Announcement PDF Atomo Diagnostics Limited Appendix 4D Half-year report 1. Company details Name of entity: ABN: Reporting period: Previous period: Atomo Diagnostics Limited 37 142 925 684 For the half-year ended 31 December 2024 For the half-year ended 31 December 2023 2. Results for announcement to the market AUD Revenues from ordinary activities up 7% to 2,052,476 Loss from ordinary activities after tax down 12% to (2,758,734) Loss for the half-year down 16% to (2,678,659) 31 31 December December 2024 2023 AUD Cents AUD Cents Basic earnings per share Diluted earnings per share (0.43) (0.43) (0.50) (0.50) Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the group after providing for income tax amounted to AUD2,758,734 (31 December 2023: AUD3,152,282). Refer to the 'Operating and Financial Review' within the Directors' Report for further commentary on the halfyear's results, financial position and likely developments in future years. 3. Net tangible assets Reporting Previous period period AUD Cents AUD Cents Net tangible assets per ordinary security 0.87 1.25 The net tangible assets / (liabilities) per ordinary security is calculated based on 639,202,310 ordinary shares on issue as at 31 December 2024, and 639,202,310 ordinary shares that were on issue as at 31 December 2023. 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. Atomo Diagnostics Limited Appendix 4D Half-year report 6. Details of associates and joint venture entities Not applicable. 7. Audit qualification or review The financial statements were subject to a review by the auditors and the review report is attached as part of the Half Year Financial Report. 8. Attachments Details of attachments (if any): The Half Year Financial Report of Atomo Diagnostics Limited for the half-year ended 31 December 2024 is attached. 9. Signed Signed ___________________________ John Keith Chair Sydney Date: 28 February 2025 Atomo Diagnostics Limited ABN 37 142 925 684 Half Year Financial Report - 31 December 2024 Atomo Diagnostics Limited Corporate directory For the half-year ended 31 December 2024 Directors John Keith (Chair & Non-Executive Director) John Kelly (Managing Director) Paul Kasian (Non-Executive Director) Deborah Neff (Non-Executive Director) Cheri Walker (Non- Executive Director) Company secretary Mathew Watkins Registered office Level 1 3 - 5 George Street Leichhardt NSW 2040 Ph: +61 2 9099 4750 Principal place of business Level 1 3 - 5 George Street Leichhardt NSW 2040 Share register Boardroom Pty Limited Level 8 210 George Street Sydney NSW 2000 Ph: 1300 737 060 Auditor BDO Audit Pty Ltd Level 11, 1 Margaret Street Sydney NSW 2000 Solicitors HWL Ebsworth Lawyers Level 14, Australia Square 264 - 178 George Street Sydney NSW 2000 Stock exchange listing Atomo Diagnostics Limited shares are listed on the Australian Securities Exchange (ASX code: AT1) Website www.atomodiagnostics.com 1 Atomo Diagnostics Limited Directors' report For the half-year ended 31 December 2024 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'group') consisting of Atomo Diagnostics Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2024. All amounts are presented in Australian dollars (AUD) unless otherwise stated. Directors The following persons were directors of Atomo Diagnostics Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated: Director John Keith (Chair & Independent Non-Executive Director) John Kelly (Managing Director) Paul Kasian (Non-Executive Director) Deborah Neff (Non-Executive Director) Cheri Walker (Non-Executive Director) Appointed 2 December 2011 1 April 2010 4 February 2020 15 September 2021 15 November 2022 Resigned n/a n/a n/a n/a n/a The Company Secretary is Mathew Watkins, who was appointed on 9 June 2024. Principal activities The principal activities of the group during the course of the half-year were the development and sale of medical devices. There were no significant changes in the nature of the activities of the group during the half-year. Review of operations For the half year ended, Atomo recorded revenues of $2.05m, an increase of 7% over the prior period. Revenue comprised of product sales of $1.33m for HIV point-of-care tests and $465k for OEM point-of-care technology & remaining revenue of $250k relating to development and other revenue fees. The loss for the group for the half year after providing for income tax amounted to $2,758,734 (31 December 2023: $3,152,282). Cash and cash equivalents at 31 December 2024 amount to $2.9m compared to $3.7m as at 30 June 2024. Ongoing measures continued to be undertaken during the period to reduce operating expenditure for the group. Overall operating expenses reduced ~$345k in comparison to 31 December 2023 period with significant investment already made in the development and commercialisation of Atomo's novel patent-protected rapid test devices and finished test products. With manufacturing capacity installed and validated, capital expenditure has reduced significantly. The company continues to invest prudently in expanding the test menu is focuses on, primarily in sexual health and supporting key areas of the business to expand market facing activities, such as increased pharmacy retail penetration and the opening up of channels direct to public health procurement. Business development activities continue to focus on re-establishing and growing our OEM customer base for Pascal, with particular focus on the US market as Lumos Diagnostics commence their process for FDA CLIA Waiver submission on the Atomo Pascal platform, FebriDx Test. FebriDx test is currently FDA 510(k) approved. New focus is being applied to the assessment of opportunities for the novel Florey device recently disclosed that utilises Atomo’s existing blood and reagent buffer technology reformatted to be compatible with standard lateral flow rapid tests in market. Significant changes in the state of affairs There were no other significant changes in the state of affairs of the group during the financial half-year. 2 Atomo Diagnostics Limited Directors' report For the half-year ended 31 December 2024 Matters subsequent to the end of the financial half-year No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the group's operations, the results of those operations, or the group's state of affairs in future financial years. Likely developments and expected results of operations With approximately $2.9 million of cash at bank and no debt. ● ● ● ● ● In October 2024, Atomo successfully secured a Cooperative Research Centres Projects (CRC-P) grant with the Commonwealth Government for $2.44m funding the development of Active Syphilis test on our leading rapid test Pascal platform, with partners, the Burnett Institute and IDE Group. Key activities commencing in December 2024. Continued roll-out of HIV self-testing continues globally, with a focus on developed healthcare markets where margins are better. Atomo re-negotiated and signed a supply agreement with key UK distributor partner, Newfoundland Diagnostics, rebalancing the agreement into a long-term commitment, valued over $5m over the next 5 years. Additionally, continued successfully rollout and sales demand in the Australian market, supported by locked in funding of key government programs supporting a national scale up of HIV self-testing and consumer awareness for continuous monitoring and screening. Focus on the expansion of Atomo's Point-of-Care (POC) cassette supply business, especially in the US market where the FDA 510(k) clearance of the Pascal FebriDx test obtained by Lumos Diagnostics has provided visibility to the platform. Commencement of the FDA approval Clai Wavier clinicals on the Atomo Pascal device opens a pathway for Atomo product and for new Diagnostics partners seeking improved userfriendly solution for POC and self-test markets. Growing the emerging development services business where Atomo is being paid to develop products and custom solutions for partners seeking access to Atomo technology and products. The next-generation clip-in blood test device, the Florey platform, is currently under development, incorporating Atomo's patented blood collection and buffer delivery system to improve usability and accuracy in standard rapid blood tests, which are often prone to user errors. Designed to accept a standard cassette, Florey enables the test to be completed using the Atomo device, and it could serve as an accessory to already-approved standard tests, making it suitable for adoption by test already approved and commercialized in market. Business risk The group's operations are not subject to any significant environmental regulation under Australian Commonwealth or State law. The company has identified the following material business risks that may cause its revenue and profitability to decline and are important to key stakeholders such as investors, consumers, customers, supplier, governments and employees. ● ● ● ● Regulatory risk: The company sells medical devices and finished products that require regulatory approvals to be maintained (for existing approved products), and to be obtained (for new products) in multiple jurisdictions. This includes obtaining and maintaining product approvals from the TGA in Australia, the FDA in the US, comparable bodies in Asia and South America, the World Health Organisation for LMIC global health markets, and compliance with the IVDD and IVDR regimes in Europe. There are risks associated with these regulatory approvals that may impact on the business should approvals be withdrawn for existing products or not obtained for new products. Product quality and safety: Should quality or safety issues arise with Atomo's products, there is the potential for negative financial and or reputational impacts. To mitigate this risk Atomo sources materials from quality suppliers, complies with ISO 13485 Medical Devices Quality Management, and delivers safe products to customers. Atomo aims to adhere to or exceed strict regulatory standards in all jurisdictions that it serves and investigates all concerns to ensure our products maintain the highest quality. We are frequently inspected by independent regulatory authorities auditing compliance with these standards. Compliance: Responsibility to drive compliance with legal and regulatory requirements applicable to our global business. Includes development of policies and controls, communication and training, oversight and continuous improvement. Consequently, compliance affects every aspect of what we do, to deliver quality products to consumers. Supply chain: Responsibility to partners to ensure our product line is free from human rights concerns such as forced labour and trafficking, unsafe labour standards and unfair treatment. Atomo relies on third party 3 Atomo Diagnostics Limited Directors' report For the half-year ended 31 December 2024 ● ● ● ● ● ● manufacturers in certain areas and as such has potential exposure to supply chain disruption risks. The company takes steps to stay closely engaged with its supply chain and ensures sufficient stock on hand to mitigate this risk. Employees and skilled labour: Atomo's business relies on key qualified personnel. Atomo seeks to ensure our employees are appropriately remunerated and work in a safe environment, which meets or exceeds relevant regulatory expectations, addresses health and safety concerns as they arise and mitigates the risk of reoccurrence of incidents. Operational risk: Atomo has international operations, including a manufacturing facility in South Africa and as such is potentially exposed to additional political, legal, economic and regulatory risk specific to those locations. Atomo operates in a competitive industry: Strategies and initiatives designed to provide diagnostics at competitive prices to ensure it can develop, manufacture and market high-quality generic and branded products, with a particular focus on accessible diagnostics for the global health and Lower and Middle Income markets. Corruption and bribery: Business must be conducted with transparency, and free from unethical persuasion. Ethical business practices relate to every aspect of Atomo's business, from identifying product sources, through the development of diagnostics, transactions with regulatory bodies and sale to customers. Resource use and waste management: Includes energy usage during manufacture and logistics, water usage and waste as a by-product of manufacture, with particular consideration given to the fact that the products are classified as medical waste upon use. Climate risk: The board is considering on an ongoing basis the potential response to climate risk and considering potential implementation of a formal review and policy response in future years. The Board believes that the group has adequate systems in place for the management of its exposure to environmental and social risks. Proceedings on behalf of the Group No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the group, or to intervene in any proceedings to which the group is a party for the purpose of taking responsibility on behalf of the group for all or part of those proceedings. Rounding of Amounts The group is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ John Keith Chair 28 February 2025 Sydney 4 Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au Level 11, 1 Margaret St Sydney NSW 2000 Australia DECLARATION OF INDEPENDENCE BY RAJNIL KUMAR TO THE DIRECTORS OF ATOMO DIAGNOSTICS LIMITED As lead auditor for the review of Atomo Diagnostics Limited for the half-year ended 31 December 2024, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Atomo Diagnostics Limited and the entities it controlled during the period. Rajnil Kumar Director BDO Audit Pty Ltd Sydney, 28 February 2025 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Atomo Diagnostics Limited Contents For the half-year ended 31 December 2024 Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's review report to the members of Atomo Diagnostics Limited 7 8 9 10 11 18 19 General information The financial statements cover both Atomo Diagnostics Limited as an individual entity and the group consisting of Atomo Diagnostics Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is Atomo Diagnostics Limited's functional and presentation currency. Atomo Diagnostics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are: Registered office Principal place of business Level 1 3 - 5 George Street Leichhardt NSW 2040 Level 1 3 - 5 George Street Leichhardt NSW 2040 A description of the nature of the group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 February 2025. The directors have the power to amend and reissue the financial statements. 6 Atomo Diagnostics Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2024 Note Revenue Costs of sales Gross profit 2 Other Income 3 Employee benefits expense Foreign exchange gains/(losses) Depreciation and amortisation expense Research and development expenses Insurance Inventory obsolescence expense IT expenses Occupancy expenses Professional and consulting fee expenses Regulatory expenses Travel expenses Other expenses Finance costs 4 4 4 Loss before income tax expense Consolidated 31 31 December December 2024 2023 AUD AUD 2,052,476 1,923,371 (1,122,917) (1,045,184) 929,559 878,187 542,709 572,253 (1,730,818) (2,333,384) (6,645) 11,960 (801,439) (833,929) (281,987) (108,813) (129,013) (169,585) (24,699) (15,793) (92,730) (94,262) (5,245) (9,159) (426,065) (343,384) (350,014) (273,829) (50,874) (73,621) (320,225) (352,972) (11,248) (5,951) (2,758,734) (3,152,282) Income tax expense - Loss after income tax expense for the half-year - (2,758,734) (3,152,282) Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation 80,075 (20,640) Other comprehensive income for the half-year, net of tax 80,075 (20,640) Total comprehensive income for the half-year (2,678,659) (3,172,922) AUD Cents AUD Cents Basic earnings per share Diluted earnings per share 15 15 (0.43) (0.43) (0.50) (0.50) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 7 Atomo Diagnostics Limited Statement of financial position As at 31 December 2024 Note Consolidated 31 December 30 June 2024 2024 AUD AUD Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets 5 6 7 2,896,419 1,239,004 1,786,100 5,921,523 3,687,990 2,063,259 1,838,757 7,590,006 8 1,280,344 191,020 1,856,477 3,327,841 1,641,519 75,567 2,071,920 3,789,006 9,249,364 11,379,012 744,005 173,978 278,901 496,836 1,693,720 774,176 84,670 279,191 49,841 1,187,878 25,402 124,282 149,684 106,515 106,515 Total liabilities 1,843,404 1,294,393 Net assets 7,405,960 10,084,619 Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Total non-current assets 9 Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Provisions Deferred revenue Total current liabilities Non-current liabilities Lease liabilities Provisions Total non-current liabilities Equity Issued capital Reserves Accumulated losses 10 Total equity 70,086,549 70,086,549 168,480 88,405 (62,849,069) (60,090,335) 7,405,960 10,084,619 The above statements of financial position should be read in conjunction with the accompanying notes 8 Atomo Diagnostics Limited Statement of changes in equity For the half-year ended 31 December 2024 Foreign Currency Translation Reserve AUD Share Based Payment Reserve AUD 68,036,837 (175,408) 478,533 (53,549,751) 14,790,211 - - - (3,152,282) (3,152,282) - (20,640) - Total comprehensive income for the halfyear - (20,640) - Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments 2,049,712 - - 37,604 - Balance at 31 December 2023 70,086,549 (196,048) 516,137 (56,702,033) 13,704,605 Foreign Currency Translation Reserve AUD Share Based Payment Reserve AUD 70,086,549 (118,322) 206,727 (60,090,335) 10,084,619 - - - (2,758,734) (2,758,734) - 80,075 - - 80,075 - 70,086,549 (38,247) 206,727 Consolidated Balance at 1 July 2023 Issued Capital AUD Loss after income tax expense for the half-year Other comprehensive income for the halfyear, net of tax Consolidated Balance at 1 July 2024 Loss after income tax expense for the half-year Other comprehensive income for the halfyear, net of tax Total comprehensive income for the halfyear Balance at 31 December 2024 Issued Capital AUD Accumulated Losses AUD Total equity AUD - (20,640) (3,152,282) (3,172,922) 2,049,712 37,604 Accumulated Losses AUD Total equity AUD - 80,075 (2,758,734) (2,678,659) (62,849,069) 7,405,960 The above statement of changes in equity should be read in conjunction with the accompanying notes 9 Atomo Diagnostics Limited Statement of cash flows For the half-year ended 31 December 2024 Note Consolidated 31 31 December December 2024 2023 AUD AUD Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) 2,564,757 1,935,585 (4,568,002) (4,655,750) Interest received R & D and other government incentives received (2,003,245) (2,720,165) 37,536 76,834 1,238,759 760,965 Net cash used in operating activities 14 (726,950) (1,882,366) Cash flows from investing activities Payments for property, plant and equipment (40,560) (2,154) Net cash used in investing activities (40,560) (2,154) Cash flows from financing activities Repayment of lease liabilities Proceeds from issue of shares Payments for transaction costs (97,111) - (88,434) 2,259,206 (209,493) Net cash (used in)/from financing activities (97,111) 1,961,279 (864,621) 3,687,990 73,050 76,759 6,470,318 (37,355) 2,896,419 6,509,722 Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial half-year 5 The above statement of cash flows should be read in conjunction with the accompanying notes 10 Atomo Diagnostics Limited Notes to the financial statements For the half-year ended 31 December 2024 Note 1. Material accounting policy information The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. Basis of preparation These general purpose financial statements for the interim half-year reporting period ended 31 December 2024 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2024 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. Going concern The half year report has been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of the assets and the settlement of liabilities in the ordinary course of business. During the financial period ended 31 December 2024 the group has reported a loss after tax of $2,758,734 (31 December 2023: $3,152,282) and cash used in operating activities of $726,950 (31 December 2023: $1,882,366). As at the 31 December 2024, the group holds cash and cash equivalents of $2,896,419 (30 June 2024: $3,687,990). As a result of these matters, there is a material uncertainty related to events or conditions that may cast significant doubt on whether the company will continue as a going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. The continuing viability of the group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the group being successful with the following factors: ● ● ● The ability of the group to raise additional funds from shareholders, new investors and or debt markets. The group has successfully conducted a number of capital raises in the recent years. When taking these into account, there is a reasonable expectation that alternative sources of funding can be sourced, as and when required. Further, the group understands it will require further funding to continue to execute its growth strategy as planned. In its determination on going concern, the Board placed significant reliance upon the representations of its Corporate Advisor with respect to its confidence in its ability to continue raising capital on behalf of the group; Increased revenue from opportunities with existing and new customers and sales arrangements as they are realised into sales revenue; and Effective monitoring and reduction of the group’s overhead expenditures, including the continued realisation of head office cost reductions. In the event that the group is unable to achieve the matters detailed above, it may not be able to continue as a going concern and therefore the group may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial statements. No adjustments have been made to the recoverability and classification of recorded asset values and the amount and classification of liabilities that might be necessary should the consolidated entity and the company not continue as going concerns. New or amended Accounting Standards and Interpretations adopted The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. 11 Atomo Diagnostics Limited Notes to the financial statements For the half-year ended 31 December 2024 Note 1. Material accounting policy information (continued) Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. Reclassification of prior year amounts and balances When required by Accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. Operating segments The Group manages its operations as a single business operation and there are no parts of the Group that qualify as operating segments under AASB 8 Operating Segments. The CEO (Chief Operating Decision Maker or “CODM”) assesses the financial performance of the Group in an integrated basis only and accordingly, the Group is managed on the basis of a single segment, being medical device research and development. Information presented to the CODM on a monthly basis is categorised by type of expenditure. Grant income During the period, Atomo was awarded a CRC-P grant to develop Active Syphilis test. The Group receives grant funds to undertake certain activities to develop the Active Syphilis rapid blood test. Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. Where grant income is received upfront and yet to be expended, the funds received is recognised as deferred revenue. As at 31 December 2024, $444,432 has been recognised as deferred revenue. Note 2. Revenue Consolidated 31 31 December December 2024 2023 AUD AUD Point of care tests Point of care technology Development fees Other 1,336,292 465,322 160,224 90,638 1,487,131 406,763 29,477 2,052,476 1,923,371 Note 3. Other Income Consolidated 31 31 December December 2024 2023 AUD AUD R&D tax rebate Grant & other income Interest income 455,983 49,190 37,536 495,419 76,834 Other Income 542,709 572,253 12 Atomo Diagnostics Limited Notes to the financial statements For the half-year ended 31 December 2024 Note 4. Expenses Profit / (loss) before income tax from continuing operations includes the following specific expenses: Employee benefits expense Salaries, wages and directors' fees Contributions to defined contribution superannuation funds Equity-settled share-based payments Other employment related expenses Depreciation and amortisation Depreciation expense (Note 8) Amortisation expense (Note 9) Right-of-use assets Finance Cost Interest expense Lease interest expense Consolidated 31 31 December December 2024 2023 AUD AUD (1,522,727) (2,033,689) (135,708) (154,183) (37,604) (72,383) (107,908) (1,730,818) (2,333,384) (401,735) (308,166) (91,538) (801,439) (446,955) (308,226) (78,748) (833,929) (6,418) (4,830) (11,248) (5,951) (5,951) Note 5. Current assets - cash and cash equivalents Consolid