Review of Operations FINANCIAL RESULTS The Group recorded a net loss from operating activities after income tax of $8,969,241 (2022: $18,195,977) and ended the financial year with a cash balance of $7,812,511 (2022: $15,394,847). Product revenues for the hTERT test totalled $363,209 (2022: $273,897). Income from other sources was $1,506,730 (2022: $1,786,130) including an accrual of $949,501 for the Research and Development Tax Incentive Refund for the 2023 financial year (2022: $1,316,437 accrual for the 2021 and 2022 Research and Development Tax Incentive claims). The refund for 2023 is expected to be received in the coming months. Grant income contributed $58,130 (2022: $404,025), comprising a final amount of $8,930 from the BTB Grant supporting the SubB2M breast cancer program and $49,200 from the Export Market Development Grant. Interest and miscellaneous income added $353,721 (2022: $65,668). General and administration costs were $6,832,901 (2022: $5,855,103) with the following significant contributors: – employee expenditure $1,914,513 (2022: $1,770,247) including non-cash share options expense of $285,111 (2022: $239,651); – consulting and legal fees $2,147,043 (2022: $1,514,422) the majority of these costs relating to fees paid to defend the Supreme Court Writ and achieve the settlement outcome; – amortisation of intangible assets $944,933 (2022: $1,677,408) for the hTERT and Nets intangible assets; and – ASX listing and share registry fees of $132,421 (2022: $213,426). Research and Development expenditure was $3,224,469 (2022: $3,035,963). The majority of expenditure was incurred on the SubB2M and Molecular Nets programs. Included in this figure was employee related expenditure of $1,334,274 (2022: $1,255,196) and $1,649,970 (2022: $1,573,161) paid to external contractors and suppliers. Sales and Marketing expenditure was $772,312 (2022: $548,451) of which employee related expenditure contributed $620,321 (2022: $437,766). Non-cash expenditures recorded (within the three categories of expenditure – General and Administration, Research and Development, and Sales and Marketing) for the reporting period included: – amortisation of intangible assets $944,933 (2021: $1,677,408) for the hTERT and Molecular Nets intangible assets and $20,030 (2022: $34,354) related to granted patents; – depreciation of right-of-use assets (required by accounting standard AASB16 – Leases) $274,998 (2022: $274,998); – depreciation of building improvements $33,154 (2022: $32,247) and depreciation of plant and equipment $120,617 (2022: $82,584); – share based payments expense of $285,111 (2022: $239,651); – intangible asset and goodwill impairment of $nil (2022: $12,821,402); and – lease liability interest expense, as required by AASB16, $59,524 (2022: $81,963). The loss recorded in the prior reporting period was reduced by the recognition of a $2,058,513 credit resulting from the recognition of the deferred tax asset associated with INOVIQ’s carried forward tax losses and the reduction in the carrying values of the Group’s intangible assets. 20 INOVIQ Limited
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