Announcement PDF 28 February 2025 FY25 HALF-YEAR FINANCIAL RESULTS • • • • • • • Consolidated sales revenue of $4.8 million Other income of $4.3 million EBITDA of $1,083,000 Net profit after tax of $314,000 Cash, term deposits and short-term receivables of $6.9 million Debt free $2 million standby working capital facility established with the two major shareholders PERTH, AUSTRALIA: Orbital Corporation Ltd (‘Orbital UAV’, ‘the Company’) presents the Company’s audited half-year financial results for the six months ended 31 December 2024. About Orbital UAV Orbital UAV is a world leader in the design and manufacture of integrated engine systems for military drones and is uniquely placed to meet the performance requirements of unmanned aerial vehicles (UAVs) through its revolutionary technology and proven operational experience. Our world leading propulsion solutions exceed the competition benchmark for reliability, power and system durability and have the scalability to meet future customer power requirements. Our patented fuel injection system enables advanced spark ignition using heavy fuel – a requirement for military applications due to fuel, logistics, defence policy and operational safety. Orbital UAV is also a class leader in the supply of real time propulsion system diagnostics. With over 30 years of proven experience dedicated to engine design, we have built a superior supply chain network with the ability to source the highest precision components for our propulsion systems. Orbital UAV customers are typically Government agencies or Tier 1 suppliers to the global defence industry. Current geographic segments include the United States of America, South-East Asia and Indian markets. Orbital UAV is now producing integrated engine packages for 4 major clients utilising core 75cc and 150cc engines and continues in-house development of an expanded product range to meet the needs of future UAV programs. Financial Review Group revenue comprises sales income from both established and new engine production models, and engineering services income from development programs across Orbital UAV’s growing customer portfolio. The Group’s consolidated revenue for the period was $4.8 million, down 43% from the corresponding period in 2023. The reduction in revenue compared to the prior period is largely attributable to delays in DSO National Laboratories (‘DSO’) production orders (a timing issue which will be recovered in the 2nd half of the financial year) and the end of production of the Boeing Insitu V3 program in late 2023. EBITDA of $1,083,000 represents a 263% increase on the December 2023 EBITA of $298,000. Net profit after tax of $314,000 is a substantial improvement on the December 2023 loss of $425,000. At 31 December 2024, cash, term deposits and receivables were $6.9 million and the Company had no debt following the retirement of the WA Government loan facility balance of $2,486,000 during the period. Operational highlights The Company continues to deliver against programs with existing customers, including: • The successful delivery of pre-production engine packages to Textron Systems for the upcoming FTUAS program, with final flight testing now underway. FTUAS is the US Army Future Tactical Unmanned Aircraft System program for the deployment of unmanned drones into military operations. A decision on the FTUAS program is now expected in Q3 of calendar 2025. • A $3.5 million contract extension with DSO National Laboratories (the centre of R&D for the Singapore Armed Forces) for the supply of additional engine packages. The order book currently runs to mid2026 and DSO has also placed initial orders for the delivery of larger prototype engine systems in support their next generation UAV platform. • A new contract with Dynamatic Technologies Limited to integrate an Orbital 150 Heavy Fuel Engine (HFE) into a new UAV platform for the Indian military. Dynamatic designs and builds highly engineered products for Automotive, Aeronautic, Hydraulic and Security applications with design, engineering and manufacturing facilities in Europe and India, and has a market capitalisation of A$1 billion. Capital Management Orbital UAV’s growth and capital requirements saw the Company complete a fully underwritten $2 million renounceable rights issue in December 2024. Funds raised will be directed towards customer engine development programs, Orbital UAV engine development programs, plant & equipment and general working capital. During the period, Orbital UAV successfully completed the required project milestones to enable the offset the full value of the WA Government loan and as a result is now debt-free. As a result of the above, Net Assets at 31 December 2024 were $13.1 million. To facilitate further growth, a $2 million standby working capital facility was established in February 2025 with the Company’s two major shareholders (refer to separate ASX Announcement lodged today). Outlook The repayment of the Company’s WA Government loan, the successful completion of the capital raising and the establishment of the standby working capital facility has strengthened Orbital UAV’s balance sheet and provides the financial capacity to progress the Company’s growth aspirations and new product development programs. Textron Aerosonde® drones containing the Company’s 150HFE system are currently undergoing trials and field testing by the United States Department of Defence as part of the FTUAS program, and a final contract decision is expected in Q3 of 2025. This represents a six-month delay on the previously expected project timetable. Orbital will continue the internally funded development of a new higher capacity engine package along with the commercialisation of advanced power management and ECU systems to deliver increased revenue through an expanded product range. -ENDS- CONTACTS Announcement authorised by: For further information, contact: Non-Executive Chairman Tel: +61 8 9441 2311 Email: contact@orbitalcorp.com.au Company Secretary & CFO Tel: +61 8 9441 2135 Email: mwege@orbitalcorp.com.au Kyle Abbott Mark Wege About Orbital UAV Orbital UAV provides integrated propulsion systems and flight critical components for tactical uncrewed aerial vehicles (UAVs). Our design thinking and patented technology enable us to meet the long endurance and high reliability requirements of the UAV market. We have offices in Australia and the United States to serve our prestigious client base. Forward-looking statements This release includes forward-looking statements that involve risks and uncertainties. These forward-looking statements are based upon management's expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company that could cause actual results to differ materially from such statements. Actual results and events may differ significantly from those projected in the forward-looking statements as a result of a number of factors including, but not limited to, those detailed from time to time in the Company’s Annual Reports. The Company makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release. ORBITAL CORPORATION LIMITED APPENDIX 4D Company Details Name of Entity: ABN: Reporting period: Previous corresponding period: Orbital Corporation Limited 32 009 344 058 Half Year ended 31 December 2024 Half Year ended 31 December 2023 Results for announcement to the market A$'000 Total revenue from continuing operations Down -43% to 4,806 Net profit from continuing operations after tax Up 174% to 314 Net profit for the period attributable to members Up 174% to 314 Net tangible assets per share Net tangible assets per share (cents) 31 Dec 2024 30 June 2024 5.66 5.15 Dividends There is no proposal to pay dividends for the half year ended 31 December 2024 CORPORATE INFORMATION ABN 32 009 344 058 REGISTERED AND PRINCIPAL OFFICE 4 Whipple Street Balcatta, Western Australia 6021 Australia CONTACT DETAILS Australia Telephone: 61 (08) 9441 2311 USA Address: 210 Wasco Loop, Hood River, OR 97031, USA Telephone: +1 541.716.5930 INTERNET ADDRESS http://www.orbitaluav.com Email: contact@orbitalcorp.com.au DIRECTORS F.K. Abbott, Chairman S.B. Gallagher G.C. Lukey A.G. Mills COMPANY SECRETARY M.C. Wege SHARE REGISTRY MUFG Corporate Markets (AU) Limited Level 4, Central Park 152 St Georges Terrace Perth, Western Australia 6000 Telephone: 61 (08) 9211 6670 SHARE TRADING FACILITIES Australian Stock Exchange Limited (Code “OEC”) AUDITORS Nexia Perth Audit Services Pty Ltd Level 3, Williams Street Perth, Western Australia 6000 I @OrbitalCorpASX I Orbital UAV Condensed Consolidated Financial Statements for the Half-Year ended 31 December 2024 DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 Your Directors submit their report for the half-year ended 31 December 2024 DIRECTORS The following persons were Directors of Orbital Corporation Limited ("Orbital UAV" or "the Company") and its controlled entities ("the Group") during the half-year ended 31 December 2024 and up to the date of this report, unless stated otherwise. Name Kyle Abbott Steve Gallagher Grant Lukey Andrew Mills John Welborn Information on Directors Chairman (Non-executive) (appointed 17 December 2024) Non-Executive Director Non-Executive Director Executive Director (appointed 9 January 2025) Chairman (Non-executive) (resigned 17 December 2024) REVIEW AND RESULTS OF PRINCIPAL ACTIVITIES Orbital UAV operates within the tactical unmanned aerial vehicle (‘UAV’) market. The Group provides world leading propulsion system solutions and flight critical components that deliver customers flight endurance, reliability and power-to-weight advantages. Financial Review The Group’s consolidated revenue for the half-year was $4,806,000 (2023: $8,497,000) with a profit before income tax from continuing operations of $314,000 (2023: loss of $425,000). At 31 December 2024, cash, term deposits and receivables were $6,902,000 (June 2024: $6,109,000). Operational Review The Group's operational revenue of $4,763,000 for the half-year ended 31 December 2024 comprises $3,693,000 from the sale of engines systems for and ongoing in-service support. Engineering services income of $1,070,000 from development programs across Orbital UAV’s customer portfolio comprises services to enable the transition and integration of design, verification and testing to bring engine systems into production readiness. Orbital UAV continues to progress its internally funded engineering studies and pre-production prototyping activities for a larger engine platform and a range of ancillary equipment. Customer Programs The Group continues to deliver against long standing programs with existing customers Textron Systems, DSO National Laboratories (“DSO”) and Finance International PL and has successfully established a new engagement with Dynamatic Technology Limited (“Dynamatic”) to integrate an Orbital 150 Heavy Fuel Engine (HFE) into a Dynamatic designed UAV platform. The recently announced $3.5 million contract extension with DSO in October 2024 validates the effectiveness of the design & development and first engine delivery activities. The order book for the DSO engine platform currently runs to mid-2026 and DSO has also placed initial orders for the delivery of larger prototype engine systems in support of their next generation UAV platform. Orbital UAV continues to support Boeing Insitu with fleet maintenance and technical support. Capital Management During the half-year Orbital UAV retired the balance of the long-standing WA Government loan that was provided in 2010. The repayment of the final balance of $2,486,000 means that Orbital UAV is now debt free. In December 2024 the Company completed a capital raising via a Renounceable Rights Issue to raise $2 million before costs. Funds raised are to be directed towards new engine development programs and general working capital. Subsequent Events In February 2025 the Group established a $2 million standby working capital loan facility with it's two largest shareholders to provide further financial capacity to continue the Group's new product development activities. As at the date of this report, the loan facility was undrawn. 1 DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 Outlook The Group has a growing portfolio of contracted and globally recognised customers. With an increasing pipeline of opportunities within the defence industry, Orbital UAV continues to build its revenue growth potential and enhance its reputation as a world leader in the design and delivery of UAV engines. The Group is well positioned and well funded to progress with its capability expansion plans, specifically the development of larger engine platforms for additional power and payload delivery, as well as further hybrid and power management system developments. Significant changes in the state of affairs For the half-year period, there have been no significant changes in the state of affairs of the Group that have not been otherwise disclosed in the condensed consolidated financial statements. Lead auditor's independence declaration under section 307C of the Corporations Act 2001 The lead auditor’s independence declaration is set out on page 3 and forms part of the Directors’ Report for the half-year ended 31 December 2024. Rounding The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Instrument, amounts in the half-year financial report and Directors’ Report have been rounded off to the nearest thousand dollars unless otherwise indicated. Signed in accordance with a resolution of the Directors. Kyle Abbott Chairman Perth, 28 February 2025 2 To the Board of Directors of Orbital Corporation Limited, Auditor’s independence declaration under section 307C of the Corporations Act 2001 As lead auditor for the review of the condensed consolidated financial statements of Orbital Corporation Limited for the half-year ended 31 December 2024, I declare that to the best of my knowledge and belief, there have been no contraventions of: (a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (b) any applicable code of professional conduct in relation to the review. Nexia Perth Audit Services Pty Ltd Muranda Janse Van Nieuwenhuizen Director Perth, Western Australia 28 February 2025 3 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 Notes 2024 2023 $'000 $'000 Sale of goods 3,693 6,709 Engineering services income 1,070 1,778 Royalty and licence income 3 - Interest income 40 10 Total revenue 4,806 8,497 Continuing operations Other income 8 Materials and consumables expenses Write down of obsolete inventory Employee benefits expenses Depreciation expenses Amortisation of intangibles Engineering consumables and contractors expenses Occupancy expenses 4 4,332 542 (2,320) (3,664) (4) (1) (3,903) (283) (4,346) (488) (325) (528) (453) (100) (318) (227) Travel and accommodation expenses (41) (62) Communications and computing expenses (328) (349) Patent expenses (109) (115) Insurance expenses (308) (347) Audit, compliance and listing expenses (196) (137) Finance costs (161) (135) Warranty expenses 185 1,208 Other expenses (70) (99) Foreign exchange gains/(losses) 20 (284) Profit/(loss) before income tax 314 (425) Income tax expense - - Profit/(loss) for the period 314 (425) Other comprehensive income (loss) Items that will not be reclassified to profit or loss: Exchange differences on translation of foreign operations (2) (1) Total comprehensive profit/(loss) for the period 312 (426) Basic profit (loss) for the period attributable to ordinary equity holders of the parent (cents) 0.21 (0.33) Diluted profit/(loss) for the year attributable to ordinary equity holders of the parent (cents) 0.21 (0.33) Earnings per share The accompanying notes form part of the condensed financial statements. 4 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024 ASSETS Notes 31 Dec 2024 30 Jun 2024 $'000 $'000 2,599 4,784 747 748 3,556 577 202 890 Current assets Cash and cash equivalents Other financial assets Trade and other receivables Contract assets Inventories 2,349 4,020 Prepayments 3 485 322 Finance lease receivable 581 433 10,519 11,774 3,783 1,054 3,320 3,312 1,138 2,896 Total current assets Non-current assets Intangibles Plant and equipment Inventories 4 3 Right-of-use asset 2,207 2,758 Finance lease receivable 394 332 Other receivables 74 21 Total non-current assets 10,832 10,457 Total assets 21,351 22,231 2,048 1,660 478 1,330 - 2,438 LIABILITIES Current liabilities Trade payables and other liabilities Deferred revenue Borrowings 7 Lease liabilities 831 690 Provisions 2,190 2,265 Total current liabilities 5,547 8,383 2,590 2,945 Non-current liabilities Lease liabilities Provisions 128 73 Total non-current liabilities 2,718 3,018 Total liabilities 8,265 11,401 Net assets 13,086 10,830 Equity Share capital 5 47,144 45,203 Options reserve 6 1,036 1,033 Reserves Accumulated losses Total equity 2,594 2,596 (37,688) (38,002) 13,086 10,830 The accompanying notes form part of the condensed financial statements. 5 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share capital (Accumulated losses) Employee equity benefits reserve Foreign currency translation reserve Option Reserve Total equity FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 $'000 $'000 $'000 $'000 $'000 $'000 At 1 July 2024 Profit for the period Foreign currency translation Total comprehensive income for the period Issue of ordinary shares, net of costs Share based payments At 31 December 2024 45,203 1,941 47,144 (38,002) 314 314 (37,688) 2,652 2,652 (56) (2) (2) (58) 1,033 3 1,036 10,830 314 (2) 312 1,941 3 13,086 At 1 July 2023 Loss for the period Foreign currency translation Total comprehensive income for the period Issue of ordinary shares Share based payments At 31 December 2023 41,380 3,787 45,167 (38,069) (425) (425) (38,494) 2,652 2,652 (58) (1) (1) (59) 1,033 1,033 6,938 (425) (1) (426) 3,787 10,299 The accompanying notes form part of the condensed financial statements. 6 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 2024 2023 $'000 $'000 Cash flows from operating activities Cash receipts from customers 4,459 6,502 Cash paid to suppliers and employees (7,369) (7,677) Interest received 40 10 Interest paid (31) (16) (2,901) (1,181) Net cash used in operating activities Cash flows from investing activities Purchase of plant and equipment (85) (22) Payments for intangible asset (982) (459) (1,067) (481) 2,008 4,000 Share issue transaction costs (67) (213) Principal elements of lease payments (174) (293) Net cash from financing activities 1,767 3,494 Net increase/(decrease) in cash and cash equivalents (2,201) 1,832 Cash and cash equivalents at 1 July 4,784 2,292 16 2 2,599 4,126 Net cash used in investing activities Cash flows from financing activities Proceeds from issues of shares and options Effects of exchange rate fluctuations on the balances of cash held in foreign currencies Cash and cash equivalents at 31 December The accompanying notes form part of the condensed financial statements. 7 NOTES TO THE HALF-YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 1. MATERIAL ACCOUNTING POLICIES (a) Reporting Entity The condensed consolidated financial statements for the half-year ended 31 December 2024 of Orbital Corporation Limited (“the Company” or “the Parent”) and its subsidiaries (collectively, “the Group”) were authorised for issue by the Company's Directors on 28 February 2025. The Company is a for-profit company limited by shares domiciled in Australia whose shares are publicly traded on the Australian Stock Exchange ("ASX"). The registered office of the Group is 4 Whipple Street, Balcatta, Western Australia. The Group is principally engaged in revolutionary design, proven manufacturing processes and rigorous testing to deliver superiority in UAV propulsion systems and flight critical components. The Group drives its UAV-focused strategy from its dedicated production facilities in WA, Australia and Oregon, USA. (b) Basis of preparation This general purpose condensed consolidated financial report for the half-year ended 31 December 2024. has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. The half-year condensed consolidated financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the annual financial report. It is recommended that the half-year financial report be read in conjunction with the annual report for the year ended 30 June 2024 and considered together with any public announcements made by the Company during the half-year ended 31 December 2024 in accordance with the continuous disclosure obligations of the ASX listing rules. The half-year condensed consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards and other authoritative pronouncements of the AASB. The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Instrument, amounts in the half-year condensed consolidated financial report and Directors’ Report have been rounded off to the nearest thousand dollars unless otherwise indicated. (c) New or amended Accounting Standards and Interpretations 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. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. (d) Going concern assumption The half-year condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Group will continue its operations and be able to meet its obligations as and when they become due and payable. This assumption is based on the Group’s ability to meet its future cash flow requirements given the cash flow projection, and existing cash reserves held as at 31 December 2024. For the half-year ended 31 December 2024, the Group recorded an after tax profit of $314,000 and had operating cash outflows of $2,901,000. As at 31 December 2024 the Group had net assets of $13,086,000 and net current assets of $4,972,000. The Group also had cash outflows from investing activities of $1,067,000 and cash inflows from financing activities of $1,767,000 leading to net cash outflows for the half-year ended 31 December 2024 of $2,201,000. The going concern assumption is based on the Group’s cash flow projections and existing cash reserves as at 31 December 2024 and covers a period of at least twelve months from the date of this report. The projections show that 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 is dependent upon a number of factors including: • achieving forecasted operational performance and positive operating cash flows from the existing engine production and engineering programs; • continued success in developing and commercialising new engines; • reducing overheads through cost saving initiatives; and • securing funding above and beyond the Group’s existing committed facilities if required. As a result of these matters, there is a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern and therefore that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. The Directors consider that the Group will be successful in the above matters and have therefore prepared the financial report on a going concern basis. 8 NOTES TO THE HALF-YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 2. OPERATING SEGMENTS Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources. Segment performance is evaluated based on Revenue and Earnings Before Interest and Tax ("EBIT") which is allocated to the reportable segments according to the geographic location in which the item arose or relates to. As of the half-year ended 31 December 2024, the Group operates and generates revenue from a single geographic location. As a result, reporting segmentation is no longer considered relevant. Accordingly, the Group has only one reportable operating segment, which is Australia. 3. INVENTORIES 31 Dec 2024 30 June 2024 $'000 $'000 Raw materials 6,061 6,304 Provision for obsolescence (1,662) (1,664) Work in progress 1,270 2,171 Finished goods 5,669 6,916 2,349 4,020 3,320 2,896 5,669 6,916 Current Non Current 105 Recognition and measurement Inventories are carried at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: • Raw materials: weighted average cost • Finished goods and work in progress: weighted average cost of direct materials and direct manufacturing labour and a proportion of manufacturing overhead costs Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. 4. INTANGIBLES 31 Dec 2024 30 June 2024 $'000 $'000 Cost 8,358 7,376 Accumulated amortisation and impairment (1,880) (1,555) R&D tax offset recognised (2,695) (2,509) Net carrying amount 3,783 3,312 3,312 3,238 Movement Net carrying amount at the beginning of the period Additions 982 846 Amortisation for the year (325) (408) R&D tax offset recognised (186) (364) Net carrying amount at the end of the period 3,783 3,312 The Intangible assets comprise of capitalised development costs for the advancement of the modular propulsion systems. The intangible assets will be amortised using the straight-line method over a finite period of 5 years. 5. SHARE CAPITAL Ordinary shares issued and fully paid Movement in ordinary shares At 1 January 2024 Employee share plan Issue of ordinary shares Share issue transaction costs 31 Dec 2024 30 June 2024 $'000 $'000 47,144 45,203 Number $000's 145,806,733 45,167 250,182 - 36 - At 30 June 2024 146,056,915 45,203 At 1 July 2024 146,056,915 45,203 Issue of ordinary shares 18,258,896 2,008 Share issue transaction costs At 31 December 2024 164,315,811 (67) 47,144 9 NOTES TO THE HALF-YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2024 6. OPTIONS RESERVE Issued Options Movement in options At 1 January 2024 Issue of options 31 Dec 2024 30 June 2024 $'000 $'000 1,036 1,033 Number $000's 17,500,000 1,033 - - At 30 June 2024 17,500,000 1,033 1,033 At 1 July 2024 17,500,000 Issue of options 1,500,000 3 At 31 December 2024 19,000,000 1,036 As part of the new options issue during the half-year: · 500,000 new Options were issued for nil cash consideration and were valued at $52,500 using the Black Scholes method of calculation at acceptance date 11 December 2024. A volatility rate of 99.11% and a risk-free rate of 4.01% was used in the calculation. The options are exercisable at nil price on or before the expiry date that is 5 years after the date of issue. · 500,000 new Options were issued for nil cash consideration and were valued at $37,819 using the Black Scholes method of calculation at acceptance date of 11 December 2024. A volatility rate of 101.28% and a risk-free rate of 4.01% was used in the calculation. The options are exercisable at $0.14 on or before the expiry date that is 5 years after the date of issue. · 500,000 new Options were issued for nil cash consideration and were valued at $50,000 using the Black Scholes method of calculation at acceptance date of 24 December 2024. A volatility rate of 101.51% and a risk-free rate of 4.01% was used in the calculation. The options are exercisable at nil price on or before the expiry date that is 5 years after the date of issue. The options value is amortised over the vesting period. 7. BORROWINGS 31 Dec 2024 30 June 2024 $'000 $'000 Current - 2,438 Non-current - - - 2,438 31 Dec 2024 30 June 2024 $'000 $'000 Changes in borrowings arising from financing activities are as follows: Movement in borrowings Net borrowings at the beginning 2,438 3,796 Loan forgiveness grant income (2,486) (1,500) Interest expenses Net borrowings at the end 48 142 - 2,438 On 25 January 2010, the Department of Jobs, Tourism, Science and Innovation ("JTSI") provided the Group with an interest-free loan of $1