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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F/A

(Amendment No. 2)

(Mark One)

☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

OR

☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 001-38018

Integrated Media Technology LtdIntegrated Media Technology Limited

(Exact name of Registrant as specified in its charter

and translation of Registrant's name into English)

Australia

(Jurisdiction of incorporation or organization)

Level 7, 420 King William Street,

Adelaide SA 5000 Australia

(Address of principal executive offices)

Xiaodong Zhang, Executive Director and Chief Executive Officer

Level 7, 420 King William Street, Adelaide, SA 5000, Australia

Phone: +61 8 8233 0881 E: corporate@imtechltd.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Ordinary Shares | IMTE | NASDAQ Capital Market |

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

The number of ordinary shares, as of April 19, 2022 is 14,753,331

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of "large accelerated filer", "accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

| Large accelerated filer ☐ |  | Accelerated filer ☐ |  | Non-accelerated filer ☒ Emerging growth company ☒ |  |

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

| U.S. GAAP ☐ |  | International Financial Reporting Standards as issued by the International Accounting Standards Board | ☒ |  | Other ☐ |

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No

TABLE OF CONTENTS

INTRODUCTION | [1]
PART I | [2]
Item 1. | Identity of Directors, Senior Management and Advisers | [2]
Item 2. | Offer Statistics and Expected Timetable | [2]
Item 3. | Key Information | [2]
Item 4. | Information on the Company | [28]
Item 4A. | Unresolved Staff Comments | [44]
Item 5. | Operating and Financial Review and Prospects | [44]
Item 6. | Directors, Senior Management and Employees | [55]
Item 7. | Major Shareholders and Related Party Transactions | [63]
Item 8. | Financial Information | [65]
Item 9. | The Offer and Listing | [65]
Item 10. | Additional Information | [66]
Item 11. | Quantitative and Qualitative Disclosures About Market Risks | [78]
Item 12. | Description of Securities Other than Equity Securities | [78]
PART II |  | [79]
Item 13. | Defaults, Dividend Arrearages and Delinquencies | [79]
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds | [79]
Item 15. | Controls and Procedures | [79]
Item 15T | Controls and Procedures | [80]
Item 16 | Reserved | [80]
Item 16A. | Audit Committee Financial Expert | [80]
Item 16B. | Code of Ethics | [80]
Item 16C. | Principal Accountant Fees and Services | [81]
Item 16D. | Exemptions from the Listing Standards for Audit Committees | [81]
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers | [81]
Item 16F. | Change in Registrant's Certifying Accountant | [82]
Item 16G. | Corporate Governance | [82]
Item 16H. | Mine Safety Disclosure | [82]
PART III |  | [83]
Item 17. | Financial Statements | [83]
Item 18. | Financial Statements | [83]
Item 19. | Exhibits | [84]
SIGNATURES | [87]

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Explanatory Note

Integrate Media Technology Limited (the "Company") is filing this Amendment No. 2 (this "Amendment No. 2") to its Annual Report on Form 20-F for the fiscal year ended December 31, 2021 and Amendment No. 1 (together the "Original Form 20-F"), which was filed with the Securities and Exchange Commission on April 28, 2022 and April 29, 2022 respectively, to submit the Interactive Data File (as defined in Rule 11 of Regulation S-T) with respect to the audited consolidated financial statements of the Company for that fiscal year as an exhibit to the Original Form 20-F pursuant to paragraph 101 under "Instructions as to Exhibits" of the Original Form 20-F in accordance with Rule 405 of Regulation S-T. Exhibit 101 was omitted from the Original Form 20F due to technical problems to include the Interactive Data File.

This Amendment No. 2 files the Form 20- F in its entity and replaces the Original Form 20-F filed originally on April 28, 2022 and the Amendment No 1 filed on April 29, 2022. Excepts as set forth above, this Amendment No. 2 does not modify or update any of the disclosures in the Original Form 20-F. This Amendment No. 2 speaks as of the time of filing of the Original Form 20-F and does not reflect events that may have occurred subsequent to such filing.

INTRODUCTION

Integrated Media Technology Limited was incorporated under the laws of the Commonwealth of Australia on August 8, 2008. As used in this annual report, the terms "we," "us," "our", "IMTE", and the "Company" mean Integrated Media Technology Limited and its subsidiaries, unless otherwise indicated. In this annual report on Form 20-F references to:

| ● | "Australia" are to the Commonwealth of Australia;
| ● | "Australian dollars" or "A$" are to the currency of Commonwealth of Australia;
| ● | "China" or the "PRC" are to the People's Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this annual report only;
| ● | "the Group" or "Group" refers to Integrated Media Technology Limited and its subsidiaries;
| ● | "Hong Kong dollar" are to the official currency of Hong Kong;
| ● | "Korea" or "South Korea" are to Republic of Korea;
| ● | "NASDAQ" are to the NASDAQ Stock Market;
| ● | "SEC" means the United States Securities and Exchange Commission;
| ● | "shares", "Shares" or "Ordinary Shares" are to the ordinary shares of the Company, no par value;
| ● | "U.S. dollars" or "US$" are to the currency of the United States of America;
| ● | "Won" are to the legal currency of South Korea;
| ● | "Hong Kong" are to the Hong Kong Special Administrative Region;
| ● | "RMB" and "Renminbi" are to the legal currency of China.

Our consolidated financial statements appearing in this annual report on Form 20-F are prepared in Australian dollars and in accordance with the International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. Our consolidated financial statements appearing in this annual report on Form 20-F comply with both the IFRS and Australian equivalents to IFRS, or A-IFRS. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with IFRS.

Statements made in this annual report on Form 20-F concerning the contents of any contract, agreement or other documents are summaries of such contracts, agreements or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this annual report or to any annual report that we previously filed, you may read the document itself for a complete description of its terms.

Except for the historical information contained in this annual report on Form 20-F, the statements contained in this annual report on Form 20-F are "forward-looking statements" which reflect our current view with respect to future events and financial results. We urge you to consider that statements which use the terms "anticipate," "believe," "do not believe," "expect," "plan," "intend," "estimate," and similar expressions are intended to identify forward-looking statements. We remind investors that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly release any update or revision to any forward-looking statements to reflect new information, future events or circumstances, or otherwise after the date hereof. Please see the Risk Factors section that appears in "Item 3. Key Information - D. Risk Factors."

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PART I

| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

| ITEM 3. | KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

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D. Risk Factors

The following risks relate specifically to our business and should be considered carefully. Our business, financial condition and results of operations could be harmed by any of the following risks. The risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. If any of the following risks and uncertainties develops into actual events, our business, financial condition, and results of operations could be materially and adversely affected, and the trading price of our Ordinary Shares could decline. As a result of the above factors, the trading price of our Ordinary Shares could decline, and the holders could lose part or all of their investment.

General Risks

The recurrence of the coronavirus disease ("COVID-19"), or similar adverse public health developments in Korea, China and Hong Kong, may materially and adversely affect our business and operating results.

The COVID-19 is currently impacting countries, communities, supply chains and markets globally. The outbreak of COVID-19 in Korea, China and Hong Kong has resulted and may continue to result in increased travel restrictions, border control, and shutdown of businesses, which may cause slower recovery of the global economies. We may experience impact from quarantines and market downturns related to pandemic fears and impact on our workforce if the virus continues to spread. COVID-19 affects our workforce and supplier's workforce, and as a result we are experiencing a slow resumption of operations and may experience delays or the inability to deliver goods on a timely basis. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the COVID-19 impacts our results are highly uncertain and will include emerging information concerning the severity of the COVID-19 and the actions taken by governments at various levels and private businesses to attempt to contain the virus. Wider-spread COVID-19 in the countries we operate and globally could prolong the deterioration in economic conditions and could cause decreases in demand and reduce and/or negatively impact our ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations. Although the Company is taking measures to mitigate the effect as much as possible, there is no assurance that the steps will be sufficient. In most respects it is still early in the pandemic to be able to quantify all the ramifications.

Geopolitical and other challenges and uncertainties due to the ongoing military conflict between Russia and Ukraine could have a material adverse effect on the global economy, certain material and commodity prices and our business.

Global markets are currently operating in a period of economic uncertainty, volatility and disruption following Russia's full-scale invasion of Ukraine on February 24, 2022. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine and any other geopolitical tensions could have an adverse effect on the economy and business activity globally and lead to:

| ● | credit and capital market disruptions;

| ● | significant volatility in commodity prices (such as grains, fertilizer inputs and oil and gas);

| ● | increased expenses related to direct and indirect materials used in our production process (i.e., packaging, logistics and inputs, among others);

| ● | increased costs of resources (such as energy, natural gas and coal) for our operations;

| ● | slowdown or disruption of the global and local supply chain, which may lead to shortages and lack of critical materials, commodities and products in the market;

| ● | potential appreciation of the U.S. dollar;

| ● | increase in interest rates and inflation in the markets in which we operate, which may contribute to further increases in the prices of energy, oil and other commodities; and

| ● | lower or negative global growth.

Any such event may increase our costs and adversely affect our business if we are not able to pass such increased costs onto our customers.

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Additionally, Russia's prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People's Republic, and the so-called Luhansk People's Republic, including the agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions, the resulting sanctions and Russian counter measures or retaliatory actions (including cyberattacks and espionage) could adversely affect the global economy and financial markets and lead to further instability and lack of liquidity in capital markets.

The impact of these measures, as well as potential responses to them by Russia, is currently unknown and, while we currently have no exposure to Russia and Ukraine, current and future measures could significantly and adversely affect our business, financial condition and results of operations, including, for example, increase in costs of exporting to Europe for our halal products, potential sanctions in the marketing of our products to Russia and threats to the safety of our employees in locations close to the conflict. Geopolitical and economic risks have also increased over the past few years as a result of trade tensions between the United States and China, Brexit, and the rise of populism. Growing tensions may lead, among others, to a deglobalization of the world economy, an increase in protectionism or barriers to immigration, a general reduction of international trade in goods and services and a reduction in the integration of financial markets, any of which could materially and adversely affect our business, financial condition, and results of operations.

We are continuing to monitor the situation in Russia, Ukraine and globally and assess its potential impact on our business. Any of the abovementioned factors could adversely affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described elsewhere in this annual report.

Risks Related to Our Business

We have a history of operating losses and may not achieve profitability in the future.

We have a long history of operating losses and, unless we are able to generate sufficient and consistent revenue, we will incur losses from operations and may not achieve or maintain profitability. As of December 31, 2021, we had an accumulated deficit of A$37,169,358. For the year ended December 31, 2021 we recorded loss of of A$6,585,626 which was mainly resulted from the decline in sales of our 3D display products due to the worldwide pandemic. Our 3D display sales are targeted to consumer and the advertising sectors, both of which have been adversely effected by the pandemic. The Company could not sell its 3D products and services on a consistent basis through distribution channels to commercial and consumer sectors to increase revenue. Therefore, the Company has been broadening its revenue base by expanding its business to electronic glass, nano-coated plate air filters and air purifier products, halal certification and sale of halal products, and the operation of a digital asset exchange. At the end of 2021, the Company stopped the sale of its 3D display products to curtail its overhead costs due to the prolonged pandemic outlook. In addition, the Company will continue to try to increase sales in other products, and reduce its operating overhead to return to profitability. There is no certainty that we can solve these issues facing the Company.

If we fail to achieve profitability, or if we are unable to fund our continuing operations, our business will be harmed, and the holders of our Ordinary Shares could lose all or part of their investment. There is a substantial risk that we may not be able to fund the new businesses in nano-coated plate filters, the lamination operation for switchable glass, halal certification and sale of halal products, and operating of a digital assets exchange. We will rely on halal certification and sale of halal food, operating the digital assets exchange, sale of switchable glass, and nano-coated plate filters, to generate revenues in the future. It is possible that none of them will be successfully commercialized which would prevent us from achieving and maintaining profitability.

We have a limited operating history, and it may be difficult for potential investors to evaluate our business.

We are just starting our new businesses in nano-coated plate filters, the lamination operation for switchable glass, halal certification and sale of halal products, and operating of a digital assets exchange ("New Businesses"). Our limited operating history in these New Businesses makes it difficult for potential investors to evaluate our New Businesses or prospective operations with long term view. We are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays inherent in these relatively new businesses. Our New Businesses may face delays in sales and financing from suppliers due to our new entry into the market of our products or services which may face challenges in consumer recognition and acceptance, where more established players and products have better resources to penetrate the markets. Moreover, as a new entrant in these competitive markets, we face many questions on our Company, organization, finances, and product information before distributors are willing to carry our products into their network. Thus, it takes additional time to establish distributor network for our products, and for these distributors to accept our products into their network. Our products may never be accepted by distributors and thereby hinder our ability to sell our products in the target markets. Investors should evaluate an investment in us considering the uncertainties encountered by such companies in a competitive environment. Our New Businesses is dependent upon the implementation of our business plan for each business segment, as well as the ability to access continuous innovation in our products and improve our services. There can be no assurance that our efforts will be successful or that we will be able to attain profitability.

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We may incur significant delays and/or expenses relating to the COVID-19 outbreak in Korea, China and Hong Kong.

Beginning in late 2019, COVID-19 was reported in Wuhan, China. The World Health Organization has declared the outbreak to constitute a "Public Health Emergency of International Concern." This has prompted government-imposed quarantines, closures of certain travel and businesses. In February 2022, the Company temporarily shut down its Hong Kong office for a few weeks due to a staff family member contracting the virus. In addition, from March 2022 the borders between Hong Kong and Shenzhen, China has been severely restricted making travel between Hong Kong and mainland China prohibitively difficult. In April 2022, the restriction in travel and the border situation have somewhat eased. In 2022, our offices have generally been open but some of our staff have been working remotely from home. This has delayed in delivery of products to our factory, interruption of the supply chain, and the effects of the increase in logistic costs for shipping goods. Our sales activities have been severely affected by the pandemic due to travel restrictions in Hong Kong and China. It is presently unknown whether and to what extent the Company's sales pipeline may be affected if the pandemic persists for an extended time. The Company will likely incur significant losses as most of our sales are expected to be derived from selling our electronic glass, air filters and air purifiers, and halal products - all requiring close interaction with our sales distributors and customers as our products and services are new to the markets. This restriction in travel could have a material adverse impact on our business, operating results, and financial condition.

We will require additional financing in the future to sufficiently fund our operations.

We had incurred a significant loss in for the past 3 years from 2019 to 2021, and we may incur losses in the future as we continue to develop our businesses in new businesses in nano-coated plat filters, the lamination operation for switchable glass, halal certification and sale of halal products and operating of a digital assets exchange. Our actual cash requirements may vary from those now planned and will depend upon many factors, including: the timing, costs and results of commercialization of our products; the commercial potential of our products; our ability to outsource manufacturing capabilities; and the status and timing of competitive developments.

We anticipate that as the development of our businesses including the capital-intensive lamination operation for our switchable glass operation, we will require additional funds to achieve our long-term goals of commercialization. In addition, we will require funds to defend our intellectual property rights, outsource manufacturing capacity, develop marketing and sales capability and fund operating expenses for all our products. We intend to seek such additional funding through public or private financings and or other arrangements with corporate partners. However, such financing, licensing opportunities or other arrangements may not be available from any sources on acceptable terms, or at all. Any shortfall in funding could result in our having to curtail or sell or cease our operations, which would harm our business, financial conditions, and results of operations.

We have limited cash resources and if we cannot raise additional funds or generate more revenues, we will not be able to pay our vendors and will probably not be able to continue as a going concern.

We will need to raise additional funds to pay outstanding debts, purchase of lamination equipment, vendor invoices and execute our business plan. Our future cash flows depend on our ability to enter into, and be paid under, contracts with our distributors for the sale of halal products, switchable glass and the nano-coated plate filters and air purifiers. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

We may be required to pursue sources of additional capital through various means, including joint venture projects and debt or equity financings. Future financings through equity investments will be dilutive to existing shareholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other convertible securities, which will have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition and results of operations.

Our ability to obtain needed financing may be impaired by such factors as the weakness of capital markets and the fact that we have incurred a substantial loss in the past few years which could impact the availability or cost of future financing. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations, we may be required to sell or cease operations.

Our limited operating history and rapidly evolving business makes it difficult for us to accurately forecast revenues and expenses.

We have a limited operating history on which to base an evaluation of our business and prospects, especially since our businesses are newly established. Our operating results may fluctuate as a result of a number of factors, many of which are outside of our control. For these reasons, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our prospects must be considered in light of inherent risks, expenses, and difficulties encountered by companies in their early stages of development, particularly in new and evolving markets.

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Some of the other risks and uncertainties of our business relate to our ability to:

- offer innovative products and services across our businesses to attract and retain customer base;

- attract customers;

- increase awareness of our brand and continue to develop consumer and customer loyalty;

- respond to competitive market conditions;

- respond to changes in our regulatory environment;

- manage risks associated with intellectual property rights;

- maintain effective control of our costs and expenses;

- raise sufficient capital to sustain and expand our business;

- attract, retain and motivate qualified personnel; and

- upgrade our technology to support increased traffic and expanded services.

If we are unsuccessful in addressing any of these risks and uncertainties, our business may be materially and adversely affected.

The development of our business is dependent upon the completion and integration of acquisitions and other transactions that have only recently closed or incurred in the future.

Our business may not be successful if we are unable to successfully operate and integrate the businesses we acquire such as the nano-coated plate filter business. Accordingly, it is difficult to evaluate our business based upon our historical financial results. We expect to continually look for new businesses to acquire to develop and grow our operations. If we fail to identify such business, or are unable to acquire such businesses on reasonable terms, or fail to successfully integrate such businesses, our operating results and prospects could be harmed.

We face significant competition and may suffer from a loss of customers as a result.

We expect to face significant competition in our nano-coated plate filter, switchable glass, halal products and digital assets marketplace businesses, particularly from other companies that seek to provide similar products and services. Many of these competitors have significantly greater financial resources and more personnel than we have. They may also have longer operating histories and more experience in attracting, retaining and managing customers. They may use their experience and resources to compete with us in a variety of ways, including by competing more for users, customers, distributors, media channels and by investing more heavily in research and development and making acquisitions. If we fail to compete effectively, our business, financial condition and results of operation will be adversely affected.

Exchange rate fluctuations will continue to affect our reported results of operations.

The functional currency of each of our Group's entities is measured using the currency of the primary economic environment in which that entity operates. For our operations in Korea, China and Hong Kong, the functional currency for the companies operating in these territories will have a functional currency of South Korea won, Chinese Renminbi and Hong Kong dollars, respectively. Substantially all of our revenues are realized, and a significant portion of our operating costs are incurred, in Korea, Chinese Renminbi and Hong Kong dollars. Movement in currency exchange rates will also affect cash denominated in U.S. dollars and Australian dollars and therefore will affect our reported results of operations.

We have limited manufacturing experience with our production candidates. Delays in manufacturing sufficient quantities of products may negatively impact our business and operations.

We have limited manufacturing experience. We manufacture nano-coated plate filters. In the second half of 2022, we expect to operate the lamination lines for the switchable glass, but we may not have the expertise, staffing and technical capability to operate a successful and profitable manufacturing operation. We may need to develop additional manufacturing resources, enter into collaborative arrangements with other parties, or have third parties manufacture our products on a contract basis. We may not have access, on acceptable terms, to financing required to scale-up production and develop commercial manufacturing processes. We may not be able to enter into collaborative or contractual arrangements on acceptable terms with third parties that will meet our requirements for quality, quantity and timeliness. Such delays and hurdles could harm our business, financial condition and results of operations.

To the extent we rely significantly on contractors, we will be exposed to risks related to the business conditions of our contractors.

We are a small company and we rely on a variety of contractors to manufacture our air filters and air purifier products. Adverse events that affect one or more of our contractors could adversely affect us. For example:

| ● | a contractor is unable to retain key staff that have been working on our manufacturing orders;

| ● | a contractor produces substandard products that are unacceptable to us;

| ● | a contractor is unable to sustain operations due to financial or other business issues;

| ● | a contractor loses its business permits or licenses that may be required to manufacture our products; or

| ● | errors, negligence or misconduct that occur within a contractor may adversely affect our business concerns although we may not be directly responsible.

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To the extent we are able to enter into collaborative arrangements or strategic alliances, we will be exposed to risks related to those collaborations and alliances.

An important element of our strategy for developing, manufacturing and commercializing our nano-coated plate filter and halal products is entering into partnerships and strategic alliances with other distribution companies or other industry participants to advance our distribution capabilities and enable us to maintain our financial and operational capacity. We may not be able to negotiate alliances on acceptable terms, if at all. Although we are not currently parties to any collaborative arrangements or strategic alliances that we believe are material to our business. In the future we may rely on collaborative arrangements or strategic alliances to complete the development and commercialization of some of our nano-coated plate filter and halal products. Although we have no specific reason to believe that we will be at a disadvantage when negotiating such collaborative arrangements or strategic alliances, our negotiating position will be influenced by our financial capacity at the relevant time to continue the development and commercialization of the relevant products, as well as the timing of any such negotiations and the stage of development of the relevant product candidate. These arrangements may result in us receiving less revenue than if we sold such products directly, may place the development, sales and marketing of our products outside our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us. Collaborative arrangements or strategic alliances will subject us to a number of risks, including the risk that:

| ● | we may not be able to control the amount and timing of resources that our strategic partners/collaborators may devote to our products;

| ● | our strategic partners/collaborators may experience financial difficulties;

| ● | we may be required to relinquish important rights such as marketing and distribution rights;

| ● | business combinations or significant changes in a collaborator's business strategy may also adversely affect a collaborator's willingness or ability to complete its obligations under any arrangement;

| ● | a collaborator could independently move forward with a competing product developed either independently or in collaboration with others, including our competitors; and

| ● | collaborative arrangements are often terminated or allowed to expire, which would delay the development and may increase the cost of developing our product candidates.

We may face intellectual property infringement claims and other related claims that could be time-consuming and costly to defend and may result in our inability to continue providing certain of our existing services.

Technology and service companies are frequently involved in litigation based on allegations of infringement of intellectual property rights, unfair competition, and invasion of privacy, defamation and other violations of third-party rights. The validity, enforceability and scope of protection of intellectual property, particularly in China, are uncertain and still evolving. In addition, many parties are actively developing and seeking protection for electronics technologies, including seeking patent protections. There may be patents issued or pending that are held by others that cover significant aspects of our technologies, products, business methods or services. As we face increasing competition and as litigation becomes more common in the United States, China, Hong Kong and elsewhere in Asia for resolving commercial disputes, we face a higher risk of being the subject of intellectual property infringement claims.

Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the operations of our businesses. If there is a successful claim of infringement, we may be required to pay substantial fines and damages or enter into royalty or license agreements that may not be available on commercially acceptable terms, if at all. Our failure to obtain a license of the rights on a timely basis could harm our business. Any intellectual property litigation could have a material adverse effect on our business, financial condition or results of operations.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

We are subject to reporting obligations under the U.S. securities laws. The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include in its annual report a management report on such company's internal controls over financial reporting which contains management's assessment of the effectiveness of the company's internal controls over financial reporting. In addition, if the Company qualifies under certain revenue or market capitalization test an independent registered public accounting firm must attest to and report on management's assessment of the effectiveness of the company's internal controls over financial reporting. In addition, an independent registered public accounting firm must attest to and report on management's assessment of the effectiveness of the company's internal controls over financial reporting. Our management may conclude that our internal controls over financial reporting are not effective. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest to our management's assessment or may issue a report that is qualified if they are not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We are a Company with a small team of accounting personnel and other resources with which to address our internal financial controls and procedures. If we fail to timely achieve and maintain the adequacy of our internal financial controls, we may not be able to conclude that we have effective internal controls over financial reporting at a reasonable assurance level. Moreover, effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the market price of our shares.

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If we fail to attract customers for our nano-coat plated filter, switchable glass products, halal products and services, and digital asset marketplace, our growth prospects could be seriously harmed.

Our distributors will not work with us if our products and services offerings do not sell well or do not have adequate sales margin for their sales channels. In addition, our customers will not maintain their business relationships with us if we cannot secure attractive competitive products and service offerings. Failure to retain customers, distributors or channel partners could seriously harm our business and growth prospects.

Because we primarily rely on distributors in distributing our halal products, nano-coated plate filter products and switchable glass products, our failure to retain key distributors or attract additional distributors could materially and adversely affect our business.

We mainly rely on distributors to sell our halal products, nano-coated plate filter products and switchable glass products. If our distributors do not provide quality services to its customers, they may lose customers and our results of operations may be materially and adversely affected indirectly. There is no assurance that we can maintain favorable relationships with our current distributors. Our distribution arrangements will be non-exclusive. Furthermore, some of our potential distributors may have contracts with our competitors or potential competitors and may not sign distribution agreements with us. If we fail to retain our key distributors or attract additional distributors on terms that are commercially reasonable, our business and results of operations could be materially and adversely affected.

We operate in a capital-intensive industry and require a significant amount of cash to fund our lamination operations and to manufacture our electronic glass. If we fail to obtain sufficient capital to fund our lamination equipment and operations, our business, financial condition and future prospects may be materially and adversely affected.

The operation of manufacturing electronic glass requires significant and continuous investment in equipment. Manufacturing the electronic glass is costly due to the need to build up inventory for large construction projects which typically requires the glass to be installed at the final stage of construction. The ability and possibly the need to fund this working capital requirement may determine the ability to win contracts. If we cannot obtain adequate capital to meet our capital needs, we may not be able to fully execute our strategic plans for growth and our business, financial condition and prospects may be materially and adversely affected.

We are subject to payment processing risk.

Our marketplace and e-commerce customers pay for their services using a variety of different online payment methods. We rely on third parties to process such payments. Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees. To the extent there are increases in payment processing fees, material changes in the payment ecosystem, such as delays in receiving payments from payment processors and/or changes to rules or regulations concerning payment processing, our revenues, operating expenses and results of operations could be adversely impacted.

Security breaches and attacks against our internal systems and network, and any potential resulting breach or failure to otherwise protect confidential and proprietary information, could damage our reputation and negatively impact our business, as well as materially and adversely affect our financial condition and results of operations.

Although we have employed resources to develop security measures against unauthorized access to our systems and networks, our cybersecurity measures may not successfully detect or prevent all unauthorized attempts to access the data on our network or compromise and disable our systems. Unauthorized access to our network and systems may result in the misappropriation of information or data, deletion or modification of user information, or a denial-of-service or other interruption to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers, we may be unable to anticipate, or implement adequate measures to protect against these attacks. If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liability, our reputation would be harmed and we could sustain substantial revenue loss from user dissatisfaction. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Actual or anticipated attacks and risks may cause us to incur significantly higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts and consultants. Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue and net income.

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Disruption or failure of our IT systems could impair our users' online experience and adversely affect our reputation.

Our ability to provide users with a high-quality online experience on our marketplace and e-commerce platform depends on the continuous and reliable operation of our IT systems. We cannot assure you that we will be able to procure sufficient bandwidth in a timely manner or on acceptable terms or at all. Failure to do so may significantly impair user experience on our platform and decrease the overall effectiveness of our platform to our users.

If we experience frequent or persistent service disruptions, whether caused by failures of our own systems or those of third-party service providers, our users' experience may be negatively affected, which in turn, may have a material and adverse effect on our reputation. We cannot assure you that we will be successful in minimizing the frequency or duration of service interruptions.

We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.

We are vulnerable to natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to produce video content or provide products and services on our e-commerce platform.

Our business operations could be disrupted if any of our employees are suspected of having COVID-19, Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, SARS or other epidemic, since we could require our employees to be quarantined and/or our offices to be disinfected. In addition, our business, financial condition or results of operations could be materially and adversely affected to the extent that any of these epidemics harms the global economy in general.

Our failure to protect our intellectual property rights could have a negative impact on our business.

We believe our brand, trade names, trademarks and other intellectual property are critical to our success. The success of our business depends substantially upon our continued ability to use our brand, trade names and trademarks to increase brand awareness and to further develop our brand. The unauthorized reproduction of our trade names or trademarks could diminish the value of our brand and our market acceptance, competitive advantages or goodwill. In addition, our proprietary information, which has not been patented or otherwise registered as our property, is a component of our competitive advantage and our growth strategy.

Monitoring and preventing the unauthorized use of our intellectual property is difficult. The measures we take to protect our brand, trade names, trademarks and other intellectual property rights may not be adequate to prevent their unauthorized use by third parties. In addition, the application of laws governing intellectual property rights in Malaysia, China and other countries are uncertain and evolving, and could involve substantial risks to us. To our knowledge, the relevant authorities in China historically have not protected intellectual property rights to the same extent as the United States. If we are unable to adequately protect our brand, trade names, trademarks and other intellectual property rights, we may lose these rights and our business may suffer materially. Further, unauthorized use of our brands, trade names or trademarks could cause brand confusion among advertisers and harm our reputation as a provider of high quality and comprehensive advertising services. If our brand recognition decreases, we may lose advertisers and fail in our expansion strategies, and our business, results of operations, financial condition and prospects could be materially and adversely affected.

The creation of non-fungible token ("NFT") marketplace is dependent on our ability to develop an acceptable blockchain.

Our ability to create NFTs that can be minted, accepted and transferred is dependent on our ability to develop an accepted and secured blockchain. Failure to develop a secured and reliable blockchain, will adversely affect our ability to create a marketplace where our users can trade, purchase and sell their NFTs.

We do not have any access or working relationship with metaverse universe platform and no assurance can be given that we will have a third party metaverse platform that will be accepted by our users or generate sufficient interest.

We do not have a metaverse platform to feature our NFT. It is our intent that we will cooperate with a metaverse platform featuring a virtual world containing immersive experiences in social networking, gaming and NFT, boasting a wide range of "online + offline" and "virtual + reality" scenarios to promote the development of new content by creators and owners of NFT.

There can be no assurance that the market for NFTs will be developed and/or sustained, which may materially adversely affect our business operations.

The market for digital assets, including, without limitation, NFTs, is still nascent. Accordingly, the market for NFTs may not develop, of if a market does develop, such value be maintained. If no market develops for NFTs in the future, it may be difficult or impossible for us to develop and maintain a marketplace where our users can trade, purchase and sell their NFTs.

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The technology underlying blockchain technology is subject to a number of industry-wide challenges and risks relating to consumer acceptance of blockchain technology. The slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have a material adverse effect on the successful development of our NFT marketplace platform.

The growth of the blockchain industry is subject to a high degree of uncertainty regarding consumer adoption and long-term development. The factors affecting the further development of the blockchain and NFT industry include, without limitation:

| ● | Worldwide growth in the adoption and use of NFTs and other blockchain technologies;

| ● | government and quasi-government regulation of NFTs and their use, or restrictions on or regulation of access to and operation of blockchain networks or similar systems;

| ● | the maintenance and development of the open-source software protocol of blockchain networks;

| ● | changes in consumer demographics and public tastes and preferences;

| ● | the availability and popularity of other forms or methods of buying and selling goods and services, or trading assets, including new means of using government-backed currencies or existing networks;

| ● | the extent to which current interest in NFTs represents a speculative "bubble";

| ● | general economic conditions in the United States and the world;

| ● | the regulatory environment relating to NFTs and blockchains; and

| ● | a decline in the popularity or acceptance of NFTs or other digital assets.

The NFT industry as a whole has been characterized by rapid changes and innovations and is constantly evolving. Although it has experienced significant growth in recent years, the slowing or stopping of the development, general acceptance and adoption and usage of blockchain networks and blockchain assets may deter or delay the acceptance and adoption of NFTs.

The slowing or stopping of the development, general acceptance and adoption and usage of blockchain networks or blockchain assets may adversely impact the value of NFTs. The value of specific NFTs relies on the development, general acceptance and adoption and usage of the applicable blockchain network which depends on ability to readily access the applicable network.

The prices of digital assets are extremely volatile.

Decreases in the price of even a single other digital asset may cause volatility in the entire digital asset industry and may affect the value of other digital assets. For example, a security breach or any other incident or set of circumstances that affects purchaser or user confidence in a well-known digital asset may affect the industry as a whole and may also cause the price of other digital assets, including NFTs, to fluctuate.

If we cannot continue to innovate technologically or develop, market and sell new products and services, or enhance existing technology and products and services to meet customer requirements, our ability to grow our revenue could be impaired.

Our growth largely depends on our ability to innovate and add value to our existing creative platform and to provide our customers and contributors with a scalable, high-performing technology infrastructure that can efficiently and reliably handle increased customer and contributor usage globally, as well as the deployment of new features. We will continually make investments to maintain and enhance the technology and infrastructure and to evolve our information processes and computer systems in order to run our business more efficiently and remain competitive. We may not achieve the anticipated benefits, significant growth or increased market share from these investments for several years, if at all. If we are unable to manage our investments successfully or in a cost-efficient manner, our business and results of operations may be adversely affected.

The value of NFT is uncertain and may subject us to unforeseeable risks.

NFTs are unique, one-of-a-kind digital assets made possible by certain digital asset network protocols. Because of their non-fungible nature, NFTs introduce digital scarcity and have become popular as online "collectibles," similar to physical rare collectible items, such as trading cards or art pieces. Like real world collectibles, the value of NFTs may be prone to "boom and bust" cycles as popularity increases and subsequently subsides. If any of these bust cycles were to occur, it could adversely affect the value of certain of our future strategies. In addition, because NFTs generally rely on the same types of underlying technologies as digital assets, most risks applicable to digital assets are also applicable to NFTs, which will subject us to general digital assets risks as described elsewhere in these risk factors.

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A particular digital asset's status as a "security" in any relevant jurisdiction is subject to a high degree of uncertainty and depending upon the activities undertaken by our customers utilizing our products and services, we and our customers may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.

The SEC and its staff have taken the position that certain digital assets fall within the definition of a "security" under the U.S. federal securities laws. The legal test for determining whether any given digital asset is a security is a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict. The SEC generally does not provide advance guidance or confirmation on the status of any particular asset as a security. Furthermore, the SEC's views in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution. With respect to various digital assets, there is currently no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular asset could be deemed a "security" under applicable laws.

The classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale and trading of such assets. For example, a digital asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in assets that are securities in the United States may be subject to registration with the SEC as a "broker" or "dealer." Platforms that bring together purchasers and sellers to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system, or ATS, in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

If the SEC, foreign regulatory authority, or a court were to determine that a supported digital asset offered, sold, or traded by one of our customers on a platform provided by us is a security, our customer would not be able to offer such asset for trading until it was able to do so in a compliant manner, which would require significant expenditures by the customer. In addition, we or our customer could be subject to judicial or administrative sanctions for failing to offer or sell the digital asset in compliance with the registration requirements, or for acting as a broker, dealer, or national securities exchange without appropriate registration. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, disgorgement, criminal liability, and reputational harm which could negatively impact our business, operating results, and financial condition.

As a branded goods business, our success depends on the value and relevance of our brand and products to consumers and on our ability to innovate and remain competitive.

For halal products, consumer tastes, preferences and behaviors are constantly changing and our ability to anticipate and respond to these changes and to continue to maintain loyalty to the halal products we distribute is vital to our business. If we are unable to innovate effectively, our sales or margins could be materially adversely affected.

The successful introduction of innovative products and packaging on a periodic basis has become increasingly important to our ability to maintain and grow our sales in halal products. Accordingly, the continued acceptance of our products and the future degree of market acceptance of any of products, which may be accompanied by significant promotional expenditures, is likely to have an important impact on our future financial results.

We may not be able to compete effectively in the highly competitive halal food markets.

The halal food markets are highly competitive. In addition, many of our principal competitors are large, diversified companies with resources significantly greater than ours. We expect strong competition to continue, including competition for adequate distribution and competition for the limited shelf space for the halal categories in supermarkets and other retail food outlets. Competition in our product categories is based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity, and the ability to identify and satisfy consumer preferences. Our ability to grow our revenue could also be adversely impacted if we are not successful in introducing innovative products in response to changing consumer demands or by new product introductions of our competitors. If we are unable to build and sustain brand equity by offering recognizably superior product quality, we may be unable to maintain pricing advantages over competitive products.

From time to time, our customers experience price pressure in some of our markets as a result of competitors' promotional pricing practices as well as general market conditions. Our failure to match or exceed our competitors' cost reductions through innovative products and other improvements could weaken our competitive position. Competition is based on product quality, reliability, food safety, distribution effectiveness, brand loyalty, price, effective promotional activities, the ability to identify and satisfy emerging consumer preferences and the ability to provide ancillary support services. We may not be able to compete effectively with these larger, more diversified companies.

A material change in consumer demand for our halal products could have a significant impact on our business.

For our halal business we rely on continued demands from consumers for our products. To achieve business goals, we must develop and sell halal products that appeal to consumers. If demand and growth rates fall substantially below expected levels, our results could be negatively impacted. This could occur due to unforeseen negative economic or political events or to changes in consumer trends and habits.

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Economic conditions adversely affecting consumer discretionary spending may negatively impact our business and operating results.

We believe that our halal products revenues and profitability are strongly correlated to consumer spending habits, which is influenced by general economic conditions, unemployment levels, and the availability of discretionary income. In an economic downturn or in the event of the continued spread of COVID-19, our business and results of operations could be materially and adversely affected.

The recent global economic and financial market crisis due to COVID-19 has had and may continue to have a negative effect on our business and results of operations.

Global economic conditions as a result of COVID-19 have had a negative effect on our business and results of operations as the economic activity in China and throughout much of the world has also undergone an economic downturn. As a result, the global credit and liquidity have tightened in much of the world, some of our potential customers in Korea, China and Hong Kong may face business downturn and credit issues, and could experience cash flow problems and other financial hardships, which could affect timeliness of doing business with us.

Changes in governmental banking, monetary and fiscal policies to restore liquidity and increase credit availability may not be effective in alleviating the global economic declines due to the COVID-19 pandemic. It is difficult to determine the breadth and duration of the economic and financial market problems and the many ways in which they may affect our customers and our business in general. Nonetheless, continuation or further worsening of these difficult financial and macroeconomic conditions could have a significant effect on our business and results of operations.

The success of our business depends on the continuing contributions of key personnel who may terminate their employment with us at any time, and we will need to hire additional qualified personnel.

We rely heavily on the services of technical and management personnel. Loss of the services of any such individuals would adversely impact our operations. In addition, we believe our technical personnel represent a significant asset and provide us with a competitive advantage over many of our competitors and that our future success will depend upon our ability to retain these key employees and our ability to attract and retain other skilled financial, engineering, technical and managerial personnel. We do not currently maintain any "key man" life insurance with respect to any of such individuals.

Our success depends on the continuing efforts of our senior management team and other key personnel and our business may be harmed if we lose their services.

Our future success depends heavily upon the continuing services of the members of our senior management. If one or more of our senior executives or other key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, and our business may be disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for senior management and key personnel is intense, the pool of qualified candidates is very limited, and we may not be able to retain the services of our senior executives or key personnel, or attract and retain high-quality senior executives or key personnel in the future.

In addition, if any member of our senior management team or any of our other key personnel joins a competitor or forms a competing company, we may lose customers, distributors, know-how and key professionals and staff members. Each of our executive officers and key employees has entered into an employment agreement with us which contains confidentiality and non-competition provisions. Legal proceedings to enforce such provisions would be costly in both money and management time and such provisions may not be enforced or enforceable.

We rely on highly skilled personnel and if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.

Our performance and future success depends on the talents and efforts of highly skilled individuals. We will need to continue to identify, hire, develop, motivate and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.

As competition in our industry intensifies, it may be more difficult for us to hire, motivate and retain highly skilled personnel. If we do not succeed in doing so, we may be unable to grow effectively.

We have no business insurance coverage.

We do not have any business liability or disruption insurance coverage for our operations in Korea, China and Hong Kong. Any business disruption, litigation or natural disaster may result in our incurring substantial costs and the diversion of our resources.

We are exposed to risks associated with the weakening global economy as a result of COVID-19, which increase the uncertainty of consumers purchasing products and/or services.

The recent severe tightening of the credit markets, turmoil in the financial markets, and weakening global economy due to COVID-19 pandemic are contributing to a decrease in spending by consumers. If these economic conditions are prolonged or deteriorate further, as a result of COVID-19, the market for our products and services will decrease accordingly.

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Our Company may experience, and continues to experience, rapid growth in operations, which may place, and may continue to place, significant demands on its management, operational and financial infrastructure.

If the Company does not effectively manage its growth, the quality of its products and services could suffer, which could negatively affect the Company's brand and operating results. To effectively manage this growth, the Company will need to continue to improve its operational, financial and management controls and its reporting systems and procedures. Failure to implement these improvements could hurt the Company's ability to manage its growth and financial position.

Our Company's business faces inherent risk in the switchable glass and halal products and services.

Our Company's business is subject to certain risks inherent in the switchable glass and halal products and services. Our Company's revenue and operating results could be adversely affect by many factors which include, amongst others, changes in general economic, business and credit conditions, fluctuation in foreign exchange rates, changes in demand for and market acceptance of our products and services, our ability to introduce new products and services and enhancements in a timely manner, rapid technological changes, increase in operating expenses, lower profit margins due to pricing competition and delay in expansion plans.

Our Company seeks to limit these business risks through, inter-alia prudent management policies, keeping abreast with new developments and technologies in the relevant industries and maintaining good relationship with customers and suppliers. However, there can be no assurance that any changes in these factors will not have any material adverse effect on our Company's business.

Our Company's business faces competitions from local and foreign competitors.

Our Company faces competitions from both local and foreign competitors which offer similar products that of our Company offerings. Increased competitions could result in competitive pricing resulting in lower profit margins. However, our Company believes that we have several competitive edges over our competitors; including amongst others, better quality products, and technological expertise.

Our Company seeks to limit the competitive risks through, inter-alia constant review of our product development and marketing strategies to adapt to changes in economic conditions and market demands as well as focusing on certain markets and industries. However, there can be no assurance that our Company will be able to compete effectively against our competitors and that competitive pressure will not materially and adversely affect our Company's business, operations and results and or financial condition.

Our production of products from lamination machinery and nano-coat plating equipment involve a significant degree of risk and uncertainty in terms of operational performance and costs.

We rely on complex machinery for production of our products, and we may experience unexpected malfunctions from time to time requiring repairs and spare parts to fix the equipment. The availability of spare parts may not be available when needed. Unexpected malfunctions of our lamination and nano-coated plate filter equipment ("Manufacturing Equipment") may significantly affect our operational efficiency and production. In addition, the operational performance and costs associated with the Manufacturing Equipment can be difficult to predict and may be influenced by factors outside of our control, such as, but not limited to, failures by suppliers to deliver necessary equipment components in a timely manner and at prices and volumes acceptable to us, which could have a material adverse effect on our operational performance, cash flows, financial condition, or prospects.

Disaster events may disrupt our business.

Unforeseen events, or the prospect of such events, including public health issues including health epidemics or pandemics, war and terrorism and other international conflicts, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in Asia or elsewhere, could disrupt our operations, disrupt the operations of suppliers or business customers or result in political or economic instability. These types of events outside of our control could adversely affect our operating results. We cannot assure that any backup systems will be adequate to protect it from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to manufacture products and provide services. These events could reduce demand for our products and services, make it difficult or impossible to receive equipment from suppliers or impair our ability to deliver products and services to business customers on a timely basis. Any such disruption could damage our reputation and cause business customer attrition. We could be subject to claims or litigation with respect to losses caused by such disruptions. Our insurance may not cover a particular event at all or be sufficient to fully cover our losses.

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Risk Factors Relating to Quality of Products

If our products fail to perform as expected, our ability to develop, market and sell our products and services could be harmed.

If our products of nano-coated plate filters or our lamination glass products to be manufactured in the second half of 2022 contain defects in design and manufacture that cause them not to perform as expected or that require repair, or certain features of its products take longer than expected to become enabled or are legally restricted, our ability to develop, sell, and service its products could be harmed. Although we will attempt to remedy any issues it observes in its products as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of our customers. While we will perform extensive internal testing on the products we manufacture, we currently have a limited frame of reference by which to evaluate detailed long-term quality, reliability, durability and performance characteristics of our products. There can be no assurance that we will be able to detect and fix any defects in our products prior to their sale to our customers.

Our inability to provide products or services in a timely manner, legal restrictions on product features, or defects in our products or services, including products and services of third parties that we incorporate into our product offerings, could adversely affect our reputation, result in delivery delays, product recalls, product liability claims, and significant warranty and other expenses, and subject the Company to claims or litigation. In addition, our inability to meet our customers' expectations with respect to our products or services could affect our ability to generate new business customers and thereby have a material adverse effect on our business, financial condition, cash flow or results of operations.

We rely on certain third-party providers of licensed software and services integral to our operations.

Certain aspects of the operation of our business may depend on third-party software and service providers. With regard to licensed software technology, we may become dependent upon the ability of third parties to maintain, enhance or develop their software and services on a timely and cost-effective basis, to meet industry technological standards and innovations to deliver software and services that are free of defects or security vulnerabilities, and to ensure their software and services are free from disruptions or interruptions. Further, these third-party services and software licenses may not always be available to us on commercially reasonable terms or at all.

If the third-party software or services become obsolete, fail to function properly, are incompatible with future versions of our products or services, or are defective or otherwise fail to address our needs, there is no assurance that we would be able to replace the functionality provided by any future third-party software or services with software or services from alternative providers. Any of these factors could have a material adverse effect on our financial condition, cash flows or results of operations.

We may need to defend ourselves against and may face liability in respect of claims for infringing, misappropriating or otherwise violating the intellectual property rights of others, which may be time-consuming and could cause us to incur substantial costs and/or materially impact our ability to operate.

From time to time, legal action by us may be necessary to enforce our contractual rights, to protect our manufacturing and distribution operation or to defend against claims of infringement, misappropriation or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results and financial condition. Others, including our competitors, may hold or obtain patents, copyrights, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to make, use, develop, or sell its products and services, which could make it more difficult for us to operate our business. We may receive inquiries from holders of patents or trademarks inquiring whether we are infringing their proprietary rights and/or seek court declarations that they do not infringe upon our rights.

We may consider entering into licensing agreements with respect to such rights, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur, and such licenses could significantly increase our operating expenses. Companies holding patents or other intellectual property rights relating to switchable glass or nano-coated plating technologies may bring suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. In addition, if we are determined to have infringed upon a third party's intellectual property rights, it may be required to cease making, selling or incorporating certain components or intellectual property into the goods and services it offers, to pay substantial damages and/or license royalties, obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all, to redesign its products and services, and/or to establish and maintain alternative branding for its products and services. In the event that we were required to take one or more such actions, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

We cannot be certain that our products and services or those of third parties that we incorporate into our products do not and will not infringe the intellectual property rights of others. We do not own any patent technologies but rely on our equipment suppliers and technology partners. In future, we may be subject to claims based on allegations of infringement, misappropriation or other violations of the intellectual property rights of others, including litigation brought by competitors, potential competitors or special purpose or so-called "non-practicing" entities that focus solely on extracting royalties and settlements by enforcing intellectual property rights and against whom our patents may therefore provide little or no deterrence or protection.

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Regardless of their merits, intellectual property claims divert the attention of our personnel and are often time-consuming and expensive. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages (including, for example, treble damages if we are found to have wilfully infringed patents and increased statutory damages if we are found to have wilfully infringed copyrights) or discontinue or modify certain products or services that are found to infringe another party's rights or enter into licensing agreements with costly royalty payments. Defending against claims of infringement, misappropriation or other violations or being deemed to be infringing, misappropriating or otherwise violating the intellectual property rights of others could impair our ability to innovate, develop, distribute and sell our current and planned products and services. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of own confidential information could be compromised by the discovery process. Although claims of this kind have not materially affected our business to date, there can be no assurance material claims will not arise in the future.

Our switchable glass products must comply with local building codes and ordinances, and failure of our products to comply with such codes and ordinances may have an adverse effect on our business.

Our switchable glass product must comply with local building codes and ordinances. Building codes may also affect the products our customers are allowed to use, and, consequently, changes in building codes may also affect the sale of our products. If our products fail to comply with such local building codes or ordinances, our ability to market and sell such products would be impaired. Also, should these codes and ordinances be amended or expanded, or should new laws and regulations be enacted, we could incur additional costs or become subject to requirements or restrictions that require us to modify our products or adversely affect its ability to market and sell our products. If our products do not adequately or quickly adapt to building standards, we may lose market share to competitors, which would adversely affect our business, results of operation, financial condition, and cash flows. Furthermore, failure of our products to comply with such codes or ordinances could subject us to negative publicity or damage our reputation.

Our insurance strategy may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to losses resulting from products liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial condition and operating results.

We are subject to all of the ordinary course operating hazards and risks that may come with the provision of our products and services and business operations. In addition to contractual provisions limiting our liability to business customers and third parties, we maintain insurance policies in such amounts and with such coverage and deductibles as required by law and that we believe are reasonable and prudent. Nevertheless, such insurance may not be adequate to protect us from all the liabilities and expenses that may arise from claims for personal injury, death or property damage arising in the ordinary course of our business and current levels of insurance may not be able to be maintained or be available at economical prices. If a significant liability claim is brought against us that is not covered by insurance, then we may have to pay the claim with our own funds, which could have a material adverse effect on our business, financial condition, cash flows or results of operations. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for its products and are forced to make a claim under our policy.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

Although our switchable glass and nano-coated plate filter products are designed and produced to be safe, product liability claims, even those without merit, could harm our business, prospects, operating results and financial condition. We face inherent risk of exposure to claims in the event our products do not perform or are claimed to not have performed as expected. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our products and business and could have a material adverse effect on our business, prospects and operating results.

If we are unable to achieve our targeted manufacturing costs for our products, our financial condition and operating results will suffer.

While we will continue reduce costs in our operations and from our suppliers, including through economies of scale in increased production, there is no guarantee that we will be able to achieve sufficient cost savings to reach our planned gross margin and profitability goals, or our other financial targets. If our efforts to continue to decrease manufacturing costs are not successful, we may incur substantial costs or cost overruns in utilizing and increasing the production capability of our manufacturing facility. Many of the factors that impact our manufacturing costs are beyond our control, such as potential increases in the costs of materials and components. If we are unable to continue to control and reduce our manufacturing costs, our operating results, business and prospects will be harmed.

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Risks Relating to Our Organization

If we infringe the intellectual property rights of third parties, it may increase our costs or prevent us from the commercialization our product candidates.

There is a risk that we are or may infringe the proprietary rights of third parties of which we are unaware. There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the electronics industries. To date, we have not been involved in any such third-party claims and we are not aware that our products (digital asset trading platform, ecommerce platform for halal products, nano-coated plate filters and air purifiers, and switchable glass) infringe the intellectual property rights of third parties. As a result of intellectual property infringement claims, or to avoid potential claims, we might be:

| ● | prohibited from selling or licensing any products or digital asset trading or ecommerce platforms that we may develop unless the patent holder licenses the patent to us, which it is not required to do;

| ● | required to expend considerable amounts of money in defending the claim;

| ● | required to pay substantial royalties or grant a cross license to our patents to another patent holder;

| ● | required to redesign the formulation of a product so that it does not infringe, which may not be possible or could require substantial funds and time; or

| ● | required to pay substantial monetary damages.

Future sales of our products may suffer if they are not accepted in the marketplace by consumers and customers.

There is a risk that our products (halal products, nano-coated plate filters and air purifier products, and switchable glass) may not gain market acceptance by consumers and customers. The degree of market acceptance of any of our products will depend on a variety of factors, including:

| ● | timing of market introduction; and

| ● | price and product feature compared to existing and new products.

We may be exposed to product liability claims which could harm our business.

The marketing and sale of consumer and electronic products entails an inherent risk of product liability. We face product liability exposure related to our products. Regardless of merit or eventual outcome, liability claims may result in:

| ● | decreased demand for our products;

| ● | injury to our reputation;

| ● | costs of related litigation;

| ● | substantial monetary awards to customers and others;

| ● | loss of revenues; and

| ● | the inability to commercialize our other products.

If there is a claim made against us or some other problems that is attributable to our products, our share price may be negatively affected. Even if we were ultimately successful in product liability litigation, the litigation would consume substantial amounts of our financial and managerial resources and may create adverse publicity, all of which would impair our ability to generate sales of our product candidates. We may incur substantial liabilities or be required to limit development or commercialization of our product candidates if we cannot successfully defend ourselves against product liability claims. Such coverage may not be available in the future on acceptable terms, or at all. We have no insurance coverage and even if we have adequate insurance coverage, product liability claims or recalls could result in negative publicity and force us to devote significant managerial and financial resources to those matters, and the commercialization of our other products may be delayed or severely compromised.

Changes in government legislation and policy may adversely affect us.

While we do not anticipate in the near future any specific material changes in government legislation that may adversely affect us, any material changes in interest rates, exchange rates, relevant taxation and other legal regimes and government policies may adversely affect our operations, the use of our financial resources and the market price of our Ordinary Shares.

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Currency fluctuations may expose us to increased costs and revenue decreases.

Our business may in the future be affected by fluctuations in foreign exchange rates. Currency fluctuations could, therefore, cause our costs to increase and revenues to decline. The majority of our expenses will continue to be denominated in Korea won, United States dollars, Hong Kong dollars and Renminbi. In the past year, the Australian dollars, our reporting currency, has, as a general trend, appreciated against the U.S. currency. We cannot anticipate whether this trend will continue in respect of the U.S. dollars. The exchange rates of the Australian dollar to the Korea won, Hong Kong and the Chinese Renminbi have also fluctuated over the same period. In circumstances where the Australian dollar appreciates against either or both of the U.S. dollar, Korea won, Hong Kong dollar or Chinese Renminbi, this may have a positive effect on our costs incurred in either the U.S. or Korea won or Hong Kong or China (as applicable) but may have a negative effect on any revenues which we source from the U.S. or South Korea or Hong Kong or China (as applicable). The same principles apply in respect of our costs and revenues in other jurisdictions. In addition, we conduct operations in South Korea, Hong Kong and China, which exposes us to potential cost increases resulting from fluctuations in exchange rates. In 2021, we have been affected negatively on foreign exchange losses as a result of currency fluctuations.

Australian takeovers laws may discourage takeover offers being made for us or may discourage the acquisition of large numbers of our shares.

We are incorporated in Australia and are subject to the takeover laws of Australia. Amongst other things, we are subject to the Corporations Act 2001 (Commonwealth of Australia). Subject to a range of exceptions, the Corporations Act prohibits the acquisition of a direct or indirect interest in our issued voting shares if the acquisition of that interest will lead to a person's or someone else's voting power in us increasing from 20% or below to more than 20%, or increasing from a starting point that is above 20% and below 90%. Exceptions to the general prohibition include circumstances where the person makes a formal takeover bid for us, if the person obtains shareholder approval for the acquisition or if the person acquires less than 3% of the voting power of us in any rolling six-month period. Australian takeovers laws may discourage takeover offers being made for us or may discourage the acquisition of large numbers of our shares.

Rights as a holder of ordinary shares are governed by Australian law and the Company's Constitution (the "Constitution") and differ from the rights of shareholders under U.S. law. Holders of our Ordinary Shares may have difficulty in effecting service of process in the United States or enforcing judgments obtained in the United States.

We are a public company incorporated under the laws of Australia. Therefore, the rights of holders of our Ordinary Shares are governed by Australian law and our Constitution. These rights differ from the typical rights of shareholders in U.S. corporations. Circumstances that under U.S. law may entitle a shareholder in a U.S. company to claim damages may also give rise to a cause of action under Australian law entitling a shareholder in an Australian company to claim damages. However, this will not always be the case. Holders of our Ordinary Shares may have difficulties enforcing, in actions brought in courts in jurisdictions located outside the U.S., liabilities under U.S. securities laws. In particular, if such a holder sought to bring proceedings in Australia based on U.S. securities laws, the Australian court might consider:

| ● | that it did not have jurisdiction; and/or

| ● | that it was not an appropriate forum for such proceedings; and/or

| ● | that, applying Australian conflict of laws rule, U.S. law (including U.S. securities laws) did not apply to the relationship between holders of our Ordinary Shares and us or our directors and officers; and/or

| ● | that the U.S. securities laws were of a public or penal nature and should not be enforced by the Australian court.

Holders of our Ordinary Shares may also have difficulties enforcing in courts outside the U.S. judgments obtained in the U.S. courts against any of our directors and executive officers or us, including actions under the civil liability provisions of the U.S. securities laws.

Our operations may be materially and adversely affected by changes in the economic, political and social conditions of China.

Some of our non-cash assets are located in, and some of our revenue is sourced from China. The growth of our switchable glass businesses will be derived from China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole.

China economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While China economy has experienced significant growth over the past three decades, growth has been uneven across different regions and among various economic sectors. The Chinese government has implemented various measures to encourage economic development and guide the allocation of resources. Some of these measures benefit the overall China economy, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. We cannot predict the possible impact of any future economic policies of the Chinese government on our business and operations.

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China is facing a continued slowdown in economic growth. China's annual gross domestic product growth rate 2021 was 8.1% compared to 2020 was 2.3% , 6.1% in 2019, and 6.7% in 2018. This slowdown could cause a slowdown or decline in investment in electronic switchable glass, which may result in a reduction of demand for our products and services and thus materially reduce our revenues and profitability.

Uncertainties in the interpretation and enforcement of Chinese laws, rules and regulations could limit the legal protections available to you and us.

China legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which legal decisions have limited value as precedents. In 1979, the Chinese government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in China. Our operations in China are foreign-invested enterprise and is subject to laws, rules and regulations applicable to foreign investment in China as well as laws, rules and regulations applicable to foreign-invested enterprises. These laws, rules and regulations change frequently, and their interpretation and enforcement involve uncertainties. For example, we may have to resort to administrative and court proceedings to enforce the legal protections that we enjoy either by law or contract. However, since China administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may also impede our ability to enforce the contracts we have entered into, and materially impair our business and operations.

We may rely on dividends and other distributions on equity paid by our operating subsidiary to fund cash and financing requirements, and limitations on the ability of our operating subsidiaries to pay dividends to us could materially restrict our ability to conduct our business.

We, as a holding company, may rely on dividends and other distributions on equity paid by our operating Korea and China companies for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to the parent company, service any debt we may incur and pay our operating expenses. If these China subsidiaries incurs debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. Furthermore, relevant Chinese laws, rules and regulations permit payments of dividends by our China subsidiaries only out of their retained earnings, if any, determined in accordance with Chinese accounting standards and regulations.

Restrictions on currency exchange may limit our ability to effectively utilize our revenues as well as the ability of our China subsidiaries to obtain debt or equity financing from financial institutions or investors outside China, including us.

A significant portion of our future operating revenues may be denominated in Renminbi, Hong Kong dollars and United Sates dollars. The Renminbi is currently convertible under the "current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans. Currently, each of our China subsidiaries may purchase foreign exchange for settlement of "current account transactions," including purchase of imported components i.e. display chips and payment of dividends to the overseas parent company, without the approval of the State Administration of Foreign Exchange (the "SAFE") by complying with certain procedural requirements. However, the relevant Chinese government authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. Since a significant amount of our future revenues will likely be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenues generated in Renminbi to purchase for example computer display chips from suppliers outside China or fund our business activities outside China denominated in foreign currencies or pay dividends in foreign currencies to our overseas parent company.

In addition, certain foreign exchange transactions under the capital account are still subject to limitations and require approvals from, or registration with, the SAFE (or qualified banks designated by it) and other relevant Chinese government authorities. In particular, any loans to our China subsidiaries are subject to China regulations and approvals. For example, loans by us to Smart (Zhenjiang) Intelligent Technology Limited ("Smartglass Zhenjiang"), a foreign-invested enterprise, cannot exceed statutory limits and must be registered with the SAFE or its local counterpart.

This could affect the ability of Smartglass Zhenjiang to obtain foreign exchange through debt or equity financing, including by means of loans or capital contributions from us.

The Chinese government may alter its regulations and policies from time to time which may have direct or indirect impact to our Company operation.

Regulations and policies may be altered or other new regulations and policies may be implemented by the Chinese government from time to time which may have direct or indirect impact to our business operations. Some examples of such regulations and policies are:

| ● | media broadcast regulations over the Internet;

| ● | foreign media to be distributed in China;

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| ● | operating permit for mobile sales and distribution;

| ● | copyrighted digital media regulations;

| ● | educational and cultural materials to be sold, distributed, created or transacted in China by foreign investment entities; and

| ● | foreign investment entities to operate business in the educational and media industries.

These are only some of the examples that may have indirect impacts to our business. Change of government officials may also affect changes in regulations and policies, especially within local government. These changes may have impacts to the operating strategies or financial performance of the Company.

Risks Associated with Our Technology and Intellectual Property

Potential technological changes in our field of businesses create considerable uncertainty.

We are no longer conducting research and development in our products. However, our competitors and other experts in nano-coated plate air filters are continuously and extensively conducting research in the relevant technologies. New developments in research are expected to continue at a rapid pace in both industry and academia. Research and discoveries by others may render some or all of our products uncompetitive or obsolete.

If we are unable to keep pace with technological change or with the advances of our competitors our products may become non-competitive.

The nano-coating technologies we use in our products are subject to rapid and significant technological change. Our competitors in Hong Kong, China, Korea and Australia and elsewhere are numerous and include, among others, major technology companies, large electronics companies, universities and other research institutions. These competitors may develop technologies and products that are more effective, or which would render the technology in our products such as nano-coated products, obsolete or non-competitive. Many of these competitors have greater financial and technical resources and manufacturing and marketing capabilities than we do. In addition, many of our competitors have much more experience in marketing, sales and commercializing new technologies of new or improved display products and nano-plated filter products.

Our nano-coated plate filter's manufacturing technology is from a third party, and to the extent that the equipment manufacturer will be able to continuously develop and upgrade the nano-coated plate filter technology to keep our nano-coated plate products competitive will determine the success of our business. If our equipment manufacturer is not able to innovate their technology to match our competitors' technology development, then there is a risk that our nano-coated products will become uncompetitive in the market place which may have an adverse effect in our nano-coated plate business, financial condition and results of operations.

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Our success depends upon our ability to protect our intellectual property and our proprietary technology.

Our success will depend in large part on whether we can:

| ● | Obtain and maintain patents to protect our own products;

| ● | Obtain licenses to relevant patented technologies of third parties;

| ● | Operate without infringing on the proprietary rights of third parties; and

| ● | Protect our trade secrets and know-how.

Patent matters in industrial and consumer electronics are highly uncertain and involve complex legal and factual questions. Accordingly, the availability and breadth of claims allowed in electronics patents cannot be predicted. Statutory differences in patentable subject matter may limit the protection we can obtain on some or all of the products we use outside Hong Kong or China or prevent us from obtaining patent protection outside Hong Kong or China, either of which could have a material adverse effect on our business, financial condition and results of operations. Moreover, since patent applications in Hong Kong or China are maintained in secrecy until the patent is issued, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain that we or any of our licensors were the first creator of inventions covered by pending patent applications or that we or our licensors were the first to file patent applications for such inventions. Additionally, the enforceability of a patent depends on several factors that may vary amongst jurisdictions. These factors may include the novelty of the invention, the requirement that the invention not be obvious in light of prior art (including prior use or publication of the invention), the utility of the invention, and the extent to which the patent clearly describes the best method of working the invention.

While we intend to seek patent protection for some of our filter products and technologies that we use which carried forward prior to the disposal of our R&D unit, we cannot be certain that any of the pending or future patent applications filed by us or on our behalf will be approved. We also cannot be certain that others will not independently develop similar products or processes, duplicate any of the products or processes developed by us previously or licensed to us, or design around the patents owned or licensed by us, or that any patents owned or licensed by us will provide us with competitive advantages. Furthermore, we cannot be certain that patents held by third parties will not prevent the commercialization of products incorporating the technology developed by us or licensed to us, or that third parties will not challenge or seek to narrow, invalidate or circumvent any of the issued, pending or future patents owned or licensed by us.

We may have to resort to litigation to enforce any patents issued or licensed to us or to determine the scope and validity of third party proprietary rights. We may have to defend the validity of our patents in order to protect or enforce our rights against a third party, or third parties may in the future assert against us infringement claims regarding proprietary rights belonging to them. Such proceedings could result in the expenditure of significant financial and managerial resources and could negatively affect our profitability. Adverse determinations in any such proceedings could prevent us from developing and commercializing our products and could harm our business, financial condition and results of operations.

Our commercial success will also depend, in part, on our ability to avoid infringement of patents issued to others. If a court determines that we were infringing any third-party patents, we could be required to pay damages, alter our products or processes, obtain licenses or cease certain activities. We cannot be certain that the licenses required under patents held by third parties would be made available on terms acceptable to us or at all. To the extent that we are unable to obtain such licenses, we could be foreclosed from the development, manufacture or commercialization of the product requiring such license or encounter delays in product introductions while we attempt to design around such patents, and any of these circumstances could have a material adverse effect on our business, financial condition and results of operations.

In addition to patent protection, we rely on unpatented trade secrets and know-how and proprietary technological innovation and expertise that are protected in part by confidentiality and invention assignment agreements with our employees, advisors and consultants. We cannot make any assurances that we will have adequate remedies for any breach. In addition, third parties could independently develop the same or similar technologies.

If we are not able to protect and control unpatented trade secrets, know-how and other technological innovation, we may suffer competitive harm.

In addition to patented intellectual property, we also rely on unpatented technology, trade secrets, confidential information and know-how to protect our technology and maintain our competitive position. Trade secrets are difficult to protect. In order to protect proprietary technology and processes, we rely in part on confidentiality and intellectual property assignment agreements with our employees, consultants and others. These agreements may not effectively prevent disclosure of confidential information or result in the effective assignment to us of intellectual property, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information or other breaches of the agreements. In addition, others may independently discover trade secrets and proprietary information that have been licensed to us or that we own, and in such case, we could not assert any trade secret rights against such party. Enforcing a claim that a party illegally obtained and is using trade secrets that have been licensed to us or that we own is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition,courts outside the United States and Australia may be less willing to protect trade secrets. Costly and time-consuming litigation could be necessary to seek to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could have a material adverse effect on our business.

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We do not have patent protection in certain countries and we may not be able to effectively enforce our intellectual property rights in certain countries, which could significantly erode the market for our product candidates.

We intend to seek regulatory approval to market our product candidates in a number of foreign countries. Our product candidates are not protected by patents in certain countries, which means that competitors may be free to sell products that incorporate the same technology that is used in our products in those countries. In addition, the laws and practices in some foreign countries may not protect intellectual property rights to the same extent as in the United States or Australia. We may not be able to effectively obtain, maintain or enforce rights with respect to the intellectual property relating to our product candidates in those countries. Our lack of patent protection in one or more countries, or the inability to obtain, maintain or enforce intellectual property rights in one or more countries, could adversely affect our ability to commercialize our products in those countries and could otherwise have a material adverse effect on our business.

Risks Relating to Our Securities

In the event that our Ordinary Shares are delisted from NASDAQ, U.S. broker-dealers may be discouraged from effecting transactions in shares of our Ordinary Shares because they may be considered penny stocks and thus be subject to the penny stock rules.

The SEC has adopted several rules to regulate "penny stock" that restrict transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity of penny stocks. "Penny stocks" generally are equity securities with a price of less than US$5.00 per share (other than securities registered on certain national securities exchanges or quoted on NASDAQ if current price and volume information with respect to transactions in such securities is provided by the exchange or system). Our Ordinary Shares have in the past constituted, and may again in the future constitute, "penny stock" within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our Ordinary Shares, which could severely limit the market liquidity of such Ordinary Shares and impede their sale in the secondary market.

A U.S. broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000, or US$300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the "penny stock" regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a "penny stock", a disclosure schedule prepared in accordance with SEC standards relating to the "penny stock" market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the "penny stock" held in a customer's account and information with respect to the limited market in "penny stocks".

Shareholders should be aware that, according to the SEC, the market for "penny stocks" has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

Our Ordinary Shares may be considered a "penny stock" under SEC regulations which could adversely affect the willingness of investors to hold our Shares.

The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. During the fiscal year ended December 31, 2021, our Ordinary Shares traded on the NASDAQ at below of US$5.00 per share. The low trading price of our Ordinary Shares may adversely impact the willingness of investors to invest in our Ordinary Shares in the United States.

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Our stock price may be volatile.

The market price of our Ordinary Shares is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

| ● | changes in our industry;

| ● | our ability to work through a health crisis or pandemic;

| ● | competitive pricing pressures;

| ● | our ability to obtain working capital financing;

| ● | additions or departures of key personnel;

| ● | limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our Ordinary Shares;

| ● | sales of our Ordinary Shares;

| ● | our ability to execute our business plan;

| ● | operating results that fall below expectations;

| ● | loss of any strategic relationship;

| ● | regulatory developments;

| ● | developments concerning research and development, manufacturing, and marketing alliances or collaborations by us and our competitors;

| ● | announcements of technological innovations or new commercial products by us and our competitors;

| ● | regulatory actions in respect of any of our products or the products of any of our competitors;

| ● | determinations regarding our patent applications and those of others;

| ● | market conditions, including market conditions in the technology and digital media sectors;

| ● | increases in our costs or decreases in our revenues due to unfavorable movements in foreign currency exchange rates;

| ● | development or litigation concerning patents, licenses and other intellectual property rights;

| ● | litigation or public concern about the safety of our potential products;

| ● | changes in recommendations or earnings estimates by securities analysts;

| ● | deviations in our operating results from the estimates of securities analysts;

| ● | rumors relating to us or our competitors;

| ● | developments concerning current or future strategic alliances or acquisitions;

| ● | political, economic and other external factors such as interest rate or currency fluctuations, war; and

| ● | period-to-period fluctuations in our financial results.

Our Ordinary Shares are traded on NASDAQ Capital Market. However, trading volumes for our Ordinary Shares have been historically low and volatile. The limited trading market for our Ordinary Shares may cause fluctuations in the market value of our Ordinary Shares to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market for our Ordinary Shares .

In addition, stock markets have recently experienced extreme price and volume fluctuations due to the effects of COVID-19. These fluctuations have especially affected the stock market price of many technology and digital media companies and, in many cases, are unrelated to the operating performance of the particular companies. We believe that these broad market fluctuations may continue to affect the market price of our Ordinary Shares.

We may be deemed a passive foreign investment company (PFIC) which would subject our U.S. investors to adverse tax rules.

Holders of our Ordinary Shares who are U.S. residents face income tax risks. There is a substantial risk that if we are deemed a passive foreign investment company, or PFIC, which could result in a reduction in the after-tax return to a "U.S. Holder" of our Ordinary Shares . For U.S. federal income tax purposes, we will be classified as a PFIC for any taxable year in which (i) 75% or more of our gross income is passive income, or (ii) at least 50% of the average value of all of our assets for the taxable year produce or are held for the production of passive income. For this purpose, cash is considered to be an asset that produces passive income.

The determination of whether we are a PFIC is made on an annual basis and depends on the composition of our income and the value of our assets. Therefore, it is possible that we could be deemed a PFIC in the current year as well as in future years. If we are classified as a PFIC in any year that a U.S. Holder owns Ordinary Shares , the U.S. Holder will generally continue to be treated as holding Ordinary Shares of a PFIC in all subsequent years, notwithstanding that we are not classified as a PFIC in a subsequent year. Dividends received by the U.S. Holder and gains realized from the sale of our Ordinary Shares would be taxed as ordinary income and subject to an interest charge. We urge U.S. investors to consult their own tax advisors about the application of the PFIC rules and certain elections that may help to minimize adverse U.S. federal income tax consequences in their particular circumstances.

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As a foreign private issuer whose shares are listed on the NASDAQ Capital Market, we follow certain home country corporate governance practices in lieu of instead of certain NASDAQ requirements.

As a foreign private issuer whose shares are listed on the NASDAQ Capital Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of The NASDAQ Marketplace Rules. As an Australian company listed on the NASDAQ Capital Market, we follow home country practice with regard to, among other things, the composition of the board of directors, director nomination process, compensation of officers and quorum at shareholders' meetings. In addition, we follow Australian law instead of the NASDAQ Marketplace Rules that require that we obtain shareholder approval for certain dilutive events, such as for the establishment or amendment of certain equity-based compensation plans, an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company. A foreign private issuer that elects to follow a home country practice instead of NASDAQ requirements, must submit to NASDAQ in advance a written statement from an independent counsel in such issuer's home country certifying that the issuer's practices are not prohibited by the home country's laws. In addition, a foreign private issuer must disclose in its annual reports filed with the U.S. Securities and Exchange Commission each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ's corporate governance rules. Please see "Item 6. Directors, Senior Management and Employees - C. Board Practices" for further information.

U.S. shareholders may not be able to enforce civil liabilities against us.

All of our directors and executive officers are non-residents of the United States, and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may not be possible for investors to affect service of process within the United States upon such persons or to enforce against them judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States. There is doubt as to the enforceability in Australia in original actions, or in actions for enforcement of judgments of U.S. courts, of civil liabilities to the extent predicated upon the federal securities laws of the United States.

As a foreign private issuer, we do not have to provide the same information as an issuer of securities based in the U.S.

Given that we are a foreign private issuer within the meaning of the rules under the Exchange Act, we are exempt from certain provisions of that law that are applicable to U.S. public companies, including (i) the rules under the Exchange Act requiring the filing with the U.S. Securities and Exchange Commission ("SEC") of quarterly reports on Form 10-Q or current reports on Form 8-K; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a registered security; and (iii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time. Thus, investors are not afforded the same information which would be ordinarily available were they investing in a domestic U.S. public corporation.

In accordance with the requirements of the Australian Corporations Act 2001, we disclose annual and semi-annual results. Our results are presented in accordance with International Financial Reporting Standards (IFRS). Our annual results are audited, and our semi-annual results undergo a limited review by our independent auditors. We file annual audited results presented in accordance with Australian Accounting Standards and IFRS as issued by International Accounting Standards Board with the SEC on Form 20-F. We are required to provide our semi-annual results and other material information that we disclose in Australia in the U.S. under the cover of Form 6-K. Nevertheless, this information is not the same information as would be made available to investors if we were a domestic U.S. public corporation.

We may issue additional securities in the future, which may result in dilution to our shareholders.

As of April 19, 2022 we have 14,753,331 Ordinary Shares issued and outstanding, which does not include the number of shares to be issued under a warrant that was issued in January 2022. The total amount of the warrants, if fully exercised, would raise US$8 million. The warrants are for a term of 2 years to January 2024 and can be exercised at US$3.74 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company. As at the date of this report, all the warrants are outstanding. In this case, to the extent that the warrants are exercised by the warrant holders, additional Ordinary Shares will be issued and would dilute our shareholders.

In addition, to the extent that we conduct additional equity offerings, additional Ordinary Shares will be issued, which may result in dilution to our current shareholders. Sales of substantial numbers of such shares in the public market would also result in further dilution to our shareholders and could adversely affect the market price of our Ordinary Shares.

We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing securities that would dilute your ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our Ordinary Shares.

We have financed our operations, and we expect to continue to finance our operations, acquisitions, if any, and the development of strategic relationships by issuing equity and/or convertible securities, which could significantly reduce the percentage ownership of our existing shareholders. Further, any additional financing that we secure, may require the granting of rights, preferences or privileges senior to, or pari passu with, those holders of our Ordinary Shares . Any issuances by us of equity securities may be at or below the prevailing market price of our Ordinary Shares and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our Ordinary Shares to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our Ordinary Shares . The holders of any securities or instruments we may issue may have rights superior to the rights of our shareholders. If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over our shareholders, it may negatively impact the trading price of our Ordinary Shares and you may lose all or part of your investment.

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If we fail to comply with internal controls evaluations and attestation requirements our stock price could be adversely affected.

We are subject to United States securities laws, including the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted by the SEC pursuant to such Act. As a foreign private issuer, under Section 404 of the Sarbanes-Oxley Act and the related regulations, we will be required to perform an evaluation of our internal control over financial reporting, including (1) management's annual report on its assessment of the effectiveness of internal control over financial reporting; and (2) our independent registered public accounting firm's annual audit of the effectiveness of internal control over financial reporting. In 2010, the enactment of the Dodd Frank Bill resulted in an exemption from Section 404(b) of the Sarbanes-Oxley Act for fiscal 2010 onwards, meaning that we did not have to comply with point (2) above. For further information, see "Item 15 - Controls and Procedures - Management's Annual Report on Internal Control over Financial Reporting."

The requirements of Section 404(a) of the Sarbanes-Oxley Act are ongoing and also apply to future years. We expect that our internal control over financial reporting will continue to evolve as our business develops. Although we are committed to continue to improve our internal control processes and we will continue to diligently and vigorously review our internal control over financial reporting in order to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed, operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. Therefore, we cannot be certain that in the future additional material weaknesses or significant deficiencies will not exist or otherwise be discovered. If our efforts to remediate weaknesses identified are not successful or if other deficiencies occur, these weaknesses or deficiencies could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or other material effects on our business, reputation, results of operations, financial conditions or liquidity.

Our Constitution and other Australian laws and regulations applicable to us may adversely affect our ability to take actions that could be deemed beneficial to our shareholders.

As an Australian company we are subject to different corporate requirements than a corporation organized under the laws of the United States. Our constituent document, or Constitution, as well as the Australian Corporations Act 2001 set forth various rights and obligations that are unique to us as an Australian company. These requirements may limit or otherwise adversely affect our ability to take actions that could be beneficial to our shareholders.

We have never paid a dividend and we do not intend to pay dividends in the foreseeable future which means that holders of shares may not receive any return on their investment from dividends.

To date, we have not declared or paid any cash dividends on our Ordinary Shares and currently intend to retain any future earnings for funding growth. We do not anticipate paying any dividends in the foreseeable future. Dividends may only be paid out of our profits. Payment of cash dividends, if any, in the future will be at the discretion of the board of directors of the Company (the "Board" or "Board of Directors"). Our holders of shares may not receive any return on their investment from dividends. The success of your investment will likely depend entirely upon any future appreciation of the market price of our Ordinary Shares, which is uncertain and unpredictable. There is no guarantee that our Ordinary Shares will appreciate in value or even maintain the price at which you purchased your Ordinary Shares.

We may not be able to attract the attention of major brokerage firms.

Securities analysts of major brokerage firms may not provide coverage of us since there is no incentive to brokerage firms to recommend the purchase of our Ordinary Shares. No assurance can be given that brokerage firms will, in the future, want to conduct any secondary offerings on behalf of our Company.

Risks Related to Doing Business in China

Uncertainties exist with respect to the interpretation and implementation of PRC Foreign Investment Law and how it may impact the viability of our group structure and business operations.

On March 15, 2019, the National People's Congress approved the Foreign Investment Law, which took effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in China. The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition.

According to the Foreign Investment Law, "foreign investment" refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as "foreign investor") within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.

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According to the Foreign Investment Law, the State Council will publish or approve to publish the "negative list" for special administrative measures concerning foreign investment. The Foreign Investment Law grants national treatment to foreign-invested entities ("FIEs"), except for those FIEs that operate in industries deemed to be either "restricted" or "prohibited" in the "negative list". Because the "negative list" has yet to be published, it is unclear whether it will differ from the current Special Administrative Measures for Market Access of Foreign Investment (Negative List). The Foreign Investment Law provides that FIEs operating in foreign restricted or prohibited industries will require market entry clearance and other approvals from relevant Chinese governmental authorities. If a foreign investor is found to invest in any prohibited industry in the "negative list", such foreign investor could be required to cease its investment activities, dispose of its equity interests or assets within a prescribed time limit and have its income confiscated. If the investment activity of a foreign investor is in breach of any special administrative measure for restrictive access provided for in the "negative list", the relevant competent department shall order the foreign investor to make corrections and take necessary measures to meet the requirements of the special administrative measure for restrictive access.

The Chinese government will establish a foreign investment information reporting system, according to which foreign investors or foreign-invested enterprises must submit investment information to the competent department for commerce concerned through the enterprise registration system and the enterprise credit information publicity system, and a security review system under which the security review shall be conducted for foreign investment affecting or likely affecting the state security.

Furthermore, the Foreign Investment Law provides that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the implementing of the Foreign Investment Law.

In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including that a foreign investor may freely transfer into or out of China, in Renminbi or a foreign currency, its contributions, profits, capital gains, income from disposition of assets, royalties of intellectual property rights, indemnity or compensation lawfully acquired, and income from liquidation, among others, within China; local governments shall abide by their commitments to the foreign investors; governments at all levels and their departments shall enact local normative documents concerning foreign investment in compliance with laws and regulations and shall not impair legitimate rights and interests, impose additional obligations onto FIEs, set market access restrictions and exit conditions, or intervene with the normal production and operation activities of FIEs; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; and mandatory technology transfer is prohibited.

As such, there is a risk that our electronic glass business, which is currently operated by Smartglass Zhenjiang, could be designated to on the "negative list" for special administrative measures concerning foreign investment. And if its business were to on the "negative list", we would need to seek permission and approval from the Chinese regulatory to continue to conduct our electronic glass business in the PRC. If Smartglass Zhenjiang were to be put on the "negative list" and were not successful in obtaining permission or approval, then its business could be required to close or sold, which could adversely affect our financial position and share price.

The Chinese government can exert substantial influence over the manner in which companies operate in China.

The Chinese government has exercised, and may continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China could be undermined by changes in PRC laws and regulations, including those relating to taxation, environmental regulations, land use rights, properties and other matters. The central or local governments could impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions, and could require the Company to relinquish any interest that we hold in Chinese properties. If our PRC subsidiaries do not receive or maintain approvals, inadvertently conclude that approvals needed for their business are not required or if there are changes in applicable laws (including regulations) or interpretations of laws and our PRC subsidiaries are required but unable to obtain approvals in the future, then such changes or need for approvals (if not obtained) could adversely affect the operations on our PRC subsidiaries and the value of our shares could significantly decline or become worthless.

As such, our PRC subsidiaries could be subject to various government and regulatory oversight in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. Our PRC subsidiaries could incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

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The Chinese government could intervene or influence the operations of our subsidiaries based in Hong Kong and the PRC at any time and any such intervention or influence could result in a material change in our operations and/or the value of our Ordinary Shares.

Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offers of securities, it is uncertain if or how the Company (which it is incorporated in Australia but most of its officers or directors are based in Hong Kong or the PRC) could be required to obtain permission from the PRC government to make an offer of securities in the future, and even if any such permission were obtained, whether it could be rescinded. Although we are currently not required to obtain permission from the PRC government or any local government to obtain such permission, our operations could be adversely affected, directly or indirectly, if we had to obtain approvals from the PRC government to offer securities. and could result in a significant decrease in the value of our Ordinary Shares, or a complete hinderance of our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or be worthless.

Recent regulatory initiatives implemented by the PRC competent government authorities on cyberspace data security could impact our business operations and compliance status.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies but not Australian companies such as IMTE.

On July 10, 2021, the Cyberspace Administration of China ("CAC") issued a revised draft of the Measures for Cybersecurity Review (the "Draft Measures") for public comments, which required that, any data processing operators controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. On January 4, 2022, the Measures for Cybersecurity Review (the "Measures") were published and became effective on February 15, 2022.We do not expect to be subject to cybersecurity review because: (i) our products and services are not offered directly to individual consumers; (ii) we do not possess a large amount of personal information in our business operations; and (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.

Although we do not believe that we will be subject to cybersecurity review as required under the Measures, it is uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations and interpretations will be modified or promulgated, if any, and the potential impact they could have on the operations of IMTE's subsidiaries in the PRC, the ability to accept foreign investments and the convertibility of foreign exchange.

The trading of our shares could potentially be adversely impacted by the Holding Foreign Companies Accountable Act ("HFCA Act") if it is later determined that the Public Company Accounting Oversight Board (the "PCAOB") is unable to inspect or investigate our auditor because of a position taken by the Chinese government, which could cause trading in our shares to be prohibited under HFCA Act and our shares to be delisted.

On December 16, 2021, the PCAOB has issued its report notifying the SEC of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong. Our auditor, Audit Alliance LLP, is a PCAOB-registered firm based in Singapore is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. As of the date of this annual report, under the HFCA Act, the PCAOB is permitted to inspect our independent public accounting firm. However, there is no guarantee that future audit reports will be prepared by auditors that are subject to complete inspection by the PCAOB and, in such event, this could result in limitations or restrictions to our access of the U.S. capital markets. Furthermore, trading in our securities could be prohibited under the HFCA Act if the SEC were to subsequently determine that our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, including as a result of a position taken by an authority in China or other foreign jurisdiction that prevents the PCAOB from conducting an inspection of our auditor and, as a result, NASDAQ could determine to delist our Ordinary Shares.

In June 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years (instead of three consecutive years under current law). Furthermore, trading in our securities could be prohibited under the HFCA Act (as amended by the Accelerating Holding Foreign Companies Accountable Act) if the SEC were to subsequently determine that our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, including as a result of a position taken by an authority in China or other foreign jurisdiction that prevents the PCAOB from conducting an inspection of our auditor and, as a result, NASDAQ could determine to delist our Ordinary Shares.

PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of the offerings to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

In utilizing the proceeds from the offerings or any future offerings, as an offshore holding company of our PRC subsidiary, we may make loans to our PRC subsidiary and controlled PRC affiliate, or we may make additional capital contributions to our PRC subsidiary. Any loans to our PRC subsidiary or controlled PRC affiliate are subject to PRC regulations and approvals. For example, loans by us to our PRC subsidiary in China, each of which is a foreign-invested enterprise, to finance their activities cannot exceed statutory limits and must be registered with a Chinese agency known as SAFE or its local counterpart.

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We may also decide to finance our PRC subsidiary through capital contributions. These capital contributions must be approved by the Ministry of Commerce in China or its local counterpart. It is possible that we may not be able to obtain these government registrations or approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or capital contributions by us to our subsidiaries or any of their respective subsidiaries. If we fail to receive such registrations or approvals, our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.

In 2015, SAFE promulgated Circular 19, a notice regulating the conversion by a foreign-invested enterprise of foreign currency into Renminbi by restricting how the converted Renminbi may be used. Circular 19 requires that Renminbi converted from the foreign currency-denominated capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specifically provided for otherwise in its business scope. In addition, SAFE strengthened its oversight of the flow and use of Renminbi funds converted from the foreign currency-denominated capital of a foreign-invested enterprise. The use of such Renminbi may not be changed without approval from SAFE and may not be used to repay Renminbi loans if the proceeds of such loans have not yet been used for purposes within the foreign-invested enterprise's approved business scope.

We cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or with respect to future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we receive from the offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.

Governmental control of currency conversion may limit our ability to use our revenues effectively and the ability of our PRC subsidiary to obtain financing.

The PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. For our PRC subsidiaries, we will receive a majority of our revenues in Renminbi, which currently is not a freely convertible currency. Restrictions on currency conversion imposed by the PRC government may limit our ability to use revenues generated in Renminbi to fund our expenditures denominated in foreign currencies or our business activities outside China. Under China's existing foreign exchange regulations, Renminbi may be freely converted into foreign currency for payments relating to current account transactions, which include among other things dividend payments and payments for the import of goods and services, by complying with certain procedural requirements. Our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, by complying with certain procedural requirements. Our PRC subsidiary may also retain foreign currency in their respective current account bank accounts for use in payment of international current account transactions. However, we cannot assure you that the PRC government will not take measures in the future to restrict access to foreign currencies for current account transactions.

Conversion of Renminbi into foreign currencies, and of foreign currencies into Renminbi, for payments relating to capital account transactions, which principally includes investments and loans, generally requires the approval of SAFE and other relevant PRC governmental authorities. Restrictions on the convertibility of the Renminbi for capital account transactions could affect the ability of our PRC subsidiary to make investments overseas or to obtain foreign currency through debt or equity financing, including by means of loans or capital contributions from us.

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| ITEM 4. | INFORMATION ON THE COMPANY

A. History and Development of the Company

We were incorporated under the laws of the Commonwealth of Australia on August 8, 2008 under the name "China Integrated Media Corporation Limited." On October 12, 2016, we changed the name to Integrated Media Technology Limited ("IMTE"). The registered office is located at Level 7, 420 King William Street, Adelaide, SA 5000, Australia and our telephone number is +61 8 8233 0881. Our principal office is located at Suite 801, 8/F., Siu On Center, 188 Lockhart Road, Wanchai, Hong Kong and our telephone number is +852 2989 0288. Our address on the Internet is www.imtechltd.com. The information on, or accessible through, our website is not part of this annual report on Form 20-F. We have included our website address in this annual report on Form 20-F solely as an inactive textual reference.

In 2013, IMTE was engaged in (i) the development of the digital advertising platform in glasses-free 3D (autostereoscopic), (ii) distribution of digital displays and (iii) lottery gaming business in China. In 2015, the Company changed this focus of its businesses to concentrate on 3D autostereoscopic business and took the following corporate actions: (i) terminated the lottery gaming business in China and (ii) acquired 3D technology and audio companies (as discussed further below). However due to the capital-intensive nature of research and development and the losses incurred in 2018 and 2019, management decided in early 2020 to stop the R&D activities and focus on the sales and marketing of 3D display products. Management also decided to broaden the Company's revenue base by investing in a lamination glass project, a new nano-coated plate filter project, IoT projects, financial research, certification of halal process and trading in halal products, and setting up a marketplace to trade in digital assets. In 2021, the Company stopped the marketing and sales of 3D display products due to the adverse effect of the pandemic on the retail and advertising sectors. As a result, the Company now engages in business activities relating to the laminated switchable glass, nano-coated plate filter and air filter products, IoT products, financial research, certification of halal process and trading in halal products, and setting up and managing a marketplace to trade in digital assets.

IMTE was listed on the Australian Securities Exchange, or ASX, in February 2013.

On February 9, 2015, the Company acquired all the issued shares of Conco International Co., Ltd. ("CICL"), a company principally engaged in the design, sales and distribution of audio products. The consideration paid was $61,591 which was the amount of the net asset value of CICL. The consideration was settled by the Company issuing 307,954 shares at $0.20 per share.

In May 2015, the Company entered into a cooperation agreement to set up Global Vantage Audio Limited, a 50% subsidiary company, to distribute and market branded "Syllable" headsets globally except for the markets in China, India and Pakistan.

On September 30, 2015, the Company acquired all of the issued shares of Marvel Digital Limited ("MDL"), a Hong Kong incorporated technology company principally engaged in the development of autostereoscopic 3D display technology and products, 2D to 3D conversion software and digital content management system. The consideration paid was A$5,216,213 which was the net asset value of MDL. The consideration was settled by the Company issuing 26,081,065 shares at A$0.20 per share.

In March 2016, the Company disposed CICL to an independent third party for US$41,235, representing the net asset value of CICL.

On October 12, 2016, pursuant to an extraordinary general meeting the Shareholders unanimously voted to change the name of the Company to Integrated Media Technology Limited.

On May 2, 2017, we effected a 1-for-30 reverse split of our Ordinary Shares, which was approved at a special meeting of our shareholders on March 2, 2017. This reduced the number of outstanding shares of our common stock from 79,301,852 shares on May 5, 2017, to 2,643,611 shares on May 8, 2017, after adjusting for fractional shares.

In July 2017, we established a new wholly owned subsidiary - GOXD Technology Limited, incorporated in Hong Kong, for carrying out business activities on sales and distribution of 2D/3D glasses-free 4K digital photo frames to corporate customers and household consumers.

On August 3, 2017 our Ordinary Shares admitted for listing on the NASDAQ Capital Markets under the symbol "IMTE".

On January 12, 2018, the Group entered into the following agreements in connection with the issue of a HK$23 million (equivalent to approximately A$3.8 million) Convertible Bonds (the "Convertible Bonds"): (i) Subscription Agreement between Marvel Digital Limited, a wholly-owned subsidiary of the Company ("MDL") and an independent third party entity ("Bondholder") for the Convertible Bonds, (ii) Deed of Guarantee between the Company and the Bondholder to guarantee the payment obligations under the Convertible Bonds and (iii) Put Option Deed between the Company and the Bondholder to repurchase any converted MDL Shares as described below.

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Pursuant to the terms of the Convertible Bonds, the Convertible Bonds were convertible into 75,000 Ordinary Shares of MDL ("MDL Shares") at a conversion price of HK$306.67 per share, which is equivalent to 20% of the then enlarged issued share capital of MDL.

On August 6, 2018, the Company's subsidiary company, MDL, completed the Share Subscription Agreement where the investor subscribed for 5% of the enlarged issued share capital of MDL for HKD15,000,000 (approximately A$2,573,000). Upon the issuance of shares in MDL, IMTE's shareholding in MDL was decreased from 100% to 95%.

On August 8, 2018, the Company's subsidiary company, GOXD Technology Limited ("GOXD") entered into an Equity Investment Agreement where the investor purchased 20% of the enlarged issued share capital of GOXD for US$4,000,000 (approximately A$5,378,000). GOXD is a subsidiary of MDL. Upon the issuance of shares in GOXD, MDL's shareholding in GOXD was decreased from 100% to 80%.

On December 12, 2018 the shareholders of the Company approved the settlement of A$8,000,000 debt owed to Marvel Finance Limited, the then ultimate holding company, by the issuance of 708,500 shares in the Company.

In April 2019, the Company and Teko International Limited ("Teko") entered into a distribution rights agreement for the territory of Hong Kong and Guangzhou Province, China ("Territories") for a proprietary conductive film and 3rd generation Polymer Dispersed Liquid Crystal ("PDLC") film. Pursuant to the Agreement, the Company will pay 50,000 IMTE shares upon the commissioning of one lamination line, (ii) for each of the next 3 years after the commissioning of the manufacturing line, IMTE shall pay Teko 50,000 IMTE shares should the annual revenue reach US$10 million or 100,000 IMTE shares should the revenue reach US$20 million, and (iii) 50,000 IMTE shares for each additional lamination line installed. In addition, for managing the operations, the Company will pay to Teko 25% of the net profits from the sale of the PDLC film products and the lamination operations. Mr. Con Unerkov and Mr. Cecil Ho, both the then CEO and CFO, respectively of IMTE, were then the directors and shareholders of Teko.

On January 3, 2020, the Convertible Bonds with MDL matured and then on January 21, 2020 the Company reached an agreement with Bondholder to repay HK$23 million (equivalent to approximately A$4.3 million) of the Convertible Bonds on the following schedule: i) HK$13 million (or about A$2.4 million) to be paid on January 17, 2020 and ii) the remaining HK$10 million (or about A$1.9 million) to be paid in equal instalments over four months. Furthermore, the interest rate is changed to 15% per annum. All of the instalment payments were made.

On January 20, 2020, the Company entered into a Convertible Note Purchase Agreement with CIMB Limited ("the CN Agreement"), an independent third party. Pursuant to CN Agreement, CIMB will purchase from the Company a 10% convertible promissory note ("the Note") in the principal amount of HK$14 million (or about A$2.6 million or about US$1.8 million) maturing in two (2) years from the date of the agreement. The holder of the Note has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$5.00 per share, subject to adjustment, over the term of the Note. On February 11, 2020, the Company and the holder of the Note entered into a supplement agreement to the CN Agreement to limit the total number of Ordinary Shares of the Company issuable upon conversion of the Note to no more than 19.99% of the total issued and outstanding Ordinary Shares of the Company. The supplement agreement further provides that the conversion price shall, in no event, be less than US$1.50 per share, subject to regulatory or shareholder approval. As at the date of this Annual Report, the Note was converted in January 2022 and a total of 664,871 shares were issued.

On February 20, 2020, the Company entered into a Securities Purchase Agreement for the sale of 158,730 ordinary shares of, no par value, of the Company and warrants ("Warrants") to purchase up to 126,984 Ordinary Shares ("Warrant Shares") to an accredited investor ("Investor") at a price of US$6.30 per share to raise gross proceeds of US1 million. The Warrants were exercisable for the period of 12 months from the date of issuance, at an exercise price of US$10.50 per Share. The Cash Offering is for US$1 million and generated net cash proceeds of approximately US$920,000 after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for partially paying off debts to a bondholder and general corporate purposes.

In May 2020, the Company disposed its research and development operations to independent third parties in order to rationalize its operations and focus on the marketing and sales of autostereoscopic 3D displays.

On August 6, 2020, IMTE entered into two conditional SP Agreements to buy 25.5% equity interest in Sunup from each of Nextglass Technologies Corp ("Nextglass") and Teko International Limited ("Teko") for US$750,000 each for a total consideration of US$1,500,000. The consideration paid was US$750,000 for each of Nextglass and Teko, and each of them was issued 250,000 Ordinary Shares in IMTE (the "Consideration Shares") at US$3.00 per share. Under the SP Agreements, IMTE could also pay a deferred consideration based on five times the annualized earnings for the two years following completion, less the initial consideration of US$750,000. For the duration of the agreements and until the deferred consideration is determined, Nextglass and Teko have the right to purchase their 25.5% Sunup equity interest back from IMTE through the restitution of the Consideration Shares if IMTE and Sunup terminate the directors and officers of Sunup without cause and without the consent of the Nextglass and Teko.

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On December 21, 2020 the Company entered into a contract with RE&I International Limited and Zhenjiang Nextek Glass Film Limited to purchase one lamination line for our switchable glass operation for total proceeds of US$1,650,000.

On December 21, 2020, the Company entered into a subscription agreement to subscribe for up to 60% equity interest in Greifenberg Capital Limited ("Greifenberg") for a total subscription amount of US$1,200,000. The initial subscription amount was US$500,000, which the Company subscribed. The Company has the option to subscribe for an additional US$700,000 if Greifenberg achieves certain milestones after May 31, 2021. The Company did not subscribe for the additional shares in Greifenberg. Greifenberg is engaged in the business of providing financial research and risk analysis on China's financial markets.

On December 21, 2020, Sunup, the Company's subsidiary entered into an assignment agreement to take up the rights to a Product Development Agreement for two new air purifiers. The contract provides for Sunup to own the trademark and the right to use the product design and the distribution right to sell the air purifier products worldwide. The total investment cost for the product development is approximately US$728,000.

On February 5, 2021, CIMC Marketing Pty Limited ("CIMC"), a wholly owned subsidiary of the Company entered into an agreement with Xped Limited (now known as Oakridge International Limited) ("Oakridge"), a company listed on the Australian Securities Exchange. Pursuant to the agreement, CIMC agreed to purchase up to 500 million shares for any shortfall of acceptance from other shareholders ("Shortfall Shares") in Oakridge's rights issue announced on January 25, 2021 at the subscription price of A$0.001 per share. On March 1, 2021, CIMC announced that it had purchased 500 million shares at a subscription price of A$0.001 per share for a total amount of A$500,000 or equivalent to US$381,000. The 500 million shares represented approximately 15% of the then total outstanding shares in Oakridge. Oakridge is engaged in the business of selling professional healthcare technology equipment and solutions to healthcare facilities. Recently Oakridge focused on expanding into delivering assisted independent living technologies utilizing synergies with Oakridge's Internet of Things (IoT) platform. Oakridge also intends to build on smart home and smart building solutions for a more efficient interactive environment for its occupants.

On February 22, 2021, the Company entered into a Securities Purchase Agreement for the sale of 625,000 Ordinary Shares of the Company to an accredited investor at a price of US$4.00 per share for US$2,500,000. The Company intended to use the net cash proceeds for working capital purposes and development of existing and new businesses.

On March 4, 2021, the Company entered into subscription agreements in a private placement with twelve investors outside the United States to subscribe a total of 573,350 shares in the Company at a price of US$4.00 per share for total proceeds of US$2,293,400. The use of the proceeds was to build out of manufacturing infrastructure and working capital.

On March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 Ordinary Shares of the Company to an accredited investor at a price of US$6.50 per share for gross proceeds of US$4,602,000. The Company intended to use the net cash proceeds for developing its current businesses, corporate expenditures, and general corporate purposes.

On July 6, 2021, the Company entered into three Securities Purchase Agreements ("SPA") with accredited investors for the sale of a total of 888,888 Ordinary Shares of the Company at a price of US$3.15 per share. The cash offerings generated net cash proceeds of approximately US$2,765,000 after deducting estimated expenses in connection with the offering. The Company intended to use the net cash proceeds for the purchase of equipment for the Company's electronic glass business and working capital.

On January 3, 2022, the Company entered into convertible note purchase agreements with 8 individual investors outside the United States to raise a total of US$10 million by the issuance of US$10 million convertible notes ("Note"). The Note bears interests at 6% per annum maturing in 2 years from the date of issuance of the Note. The holder of the Note has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$3.12 per share, subject to adjustment, over the term of the Note. The holder of the Note cannot convert the shares in the Company if such conversion would take the noteholder over 4.99% shareholding in the Company. As at the date of this report all the Notes were converted into a total of 3,205,128 shares in the Company. In addition, the noteholder also received a warrant representing 80% of the amount of the Note, raising an additional US$8 million if all the warrants are exercised. The warrants are for a term of 2 years from the date of the Note and can be exercised at US$3.74 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company. As at the date of this report, all the warrants are outstanding. The use of the proceeds from this fund raise was to support the acquisition and building out of manufacturing infrastructure and working capital of the Company.

On January 19, 2022, the noteholder holding a 10% convertible promissory note ("CN Note") in the principal amount of HK$14 million (or about A$2.6million or about US$1.8million) issued by the Company on January 20, 2020 converted the CN Note into 664,871 shares in the Company.

In March 2022, the Company announced the Board approved fund raising of up to US$20 million from the sale of our Ordinary Shares. In March 2022 and up to the date of this report, the Company has entered into Securities Purchase Agreements selling a total of 1,431,788 Ordinary Shares of the Company to accredited investors at a price of US$4.50 per share for a total gross proceeds of approximately US$6.4 million. The use of the proceeds was for the expansion of the lamination plant in USA, air filter operation, investment in new projects and working capital.

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In summary, the Group's business activities are manufacture and sale of nano coated plates for filters and air purifiers, the manufacture and sale of electronic glass, provision of halal certification and distribution of halal products, the operating of an online exchange platform for trading in digital assets and the provision of financial research.

B. Business Overview

IMTE is an Australian company and in 2021 was engaged in the business of glasses-free 3D (also known as autostereoscopic 3D) display, the manufacture and sale of nano-coated plates for filters and air purifiers, the sale of electronic glass, IoT products and financial research. At the end of 2021, the Company stopped the business of glasses-free 3D due to the adverse effect of pandemic on the sales of 3D products to consumer and advertising sectors.

Breakdown of total revenues by category for the years ended December 31, 2021, 2020 and 2019:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment |  | 3,980 |  | 1,427,157 |  | 1,273,921
Sales of software and technology solutions |  | - |  | - |  | 1,504
Sales of nano-coated plate for air-filters products |  | 189,133 |  | 317,472 |  | -
Interest income |  | 18,864 |  | 6,197 |  | 115,762
|  | 211,977 |  | 1,750,826 |  | 1,391,187

Breakdown of total revenues by geographic market for the years ended December 31, 2021, 2020 and 2019:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Korea |  | - |  | 315,034 |  | -
Singapore |  | - |  | 2,439 |  | -
Malaysia |  | 78,123 |  | - |  | -
United States |  | 104,164 |  | - |  | -
Hong Kong |  | 22,844 |  | 1,366,200 |  | 1,310,912
China |  | 6,846 |  | 60,956 |  | 80,275
|  | 211,977 |  | 1,744,629 |  | 1,391,187

At the beginning of 2019, IMTE was engaged in the business of development, manufacture and distribution of glasses-free 3D (also known as autostereoscopic 3D) ("ASD") display. 2019 was a challenging year for our ASD business as our development of technologies was undercapitalized and much of our work plan was postponed or delayed until funding was secured. We also faced difficulties with our subcontractors to resolve the manufacturing process problems which further delayed sales. In early 2020, the COVID-19 pandemic hit China and then spread to the rest of the world, putting our business on hold for most of 2020 and 2021. At the end of 2020, the economic outlook for retail business was uncertain as the extent of the people's behaviour changed to stay at home more and rely on pick-up and delivery services. This drastically affected our 3D advertising platform business.

In May 2020, we divested our research and development operation as a cost cutting measure. We decided to focus on the marketing and sales of ASD products and services, and outsource all development works with defined budgets.

In June 2020, the Company diversified its business by dedicating resources to the electronic glass and the nano-coated plate filters businesses. These two businesses are not affected by COVID-19 as much as the ASD business, which was operating in the retail advertising markets. In particular, the air filter products should not be affected as much as the ASD business because, in a pandemic environment, consumers will look to purchase devices that cleanse the air. The electronic switchable glass product is a commercial product that is less susceptible to short-term interruptions in a pandemic environment because it does not depend on retail and or travel sector.

In line with our renewed business strategy, in August 2020, we acquired 25.5% interests in Sunup Holdings Limited ("Sunup") from each of Nextglass Technologies Corp. and Teko International Limited for US$750,000 each. In total, we acquired 51% of Sunup for a total consideration of US$1,500,000, which was paid by the issuance of a total of 500,000 shares in the Company at a price of US$3.00 per share. Sunup is engaged in the manufacturing and sale of nano-coated plates used in air filters. Sunup has set up its equipment and began commercial production in November 2020.

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Consistent with our current strategy to diversify and expand our business operations, on December 21, 2020, the Company entered into an agreement to acquire the majority interest in Greifenberg Capital Limited ("Greifenberg"), a company that analyses credit risk using Big Data and Artificial Intelligence, for a total subscription of up to US$1,200,000. This investment provides the Company with an opportunity to integrate its business operation with use of new data and Artificial Intelligence to foster growth in the new digital economy. We believe that strategically integrating our businesses with Artificial Intelligence and Big Data tools will enhance our business operations, especially in the advertising sector such as tracking or predicting trends in consumer behaviour. As at the date of this Report, the Company has only subscribed for US$500,000 in the capital of Greifenberg.

Consistent with our current strategy to diversify and expand our business operations, on January 28, 2021 the Company entered into an agreement to acquire a 70% equity interest in Shenzhen Koala Wisdom Fire Engineering Co., Ltd., a company in the business of Internet of Things. Pursuant to the agreement, the vendors will enter into contracts for deployment of an IoT Detection System of not less than RMB200,000 within 60 days from the date of the agreement. IMTE will purchase the 70% equity interest in Shenzhen Koala for US$40,000 ("Initial Consideration") by the issuance of a total of 10,000 Ordinary Shares in the Company. In April 2021, the parties agreed to cancel this agreement and to negotiate another agreement involving other IoT projects in the future.

On February 5, 2021, CIMC acquired 500 million shares representing approximately 15% or A$500,000 (approximately US$381,000) in Xped Limited (now known as Oakridge International Limited) ("Oakridge"), a company listed on the Australia Securities Exchange at the subscription price of A$0.001 per share. Oakridge is engaged in the business of selling professional healthcare technology equipment and solutions to healthcare facilities. Oakridge is focused on expanding into delivering assisted independent living technologies utilizing synergies with Oakridge's internet of Things (IoT) platform. Oakridge also intends to build on smart home and smart building solutions for a more efficient interactive environment for the occupants. Our investment provides a strategic investment into the technology and healthcare markets in Australia.

At the end of 2021, the Company decided to stop selling ASD products to curtail ongoing overhead costs in the ASD operation as the demand for such products in the retail and advertising markets were drastically reduced due to the effects of the pandemic.

On December 29, 2021, the Company entered into an Assignment and Assumption Agreement to take over the rights and obligation on a Cooperation Agreement on developing a Blockchain business focusing on digital asset market platform mainly focusing on NFT (Non-Fungible Token) trading market. Under the Cooperation Agreement, the Company shall invest up to US$1 million for 60% equity interests in Ace Corporation Limited to develop, establish, and operate a trading marketplace platform called "Ouction" at www.ouction.io. Ouction platform will be an interactive experiencing solution designed with dynamic image cryptographic verification technology which will serve as a bridge for O2O (Online to Offline) transaction. This will enable the Ouction platform to not only verify virtual asset transactions, but also provide encryption and Blockchain notarized digital certificates of physical assets for a fairer and more credible platform trading experience to e-commerce companies and their users. Ouction is expected to adopt decentralized technologies in the fields of games, fintech, film & TV, culture, and e-commerce. Ouction also plans to develop cross-industrial synergy and economic value from the new NFT marketplace it creates. Ouction's marketplace plans to be a niche market in art, historical artifacts, photos and videos.

On January 4, 2022, the Company announced its intention to divest its China electronic glass business by either selling the business unit or undertaking a spin off the business unit into a stand-alone, publicly traded listed company. The Company expects to implement the reorganization during 2022 and the resulting entity will be independent from the Company and exclusively focused in developing, and building the electronic glass business in China. The Company will continue with the electronic glass business by focusing on the lamination operation in the United States.

On January 20, 2022, the Company entered into a subscription agreement for 60% equity interests in World Integrated Supply Ecosystem Sdn Bhd. ("WISE"), a Malaysia company engaged in the business of the provision of halal certification to qualified businesses/operations, the establishment halal products supply chain, and sale of halal products. WISE will be providing halal certification working with the JAKIM, a department of the Malaysia government mandated to conduct and manage the halal certification process. WISE is working towards being appointed by JAKIM Malaysia as an accredited certification body to conduct the auditing process and certify product application. WISE will also work with other certification bodies worldwide that have been accredited by JAKIM, thereby extending our reach to the global markets.

Currently, the Company is focusing on the marketing and distribution of halal products, the manufacture and sale of nano coated plates for air filters and air purifiers, operating the Ouction digital asset marketplace, and manufacture and sale of switchable glass, the sale of IoT, and financial research.

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IMTE Products and Services

Switchable Glass Products

Due to the pandemic, the installation for our lamination equipment has been delayed till the second half of 2022. We plan to have 2-3 lamination lines with capabilities to produce annually between 160,000 - 240,000 m2 of laminated glass in China and 2 lamination lines with capabilities to produce annually about 160,000 m2 of laminated glass in the USA. The total manufacturing capability of 320,000 m2 of laminated glass allows us to support large real estate projects, initially on a subcontract basis for our partners, and then to develop our own customers and markets. The switchable glass is a new form of material mainly for the real estate industry for both external and internal walls for new buildings and or homes. The real estate and construction industry in the USA, China and other Asian countries, in particular, are expected to grow with the economies in these regions. Our energy saving switchable glass are suitable for environmental buildings/homes of tomorrow.

Buildings today are built with windows for aesthetic purposes and to allow for natural light and outside views. However, normal glass has two significant draw backs in letting the heat and the glare from sun light to come directly into the building. To compensate for this, we use blinds and curtains to shield us from these uncomfortable occurrences. Heat entering the buildings requires more energy to cool the internal environment, normally the use of air conditioner which is detrimental to the environment and costly to the building owner.

Our laminated switchable and energy saving glass can provide more natural light and outdoor views while minimizing heat and glare. This is achieved by adjusting the tinting and transparency in the glass (from transparent to opaque states, and vice versa) automatically by the use of sensors in determining the amount of sunlight to allow into the interior of the building.

Our lamination process is to laminate our partner's proprietary PLDC film between the glass to enable the glass to go from transparent and opaque, and vice versa. In the near future, we will also develop sensors to operate and manage each switchable glass to optimize energy savings and customer experience.

Our energy saving glass uses electrochromic technology from our supplier, Nextglass Technologies Corp. Electrochromic is the phenomenon by which light transmission through a transparent material, changes when an electrical voltage is applied to it. Our energy saving glass can modulate ultraviolet, visible and infrared light simultaneously and can block more than 99% of solar radiation and achieve reduced energy consumption. This ability to control the transmission of light enables us to automatically control the amount of heat and glare into a building.

Our Advantages

Our switchable glass and energy saving glass provides multiple benefits to users and building owners.

| ● | Sustainability and Energy Efficiency: Our switchable glass reduces energy usage in buildings by blocking heat from entering buildings and thus reducing the energy required to cool buildings. Our switchable glass also helps bring in natural light reducing the daytime lighting energy requirements.

| ● | Improved User Experience: Our energy saving glass will allow users to work closely to the glass/windows without the feeling of discomfort from heat and glare coming through the glass. Our energy saving windows can control the sun light and the heat from coming into the building for the comfort of the occupants.

| ● | Cost savings from switchable glass saves us from putting up blinds or curtains and reduce the ongoing maintenance costs for the property owner.

Market Opportunities

We believe that the market for switchable and energy saving glass will include internal and external walls and, other applications for privacy walls/windows such as in hospitals and offices.

The growing demand for smart buildings in the China in the next 10 years gives the Company an exciting platform to launch switchable and energy saving glass. The development of IoT, automation and other high-tech industries in the Greater Bay Area in China (Guangdong Province, Hong Kong and Macau) leads to further development of smart buildings and smart cities where our switchable glass can be specified building material in new buildings by real estate developers and architects. A truly intelligent building needs make its external walls smart through energy savings and aesthetically pleasing to occupants while having a smaller carbon footprint.

For the United States, we are working with our partners on a contract manufacturing arrangement to support their orders in the United States. In the longer term we will seek approval from our partner Nextglass to enter the market directly.

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Our Customers

We plan to sell our products to the construction and real estate industry for properties such as train stations, airports, convention centers, commercial offices, hospitals, residential homes and apartments.

We plan to engage with commercial building owners, architect, real estate developers and general contractors. We believe that market adoption of our products is strongly influenced by an appreciation of the cost savings to owner and or tenants; and the overall improvement to the environment by reducing the carbon footprint of the buildings using our switchable and energy saving glass.

Our Competition

We compete in the commercial window industry and the electrochromic glass industry, both of which are highly competitive in price and product functionality. We believe that our main sources of competition are existing commercial window manufacturers, electrochromic glass manufacturers, and companies developing smart window products. We believe the primary competitive factors in our markets are:

● Price,

● Product performance,

● Product functionality quality and durability,

● Ease of installation and maintenance, and

● Technological innovation.

Growth Strategies

We will need to introduce to the real estate industry participants i.e. developers and architects of the advantages of our switchable and energy saving glass products. We will also seek to expand the usage of our switchable glass to provide internal privacy walls such as in offices and hotels. The growth in the use of switchable and energy saving glass is expected to be in applications where cost savings and privacy consideration in which glass is used as a barrier to the outside environment.

Nano-coated Plate Filter Products

In August 2020, the Company purchased equipment to manufacture nano-coated plate filters using a new technology for air and water filters. These filters provide better clean air and eliminate small particle pollutants in the air for large indoor meeting places and in closed environment where the air is circulated i.e. trains, taxi, subways, buses, cruise ships, etc.

The current technology of Plasma-Enhanced Chemical Vapor Deposition (PECVD) is too expensive and causes emission of toxic material. However, we are using a new PECVD technology, patent owned by our Korea partner, that manufactures the product at a much lower costs than the traditional PECVD technology and the process does not emit toxic material in the manufacturing process. The technology we use is superior in performance and less costly to produce.

What is Plasma-Enhanced Chemical Vapor Deposition

In PECVD, one or more gaseous reactants are used to form a solid insulating or conducting layer on the surface of a wafer. This layer is then enhanced by the use of a vapor containing electrically-charged particles or plasma, at lower temperatures.

PECVD processing enables deposition at lower temperatures. A plasma is formed from the gaseous chemicals in a reaction chamber. In contrast to traditional Chemical Vapor Deposition, where higher temperature is used to cause reactions, in PECVD the plasma provides the energy needed to cause the reaction, which means that it can be done at a lower temperature.

The positive effect of photo catalytic air purification and sterilization are:

● Eliminating all kinds of particles.

● Remoinge odors.

● Eliminating cigarette smoke and carcinogens.

● Removing VOCs contained in the dust.

● Increasing negative ions and oxygen in the close environment will increase.

● Eliminating contact with allergen inducing substances and have the effect of allergy treatment.

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We have started manufacturing and selling the air filter plates product in Q4 2020. We have also invested in our own proprietary design of a family of air purifier products which are expected to be available in 2022. Due to the COVID-19 pandemic and the integrated chip shortage worldwide, the distribution and manufacturing of our products have been delayed until the second half of 2022. We will start to market our generation 2 air filter/purifiers in South Korea, United States, China and Southeast Asia. The initial market response to our purifiers has been very positive based on the feedbacks from the brand distributors willing to carry out products, and we expect to secure orders in Q3 2022, once the chip shortages are resolved.

Our nano-coated plate products eliminate particles, eliminate germs and viruses, eliminate micro molecules that are harmful to human body and odors in the air. We have sent the product to testing labs in Korea to certify our air filters eliminate particles in the air. With such test results we believe that we will receive many more enquiries and sales orders. In the second half of 2022, we will seek to sell our products in North America, Europe and Asia.

Our sales strategy is to appoint distributors and or channel partners for certain territories and countries while the other markets we will sell direct to consumers online to build our own customer base and branding. We will also seek manufacturing and distribution partners as part of our growth strategy.

Our product strategy is to build a product line catering to all price points. We may invest in more designs for specific markets and applications such as air purifiers for baby care, aged care, and healthcare environments. As our air filters/purifiers are designed to be mobile for personal use, there are many applications where users are in confined space such as travellers on trains or buses.

Going forward, we will look at using this technology to manufacture water filters for the home, and for the food sanitary water treatment industries.

Internet of Things ("IoT") Products

IMTE will be focusing on IoT products as one of the core businesses to be engaged in the future. In February 2021, the Company took a strategic 15% stake in an ASX company Oakridge International Limited (formerly known as Xped Limited) ("Oakridge"). Oakridge is engaged in the business of IoT and healthcare technologies to assisted healthcare, age homes and self-care homes.

The Company is seeking opportunities to invest in IoT technologies locally in Asia, and then bring these technologies to other markets such as in Australia that could benefit from first mover advantage.

Financial Research

In December 2020, the Company entered into an agreement to invest up to US$1.2 million for up to 60% in Greifenberg Capital Limited ("Greifenberg"), a Hong Kong company specialized in the development and sale of risk analytics for Chinese and East Asian credit markets.

Greifenberg Business

The Greifenberg Business is the development of risk analytics for emerging fixed-income markets, with an initial focus on China, and eventual coverage of all the major emerging markets. Risk analytics will be a catalyst to accessible and investible one.

China's bond market is the world's second largest with a market capitalization of about US$15 trillion.

| ● | This includes US$3.7 trillion of non-financial corporate bonds and US$2.1 trillion of financial bonds.

| ● | Foreign ownership of Chinese bonds nearly doubled during 2017 and 2018 and is likely to increase more rapidly.

| ● | 2,307 institutional investors were registered for direct trading in Chinese bonds through Bond Connect as of November 2020, and 612 institutional investors now are trading in the interbank bond market.

Although China's bond market is smaller than the one in the US, real interest rates for government bonds(the difference between the nominal yield and the rate of change of consumer prices) are positive in China and negative in the US, Europe and Japan, and the aggregate yield offered in China's fixed income is greater than that of the US bond market. China's credit market should be a magnet for global investors, but foreign participation is discouraged by two related problems, namely inadequate resources for credit ratings and risk analysis, and poor secondary market liquidity.

The International Capital Markets Association found in a January 2020 survey: "Interviewees complain of very little transparency and price visibility in the secondary credit markets, making it difficult to know where to go to find prices. They report that many Tier 1 banks limit their market-making capacity in credit to perhaps only the 20-or-so most liquid issues, with a skew towards financials. Meanwhile, less liquid issues, in particular NFCs, tend to be traded by the Tier 2 or Tier 3 banks and securities houses, and even then, interviewees note that this tends to be more in a broking capacity than as a true market-maker."

Lack of transparency and liquidity have discouraged domestic as well as foreign participation in what should be one of the world's most attractive markets.

| ● | Only one US exchange-traded fund invests in Chinese high-yield bonds, the Kraneshares CCBS China Corporate High Yield ETF, and its net assets are only $7.84 million. The Kraneshares fund subsequently switched to an Asia Pacific High Yield Fund.

| ● | Uncertainty rather than performance is the main barrier to investor sponsorship of China's credit market.

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Two Chinese Credit Markets

China's credit market in fact is split into two markets, as the histogram below illustrates.

| ● | There are two universes of credit, one (on the left of the chart) composed of bonds of quasi-governmental entities and policy banks, with an average yield of about 4%, and another (on the right of the chart) composed of corporate issuers with an average yield of about 7%.

| ● | Illiquidity and lack of transparency characterize the right side of the distribution.

Huarong Asset Management and Property Issuers Show Need for Risk Analytics

Recent volatility in the price of bonds issued by Huarong Asset Management, the legacy portfolio of the Industrial and Commercial Bank of China's distressed assets, illustrates the problem. The job of distressed asset managers is to either liquidate or recapitalize troubled companies and raise salvageable businesses out of distress. If investors do not have the tools to assess the risk of high-yield companies, they will stay clear of distressed companies. The state-sponsored distressed managers remain a dead weight on the market. In late 2021, several of China's leading property companies, the largest group of issuers in the high-yield market, became distressed. Bondholders suffered severe losses. In these and other cases, the credit quality of issuers was not adequately captured by Chinese and international rating agencies. Risk analytics that embody advanced technology can substantially improve risk assessment and increase participation in China's high-yield market.

China is eager to improve credit market liquidity.

| ● | In April 2021, China's securities regulator announced that high-yield corporate bonds could be pledged as collateral in the interbank repurchase-agreement market, an incentive to improve liquidity. The absence of reliable risk measurement, though, remains a crucial barrier to improved market liquidity.

| ● | In January 2020 China's largest rating agency, China Chengxin International Credit Rating Co., was suspended for three months after a state-owned utility, Yongcheng Coal, defaulted on a short-term RMB 1 billion bond issue shortly after the agency assigned the bond a top AAA rating. China's National Development and Reform Commission had ranked the suspended firm as the best among the country's credit rating agencies, and it was the largest provider of ratings during the third quarter of 2020.

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Risk Measurement is the Key to Unlocking the Value of Chinese Credit

The key to unlocking the underlying value of China's corporate bond market is risk measurement. That is not a uniquely Chinese problem.

As recently as the early 1980's, what was then the largest fixed income market in the world, the market for US home mortgage lending, was entirely illiquid. Mortgages were held as long-term portfolio investments by more than 11,000 savings institutions who lacked the capital markets access and capacity to manage interest rate risk. The sharp rise in US interest rates during the early 1980s made almost all the savings institutions insolvent.

| ● | By the late 1980s, US mortgages had become one of the world's most liquid fixed-income markets with broad global participation, due to 1981 legislation that created mortgage-backed securities and gave rise to a liquid secondary market in home mortgages.

| ● | Mortgage cash flows are complex, and the advent of Option-Adjusted Spread models made available through financial institutions gave investors a standard gauge of risk compensation across a wide variety of securities.

| ● | The profit opportunity for the financial sector made fixed income the main source of brokerage industry revenues for the next two decades.

During the early 2000s, modelling of corporate bond default risk created a multi-trillion-dollar market in structured credit products, including Collateralized Debt Obligations (CDOs).

| ● | As in the earlier case of mortgage-backed securities, quantitative risk models made possible the distribution of the cash flows of pools of corporate obligations to different investors with different risk tolerances and income requirements.

| ● | Issuance of CDOs globally rose from US$65 billion in 2000 to US$431 billion in 2006.

China's Opportunity is One of the Biggest in Market History

China's credit market presents an opportunity as great or greater than mortgage-backed securities and structured credit in the United States.

Greifenberg Digital's principals were pioneers in the development of fixed-income risk models in the United States and Europe, and participants in the revolution in risk analytics that built the modern securities industries. We now apply that experience to China's credit market, with specifically Chinese characteristics.

Greifenberg has built a suite of risk analytics combining the credit risk methods, including:

| 1) | Proprietary analytics for corporate financials;

| 2) | Contingent Claims Analysis of distance-to-default;

| 3) | Artificial-Intelligence based fraud detection;

| 4) | Natural Language Processing of news and social media comments on issuers;

| 5) | Spread decomposition into credit risk and liquidity premia; and

| 6) | AI-driven matrix pricing to estimate fair value prices for illiquid bonds.

Greifenberg employs machine learning to determine a best estimate of corporate bond risk.

Greifenberg Risk Analytics give market participants the most advanced available tools for trading and portfolio management of Chinese corporate bonds. They will assist:

| 1) | the trading and sales businesses of broker-dealers,

| 2) | the distribution business of private client services and exchange-traded funds, and

| 3) | the portfolio management business of asset managers.

Greifenberg's mission is to set a standard for risk analytics as a catalyst for a thriving, liquid, and globally-sponsored Chinese credit market.

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The same methods can be applied to credit markets outside of China.

Market and Competitive Landscape

The market for credit risk analysis in China is in early stages of development. There is presently no competitor who offers a credit risk management system comparable to Greifenberg's.

China's ratings agencies have poor credibility. Earlier this year China's largest rating agency, China Chengxin International Credit Rating Co., was suspended for three months after a state-owned utility, Yongcheng Coal, defaulted on a short-term RMB 1 billion bond issue shortly after the agency assigned the bond a top AAA rating. That leaves a vacuum which no other firm has filled.

The application of Artificial Intelligence to "Big Data" sets is frequently cited in advertising by credit firms, but the credibility of such systems remains low. According to reports in Chinese business media, the decision of Chinese regulators to postpone the planned IPO of Ant Financial in November 2020 reflected in part lack of confidence in the company's credit risk management systems, which were widely believed to represent the state of the art.

What distinguishes Greifenberg's approach is the simultaneous use of several risk filters and a machine-learning overlay that weights the relevance of each risk filters by its actual predictive value in anticipating credit events. Several prospective competitors offer one of the risk filters employed by Greifenberg, but Greifenberg is unique in employing all of them. These include:

| 1) | Natural Language Processing ("dynamic ontology") of news and social media as well as government publications;

| 2) | Contingent Claims Analysis (based on options theory and observed equity price movements and balance sheet structure);

| 3) | Analysis of reported corporate information;

| 4) | Fraud detection (based on Artificial Intelligence analysis of the whole credit universe); and

| 5) | Corporate governance analysis ("ecosystem" scoring).

The American ratings agency Standard and Poor's has developed a National Language Processing "sentiment index" based on published comments on corporate bond issuers (the "S&P system"). The S&P system appears to lacks the capacity to track regulatory risk, an important factor in China's bond market. CB Insights provides Natural Language Processing but concentrates on "venture capital, start-ups, patents, and partnerships" rather than on credit.

None of our prospective competitors now combines Contingent Claims Analysis with machine-learning enhancement of financial statement analysis along the lines of Greifenberg's "meta-model."

Several competitors perform analysis of reported corporate information. This is limited by the quality of available data. There are numerous companies providing financial data but their impact is limited by data quality.

We believe the one prospective competitor with capabilities closest to Greifenberg is China Securities Credit Investment (CSCI), in association with Oliver Wyman. However, CSCI is also limited by several factors, most importantly its association with Pengyuan, one of China's oldest credit rating systems. Existing ratings agencies have not performed well during the default wave of the past year, and Pengyuan was fined by the People's Bank of China in January 2021 for operating without a proper license and failing to file timely updates. According to the Business Information Industry Association, regulators in doing so were "delivering a severe reprimand to the financial data industry."

The poor performance of China's credit rating agencies provides a unique opportunity for Greifenberg's approach. The problems of China's existing fintech sector indicate that Greifenberg faces little hurdles to market entry.

The biggest business we face is that a large competitor might seek to reproduce our system and market it in competition with Greifenberg. That could work to our advantage as well as disadvantage, provided that we conduct a rapid and effective branding exercise.

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NFT Trading Marketplace

We have set up our NFT online trading presence named Ouction at www.ouction.io. This platform is an interactive experiencing solution designed with dynamic image cryptographic verification technology which will serve as a bridge for O2O (Online to Offline) transaction. This will enable the Ouction platform to not only verify virtual (digital) asset transactions, but also provide encryption and Blockchain notarized digital certificates of physical assets for a fairer and more credible platform trading experience to e-commerce companies and their users.

We are now working on our marketing and promotional plans to attract more users to our Ouction platform. The Ouction platform will focus on art and pop culture in Asia.

Halal Certification and Products

We will be developing the business of halal product and services through our subsidiary World Integrated Supply Ecosystem Sdn. Bhd. ("WISE") based in Malaysia. WISE's long-term strategy is to build a global supply chain for halal products on a secure digital marketplace for growers, producers and traders. WISE will focus on its business of the provision of halal certification to qualified businesses/operations, the establishment halal products supply chain, and sale of Halal products. Currently due to the COVID-19 pandemic and the quarantine and restriction on travel in Malaysia, Hong Kong and China, we are not able to implement the halal certification in the target markets of Southeast Asia and China. The demand for halal certification by food manufacturers and producers in Asia has been very strong. However, with the pandemic, we expect to launch this segment of our business in the second half of 2022 when we expect the travel and quarantine restrictions to be lifted.

In April 2022, the Company signed a distribution agreement with a Paris, France based distributor to distribute our halal products. We have placed our initial order of products and we expect the products to arrive by the end of Q2 2022 and sales to start in Q3 2022. This is our first foray into the European market, and we expect it to expand to Germany, Italy and United Kingdom in the next 12 months.

Currently we are only distributing halal food products, but we expect to expand our product line as we develop our sourcing and distribution network. We will seek to work with manufacturers / producers in Asia and the Middle East to bring halal products to the European markets. We will also seek to sign up distributors and halal suppliers in North America to further expand our halal network.

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Future Developments

The focus of the Group is to continue to develop its businesses in switchable glass, nano-coated plate filters, IoT products, halal certification process and sale of halal products, operating a digital asset marketplace platform, and financial research. We have experienced significant losses in the past 3 years and the Group needs to build a more diversified business and revenue base. The initiatives in 2021 to curtail operating costs and to start new revenue stream outlined above is a move toward bringing positive results.

Due to recent losses incurred in operations as a result of the pandemic and in order to reduce the overhead expenses of the Group, in December 2021 we stopped selling 3D display products. This will enable the Group to rationalize its operation and overhead costs, and focus on developing other businesses.

The future business plans depend on adequate capital being available to the Group. The Company will be reviewing potential acquisitions and or strategic partnerships /co-operations that can add value to the Group. Management will also seek synergistic acquisitions to build revenue and bring in resources to complement and to supplement our internal capabilities to become a well-managed and fast-growing technology company.

Market and Industry Analysis

Nano-coated plate filter

The nano-coated plate air filters is expected to be a popular product during a pandemic where consumers are weary of the pollutants in the air. Thus, a product that can filter particles in the air will stimulate interest in the healthcare industries.

Switchable glass

The market for switchable glass in China, Hong Kong and USA is expected to grow as the roll out for more smart buildings. The switchable glass will reduce costs for building owners by reducing the amount of heat and glare in buildings. Consequently, buildings will require less energy to cool its interiors and the carbon footprint.

Sourcing and Manufacturing

For certain products such as halal or IoT products, we will source manufacturer to supply us the products for sale. However, for nano-coated plates and lamination of switchable glass, we will manufacture these products for sale.

Marketing, Distribution and Sales

We plan to build our own brands for our air purifier, halal and switchable glass products when we launch our products to market.

Sources and Availability of Raw Materials and Principal Suppliers

Other than our lamination line for switchable glass, our source and availability of raw materials is not dependent on a principal supplier. For the lamination operation we are reliant on our film manufacturer to supply film to be used in the lamination process. To mitigate the situation, we will place sufficient order of this raw materials so that we are not delayed in our manufacturing process.

Inventory, Operating Capital and Seasonality

Our inventory levels are expected to be modest relative to our sales. Our policy is to manufacture to order. Thus, we do not expect to keep much inventory other than key components, unless under extraneous circumstances such as material shortage i.e. chip shortages or expected prolonged manufacturing interruption i.e. labor strike.

We will monitor our operating capital to meet our obligations as they come due. We monitor our operating budgets in view of our operating cash flow requirements.

We do not expect any seasonality to our business other than normally expected in the consumer electronics business where there is a general let down in the first quarter of each year after the Christmas season.

Dependence on Major Customers

In 2021, we had limited sales. Our strategy going forward is to appoint distributors to sell our products and services, and we will maintain a small sales and marketing team in order to keep our operating costs low. The distributors will have their own major customers, but consider as a whole, we are not dependent on only a few specific customers in order to derive sales as we build up our distributor network and customer base.

Research and Developments

We will rely on our partners and or third parties on development of new technologies in nano-coated plates and lamination lines for switchable glass.

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Intellectual Property

We rely on unpatented trade secrets, know-how and other non-confidential information as well as our proprietary technological innovation and expertise that are protected in part by confidentiality and invention assignment agreements with our employees, advisors, consultants and associates.

Patent matters in electronics industry are highly uncertain and involve complex legal and factual questions. The availability and breadth of claims allowed in electronics patents cannot be predicted. Statutory differences in patentable subject matter may limit the protection the Company can obtain on some or all of its licensed inventions or prevent us from obtaining patent protection either of which could harm our business, financial condition and results of operations. Since patent applications are not published until at least 18 months from their first filing date and the publication of discoveries in the scientific literature often lags behind actual discoveries, we cannot be certain that we, or any of our licensors, were the first creator of inventions covered by pending patent applications, or that we or our licensors, were the first to file patent applications for such inventions. Additionally, the grant and enforceability of a patent is dependent on a number of factors that may vary between jurisdictions. These factors may include the novelty of the invention, the requirement that the invention not be obvious in the light of prior art (including prior use or publication of the invention), the utility of the invention, and the extent to which the patent clearly describes the best method of working the invention. In short, this means that claims granted in various territories may vary and thereby influence commercial outcomes.

While we intend to seek patent protection for our products and technologies, we cannot be certain that any of the pending or future patent applications filed by the Company, or licensed to us, will be approved, or that IMTE will develop additional proprietary products or processes that are patentable or that we will be able to license any other patentable products or processes. IMTE cannot be certain that others will not independently develop similar products or processes, duplicate any of the products or processes developed or being developed by the Company or licensed to us, or design around the patents owned or licensed by us, or that any patents owned or licensed by us will provide us with competitive advantages.

Furthermore, we cannot be certain that patents held by third parties will not prevent the commercialization of products incorporating the technology developed by us or licensed to us, or that third parties will not challenge or seek to narrow, invalidate or circumvent any of the issued, pending or future patents owned or licensed by us.

Our commercial success will also depend, in part, on our ability to avoid infringement of patents issued to others. If a court determines that we were infringing any third-party patents, we could be required to pay damages, alter our products or processes, obtain licenses or cease certain activities. We cannot be certain that the licenses required under patents held by third parties would be made available on terms acceptable to us or at all. To the extent that we are unable to obtain such licenses, we could be foreclosed from the development, export, manufacture or commercialization of the product requiring such license or encounter delays in product introductions while we attempt to design around such patents, and any of these circumstances could have a material adverse effect on our business, financial condition and results of operations. We may have to resort to litigation to enforce any patents issued or licensed to us or to determine the scope and validity of third-party proprietary rights. Such litigation could result in substantial costs and diversion of effort by us. We may have to participate in opposition proceedings before the relevant patent office, or in interference proceedings declared by the United States Patent and Trademark Office, to determine the priority of invention for patent applications filed by competitors. Any such litigation interference or opposition proceeding, regardless of outcome, could be expensive and time consuming, and adverse determinations in any such proceedings could prevent us from developing, manufacturing or commercializing our products and could have a material adverse effect on our business, financial condition and results of operations.

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Material Contracts Related to Intellectual Property and Commercialization Rights

None.

Government Regulations

The market for our lamination glass, nano-coated plate filter product and halal products are affected by a wide range of U.S. and international regulations, including regulations related to taxation and import-export controls, which could negatively impact the market for these products we sell or decrease potential profits to the Company. Pursuant to the Tariff Act of 1930, as amended, the Trade Act of 1974 and regulations promulgated there under, the United States government charges tariff duties, excess charges, assessments and penalties on many imports. These regulations are subject to continuous change and revision by government agencies and by action of the United States Trade Representative and may have the effect of increasing the cost of goods purchased by the Company or limiting quantities of goods available to the Company from our overseas suppliers. As some of our products are sold in China, we will need to follow the Regulations of the People's Republic of China on Import and Export Duties which are amended from time to time and may have the effect of increasing the costs of goods sold by the Company into China.

Costs and Effects of Compliance with Environmental Laws; Environmental Matters

We are not aware of any material costs or impacts on our business related to compliance with federal, state or local environmental laws regarding the products we intend to market and sell.

Insurance

We do not carry any kind of product liability or other business insurance.

Legal and Administrative Proceedings

We are not part to any material legal or administrative proceedings, and we are not aware of any threatened material legal or administrative proceedings against us.

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C. Organizational Structure

During the year and as at December 31, 2021, we have the following subsidiaries and their corporate details and business activities are listed below:

Subsidiary Name | Place of Incorporation | % held | Business scope
Binario Ltd* | British Virgin Islands | 100% Direct | Investment holding company
CIMC Marketing Pty Ltd | Australia | 100% Direct | Management services, and investment holding
Colour Investment Limited* | Hong Kong | 100% Direct | Investment holding company
Cystar International Ltd* | Hong Kong | 100% Indirect | Sale of software and provision of consultancy services
Cystar International (Shenzhen) Limited * | China | 100% Indirect | Dormant
Digital Media Technology Ltd* | Labuan, Malaysia | 100% Indirect | Dormant
GOXD International Limited * | Hong Kong | 80% Indirect | Distribution of digital picture frame
Grand Dynasty Limited # | Hong Kong | 100% Direct | Investment holding company
Grand Dynasty (Zhenjiang) Co., Limited # | China | 100% Indirect | Dormant
Greifenberg Digital Limited # | Canada | 40.75% Direct | Investment holding company
Greifenberg Capital Limited | Hong Kong | 40.75% Indirect | Administrative services
Greifenberg Analytics Limited # | Canada | 40.75% Indirect | Online analytic financial research services
IMTE Limited (Formerly known as Great Gold Investment Limited) | Hong Kong | 100% Direct | Treasury and administrative services
Itana Holdings Limited # | Canada | 100% Direct | Investment holding company
IMTE Asia Limited # | Hong Kong | 100% Direct | Administrative service
Renfrew International Limited # | U.S.A. | 100% Direct | Lamination production in United States
Lonsdale International Limited # | U.S.A. | 100% Direct | Development in filter
Smartglass Limited | Hong Kong | 100% Direct | Sales of distribution of switchable glass and consultancy services
Smart (Zhenjiang) Intelligent Technology Limited (Formerly known as Smart (Shenzhen) Technology Limited) | China | 100% Indirect | Marketing and distribution
Sunup Holdings Limited | Hong Kong | 51% Direct | Manufacturing of filter plates
Sunup Korea Limited | Hong Kong | 51% Indirect | Sales of filter plates and air filter products

* Disposed during the year.

# Established during the year

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D. Property, Plant and Equipment

As of December 31 2021, the Company has its registered office in Adelaide, Australia and its principal and main operating office located in Hong Kong, an administration office in Shenzhen, China and a factory located in Zhenjiang, China. In Australia in 2021, the Company rented a 100 square feet office and 2 car parks on a month to month basis at a total cost of A$1,800 per month.

In January 2020, a subsidiary of the Group entered into a two years lease agreement to lease a 2,800 square feet principal office in Hong Kong at a monthly rent of approximately A$14,300.

In July 2021, the Company rented a 10,000 square meter factory in Zhenjang Jiangsu Province, in China, on a five-year lease at approximately A$39,115 per month until July 2026.

In November 2021, the Company rented a 1,500 square feet administration office in Shenzhen, Guangdong Province, China, on a six-month lease at approximately A$1,688 per month until May 2022.

Our plant and equipment recorded in our consolidated financial statements as at December 31, 2021 consists of A$6,441,734 for office furniture and equipment. We are not aware of any environmental impact on the use of these equipment.

| ITEM 4A. | UNRESOLVED STAFF COMMENTS

None.

| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of the financial condition and results of operations of IMTE should be read in conjunction with the audited consolidated financial statements as at and for the fiscal year ended December 31, 2021, as at and for the year ended December 31, 2020, and for the year ended December 31, 2019, together with the notes thereto included elsewhere in this Annual Report. The financial information contained in this Annual Report is derived from the financial statements, which were prepared in accordance with IFRS.

A. Operating Results

IMTE is an Australian company and in 2021 was engaged in the business of glasses-free 3D (also known as autostereoscopic 3D) display, the manufacture and sale of nano coated plates for filters, the sale of electronic glass and financial research.

For a description of the milestones that we have achieved since inception and through to the date of this report, see "Item 4. Information on the Company - A. History and Development of the Company."

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Overview

For the past few years, we were an early stage company in the development of 3D products and services. We have incurred net losses since inception with an exception in 2017 when we recorded a profit mainly through the sale of our autostereoscopic 3D display, 3D conversion equipment and software. In 2019 and 2020, the Group recorded significant losses of A$16,700,199 and A$10,543,658 respectively. In order to curtail the losses in the COVID-19 pandemic, in May 2020 the Group restructured its operation by disposing its R&D and test manufacturing operation for 3D autostereoscopic products, and focused only on the marketing and sales of these 3D products to reduce our administrative and operating costs. Later in 2020 the Company started new businesses in nano-coated plate filter products and switchable glass to provide a broader revenue base in the coming years.

In 2021, the pandemic continued to affect the development of our nano-coated plate filter and switchable glass operation. The quarantine and restriction on travel and constant re-start / stop of the economy caused delays in these two businesses. In addition, in late 2021 with no indication of the end of the pandemic, we disposed the marketing and sales of 3D autostereoscopic products and services operation to contain our costs.

Going forward in 2022, the pandemic continues to factor in our business and present challenges for us to grow our business and sales in 2022. To widen our revenue base, in January 2022 the Company announced entering into two other businesses namely: (i) the provision of certification halal products and processes, and the sale of halal products and (ii) the setting up of a marketplace (Ouction) for trading in digital assets.

For the past two years, we have funded our operations primarily through the sale of equity securities in the Company and its subsidiaries, advances from shareholder, issuances of convertible notes and from operation cashflows. For details of the business overview, see "Item 4. Information on the Company - B. Business Overview."

Recent Acquisitions

See "Item 4. Information on the Company - A. History and Development of the Company."

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Results of Operations

The following table sets forth our condensed consolidated statements of operations by amount and as a percentage of our total operating revenues for the periods indicated:

|  | For the years ended December 31,
|  | 2021 |  | 2020 |  | 2019
|  | Amount A$ |  | % of Net Revenues |  | Amount A$ |  | % of Net Revenues |  | Amount A$ |  | % of Net Revenues
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Products |  | 193,113 |  | 100.0 |  | 1,659,916 |  | 95 |  | 1,165,607 |  | 91.4
Services |  | - |  | - |  | 84,713 |  | 5 |  | 109,818 |  | 8.6
Total operating revenues |  | 193,113 |  | 100.0 |  | 1,744,629 |  | 100.0 |  | 1,275,425 |  | 100
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  | 149,447 |  | 77.4 |  | 1,311,566 |  | 74.2 |  | 1,008,821 |  | 76.2
Employee benefit expenses |  | 1,613,922 |  | 835.7 |  | 2,212,643 |  | 126.8 |  | 4,034,378 |  | 304.6
Depreciation and amortization expenses |  | 1,326,811 |  | 687.1 |  | 2,078,762 |  | 119.2 |  | 3,174,784 |  | 239.7
Professional and consulting expenses |  | 2,376,038 |  | 1,230.4 |  | 1,373,907 |  | 78.7 |  | 2,019,970 |  | 158.4
(Gain)/ loss on disposal of subsidiaries |  | (1,998,269) |  | (1,034.8) |  | 28,990 |  | 2.3 |  | - |  | -
Travel and accommodation expenses |  | 91,385 |  | 47.3 |  | 40,895 |  | 2.3 |  | 281,895 |  | 22.1
Other operating expenses |  | 730,661 |  | 378.3 |  | 2,082,867 |  | 119.3 |  | 2,341,672 |  | 183.6
Provision for impairment loss for goodwill |  | - |  | - |  | - |  | - |  | 4,486,301 |  | 351.8
Provision for impairment loss for intangible assets |  | - |  | - |  | 3,459,340 |  | 198.2 |  | - |  | -
Financial costs |  | 2,000,952 |  | 1,036.2 |  | 2,100,272 |  | 120.4 |  | 1,561,625 |  | 122.4
Total expenses |  | 6,290,947 |  | 3,257.7 |  | 14,689,242 |  | 841.9 |  | 18,909,446 |  | 1,482.6
Operating loss before income tax |  | (6,097,834) |  | (3,157.7) |  | (12,944,613) |  | (741.9) |  | (17,634,021) |  | (1,382.6)
Non-operating income |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | 18,864 |  | 9.8 |  | 6,197 |  | 0.4 |  | 115,762 |  | 9.1
(Loss)/Gain on disposal of financial assets at fair value through profit or loss |  | (842,463) |  | (436.3) |  | 2,312,197 |  | 132.5 |  | 127,551 |  | 10.0
Other income |  | 335,807 |  | 173.9 |  | 82,561 |  | 4.7 |  | 807,831 |  | 63.3
Net loss before income taxes |  | (6,585,626) |  | (3,410.2) |  | (10,543,658) |  | (604.3) |  | (16,582,877) |  | (1,300.2)
Income tax credit / (expense) |  | - |  | - |  | - |  | - |  | (117,322) |  | 9.2
Net loss |  | (6,585,626) |  | (3,410.2) |  | (10,543,658) |  | (604.3) |  | (16,700,199) |  | (1,309.4)

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Comparison of Year Ended December 31, 2021 to Year Ended December 31, 2020

Revenue

The following table sets forth revenues by sources and the percentage of our total operating revenues for the period indicated:

| For the years ended December 31,
| 2021 |  | 2020
| Amount A$ |  | % of Total Revenues |  | Amount A$ |  | % of Total Revenues
Products |  |  |  |  |  |  |
Displays | 3,980 |  | 2.1 |  | 1,059,347 |  | 60.7
Tablets and mobiles | - |  | - |  | 283,097 |  | 16.2
Air-filter products | 189,133 |  | 97.9 |  | 317,472 |  | 18.2
Sub-total | 193,113 |  | 100 |  | 1,659,916 |  | 95.1
Services |  |  |  |  |  |  |
Conversion services | - |  | - |  | 79,938 |  | 4.6
Other services | - |  | - |  | 4,775 |  | 0.3
Sub-total | - |  | - |  | 84,713 |  | 4.9
Total operating revenues | 193,113 |  | 100.0 |  | 1,744,629 |  | 100.00

Revenues. The revenue from operating activities for the year ended December 31, 2021 was A$193,113 as compared to the prior year of A$1,744,629, a decrease of A$1,551,516 or 88.93% from the prior year. The revenue for the year ended December 31, 2021 was mainly from the sale of nano-coated plate filter products. The sales decline as compare to the prior year was mainly due to the decline of the sale of display products in 2021 as a result of COVID-19. In 2022, we will continue to put more emphasis on sales of nano-coated plate filter products; but we also expect to receive revenue from switchable glass products, sale of halal products and fees from the digital assets marketplace.

Cost of Sales. The following table sets forth cost of sales by sources of revenues by amount and as a percentage of net revenues for the years indicated:

| Years ended December 31,
| 2021 |  | 2020
| Amount A$ |  | % of Net Revenues |  | Amount A$ |  | % of Net Revenues
Products | 149,447 |  | 77.4 |  | 1,293,425 |  | 74.1
Services | - |  | - |  | 18,141 |  | 1.0
Total cost of sales | 149,447 |  | 77.4 |  | 1,311,566 |  | 75.1

Cost of sales decreased by 89% to A$149,447 in 2021 from A$1,311,566 in 2020, which was primarily due to the corresponding decrease in sales as compared with the year in 2020.

Gross Profit and Gross Margin. Gross profit decreased by 90% from A$433,063 in 2020 to A$43,666 in 2021. The gross margin decreased from 24.82% in 2020 to 22.6% in 2021.

Loss on fair value change in derivate financial instruments.

For the year ended December 31, 2021, the fair value change of derivative financial instrument relating to convertible promissory notes were a loss of A$842,463 as compared to a gain of A$2,312,197 in the prior year.

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Other income

Other income was mainly the underwriting fee received from our investment in Oakridge International Limited (formerly known as Xped Limited), a company listed on the ASX.

Expenses

The operating expenses for the year ended December 31, 2021 was A$6,290,947 as compared to the prior year of A$14,689,242 a decrease of A$8,398,295 or 57.17% from the prior year. The decrease in total operating expenses was mainly attributable to the following:

| - | A decrease of A$598,721 in employee benefit expenses from A$2,212,643 in 2020 to A$1,613,922 in 2021, which was primarily due to decreased in number of staffs in 2021 as a result of the group restructuring;

| - | A net decrease of A$751,951 in depreciation and amortization expenses from A$2,078,762 in 2020 to A$1,326,811 in 2021 as the result of (i) the group restructuring in the prior year when it disposed of its R&D and test manufacturing operations and (ii) the increase in depreciation expenses in nano-filter equipment;

| - | An increase of A$1,002,131 in professional and consulting expenses from A$1,373,907 in 2020 to A$2,376,038 in 2021 resulting from the increase in legal and professional fees relating to increase in corporate activities in 2021 and the increase in consulting services for financial research business unit and consulting services for our executives;

| - | A decrease of A$1,352,206 in other operating expenses from A$2,082,867 in 2020 to A$730,661 in 2021 which was mainly attributable to write-off of development costs and bad debt expenses in the prior year;

| - | A decrease of A$99,320 in finance costs from A$2,100,272 in 2020 to A$2,000,952 in 2021 which was mainly attributable to a decrease in interest for convertible bonds in prior year.

| - | No impairment loss for intangible assets in 2021, while in 2020 an impairment loss of A$3,459,340 was recorded for intangible assets.

Income tax

No income tax expenses were recognized during the year ended December 31, 2021.

Net Profit (Loss)

We recorded a net loss of A$6,585,626 for the year ended December 31, 2021 as compared to a net loss of A$10,543,658 recorded for the year ended December 31, 2020.

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Comparison of Year Ended December 31, 2020 to Year Ended December 31, 2019

Revenue

The following table sets forth revenues by sources and the percentage of our total operating revenues for the period indicated:

| For the years ended December 31,
| 2020 |  | 2019
| Amount A$ |  | % of Total Revenues |  | Amount A$ |  | % of Total Revenues
Products |  |  |  |  |  |  |
Displays | 1,059,347 |  | 60.7 |  | 1,164,103 |  | 91.3
Tablets and mobiles | 283,097 |  | 16.2 |  | - |  | -
Software | - |  | - |  | 1,504 |  | 0.1
Nano-coat plated filter products | 317,472 |  | 18.2 |  | - |  | -
Sub-total | 1,659,916 |  | 95.1 |  | 1,165,607 |  | 91.40
Services |  |  |  |  |  |  |
Conversion services | 79,938 |  | 4.6 |  | 16,686 |  | 1.30
Other services | 4,775 |  | 0.3 |  | 93,132 |  | 7.30
Consulting services income | - |  | - |  | - |  | -
Sub-total | 84,713 |  | 4.9 |  | 109,818 |  | 8.60
Total operating revenues | 1,744,629 |  | 100.00 |  | 1,275,425 |  | 100.00

Revenues. The revenue from operating activities for the year ended December 31, 2020 was A$1,744,629 as compared to the prior year of A$1,275,425, an increase of A$469,204 or 37% from the prior year. The revenue for the year ended December 31, 2020 consists of the sales and distribution of 3D autostereoscopic products, 2D tablets and nano-coated plate filter products.

Cost of Sales. The following table sets forth cost of sales by sources of revenues by amount and as a percentage of net revenues for the periods indicated:

| Years ended December 31,
| 2020 |  | 2019
| Amount A$ |  | % of Net Revenues |  | Amount A$ |  | % of Net Revenues
Products | 1,293,425 |  | 74.1 |  | 962,799 |  | 75.0
Services | 18,141 |  | 1.0 |  | 46,022 |  | 4.0
Total cost of sales | 1,311,566 |  | 75.1 |  | 1,008,821 |  | 79.0

Cost of sales increased by 30% to A$1,311,566 in 2020 from A$1,008,821 in 2019, which primarily due to the change in product mix of the Group with 2D tablets being sold in current year, bringing more costs of sales than that of the products sold in the prior year.

Gross Profit and Gross Margin. Gross profit increased by 62% from A$266,604 in 2019 to A$433,063 in 2020. Our gross margin significantly increased from 21% in 2019 to 25% in 2020, primarily due to the change in product mix of the Group with nano-coated plated filter products being sold with comparatively higher profit margin than that of the products sold in the prior year.

Gain on disposal of financial assets at fair value through profit and loss.

The amount of derivative financial instrument issued that is recognized as income is A$2,312,197.

Provision for impairment loss of intangible assets and goodwill.

It represents the impairment loss of intangible assets of A$3,459,340 in 2020.

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Other income

It represented primarily the government subsidy in respect of our technology development projects received for the years ended December 31, 2020 and 2019. The decrease in 2020 was the result of the Company disposing the research and development operation which decreased the government subsidies.

Expenses

The operating expenses for the year ended December 31, 2020 was A$14,689,242 as compared to the prior year of A$18,909,446 a decrease of A$4,220,204 or 22.32% from the prior year. The decrease in total operating expenses was mainly attributable to the following:

| - | A decrease of A$4,486,301 in the provision for impairment loss of goodwill, as it was fully impaired in 2019;

| - | A decrease of A$1,821,735 in employee benefit expenses from A$4,034,378 in 2019 to A$2,212,643 in 2020, which was primarily due to group restructuring and decreases in number of staffs in 2020;

| - | A decrease of A$1,096,022 in depreciation and amortization expenses from A$3,174,784 in 2019 to A$2,078,762 in 2020 as the result of the group restructuring in 2020 when it disposed of its R&D and test manufacturing operations;

| - | A decrease of A$646,063 in professional and consulting expenses from A$2,019,970 in 2019 to A$1,373,907 in 2020 resulting from the decrease in legal and professional fees for certain corporate activities during the respective years;

| - | A decrease of A$258,805 in other operating expenses from A$2,341,672 in 2019 to A$2,082,867 in 2020 resulted from the group restructuring 2020 when it disposed of its R&D and test manufacturing in 3D autostereoscopic operations; and a decrease in rental from A$637,321 to A$126,382 as a result of the aforementioned group restructuring; and

| - | A increase of A$538,647 in finance costs from A$1,561,625 in 2019 to A$2,100,272 in 2020 was mainly attributable to a decrease in the convertible bonds interest of A$1,316,702 in 2019, which was fully repaid in January 2020, but imputed financial interest expenses for convertible promissory note during the year.

Income tax

No income tax expenses were recognized during the year ended December 31, 2020.

Net Profit (Loss)

We recorded a net loss of A$10,543,658 for the year ended December 31, 2020 as compared to a net loss of A$16,700,199 recorded for the year ended December 31, 2019.

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New, Revised or Amending Accounting Standards and Interpretations

| (i) | The Group has applied the following standards and amendments for first time in their annual reporting period commencing January 1, 2021:

Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:

● A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest;

● Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued;

● Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component; and

These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.

COVID-19-Related Rent Concessions beyond June 30, 2021 Amendments to IFRS 16

On May 28, 2020, the IASB issued COVID-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a COVID-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the COVID-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment was intended to apply until June 30, 2021, but as the impact of the COVID-19 pandemic is continuing, on March 31, 2021, the IASB extended the period of application of the practical expedient to June 30, 2022. The amendment applies to annual reporting periods beginning on or after April 1, 2021. However, the Group has not received COVID-19-related rent concessions but plans to apply the practical expedient if it becomes applicable within allowed period of application.

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(ii) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations issued by the IASB which are not yet mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out as below and not expected to have a significant impact on the Group's consolidated financial statements. The Group does not plan to adopt these standards early.

New, Revised or Amended Standards and Interpretations | Effective Date Issued by IASB
Annual Improvements to IFRS Standards 2018-2020 Cycle "Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture" | January 1, 2022
Amendments to IFRS 3 "Reference to the Conceptual Framework" | January 1, 2022
Amendments to IFRS 10 and IAS 28 "Sales or Contribution of Assets between an Investor and its Associate or Joint Venture" | To be determined by IASB
Amendments to IAS 1 "Classification of Liabilities as Current or Non-current" | January 1, 2023
Amendments to IAS 1 "Disclosure of Accounting Policies" | January 1, 2023
Amendments to IAS 8 "Definition of Accounting Estimates" | January 1, 2023
Amendments to IAS 12 "Deferred Tax related to Assets and Liabilities arising from a Single Transaction" | January 1, 2023
Amendments to IAS 16 "Property, Plant and Equipment: Proceeds before Intended Use" | January 1, 2022
Amendments to IAS 37 "Onerous Contracts – Costs of Fulfilling a Contract" | January 1, 2022

B. Liquidity and Capital Resources

Since our inception, our operations have mainly been financed through the issuance of equity securities. Additional funding has come through shareholder advances and short-term borrowings. For the past 3 years, we have recorded loss of A$6,585,626, A$10,543,658, and A$16,700,199 for the fiscal years ended December 31, 2021, 2020, and 2019 respectively.

Equity Issuances

The following table summarizes our issuance of Ordinary Shares for cash or from the conversion debts. We did not issue shares for share-based payments, executive and employee compensation in the last 3 fiscal years.

|  | Fiscal Year |  | Number of Shares |  | Net Proceeds
|  |  |  |  |  | (in A$)
Share issuance for debts or cash |  | 2019 |  | Nil |  | Nil
Share issuance in respect to payment to convertible bonds |  | 2020 |  | 285,714 |  | 1,514,284
Share issuance for the settlement of interest on a convertible promissory note |  | 2020 |  | 46,741 |  | 174,811
Share issuance for debt to equity conversion |  | 2020 |  | 941,667 |  | 3,947,751
Share issuance for cash and acquisition of businesses |  | 2020 |  | 1,357,692 |  | 5,606,999
Share issuance for acquisition of business |  | 2020 |  | 500,000 |  | 2,060,000
Share issuance in respect of payment to a consultant |  | 2020 |  | 4,471 |  | 23,249
Share issuance in respect of payment to a consultant |  | 2021 |  | 20,512 |  | 97,282
Share issuance for cash |  | 2021 |  | 2,795,237 |  | 16,019,301

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Capital Requirements

As of December 31, 2021, we had cash and cash equivalents of A$274,767 and trade receivables of A$480,095. Our trade receivable balance significantly decreased as compared to A$1,233,709 as of December 31, 2020, was mainly attributable to the group restructuring and decline in sales. For the first 3 months ended March 31, 2022 the Company sold US$15.1 million of its shares to recapitalize its equity base and working capital. However, we anticipate that our current cash and cash equivalents will be insufficient to fund our capital expenditures and operations for the next 12 months based on our budget and forecasted revenue. However, our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. If we are unable to raise additional capital when required or on acceptable terms or not realize our anticipated operating and sales plans, we may have to significantly delay, scale back or discontinue our nano-coated plate filter developments, switchable glass for the USA and China markets, and our other projects/operations.

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Cash Flows

The following table summarizes our cash flows for the periods presented:

|  | Fiscal Year Ended December 31,
|  | 2021 |  | 2020 |  | 2019
|  | A$ |  | A$ |  | A$
Net cash outflows in operating activities |  | (7,971,326) |  | (6,191,115) |  | (6,540,014)
Net cash outflows in investing activities |  | (12,144,439) |  | (4,586,121) |  | (1,828,617)
Net cash inflows by financing activities |  | 18,120,257 |  | 13,392,848 |  | 7,575,583
Net increase (decrease) in cash and cash equivalents |  | (1,995,508) |  | 2,615,612 |  | (793,048)
Effect of exchange rate changes on cash and cash equivalents |  | 76,191 |  | (254,770) |  | 6,585
Cash and cash equivalents at beginning of year |  | 2,194,084 |  | (166,758) |  | 619,705
Cash and cash equivalents at end of year |  | 274,767 |  | 2,194,084 |  | (166,758)

Net cash outflows in operating activities were A$(7,971,326), A$(6,191,115), and A$(6,540,014) during the years ended December 31, 2021, 2020 and 2019, respectively. Net cash outflows in operating activities during the year ended December 31, 2021 was mainly due to the cash from the disposal of 3D autostereoscopic business. For the years ended December 31, 2020 and 2019, the net cash outflows in operating activities relates to the 3D autostereoscopic operating activities.

Net cash outflows in investing activities were A$(12,144,439), A$(4,586,121), and A$(1,828,617) for the years ended December 31, 2021, 2020 and 2019 respectively. Net cash outflows in investing activities during the years ended December 31, 2021 was mainly the share investment in Oakridge International Limited and deposit made in lamination production line. Net cash outflows in investment activities during the years ended December 31, 2020 and 2019 was primarily attributable to the payments for acquisition of various patents and intangible assets, and development costs incurred for various on-going technology projects.

Net cash inflows in financing activities were A$18,120,257, A$13,392,848, and A$7,575,583 for the years ended December 31, 2021, 2020 and 2019 respectively. Net cash inflows in financing activities during the years ended December 31, 2021 are attributable to the issuance of shares. Net cash inflows in financing activities during the years ended December 31, 2020, and 2019 are attributable to the issuance of convertible notes, loan provided from third party, advances from related companies and ultimate holding company.

We had net cash and bank balance of A$274,767, A$2,194,084, and A$(166,758) as at December 31, 2021, 2020 and 2019 respectively. The cash and bank balance as at December 31, 2021, 2020 and 2019 were A$274,767, A$2,194,084, and A$735,424 respectively and the bank overdraft for the corresponding three years ended was Nil except for 2019 which was a bank overdraft of A$902,482.

C. Research and Development, Patents and Licenses

The Company did not conduct any research and development activities and incur no expenses for R&D in 2021. In 2020, the Company disposed its subsidiary that conducted research and development in 3D autostereoscopic. For the 3 years ended December 31, 2021, we have employed 0, 0, and 25 staff, respectively, in the research and development of 3D autostereoscopic technology, and we incurred annual staffing costs of approximately A$Nil, A$675,500, and A$6,155,884 during the respective years. In the prior year, we also have Company sponsored research with certain universities and research institutes as discussed in Item 4.

The Company has conducted research into formulation of credit models for its financial research business in 2021.

D. Trend Information

We are still a relatively young company and it is not possible for us to predict with any degree of accuracy the outcome of our business in the future. Our operations are mainly dependent on further development and commercialization of our business and technologies.

E. [Reserved]

F. [Reserved]

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| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth our directors and senior management and the positions they held as of the date of this annual report on Form 20-F.

Name |  | Position
Mr. Xiaodong ZHANG (1) |  | Executive Director and CEO
Ms. Jing ZHUO (2) |  | Executive Director and CFO
Ms. Hui ZHONG (3) |  | Independent Non-Executive Director
Ms. Dan LI(4) |  | Independent Non-Executive Director
Dr. Heming CUI (5) |  | Independent Non-Executive Director
Ms. Xinmei SHI (6) |  | Independent Non-Executive Director
Mr. Con UNERKOV(7) |  | Former Chairman and Chief Executive Officer
Mr. Uwe von PARPART (8) |  | Former Executive Director
Mr. Wuhua ZHANG (9) |  | Former Non-Executive Director
Dr. Man-Chung CHAN (9) |  | Former Independent Non-Executive Director
Mr. Luis PUYAT (10) |  | Former Independent Non-Executive Director
Ms. Jannu Binti BABJAN (11) |  | Former Independent Non-Executive Director
Mr. Cecil HO (12) |  | Former Chief Financial Officer and Joint Company Secretary

| (1) | Mr. Xiaodong ZHANG was appointed as an executive director and Chief Executive Officer-China as well as a member of nomination and remuneration committee with effect from July 19, 2021. Mr. ZHANG became the Chairman and Chief Executive Officer of the Group on August 24, 2021.

| (2) | Ms. Jing ZHUO was appointed as an independent non-executive director with effect from July 19, 2021. Ms. Zhuo was appointed as Chief Financial Officer with effect from August 26, 2021 and she also became an executive director on the same date.

| (3) | Ms. Hui ZHONG was appointed as an independent non-executive director as well as a member of audit committee and a member of nomination and remuneration committee with effect from August 3, 2021.

| (4) | Ms. Dan LI was appointed as an independent non-executive director and a member of audit committee with effect from August 31, 2021.

| (5) | Chairman of the Audit Committee and Nomination and Remuneration Committee.

| (6) | Ms. Xinmei SHI was appointed as an independent non-executive director and a member of Nomination and Remuneration Committee on August 18, 2021 and resigned from both positions on December 20, 2021.

| (7) | Mr. Con UNERKOV resigned as an executive director and Chief Executive Officer on August 24, 2021.

| (8) | Mr. Uwe von Parpart resigned as an executive director with effect on August 24, 2021.

| (9) | Dr. Man Chung CHAN and Mr. Wuhua ZHANG resigned from an independent non-executive Director from September 30, 2021.

| (10) | Mr. Luis PUYAT resigned as an Independent Non-Executive Director on July 19, 2021.

| (11) | Ms. Jannu binti BABJAN resigned as an Independent Non-Executive director on August 6, 2021.

| (12) | Mr. Cecil HO resigned as Chief Financial Officer on August 31, 2021.

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Mr. Xiaodong ZHANG, aged 52, was the Executive Vice President and CFO of Boqi Xinhai Group Company Limited ("Boqi Xinhai"), a company in the business of investment and financing management, sales of automobile and agricultural technology development in China. Mr. Zhang has extensive experience in financial management in the capital market in China. Prior to joining the Boqi Xinhai, Mr. Zhang has worked in senior positions in capital operation and risk control management in China. Mr. Zhang has a Master of Science in Financial Management from Northwestern Polytechnical University in Xi'an city, Shaanxi province, China.

Ms. Jing ZHUO, aged 35, was the Executive Vice General Manager of Dalian Jiujiu Technology Company Ltd. ("Dalian Jiujiu"), a company in the business of IT technology development and consultancy. Ms. Zhuo manages all the financial matters for Dalian Jiujiu including capital market initiatives. She has worked in Dailan Jiujiu since 2019. Ms. Zhuo has extensive experience in financial management in the technology industry and in the capital market. Prior to joining the Dalian Jiujiu, Ms. Zhuo has worked in senior positions, including software development, for a number of companies. In 2009, Ms. Zhuo received a Master of Science in Financial Management from Dongbei University of Finance & Economics in Dalian City, Liaoning province, China.

Ms. Hui ZHONG, aged 39, has worked as a project costing engineer for construction projects in China from 2006 to 2013 before moving to Australia. In the past 5 years, Ms. Zhong operated her own gift shop business from 2017 to 2019. From 2017 to now, Ms. Zhong has worked for Max Biocare Pharmaceutical Company as a part time consultant for events and expos.

Ms. Zhong has a Bachelor Degree in Public Utility Management from Dalian University of Technology in Dalian city, Liaoning province, China.

Ms. Dan LI, aged 36, currently is the vice president of enterprise operations for RD International Holdings Limited, an investment company providing investment and financial consulting services and selling of financial products to retail customers. Prior to this, from 2007 to 2012, Ms. Li was the corporate investment manager and senior investment analyst for a large financial group in Australia, focusing on investments in the securities market.

Ms. Li holds degrees in International Business from Monash University and the Australia Institute of Business and Technology, both institutions are based in Australia.

Dr. Heming CUI, aged 39, an assistant professor in Computer Science of the University of Hong Kong ("HKU") since January 2015. His research interests are in distributed system, IOT, big-data computing, and parallel computing, with a particular focus on creating software infrastructures and tools to greatly improve the performance, reliability and security of real-world software. After joining HKU, Dr. Cui's research publications mainly contained in two segments: (1) transparent and efficient distributed fault-tolerance systems, and (2) automated program analysis tools that can greatly improve the security of parallel and IOT software. Dr. Cui's research in HKU has led to a series of open source projects as well as publications in international conferences and journals on computer systems (e.g., SOSP, NSDI, ATC, DSN, SOCC, ACSAC, SRDS, JSAC, and TPDS). Dr. Cui's serves on the program committees of international top systems, and networking conferences, including NSDI, ATC, SOCC, DSN, and ICDCS. Much of the source code and evaluation results in Dr. Cui's publications are adopted by global software companies, including RedHat, Android, Ubuntu, and VMWare. Before joining HKU, Dr. Cui obtained his master and bachelor degrees in Computer Science from Tsinghua University in Beijing, and PhD degree in Computer Science from Columbia University in New York.

Directors Resigned/Retired during the year and up to the date of this Report.

Mr. Con UNERKOV, aged 52, is an Australian based businessman with more than 25 years of local and international senior executive experience. Throughout his career, Mr. Unerkov has worked as an executive and chief executive officer for a number of companies both in the private and public sectors. He has significant experience in the financial markets with a focus on structuring, M&A and corporate financing for both private and public companies, simultaneously providing parallel guidance for companies to gain market recognition, shareholder value and liquidity. Mr. Unerkov was a director of the Company in the past and he re-joined the Company as the CEO in April 2019 and as director and chairman on May 31, 2019. Mr. Unerkov is the non-executive Chairman of Oakridge International Limited (formerly Xped Limited), a company listed on the Australian Securities Exchange ("ASX") engaged in the Internet of Things (IOT) and Healthcare sector.

Mr. Uwe von PARPART, aged 80, Mr. Parpart is currently the Chairman and Publisher of Asia Times Holding Limited, a Hong Kong based English language news media publishing group, covering politics, economics, business and culture from an Asian perspective. Previously, Mr. Parpart was the Executive Managing Director, Chief Strategist, and Head - Research of Reorient Group Limited, a company listed on the Hong Kong Stock Exchange Limited. Mr. Parpart brings over three decades of experience in finance, journalism, and academia to our Company. Before Reorient, he was the Chief Economist and Strategist at Cantor Fitzgerald HK Capital Markets and prior to that a senior currency strategist at Bank of America. Mr. Parpart's experience in Asia dates back to the late 1980s, when he worked with the Mitsubishi Research Institute in Tokyo, and later served as an advisor to the Thailand's Prime Minister's office. He has contributed to numerous magazines and publications; he was the founding editor of Asia Times from 1995 - 1997, a contributing editor of Forbes magazine, and a columnist for Shinchosha Foresight magazine, Tokyo. He was a frequent guest on CNBC and Bloomberg TV. After serving as an officer in the German Navy, Mr. Parpart received a Fulbright scholarship for doctoral studies in Mathematics and Philosophy at the University of Pennsylvania. He had also taught at University of Pennsylvania and Swarthmore College.

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Mr. Wuhua ZHANG, aged 46, is a businessman with significant experience in the electronics industry with a specialty in the semiconductors product field. Mr. Zhang holds a Masters of Technology Management and a Bachelor of Applied Science in Electronic Engineering. Mr. Zhang has extensive experience in product and engineering management, product marketing and sales which was attained during his career as an Account Executive at ST Microelectronics (Shenzhen) Company and as a Key Account Manager at Philips Semiconductors. Mr. Zhang's primary responsibilities in those roles was to drive distribution sales for semiconductor products in China and discover any key new opportunities.

Dr. Man-Chung CHAN, aged 62, graduated from the Chinese University of Hong Kong in 1980 in Philosophy and Government & Public Administration. He received his PhD in Computer Science from La Trobe University in Australia. From 1988 till 1994, he taught Computer Science at University of New South Wales. From 1994, he has worked with the Computing Department of the Hong Kong Polytechnic University. Dr. MC Chan was a computational logician and lately he worked in the broad field of knowledge management, artificial intelligence and intellectual property of computing. His theory of functional unification has bridged the gap between modal logic, natural language and logic programming. He founded the Institute of Systems Management in 2003. He has extensive working relationship with municipal government of Jiangsu, Hubei and Henan provinces in China.

Mr. Luis PUYAT, aged 58, is a businessman with significant experience in the banking and finance industry. Currently Mr. Puyat is the CEO of VGP Investments, Inc., a company engaged in property investments, and an executive director of First Sovereign Asset Management, Inc. Previously, Mr. Puyat was the Chairman of The Manila Banking Corporation from1999 to 2007. He was also the President of The Manila Bankers Life Insurance from 1993 to 1999. Mr. Puyat has a Masters in Business Economics (Non-Degree) from the University of Asia & the Pacific and a B.S. in Business Administration from the University of Philippines.

Ms. Jannu Binti BABJAN, aged 54, is an Advocate & Solicitor practicing in Malaysia operating her own proprietary business for the past 5 years. She has over 29 years of experience in civil litigations in a wide range of areas including commercial disputes, employment and industrial matters, shareholder disputes, etc. Ms. Babjan has acted for clients in all tiers of the Malaysian Legal System from the magistrate courts right up to the Federal Court of Malaysia. Ms. Babjan graduated from the University of Malaya - LLB (Hons) Malaya.

Ms. Xinmei SHI, aged 37, has over 16 years of financial and property industry experience. In the past 5 years, Ms. Shi has been working as the Sales Director of Prudential Hong Kong Limited and Prudential General Insurance Hong Kong Limited, a financial institution offering a range of financial planning services and products including individual life insurance, investment-linked insurance, retirement investment products, health and medical insurance, general insurance and employee benefits in Hong Kong. Prior to that, Ms. Shi was the Financial Supervisor at China Overseas Property Group Company Limited, a company that is engaged in property development and commercial property management experience with a focus on developing quality properties in major cities in Hong Kong and China. Ms. Shi is currently an independent director of Wunong Net Technology Co. Ltd, a company listed on the NASDAQ, engaged in the e-commerce of food products and restaurants. Ms. Shi obtained her Bachelor's Degree in Finance and Trade from Anhui University in 2006 and her Master's Degree of Business Administration from UMT, Peking University.

Mr. Cecil HO, aged 60, brings to IMTE nearly 30 years of financial management experience in both public and private companies. He most recently served as the CFO for Asia Times Holdings Limited, an online news publication in Hong Kong. Prior to that, Mr. Ho held various senior finance positions in public companies listed on the Hong Kong Stock Exchange. Currently, Mr. Ho is the CFO of Ares Motor Works, Limited, a company engaged in electric commercial vehicles. In his roles, Mr. Ho excelled in strategy execution, shareholder value creation and risk management. Mr. Ho is a member of the Hong Kong Institute of Certified Public Accountant and a Chartered Professional Accountant (CA). Mr. Ho holds a Bachelor of Commerce degree from the University of British Columbia in Canada.

There are no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined.

There are no family relationships among any of our officers and directors.

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B. Compensation

Remuneration Principles

Remuneration of all directors and officers is determined by the Nomination and Remuneration Committee.

We are committed to remunerating senior executives and executive directors in a manner that is market-competitive and consistent with "Best Practice" including the interests of shareholders. Remuneration packages are based on fixed and variable components, determined by the executives' position, experience and performance, and may be satisfied via cash or equity.

Non-executive directors are remunerated out of the aggregate amount approved by shareholders and at a level that is consistent with industry standards. Non-executive directors do not receive performance - based bonuses and prior shareholder approval is required to participate in any issue of equity. No retirement benefits are payable other than statutory superannuation, if applicable.

Our remuneration policy is based on our financial performance and on success of our development and commercializing of our products, services or solutions.

The purpose of a performance bonus is to reward individual performance in line with our objectives. Consequently, performance - based remuneration is paid to an individual where the individual's performance clearly contributes to a successful outcome. This is regularly measured in respect of performance against key performance indicators.

We use a variety of key performance indicators to determine achievement, depending on the role of the executive being assessed. These include:

| ● | Successful in achieving sales targets,

| ● | Successful contract negotiations,

| ● | Achievement of reaching operational/project milestones within scheduled time and/or budget, and

| ● | Our share price reaching a targeted level on the NASDAQ over a period of time.

Executive Compensation

The following table sets forth all of the compensation awarded to, earned by or paid to each individual who served as directors and officer in fiscal year of 2021.

|  | Short-term Benefits |  | Post-Employment |  | Share-based |  |
|  | Benefits |  | Benefits |  | Payments |  | Total
|  | Salary & |  |  |  | Super- |  | Retirement |  |  |  |  |  |
|  | Fees |  | Other |  | annulation |  | Benefits |  | Shares |  | Options |  |
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Mr. Xiaodong ZHANG |  | 125,806 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 125,806
Ms. Jing ZHUO |  | 64,742 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 64,792
Ms. Hui ZHONG |  | 9,500 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 9,500
Ms. Dan LI(1) |  | 6,048 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 6,048
Ms. Xinmei SHI |  | 4,226 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 4,226
Dr. Heming CUI |  | 26,267 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 26,267
Mr. Con UNERKOV |  | - |  | 437,290 |  | N/A |  | N/A |  | N/A |  | N/A |  | 437,290
Mr. Uwe von PARPART |  | 11,274 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 11,274
Mr. Wuhua ZHANG |  | 12,000 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 12,000
Dr. Man-Chung CHAN |  | 16,500 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 16,500
Mr. Luis PUYAT |  | 12,149 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 12,149
Ms. Jannu Binti BABJAN |  | 4,940 |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | 4,940
Total |  | 293,452 |  | 437,290 |  | N/A |  | N/A |  | N/A |  | N/A |  | 730,742

| (1) | Mr. Con Unerkov is employed under a service agreement provided by a related company.

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Service Agreements

All the directors have formal letters of appointment in place that have been executed which outline their roles and responsibilities. The agreements with the Company have no fixed term and the directors' position can be terminated with cause without notice, and subject to the Company's Constitution. The letters of appointment executed do not provide for any termination payment to directors in the event of being terminated or removed from their positions. Our former director, Mr. Con Unerkov, has a service agreement provided by a related company. The service agreement can be terminated immediately for serious misconduct, and for all other cases, a 3 months' notice period. Please refer to the executive compensation table for details on director individual remuneration. Mr. Unerkov resigned from the Board on August 24, 2021.

Employee Share Option Plan

In August 2020, an Employee Share Option Plan ("2020 ESOP") was approved and established by the Board. The ESOP is available to employee, consultants and eligible persons (as the case may be) of the Company as the Board may in its discretion determine. The 2020 ESOP was terminated by the Board in September 2021 and replaced by a new Employee Share Option Plan ("2021 ESOP") in December 2021. The 2021 ESOP was approved and established by the Board on December 23, 2021. This 2021 ESOP is available to eligible employees, consultants, and eligible persons (as the case may be) of the Company as the Board may in its discretion determine. See below under item 10.A for more information.

Pension and Retirement Benefits

There was no amount set aside or accrued by the Group to provide pension, retirement or similar benefits as at December 31, 2021 as these amounts were expensed and paid as of this date.

C. Board Practices

Introduction

Our Board of Directors is elected by and accountable to our shareholders. It currently consists of five directors, the executive Chairman and director, one executive director and three independent non-executive directors. The Chairman of our Board of Directors is responsible for the management of the Board of Directors and its functions.

Election of Directors

Directors are elected at our annual general meeting of shareholders. Under our Constitution, a director, other than a managing director, must not hold office for more than three years or beyond the third annual general meeting following his appointment (whichever is the longer period) without submitting himself for re-election. Our Board of Directors has the power to appoint any person to be a director, either to fill a vacancy or as an additional director (provided that the total number of directors does not exceed the maximum allowed by law), and any director so appointed may hold office only until the next annual general meeting when he or she shall be eligible for election.

Corporate Governance

ASX Corporate Governance Principles

As a "foreign private issuer", we are not required to comply with all of the corporate governance practices followed by U.S. companies under NASDAQ listing standards.

In Australia there are no defined corporate governance structures and practices that must be observed by a company listed on NASDAQ. The practices we follow in lieu of NASDAQ's corporate governance requirements is the ASX Best Practice Guide published by the ASX Corporate Governance Council. The Guide contains what are called the Recommendations which articulate eight core principles which are intended to provide a reference point for companies about their corporate governance structure and practices. It is not mandatory to follow the Recommendations. We believe that our established practices in the area of corporate governance are in line with the spirit of the NASDAQ standards and provide adequate protection to our shareholders. We believe that we are in material compliance with the ASX Corporate Governance Principles. Set forth below are material provisions of the ASX corporate Governance Principles together with the reasons, where applicable, for variation therefrom.

| 1. | Lay solid foundations for management and oversight. Companies should establish and disclose the respective roles and responsibilities of Board and management.

| 2. | Structure the Board to add value. Companies should have a Board of an effective composition, size, and commitment to adequately discharge its responsibilities and duties. During the year ended December 31, 2021, we varied from the Recommendations in the following area:

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| a) | No formal performance evaluation of the Board was conducted for the year ended December 31, 2021 as the Board believes that we are not of a size, nor are our financial affairs of such complexity, to warrant such an exercise. The Board recognizes the importance of performance evaluations and will continually assess the necessity and timing of future performance evaluation.

| 3. | Act ethically and responsibly. Companies should actively promote ethical and responsible decision-making.

| 4. | Safeguard integrity in financial reporting. Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.

| 5. | Make timely and balanced disclosure. Companies should promote timely and balanced disclosure of all material matters concerning the compliance.

| 6. | Respect the rights of security holders. Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.

| 7. | Recognize and manage risk. Companies should establish a sound system of risk oversight and management and internal control.

| 8. | Remunerate fairly and responsibly. Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.

Non-Executive and Independent Directors

Australian law does not require a company to appoint a certain number of independent directors to its board of directors or audit committee. However, under the ASX Corporate Governance Principles and Recommendations, that a listed company have a majority of independent directors on its board of directors and that the audit committee be comprised of independent directors. Our Board of Directors currently have five directors, of which three are non-executive directors within the meaning of the ASX Corporate Governance Principles and Recommendations, and our audit committee consists of such three independent non-executive directors. Accordingly, we currently comply with the Recommendations.

Under NASDAQ Marketplace Rules, in general a majority of our Board of Directors must qualify as independent directors within the meaning of the NASDAQ Marketplace Rules and our audit committee must have at least three members and be comprised only of independent directors, each of whom satisfies the respective "independence" requirements of NASDAQ and the U.S. Securities and Exchange Commission.

The Board of Directors does not have regularly scheduled meetings at which only independent directors are present. The Board of Directors does meet regularly and independent directors are expected to attend all such meetings. Our practices are consistent with the Recommendations, in that the Recommendations do not provide that independent directors should meet separately from the Board of Directors.

Our Board of Directors has determined that each of Dr. Heming Cui, Ms. Hui Zhong and Ms. Dan Li qualifies as an independent director under the requirements of the NASDAQ Marketplace Rules and U.S. Securities and Exchange Commission.

Committees of the Board of Directors

Audit Committee. NASDAQ Marketplace Rules require us to establish an audit committee comprised of at least three members, each of whom is financially literate and satisfies the respective "independence" requirements of the U.S. Securities and Exchange Commission and NASDAQ and one of whom has accounting or related financial management expertise at senior levels within a company.

Our Audit Committee assists our Board of Directors in overseeing the accounting and financial reporting processes of our Company and audits of our consolidated financial statements, including the integrity of our consolidated financial statements, compliance with legal and regulatory requirements, our independent registered public accounting firm's qualifications and independence, and independent registered public accounting firm, and such other duties as may be directed by our Board of Directors. The Audit Committee is also required to assess risk management.

Our Audit Committee currently consists of three board members, each of whom satisfies the "independence" requirements of the U.S. Securities and Exchange Commission, and NASDAQ Marketplace Rules. Our Audit Committee is currently composed of Dr. Heming Cui, Ms. Hui Zhong and Ms. Dan Li. Dr Heming Cui is the chairman of the audit committee. The audit committee meets at least two times per year.

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Nomination and Remuneration Committee. Our Board of Directors has established a Nomination and Remuneration Committee, which is comprised by majority of independent directors, within the meaning of NASDAQ Marketplace Rules. The Nomination and Remuneration Committee is responsible for reviewing the salary, incentives and other benefits of our directors, senior executive officers and employees, and to make recommendations on such matters for approval by our Board of Directors. The Nomination and Remuneration Committee is also responsible for overseeing and advising our Board of Directors about the adoption of policies that govern our compensation programs. Dr. Heming Cui, Ms. Hui Zhong and Mr. Xiaodong Zhang are the current members of the Nomination and Remuneration Committee. Dr. Heming Cui and Ms. Hui Zhong both qualified as an "independent director" within the meaning of NASDAQ Marketplace Rules. Dr. Heming Cui is the chairman of this committee.

Corporate Governance Requirements Arising from Our U.S. Listing - the Sarbanes-Oxley Act of 2002, SEC Rules and the NASDAQ Capital Market Marketplace Rules

NASDAQ permits "foreign private issuers" such as the Company follow "home country" corporate governance practices in lieu of the otherwise applicable NASDAQ corporate governance standards, as long as we disclose each requirement of Rule 5600 that we do not follow and describe the home country practice we follow in lieu of the relevant NASDAQ corporate governance standards. We follow Australian corporate governance practices in lieu of the corporate governance requirements of the NASDAQ Marketplace Rules in respect of:

| ● | NASDAQ requirement under Rule 5620(c) that a quorum consist of holders of 33 1/3% of the outstanding Ordinary Shares - In Australia, we do not have an express requirement that each listed company have a quorum of any particular number of the outstanding Ordinary Shares, but instead allow a listed issuer to establish its own quorum requirements. Our quorum is currently two persons who are entitled to vote. We believe this quorum requirement is consistent with the requirements in Australia and is appropriate and typical of generally accepted business practices in Australia.

| ● | The NASDAQ requirements under Rules 5605(b)(1) and (2) relating to director independence, including the requirements that a majority of the board of directors must be comprised of independent directors and that independent directors must have regularly scheduled meetings at which only independent directors are present - The NASDAQ and ASX definitions of what constitute an independent director are not identical and the requirements relating to the roles and obligations of independent directors are not identical. In Australia, unlike NASDAQ, permits an issuer to establish its own materiality threshold for determining whether a transaction between a director and an issuer affects the director's status as independent and it does not require that a majority of the issuer's board of directors be independent, as long as the issuer publicly discloses this fact. In addition, in Australia, it is not required that the independent directors have regularly scheduled meeting at which only independent directors are present. We believe that our Board composition is consistent with the requirements in Australia and that it is appropriate and typical of generally accepted business practices in Australia.

| ● | We have relied on and expect to continue to rely on an exemption from the requirement that our independent directors meet regularly in executive sessions under NASDAQ Listing Rules. The Corporations Act does not require the independent directors of an Australian company to have such executive sessions and, accordingly, we claim this exemption.

| ● | The NASDAQ requirements under Rules 5605(d) that compensation of an issuer's officers must be determined, or recommended to the Board for determination, either by a majority of the independent directors, or a compensation committee comprised solely of independent directors, and that director nominees must either be selected, or recommended for the Board's selection, either by a majority of the independent directors, or a nomination committee comprised solely of independent directors. The NASDAQ compensation committee requirements are not identical to the Australia's remuneration and nomination committee requirements. We have established a remuneration committee consisting of a majority of independent directors and an independent chairperson, or publicly disclose that it has not done so. We have a Nomination and Remuneration Committee that is consistent with the requirements in Australia and which we believe is appropriate and typical of generally accepted business practices in Australia.

Directors' Service Contracts

For details of directors' service contracts providing for benefits upon termination of employment, see "Item 6. Directors, Senior Management and Employees - B. Compensation - Service Agreements."

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Indemnification of Directors and Officers

Our Constitution provides that, we may indemnify a person who is, or has been, an officer of our Company, to the full extent permissible by law, out of our property against any liability incurred by such person as an officer in defending proceedings, whether civil or criminal, and whatever their outcome.

In addition, our Constitution provides that to the extent permitted by law, we may pay, or agree to pay, a premium in respect of a contract insuring a person who is or has been an officer of our company or one of our subsidiaries against any liability:

| ● | incurred by the person in his or her capacity as an officer of our company or a subsidiary of our company, and

| ● | for costs and expenses incurred by that person in defending proceedings relating to that person acting as an officer of IMTE, whether civil or criminal, and whatever their outcome.

We currently do not maintain a directors' and officers' liability insurance policy. However, we intend to arrange an insurance policy for our directors and officers in the near future. We have established a policy for the indemnification of our directors and officers against certain liabilities incurred as a director or officer, including costs and expenses associated in successfully defending legal proceedings.

D. Employees

As of December 31, 2019, we had 53 employees. Of these employees, 2 were employed in administration located in Australia, 11 employees in finance, administration and management located in Hong Kong and 14 employees in operations located in Hong Kong, 7 employees in finance, administration and management located in China and 19 employees in operations located in China.

As of December 31, 2020, we had 15 employees and of these employees, 2 were employed in administration in Australia, 6 employees in finance, administration and management located in Hong Kong, and 7 employees in operation located in Hong Kong. There were no employees employed in finance, administration, management and operations in China.

As of December 31, 2021, we had 13 employees and of these employees, 1 was employed in administration in Australia, 6 employees in finance, administration and management located in Hong Kong, and 1 employee in operation located in Hong Kong. There was 1 employee employed in finance, administration, and management, and 3 employees in operations in China, and 1 employee in finance, and administration and management in Korea.

Each of our full-time employees enters into an employment agreement. We also engage part-time employees from time to time. We may only terminate the employment of any of our employees in accordance with the relevant employee's contract of employment.

Our standard contract of employment for full time and part-time employees provides that we can terminate the employment of an employee without notice for serious misconduct or with between one to three months' notice without cause (as set out in the relevant employee's contract of employment). We can terminate the employment of a casual employee without notice. For a summary of the key terms of employment of each of our senior management, see "Item 6. Directors, Senior Management and Employees - B. Compensation - Service Agreements."

E. Share Ownership

Beneficial Ownership of Senior Management and Directors

The beneficial ownership of senior management and directors are set out in Item 7.A.

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| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth information regarding shares of our Ordinary Shares beneficially owned as of April 19, 2022 by: (i) each of our directors; (ii) all the directors as a group; and (iii) each person known by us to beneficially own five percent or more of the outstanding shares of our common stock.

Except as otherwise indicated, based on information furnished by the owners, we believe that the beneficial owners listed below have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by them, subject to the information contained in the footnotes to this table. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated, the address of the beneficial owner is c/o Integrated Media Technology Limited at Suite 801, 8/F, Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong.

For purposes of computing the percentage of outstanding Ordinary Shares held by each person or group of persons named above, any shares that such person or group has the right to acquire within 60 days are deemed outstanding but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person or group. As of April 19, 2022, there were 14,753,331 outstanding shares.

|  | Options | Note | Total Stock and |
| Ordinary | Exercisable | Convertible | Stock Based |
Name | Shares | Within 60 Days | Within 60 Days | Holdings | % Ownership
Xiaodong Zhang(1)(4) | 354,478 | - | - | 354,478 | 2.1%
Jing Zhuo(1) | - | - | - | - | -
Dr. Heming Cui | - | - | - | - | -
Hui Zhong (2) | - | - | - | - | -
Dan Li (3) | - | - | - | - | -
All directors as a group (5 persons) | 354,478 | - | - | 354,478 | 2.1%
Xinhaixin International Holdings Limited (5) | 1,685,000 | - | - | 1,685,000 | 9.97%

Notes:

| (1) | Appointed as a director of the Company on July 19, 2021.

| (2) | Appointed as a director of the Company on August 3, 2021.

(3) Appointed as a director of the Company on August 31, 2021.

(4) Kingzhongming International Holdings Limited, a company incorporated in the British Virgin Islands, is a company wholly owned and controlled by our director Xiaodong Zhang.

(5) Xinhaixin International Holdings Limited, a company incorporated in the British Virgin Islands, is a company wholly owned and controlled by Mr. Yongquan Bi.

B. Related Party Transactions

The following related party transactions, other than employment matters and indemnification agreements between our directors and executive officers on the one hand and IMTE on the other, occurred during the years ended December 31, 2021, 2020 and 2019.

For the year ended December 31, 2021

During the year, the Group had the following related party transactions:

| a) | Company secretarial and consulting service fees for the services of our executives totalling A$787,618 to entities controlled by former CFO and Company Secretary, Mr. Cecil Ho.

| b) | On February 5, 2021, CIMC Marketing Pty Limited, a subsidiary of the Company, acquired 500 million shares for A$500,000 (approximately US$381,000) representing approximately 15% of the then equity interest in Oakridge International Limited (formerly Xped Limited) ("Oakridge"). Mr. Con Unerkov, the then Chairman and Chief Executive Officer of the Company, was also the Chairman and Chief Executive Officer of Oakridge. Mr. Cecil Ho, the Chief Financial Officer of the Company, was also the then Chief Financial Officer of Oakridge until March 10, 2021.

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For the year ended December 31, 2020

During the year, the Group had the following related party transactions:

| a) | Purchase of products and payment of services fees of A$29,794 and A$67,187 respectively from Marvel Digital Productions Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;

| b) | Purchase of products of A$274,417 from Integration Multimedia Techno., an entity controlled by Mr. Zhang Wuhua, a former director;

| c) | Sales of products of A$8,490 to Marvel Digital Productions Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;

| d) | Sales of products of A$315,034 to SWIS Co., Limited, a subsidiary of our substantial shareholder;

| e) | Service fee paid of A$21,812 to Marvel Research Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee Lee;

| f) | Service fee paid of A$193,972 to Marvel Digital Group Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;

| g) | Company secretarial and service fees paid of A$607,659 to Asset Union Limited, an entity controlled by Company Secretary, Mr. Cecil Ho.

For the year ended December 31, 2019

During the year, the Group had the following related party transactions:

| a) | Purchase of products of A$523,650 from related parties;

| b) | Service fees paid of A$571,519 to related parties;

| c) | Interest income of A$115,678 by the ultimate holding company;

| d) | Company secretarial and service fees paid of A$563,196 to related parties;

| e) | the Group incurred expenditure of A$40,000 (excluding GST) to BDO Administration (SA) Pty Ltd in respect to company secretarial and taxation services. George Yatzis, Company Secretary of IMTE is a director of BDO Administration (SA) Pty Ltd;

| f) | the unsecured bank overdraft and bank borrowings are personally guaranteed by our former director, Dr. Herbert Ying Chiu LEE. No charge has been requested for this guarantee.

C. Interests of Experts and Counsel

Not applicable.

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| ITEM 8. | FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

Our audited consolidated financial statements for the fiscal year ending December 31, 2021 are included in Item 18 of this Annual Report on Form 20-F.

Legal Proceedings

We are not involved in any significant legal, arbitration or governmental proceedings. We are not aware of any pending significant legal, arbitration or governmental proceedings with respect to IMTE.

Dividend Distribution Policy

We have never paid cash dividends to our shareholders. We intend to retain future earnings for use in our business and do not anticipate paying cash dividends on our Ordinary Shares in the foreseeable future. Any future dividend policy will be determined by the Board of Directors and will be based upon various factors, including our results of operations, financial condition, current and anticipated cash needs, future prospects, contractual restrictions and other factors as the Board of Directors may deem relevant.

B. Significant Changes

No significant changes occurred since the date of the annual financial statements.

| ITEM 9. | THE OFFER AND LISTING

A. Offer and Listing Details

NASDAQ Capital Markets

Our Ordinary Shares have traded on the NASDAQ Capital Markets since August 4, 2017.

Australian Securities Exchange

Our Ordinary Shares have traded on the ASX since our initial public offering on February 22, 2013 to our delisting from the ASX on June 15, 2018.

B. Plan of Distribution

Not applicable.

C. Markets

Our Ordinary Shares are listed and traded on the NASDAQ Capital Market and was traded on the Australian Securities Exchange Ltd., or ASX from February 2013 to June 15, 2018 when it was delisted from the ASX.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

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| ITEM 10. | ADDITIONAL INFORMATION

A. Share Capital

As at the date of this Annual Report, there is no concept of authorized share capital and par value for companies incorporated in Australia. The Company can issue unlimited number of Common Stock without par value. The Company only has one class of Ordinary Shares.

As at December 31, 2019, we had 3,377,386 Common Stock issued, outstanding and fully paid.

On February 20, 2020 the Company completed a Securities Purchase Agreement ("SPA") and issued 158,730 Ordinary Shares at a share price of US$6.30 per share for a total subscription proceeds of US$1,000,000.

On May 12, 2020, the Company issued 126,984 Ordinary Shares as a result of the exercise of warrants (as describe more fully under Warrants below) issued under the SPA above. The warrants were exercised by means of a cashless exercise pursuant to conditions in the form of warrant.

On May 18, 2020, the Company issued 126,984 Ordinary Shares as a result of the exercise of warrants (the "Warrants") pursuant to Securities Purchase Agreement entered into on February 20, 2020. The Warrants were exercised by means of a cashless exercise pursuant to conditions in the form of warrant.

On July 28, 2020, the Company issued 700,000 Ordinary Shares at a share price of US$3.00 per share for the conversion of debt pursuant to debt conversion agreement dated July 25, 2020.

On September 15, 2020, the Company issued 450,000 Ordinary Shares at a share price of US$3.00 per share to raise US$1,350,000 for working capital.

On September 15, 2020, the Company issued 4,471 Ordinary Shares at a share price of US$3.81 per share for the provision of IT development services.

On September 17, 2020, the Company issued 500,000 Ordinary Shares at a share price of US$3.00 per share to acquire 51% interest in Sunup Holdings Limited.

On October 6, 2020, the Company issued 241,667 Ordinary Shares as a result of the conversion of convertible promissory note of US$725,000.

On October 6, 2020, the Company and its subsidiaries settled the interest accrued of A$174,811 by issuing 46,741 shares to the Noteholder of Convertible Promissory Note dated January 20, 2020.

On December 2, 2020, the Company issued 600,000 Ordinary Shares at a share price of US$3.00 per share to raise US$1,800,000 for working capital.

On December 21, 2020, the Company entered into a placement agreement selling 307,692 shares in the Company at a price of US$3.25 per share raising US$1.0 million.

On December 21, 2020, the Company completed the US$1.65 million convertible debt agreement. The Convertible Note is without interest, matures in 2 years from the date of the Convertible Note and is convertible into ordinary share of the Company at a conversion price of US$3.25 for the period from 2 months after the issuance of the Convertible Note to its maturity.

On February 2, 2021, the Company issued 17,744 Ordinary Shares at a share price of US$3.6125 per share for a total subscription amount of US$64,100 (A$84,106) for the performance remuneration.

On February 5, 2021, the Company issued 2,768 Ordinary Shares at a share price of US$3.6125 per share for a total subscription amount of US$10,000 (A$13,176) for the performance remuneration.

On February 22, 2021, the Company issued 625,000 Ordinary Shares at a share price of US$4.00 per share to raise US$2,500,000 (A$3,162,500) for working capital.

On March 4, 2021, the Company entered into subscription agreements in a private placement with twelve investors outside the United States to subscribe a total of 573,350 shares in the Company at a price of US$4.00 per share for total proceeds of US$2,293,400 (approximately A$2,964,220). The use of the proceeds is to build out manufacturing infrastructure and working capital.

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On March 23, 2021, the Company issued 708,000 Ordinary Shares at a price of US$6.50 per share to raise US$4,602,000 (approximately A$6,046,320) for developing its current businesses, corporate expenditures and general corporate purposes.

On July 6, 2021, the Company entered into three Securities Purchase Agreements ("SPA") with three accredited investors ("Investors") for the total sale of 888,887 Ordinary Shares of, no par value, of the Company ("Ordinary Shares") at a price of US$3.15 per share (the "Cash Offerings"). The Cash Offerings generated net cash proceeds of approximately US$2,765,000 (approximately A$3,846,261) after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for the purchase of equipment for the Company's electronic glass business and working capital.

On January 3, 2022, the Company entered into convertible note purchase agreements with 8 individual investors outside the United States raising a total of US$10 million by the issuance of US$10 million convertible notes ("Note"). The Note bears interests at 6% per annum maturing in 2 years from the date of issuance of the Note. The holder of the Note has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$3.12 per share, subject to adjustment, over the term of the Note. Under the Note, the holder of the Note cannot convert the shares in the Company if such conversion would take the noteholder over 4.99% shareholding in the Company. On the same date, the notes were converted and a total of 3,205,128 shares were issued.

On January 19, 2022, the Company issued a total of 664,871 Ordinary Shares as a result of the conversion of convertible promissory note of HK$14,000,000 issued on January 20, 2020.

In March 2022, the Company approved the issuance of 698,888 shares at a price of US$4.50 per share for a total raise of about US$3.14 million. The Company intends to use the net cash proceeds for the purchase of equipment for the expansion of the lamination plant in USA, air filter operation, investment in new projects and working capital.

In April 2022, the Company issued a total of 507,692 Ordinary Shares as a result of the conversion of convertible promissory note of US$1,650,000 by Nextglass Technologies Corp.

Warrants

On February 20, 2020 the Company entered into a SPA for the sale of 158,730 Ordinary Shares of the Company and warrants ("Warrants") to purchase up to 126,984 Ordinary Shares. The Warrants were exercisable for the period of 12 months from the date of issuance, at an exercise price of US$10.50 per Share. If the VWAP of the Company's Ordinary Shares on the trading day immediately prior to the exercise date is less than US$10.50, then the Warrants may be exercised at such time by means of a cashless exercise where each Warrant exercised would receive one Share without any cash payment to the Company. On May 12, 2020, all the Warrants were exercised by means of a cashless exercise

On January 3, 2022 in connection with the sale of the convertible note, the Company issued to the noteholders warrants to purchase up to 2,139,032 shares raising an additional US$8 million if all the warrants are exercised. The warrants are for a term of 2 years from the date of the convertible notes and can be exercised at US$3.74 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company. The Company intends to use the net cash proceeds for supporting the acquisition and building out of manufacturing infrastructure and working capital of the Company.

Options

The Company had no employee share options outstanding as of December 31, 2021.

2020 Employee Share Option Plan

In August 2020, an Employee Share Option Plan ("2020 ESOP") was approved and established by the board. The 2020 ESOP is available to employee, consultants and eligible persons (as the case may be) of the Company as the board may in its discretion determine. The total number of the shares which may be offered by the Company under the 2020 ESOP shall not at any time exceed 5% of the Company's total issued shares when aggregated with the number of shares issued or that may be issued as a result of offers made at any time during the previous 3-year period. The shares are to be issued at a price determined by the board. The options are to be issued for no consideration. The exercise price, duration and other relevant terms of an option is to be determined by the board at its sole discretion.

In September 2020, the Company, subject to shareholders' approval, granted options to subscribe up to 261,000 Ordinary Shares for employees, directors and consultants under the 2020 ESOP. This term of the option is two years and have vesting period of the option holder over two years vesting period. The exercise prices will range from US$3.50 to US$3.70 per share. Each option when exercised will entitle the option holder to one ordinary share in the Company. Options will be able to be exercisable on or before an expiry date, will not carry any voting or dividend rights and will not be transferable except on death of the option holder. In September 2021 these options and the 2020 ESOP were cancelled by the Board.

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2021 Employee Share Option Plan

In December 2021, the Company approved a new Employee Share Option Plan ("2021 ESOP"). The 2021 ESOP is available to employee, consultants, and eligible persons (as the case may be) of the Company [upon determined by the Remuneration Committee or other body/ person as determined by the Board] and at the absolute discretion of the Board. The 2021 ESOP is valid for 10 years term. The shares are to be issued at a price determined by the Board. The options are to be issued for no consideration. The exercise price and other relevant terms of an option is to determine by the Board at its sole discretion. The total number of the shares which may be offered by the Company under the ESOP shall not at any time exceed 20% of the Company's total issued shares when aggregated with the number of shares issued or that may be issued as a result of offers made at any time during the previous 3-year period, the limit imposed under the Australian Securities and Investments Commission Class Order 14/1001.

B. Memorandum and Articles of Association

A summary of our Constitution is incorporated by reference to our registration statement on Form 20-F filed on July 21, 2017.

C. Material Contracts

Except for contracts entered into in the ordinary course of business, the only contracts entered into by IMTE within two years immediately preceding this annual report that are still in effect, which may be regarded as material are as follows:

Subscription Agreement for 60% Equity interests in World Integrated Supply Ecosystem Sdn Bhd. ("WISE")

On January 20, 2022, the Company entered into a subscription agreement for 60% equity interests in World Integrated Supply Ecosystem Sdn Bhd. ("WISE"), a Malaysia company engaged in the business of the provision of halal certification to qualified businesses/operations, the establishment halal products supply chain, and sale of halal products. WISE will be providing halal certification working with the JAKIM, a department of the Malaysia government mandated to conduct and manage the halal certification process. WISE is working towards being appointed by JAKIM Malaysia as an accredited certification body to conduct the auditing process and certify product application. WISE will also work with other certification bodies worldwide that have been accredited by JAKIM, thereby extending our reach to the global markets.

Assumption and Assignment Agreement between IMTE and Joint Investment Limited dated December 29, 2021 for IMTE to subscribe up to 60% in Ace Corporation Limited

On December 29, 2021, the Company entered into an Assignment and Assumption Agreement to take over the rights and obligation on a Cooperation Agreement on developing a Blockchain business focusing on digital asset market platform mainly focusing on NFT (Non-Fungible Token) trading market. Under the Cooperation Agreement, the Company shall invest up to US$1 million for 60% equity interests in Ace Corporation Limited to develop, establish, and operate a trading marketplace platform called "Ouction" at www.ouction.io. Ouction platform will be an interactive experiencing solution designed with dynamic image cryptographic verification technology which will serve as a bridge for O2O (Online to Offline) transaction. This will enable the Ouction platform to not only verify virtual asset transactions, but also provide encryption and Blockchain notarized digital certificates of physical assets for a fairer and more credible platform trading experience to e-commerce companies and their users. Ouction is expected to adopt decentralized technologies in the fields of games, fintech, film & TV, culture, and e-commerce. Ouction also plans to develop cross-industrial synergy and economic value from the new NFT marketplace it creates. Ouction's marketplace plans to be a niche market in art, historical artifacts, photos and videos.

Debt Conversion Agreement and Convertible Note with CIMB Limited ("CIMB") for a total of US$2,825,000

On January 20, 2020, the Company entered into a convertible note purchase agreement (the "Purchase Agreement") with CIMB Limited, an independent third party. Pursuant to the Purchase Agreement, CIMB will loan HK$14 million (about US$1.8 million) under a convertible promissory note (the "Note") with a coupon rate of 10% per annum, maturing in two years from the date of the Purchase Agreement. Interest is payable in cash on a quarterly basis, with the first payment due by March 31, 2020. The Company, at its sole option, may pay interest in Ordinary Shares based on 75% of the average of the closing prices of its Ordinary Shares for the five trading days prior to each end-of-quarter interest due date. The holder of the Note has the right to convert the principal and accrued interest to Ordinary Shares of the Company at a conversion price of US$5.00 per share over the term of the Note. The conversion price is subject to downward adjustment if the Company sells Ordinary Shares below the conversion price within 12 months after the date of the Purchase Agreement. Both the Company and the holder may request prepayment of the Note at any time without penalty after the Company receives financing of a minimum of US$4 million. The holder of the Note is also entitled to piggyback registration rights.

On February 11, 2020, the Company and the holder of the Note entered into a supplement agreement to the Purchase Agreement to limit the total number of Ordinary Shares of the Company issuable upon conversion of the Note to no more than 19.99% of the total issued and outstanding Ordinary Shares of the Company as of the date of Purchase Agreement. The supplement agreement further provides that the conversion price shall, in no event, be less than US$1.50 per share, subject to regulatory or shareholder approval.

On January 19, 2022, the noteholder converted this Note and 664,871 shares in the Company was issued.

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US$3 million funding with Nextglass Technologies Corp ("Nextglass")

On August 6, 2020, the Company entered into two agreements with Nextglass, an independent third party, to raise a total of US$3,000,000. The first agreement is a placement of 450,000 shares at a share price of US$3.00 per share to raise US$1,350,000. The second agreement is a Convertible Note Purchase Agreement (the "Purchase Agreement"), which Nextglass will invest US$1,650,000 under a convertible note (the "Note") without interest, maturing in two years from the date of the Note. The holder of the Note or the Company has the right to convert the principal into Ordinary Shares of the Company at a conversion price of US$3.25 per share over the term of the Note. The conversion price is subject to downward adjustment and has a floor price of US$1.50 if the Company sells Ordinary Shares below the conversion price within 12 months after the date of the Note. The Note cannot be prepaid. The holder of the Note is also entitled to piggyback registration rights. Furthermore, there is a conversion limitation such that no conversion can be effected if after such conversion Nextglass would own more than 19.99% equity interest in the Company.

In April 2022, the noteholder converted this Note and 507,692 shares in the Company was issued.

Sale and Purchase Agreements ("SP Agreements") to purchase a total of 51% interest in Sunup Holdings Limited ("Sunup").

On August 6, 2020, IMTE entered into two conditional SP Agreements to buy 25.5% equity interest in Sunup from each of Nextglass and Teko International Limited ("Teko") for US$750,000 each for a total consideration of US$1,500,000.

The consideration paid was US$750,000 for each of Nextglass Technologies Corp ("Nextglass") and Teko, and each of them was issued 250,000 Ordinary Shares in IMTE (the "Consideration Shares") at US$3.00 per share. Under the SP Agreements, IMTE could also pay a deferred consideration based on five times the annualized earnings for the two years following completion, less the initial consideration of US$750,000.

For the duration of the agreements and until the deferred consideration is determined, Nextglass and Teko have the right to purchase their 25.5% Sunup equity interest back from IMTE through the restitution of the Consideration Shares if IMTE and Sunup terminate the directors and officers of Sunup without cause and without the consent of the Nextglass and Teko

Purchasing Product Designs and Moulds for New Filter Design

On December 21, 2020, Sunup, the Company's subsidiary entered into an assignment agreement to take up the rights to a Product Development Agreement for two new air filters. The contract provides for Sunup to own the trademark and the right to use the product design and the distribution right to sell the air filter products worldwide. The total investment costs for the product development is approximately US$728,000 (South Korean Won 800 Million).

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D. Exchange Controls

Australia has largely abolished exchange controls on investment transactions. The Australian dollar is freely convertible into U.S. dollars. In addition, there are currently no specific rules or limitations regarding the export from Australia of profits, dividends, capital or similar funds belonging to foreign investors, except that certain payments to non-residents must be reported to the Australian Transaction Reports and Analysis Centre, which monitors such transaction, and amounts on account of potential Australian tax liabilities which may be required to be withheld unless a relevant taxation treaty can be shown to apply. Article 11.8 of the free trade agreement between Australia and the US provides that all transfers relating to a covered investment is to be made freely and without delay into and out of each territory. Such transfers include inter alia contributions to capital, including the initial contribution; profits, dividends, capital gains and proceeds from the sale of all or any part of the covered investment or from the partial or complete liquidation of the covered investment.

The Foreign Acquisitions and Takeovers Act 1975

Under Australian law, in certain circumstances foreign persons are prohibited from acquiring more than a limited percentage of the shares in an Australian company without approval from the Australian Treasurer. These limitations are set forth in the Australian Foreign Acquisitions and Takeovers Act, or the Takeovers Act.

Under the Takeovers Act, as currently in effect, any foreign person, together with associates, or parties acting in concert, is prohibited (without approval) from acquiring 20% or more of the shares in any company having total assets of A$252 million or more (or A$1,094 million or more in case of private (non-government) U.S. investors). "Associates" is a broadly defined term under the Takeovers Act and includes:

| ● | spouses, lineal ancestors and descendants, and siblings;

| ● | any person with whom the person is acting, or proposes to act, in concert;

| ● | partners, officers of companies, the company, employers and employees, and corporations;

| ● | their shareholders related through substantial shareholdings or voting power;

| ● | corporations whose directors are controlled by the person, or who control a person; and

| ● | associations between trustees and substantial beneficiaries of trust estates.

In addition, a foreign person may not acquire shares in a company having total assets of A$252 million or more (or A$1,094 million or more in case of private (non-government) U.S. investors) if, as a result of that acquisition, the total holdings of all foreign persons and their associates will exceed 40% in aggregate without the approval of the Australian Treasurer. If the necessary approvals are not obtained, the Treasurer may make an order requiring the acquirer to dispose of the shares it has acquired within a specified period of time. At present, we do not have total assets of A$252million or more. At this time, our total assets do not exceed any of the above thresholds and therefore no approval would be required from the Australian Treasurer. Nonetheless, should our total assets exceed the threshold in the future, we will be mindful to monitor the holdings for foreign persons (together with the associates) to ensure that the thresholds will not be exceeded without the Australian Treasurer's approval.

Each foreign person seeking to acquire holdings in excess of the above caps (including their associates, as the case may be) would need to complete an application form setting out the proposal and relevant particulars of the acquisition/shareholding. The Australian Treasurer then has 30 days to consider the application and make a decision. However, the Australian Treasurer may extend the period by up to a further 90 days by publishing an interim order. The Australian Treasurer has issued a guideline titled Australia's Foreign Investment Policy which provides an outline of the policy. As for the risk associated with seeking approval, the policy provides that the Treasurer will reject an application if it is contrary to the national interest.

If the level of foreign ownership exceeds 40% at any time (or if one individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds at least 20%), we would be considered a foreign person under the Takeovers Act. In such event, we would be required to obtain the approval of the Australian Treasurer for our company, together with our associates, to acquire (i) more than 20% of an Australian company or business with assets totalling over A$252 million (or A$1,094 million if we were considered a private US investor); or (ii) any direct or indirect ownership in certain real estate interests.

The percentage of foreign ownership in our company would also be included in determining the foreign ownership of any Australian company or business in which we may choose to invest. Since we have no current plans for any such investments or acquisitions and do not currently own any relevant real estate interests, any such approvals required to be obtained by us as a foreign person under the Takeovers Act will not affect our current or future ownership or lease of real estate interests in Australia.

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Our Constitution does not contain any additional limitations on a non-resident's right to hold or vote our securities.

Australian law requires the transfer of shares in our company to be made in writing. No stamp duty will be payable in Australia on the transfer of Ordinary Shares quoted on the NASDAQ.

The Financial Transactions Reports Act 1988

The Financial Transactions Reports Act 1988 (Cth) is an act of the Parliament of the Commonwealth of Australia, designed to facilitate the administration and enforcement of Australia's taxation laws. It provides for the reporting of certain financial transactions and transfers, including the export or import of currency exceeding $10,000 to Australian Transaction Reports and Analysis Centre.

The Income Tax Assessment Act of 1936 and the Income Tax Assessment Act of 1997 (collectively, the "Tax Act")

The Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth) (collectively, the " Tax Act ") is the principal law governing the imposition of Federal taxes in Australia (except goods and services tax and a number of specific taxes such as fringe benefits tax).

Under the Tax Act, in some circumstances overseas residents are obliged to pay income tax in Australia on income derived from Australian sources or property.

E. Taxation

The following is a summary of the current tax laws of the U.S. (including the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions) and Australia as they relate to us and our shareholders, including United States and other non-Australian shareholders. The summary is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change, possibly on a retroactive basis. The discussion does not address any aspects of U.S. taxation other than federal income taxation or any aspects of Australian taxation other than federal income taxation, inheritance taxation, stamp duty and goods and services tax.

Existing and prospective holders of ordinary shares are advised to consult their own tax advisors with respect to the specific tax consequences to them of the purchase, ownership and disposition of ordinary shares, including, in particular, the effect of any foreign, state or local taxes.

Australian Tax Consequences

Non-Australian residents may be liable to pay Australian tax on income derived from Australian sources. One mechanism by which that tax is paid (for non-residents who have no permanent establishment or fixed base in Australia or where the income is not connected with a permanent establishment or fixed base) is known as withholding tax. Dividends paid by a resident Australian company to a resident of the United States of America who is entitled to the benefits of the Australia/US double tax treaty and is beneficially entitled to the dividends are subject to withholding tax at the rate of 15% to the extent the dividends are unfranked. The rate of withholding tax on dividends is normally 30%, but since the United States has concluded a double tax treaty agreement with Australia, the rate is reduced to 15% where the benefits of the treaty apply. It should be noted, however, that under Section 128B(3) of the Income Tax Assessment Act 1936 (Cth), to the extent that dividends paid to non-residents have been franked (generally where a company pays tax itself), such dividends are exempt from withholding tax. "Franked dividends" is the expression given to dividends when the profits out of which those dividends are paid have been taxed at company level and such tax is allocated to the dividend. Accordingly, an Australian company paying fully franked dividends to a non-resident is not required to deduct any withholding tax. Dividends on which withholding tax has been paid are generally not subject to any further Australian tax. In other words, the withholding tax should represent the final Australian tax liability in relation to those dividends.

The pertinent provisions of the double tax treaty between Australia and the United States provide that dividends are primarily liable for tax in the country of residence of the beneficial owner of the dividends. However, the source country, in this case Australia, may also tax them, but in such case the tax will be limited to 15% if the benefits of the treaty apply. Where the beneficial owner is a United States resident corporation that directly holds at least 10% of the voting power in us, the tax will be limited to 5%. The 15% limit does not apply to dividends derived by a resident of the United States of America who has a permanent establishment or fixed base in Australia, if the holding giving rise to the dividends is effectively connected with that establishment or base. Such dividends are taxed on a net assessment basis as business income or independent personal services income as the case may be.

We have not paid any cash dividends since our inception and we do not anticipate the payment of cash dividends in the foreseeable future. See "Item 8.A. Financial Statements and Other Financial Information-Dividend Policy."

Capital gains tax in Australia is payable on net assessable real gains over the period in which the shares have been held, that is, the difference between the selling price and the total cost price calculated under Australian tax law. In some cases the cost price may be indexed for inflation, or, if the shares have been held for more than one year, certain taxpayers can, with respect to shares held for more than one year, be eligible for a discount of up to 50% of the gross gain. Capital losses may be available to offset capital gains.

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Stamp Duty

Any transfer of shares through trading on the NASDAQ, whether by Australian residents or foreign residents, should not be subject to stamp duty.

Australian Death Duty

Australia does not have estate or death duties. Generally, no capital gains tax liability is realized upon the inheritance of a deceased person's shares. The disposal of inherited shares by beneficiaries, may, however, give rise to a capital gains tax liability.

Goods and Services Tax

The issue or transfer of shares will not incur Australian goods and services tax and does not require a stockholder to register for Australian goods and services tax purposes.

U.S. Federal Income Tax Considerations

The following discussion summarizes the principal U.S. federal income tax considerations relating to the purchase, ownership and disposition of our Ordinary Shares by a U.S. holder (as defined below) holding such shares as capital assets (generally, property held for investment). This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations, administrative pronouncements of the U.S. Internal Revenue Service (the "IRS") and judicial decisions, all as in effect on the date hereof, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. This summary does not describe any state, local or non-U.S. tax law considerations, or any aspect of U.S. federal tax law other than income taxation; U.S. holders are urged to consult their own tax advisors regarding such matters.

This summary does not purport to address all material federal income tax consequences that may be relevant to a holder of ordinary shares or warrants. This summary does not take into account the specific circumstances of any particular investors, some of which (such as tax-exempt entities, banks or other financial institutions, insurance companies, broker-dealers, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, regulated investment companies, real estate investment trusts, U.S. expatriates, investors liable for the alternative minimum tax, partnerships and other pass-through entities, investors that own or are treated as owning 10% or more of our voting stock, investors that hold the ordinary shares as part of a straddle, hedge, conversion or constructive sale transaction or other integrated transaction, and U.S. holders whose functional currency is not the U.S. dollar) may be subject to special tax rules. This discussion does not address U.S. federal tax laws other than those pertaining to U.S. federal income taxation (such as estate or gift tax laws or the Medicare tax on investment income), nor does it address any aspects of U.S. state or local or non-U.S. taxation.

As used below, a "U.S. Holder" is a beneficial owner of an ordinary share that is, for U.S. federal income tax purposes, (i) a citizen or resident alien individual of the United States, (ii) a corporation (or an entity taxable as a corporation) created or organized under the law of the United States, any State thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income tax without regard to its source, or (iv) a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. For purposes of this discussion, a "Non-U.S. Holder" is a beneficial owner of an ordinary share or warrant that is (i) a non-resident alien individual, (ii) a corporation (or an entity taxable as a corporation) created or organized in or under the law of a country other than the United States or a political subdivision thereof or (iii) an estate or trust that is not a U.S. holder. This discussion does not address any aspect of U.S. federal gift or estate tax, or state, local or non-U.S. tax laws. Additionally, the discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold ordinary shares through such entities. If a partnership (including for this purpose any entity treated as a partnership for U.S. federal tax purposes) is a beneficial owner of ordinary shares or warrants, the U.S. federal tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of ordinary shares or warrants that is a partnership and partners in that partnership are urged to consult their own tax advisers regarding the U.S. federal income tax consequences of purchasing, holding and disposing of ordinary shares or warrants.

We have not sought a ruling from the IRS or an opinion of counsel as to any U.S. federal income tax consequence described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court.

GIVEN THE COMPLEXITY OF THE TAX LAWS AND BECAUSE THE TAX CONSEQUENCES TO ANY PARTICULAR INVESTOR MAY BE AFFECTED BY MATTERS NOT DISCUSSED HEREIN, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS.

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TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE IRS UNDER TREASURY CIRCULAR 230, WE INFORM YOU THAT (1) ANY DISCUSSION OF U.S. FEDERAL INCOME TAX ISSUES CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS), UNLESS OTHERWISE SPECIFICALLY STATED, WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE UNITED STATES INTERNAL REVENUE CODE, AND (2) EACH U.S. HOLDER SHOULD SEEK ADVICE BASED UPON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

Taxation of Distributions

U.S. Holders. In general, subject to the passive foreign investment company ("PFIC") rules discussed below, a distribution on an ordinary share will constitute a dividend for U.S. federal income tax purposes to the extent that it is made from our current or accumulated earnings and profits as determined under U.S. federal income tax principles. If a distribution exceeds the amount of our current and accumulated earnings and profits, it will be treated as a non-taxable reduction of basis to the extent of the U.S. Holder's tax basis in the ordinary share on which it is paid, and to the extent it exceeds that basis it will be treated as a capital gain. For purposes of this discussion, the term "dividend" means a distribution that constitutes a dividend for U.S. federal income tax purposes.

The gross amount of any dividend on an ordinary share (which will include the amount of any Australian taxes withheld) generally will be subject to U.S. federal income tax as foreign source dividend income and will not be eligible for the corporate dividends received deduction. The amount of a dividend paid in Australian currency will be its value in U.S. dollars based on the prevailing spot market exchange rate in effect on the day that the U.S. Holder receives the dividend, whether or not the dividend is converted into U.S. dollars. A U.S. holder will have a tax basis in any distributed Australian currency equal to its U.S. dollar amount on the date of receipt, and any gain or loss realized on a subsequent conversion or other disposition of the Australian currency generally will be treated as U.S. source ordinary income or loss. If dividends paid in Australian currency are converted into U.S. dollars on the date they are received by a U.S. Holder, the U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. U.S. Holders are urged to consult their own tax advisers regarding the treatment of any foreign currency gain or loss if any Australian currency received by the U.S. Holder is not converted into U.S. dollars on the date of receipt.

Subject to certain exceptions for short-term and hedged positions, any dividend that a non-corporate holder receives on an ordinary share will be subject to tax rate of 20% if the dividend is a "qualified dividend". A dividend on an ordinary share will be a qualified dividend if (i) either (a) the ordinary shares are readily tradable on an established securities market in the U.S. or (b) we are eligible for the benefits of a comprehensive income tax treaty with the U.S. that the U.S. Secretary of the Treasury determines is satisfactory for purposes of these rules and that includes an exchange of information program, and (ii) we were not, in the year prior to the year the dividend was paid, and are not, in the year the dividend is paid, a PFIC. The ordinary shares are listed on the NASDAQ Capital Market, which should then qualify them as readily tradable on an established securities market in the United States. In any event, the double tax treaty between Australia and the U.S. (the "Treaty") satisfies the requirements of clause (i)(b), and, although the matter is not free from doubt, we believe that we should be a resident of Australia entitled to the benefits of the Treaty. However, because the facts relating to our entitlement to the benefits of the Treaty can change over time, there can be no assurance that we will be entitled to the benefits of the Treaty for any taxable year. As discussed above, qualified dividends do not include dividends paid by a company which was a PFIC in the year prior to the year the dividend was paid, or in the year the dividend is paid. Based on our audited financial statements and relevant market and shareholder data, we believe we were not a PFIC for U.S. federal income tax purposes for our December 31, 2019 taxable year. Based on our audited consolidated financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not expect that we could be classified as a PFIC for our December 31, 2019 taxable year. Given that the determination of PFIC status involves the application of complex tax rules, and that it is based on the nature of our income and assets from time to time, no assurances can be provided that we will not be considered a PFIC for any past or future taxable year. Moreover, as described in the section below entitled "Passive Foreign Investment Company Rules," if we were a PFIC in a year while a U.S. Holder held an ordinary share, and if the U.S. Holder has not made a qualified electing fund election effective for the first year the U.S. Holder held the ordinary share, the ordinary share remains an interest in a PFIC for all future years or until such an election is made. The IRS takes the position that that rule will apply for purposes of determining whether an ordinary share is an interest in a PFIC in the year a dividend is paid or in the prior year, even if the Company does not satisfy the tests to be a PFIC in either of those years.

Even if dividends on the ordinary shares would otherwise be eligible for qualified dividend treatment, in order to qualify for the reduced qualified dividend tax rates, a non-corporate holder must hold the ordinary share on which a dividend is paid for more than 60 days during the 120-day period beginning 60 days before the ex-dividend date, disregarding for this purpose any period during which the non-corporate holder has an option to sell, is under a contractual obligation to sell or has made (and not closed) a short sale of substantially identical stock or securities, is the grantor of an option to buy substantially identical stock or securities or, pursuant to Treasury regulations, has diminished their risk of loss by holding one or more other positions with respect to substantially similar or related property. In addition, to qualify for the reduced qualified dividend tax rates, the non-corporate holder must not be obligated to make related payments with respect to positions in substantially similar or related property. Payments in lieu of dividends from short sales or other similar transactions will not qualify for the reduced qualified dividend tax rates. A non-corporate holder that receives an extraordinary dividend eligible for the reduced qualified dividend rates must treat any loss on the sale of the stock as a long-term capital loss to the extent of the dividend. For purposes of determining the amount of a non-corporate holder's deductible investment interest expense, a dividend is treated as investment income only if the non-corporate holder elects to treat the dividend as not eligible for the reduced qualified dividend tax rates. Special limitations on foreign tax credits with respect to dividends subject to the reduced qualified dividend tax rates apply to reflect the reduced rates of tax.

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The U.S. Treasury has announced its intention to promulgate rules pursuant to which non-corporate holders of stock of non-U.S. corporations, and intermediaries though whom the stock is held, will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because those procedures have not yet been issued, it is not clear whether we will be able to comply with them.

Non-corporate holders of ordinary shares are urged to consult their own tax advisers regarding the availability of the reduced qualified dividend tax rates in the light of their own particular circumstances.

Any Australian withholding tax will be treated as a foreign income tax eligible for credit against a U.S. Holder's U.S. federal income tax liability, subject to generally applicable limitations under U.S. federal income tax law. For purposes of computing those limitations separately under current law for specific categories of income, a dividend generally will constitute foreign source "passive category income" or, in the case of certain holders, "general category income". A U.S. Holder will be denied a foreign tax credit with respect to Australian income tax withheld from dividends received with respect to the ordinary shares to the extent the U.S. Holder has not held the ordinary shares for at least 16 days of the 30-day period beginning on the date which is 15 days before the ex-dividend date or to the extent the U.S. Holder is under an obligation to make related payments with respect to substantially similar or related property. Any days during which a U.S. Holder has substantially diminished its risk of loss on the ordinary shares are not counted toward meeting the 16-day holding period required by the statute. The rules relating to the determination of the foreign tax credit are complex, and U.S. Holders are urged to consult with their own tax advisers to determine whether and to what extent they will be entitled to foreign tax credits as well as with respect to the determination of the foreign tax credit limitation. Alternatively, any Australian withholding tax may be taken as a deduction against taxable income, provided the U.S. Holder takes a deduction and not a credit for all foreign income taxes paid or accrued in the same taxable year. In general, special rules will apply to the calculation of foreign tax credits in respect of dividend income that is subject to preferential rates of U.S. federal income tax.

Non-U.S. Holders. A dividend paid to a Non-U.S. Holder on an ordinary share will not be subject to U.S. federal income tax unless the dividend is effectively connected with the conduct of trade or business by the non-U.S. Holder within the United States (and is attributable to a permanent establishment or fixed base the Non-U.S. Holder maintains in the United States if an applicable income tax treaty so requires as a condition for the Non-U.S. Holder to be subject to U.S. taxation on a net income basis on income from the ordinary share). A Non-U.S. Holder generally will be subject to tax on an effectively connected dividend in the same manner as a U.S. Holder. A corporate Non-U.S. Holder may also be subject under certain circumstances to an additional "branch profits tax," the rate of which may be reduced pursuant to an applicable income tax treaty.

Taxation of Capital Gains

U.S. Holders. Subject to the passive foreign investment company rules discussed below, on a sale or other taxable disposition of an ordinary share, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between the U.S. Holder's adjusted basis in the ordinary share and the amount realized on the sale or other disposition, each determined in U.S. dollars.

Such capital gain or loss will be long-term capital gain or loss if at the time of the sale or other taxable disposition the ordinary share has been held for more than one year. In general, any adjusted net capital gain of an individual is subject to a federal income tax rate of 20%. Capital gains recognized by corporate U.S. Holders generally are subject to U.S. federal income tax at the same rate as ordinary income. The deductibility of capital losses is subject to various limitations.

Any gain a U.S. Holder recognizes generally will be U.S. source income for U.S. foreign tax credit purposes, and, subject to certain exceptions, any loss will generally be a U.S. source loss. If an Australian tax is withheld on a sale or other disposition of an ordinary share, the amount realized will include the gross amount of the proceeds of that sale or disposition before deduction of the Australian tax. The generally applicable limitations under U.S. federal income tax law on crediting foreign income taxes may preclude a U.S. Holder from obtaining a foreign tax credit for any Australian tax withheld on a sale of an ordinary share. The rules relating to the determination of the foreign tax credit are complex, and U.S. Holders are urged to consult with their own tax advisers regarding the application of such rules. Alternatively, any Australian withholding tax may be taken as a deduction against taxable income, provided the U.S. Holder takes a deduction and not a credit for all foreign income taxes paid or accrued in the same taxable year.

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Non-U.S. Holders. A Non-U.S. Holder will not be subject to U.S. federal income tax on a gain recognized on a sale or other disposition of an ordinary share unless (i) the gain is effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and is attributable to a permanent establishment or fixed base that the Non-U.S. Holder maintains in the United States if an applicable income tax treaty so requires as a condition for the Non-U.S. Holder to be subject to U.S. taxation on a net income basis on income from the ordinary share), or (ii) in the case of a Non-U.S. Holder who is an individual, the Non-U.S. Holder is present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions apply. Any effectively connected gain of a corporate Non-U.S. Holder may also be subject under certain circumstances to an additional "branch profits tax", the rate of which may be reduced pursuant to an applicable income tax treaty.

Passive Foreign Investment Company Rules

A special set of U.S. federal income tax rules applies to a foreign corporation that is a PFIC for U.S. federal income tax purposes. As noted above, based on our audited consolidated financial statements and relevant market and shareholder data, we believe we were not a PFIC for U.S. federal income tax purposes for our December 31, 2020 taxable year. Moreover, given that the determination of PFIC status involves the application of complex tax rules, and that it is based on the nature of our income and assets from time to time, no assurances can be provided that we will be considered a PFIC for any future taxable year.

In general, a foreign corporation is a PFIC if at least 75% of its gross income for the taxable year is passive income or if at least 50% of its assets for the taxable year produce passive income or are held for the production of passive income. In general, passive income for this purpose means, with certain designated exceptions, dividends, interest, rents, royalties (other than certain rents and royalties derived in the active conduct of trade or business), annuities, net gains from dispositions of certain assets, net foreign currency gains, income equivalent to interest, income from notional principal contracts and payments in lieu of dividends. The determination of whether a foreign corporation is a PFIC is a factual determination made annually and is therefore subject to change. Subject to exceptions pursuant to certain elections that generally require the payment of tax, once stock in a foreign corporation is classified as stock in a PFIC in the hands of a particular shareholder that is a U.S. person, it remains stock in a PFIC in the hands of that shareholder.

Unfavorable tax consequences for a U.S. Holder can occur if we are treated as a PFIC for any year while a U.S. Holder owns ordinary shares. Certain of these tax consequences can be mitigated with respect to a U.S. Holder's ordinary shares (but not a U.S. Holder's warrants) if the U.S. Holder makes, or has made, a timely qualified electing fund election or election to mark to market the holder's ordinary shares, and such election is in effect for the first taxable year during which the U.S. Holder owns ordinary shares that we are a PFIC. If we are treated as a PFIC, and neither election is made, then contrary to the tax consequences described in "U.S. Federal Income Tax Considerations-Taxation of Distributions" and "U.S. Federal Income Tax Considerations-Taxation of Capital Gains" above, in any year in which the U.S. Holder either disposes of an ordinary share at a gain or receives one or more "excess distributions" in respect of our Ordinary Shares, special rules apply to the taxation of the gain or the excess distributions. For purposes of these rules, a U.S. Holder will be treated as receiving an "excess distribution" to the extent that actual or constructive distributions received in the current taxable year exceed 125% of the average distributions (whether actual or constructive and whether or not out of earnings and profits) received by such U.S. Holder in respect of our Ordinary Shares during the three preceding years or, if shorter, the U.S. Holder's holding period. A disposition of an ordinary share, for purposes of these rules, includes many transactions on which gain or loss is not realized under general U.S. federal income tax rules (but generally should not include the exercise of a warrant, as discussed below). The gain or the excess distributions must be allocated ratably to each day the U.S. Holder has held the ordinary share, as the case may be. Amounts allocated to each year are taxable as ordinary income in their entirety (and are not eligible for the reduced qualified dividend rates) and not as capital gain, and amounts allocable to prior years may not be offset by any deductions or losses. Amounts allocated to each such prior year are taxable at the highest rate in effect for that year and are subject to an interest charge at the rates applicable to deficiencies for income tax for those periods. In addition, a U.S. Holder's tax basis in an ordinary share that is acquired from a decedent would not receive a step-up to fair market value as of the date of the decedent's death but instead would be equal to the decedent's basis, if lower.

The special PFIC rules described above will not apply to a U.S. Holder's ordinary shares if the U.S. Holder makes a timely election, which remains in effect, to treat us as a qualified electing fund, or QEF, for the first taxable year in which the U.S. Holder owns an ordinary share and in which we are classified as a PFIC, provided that we comply with certain reporting requirements. Instead, a U.S. Holder that has made a QEF election is required for each taxable year to include in income a pro rata share of our ordinary earnings as ordinary income and a pro rata share of its net capital gain as long-term capital gain, subject to a separate election to defer payment of taxes, which deferral is subject to an interest charge. In order for such a QEF election to be valid, we must provide U.S. Holders either (1) a statement showing such U.S. Holder's pro rata share of our ordinary earnings and net capital gain (calculated for U.S. tax purposes) for the Company's taxable year, (2) sufficient information to enable the U.S. Holder to calculate its pro rata share for such year, or (3) a statement that the Company has permitted the U.S. Holder to inspect and copy its permanent books of account, records, and such other documents as may be maintained by us that are necessary to establish that PFIC ordinary earnings and net capital gain are computed in accordance with U.S. income tax principles. We have not yet determined whether, in years in which we are classified as a PFIC, we will make the computations necessary to supply U.S. Holders with the information needed to report income and gain pursuant to a QEF election. It is, therefore, possible that U.S. Holders would not be able to make or retain that election in any year we are a PFIC. The QEF election is made on a shareholder-by-shareholder basis and once made, can only be revoked with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information statement, to a timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections may only be made by filing a protective statement with such return or with the consent of the IRS. A U.S. Holder may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.

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If a U.S. Holder has elected the application of the QEF rules to the U.S. Holder's ordinary shares, and the special tax and interest charge rules described in the second preceding paragraph do not apply to such shares (because of a timely QEF election for the first tax year of the U.S. Holder's holding period for such shares, or, as described below, a purge of the PFIC taint pursuant to a special purging election), any gain realized on the disposition of an ordinary share generally will be taxable as capital gain and no interest charge will be imposed. As discussed above, U.S. Holders of a QEF are currently taxed on their pro rata shares of the QEF's earnings and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were previously included in income generally will not be taxable as a dividend. The tax basis of a U.S. Holder's shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. Similar basis adjustments apply to property if by reason of holding such property the U.S. Holder is treated under applicable attribution rules as owning shares in a QEF.

If a QEF election is not made for the first taxable year in which the U.S. Holder owns an ordinary share and in which we are a PFIC, certain elections can be made while we continue to satisfy the definition of a PFIC that, combined with a QEF election, can cause the QEF election to be treated as having been made for that first taxable year. Those elections may require the electing shareholder to recognize gain on a constructive sale or to be taxable on the shareholder's share of certain undistributed profits of the foreign corporation. If gain or income is recognized pursuant to one of those elections, the special PFIC rules set forth in the fourth preceding paragraph would apply to that gain or income. Even if a QEF election ceases to apply because in a later taxable year we cease to satisfy the tests to be a PFIC, the QEF election will apply again in any subsequent year in which the Company again satisfies the tests to be a PFIC. Moreover, if a U.S. Holder sells all of the ordinary Shares they own and later reacquires other ordinary shares, any QEF election the U.S. Holder has made that remains in effect will apply to the ordinary shares acquired later. The applicable Treasury regulations provide that the Commissioner of the IRS has the discretion to invalidate or terminate a QEF election if the U.S. Holder or we, or an intermediary, fails to satisfy the requirements for the QEF election.

The special PFIC rules described in the fourth preceding paragraph will not apply to a U.S. Holder's ordinary shares if the U.S. Holder elects to mark the U.S. Holder's ordinary shares to market each year, provided that the ordinary shares are considered "marketable stock" within the meaning of the applicable Treasury regulations. A U.S. Holder that makes this election will recognize as ordinary income or loss each year an amount equal to the difference, if any, as of the close of the taxable year between the fair market value of the U.S. Holder's ordinary shares and the U.S. Holder's adjusted tax basis in the ordinary shares. Losses would be allowed only to the extent of net mark-to-market gain previously included in income by the U.S. Holder under the election for prior taxable years, reduced by losses allowed in prior taxable years. If the mark-to-market election were made, then the special PFIC rules set forth in the fourth preceding paragraph would not apply for periods covered by the election. In general, the ordinary shares will be marketable stock within the meaning of the applicable Treasury regulations if they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter on a "qualified exchange or other market" within the meaning of the applicable Treasury regulations and certain other requirements are met. The Australian Securities Exchange is a qualified exchange within the meaning of the applicable Treasury regulations. Thus, the ordinary shares should be "marketable stock" within the meaning of the applicable Treasury regulations. If a U.S. Holder makes a mark-to-market election, but does not make that election for the first taxable year in which the U.S. Holder owns an ordinary share and in which the Company is classified as a PFIC, and if the U.S. Holder had not made a QEF election for that first such taxable year, the rules set forth in the fourth preceding paragraph will apply to any distributions on an ordinary share in the year of the mark-to-market election, to any gain recognized on an actual sale of an ordinary share in that year, and to any gain recognized in that year pursuant to the mark-to-market election. The mark-to-market rules generally continue to apply to a U.S. Holder who makes the mark-to-market election, even in years we do not satisfy the tests to be a PFIC.

A U.S. Holder who owns ordinary shares during a year in which we are classified as a PFIC generally will remain subject to the rules set forth in the fifth preceding paragraph for all taxable years if the U.S. Holder has not made a QEF election or a mark-to-market election for the first taxable year in which the U.S. Holder owns an ordinary share and in which we are classified as a PFIC. In that event, those rules will apply to any gains on dispositions of ordinary shares and to any "excess distributions." It is, however, possible for a U.S. Holder to avoid this "once a PFIC, always a PFIC" result by electing to treat all of the U.S. Holder's ordinary shares as sold for their fair market value as of the last day of the last taxable year we satisfy the tests to be a PFIC, provided the statute of limitations has not run for that year. If a gain is recognized on that constructive sale, the rules set forth in the fifth preceding paragraph would apply to that gain.

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If we are classified as a PFIC for a taxable year, and, at any time during such taxable year, have a non-U.S. subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described in the sixth preceding paragraph, if we receive a distribution from, or dispose of all or part of its interest in, the lower-tier PFIC. We have not yet determined whether, if we are classified as a PFIC, we would make the computations necessary to supply U.S. Holders with the information needed to make or maintain a QEF election with respect to the lower-tier PFIC. It is, therefore, possible that U.S. Holders would not be able to make or retain that election in any taxable year that we are classified as a PFIC and has a non-U.S. subsidiary that is also classified as a PFIC. U.S. Holders are urged to consult their own tax advisors regarding the tax issues raised by lower-tier PFICs.

A dividend from a foreign corporation that otherwise would qualify for reduced qualified dividend rates does not qualify for that rate if the foreign corporation is a PFIC in either the taxable year of the dividend or the preceding taxable year.

A U.S. Holder who owns (or is deemed to own) shares in a PFIC during any taxable year, such U.S. Holder may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made).

GIVEN THE COMPLEXITIES OF THE PFIC RULES AND THEIR POTENTIALLY ADVERSE TAX CONSEQUENCES, U.S. HOLDERS OF ORDINARY SHARES ARE URGED TO CONSULT THEIR TAX ADVISERS ABOUT THE PFIC RULES, INCLUDING THE CONSEQUENCES TO THEM OF MAKING A QEF ELECTION OR A MARK-TO-MARKET ELECTION WITH RESPECT TO THE ORDINARY SHARES IN THE EVENT THAT THE COMPANY QUALIFIES AS A PFIC FOR ANY TAXABLE YEAR.

Information Reporting and Backup Withholding

U.S. Holders. Dividends paid on, and proceeds from the sale or other disposition of, an ordinary share generally may be subject to information reporting requirements and may be subject to backup withholding at the rate of 28% unless a U.S. Holder provides an accurate taxpayer identification number or otherwise demonstrates that they are exempt. The amount of any backup withholding collected from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder's U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that certain required information is submitted to the Internal Revenue Service. Under U.S. federal income tax law and U.S. Treasury Regulations, certain categories of U.S. holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. U.S. holders are urged to consult with their own tax advisors concerning such reporting requirements.

Non-U.S. Holders. Non-U.S. Holders generally will be exempt from these information reporting requirements and backup withholding tax but may be required to comply with certain certification and identification procedures in order to establish their eligibility for exemption.

THE DISCUSSION ABOVE IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO AN INVESTMENT IN ORDINARY SHARES. HOLDERS AND POTENTIAL HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISER(S) CONCERNING THE TAX CONSEQUENCES RELEVANT TO THEM IN THEIR PARTICULAR SITUATION.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the reporting requirements of the United States Securities and Exchange Act of 1934, as amended, or the Exchange Act, as applicable to "foreign private issuers" as defined in Rule 3b-4 under the Exchange Act. As a foreign private issuer, we are exempt from certain provisions of the Exchange Act. Accordingly, our proxy solicitations are not subject to the disclosure and procedural requirements of regulation 14A under the Exchange Act, and transactions in our equity securities by our officers and directors are exempt from reporting and the "short-swing" profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will file with the U.S. Securities and Exchange Commission an annual report on Form 20-F containing financial statements that have been examined and reported on, with and opinion expressed by an independent registered public accounting firm, and we will submit reports to the U.S. Securities and Exchange Commission on Form 6-K containing (among other things) press releases and unaudited financial information for the first six months of each fiscal year. We post our annual report on Form 20-F on our website promptly following the filing of our annual report with the U.S. Securities and Exchange Commission. The information on our website is not incorporated by reference into this annual report.

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This document and the exhibits thereto and any other document we file pursuant to the Exchange Act may be inspected without charge and copied at prescribed rates at the U.S. Securities and Exchange Commission public reference room at 100 F Street, N.E., Room 1580, Washington D.C. 20549. You may obtain information on the operation of the Securities and Exchange Commission's public reference room in Washington, D.C. by calling the U.S. Securities and Exchange Commission at 1-800-SEC-0330.

The U.S. Securities and Exchange Commission maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings with the U.S. Securities and Exchange Commission using its EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system.

The documents concerning our Company which are referred to in this document may also be inspected at the offices of our registered office located at Level 7, 420 King William Street, Adelaide SA 5000, Australia.

I. Subsidiary Information

See "Item 4.C. Information on the Company - Organizational Structure."

| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our cash and cash equivalents consist primarily of cash and money market funds in Australia and Hong Kong currency. We invest our excess cash and cash equivalents in interest-bearing accounts and term deposits with banks in Australia or Hong Kong. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of Australian and or Hong Kong interest rates. However, because of the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not be expected to have a material impact on our financial condition and/or results of operation.

We are exposed to foreign currency risk via our operation in Hong Kong and China and trade and other payables we hold. We are required to make certain payments in U.S. dollars, Hong Kong dollars and Chinese Renminbi and other currencies. An adverse movement in end-of-period exchange rates would have a material impact on our operating results.

| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

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PART II

| ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

| ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

| ITEM 15. | CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management of the Company maintain disclosure controls and procedures as such term is defined in Rules 13 a-15 (e) and 15d-15(e) under the Securities Exchange Act of 1934 as amended (the "Exchange Act"), as amended, that are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Executive Chairman and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives.

Management has carried out an evaluation, under the supervision and with the participation of the Executive Chairman and the Chief Financial Officer, of the effectiveness of the disclosure controls and procedures as of December 31, 2021. Based on that evaluation, the Executive Chairman and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2021.

Management's Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. A Company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the consolidated financial statements in accordance with IFRS as issued by the International Accounting Standards Board and that receipts and expenditures of the Company are being made only in accordance with authorizations of our Board of Directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In particular, the design of a control system must be considered relative to their costs. Additionally, the design of a control system is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Due to its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements to the consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2021 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") (the "2013 Framework") Internal Control-Integrated Framework. Based on this assessment, management concluded that the Company's internal control over financial reporting is not effective as of December 31, 2021 under the COSO 2013 Framework.

A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses at December 31, 2021:

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| i. | inadequate segregation of duties due to limited number of personnel, which makes the reporting process susceptible to management override; and

| ii. | ineffective controls over period end financial disclosure and reporting processes; and

| iii. | Lack of technical accounting expertise to evaluate complex accounting transactions, such as convertible promissory notes; and

| iv. | Lack of formal accounting processes over key accounting areas.

Management believes that the material weaknesses set forth in items (i) through (ii) above did not have an effect on the Company's financial reporting during the year ended December 31, 2021.

Remediation of Material Weaknesses

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No. 5), or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. While management believes that the Company's consolidated financial statements previously filed in the Company's SEC reports have been properly recorded and disclosed in accordance with IFRS, we have designed and plan to implement, or in some cases have already implemented, the specific remediation initiatives described below:

| ● | We plan to retain additional accounting personnel and continue to enhance our internal finance and accounting organizational structure.

| ● | We are in the process of further enhancing the supervisory procedures to include additional levels of analysis and quality control reviews within the accounting and financial reporting functions.

While we now believe that these material weaknesses are continuing being addressed, we will continue our remediation efforts during fiscal year 2022.

Changes in Internal Control over Financial Reporting

There have been no significant changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect internal control over financial reporting during the period covered by this Annual Report.

| ITEM 15T. | CONTROLS AND PROCEDURES

Not applicable.

| ITEM 16. | RESERVED

Not applicable.

| ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

| ITEM 16B. | CODE OF ETHICS

We have adopted a code of ethics that applies to our executive directors and chief financial officer. A copy of this Code of Ethics is available on the Company's website at www.imtechltd.com.

No waivers to this Code of Ethics were granted to our executive directors or chief financial officer during the fiscal year ended December 31, 2021.

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| ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company has not paid for services provided by Audit Alliance LLP and affiliated entities, the current auditor of the Group, as they were appointed as auditors of the Company on December 30, 2021. During the year 2021 and 2020, the following fees were paid or payable for services provided by Ramirez Jimenez International CPAs, the former auditor of the Group.

Fee Category |  | 2021 |  | 2020 |
Audit Fees |  | US$ | 145,000 |  | US$ | 45,820 |
Audit-Related Fees |  | US$ | 17,400 |  | US$ | 9,680 |
Tax Fees |  | US$ | - |  | US$ | - |
All Other Fees |  | US$ | 37,125 |  | US$ | - |

Audit Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for the audit of our annual financial statements, review of financial statements included in our interim reports and services that are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

This category consists of fees for assurance and related services by our principal independent registered public accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees". The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.

Tax Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for tax compliance, tax advice, and tax planning.

All Other Fees

This category consists of fees for services provided by our principal independent registered public accountant other than the services described above.

Policy on Pre-Approval of Audit Services

The Audit Committee pre-approves all services, including both audit and non-audit services, provided by our independent registered public accounting firm. All audit services (including statutory audit engagements as required under local country laws) must be accepted by the Audit Committee before the audit commences.

Each year, management and the independent registered public accounting firm will jointly submit a pre-approval request, which will list each known and/or anticipated audit and non-audit service for the upcoming calendar year and which will include associated budgeted fees. The Audit Committee will review the requests and approve a list of annual pre-approved non-audit services.

| ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

| ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

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| ITEM 16F. | CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

The Company announced that on December 30, 2021, the Company dismissed Ramirez Jimenez International CPAs ("RJI") as our independent registered public accounting firm. On December 30, 2021, the Company appointed Audit Alliance LLP ("Alliance") as the Company's independent registered public accounting firm. This change in the Company's independent registered public accounting firm was approved by the Board of Directors on December 29, 2021.

RJI's reports on the financial statements for the years ended December 31, 2020, 2019 and 2018 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or auditing principles. The Company did have a going concern for each of these three years.

During the period of RJI's engagement there were (i) no disagreements between the Company and the former accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused it to make a reference to the subject matter of the disagreements in connection with its report; and (ii) no "reportable events" as defined in Item 16F(a)(1)(v) of Form 20-F.

During the two most recent fiscal years ended December 31, 2020 and 2019, neither the Company, nor someone on behalf of the Company, has consulted Alliance regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report was provided to the Company nor oral advice was provided that Alliance concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was the subject of a disagreement as defined in Item 16F(a)(1)(iv) of Form 20-F and related instructions to Item 16F of Form 20-F, or any reportable events as described in Item 16F(a)(1)(v) of Form 20-F.

| ITEM 16G. | CORPORATE GOVERNANCE

Not applicable.

| ITEM 16H. | MINE SAFETY DISCLOSURES

Not applicable.

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PART III

| ITEM 17. | FINANCIAL STATEMENTS

We have elected to furnish financial statements and related information specified in Item 18.

| ITEM 18. | FINANCIAL STATEMENTS

Integrated Media Technology Limited

Financial Statements - Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm - 2021 (PCAOB ID: 3487) | F-1
Report of Independent Registered Public Accounting Firm - 2019 and 2020 (PCAOB ID: 820) | F-3
Consolidated Statements of Profit or Loss and Other Comprehensive Income for the years ended December 31, 2019, 2020 and 2021 | F-5
Consolidated Statements of Financial Position as of December 31, 2020 and 2021 | F-6
Consolidated Statements of Changes in Equity for the years ended December 31, 2019, 2020 and 2021 | F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2020 and 2021 | F-8
Notes to the Consolidated Financial Statements | F-9 through F-57

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Integrated Media Technology Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Integrated Media Technology Limited (the "Company") and its subsidiaries (collectively, the "Group") as of December 31, 2021, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the year ended December 31, 2021, and the related notes to the consolidated financial statements (collectively referred to as the "consolidated financial statements"). In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2021, and the results of their operations, and their cash flows for the year ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Material Uncertainty Related to Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Group incurred a net loss in the amount of approximately A$6.6 million and used cash in operating activities in the amount of approximately A$8.0 million during the year ended December 31, 2021, and had accumulated losses of approximately A$37.2 million and had net current liabilities of approximately A$6.5 million as of December 31, 2021, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit Committee of the Board of Directors and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements, and (2) involved challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

F-1

Table of Contents

Convertible Promissory Notes

Critical Audit Matter Description

As discussed in Notes 3, 21 and 22 to the consolidated financial statements, during the year ended December 31, 2021, the Group issued two convertible promissory notes. The Group analyzed these convertible promissory notes for embedded derivatives and determined they contained conversion options and embedded derivatives, which were recorded at fair value as a liability upon inception of the notes, and were revalued at the reporting date at fair value.

How the Critical Audit Matter was Addressed in our Audit

We identified convertible promissory notes as a critical audit matter as subjective auditor judgment was required to evaluate whether these notes contain derivative financial instruments and assess the proper valuation of such instruments.

The following are the primary procedures we performed to address this critical audit matter:

| • | Evaluated and discussed with management, their analysis over the valuation and accounting treatment over the convertible promissory notes, as well as, the embedded conversion options and derivatives that require recognition as derivative liabilities;
| • | Read and analyzed the convertible promissory note agreements;
| • | Reviewed management's specialist's valuations for the convertible promissory notes, including the embedded derivative components;
| • | Obtained an understanding of the work of the specialist, including assessing the knowledge, skill and ability of the specialist;
| • | Evaluated the work of the specialist, including engaged with internal specialists to assess the reasonableness of assumptions used in the valuation and the accounting treatment of the convertible promissory notes and related derivatives;
| • | Tested and reviewed the overall calculations; and
| • | Tested the design and implementation of management's controls surrounding management's valuation of the convertible promissory note process.

/s/ Audit Alliance LLP

Singapore

April 28, 2022

We have served as the Group's auditor since 2021.

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|  | 18012 Sky Park Circle, Suite 200 Irvine, California 92614 tel 949-852-1600 fax 949-852-1606 www.rjicpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Integrated Media Technology Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Integrated Media Technology Limited (the "Company") and its subsidiaries (collectively, the "Group") as of December 31, 2020 and 2019, and the related consolidated statements of profit or loss and other comprehensive income / (loss), changes in equity, and cash flows for the years ended December 31, 2020 and 2019, and the related notes to the consolidated financial statements (collectively referred to as the "consolidated financial statements"). In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2020 and 2019, and the results of their operations, and their cash flows for the years ended December 31, 2020 and 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Group incurred a net loss in the amount of approximately A$10.5 million and used cash in operating activities in the amount of approximately A$6.2 million during the year ended December 31, 2020, and had accumulated losses of approximately A$34.1 million as of December 31, 2020, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit Committee of the Board of Directors and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements, and (2) involved challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

F-3

Table of Contents

Convertible Promissory Notes

Critical Audit Matter Description

As discussed in Notes 3, 21 and 22 to the consolidated financial statements, during the year ending December 31, 2020, the Company issued two convertible promissory notes. The Company analyzed these convertible promissory notes for embedded derivatives and determined they contained conversion options and embedded derivatives, which were recorded at fair value as a liability upon inception of the notes, and were revalued at the reporting date at fair value.

How the Critical Audit Matter was Addressed in our Audit

We identified convertible promissory notes as a critical audit matter as subjective auditor judgment was required to evaluate whether these notes contain derivative financial instruments and assess the proper valuation of such instruments.

The following are the primary procedures we performed to address this critical audit matter:

| • | Evaluated and discussed with management, their analysis over the valuation and accounting treatment over the convertible promissory notes, as well as, the embedded conversion options and derivatives that require recognition as derivative liabilities;
| • | Read and analyzed the convertible promissory note agreements;
| • | Reviewed management's specialist's valuations for the convertible promissory notes, including the embedded derivative components;
| • | Obtained an understanding of the work of the specialist, including assessing the knowledge, skill and ability of the specialist;
| • | Evaluated the work of the specialist, including engaged with internal specialists to assess the reasonableness of assumptions used in the valuation and the accounting treatment of the convertible promissory notes and related derivatives;
| • | Tested and reviewed the overall calculations; and
| • | Tested the design and implementation of management's controls surrounding management's valuation of the convertible promissory note process.

/s/ Ramirez Jimenez International CPAs

Ramirez Jimenez International CPAs

April 30, 2021

We have served as the Group's auditor since 2018.

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INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(in Australian dollars, except number of shares)

|  |  |  | Years ended December 31,
|  | Note |  | 2021 A$ |  | 2020 A$ |  | 2019 A$
Revenue, net |  | 4 |  | 193,113 |  | 1,744,629 |  | 1,275,425
Cost of sales |  |  |  | (149,447) |  | (1,311,566) |  | (1,008,821)
|  |  |  | 43,666 |  | 433,063 |  | 266,604
Interest income |  |  |  | 18,864 |  | 6,197 |  | 115,762
Gain on disposal of plant and equipment |  |  |  | - |  | - |  | 212,195
(Loss)/gain on fair value change in derivative financial instruments |  | 21 |  | (842,463) |  | 2,312,197 |  | 127,551
Other income |  | 5 |  | 335,807 |  | 82,561 |  | 807,831
|  |  |  | (444,126) |  | 2,834,018 |  | 1,529,943
Expenses |  |  |  |  |  |  |  |
Employee benefit expenses |  | 7 |  | (1,613,922) |  | (2,212,643) |  | (4,034,378)
Depreciation and amortization expenses |  | 7 |  | (1,326,811) |  | (2,078,762) |  | (3,174,784)
Professional and consulting expenses |  |  |  | (2,376,038) |  | (1,373,907) |  | (2,019,970)
Travel and accommodation expenses |  |  |  | (91,385) |  | (40,895) |  | (281,895)
Office expenses and supplies |  |  |  | (142,482) |  | (310,360) |  | (312,343)
Rental costs |  | 7 |  | (116,406) |  | (126,382) |  | (637,321)
Other operating expenses |  |  |  | (378,500) |  | (480,015) |  | (794,036)
Finance costs |  | 6 |  | (2,000,952) |  | (2,100,272) |  | (1,561,625)
Provision for impairment loss of goodwill |  |  |  | - |  | - |  | 4,486,301
Reversal/ (Provision) of allowance for inventory obsolescence |  | 7 |  | 9,439 |  | 17,671 |  | (799,871)
Provision for bad debt |  |  |  | (14,390) |  | (58,932) |  | -
Gain/ (loss) on disposal of subsidiaries |  | 24 |  | 1,998,269 |  | (28,990) |  | -
Plant and equipment written off |  |  |  | - |  | (110) |  | -
Provision for impairment loss on intangible assets |  | 15 |  | - |  | (3,459,340) |  | -
Development projects written off |  |  |  | - |  | (930,356) |  | -
Exchange loss |  |  |  | (88,322) |  | (194,383) |  | (10,296)
Total expenses |  |  |  | (6,141,500) |  | (13,377,676) |  | (18,112,820)
Loss before income tax |  | 7 |  | (6,585,626) |  | (10,543,658) |  | (16,582,877)
Income tax expense |  | 8 |  | - |  | - |  | (117,322)
Loss for the year |  |  |  | (6,585,626) |  | (10,543,658) |  | (16,700,199)
Other comprehensive income |  |  |  |  |  |  |  |
Items that may be re-classified subsequently to profit or loss: |  |  |  |  |  |  |  |
Fair value through other comprehensive income |  |  |  | 62,500 |  | - |  | -
Exchange differences on translation of financial statements of overseas subsidiaries |  |  |  | 158,547 |  | 55,673 |  | 157,471
Other comprehensive income for the year, net of tax |  |  |  | 221,047 |  | 55,673 |  | 157,471
Total comprehensive loss for the year |  |  |  | (6,364,579) |  | (10,487,985) |  | (16,542,728)
Loss for the year attributable to: |  |  |  |  |  |  |  |
Equity shareholders of Integrated Media Technology Limited |  |  |  | (5,771,510) |  | (10,034,077) |  | (15,646,147)
Non-controlling interests |  |  |  | (814,116) |  | (509,581) |  | (1,054,052)
|  |  |  | (6,585,626) |  | (10,543,658) |  | (16,700,199)
Total comprehensive loss for the year attributable to: |  |  |  |  |  |  |  |
Equity shareholders of Integrated Media Technology Limited |  |  |  | (5,830,540) |  | (9,885,412) |  | (15,540,317)
Non-controlling interests |  |  |  | (534,039) |  | (602,573) |  | (1,002,411)
|  |  |  | (6,364,579) |  | (10,487,985) |  | (16,542,728)
Loss per share |  |  |  | A$ |  | A$ |  | A$
- Basic and Diluted |  | 10 |  | (0.70) |  | (2.33) |  | (4.63)

The above consolidated statements of profit or loss and comprehensive loss should be read in conjunction with the accompanying notes.

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INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in Australian dollars)

|  |  | December 31,
|  |  | 2021 |  | 2020
|  | Note | A$ |  | A$
ASSETS |  |  |  |  |
Current Assets |  |  |  |  |
Cash and cash equivalents |  |  | 274,767 |  | 2,194,084
Inventories |  | 11 | - |  | 187,401
Right-of-use assets |  | 20(a) | 513,942 |  | -
Trade and other receivables |  | 12 | 486,121 |  | 1,164,605
Other assets |  | 13 | 2,006,636 |  | 2,089,897
Total Current Assets |  |  | 3,281,466 |  | 5,635,987
Non-Current Assets |  |  |  |  |
Plant and equipment, net |  | 14 | 6,441,734 |  | 7,317,678
Other assets - equipment deposits |  |  | 11,459,195 |  | -
Financial asset at fair value through other comprehensive income |  | 16 | 562,500 |  | -
Intangible assets and goodwill |  | 15 | 1,900,589 |  | -
Right-of-use assets |  | 20(a) | 1,444,927 |  | -
Total Non-Current Assets |  |  | 21,808,945 |  | 7,317,678
TOTAL ASSETS |  |  | 25,090,411 |  | 12,953,665
LIABILITIES |  |  |  |  |
Current Liabilities |  |  |  |  |
Trade and other liabilities |  | 17 | 2,424,717 |  | 3,589,164
Amounts due to related companies |  | 18 | 247,406 |  | 237,674
Amount due to holding company |  | 19 | - |  | 532,718
Lease liabilities |  | 20(b) | 425,567 |  | -
Derivative financial instruments |  | 21 | 2,321,003 |  | -
Convertible promissory notes |  | 22 | 4,311,416 |  | -
Total Current Liabilities |  |  | 9,730,109 |  | 4,359,556
Non-current Liabilities |  |  |  |  |
Lease liabilities |  | 20(b) | 1,403,932 |  | -
Derivative financial instruments |  | 21 | - |  | 1,478,540
Deferred tax liabilities |  | 8 | - |  | 13,668
Convertible promissory notes |  | 22 | - |  | 2,196,049
Total Non-Current Liabilities |  |  | 1,403,932 |  | 3,688,257
TOTAL LIABILITIES |  |  | 11,134,041 |  | 8,047,813
NET CURRENT (LIABILTIES) / ASSETS |  |  | (6,448,643) |  | 1,276,431
NET ASSETS |  |  | 13,956,370 |  | 4,905,852
CAPITAL AND RESERVES |  |  |  |  |
Issued capital (no par value, 9,329,420 and 6,513,671 ordinary shares issued and outstanding as of December 31, 2021 and 2020, respectively) |  | 25 | 48,144,406 |  | 32,089,997
Foreign currency translation reserve |  | 26(a) | 762,348 |  | 883,878
Other reserves |  | 26(b) | 62,500 |  | 2,704,452
Accumulated losses |  |  | (37,169,358) |  | (34,102,300)
Equity attributable to equity shareholders of Integrated Media Technology Limited |  |  | 11,799,896 |  | 1,576,027
Non-controlling interests |  |  | 2,156,474 |  | 3,329,825
TOTAL EQUITY |  |  | 13,956,370 |  | 4,905,852
Ordinary shares issued |  |  | 9,329,420 |  | 6,513,671

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.

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INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in Australian dollars)

|  | Attributable to owners of the Group |  |  |  |
|  | Issued Capital |  | (Accumulated Losses) / Retained Earnings |  | Foreign Currency Translation Reserve |  | Other Reserves |  | Non-controlling Interests |  | Total
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Balance as of December 31, 2018 and as of January 1, 2019 |  | 18,902,029 |  | (10,676,713) |  | 629,383 |  | 4,959,089 |  | 2,807,963 |  | 16,621,751
Loss for the year |  | - |  | (15,646,147) |  | - |  | - |  | (1,054,052) |  | (16,700,199)
Other comprehensive income for the year, net of tax |  | - |  | - |  | 105,830 |  | - |  | 51,641 |  | 157,471
Total comprehensive loss for the year |  | - |  | (15,646,147) |  | 105,830 |  | - |  | (1,002,411) |  | (16,542,728)
Transfer convertible bond reserves (Note 26 (b)) |  | - |  | 535,948 |  | - |  | (535,948) |  | - |  | -
Balance as of December 31, 2019 and as of January 1, 2020 |  | 18,902,029 |  | (25,786,912) |  | 735,213 |  | 4,423,141 |  | 1,805,552 |  | 79,023
Changes in equity for 2020: |  |  |  |  |  |  |  |  |  |  |  |
Loss for the year |  | - |  | (10,034,077) |  | - |  | - |  | (509,581) |  | (10,543,658)
Other comprehensive income / (loss) for the year, net of tax |  | - |  | - |  | 148,665 |  | - |  | (92,992) |  | 55,673
Total comprehensive loss for the year |  | - |  | (10,034,077) |  | 148,665 |  | - |  | (602,573) |  | (10,487,985)
Transfer other reserve to accumulated losses |  | - |  | 1,718,689 |  | - |  | (1,718,689) |  | - |  | -
Acquisition of subsidiaries |  | - |  | - |  | - |  | - |  | 3,888,027 |  | 3,888,027
Disposal of subsidiaries |  | - |  | - |  | - |  | - |  | (1,761,181) |  | (1,761,181)
Issuance of new ordinary shares - cash (Note 25(b)) |  | 7,121,283 |  | - |  | - |  | - |  | - |  | 7,121,283
Issuance of new ordinary shares - conversion of debt (Note 25(b)) |  | 4,122,562 |  | - |  | - |  | - |  | - |  | 4,122,562
Issuance of new ordinary shares - services (Note 25(b)) |  | 23,249 |  | - |  | - |  | - |  | - |  | 23,249
Issuance of new ordinary shares - acquisition (Note 25(b)) |  | 2,060,000 |  | - |  | - |  | - |  | - |  | 2,060,000
Legal expenses in respect of issuance of shares (Note 25(b)) |  | (139,126) |  | - |  | - |  | - |  | - |  | (139,126)
Balance as of December 31, 2020 and as of January 1, 2021 |  | 32,089,997 |  | (34,102,300) |  | 883,878 |  | 2,704,452 |  | 3,329,825 |  | 4,905,852
Changes in equity for 2021: |  |  |  |  |  |  |  |  |  |  |  |
Loss for the year |  | - |  | (5,771,510) |  | - |  | - |  | (814,116) |  | (6,585,626)
Fair value through other comprehensive income |  | - |  | - |  | - |  | 62,500 |  | - |  | 62,500
Other comprehensive income for the year, net of tax |  | - |  | - |  | (121,530) |  | - |  | 280,077 |  | 158,547
Total comprehensive loss for the year |  | - |  | (5,771,510) |  | (121,530) |  | 62,500 |  | (534,039) |  | (6,364,579)
Transfer from other Reserve to Accumulated Loss |  | - |  | 2,704,452 |  | - |  | (2,704,452) |  | - |  | -
Acquisition of subsidiary |  | - |  | - |  | - |  | - |  | 983,928 |  | 983,928
Disposal of subsidiaries |  | - |  | - |  | - |  | - |  | (1,623,240) |  | (1,623,240)
Issuance of new ordinary shares for cash (Note 25(b)) |  | 16,054,409 |  | - |  | - |  | - |  | - |  | 16,054,409
Balance as of December 31, 2021 |  | 48,144,406 |  | (37,169,358) |  | 762,348 |  | 62,500 |  | 2,156,474 |  | 13,956,370

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in Australian dollars)

|  |  |  | Years Ended December 31,
|  |  |  | 2021 |  | 2020 |  | 2019
|  | Note |  | A$ |  | A$ |  | A$
Cash flows from operating activities |  |  |  |  |  |  |  |
Loss before income tax |  |  |  | (6,585,626) |  | (10,543,658) |  | (16,582,877)
Adjustments to reconcile loss before income tax to net cash used in operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  |  | 1,326,811 |  | 2,078,762 |  | 3,174,784
Impairment loss of trade receivables |  |  |  | 14,390 |  | 58,932 |  | 11,052
Provision for inventories obsolescence |  |  |  | (9,439) |  | (17,671) |  | 799,871
Loss / (gain) on disposal of subsidiaries |  | 24 |  | (1,998,269) |  | 28,990 |  | -
Gain on disposal on plant and equipment |  |  |  | - |  | - |  | (212,195)
Plant and equipment written off |  |  |  | - |  | 110 |  | -
Provision for impairment loss on intangible assets |  |  |  | - |  | 3,459,340 |  | -
Development projects written off |  |  |  | - |  | 930,356 |  | -
Provision for impairment loss of goodwill |  |  |  | - |  | - |  | 4,486,301
Net cash (outflows) / inflows from changes in working capital |  | 30(b) |  | (719,193) |  | (2,186,276) |  | 1,783,050
Net cash used in operating activities |  |  |  | (7,971,326) |  | (6,191,115) |  | (6,540,014)
Cash flows from investing activities |  |  |  |  |  |  |  |
Capital injection from minority shareholders |  |  |  | 542,887 |  | 1,920,153 |  | -
Payments for acquisition of plant and equipment |  |  |  | (71,109) |  | (7,236,260) |  | (1,223,028)
Payments for other assets - equipment deposits |  |  |  | (11,459,195) |  | - |  | -
Payments for intangible assets |  |  |  | (624,095) |  | - |  | (7,283)
Payments for development projects |  |  |  | - |  | (125,520) |  | (598,306)
Payments for investment in financial assets |  |  |  | (500,000) |  | - |  | -
Disposal of subsidiaries, net of cash disposed of |  | 24 |  | (32,927) |  | 855,506 |  | -
Net cash used in investing activities |  |  |  | (12,144,439) |  | (4,586,121) |  | (1,828,617)
Cash flows from financing activities |  |  |  |  |  |  |  |
Advances from of amounts due to related companies |  |  |  | - |  | 840,509 |  | 3,954,640
Advance from other liabilities |  |  |  | - |  | 211,567 |  | 2,610,091
Advance from / (repayment) to holding company |  |  |  | (562,201) |  | - |  | 501,343
Fair value change in derivative financial instruments |  |  |  | 842,463 |  | (2,312,197) |  | (127,551)
Interest income from ultimate holding company |  |  |  | - |  | - |  | (115,678)
Interest received from ultimate holding company |  |  |  | - |  | - |  | 18,714
Interest accrued for lease liabilities |  |  |  | 28,371 |  | 32,526 |  | 109,675
Finance costs for convertible bonds |  |  |  | 1,895,371 |  | 1,693,890 |  | 1,316,702
Interest paid for convertible bonds |  |  |  | - |  | (185,469) |  | (209,392)
Proceeds from bank borrowings |  |  |  | - |  | - |  | 930,334
Repayment of bank borrowings |  |  |  | - |  | - |  | (840,285)
Repayment for convertible bonds |  |  |  | - |  | (4,668,195) |  | -
Payment of lease liabilities |  |  |  | (138,156) |  | (320,851) |  | (573,010)
Proceeds from issuance of convertible promissory notes |  |  |  | - |  | 4,913,100 |  | -
Net Proceeds from issuance of ordinary shares |  |  |  | 16,054,409 |  | 13,187,968 |  | -
Net cash provided by financing activities |  | 30(a) |  | 18,120,257 |  | 13,392,848 |  | 7,575,583
Net increase / (decrease) in cash and cash equivalents |  |  |  | (1,995,508) |  | 2,615,612 |  | (793,048)
Effect of exchange rate changes on cash and cash equivalents |  |  |  | 76,191 |  | (254,770) |  | 619,705
Cash and cash equivalents at the beginning of financial year |  |  |  | 2,194,084 |  | (166,758) |  | 6,585
Cash and cash equivalents at the end of financial year |  |  |  | 274,767 |  | 2,194,084 |  | (166,758)
Analysis of cash and cash equivalents: |  |  |  |  |  |  |  |
Cash and bank balances |  |  |  | 274,767 |  | 2,194,084 |  | 735,724
Bank overdraft |  |  |  | - |  | - |  | (902,482)
Cash and cash equivalents |  |  |  | 274,767 |  | 2,194,084 |  | (166,758)

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

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INTEGRATED MEDIA TECHNOLOGY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in Australian dollars, unless otherwise noted)

NOTE 1. REPORTING ENTITY

The consolidated financial report covers the entity of Integrated Media Technology Limited ("IMTE") and its controlled entities for the years ended December 31, 2021, 2020 and 2019 which were authorized for issue by the Board of Directors on April 28, 2022. IMTE is a for-profit public company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded on the NASDAQ Capital Markets. IMTE is an investment holding company and its subsidiaries carry out the business of the Group in Australia, Korea, Hong Kong and China.

The Company and its subsidiaries are referred to as the "Group".

Going Concern

The Group's consolidated financial statements are prepared using International Financial Reporting Standards as issued by the International Accounting Standards Board applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Group has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of December 31, 2021, the Group had accumulated losses of A$37,169,358 and generated a net loss in 2021 of A$6,585,626 and had net current liabilities of A$6,448,643. The ability of the Group to continue as a going concern is dependent on the Group obtaining adequate capital to fund operating losses until it becomes profitable. If the Group is unable to obtain adequate capital, it could be forced to cease or reduce its operations.

In order to continue as a going concern, the Group will need, among other things, additional capital resources. For the year ended December 31, 2021, the Group was successful in raising a total of approximately US$12.3 million through equity financing for the repayment of debts and for working capital in the Group. Subsequent to the balance sheet date from January 2022 to the date of this report, the Group has raised a total of US$15.2 from debt and equity fund raising. The funds raised are to be used for the build out of infrastructure, purchase of equipment and working capital. The Group will need to continue to raise funds through the sale of its equity securities and issuance of debt instruments to obtain additional operating capital. The Group is and will continue to be dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing until the Group can earn revenue and realize positive cash flow from its operations.

There are no assurances that the Group will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Group will continue as a going concern.

Based on the Group's current rate of cash outflows, cash on hand and proceeds from the recent sales of equity securities and convertible notes after the year ended, management believes that its current cash may not be sufficient to meet the anticipated cash needs for working capital for the next 12 months for the investments in the switchable glass operations.

The Group's plans with respect to its liquidity issues include, but are not limited to, the following:

1) Continue to raise financing through the sale of its equity and/or debt securities;

2) Continue developing its business, products and services and seek strategic partnerships and cooperative arrangement to grow our revenue and profitability.

The Group is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Group can consummate such a transaction, or consummate a transaction at favorable pricing.

The ability of the Group to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

The consolidated financial statements of the Group are presented in Australian Dollars ("A$"), unless otherwise stated.

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NOTE 2. BASIS OF ACCOUNTING

The consolidated financial statements present general purpose financial report that have been prepared in accordance with Australian Accounting Standards ("AASBs"), including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 as appropriate for for-profit entities. The consolidated financial statements also comply with International Financial Reporting Standards ("IFRSs") as adopted by the International Accounting Standards Board.

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies adopted by the Group in the preparation of the consolidated financial statements. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of Preparation

The consolidated financial statements have been prepared on the accrual basis and are based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

(b) Principles of Consolidation

The consolidated financial statements comprise the financial statements of IMTE and its subsidiaries as at December 31, 2021 (the "Group"). Subsidiaries are consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. A list of the controlled entities as at December 31, 2021 is disclosed in Note 23 to the consolidated financial statements.

All inter-company balances and transactions between entities within the Group, including any unrealized profits or losses, have been eliminated upon consolidation.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated statements of profit or loss and other comprehensive income or loss and consolidated statements of financial position of the Group.

(c) Business Combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Company, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred, except if related to the issue of debt or equity securities.

The Company recognizes identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognized in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognized amount of any non-controlling interest in the acquiree, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets.

Any contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. Subsequent adjustments to consideration are recognized against goodwill only to the extent that they arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date) about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an asset or a liability are recognized in the consolidated statement of profit or loss.

(d) Current and deferred income tax

Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other comprehensive income / loss or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively.

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Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.

Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.

The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Company or the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met:

| (i) | in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or

| (ii) | in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either:

- the same taxable entity; or

- different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax assets and settle the current tax liabilities on a net basis or realized and settle simultaneously.

(e) Intangible Assets

(i) Acquired both separately and from a business combination

Purchased intangible assets are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are measured at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets with finite lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at each financial year end.

(ii) Autostereoscopic 3D display technologies and knowhow

The autostereoscopic 3D display technologies and knowhow acquired in the business combination is measured at fair value as at the date of acquisition. These costs are amortized over the estimated useful life of 8 years and are tested for impairment where an indicator of impairment exists. The useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Please refer to Note 15 for impairment review of these autostereoscopic 3D display technologies and knowhow.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(iii) Research and development costs

Development projects in the consolidated statements of financial position represent the development costs directly attributable to and incurred for internal technology projects of the Group. An intangible asset arising from development expenditure on an internal technology project is recognised and included in development projects only when the Group can demonstrate the technical feasibility of completing the intangible asset or technology so that it will be available for application in existing or new products or for sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development, the ability to measure reliably the expenditure attributable to the intangible asset during its development and the ability to use the tangible asset generated. For labour costs, all research and development member salaries that are directly attributable to the technology project are capitalised. Administrative staff and costs are recognised in the profit or loss instead of capitalising this portion of costs. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated impairment losses. The amortisation rate of these intangible assets was determined on the basis of the estimated useful life from the time that the relevant asset is taken into use.

(iv) Intellectual property

Expenditure incurred on patents, trademarks or licenses are capitalized from the date of application. They have a definite useful life and are carried at cost less accumulated amortization. They are amortized using the straight-line method over their estimated useful lives for a period of 8 to 15 years.

(v) Computer software

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives ranging (2-5 years). Costs associated with maintaining computer software are recognized as an expense when incurred.

(f) Inventories

Finished goods are stated at the lower of cost and net realizable value on a "first in first out" basis. Cost comprises direct materials and delivery costs, import duties and other taxes. Costs of purchased inventories are determined after deducting rebates and discounts received or receivable. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

(g) Leases

The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately.

The policy applicable from 1 January 2019

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

This policy is applied to contracts entered into, on or after 1 January 2019.

As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative and-alone prices. However, for the leases of property the Group has elected not to separate lease components and account for the lease and non-lease components as a single lease component.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets that do not meet the definition of investment property in property, plant and equipment' and lease liabilities in loans and borrowings' in the statement of financial position.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Policy applicable before 1 January 2019

For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether: fulfilment of the arrangement was dependent on the use of a specific asset or assets; and the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the asset if one of the following was met: the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insignificant amount of the output; the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insignificant amount of the output; or; amounts expected to be payable under a residual value guarantee; and facts and circumstances indicated that it was remote that other parties would take more than an insignificant amount of the output, and the price per unit was neither fixed per unit of output nor equal to the current market price per unit of output.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

As a lessee

In the comparative period, where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are recognised as plant and equipment and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Group will obtain ownership of the asset, the life of the asset, as set out in note 3(k). Impairment losses are accounted for in accordance with an accounting policy as set out in note 3(h). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight line basis unless another method is more representative of the pattern to the

(h) Impairment of Assets

Internal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased:

- property, plant and equipment (other than properties carried at revalued amounts);

- intangible assets; and

- goodwill.

If any such indication exists, the asset's recoverable amount is estimated. In addition for goodwill, intangible assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication of impairment.

(i) Calculation of recoverable amount

The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

(ii) Recognition of impairment losses

An impairment loss is recognized in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable).

(iii) Reversals of impairment losses

In respect of assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed.

A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Trade deposits

Trade deposits are payments in advance to suppliers of equipment, products and services, which are initially recognized at fair value and thereafter stated at amortized cost using the effective interest method less impairment losses, except where the effect of discounting would be immaterial.

(j) Plant and Equipment

Items of plant and equipment are measured at cost less accumulated depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The depreciable amount of all fixed assets are depreciated over their estimated useful lives to the Group commencing from the time the assets is held ready for use.

Depreciation is calculated on a straight-line basis to write the net cost of each item of plant and equipment over their expected useful lives. The depreciation rates used for each class of depreciable assets are generally as follows:

| Class of fixed assets | Depreciation rate |
| Leasehold Improvements | lesser of 5 years or lease term |
| Office Furniture and Equipment | 5-12 years |
| Machinery | 5-12 years |

Gains and losses on disposal are determined by deducting the net book value of the assets from the proceeds of sale and are booked to the profit or loss in the year of disposal.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(k) Foreign Currency Translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in Australian Dollars ("A$"), which is the Group's presentation currency.

(ii) Transactions and balances

Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognized in profit or loss, except those arising from foreign currency borrowings used to hedge a net investment in a foreign operation which are recognized in other comprehensive income.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was measured.

(iii) Group companies

The results of foreign operations are translated into Australian Dollars at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Statement of financial position items, are translated into Australian Dollars at the closing foreign exchange rates at the end of the reporting period. The resulting exchange differences are recognized in other comprehensive income and accumulated separately in equity in the exchange reserve.

On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognized.

For years ended December 31, 2021 and 2020, the comprehensive income was A$762,348 and A$883,878 respectively which was mainly resulted from the translation of the foreign operations in Hong Kong (HK$), China (RMB) and United States (USA) into Australia dollars. The significant monetary items denominated in currencies other than Australia dollars include intangible assets and goodwill, due to related companies, amount due to ultimate holding company, borrowings, convertible bonds and derivative financial instruments.

(l) Trade and Other Receivables

Trade receivables are recognized at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. Objective evidence of impairment includes financial difficulties of the debtor, default payments or debts more than 30 days overdue. On confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written off against the associated provision.

(m) Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are paid on normal commercial terms.

(n) Provisions and Contingent Liabilities

Provisions are recognized for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(o) Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the facility, are recognized as an offset against the liability balance and amortized on a straight-line basis over the term of the facility.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in other income or other expenses.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

(p) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.

The capitalization of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete.

(q) Convertible Promissory Note

Convertible promissory note that can be converted into ordinary shares at the option of the holder, where the number of shares to be issued is fixed, are accounted for as compound financial instruments, i.e. they contain both a liability component and an equity component.

At initial recognition the liability component of the convertible promissory note is measured at fair value based on the future interest and principal payments, discounted at the prevailing market rate of interest for similar non-convertible instruments. The equity component is the difference between the initial fair value of the convertible promissory note as a whole and the initial fair value of the liability component. Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components in proportion to the allocation of proceeds.

The liability component is subsequently carried at amortised cost. Interest expense recognised in profit or loss on the liability component is calculated using the effective interest method. The equity component is recognised in the capital reserve until either the bonds are converted or redeemed.

If the note are converted, the capital reserve, together with the carrying amount of the liability component at the time of conversion, is transferred to share capital and share premium as consideration for the shares issued. If the note are redeemed, the capital reserve is released directly to retained profits.

(r) Derivative Financial Instruments

Derivative financial instruments are recognised at fair value. At the end of each reporting period the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss.

(s) Employee Benefits

(i) Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the date of the statement of financial position.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ii) Pension obligations

Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.

(t) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and call deposits with banks or financial institutions and net of bank overdrafts.

(u) Revenue

Revenue is recognized in accordance with IFRS 15 Revenue from Contracts with Customers. The underlying principle is to recognize revenue when a customer obtains control of the promised goods at an amount that reflects the consideration that is expected to be received in exchange for those goods. It also requires increased disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. We adopted IFRS 15 Revenue from Contracts with Customers at the beginning of 2018, and implemented new accounting policies and internal controls necessary to support its requirements. The adoption of IFRS 15 did not have any impact on our revenue recognition.

We recognize revenue upon transfer of control of the promised goods in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. We account for a contract with customer when we have approval and commitment from both parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We identify separated contractual performance obligations and evaluate each distinct performance obligation within a contract, whether it is satisfied at a point in time or over time. All of our performance obligations for the reported periods were satisfied at a point in time.

Revenue is allocated among performance obligations in a manner that reflects the consideration that we expect to be entitled to for the promised goods based on standalone selling prices (SSP). SSP are estimated for each distinct performance obligation and judgment may be required in their determination. The best evidence of SSP is the observable price of the product when we sell the goods separately in similar circumstances and to similar customers.

Until January 1, 2018, revenues from sales of products and services were recognized upon delivery provided that the collection of the resulting receivable was reasonably assured, there was persuasive evidence of an arrangement, no significant obligations remained and the price was fixed or determinable.

The product warranties, which in the great majority of cases includes component and functional errors, are usually granted for a one year period from legal transfer of the product. For the customers, the specific warranty period and the specific warranty terms are part of the basis of the individual contract.

Warranty provisions include only standard warranty, whereas services purchased in addition to the standard warranty are included in the services contracts.

Interest Income

Revenue is recognized as interest accrues using the effective interest method.

(v) Sales Taxes

Revenues, expenses and assets are recognized net of the amount of goods and services tax ("GST") or valued-added tax ("VAT"), except where the amount of GST or VAT incurred is not recoverable from the Australian Taxation Office or taxation authorities in other jurisdictions. In these circumstances, the GST or VAT is recognized as part of the cost of acquisition of the assets or as part of an item of expense. Receivables and payables in the consolidated statement of financial position are shown inclusive of GST or VAT.

Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST or VAT component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(w) Earnings Per Share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, 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 year.

(ii) 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.

(x) 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. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

(y) Related Party Transactions

For the purpose of these consolidated financial statements, related party includes a person and entity as defined below:

(i) A person, or a close member of that person's family, is related to the Group if that person:

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of the key management personnel of the Group or the Group's parent.

(ii) An entity is related to the Group if any of the following conditions applies:

(i) the entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.

(vi) the entity is controlled or jointly controlled by a person identified in (i).

(z) Government grants

Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expenses are recognised as income over the periods necessary to match grants to the costs are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the assets on a straight line basis.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(aa) Fair Value

Fair values may be used for financial asset and liability measurement and for sundry disclosures.

Fair value is 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. It is based on the presumption that the transaction takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market. The principal or most advantageous market must be accessible to, or by, the Group.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

The fair value measurement of a non-financial asset takes into account the market participant's ability to generate economic benefits by using the asset at its highest and best use or by selling it to another market participant that would use the asset at its highest and best use.

In measuring fair value, the Group uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

(ab) Financial assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

(i) Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, investments in debt instruments and equity instruments at FVTOCI, and financial assets at amortized cost.

(i) Financial asset at FVTPL

For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset.

(ii) Investments in debt instruments at FVTOCI

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of collecting contractual cash flows and selling the financial assets, are measured at FVTOCI.

Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed.

(iii) Investments in equity instruments at FVTOCI

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company's right to receive the dividends is established, unless the Company's rights clearly represent a recovery of part of the cost of the investment.

(iv) Measured at amortized cost

Cash and cash equivalents, debt instrument investments, notes and accounts receivable (including related parties), other receivables and refundable deposits are measured at amortized cost.

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of holding financial assets in order to collect contractual cash flows, are measured at amortized cost.

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(ii) Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at FVTOCI.

The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost and investments in debt instruments that are measured at FVTOCI, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

(iii) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

(ac) New, Revised or Amending Accounting Standards and Interpretations

(i) The Group has applied the following standards and amendments for first time in their annual reporting period commencing January 1, 2021:

Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:

• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest

• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued

• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component

These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.

Covid-19-Related Rent Concessions beyond 30 June 2021 Amendments to IFRS 16

On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment was intended to apply until 30 June 2021, but as the impact of the Covid-19 pandemic is continuing, on 31 March 2021, the IASB extended the period of application of the practical expedient to 30 June 2022.The amendment applies to annual reporting periods beginning on or after 1 April 2021. However, the Group has not received Covid-19-related rent concessions but plans to apply the practical expedient if it becomes applicable within allowed period of application.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ii) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations issued by the IASB which are not yet mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out as below and not expected to have a significant impact on the Group"s consolidated financial statements. The Group does not plan to adopt these standards early.

New, Revised or Amended Standards and Interpretations | Effective Date Issued by IASB
Annual Improvements to IFRS Standards 2018-2020 Cycle "Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture" | January 1, 2022
Amendments to IFRS 3 "Reference to the Conceptual Framework" | January 1, 2022
Amendments to IFRS 10 and IAS 28 "Sales or Contribution of Assets between an Investor and its Associate or Joint Venture" | To be determined by IASB
Amendments to IAS 1 "Classification of Liabilities as Current or Non-current" | January 1, 2023
Amendments to IAS 1 "Disclosure of Accounting Policies" | January 1, 2023
Amendments to IAS 8 "Definition of Accounting Estimates" | January 1, 2023
Amendments to IAS 12 "Deferred Tax related to Assets and Liabilities arising from a Single Transaction" | January 1, 2023
Amendments to IAS 16 "Property, Plant and Equipment: Proceeds before Intended Use" | January 1, 2022
Amendments to IAS 37 "Onerous Contracts - Costs of Fulfilling a Contract" | January 1, 2022

(ad) Critical Accounting Judgments, Estimates and Assumptions

The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments, 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 judgments and estimates will seldom equal the related actual results. The judgments, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(i) Provision for impairment of receivables

The provision for impairment of receivables assessment requires a degree of estimation and judgment. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtor's financial position. Refer to Note 12 for further details.

(ii) Estimation of useful lives of assets

The Group determines the estimated useful lives and related depreciation and amortization charges for its plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other events. The depreciation and amortization charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Please refer to Note 3(e) and 3(j) for further detail.

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NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(iii) Income tax

The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax and in assessing whether deferred tax assets and certain deferred tax liabilities are recognized in the consolidated statement of financial position. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognized only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. In addition, there are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognizes liabilities for anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized in the statement of financial position and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or all of the carrying amounts of recognized deferred tax assets and liabilities may require adjustments, resulting in a corresponding credit or charge to the consolidated statement of profit or loss and comprehensive income.

(iv) Capitalized technology development expenditure in intangibles

In determining which technology development expenditure may be capitalized the Group applies judgement to distinguish those costs which have a direct relationship to the criteria for capitalization described in accounting policy Note 3e, from those which should be expensed in the period incurred. This involves evaluating the nature of work performed by staff as well as universities, educational and professional institutions, third party consultants and contractors, and in many cases includes a judgmental apportionment of costs.

(v) Impairment of non-financial assets

The Group assesses impairment of all assets (including intangible assets) at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include product, technology, economic and political environments and future product expectations. If an impairment trigger exists the recoverable amount of the asset is determined. Given the current uncertain economic environment management considered that the indicators of impairment were significant enough and as such these assets have been tested for impairment in this financial period. Refer to Note 3(h) for details regarding the method and assumptions used.

(vi) Fair value of convertible bonds

The fair value of convertible bonds are determined using valuation techniques including reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.

(vii) Fair value of derivative financial instruments

The fair values of derivative financial instruments that are not quoted in active markets are determined by using valuation techniques. Valuation techniques used include discounted cash flows analysis and models with built-in functions available in externally acquired financial analysis or risk management systems widely used by the industry such as option pricing models. To the extent practical, the models use observable data. In addition, valuation adjustments may be adopted if factors such as credit risk are not considered in the valuation models. Management judgement and estimates are required for the selection of appropriate valuation parameters, assumptions and modelling techniques.

(viii) Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Group uses estimate to determine the net realizable value of inventory at the end of each reporting period.

The Group estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon.

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NOTE 4. REVENUE AND SEGMENT INFORMATION

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment |  | 3,980 |  | 1,427,157 |  | 1,273,921
Sales of software and technology solutions |  | - |  | - |  | 1,504
Sales of air- filter products |  | 189,133 |  | 317,472 |  | -
Total Revenue |  | 193,113 |  | 1,744,629 |  | 1,275,425

Operating segments have been determined on the basis of reports reviewed by the executive director. The executive director is considered to be the chief operating decision maker of the Group. The executive director considers that the Group has assessed and allocated resources on this basis. The executive director considers that the Group has six operating segments for the year ended December 31, 2021 (2019: three and 2020: four), being (1) the development, sale and distribution of autostereoscopic 3D displays, conversion equipment, software and others, (2) the sale of electronic glass, (3) sale of nano coated plates and air filters, (4) provision of credit risk analysis, (5) IoT and (6) Corporate.

Disaggregation of Revenue

Timing of transfer of good or services

2021 |  | At a point in time A$ |  | Over time A$ |  | Total A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment |  | 3,980 |  | - |  | 3,980
Sales of air- filter products |  | 189,133 |  | - |  | 189,133
Total Revenue |  | 193,113 |  | - |  | 193,113

2020 |  | At a point in time A$ |  | Over time A$ |  | Total A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment |  | 1,342,444 |  | 84,713 |  | 1,427,157
Sales of air- filter products |  | 317,472 |  | - |  | 317,472
Total Revenue |  | 1,659,916 |  | 84,713 |  | 1,744,629

2019 |  | At a point in time A$ |  | Over time A$ |  | Total A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment |  | 1,164,103 |  | 109,818 |  | 1,273,921
Sales of software and technology solutions |  | 1,504 |  | - |  | 1,504
Total Revenue |  | 1,165,607 |  | 109,818 |  | 1,275,425

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NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

Revenue by geographic location

The Group's operations are located in Korea, Hong Kong and China. The following table provides an analysis of the Group's sales by geographical markets based on locations of customers:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Hong Kong |  | 3,980 |  | 1,366,200 |  | 1,195,150
China |  | 6,846 |  | 60,956 |  | 80,275
Korea |  | - |  | 315,034 |  | -
USA |  | 104,164 |  | - |  | -
Malaysia |  | 78,123 |  | - |  | -
Other |  | - |  | 2,439 |  | -
|  | 193,113 |  | 1,744,629 |  | 1,275,425

Non-current assets by geographic location

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Australia |  | 562,500 |  | - |  | -
USA |  | 4,599,618 |  | - |  | -
Hong Kong |  | 1,946,263 |  | 262,626 |  | 13,136,585
China |  | 4,138,043 |  | 2,139,605 |  | 1,580,444
Korea |  | 10,562,521 |  | 4,915,447 |  | -
|  | 21,808,945 |  | 7,317,678 |  | 14,717,029

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NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

Major customers

For the year ended December 31, 2021, the Group has two individual customers (2020 and 2019: 4 and 2 respectively) with revenues comprising more than 10% of Group's revenues and their respective receivables due from these customers are disclosed below:

|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
|  | Percentage of Revenue |  | Balance due A$ |  | Percentage of Revenue |  | Balance due A$ |  | Percentage of Revenue |  | Balance due A$
Customer A |  | - |  | - |  | 16.23% |  | - |  | 41.00% |  | -
Customer B |  | 53.93% |  | 104,645 |  | - |  | - |  | - |  | -
Customer C |  | - |  | - |  | - |  | - |  | 13.00% |  | 116,488
Customer D |  | 40.45% |  | 78,483 |  | - |  | - |  | - |  | -
Customer E |  | - |  | - |  | 41.23% |  | 628,621 |  | - |  | -
Customer F |  | - |  | - |  | 18.05% |  | 314,892 |  | - |  | -
Customer G |  | - |  | - |  | 10.87% |  | 179,338 |  | - |  | -

Segment information for the reporting period is as follows:

For the year ended December 31, 2021 |  | Development, sale and distribution of 3D displays, conversion equipment, software and others A$ |  | Sales of electronic glass A$ |  | Sales of air- filter products A$ |  | Provision of credit risk analysis A$ |  | IoT A$ |  | Corporate A$ |  | Total A$
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue from operating activities |  | 3,980 |  | - |  | 189,133 |  | - |  | - |  | - |  | 193,113
Interest income |  | 18,859 |  | - |  | - |  | 5 |  | - |  | - |  | 18,864
Fair value change in derivative financial instruments |  | - |  | - |  | - |  | - |  | - |  | (842,463) |  | (842,463)
Other income |  | - |  | - |  | - |  | - |  | 39,731 |  | 296,076 |  | 335,807
Segment revenue |  | 22,839 |  | - |  | 189,133 |  | 5 |  | 39,731 |  | (546,387) |  | (294,679)
Cost of sales |  | 2,721 |  | 6,654 |  | 140,072 |  | - |  | - |  | - |  | 149,447
Employee benefit expenses |  | 215,757 |  | 105,680 |  | - |  | 10,925 |  | 550,817 |  | 730,743 |  | 1,613,922
Depreciation and amortization expenses |  | 109,325 |  | 913 |  | 1,049,125 |  | - |  | 25,976 |  | 141,472 |  | 1,326,811
Professional and consulting expenses |  | 5,802 |  | 8,772 |  | 36,881 |  | 307,700 |  | 1,179,003 |  | 837,880 |  | 2,376,038
Travel and accommodation expenses |  | 7,980 |  | 65,808 |  | - |  | 10,633 |  | 919 |  | 6,045 |  | 91,385
Other operating expenses |  | 1,534,404 |  | 92,035 |  | 23,855 |  | 66,372 |  | 692,327 |  | (1,683,283) |  | 725,710
Provision for obsolence inventory |  | (9,439) |  | - |  | - |  | - |  | - |  | - |  | (9,439)
Provision for bad debts |  | - |  | - |  | 14,390 |  | - |  | - |  | - |  | 14,390
(Gain)/ Loss disposal of subsidiaries |  | (6,927,976) |  | - |  | - |  | - |  | - |  | 4,929,707 |  | (1,998,269)
Finance costs |  | 16,763 |  | 60,448 |  | 3,009 |  | - |  | (33,335) |  | 1,954,067 |  | 2,000,952
Segment expenses |  | (5,044,663) |  | 340,310 |  | 1,267,332 |  | 395,630 |  | 2,415,707 |  | 6,916,631 |  | 6,290,947
Segment operating (loss) / profit |  | 5,067,502 |  | (340,310) |  | (1,078,199) |  | (395,625) |  | (2,375,976) |  | (7,463,018) |  | (6,585,626)
Segment assets 2021 |  | - |  | 15,645,858 |  | 6,417,042 |  | 2,049,261 |  | 767,670 |  | 210,580 |  | 25,090,411
Segment liabilities 2021 |  | - |  | (1,737,509) |  | (457,741) |  | (808,980) |  | (287,802) |  | (7,842,009) |  | (11,134,041)
|  | - |  | 13,908,349 |  | 5,959,301 |  | 1,240,281 |  | 479,868 |  | (7,631,429) |  | 13,956,370

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NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

For the year ended December 31, 2020 |  | Development, sale and distribution of 3D displays, conversion equipment, software and others A$ |  | Sales of air- filter products A$ |  | Consultancy services A$ |  | Corporate A$ |  | Total A$
Revenue |  |  |  |  |  |  |  |  |  |
Revenue from operating activities |  | 1,427,157 |  | 317,472 |  | - |  | - |  | 1,744,629
Interest income |  | 6,197 |  | - |  | - |  | - |  | 6,197
Fair value change in derivative financial instruments |  | - |  | - |  | - |  | 2,312,197 |  | 2,312,197
Other income |  | 82,561 |  | - |  | - |  | - |  | 82,561
Segment revenue |  | 1,515,915 |  | 317,472 |  | - |  | 2,312,197 |  | 4,145,584
Cost of sales |  | 1,155,006 |  | 156,560 |  | - |  | - |  | 1,311,566
Employee benefit expenses |  | 1,570,626 |  | - |  | 241,914 |  | 400,103 |  | 2,212,643
Depreciation and amortization expenses |  | 1,897,243 |  | 179,144 |  | 2,307 |  | 68 |  | 2,078,762
Professional and consulting expenses |  | (116,977) |  | - |  | 634,186 |  | 856,698 |  | 1,373,907
Travel and accommodation expenses |  | 24,436 |  | - |  | 2,246 |  | 14,213 |  | 40,895
Other operating expenses |  | 734,523 |  | 1,196 |  | 40,476 |  | 334,945 |  | 1,111,140
Provision for bad debt |  | 58,932 |  | - |  | - |  | - |  | 58,932
Provision for inventory obsolescence |  | (17,671) |  | - |  | - |  | - |  | (17,671)
Loss disposal of subsidiaries |  | (22,206,347) |  | - |  | - |  | 22,235,337 |  | 28,990
Plant and equipment written off |  | - |  | - |  | - |  | 110 |  | 110
Provision for impairment loss on intangible assets |  | 3,459,340 |  | - |  | - |  | - |  | 3,459,340
Development projects written off |  | 930,356 |  | - |  | - |  | - |  | 930,356
Finance costs |  | 408,054 |  | - |  | - |  | 1,692,218 |  | 2,100,272
Segment expenses |  | (12,102,479) |  | 336,900 |  | 921,129 |  | 25,533,692 |  | 14,689,242
Segment operating (loss) / profit |  | 13,618,394 |  | (19,428) |  | (921,129) |  | (23,221,495) |  | (10,543,658)
Segment assets 2020 |  | 2,070,047 |  | 6,529,733 |  | 2,337,630 |  | 2,016,256 |  | 12,953,666
Segment liabilities 2020 |  | 5,015,497 |  | 2,733,042 |  | 5,888,659 |  | (5,589,384) |  | 8,047,814

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NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

For the year ended December 31, 2019 |  | Development, sale and distribution of 3D displays, conversion equipment, software and others A$ |  | Sales and distribution of audio products* A$ |  | Consultancy services A$ |  | Corporate A$ |  | Total A$
Revenue from operating activities |  | 1,275,425 |  | - |  | - |  | - |  | 1,275,425
Interest income |  | 115,707 |  | - |  | - |  | 55 |  | 115,762
Fair value change in derivative financial instruments |  | - |  | - |  | - |  | 127,551 |  | 127,551
Other income |  | 807,831 |  | - |  | - |  | - |  | 807,831
Gain on disposal of plant and equipment |  | 212,195 |  | - |  | - |  | - |  | 212,195
Segment revenue |  | 2,411,158 |  | - |  | - |  | 127,606 |  | 2,538,764
Cost of sales |  | 1,008,821 |  | - |  | - |  | - |  | 1,008,821
Employee benefit expenses |  | 3,302,504 |  | - |  | 42,573 |  | 689,301 |  | 4,034,378
Depreciation and amortization expenses |  | 3,166,643 |  | - |  | 7,375 |  | 766 |  | 3,174,784
Professional and consulting expenses |  | 711,172 |  | - |  | 547,018 |  | 761,780 |  | 2,019,970
Travel and accommodation expenses |  | 174,914 |  | - |  | 51,171 |  | 55,810 |  | 281,895
Other operating expenses |  | 1,731,000 |  | - |  | 5,544 |  | 17,452 |  | 1,753,996
Provision for impairment loss of goodwill |  | - |  | - |  | - |  | 4,486,301 |  | 4,486,301
Provision for inventory obsolescence |  | 799,871 |  | - |  | - |  | - |  | 799,871
Finance costs |  | 1,561,625 |  | - |  | - |  | - |  | 1,561,625
Segment expenses |  | 12,456,550 |  | - |  | 653,681 |  | 6,011,410 |  | 19,121,641
Segment operating (loss) / profit |  | (10,045,392) |  | - |  | (653,681) |  | (5,883,804) |  | (16,582,877)
Segment assets 2019 |  | 12,498,397 |  | - |  | 29,716 |  | 7,418,163 |  | 19,946,276
Segment liabilities 2019 |  | 16,209,166 |  | - |  | 3,004,589 |  | 653,498 |  | 19,867,253

* Discontinued in 2019

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NOTE 5. OTHER INCOME

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Government grant |  | - |  | 82,082 |  | 789,083
Sundry income |  | 335,807 |  | 479 |  | 18,748
|  | 335,807 |  | 82,561 |  | 807,831

NOTE 6. FINANCE COSTS

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Bank overdraft and borrowing interest |  | - |  | 37,091 |  | 84,920
Interest on revolving loan |  | 16,763 |  | 228,627 |  | 50,328
Interest on operating lease liability |  | 88,818 |  | 32,526 |  | 109,675
Interest on convertible bonds |  | - |  | 109,811 |  | 1,316,702
Interest on convertible promissory notes (Note 22) |  | 1,895,371 |  | 1,692,217 |  | -
|  | 2,000,952 |  | 2,100,272 |  | 1,561,625

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NOTE 7. LOSS BEFORE INCOME TAX

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Employee benefit expenses: |  |  |  |  |  |
- Wages and salaries |  | 851,073 |  | 1,482,072 |  | 3,352,495
- Defined contribution superannuation plan expenses |  | 32,106 |  | 83,441 |  | 255,708
- Less: Labor cost allocated to development projects |  | - |  | (133,702) |  | (289,126)
|  | 883,179 |  | 1,431,811 |  | 3,319,077
- Executive directors' remuneration |  | 574,371 |  | 722,157 |  | 683,944
- Non-executive directors' remuneration |  | 156,372 |  | 58,675 |  | 31,357
|  | 730,743 |  | 780,832 |  | 715,301
Total employee benefit expenses |  | 1,613,922 |  | 2,212,643 |  | 4,034,378
Depreciation and amortization of non-current assets: |  |  |  |  |  |
- Leasehold improvements |  | 18,978 |  | 10,385 |  | 44,698
- Office furniture and equipment |  | 118,143 |  | 179,140 |  | 504,447
- Motor vehicles |  | - |  | - |  | 18,757
- Machinery |  | 1,049,125 |  | 172,982 |  | -
- Right of use assets |  | 140,565 |  | 299,981 |  | 488,520
- Intangible assets |  | - |  | 1,416,274 |  | 2,118,362
Total depreciation and amortization |  | 1,326,811 |  | 2,078,762 |  | 3,174,784
Other Expenses: |  |  |  |  |  |
Allowances for bad debts |  | 14,390 |  | 58,932 |  | 11,052
Rental expense on operating lease |  | 116,406 |  | 126,382 |  | 637,321
Reversal/(Provision) of allowance for inventory obsolescence |  | (9,439) |  | (17,671) |  | 799,871
Audit and review of financial statements: |  |  |  |  |  |
- statutory audit of the Group in Australia |  | - |  | 25,000 |  | 55,157
- statutory audit of the Group in USA |  | 185,272 |  | 76,780 |  | 435,899
- auditors of the subsidiaries in Hong Kong and China |  | 10,922 |  | - |  | 14,246
- review for other reporting purposes |  | 87,130 |  | 18,822 |  | -
Total audit and review fees |  | 283,324 |  | 120,602 |  | 505,302

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NOTE 8. INCOME TAX (EXPENSE) / CREDIT

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Income tax expenses |  | - |  | - |  | -
Deferred tax expenses |  | - |  | - |  | (117,322)
Income tax expenses |  | - |  | - |  | (117,322)

(a) The prima-facie tax on loss before income tax is reconciled to the income tax expense as follows:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Numerical reconciliation of income tax expense to prima facie tax payable |  |  |  |  |  |
Loss before income tax |  | (6,585,626) |  | (10,543,548) |  | (16,582,877)
Income tax expenses on loss before income tax at 30% |  | 1,975,688 |  | 3,163,064 |  | 4,974,863
Difference in overseas tax rates |  | (401,475) |  | (148,299) |  | (3,260,006)
Add / (less) the tax effect of: |  |  |  |  |  |
Tax losses and temporary differences for the year for which no deferred tax is recognized |  | (1,574,213) |  | (3,014,765) |  | (1,832,179)
Income tax expenses |  | - |  | - |  | (117,322)

(b) Deferred tax liabilities arising from temporary differences and unused tax losses can be summarized as follows:

|  |  |  | Consolidated
|  |  |  | December 31, 2021 A$ |  | December 31, 2020 A$
Balance brought forward |  |  |  | (13,668) |  | (1,372,653)
Written off of the deferred tax liabilities |  |  |  | - |  | -
Release of disposal of subsidiaries |  |  |  | - |  | 1,380,402
Exchange difference |  |  |  | 13,668 |  | (21,417)
Total |  |  |  | - |  | (13,668)

(c) There were no income tax payable in the consolidated statements of financial position in years 2021 and 2020.

NOTE 9. DIVIDENDS

No dividends were declared and paid during the financial year ended December 31, 2021 (2020: Nil).

NOTE 10. LOSS PER SHARE

|  | Consolidated
|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
Loss after income tax attributable to shareholders |  | A$(5,771,510) |  | A$(10,034,077) |  | A$(15,646,147)
Number of ordinary shares |  | 9,329,420 |  | 6,513,671 |  | 3,377,386
Weighted average number of ordinary shares on issue |  | 8,292,403 |  | 4,311,360 |  | 3,377,386
Basic and diluted loss per share |  | A$(0.70) |  | A$ (2.33) |  | A$ (4.63)

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NOTE 11. INVENTORIES

Inventories consist of the following:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Raw materials |  | - |  | 296,472
Finished goods - displays and other products |  | - |  | 529,080
Provision for inventories obsolescence |  | - |  | (638,151)
Total |  | - |  | 187,401

NOTE 12. TRADE AND OTHER RECEIVABLES

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Trade receivables |  | 480,095 |  | 1,233,709
Other receivables |  | 20,482 |  | 1,689
|  | 500,577 |  | 1,235,398
Less: Allowances for doubtful debts |  | (14,456) |  | (70,793)
|  | 486,121 |  | 1,164,605

(a) Ageing Analysis

The ageing analysis of trade receivables is as follows:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Past due: |  |  |  |
< 31 days Less than 31 days |  | 190,969 |  | 711,754
31 - 90 days |  | - |  | 394,384
> 90 days |  | 289,126 |  | 127,571
|  | 480,095 |  | 1,233,709

(b) Trade receivables which are past due but not impaired

Included in the Group's trade receivable balances are debtors with an aggregate carrying amount of A$480,095 (2020: A$1,233,709) which are past due at the end of the reporting period for which the Group has made provision for impairment loss of A$14,456 (2020: A$70,793).

The carrying value of trade receivables is considered reasonable approximation of fair value to the short-term nature of the balance.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables in the consolidated financial statements. Refer to Note 28(e) for further details of credit risk management.

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NOTE 13. OTHER ASSETS

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Prepayments |  | - |  | 50,382
Trade deposits |  | 432,236 |  | 692,026
Other deposits |  | 1,574,128 |  | 1,347,360
VAT receivable |  | 272 |  | 129
|  | 2,006,636 |  | 2,089,897

NOTE 14. PLANT AND EQUIPMENT

|  |  |  | Consolidated
|  |  |  | Leasehold Improvements A$ |  | Fixtures and Equipment A$ |  | Machinery A$ |  | Total A$

As of December 31, 2019 |  |  |  |  |  |  |  |  |  |
Cost |  |  |  | 826,997 |  | 2,888,508 |  | - |  | 3,715,505
Accumulated depreciation |  |  |  | (743,048) |  | (2,243,340) |  | - |  | (2,986,388)
Carrying amount as of December 31, 2019 |  |  |  | 83,949 |  | 645,168 |  | - |  | 729,117
Year ended December 31, 2020 |  |  |  |  |  |  |  |  |  |
Opening carrying amount |  |  |  | 83,949 |  | 645,168 |  | - |  | 729,117
Additions |  |  |  | 2,064 |  | 7,899 |  | 7,224,551 |  | 7,234,514
Disposals |  |  |  | (80,581) |  | (203,788) |  | - |  | (284,369)
Depreciation expenses |  |  |  | (10,385) |  | (172,979) |  | (179,144) |  | (362,508)
Exchange difference |  |  |  | 4,953 |  | (13,674) |  | 9,645 |  | 924
Closing carrying amount as of December 31, 2020 |  |  |  | - |  | 262,626 |  | 7,055,052 |  | 7,317,678
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |
Cost |  |  |  | - |  | 710,621 |  | 7,224,551 |  | 7,935,172
Accumulated depreciation |  |  |  | - |  | (447,995) |  | (169,499) |  | (617,494)
Carrying amount as of December 31, 2020 |  |  |  | - |  | 262,626 |  | 7,055,052 |  | 7,317,678
Year ended December 31, 2021 |  |  |  |  |  |  |  |  |  |
Opening carrying amount |  |  |  | - |  | 262,626 |  | 7,055,052 |  | 7,317,678
Additions |  |  |  | 42,392 |  | 28,717 |  | - |  | 71,109
Disposals |  |  |  | - |  | (164,829) |  | - |  | (164,829)
Depreciation expenses |  |  |  | (18,978) |  | (118,143) |  | (1,049,125) |  | (1,186,246)
Exchange difference |  |  |  | (452) |  | 14,341 |  | 390,133 |  | 404,022
Closing carrying amount as of December 31, 2021 |  |  |  | 22,962 |  | 22,712 |  | 6,396,060 |  | 6,441,734
As of December 31, 2021 |  |  |  |  |  |  |  |  |  |
Cost |  |  |  | 42,392 |  | 199,798 |  | 7,655,465 |  | 7,897,655
Accumulated depreciation |  |  |  | (19,430) |  | (177,086) |  | (1,259,405) |  | (1,455,921)
Carrying amount as of December 31, 2021 |  |  |  | 22,962 |  | 22,712 |  | 6,396,060 |  | 6,441,734

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NOTE 15. INTANGIBLE ASSETS AND GOODWILL

|  | Consolidated
|  | Goodwill A$ |  | Technologies and Knowhow A$ |  | Patents and Trademark A$ |  | Software and License A$ |  | Total A$
Cost |  |  |  |  |  |  |  |  |  |
As of January 1, 2020 |  | 14,578,707 |  | 14,880,322 |  | 1,283,700 |  | 531,471 |  | 31,274,200
Additions |  | - |  | 446,786 |  | 36,688 |  | 3,771 |  | 487,245
Disposal |  | (14,578,707) |  | 8,927,601 |  | (976,692) |  | (2,680) |  | (24,485,680)
Exchange difference |  | - |  | (181,683) |  | (107,168) |  | (45,698) |  | (334,549)
As of December 31, 2020 |  | - |  | 6,217,824 |  | 236,528 |  | 486,864 |  | 6,941,216
As of January 1, 2021 |  | - |  | 6,217,824 |  | 236,528 |  | 486,864 |  | 6,941,216
Additions |  | - |  | 1,900,589 |  | - |  | - |  | 1,900,589
As of December 31, 2021 |  | - |  | 8,118,413 |  | 236,528 |  | 486,864 |  | 8,841,805
Accumulated Amortization and Impairment Losses |  |  |  |  |  |  |  |  |  |
As of January 1, 2020 |  | (14,578,707) |  | (6,157,872) |  | (390,491) |  | (196,327) |  | (21,323,397)
Amortization |  | - |  | (1,238,718) |  | (82,474) |  | (95,082) |  | (1,416,274)
Provision for impairment |  | - |  | (3,155,932) |  | (81,875) |  | (221,533) |  | (3,459,340)
Disposal |  | 14,578,707 |  | 4,617,299 |  | 288,570 |  | - |  | 19,484,576
Exchange difference |  | - |  | (282,601) |  | 29,742 |  | 26,078 |  | (226,781)
As of December 31, 2020 |  | - |  | (6,217,824) |  | (236,528) |  | (486,864) |  | (6,941,216)
As of January 1, 2021 |  | - |  | (6,217,824) |  | (236,528) |  | (486,864) |  | (6,941,216)
As of December 31, 2021 |  | - |  | (6,217,824) |  | (236,528) |  | (486,864) |  | (6,941,216)
Carrying Amount |  |  |  |  |  |  |  |  |  |
As of December 31, 2021 |  | - |  | 1,900,589 |  | - |  | - |  | 1,900,589
As of December 31, 2020 |  | - |  | - |  | - |  | - |  | -

As at December 31, 2020, based on the results of impairment review and value-in-use assessment, the management considered that the goodwill and intangible assets have suffered an impairment loss and provision of impairment for goodwill of A$4,486,301 has been made in 2019, which then impaired the full value of the goodwill of A$14,578,707.

During the year 2020, the Group restructured of certain subsidiaries which had intangible assets. The details of these disposals are set out in note 24.

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NOTE 16. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

| Consolidated
| December 31 2021 A$ |  | December 31 2020 A$
Investment in equity instrument designated at FVOCI |  |  |
Investment in Listed Shares | 562,500 |  | -

On February 25, 2021, the Group completed the underwriting in Oakridge International Limited (formerly known as Xped Limited) ("Oakridge"), a company listed on the Australian Securities Exchange, for 500 million shares at a subscription price of A$0.001 per share for a total subscription amount of A$500,000 or equivalent to US$381,000. The 500 million shares represent approximately 15% of the then total outstanding shares in Oakridge.

This investment in equity instrument is not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the directors of the Company have elected to designate this investment in equity instrument as at Fair Value Through Other Comprehensive Income (FVTOCI) as they believe that recognising short-term fluctuations in this investment"s fair value in profit or loss would not be consistent with the Group"s strategy of holding this investment for long-term purposes and realising their performance potential in the long run.

NOTE 17. TRADE AND OTHER LIABILITIES

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Trade payables (Note 29 (diii)) |  | 142,325 |  | 146,730
Accruals |  | 1,014,368 |  | 385,888
Trade deposits received |  | - |  | 630,523
Other borrowing (i) |  | - |  | 211,567
Other payables |  | 1,268,024 |  | 2,214,456
|  | 2,424,717 |  | 3,589,164

(i) The borrowing is unsecured, carry interest at 8% per annual, and full paid during the year.

NOTE 18. AMOUNTS DUE TO RELATED COMPANIES

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Current portion |  | 247,406 |  | 237,674
|  | 247,406 |  | 237,674

As at December 31, 2021 and 2020, the non-trade amounts due to related companies are unsecured, non-interest bearing and repayable on demand.

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NOTE 19. AMOUNT DUE TO HOLDING COMPANY

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Current portion |  | - |  | 532,718
|  | - |  | 532,718

As at December 31, 2020, the non-trade amounts due to the ultimate holding company is unsecured non-interest bearing and repayable on demand.

NOTE 20. LEASES

(a) Right of use assets

The carrying amount of the Group's right of use assets and the movements during the year are as follows:

| Consolidated
| Lease Properties |  | Motor Vehicles |  | Total
| A$ |  | A$ |  | A$
As of January 1, 2020 | 1,064,986 |  | 42,906 |  | 1,107,892
Depreciation expenses | (287,557) |  | (12,427) |  | (299,984)
Disposal | (862,109) |  | (3,887) |  | (865,996)
Exchange difference | 84,680 |  | (26,592) |  | 58,088
As of December 31, 2020 | - |  | - |  | -
Additions | 2,086,229 |  | - |  | 2,086,229
Depreciation expenses | (140,565) |  | - |  | (140,565)
Exchange difference | 13,205 |  | - |  | 13,205
As of December 31, 2021 | 1,958,869 |  | - |  | 1,958,869

(b) Lease liabilities

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Within one year |  | 425,567 |  | -
Two to five years |  | 1,403,932 |  | -
|  | 1,829,499 |  | -
Less: Amount due within one year shown under current liabilities |  | (425,567) |  | -
Amount due after one year |  | 1,403,932 |  | -
Analyzed into: |  |  |  |
Current portion |  | 425,567 |  | -
Non-current portion |  | 1,403,932 |  | -
|  | 1,829,499 |  | -

Obligations under operating leases carried an interest rate of 2.5% per annum.

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NOTE 21. DERIVATIVE FINANCIAL INSTRUMENTS

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Derivative financial liabilities: |  |  |  |
Carrying value as at beginning of year |  | 1,478,540 |  | -
Derivates related to convertible promissory note (Note 22) |  | - |  | 3,790,737
Fair value change in derivative financial instruments during the year |  | 842,463 |  | (2,312,197)
Exchange difference |  | - |  | -
Carrying value as at end of year |  | 2,321,003 |  | 1,478,540

As at December 31, 2021 and 2020, the derivatives related to two convertible promissory notes entered into during 2020 (details are set out in Note 22) were revalued using the weighted average assumptions: volatility 90.8% and 72.80%, the weighted expected term of two years, a discount rate of 3.51% and a dividend yield of 0%.

The Group departed from IFRS 9 for certain disclosures for the note issued January 20, 2020 as not doing so would be misleading to the readers of the consolidated financial statements as it would greatly inflate the activity on the 2020 consolidated statement of activity but have no effect on the consolidated balance sheet or on the net loss of the Group. As such, the Group determined it was appropriate to present the change in fair value of this derivative instrument, net of interest expense recorded at the time of issuance

NOTE 22. CONVERTIBLE PROMISSORY NOTES

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$
Face value of convertible promissory note issued on January 20, 2020 (note i) |  | 2,621,360 |  | 2,621,360
Face value of convertible promissory note issued on August 6, 2020 (note ii) |  | 2,291,740 |  | 2,291,740
Debt discount |  | (3,790,737) |  | (3,790,737)
Liability component on initial recognition |  | 1,122,363 |  | 1,122,363
Interest accrued but not yet paid for the period (Note 6) |  | 3,587,588 |  | 1,692,217
Interest paid during the year |  | (185,469) |  | (185,469)
Exchange differences |  | (213,066) |  | (433,062)
Carrying value as at end of year |  | 4,311,416 |  | 2,196,049

Note (i)

On January 20, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement the ("CN Agreement"), with an independent third party ("Noteholder"). Pursuant to CN Agreement, the Noteholder purchased from the Company a 10% convertible promissory note (the "Promissory Note") in the principal amount of HK$14 million (equivalent to approximately A$2.6 million) maturing in two (2) years from the date of the agreement. The Noteholder has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$3.00, subject to adjustment, per share over the term of the Promissory Note.

In October 2020, the Group settled the interest accrued of A$174,811 by issuing 46,741 shares to the Noteholder.

Subsequent to the balance sheet date, on January 19, 2022, the Noteholder converted the Promissory Note and accrued interest to a total of 664,871 shares in the Company.

Note (ii)

On August 6, 2020, the Company entered into a second Convertible Promissory Note Agreement ("the Second CN Agreement") with a third party ("Second Noteholder"). Pursuant to the Second CN Agreement, the holder invested USD 1,650,000 under a convertible note (the "Second Note") without interest, maturing in two years from the date of the Second Note. The Second Noteholder or the Company has the right to convert the principal into ordinary shares of the Company at a conversion price of US$ 3.25 per share over the term of the Second Note. The conversion price is subject to downward adjustment and has a floor price of US$ 1.50 if the Company sells ordinary shares below the conversion price within 12 months after the date of the Second Note. The Second Note cannot be prepaid. The Second Noteholder agreed to waive piggyback registration rights.

The conversion feature in convertible promissory notes were derivative liabilities based on the fact the conversion into shares could result in a variable number of shares to be issued.

Subsequent to the balance sheet date, on April 13, 2022, the Second Noteholder converted the Second CN Agreement to a total of 507,692 shares in the Company.

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NOTE 23. CONTROLLED ENTITIES

As at December 31, 2021, the entities controlled by the Company are as follows:

Name of Subsidiary |  | Country of Incorporation |  | Principal Activities |  | Paid Up Capital |  | Percentage Owned
|  |  |  |  |  |  |  | 2021 |  | 2020
CIMC Marketing Pty Limited |  | Australia |  | Management services & Investment holding |  | A$1 |  | 100% (Direct) |  | 100% (Direct)
Grand Dynasty Limited* |  | Hong Kong |  | Investment Holding |  | HK$ 1 |  | 100% (Direct) |  | -
Grand Dynasty (Zhenjiang) Co., Limited* |  | P.R.C |  | Dormant |  | RMB 1 |  | 100% (Indirect) |  | -
Greifenberg Digital Limited* |  | Canada |  | Investment Holding |  | US$1 |  | 40.75% (Direct) |  | -
Greifenberg Analytics Limited* |  | Canada |  | Online analytic financial research services |  | US$1 |  | 40.75% (Indirect) |  | -
Greifenberg Capital Limited* |  | Hong Kong |  | Administrative services |  | HK$1 |  | 40.75% (Indirect) |  | -
IMTE Limited (Formerly known as Great Gold Investment Limited) |  | Hong Kong |  | Treasury and Administrative services |  | HK$1 |  | 100% (Direct) |  | 100% (Direct)
IMTE Asia Limited* |  | Hong Kong |  | Administrative services |  | HK$1 |  | 100% (Direct) |  | -
Itana Holdings Limited* |  | Canada |  | Investment Holding |  | US$1 |  | 100% (Direct) |  | -
Renfrew International Limited* |  | United State |  | Investment Holding |  | US$1 |  | 100% (Direct) |  | -
Lonsdale International Limited* |  | United State |  | Investment Holding |  | US$1 |  | 100% (Direct) |  | -
Smart (Zhenjiang) Intelligent Technology Limited (Formerly known as Smart (Shenzhen) Technology Limited) |  | P.R.C. |  | Marketing, manufacturing and distribution |  | RMB 5,000,000 |  | 100% (Indirect) |  | 100% (Indirect)
Smartglass Limited |  | Hong Kong |  | Sales of distribution of switchable glass and consultancy services |  | HK$8 |  | 100% (Direct) |  | 100% (Direct)
Sunup Holdings Limited |  | Hong Kong |  | Manufacturing of filter plates |  | US$ 1,290 |  | 51% (Direct) |  | 51% (Direct)
Sunup Korea Limited |  | Hong Kong |  | Sale of filter plates and air filter products |  | US$ 0.13 |  | 51% (Indirect) |  | 51% (Indirect)
Binario Limited# |  | British Virgin Island |  | Investment Holding |  | A$ 1 |  | - |  | 100% (Direct)
Colour Investment Limited# |  | Hong Kong |  | Investment holdings |  | HK$ 43,043,130 |  | - |  | 100% (Direct)
Cystar International Limited# |  | Hong Kong |  | Sales of software and provision of consultancy services |  | HK$ 1 |  | - |  | 100% (Indirect)
Cystar International (Shenzhen) Limited# |  | P.R.C. |  | Dormant |  | RMB 379,141 |  | - |  | 100% (Indirect)
Digital Media Technology Limited# |  | Malaysia |  | Dormant |  | US$ 100 |  | - |  | 100% (Indirect)
GOXD International Limited# |  | Hong Kong |  | Distribution of Digital Picture Frame |  | HK$ 56,803,913 |  | - |  | 80% (Indirect)

* Established during the year

# Disposed during the year

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NOTE 24. BUSINESS COMBINATIONS

(a) Disposal of subsidiaries

During the year ended December 31, 2021, the Group disposed 6 subsidiaries namely: GOXD International Limited, Colour Investment Limited, Cystar International Limited, Cystar (Shenzhen) Limited, Binario Limited and Digital Media Technology Limited. In 2020, the Company disposed of its subsidiaries Marvel Digital Limited and its subsidiaries. The detail of the net gain / (loss) on the disposals during the year are set out below:

| 2021 |  | 2020 |  | 2019
| A$ |  | A$ |  | A$
Total disposal consideration | 538 |  | 25,129 |  | -
Carrying amount of net asset sold (note(i) below) | 270,908 |  | (230,294) |  | -
Gain on sales before income tax and reclassification of foreign currency translation reserve | (270,370) |  | 255,423 |  | -
Reclassification of foreign currency transaction reserve | 645,399 |  | (26,871) |  | -
Non-controlling interest | 1,623,240 |  | (257,542) |  | -
Gain/ (loss) on disposal after income tax | 1,998,269 |  | (28,990) |  | -

(i) Net assets disposed of:

| 2021 |  | 2020 |  | 2019
| A$ |  | A$ |  | A$
Plant and equipment | 164,829 |  | 284,240 |  | -
Development projects | - |  | 2,864,052 |  | -
Intangible assets | - |  | 4,790,784 |  | -
Right of use assets | - |  | 865,996 |  | -
Cash and bank balances | 32,927 |  | 99,061 |  | -
Inventories | 208,737 |  | 400,806 |  | -
Trade and others receivable | 689,336 |  | 603,923 |  | -
Other deposit and prepayment | 779,821 |  | 1,664,343 |  | -
Trade and other liabilities | (1,560,899) |  | (912,580) |  | -
Amount due to a related company | (4,951) |  | (6,689,290) |  | -
Bank overdraft | - |  | (929,438) |  | -
Bank loan | - |  | (966,747) |  | -
Lease liabilities | - |  | (925,042) |  | -
Income tax payables | - |  | - |  | -
Deferred tax liabilities | (38,892) |  | (1,380,402) |  | -
Obligation under finance lease | - |  | (33,329) |  | -
| 270,908 |  | (230,294) |  | -

(ii) Net cash flows from disposal of subsidiaries

| 2021 |  | 2020 |  | 2019
| A$ |  | A$ |  | A$
Consideration received, satisfied in cash | - |  | 25,129 |  | -
Cash and cash equivalents of subsidiaries disposed of (included cash at bank and bank overdraft) | 32,927 |  | 830,377 |  | -
| 32,927 |  | 855,506 |  | -

(b) Acquisition of Subsidiaries

During the year 2021, there was no acquisition of any subsidiary companies.

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NOTE 25. ISSUED CAPITAL

(a) Share Capital

|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
|  | Number of shares |  | A$ |  | Number of shares |  | A$ |  | Number of shares |  | A$
Ordinary Shares fully paid |  | 9,329,420 |  | 48,144,406 |  | 6,513,671 |  | 32,089,997 |  | 3,377,386 |  | 18,902,029

(b) Movements in ordinary share capital

|  | Number of Shares |  | A$
January 1, 2019 |  | 3,377,386 |  | 18,902,029
Issue of shares during the year 2019 |  | - |  | -
December 31, 2019 |  | 3,377,386 |  | 18,902,029
Issue of shares for cash |  | 1,643,406 |  | 7,121,283
Issue of shares for conversion of debt |  | 988,408 |  | 4,122,562
Issue of shares for services |  | 4,471 |  | 23,249
Issue of shares for acquisition of shares in subsidiary companies |  | 500,000 |  | 2,060,000
Legal expenses in respect of issuance of shares |  | - |  | (139,126)
December 31, 2020 |  | 6,513,671 |  | 32,089,997
Issue of shares for services |  | 20,512 |  | 97,282
Issue of shares for cash |  | 2,795,237 |  | 16,019,301
Legal expenses in respect of issuance of shares |  | - |  | (62,174)
December 31, 2021 |  | 9,329,420 |  | 48,144,406

(b) Movements in ordinary share capital

There is only one class of share on issue being ordinary fully paid shares. Holders of ordinary shares are treated equally in all respects regarding voting rights and with respect to the participation in dividends and in the distribution of surplus assets upon a winding up. The fully paid ordinary shares have no par value.

During the year 2020, the details of shares movements are as below:

Issue of shares for cash

On February 24, 2020, the Company issued 158,730 shares at a share price of US$6.30 per share for a total subscription amount of US$1,000,000 (or about A$1,514,284). The proceeds from this sale of shares were used for repaying debts and working capital in the Company.

On May 12, 2020, the Company issued 126,984 shares as a result of the exercise of the warrants referred to (d) below.

On September 15, 2020, the Company issued 450,000 shares at a share price of US$3.00 per share for a total subscription amount of US$1,350,000 (or about A$1,845,000). The proceeds from this sale of shares were used for the Company's operations and working capital.

On December 2, 2020, the Company issued 600,000 shares at a share price of US$3.00 per share for a total subscription amount of US$1,800,000 (or about A$2,442,000). The proceeds from this sale of shares are intended to be used for working capital purposes and development of existing and new business.

On December 21, 2020, the Company issued 307,692 shares at a share price of US$3.25 per share for a total subscription amount of US$1,000,000 (or about A$1,319,999). The proceeds from this sale of shares were intended to be used for the new product design for the filter business.

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NOTE 25. ISSUED CAPITAL (Continued)

Issue of shares on conversion of debt

On July 25, 2020, the Company issued 700,000 shares at a share price of US$3.00 per share for payment of debt in total of HK$16,380,000 (equivalent to about US$2,100,000 or about A$2,940,000).

On October 6, 2020, the Company issued 241,667 shares at a share price of US$3.90 per share for payment of debt in total of HK$5,655,000 (equivalent to about A$1,007,751).

On October 6, 2020, the Company issued 46,741 shares for US$125,852 (equivalent to about A$174,811) in interest payment on the Convertible Notes.

Issue of shares for services

On September 15, 2020, the Company issued 4,471 shares at a share price of US$3.81 per share for a total payment of US$17,035 (equivalent to about A$23,249) to a consultancy company for technical support services.

Issue of shares for acquisition of subsidiary company

On September 17, 2020, the Company issued a total of 500,000 shares at a price of US$3.00 per share for a total payment of US$1,500,000 (equivalent to about A$2,060,000) for the acquisition of 51% equity interest in Sunup Holdings Limited.

During the year 2021, the details of shares movements are as below:

Issue of shares for services

On February 2, 2021, the Company issued 17,744 ordinary shares at a share price of US$3.6125 per share for a total of US$64,100 (or about A$84,106) to employees for performance remuneration.

On February 5, 2021, the Company issued 2,768 ordinary shares at a share price of US$3.6125 per share for a total of US$10,000 (or about A$13,176) to a consultant for provision of accounting and administrative services.

Issue of shares for cash

On February 22, 2021, the Company entered into a Securities Purchase Agreement for the sale of 625,000 shares of the Company to an investor at a price of US$4.00 per share for US$2,500,000 (approximately A$3,162,500). The Company intends to use the net cash proceeds for working capital and development of existing and new businesses.

On March 4, 2021, the Company entered into subscription agreements in a private placement with twelve investors outside the United States to subscribe a total of 573,350 shares in the Company at a price of US$4.00 per share for a total of US$2,293,400 (approximately A$2,964,220). The Company intends to use the net cash proceeds for building out manufacturing infrastructure and working capital.

On March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 shares of the Company at a price of US$6.50 per share for US$4,602,000 (approximately A$6,046,320) generating net cash proceeds of approximately US$4,577,000 (approximately A$6,013,000) after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for developing its current businesses, corporate expenditures and general corporate purposes.

On July 6, 2021, the Company entered into three Securities Purchase Agreements for the total sale of 888,887 ordinary shares of the Company at a price of US$3.15 per share for a total net cash proceeds of approximately US$2,765,000 (approximately A$3,846,261) after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for the purchase of equipment for the Company's electronic glass business and working capital.

Subsequent to the year end to the date of this report, the details of shares movement are as below:

On January 3, 2022, the Company issued a US$10 million convertible note and warrants to subscribe another US$8 million as described in Note 25(d) below. In January 2022 all the convertible notes were converted into a total of 3,205,128 shares in the Company. As of the date of this report, the warrants remain outstanding. Further details of the warrants are set out in (d) below.

On January 19, 2022, the Company issued 664,871 ordinary shares as a result of the conversion of convertible promissory note of HK$14 million as set out in (c) below.

In March 2022, the Company announced the Board approved a share placement of up to US$20 million. The Company has since March 2022 to the date of this Report raised a total of US$6.7 million by selling 1,489,010 of our ordinary shares in the Company.

On April 13, 2022, the Company issued 507,692 ordinary shares as a result of the conversion of convertible promissory note of US$1.65 million as set out in (c) below.

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NOTE 25. ISSUED CAPITAL (Continued)

(c) Convertible Notes

During the year 2020, the details of convertible notes movements are as below:-

On January 20, 2020, the Company entered into a Convertible Note Purchase Agreement for an investor to purchase from the Company a 10% convertible promissory note ("the Note") in the principal amount of HK$14 million (or about A$2.6million or about US$1.8million) maturing in two (2) years from the date of the agreement. During the year the Company paid a total of US$125,852 (or equivalent to about A$174,811) in interest by issuance of 46,741 shares in the Company. Subsequent to the balance sheet date, on January 19, 2022 the noteholder converted the Note into a total of 664,871 shares in the Company.

On August 6, 2020, the Company entered into a convertible note purchase agreement for Nextglass Technologies Corp. to purchase from the Company a convertible promissory note (the "NGT Note") in the principal amount of USD1,650,000 maturing in two (2) years from the date of the agreement. The NGT Note is interest free, non-secured, and each of the Company and noteholder has the right to convert the NGT Note into shares in the Company at a price of US$3.00 per share, subject to adjustment, over the term of the NGT Note. Subsequent to the balance sheet date, the noteholder has converted the NGT Note into 507,692 shares in the Company.

(d) Warrants

On February 20, 2020, the Company entered into a Securities Purchase Agreement for the sale of 158,730 ordinary shares of the Company and warrants ("Warrants") to purchase up to 126,984 ordinary shares. The Warrants were exercisable for the period of 12 months from the date of issuance, at an exercise price of US$10.50 per share. If the volume weighted average price ("VWAP") of the Company's ordinary shares on the trading day immediately prior to the exercise date is less than US$10.50, then the Warrants may be exercised at such time by means of a cashless exercise where each Warrant exercised would receive one share without any cash payment to the Company. On May 12, 2020, all the Warrants were exercised by means of a cashless exercise.

On January 3, 2022 in connection with the sale of the convertible note and warrants to purchase up to 2,139,032 shares raising an additional US$8 million if all the warrants are exercised. The warrants are for a term of 2 years from the date of the convertible notes and can be exercised at US$3.74 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company. The Company intends to use the net cash proceeds for supporting the acquisition and building out of manufacturing infrastructure and working capital of the Company.

(e) Options

The Company has no share options outstanding at the date of our Annual Report.

2020 Employee Share Option Plan

In August 2020, an Employee Share Option Plan ("2020 ESOP") was approved and established by the board. The 2020 ESOP is available to employee, consultants and eligible persons (as the case may be) of the Company as the board may in its discretion determine. The total number of the shares which may be offered by the Company under the 2020 ESOP shall not at any time exceed 5% of the Company's total issued shares when aggregated with the number of shares issued or that may be issued as a result of offers made at any time during the previous 3-year period. The shares are to be issued at a price determined by the board. The options are to be issued for no consideration. The exercise price, duration and other relevant terms of an option is to be determined by the board at its sole discretion.

In September 2020, the Company, subject to shareholders" approval, granted options to subscribe up to 261,000 ordinary shares for employees, directors and consultants under the 2020 ESOP. This term of the option is two years and have vesting period of the option holder over a two year vesting period. The exercise prices will range from US$3.50 to US$3.70 per share. Each option when exercised will entitle the option holder to one ordinary share in the Company. Options will be able to be exercisable on or before an expiry date, will not carry any voting or dividend rights and will not be transferable except on death of the option holder. In September 2021 these options and the 2020 ESOP were cancelled by the Board.

2021 Employee Share Option Plan

In December 2021, the Company approved a new Employee Share Option Plan ("2021 ESOP"). The 2021 ESOP is available to employee, consultants, and eligible persons (as the case may be) of the Company as the board may in its discretion determine.

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NOTE 26. RESERVES

(a) The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations to Australian dollars.

(b) (i) In 2020, the movement in other reserves represents the release of the reserve to accumulated losses as a result of the disposal of the subsidiary Marvel Digital Limited ("MDL") and its subsidiaries (Note 24).

(ii) In 2021, the movement in other reserves represents the release of the reserve to accumulated losses as a result of the disposal of the subsidiary GOXD International Limited ("GOXD") and its subsidiaries (Note 24).

NOTE 27. COMMITMENTS

(a) Non-cancellable operating leases

The Group has entered into a short-term commercial lease of total A$9,113 (2020:17,644) for rental office.

The following table sets forth our contractual obligations as of December 31, 2021.

|  | Payment due by December 31
|  | Total |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Operating lease commitments for property management expenses under lease agreements |  | 1,439,299 |  | 300,553 |  | 287,535 |  | 299,373 |  | 314,342 |  | 237,496

(b) License Agreement with Versitech Limited

In September 2015, Versitech Limited ("Versitech") and a former subsidiary Marvel Digital Limited ("MDL") entered into a License Agreement in respect to the sharing of income arising from the intellectual property rights in the video encoding and transmission worldwide. The agreement provided MDL and its affiliates for the term an exclusive and royalty-bearing license under the patent rights owned by Versitech to develop, make, have made, use, sell, offer to sell, lease, import, export or otherwise dispose of licensed product in 3D video encoding and transmission worldwide and with the right to grant sublicense pursuant to the terms of the agreement. MDL shall pay an upfront payment in the amount of HK$100,000 and a running royalty of 3% of net sales ("3% Royalty") on licensed product and licensed process by MDL and its affiliates and sublicensee. Beginning in 2019, the royalty will be the greater of 3% Royalty and HK$200,000 each year. MDL shall also pay Versitech a total of 15% of all sublicense income received by MDL or any of its affiliates. In addition, there are milestone payments payable to Versitech Limited upon the event when cumulative gross revenue arising from the licensed products reaching certain levels with the maximum cumulative total milestone payments of HK$2,000,000. This project was originally derived from an earlier agreement entered into among the Government of the Hong Kong Special Administrative Region, MDL and the University of Hong Kong ("HKU") under the Innovation and Technology Fund University-Industry Collaboration Programme entitled "Content Generation and Processing Technologies for 3D/Multiview Images and Videos". Versitech is a wholly-owned subsidiary and the technology transfer arm of HKU.

During the year 2021, there was no royalty fee paid to Veritech (2020:HK$200,000). There was no sublicense fee paid in both years.

On December 8, 2021, the Group disposed the subsidiary holding this license agreement and the Group did not have any commitments for the royalty fee and the sublicense fee.

(c) Capital commitments

As of December 31, 2021, the Group had capital commitment for purchasing lamination productions lines of A$16,040,885 (approximately US$ 11,350,000) (2020: Nil).

(d) Share commitments

On April 29, 2019, the Company and Teko International Limited ("Teko") entered into a distribution rights agreement for the territory of Hong Kong and Guangzhou Province, China ("Territories") for a proprietary conductive film and 3rd generation Polymer Dispersed Liquid Crystal ("PDLC") film. Pursuant to the Agreement, the Company shall pay 50,000 IMTE shares upon the commissioning of one (1) lamination line, (ii) for each of the next 3 years after the commissioning of the manufacturing line, IMTE shall pay Teko 50,000 IMTE shares should the annual revenue reach US$10 million or 100,000 IMTE shares should the revenue reach US$20 million, and (iii) 50,000 IMTE shares for each additional lamination line installed. In addition, for managing the operations, the Company will pay to Teko 25% of the net profits from the sale of the PDLC film products and the lamination operations. The Company and Teko has agreed to continue this arrangement for another 3 months until a new distribution rights agreement has been agreed.

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NOTE 28. FINANCIAL RISK MANAGEMENT

(a) Financial risk management objectives

The Group is exposed to financial risk through the normal course of their business operations. The key risks impacting the Group's financial instruments are considered to be interest rate risk, foreign currency risk, liquidity risk, credit risk and capital risk. The Group's financial instruments exposed to these risks are cash and short term deposits, receivables, trade payables and borrowings.

The Group's chief executive officer for operations is Xiaodong Zhang, who monitors the Group's risks on an ongoing basis and report to the Board.

(b) Interest rate risk management

The Group is exposed to interest rate risk (primarily on its cash and bank balances, amount due to ultimate holding company, and borrowings), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments.

The Group has adopted a policy of ensuring it maintains adequate cash and cash equivalents balances available at call. These accounts currently earn low interests.

The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease represents management's assessment of the possible change in interest rates.

At reporting date, if interest rates had increased/decreased by 50 basis points from the weighted average effective rate for the year, with other variables constant, the profit for the year would have been A$1,019 lower (2020: A$9,130 lower) / A$1,019 higher (2020: A$9,130 higher).

The following table summarizes interest rate risk for the Group, together with effective interest rates as at the reporting date.

|  | Weighted average effective interest rate |  | Floating interest rate A$ |  | Non-interest bearing A$ |  | Total A$
2021 |  |  |  |  |  |  |  |
Financial Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 0.18% |  | 203,857 |  | 70,910 |  | 274,767
Trade and other receivables |  |  |  | - |  | 486,121 |  | 486,121
Other assets |  |  |  | - |  | 13,465,831 |  | 13,465,831
Total Financial Assets |  |  |  | 203,857 |  | 14,022,862 |  | 14,226,719
Financial Liabilities |  |  |  |  |  |  |  |
Trade and other payables |  | 8% |  | - |  | 2,424,717 |  | 2,424,717
Amounts due to related companies |  |  |  | - |  | 247,406 |  | 247,406
Lease liability |  | 2.5% |  | - |  | 1,829,499 |  | 1,829,499
Convertible promissory notes |  | 10% |  | 4,311,416 |  | - |  | 4,311,416
Total Financial Liabilities |  |  |  | 4,311,416 |  | 4,501,622 |  | 8,813,038
2020 |  |  |  |  |  |  |  |
Financial Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 0.39% |  | 2,037,502 |  | 156,582 |  | 2,194,084
Trade and other receivables |  |  |  | - |  | 1,164,605 |  | 1,164,605
Other assets |  |  |  | - |  | 2,089,897 |  | 2,089,897
Total Financial Assets |  |  |  | 2,037,502 |  | 3,411,084 |  | 5,448,586
Financial Liabilities |  |  |  |  |  |  |  |
Trade and other payables |  | 8% |  | 211,567 |  | 2,747,074 |  | 2,958,641
Trade deposits received |  |  |  | - |  | 630,523 |  | 630,523
Amounts due to related companies |  |  |  | - |  | 237,674 |  | 237,674
Amount due to ultimate holding company |  |  | - |  | 532,718 |  | 532,718
Convertible promissory notes |  | 10% |  | 2,196,049 |  | - |  | 2,196,049
Total Financial Liabilities |  |  |  | 2,407,616 |  | 4,147,989 |  | 6,555,605

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NOTE 28. FINANCIAL RISK MANAGEMENT (Continued)

(c) Foreign currency risk

The Group has net assets denominated in certain foreign currencies as at December 31, 2021. Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts are those reported to key management translated into AUD at the following closing rates, HK$0.17658, US$1.3769 and RMB1.22518:

|  | Short term exposure |  | Long term exposure
|  | HK$ |  | US$ |  | RMB |  | HK$ |  | US$ |  | RMB
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |
- Cash and cash equivalents |  | 70,053 |  | 187,400 |  | 13,295 |  | - |  | - |  | -
- Trade and other receivables |  | 3,279 |  | 457,798 |  | 21,851 |  | - |  | - |  | -
- Other assets |  | 63,841 |  | 13,323,142 |  | 78,576 |  | - |  | - |  | -
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
- Trade and other liabilities |  | (712,801) |  | (1,142,816) |  | (125,876) |  | - |  | - |  | -
- Amounts due to related companies |  | - |  | (247,406) |  | - |  | - |  | - |  | -
- Convertible promissory notes |  | (2,512,137) |  | (1,799,278) |  | - |  | - |  | - |  | -
- Derivates on financial statements |  | (1,220,904) |  | (1,100,099) |  | - |  | - |  | - |  | -
Total exposure |  | (4,308,669) |  | 9,678,741 |  | (12,154) |  | - |  | - |  | -

|  | Short term exposure |  | Long term exposure
|  | HK$ |  | US$ |  | RMB |  | HK$ |  | US$ |  | RMB
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |
- Cash and cash equivalents |  | 156,753 |  | 2,029,569 |  | 65 |  | - |  | - |  | -
- Trade and other receivables |  | 864,845 |  | 298,071 |  | - |  | - |  | - |  | -
- Other assets |  | 774,532 |  | 1,315,236 |  | 129 |  | - |  | - |  | -
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
- Trade and other liabilities |  | (1,219,242) |  | (1,905,180) |  | - |  | - |  | - |  | -
- Amounts due to related companies |  | (4,592) |  | (233,082) |  | - |  | - |  | - |  | -
- Amount due to ultimate holding company |  | (532,718) |  | - |  | - |  | - |  | - |  | -
- Convertible promissory notes |  | - |  | - |  | - |  | (981,459) |  | (1,214,590) |  | -
- Derivates on financial statements |  | - |  | - |  | - |  | (438,286) |  | (1,040,254) |  | -
Total exposure |  | 39,578 |  | 1,504,614 |  | 194 |  | (1,419,745) |  | (2,254,844) |  | -

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NOTE 28. FINANCIAL RISK MANAGEMENT (Continued)

The following table illustrates the sensitivity of loss and equity in regard to the Group's financial assets and financial liabilities and the HK$/AUD exchange rate, US$/AUD exchange rate and RMB/AUD exchange rate and assure "all other things being equal'. It assumes a +/- 5% change of the AUD/HK$ exchange rate for the year ended at December 31, 2021 (2020: 5%). A +/- 5% change is considered for the AUD/US$ exchange rate (2020: 5%). A +/- 10% change is considered for the AUD/RMB exchange rate (2020: 10%). These percentages have been determined based on the average market volatility in exchange rates in the previous twelve (12) months. The sensitivity analysis is based on the Group's foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset effects from changes in currency exchange rates.

If the AUD had strengthened against the HK$ by 5% (2020: 5%), the US$ by 5% (2020: 5%) and the RMB by 10% (2020: 10%) respectively then this would have had the following impact:

| Loss for the year |  | Equity
| HK$ |  | US$ |  | RMB |  | Total |  | HK$ |  | US$ |  | RMB |  | Total
December 31, 2021 | 215,433 |  | (483,937) |  | 1,215 |  | (267,289) |  | 215,433 |  | (483,937) |  | 1,215 |  | (267,289)
December 31, 2020 | 69,008 |  | 37,512 |  | (19) |  | 106,501 |  | 69,008 |  | 37,512 |  | (19) |  | 106,501

If the AUD had weakened against the HK$ by 5% (2020: 5%), the US$ by 5% (2020: 5%) and the RMB by 10% (2020: 10%) respectively then this would have had the following impact:

| Loss for the year |  | Equity
| HK$ |  | US$ |  | RMB |  | Total |  | HK$ |  | US$ |  | RMB |  | Total
December 31, 2021 | (215,433) |  | 483,937 |  | (1,215) |  | 267,289 |  | (215,433) |  | 483,937 |  | (1,215) |  | 267,289
December 31, 2020 | (69,008) |  | (37,512) |  | 19 |  | (106,501) |  | (69,008) |  | (37,512) |  | 19 |  | (106,501)

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group's exposure to currency risk.

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NOTE 28. FINANCIAL RISK MANAGEMENT (Continued)

(d) Liquidity risk management

Prudent liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities based on the agreed repayment terms or the earliest date on which the Group can be required to pay. The table has been drawn up based on the undiscounted cash flows of financial liabilities and include both interest and principal cash flows.

2021 |  |  | Total |  |  |  |  |  |  |  |
|  |  | contractual |  | 0 - 30 days |  |  |  |  |  |
| Carrying |  | undiscounted |  | or on |  | 31 - 90 |  | 91 - 365 |  | Over
| amount |  | cash flow |  | demand |  | days |  | Days |  | 1 year
| A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Trade and other liabilities | 2,424,717 |  | 2,424,717 |  | 2,424,717 |  | - |  | - |  | -
Amounts due to related companies | 247,406 |  | 247,406 |  | 247,406 |  | - |  | - |  | -
Lease liability | 1,829,499 |  | 1,829,499 |  | - |  | - |  | 425,567 |  | 1,403,932
Convertible promissory notes | 4,311,416 |  | 4,311,416 |  | 4,311,416 |  | - |  | - |  | -
| 8,813,038 |  | 8,813,038 |  | 6,983,539 |  | - |  | 425,567 |  | 1,403,932
2020 |  |  | Total |  |  |  |  |  |  |  |
|  |  | contractual |  | 0 - 30 days |  |  |  |  |  |
| Carrying |  | undiscounted |  | or on |  | 31 - 90 |  | 91 -365 |  | Over
| amount |  | cash flow |  | demand |  | days |  | Days |  | 1 year
| A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Trade and other liabilities | 2,958,911 |  | 2,958,911 |  | 2,958,911 |  | - |  | - |  | -
Trade deposits received | 630,523 |  | 630,523 |  | 630,523 |  | - |  | - |  | -
Amounts due to related companies | 237,674 |  | 237,674 |  | - |  | - |  | - |  | 237,674
Amount due to ultimate holding company | 532,718 |  | 532,718 |  | 532,718 |  | - |  | - |  | -
Convertible promissory notes | 2,196,049 |  | 2,448,048 |  | 21,402 |  | 61,447 |  | 169,150 |  | 2,196,049
| 6,555,875 |  | 6,807,874 |  | 4,143,554 |  | 61,447 |  | 169,150 |  | 2,433,723

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NOTE 28. FINANCIAL RISK MANAGEMENT (Continued)

(e) Credit risk

Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in a financial loss to the Group. The Group's potential concentration of credit risk consists mainly of cash deposits with banks and trade receivables with its customers. The Group's short term cash surpluses are placed with banks that have investment grade ratings. The Group considers the credit standing of counterparties and customers when making deposits and sales, respectively, to manage the credit risk. The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the Group. Considering the nature of the business at current, the Group believes that the credit risk is not material to the Group's operations.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at the end of the reporting period, to financial assets, is represented by the carrying amount of cash and bank balances, trade and other receivables, net of any provisions for doubtful debts, as disclosed in the consolidated statement of financial positions and notes to the consolidated financial statements.

(f) Fair value of financial instruments

The following liability is recognized and measured at fair value on a recurring basis:

- Derivative financial instruments

Fair value hierarchy

All assets and liabilities for which fair value is measured or disclosed are categorized according to the fair value hierarchy as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Recognized fair value measurements

The following table sets out the Group's assets and liabilities that are measured at fair value in the consolidated financial statements.

|  |  |  |  |  |  |  | Level 2
|  |  |  |  |  |  |  | A$
Derivative financial instruments |  |  |  |  |  |  |  |
December 31, 2021 |  |  |  |  |  |  |  | 2,321,003
December 31, 2020 |  |  |  |  |  |  |  | 1,478,540

The Group does not have any assets and liabilities that qualify for the level 1 category. There were no transfers between level 1, 2 and 3 during the year.

An instrument is included in level 2 if the financial instrument is not traded in an active market and if the fair value is determined by using valuation techniques based on the maximum use of observable market data for all significant inputs. For the derivatives, the Group uses the estimated fair value of financial instruments determined by using available market information and appropriate valuation methods, including relevant credit risks. The estimated fair value approximates to 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. Specific valuation techniques used to value financial instruments include:

• quoted market prices or dealer quotes for similar instruments; and

• binomial options pricing models.

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NOTE 28. FINANCIAL RISK MANAGEMENT (Continued)

The reconciliation of the opening and closing fair value balance of level 2 financial instruments is provided below:

|  |  |  |  |  | Put Option A$
At January 1, 2021 |  |  |  |  |  | -
Issuance of derivatives at fair value |  |  |  |  |  | 1,478,540
Gain included in profit or loss on change in fair value |  |  |  |  |  | 842,463
At December 31, 2021 |  |  |  |  |  | 2,321,003

Disclosed fair values

The Group also has assets and liabilities which are not measured at fair values, but for which fair values are disclosed in the notes to the consolidated financial statements.

Due to their short term nature, the carrying amounts of trade receivables (refer to Note 12) and payables (refer to Note 17) are assumed to approximate their fair values because the impact of discounting is not significant.

(g) Capital management risk

The Group's objective when managing capital are to safeguard the Group's ability to continue as a going concern and to maintain a strong capital base sufficient to maintain future development of its business. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debts. The Group's focus has been to raise sufficient funds through equity to fund its business activities.

There were no changes to the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated loss or retained earnings as disclosed in Notes 25 and 26 respectively.

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NOTE 29. RELATED PARTIES

(a) Parent and ultimate controlling party

As at December 31, 2019 and 2020, Marvel Finance Limited ("MFL") owned 2,201,412 shares, representing approximately 65.18% and 33.80%, respectively in the Company. MFL was the ultimate controlling party of the Group as at December 31, 2019. However as at December 31, 2020, MFL's shareholding in the Company decreased to 33.80% and therefore MFL was not considered the ultimate controlling party of the Group from that date on.

(b) Transactions with directors

During the years ended December 31, 2021, 2020 and 2019, the remuneration of directors of the Company was as follows:

|  | Company
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Short term benefits (1) |  | 730,743 |  | 780,832 |  | 715,301
Post-employment benefits |  | - |  | - |  | -
Total |  | 730,743 |  | 780,832 |  | 715,301

(1) The director remuneration relating to Mr. Con Unerkov, our then CEO, is provided by a related company over which Mr. Cecil Ho, our former Company Secretary and Chief Financial Officer has control.

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NOTE 29. RELATED PARTIES

(c) Other related party transactions

During the years ended December 31, 2021, 2020 and 2019, the Group has the following material transactions with its related parties:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Revenue received from related parties (1) |  | - |  | 8,490 |  | -
General consultancy and management fee paid to a related party (1) |  | - |  | 282,971 |  | 571,519
Purchase of products from related parties (1) |  | - |  | 29,794 |  | 22,588
Interest income earned from the former ultimate holding company (1) |  | - |  | - |  | 115,678
Group Secretarial, taxation service and interim CFO fee paid to a related company (2) |  | - |  | - |  | 40,000
Company Secretarial, taxation service and CFO fee paid to a related company (3) |  | 561,758 |  | 607,659 |  | 523,196
Consultancy fee paid to a related party (6) |  | 225,860 |  | - |  | -
Purchase of products from a related party (4) |  | - |  | 274,417 |  | 501,062
Sales to a related party (5) |  | - |  | 315,034 |  | -

| (1) | Dr. Herbert Ying Chiu LEE, former director controlled the entities providing the consultancy and management services. These transactions were carried at market value in the ordinary course of business.

| (2) | Mr. George Yatzis, former Company Secretary, is a director of the related party.

| (3) | Mr. Cecil Ho, former Company Secretary and CFO controlled the entity providing professional services.

| (4) | Mr.Wuhua Zhang, our former director of the Company controlled the entity. The transactions were carried at the then current market value in the ordinary course of business.

| (5) | The related party is one of the subsidiaries of our shareholder.

| (6) | Mr. Con Unerkov, former director, is a director of the related party.

During the years ended December 31, 2021 and 2020, the Group did not charge any interest to MFL. For the year ended December 31, 2019, the Group charged MFL interest in relation to 2 loans a total of A$115,678.

(d) Amounts due from / to related companies

Other than the related party balances disclosed in Note 18 and 19, the other related party balances as of December 31, 2021 and 2020 are disclosed:

(i) included in trade and other receivables in Note 12, there were amounts of Nil (2020: A$14,245) in respect to trade and non-trade in nature respectively and were due from certain related companies in which our former director, Dr. Herbert Ying Chiu LEE has control. The amounts due from the related companies are unsecured, non-interest bearing and repayable on demand;

(ii) included in other assets in Note 13, there was amount of Nil (2020: A$603,600) in respect to trade in nature and was deposits paid to a related company in which our director, Mr. Michael Wuhua ZHANG has control; and

(iii) included in trade and other liabilities in Note 17, there was amount of Nil (2020: A$5,329) in respect to trade in nature and was due to a related company in which our former director, Dr. Herbert Ying Chiu LEE has control. The amount due to the related company is unsecured, non-interest bearing and repayable on demand.

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NOTE 30. CASH FLOW INFORMATION

| (a) | Reconciliation of liabilities arising from financing activities

|  | Amounts due to related companies |  | Other liabilities |  | Bank borrowings, net |  | Amount due to holding company |  | Convertible promissory notes |  | Lease liabilities |  | Derivative embedded in convertible bonds issued |  | Issue of shares |  | Total
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Beginning balance as of 1 January 2021 |  | 237,674 |  | 211,567 |  | - |  | 532,718 |  | 2,196,049 |  | - |  | 1,478,540 |  | 13,187,968 |  | 17,844,516
Cash flows from financing activities |  | - |  | - |  | - |  | (562,201) |  | - |  | (138,156) |  | - |  | 16,054,409 |  | 15,354,052
Inception of lease |  | - |  | - |  | - |  | - |  | - |  | 2,086,229 |  | - |  | - |  | 2,086,229
Interest |  | - |  | - |  | - |  | - |  | 1,848,947 |  | 28,371 |  | - |  | - |  | 1,877,318
Put option liabilities in convertible bonds issued |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Fair value change |  |  |  |  |  |  |  |  |  | - |  |  |  | 842,463 |  |  |  | 842,463
Disposal of plant and equipment |  | (4,951) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (4,951)
Foreign exchange movement |  | 14,683 |  | - |  | - |  | 29,483 |  | 266,420 |  | (146,945) |  | - |  | - |  | 163,641
Ending balance as of 31 December 2021 |  | 247,406 |  | 211,567 |  | - |  | - |  | 4,311,416 |  | 1,829,499 |  | 2,321,003 |  | 29,242,377 |  | 38,163,268

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NOTE 30. CASH FLOW INFORMATION

|  | Amounts due to related companies |  | Other liabilities |  | Bank borrowings, net |  | Amount due to holding company |  | Convertible promissory notes |  | Convertible bonds by a subsidiary |  | Lease liabilities |  | Derivative embedded in convertible bonds issued |  | Issue of shares |  | Total
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Beginning balance as of 1 January 2020 |  | 6,101,850 |  | 1,761,309 |  | 915,300 |  | 582,832 |  | - |  | 4,420,899 |  | 1,168,607 |  | - |  | - |  | 14,950,797
Cash flows from financing activities |  | 840,509 |  | 211,567 |  | - |  | - |  | 4,913,100 |  | (4,668,195) |  | (320,851) |  | - |  | 13,187,968 |  | 14,164,098
Non-cash movement: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Settled by issuing convertible promissory note |  | - |  | (1,761,309) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (1,761,309)
Fair value change |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (2,312,197) |  | - |  | (2,312,197)
Put option liabilities in convertible bonds issued |  | - |  | - |  | - |  | - |  | (3,790,737) |  | - |  | - |  | 3,790,737 |  | - |  | -
Interest |  | - |  | - |  | - |  | - |  | 1,508,421 |  | - |  | - |  | - |  | - |  | 1,508,421
Disposal of plant and equipment |  | (6,689,290) |  | - |  | (966,747) |  | - |  | - |  | - |  | (925,042) |  | - |  | - |  | (8,581,079)
Foreign exchange movement |  | (15,395) |  | - |  | 51,447 |  | (50,114) |  | (434,735) |  | 247,296 |  | 77,286 |  | - |  | - |  | (124,215)
Ending balance as of 31 December 2020 |  | 237,674 |  | 211,567 |  | - |  | 532,718 |  | 2,196,049 |  | - |  | - |  | 1,478,540 |  | 13,187,968 |  | 17,844,516

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NOTE 30. CASH FLOW INFORMATION

|  | Amounts due to related companies |  | Other liabilities |  | Bank borrowings, net |  | Amount due to holding company |  | Obligation under finance lease |  | Convertible bonds by a subsidiary |  | Lease liabilities |  | Derivative embedded in convertible bonds issued |  | Total
|  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$ |  | A$
Beginning balance as of 1 January 2019 |  | 2,130,368 |  | - |  | 814,365 |  | 172,773 |  | - |  | 3,280,744 |  | 1,163,778 |  | 126,095 |  | 7,688,123
Cash flows from financing activities |  | 3,954,460 |  | 2,610,091 |  | 90,049 |  | 501,343 |  | - |  | - |  | (573,010) |  | - |  | 6,583,113
Non-cash movement: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unpaid interest |  | - |  | - |  | - |  | - |  | - |  | 1,107,310 |  | 109,027 |  | - |  | 1,216,337
Interest |  | - |  | - |  | - |  | (96,965) |  | - |  | - |  | 648 |  | - |  | (96,317)
Inception of new lease |  | - |  | - |  | - |  | - |  | - |  | - |  | 458,990 |  | - |  | 458,990
Fair value change |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (127,551) |  | (127,551)
Disposal of plant and equipment |  | - |  | (848,782) |  | - |  | - |  | - |  | - |  | - |  | - |  | (848,782)
Foreign exchange movement |  | 16,842 |  | - |  | 10,886 |  | 5,681 |  | - |  | 32,845 |  | 9,174 |  | 1,456 |  | 76,884
Ending balance as of 31 December 2019 |  | 6,101,850 |  | 1,761,309 |  | 915,300 |  | 582,832 |  | - |  | 4,420,899 |  | 1,168,607 |  | - |  | 14,950,797

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NOTE 30. CASH FLOW INFORMATION (Continued)

(b) Net cash inflows / (outflows) from changes in working capital

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Cash flows from changes in working capital |  |  |  |  |  |
(Increase) / Decrease in assets: |  |  |  |  |  |
Trade and other receivables |  | (105,014) |  | (1,016,464) |  | (137,579)
Inventories |  | - |  | 142,608 |  | 405,891
Other assets |  | (295,635) |  | (1,659,728) |  | (361,676)
Increase / (Decrease) in liabilities: |  |  |  |  |  |
Trade and other liabilities |  | (318,544) |  | 347,308 |  | 1,876,414
Net cash (outflows)/ inflows from changes in working capital |  | (719,193) |  | (2,186,276) |  | 1,783,050

NOTE 31. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Remuneration

The total remuneration paid or payable to the directors and senior management of the Group during the year are as follows:

|  | Consolidated
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Short-term employee benefits |  | 1,929,914 |  | 1,586,604 |  | 1,645,794
Post-employment benefits |  | 6,196 |  | 5,124 |  | 7,703
Total |  | 1,936,110 |  | 1,591,728 |  | 1,653,497

During the year 2021, included in short term benefits for directors and officers included payments of A$561,758 (US$420,000) to a service companies owned by the then CFO for the provision of Chief Executive Officer and Chief Financial Officer services.

(b) Loans to Key Management Personnel and their related parties

Save as disclosed in Note 29(d), there were no other loans outstanding at the reporting date to Key Management Personnel and their related parties.

Other transactions with Key Management Personnel

Several key management persons, or their related parties, held positions in other entities that resulted in them having control or significant influences over the financials or operating policies of these entities. Transactions between related parties are in normal commercial terms and conditions unless otherwise stated in Notes 18 and 29.

(c) Share Options - number of share options held by management

There were no share options held outstanding held by the management.

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NOTE 32. PARENT ENTITY INFORMATION (UNAUDITED)

Set out below is the supplementary information about the parent entity.

Statement of Comprehensive Income

|  | Company
|  | December 31, 2021 A$ |  | December 31, 2020 A$ |  | December 31, 2019 A$
Loss after income tax |  | 9,287,226 |  | 2,097,600 |  | 1,635,241
Other comprehensive income |  | - |  | - |  | -
Total comprehensive loss |  | 9,287,226 |  | 2,097,600 |  | 1,635,241

Statement of Financial Position

|  | Company
|  | December 31, 2021 |  | December 31, 2020
|  | A$ |  | A$
Total non-current assets |  | 1,245 |  | 2,382
Total current assets |  | 39,664,914 |  | 28,456,242
Total assets |  | 39,666,159 |  | 28,458,624
Total current liabilities |  | 6,064,179 |  | 5,931,676
Total liabilities |  | 6,064,179 |  | 5,931,676
Total assets less liabilities |  | 33,601,980 |  | 22,526,948
Equity |  |  |  |
Issued capital |  | 48,144,406 |  | 32,089,997
Accumulated losses |  | (14,542,426) |  | (9,563,049)
Total equity |  | 33,601,980 |  | 22,526,948

Guarantees entered into by the parent entity in relation to the debts of its subsidiary

Other than as disclosed in this Annual Report, the parent entity had not guarantee debts of its subsidiary companies.

Contingent liabilities

Other than as disclosed in this Annual Report, the parent entity had no contingent liabilities as at December 31, 2021 and December 31, 2020.

Capital commitments - plant and equipment

The parent entity has no capital commitments for plant and equipment as at December 31, 2021 and December 31, 2020.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 3, except for:

- Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity,

- Dividends received from subsidiaries are recognized as other income by the parent entity and its receipt may be an indicator of impairment.

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NOTE 33. PRIOR YEAR RECLASSIFICATIONS

Certain comparative figures have been reclassified to conform with the current year's presentation of the consolidated financial statements.

NOTE 34. EVENTS OCCURRING AFTER THE REPORTING DATE

Save as disclosed below, there is no other matter or circumstance arisen since December 31, 2021, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.

| a) | As announced in Form 6K on December 30, 2021, the Company entered into an Assignment and Assumption Agreement to take over the rights and obligation on a Cooperation Agreement on developing a Blockchain business focusing on digital asset market platform mainly focusing on NFT (Non Fungible Token) trading market. Under the Cooperation Agreement, the Group may invest up to US$1 million for 60% equity interests in Ace to develop, establish, and operate a trading platform called "Ouction". The development, marketing and operating team will receive the 40% of the equity interest in Ace. The Company will pay a deferred payment based on future earnings of Ace Corporation Limited ("Ace") and a bonus payment if Ace is listed on a recognized exchange in the next 5 years.

| b) | As announced in the Form 6K on January 3, 2022, the Company entered into convertible note purchase agreements with individual investors outside the United States raising a total of US$10 million by the issuance of US$10 million convertible notes ("Note"). The Note bears interests at 6% per annum maturing in 2 years from the date of issuance of the Note. The holder of the Note has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$3.12 per share, subject to adjustment, over the term of the Note. Under the Note, the holder of the Note cannot convert the shares in the Company if such conversion would take the noteholder over 4.99% shareholding in the Company. In January 2022, the noteholders converted all the notes into 3,205,128 shares in the Company.

In addition, the noteholder also received a warrant representing 80% of the amount of the Note, raising an additional US$8 million if all the warrants are exercised. The warrants are for a term of 2 years from the date of the convertible notes and can be exercised at US$3.74 for each share. Under the warrant agreement, the warrant holder cannot exercise the warrant to subscribe for shares in the Company if such exercise would take the warrant holder over 4.99% shareholding in the Company.

| c) | On January 19, 2022, the Company issued 664,871 ordinary shares as a result of the conversion of HK$14 million convertible promissory note dated January 20, 2020.

| d) | As announced in Form 6K on January 20, 2022, the Company entered into a subscription agreement to subscribe US$1 million for 60% equity interests in World Integrated Supply Ecosystem Sdn Bhd ("WISE"). WISE, a Malaysia company based in Kuala Lumpur, is engaged in the business of the provision of Halal certification to qualified businesses/operations, the establishment Halal products supply chain, and sale of Halal products.

| e) | As announced in Form 6K on March 17, 2022, the Company approved the fund raising of share placement of up to US$20 million, depending on market conditions. Since March 2022 to the date of this report, the Company has raised US$6.7 million by the issuance of a total of 1,489,010 shares in the Company.

| f) | On April 13, 2022, the Company issued 507,692 ordinary shares as a result of the conversion of US$1.65 million convertible promissory note dated August 6, 2020

NOTE 35. GROUP DETAILS

The registered office and principal place of business is:

Level 7, 420 King William Street

Adelaide SA 5000

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| ITEM 19 | EXHIBITS

The following exhibits are filed as part of this registration statement:

Exhibit | Description
1.1(1) | Constitution of Registrant
4.1(1) | Share Sale and Purchase Agreement for the purchase of 100% in Marvel Digital Limited between Marvel Finance Limited and IMTE dated May 14, 2015
4.2(1) | Consulting Agreement between IMTE and BDO Partnership SA Pty Limited for the provision of Company Secretarial services dated November 6, 2015
4.3(2) | Subscription agreement between Marvel Digital Limited and E-Tech Electronics Limited, Deed of Guarantee between IMTE and E-Tech Electronics Limited, and Put option between IMTE and E-Tech Electronics Limited. All 3 agreements are dated January 3, 2018
4.4(3) | Subscription agreement between IMTE and Marvel Finance Limited dated October 13, 2018
4.5(3) | Distribution agreement between IMTE and Teko International Limited dated April 29, 2019
4.6(4) | Convertible Note Purchase Agreement with CIMB Limited dated January 20, 2020 and Supplemental Agreements dated February 11, 2020
4.7(5) | Securities Purchase Agreement for the sale of Shares and Warrants to Ionic Ventures, LLC dated February 20, 2020
4.8(6) | Directors agreement between IMTE and Con Unerkov dated January 7, 2019
4.9(6) | Directors agreement between IMTE and Uwe von Parpart dated November 15, 2019
4.10(6) | Directors agreement between IMTE and Dr Heming Cui dated June 12, 2020
4.11(6) | Service agreement for Cecil Ho, between IMTE and Asset Union Limited dated March 19, 2019
4.12(6) | Agreement for Sale of 95% Issued Shares of Marvel Digital Limited dated May 11, 2020
4.13(7) | Debt Conversion Agreement between IMTE and CIMB Limited dated July 25, 2020
4.14(7) | Convertible Note Purchase Agreement between IMTE and CIMB Limited dated July 25, 2020
4.15(8) | Placement Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020
4.16(8) | Convertible Note Purchase Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020
4.17(8) | Sale and Purchase Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020 for 25.5% interests in Sunup Holdings Limited
4.18(8) | Sale and Purchase Agreement between IMTE and Teko International Limited dated August 6, 2020 for 25.5% interests in Sunup Holdings Limited
4.19(9) | Securities Purchase Agreement between IMTE and Mercer Street Global Opportunity Fund, LLC dated November 27, 2020
4.20(10) | IMTE's Employee Share Option Plan ("2020 ESOP")
4.21(10) | Placement Agreement between IMTE and IPO Solutions Limited dated December 21, 2020
4.22(10) | Supplement Letter Agreement to the Convertible Note Purchase Agreement between IMTE and Nextglass Technologies Corp dated December 21, 2020
4.23(10) | Equipment Purchase and Sale Agreement between IMTE, RE&I International Limited and Zhenjiang Nextek Glass Film Limited dated December 21, 2020
4.24(10) | Subscription Agreement between IMTE, Joinstar International Limited and Greifenberg Capital Limited dated December 21, 2020

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Exhibit | Description
4.25(10) | Assignment and Assumption of Contracts and Contract Rights between Sunup Holdings Limited and SWIS Co., Ltd dated December 21, 2020
4.26* | Underwriting Agreement between CIMC Marketing Pty Limited, a wholly owned subsidiary of IMTE and Xped Limited dated February 5, 2021
4.27(11) | Securities Purchase Agreement between IMTE and Mercer Street Global Opportunity Fund, LLC dated February 22, 2021
4.28(12) | Securities Purchase Agreement between IMTE and accredited investor dated on March 23, 2021
4.29(13) | Director's Agreement between IMTE and Mr. Luis Puyat dated January 15, 2021
4.30* | Subscription Agreements in a private placement with investors outside the United States dated on March 4, 2021 raising a total of US$2,293,400.
4.31(13) | Director's Agreement between IMTE and Ms. Jannu Binti Babjan dated April 28, 2021
4.32(14) | Securities Purchase Agreement between IMTE and Gold Bull Capital Co., Ltd. dated July 6, 2021
4.33(14) | Securities Purchase Agreement between IMTE and Blackhorse Capital Co., Limited dated July 6, 2021
4.34(14) | Securities Purchase Agreement between IMTE and Goldenyadan International Holdings Limited dated July 6, 2021
4.35(15) | Sale and Purchase Agreement between IMTE and the shareholders of Magnum International Holdings Limited, dated October 11, 2021
4.36(16) | Director's Agreement between IMTE and Mr. Xiaodong ZHANG dated July 19, 2021
4.37(16) | Director's Agreement between IMTE and Ms. Jing ZHUO dated July 19, 2021
4.38(16) | Director's Agreement between IMTE and Ms. Jennifer Hui ZHONG dated August 3, 2021
4.39(16) | Director’s Agreement between IMTE and Ms. Xinmei SHI dated August 18, 2021
4.40(16) | Director’s Agreement between IMTE and Ms. Dan LI dated August 31, 2021
4.41(17) | Assumption and Assignment Agreement between IMTE and Joint Investment Limited dated December 29, 2021 for IMTE to subscribe up to 60% in Ace Corporation Limited
4.42(18) | Convertible Note Purchase and Warrant Agreements between IMTE and Investors dated January 3, 2022
4.43(19) | Subscription Agreement between IMTE and World Integrated Supply Ecosystem Sdn. Bhd. ("WISE") dated January 20, 2022 for IMTE to subscribe up to 60% in WISE
4.44* | Private Placing Agreements between IMTE and Individual Investors outside the United States dated in March and April 2022 raising a total of US$6.7 million
4.45* | Rental Agreements between Smartglass Zhenjiang and Unilogix (Zhenjiang) Supply Chain Co., Limited dated July 22, 2021

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Exhibit | Description
8.1* | List of subsidiaries
12.1* | Certification of Chief Executive Officer
12.2* | Certification of Principal Accounting Officer
13.1* | Certification by Chief Executive Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act
13.2* | Certification by Chief Accounting Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act
15.1* | Consent of Independent Registered Public Accounting Firm for the 2021 Financial Statements
15.2* | Consent of Independent Registered Public Accounting Firm for the 2020 and 2019 Financial Statements
15.3(20) | Letter to Securities and Exchange Commission from Ramirez Jimenez International CPAs dated December 30, 2021

Exhibit | Description
101. INS | XBRL Instance Document
101. SCH | XBRL Taxonomy Extension Schema Document
101. CAL | XBRL Taxonomy Calculation Linkbase Document
101. DEF | XBRL Taxonomy Extension Definition Linkbase Document
101. LAB | XBRL Taxonomy Extension Label Linkbase Document
101. PRE | XBRL Taxonomy Extension Presentation Linkbase Document

| (1) | Incorporated by reference on Form 20-F/A3 submitted on May 8, 2017.
| (2) | Incorporated by reference on Form 6-K filed on January 3, 2018.
| (3) | Incorporated by reference on Form 20-F filed on May 15, 2019.
| (4) | Incorporated by reference on Form 6-K filed on January 20, 2020 and Form 6-K/A filed on February 12, 2020.
| (5) | Incorporated by reference on Form 6-K filed on February 24, 2020.
| (6) | Incorporated by reference on Form 20-F filed on June 16, 2020.
| (7) | Incorporated by reference on Form 6-K filed on July 29, 2020.
| (8) | Incorporated by reference on Form 6-K filed on August 12, 2020.
| (9) | Incorporated by reference on Form 6-K filed on December 2, 2020.
| (10) | Incorporated by reference on Form F-1 filed on December 23, 2020.
| (11) | Incorporated by reference on Form 6-K filed on February 22, 2021.
| (12) | Incorporated by reference on Form 6-K filed on March 23, 2021.
| (13) | Incorporated by reference on Form 20-F filed on May 3, 2021.
| (14) | Incorporated by reference on Form 6-K filed on July 6, 2021.
| (15) | Incorporated by reference on Form 6-K filed on October 12, 2021.
| (16) | Incorporated by reference on Form F-1 filed on October 14, 2021.
| (17) | Incorporated by reference on Form 6-K filed on December 30, 2021.
| (18) | Incorporated by reference on Form 6-K filed on January 3, 2022.
| (19) | Incorporated by reference on Form 6-K filed on January 20, 2022.
| (20) | Incorporated by reference on Form 6-K filed on December 30, 2021.

* Filed with this annual report on Form 20-F.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

|  | Integrated Media Technology Limited
|  | /s/ Xiaodong ZHANG
|  | By: Xiaodong ZHANG Title: Executive Chairman and Chief Executive Officer

Date: April 28, 2022

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