HALO FOOD CO. LIMITED For personal use only
30 June 2022
ASX Release
Statutory Accounts - Financial Year 2022
halofoodco.com | Halo Food Co. Limited |
ABN: 49 627 970 652 |
Halo Food Co. Limited (formerly Keytone Dairy Corporation Limited) Directors' report
31 March 2022
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Halo Food Co. Limited (referred to hereafter as the 'company' or 'parent entity' or 'HLF') and the entities it controlled at the end of, or during, the year ended 31 March 2022.
onlyDirectors
The following persons were directors of the company during the financial period and / up to the date of this report, unless otherwise stated:
Peter James
Andrew Reeves
Daniel Rotman
Susan Klose (appointed 7 March 2022)
Robert Clisdell (resigned 17 February 2022)
Arie Nudel (resigned 27 May 2021)
usePrincipal activities
The principal activity of the consolidated entity was the manufacture and export of dairy, health and wellness and nutritional products, with a particular focus on formulated powdered products, ready-to-drink protein drinks for both third party private label clients and the consolidated entity's proprietary product suite. The consolidated entity earns the majority of its revenues from the sales of its proprietary products, contract manufacturing for third party private label clients in Australia and the export of its New Zealand products to international markets, including China.
Dividends
personalThere were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $7,467,651 (31 March 2021: $8,195,476).
Sig ificant changes in the state of affairs
Capital structure
On 20 July 2021, the company announced the lapse of 16,500,000 options issued under the Company Employee C ncessional Incentive Options Plan.
On 21 July 2021, the company issued 1,000,000 ordinary shares at nil consideration upon conversion of Options issued under the Company Employee Concessional Incentive Option Plan.
On 27 September 2021, the company announced the lapse of 4,000,000 unlisted options exercisable at $0.68 with an expiry date of 25 September 2021.
On 28 October 2021, the company announced the adoption of Employee Incentive Plan following shareholder approval at the Annual General Meeting on the same date.
On 26 November 2021, the company issued 21,000,000 options to Directors and 17,000,000 options to employees, under the Halo Employee Incentive Plan with an expiry date of 26 November 2024.
ForOn 21 February 2022, the company completed a capital raising of $3.5 million (before costs) by issuing 35,000,000 fully paid rdinary shares at an issue price of $0.10 per share.
On 21 March 2022, the company issued 37,933,477 fully paid ordinary shares at an issue price of $0.068 under the Share Purchase Plan raising a total of $2.6 million.
On 22 March 2022, the company issued 2,151,156 ordinary shares at nil consideration upon conversion of Zero Price Exercise Options issued under the Company Employee Concessional Incentive Option Plan.
Board update
On 27 May 2021, Mr Arie Nudel resigned as an executive director of the consolidated entity.
On 17 February 2022, Mr Robert Clisdell resigned as a non-executive director of the consolidated entity.
On 7 March 2022, Ms Susan Klose was appointed as a non-executive director of the consolidated entity.
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Halo Food Co. Limited (formerly Keytone Dairy Corporation Limited) Directors' report
31 March 2022
Change of name
On 9 November 2021, the company announced its new company name and corporate brand Halo Food Co. Limited following shareholder approval at the Annual General Meeting on 28 October 2021.
onlyAustralia, Halo Food as a food manufacturer is considered an essential service and will continue to operate through these challenging periods. The Group has a flexible and diversified operational base across six manufacturing sites and an
Impact of COVID-19
On 11 March 2020, the World Health Organisation ("WHO") declared the Coronavirus disease 2019 ("COVID-19") a
pandemic. The pandemic has adversely affected the global economy, including a decrease in consumer demand,
i terruptions in supply chains, and tight liquidity and credit conditions. Consequently, governments around the world have a ounced monetary and fiscal stimulus packages to minimise the adverse economic impact.
N twithstanding the increasing and varied levels of Government lockdowns being implemented in New Zealand and
additional dedicated warehousing facilities in New Zealand and Australia, has implemented additional risk mitigation m asures and stringent personal and food safety standards.
usein various states, realised significant challenges for the Halo business and recorded absenteeism across the business was material and in excess of 50% at its peak. This resulted in delayed sales to the Company and particularly impacted the fourth
Throughout the financial year 2022, the COVID-19 situation continued to evolve. Vaccination rates across Australia enabled
Au tralian markets to emerge from lockdown and re-open with restrictions continuing to be ease as vaccination rates
continued to increase through FY22. Notwithstanding, the improvement in trading conditions for consumers, significant
challenges remained in FY22. Principally, The Omicron variant which peaked from December 2021 through to February 2022
quarter of FY22 as manufacturing crews in multiple sites were impacted. The loss of sales was a timing lag and the sales order book for Halo remains strong. A proportion of the delayed sales were realised in March 2022 as conditions eased with the remainder expected to be manufactured in FY23.
While Government policy continues to be fluid, however stabilising, and evolve around lockdowns, self-solation and the required course of action where a positive COVID infection presents, the operating business is normalising and the risks are mitigated through stringent hygiene and food safety standards.
The Board will continue to monitor the effect of COVID-19 on the business moving forward. There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
On 1 April 2022, the company announced the completion of the acquisition of 100% of the issued share capital in leading digital health and wellness business, The Healthy Mummy ("THM"), in line with the following terms:
U front consideration
● | $10.84 million in cash to Whiteoak and Rhian Allen. $8.04 million to Whiteoak and $2.8 million to Rhian Allen. |
personal● | $6.17 million in HLF equity to Whiteoak and Rhian Allen. $2.95 million to Whiteoak and $3.22 million to Rhian Allen. |
51,588,628 ordinary | |
shares were issued as part of the upfront consideration. 16,722,408 of the shares to be held in escrow for 12 months, | |
the balance of 34,866,220 shares to be held in escrow for 24 months. | |
Earn out | |
● | Cash payment of $0.5 million and an issue of HLF equity to the value of $2 million where FY22 revenue is greater than |
$25 million and EBITDA is greater than $5 million. | |
● | Cash payment of $0.5 million and an issue of HLF equity to the value of $2 million where FY23 revenue is greater than |
For | $30 million and EBITDA is greater than $6.5 million. |
- Deferred consideration is only payable to Rhian Allen and the HLF equity issued is subject to a 24 month escrow from the time of issue.
On 1 April 2022, the company received the funds from the Facility Agreement with Arrowpoint for $13 million. On the same date, the company issued 1 warrant exercisable into 44,117,648 fully paid ordinary shares.
No other matter or circumstance has arisen since 31 March 2022 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
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Halo Food Co. Limited (formerly Keytone Dairy Corporation Limited) Directors' report
31 March 2022
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
onlyEnvironmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Experience and expertise:
useOther current directorships: Former directorships (last 3 years): Interests in shares:
Interests in options:
personalInterests in rights: N me:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Int rests in shares:
Interests in rights:
Name:
Title:
Experience and expertise:
For
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
Interests in options:
Interests in rights:
Halo Food Co. Limited (formerly Keytone Dairy Corporation Limited) Directors' report
31 March 2022
Name:
Title:
Experience and expertise:
onlyOther current directorships:
F rmer directorships (last 3 years): Interests in shares:
Interests in options:
Interests in rights: useName:
Title:
Experience and expertise:
Other current directorships: Former directorships (last 3 years):
Interests in shares: personalInterests in options:
Interests in rights:
Name:
Title:
Experience and expertise:
Oth r current directorships:
Former directorships (last 3 years): Interests in shares:
Interests in options:
Arie Nudel
Executive Director and International Head of Business Development (resigned 27 May 2021)
Mr Nudel is a founding partner of Omniblend. Mr Nudel has significant experience with advancements in nutritional understanding in recent times that can be used in preventive and adjunct therapies. He has experience with both public listed public and private companies having previously being a director of an ASX listed public company and currently sits on a number of private company boards. He is a graduate of Australian Institute of Company Directors.
None
None
5,813,953 Ordinary Shares Nil
Nil
Daniel Rotman
Executive Director and Chief Executive Officer
Mr Rotman is a co-founder and Managing Director of Omniblend. Prior to founding Omniblend, Mr Rotman worked as a commercial lawyer with both Gadens and Rotman
-
Morris specialising in commercial law. Mr Rotman is a qualified lawyer and holds a Bachelor of Commerce/Law (Honours) from Monash University.
None None
3,578,153 Ordinary Shares
10,000,000 Incentive Options exercisable at $0.18
5,000,000 Incentive Options exercisable at $0.30
8,720,931 Performance Shares
Susan Klose
Non-Executive Director (appointed 7 March 2022)
Ms. Klose has a strong executive background in senior leadership positions across SaaS businesses focussing on digital strategy, corporate development, partnerships and business growth in Australia and the USA. Ms. Klose previous executive role included Chief Operating Officer at Michelle Bridges' online business, 12WBT (12 Week Body Transformation). Sue also has an MBA in Finance, Strategy and Marketing from the JL Kellogg School of Management at Northwestern University, and a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania. Ms Klose is a graduate of the Australian Institute of Company Directors.
Non-Executive Director in Nearmap Limited (ASX:NEA), Envirosuite Limited (ASX:EVS), and Pure Profile Limited (ASX:PPL)
None Nil Nil
For'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all ther types of entities, unless otherwise stated.
'F rmer directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Heldi Aldred BEco,LLB
Heidi Aldred was appointed Company Secretary on 16 December 2019. Heidi, is a qualified lawyer and has over 20 years' experience in secretarial and general counsel roles in a variety of sectors with both listed and non-listed companies. Her early career included working in commercial litigation and law with legal firms Arnold Bloch Liebler and Allens Linklaters.
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Halo Food Co. Ltd. published this content on 30 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 June 2022 06:31:07 UTC.
