Jun23 Quarterly Activities Statement and 4C
Released
Released
Announcement PDF
ASX ANNOUNCEMENT
28 July 2023
HITIQ Quarterly Activities Report
June 2023
Highlights
Cash Receipts of $225k, surpassing $1m in annual sales, up 89% year on year;
Significant Progress of Shock Doctor & CoVR programs;
Exceptional market feedback on the latest generation Nexus unit; and
Stronger sales pipeline expected in FY24.
Summary
During the June Quarter, the Company launched its next generation elite hardware in the field,
improved internal manufacturing efficiency and continued to build a strong future sales pipeline.
Data collection volumes in Nexus and CoVR product lines continued to drive important advances
in the company’s technology platform.
Commercial
The company acknowledges several opportunities which were expected to be executed in the June
quarter failed to complete. These opportunities continue to be pursued, however have been added
to the FY24 pipeline which currently consists of a strong, qualified pipeline of commercial
discussions with several material opportunities globally.
Pipeline
>
The commercial team are progressing these opportunities in the Northern Hemisphere off
season and are optimistic on progressing several of the qualified opportunities through to
close.
Technology, Research & Development
CoVR
Significant progress was achieved with the CoVR Virtual Reality pre-clinical program, with the
quarter yielding 411 new participants, with each study now showing progress towards volume
targets as outlined below:
Volume
Target
Volume
Achieved
# Increase
for Quarter
Normative Data
800
548
+411
Construct Validity
200
154
+17
Reliability of Change
100
32
+1
Concussed
40
16
+2
Study
>
Concussion capture in the Northern Hemisphere at key sites was limited due to ‘out of season’
status.
>
The expectation is concussed participant data will increase significantly in the September
Quarter with Northern Hemisphere contact sports returning.
>
Pre-Clinical trial focus is on reaching participant volume targets for studies 2-4. Study 1
participant volumes will be met through the collation of participants in both pre-clinical studies
and a subsequent clinical trial upon satisfactory results from Studies 2-4.
Importantly, preliminary analysis from the construct validity data as it compares to the predicate
device identified in the company’s Q-Sub with the FDA, is demonstrating superior performance as
outlined below:
CoVR
Correlation
Predicate
Equivalent
+/-
Domain 1
0.41
0.35
+0.06
Domain 2
0.43
0.37
+0.06
Domain 3
0.51
0.37
+0.14
Domain 4
0.44
0.35
+0.09
Cognitive domain
The table demonstrates CoVR’s
correlation to the ‘gold standard’
pen and paper-based testing. As
can be seen, CoVR is more closely
correlated to the current 'gold
standard' than the predicate
medical device.
Exceptional market feedback for Nexus
As noted in the previous two quarter updates, the release of the latest Nexus generation has shown
significant improvements in device performance metrics and independent third-party system
HITIQ.COM
testing. With a significant amount of field data now captured with our latest device, analysis is
demonstrating:
98% Sensitivity and 92% specificity in field data;
9/10 satisfaction rating from athletes; and
51% increase in compliance across customers and partners who transitioned from previous
generation units.
Field Deployments
The company deployed 432 new units into the field during the quarter, taking the number
of active units currently being utilised during the quarter to ~1,700.
Shock Doctor
The final stages of the development phase are close to completion, with one
final prototype iteration expected before field testing commencement.
All key technical and manufacturing barriers have been overcome with only
minor tooling adjustments required.
ISO 27001
During the quarter, an ISO27001 Gap analysis was successfully completed with no significant
gaps identified. The Stage 1 Audit with BSI is schedule for August 11th,
The Company anticipates it will confirm the absence of any non-conformities and allow a
Stage 2 audit to take place soon after.
Corporate
HITIQ welcomed visits from key government
ministers during the quarter, who received
demonstrations of the Company’s technologies. The
Company hosted The Hon Ed Husic MP, Minister for
Industry and Science and Josh Burns MP, Labor's
Federal Member for Macnamara.
There is heightened awareness and interest in the
concussion sector ahead of the Senate inquiry
handing down its findings report on August 2nd
relating to the Senate Inquiry into Concussions and
repeated head trauma in contact sports.
The Company expects the report to recommend
expedited adoption of new technology solutions into
elite and consumer sports.
Subsequent to quarter end, the Company announced that James Barrie had been appointed
Company Secretary, effective 3 July 2023, following the resignation of Peter Torre from the role.
HITIQ.COM
Financial
The Company had cash reserves of A$1.980m as at 30 June 2023.
As advised in Section 6.1 in the Appendix 4C for the period, payments to, or to an associate of, a related
party of the entity during quarter A$104,590 was paid to related parties of the Company as follows:
>
>
>
Executive Director Salary and superannuation
$53,550
Non-Executive Director Fees
$45,920
Bookkeeping and Accounting Services provided by Optima Partners,
a related party of non-executive director, Mr Philip Carulli:
$5,120
A comparison of the use of funds since the date of admission, to the use of funds statement contained
within the Company’s Prospectus, as required by ASX Listing Rule 4.7C.2 is as follows:
Allocation of funds1
Prospectus
estimate
(2 years)
Actual use of funds
(for the quarter ended
June 2023 quarter)
$A’000
$A’000
Actual use of funds since
listing
(15 June 2021 to June
2023 quarter end)
Technology, Research &
Development
$4,701
$955
$6,377*
Sales & Marketing
$1,068
$309
$2,077
Working capital
$4,049
$332
$4,487
Cost of the Offer
$802
$0
$767
Total
$10,620
$1,596
$13,708
$A’000
(* Includes R&D Rebate Received)
1
Refer to the HITIQ Prospectus dated 22 April 2021 for full details.
- ENDS Authorised for release by the Board of Directors.
For more information, contact:
Mike Vegar
CEO & MD
HITIQ Limited
investors@hitiq.com
About HITIQ
HITIQ Limited (ASX: HIQ) operates in the healthcare equipment sector, providing and further developing a transformative,
end-to-end concussion management technology platform. This platform aims to provide a total concussion ecosystem
whereby the Company’s products support the identification, monitoring and management of sport related brain injury.
HITIQ’s product suite utilises high-end technology that will span multiple domains – from early detection and surveillance to
assessment and rehabilitation technology tools.
HITIQ is targeting a growing worldwide concussion management market including elite and recreational sport, clinical
practitioners, military, research, and combat sports. The Company’s first commercial partner is the Australian Football
League, with current strategy initiatives expanding commercially into Rugby League, Rugby Union, Ice Hockey, Lacrosse,
MMA and American Football (particularly the NCAA). The market opportunity globally represents ~500k athletes within the
elite market and ~10million in the consumer market.
HITIQ.COM
APPENDIX 4C
Quarterly cash flow report for entities
subject to listing rule 4.7b
Name of entity
HITIQ Limited
ABN
Quarter ended (“current quarter”)
53 609 543 213
Consolidated statement of cash flows
1.
Cash flows from operating activities
1.1
Receipts from customers
1.2
Payments for
30 June 2023
Current quarter
$A’000
Year to date (12
months)
$A’000
225
1,046
(a) research and development
(135)
(946)
(b) product manufacturing and
-
-
(88)
(336)
-
-
(e) staff costs
(1,027)
(4,166)
(f)
(486)
(1,945)
operating costs
(c) advertising and marketing
(d) leased assets
administration and corporate costs
1.3
Dividends received (see note 3)
-
-
1.4
Interest received
6
20
1.5
Interest and other costs of finance paid
-
(6)
1.6
Income taxes paid
-
-
1.7
Government grants and tax incentives
-
2,224
1.8
Other (provide details if material)
-
-
1.9
Net cash from / (used in) operating
activities
(1,505)
(4,109)
2.
Cash flows from investing activities
2.1
Payments to acquire or for:
-
-
(b) businesses
(65)
(65)
(c) property, plant and equipment
(26)
(46)
(d) investments
-
-
(e) intellectual property
-
-
(f)
-
-
(g) entities
-
-
(h) businesses
-
-
(a) entities
2.2
other non-current assets
Proceeds from disposal of:
HITIQ.COM
Consolidated statement of cash flows
Current quarter
$A’000
Year to date (12
months)
$A’000
(i)
property, plant and equipment
-
-
(j)
investments
-
-
(k) intellectual property
-
-
(l)
-
-
other non-current assets
2.3
Cash flows from loans to other entities
-
-
2.4
Dividends received (see note 3)
-
-
2.5
Other (provide details if material)
-
-
2.6
Net cash from / (used in) investing
activities
(91)
(111)
3.
Cash flows from financing activities
3.1
Proceeds from issues of equity securities
(excluding convertible debt securities)
-
4,032
3.2
Proceeds from issue of convertible debt
securities
-
-
3.3
Proceeds from exercise of options
-
-
3.4
Transaction costs related to issues of
equity securities or convertible debt
securities
-
(42)
3.5
Proceeds from borrowings
1,541
1,541
3.6
Repayment of borrowings
-
(2,270)
3.7
Transaction costs related to loans and
borrowings
-
-
3.8
Dividends paid
-
-
3.9
Other (provide details if material)
-
-
3.10
Net cash from / (used in) financing
activities
1,541
3,261
4.
Net increase / (decrease) in cash and
cash equivalents for the period
4.1
Cash and cash equivalents at beginning
of period
2,035
2,939
4.2
Net cash from / (used in) operating
activities (item 1.9 above)
(1,505)
(4,109)
4.3
Net cash from / (used in) investing
activities (item 2.6 above)
(91)
(111)
4.4
Net cash from / (used in) financing
activities (item 3.10 above)
1,541
3,261
4.5
Effect of movement in exchange rates
on cash held
-
-
4.6
Cash and cash equivalents at end of
period
1,980
1,980
HITIQ.COM
5.
Reconciliation of cash and cash
equivalents
at the end of the quarter (as shown in
the consolidated statement of cash
flows) to the related items in the
accounts
5.1
Bank balances
5.2
Current quarter
$A’000
Previous quarter
$A’000
1,980
2,035
Call deposits
-
-
5.3
Bank overdrafts
-
-
5.4
Other (provide details)
-
-
5.5
Cash and cash equivalents at end of
quarter (should equal item 4.6 above)
1,980
2,035
6.
Payments to related parties of the entity and their
associates
6.1
Aggregate amount of payments to related parties and their
associates included in item 1
105
6.2
Aggregate amount of payments to related parties and their
associates included in item 2
-
Current quarter
$A'000
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include
a description of, and an explanation for, such payments.
7.
Financing facilities
Note: the term “facility’ includes all
forms of financing arrangements
available to the entity.
Total facility
amount at quarter
end
$A’000
Amount drawn at
quarter end
$A’000
1,523
1,523
Add notes as necessary for an
understanding of the sources of finance
available to the entity.
7.1
Loan facilities
7.2
Credit standby arrangements
-
-
7.3
Other (please specify)
-
-
7.4
Total financing facilities
1,523
1,523
7.5
Unused financing facilities available at quarter end
7.6
Include in the box below a description of each facility above, including the lender,
interest rate, maturity date and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed to be entered into after
quarter end, include a note providing details of those facilities as well.
-
N/A
HITIQ.COM
8.
Estimated cash available for future operating activities
$A’000
8.1
Net cash from / (used in) operating activities (item 1.9)
(1,505)
8.2
Cash and cash equivalents at quarter end (item 4.6)
1,980
8.3
Unused finance facilities available at quarter end (item 7.5)
8.4
Total available funding (item 8.2 + item 8.3)
8.5
Estimated quarters of funding available (item 8.4 divided by
item 8.1)
1,980
1.32
Note: if the entity has reported positive net operating cash flows in item 1.9, answer
item 8.5 as “N/A”. Otherwise, a figure for the estimated quarters of funding available
must be included in item 8.5.
8.6
If item 8.5 is less than 2 quarters, please provide answers to the following questions:
8.6.1
Does the entity expect that it will continue to have the current level of net
operating cash flows for the time being and, if not, why not?
Answer: The entity expects to record similar levels to the current net operating
cashflows in upcoming quarters.
8.6.2
Has the entity taken any steps, or does it propose to take any steps, to raise
further cash to fund its operations and, if so, what are those steps and how
likely does it believe that they will be successful?
Answer: The Company’s Board is considering several alternative steps to raise further
liquidity to fund its operations going forward. Steps include raising funds,
including equity funding via a strategic placement and / or offering current
shareholders participation. The Company’s Board is confident that it could
successfully implement either of the above alternatives.
8.6.3
Does the entity expect to be able to continue its operations and to meet its
business objectives and, if so, on what basis?
Answer: The entity expects to be able to continue its operations and to meet its
business objectives on the basis of the expected implementation and
completion of the alternatives outlined in 8.6.2.
Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above
must be answered.
Compliance statement
1
This statement has been prepared in accordance with accounting standards and policies
which comply with Listing Rule 19.11A.
2
This statement gives a true and fair view of the matters disclosed.
Date: 28 July 2023
Authorised by: .The Board of HITIQ Limited
(Name of body or officer authorising release – see note 4)
HITIQ.COM
Notes
1.
This quarterly cash flow report and the accompanying activity report provide a basis for informing the market
about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its
cash position. An entity that wishes to disclose additional information over and above the minimum required
under the Listing Rules is encouraged to do so.
2.
If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the
definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow
report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing
Rule 19.11A, the corresponding equivalent standard applies to this report.
3.
Dividends received may be classified either as cash flows from operating activities or cash flows from investing
activities, depending on the accounting policy of the entity.
4.
If this report has been authorised for release to the market by your board of directors, you can insert here: “By the
board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert
here: “By the [name of board committee – e.g., Audit and Risk Committee]”. If it has been authorised for release to
the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.
5.
If this report has been authorised for release to the market by your board of directors and you wish to hold yourself
out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in
their opinion, the financial records of the entity have been properly maintained, that this report complies with the
appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their
opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
HITIQ.COM
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