Integrated Media Technology Limited — FY2020 Form 20-F
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone Q4 filing. Financial statements are audited, prepared under IFRS, and presented in Australian dollars (A$). IMTE is an Australian company listed on Nasdaq under IMTE.
Business context and reporting period
IMTE shifted strategy during 2020: it disposed of its 3D research and development and test-manufacturing operations, reducing staff and overhead and focusing on marketing and sales. It expanded into nano-coated air-filter plates through its 51%-owned Sunup subsidiary, which began commercial production in November. Switchable-glass lamination, IoT and financial research were also identified as growth initiatives; these businesses were at early or pre-commercial stages at year-end.
Key financial metrics
| Metric (A$ unless noted) | FY2020 | FY2019 |
|---|---|---|
| Operating revenue, audited statements | 1,744,629 | 1,275,425 |
| Gross profit | 433,063 | 266,604 |
| Gross margin | About 24.8% | About 20.9% |
| Net loss | (10,543,658) | (16,700,199) |
| Basic and diluted loss per share | (A$2.33) | (A$4.63) |
| Net cash used in operating activities | (6,191,115) | (6,540,014) |
| Cash and bank balances at year-end | 2,194,084 | 735,724 |
| Total assets | 12,953,665 | 19,946,276 |
| Total liabilities | 8,047,813 | 19,867,253 |
| Net current assets | 1,276,431 | (12,763,614) |
| Total equity | 4,905,852 | 79,023 |
Revenue growth reflected sales of 3D products and tablets, as well as A$317,472 of new air-filter sales. Products accounted for about 95% of audited operating revenue. The gross-margin improvement was attributed mainly to product mix, including higher-margin filter products. The loss narrowed year over year, but remained substantial. It included A$3.46 million of impairment on intangible assets, A$0.93 million of development-project write-offs, A$2.10 million of finance costs, and a A$2.31 million fair-value gain on derivative instruments.
Cash flow remained negative from operations and investing: investing used A$4.59 million, including equipment purchases, while financing provided A$13.39 million, primarily through share issuance and convertible-note proceeds. The company reported no bank borrowings or lease liabilities at year-end. Convertible promissory notes had a reported carrying value of A$2.20 million, with associated derivative liabilities of A$1.48 million. Total equity improved substantially, supported by financing and other balance-sheet changes.
Material changes versus the prior comparable period
- Audited operating revenue increased about 37%, and gross margin rose roughly 4 percentage points.
- Net loss decreased by about A$6.16 million. Management attributed lower costs to restructuring and reduced staffing, depreciation, rent and professional expenses; the 2019 goodwill impairment did not recur. The 2020 intangible impairment and derivative fair-value gain materially affected the comparison.
- Headcount fell from 53 at year-end 2019 to 15 at year-end 2020. The company disposed of four subsidiaries associated with prior operations and acquired 51% of Sunup.
- Net current assets swung from a substantial deficit to a positive balance, and reported equity rose from A$79,023 to A$4.91 million. Financing and debt conversions were important contributors; share count increased from 3.38 million to 6.51 million during 2020.
Outlook, risks, contingencies and unusual items
- Going concern and funding: The auditor highlighted substantial doubt about IMTE’s ability to continue as a going concern, citing the A$10.5 million 2020 loss, A$6.2 million operating cash outflow and A$34.1 million accumulated deficit. Management planned further equity or debt financing and commercial growth. The filing contains conflicting liquidity assessments: one section says available funds are expected to cover the next 12 months, while the financial-statement note says cash may not be sufficient for that period.
- COVID-19 and execution: Management said the pandemic disrupted operations and reduced or cancelled planned 3D-display sales. Future revenue depends on commercialization, customer acceptance, distribution and production ramp-up in newer businesses. No quantified revenue or earnings guidance is provided.
- New business and capital commitments: IMTE contracted to purchase a switchable-glass lamination line for US$1.65 million and disclosed A$2.90 million of capital commitments for investments in two PRC subsidiaries. It planned lamination operations in late 2021. Air-filter expansion, production costs and equipment performance remain execution risks.
- Subsequent financing and dilution: The company reported approximately US$9.4 million of share placements in the first three months of 2021. Convertible notes and proposed director/officer debt conversions could result in additional shares, with conversion-price adjustment provisions. Further share issuance may dilute existing holders.
- Controls and reporting: Management concluded disclosure controls and internal control over financial reporting were ineffective at December 31, 2020, identifying material weaknesses involving segregation of duties, period-end reporting, technical accounting expertise and formal accounting processes. Management planned remediation. The auditor’s opinion on the financial statements was unqualified; the auditor did not opine on internal-control effectiveness.
- Other risks: Nasdaq equity-listing compliance, foreign-exchange exposure, customer and distributor concentration, reliance on third parties and technology partners, intellectual-property protection, and lack of business/product-liability insurance are disclosed risks. The company stated it was compliant with Nasdaq’s equity requirement at year-end.
Important facts for investors to verify
- Reconcile inconsistent revenue figures in the filing: the audited statements report A$1.745 million, while other summary tables show different totals (including A$1.833 million and A$1.751 million). The MD&A also contains a 2020 loss figure of A$7.02 million that conflicts with the audited A$10.54 million net loss.
- Assess the going-concern funding position, particularly against the conflicting statements about whether liquidity covers the next 12 months, subsequent financing proceeds, cash burn and committed investment needs.
- Confirm conversion terms, dilution exposure and outstanding balances for convertible notes, derivative liabilities and proposed insider debt conversions.
- Track commercial orders, margins and cash collection for nano-coated filters, and actual timing, cost and customer demand for switchable glass; year-end receivables were A$1.23 million, with all trade receivables reported past due.
- Monitor remediation of the disclosed material weaknesses and clarify the financial-statement inconsistencies in future filings.