Announcement PDF ASX ANNOUNCEMENT 24 January 2022 Biome Australia’s strong sales drive record H1 result Investment Highlights ● ● ● Record H1 FY22 sales results of $1.81m Successful listing on the ASX in November following oversubscribed IPO With cash at the end of quarter of $7.4m, Biome is well-placed to continue executing its strategic growth plan Microbiome health company Biome Australia Limited (ASX: BIO) (‘Biome’ or ‘the Company’) is pleased to provide its 4C for the December quarter (Q2 FY22) along with the following operational update. Biome achieved an unaudited sales result of $1.81m from June to December 2021. This halfyear is the best result Biome has recorded for any six-month trading period. This represents a 100% increase in sales revenue compared to the previous corresponding period (PCP). Biome’s strong sales growth has been driven by its flagship precision probiotics brand Activated Probiotics, delivering $1.6m or 89% of sales for the H1 FY22 period. Australian community pharmacy remains Biome’s largest sales channel, with sales of $1.15m (H1 FY22). As a result of community pharmacy supporting the national COVID-19 vaccination program, the Biome sales and education teams have pivoted their focus toward the independent practitioner channel. The Australian independent practitioner channel delivered $435k (H1 FY22) and now represents 24.1% of sales, an increase from 12.7% (FY21). As of December 31 (H1 FY22), the international practitioner channel represents 8.4% of sales. Biome Australia sees this market as a strategic growth opportunity for H2 FY22 and beyond. New Product Launches New product launches have supported Biome’s growth in H1 FY22 and will continue with three additional product launches planned for H2 FY22. Biome Eczema Probiotic, a clinically proven probiotic to support mild eczema, was launched in H1 FY22. This product has received significant positive patient feedback, as shared below. “J and his mum have said thank you so much. They had tried every skin cream/soap/tablet and nothing has worked up until now. If you recall, J told one of the boys at school who asked what was wrong with his skin that he didn’t need to worry because soon it would be ‘brand new’. Looks like he is getting very close to that! I was also told that he could go for a swim in the ocean for the first time the other day without his skin stinging from the salt water.” Casey - Pharmacist (QLD) IPO and listing on the ASX Biome successfully completed its initial public offering (IPO) and listed on the Australian Securities Exchange (ASX) on November 30 2021. The Offer was oversubscribed, with the IPO raising total gross proceeds of $8m. Biome is using the proceeds from the IPO to accelerate its growth through new product development and commercialisation. For further details of the IPO and Biome’s growth strategy, see the ASX announcement dated 30 November 2021. B Corporation certification Biome was certified as a B Corporation on 18 November 2021. Certified B Corporations are businesses that meet “high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials.”[1] Achieving this significant milestone is a testament to the Company’s people, operations, and positive impact. Company Financial and Corporate Overview Cash at the end of the quarter was $7.74 million (30 September 2021: $1.34 million). The Company received $983,000 in cash receipts from customers in Q2 FY22. Net cash outflow from operating activities for the quarter was $710,000 (previous quarter net cash outflow of $647,000). Business activities expenditure totalled $1.92 million for the Quarter (increase of 16% from the previous quarter of $1.65 million), consisting of advertising and marketing of $221,000 (previous quarter $252,000), operating costs of $859,000 (previous quarter $656,000) and research and development of $23,000 (previous quarter $30,000) with the balance being administration and staff costs of $797,000 (previous quarter $704,000). R&D rebate received during the quarter was $223,000. The management team continue to use rigorous financial and commercial discipline to ensure the Company’s operating costs are optimised to support the ongoing growth of the company. The table on the following page illustrates the expenditure comparison against the Company’s ‘Use of proceeds table’ in the Prospectus dated 19 October 2021: [1] B Corporation, https://www.bcorporation.net/en-us/certification/ Use of proceeds Amounted budgeted in Prospectus Actual amount spent to date Inventory $2.4 million $0.24 million Sales & Marketing $2.15 million $0.58 million New Product Development $0.5 million $0.02 million Administrative & Working Capital $1.95 million $0.14 million Costs of the Offer $1 million $1.07 million Total $8 million $2.05 million The Company notes in the December 2021 quarter, the Company paid $112,000 to Directors of the Company in fees, salaries and superannuation. Biome Australia Managing Director and Founder Blair Norfolk said: “We are very pleased with our performance in the December half, our first as a listed company. With strong sales and a robust balance sheet following the IPO, we are wellplaced to continue expanding and improving the quality of life of our customers worldwide. Looking ahead, we plan to grow our sales revenue and explore distribution opportunities in new markets globally. We look forward to providing shareholders with further updates on our progress.” –ENDS– Approved for release by the Biome Australia board of directors. About Biome Australia Limited Biome Australia develops, licenses, commercialises and markets innovative, evidence-based live biotherapeutics (probiotics) and complementary medicines, many of which are supported by clinical research. Biome aims to improve health outcomes and quality of life, and make its products accessible to all. Incorporated in Australia in 2018, Biome distributes locally and abroad. In partnership with some of the world's leading organisations in microbiome research and development, Biome produced several unique live biotherapeutic (probiotic) products with innovative delivery technologies that improve their stability and efficacy to create its flagship range of complementary medicines: Activated Probiotics®. Supported by clinical research, including randomised double-blind placebo-controlled trials, Activated Probiotics help prevent and support the management of various health concerns, including low mood and sleep, bone health, iron malabsorption, mild eczema and IBS. Through practitioner-only distribution, Biome is committed to educating health professionals on the newfound systemic health effects of the gut microbiota, helping them to provide innovative, evidence-based natural medicines for the management of some of humanity's most prevalent and chronic health concerns. Biome also develops, licenses and distributes a scientifically formulated, organic nutraceutical range, Activated Nutrients® and a sports performance and recovery range, Activated X Performance®, which is made exclusively for professional athletes. For more information visit: www.biomeaustralia.com Investor Relations The Capital Network Julia Maguire +61 2 8999 3699 julia@thecapitalnetwork.com.au Media enquiries media@activated.co Forward looking statements This release may contain forward looking statements, including but not limited to projections, guidance on future revenues, earnings, other potential synergies and estimates and the future performance of Biome (Forward Looking Statements). Forward Looking Statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results, performance or achievements may differ materially from those expressed or implied in such Forward Looking Statements and any projections and assumptions on which these Forward Looking Statements are based. Such statements may assume the success of Biome's business strategies. You are cautioned not to place undue reliance on Forward Looking Statements. The Forward Looking Statements are based on information available to Biome as at the date of this release. Any Forward Looking Statements containing forward looking financial information provided in this release is for illustrative purposes only and is not represented as being indicative of Biome's views on its future financial condition and/or performance. The historic financial information for the September 2021 financial quarter and revenue figures for October and November 2021 have not been audited or reviewed by Biome's auditors. Such information should not be taken as a guide for future performance. Nothing in this release is a promise or representation as to the future. No representation or warranty, express or implied, is made as to the accuracy, likelihood of achievement or reasonableness of any Forward Looking Statements contained in this release. Except as required by law or regulation (including the ASX Listing Rules), Biome does not undertake to provide any additional or updated information whether as a result of a change in expectations or assumptions, new information, future events or results or otherwise. To the maximum extent permitted by law, Biome excludes and expressly disclaims all liabilities in respect of, and makes no representation or warranty, express or implied as to the fairness, currency, accuracy, reliability or completeness of information in this release or the accuracy, likelihood of achievement or reasonableness of any Forward Looking Statements (or any event or results expressed or implied in any Forward Looking Statements) contained in, implied by, the information in this release or any part of it, or that this release contains all material information about Biome or which a prospective investor or purchaser may require in evaluating a possible investment in Biome or acquisition of securities in Biome. Investors are strongly cautioned not to place undue reliance on Forward Looking Statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by the Covid-19 pandemic. Appendix 4C Quarterly cash flow report for entities subject to Listing Rule 4.7B Name of entity BIOME AUSTRALIA LIMITED (BIO) ABN Quarter ended (“current quarter”) 51 627 364 014 DECEMBER 2021 Consolidated statement of cash flows Current quarter $A’000 1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for Year to date (....6...months) $A’000 983 1,949 (a) research and development (23) (53) (b) product manufacturing and operating costs (859) (1,515) (c) advertising and marketing (221) (473) - - (e) staff costs (643) (1,154) (f) (154) (347) (d) leased assets administration and corporate costs 1.3 Dividends received (see note 3) - - 1.4 Interest received 1 1 1.5 Interest and other costs of finance paid (17) (21) 1.6 Income taxes paid - - 1.7 Government grants and tax incentives 223 256 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities (710) (1,357) Consolidated statement of cash flows 2. Cash flows from investing activities 2.1 Payments to acquire or for: Current quarter $A’000 Year to date (....6...months) $A’000 (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) 2.2 other non-current assets Proceeds from disposal of: (a) entities (b) businesses (c) property, plant and equipment 32 32 (30) (30) 2 2 8,092 9,797 (d) investments (e) intellectual property (f) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (*bank guarantee) 2.6 Net cash from / (used in) investing activities 3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities - - 3.3 Proceeds from exercise of options - - 3.4 Transaction costs related to issues of equity securities or convertible debt securities (915) (1,236) 3.5 Proceeds from borrowings 170 170 3.6 Repayment of borrowings (237) (242) 3.7 Transaction costs related to loans and borrowings - (1) 3.8 Dividends paid - - Consolidated statement of cash flows 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities 4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Current quarter $A’000 Year to date (....6...months) $A’000 - - 7,110 8,488 1,341 610 (710) (1,357) Net cash from / (used in) investing activities (item 2.6 above) 2 2 4.4 Net cash from / (used in) financing activities (item 3.10 above) 7,110 8488 4.5 Effect of movement in exchange rates on cash held 1 1 4.6 Cash and cash equivalents at end of period 7,744 7,744 5. Reconciliation of cash and cash equivalents Current quarter $A’000 Previous quarter $A’000 at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts 5.1 Bank balances 7,744 7,744 5.2 Call deposits - - 5.3 Bank overdrafts - - 5.4 Other (provide details) - - 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 7,744 7,744 Current quarter $A'000 6. Payments to related parties of the entity and their associates 6.1 Aggregate amount of payments to related parties and their associates included in item 1 112 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. 7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 7.1 Loan facilities Nil n/a 7.2 Credit standby arrangements Nil n/a 7.3 Other (please specify) Nil n/a 7.4 Total financing facilities Nil n/a 7.5 Unused financing facilities available at quarter end 7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. 8. Estimated cash available for future operating activities 8.1 Net cash from / (used in) operating activities (item 1.9) (710) 8.2 Cash and cash equivalents at quarter end (item 4.6) 7,744 8.3 Unused finance facilities available at quarter end (item 7.5) 8.4 Total available funding (item 8.2 + item 8.3) 8.5 Estimated quarters of funding available (item 8.4 divided by item 8.1) n/a $A’000 7,744 10.9 Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.5. 8.6 If item 8.5 is less than 2 quarters, please provide answers to the following questions: 8.6.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? Answer: n/a 8.6.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? Answer: n/a 8.6.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? Answer: n/a Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered. Compliance statement 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. 2 This statement gives a true and fair view of the matters disclosed. Date: 24 JANUARY 2022 Authorised by: By the Board (Name of body or officer authorising release – see note 4) Notes 1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so. 2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report. 3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. 4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”. 5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.