Mobilicom (MOB) - 2023 Q4 - Annual Report

Revenue Performance - Revenue for the year ended December 31, 2023, was AUD $3,301,887, an increase of AUD$ 974,829 or 42% compared to AUD $2,327,058 in 2022, primarily due to initial scaled production by Tier-1 customers and increased defense orders [240]. - Total revenue and other income decreased to AUD$ 4,593,140 in 2023 from AUD $8,363,135 in 2022, a decline of AUD$ 3,769,995 [239]. Profitability and Expenses - Gross profit for 2023 was AUD $1,944,273, with a gross margin of 59%, down from 62% in 2022, attributed to high-end IP-based technology and effective cost-reduction strategies [245]. - General and administrative expenses increased by AUD$ 1,341,534 or 50% to AUD $4,032,454 in 2023, mainly due to higher costs associated with being a public company and increased U.S. operations [249]. - The company incurred a net loss of AUD$ 6.9 million (approximately $4.7 million) for the year ended December 31, 2023, with accumulated losses of AUD$ 30.9 million since inception [252]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2023, were AUD $12.3 million (approximately$ 8.4 million), with total receivables recognized at AUD $1.4 million (approximately$ 977,578) [254]. - Net cash used in operating activities for 2023 was AUD $6,207,518, an increase from AUD$ 4,468,304 in 2022, primarily due to decreased customer receipts and increased payments to suppliers [258]. - The company believes its existing funds will cover operating expenses and capital expenditures for the next twelve months despite liquidity risks associated with operational expansion [418]. Research and Development - Research and development expenses rose by AUD $351,518 or 14% to AUD$ 2,936,825 in 2023, driven by higher material costs and new product development [248]. Financing and Future Plans - The company plans to satisfy future cash needs through debt or equity financings and governmental grants until significant recurring revenues are generated [255]. - The company raised gross proceeds of $2.95 million (approximately AUD$ 4.3 million) from the January 2024 Offering, which included the issuance of 486,871 ADSs and warrants [265]. Economic and Market Conditions - The company continues to monitor macro-economic conditions, including supply chain issues and inflation, which may impact operations and costs, with potential price increases considered to offset cost pressures [267]. - The company does not currently hedge foreign currency exchange risk but may consider formal hedging transactions in the future to mitigate exposure from AUD $/NIS fluctuations [417]. - A 10% devaluation of the AUD$ against the NIS could increase the company's net loss by approximately AUD $434,000, while a 10% appreciation could decrease the net loss by approximately AUD$ 355,000 [417]. - The company is not aware of any trends or events likely to materially affect its net revenue or profitability from January 1, 2023, to the present [267]. Liabilities and Obligations - As of December 31, 2023, the company has operating lease obligations of AUD $696,800 (approximately$ 476,611) and net employee benefits obligations of AUD $295,542 (approximately$ 202,151) not reflected as liabilities in the balance sheet [264]. - The company measures governmental liabilities on grants received based on discounted cash flows from anticipated future revenues [271]. - The lease term is a significant factor in measuring right-of-use assets and lease liabilities, with management exercising judgment on lease extension options [272]. Share-Based Remuneration - The company has a share-based remuneration scheme, with the fair value of share options estimated using the Black-Scholes model, impacting the financial statements over the vesting period [270].