Aeris Environmental : Half-Year Report & Appendix 4D

Aeris Environmental Ltd

ACN 093 977 336

onlyInterim Report

Half Year Ended 31 December 2021

For usepersonal

WORKING DRAFT MKT-047-03

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Appendix 4D

Half Year Report

Rule 4.2A.3

Appendix 4D

Half Year Report

for the six months ended on 31 December 2021

Name of entity

AERIS ENVIRONMENTAL LTD ABN: 19 093 977 336

Half year report for the six months ended on 31 December 2021 (comparatives for the six months ended on 31 December 2020).

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Results for announcement to the market

Revenue from ordinary activities

(Loss) from ordinary activities after tax attributable to members

Net (loss) for the period attributable to members

Down	66.3%	to	1,755,653
Up	93.2%	to	(3,405,433)
Up	93.2%	to	(3,405,433)

For personal

Dividends (distributions)	Amount per	Franked amount per
security	security
Final and interim dividends	Nil	¢	Nil	¢
Previous corresponding period	Nil	¢	Nil	¢

Brief Explanation of Figures

Refer to attached 31 December 2021 Half Year Financial Report.

The Group applies international accounting standards in compiling the financial reports of its subsidiary foreign entities.

Net tangible assets (NTA) per security with the comparative figure for the previous corresponding period:

Net Tangible Assets
	31 Dec 2021	31 Dec 2020
Net tangible assets per ordinary share	4.18 cents	7.20 cents

Audit Qualification or Review

The financial statements were subject to review by the Auditors and the review report is attached as part of half year report.

Other Comments

Refer to the attached 31 December 2021 Half Year Financial Report.

Robert J Waring

Company Secretary

28 February 2022

This Report was authorised by the Board of Directors.

31/12/2021

Appendix 4D Page 1

For personal use only

28 February 2022

AERIS HALF-YEAR REPORT

Aeris Environmental Ltd (Aeris or the Company) reports its financial results for the half year ended 31 December 2021.

Finance

Revenue for the Company from activities for the first half of the 2021-22 financial year to 31 December 2021 was $1,755,000 (2020 - $5,206,000). Sales during the half year were materially-impacted by the rolling COVID-19 shutdowns in Australia, south-east Asia and the northern hemisphere, and Aeris' customers continue to face a number of significant issues in terms of supply chains, their customer demands and pricing pressures.

The Company's gross profit margin for the first half of the financial year was 50%, which compares to 40% in the previous half year. The cash receipts from customers were $2,349,000 for the half year (2020 - $8,119,000). Aeris was cash flow negative for the half year, generating a net negative operating cash flow of $2,737,000 (2020 - positive $756,000).

Operations

During the half year the Company commenced a broad review to evaluate a spectrum of initiatives for Aeris' business, with a comprehensive strategic review of its commercial, marketing and technical activities.

The Company remains focused on growing revenue from the commercialisation of its core proprietary product platforms. Aeris' sales, marketing and channel management team, together with consultants engaged as required, are working to achieve improved customer satisfaction and sales growth, and to build long-term partnerships.

Recognising the significant unpredictability of markets, the Company is directing its efforts towards established customers and distributors, as well expanding into international markets and establishing broad activities in China. Aeris is well capitalised and net debt free, with a strong portfolio of differentiated products.

Environmental Hygiene

During the half year, the Company's 'Return to Work' initiative concentrated on the built environment, including office spaces, schools, public transport and aged care facilities. These initiatives were supported by expanded sales and marketing activity, and Aeris concentrated its efforts on both environmental hygiene, and heating, ventilation and air-conditioning (HVAC) microbial safety and energy efficiency. These programmes incorporate the Company's new Aeris Defence product line, which is now being trialled or in use at high-profile sites, as well as Aeris Active, which continues to be the preferred product for high-volume,high-risk applications.

Cleaning schedules, hygiene policies and good practices can play significant roles in protecting against COVID-19, and target the three key transmission routes - surface, hand and air - which Aeris' integrated and compatible portfolio of products addresses in both an environmentally-friendly and workflow-effective manner. The Company is further investing in education, technical and marketing support for its network of dealers and customers, both domestically and internationally, who are dealing with multi-faceted issues arising from the COVID-19 pandemic.

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China

Aeris' Wholly Foreign-Owned Enterprise (WFOE) in China, Shanghai Aeris Environmental Technology Co., Ltd, has now been registered and is operational, and, with the establishment of the WFOE, has a path to Government tenders.

The Company's focus is on re-establishing revenue generation in China through the sale of its products with a range of partnerships and distributors, with growing customer interest. The initial focus is on Aeris Active, Aeris Defence, anti-microbial paper and the HVAC hygiene platform. The required regulatory testing for these products in China is underway.

Aeris is evaluating material opportunities for the incorporation of its novel anti-microbial polymers in a range of applications in collaboration with leading Chinese manufacturers. Potential advantages for the Company are improved supply chains, lower raw material costs, specialised value-added manufacturing and, of equal importance, a large market for Aeris' broad range of novel technologies.

It is anticipated that, with the recommencement of international travel, the Company will be better positioned to support its dealers and leverage its forthcoming opportunities. China remains an important part of Aeris' international dealings, with the advancement of environmental hygiene as a priority product category in the private and public sectors.

North America

The Company remains focused on rebuilding its North American business after the COVID-19 interruptions, along with adapting to the changing market position and Aeris' priorities. The Company is managing its costs in the USA in recognition of these disruptions. Aeris continues to pursue Environment Protection Authority regulatory filings. The US regulatory environment has been complex and rapidly changing, requiring both Federal and State approvals. The Company believes its latest hard surface formulations can now address these challenging standards.

Emerging opportunities for corrosion protection with multiple original equipment manufacturers (OEM) are under discussion. Aeris directly supports specialist platinum partner applicators in multiple locations within the USA. The Company is focusing on identifying distribution partners to make its already-approved Bioactive Filter and Surface treatments available in the North American market.

Mould Remediation

Aeris' mould remediation portfolio represents a strong opportunity with a range of novel and differentiated products that are highly effective, and provide long-term protection against surfaces becoming re-contaminated with mould. The Company is prioritising the advancement of its mould remediation range, with a focus on ready-to-use products, beyond its core market of water damage and disaster recovery. Aeris' mould technical support programme will be made available to distributors in the Company's international markets, initially in countries where there are relatively modest regulatory requirements for the application of mould remediation.

Corrosion Protection

Aeris' corrosion protection portfolio has been the subject of a number of important technical developments and the business is progressively re-opening as economic activity expands, particularly in the southern hemisphere. When the Company's team is able to travel again more freely, it will be able to conduct plant trials. Aeris is targeting the full spectrum of users from private individuals and tradesmen to OEM.

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The upcoming launch of the AerisGuard corrosion protection product in aerosol form will address a large market opportunity for sales through trade stores and wholesale groups. The launch is currently being held up by the unavailability in Australia of a required component.

Annual General Meeting (AGM)

A comprehensive review of the Company's operations was provided to Aeris' shareholders at its AGM held on 27 January 2022. The Chairman's and Chief Executive Officer's presentations were released to the market, and are available via the Investor section of the Company's website and on the ASX website.

Summary

Aeris will remain focused on revenue growth and a number of evolving opportunities in the coming quarters. The Company enjoys a solid balance sheet, is net debt free and is now investing in its key international markets, in particular the re-launch in China. Aeris is concentrating its efforts on forming long-term partnerships with companies that have substantial and recurrent demand for the product categories in the Company's existing portfolio.

Aeris believes that its positioning as a trusted partner in HVAC efficiency and safety, together with its comprehensive portfolio of environmental hygiene technologies, enables the Company to effectively support the needs of its distributors and customers in returning to work, and successfully coping in the new reality of a world where COVID-19 is endemic.

Aeris now has an integrated portfolio of products addressing HVAC efficiency and safety, together with environmental hygiene and corrosion protection in the built environment.

Recently, considerable investments have been made in both the Company's anti-microbial

polymers and its paper technologies. Both these platforms have international commercialisation potential and represent scalable revenue opportunities in 2022.

Aeris Environmental Ltd
Maurie Stang	Peter Bush
Chairman	Chief Executive Officer

The Company's Half-Year Report was authorised by the Board of Directors.

About Aeris Environmental Ltd

The Company develops, manufactures and markets proprietary, environmentally-friendly technology that drives measurable improvements in asset performance and sustainability. Aeris' whole-of-system approach ensures that systems perform better, are safer, last longer and cost less to run.

The Company's products solve real world problems more effectively than conventional toxic chemicals. Uniquely based on validated, green formulations, Aeris' enzymes and treatments, with residual protection, provide long-term remediation and prevention of mould, bacteria growth and corrosion, and achieve improved hygiene.

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