877
4,649,375
3,808,490
3,732,944
2,280,381
8,120,505
8,134,124
(1,382,411) 14,872,218
$0.152
$0.152
$0.152
$0.152
$0.081
$0.220
$0.214
$0.210
$0.155
D Pini, A Blackburn, C Hicks and Y King were not a KMP as at 30 June 2023 reducing the opening balance of rights held.
Balances are held as at 30 June 2023 and do not reflect conversions or exercising of rights since that date.
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:
Annual Report 2023
17
3 6
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 2023
Grant Date
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
12 December
2022
3 January
2023
3 January
2023
3 January
2023
9 January
2023
Vesting and
exercise date
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
12 December
2025
31 August
2023
3 January
2026
3 January
2026
31 August
2023
Expiry date
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
21 December
2036
12 December
2037
3 January
2038
3 January
2038
3 January
2038
9 January
2038
Performance
Criteria
Value per
right at grant
date
Performance
achieved
% Vested
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
Long term
service
Short term
performance
Long term
performance
Long term
performance
Short term
performance
$0.370
85% of target
85%
$0.219
200% of target
100%
$0.231
0% of target
0%
$0.243
$0.370
$0.370
To be
determined
100%
100%
$0.370
Various
$0.330
75% of target
$0.199
$0.330
$0.152
$0.125
To be
determined
To be
determined
To be
determined
To be
determined
N/A
100%
100%
N/A
75%
N/A
N/A
N/A
N/A
$0.145
65% of target
65%
$0.081
$0.081
$0.140
To be
determined
To be
determined
To be
determined
N/A
N/A
N/A
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:
Ordinary shares
D Knox
A Gosling
P O'Brien
J McDowell
I Meyer
P Rowland
B Gonzales
Balance at Received
the start of as part of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
376,802
532,151
7,806,388
281,637
50,000
12,995,279
438,659
22,480,916
336,849
-
-
239,579
-
-
-
576,428
-
-
-
-
55,555
-
206,494
262,049
713,651
-
532,151
-
7,806,388
-
521,216
-
105,555
-
- 12,995,279
-
645,153
- 23,319,393
D Pini, A Blackburn, C Hicks and Y King were not a KMP as at 30 June 2023 reducing the opening balance of rights held.
Balances are held as at 30 June 2023 and do not reflect additions of shares since that date.
This concludes the remuneration report, which has been audited.
18
Micro-X Limited
3 7
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 2023
Shares issued on the exercise of rights
The following ordinary shares of Micro-X Limited were issued during the year ended 30 June 2023 and up to the date of this
report on the exercise of rights granted:
Date shares issued on conversion of rights
29 July 2022
19 October 2022
28 October 2022
21 December 2022
1 March 2023
25 May 2023
7 July 2023
Exercise
price
Number of
shares
issued
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
50,725
27,778
120,960
598,767
211,170
51,150
1,584,068
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.
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 25 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 or BDO Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton Audit Pty Ltd or BDO Audit Pty Ltd.
Annual Report 2023
19
3 8
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 2023
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
BDO Audit Pty Ltd commenced in office on 15 June 2023 following the resignation of Grant Thornton Audit Pty Ltd. A
resolution will be put before shareholders at the Company's 2023 Annual General Meeting, to confirm the appointment of
BDO Audit Pty Ltd as the Company's external auditor in accordance with section 327B of the Corporation 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 2023
20
Micro-X Limited
3 9
D E C L A R A T I O N O F I N D E P E N D E N C E
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
GPO Box 2018 Adelaide SA 5001
Australia
DECLARATION OF INDEPENDENCE
BY ANDREW TICKLE
TO THE DIRECTORS OF MICRO-X LIMITED
As lead auditor of Micro-X Limited for the year ended 30 June 2023, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Micro-X Limited and the entities it controlled during the period.
Andrew Tickle
Director
BDO Audit Pty Ltd
Adelaide, 29 August 2023
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Annual Report 2023
4 0
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
Micro-X Limited
For the year ended 30 June 2023
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Total Revenue
Total Revenue
Other Income
Other Income
Expenses
Change in inventory/raw materials and consumables
Expenses
Employee and director expenses
Change in inventory/raw materials and consumables
Selling and Distribution expenses
Employee and director expenses
Office and administrative expenses
Selling and Distribution expenses
Corporate expenses
Office and administrative expenses
Quality and regulatory expenses
Corporate expenses
Project development expenses
Quality and regulatory expenses
Depreciation and amortisation expense
Project development expenses
Other expenses
Depreciation and amortisation expense
Finance expenses
Other expenses
Total expenses
Finance expenses
Total expenses
Loss before income tax expense
Loss before income tax expense
Income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the owners of Micro-
X Limited
Loss after income tax expense for the year attributable to the owners of Micro-
X Limited
Other comprehensive income
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Micro-X
Limited
Total comprehensive income for the year attributable to the owners of Micro-X
Limited
Basic earnings per share
Diluted earnings per share
Basic earnings per share
Diluted earnings per share
Note
Note
5
5
6
6
7
7
32
32
32
32
Consolidated
Consolidated
2022
$'000
2022
$'000
2023
$'000
2023
$'000
15,005
15,005
7,390
7,390
8,970
8,970
4,144
4,144
(3,505)
(17,019)
(3,505)
(1,378)
(17,019)
(769)
(1,378)
(331)
(769)
(269)
(331)
(6,444)
(269)
(1,589)
(6,444)
(1,576)
(1,589)
(269)
(1,576)
(33,149)
(269)
(33,149)
(10,754)
(10,754)
-
-
(10,754)
(10,754)
(3,970)
(15,894)
(3,970)
(856)
(15,894)
(779)
(856)
(360)
(779)
(253)
(360)
(4,444)
(253)
(1,432)
(4,444)
(1,919)
(1,432)
(296)
(1,919)
(30,203)
(296)
(30,203)
(17,089)
(17,089)
-
-
(17,089)
(17,089)
(4)
(4)
(4)
(4)
18
18
18
18
(10,758)
(10,758)
(17,071)
(17,071)
Cents
Cents
(2.17)
(2.17)
(2.17)
(2.17)
Cents
Cents
(3.71)
(3.71)
(3.71)
(3.71)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
22
accompanying notes
22
Micro-X Limited
4 1
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
Micro-X Limited
Statement of financial position
Micro-X Limited
As at 30 June 2023
Statement of financial position
As at 30 June 2023
Assets
Assets
Current assets
Cash and cash equivalents
Current assets
Trade and other receivables
Cash and cash equivalents
Contract assets
Trade and other receivables
Inventories
Contract assets
Other Assets
Inventories
Total current assets
Other Assets
Total current assets
Non-current assets
Property, plant and equipment
Non-current assets
Right-of-use assets and lease liabilities
Property, plant and equipment
Intangibles
Right-of-use assets and lease liabilities
Total non-current assets
Intangibles
Total non-current assets
Total assets
Total assets
Liabilities
Liabilities
Current liabilities
Trade and other payables
Current liabilities
Contract liabilities
Trade and other payables
Lease liabilities
Contract liabilities
Provisions
Lease liabilities
Total current liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Equity
Issued capital
Equity
Foreign currency translation reserve
Issued capital
Convertible notes
Foreign currency translation reserve
Share based payments reserve
Convertible notes
Accumulated losses
Share based payments reserve
Accumulated losses
Total equity
Total equity
Note
Note
8
9
8
10
9
11
10
11
12
13
12
14
13
14
15
16
15
13
16
17
13
17
13
18
13
18
19
20
19
20
21
21
Consolidated
Consolidated
2022
$'000
2022
$'000
2023
$'000
2023
$'000
5,223
6,996
5,223
1,633
6,996
7,338
1,633
1,247
7,338
22,437
1,247
22,437
3,114
4,615
3,114
132
4,615
7,861
132
7,861
30,298
30,298
5,584
855
5,584
726
855
1,153
726
8,318
1,153
8,318
3,977
810
3,977
4,787
810
4,787
13,105
13,105
17,193
17,193
10,303
3,755
10,303
1,314
3,755
5,783
1,314
1,589
5,783
22,744
1,589
22,744
3,081
5,308
3,081
144
5,308
8,533
144
8,533
31,277
31,277
4,366
459
4,366
633
459
1,021
633
6,479
1,021
6,479
4,681
828
4,681
5,509
828
5,509
11,988
11,988
19,289
19,289
125,396
14
125,396
65
14
3,852
65
(112,134)
3,852
(112,134)
17,193
17,193
117,529
18
117,529
65
18
3,057
65
(101,380)
3,057
(101,380)
19,289
19,289
The above statement of financial position should be read in conjunction with the accompanying notes
23
The above statement of financial position should be read in conjunction with the accompanying notes
23
Annual Report 2023
4 2
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
Micro-X Limited
For the year ended 30 June 2023
Statement of changes in equity
For the year ended 30 June 2023
Consolidated
Consolidated
Balance at 1 July 2021
Balance at 1 July 2021
Loss after income tax expense
for the year
Loss after income tax expense
Other comprehensive income
for the year
for the year, net of tax
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners:
Transactions with owners in
Issue of rights under Employee
their capacity as owners:
Equity Plan (Note 21)
Issue of rights under Employee
Exercise of Rights under
Equity Plan (Note 21)
Employee Equity Plan (Note 19)
Exercise of Rights under
Issue of shares in lieu of Cash
Employee Equity Plan (Note 19)
Payments (Note 19)
Issue of shares in lieu of Cash
Issue of shares under Employee
Payments (Note 19)
Gift Plan (Note 19)
Issue of shares under Employee
Gift Plan (Note 19)
Balance at 30 June 2022
Balance at 30 June 2022
Issued
capital
Issued
$'000
capital
$'000
116,967
116,967
Share based
payment
Share based
reserve
payment
$'000
reserve
$'000
1,472
1,472
Foreign
currency
Foreign
translation
currency
reserve
translation
$'000
reserve
$'000
-
-
Convertible
notes
Convertible
$'000
notes
$'000
65
65
Accumulated
losses
Accumulated
$'000
losses
$'000
(84,291)
(84,291)
Total equity
$'000
Total equity
$'000
34,213
34,213
-
-
-
-
-
-
-
-
462
462
27
27
73
73
117,529
117,529
-
-
-
-
-
-
2,047
2,047
(462)
(462)
-
-
-
-
3,057
3,057
-
-
18
18
18
18
-
-
-
-
-
-
-
-
18
18
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65
65
(17,089)
(17,089)
-
-
(17,089)
(17,089)
-
-
-
-
-
-
-
-
(101,380)
(101,380)
(17,089)
(17,089)
18
18
(17,071)
(17,071)
2,047
2,047
-
-
27
27
73
73
19,289
19,289
The above statement of changes in equity should be read in conjunction with the accompanying notes
24
The above statement of changes in equity should be read in conjunction with the accompanying notes
24
Micro-X Limited
4 3
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 C O N T ’ D
Micro-X Limited
Statement of changes in equity
Micro-X Limited
For the year ended 30 June 2023
Statement of changes in equity
For the year ended 30 June 2023
Consolidated
Consolidated
Balance at 1 July 2022
Balance at 1 July 2022
Loss after income tax expense
for the year
Loss after income tax expense
Other comprehensive income
for the year
for the year, net of tax
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Total comprehensive income for
the year
Issue of shares - placement
Capital raising costs
Issue of shares - placement
Capital raising costs
Transactions with owners in
their capacity as owners:
Transactions with owners in
Issue of rights under Employee
their capacity as owners:
Equity Plan (Note 21)
Issue of rights under Employee
Exercise of Rights under
Equity Plan (Note 21)
Employee Equity Plan (Note 19)
Exercise of Rights under
Issue of shares in lieu of Cash
Employee Equity Plan (Note 19)
Payments (Note 19)
Issue of shares in lieu of Cash
Issue of shares under Employee
Payments (Note 19)
Gift Plan (Note 19)
Issue of shares under Employee
Gift Plan (Note 19)
Balance at 30 June 2023
Balance at 30 June 2023
Issued
capital
Issued
$'000
capital
$'000
117,529
117,529
Share based
payment
Share based
reserve
payment
$'000
reserve
$'000
3,057
3,057
Foreign
currency
Foreign
translation
currency
reserve
translation
$'000
reserve
$'000
18
18
Convertible
notes
Convertible
$'000
notes
$'000
65
65
Accumulated
losses
Accumulated
$'000
losses
$'000
(101,380)
(101,380)
Total equity
$'000
Total equity
$'000
19,289
19,289
-
-
-
-
-
-
7,455
(105)
7,455
(105)
-
-
360
360
80
80
77
77
125,396
125,396
-
-
-
-
-
-
-
-
-
-
1,155
1,155
(360)
(360)
-
-
-
-
3,852
3,852
-
-
(4)
(4)
(4)
(4)
-
-
-
-
-
-
-
-
-
-
-
-
14
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65
65
(10,754)
(10,754)
-
-
(10,754)
(10,754)
-
-
-
-
-
-
-
-
-
-
-
-
(112,134)
(112,134)
(10,754)
(10,754)
(4)
(4)
(10,758)
(10,758)
7,455
(105)
7,455
(105)
1,155
1,155
-
-
80
80
77
77
17,193
17,193
The above statement of changes in equity should be read in conjunction with the accompanying notes
25
The above statement of changes in equity should be read in conjunction with the accompanying notes
25
Annual Report 2023
4 4
S T A T E M E N T O F C A S H F L O W S
Note
Note
31
31
Micro-X Limited
Statement of cash flows
Micro-X Limited
For the year ended 30 June 2023
Statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Cash flows from operating activities
Payments to suppliers
Receipts from customers
Interest received
Payments to suppliers
R&D incentive tax refunds
Interest received
Grant funding received
R&D incentive tax refunds
Receipts in relation to the ASA MRFF Program
Grant funding received
Receipts in relation to the DHS Checkpoint Program
Receipts in relation to the ASA MRFF Program
Receipts in relation to Varex Technology Transfer
Receipts in relation to the DHS Checkpoint Program
Lease interest payments
Receipts in relation to Varex Technology Transfer
Lease interest payments
Net cash used in operating activities
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Cash flows from investing activities
Payments for intangibles
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Cash flows from financing activities
Payments for capital raising costs
Proceeds from issue of shares
Repayment of Lease liabilities
Payments for capital raising costs
Repayment of Lease liabilities
Net cash from/(used in) financing activities
Net cash from/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the Financial Year
Net 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
Cash and cash equivalents at the end of the Financial Year
Consolidated
Consolidated
2022
$'000
2022
$'000
2023
$'000
2023
$'000
3,894
(30,029)
3,894
1
(30,029)
3,885
1
494
3,885
3,268
494
3,227
3,268
4,518
3,227
(251)
4,518
(251)
(10,993)
(10,993)
(779)
-
(779)
-
(779)
(779)
7,455
(105)
7,455
(658)
(105)
(658)
6,692
6,692
(5,080)
10,303
(5,080)
10,303
5,223
5,223
4,099
(28,285)
4,099
20
(28,285)
2,079
20
378
2,079
1,413
378
2,468
1,413
-
2,468
(280)
-
(280)
(18,108)
(18,108)
(1,056)
(56)
(1,056)
(56)
(1,112)
(1,112)
-
-
-
(612)
-
(612)
(612)
(612)
(19,832)
30,135
(19,832)
30,135
10,303
10,303
The above statement of cash flows should be read in conjunction with the accompanying notes
26
The above statement of cash flows should be read in conjunction with the accompanying notes
26
Micro-X Limited
4 5
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
Micro-X Limited
Notes to the financial statements
For the year ended 30 June 2023
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 2023.
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.
Annual Report 2023
27
4 6
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 2023
Note 2. Significant accounting policies (continued)
Going concern
The Group incurred a net loss after tax for the Financial Year ended 30 June 2023 of $10.8M (2022: $17.1M) and had net
cash outflows from operating activities of $11.0M (2022: $18.1M). The Group had net assets for the Financial Year ended
30 June 2023 of $17.2M (2022: $19.3M).
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 Group has $13.0M of contracted revenues for development work due to be received in FY2024, subject to satisfaction
of milestones, under the contracts with the Australian Stroke Alliance for the CT Brain scanner, U.S. Department of
Homeland Security for the Miniature baggage scanner and Airport Self Service Portal and Varex Imaging Corporation;
the Group expects to convert the majority of its $6M of Rover inventory to positive cashflow with limited new costs to be
incurred for these sales;
the Group is due to receive approximately $6.2M from the R&D tax incentive scheme in relation to FY2023 in the coming
months;
the operating loss for the year ended 30 June 2023 included investment in the development of the high powered
generator and associated X-ray tube and the Argus X-ray Camera which are largely completed;
the Group has completed a cost reduction initiative to better manage cash resources moving forward with $2.0M of
annual savings;
the Group will continue to explore additional partnership opportunities to fund and co-fund development, and the Group
has a successful track record of securing partnerships; and
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 2023.
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 2023 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
Micro-X Limited
4 7
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 2023
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, the Department of Homeland Security and Varex
Imaging Corporation, 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 to consideration 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.
Annual Report 2023
29
4 8
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 2023
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
Micro-X Limited
4 9
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 2023
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 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.
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.
Annual Report 2023
31
5 0
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 2023
Note 2. Significant accounting policies (continued)
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.
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.
32
Micro-X Limited
5 1
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 2023
Note 2. Significant accounting policies (continued)
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.
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.
Annual Report 2023
33
5 2
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 2023
Note 2. Significant accounting policies (continued)
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.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2023. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next Financial Year are
discussed below.
34
Micro-X Limited
5 3
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 2023
Note 3. Critical accounting judgements, estimates and assumptions (continued)
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.
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.
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.
Annual Report 2023
35
5 4
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 2023
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).
Operating segment information
For management purposes, the Group has been split into geographical segments. 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
11,969
8,928
20,897
(1,303)
(200)
(24,365)
(25,868)
3,036
(1,538)
1,498
(286)
(69)
(6,926)
(7,281)
Total
15,005
7,390
22,395
(1,589)
(269)
(31,291)
(33,149)
Loss before income tax expense
(4,971)
(5,783)
(10,754)
Total assets
Total Liabilities
Net Assets
Micro-X
Limited
Australia
$'000
Micro-X Inc
United
States
$'000
Total
27,853
(10,471)
2,445
(2,634)
30,298
(13,105)
17,382
(189)
17,193
Major customers
During the Financial Year ended 30 June 2023 approximately $4.5M being 30% (2022: N/A) from engineering contract
services was derived from an agreement in September 2022 with Varex Imaging Corporation for an exclusive global license
enabling them to use Micro-X's NEX technology in the field of multi-beam X-ray tubes.
In addition, $3.4M being 23% (2022: $2.6M being 30%) was derived from engineering contract services to the U.S
Department of Homeland Security (DHS) and $3.3M being 21% (2022: $2.5M being 28%) was relating to services to the
Australian Stroke Alliance (ASA).
36
Micro-X Limited
5 5
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 2023
Note 5. Revenue
Sale of Goods
Engineering contract services
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
Spare Parts
Geographical regions
United States
Asia-Pacific
Europe, EMEA & Ukraine
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Note 6. Other Income
Interest Received
Research & Development Tax Incentive Refund
Net Gain on Disposal of Asset
Other Government Grants
Annual Report 2023
37
Consolidated
2023
$'000
2022
$'000
3,795
11,210
15,005
3,781
5,189
8,970
Consolidated
2023
$'000
2022
$'000
238
2,812
11,210
745
15,005
10,772
4,012
221
15,005
3,795
11,210
15,005
1,614
1,609
5,189
558
8,970
4,196
4,047
727
8,970
3,781
5,189
8,970
Consolidated
2023
$'000
2022
$'000
1
6,647
67
675
7,390
21
3,655
-
468
4,144
5 6
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 2023
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%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
R&D tax incentive income
Feedstock adjustment
R&D expenditure
Loss conversion of convertible notes
Other-assessable income
Current year tax losses not recognised
Current year temporary differences not recognised
Income tax expense
Consolidated
2023
$'000
2022
$'000
(10,754)
(17,089)
(2,689)
(4,272)
308
(1,662)
65
3,582
23
30
(343)
666
(323)
489
(914)
52
1,994
-
-
(2,651)
2,842
(191)
-
-
The Group has tax losses that arose of $38.1 million (2022: $40.3 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
Note 9. Current assets - contract assets
Contract assets
38
Consolidated
2023
$'000
2022
$'000
698
6,232
20
6,950
115
3,470
18
3,603
46
152
6,996
3,755
Consolidated
2023
$'000
2022
$'000
1,633
1,314
Micro-X Limited
5 7
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 2023
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
Annual Report 2023
39
Consolidated
2023
$'000
2022
$'000
5,973
1,365
4,395
1,388
7,338
5,783
Consolidated
2023
$'000
2022
$'000
1,247
1,589
Consolidated
2023
$'000
2022
$'000
1,757
(723)
1,034
3,092
(1,698)
1,394
232
(105)
127
652
(399)
253
306
1,749
(535)
1,214
2,446
(1,195)
1,251
216
(74)
142
518
(234)
284
190
3,114
3,081
5 8
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 2023
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 2021
Additions
Transfers in/(out)
Depreciation expense
Balance at 30 June 2022
Additions
Transfers in/(out)
Disposals
Depreciation expense
Leasehold
improvements
$'000
Plant &
equipment
$'000
Fixtures &
fittings
$'000
Computer
Equipment
$'000
Work in
Progress
$'000
Total
$'000
1,334
55
-
(175)
1,214
9
-
-
(189)
1,145
508
(93)
(309)
1,251
555
149
(23)
(538)
76
89
-
(23)
142
14
-
-
(29)
127
183
221
-
(120)
284
137
-
-
(168)
253
-
190
-
-
190
306
(149)
(41)
-
2,738
1,063
(93)
(627)
3,081
1,021
-
(64)
(924)
306
3,114
Balance at 30 June 2023
1,034
1,394
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
Modification to Lease Agreement
Depreciation
As at 30 June
Consolidated
2023
$'000
2022
$'000
6,489
(1,874)
6,458
(1,150)
4,615
5,308
Consolidated
2023
$'000
2022
$'000
5,308
30
(723)
5,999
24
(715)
4,615
5,308
Set out below are the carrying amounts of lease liabilities (disclosed as current and non-current lease liabilities) and the
movements during the period:
40
Micro-X Limited
5 9
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 2023
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
2023
$'000
2022
$'000
5,314
21
30
251
(913)
4,703
726
3,977
4,703
5,837
52
24
281
(880)
5,314
633
4,681
5,314
Consolidated Consolidated
2023
$'000
2022
$'000
723
250
973
715
281
996
Consolidated
2023
$'000
2022
$'000
47
85
59
85
132
144
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 2021
Additions
Amortisation expense
Balance at 30 June 2022
Amortisation expense
Balance at 30 June 2023
Annual Report 2023
41
Capitalised
development
costs
$'000
Patents &
Trademarks
$'000
Total
$'000
-
59
-
59
(12)
47
129
-
(44)
85
-
85
129
59
(44)
144
(12)
132
6 0
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 2023
Note 15. Current liabilities - trade and other payables
Trade payables
Other payables and accrued expenses
Note 16. Current liabilities - contract liabilities
Government Grant funding in advance (AMGF & MMF)
Contract Liabilities
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous Financial Year are set out below:
Opening balance
Grant funding received
Transfer to revenue
Payments received in advance
Closing balance
Consolidated
2023
$'000
2022
$'000
2,482
3,102
1,304
3,062
5,584
4,366
Consolidated
2023
$'000
2022
$'000
355
500
855
459
-
459
459
-
(104)
500
501
280
(322)
-
855
459
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the
reporting period was $5.5M as at 30 June 2023 ($8.4M as at 30 June 2022) and is expected to be recognised as revenue in
future periods as follows:
Within 6 months
6 to 12 months
12 to 18 months
Consolidated
2023
$'000
2022
$'000
2,800
2,118
561
2,768
4,372
1,220
5,479
8,360
Subsequent to year-end, the Company successfully negotiated an extension to the existing Self-Screening Checkpoint Portal
project with the DHS. This disclosure does not consider the extension. See Note 30 Events after the reporting period for
more information.
Note 17. Current liabilities - provisions
Employee Entitlements
Consolidated
2023
$'000
2022
$'000
1,153
1,021
42
Micro-X Limited
6 1
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 2023
Note 18. Non-current liabilities - provisions
Long service leave
Lease make good
Warranties
Consolidated
2023
$'000
2022
$'000
173
505
132
810
93
505
230
828
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the
end of the respective lease terms.
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the
reporting date. The provision is estimated based on historical warranty claim information, sales levels and any recent trends
that may suggest future claims could differ from historical amounts.
Movements in provisions
Movements in each class of provision during the current Financial Year, other than employee benefits, are set out below:
Consolidated
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Unused amounts reversed
Carrying amount at the end of the year
Note 19. Equity - Issued capital
Lease make
good
$'000
Warranties
$'000
505
-
-
-
505
230
44
(90)
(52)
132
Ordinary shares - fully paid
514,365,432 461,454,266
125,396
117,529
Consolidated
2023
Shares
2022
Shares
2023
$'000
2022
$'000
Annual Report 2023
43
6 2
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 2023
Note 19. Equity - Issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
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
Exercise of Rights under Employee Equity Plan
Issue of shares in lieu of cash payments for Directors
Fees
1 July 2021
30 Sep 2021
06 Oct 2021
04 Jan 2022
02 May 2022
15 Feb 2022
459,701,740
223,891
202,114
13,210
985,381
178,336
$0.326
$0.370
$0.370
$0.320
$0.370
116,967
73
75
5
316
66
02 May 2022
149,594
$0.180
27
Balance
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
Issues of shares - Placement
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
Issue of shares under Employee Gift Plan
Issues of shares - Placement
Capital Raising Costs
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
Exercise of Rights under Employee Equity Plan
Exercise of Rights under Employee Equity Plan
30 June 2022
29 July 2022
29 July 2022
21 Sep 2022
23 Sep 2022
19 Oct 2022
28 Oct 2022
28 Oct 2022
16 Nov 2022
13 Dec 2022
15 Dec 2022
15 Dec 2022
21 Dec 2022
21 Dec 2022
1 Mar 2023
1 Mar 2023
1 Mar 2023
25 May 2023
461,454,266
35,589
15,136
196,783
23,780,000
27,778
83,965
36,995
174,863
565,188
26,929,000
-
245,687
353,080
204,782
112,388
98,782
51,150
$0.370
$0.330
$0.138
$0.147
$0.330
$0.370
$0.330
$0.150
$0.138
$0.147
$0.000
$0.370
$0.330
$0.120
$0.370
$0.219
$0.370
117,529
13
5
27
3,496
9
31
12
26
78
3,959
(105)
91
117
25
42
22
19
Balance
30 June 2023
514,365,432
125,396
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
Consolidated
2023
$'000
2022
$'000
Exchange differences on translating foreign operations
14
18
44
Micro-X Limited
6 3
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 2023
Note 21. Equity - Share based payments reserve
Share-based payments reserve
Consolidated
2023
$'000
2022
$'000
3,852
3,057
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 9 December
2022, 3 January and 9 January 2023. The rights hold various service and performance conditions which vest over 3 years.
Consistent with the Resolutions passed at its AGM on 14 November 2022, Micro-X issued performance rights to one of its
Directors on 3 January 2023. The rights hold various performance conditions which vest over 3 years to 3 January 2026.
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
(Tranche 1)
3 Jan 2023
6,720,455
$0.145
Nil
1.0
75%
0.00%
3.36%
$0.145
STI
Performance
Rights
(Tranche 2)
LTI
Service
Rights
LTI Performance
Rights
Non-Executive
Director LTI
Performance
Rights
9 Jan 2023
12 Dec
2022
1,763,356 6,857,576
$0.125
Nil
3
75%
0.00%
3.07%
$0.125
$0.140
Nil
1.0
75%
0.00%
3.32%
$0.140
3 Jan 2023
3 Jan 2023
4,015,933
$0.145
Nil
3
75%
0.00%
3.39%
$0.081
127,877
$0.145
Nil
3
75%
0.00%
3.39%
$0.081
*Based on historical volatility of Micro-X shares and comparable companies.
The fair value of the rights expensed for the year ended 30 June 2023 was $1.155 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
2022
Granted as
Remuneration
Exercised or
Expired
Held at 30 June
2023
Average Fair
Value per Right
at Grant Date
8,120,505
8,134,124
(1,382,411)
14,872,218
$0.204
Rights issued under
Employee Equity Plan
D Pini, A Blackburn, C Hicks and Y King were not KMP as at 30 June 2023 reducing the opening balance of rights held.
Balances are as held at 30 June 2023 and do not reflect conversions or exercising of rights since that date.
Annual Report 2023
45
6 4
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 2023
Note 21. Equity - Share based payments reserve (continued)
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
2023
Number
2023
WAFV
2022
Number
2022
WAFV
15,669,148
19,485,197
(1,060,550)
(3,508,830)
30,584,965
9,678,962
$0.308
9,093,045
$0.124
(1,379,041)
$0.340
$0.286
(1,723,818)
$0.202 15,669,148
$0.319
$0.300
$0.334
$0.355
$0.308
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.
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 2021
Share rights expense1
Share right equity movement2
Balance at 30 June 2022
Share rights expense1
Share right equity movement2
Balance at 30 June 2023
Share-based
payment
reserve
$'000
Total
$'000
1,472
2,047
(462)
3,057
1,155
(360)
1,472
2,047
(462)
3,057
1,155
(360)
3,852
3,852
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.
46
Micro-X Limited
6 5
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 2023
Note 23. Financial instruments (continued)
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.
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 $5.2M (2022: $10.3M). The sensitivity of the cash at bank balance to changes in interest rate (of +/-1%)
equates to +/-$52,000 (2021: +/-$103,030). 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); and
(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.
Annual Report 2023
47
6 6
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 2023
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 - 2023
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Consolidated - 2022
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 Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
2,482
-
-
-
2,482
5.00%
725
3,207
698
698
1,750
1,750
1,530
1,530
4,703
7,185
Weighted
average
interest rate
%
1 year or
less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
1,304
-
-
-
1,304
5.00%
633
1,937
719
719
1,870
1,870
2,092
2,092
5,314
6,618
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
2023
$
2022
$
1,617,295
445,970
547,510
2,142,900
253,854
1,236,374
2,610,775
3,633,128
Micro-X Limited
6 7
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 2023
Note 24. Key management personnel disclosures (continued)
Consistent with the prior year. Key Management Personnel were granted rights under the Employee Equity Plan on 9
December 2022 and 3 January 2023.
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 BDO and Grant Thornton, the
auditors of the Company:
Audit services
Grant Thornton - audit or review of the financial statements up to 31 December 2022
BDO - audit or review of the financial statements up to 30 June 2023
Other services - BDO
Tax and Transfer Pricing
R&D Tax Incentive
Other
Note 26. Contingent liabilities
The Company has no contingent liabilities as at 30 June 2023.
Note 27. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in Note 29.
Consolidated
2023
$
2022
$
35,690
65,000
100,690
100,395
-
100,395
30,494
13,379
3,075
46,948
-
-
-
-
147,638
100,395
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
Details and terms and conditions of other transactions with KMP and their related parties:
During the Financial Year, purchases totalling $16,600 at market prices have been made by the Company for marketing
services provided by companies of which Anthony Skeat's wife is a director. There were also additional purchases of
$11,165 at market prices that have been made by the Company's for video and photography services provided by Miles
Rowland who is Peter Rowland's son.
Receivable from and payable to related parties
Noted as at reporting date, a $65,295 payable to Patrick O'Brien is included within trade payables for director fees invoiced
at 30 June 2023.
There were no other trade receivables from or trade payables to related parties at the current and previous date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Annual Report 2023
49
6 8
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 2023
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
Parent
2023
$'000
2022
$'000
(6,779)
(17,131)
(6,779)
(17,131)
Parent
2023
$'000
2022
$'000
20,563
18,916
27,822
27,674
5,633
6,450
7,309
8,348
125,396
260
65
3,852
(108,201)
117,529
97
65
3,057
(101,422)
21,372
19,326
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 2023.
Contingent liabilities
The parent entity has no contingent liabilities as at 2023.
Capital commitments - Property, plant and equipment
The parent entity has no capital commitments for property, plant and equipment as at 2023.
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 2, except for the
accounting policy relating to investment in subsidiaries which are carried at cost in the parent accounts but would be applied
at fair value for any Group accounting.
50
Micro-X Limited
6 9
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 2023
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
Micro-X Incorporated
Micro-X UK Operations Limited
USA
United Kingdom
Ownership interest
2022
2023
%
%
100%
100%
100%
100%
Note 30. Events after the reporting period
Subsequent to year-end, the Company’s wholly owned subsidiary, Micro-X Inc, executed an extension to the existing contract
with the DHS for the Self-Screening Checkpoint Portal project. The contract extension has a number of phases of work and
milestones, and subject to successfully achieving these, will take the Self-Screening Checkpoint Portal product beyond
design to build and test fully integrated self-screening stations in live US airport environments with travelling passengers.
The contract extension represents funding worth up to US$14M (A$21M) over the life of the contract, with an initial contract
commitment of US$4.8M (A$7.25M).
No other matter or circumstance has arisen since 30 June 2023 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:
Increase in trade and other receivables
Increase in trade and other payables
Increase in employee benefits
Increase in inventories
Increase in unearned income
Consolidated
2023
$'000
2022
$'000
(10,754)
(17,089)
1,601
1,233
(4)
(3,543)
1,493
107
(1,521)
395
1,432
1,954
86
(2,592)
709
320
(2,887)
(41)
Net cash used in operating activities
(10,993)
(18,108)
Annual Report 2023
51
7 0
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 2023
Note 32. Earnings per share
Loss after income tax attributable to the owners of Micro-X Limited
(10,754)
(17,089)
Consolidated
2023
$'000
2022
$'000
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.17)
(2.17)
(3.71)
(3.71)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
495,806,716 460,277,186
Weighted average number of ordinary shares used in calculating diluted earnings per share 495,806,716 460,277,186
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).
The potential number of shares on conversion of performance rights is 30,584,965 which is made up of 5,929,311 vested
performance rights on which all relevant performance criteria have been met and 24,655,654 unvested rights upon which
require further performance criteria to be met before they become convertible.
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
Micro-X Limited
7 1
D I R E C T O R S ’ D E C L A R A T I O N
Micro-X Limited
Directors' declaration
For the year ended 30 June 2023
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
2023 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 2023
Annual Report 2023
53
7 2
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
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
GPO Box 2018 Adelaide SA 5001
Australia
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICRO-X LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Micro-X Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial report, including 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:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Micro-X Limited
7 3
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
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.
Recognition and measurement of engineering contract services revenue
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Refer to Note 5 of the financial report and Note 2
Our procedures included but were not limited to;
for the accounting policy.
For the year ended 30 June 2023 the Group
recognised $11.210m (2022: $5.189m) of
engineering contract services revenue
•
•
Developing an understanding of each contract and
ensuring the revenue recognised was in accordance
with AASB 15
Evaluating the accuracy of management’s assessment
Revenue recognition and measurement of
associated with the stage of completion for individual
engineering contract services was identified as a
contracts by testing the accuracy of assumptions in
key audit matter due to the significance of revenue
relation to services performed to date against the
to the financial report and the judgment exercised
expected total services to be provided under the
by management in the determining the timing and
contracts
amount of revenue to be recognised
Research and Development (R&D) Tax Incentive
KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
Refer to Note 6 and 8 of the financial report and
Our procedures included but were not limited to;
Note 2 for the accounting policy.
For the year ended 30 June 2023 the Group
recognised a $6.232m (2022: $3.470m) of R&D Tax
Incentive receivable.
•
•
Obtaining and analysing the evidence provided by the
Group to support the carrying value of the R&D Tax
Incentive receivable.
Discussing and analysing management’s assessment of
The R&D Tax Incentive was identified as a key
the recoverability of the R&D Tax Incentive
audit matter because of the extent of judgment
receivable with reference to tax legislation,
involved in considering the recognition of the other
discussions with internal specialists, and
income and receivable as at the reporting date and
management’s historical accuracy in estimating these
the complexities involved in the computation.
claims in prior periods.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
Annual Report 2023
7 4
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
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.
Other matter
The financial report of Micro-X Limited, for the year ended 30 June 2022 was audited by another
auditor who expressed an unmodified opinion on that report on 29 August 2022.
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 ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
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:
https://www.auasb.gov.au/admin/file/content102/c3/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 pages 28 to 36 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Micro-X Limited, for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.
Micro-X Limited
7 5
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
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Andrew Tickle
Director
Adelaide, 29 August 2023
Annual Report 2023
7 6
S H A R E H O L D E R I N F O R M A T I O N
For the year ended 30 June 2023
The shareholder information set out below was applicable as at 17 August 2023.
The total number of shareholders is 3,965 and there are 516,424,994 ordinary fully paid shares on issue.
There are a further 25,715,773 unquoted performance rights over fully paid ordinary shares issued under the
Employee Equity Plan, which are held by 82 participants. During the year ended 30 June 2023 the following
grants of performance rights were made:
Grant Date
12 December 2022 – Employees1
3 January 2023 – Employees1
3 January 2023 – Non‑Executive
Director2
9 January 2023 – Employees1
Exercise
Price
Number of
Holders
Number on
Issue
Number of
Restricted
Securities
Release Data
(If Applicable)
$0.000
$0.000
$0.000
$0.000
86
6,857,576
8
1
10,736,388
127,877
20
1,763,356
–
–
–
–
–
–
–
–
1. As part of the Employee Equity Plan including both short term incentives and long term incentives for employees,
19,357,320 rights (including performance rights and service rights) were issued on 12 December 2022, 3 January 2023 and
9 January 2023. The rights hold various service and performance conditions which will be assessed and potentially vest
on 31 August 2024 (short term incentives) and 12 December 2026 (long term incentives).
2. Consistent with the Resolutions passed at the AGM on 17 November 2022, the Company issued 127,877 performance
rights to a Non‑Executive Director as part of the Employee Equity Plan. These performance rights hold various
performance conditions which will be assessed and potentially vest on 3 January 2026.
Accounting for previous grants of performance rights, as well as conversion and expiry of 9,438,572 performance
rights during the financial year as at 17 August 2023 there were 25,715,773 unquoted rights over fully paid
ordinary shares issued which are held by 82 participants.
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:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Ordinary shares
Options over ordinary shares
Number
of holders
% of total
shares
issued
Number
of holders
% of total
shares
issued
85
969
663
1,742
506
3,965
904
0.00
0.58
1.03
12.33
86.06
100.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
There are 904 holders (with a total of 2,258,259 shares) holding less than a marketable parcel.
Micro-X Limited
7 7
S H A R E H O L D E R I N F O R M A T I O N C O N T ’ D
Equity security holders
Twenty largest equity security holders
The names of the twenty largest security holders of equity securities are listed below:
Varex Imaging Corporation
BNP Paribas Nominees Pty Ltd (DRP)
National Nominees Limited
UBS Nominees Pty Ltd
JP Morgan Nominees Australia Pty Ltd
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
Citicorp Nominees Pty Ltd
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 A/C)
Bronte Investments Pty Ltd (McMahon Superannuation A/C)
Meddiscope Pty Ltd (Podesta Family A/C)
Anglesea Investments Pty Ltd (Damien O’Brien Family A/C)
Gowing Bros Limited
Vaben Pty Ltd (The Vaben Superannuation A/C)
Dr Russell Kay Hancock
Kanat Nominees Pty Ltd (Aaron Kanat ML A/C)
Charli Jordan Pty Ltd (Molloy Settlement A/C)
Ordinary shares
Number held
% of total
Shares
issued
50,709,000
39,825,217
36,399,955
35,942,251
34,802,859
18,430,363
13,797,279
13,534,068
10,875,613
5,904,601
4,966,867
4,816,556
4,600,279
3,244,565
2,766,379
2,752,858
2,565,931
2,500,000
2,420,828
2,400,000
9.86
7.74
7.08
6.99
6.77
3.58
2.68
2.63
2.11
1.15
0.97
0.94
0.89
0.63
0.54
0.54
0.50
0.49
0.47
0.47
Substantial holders in the company, as disclosed in substantial holding notices given to the Company, are set
out below:
293,255,469
57.03
Perennial Value Management Limited
Varex Imaging Corporation
Acorn Capital Limited
TIGA Trading Pty Ltd and Thorney Technologies Limited
Annual Report 2023
Ordinary shares
Number held
54,653,635
50,709,000
45,097,950
26,282,972
% of total
Shares
issued
10.63
9.86
8.77
5.11
7 8
S H A R E H O L D E R I N F O R M A T I O N C O N T ’ D
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
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.
Micro-X Limited
7 9
C O R P O R A T E D I R E C T O R Y
Directors
Share Register
David Knox (Non‑Executive Chair)
Alexander Gosling (Non‑Executive Director)
Patrick O’Brien (Non‑Executive Director)
James McDowell (Non‑Executive Director)
Ilona Meyer (Non‑Executive Director)
Andrew Hartmann (Non‑Executive Director) –
Appointed 15 December 2022
Computershare Investors Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3067
Phone: 1300 555 159 (within Australia)
Phone: +61 3 8320 4062 (outside Australia)
Peter Rowland (Non‑Executive Director) – Appointed
1 May 2023 was previously Managing Director
Auditor
BDO Audit Pty Ltd
Level 7, 420 King William Street
Adelaide, SA 5000
Phone: +61 8 8324 6000
Legal
Thompson Geer
Level 14, 60 Martin Place
Sydney NSW 2000
Stock exchange listing
Micro‑X Ltd shares are listed on the
Australian Securities Exchange
(ASX code: MX1)
Website
www.micro‑x.com
Company Secretary
Kingsley Hall
Registered Office
A14, 6 MAB Eastern Promenade
1284 South Road
Tonsley, SA 5042
Principal place of business
A14, 6 MAB Eastern Promenade
1284 South Road
Tonsley, SA 5042
colliercreative.com.au #MIX0005
Annual Report 2023
M I C R O - X . C O M