UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(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, 2020

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 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

Phone: +61 8 7324 6018    Fax: +61 8 8312 0248

(Address of principal executive offices)

Con Unerkov, Executive Chairman and Chief Executive

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

Phone: +61 8 7324 6018    Fax: +61 8 8312 0248

(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 28, 2021 is 8,440,533

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	16
Item 4A.	Unresolved Staff Comments	31
Item 5.	Operating and Financial Review and Prospects	32
Item 6.	Directors, Senior Management and Employees	45
Item 7.	Major Shareholders and Related Party Transactions	50
Item 8.	Financial Information	52
Item 9.	The Offer and Listing	52
Item 10.	Additional Information	53
Item 11.	Quantitative and Qualitative Disclosures About Market Risks	62
Item 12.	Description of Securities Other than Equity Securities	62
PART II		63
Item 13.	Defaults, Dividend Arrearages and Delinquencies	63
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	63
Item 15.	Controls and Procedures	64
Item 15T	Controls and Procedures	64
Item 16	Reserved	64
Item 16A.	Audit Committee Financial Expert	64
Item 16B.	Code of Ethics	64
Item 16C.	Principal Accountant Fees and Services	64
Item 16D.	Exemptions from the Listing Standards for Audit Committees	64
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	64
Item 16F.	Change in Registrant's Certifying Accountant	64
Item 16G.	Corporate Governance	64
Item 16H.	Mine Safety Disclosure	64
PART III		65
Item 17.	Financial Statements	65
Item 18.	Financial Statements	65
Item 19.	Exhibits	66
SIGNATURES		67

i

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.

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.

In this annual report, all references to "U.S. dollars" or "US$" are to the currency of the United States of America, and all references to "Australian dollars" or "A$" are to the currency of Australia.

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."

1

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. Selected Financial Data

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

The following selected consolidated financial data as of December 31, 2020 and 2019 and for the fiscal years ended December 31, 2020, 2019 and 2018 have been derived from our audited consolidated financial statements and notes thereto included elsewhere in this annual report on Form 20-F, on a post-reverse split basis that was effected in 2017. This data should be read together with, and is qualified in its entirety by reference to, "Item 5. Operating and Financial Review and Prospects" as well as our consolidated financial statements and notes thereto appearing in "Item 18. Financial Statements" of this annual report on Form 20-F.

The selected financial data are presented in Australian dollars (A$) (except as otherwise noted).

Consolidated Statement of Profit or Loss and Other Comprehensive Income (Loss) Data:

	Year Ended December 31,
	2020	2019	2018	2017	2016
	(Audited)	(Audited)	(Audited)	(Audited)	(Audited)
	(expressed in A$)
Total revenue	1,833,387	2,411,213	1,815,475	10,153,636	14,039,248
Cost of sales	(1,311,566)	(1,008,821)	(723,711)	(2,548,064)	(2,027,743)
Depreciation and amortization expenses	(2,078,762)	(3,174,784)	(2,029,373)	(2,021,131)	(2,147,231)
Corporate administrative expenses	(3,627,445)	(6,336,243)	(4,384,357)	(2,522,927)	(2,447,545)
(Loss) / gain on disposal of subsidiaries	(28,990)	-	608,995	-	(872)
Other operating expenses	(5,347,824)	(2,543,571)	(2,503,507)	(1,510,267)	(1,627,234)
Gain on fair value change in derivative financial instruments	2,312,197	127,551	709,543	-	-
Provision for impairment loss of goodwill	-	(4,486,301)	(9,953,311)	-	-
Exchange (loss) / gain	(194,383)	(10,296)	493,365	61,307	(100,950)
Finance costs	(2,100,272)	(1,561,625)	(1,383,399)	(107,101)	(73,666)
Income tax credit / (expense)	-	(117,322)	507,057	187,213	(2,018,939)
Net / (loss) profit	(10,543,658)	(16,700,199)	(16,843,223)	1,692,666	3,595,068
(Loss) / profit per share - basic and diluted (post-reverse split)	(2.33)	(4.63)	(5.93)	0.64	1.37
Weighted average number of ordinary shares outstanding (post-reverse split)
- basic and diluted	6,513,671	3,377,386	2,692,543	2,643,611	2,643,611
Dividends per share	-	-	-	-	-

Consolidated Statement of Financial Position Data:

		As of December 31,
	2020	2019	2018	2017	2016
	(Audited)	(Audited)	(Audited)	(Audited)	(Audited)
	(expressed in A$)
Cash and cash equivalents	2,194,084	(166,758)	1,514,215	2,860,014	1,820,994
Working capital	1,276,431	(12,798,159)	1,279,813	5,478,132	8,263,311
Total assets	12,953,665	19,946,276	26,033,074	35,859,449	43,481,437
Long-term debt	3,688,257	1,874,392	4,690,822	16,748,877	22,657,065
Total shareholders' equity	4,905,852	79,023	16,621,751	15,390,334	14,354,982

(1) All previously reported share and per share amounts have been restated to reflect the reverse stock split of thirty-to-one effective on May 8, 2017.

2

Exchange Rate Information:

The Company publishes its consolidated financial statements in Australian dollars. In this annual report and the annual report, references to dollars, "$" or "A$" are to Australian dollars currency and references to "U.S. dollars" or "US$" are to U.S. currency. Solely for informational purposes, this annual report and the annual report contains translations of certain Australian dollars into or from U.S. dollars at specified rates. These translations should not be construed as representations that the Australian dollars amounts actually represent such U.S. dollar amounts or could be converted into or from U.S. dollars at the rate indicated or at any other rate. Unless otherwise stated herein, the translations of Australian dollars into or from U.S. dollars have been made at A$1.00 to US$0.7709, the buying rate on December 31, 2020.

The following tables set forth, for the periods and dates indicated, certain information regarding the rates of exchange of A$1.00 into US$ based on the noon market buying rate in New York City for cable transfers in Australian dollars as certified for customs purposes by the Federal Reserve Bank of New York, or the noon buying rate. The period average data set forth below is the average of the last day of each full month during the period.

Year Ended December 31,	At Period End	Average Rate	High	Low
	US$	US$	US$	US$
2014	0.8173	0.9034	0.9488	0.8097
2015	0.7286	0.7522	0.8212	0.6917
2016	0.7230	0.7445	0.7817	0.6855
2017	0.7815	0.7671	0.8071	0.7230
2018	0.7040	0.7480	0.8100	0.7020
2019	0.7030	0.6954	0.7282	0.6698
2020	0.7709	0.6899	0.7709	0.5755

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

3

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 China and Korea, 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 too early in the pandemic to be able to quantify all the ramifications.

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, 2020, we had an accumulated deficit of A$34,102,300. For the year ended December 31, 2020 we recorded loss of A$10,543,658. The loss was the result of the decline of sales of our 3D display products, and the write-down of development and intellectual properties costs. The Company needs to sell its 3D products and services on a consistent basis through distribution channels for commercial and consumer sectors to increase revenue. In addition, the Company also needs to reduce its operating overhead to return to profitability. There is no certainty that the Company can solve these issues facing the Company.

In the past, the Company pursued the strategy to undertake to innovate the technologies and products in house, the costs of which was substantial. Because of the numerous risks and uncertainties associated with the research and development of 3D technologies and products, we experienced lesser profits or even incur losses, and may never become profitable. In May 2020, the Company divested from research and development in the core 3D technologies so that it could reduce costs and focus exclusively on marketing and sales of 3D products. As a result, we are now dependent on outside developers to develop our future products which may not be successfully developed, and if successfully developed, may not generate sufficient revenue to enable us to recover such development costs and to generate sales to achieve profitability in the future.

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-coat plated filters and the lamination operation for switchable glass. We will rely on nano-coat plated filters and switchable glass, and to a lesser extent, 3D display products 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.

The 3D display operation commenced in 2013 with limited success, and we are now starting the nano-coat plated filter and lamination operation for switchable glass. Our limited operating history in these businesses makes it difficult for potential investors to evaluate our 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 3D display, nano-coat plated filter, and lamination operation for switchable glass businesses may face delays in sales and financing from suppliers due to our new entry into the market. Our products are new in the market and 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 business is dependent upon the implementation of our business plan, as well as the ability to access continuous innovation in our products. There can be no assurance that our efforts will be successful or that we will be able to attain profitability.

4

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

Beginning in late 2019, a novel strain of coronavirus (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. Following this outbreak, in February 2020, the Company temporarily shut down its operations in Shenzhen and Guangzhou, Guangdong Province, as mandated by the local authorities. In March 2020, the Company gradually resumed its operations in these cities and continue to conduct some of our development activities. In Hong Kong, for the months of February and March, our offices has generally been open but some of our staff have been working remotely from home. This has delayed some of our work in research and development activities. Our sales activities has been severely affected by the pandemic and the effect of social distancing to advertising industry. As many people choose to stay at home, advertisers will be cautious in committing capital expenditures for advertising i.e. 3D displays. Our customers reviewed their purchase commitments with us for the rest of 2020 and 2021. 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 is derived from selling our 3D displays to advertisers. This 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 2020, and we may incur losses in the future as we continue to develop our businesses in 3D displays, nano-coat plated filters and switchable glass and financial research operation. 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 lamination operation from our switchable glass and its associated costs increase we will require additional funds to achieve our long-term goals of commercialization. In addition, we will require funds to defend 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 cease our operations including our research and development activities, 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, 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 lamination lines for the switchable glass and the nano-coat plated filters. 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 stockholders. 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 2018 to 2020 which could impact the availability or cost of future financings. 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 accordingly, we may be required to 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. 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.

We have incurred losses from 2018 to 2020, but profits in 2017 and 2016 from our ASD products and software, 2D to 3D auto conversion workstations and the audio products. Currently we have stopped our R&D activities in 3D technologies and focuses on marketing and sales. In addition, we have increased our product offerings by entering nano-coat plated filter products and switchable glass. With the introduction of these new businesses, our future prospects are uncertain in light of the risks and uncertainties experienced by successfully selling new products in a global pandemic business environment. Due to our short history in these new products, it is difficult for us to predict future revenues and operating expenses. We based our expense levels, in part, on our expectations of future revenues from anticipated transactions. If our 3D display, nano-coat plated filter and switchable glass businesses develop slower than we expect, we may continue to incur losses and we may then have to curtail part of our business plan and the market price of our stock may decline.

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

-  offer new and innovative 3D products and services 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.

5

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 will not be successful if we are unable to successfully operate and integrate the businesses we acquire such as the nano-coat plated 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 3D display, nano-coat plated filter and switchable glass 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, Hong Kong and China, the functional currency for the companies operating in these territories will have a functional currency of South Korea won, Hong Kong dollars and Chinese Renminbi, respectively. Substantially all of our revenues are realized, and a significant portion of our operating costs are incurred, in Korea, Hong Kong dollars and Chinese Renminbi. 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 no longer manufacture any 3D displays and instead rely on third party manufacturers. We manufacture nano-coat plated filters and in the second half of 2021, 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 substantial financing that would be 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, with few manufacturing staff and small test assembly facilities. We rely on a variety of contractors to manufacture our products. Adverse events that affect one or more of our contractors could adversely affect us, such as:

• 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 clients;

• 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.

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 3D display, nano-coat plated filter products is entering into partnerships and strategic alliances with other electronics and distribution companies or other industry participants to advance our development and 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 party to any collaborative arrangement or strategic alliance that we believe is 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 3D 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 3D 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 the 3D 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.

6

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 protection. 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 China and 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.

If we fail to attract customers for our 3D display, nano-coat plated filter and switchable glass products, 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 product 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 3D display and nano-coat plated filter 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 3D display and nano-coat filter 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. We will sign distributing agreements with our distributors, although we may not sign any long-term agreements with them, but we cannot assure that we can maintain favorable relationships with them. 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.

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, Asia 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.

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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.

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 electronics and digital media industries for 3D display and switchable glass products.

Our Company's business is subject to certain risks inherent in the electronics and digital advertising industries for 3D 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 competition from local and foreign competitors.

Our Company faces competition from both local and foreign competitors which offer similar products that of our Company offerings. Increased competition could result in competitive pricing resulting in lower profit margins. However, our Company believes that we have competitive edge over our competitors; including amongst others, better quality products, access to R&D capabilities and technological expertise acquired over the years.

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.

The integration of Sunup with our business operations may be unsuccessful.

In September 2020, we acquired 51% of Sunup Holdings Limited ("Sunup") for a total consideration of US$1,500,000. The profitability of this acquisition depends on our ability to successfully develop and integrate Sunup's business operations with our existing operations. As Sunup has only recently commenced commercial operations, there are uncertainties as to whether its business will be successfully developed and integrated into our existing business.

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 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 China 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.

Risk Factors Relating to Quality of Products

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

If our products of nano coated plated filters or our lamination glass products to be manufactured in the second half of 2021 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 ourself 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 coat 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.

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 we 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.

Many of our products 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 Manufactured Products (as defined above) will be designed and produced to be safe switchable glass or nano coat air filters, 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 (3D display, nano-coat plated filters, 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 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 (3D display, nano-coat plated filters, and switchable glass) may not gain market acceptance by consumers and customers. The degree of market acceptance of any of our 3D 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. 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. 

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, Hong Kong dollars and Renminbi. In the past two years, the Australian dollars, our reporting currency, has as a general trend, depreciated 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 depreciates against either or both of the U.S. dollar, Korea won, Hong Kong dollar or Chinese Renminbi, this may have an adverse effect on our costs incurred in either the U.S. or Korea won or Hong Kong or China (as applicable) but may have a positive 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. To date, we have been affected negatively on material foreign exchange losses as a result of currency fluctuations.

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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 our 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. However, the growth of our 3D display and 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.

China is facing a continued slowdown in economic growth. China's annual gross domestic product growth rate 2020 was 2.3% compared to 6.1% in 2019, 6.7% in 2018 and 6.9% in 2017. This slowdown could cause a slowdown or decline in investment in digital advertising display networks, which, in turn, 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 China subsidiaries 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.

10

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. 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 Smartglass Shenzhen Limited, 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 Shenzhen Limited 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;

• 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 impact to our business. Change of government officials may also affect changes in regulations and policies, especially within local government. These changes may have impact 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 products in 3D technology and nano-plated air filters are characterized by continuous and extensive research efforts, and rapid technological progress by others in these 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 3D display and 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 3D display and 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.

We know that competitors are developing or manufacturing various technologies or products for the 3D display products and services competing in our product lines. Some of these competitive products use alternative approaches that compete directly with some of our product candidates. Our ability to further develop our products may be adversely affected if any of our competitors were to succeed in commercializing their products sooner than we do.

For the nano-plated filter products, the 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-plated filter technology to keep our nano-plated 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-products will become uncompetitive in the market place which may have an adverse effect in our nano-plated 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 3D patents 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 3D 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.

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.

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Risks Relating to Our Securities

If we do not maintain compliance with the Nasdaq continued listing requirements, our securities will be subject to delisting.

On June 19, 2020, the Company received a letter from the Listing Qualifications Staff (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it no longer complied with Nasdaq Listing Rule 5550(b)(1) due to the Company's failure to maintain a minimum of US$2,500,000 in Stockholders' Equity (or meet the alternatives of market value of listed securities of US$35 million or US$500,000 in net income from continuing operations). On September 28, 2020, the Company announced that it believed that it was compliant as its Shareholders' Equity was approximately US$4.5 million. The Company subsequently received a letter from Nasdaq stating that the Staff had determined that the Company complies with the rule. However, the letter further stated that, if the Company fails to evidence compliance upon filing its next periodic report, it may be subject to delisting. In such event, the Staff will provide written notification to the Company, which will have an opportunity to appeal any such determination to a Hearings Panel. There are no assurances that our Shareholders' Equity will continue to be in compliance with the Nasdaq Listing Rule 5550(b)(1) of maintaining a minimum of US$2.5 million in stockholders' equity or meet the alternatives of market value of listed securities of US$35 million or US$500,000 in net income from continuing operations. If the Company is in non-compliance of this requirement, then the Company could be subject to delisting. As of the December 31, 2020, the Company was in compliance of Rule 5550(b) for continued listing of a company's Primary Equity Security on the Capital Market, as the Company's Stockholders' equity was at least US$2.5 million.

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, 2020, 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 common shares in the United States. 

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Our stock price may be volatile.

The market price of our Common Stock 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 Common Stock;

• sales of our Common Stock;

• 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; and

• period-to-period fluctuations in our financial results.

Our ordinary shares trade on Nasdaq. 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.

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.

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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 Australian Accounting Standards and 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 23, 2021 we have 8,440,533 ordinary shares issued and outstanding, which does not include the number of shares to be issued under a previously issued and outstanding convertible promissory note. As of April 23, 2021 we have two outstanding convertible promissory notes of US$1,799,486 and US$1,650,000 at a conversion price of US$3.00 per share and US$3.25 per share respectively for a total of 1,107,520 shares issuable (the "Convertible Notes"). Under the terms of these Convertible Promissory Notes, there are adjustments to the conversion price if the Company issues shares below certain prices. In particular, if the Company issues shares below US$2.50 then the total shares issuable under the two Convertible Notes is 1,379,794. If the Company issues shares below US$1.50 then the total shares issuable under the two Convertible Notes is 2,299,657. In these cases, to the extent that the conversion rights are exercised by the noteholders, additional ordinary shares will be issued and would dilute our shareholders. In addition, subject to shareholder approval, we have two other convertible debt agreements with directors and officers of the Company to issue up to 401,939 shares in the Company at a price of US$3.61 for a total debt of US$1,451,000.

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 stockholders. 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.

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 our 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.

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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 7324 6018 and our fax number is +61 8 8312 0248. 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, our management decided in early 2020 to stop the R&D activities and focus on the sales and marketing of 3D AST products. Management also decided to broaden the Company's revenue base by investing in a lamination glass project, a new nano-coast plated filter project, IoT projects and financial research. As a result, the Company now engages in business activities relating to the marketing and sales of 3D ASD products, laminated switchable glass, nano-coat plate filter, IoT products and financial research.

IMTE was listed on the Australian Securities Exchange, or ASX, in February 2013 and raised A$3,480,000 at IPO.

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.

As a result of the acquisition of MDL, Marvel Finance Limited, a company wholly owned and controlled by our then Chairman, Dr. Herbert Ying Chiu Lee, became the controlling shareholder of IMTE holding 44,787,331 shares (pre share consolidation) representing approximately 56.48% of the then outstanding shares of IMTE.

In February 2016, Digital Media Technology Limited, a 100% owned subsidiary of IMTE, was incorporated in the Labuan, Malaysia. This subsidiary will be the sales and distribution of products and technology licenses outside of Hong Kong and China.

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. The purpose of the reverse stock split was to enable us to meet the Nasdaq's minimum share price requirement. 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.

Pursuant to the terms of the Convertible Bonds, the Convertible Bonds are 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.

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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 will be 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 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 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 installments over four months. Furthermore, the interest rate is changed to 15% per annum. All of the installments payments have been 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, (i) the Note is still outstanding, ii) a total of A$325,000 interest payment in the CN Agreement, and (iii) the fixed conversion price has been adjusted to US$3.00 per share due to the exercise of the cashless Warrants and described below.

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 ("Ordinary Shares") 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 will be 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 will generate a net cash proceeds of approximately US$920,000 after deducting estimated expenses in connection with the offering. The Company intends to used 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.

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 is US$500,000, which is due on or before January 10, 2021 and the Company has the option to subscribe for an additional US$700,000 if Greifenberg achieves certain milestones after May 31, 2021. Greifenberg will be engaged in the business of providing financial research and risk analysis on China's financial markets.

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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 cost for the product development is approximately US$728,000.

On January 28, 2021, the Company entered into a conditional sale and purchase agreement to acquire 70% equity interests in Shenzhen Koala Wisdom Fire Engineering Co., Ltd.

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 represent approximately 15% of the total outstanding shares in Oakridge. Oakridge is engaged in the business of selling professional healthcare technology equipment and solutions to healthcare facilities. Recently Oakridge has 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 intends 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 is 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 intends to use the net cash proceeds for developing its current businesses, corporate expenditures, and general corporate purposes.

In summary, the Group's business activities are the marketing and sales of 3D ASD products, switchable glass, nano-coat plate filter project, IoT and financial research.

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B. Business Overview

IMTE is an Australian company 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, IoT products and financial research. 

Breakdown of total revenues by category for the years ended December 31, 2020, 2019 and 2018:

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$	December 31, 2018 A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment	1,427,157	1,273,921	1,166,144
Sales of software and technology solutions	-	1,504	13,731
Sales and distribution of audio products	-	-	48,609
Provision of consultancy and other services	-	-	95,922
Sales of nano-coat plate for air-filters	317,472	-	-
Interest income	6,197	115,762	21,409
	1,750,826	1,391,187	1,345,815

Breakdown of total revenues by geographic market for the years ended December 31, 2020, 2019 and 2018:

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$	December 31, 2018 A$
Korea	315,034	-	-
Singapore	2,439	-	-
Australia	-	-	65
Hong Kong	1,366,200	1,310,912	346,954
China	60,956	80,275	998,796
	1,744,629	1,391,187	1,345,815

At the beginning of 2019, IMTE was engaged in the business of development, manufacturing 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 possibly longer. The economic outlook for retail business is uncertain as the extent of the people's behaviour change to stay at home more and rely on pick-up and delivery services. This has and will drastically affect 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. Most of the remaining development work will be outsourced with defined budgets. In the longer term, we may develop our technologies if we can see a clear path to market.

The Company is diversifying its business by dedicating resources to the electronic glass and the nano-coated plate filters businesses. These two businesses will not be affected by COVID 19 as much as the ASD business, which is operating in the retail advertising markets, in an uncertain pandemic environment. In particular, the air filter product should not be affected as much as the ASD business because, in a pandemic environment, we expect people to consider purchasing devices that cleanse the air. As for the electronic switchable glass business, this 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 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. At the time of the acquisition, Sunup was a non-operating company and its only assets were equipment.

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 seeks to analyse credit risk using Big Data and Artificial Intelligence, for a total subscription amount of 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.

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 a 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 addition, the Company shall pay a deferred consideration of the Profits (as defined below) less the Initial Consideration. The deferred consideration would be paid by the issuance of ordinary shares in the Company (to a maximum number of shares not equal or exceeding 20% of the then issued shares of the Company) at a price equal to 85% of the prior 15 days VWAP of the Company's share price immediately prior to the date of the parties agreeing to the Profits and such date may not be later than March 31, 2022. Profits is defined as the profits before taxation of Shenzhen Koala for the period from the completion date to December 31, 2021 and excluding any relevant gross profits from uncollected sales receipts. As at the date of this report, this parties agreed to cancel this agreement and to negotiate another agreement involving other IoT projects.

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 Australian 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.

Currently, the Company is focusing on the marketing and distribution of ASD products, the manufacture and sale of nano coated plates for air filters and switchable glass, the sale of IoT, and financial research. We believe these two new business operations in air filters and electronic switchable glass will form the foundation of our future growth strategy.

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IMTE Products and Services

ASD Products

IMTE is focusing on the marketing and sale of our autostereoscopic display (ASD) products. The current products we offer are ASD technology displays and Marvel3DPro Super-workstation.

ASD Technology Display Products

ASD hardware products are mainly display terminals for presenting glasses-free 3D content which generally include ASD Video Wall and ASD digital signage.

ASD hardware products can be classified into fixed lenticular hardware and switchable lenticular hardware based on the capability display panel. Switchable technology can display 2D image without affecting its perceived resolution, but the technology is still immature and limited to small screen size. The following table shows the current application of fixed and switchable technology on ASD hardware and the products which IMT is supplying today.

Screen Size	Fixed Technology	Switchable Technology	Application	IMTE Products
35"-100"	Yes	No	Display and video wall	28", 46", 50", 55", 65", 85" 1x3, 3x3, 4x3 configuration

Autostereoscopic Display Solution

We provide a full series of ASD digital signage displays with very high-quality 3D image. We can provide the following 3D Displays:

i)	A wide range of Glasses-Free 3D displays in ultra-high definition ranging from 27" to 85";
ii)	Outdoor Glasses-Free 3D digital signage which are waterproof and visible under sunlight making them suitable for use at bus-stops, stadiums and street store-fronts;
iii)	Indoor Glasses-Free 3D digital signage offer high-brightness making it suitable for use in shopping malls, hotels and casinos; and
iv)	Indoor Glasses-Free 3D video wall using super thin bezel panels. Total resolution can be up to 8K with outstanding Glasses-Free 3D effect.

Switchable Glass Products

We are planning to install and operate our switchable glass and energy saving glass lamination operation in late 2021. We plan to have 2-3 lamination lines with capabilities to produce annually between 160,000 - 240,000 m² of laminated glass. The switchable glass are mainly for the real estate industry for both external and internal walls.

The real estate and construction industry in Asia and China in particular is expected to grow with the economies in these regions. Our switchable glass and energy saving glass would create a friendly energy savings environment for buildings and or homes.

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

Our laminated switchable glass and energy saving glass can provide more natural light and views while minimizing heat and glare. This is achieved by adjusting the tinting and 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 vise versa, becoming our switchable glass. 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 Corporation. Electrochromic is the phenomenon by which the 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 the building. 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 the blinds or curtains to ongoing maintenance 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 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 a major new building material for real estate developers and architects to build in. A truly intelligent building needs make its external walls smart through energy savings and aesthetically pleasing to the occupants while having a smaller carbon footprint.

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Our Customers

We plan to sell our products to the construction and real estate industry, including train stations, airports, convention centers, commercial offices, hospitals and 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 the 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 glasses.

Our Competition

We compete in the commercial window industry and the electrochromic glass industry, both of which is 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 need to look at expanding the usage of our switchable glass to provide privacy walls such as in offices and hotels. The growth in the use of switchable and energy saving glasses will be in the use of costs savings in all applications where 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, makes the product at a much lower costs than the traditional PECVD technology and 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:

• Eliminate all kinds of particles.

• Remove odors.

• Eliminate cigarette smoke and carcinogens.

• Remove VOCs contained in the dust.

• Negative ions and oxygen in the taxi will increase.

• Eliminate contact with allergen inducing substances and have the effect of allergy treatment.

We have started the manufacturing and selling of the product in Q4 2020. We have also invested in our own proprietary design of a family of air filter products to be available in Q2 2021. Currently we have started marketing our generation 2 air filter (picture below) in South Korea, China and South East Asia. The response has been very positive and we look to secure some orders in Q2 2021.

Our nano-coat plated products eliminate particles, eliminate germs and viruses, eliminate micro molecules that are harmful to human bod 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 2021, we will seek to sell our products in North America and Europe.

Our sales strategy is to appoint distributors and or channel partners for certain territories countries. For some markets we will sell direct to consumers online to build our own customer base.

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

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Internet of Things ("IoT") Products

IMTE will be focusing on the IoT products as one of the core businesses to invest as there are many developments in China spearheading the deployment of IoT technologies throughout society. In February, the Company took a strategic 15% stake in an ASX company Oakridge International Limited (formerly known as Xped Limited) ("Oakridge"). Oakridge is in the business of IoT and healthcare technologies to assisted healthcare, age homes and self-care homes.

IMTE is seeking opportunities to invest in IoT technologies locally in Hong Kong or China, and then bringing these technologies to other markets such as in Australia that could benefit from first mover advantage.

Financial Research

In December 2020, IMTE 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 required to transform China's credit market into a globally 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 America's, real interest rates for government bonds 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.

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

• Less than 1% of outstanding principal in China's bond market is in default, according to an analysis by Bocom Securities.

Two Chinese Credit Markets

China's credit market really is 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 Shows 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.

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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.

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, modeling 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 Capital'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's suite of models are inputs for a Meta-Model that 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.

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

23

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. We believe 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 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, startups, patents, and partnerships" rather than on credit.

None of our prospective competitors now combines Contingent Claims Analysis with conventional balance sheet 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 prospective competitor with capabilities closest to Greifenberg is China Securities Credit Investment (CSCI), in association with Oliver Wyman. CSCI is 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.

Future Developments

The focus of the Group is to continue to develop its businesses switchable glass, nano-coat plated filters, IoT products and financial research to support our glasses-free 3D (autostereoscopic) displays (ASD). Our focus in the past has been in the technology development in ASD displays with limited success. We have experienced significant losses in the past 3 years and the Group needed to build a more diversified business and revenue base for the Company. The initiatives in 2020 to curtail the R&D operation and to start new revenue stream in the nano-coat plate is a move forward. In 2021, we look forward to continuing the development in the businesses of lamination for switchable glass, Iot products and financial research, to all contribute in the Group's revenue stream.

Due to recent losses incurred in operations and in order to reduce the overhead and expenses of the Group, in May 2020 we divested from the research and development operation. Our strategy is to outsource the development to third parties of our technologies and patents. This will ensure that we can cap the costs of development and off load the risk and share the benefits. This will enable the Group to reduce its overhead costs and focus on sales and marketing of ASD products.

The future business plans depend on adequate capital being available to the Group. The Company will be reviewing potential acquisitions 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.

24

Market and Industry Analysis

3D Display Market

The 3D display market has not changed and is still in its early stage. Most of the 3D-enabled electronic devices require 3D glasses to experience the 3D effect. The usage of these 3D glasses is limiting the adoption of 3D displays as the glasses are uncomfortable to wear. For instance, wearing 3D glasses for a long period sometimes causes headache or eyestrain. Therefore, to eliminate the use of glasses, vendors in 3D display market are focusing on adopting autostereoscopic technology, which delivers the 3D effect to the naked eye.

However, autostereoscopic technology currently has limitations because of its high cost and image quality. Therefore, the potential commercialization of this technology will be seen in the near future as the vendors in the 3D display market are focusing on developing ideal 3D displays using autostereoscopic technology.

Nano-coating plated filter

The nano-coating plated 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 eliminate particles will stimulate interest in the healthcare industries.

Switchable glass

The market for switchable glass in China and Hong Kong 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 the building. Consequently the building will require less energy to cool its interiors and carbon footprint.

Competitors

The market for glasses-free 3D technology is still in its early stage, and there are very few competitors worldwide. Nonetheless, there are many established and early stage companies that address the 3D display market in one way or another, including makers of 3D televisions and mobile phones, such as Panasonic Corporation, Samsung Electronics Corporation, Ltd. and Sony Corporation. For the most part, these companies do not market 3D autostereoscopic products, and thus do not compete directly with the products and services we seek to market. However, at this time, we consider them to be competitors generally in the effort to market stereoscopic display (with glasses) solutions to end user businesses. Other companies operating in this domain such as Magnetic 3D, Alioscopy, and Dimenco have started operations earlier than us. For the air filter products, there are many larger companies such as Samsung and LG selling air filters for the homes. We believe that our air filters are competitive in price and function. For the switchable glass, there are many companies offering switchable glass in China, however we do not believe that their products are competitively priced or have the functionality and durability as our switchable glass. The IoT products are generally available in the market so there are many competitors in China. However, we will select the IoT products that have advantages to the markets we enter.

Sourcing and Manufacturing

For certain products such as ASD 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.

Marketing, Distribution and Sales

For our products we are in the process of building our own brand for our air filter and switchable glass products which we intend to launch when we take the 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 secured 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 would not expect to keep much inventory other than key components unless under extraneous circumstances such as material shortage 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 2020, our major sales were to a few customers. Our strategy 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. Each of these 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

Prior to 2020, the Company conducted a lot of its own R&D activities with limited success in commercializing the technologies developed. Due to the severity of the recent losses and the uncertainty of the COVID 19, in May 2020, we have divested from any internal R&D. We will rely on our partners and or third parties on development of new technologies in ASD, nano-coated plates, and lamination lines for switchable glass.

25

Intellectual Property

The intellectual property protection for the licenses we hold are further described under "Patent Portfolio" below.

In addition to patent protection, we rely on unpatented trade secrets, know-how and other confidential information as well as 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 IMTE 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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Patent Portfolio

The following table presents our portfolio of patents and patent applications, including their status (as at December 31 2020) and a brief description of their respective inventions.

Patent Owner	Title	Patent No. /Application No.	Status	Expires
Visumotion International Limited (A wholly owned subsidiary of MDL)	(i) Method for processing a spatial image	EP 2172032	Granted in Germany	June 2028
		EP 2172032	Granted in France
		EP 2172032	Granted in U.K.
		4988042	Granted in Japan
		US 8,817,013	Granted in U.S.	Feb 2031
	(ii) Method for stereoscopic illustration	2010 80019861.4	Granted in China	May 2034
		US 8,797,383	Granted in U.S.	Feb 2031
		102010028668	Granted in Germany	May 2030
	(iii) Glasses-free 3D display device	1252602 A	Granted in HK	Nov 2026
		201711080471.8	Granted in China	Nov 2037
Independent party Versitech Limited (A subsidiary of the University of Hong Kong)	(i) Method and System for Global Motion Estimation and Compensation	US 10,453,207 B2	These patent rights in relation to 3D video encoding and transmission will be assigned by the owner to Marvel Digital Limited in the event of either (1) IPO of MDL shares or (2) the 3D video technologies covered by the Patent Rights is approved by PRC authority as an industry standard.	Oct 2036
	(ii) Auxiliary Data for Artifacts Aware View Synthesis	US 10,404,961 B2		Nov 2036
	(iii) A depth discontinuity based method for efficient intra coding for depth videos	US15/748,532		May 2037
	(iv) A multi overlay variable support and order kernel based representation for image deformation and view synthesis	US15/748,503		Aug 2036
	(v) Auxiliary Data for Artifacts Aware View Synthesis (US)	62/285,825		Aug 2036
	(vi) Auxiliary Data for Artifacts Aware View Synthesis (PCT)	PCT/CN2016/104887		N/A
		JP2018523453A		N/A
		201680078156.9		N/A
	(vii) Shape adaptive model based codec for loss and lossless compression of binary images	62/300,502		N/A
		KR1020187027805A		N/A
		201780013263.8		N/A
		EP17755817.8		N/A
		JP2018544483A		N/A
		US15/441,530		N/A

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Patent Owner	Title	Patent No. /Application No.	Status	Expires
GOXD Technology Limited	Digital Photo Frame Device and Control Method thereof	18103421.3	Granted in HK	Mar 2026
	Digital photo frame	1701272.5	Granted in HK	Jun 2022
		228398846	Granted in China	Aug 2027
Marvel Digital Limited	Method for Enhancing Video Resolution and Video Quality, Encoder and Decoder	16103565.1	Granted in Hong Kong	Mar 2024
	A Method, Apparatus and Device for Acquiring a Spatial Audio Directional vector	16103566.0	Granted in Hong Kong	Mar 2024
		201610566911.X	Granted in China	Jul 2036
		15/216,726	Granted in U.S.	Jul 2036
		105134696	Granted in Taiwan	Oct 2036
	A Lens for Extended Light Source and Design Method Therefor	16106705.5	Granted in HK	Jun 2024
		201710427469.7	Granted in China	Jun 2037
		15/61,720	Granted in USA	Jul 2038
		18103254.5	Granted H.K.	May 2037
	A Method and a System for generating depth information associated with an image	16111725.1	Granted in HK	Oct 2024
		US15/404,461	Granted in U.S.	May 2037
		US 15/784,875	Granted in U.S.	May 2038
	Method For Improving the Quality Of 2D-to-3D Automatic Conversion By Using Machine Learning	16111899.1	Granted in HK	Oct 2024
		15/784875	Granted in US	May 2038
	Parametric Splitting for Block Representation and Coding	HK 19124279.1	Granted in HK	May 2027
	Methods for Multiple Layer Representation of Depth Map for Intra Coding	HK 19124682.6	Granted in HK	Jun 2027
	Computer	1601506.3	Granted in HK	Aug-2041
		29/574,856	Granted in U.S.	May 2031

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Material Contracts Related to Intellectual Property and Commercialization Rights

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 provides MDL and its affiliates for the term an exclusive and royalty-bearing license under the patent rights owned by Versitech listed in the previous table above, 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 royalties of 3% of net sales ("3% Royalty") on licensed product and licensed process by MDL and its affiliates and sublicensee. 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.

Starting in 2019 and thereafter, the royalty will be the greater of 3% Royalty and HKD200,000 (approximately A$36,194) each year.

During the 2020 year, there were royalty fee of HK$200,000 paid to Veritech (2019:Nil). There were no sublicense fee paid in both years.

Technology License Agreement with Koninklijke Philips N.V.

In October 2013, a Technology License Agreement between Koninklijke Philips N.V. ("Philips") and MDL for granting MDL a non-exclusive and non-transferable license under certain intellectual property rights on/over for licensed patents and knowhow in relation to the 3D lenticular display design, 3D content creation and 3D formats ("the 3D Technology") to develop, manufacture, sell and / or otherwise dispose of such 3D display modules and sets, and to disclose and make available certain know-how and information relating to the 3D technology to MDL. The Agreement shall remain in force for a period of 10 years or until the last to expire Licensed Patent has expired, whichever is later, unless terminated earlier in accordance with the provisions. The Technology License Agreement involve 700+ patents owned by Philips.

Government Regulations

The market for 3D technology is 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 devices 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

As at December 31, 2020, we have a total of 12 subsidiaries and their corporate details and business activities are listed below:

Subsidiary Name	Place of Incorporation	% held	Business scope
CIMC Marketing Pty Ltd	Australia	100% Direct	Management services, and investment holding
Binario Ltd	British Virgin Islands	100% Direct	Investment holding company
Digital Media Technology Ltd	Labuan, Malaysia	100% Indirect	Sale and distribution of Group products
Cystar International Ltd (formerly Visumotion International Limited)	Hong Kong	100% Indirect	Sale of software and provision of consultancy services
Colour Investment Limited	Hong Kong	100% Direct	Investment holding company
GOXD International Limited	Hong Kong	80% Indirect	Distribution of Digital Picture Frame
Great Gold Investment Limited	Hong Kong	100% Direct	Administrative services
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
Smartglass Limited (formerly Dragon Creative Ltd)	Hong Kong	100% Direct	Sales and distribution of switchable glass
Cystar International (Shenzhen) Limited	China, PRC	100% Indirect	Dormant
Smart (Shenzhen) Technology Limited	China, PRC	100% Indirect	Marketing and distribution
GOXD Dongguan Limited*	China, PRC	76% Indirect	Design and sale of 3D digital picture frame
GOXD Technology Limited*	Hong Kong	76% Indirect	Development and distribution of 3D digital picture frames
Marvel Digital Ltd*	Hong Kong	95% Indirect	Development of 3D autostereoscopic display technology and investment holding
Marvel Display Technology (Shenzhen) Limited (formerly Marvel Software (Shenzhen) Ltd)*	China, PRC	95% Indirect	Manufacturing and distribution of 3D products and provision of 3D consultancy services

* Disposed during the year.

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D. Property, Plant and Equipment

At December 31 2020, the Company has its registered office in Adelaide, Australia and its principal and main operating office located in Hong Kong, and an administration office in Shenzhen, China. In Australia in 2020, the Company rents a 100 square feet office on a month to month basis at a cost of A$1,000 per month until July 2020 and thereafter it was rent free until December 2020. In January 2021, the Company rents 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 Hong Kong, the Company's the principal office is approximately 3,000 square feet which in January 2020 the Company entered into a short-term arrangement to pay a monthly rent at US$20,000 (A$28,500) per month on a month to month arrangement. In January 2021, the Company terminated the lease for the Hong Kong's principal office and a Group company entered into a 2 year lease agreement to lease a 2,800 square feet our principal office at a monthly rent of approximately A$14,300.

The Company also rented two operating offices, (i) one of which is approximately 4,000 square feet on a three-year lease at approximately A$15,500 per month until May 31, 2020 and (ii) the other is approximately 4,400 square feet on a 3 year lease at approximately A$26,300 per month until October, 2021. In April and May 2020, the Group disposed of the subsidiaries holding these leases.

During the year, in China, the Company rented a 4,405 square feet development office in Dongguan, Guangdong Province, on a 3 year lease at approximately A$3,857 per month until November, 2021. In addition, the Company rented a 15,930 square feet pre-production facility in Shenzhen on a 2 years rental at approximately A$33,663 per month until January 2021. In April and May 2020, the Group disposed of the subsidiaries holding these leases.

Due to the divestment of the Company's R&D and pre-production/testing facilities in Shenzhen for its 3D products, the Company plans to outsource the production of its products. Accordingly, the Company does not intend to build at this time any infrastructure for its manufacturing requirements for 3D products. We believe we will be able to obtain additional office space for our operations, as needed, on commercially reasonable terms.

Our plant and equipment recorded in our consolidated financial statements as at December 31, 2020 consists of A$262,626 for office furniture and equipment. We are not aware of any environmental impact on the use of these equipment. With the distribution rights agreement for conductive film, we are profiling locations to house our lamination line for manufacturing electronic glass products. We hope to conclude our factory site selection by June 30, 2021.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

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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, 2020, as at and for the year ended December 31, 2019, and for the year ended December 31, 2018, 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 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."

Overview

In the past few years, we were at an early stage in the development of our 3D products and services. We have incurred net losses since inception until recently when we recorded a profit for the fiscal year 2017 mainly through the sale of our autostereoscopic 3D display, 3D conversion equipment and software. However, in 2019 the Group recorded significant losses of A$16,700,199 and another loss of A$10,543,658 in 2020. In order to curtail the losses going forward, the Group restructured its operation by disposing its R&D and test manufacturing operation, and only focusing on the marketing and sales, in 3D autostereoscopic products. In May 2020, the Company disposed of these operations and this resulted in reducing our administrative and operating costs which resulted in reducing our losses in 2020. The Company also initiated new businesses in nano-coat plated filter products and switchable glass which should provide a wider revenue base and sales growth in the coming years. This will offset the business losses in this pandemic environment. The Company was severely affected by the pandemic as the majority of our 2020 sales plan was reduced or cancelled and we expect that. Going forward in 2021, Covid 19 will continue to present a challenge for the Company to grow sales in 2021 and become profitable.

For the past 2 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."

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with IFRS as issued by IASB. As such, we are required to make certain estimates, judgments, and assumptions that management believes are reasonable based upon the information available. These estimates, judgments and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies listed in Note 3 to the consolidated financial statements that management believes are the most critical to aid in fully understanding and evaluating our financial condition and results of operations under IFRS are discussed below.

Goodwill

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.

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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.

(iii) Research and development costs

Development projects in the consolidated statement 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 (2-5 years). Costs associated with maintaining computer software programmes are recognized as an expense when incurred.

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.

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.

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.

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.

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.

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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‘plant and equipment' and lease liabilities in ‘loans and borrowings' in the consolidated 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.

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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.

Convertible Bonds

Convertible bonds 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 bonds 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 bonds 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 bonds 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 bonds are redeemed, the capital reserve is released directly to retained profits.

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.

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 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.

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Recent Acquisitions

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

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,
	2020		2019		2018
	Amount A$	% of Net Revenues	Amount A$	% of Net Revenues	Amount A$	% of Net Revenues
Revenues:
Products	1,659,916	95	1,165,607	91.4	1,228,485	92.8
Services	84,713	5	109,818	8.6	95,921	7.2
Total operating revenues	1,744,629	100	1,275,425	100	1,324,406	100.0
Expenses
Cost of sales	1,311,566	74.2	1,008,821	76.2	723,711	54.6
Employee benefit expenses	2,212,643	126.8	4,034,378	304.6	2,253,411	170.1
Depreciation and amortization expenses	2,078,762	119.2	3,174,784	239.7	2,029,373	153.2
Professional and consulting expenses	1,373,907	78.7	2,019,970	158.4	1,746,762	131.9
Loss / (gain) on disposal of subsidiaries	28,990	2.3	-	-	(608,995)	(46)
Travel and accommodation expenses	40,895	2.3	281,895	22.1	384,184	29.0
Other operating expenses	2,082,867	119.3	2,341,672	183.6	2,010,142	151.8
Provision for impairment loss for goodwill	-	-	4,486,301	351.8	9,953,311	751.5
Provision for impairment loss for intangible assets	3,459,340	198.2	-	-	-	-
Financial costs	2,100,272	120.4	1,561,625	122.4	1,383,399	104.5
Total expenses	14,689,242	841.9	18,909,446	1,482.6	19,875,298	1,300.7
Operating loss before income tax	(12,944,613)	(741.9)	(17,634,021)	(1,382.6)	(18,550,892)	(1,400.7)
Non-operating income
Interest income	6,197	0.4	115,762	9.1	21,409	1.6
Gain on disposal of financial assets at fair value through profit or loss	2,312,197	132.5	127,551	10.0	709,543	53.6
Other income	82,561	4.7	807,831	63.3	469,660	35.5
Net (loss) / profit before income taxes	(10,543,658)	(604.3)	(16,582,877)	(1,300.2)	(17,350,280)	(1,310.0)
Income tax credit / (expense)	-	-	(117,322)	9.2	507,057	38.3
Net (loss) / profit	(10,543,658)	(604.3)	(16,700,199)	(1,309.4)	(16,843,223)	(1,271.8)

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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	0.01
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	4.5	16,686	1.30
Other services	4,775	0.2	93,132	7.30
Consulting services income	-	-	-	-
Sub-total	84,713	4.8	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, a 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-coat plate filter products. In 2021, we will put more emphasis on sales of nano-coat plated filter products and switchable glass 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-coat 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$10,543,658 as compared to the prior year of A$18,909,446 a decrease of A$8,365,788 or 44.24% 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 during the year 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 during the year 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 during the year 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 valuation during the year.

Income tax

Income tax expenses of A$Nil were recognized during the year ended December 31, 2020.

Net Profit (Loss)

We recorded a net loss of A$7,020,972 for the year ended December 31, 2020 as compared to a net loss of A$16,700,199 was recorded for the year ended December 2019.

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Comparison of Year Ended December 31, 2019 to Year Ended December 31, 2018

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,
	2019		2018
	Amount A$	% of Total Revenues	Amount A$	% of Total Revenues
Products
Displays	1,164,103	91.3	1,166,144	88.0
Tablets and mobiles	-	-	-	-
Software	1,504	0.1	13,731	1.0
Audio products	-	-	48,609	3.7
Other products	-	-	-	-
Sub-total	1,165,607	91.4	1,228,484	92.7
Services
Conservation services	16,686	1.3	57,661	4.4
Other services	93,132	7.3	38,261	2.9
Consulting services income	-	-	-	-
Sub-total	109,818	8.6	95,922	7.3
Total operating revenues	1,275,425	100.0	1,324,406	100.0

Revenues. The revenue from operating activities for the year ended December 31, 2019 was A$1,275,425 as compared to the prior year of A$1,324,406, a decrease of A$48,981 or 4% from the prior year. The revenue for the year ended December 31, 2019 consists of the sales and distribution of 3D autostereoscopic products and sales of 2D tablets. In 2020, we will put more emphasis on sales of 3D POS machines, a new advertising product.

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,
	2019		2018
	Amount A$	% of Net Revenues	Amount A$	% of Net Revenues
Products	962,799	75.0	559,840	42.3
Services	46,022	4.0	163,871	12.4
Total cost of sales	1,008,821	79.0	723,711	54.7

Cost of sales increased by 39% to A$1,008,821 in 2019 from A$723,711 in 2018, 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 decreased by 56% from A$600,695 in 2018 to A$266,604 in 2019. Our gross margin significantly decreased from 45% in 2018 to 21% in 2019, primarily due to the change in product mix of the Group with 2D tablets being sold with comparatively lower 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$127,551.

Other income

It represented primarily the government subsidy in respect of our technology development projects received for the years ended December 31, 2019 and 2018.

Expenses

The operating expenses for 2019 was A$18,909,446 as compared to 2018 of A$19,875,298 a decrease of A$965,852 or 4.86% from the prior year. The decrease in total operating expenses was mainly attributable to the following:

- A decrease of A$5,467,010 in the provision for impairment loss of goodwill from A$9,953,311 in 2018 to A$4,486,301 in 2019;

- An increase of A$285,110 in cost of sales from A$723,711 in 2018 to A$1,008,821 in 2019 as discussed above;

- An increase of A$1,789,967 in employee benefit expenses from A$2,253,411 in 2018 to A$4,034,378 in 2019, which was primarily due to increase in the number of staff and general salary increment. The increase of staff was primarily due to the addition of staff for GOXD operation and executive director's compensation;

- An increase of A$1,145,411 in depreciation and amortization expenses from A$2,029,373 in 2018 to A$3,174,784 in 2019;

- A decrease of A$608,995 in gain on disposal of a subsidiaries relating to disposals of subsidiaries in 2018. There were no disposals in 2019;

- An increase of A$273,208 in professional and consulting expenses from A$1,746,762 in 2018 to A$2,019,970  in 2019 resulting from the increase in legal and professional fees for certain corporate activities during the year including the investor relations fees.

- An increase of A$331,530 in other operating expenses from A$2,010,142 in 2018 to A$2,341,672 in 2019 resulting from the operating cost of the GOXD operation for the full year in 2019; and

- An increase of A$117,322 in finance costs from A$1,383,399 in 2018 to A$1,561,625 in 2019 was mainly attributable to the convertible bonds interest of amount A$1,316,702 in 2019, compared to the prior year of A$930,276 in 2018 and interest charged of A$50,329 in 2019 on the amounts of revolving loan with interest rate on 8% per annum.

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Income tax

Income tax expenses of A$117,322 were recognized during the year ended December 31, 2019 in mainly deferred tax were recognized during the year.

Net Profit (Loss)

We recorded a net loss of A$16,700,199 for the year ended December 31, 2019 while net loss of A$16,843,223 was recorded for the year ended December 2018.

Inflation and Seasonality

Management believes inflation has not had a material impact on our operations or financial condition and that our operations are not currently subject to seasonal influences.

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, 2020:

Amendments to References to the Conceptual Framework in IFRS Standards

The Group has adopted the amendments included in Amendments to References to the Conceptual Framework in IFRS Standards for the first time in the current year. The amendments include consequential amendments to affected Standards so that they refer to the new Framework. Not all amendments, however, update those pronouncements with regard to references to and quotes from the Framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the Framework they are referencing to (the IASC Framework adopted by the IASB in 2001, the IASB Framework of 2010, or the new revised Framework of 2018) or to indicate that definitions in the Standard have not been updated with the new definitions developed in the revised Conceptual Framework.

The adoption of these amendments has not had a material impact on the Group.

Amendments to IFRS 3 Definition of a business

The Group has adopted the amendments to IFRS 3 for the first time in the current year. The amendments clarify that while businesses usually have outputs, outputs are not required for an integrated set of activities and assets to qualify as a business. To be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.

The amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs. The amendments also introduce additional guidance that helps to determine whether a substantive process has been acquired.

The amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business. Under the optional concentration test, the acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets. The amendments are applied prospectively to all business combinations and asset acquisitions for which the acquisition date is on or after 1 January 2020.

The adoption of these amendments has not had a material impact on the Group.

Amendments to IAS 1 and IAS 8 Definition of material

The Group has adopted the amendments to IAS 1 and IAS 8 for the first time in the current year. The amendments make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of 'obscuring' material information with immaterial information has been included as part of the new definition.

The threshold for materiality influencing users has been changed from 'could influence' to 'could reasonably be expected to influence'. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of 'material' or refer to the term ‘material' to ensure consistency.

The adoption of these amendments has not had a material impact on the Group.

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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.

IFRS 17	Insurance Contracts
IFRS 10 and IAS 28 (amendments)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to IAS 1	Classification of Liabilities as Current or Non-current
Amendments to IFRS 3	Reference to the Conceptual Framework
Amendments to IAS 16	Property, Plant and Equipment—Proceeds before Intended Use
Amendments to IAS 37 Onerous Contracts	Cost of Fulfilling a Contract
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 and IAS 41 Agriculture

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) Goodwill and other intangible assets

The goodwill included in the consolidated financial statements was derived from the acquisition of Marvel Digital Limited. Determining whether goodwill is impaired requires as estimation of the value in use of the cash generating unit ("CGU") to which goodwill have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. At the end of the reporting year, the carrying amount of goodwill is A$NIL (2019: A$Nil). Details of the recoverable amount calculations are disclosed in Note 15.

(ii) 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.

(iii) 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(k) for further detail.

(iv) 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.

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(v) 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 3(e), 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.

(vi) 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.

(vii) 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.

(viii) 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 modeling techniques.

(ix) Valuation of contingent consideration

The contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. The fair value of contingent consideration was based on an independent valuation which is determined by using the discounted cash flow method on the probability-weighted financial projection of MDL for the period from October 1, 2015 to September 30, 2017 and is under level 3 fair value adjustment which involve significant estimates and judgements from the management. There is no more contingent liabilities as at December 31, 2020 and 2019, as the Company recognized the actual deferred performance fee to be paid to MFL of A$15,110,749 in 2017.

42

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 investments. We have incurred significant losses since our inception until 2015. For the past 3 years, we have recorded loss of A$7,020,972, A$16,700,199, loss of A$16,843,223, for the fiscal years ended December 31, 2020, 2019, and 2018 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 payment to consultant		2018		25,275		491,750
Share issuance for debts		2018		708,500		8,000,000
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 in respect of development of new business and working capital		2020		1,857,692		7,666,999
Share issuance in respect of payment to a consultant		2020		4,471		23,249

Capital Requirements

As of December 31, 2020, we had cash and cash equivalents of A$2,194,084 and trade receivables of A$1,233,709. Our trade receivable balance significantly increased as compared to A$892,488 as of December 31, 2019, was partially attributable to the increase in sales in 2020. We anticipate that our current cash and cash equivalents will be sufficient to fund our 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-coat plate filter developments or our operations.

In addition, the Company has started to recapitalize its equity base by selling US$9.4 million of its shares in the first 3 months of 2021. Furthermore, the Company is working on increasing its shareholder's equity to more than US$2.5 million or having a market capitalization of more than US$35 million so that it complies with Nasdaq's continual listing requirement. At the date of this report, the Company is compliant with the continued listing rule requirement.

Cash Flows

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

	Fiscal Year Ended December 31,
	2020	2019	2018
	A$	A$	A$
Net cash outflows in operating activities	(6,191,115)	(6,540,014)	(6,685,106)
Net cash outflows in investing activities	(4,586,121)	(1,828,617)	(3,319,768)
Net cash inflows by financing activities	13,392,848	7,575,583	8,465,255
Net increase (decrease) in cash and cash equivalents	2,615,612	(793,048)	(1,539,619)
Effect of exchange rate changes on cash and cash equivalents	(254,770)	6,585	89,252
Cash and cash equivalents at beginning of period	(166,758)	619,705	2,070,072
Cash and cash equivalents at end of period	2,194,084	(166,758)	619,705

Net cash outflows in operating activities was A$(6,191,115), A$(6,540,014), and A$(6,685,106) during the years ended December 31, 2020, 2019 and 2018, respectively. Net cash outflows in operating activities during the year ended December 31, 2020 was mainly to the delay in receipts from customers. Net cash inflows in operating activities significantly increased during the year ended December 31, 2018 were attributable to the receipts from customers on sale of software and technology solutions.

Net cash outflows in investing activities were A$(4,586,121), A$(1,828,617), and A$(3,319,768) during the years ended December 31, 2020, 2019 and 2018 respectively. Net cash outflows in investing activities during the years ended December 31, 2020, 2019 and 2018 was primarily attributable to the payments for acquisition of various patents and intangible assets, and development costs incurred for various on-going technology projects.

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Net cash inflows/(outflows) in financing activities was A$13,392,848, A$7,575,583, and A$8,465,255 during the years ended December 31, 2020, 2019 and 2018 respectively.

Net cash inflows in financing activities during the years ended December 31, 2020 are attributable to the issuance of shares. Net cash outflows in financing activities during the years ended December 31, 2020 and 2019 are attributable to the revolving loan provided from third party, advances from related companies and ultimate holding company.

We had cash and bank balance of A$2,194,084, A$(166,758), and A$619,705 as at December 31, 2020, 2019 and 2018 respectively. Cash and bank balance as at December 31, 2020, 2019 and 2018 were consisted of A$2,194,084, A$735,424 and A$1,514,215 of cash and bank balances, and Nil, A$(902,482) and A$(894,510) of bank overdraft, respectively.

C. Research and Development, Patents and Licenses

The Company no longer conducts any research and development activities as during the year, it disposed its subsidiary that conducted research and development in 3D autostereoscopic. Accordingly, for the 3 years ended December 31, 2020, we have employed 0, 25, and 10 staff, respectively, in the research and development of 3D autostereoscopic technology and we incur annual staffing costs of approximately A$675,500 A$6,155,884, and A$716,000 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. Information of the Company under Research and Developments, which also includes a cooperation agreement with the Hong Kong Applied Science and Technology Institute (ASTRI) to establish the ASTRI-Marvel Digital Joint Research and Development Center, focusing on research and development of advanced technology in 3D imaging, as announced on June 20, 2016.

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 is mainly dependent on further development and commercialization of our technologies.

E. Off-Balance Sheet Arrangements

During fiscal years ended December 31, 2018, 2019 and 2020, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

F. Tabular Disclosure of Contractual Obligations

As of December 31, 2020, the Group had internal capital commitments for the investments in two China subsidiaries of approximately A$2,901,071 (2019: A$1,755,456).

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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. Con UNERKOV(2)	Chairman and Chief Executive Officer
Mr. Uwe von PARPART (6)	Executive Director
Mr. Wuhua ZHANG (1)	Non-Executive Director
Dr. Man-Chung CHAN	Independent Non-Executive Director
Dr. Heming CUI (1) (2) (3) (5)	Independent Non-Executive Director
Mr. Luis PUYAT (1) (2) (4) (7)	Independent Non-Executive Director
Ms. Jannu Binti BABJAN (8)	Independent Non-Executive Director
Mr. Cecil HO	Chief Financial Officer and Joint Company Secretary

(1)	Member of the Audit Committee.
(2)	Member of the Nomination and Remuneration Committee.
(3)	Chairman of the Audit Committee.
(4)	Chairman of the Nomination and Remuneration Committee.
(5)	Dr. Heming CUI was appointed as a director on June 12, 2020 and was appointed as the Chairman of the Audit Committee and a member of the Nomination and Remuneration Committee.
(6)	Mr. Uwe von Parpart was changed from Independent Non-Executive director to Executive director on January 15, 2021. He also resigned as a member of Audit Committee on the same date.
(7)	Mr. Luis Puyat was appointed as an Independent Non-Executive director on January 15, 2021 and a member of the Audit Committee and the Chairman of the Nomination and Remuneration Committee.
(8)	Ms. Babjan was appointed as an Independent Non-Executive director on April 28, 2021 and a member of the Audit Committee.

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.

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.

Dr. Heming CUI, aged 38, 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.

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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.

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.

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.

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 2020.

	Short-term Benefits				Post Employment			Share-based			Total
					Benefits			Payments
	Salary &		Other		Super-		Retirement	Shares	Options
	Fees				annulation		Benefits
	A$		A$		A$		A$	A$	A$		A$
Mr. Con Unerkov (1)	-		722,157		N/A		N/A	N/A	N/A		722,157
Dr. Man-Chung Chan	12,000		N/A		N/A		N/A	N/A	N/A		12,000
Mr. Wuhua Zhang	18,000		N/A		N/A		N/A	N/A	N/A		18,000
Mr. Uwe von Parpart	18,725		N/A		N/A		N/A	N/A	N/A		18,725
Dr. Heming Cui	9,950		N/A		N/A		N/A	N/A	N/A		9,950
Mr. Luis Puyat	-		N/A		N/A		N/A	N/A	N/A		-
Ms. Babjan	-		N/A		N/A		N/A	N/A	N/A		-
Mr. Cecil Ho	607,659		N/A		N/A		N/A	N/A	N/A		607,659
Total	666,334		722,157		N/A		N/A	N/A	N/A		1,388,491

⁽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 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.

Employee Share Option Plan

In August 2020, an Employee Share Option Plan ("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. 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, 2020 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 seven directors, the executive Chairman and executive director, one non-executive director and four 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, 2020, we varied from the Recommendations in the following area:

a) No formal performance evaluation of the Board was conducted for the year ended December 31, 2020 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.

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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 six directors, of which four 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. Man-Chung Chan, Mr. Puyat, Dr. Heming Cui and Ms. Babjan 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 Ms. Babjan, Mr. Luis Puyat and Dr. Heming Cui. Dr Heming Cui is the chairman of the audit committee. The audit committee meets at least two times per year.

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. Mr. Uwe Parpart, Mr. Luis Puyat and Dr. Heming Cui are the current members of the Nomination and Remuneration Committee. Mr. Luis Puyat and Dr Heming Cui both qualified as an "independent director" within the meaning of NASDAQ Marketplace Rules. Mr. Puyat 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.

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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."

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, 2018, we had 74 employees. Of these employees, 2 were employed in administration located in the Australia, 19 employees in finance, administration and management located in the Hong Kong and 27 employees in operations located in Hong Kong, 8 employees in finance, administration and management located in the China and 18 employees in operations located in China.

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

As of December 31, 2020, we had 15 employees 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.

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 March 2, 2021 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.

Name (1)	Ordinary Shares	Options Exercisable Within 60 Days	Warrants/ Convertible Note Exercisable Within 60 Days	Total Stock and Stock Based Holdings (1)	% Ownership (2)
Mr. Con Unerkov (3) (7)	-	-	-	-	*
Mr. Uwe von Parpart (4) (7)	-	-	-	-	*
Dr. Man-Chung Chan	-	-	-	-	-
Mr. Wuhua Zhang	-	-	-	-	-
Dr. Heming Cui (5)	-	-	-	-	-
Mr. Luis Puyat (6)	-	-	-	-	-
All directors as a group (6 persons)	-	-	-	-	*
Marvel Finance Limited (8)	2,201,412	-	-	2,201,412	23.06%
CIMB Limited (9)	988,408	-	599,828	1,588,236	16.63%
Nextglass Technologies Corp (10)	700,000	-	507,692	1,207,692	12.65%
Ionic Ventures LLC (11)	708,000	-	-	708,000	7.42%

* less than 1%

Note

(1)	Except as otherwise indicated, based on information furnished by the owners, we believe that the beneficial owners listed above 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 Center, 188 Lockhart Road, Wanchai, Hong Kong.
(2)	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 the date of the table above on April 19, 2021, there were 8,440,533 outstanding shares and there are convertible notes of 950,405 outstanding entitling the holders to purchase ordinary shares.
(3)	Appointed as a director of the Company on May 31, 2019.
(4)	Appointed as a director of the Company on December 17, 2019.
(5)	Appointed as a director of the Company on June 12, 2020.
(6)	Appointed as a director of the Company on January 15, 2021.
(7)	The person holds less than one percent of the shares in the Company.
(8)	Marvel Finance Limited, a company wholly owned and controlled by former director Dr. Herbert Ying Chiu Lee.
(9)	Pursuant to convertible note purchase agreement and supplement agreement dated January 20, 2020 and February 11, 2020 respectively, CIMB Limited has right to convert about US$1,799,486 at a current downward adjusted conversion price of US$3.00 per share over the term of the convertible promissory note (the "Note"), subject to the maximum 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 a result, for the purpose of the calculating the right to acquire shares within 60 days, 442,713 shares are deemed to be converted to the ordinary shares of the Company.
(10)	Pursuant to a convertible note purchase agreement and supplement agreement dated December 21, 2020. Nextglass Technologies Corp has the right to convert US$1,650,000 at a conversion price of US$3.25 per share over the term of the convertible promissory note, subject to the maximum number of ordinary shares of the Company issuable upon conversion of such note to no more than 19.99% of the total issued and outstanding ordinary shares of the Company. As a result, for the purpose of the calculating the right to acquire shares within 60 days, 507,692 shares are deemed to be beneficially owned.
(11)	On March 23, 2021, the Company entered into a US$4,602,000 placement agreement with Ionic Ventures LLC at US$6.50 per share for a total of 708,000 ordinary shares.

As of April 28, 2021, we had 234,304 shares of our Common Stock held by 245 shareholders in our share registrar in Australia, the host county and we had 8,206,229 shares of our Common Stock held by 45 shareholders in our share registrar in USA.

The Company is not aware that it is directly owned or controlled by another corporation, any foreign government or any other natural or legal person(s) severally or jointly. The Company is not aware of any arrangement, the operation of which may result in a change of control of the Company.

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B. Related Party Transactions

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

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, 2020 and 2019.

For the year ended December 31, 2020

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

a) Purchase of products of A$29,794 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 Mulitimedia Techno., an entity controlled by Mr. Zhang Wuhua, our director of the Group;

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, one of the subsidiaries of our shareholders;
e)	Service fee paid of A$67,187 to Marvel Digital Productions Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;
f)	Service fee paid of A$21,812 to Marvel Research Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;
g)	Service fee paid of A$193,972 to Marvel Digital Group Limited, an entity controlled over by former director, Dr. Herbert Ying Chiu Lee;
h)	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$22,588 from Marvel Digital Productions Limited, an entity controlled over by director, Dr. Herbert Ying Chiu Lee;

b) Purchase of products of A$501,062 from from Integration Mulitimedia Techno., an entity controlled by director, Mr. Zhang Wuhua;

c) Service fees paid of A$484,216 to Marvel Digital Group Limited, an entity controlled over by director, Dr. Herbert Ying Chiu Lee;

d)	Service fees paid of A$87,303 to Marvel Digital Productions Limited, an entity controlled over by director, Dr. Herbert Ying Chiu Lee;
e)	Interest income of A$115,678 by the ultimate holding company, Marvel Finance Limited, an entity controlled by director, Dr. Herbert Ying Chiu Lee;
f)	Company secretarial and service fees paid of A$523,196 to Asset Union Limited, an entity controlled by Company Secretary, Mr. Cecil Ho.

During the year, the Company incurred expenditure of A$40,000 to BDO Administration (SA) Pty Ltd in respect to company secretarial and taxation services. George Yatzis, Company Secretary of IMT is a director of BDO Administration (SA) Pty Ltd.

During 2019, 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, 2020 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, 2017, we had 2,643,611 Common Stock issued, outstanding and fully paid.

On July 17, 2018, the Company issued 25,275 ordinary shares at a share price of US$14.45 (or about A$ 19.456) per share for a total subscription proceeds of A$491,750 for settlement of consultancy service payment.

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

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 shares 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$84,000) 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$13,000) 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$3,289,000) for working capital.

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 for developing its current businesses, corporate expenditures and general corporate purposes.

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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.

Options

The Company had no employee share options outstanding as of December 31, 2020.

In August 2020, an Employee Share Option Plan ("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 total number of the shares which may be offered by the Company under the 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 granted options ("2020 Options") pending shareholder approval, to subscribe up to 261,000 ordinary shares to employees, directors and consultants under the ESOP. The 2020 Options is a two-year plan with the vesting schedule that 50% of the shares vest six months after the vesting commencement date and the balance of the shares vest on the first anniversary of the vesting commencement date. The exercise prices range from US$3.50 to US$3.70 per share. Each option when exercised entitles the option holder to one ordinary share in the Company. Options are exercisable on or before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the option holder.

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:

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.

54

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

On July 25, 2020, the Company entered into two transactions with CIMB, an independent third party, to convert a total of US$2,825,000 of debts owed to CIMB into shares in the Company. The first transaction is a conversion of debt of US$2,100,000 at a price of US$3.00 for a total issuance of 700,000 shares in the Company. The second transaction is the issuance of a convertible note of US$725,000. The Note (the "Note") is non-interest bearing, cannot be pre-paid and has a term of 2 years from the date of the issuance of the Note. The holder of the Note or the Company can convert the Note at any time into shares in the Company at US$3.00 per share. There is a downward adjustment for any issuance of shares at price lower than the Conversion Price in the next 12 months following the issue of the Note, subject to a floor price of US$1.50 per share. Furthermore, there is a conversion limitation such that no conversion can be effected if after such conversion CIMB would own more than 19.99% in the Company.

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$3.00 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.

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.

Purchase of Lamination Line

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.

Subsciption agreement with Greifenberg

On December 21, 2020, the Company entered into a subscription agreement to subscribe up to a 60% equity interest in Greifenberg Capital Limited ("Greifenberg") for a total subscription amount of US$1,200,000. The initial subscription amount is US$500,000, which is due on or before January 10, 2021. The Company has the option to subscribe for an additional US$700,000 if Greifenberg achieves certain milestones after May 31, 2021.

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).

Supplemental Agreement with Nextglass on Adjusting Subscription Price

On December 21, 2020, the Company signed a letter agreement to adjust the subscription price of a Convertible Note Purchase Agreement dated August 6, 2020 from US$3.00 per share to US$3.25 per share.

55

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 totaling 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.

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.

56

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.

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.

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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.

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.

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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.

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.

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.

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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.

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.

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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.

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.

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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.

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

At the date of this report, we have 13 subsidiaries as follows:

Subsidiary Name	Place of Incorporation	% held	Business scope
CIMC Marketing Pty Ltd	Australia	100% Direct	Management services and trading
Binario Ltd	British Virgin Islands	100% Direct	Investment holding company
Digital Media Technology Ltd	Labuan, Malaysia	100% Indirect	Sale and distribution of 3D and audio products
Colour Investment Limited	Hong Kong	100% Direct	Investment holdings
Cystar International Limited (formerly Visumotion International Ltd)	Hong Kong	100% Indirect	Sale of software and provision of consultancy services
GOXD International Limited	Hong Kong	80% Indirect	Development and distribution of 3D digital picture frames
Great Gold Investment Limited	Hong Kong	100% Direct	Administrative Services
Greifenberg Capital Limited	Hong Kong	60% Direct	Investment holdings
Smartglass Limited (Formerly Dragon Creative Ltd)	Hong Kong	100% Direct	Sales and distribution of switchable glass
Sunup Holdings Limited	Hong Kong	51% Direct	Manufacturing of filter products
Sunup Korea Limited	Hong Kong	51% Indirect	Sales of filter plates and air filter products
Cystar International (Shenzhen) Limited	China, PRC	100% Indirect	Dormant
Smart (Shenzhen) Technology Limited	China, PRC	100% Indirect	Marketing and distribution

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.

62

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, 2020. 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, 2020.

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, 2020 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, 2020 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, 2020:

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.
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, 2020.

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 currently being addressed, we will continue our remediation efforts during fiscal year 2021.

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.

63

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, 2020.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the financial year the following fees were paid or payable for services provided by Ramirez Jimenez International CPAs and affiliated entities, the auditor of the Group:

Fee Category	2020		2019
Audit Fees	US$	45,820	US$	289,000
Audit-Related Fees	US$	9,680	US$	-
Tax Fees	US$	-	US$	-
All Other Fees	US$	-	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.

ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable

ITEM 16G. CORPORATE GOVERNANCE

Not applicable.

ITEM 16H. MINE SAFETY DISCLOSURES

Not applicable.

64

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 – 2020	F-1
Consolidated Statements of Profit or Loss and Other Comprehensive Income / (loss) for the years ended December 31, 2018, 2019 and 2020	F-2
Consolidated Statements of Financial Position as of December 31, 2019 and 2020	F-3
Consolidated Statements of Changes in Equity for the years ended December 31, 2018, 2019 and 2020	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2019 and 2020	F-5
Notes to the Consolidated Financial Statements	F-6 through F-54

65

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.

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.

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.

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.

Convertible Promissory Notes

Critical Audit Matter Description

As discussed in Notes 3, 24 and 25 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 Company's auditor since 2018.

F-1

INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME / (LOSS)

(in Australian dollars, except number of shares)

		Years ended December 31,
	Note	2020 A$	2019 A$	2018 A$
Revenue, net	4	1,744,629	1,275,425	1,324,406
Cost of sales		(1,311,566)	(1,008,821)	(723,711)
		433,063	266,604	600,695
Interest income		6,197	115,762	21,409
(Loss) / gain on disposal of plant and equipment		-	212,195	-
Gain on fair value change in derivative financial instruments	24	2,312,197	127,551	709,543
Gain on disposal of subsidiaries	27	-	-	608,995
Other income	5	82,561	807,831	469,660
		2,834,018	1,529,943	2,410,302
Expenses
Employee benefit expenses	7	(2,212,643)	(4,034,378)	(2,253,411)
Depreciation and amortization expenses	7	(2,078,762)	(3,174,784)	(2,029,373)
Professional and consulting expenses		(1,373,907)	(2,019,970)	(1,746,762)
Travel and accommodation expenses		(40,895)	(281,895)	(384,184)
Office expenses and supplies		(310,360)	(312,343)	(659,611)
Rental costs	7	(126,382)	(637,321)	(674,112)
Other operating expenses		(480,015)	(794,036)	(1,069,784)
Finance costs	6	(2,100,272)	(1,561,625)	(1,383,399)
Provision for impairment loss of goodwill		-	(4,486,301)	(9,953,311)
Provision for inventory obsolescence	7	17,671	(799,871)	(100,000)
Provision for bad debt		(58,932)	-	-
Loss disposal of subsidiaries	27	(28,990)	-	-
Plant and equipment written off		(110)	-	-
Provision for impairment loss on intangible assets	15	(3,459,340)	-	-
Development projects written off	16	(930,356)	-	-
Exchange (loss) / gain		(194,383)	(10,296)	493,365
Total expenses		(13,377,676)	(18,112,820)	(19,760,582)
Loss before income tax	7	(10,543,658)	(16,582,877)	(17,350,280)
Income tax (expense) / credit	8	-	(117,322)	507,057
Loss for the year		(10,543,658)	(16,700,199)	(16,843,223)
Other comprehensive income / (loss)
Items that may be re-classified subsequently to profit or loss:
Exchange differences on translation of financial statements of overseas subsidiaries		55,673	157,471	1,015,454
Other comprehensive income / (loss) for the year, net of tax		55,673	157,471	1,015,454
Total comprehensive loss for the year		(10,487,985)	(16,542,728)	(15,827,769)
Loss for the year attributable to:
Equity shareholders of Integrated Media Technology Limited		(10,034,077)	(15,646,147)	(15,962,278)
Non-controlling interests		(509,581)	(1,054,052)	(880,945)
		(10,543,658)	(16,700,199)	(16,843,223)
Total comprehensive loss for the year attributable to:
Equity shareholders of Integrated Media Technology Limited		(9,885,412)	(15,540,317)	(15,119,876)
Non-controlling interests		(602,573)	(1,002,411)	(707,893)
		(10,487,985)	(16,542,728)	(15,827,769)
Loss per share		A$	A$	A$
- Basic and Diluted	10	(2.33)	(4.63)	(5.93)

The above consolidated statements of profit or loss and comprehensive income / (loss) should be read in conjunction with the accompanying notes.

F-2

INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in Australian dollars) 

		December 31,
		2020	2019
	Note	A$	A$
ASSETS
Current Assets
Cash and bank balances		2,194,084	735,724
Inventories	11	187,401	749,173
Right of use assets	22(a)	-	682,119
Trade and other receivables	12	1,164,605	770,958
Other assets	13	2,089,897	2,291,273
Total Current Assets		5,635,987	5,229,247
Non-Current Assets
Plant and equipment, net	14	7,317,678	729,117
Intangible assets and goodwill	15	-	9,950,803
Right of use assets	22(a)	-	425,773
Development projects	16	-	3,611,336
Total Non-Current Assets		7,317,678	14,717,029
TOTAL ASSETS		12,953,665	19,946,276
LIABILITIES
Current Liabilities
Trade and other liabilities	17	3,589,164	4,338,495
Provision for employee benefits	18	-	64,135
Amounts due to related companies	19	237,674	6,101,850
Amount due to holding company	20	532,718	582,832
Borrowings	21	-	1,817,782
Lease liabilities	22(b)	-	666,868
Convertible bonds	23	-	4,420,899
Total Current Liabilities		4,359,556	17,992,861
Non-current Liabilities
Lease liabilities	22(b)	-	501,739
Derivative financial instruments	24	1,478,540	-
Deferred tax liabilities	8	13,668	1,372,653
Convertible promissory notes	25	2,196,049	-
Total Non-Current Liabilities		3,688,257	1,874,392
TOTAL LIABILITIES		8,047,813	19,867,253
NET CURRENT ASSETS / (LIABILTIES)		1,276,431	(12,763,614)
NET ASSETS		4,905,852	79,023
CAPITAL AND RESERVES
Issued capital (no par value, 6,513,671 and 3,377,386 ordinary shares issued and outstanding as of December 31, 2020 and 2019, respectively)	28	32,089,997	18,902,029
Foreign currency translation reserve	29(a)	883,878	735,213
Other reserves	29(b)	2,704,452	4,423,141
Accumulated losses		(34,102,300)	(25,786,912)
Equity attributable to equity shareholders of Integrated Media Technology Limited		1,576,027	(1,726,529)
Non-controlling interests		3,329,825	1,805,552
TOTAL EQUITY		4,905,852	79,023

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.

F-3

INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in Australian dollars)

	Attributable to owners of the Company
	Issued Capital	(Accumulated Losses) / Retained Earnings	Foreign Currency Translation Reserve	Other Reserves	Non-controlling Interests	Total
	A$	A$	A$	A$	A$	A$
Balance at January 1, 2018	10,410,279	5,285,565	(251,659)	-	(53,851)	15,390,334
Changes in equity for 2018:
Loss for the year	-	(15,962,278)	-	-	(880,945)	(16,843,223)
Other comprehensive income for the year, net of tax	-	-	842,402	-	173,052	1,015,454
Total comprehensive loss for the year	-	(15,962,278)	842,402	-	(707,893)	(15,827,769)
Disposal of subsidiaries	-	-	38,640	-	41,420	80,060
Issue of convertible bonds	-	-	-	535,948	-	535,948
Capital injection by non-controlling interests	-	-	-	-	3,528,287	3,528,287
Gain on deemed disposal of subsidiaries	-	-	-	4,423,141	-	4,423,141
Issuance of new ordinary shares (Note 28(b))	491,750	-	-	-	-	491,750
Issue of shares for conversion of debt (Note 28(b))	8,000,000	-	-	-	-	8,000,000
Balance at December 31, 2018 and as at January 1, 2019	18,902,029	(10,676,713)	629,383	4,959,089	2,807,963	16,621,751
Changes in equity for 2019:
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 29 (b))	-	535,948	-	(535,948)	-	-
Balance at December 31, 2019 and as at 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 28(b))	7,121,283	-	-	-	-	7,121,283
Issuance of new ordinary shares – conversion of debt (Note 28(b))	4,122,562	-	-	-	-	4,122,562
Issuance of new ordinary shares – services (Note 28(b))	23,249	-	-	-	-	23,249
Issuance of new ordinary shares – acquisition (Note 28(b))	2,060,000	-	-	-	-	2,060,000
Legal expenses in respect of issuance of shares (Note 28(b))	(139,126)	-	-	-	-	(139,126)
Balance at December 31, 2020	32,089,997	(34,102,300)	883,878	2,704,452	3,329,825	4,905,852

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

F-4

INTEGRATED MEDIA TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in Australian dollars)

		Years Ended December 31,
		2020	2019	2018
	Note	A$	A$	A$
Cash flows from operating activities
Loss before income tax		(10,543,658)	(16,582,877)	(17,350,280)
Adjustments to reconcile loss before income tax to net cash used in operating activities:
Depreciation and amortization		2,078,762	3,174,784	2,029,373
Write off of plant and equipment		-	-	171,371
Equity settled share based payment transaction		-	-	491,750
Impairment loss of trade receivables		58,932	11,052	124,528
Provision for inventories obsolescence		(17,671)	799,871	100,000
Loss / (gain) on disposal of subsidiaries		28,990	-	(608,995)
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	9,953,311
Net cash (outflows) / inflows from changes in working capital	33(b)	(2,186,276)	1,783,050	(1,596,164)
Net cash used in operating activities		(6,191,115)	(6,540,014)	(6,685,106)
Cash flows from investing activities
Capital injection from minority shareholders		1,920,153	-	-
Payments for acquisition of plant and equipment		(7,236,260)	(1,223,028)	(838,238)
Payments for intangible assets		-	(7,283)	(587,864)
Payments for development projects		(125,520)	(598,306)	(1,884,172)
Disposal of subsidiaries, net of cash disposed of		855,506	-	(9,494)
Net cash used in investing activities		(4,586,121)	(1,828,617)	(3,319,768)
Cash flows from financing activities
Advances from of amounts due to related companies		840,509	3,954,640	1,806,044
Advance from other liabilities		211,567	2,610,091	-
Advance from / (repayment) to holding company		-	501,343	(4,782,610)
Fair value change in derivative financial instruments		(2,312,197)	(127,551)	(709,543)
Interest income from ultimate holding company		-	(115,678)	-
Interest received from ultimate holding company		-	18,714	-
Interest accrued for lease liabilities		32,526	109,675	-
Finance costs for convertible bonds		1,693,890	1,316,702	930,276
Interest paid for convertible bonds		(185,469)	(209,392)	(394,060)
Proceeds from bank borrowings		-	930,334	809,280
Repayment of bank borrowings		-	(840,285)	(904,850)
Repayment for convertible bonds		(4,668,195)	-	-
Payment of lease liabilities		(320,851)	(573,010)	(10,180)
Proceeds from issuance of convertible promissory notes		4,913,100	-	-
Proceeds from issuance of convertible bonds by a subsidiary		-	-	3,769,470
Net Proceeds from issuance of ordinary shares		13,187,968	-	7,951,428
Net cash provided by financing activities	33(a)	13,392,848	7,575,583	8,638,582
Net  increase / (decrease) in cash and cash equivalents		2,615,612	(793,048)	(1,539,619)
Effect of exchange rate changes on cash and cash equivalents		(254,770)	619,705	89,252
Cash and cash equivalents at the beginning of financial year		(166,758)	6,585	2,070,072
Cash and cash equivalents at the end of financial year		2,194,084	(166,758)	619,705
Analysis of cash and cash equivalents:
Cash and bank balances		2,194,084	735,724	1,514,215
Bank overdraft		-	(902,482)	(894,510)
Cash and cash equivalents		2,194,084	(166,758)	619,705

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

F-5

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, 2020, 2019 and 2018 which were authorized for issue by the Board of Directors on Apr 30, 2021. 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 Company'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 Company 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, 2020, the Company had accumulated losses of A$34,102,300 and generated a net loss in 2020 of A$10,543,658 and used cash in operating activities in the amount of A$6,191,115. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company 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 Company will need, among other things, additional capital resources. Though year ended December 31, 2020, the Company was successful in raising a total of approximately US$13 million through debt and equity financing for the repayment of debts and working capital in the Company. Furthermore, the Company disposed of its research and development operation to reduce the overhead of the Group going forward and focus on the sale and marketing operations. The Company 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 Company 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 Company can earn revenue and realize positive cash flow from its operations.

There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern.

Based on the Company's current rate of cash outflows, cash on hand and proceeds from the recent sales of equity securities and convertible promissory notes, management believes that its current cash may not be sufficient to meet the anticipated cash needs for working capital for the next 12 months.

The Company'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 Company is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing. 

The ability of the Company 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.

F-6

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, 2020 (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, 2020 is disclosed in Note 26 to the consolidated financial statements. Other than, Cystar International Limited (Formerly know as Visumotion International Limited), Colour Investment Limited and GOXD International Limited, all other controlled entities have a December, 31 statutory financial year end.

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.

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.

F-7

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d) Current and deferred income tax (Continued)

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.

(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-8

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(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.

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.

F-9

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g) Leases (Continued)

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.

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 users benefit.

(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.

F-10

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Investments and Other Financial Assets

(i) Recognition

Financial instruments are initially measured at costs on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

(ii) Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designed by management and within the requirements of IFRS 39: Recognition and Measurement of Financial Instruments. Derivatives are also categorized as held for trading unless they are designated as hedges. Realized and unrealized gains and losses arising from changes in the fair value of these assets are recognized in profit or loss in the period in which they arise.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active market and are stated at amortized costs using the effective interest rate methods.

(iv) Financial liabilities

Non-derivative financial liabilities are recognized at amortized costs, comprising original debt less principal payments and amortization.

(v) Fair value

Fair value is determined based on current bid prices for all quoted investments.

(vi) Impairment

At each reporting date, the Group assesses whether there is any objective evidence that a financial instrument has been impaired. Impairment losses are recognized in profit or loss.

(j) 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.

(k) 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.

F-11

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(l) 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, 2020 and 2019, the comprehensive income was A$883,878 and A$735,213 respectively which was mainly resulted from the translation of the foreign operations in Hong Kong (HK$), 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.

(m) 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.

(n) 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.

(o) 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.

F-12

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(p) 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.

(q) 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.

(r) Convertible Bonds

Convertible bonds 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 bonds 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 bonds 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 bonds 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 bonds are redeemed, the capital reserve is released directly to retained profits.

(s) 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.

(t) 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.

(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.

(iii) Termination benefits

Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when it recognises restructuring costs involving the payment of termination benefits.

(u) 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.

F-13

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(v) 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.

(w) 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.

(x) Earnings Per Share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, 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.

(y) 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.

F-14

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(z) 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).

(aa) 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.

(ab) 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.

F-15

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(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, 2020:

Amendments to References to the Conceptual Framework in IFRS Standards

The Group has adopted the amendments included in Amendments to References to the Conceptual Framework in IFRS Standards for the first time in the current year. The amendments include consequential amendments to affected Standards so that they refer to the new Framework. Not all amendments, however, update those pronouncements with regard to references to and quotes from the Framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the Framework they are referencing to (the IASC Framework adopted by the IASB in 2001, the IASB Framework of 2010, or the new revised Framework of 2018) or to indicate that definitions in the Standard have not been updated with the new definitions developed in the revised Conceptual Framework.

The adoption of these amendments has not had a material impact on the Group.

Amendments to IFRS 3 Definition of a Business

The Group has adopted the amendments to IFRS 3 for the first time in the current year. The amendments clarify that while businesses usually have outputs, outputs are not required for an integrated set of activities and assets to qualify as a business. To be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.

The amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs. The amendments also introduce additional guidance that helps to determine whether a substantive process has been acquired.

The amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business. Under the optional concentration test, the acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets. The amendments are applied prospectively to all business combinations and asset acquisitions for which the acquisition date is on or after 1 January 2020.

The adoption of these amendments has not had a material impact on the Group.

Amendments to IAS 1 and IAS 8 Definition of Material

The Group has adopted the amendments to IAS 1 and IAS 8 for the first time in the current year. The amendments make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of 'obscuring' material information with immaterial information has been included as part of the new definition.

The threshold for materiality influencing users has been changed from 'could influence' to 'could reasonably be expected to influence'. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of 'material' or refer to the term ‘material' to ensure consistency.

The adoption of these amendments has not had a material impact on the Group.

(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.

IFRS 17	Insurance Contracts
IFRS 10 and IAS 28 (amendments)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to IAS 1	Classification of Liabilities as Current or Non-current
Amendments to IFRS 3	Reference to the Conceptual Framework
Amendments to IAS 16	Property, Plant and Equipment - Proceeds before Intended Use
Amendments to IAS 37 Onerous Contracts	Cost of Fulfilling a Contract
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

F-16

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(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) Goodwill and other intangible assets

The goodwill included in the consolidated financial statements was derived from the acquisition of Marvel Digital Limited. Determining whether goodwill is impaired requires as estimation of the value in use of the cash generating unit ("CGU") to which goodwill have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. At the end of the reporting year, the carrying amount of goodwill is A$Nil (2019: A$ Nil). Details of the recoverable amount calculations are disclosed in Note 15.

(ii) 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.

(iii) 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(k) for further detail.

(iv) 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.

(v) 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 3(e), 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.

(vi) 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.

F-17

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(vii) 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.

(viii) 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 modeling techniques.

(ix) Valuation of contingent consideration

The contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. The fair value of contingent consideration was based on an independent valuation which is determined by using the discounted cash flow method on the probability-weighted financial projection of MDL for the period from October 1, 2015 to September 30, 2017 and is under level 3 fair value adjustment which involve significant estimates and judgements from the management. There is no more contingent liabilities as at December 31, 2019 and 2020.

(ae) Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's consolidated financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

(i) IFRS 17 Insurance Contracts

IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts an supersedes IFRS 4 Insurance Contracts.

IFRS 17 outlines a general model, which is modified for insurance contracts with direct participation features, described as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach.

The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of policyholders' options and guarantees.

In June 2020, the IASB issued Amendments to IFRS 17 to address concerns and implementation challenges that were identified after IFRS 17 was published. The amendments defer the date of initial application of IFRS 17 (incorporating the amendments) to annual reporting periods beginning on or after 1 January 2023. At the same time, the IASB issued Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) that extends the fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 to annual reporting periods beginning on or after 1 January 2023.

IFRS 17 must be applied retrospectively unless impracticable, in which case the modified retrospective approach or the fair value approach is applied.

For the purpose of the transition requirements, the date of initial application is the start if the annual reporting period in which the entity first applies the Standard, and the transition date is the beginning of the period immediately preceding the date of initial application. This standard is not applicable to the Group.

F-18

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ii) Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, the amendments state that gains or losses resulting from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or a joint venture that is accounted for using the equity method, are recognised in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture. Similarly, gains and losses resulting from the remeasurement of investments retained in any former subsidiary (that has become an associate or a joint venture that is accounted for using the equity method) to fair value are recognised in the former parent's profit or loss only to the extent of the unrelated investors' interests in the new associate or joint venture.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

(iii) Amendments to IAS 1 – Classification of Liabilities as Current or Non-current

The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the statement of financial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items.

The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of ‘settlement' to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with early application permitted.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

(iv) Amendments to IFRS 3 – Reference to the Conceptual Framework

The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They also add to IFRS 3 a requirement that, for obligations within the scope of IAS 37, an acquirer applies IAS 37 to determine whether at the acquisition date a present obligation exists as a result of past events. For a levy that would be within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date.

Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

The amendments are effective for business combinations for which the date of acquisition is on or after the beginning of the first annual period beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

F-19

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

(v) Amendments to IAS 16 – Property, Plant and Equipment—Proceeds before Intended Use

The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from

selling items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Consequently, an entity recognises such sales proceeds and related costs in profit or loss. The entity measures the cost of those items in accordance with IAS 2 Inventories.

The amendments also clarify the meaning of ‘testing whether an asset is functioning properly'. IAS 16 now specifies this as assessing whether the technical and physical performance of the asset is such that it is capable of being used in the production or supply of goods or services, for rental to others, or for administrative purposes. If not presented separately in the statement of comprehensive income, the financial statements shall disclose the amounts of proceeds and cost included in profit or loss that relate to items produced that are not an output of the entity's ordinary activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds and cost.

The amendments are applied retrospectively, but only to items of property, plant and equipment that are

brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. The entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented.

The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

(vi) Amendments to IAS 37 – Onerous Contracts—Cost of Fulfilling a Contract

The amendments specify that the "cost of fulfilling" a contract comprises the "costs that relate directly to the contract". Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (examples would be direct labour or materials) and an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

The amendments apply to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not restated. Instead, the entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or other component of equity, as appropriate, at the date of initial application.

The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

(vii) Annual Improvements to IFRS Standards 2018–2020

The amendments are effective for annual reporting periods beginning on or after 1 January 2022 with earlier application permitted.

IFRS 1 First-time Adoption of International Financial Reporting Standards

This amendment simplifies the application of IFRS 1 for a subsidiary that becomes a first-time adopter of IFRS Standards later than its parent, i.e. if a subsidiary adopts IFRS Standards later than its parent and applies IFRS 1:D16(a), then a subsidiary may elect to measure cumulative translation differences for all foreign operations at amounts included in the consolidated financial statements of the parent, based on the parent's date of transition to IFRS Standards.

IFRS 9 Financial Instruments

This amendment clarifies that - for the purpose of performing the "10 per cent test" for derecognition of financial liabilities - in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf.

IFRS 16 Leases

The amendment removes the illustration of payments from the lessor relating to leasehold improvements. As currently drafted, this example is not clear as to why such payments are not a lease incentive.

IAS 41 Agriculture

This amendment removes the requirement to exclude cash flows for taxation when measuring fair value, thereby aligning the fair value measurement requirements in IAS 41 with those in IFRS 13 Fair Value Measurement.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise.

F-20

NOTE 4. REVENUE AND SEGMENT INFORMATION

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Development, sales and distribution of 3D autostereoscopic products and conversion equipment	1,427,157	1,273,921	1,262,066
Sales of software and technology solutions	-	1,504	13,731
Sales and distribution of audio products	-	-	48,609
Sales of air- filter products	317,472	-	-
Total Revenue	1,744,629	1,275,425	1,324,406

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 four operating segments for the year ended December 31, 2020 (2018: four and 2019: three), being (1) the development, sale and distribution of autostereoscopic 3D displays, conversion equipment, software and others, (2) Sales of air-filter products, (3) provision of consultancy services and (4) corporate.

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, 2020 A$	December 31, 2019 A$	December 31, 2018 A$
Hong Kong	1,366,200	1,195,150	326,943
China	60,956	80,275	997,463
Korea	315,034	-	-
Other	2,439	-	-
	1,744,629	1,275,425	1,324,406

Non-current assets by geographic location

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$	December 31, 2018 A$
Australia	-	-	4,468,293
Hong Kong	262,626	13,136,585	14,534,313
China	2,139,605	1,580,444	1,030,154
Korea	4,915,447	-	-
	7,317,678	14,717,029	20,032,760

Major customers

For the year ended December 31, 2020, the Group has four individual customers (2019 and 2018: 2 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, 2020		December 31, 2019		December 31, 2018
	Percentage of Revenue	Balance due A$	Percentage of Revenue	Balance due A$	Percentage of Revenue	Balance due A$
Customer A	16.23%	-	41%	-	-	-
Customer B	-	-	13%	116,488	-	-
Customer C	-	-	-	-	44%	576,590
Customer D	-	-	-	-	28%	346,163
Customer E	41.23%	628,621	-	-	-	-
Customer F	18.05%	314,892	-	-	-	-
Customer G	10.87%	179,338	-	-	-	-

F-21

NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

Segment information for the reporting period is as follows:

For the year ended December 31, 2020	Development, sale and distribution of 3D displays, conversion equipment, software and othersA$	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

F-22

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 othersA$	Sales and distribution of audio products*A$	Consultancy servicesA$	CorporateA$	TotalA$
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

F-23

NOTE 4. REVENUE AND SEGMENT INFORMATION (Continued)

For the year ended December 31, 2018	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
Revenue from operating activities	1,275,797	48,609	-	-	1,324,406
Interest income	21,343	1	-	65	21,409
Fair value change in derivative financial instruments	-	-	-	709,543	709,543
Other income	469,660	-	-	-	469,660
Gain / (loss) on disposal of subsidiaries	521,042	(39,399)	-	127,352	608,995
Segment revenue	2,287,842	9,211	-	836,960	3,134,013
Cost of sales	696,787	26,924	-	-	723,711
Employee benefit expenses	2,154,015	-	32,025	67,371	2,253,411
Depreciation and amortization expenses	2,002,195	586	26,592	-	2,029,373
Professional and consulting expenses	1,273,595	-	-	473,167	1,746,762
Travel and accommodation expenses	244,867	481	21,142	117,694	384,184
Other operating expenses	2,175,550	(446,085)	2,530	278,147	2,010,142
Provision for impairment loss of goodwill	-	-	-	9,953,311	9,953,311
Finance costs	986,531	-	-	396,868	1,383,399
Segment expenses	9,533,540	(418,094)	82,289	11,286,558	20,484,293
Segment operating (loss) / profit	(7,245,698)	427,305	(82,289)	(10,449,598)	(17,350,280)
Segment assets 2018	11,674,848	-	35,610	14,322,616	26,033,074
Segment liabilities 2018	2,797,393	-	(688,268)	7,302,198	9,411,323

In presenting the geographic information, segment revenue has been based on the geographic location of customers and segment assets were based on the geographic location of the assets.

F-24

NOTE 5. OTHER INCOME 

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Government grant	82,082	789,083	436,889
Sundry income	479	18,748	32,771
	82,561	807,831	469,660

NOTE 6. FINANCE COSTS

	Consolidated
	December 31, 2020 A$	December 31, 2019A$	December 31, 2018A$
Bank overdraft and borrowing interest	37,091	84,920	53,262
Interest on revolving loan	228,627	50,328	-
Interest on finance lease liability	32,526	109,675	2,993
Interest on convertible bonds (Note 23)	109,811	1,316,702	930,276
Interest charged by the ultimate holding company	-	-	396,868
Interest on convertible promissory notes (Note 25)	1,692,217	-	-
	2,100,272	1,561,625	1,383,399

NOTE 7. LOSS BEFORE INCOME TAX

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Employee benefit expenses:
- Wages and salaries	1,482,072	3,352,495	2,752,041
- Defined contribution superannuation plan expenses	83,441	255,708	150,114
- Less: Labor cost allocated to development projects	(133,702)	(289,126)	(716,115)
	1,431,811	3,319,077	2,186,040
- Executive directors' remuneration	722,157	683,944	-
- Non-executive directors' remuneration	58,675	31,357	67,371
	780,832	715,301	67,371
Total employee benefit expenses	2,212,643	4,034,378	2,253,411
Depreciation and amortization of non-current assets:
- Leasehold improvements	10,385	44,698	310,370
- Office furniture and equipment	179,140	504,447	115,123
- Motor vehicles	-	18,757	9,813
- Machinery	172,982	-	-
- Right of use assets	299,981	488,520	-
- Intangible assets	1,416,274	2,118,362	1,594,067
Total depreciation and amortization	2,078,762	3,174,784	2,029,373
Other Expenses:
Allowances for bad debts	58,932	11,052	124,528
Rental expense on operating lease	126,382	637,321	674,112
Provision for inventory obsolescence	(17,671)	799,871	100,000
Audit and review of financial statements:
-    statutory audit of the Group in Australia	25,000	55,157	62,794
-    statutory audit of the Group in USA	76,780	435,899	-
-    auditors of the subsidiaries in Hong Kong and China	-	14,246	9,175
-    audit for other reporting purposes	18,822	-	69,110
Total audit and review fees	120,602	505,302	141,079

F-25

NOTE 8. INCOME TAX (EXPENSE) / CREDIT

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Income tax over provision / (income tax expenses)	-	-	102,853
Deferred tax (expenses) / credit	-	(117,322)	404,204
Income tax (expenses) / credit	-	(117,322)	507,057

(a) The prima-facie tax on (loss) / profit before income tax is reconciled to the income tax credit /(expense) as follows:

	Consolidated
	December 31, 2020A$	December 31, 2019 A$	December 31, 2018A$
Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax	(10,543,548)	(16,582,877)	(17,350,280)
Income tax credit / (expenses) on loss before income tax at 30%	3,163,064	4,974,863	5,205,084
Difference in overseas tax rates	(148,299)	(3,260,006)	(830,805)
Add / (less) the tax effect of:
Reversal of over provision	-	-	102,853
Tax losses and temporary differences for the year for which no deferred tax is recognized	(3,014,765)	(1,832,179)	(3,970,075)
Income tax (expenses) / credit	-	(117,322)	507,057

(b) Deferred tax assets / (liabilities) arising from temporary differences and unused tax losses can be summarized as follows:

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Balance brought forward	(1,372,653)	(1,244,814)
Temporary differences derecognized	-	(117,322)
Release of disposal of subsidiaries	1,380,402	-
Exchange difference	(21,417)	(10,517)
Total	(13,668)	(1,372,653)

(c) There were no income tax payable in the consolidated statement of financial position in years 2019 and 2020.

F-26

NOTE 9. DIVIDENDS

No dividends were declared and paid during the financial year ended December 31, 2020 (2019: Nil).

NOTE 10. LOSS PER SHARE

	Consolidated
	December 31, 2020	December 31, 2019	December 31, 2018
Loss after income tax attributable to shareholders	A$ (10,034,077)	A$ (15,646,147)	A$ (15,962,278)
Number of ordinary shares	6,513,671	3,377,386	3,377,386
Weighted average number of ordinary shares on issue	4,311,360	3,377,386	2,692,543
Basic and diluted (loss) / earnings per share	A$ (2.33)	A$ (4.63)	A$ (5.93)

NOTE 11. INVENTORIES

Inventories consist of the following:

	Consolidated
	December 31, 2020 A$	December 31, 2019A$
Raw materials	296,472	843,686
Finished goods – displays and other products	529,080	789,984
Provision for inventories obsolescence	(638,151)	(884,497)
Total	187,401	749,173

NOTE 12. TRADE AND OTHER RECEIVABLES

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Trade receivables	1,233,709	892,488
Other receivables	1,689	2,390
	1,235,398	894,878
Less: Allowances for doubtful debts	(70,793)	(123,920)
	1,164,605	770,958

(a) Ageing Analysis

The ageing analysis of trade receivables is as follows:

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Current	-	-
Past due:
< 31 days	711,754	31,495
31 - 90 days	394,384	12,655
> 90 days	127,571	848,338
	1,233,709	892,488

(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$1,233,709 (2019: A$892,488) which are past due at the end of the reporting period for which the Group has made provision for impairment loss of A$70,793 (2019: A$123,920).

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 31(e) for further details of credit risk management.

F-27

NOTE 13. OTHER ASSETS

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$
Prepayments	50,382	311,710
Trade deposits	692,026	1,522,976
Other deposits	1,347,360	262,228
VAT receivable	129	194,359
	2,089,897	2,291,273

NOTE 14. PLANT AND EQUIPMENT

	Consolidated
	Leasehold ImprovementsA$	Fixtures and EquipmentA$	Motor Vehicles A$	MachineryA$	TotalA$
At January 1, 2019
Cost	731,794	2,290,643	68,170	-	3,090,607
Accumulated depreciation	(643,317)	(1,710,235)	(7,575)	-	(2,361,127)
Net book amount at January 1, 2019	88,477	580,408	60,595	-	729,480

Year ended December 31, 2019
Opening net book amount	88,477	580,408	60,595	-	729,480
Additions	38,866	1,184,162	-	-	1,223,028
Disposals	-	(636,587)	-	-	(636,587)
Transfer to right of use assets (Note 22(a))	-	-	(41,838)	-	(41,838)
Depreciation expenses	(44,698)	(504,447)	(18,757)	-	(567,902)
Exchange difference	1,304	21,632	-	-	22,936
Closing net book amount at December 31, 2019	83,949	645,168	-	-	729,117

At December 31, 2019
Cost	826,997	2,888,508	-	-	3,715,505
Accumulated depreciation	(743,048)	(2,243,340)	-	-	(2,986,388)
Net book amount at December 31, 2019	83,949	645,168	-	-	729,117

Year ended December 31, 2020
Opening net book 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 net book amount at December 31, 2020	-	262,626	-	7,055,052	7,317,678

At December 31, 2020
Cost	-	710,621	-	7,224,551	7,935,172
Accumulated depreciation	-	(447,995)	-	(169,499)	(617,494)
Net book amount at December 31, 2020	-	262,626	-	7,055,052	7,317,678

F-28

NOTE 15. INTANGIBLE ASSETS AND GOODWILL

	Consolidated
	GoodwillA$	Autostereoscopic 3D Display Technologies and KnowhowA$	Patents and TrademarkA$	Software and LicenseA$	TotalA$
Cost
At January 1, 2019	14,421,604	14,710,435	1,288,146	518,165	30,938,350
Additions	-	-	-	7,283	7,283
Exchange difference	157,103	169,887	(4,446)	6,023	328,567
At December 31, 2019	14,578,707	14,880,322	1,283,700	531,471	31,274,200
At 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)
At December 31, 2020	-	6,217,824	236,528	486,864	6,941,216
Accumulated Amortization and Impairment Losses
At January 1, 2019	(9,953,311)	(4,248,763)	(341,868)	(71,241)	(14,615,183)
Amortization	-	(1,863,639)	(130,221)	(124,502)	(2,118,362)
Provision for impairment	(4,486,301)	-	-	-	(4,486,301)
Exchange difference	(139,095)	(45,470)	81,598	(584)	(103,551)
At December 31, 2019	(14,578,707)	(6,157,872)	(390,491)	(196,327)	(21,323,397)
At 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)
At December 31, 2020	-	(6,217,824)	(236,528)	(486,864)	(6,941,216)
Carrying Amount
At December 31, 2019	-	8,722,450	893,209	335,144	9,950,803
At December 31, 2020	-	-	-	-	-

The technology and software applied to develop the autostereoscopic 3D display technologies was included with the acquisition of Marvel Digital Limited on September 30, 2015 and was revalued to fair value at that time by an independent valuer.

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.

There was no reclassification of development costs to intangible assets in 2020. In 2019, development projects were reclassified as intangible asset only when the Group can demonstrate the technical feasibility of completing the intangible asset itself 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.

During the year 2020, the Group restructured of certain subsidiaries which had intangible assets. The details of these disposals are listed out in note 27.

F-29

NOTE 16. DEVELOPMENT PROJECTS

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$
As at January 1:
Cost	3,611,336	2,980,113
Accumulated impairment losses	-	-
Net book amount	3,611,336	2,980,113
	A$	A$
Year ended December 31:
Opening net book amount	3,611,336	2,980,113
Additions	125,520	598,649
Disposal	(2,864,052)	(687)
Written off	(930,356)	-
Exchange difference	57,552	33,261
Closing net book amount	-	3,611,336
	A$	A$
As at December 31:
Cost	-	3,611,336
Accumulated impairment losses	-	-
Net book amount	-	3,611,336

Development projects represent the development costs directly attributable to and incurred for several internal technology projects of the Group which are in cooperation with the universities and professional technology institutions in Hong Kong for developing innovative technology to be applied in the existing and new 3D related products of the Group. Cost model is applied for development projects which require these assets to be carried at cost less any accumulated impairment losses. The Group had performed an impairment review for the development projects at the reporting period end and management considered that the development projects had suffered impairment loss and have been written off accordingly.

NOTE 17. TRADE AND OTHER LIABILITIES

	Consolidated
	December 31, 2020A$	December 31, 2019 A$
Trade payables (Note 32 (diii))	146,730	109,746
Accruals	385,888	328,071
Trade deposits received	630,523	900,740
Other borrowings (i)	211,567	1,761,308
Other payable	2,214,456	1,238,630
	3,589,164	4,338,495

(i) The loan is unsecured, carry interest at 8% per annual, and repayable on December 31, 2020.

NOTE 18. PROVISION FOR EMPLOYEE BENEFITS

	Consolidated
	December 31, 2020A$	December 31, 2019 A$
Provision for employee benefits	-	64,135

The provision for employee benefits represents the unpaid annual leave provision.

NOTE 19. AMOUNTS DUE TO RELATED COMPANIES

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Current portion	237,674	6,101,850
Non-current portion	-	-
	237,674	6,101,850

As at December 31, 2020, the amounts due to related companies are unsecured, non-interest bearing and repayable on demand.

In 2018, a Group company entered into a loan agreement to borrow A$1,664,924 (HK$9,200,000) from a former related company, Oakridge (Hong Kong) Corporation Limited ("Oakridge"), a company owned and controlled by Dr. Herbert Ying Chiu LEE, the then controlling shareholder of the Company. The loan was non-interest bearing, unsecured and repayable on March 31, 2020 after an extension from the previous repayment date of September 30, 2019. During the year 2019, Oakridge advanced to the Group an additional A$3,478,140 (HK$19,000,000). These advances were non-interest bearing, non-secured and repayable on March 31, 2020. As at December 31, 2019, the Group owed Oakridge A$5,162,292 (HK$28,200,000) in respect of these loans.

On March 31, 2020, the terms of the above said unsecured loans of A$5,162,292 (HK$28,200,000) was changed to interest bearing at an annual interest rate of 6.0% and the repayment date was extended to March 31, 2021. The loan was removed after disposal of subsidiaries. The datails of these disposals are listed out in note 27.

NOTE 20. AMOUNT DUE TO HOLDING COMPANY

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Current portion	532,718	582,832
Non-current portion	-	-
	532,718	582,832

In 2018, the Group entered into two loans with Marvel Finance Limited ("MFL") then ultimate holding company, where the Group lend approximately a total of A$2,117,349 (HK$11,700,000) to MFL. One loan of A$1,085,820 (HK$6,000,000) bears interest at 10% per annum and the second loan of A$1,031,529 (HK$5,700,000) bears interests at 5% per annum. Both loans are unsecured and repayable on September 30, 2019. During the year 2019, the Group earned interest income of A$115,678 (HK$637,301) from these two loans.

As at December 31, 2020, the amounts due to ultimate holding company is unsecured non-interest bearing and repayable on demand.

F-30

NOTE 21. BORROWINGS

	Consolidated
	December 31, 2020A$	December 31, 2019A$
Bank overdraft, unsecured	-	902,482
Bank borrowings, unsecured	-	915,300
	-	1,817,782

During the year 2020, the Group restructured of certain subsidiaries which had the bank overdraft and bank borrowings. The details of these disposals are listed out in note 27.

NOTE 22. 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 at January 1, 2019	1,106,486	-	1,106,486
Additions	1,267,476	-	1,267,476
Terminations	(825,454)	-	(825,454)
Transfer from plant and equipment	-	41,838	41,838
Depreciation expenses	(488,520)	-	(488,520)
Exchange difference	4,998	1,068	6,066
As at December 31, 2019 & 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 at December 31. 2020	-	-	-

(b) Lease liabilities

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$
Within one year	-	666,868
Two to five years	-	501,739
	-	1,168,607
Less: Amount due within one year shown under current liabilities	-	(666,868)
Amount due after one year	-	501,739
Analyzed into:	-	666,868
Current portion	-	501,739
Non-current portion	-	1,168,607

Obligations under finance leases carried an interest rate of 2.5% per annum.

F-31

NOTE 23. CONVERTIBLE BONDS

	Consolidated
	December 31, 2020A$	December 31, 2019 A$
Face value of convertible bonds issued on 3 January 2018	-	3,769,470
Equity component	-	(535,948)
Derivatives embedded in the convertible bonds issued (Note 24)	-	(772,112)
Liability component on initial recognition at January 3, 2018	-	2,461,410
Interest accrued but not yet paid for the year ended 2018	-	536,216
Interest accrued at effective interest rate during the year (Note 6)	-	1,316,702
Interest paid during the year	-	(209,392)
Exchange difference	-	315,963
Carrying value as at end of year	-	4,420,899

On January 3, 2018, the Group entered into the following agreements in connection with the issue of HK$23 million (equivalent to approximately A$3.8 million) Convertible Bonds ("Convertible Bonds"): (i) Subscription Agreement between Marvel Digital Limited, a wholly-owned subsidiary of the Company (the "Issuer" or "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. On the same date, pursuant to the Subscription Agreement, the Convertible Bonds were issued by MDL to the Bondholder as all the terms and conditions in respect of the subscription of the Convertible Bonds were complied with and fulfilled.

Pursuant to the terms of the Convertible Bonds, the Convertible Bonds are convertible in the circumstances set out therein 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 enlarged issued share capital of MDL as of the date of the above Subscription Agreement. The Bondholder will have the right to convert the whole of their Convertible Bonds into ordinary shares of MDL at any time during the period from January 3, 2018 to January 2, 2020. The period may be extended to a further 12 months subject to the mutual agreement among MDL, the Company and Bondholder. Unless previously redeemed or converted, the Convertible Bonds will be redeemed at 100% of their principal amount on the maturity date which is 2 years from the Convertible Bonds issue date.

In connection with the Convertible Bonds, the Company also entered into a Deed of Guarantee to guarantee the due and punctual performance and observance by the Issuer of its payment obligations of the bond principal and interest under the Convertible Bonds until all the guaranteed obligations have been fully satisfied, discharged or paid in full. A Put Option Deed was also entered into between the Company and the Bondholder whereby the Bondholder can exercise an option, during the Put Option Exercise Period as defined in Note 24, to have IMTE repurchase the MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds.

The estimated net proceeds from this bond issue, after deduction of commission and expenses, amount to approximately HK$21.5 million.

On January 3, 2020 the Company was not able to pay the Convertible Bonds on the maturity date. On or about January 17, 2020, the Company and the Bondholder agreed to a payment schedule of paying HK$13 million or approximately A$2.4 million on January 17, 2020, and the remaining HK$10 million or approximately A$1.9 million to be paid in 4 equal monthly installments of HK$2.5 million or approximately A$475,000. Furthermore, the interest charged on the outstanding Convertible Bonds amount from January 3, 2020 was at 15% per annum.

In 2020, the Group has fully repaid the installments and the accrued interests in full.

F-32

NOTE 24. DERIVATIVE FINANCIAL INSTRUMENTS

	Consolidated
	December 31, 2020 A$	December 31, 2019 A$
Derivative financial liabilities:
Put option liability embedded in the convertible bonds issued (Note 23)	-	126,095
Derivates related to convertible promissory note (Note 25)	3,790,737	-
Fair value change in derivative financial instruments during the year	(2,312,197)	(127,551)
Exchange difference	-	1,456
Carrying value as at end of year	1,478,540	-

In connection with the Convertible Bonds as disclosed in Note 23, a Put Option Deed was entered into between the Company and the Bondholder in 2018 whereby the Bondholder can exercise an option, during the Put Option Exercise Period (means the period of 7 days commencing from the day immediately after the date falling 2 years from the conversion date of the Convertible Bonds or such other date as agreed by the Company and the Bondholder in writing), to have the Company repurchase a former subsidiary MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds.

As at December 31, 2019, the management has determined that the option was not going to be executed and wrote off this derivative financial instruments to the statement of profit and loss.

In 2020, the Company entered into two convertible promissory notes as disclosed in Note 25. As at December 31, 2020, the derivatives related to these convertible promissory notes were revalued using the weighted average assumptions: volatility 102.3% and 91.80%, the weighted expected term of two years, a discount rate of 4.13% and a dividend yield of 0%.

The Group departed from IFRS 9 for certain disclosures of 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 25. CONVERTIBLE PROMISSORY NOTES

	Consolidated
	December 31, 2020A$	December 31, 2019 A$
Face value of convertible promissory note issued on January 20, 2020	2,621,360	-
Face value of convertible promissory note issued on August 6, 2020	2 291,740	-
Debt discount	(3,790,737)	-
Liability component on initial recognition	1,122,363	-
Interest accrued but not yet paid for the period (Note 6)	1,692,217	-
Interest paid during the period	(185,469)	-
Exchange differences	(433,062)	-
Carrying value as at end of period	2,196,049	-

On January 20, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement ("the First CN Agreement"), with an independent third party ("First Noteholder"). Pursuant to First CN Agreement, the First Noteholder purchased from the Company a 10% convertible promissory note (the "First 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 First CN Agreement. The First Noteholder has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$5.00, subject to adjustment, per share over the term of the First Note.

In October 2020, the Company settled the interest accrued of A$174,811 by issuing 46,741 shares to the First Noteholder.

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 USD 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 USD 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 liability based on the fact the conversion into shares could result in a variable number of shares to be issued.

F-33

NOTE 26. CONTROLLED ENTITIES

As at December 31, 2020, the entities controlled by the Company are as follows:

Name of Subsidiary	Country of Incorporation	Principal Activities	Paid Up Capital	PercentageOwned
				2020	2019
CIMC Marketing Pty Ltd	Australia	Management Services & Investment holding	A$1	100%	100%
Colour Investment Limited	Hong Kong	Investment holdings	HK$43,043,130	100%	-
Cystar International Limited	Hong Kong	Sales of software and provision of consultancy services	HK$1	100% (Indirect)	95% (Indirect)
Great Gold Investment  Limited	Hong Kong	Administrative services	HK$1	100%	-
GOXD International Limited	Hong Kong	Distribution of Digital Picture Frame	HK$56,803,913	80% (Indirect)	-
Smart (Shenzhen) Technology Limited	P.R.C.	Marketing and distribution	RMB 5,000,000	100% (Indirect)	-
Smartglass Limited	Hong Kong	Sales of distribution of switchable glass and consultancy services	HK$8	100%	100%
Sunup Holdings Limited	Hong Kong	Manufacturing of filter plates	US$1,290	51%	-
Sunup Korea Limited	Hong Kong	Sale of filter plates and air filter products	US$0.13	51% (Indirect)	-
Binario Limited	British Virgin Islands	Investment holding	A$1	100%	100%
Cystar International (Shenzhen) Limited	P.R.C.	Dormant	RMB 379,141	100% (Indirect)	-
Digital Media Technology Limited	Malaysia	Dormant	US$100	100% (Indirect)	100% (Indirect)
Greifenberg Capital Limited*	Hong Kong	Dormant	HK$1	60% (Direct)	-

*Acquired after year end

F-34

NOTE 27. BUSINESS COMBINATIONS

(a) Disposal of subsidiaries

During the year ended December 31, 2020, the Group sold 4 subsidiaries including: Marvel Digital Limited, Marvel Display Technology (Shenzhen) Limited, GOXD Technology Limited and GOXD Dongguan Limited. The detail of the net gain / (loss) on the disposals during the year are set out below:

	2020	2019	2018
	A$	A$	A$
Total disposal consideration	25,129	-	206,034
Carrying amount of net asset sold (note(i) below)	(230,294)	-	483,021
Gain on sales before income tax and reclassification of foreign currency translation reserve	255,423	-	689,055
Reclassification of foreign currency transaction reserve	(26,871)	-	(38,640)
Non-controlling interest	(257,542)	-	(41,420)
(Loss) / gain on disposal after income tax	(28,990)	-	608,995

(i) Net assets disposed of:

	2020	2019	2018
	A$	A$	A$
Plant and equipment	284,240	-	190,593
Development projects	2,864,052	-	120,715
Intangible assets	4,790,784	-	-
Right of use assets	865,996	-	-
Cash and bank balances	99,061	-	215,528
Inventories	400,806	-	550,906
Trade and others receivable	603,923	-	179,276
Other deposit and prepayment	1,664,343	-	-
Trade and other liabilities	(912,580)	-	(677,397)
Amount due to a related company	(6,689,290)	-	(5,067)
Bank overdraft	(929,438)	-	-
Bank loan	(966,747)	-	-
Lease liabilities	(925,042)	-	-
Income tax payables	-	-	(992,343)
Deferred tax liabilities	(1,380,402)	-	(65,232)
Obligation under finance lease	(33,329)	-	-
	(230,294)	-	(483,021)

(ii) Net cash flows from disposal of subsidiaries

	2020	2019	2018
	A$	A$	A$
Consideration received, satisfied in cash	25,129	-	206,034
Cash and cash equivalents of subsidiaries disposed of (included cash at bank and bank overdraft)	830,377	-	(215,528)
	855,506	-	(9,494)

(b) Acquisition of Subsidiaries

On August 6, 2020, Integrated Media Technology Limited acquired 51% of the ordinary shares of Sunup Holdings Limited for the total consideration transferred of AUD 1,945,770 (USD 1,500,000). This is a nano-coat plated filter business and operates in the sales of air-filter products segment of the consolidated entity. The acquired business contributed loss after tax of AUD 177,829 to the consolidated entity for the period from August 6, 2020 to December 31, 2020. The values identified in relation to the acquisition of Sunup Holdings Limited are final as at December 31, 2020.

Details of the acquisition are as follows:

	Fair value
	AUD
Machinery, plant and equipment	5,084,946
Other assets	1,673
Other payables	(1,271,713)
Net assets acquired	3,814,906
Goodwill arising form the acquisition has been recognized as follow:
Consideration	1,945,770
Non-controlling interest	1,869,304
Fair value of net asset acquired	(3,814,906)
Written off to other operating expenses	(168)
	-

F-35

NOTE 28. ISSUED CAPITAL

(a) Share Capital

	December 31, 2020		December 31, 2019		December 31, 2018
	Number of shares	A$	Number of shares	A$	Number of shares	A$
Ordinary Shares fully paid	6,513,671	32,089,997	3,377,386	18,902,029	3,377,386	18,902,029

(b) Movements in ordinary share capital

	Number of Shares	A$
January 1, 2018	2,643,611	10,410,279
Issue of shares during the year 2018	25,275	491,750
Issue of shares for conversion of debt	708,500	8,000,000
December 31, 2018	3,377,386	18,902,029
Issue of shares during the year 2019	-	-
December 31, 2019	3,377,386	18,902,029
Issuance of shares for cash	1,643,406	7,121,283
Issue of shares for conversion of debt	988,408	4,122,562
Issuance of shares for services	4,471	23,249
Issuance 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

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 2018, the details of shares movements are as below:-

On July 17, 2018, the Company issued 25,275 ordinary shares at a share price of US$14.45 per share for a total subscription amount of US$365,224 (or about A$491,750). These 25,275 ordinary shares were issued for consultancy services payment.

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

During the year 2020, the details of shares movements are as below:-

Issuance 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.

Issuance 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 totaling 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 totaling 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.

Issuance 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) for technical support services.

Issuance 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.

F-36

NOTE 28. ISSUED CAPITAL (Continued)

(b) Movements in ordinary share capital (Continued)

Subsequent to the year end to the date of this report, the details of shares movement are as below:-

As announced in the Form 6K on February 1, 2021, on January 28, 2021, the Company entered into a into a conditional sale and purchase agreement ("Koala Agreement") to acquire 70% equity interests in Shenzhen Koala Wisdom Fire Engineering Co., Ltd. ("Shenzhen Koala"). Pursuant to the agreement, the vendors will sign up contracts for deployment of IoT Detection System of not less than RMB200,000 within 60 days from the date of the Agreement. IMTE shall purchase 70% equity interests in Shenzhen Koala for US$40,000 ("Initial Consideration") by the issuance of a total of 10,000 shares in the Company. The Company shall also pay a deferred consideration of the profits less the Initial Consideration. The deferred consideration shall be paid by the issuance of shares in the Company (to a maximum number of shares not equal or exceeding 20% of the then issued shares of the Company) at a price equal to 85% of the prior 15 days volume weighted average price (VWAP) of the Company's share price immediately prior to the date of the parties agreeing to the Profits and such date shall not be later than March 31, 2022. Profits is defined as the profits before taxation of Shenzhen Koala for the period from the Completion Date to December 31, 2021 and excluding any relevant gross profits from uncollected sales receipts.

On February 2, 2021, the Company issued 17,744 ordinary shares at a share price of US$3.6125 per share for a total amount of US$64,100 (or about A$84,000) 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 amount of US$10,000 (or about A$13,000) for provision of accounting and administrative services.

As announced in the Form 6K 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 purposes and development of existing and new businesses.

As announced in the Form 6K on March 8, 2021, 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$2,942,900). The use of the proceeds is to build out manufacturing infrastructure and working capital.

As announced in the Form 6K on March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 ordinary shares of, no par value, of the Company ("Ordinary Shares") to an accredited investor ("Investor") at a price of US$6.50 per share (the "Cash Offering"). The Cash Offering is for US$4,602,000 (approximately A$6,046,000) and will generate 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.

(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 with CIMB Limited, an independent third party. Pursuant to this agreement the holder of the note can convert this note for 2 years from the date of issuance to maturity on January 20, 2022 at a price of US$5.00 per shares, subject to adjustment, over the term of the note. The Company, at its sole option, may pay interests in ordinary shares based on 75% of the average of the closing price of its ordinary shares for the five trading days prior to each end-of-quarter interest due date. 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.

On August 11, 2020, the Company entered into a convertible note purchase agreement with Nextglass Technologies Inc. Pursuant to this agreement the holder of the note can convert this note for 2 years from the date of issuance to maturity on December 2022 at a price of US$3.0 per shares, subject to adjustment, over the term of the note. This note carries no interest.

F-37

NOTE 28. ISSUED CAPITAL (Continued)

(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.

(e) Options

The Company has no share options outstanding at the date of our Annual Report.

In August 2020, an Employee Share Option Plan ("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 total number of the shares which may be offered by the Company under the 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 approved a plan that is pending shareholder approval to grant options to subscribe up to 261,000 ordinary shares for employees, directors and consultants under the ESOP. The ESOP will be a two-year plan with a vesting schedule that 50% of the shares vest six months after the vesting commencement date and the balance of the shares vest on the first anniversary of the vesting commencement date. 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.

Note 29. 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)	In 2020, the other reserve represented the following:
	(i)	On May 25, 2020, the movement in other reserves represents the release of the reserve to accumulated losses as a result of the disposal of the subsidiaries Marvel Digital Limited ("MDL") (Note 27).
	(ii)	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, of which included the valuation of filter equipment for a total of A$2,011,000 attributable to the Company.
	In 2019, the other reserve represented the following:

The movement in other reserves represents the release of the reserve to accumulated losses as a result of the redemption of the Convertible Bonds.

F-38

NOTE 30. COMMITMENTS

(a) Non-cancellable operating leases

The Group has entered into a one year commercial lease of total A$17,644 (2019:NIL) for rental accommodations.

(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 2020, there were royalty fee of HK$200,000 paid to Veritech (2019:Nil). There were no sublicense fee paid in both years.

(c) Capital commitments

As of December 31, 2020, the Group had internal capital commitments for the investments in two P.R.C. subsidiaries of RMB14,620,859 (approximately A$2,901,071) (2019: A$1,755,456).

(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. Mr. Con Unerkov and Mr. Cecil Ho, both the CEO and CFO, respectively of IMTE, are directors and shareholders of Teko.

F-39

NOTE 31. 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 Dr. Chang Yuen CHAN, 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$9,130 lower (2019: A$17,889 lower) / A$9,130 higher (2019: A$17,889 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 bearingA$	TotalA$
2020
Financial Assets
Cash and bank balances	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

F-40

NOTE 31. FINANCIAL RISK MANAGEMENT (Continued)

	Weighted average effective interest rate	Floating interest rate A$	Non-interest bearingA$	TotalA$
2019
Financial Assets
Cash and bank balances	0.47%	40,860	694,864	735,724
Trade and other receivables		-	770,958	770,958
Other assets		-	2,291,273	2,291,273
Total Financial Assets		40,860	3,757,096	3,848,419
Financial Liabilities
Trade and other payables	8%	1,761,308	1,676,447	3,437,755
Trade deposits received		-	900,740	900,740
Amounts due to related companies		-	6,101,850	6,101,850
Amount due to ultimate holding company		-	582,832	582,832
Bank overdraft	4.62%	902,482	-	902,482
Bank borrowings	4.62%	915,300	-	915,300
Lease liability	2.5%	39,492	1,129,115	1,168,607
Convertible bonds	34.67%	4,420,899	-	4,420,899
Provisions			64,135	64,135
Total Financial Liabilities		8,039,481	10,455,119	18,494,600

(c) Foreign currency risk

The Group has net assets denominated in certain foreign currencies as at December 31, 2020. 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$0.16732, US$1.29718 and RMB1.18582:

	Short term exposure			Long term exposure
	HK$	US$	RMB	HK$	US$	RMB
December 31, 2020
Financial assets
- Cash and bank balances	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)	-

F-41

NOTE 31. FINANCIAL RISK MANAGEMENT (Continued)

	Short term exposure			Long term exposure
	HK$	US$	RMB	HK$	US$	RMB
December 31, 2019
Financial assets
- Cash and bank balances	583,524	29,989	116,085	-	-	-
- Trade and other receivables	197,906	-	570,662	-	-	-
- Other assets	1,726,881	-	564,392	-	-	-
Financial liabilities
- Trade and other liabilities	(2,992,663)	(202,448)	(455,854)	-	-	-
- Provisions	(64,135)	-	-	-	-	-
- Amounts due to related companies	(6,101,850)	-	-	-	-	-
- Amount due to ultimate holding company	(582,832)	-	-	-	-	-
- Bank overdraft	(902,482)	-	-	-	-	-
- Borrowings	(915,300)	-	-	-	-	-
- Convertible bonds	(4,420,899)	-	-	-	-	-
- Derivates on financial statements	-	-	-	-	-	-
- Lease liabilities	(666,867)	-	-	(501,740)	-	-
Total exposure	(14,138,717)	(172,459)	795,285	(501,740)	-	-

The following table illustrates the sensitivity of profit / (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, 2020 (2019: 5%). A +/- 5% change is considered for the AUD/US$ exchange rate (2019: 5%). A +/- 10% change is considered for the AUD/RMB exchange rate (2019: 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% (2019: 5%), the US$ by 5% (2019: 5%) and the RMB by 10% (2019: 10%) respectively then this would have had the following impact:

	Profit / (Loss) for the year				Equity
	HK$	US$	RMB	Total	HK$	US$	RMB	Total
December 31, 2020	69,008	37,512	(19)	106,501	69,008	37,512	(19)	106,501
December 31, 2019	643,219	8,623	(79,529)	572,313	643,219	8,623	(79,529)	572,313

If the AUD had weakened against the HK$ by 5% (2019: 5%), the US$ by 5% (2019: 5%) and the RMB by 10% (2019: 10%) respectively then this would have had the following impact:

	Profit / (Loss) for the year				Equity
	HK$	US$	RMB	Total	HK$	US$	RMB	Total
December 31, 2020	(69,008)	(37,512)	19	(106,501)	(69,008)	(37,512)	19	(106,512)
December 31, 2019	(643,219)	(8,623)	79,529	(572,313)	(643,219)	(8,623)	79,529	(572,313)

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.

F-42

NOTE 31. 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.

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

2019		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	3,437,755	3,437,755	3,437,755	-	-	-
Trade deposit received	900,740	900,740	900,740	-	-	-
Provision for employee benefits	64,135	64,135	64,135	-	-	-
Amounts due to related companies	6,101,850	6,101,850	-	-	-	6,101,850
Amount due to ultimate holding company	582,832	582,832	582,832	-	-	-
Bank overdraft	902,482	902,482	902,482	-	-	-
Bank borrowings	915,300	929,625	-	-	929,625	-
Lease liability	1,168,606	1,399,149	1,501	3,004	99,339	1,295,305
Convertible bonds	4,420,899	4,420,899	4,420,899	-	-	-
	18,494,599	18,739,467	10,310,344	3,004	1,028,964	7,397,155

F-43

NOTE 31. 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, 2020	1,478,540
December 31, 2019	-

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.

F-44

NOTE 31. 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, 2020	-
Issuance of derivatives at fair value	3,790,737
Gain included in profit or loss on change in fair value	(2,312,197)
Foreign currency translation	-
At December 31, 2020	1,478,540

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 28 and 29 respectively.

NOTE 32. RELATED PARTIES

(a) Parent and ultimate controlling party

On December 12, 2018, the shareholders of the Company approved the settlement of A$8,000,000 debt owed to Marvel Finance Limited ("MFL") by the issuance of 708,500 shares in the Company. As at December 31, 2018 2019 and 2020, MFL owned 2,201,412 shares, representing approximately 65.18%, 65.18% and 33.80%, respectively in the Company. MFL was the ultimate controlling party of the Group as at December 31, 2018 and 2019. However as at December 31, 2020 and the date of this report, MFL's shareholding in the Company decreased to 33.80% and 26.08% respectively and it is therefore not considered the ultimate controlling party of the Group.

(b) Transactions with directors

During the years ended December 31, 2020, 2019 and 2018, the remuneration of directors of the Company is as follows:

	Company
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Short term benefits (1)	780,832	715,301	67,371
Post-employment benefits	-	-	-
Total	780,832	715,301	67,371

⁽¹⁾ The director remuneration relating to Mr. Con Unerkov, our CEO, is provided by a related company over which Mr. Cecil Ho, our Company Secretary and Chief Financial Officer has control.

F-45

NOTE 32. RELATED PARTIES (Continued)

(c) Other related party transactions

During the years ended December 31, 2020, 2019 and 2018, the Group has the following material transactions with its related parties:

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Revenue received from related parties (1)	8,490	-	41,291
General consultancy and management fee paid to a related party (1)	282,971	571,519	595,645
Purchase of products from related parties (1)	29,794	22,588	-
Interest charged by the ultimate holding company (1)	-	-	396,868
Interest income earned from the former ultimate holding company (1)	-	115,678	-
Purchase of plant and equipment from related parties (1)	-	-	512,561
Company Secretarial, taxation service and interim CFO fee paid to a related company (2)	-	40,000	117,663
Company Secretarial, taxation service and CFO fee paid to a related company (3)	607,659	523,196	-
Purchase of products from a related party (4)	274,417	501,062	-
Sales to a related party (5)	315,034

⁽¹⁾ Entities controlled over by former director, Dr. Herbert Ying Chiu LEE. The consultancy and management services transactions are carried at the current market value in the ordinary course of business.

⁽²⁾ Mr. George Yatzis, former Company Secretary, is a director of the related party.

⁽³⁾ An entity controlled by Mr. Cecil Ho, Company Secretary and CFO for providing professional services .

⁽⁴⁾ An entity controlled by Mr. Zhang Wuhua, our director of the Company. The transactions are carried at the current market value in the ordinary course of business.

⁽⁵⁾ The related party is one of the subsidiaries of our shareholder.

During the year, there were no interest income charged to MFL by the Group. For the year ended December 31, 2019, the Group charged MFL interest income for a total of A$115,678 charged in relation to 2 loans:

(i) a loan of A$1,043,442 (HKD5,700,000) to Cystar International Limited (formerly known as Visumotion International Limited). This loan bears interest at 5% per annum, unsecured and payable on September 30, 2019. For the year ended December 31, 2019 the Company accrued interest income of A$76,533. This loan was repaid on September 30, 2019; and

(ii) in 2018, a former Group company GOXD Technology Limited entered into a loan agreement to lend A$1,085,820 (HK$6,000,000) to Marvel Finance Limited, a company owned by the then controlling shareholder of the Company. The loan bears interest at 10% per annum, unsecured and payable on 30 September 2019. The Company accrued interest income of A$39,145 during the year ended December 31, 2019. This loan was repaid in September 30, 2019.

During the year 2020, the Company used a 3,000 sq. feet administrative and accounting office in Hong Kong which was the Group was charged US$60,000 for the second half of the year (2019: Nil). This office belongs to the family of Dr. Herbert Ying Chiu Lee. There is no written lease agreement, but a general understanding that there will be a 3 months notice period to vacate this office. The Company moved to another office in January 2021.

(d) Amounts due from / to related companies

Other than the related party balances disclosed in Note 19 and 20, the other related party balances as of December 31, 2020 and 2019 are disclosed:

(i) included in trade and other receivables in Note 12, there were amounts of A$14,245 (2019: A$15,585) 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 A$603,600 (2019: A$650,183) in respect to trade in nature and was deposits paid to a related company in which our director, Mr. Michael Wuhua ZHANG has control.
(iii)	included in trade and other liabilities in Note 17, there was amount of A$5,329 (2019: A$91,463) 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; and

F-46

NOTE 33. 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	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 at 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 at 31 December 2020	237,674	211,567	-	532,718	2,196,049	-	-	1,478,540	13,187,968	17,844,516

	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 at 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	3,954,640	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 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 at 31 December 2019	6,101,850	1,761,309	915,300	582,832	-	4,420,899	1,168,607	-	14,950,797

	Amounts due to related companies	Bank borrowings, net	Amount due to holding company	Lease liabilities	Convertible bonds by a subsidiary	Derivative embedded in the convertible bonds issued	Issue of shares of subsidiaries	Total
	A$	A$	A$	A$	A$	A$	A$	A$
Beginning balance as at 1 January 2018	33,353	819,450	15,268,241	67,472	-	-	-	16,188,516
Cash flows from financing activities	1,806,044	(95,570)	(4,782,610)	(10,180)	3,769,470	-	7,951,428	8,638,582
Non-cash movement:
Issue share for debt	-	-	(8,000,000)	-	-	-	-	(8,000,000)
Debt assignment	-	-	(3,562,962)	-	-	-	-	(3,562,962)
Other reserves	-	-	-	-	(535,948)	-	(3,915,161)	(4,451,109)
Non-controlling interest	-	-	-	-	-	-	(4,036,267)	(4,036,267)
Unpaid interest	-	-	-	-	536,216	-	-	536,216
Put option liabilities in convertible bonds issued	-	-	-	-	(772,112)	772,112	-	-
Fair value change	-	-	-	-	-	(709,543)	-	(709,543)
Other changes	175,975	-	-	-	-		-	175,975
Foreign exchange movement	114,996	90,485	1,250,104	-	283,118	63,526	-	1,802,229
Ending balance as at 31 December 2018	2,130,368	814,365	172,773	57,292	3,280,744	126,095	-	6,581,637

F-47

NOTE 33. CASH FLOW INFORMATION (Continued)

(b) Net cash inflows / (outflows) from changes in working capital

	Consolidated
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Cash flows from changes in working capital
(Increase) / Decrease in assets:
Trade and other receivables	(1,016,464)	(137,579)	(1,526,651)
Inventories	142,608	405,891	(151,883)
Other assets	(1,659,728)	(361,676)	(400,034)
Increase / (Decrease) in liabilities:	-
Trade and other liabilities	347,308	1,876,414	488,490
Provisions	-	-	29
Obligations under finance lease	-	-	(6,115)
Net cash (outflows)/ inflows from changes in working capital	(2,186,276)	1,783,050	(1,596,164)

NOTE 34. KEY MANAGEMENT PERSONNEL DISCLOSURES (UNAUDITED)

(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, 2020A$	December 31, 2019A$	December 31, 2018A$
Short-term employee benefits	1,586,604	1,645,794	673,284
Post-employment benefits	5,124	7,703	10,794
Total	1,591,728	1,653,497	684,078

During the year 2020, included in short term benefits for directors and officers included payments of A$1,329,814 (US$920,004) to a service company owned by the CFO for the provision of Chief Executive Officer and Chief Financial Officer services during the period. In addition, the Company paid A$40,000 to BDO Administration (SA) Pty Ltd where Company's former interim CFO and Company Secretary is a director.

(b) Loans to Key Management Personnel and their related parties

Save as disclosed in Note 32(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 12, 17, 20 and 32.

(c) Share Options – number of share options held by management

There were no share options held outstanding held by the management.

F-48

NOTE 35. PARENT ENTITY INFORMATION (UNAUDITED)

Set out below is the supplementary information about the parent entity.

Statement of Comprehensive Income

	Company
	December 31, 2020A$	December 31, 2019A$	December 31, 2018A$
Loss after income tax	2,097,600	1,635,241	3,926,487
Other comprehensive income	-	-	-
Total comprehensive loss	2,097,600	1,635,241	3,926,487

Statement of Financial Position

	Company
	December 31,  2020	December 31,  2019
	A$	A$
Total non-current assets	2,382	3
Total current assets	28,456,242	12,521,701
Total assets	28,458,624	12,521,704
Total current liabilities	5,931,676	1,085,124
Total liabilities	5,931,676	1,085,124
Total assets less liabilities	22,526,948	11,436,580
Equity
Issued capital	32,089,997	18,902,029
Accumulated losses	(9,563,049)	(7,465,449)
Total equity	22,526,948	11,436,580

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, 2020 and December 31, 2019.

Capital commitments – plant and equipment

The parent entity has no capital commitments for plant and equipment as at December 31, 2020 and December 31, 2019.

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.

NOTE 36. PRIOR YEAR RECLASSIFICATIONS

Certain comparative figures have been reclassified to conform with the current year's presentation of the consolidated financial statements.

F-49

NOTE 37. EVENTS OCCURRING AFTER THE REPORTING DATE

Save as disclosed below, there is no other matter or circumstance arisen since December 31, 2020, 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.

(i) On January 15, 2021, the Company entered into two convertible debt agreements with a director and an officer of the Company to issue up to 401,939 shares in the Company at a price of US$3.61 for a total debt of US$1,451,000 (approximately A$1,878,800) subject to shareholders approval. 

(ii) As announced in the Form 6K on February 1, 2021, on January 28, 2021, the Company entered into a into a conditional sale and purchase agreement ("Koala Agreement") to acquire 70% equity interests in Shenzhen Koala Wisdom Fire Engineering Co., Ltd. ("Shenzhen Koala"). Pursuant to the agreement, the vendors will sign up contracts for deployment of IoT Detection System of not less than RMB200,000 within 60 days from the date of the Agreement. IMTE shall purchase 70% equity interests in Shenzhen Koala for US$40,000 ("Initial Consideration") by the issuance of a total of 10,000 shares in the Company. The Company shall also pay a deferred consideration of the profits less the Initial Consideration. The deferred consideration shall be paid by the issuance of shares in the Company (to a maximum number of shares not equal or exceeding 20% of the then issued shares of the Company) at a price equal to 85% of the prior 15 days volume weighted average price (VWAP)  of the Company's share price immediately prior to the date of the parties agreeing to the Profits and such date shall not be later than March 31, 2022. Profits is defined as the profits before taxation of Shenzhen Koala for the period from the Completion Date to December 31, 2021 and excluding any relevant gross profits from uncollected sales receipts.

(iii) As announced in the Form 6K on February 10, 2021, on February 5, 2021, the Company's wholly owned subsidiary company CIMC Marketing Pty Ltd. ("CIMC") into an Underwriting Agreement ("Agreement") with Xped Limited ("Xped"), a company listed on the Australian Securities Exchange. Pursuant to the Agreement, CIMC will underwrite for 500 million shares for any shortfall of acceptance from other shareholders ("Shortfall Shares") in Xped's rights issue announced on January 25, 2021 at the subscription price of A$0.001 per share. The total commitment by CIMC is A$500,000 or equivalent to approximately US$381,000. CIMC shall receive A$25,000 (approximately A$19,050) as an underwriter fee.  As announced in the Form 6K on March 1, 2021, the Company took up the shortfall of acceptance of 500 million shares at a price of A$0.001 per share, representing approximately 15% of the total outstanding shares in Xped.

(iv) As announced in the Form 6K 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 purposes and development of existing and new businesses.

(v) As announced in the Form 6K on March 8, 2021, 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$2,942,900). The use of the proceeds is to build out of manufacturing infrastructure and working capital.

(vi) As announced in the Form 6K on March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 ordinary shares of, no par value, of the Company ("Ordinary Shares") to an accredited investor ("Investor") at a price of US$6.50 per share (the "Cash Offering"). The Cash Offering is for US$4,602,000 and will generate net cash proceeds of approximately US$4,577,000 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.

F-50

NOTE 38. COMPANY DETAILS

The registered office and principal place of business is:

Level 7, 420 King William Street

Adelaide SA 5000

F-51

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(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
4.3(3)	Subscription agreement between IMTE and Marvel Finance Limited dated October 13, 2018
4.4(3)	Distribution agreement between IMTE and Teko International Limited dated April 29, 2019
4.5(4)	Convertible Note Purchase Agreement with CIMB Limited dated January 20, 2020 and Supplemental Agreements dated February 11, 2020
4.6(5)	Securities Purchase Agreement for the sale of Shares and Warrants to Ionic Ventures, LLC dated February 20, 2020
4.7(6)	Directors agreement between IMTE and Con Unerkov dated January 7, 2019
4.8(6)	Directors agreement between IMTE and Uwe von Parpart dated November 15, 2019
4.9(6)	Directors agreement between IMTE and Dr Heming Cui dated June 12, 2020
4.10(6)	Service agreement for Cecil Ho, between IMTE and Asset Union Limited dated March 19, 2019
4.11(6)	Agreement for Sale of 95% Issued Shares of Marvel Digital Limited dated May 11, 2020
4.12(7)	Debt Conversion Agreement between IMTE and CIMB Limited dated July 25, 2020
4.13(7)	Convertible Note Purchase Agreement between IMTE and CIMB Limited dated July 25, 2020
4.14(8)	Placement Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020
4.15(8)	Convertible Note Purchase Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020
4.16(8)	Sale and Purchase Agreement between IMTE and Nextglass Technologies Corp dated August 6, 2020 for 25.5% interests in Sunup Holdings Limited
4.17(8)	Sale and Purchase Agreement between IMTE and Teko International Limited dated August 6, 2020 for 25.5% interests in Sunup Holdings Limited
4.18(9)	Securities Purchase Agreement between IMTE and Mercer Street Global Opportunity Fund, LLC dated November 27, 2020
4.19(10)	IMTE's Employee Share Option Plan ("ESOP")
4.20(10)	Placement Agreement between IMTE and IPO Solutions Limited dated December 21, 2020
4.21(10)	Supplement Letter Agreement to the Convertible Note Purchase Agreement between IMTE and Nextglass Technologies Corp dated December 21, 2020
4.22(10)	Equipment Purchase and Sale Agreement between IMTE, RE&I International Limited and Zhenjiang Nextek Glass Film Limited dated December 21, 2020
4.23(10)	Subscription Agreement between IMTE, Joinstar International Limited and Greifenberg Capital Limited dated December 21, 2020
4.24(10)	Assignment and Assumption of Contracts and Contract Rights between Sunup Holdings Limited and SWIS Co., Ltd dated December 21, 2020
4.25(11)	Securities Purchase Agreement between IMTE and Mercer Street Global Opportunity Fund, LLC dated February 22, 2021
4.26(12)	Securities Purchase Agreement between IMTE and accredited investor dated on March 23, 2021
4.27*	Director's agreement between IMTE and Mr. Luis Puyat dated January 15, 2021
4.28*	Director's agreement between IMTE and Ms. Jannu Binti Babjan dated April 28, 2021
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 2020, 2019 and 2018 Financial Statements

(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.
*	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/ Con Unerkov

By: Con Unerkov

Title: Executive Chairman and Chief Executive Officer

Date: April 30, 2021

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