Nanollose Limited
Annual Report 2024

Plain-text annual report

Nanollose Limited Appendix 4E Preliminary final report 1 1. Company details Name of entity: Nanollose Limited ABN: 13 601 676 377 Reporting period: For the year ended 30 June 2024 Previous period: For the year ended 30 June 2023 2. Results for announcement to the market $000 Revenues from ordinary activities down 67.2% to 0.013 Loss from ordinary activities after tax attributable to the owners of Nanollose Limited down 14.1% to 1,157 Loss for the year attributable to the owners of Nanollose Limited down 14.1% to 1,157 Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the Company after providing for income tax amounted to $1,156,553 (30 June 2023: loss of $1,345,656). 3. Net tangible assets Reporting period Previous period Cents Cents Net Tangible Assets/ (Liabilities) (223,692) 451,632 Shares on issue 172,006,368 148,886,368 Net tangible assets per ordinary security (cents) (0.13) 0.30 4. Control gained over entities Name of entities (or group of entities) N/A 5. Loss of control over entities Not applicable. Nanollose Limited Appendix 4E Preliminary final report 6. Status of Audit This report is based on the financial statements which have been audited by RSM Australia Partners. Attachments Additional Appendix 4E disclosure requirements can be found in the directors’ report and the 30 June 2024 financial statements and accompanying notes. This report is based on the financial statements which have been audited by RSM Australia Partners. Winton Willesee Director 28 August 2024 NANOLLOSE LIMITED ABN 13 601 676 377 ANNUAL REPORT - 30 JUNE 2024 CONTENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 2 PAGE CORPORATE DIRECTORY 3 CHAIRMANS’ LETTER TO SHAREHOLDERS 4 DIRECTORS’ REPORT 5 AUDITOR’S INDEPENDENCE DECLARATION 23 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 24 STATEMENT OF FINANCIAL POSITION 25 STATEMENT OF CHANGES IN EQUITY 26 STATEMENT OF CASH FLOWS 28 NOTES TO THE FINANCIAL STATEMENTS 29 CONSOLIDATED ENTITY DISCLOSURE STATEMENT 49 DIRECTORS’ DECLARATION 50 INDEPENDENT AUDITOR’S REPORT 51 ASX ADDITIONAL INFORMATION 54 CORPORATE DIRECTORY NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 3 DIRECTORS Wayne Best Winton Willesee Heidi Beatty COMPANY SECRETARY Erlyn Dawson REGISTERED AND PRINCIPAL OFFICE Suite 5 CPC, 145 Stirling Highway NEDLANDS WA 6009 Telephone: (08) 9389 3120 Website: www.nanollose.com Email: info@nanollose.com AUDITORS RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 SHARE REGISTRY Automic Registry Services Level 5, 191 St Georges Terrace PERTH WA 6000 Telephone: (08) 9324 2099 HOME EXCHANGE Australian Securities Exchange Level 40, Central Park 152-158 St George’s Terrace PERTH WA 6000 ASX Code: NC6, Options NC6OB SOLICITORS Fairweather Corporate Lawyers Suite 2, 589 Stirling Highway Cottesloe WA 6011 Steinepreis Paganin Level 4, 16 Milligan Street Perth WA 6000 CHAIRMAN’S LETTER TO SHAREHOLDERS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 4 Dear fellow shareholders, I am pleased to present to you the 2024 Annual Report for Nanollose Limited (ASX:NC6) (‘Nanollose’ or ‘the Company’), with accompanying financial statements for the year ended 30 June 2024 (‘FY2024’). During the period, Nanollose further strengthened its emerging dual-channel commercialisation strategy, with another round of key research and development breakthroughs for the scalable manufacture of its Nullarbor™ fibre technology, complemented by increased traction for its innovative range of Biollose™ soilless growing media products in the fast- growing markets for microgreens and vertical indoor farming. Operationally, Nanollose entered the year with strong momentum in its joint pilot production program for the Company’s ‘Forest-Friendly’ Nullarbor and Nufolium lyocell fibres. It followed the success in FY2023 of the second pilot production spin in collaboration with long-term development partner Birla Cellulose, which resulted in a material uplift in total production volumes. Pleasingly, in the first half of FY2024 Nanollose reported that all the key objectives of the third pilot spin were achieved, including an expanded production run of over half a tonne of fibre and the first production batch of Nufolium fibre for nonwoven applications such as wipes, reaffirming access to a potentially significant addressable market. In line with its stated strategy, Nanollose made key progress in the second half of FY2024 to convert the comprehensive R&D program for its Nullarbor fibre into commercial opportunities, commencing with a purchase order for 340kg of Nullarbor-20™ fibre from ORTA, an international manufacturing group headquartered in Turkey which is a global leader in sustainable denim production. That was followed in the June quarter by a non-binding Term Sheet with Paradise Textiles Pte Limited for a Joint Venture relating to an exclusive supply arrangement, which will also include R&D by Paradise for the manufacture of fabrics from Nullarbor fibres. Operating as a division of the global textiles company Alpine Group, the agreement with Paradise Textiles furthers the Company’s commitment to work with best-in-class partners as it moves from R&D to commercialisation. These initiatives have continued into the new financial year and are complemented by Nanollose’s growing network of partners of industry leaders in the global fabric and fashion sectors. With another year of strong progress in the fibre and fabric technology division, we are also pleased to report several important development milestones in the horticulture division. During the financial year, Nanollose introduced Biollose, reflecting the evolution of its unique soilless growth media into a more versatile technology that can be used in a range of highly scalable commercial agriculture and horticulture products. The development of Biollose represented an important research breakthrough by the Company, culminating in a unique dry powder formulation that can be rehydrated at the point of use – an important attribute to facilitate cheaper, more efficient transport, storage and handling for end users. Over the course of FY2024, we have already seen strong interest in our Biollose technology from industry participants in commercial microgreens and indoor vertical farming. These are fast-growing industries where the Biollose product suite has the potential to play a key role as an advanced soilless growing technology to directly assist with the development of large-scale automated indoor horticultural practices. With another year of hard work and key R&D breakthroughs in FY2024, we are confident that Nanollose is on the cusp of another step-change in growth over the next 12 months as it converts its unique technology suite into commercial agreements, with product market fit for the industries of the future in sustainable manufacturing and indoor vertical farming. We look forward to updating our investors in the months ahead as Nanollose executes on its targeted commercial scale-up plans. Dr Wayne Best Executive Chairman DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 5 The directors present their report, together with the financial statements of Nanollose Limited (referred to hereafter as the 'Company') for the year ended 30 June 2024. BOARD OF DIRECTORS The names and details of the Directors in office during the financial period and until the date of this report are set out below. Each Director was in office for the whole of the financial period, unless otherwise stated. • Wayne Best Executive Chairman • Winton Willesee Non-Executive Director • Heidi Beatty Non-Executive Director • Terence Walsh Non-Executive Director (Resigned 3 November 2023) PRINCIPAL ACTIVITIES Nanollose Limited is a leading biomaterials company, commercialising scalable technology to create fibres, fabrics, and other materials with minimal environmental impact. During the financial year, the principal continuing activities of the Company consisted of research and development, and promotion of the Company’s microbial cellulose technologies. The primary focus has been directed towards the development, scale up and ultimate commercialisation of the Company’s Tree-Free rayon fibre for use in textiles (NullarborTM) and non-woven applications (Nufolium™). DIVIDENDS PAID OR RECOMMENDED There were no dividends declared or paid during the financial year (2023 Nil). OPERATING RESULTS During the year, the principal continuing activities of the Company consisted of research and development, and promotion of the Company’s microbial cellulose technologies. The loss for the Company after providing for income tax amounted to $1,156,553 (30 June 2023: $1,345,656). REVIEW OF OPERATIONS Nanollose is a leading biomaterials company commercialising scalable technology to create forest-friendly fibres, fabrics and other materials with superior performance and minimal environmental impact. Nanollose uses a natural fermentation process which can transform agricultural waste and by-products into microbial cellulose, a versatile raw material and Forest-Friendly alternative to traditional cellulose produced from trees via the wood pulping process. The Company then uses this ‘Tree-Free’ microbial cellulose as an input for its range of innovative biomaterials including its Nullarbor and Nufolium fibres, Biollose horticultural medium, and its emerging animal-free and plastic-free leather-like materials. During FY2024, the Company continued to advance its ‘Tree-Free’ microbial cellulose technologies, the highlights of which are set out below: BIOLLOSE SOILLESS GROWING MEDIA Introduction of Biollose™ and MicroGel™: During FY2024 the Company introduced Biollose - a new and improved version of the soilless growing media used in the Company’s original Jelli Grow™ product – and the expansion of its product range to include MicroGel, which was developed specifically for the commercial microgreens market. The rebranding reflects the evolution of Nanollose’s original liquid-gel Jelli Grow product to a more versatile dry powder, DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 6 Biollose, based on the Company’s patent application in May of 2023. The new formulation of dry power can be rehydrated at point of use, overcoming problems with shipping, handing and storing associated with the original liquid- gel formulation. The new formulation considerably strengthens the commercial use-case for microbial cellulose in these applications. Biollose is expected to be a pivotal ingredient in a range of soilless growing substrates for large-scale horticultural markets. The first of these products is MicroGel, which has been developed from an extensive R&D project. MOU to supply MicroGel™ to Greenspace: The Company entered into a non-binding Memorandum of Understanding (MOU) with Sydney-based Greenspace ESG Pty Ltd (“Greenspace”) for the exclusive evaluation and supply of MicroGel for the commercial microgreens market in Australia. Greenspace is a producer of sustainably grown living micro herbs, natives and edible flowers. The Greenspace Community Vertical Farm™ serviced solution involves the construction of hub-and-spoke urban food production centres across macrofarm (large scale) and connected smart microfarms - unlocking numerous ESG benefits that drive changes in consumer food demand around freshness, flavour, nutrition and security. As part of the agreement, Greenspace is undertaking extensive trials using MicroGel in its commercial production facilities. Feedback from these trials will allow Nanollose to refine the product for the key markets in which Greenspace operates. On successful completion of the trials, it is proposed that Nanollose and Greenspace will enter into a supply agreement, under which Greenspace will be offered an exclusive supply of MicroGel in the commercial microgreens market in Australia, on commercial terms to be agreed between the parties. European and Australian patents granted for Jelli Grow™ technology: During FY2024 Nanollose further strengthened its IP portfolio following the grant of both European and Australian Patents for its application titled "Plant Growth Media and Method for Making Same". The patents cover Nanollose’s original wet-gel formulation of its Jelli Grow seed raising medium. While the Company's primary focus is currently on its new dry powder Biollose formulations for Jelli Grow and MicroGel, the patents provide important protection from potential competitors in significant markets. The patent family has also been granted in China and Japan and remains pending in other jurisdictions. NULLARBOR™ AND NUFOLIUM™ FIBRE TECHNOLOGY Third pilot production completed with Birla Cellulose: Nanollose’s third pilot spin with Birla Cellulose was completed during the period, which achieved two important objectives including increasing the scale of Nullarbor fibre production and producing the first batch of Nufolium fibre for nonwoven applications. The spin was the Company’s largest to date, producing over half a tonne of fibre, more than twice the amount of fibre than the previous pilot spin, and augurs well for continued scale-up of the manufacturing process. The spin produced 430kg of Nullarbor-20, a blend of 20% microbial cellulose and 80% FSC certified wood pulp, and 110kg of a similar blend of Nufolium-20 for nonwoven applications. Nufolium uses the same microbial cellulose raw material and the same environmentally friendly lyocell process but changes some parameters to modify the fibres for use in nonwoven materials such as wipes. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 7 Maiden sale of Nullarbor fibre to industry leader in sustainable denim: The Company achieved a major milestone in 2024 with its first sale of Nullarbor-20 fibre to Orta Anadolu Ticaret Ve Sanayi İşletmesi T.A.Ş (“ORTA”). The order was for 340kg of the Company’s Nullarbor-20 fibre, which was shipped from the batch produced during the Company’s third pilot spin with Birla Cellulose. ORTA is a global leader in the development, manufacture and supply of sustainable denim, based in Turkey and has a total production capacity of 35 million metres of denim annually. ORTA currently supplies denim internationally to luxury brands, leading denim brands and retail brands. ORTA has ~1,500 employees and is a leader in the field of sustainability with the aim of creating a more robust denim ecosystem where design meets technology and ethics. While the order is not deemed material in value, it marks an important milestone for the Company and provides considerable validation of Nanollose’s technology. Selection in Fashion for Good’s 2024 Innovative program: Providing further validation of Nanollose’s fibre technology, the Company was selected to participate in Fashion For Good’s 2024 Innovation Programme. Fashion For Good is a global initiative designed to support disruptive innovators scale solutions which are dedicated to sustainable fashion practices. Nanollose was one of ten companies chosen by a panel of industry experts to participate. The nine-month initiative will provide bespoke support based on the development stage and ambitions of each innovator, matching them with relevant industry partners to drive technology, impact validation as well as investment opportunities. Nanollose is already benefiting greatly from the programme’s Innovation Platform – an industry hub which connects companies working on sustainable innovation with brands, retailers, manufacturers, and funders to bring new ideas and technologies from niche to norm. Selection in 2024 Challenge the Fabric event: Nanollose was one of eight innovative companies showcased at the 2024 Challenge the Fabric (CTF) event in Milan – an annual event organized by the Swedish Fashion Council for cross-industry collaboration in sustainable man-made cellulosic fibres. CTF brings together stakeholders across the global textiles supply chain to share ideas on how to achieve sustainable fabric manufacturing at scale using man-made cellulosic fibres (MMCF). The event is hosted each year by Ekman Group, a Swedish biomaterials conglomerate, alongside the Swedish Fashion Council. Each of the eight sustainable fabric companies were matched with an emerging designer to create a look using the innovative MMCF fabric supplied by their partner company. Nanollose was paired with Louise Lyngh Bjerrergaard, a Danish designer based in Paris, who designed a piece using 10m of Nullarbor-20 single jersey fabric made by Nanollose’s partner, Paradise Textiles. Australian, Indian and Japanese patents granted for Nullarbor viscose technology: During the period, Nanollose further strengthened its IP portfolio in viscose fibres following the grant of Patents in Australia, India, and Japan for its application titled "Methods for producing a viscose dope from microbial cellulose". The patents cover the production of the Company’s original Nullarbor viscose fibres. The patent family has also been granted in the USA and remains pending in other jurisdictions. Indian patent granted for Nullarbor Lyocell technology: The Company’s IP portfolio reached another significant milestone in FY2024 with the first grant of its joint patent application with Grasim Industries titled ‘A High Tenacity Regenerated Cellulosic Fiber’. The grant by the Indian Patent Office represents the Company’s first granted patent for its lyocell technology and complements its existing granted DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 8 patents for viscose mentioned above. The patent application was lodged alongside industry partner, Grasim Industries, a company belonging to global conglomerate, Aditya Birla Group, one of the world’s largest man-made cellulosic fibre producers. Several other applications from this patent family remain pending in other jurisdictions and the successful grant from the Indian Patent Office augurs well for these other applications. Term sheet executed with Paradise Textiles for exclusive supply of Nullarbor fibre: The Company signed a non-binding term sheet with Paradise Textiles Pte Limited, which outlines the principal terms for a joint venture agreement between Nanollose and Paradise Textiles involving the exclusive supply of Nullarbor fibres to Paradise. Under the terms of the term sheet, the parties have set out a framework for Nanollose to supply Nullarbor fibres exclusively to Paradise Textiles for the production of yarns and fabrics, with the exception of fibre for denim fabrics. In return, Paradise Textiles will continue to work alongside Nanollose to develop new yarn and fabric constructions, provide samples, and promote Nullarbor to its current and prospective client base. Both parties signed a collaboration agreement in May 2022 for the production of yarns and fabrics from Nullarbor fibres. Since that time the two companies have been collaborating to develop a variety of fabric constructions and present them to selected fashion and footwear brands. During this process Paradise Textiles has demonstrated its belief in the potential for the technology and committed significant resources to the collaboration. Consequently, they have already gained experience in working with the fibre and producing a range of materials aimed at meeting market needs. Both parties are progressing due diligence on one another and will continue to negotiate key commercial terms for the joint venture, with discussions focused on pricing and exclusivity CORPORATE Resignation of Director: Mr Terence (Terry) Walsh resigned as a Non-Executive Director, effective 3 November 2023. Resignation of Company Secretary: Miss Emily Spano resigned as a Company Secretary of the Company, effective 30 November 2023. Liquidation of CelluAir Pty Ltd: CelluAir Pty Ltd was placed into voluntary liquidation during FY2024 and its remaining assets distributed to shareholders. CelluAir was an early-stage spinout from Queensland University of Technology undertaking R&D to develop a superior filtration material for face masks using nanocellulose. Nanollose acquired a 20% shareholding in CelluAir in 2020. Placement and Security Purchase Plan (SPP): During the period, the Company secured firm commitments from new and existing professional, sophisticated and institutional investors to subscribe for 10,000,000 fully paid ordinary shares in the capital of the Company (Shares) at an issue price of $0.025 per Share, together with one Attaching Option for every Share subscribed for and issued (Placement), to raise $250,000 (before costs). The Shares issued under the Placement were issued pursuant to the Company’s available placement capacity under ASX Listing Rule 7.1. The Attaching Options issued under the Placement were subject to Shareholder approval, which the Company sought at a general meeting in early 2024. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 9 In addition to the Placement, the Company offered eligible shareholders the opportunity to participate in the capital raising via an SPP for up to a further $500,000. The Company received valid applications totalling $328,000 and issued 13,120,000 SPP Shares and 13,120,000 SPP Options following the receipt of shareholder approval. SIGNIFICANT CHANGES IN STATE OF AFFAIRS Other than as detailed in the review of operations, there were no other significant changes in the state of affairs of the Company during the financial year. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 31 July 2024, the Company has entered into a $200,000 R&D Loan facility with Asymmetric Innovative Finance Pty Ltd. The R&D loan facility has been established against the Company’s anticipated R&D tax rebate for the FY24 period and is subject to a pro-rata annual interest rate of 16%. Funds from the loan facility have been received. Other than as noted above, no matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the Company's operations, the results of those operations, or the Company's state of affairs in future financial years. OUTLOOK During FY2025, the Company will remain focused on its strategy to commercialise its multi-channel R&D program across local and international markets. Nanollose is also currently advancing a number of opportunities associated with its Biollose technology in the fast-growing vertical farming sector, alongside ongoing efforts to establish commercial scale of its innovative Nullarbor sustainable fibre and fabric solutions. Nanollose’s near term priorities include scaling up pilot production of Nullarbor fibres with Birla Cellulose to produce increased volumes with a higher microbial cellulose content. With the increased volume of fibre expected, the Company will strengthen its ongoing engagement with fashion brands to advance off-take agreements for its Nullarbor fibres and fabrics in collaboration with its partners. Commercialisation initiatives for the Biollose product suite will also remain a focus for FY2025. In particular, MicroGel and related products targeting the rapidly growing commercial microgreen and vertical farming sectors will be given priority. AGM The Company anticipates that it will hold its next Annual General Meeting (‘AGM’) on or before 7 November 2024. In accordance with ASX Listing Rule 3.13.1, the closing date for the receipt of nominations from persons wishing to be considered for election as a director of the Company is 19 September 2024 (35 business days prior to the date of the AGM). Any nominations must be received in writing no later than 5.00pm (WST) on 19 September 2024, at the Company’s registered office. ENVIRONMENTAL REGULATION The Company is not subject to any significant environmental regulation under Australian Commonwealth or State law. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 10 BOARD OF DIRECTORS Wayne Best – Executive Chairman Experience and Expertise Dr Best has 40 years’ experience in organic chemistry both in academia, government and industry. Wayne obtained his BSc (Hons) and PhD in Organic Chemistry from The University of Western Australia. He then spent two years at Imperial College in the UK where he obtained a DIC, followed by a year at the Australian National University in Canberra. He then took up a position with ICI Australia’s Research Group in Melbourne for four and a half years which included a secondment to ICI Agrochemicals in the UK. Following ICI, Wayne returned to Western Australia and spent ten years at the Chemistry Centre (WA) where he was responsible for the formation and running of the Medicinal & Biological Chemistry Section which undertook collaborative R&D into drug discovery and contract synthesis for the drug discovery and pharmaceutical industries. He then founded Epichem Pty Ltd, a contract research and drug discovery Company, which he managed for 14 years before moving full-time to Nanollose in 2018. Wayne is a Fellow of the Royal Australian Chemical Institute and has held appointments as an Adjunct Associate Professor at both Murdoch University and The University of Western Australia. He is also a Graduate Member of the Australian Institute of Company Directors and has served as a Director for several listed and unlisted biotechnology companies. BSc (Honours), PhD, DIC, FRACI, GAICD Other Current Directorships None Former Directorships in last 3 years None Special Responsibilities Executive Chairman of the Board Interests in Shares and Options 9,900,000 ordinary shares 1,200,000 listed $0.05 options expiring 6 February 2027 1,000,000 unlisted $0.10 options expiring 13 December 2024 1,000,000 Class E performance rights 1,000,000 Class F performance rights Winton Willesee – Non-Executive Director Experience and Expertise Mr Willesee is an experienced company director with over 20 years’ experience in various roles within the Australian capital markets. Mr Willesee has considerable experience with ASX listed and other companies over a broad range of industries having been involved with many successful ventures from early stage through to large capital development projects. He has a core expertise in strategy, company development, corporate governance, company public listings, merger and acquisition transactions and corporate finance. Mr Willesee holds a Master of Commerce, a Post-Graduate Diploma in Business (Economics and Finance), a Graduate Diploma in Applied Finance and Investment, a Graduate Diploma in Applied Corporate Governance, a Graduate Diploma in Education and a Bachelor of Business. He is a Fellow of the Financial Services Institute of Australasia, a Graduate of the Australian Institute of Company Directors, a Member of CPA Australia and a Fellow of the Governance DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 11 Institute of Australia and the Institute of Chartered Secretaries and Administrators/Chartered Secretary. BBus, DipEd, PGDipBus, MCom, FFin, CPA, GAICD, FGIS/FCIS Other Current Directorships Non-Executive Director of One Click Group Limited (ASX:1CG) (appointed 3 October 2020) Non-Executive Director of Metals One Plc (AIM:MET1) (appointed 25 July 2023) Non-Executive Chairman of Citius Resources PLC (LSE:CRES) (appointed November 2020) Former Directorships in last 3 years Non-Executive Director of eSense Lab Ltd (from 31 July 2020 to 21 September 2021) (delisted from ASX on 10 August 2021) Non-Executive Director of Hygrovest Ltd (ASX: HGV) (from 21 October 2014 to 20 March 2023) Non-Executive Chairman of New Zealand Coastal Seafoods Limited (ASX:NZS) (from 7 July 2016 to 10 March 2023) Non-Executive Director of Neurotech International Limited (ASX: NTI) (From 15 April 2019 to 19 April 2024) Non-Executive Director of Bridge SaaS Limited (ASX:BGE) (from 5 May 2023 to 18 January 2024) Interests in Shares and Options 9,268,504 ordinary shares 1,200,000 listed $0.05 options expiring 6 February 2027 500,000 unlisted $0.147 options expiring 7 December 2024 Heidi Beatty – Non-Executive Director Experience and Expertise Heidi Beatty, founder of Crown Abbey Ltd is a scientist and innovator who has 20 years’ experience developing consumer and health care products. After gaining a BSc in Chemistry from the University of York UK, Heidi worked with Johnson & Johnson for 10 years in Europe and the US. In 2015 Heidi founded Crown Abbey Ltd, a consultancy company that supports clients in their project launches, combining Project Management and Product Development across Consumer and Healthcare categories Other Current Directorships None Former Directorships in last 3 years None Interests in Shares and Options 68,504 ordinary shares DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 12 COMPANY SECRETARY Erlyn Dawson – Company Secretary Experience and Expertise Mrs Dawson is an experienced corporate professional with a broad range of corporate governance and capital markets experience, having been involved with several public company listings, merger and acquisition transactions and capital raisings for ASX-listed companies across a diverse range of industries. Mrs Dawson began her career in corporate recovery and restructuring at Ferrier Hodgson and is now the Managing Director of corporate services firm, Azalea Consulting, which provides outsourced company secretarial, accounting and administration services to a portfolio of ASX-listed companies. Mrs Dawson holds a Bachelor of Commerce (Accounting and Finance) and a Graduate Diploma in Applied Corporate Governance. She is a member of the Governance Institute of Australia/Chartered Secretary. DIRECTORS’ MEETINGS Attendances by each Director during the year were as follows: Director Number Eligible to Attend Number Attended Wayne Best 6 6 Winton Willesee 6 6 Heidi Beatty 6 6 Terence Walsh 2 2 Eligible: represents the number of meetings held during the time the director held office. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 13 REMUNERATION REPORT (AUDITED) The remuneration report details the key management personnel remuneration arrangements for the Company, 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 Company, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Service agreements ● Share-based compensation ● Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration The objective of the Company’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') ensures that executive reward satisfies the following key criteria for good reward governance practices: ● competitiveness and reasonableness ● acceptability to shareholders ● performance linkage / alignment of executive compensation ● transparency The Board, fulfilling the role of the Nomination and Remuneration Committee, is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the Company depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel. The Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the Company. The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by: ● having value creation and capital growth in advance of economic profit as a core component of plan design; ● focusing on sustained growth in shareholder wealth, consisting of growth in share price and eventually dividends, 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 reward framework should seek to enhance 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 DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 14 remuneration is separate. Non-executive directors’ remuneration Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed from time to time by the Board fulfilling its role as the Nomination and Remuneration Committee. The Board 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 chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not entitled to vote on the determination of his own remuneration. Given the nature of the Company and the more hands-on role the non-executive directors’ play in the operations of the Company non-executive directors may receive share options or other incentives. The ASX Listing Rules and the Company’s Constitution provide that the aggregate annual non-executive directors' fees paid shall not exceed that determined by shareholders in a general meeting. The most recent determination was via a resolution of all shareholders on 5 June 2016, where the shareholders approved a maximum annual aggregate remuneration of $500,000. Executive directors’ remuneration The Company aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The executive remuneration and reward framework has four components: ● base pay and non-monetary benefits ● short-term performance incentives ● share-based payments ● other remuneration such as superannuation and long service leave The combination of these comprises the executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed regularly by the Board fulfilling the role of Nomination and Remuneration Committee based on the overall performance of the Company and comparable market remunerations. Executives may receive their fixed remuneration in the form of cash or other benefits where it does not create any additional costs to the Company and provides additional value to the executive. The short-term incentives ('STI') program has yet to be finalised. Once adopted it will be designed to align the targets of the Company with the performance hurdles of executives. STI payments will be granted to executives based on specific annual targets and key performance indicators ('KPI's') being achieved. The long-term incentives ('LTI') include equity-based payments. Equity securities are awarded to executives with vesting conditions and expiry dates aligned to the Company’s business plans and targets. The details of the current vesting conditions and targets are as follows and further detailed in the section on service agreements found below. Options The are no unvested options currently on issue as at the date of this report. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 15 Performance Rights On 27 November 2023 following shareholder approval on 24 November 2023, the Company issued 1,000,000 Class F Performance Rights to Dr Wayne Best. The Class F Performance Rights are to vest on the achievement of the following milestone on or before 13 December 2024: The Company achieving $1,500,000 in revenue for the calendar year 2024, as confirmed by reference to the Company’s audited and auditor reviewed financial statements. On 27 November 2023 following shareholder approval on 24 November 2023, the Company issued 1,000,000 Class G Performance Rights to Dr Wayne Best. The Class G Performance Rights are to vest on the achievement of the following milestone on or before 31 March 2024: The Company entering into a commercial agreement with Grasim Industries (Birla Cellulose) with respect to the commercialisation of the Nullabor™ fibre technology on terms satisfactory to the Board. The Class G Performance Rights lapsed on 30 May 2024 due to the milestone having not been met. Company performance and link to remuneration Remuneration for certain individuals is directly linked to the performance of the Company. Each key management personnel held equity securities designed to incentivise them to drive the Company’s performance in line with its business plans. A portion of any cash bonus that may be paid to executives will be directly linked to the achievement of goals designed to align with the Company’s performance. Details of remuneration Details of the remuneration of key management personnel of the Company during the year ended 30 June 2024 are set out in the following tables. The key management personnel of the Company consisted of the following directors of Nanollose Limited: Directors Wayne Best Executive Chairman Winton Willesee Non-Executive Director Heidi Beatty Non-Executive Director Terence Walsh Non-Executive Director (Resigned 3 November 2023) DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 16 Key Management Personnel Compensation The compensation of the Company’s Key Management Personnel is disclosed below: 2024 Key Management Personnel Cash Salary and fees Super- annuation Annual Leave Options issued Equity- settled Shares Equity-settled Performance rights Total Fixed Incentive ($) ($) ($) ($) ($) ($) ($) (%) (%) DIRECTORS Executives: Wayne Best 225,000 24,750 6,354 - - (21,729) 234,375 109% -9% Non-executives: Winton Willesee 35,000 - - - - - 35,000 100% - Terence Walsh1 11,958 - - - - - 11,958 100% - Heidi Beatty 35,000 - - - - - 35,000 100% - TOTAL 306,958 24,750 6,354 - - (21,729) 316,333 1 Resigned 3 November 2023 DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 17 2023 Key Management Personnel Cash Salary and fees Super- annuation Annual Leave Options issued Equity- settled Shares Equity- settled Performance rights Total Fixed Incentive ($) ($) ($) ($) ($) ($) ($) (%) (%) DIRECTORS Executives: Wayne Best 225,000 23,625 15,970 34,640 - 21,729 320,964 82% 18% Non-executives: Winton Willesee 35,000 - - - - - 35,000 100% - Terence Walsh 35,000 - - - - - 35,000 100% - Heidi Beatty 35,000 - - - - - 35,000 100% - TOTAL 330,000 23,625 15,970 34,640 - 21,729 425,964 DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 18 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: Wayne Best Title: Executive Chairman Agreement commenced: 10 April 2018 Term of agreement: No fixed term Details: The remuneration of Dr Wayne Best is $225,000 per year plus statutory superannuation. Key management personnel have no entitlement to termination payments in the event of removal for misconduct. Share-based compensation On 24 November 2023, Shareholders agreed to issue the following performance rights and options to Directors: On 27 November 2023, Dr Wayne Best was issued 1,000,000 Class F Performance Rights and 1,000,000 Class G Performance Rights. The Performance Rights vest on the achievement of certain milestones by 13 December 2024 and 31 March 2024 upon vesting, each Class F Performance Right and Class G Performance Rights will be convertible into one ordinary share at the election of the holder. No expense was recognised in the financial year ended 30 June 2024. Class F Class G * Number of performance rights 1,000,000 1,000,000 Grant date 24 Nov 2023 24 Nov 2023 Vesting date 13 Dec 2024 31 March 2024 Share price at grant date $0.022 $0.022 Probability 0% 0% * The Class G Performance Rights was lapsed on 30 May 2024 due to the milestone not being met. Additional information The loss of the Company for the five years to 30 June 2024 are summarised below: 2024 ($) 2023 ($) 2022 ($) 2021 ($) 2020 ($) Sales revenue 12,501 38,101 - - - EBITDA (1,103,206) (1,324,799) (1,505,105) (875,938) (1,187,793) EBIT (1,139,118) (1,361,568) (1,570,109) (932,885) (1,241,318) Loss after income tax (1,156,553) (1,345,656) (1,566,504) (931,045) (1,235,489) The factors that are considered to affect total shareholders return ('TSR') are summarised below. 2024 2023 2022 2021 2020 Share price at financial year end ($) 0.025 0.055 0.071 0.09 0.04 Total dividends declared (cents per share) - - - - - Basic loss per share (cents per share) 0.72 0.90 1.05 0.77 1.57 DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 19 Additional disclosures relating to key management personnel Shareholdings The number of shares in the Company held during the financial year by each director and other members of key management personnel of the Company, including their personally related parties, is set out below: Balance at Received Balance at the start of as part of Disposal on the end of the year remuneration Additions resignation the year Ordinary shares Wayne Best 8,700,000 - 1,200,000 - 9,900,000 Winton Willesee 8,068,504 - 1,200,000 - 9,268,504 Terence Walsh 965,672 - - (965,672) - Heidi Beatty 68,504 - - - 68,504 Total 17,802,680 - 2,400,000 (965,672) 19,237,008 Option holdings The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the Company, including their personally related parties, is set out below: Balance at Expired/ Balance at the start of disposal on the end of the year Issued Exercised resignation the year Options over ordinary shares Wayne Best 1,000,000 1,200,000 - - 2,200,000 Winton Willesee 500,000 1,200,000 - - 1,700,000 Terence Walsh 500,000 - - (500,000) - Heidi Beatty 500,000 - - (500,000) - Total 2,500,000 2,400,000 - (1,000,000) 3,900,000 Performance Rights holdings The number of performance rights in the Company held during the financial year by each director and other members of key management personnel of the Company, including their personally related parties, is set out below: Balance at Balance at the start of Lapsed / the end of the year Issued Converted other the year Rights to Ordinary shares Wayne Best 1,000,000 2,000,000 - (1,000,000) 2,000,000 Total 1,000,000 2,000,000 - (1,000,000) 2,000,000 DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 20 Other transactions with key management personnel and their related parties during the financial year (i) Receivable from and payable to key management personnel and their related parties are as follows: The following balances are outstanding at the reporting date in relation to transactions with key management personnel and their related parties: 2024 2023 Payable to Epichemistry Pty Ltd (director related entity of Winton Willesee and Wayne Best) 590 - Payable to Azalea Corporate Services Pty Ltd (director related entity of Winton Willesee) 37,519 10,412 (ii) Transactions with key management personnel and their related parties Payments to Epichemistry Pty Ltd (director related entity of Wayne Best and Winton Willesee) of $10,180 (2023: $0) for performing chemical research and analysis. Payments to Azalea Corporate Services Pty Ltd (director related entity of Winton Willesee) of $68,209 (2023: $82,451) for bookkeeping and financial reporting services fees, corporate services fees including company secretarial services, and front and registered office services. All transactions were made on normal commercial terms and conditions and at market rates. Use of remuneration consultants During the year, the Company did not engage any remuneration consultants. Voting and comments made at the Company's 2023 Annual General Meeting ('AGM') At the AGM held on 24 November 2023, the Company received votes representing 17,344,286 shares in favour of the adoption of the remuneration report put to shareholders for the financial year ended 30 June 2023. This represented 65.09% of the votes cast on that resolution. The Company notes that the votes cast in favour of the non-binding resolution to adopt its remuneration report at its 2023 AGM totalled less than 75% of the votes. The company received feedback from some shareholders in relation to that vote and has taken onboard that feedback into its remuneration practices. The Company believes some of the votes cast against that resolution were cast in response to matters unrelated to remuneration but cast as a form of protest. This is the end of the Audited Remuneration Report. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 21 SHARES As at the date of this report, there are 172,006,368 (2023: 148,886,368) fully paid ordinary shares on issue. Options on issue Unissued ordinary shares of Nanollose Limited under option as at the date of this report are as follows: Date of issue Class of option No. of Options Exercise price Expiry date 15 September 2021 Class I 1,000,000 $0.15 15 September 2024 7 December 2021 Class J 1,000,000 $0.147 7 December 2024 13 December 2022 Class K 1,000,000 $0.10 13 December 2024 20 January 2023 Class L 500,000 $0.10 20 January 2026 6 February 2024 NC6OB 23,120,000 $0.05 6 February 2027 Total 26,620,000 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate. Performance Rights on issue 1,000,000 Class E Performance Rights were issued to Dr Wayne Best on 13 December 2022. The Performance Rights vest on the achievement of certain milestones by 13 December 2024. 1,000,000 Class F Performance Rights were issued to Dr Wayne Best on 27 November 2023. The Performance Rights vest on the achievement of certain milestones by 13 December 2024. 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. 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. 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. DIRECTORS’ REPORT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 22 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 15 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 16 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 RSM Australia Partners There are no officers of the company who are former partners of RSM Australia Partners. Corporate Governance The Company’s 2024 Corporate Governance Statement is contained in the ‘Corporate Governance’ section of the Company’s website at https://nanollose.com/about/corporate-governance/. Auditor RSM Australia Partners continues in office in accordance with Section 327 of the Corporations Act 2001. Auditor’s Independence Declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' Report. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. Signed on behalf of the Board of Directors. Winton Willesee Non-Executive Director Dated at Perth, Western Australia 28 August 2024 RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 www.rsm.com.au AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Nanollose Limited for the year ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA Perth, WA ALASDAIR WHYTE Dated: 28 August 2024 Partner NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 24 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024 Notes 30 June 2024 ($) 30 June 2023 ($) Revenue Sales 12,501 38,101 Interest income 4,444 17,100 R&D incentives 280,279 374,063 Other income 11,259 308,483 429,264 Expenses Research expenses (361,453) (353,875) Promotion and communication expenses (133,942) (185,132) Consultancy and legal expenses (96,903) (74,099) Employee benefits expense (621,842) (648,702) Depreciation and amortisation (35,912) (36,769) Share-based payments 12 21,729 (68,969) Other expenses (231,452) (214,875) Interest expense (21,879) (1,188) Impairment of Investment 15,970 (160,199) Fixed asset disposal 7 - (30,698) Foreign exchange losses 648 (414) (LOSS) BEFORE INCOME TAX (1,156,553) (1,345,656) Income tax benefit 4 - - (LOSS) AFTER INCOME TAX (1,156,553) (1,345,656) Other comprehensive income/(loss) - - Total comprehensive (loss) for the year (1,156,553) (1,345,656) Basic loss per share (cents per share) 23 (0.72) (0.90) Diluted loss per share 23 (0.72) (0.90) The Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes. NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 25 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024 Notes 30 June 2024 ($) 30 June 2023 ($) CURRENT ASSETS Cash and cash equivalents 5 138,755 548,248 Trade and other receivables 10,592 20,452 Prepayments 36,545 31,045 TOTAL CURRENT ASSETS 185,892 599,745 NON-CURRENT ASSETS Right of use asset 6 41,422 11,021 Plant and equipment 7 14,637 22,472 TOTAL NON-CURRENT ASSETS 56,059 33,493 TOTAL ASSETS 241,951 633,238 CURRENT LIABILITIES Trade and other payables 8 331,903 92,782 Provisions 9 91,210 77,305 Lease liability 10 42,530 11,519 TOTAL CURRENT LIABILITIES 465,643 181,606 TOTAL LIABILITIES 465,643 181,606 NET (LIABILITIES)/ASSETS (223,692) 451,632 EQUITY Issued capital 11 9,478,454 8,975,496 Reserves 12 1,101,666 1,123,395 Accumulated Losses 13 (10,803,812) (9,647,259) TOTAL (DEFICEINCY IN EQUITY)/EQUITY (223,692) 451,632 The Statement of Financial Position is to be read in conjunction with the accompanying notes. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024 NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 26 The Statement of Changes in Equity is to be read in conjunction with the accompanying notes. Issued Capital ($) Reserves ($) Accumulated Losses ($) Total Equity ($) Balance as at 1 July 2023 8,975,496 1,123,395 (9,647,259) 451,632 Total comprehensive loss for the year - - (1,156,553) (1,156,553) Transactions with owners in their capacity as owners: Share issued 578,000 - - 578,000 Share issued costs (75,042) - - (75,042) Class E performance rights not vested (note 12b) - (21,729) - (21,729) Balance as at 30 June 2024 9,478,454 1,101,666 (10,803,812) (223,692) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023 NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 27 The Statement of Changes in Equity is to be read in conjunction with the accompanying notes. Issued Capital ($) Reserves ($) Accumulated Losses ($) Total Equity ($) Balance as at 1 July 2022 8,975,496 1,054,426 (8,301,603) 1,728,319 Total comprehensive loss for the year - - (1,345,656) (1,345,656) Transactions with owners in their capacity as owners: K Class options issued (note 12a) - 34,640 - 34,640 Issue of class NC6OPT8 options - 12,600 - 12,600 E Class performance rights not vested (note 12b) - 21,729 - 21,729 Balance as at 30 June 2023 8,975,496 1,123,395 (9,647,259) 451,632 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2024 NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 28 Notes 30 June 2024 ($) 30 June 2023 ($) CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 23,008 37,641 R&D incentive received 280,279 374,063 Payments to suppliers and employees (1,186,805) (1,439,046) Interest paid (21,879) (1,188) Interest received 4,444 17,100 NET CASH USED IN OPERATING ACTIVITIES 21 (900,953) (1,011,430) CASH FLOWS FROM INVESTING ACTIVITIES Cash obtained from liquidation of associate 15,970 - NET CASH FROM INVESTING ACTIVITIES 15,970 - CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 578,000 Payment of share issue costs (75,042) - Repayment of lease liability (27,468) (26,574) Repayment of borrowings - - Proceeds from borrowings - - NET CASH FROM/ (USED IN) FINANCING ACTIVITIES 475,490 (26,574) Net decrease in cash and cash equivalents (409,493) (1,038,004) Cash and cash equivalents at beginning of financial year 548,248 1,586,252 Cash and cash equivalents at end of financial year 5 138,755 548,248 The Statement of Cash Flows is to be read in conjunction with the accompanying notes. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 29 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES The primary accounting policies adopted in the preparation of the Financial Statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The following Accounting Standards and Interpretations are most relevant to the Company: a. 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'). b. Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, certain financial assets and liabilities. c. 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 Company’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 2. Going concern The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. The Company incurred a loss of $1,156,553 and net cash outflows from operating activities of $900,953 for the financial year ended 30 June 2024. As at that date, the Company had net current liabilities of $279,751 and net liabilities of $223,692. The ability of the Company to continue as a going concern is principally dependent upon the ability of the Company to generate sufficient cash inflows from operations, by raising additional capital from equity markets and managing cash flows in line with available funds. These factors indicate an uncertainty which may cast doubt as to whether the Company will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The Board believes that there are reasonable grounds to believe that the Company will be able to continue as a going concern and that it is appropriate for it to adopt the going concern basis in the preparation of the financial report after consideration of following factors: NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 30 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) - The Company has the ability to issue additional equity securities under the Corporations Act 2001 to raise further working capital; - The Company expects to receive a R&D tax incentive related to its R&D activities for the year ended 30 June 2024 upon lodgement of its claim. The Company has taken a loan against its R&D incentive payments; - The Company will seek to minimise administrative, discretionary research expenses and overhead cash outflows as and when required. Accordingly, the Board believes that the Company will be able to continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report. The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities that might be necessary if the Company does not continue as a going concern. 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. Foreign currency translation The financial statements are presented in Australian dollars, which is Nanollose Limited’s functional and presentation currency. Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Revenue recognition The Company recognises revenue as follows: Revenue from contracts with customers Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. Sale of goods Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 31 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) Interest Interest income is recognised as interest accrues using the effective interest method. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. 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. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 32 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, 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 take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 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 Company'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 Company'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 includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position. 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 Company has applied the simplified approach of 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 33 NOTE 1. STATAMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) Plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line or diminishing balance basis to write off the net cost of each class of plant and equipment over their expected useful lives as follows: Plant and equipment 3-5 years diminishing balance Leasehold improvements 4 years straight-line The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of 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. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. Right-of-use assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Company 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 Company 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. Research and development Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; that the Company is able to use or sell the asset; the Company has sufficient resources and intent to complete the development; and its costs can be measured reliably. Capitalised development costs are amortised on a straight- line basis over the period of their expected benefit. Trade and other payables These amounts represent liabilities for goods and services provided to the Company 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 34 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 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 corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the 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 is 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. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: • during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. • from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 35 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 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 Company or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Company 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. 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 Company's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. Finance costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 36 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) Assets and liabilities measured at fair value are classified into three levels using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. 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. Dividends Dividends are recognised when declared during the financial year and no longer at the discretion of the Company. 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 37 NOTE 1. STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 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 Company for the annual reporting period ended 30 June 2024. The Company has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions 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. Management has applied a probability estimate to the vesting conditions being met, since the Company was unable to reliably measure the fair value of the services received. 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. NOTE 3. OPERATING SEGMENTS Primary Reporting Format – Business Segments The Company has one geographical location which is Australia. The Company’s sole operations are research and development, and promotion of the Company’s nanocellulose technology from that location. Identification of reportable operating segments The operating segment identified is based on the internal reports that are reviewed and used by the Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The CODM reviews EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements. The information reported to the CODM is on at least a quarterly basis. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 38 NOTE 4. INCOME TAX EXPENSE 30 June 2024 ($) 30 June 2023 ($) Reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense from continuing operations (1,156,553) (1,345,656) Tax benefit at the statutory tax rate of 25% (2023: 30%) 289,138 403,697 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Non-assessable income - - Other non-deductible expenses (86,556) (21,550) 202,582 382,147 Future tax benefit not recognised (202,582) (382,147) Income tax expense - - Unrecognised deferred tax balances The Company does not currently recognise any deferred tax asset arising from its tax losses. The Directors estimate that the potential deferred tax assets at 30% not brought to account attributable to tax losses carried forward at reporting date is approximately $1,888,898 (2023: $1,686,316). The losses have not been brought to account because the Directors do not believe it is appropriate to regard realisation of those deferred tax assets as being probable. The benefit of these deferred tax assets will only be obtained if: (1) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the temporary differences to be realised; (2) the Company continues to comply with the conditions for deductibility imposed by tax legislation; and (3) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the temporary differences. NOTE 5. CASH AND CASH EQUIVALENTS 30 June 2024 ($) 30 June 2023 ($) Cash at bank 118,755 528,248 Term deposit [1] 20,000 20,000 [1] Term deposit amount includes $20,000 used as security for credit cards. 138,755 548,248 NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 39 NOTE 6. RIGHT OF USE ASSET 30 June 2024 ($) 30 June 2023 ($) Right of use asset 211,668 153,190 Accumulated depreciation (170,246) (142,169) 41,422 11,021 Right of use asset Opening balance 153,190 153,190 Additions 58,478 - Closing balance 211,668 153,190 Accumulated depreciation Opening balance (142,169) (115,719) Depreciation expense (28,077) (26,450) (170,246) (142,169) 41,422 11,021 NOTE 7. PLANT AND EQUIPMENT 30 June 2024 ($) 30 June 2023 ($) Plant and equipment – at cost 86,600 86,600 Accumulated depreciation (79,652) (74,380) 6,948 12,220 Leasehold improvements – at cost 58,251 58,251 Accumulated depreciation (50,562) (47,999) 7,689 10,252 14,637 22,472 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Plant and equipment ($) Leasehold improvements ($) Total ($) Balance at 30 June 2023 12,220 10,252 22,472 Depreciation expense (5,272) (2,563) (7,835) Balance at 30 June 2024 6,948 7,689 14,637 NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 40 NOTE 8. TRADE AND OTHER PAYABLES 30 June 2024 ($) 30 June 2023 ($) Trade payables 139,524 43,024 Other payables 192,379 49,758 331,903 92,782 Refer to Note 22 for further information on financial instruments. NOTE 9. PROVISIONS 30 June 2024 ($) 30 June 2023 ($) Provision for annual leave 91,210 77,305 The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current since the Company does not have an unconditional right to defer settlement. NOTE 10. LEASE LIABILITY 30 June 2024 ($) 30 June 2023 ($) Lease liability - current 42,530 11,519 The lease liability relates to the lease of premises with an annual rental of $31,540.20 and an expiry date of 25 November 2025, hence the remaining liability has been classified as current. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 41 NOTE 11. EQUITY - ISSUED CAPITAL 2024 (shares) 2023 (shares) 2024($) 2023 ($) Ordinary shares - fully paid 172,006,368 148,886,368 9,478,454 8,975,496 Movements in ordinary share capital Date Shares $ Balance as at 30 June 2023 148,886,368 8,975,496 Placement 10,000,000 192,590 Issued of SPP shares 13,120,000 310,368 Balance as at 30 June 2024 172,006,368 9,478,454 Date Shares $ Balance as at 30 June 2022 148,886,368 8,975,496 - - Balance as at 30 June 2023 148,886,368 8,975,496 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. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 42 NOTE 12. EQUITY – RESERVES 30 June 2024 ($) 30 June 2023 ($) Options reserve (a) 1,101,666 1,101,666 Performance rights reserve (b) - 21,729 1,101,666 1,123,395 (a) Movements in options reserve No. of Options $ Balance as at 30 June 2022 26,568,635 1,054,426 13 December 2022 Issue of K Class options to Director 1,000,000 34,640 20 January 2023 Issue of L Class options to consultant 500,000 12,600 31 May 2023 Expiry of NC6OPT1 options (800,000) - Balance as at 30 June 2023 27,268,635 1,101,666 31 October 2023 Expiry of NC6OPT2 options (500,000) - 6 February 2024 Issue of listed NC6OB options 23,120,000 - 22 April 2024 Expiry of NC6OPT1 options (1,000,000) - Balance as at 30 June 2024 48,888,635 1,101,666 The options on issue as at 30 June 2024 are as follows: Grant date Option Class No. of Options Exercise price Expiry date 5 July 2021 NC6OA 22,268,635 $0.15 5 July 2024 1 September 2021 Class I 1,000,000 $0.15 15 September 2024 26 November 2021 Class J 1,000,000 $0.147 7 December 2024 13 December 2022 Class K 1,000,000 $0.10 13 December 2024 20 January 2023 Class L 500,000 $0.10 20 January 2026 6 February 2024 NC6OB 23,120,000 $0.05 6 February 2027 Total 48,888,635 NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 43 NOTE 12. EQUITY – RESERVES (CONTINUED) (b) Movements in performance rights reserve No. of Performance Rights $ Balance as at 30 June 2022 - - E Class Performance Rights issued to director - expense recognised for the year end 30 June 2023 1,000,000 21,729 Balance as at 30 June 2023 1,000,000 21,729 Reversal of E Class Performance not vested - (21,729) F Class Performance Rights issued to director - No expense recognised for the year end 30 June 2024 1,000,000 - Balance as at 30 June 2024 2,000,000 - 1,000,000 performance rights were issued to director, Wayne Best. No expense was recognised in the financial year ended 30 June 2024. E Class Performance Rights F Class Performance Rights Number of performance rights 1,000,000 1,000,000 Grant date 25 Nov 2022 24 Nov 2023 Vesting date 13 Dec 2024 13 Dec 2024 Share price at grant date $0.075 $0.022 Probability 0% 0% A summary of share-based payments recognised as expenses/share issued costs for the year are as follows: Share-based payment – employees/KMP 30 June 2024 ($) 30 June 2023 ($) Options issued to employee Options issued to directors - 34,640 Performance rights issued to directors (21,729) 21,729 (21,729) 56,369 Share-based payment – supplier/consultant Options issued to consultant – recognised in profit or loss - 12,600 - 12,600 (21,729) 68,969 NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 44 NOTE 13. EQUITY – ACCUMULATED LOSSES 30 June 2024 ($) 30 June 2023 ($) Accumulated losses at the beginning of the financial year (9,647,259) (8,301,603) Loss after income tax expense for the year (1,156,553) (1,345,656) Accumulated losses at the end of the financial year (10,803,812) (9,647,259) NOTE 14. KEY MANAGEMENT PERSONNEL COMPENSATION Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report. 30 June 2024 ($) 30 June 2023 ($) Short-term employee benefits 306,958 330,000 Post-employment benefits 24,750 23,625 Annual leave payments 6,354 15,970 Share-based payments – options - 34,640 Share-based payments - performance rights (21,729) 21,729 316,333 425,964 NOTE 15. REMUNERATION OF AUDITORS During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of the Company: 30 June 2024 ($) 30 June 2023 ($) Audit services – RSM Australia Partners Audit or review of the financial statements 38,810 36,950 Other services – RSM Australia Pty Ltd Preparation of income tax return 7,700 7,000 46,510 43,950 NOTE 16. COMMITMENTS The Company has no commitments not recognised as liabilities as at 30 June 2024 (2023: $nil). NOTE 17. CONTINGENT ASSETS The Company has no contingent assets as at 30 June 2024 (2023: $nil). NOTE 18. CONTINGENT LIABILITIES The Company has no contingent liabilities as at 30 June 2024 (2023: $nil). NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 45 NOTE 19. EVENTS AFTER THE REPORTING PERIOD On 31 July 2024, the Company has entered into a $200,000 R&D Loan facility with Asymmetric Innovative Finance Pty Ltd. The R&D loan facility has been established against the Company’s anticipated R&D tax rebate for the FY24 period and is subject to a pro-rata annual interest rate of 16%. Funds from the loan facility have been received. NOTE 20. RELATED PARTY TRANSACTIONS Disclosures relating to key management personnel are set out in Note 14 and the Remuneration Report included in the Directors’ Report. Transactions with key management personnel and their related parties Payments to Epichemistry Pty Ltd (director related entity of Wayne Best and Winton Willesee) of $10,180 (2023: $0) for performing chemical research and analysis. Payments to Azalea Corporate Services Pty Ltd (director related entity of Winton Willesee) of $68,209 (2023: $82,451) for bookkeeping and financial reporting services fees, corporate services fees including company secretarial services, and front and registered office services. Receivable from and payable to key management personnel and their related parties are as follows: The following balances are outstanding at the reporting date in relation to transactions with key management personnel and their related parties: 2024 2023 Payable to Epichemistry Pty Ltd (director related entity of Winton Willesee and Wayne Best) 590 - Payable to Azalea Corporate Services Pty Ltd (director related entity of Winton Willesee) 37,519 10,412 Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. There were no further transactions with Directors or other Key Management Personnel, including their personally related parties, not disclosed in Note 14 or the above. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 46 NOTE 21. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN OPERATING ACTIVITIES 30 June 2024 ($) 30 June 2023 ($) Loss after income tax expense for the year (1,156,553) (1,345,656) Adjustments for: Depreciation of plant and equipment 7,835 10,319 Depreciation of right-of-use-asset 28,077 26,450 Net loss on disposal of property, plant and equipment - 30,698 Liquidation of investment (15,970) 160,199 Share based payments (21,729) 68,969 Change in operating assets and liabilities: Trade and other receivables 9,862 (46) Prepayments (5,501) 10,966 Provisions 13,905 22,066 Trade and other payables 239,121 4,605 Net cash used in operating activities (900,953) (1,011,430) NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 47 NOTE 22. FINANCIAL INSTRUMENTS The Company’s activities are being funded by equity and are not exposed to significant financial risks. There are no speculative or financial derivative instruments. The Company holds the following financial instruments: 30 June 2024 ($) 30 June 2023 ($) Financial assets Cash and cash equivalents 138,755 548,248 Trade and other receivables 10,592 20,452 149,347 568,700 Financial liabilities Trade and other payables 331,903 92,782 Lease liability 42,530 11,519 374,433 104,301 The Company’s principal financial instruments comprise of cash. The main purpose of these financial instruments is to fund the Company’s operations. It is, and has been throughout the period under review, the Company’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Company’s financial operations are credit risk, capital risk and liquidity risk. The Directors’ review and agree policies for managing each of these risks and they are summarised below: (a) Credit risk Management does not actively manage credit risk as the Company has no significant exposure to credit risk from external parties at year end as there are no trade receivables. (b) Capital risk The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. NOTES TO THE FINANCIAL STATEMENTS NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 48 NOTE 22. FINANCIAL INSTRUMENTS (CONTINUED) (c) Liquidity risk Maturity profile of financial instruments Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding. The Company’s exposure to the risk of changes in market interest rates relates primarily to cash assets and floating interest rates. The Company does not have significant interest-bearing assets and is not materially exposed to changes in market interest rates. The Company does not have financial instruments with maturity exceeding 12 months (2023: $nil). Sensitivity analysis – interest rates The sensitivity effect of possible interest rate movements has not been disclosed as they are not material. (d) Net fair value of financial assets and liabilities Unless otherwise stated, the carrying amount of financial instruments reflect their fair value. NOTE 23. LOSS PER SHARE 30 June 2024 ($) 30 June 2023 ($) Basic (loss) per share (cents) (0.72) (0.90) Diluted (loss) per share (cents) (0.72) (0.90) 30 June 2024($) 30 June 2023 ($) Net loss used in the calculation of basic and diluted loss per share (1,156,553) (1,345,656) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic loss per share 160,180,615 148,886,368 Weighted average number of ordinary shares outstanding during the year used in the calculation of diluted loss per share 160,180,615 148,886,368 As the Company is in a loss position, the diluted loss per share calculation excludes the dilutive effect of the performance rights and options issued and not yet converted to ordinary shares. NOTE 24. DIVIDENDS There were no dividends declared or paid during the financial year (2023: Nil). CONSOLIDATED ENTITY DISCLOSURE STATEMENT NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 49 AS AT 30 JUNE 2024 Nanollose Limited does not have any controlled entities and is not required by the Accounting Standards to prepare consolidated financial statements. Therefore, section 295(3A)(a) of the Corporations Act 2001 does not apply to the entity. DIRECTOR’S DECLARATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 50 In the opinion of the Directors of Nanollose Limited: (a) the attached Financial Statements and Notes are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Company’s financial position as at 30 June 2024 and of its performance, for the financial period ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001; and other mandatory professional reporting requirements. (b) the Financial Report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board as disclosed in Note 1 to the financial statements; and (c) 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 by the Financial Officer and Chief Executive Officer for the financial period ended 30 June 2024. Signed in accordance with a resolution of the Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. Winton Willesee Non-Executive Director Dated at Perth, Western Australia 28 August 2024 RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 www.rsm.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NANOLLOSE LIMITED Opinion We have audited the financial report of Nanollose Limited (the Company), which comprises the statement of financial position as at 30 June 2024, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and the directors' declaration. In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Company's financial position as at 30 June 2024 and of its financial performance for the year then ended; 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 Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (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 1, which indicates that the Company incurred a loss of $1,156,553 and had net cash outflows from operating activities of $900,953 for the financial year ended 30 June 2024. As at that date, the Company had net current liabilities of $279,751 and net liabilities of $223,692. These events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no key audit matters to be communicated in our report. Other Information The directors are responsible for the other information. The other information comprises the information included in the Company's annual report for the year ended 30 June 2024 but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of 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 Company 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 Company or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.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 within the directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Nanollose Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. RSM AUSTRALIA Perth, WA Alasdair Whyte Dated: 28 August 2024 Partner ASX ADDITIONAL INFORMATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 54 The shareholder information set out below was applicable as at 12 August 2024. 1. Quotation Listed securities in Nanollose Limited are quoted on the Australian Securities Exchange under ASX code NC6 (Fully Paid Ordinary Shares) and NC6OB (Listed Options) and are not quoted on any other exchange. 2. Voting Rights The voting rights attached to the Fully Paid Ordinary Shares (“Shares”) of the Company are: (a) at a meeting of members or classes of members each member entitled to vote may vote in person or by proxy or by attorney; and (b) every member present in person, or by proxy or attorney: (i) on a show of hands, has one vote; and (ii) on a poll, has one vote for each Share held. There are no voting rights attached to any Options or Performance Rights on issue. 3. Distribution of Shareholders i) Fully Paid Ordinary Shares Shares Range Holders Units % 1 – 1,000 34 4,823 - 1,001 – 5,000 159 620,918 0.36% 5,001 – 10,000 228 1,833,100 1.07% 10,001 – 100,000 611 23,201,712 13,49% 100,001 and above 208 146,345,815 80.08% Total 1,240 172,006,368 100.00% On 12 August 2024, there were 665 holders of unmarketable parcels of less than 25,000 Shares (based on the closing Share price of $0.020). ii) Listed Options exercisable at $0.05 on or before 6 February 2027 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 37 1,640,000 7.09% 100,001 and above 31 21,480,000 85.41% Total 68 23,120,000 100.00% ASX ADDITIONAL INFORMATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 55 iii) NC6OPT5 Options exercisable at $0.15 on or before 15 September 2024 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 1 1,000,0001 100% Total 1 1,000,000 100% 1Held by Boon Aik Tan iv) NC6OPT6 Options exercisable $0.147 on or before 7 December 2024 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 2 1,000,0001 100% Total 2 1,000,000 100% 1Holders that hold more than 20% of these securities are: - Walsh Investments WA Pty Ltd – 500,000 options - Chincherinchee Nominees Pty Ltd – 500,000 options v) NC6OPT7 Options exercisable at $0.10 on or before 13 December 2024 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 1 1,000,0001 100% Total 1 1,000,000 100% 1 Held by Wayne Morris Best ASX ADDITIONAL INFORMATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 56 vi) NC6OPT8 Options exercisable at $0.10 on or before 20 January 2026 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 1 500,0002 100% Total 1 500,000 100% 1 Held by Carla Woidt vii) Class E Performance Rights expiring on or before 13 December 2024 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 1 1,000,0001 100% Total 1 1,000,000 100% 1 Held by Wayne Morris Best viii) Class F Performance Rights expiring on or before 13 December 2024 Shares Range Holders Units % 1 – 1,000 - - - 1,001 – 5,000 - - - 5,001 – 10,000 - - - 10,001 – 100,000 - - - 100,001 and above 1 1,000,0001 100% Total 1 1,000,000 100% 1 Held by Wayne Morris Best 4. Substantial Shareholders The names of the substantial shareholders as notified to the Company as at 12 August 2024 are: Name: Azalea Family Holdings Pty Ltd ATF The Britt and Winton Willesee Family Trust Holder of: 8,068,504 Shares, representing 5.43% as at 24 June 2021 Notice Received: 17 August 2021 Name: Wayne Morris Best ATF Wayne & Debra Best Fam A/C Holder of: 8,431,798 Shares, representing 5.67% as at 24 June 2021 Notice Received: 17 August 2021 ASX ADDITIONAL INFORMATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 57 5. Restricted Securities There are no restricted securities listed on the Company’s register as at 12 August 2024. 6. On market buy-back There is currently no on market buy-back in place. 7. Twenty Largest Shareholders The twenty largest holders of the Company’s quoted Shares as at 12 August 2024 are as follows: Holder Name Holding % 1 Azalea Family Holdings Pty Ltd 9,200,000 5.35% 2 Mr Shane Raffa 8,300,000 4.83% 3 Wayne Morris Best 7,725,002 4.49% 4 Mr Jason Duncan Maclaurin 6,351,190 3.69% 5 Citicorp Nominees Pty Limited 6,005,832 3.49% 6 Mr John Moursounidis 5,934,523 3.45% 7 Madeiros Pty Ltd 3,805,015 2.21% 8 Mr Dean Anthony Mackenzie 3,481,540 2.02% 9 Mr Bryant James McLarty 3,459,973 2.01% 10 Mr Adam Laurence Bode 3,356,240 1.95% 11 BNP Paribas Nominees Pty Ltd 3,087,332 1.79% 12 Tripit Pty Ltd 3,000,000 1.74% 13 Mr Andreas Steinwachs 2,500,000 1.45% 14 Mr Shorsh Salehi 2,297,492 1.34% 15 Mr Bertrand Lalanne 2,250,000 1.31% 16 Mr Tak Wai Chow 2,198,893 1.28% 17 Gman (WA) Pty Ltd 1,800,000 1.05% 18 Mr Anthony West 1,756,193 1.02% 19 Mr David Robin Lunn & Mrs Stephanie Ann Yu 1,722,097 1.00% 20 Mr Brad Franken 1,700,000 0.99% Total 79,931,322 46.47% 8. Twenty Largest Listed Option Holders – NC6OB ($0.05, 06/02/2027) The twenty largest holders of the Company’s quoted Options as at 12 August 2024 are as follows: Holder Name Holding % 1 Madeiros Pty Ltd 2,800,000 12.11% 2 Mr Adam Laurence Bode 2,449,449 10.59% 3 Mr Jason Paul Kent 1,750,000 7.57% 4 Mr Christopher David Hoffmann 1,495,813 6.47% ASX ADDITIONAL INFORMATION NANOLLOSE LIMITED ANNUAL REPORT 2024 PAGE 58 5 Mr Shorsh Salehi 1,275,000 5.51% 6 Mr Wayne Morris Best 1,200,000 5.19% 6 Azalea Family Holdings Pty Ltd 1,200,000 5.19% 7 Mr Brad Franken 1,000,000 4.33% 8 Mr Tak Wai Chow 821,100 3.55% 9 Mr Tony John Schirmer 695,000 3.01% 10 Ms Anastazja Magda Gorecki 600,000 2.60% 10 Murphy Lee Pty Ltd 600,000 2.60% 11 Mrs Hafidah Visser 425,556 1.84% 12 Dawson Dale Investments Pty Ltd 400,000 1.73% 12 Gman (WA) Pty Ltd 400,000 1.73% 12 Mr Gregory Rolland Cunnold & Ms Lara Cheryl Groves 400,000 1.73% 12 Randus Investments Pty Ltd 400,000 1.73% 12 Mr Terry Visser & Mrs Hafidah Visser 400,000 1.73% 12 Mr Anthony Nosek 400,000 1.73% 13 Mr Daljit Gill 320,000 1.38% 14 Finclear Services Pty Ltd 300,000 1.30% 14 Simmo Enterprises Pty Ltd 300,000 1.30% 14 Mrs Paula Louise Errington 300,000 1.30% 15 Mr Thomas Bryn Davis 203,082 0.88% 16 Mrs Joann Michelle Rotondella 200,000 0.87% 16 Mr Brijesh Dutta 200,000 0.87% 16 Mr Paul Michael Okey & Mrs Thalia Merle Okey 200,000 0.87% 16 Sagemila Investments Pty Ltd 200,000 0.87% 16 Mrs Verna Hastings 200,000 0.87% 17 Mr Mark Hastings 175,000 0.76% 18 Mr Michael Anthony Parnell 170,000 0.74% 19 Mr David Michael Mills & Mrs Rae Frances Mills 100,000 0.43% 19 Mr Graham Malcolm Dyason 100,000 0.43% 19 Ms Karen Laura Boyd 100,000 0.43% 19 Mr Robert Speechly Hogan 100,000 0.43% 19 Prof Terry Stirling Walter 100,000 0.43% 19 Mr Graham Andrew Colquhoun 100,000 0.43% 19 Mr Paul Hilary Spillane & Dr Heather Marie Barton 100,000 0.43% 19 Mr Benjamin Daniel Alford 100,000 0.43% 20 Miss Sara Visser 80,000 0.35% Total 22,360,000 96.71%

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