Carbonxt Group Limited Appendix 4D Half-year report 1. Company details Name of entity: ABN: Reporting period: Previous period: Carbonxt Group Limited 59 097 247 464 For the half-year ended 31 December 2024 For the half-year ended 31 December 2023 2. Results for announcement to the market $ Revenues from ordinary activities down 12.7% to 7,352,330 Underlying Earnings/(Loss) Before Interest, Tax, Depreciation and Amortisation ('EBITDA') up 143.0% to (694,425) Loss from ordinary activities after tax attributable to the owners of Carbonxt Group Limited up 25.0% to (4,209,461) Loss for the half-year attributable to the owners of Carbonxt Group Limited up 25.0% to (4,209,461) Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the Group after providing for income tax amounted to $4,209,461 (31 December 2023: $3,368,165). Revenues decreased 12.7% compared to 1H24 primarily due to reduced supply to the largest Activated Carbon pellet customer due to plant outages at that customer's facility. The directors consider Underlying Earnings/(Loss) Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) and Underlying EBIT to reflect the core earnings of the Group. Underlying EBITDA and underlying EBIT are financial measures which are not prescribed by Australian Accounting Standards (‘AAS’) and represent the profit or loss under AAS adjusted for non-cash and significant items. The following table summarises key reconciling items between statutory loss after income tax and underlying EBITDA for the current and previous half-year period: Consolidated 31 Dec 2024 31 Dec 2023 $ $ Revenue 7,352,330 8,423,963 Gross margin Other income Shipping and distribution costs Operating expenses 3,592,424 120,109 (912,676) (3,494,282) 3,682,362 68,987 (1,095,887) (2,941,221) Underlying EBITDA Depreciation and amortisation (694,425) (1,126,596) (285,759) (1,209,209) Underlying loss before interest and tax ('EBIT') Net interest expense Share based payment expense Remeasurement (loss)/gain on financial liabilities Share in losses of joint ventures (1,821,021) (2,236,093) (51,906) (98,046) (2,395) (1,494,968) (2,014,172) 140,975 - Loss before income tax expense (4,209,461) (3,368,165) Carbonxt Group Limited Appendix 4D Half-year report For further commentary refer to 'Review of operations' section within the Directors' report of the Interim Report and the attached market announcement. 3. Net tangible assets Reporting period Cents Net tangible assets per ordinary security Previous period Cents 1.60 2.30 The net tangible assets calculation includes rights-of-use assets of $7,335,241 (31 Dec 2023: $5,171,643) and the lease liabilities of $2,435,711 (31 Dec 2023: $1,879,385). 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. 8. Details of associates and joint venture entities Reporting entity's percentage holding Name of associate / joint venture NewCarbon Processing, LLC Group's aggregate share of associates and joint venture entities' profit/(loss) (where material) Profit/(loss) from ordinary activities before income tax Income tax on operating activities Reporting period % 40.30% Previous period % 35.48% Contribution to profit/(loss) (where material) Reporting period $ Previous period $ (2,395) - (2,395) - - - Carbonxt Group Limited Appendix 4D Half-year report 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements were subject to a review by the auditors and an unqualified conclusion has been issued with a paragraph addressing material uncertainty related to going concern. 11. Attachments Details of attachments (if any): The Interim Report of Carbonxt Group Limited for the half-year ended 31 December 2024 is attached. 12. Signed Authorised by the Board of Directors. Signed ___________________________ Warren Murphy Managing Director Sydney Date: 28 February 2025 Carbonxt Group Limited ABN 59 097 247 464 Interim Report - 31 December 2024 Carbonxt Group Limited Contents 31 December 2024 Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's review report to the members of Carbonxt Group Limited 1 2 4 5 6 7 8 9 18 19 Carbonxt Group Limited Directors' report 31 December 2024 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Carbonxt Group Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2024. Directors The following persons were directors of Carbonxt Group Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated: Matthew Driscoll - Chairman Warren Murphy David Mazyck Imtiaz Kathawalla Nicholas Andrews Principal activities During the financial half-year the principal continuing activities of the Group consisted of the development and sale of specialised Activated Carbon ('AC') products, including Powdered Activated Carbon ('PAC') and AC pellets for the removal of pollutants and toxins in industrial processes. These products are used in industrial air purification, waste water treatment and other liquid and gas phase markets, primarily for the capture of mercury and sulphur in order to reduce harmful emissions into the atmosphere, as required by global regulations. Review of operations The loss for the Group after providing for income tax amounted to $4,209,461 (31 December 2023: $3,368,165). Revenue for the half-year was $7,352,330 representing a decrease of 12.7% on the prior half-year's revenue of $8,423,963. Revenues decreased 12.7% compared to 1H24 primarily due to reduced supply to the largest Activated Carbon pellet customer due to plant outages at that customer's facility. The directors consider Underlying Earnings/(Loss) Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) and Underlying EBIT to reflect the core earnings of the Group. Underlying EBITDA and underlying EBIT are financial measures which are not prescribed by Australian Accounting Standards (‘AAS’) and represent the profit or loss under AAS adjusted for non-cash and significant items. The following table summarises key reconciling items between statutory loss after income tax and underlying EBITDA for the current and previous half-year period: Consolidated 31 Dec 2024 31 Dec 2023 $ $ Revenue 7,352,330 8,423,963 Gross margin Other income Shipping and distribution costs Operating expenses 3,592,424 120,109 (912,676) (3,494,282) 3,682,362 68,987 (1,095,887) (2,941,221) Underlying EBITDA Depreciation and amortisation (694,425) (1,126,596) (285,759) (1,209,209) Underlying loss before interest and tax ('EBIT') Net interest expense Share based payment expense Remeasurement (loss)/gain on financial liabilities Share in losses of joint ventures (1,821,021) (2,236,093) (51,906) (98,046) (2,395) (1,494,968) (2,014,172) 140,975 - Loss before income tax expense (4,209,461) (3,368,165) 2 Carbonxt Group Limited Directors' report 31 December 2024 As a result of the loss incurred for the half year ended 31 December 2024 and the liquidity available at the reporting date, there is a material uncertainty on whether the Group can continue as a going concern. The directors consider that the Group will continue as a going concern, as explained in note 2 to the financial statements. Significant changes in the state of affairs Capital raising On 24 September 2024, the Company announced the completion of the share placement of 46,415,830 fully paid shares at $0.065 per share before issue costs with 23,207,919 options attached at a strike price of $0.10 per share. The shares were issued on 30 September 2024. On 20 December 2024, the Company announced the completion of the share placement of 17,146,667 fully paid shares at $0.06 per share before issue costs with 8,573,333 options attached at a strike price of $0.10 per share. The shares were issued on 2 January 2025. Investment in NewCarbon The advances to NewCarbon for the half-year period totalled to US$1,250,000 which increased the ownership in NewCarbon to 40.30% as of 31 December 2024. There were no other significant changes in the state of affairs of the Group during the financial half-year. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Warren Murphy Managing Director 28 February 2025 Sydney 3 Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s independence declaration to the directors of Carbonxt Group Limited As lead auditor for the review of the half-year financial report of Carbonxt Group Limited for the half-year ended 31 December 2024, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; b. No contraventions of any applicable code of professional conduct in relation to the review; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the review. This declaration is in respect of Carbonxt Group Limited and the entities it controlled during the financial period. Ernst & Young James Johnson Partner 28 February 2025 A member firm of Ernst & Young Global Limited 4 Liability limited by a scheme approved under Professional Standards Legislation Carbonxt Group Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2024 Note Revenue Sales revenue Cost of goods sold 4 Consolidated 31 Dec 2024 31 Dec 2023 $ $ 7,352,330 (3,759,906) 8,423,963 (4,741,601) 3,592,424 3,682,362 (2,395) 120,109 (98,046) 68,987 140,975 (912,676) (1,558,381) (51,906) (1,126,596) (307,046) (1,163,492) (465,363) (1,095,887) (1,227,730) (1,209,209) (222,773) (907,047) (583,671) (1,973,368) (1,353,993) 5,952 (2,242,045) 49,373 (2,063,545) (4,209,461) (3,368,165) - - (4,209,461) (3,368,165) Items that may be reclassified subsequently to profit or loss Foreign currency translation 1,595,739 (964,181) Other comprehensive income/(loss) for the half-year, net of tax 1,595,739 (964,181) Total comprehensive loss for the half-year attributable to the owners of Carbonxt Group Limited (2,613,722) (4,332,346) Cents Cents Gross margin Share of losses of joint ventures accounted for using the equity method Other income Remeasurement (loss)/gain on financial liabilities Expenses Shipping and distribution costs Employee benefits expense Share-based payment expense Depreciation and amortisation expense Selling and marketing expenses General and administrative expenses Other expenses 5 Operating loss Interest revenue Finance costs 5 Loss before income tax expense Income tax expense Loss after income tax expense for the half-year attributable to the owners of Carbonxt Group Limited Other comprehensive income/(loss) Basic loss per share Diluted loss per share 16 16 (1.20) (1.20) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 5 (1.22) (1.22) Carbonxt Group Limited Statement of financial position As at 31 December 2024 Note Consolidated 31 Dec 2024 30 Jun 2024 $ $ Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other Total current assets 932,892 1,859,178 1,042,472 113,464 3,948,006 4,141,926 927,861 958,585 130,770 6,159,142 11,068,364 5,328,639 7,335,241 5,786,251 29,518,495 8,550,681 5,201,389 7,328,237 5,611,755 26,692,062 33,466,501 32,851,204 4,341,851 75,792 10,918,902 2,270,590 320,063 124,324 18,051,522 2,516,658 2,703,140 10,322,007 2,925,321 188,459 190,948 18,846,533 165,121 3,258,842 3,423,963 428,003 2,841,757 3,269,760 Total liabilities 21,475,485 22,116,293 Net assets 11,991,016 10,734,911 6 Non-current assets Investments accounted for using the equity method Property, plant and equipment Right-of-use assets Intangibles Total non-current assets 7 Total assets Liabilities Current liabilities Trade and other payables Contract liabilities Borrowings Lease liabilities Royalty payable Employee benefits Total current liabilities 8 9 10 11 Non-current liabilities Lease liabilities Royalty payable Total non-current liabilities 11 Equity Contributed capital Reserves Accumulated losses 12 13 Total equity 95,982,191 92,164,270 22,296,653 20,649,008 (106,287,828) (102,078,367) 11,991,016 10,734,911 The above statement of financial position should be read in conjunction with the accompanying notes 6 Carbonxt Group Limited Statement of changes in equity For the half-year ended 31 December 2024 Contributed capital $ Reserves $ Accumulated Total equity losses $ $ 89,387,844 20,848,635 (93,959,868) 16,276,611 Loss after income tax expense for the half-year Other comprehensive loss for the half-year, net of tax - (964,181) (3,368,165) - (3,368,165) (964,181) Total comprehensive loss for the half-year - (964,181) (3,368,165) (4,332,346) 554,900 - (128,655) - 554,900 (128,655) 89,942,744 19,755,799 (97,328,033) 12,370,510 Consolidated Balance at 1 July 2023 Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments Balance at 31 December 2023 Accumulated Contributed capital $ Consolidated Balance at 1 July 2024 92,164,270 Reserves $ Total equity $ losses $ 20,649,008 (102,078,367) 10,734,911 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax - 1,595,739 (4,209,461) - (4,209,461) 1,595,739 Total comprehensive income/(loss) for the half-year - 1,595,739 (4,209,461) (2,613,722) Transactions with owners in their capacity as owners: Contributions of equity net of transaction costs (note 12) Share-based payments 3,817,921 - 51,906 - 3,817,921 51,906 Balance at 31 December 2024 95,982,191 22,296,653 (106,287,828) 11,991,016 The above statement of changes in equity should be read in conjunction with the accompanying notes 7 Carbonxt Group Limited Statement of cash flows For the half-year ended 31 December 2024 Note Consolidated 31 Dec 2024 31 Dec 2023 $ $ Cash flows from operating activities Receipts from customers Payments to suppliers and employees (inclusive of GST) Interest received Government grants received Interest and other finance costs paid 3,810,971 (6,492,182) 5,952 120,109 (854,233) 8,382,596 (8,898,217) 49,373 (506,373) Net cash used in operating activities (3,409,383) (972,621) Cash flows from investing activities Payments for investment in NewCarbon Payments for property, plant and equipment Payments for intangible assets (1,877,568) (162,838) (56,101) (730,994) (402,365) Net cash used in investing activities (2,096,507) (1,133,359) 3,705,555 (227,908) (1,038,194) 600,000 (45,100) (1,063,445) Net cash from/(used in) financing activities 2,439,453 (508,545) Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents (3,066,437) 4,141,926 (142,597) (2,614,525) 4,305,838 (42,431) 932,892 1,648,882 Cash flows from financing activities Proceeds from issue of shares and exercise of options Share issue transaction costs Repayment of lease liability 12 12 Cash and cash equivalents at the end of the financial half-year The above statement of cash flows should be read in conjunction with the accompanying notes 8 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 1. General information The financial statements cover Carbonxt Group Limited as a Group consisting of Carbonxt Group Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year (referred to in these financial statements as the 'Group'). The financial statements are presented in Australian dollars, which is Carbonxt Group Limited's functional and presentation currency. Carbonxt Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are: Registered office Principal place of business Level 8, 210 George Street Sydney NSW 2000 Australia Suite 111 3951 NW 48th Terrace Gainesville FL 32606 United States of America A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 February 2025. Note 2. Material accounting policy information These general purpose financial statements for the interim half-year reporting period ended 31 December 2024 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2024 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements arising under Australian Securities Exchange Listing Rules and the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group during the financial half-year ended 31 December 2024 and are not expected to have significant impact for the full financial year ending 30 June 2025. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Going concern The financial statements for the half year have been prepared on the going concern basis, which assumes that the Group will be able to realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the financial report. During the half year ended 31 December 2024, the Group reported a net loss of $4,209,461 (31 December 2023: $3,368,165) and operating cash outflows of $3,409,383 (31 December 2023: outflows of $ 972,621). At 31 December 2024, cash and cash equivalents were $932,892 (30 June 2024: $4,141,926), net current liabilities of $14,103,516 (30 June 2024 : net current liabilities of $12,687,391) and the Group reported net assets of $11,991,016. 9 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 2. Material accounting policy information (continued) Net current liabilities include $10,918,902 relating to the Pure Loan Facility which has a maturity date of 31 May 2027. The loan balance has been classified as current as during the half year-ended 31 December 2024 the Minimum Cash Balance financial covenant that requires the Group to maintain a minimum cash balance of $3,000,000 at all times was breached. The Group received a Waiver from the Lender on 27 February 2025 providing a grace period until 1 July 2025. On 17 February 2025, the Group announced a Share Purchase Plan to raise up to $2,000,000 with expected completion on 14 March 2025. The Share Purchase Plan has been underwritten to $1,000,000 by two major shareholders. In addition, on 27 February 2025, the Group entered into a convertible note facility with Phelbe Pty Ltd for a total of $500,000 in funds, convertible to shares at 8 cents per share with a two-year term. The Group is in advanced discussions with other parties to secure further funding of up to $500,000 through issuance of Convertible Notes on similar terms. The Directors, in their consideration of the appropriateness of the going concern basis for the preparation of the half year financial statements, have prepared a cash flow forecast through to 31 March 2026. In order to continue as a going concern the Group requires a combination of ongoing support from its lenders, commercialization and generation of positive net cash inflows from the NewCarbon Processing LLC per assumed timelines, improvements in its existing operations such that positive net cash flows are achieved and successfully raising new capital as and when required in order to have sufficient cash to meet its financial obligations as and when they fall due. The Group’s ability to achieve the above outcomes represent material uncertainties that may cast significant doubt on the Group’s ability to continue as a going concern and, whether, it will realise its assets and extinguish its liabilities other than in the normal course of business. At the date of signing this report, the Directors have reasonable grounds to believe the Group will be able to achieve the matters noted above and that it is appropriate to prepare the financial statements on the going concern basis, based upon the following actions: ● Raising funds in equity markets and through issuance of convertible notes, as noted above by March 2025, noting that the Group has a history of successful equity raisings; ● Commissioning of the NewCarbon Facility by 31 March 2025 and commercialization of its product so as to achieve positive net cash inflows by end of June 2025; ● Continue to monitor the progress of the NewCarbon Processing LLC and proactively engage prospective customers in North American market; ● Proactively manage the cash flow requirements and improve the operating performance of the business to ensure that no future loan covenant breaches occur; and ● Deferral of certain capital expenditures to preserve cash as required. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern. Note 3. Operating segments Identification of reportable operating segments The Group only has one reportable segment being the development and sale of specialised Activated Carbon ('AC') products, principally in the United States of America. This is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The information reported to the CODM is on a monthly basis. 10 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 3. Operating segments (continued) Geographical information Geographical non-current Sales to external customers assets 31 Dec 2024 31 Dec 2023 31 Dec 2024 30 Jun 2024 $ $ $ $ Australia United States of America 7,352,330 8,423,963 289,164 29,229,331 616,758 26,075,304 7,352,330 8,423,963 29,518,495 26,692,062 The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-employment benefits assets and rights under insurance contracts. Note 4. Revenue Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows: Consolidated 31 Dec 2024 31 Dec 2023 $ $ Major product lines Sale of activated carbon 7,352,330 8,423,963 Geographical regions United States of America 7,352,330 8,423,963 Timing of revenue recognition Goods transferred at a point in time 7,352,330 8,423,963 11 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 5. Expenses Consolidated 31 Dec 2024 31 Dec 2023 $ $ Loss before income tax includes the following specific expenses: Depreciation Plant and equipment Plant and equipment right-of-use assets 353,259 557,290 358,828 595,449 Total depreciation 910,549 954,277 Amortisation Development Engineering Performance Solutions ('EPS) patents Other patents 122,099 48,186 45,762 157,968 48,199 48,765 Total amortisation 216,047 254,932 Total depreciation and amortisation 1,126,596 1,209,209 Finance costs Interest and finance charges paid/payable on borrowings and royalty payable Interest and finance charges paid/payable on lease liabilities 2,108,914 133,131 1,994,637 68,908 Finance costs expensed 2,242,045 2,063,545 Note 6. Trade and other receivables Consolidated 31 Dec 2024 30 Jun 2024 $ $ Current assets Trade receivables Receivable from NewCarbon 1,805,097 54,081 877,103 50,758 1,859,178 927,861 Allowance for expected credit losses The Group assessed that the allowance for expected credit losses is not material for the half-year 31 December 2024 and for the year ended 30 June 2024. 12 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 7. Investments accounted for using the equity method Consolidated 31 Dec 2024 30 Jun 2024 $ $ Non-current assets Investment in associate 11,068,364 8,550,681 Opening carrying amount Share in losses after income tax Additions Foreign exchange difference 8,550,681 (2,395) 1,877,568 642,510 7,835,571 (32,198) 730,994 16,314 Closing carrying amount 11,068,364 8,550,681 Reconciliation Reconciliation of the carrying amounts at the beginning and end of the current and previous financial half-year are set out below: Interest in NewCarbon The advances to NewCarbon for the half-year period totalled to US$1,250,000 which increased the ownership in NewCarbon to 40.30% as at 31 December 2024 (30 June 2024: 35.48%). Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are material to the Group are set out below: Name Principal place of business / Country of incorporation NewCarbon Processing, LLC USA Ownership interest 31 Dec 2024 30 Jun 2024 % % 40.30% 35.48% 31 Dec 2024 $ 30 Jun 2024 $ Summarised statement of financial position Cash and cash equivalents Non-current assets 1,919 26,942,255 7,740 23,399,758 Total assets 26,944,174 23,407,498 Current liabilities 103,944 97,558 Total liabilities 103,944 97,558 26,840,230 23,309,940 Summarised statement of profit or loss and other comprehensive income Expenses (5,943) (90,750) Loss before income tax (5,943) (90,750) - - (5,943) (90,750) Summarised financial information Net assets Other comprehensive income Total comprehensive loss 13 Carbonxt Group Limited Notes to the financial statements 31 December 2024 Note 8. Trade and other payables Consolidated 31 Dec 2024 30 Jun 2024 $ $ Current liabilities Trade payables Accrued expenses Other payables 3,025,658 1,257,653 58,540 1,443,057 988,067 85,534 4,341,851 2,516,658 Note 9. Contract liabilities Consolidated 31 Dec 2024 30 Jun 2024 $ $ Current liabilities Contract liabilities 75,792 2,703,140 2,703,140 (2,633,993) 6,645 4,237,410 (1,581,208) 46,938 75,792 2,703,140 Reconciliation Reconciliation of the written down values at the beginning and end of the current and previous financial half-year are set out below: Opening balance Payments received in advance Revenue recognised Exchange differences Closing balance Note 10. Borrowings Consolidated 31 Dec 2024 30 Jun 2024 $ $ Current liabilities Pure loan payable 10,918,902 10,322,007 Pure loan payable During the period, an event of default under the terms of the amended and restated facility agreement with Pure occurred as a result of the Group’s cash balance falling below AU$3,000,000. An event of default provides the Lender to demand full repayment of the loan. As at 31 December 2024 and up to the date of this report, the Lender or its agent has not notified the Group for the full repayment of the loan and continued to be supportive to the Group. Nonetheless, the loan has been classified as current as at 31 December 2024 as the Group does not have the unconditional right to defer settlement of the liability for at least twelve months after the reporting period as a result of the event of default. Interest of $596,895 was capitalised against the loan for the half-year ended 31 December 2024. 14 Carbonxt Group Limited Notes to the financial statements 31 December