Half Yearly Report to 30 September 2017

2690359
NZX APPENDIX 1 RELEASE
BLIS TECHNOLOGIES LIMITED
For the six months ended 30 September 2017
The information below relates to the preliminary announcement required under Listing Rule 10.3.1 and
Appendix 1 of the NZX Main Board Listing Rules:
2.1 Details of the reporting period and previous reporting period

Reporting Period 6 months to 30 September 2017
Previous Reporting Period 6 months to 30 September 2016

2.2 Information prescribed by NZX

RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the six months ended 30 September 2017

Amount ($000s) Percentage change
Revenue from ordinary
activities
2,072 46% decrease
Profit (loss) from ordinary
activities after tax attributable
to security holder
(1,246) [391]% decrease
Net profit (loss) attributable to
security holders
(1,246) [391]% decrease

Interim/Final Dividend: The Company does not propose to pay dividends to its shareholders.

2.3 The following information:

(a) A Statement of Financial Performance

Refer to the Financial Statements for the six months ended 30 September 2017.

(b) A Statement of Financial Position

Refer to the Financial Statements for the six months ended 30 September 2017.

(c) A Statement of Cash Flows

Refer to the Financial Statements for the six months ended 30 September 2017.

(d) Details of dividends or distributions

The Company does not propose to pay dividends to shareholders.

(e) Details of any dividend or distribution reinvestment plans in operation

The Company has no dividend reinvestment plan.

(f) Net tangible assets per security

Refer to Note 3 of the Notes to the Financial Statements for the six months ended 30
September 2017.

(g) Details of entities over which control has been gained or lost during the period

Nil

2690359 Page 2 of 3

(h) Details of associates and joint venture entities

Nil

3.1 Basis of preparation

The financial statements for the six months to 30 September 2017 have been prepared in accordance
with Generally Accepted Accounting Practice (NZ GAAP) and comply with the New Zealand
Equivalents to International Financial Reporting Standards (NZ IFRS), as appropriate for interim
financial statements (NZ IAS 34)

3.2 Accounting policies

Refer to the Statement of Accounting policies in Note 1 of the Notes to the Financial Statements for
the six months ended 30 September 2017.

3.3 Changes in accounting policies

There has been no material changes in the accounting policies applied in prepared of the Financial
Statements for the six months ended 30 September 2017.

3.4 Audit report

The interim Financial Statements for the six months ended 30 September 2016 have not been audited.

3.5 Additional information

Going Concern
The financial statements have been prepared based on an assumption of going concern.
The Group has recorded a net deficit of $1,246k for HY18 (HY17: surplus $428k) for HY18.
The Directors believe the going concern assumption is valid, reaching such a conclusion after having
regard to the circumstances which they consider reasonably likely to affect the Group during the
period of one year from the date the financial statements are approved.
Specifically, the Group held cash reserves of $526k as at 30 September 2017 which is considered
sufficient to meet its working capital requirements. The Company is investing in a new tablet press and
has finance in place to fund this. It is also upgrading the plant to a fully accredited “Good
Manufacturing Practice” (GMP) status, regulatory approvals and new product launches as part of the
Company’s growth strategy. Depending on progress, the Company may consider options to support its
growth and may seek additional capital by way of a placement and/or share plan.

Based on management budgets and plans, the Group will be able to meet financial obligations for at
least 12 months from the date of approval of interim financial statements.

The Directors believe that there is no material uncertainty in respect of the Group’s ability to continue
as a going concern for the period assessed above due to the level of its current cash holdings and
ability to generate operating cash flows. Nevertheless, in the event it fails to achieve planned
profitability the Group may not be able to continue as a going concern.
If the Group were unable to continue as a going concern, and pay debts as, and when, they become
due and payable, adjustments to the carrying value of assets would have to be made to reflect the
situation. In such circumstances, assets may need to be realised and liabilities extinguished, other
than in the normal course of business and at amounts which could differ significantly from the amounts
at which they are currently recorded in the balance sheet. This situation would likely impact, in
particular, on the carrying value of plant and equipment and intangible assets

MAJOR CHANGES OR TRENDS IN THE COMPANY'S BUSINESS

Refer to the commentary in the Operations Report.

2690359 Page 3 of 3
UNREALISED GAINS RESULTINGS FROM REVALUATIONS

There are no unrealised gains resulting from the revaluation of assets of the Company or its
subsidiaries, or any unrealised net changes in values or development margins of investment assets
included as separate items after profit before extraordinary items.

---

Half Year Report
For the six months to 30 September 2017

Page 2

OPERATIONS REPORT 30 September 2017


OVERVIEW

Blis Technologies Limited (Company) was formed to commercialise BLIS
®
advanced probiotic bacteria in
consumer products targeted at oral health applications such as for ear, nose and throat health, halitosis (bad
breath), gum and teeth health and immune support.

The Company reports a Net Deficit of $1,246k on revenue of $2,072k for the six months to 30 September 2017
(HY18). This represents a reduction of $1,674k from the $428k surplus recorded for the corresponding prior
period, being the six months to 30 September 2016 (HY17). This is below expectations.

Trading revenue for HY18 has reduced by 46% (down $1,767k) compared to the same period last year (HY18
$2,069k and HY17 $3,836k). In HY17, the Company experienced sales that related to a significant stock build by
our distributors in North America and Japan of BLIS M18
®
to support new product launches. Along with this, the
Company has invested in increasing its own stock levels of raw ingredient and worked to reduce lead times of
supply. This has resulted in a change in buying patterns by some of the Company's customers including a run-
down in their inventories. Sales by the Company are subject to major fluctuations due to distributors’ purchasing
patterns. Therefore, it is purchases by users/formulators that are important; in this respect, we can report that year
-on-year sales have continued to increase in our major markets in Europe and the US.

Our European business has continued to grow during HY18, albeit at a lower rate than expected due to the
extended period it took for Maspex Group to complete the acquisition of two brands, ENTitis™ and ENTitis baby™
(both of which contain BLIS K12
®
) from Sequoia Pharma. This impacted on sales momentum and new product
launch plans for the last quarter of FY17 and for HY18. Maspex is Poland’s largest food company and we believe
that their resources and expertise will be positive for our ongoing success in Poland. Together with our European
distributor, Bluestone Pharma, we are working closely with Maspex Group who are fully behind re-establishing the
sales momentum and implementing new product launches.

Key Challenges for HY18 include:
• Several customers choosing to run down stock levels through northern hemisphere summer months;
• Long lead times with new customer initiatives;
• Delays in new regulatory approvals; and
• Limited resources for targeting accelerated growth opportunities.
Key Highlights for HY18 include:
• Finalising a clear range portfolio of Blis-branded BLIS K12
®
and BLIS M18
®
finished products differentiated for
specific health targets within the NZ market, and in preparation for similar launches into overseas markets;
• Blis-branded BLIS K12
®
Throat Lozenges are now ranked as the 2
nd
largest brand in NZ Pharmacy Throat
Lozenge category and the fastest growing of the top 5 brands at 18% (calendar year to date compared with
previous year);
• Maspex Group, a leading food and supplements company taking over the Poland product range containing
BLIS K12
®;

• BLIS ElitePro
TM
approved for the High-Performance Sport Nutrition NZ supplements programme; and
• European/ Middle East expansion with Bluestone Pharma, signing 7 new partner agreements for new launch
activity and the initiation of their respective regulatory processes.

FINANCIAL

The Company reports a consolidated net deficit for HY18 of $1,246k (HY17: $428k net surplus) before tax. This
includes interest income of $3k received during HY18 ($3k for HY17).

Australasian sales of $484k in HY18 are $193k lower than HY17. During the first half of the year, we have
transitioned to the new portfolio of retail products in NZ which required a sell-through of old stock within the
channel. We have also launched a new website for online sales and have revised selling policies which has
resulted in a temporary decline in web sales. In spite of these impacts, we have seen 18% growth in sales ex
pharmacy to consumers. Sales in Australia are down on HY17, but have been prone to ordering fluctuations. This
is a small proportion of our overall Australasian sales as we await complementary medicine approval by the
Australian Therapeutic Goods Administration.

Page 3

Sales in Europe of $1,019k provided a small 3% ($33k) increase compared to HY17 ($986k) despite the lost sales
momentum experienced during the transition in ownership of the leading BLIS K12
®
based ENTitis products to
Maspex Group.

Sales in Asia of $220k show a reduction of $716k compared to HY17 ($936k). The main contributor to this decline
has been a run-down of stock following a pipeline build for a new product launch in Japan during HY17. Slower
sales than anticipated from the product launch have meant delays in further orders for that product until the initial
stock build is sold down. There has been a small initial ‘test’ order of BLIS K12
®
powder stick pack product into
China for a new customer launch. We continue to work with NZPR Group, our distributor for China, and Sinopharm
the largest pharmaceutical company in China, to finalise regulatory and channel pathways for successful product
launches.

North American ingredients sales is where the greatest impact is seen with a $863k decrease in sales during
HY18 compared with sales in HY17 ($1,173k) due to a change in buying patterns and the run-down of stock levels
over the northern hemisphere summer. It is important to note that the underlying sales from our distributor to their
customer base remains strong with Blis K12 sales above HY17. Blis M18 sales are down by 10% compared with
HY17, as sales were impacted by stock-build associated with new products. Looking forward, we have seen recent
confirmation of new product launch plans which are indicative of a recovery in the second half of the FY18.

Total expenses of $3,318k in HY18 are $93k lower than in HY17 ($3,411k). Overall this reflects lower operating
costs due to reduced sales and cost controls in place. During HY18, a key initiative has been to increase
investment in business development activity particularly marketing, regulatory, and business development to
support longer-term growth opportunities. We are making good progress in opening new markets and driving
greater consistency in the value proposition that is commercialised within markets along with ensuring recognition
of the BLIS brand across our markets. This will provide the Company with longer term value and a higher share of
profit margins as we get closer to our ultimate customer. No tax was payable and no dividend will be paid.

Net consolidated cash outflow from operating activities in HY18 was $545k (HY17: $690k cash inflow).

Investment in HY18 totalled $80k (HY17: $152k) reflecting further investment in finished goods manufacturing and
capitalisation of patent costs.

As at 30 September 2017, the Company held a net working capital position of $1,220k (HY17 $2,510k) which the
directors believe is sufficient to support its current business.


BUSINESS DEVELOPMENT STRATEGY PROGRESS

Blis Technologies Limited was formed to commercialise BLIS
TM
advanced probiotic bacteria in consumer products
targeted at oral health applications such as for ear, nose and throat health, halitosis (bad breath), gum and teeth
health and immune support.

We are world leaders in the commercial applications of these commensal probiotic bacteriocin-producing microbes
used to enhance Oral Health.

The board and management are focused on three core areas to ensure long-term sustainable profitable growth:
Positioning, Supply Chain and Product Pipeline.

Positioning:

We are moving our focus towards being a supplier of BLIS™-branded finished goods (including prominent co-
branding) to help ensure that the Company is recognised as the source. This is based on our increased
understanding of the customer value proposition and supported by credible clinical data. At the same time,
branded ingredient sales will be actively managed recognising this important revenue stream. Progress during
HY18 included:

• Completing revisions to the NZ portfolio and preparation for this range to be launched into other
international markets. The portfolio now includes:
o ThroatGuard Pro
TM
– extra-strength BLIS K12
®
protection for the mouth and throat.
o DailyDefence
TM
– BLIS K12
®
lozenges for adults and powder for young children helping to support
the natural immune system in the mouth and throat.
o HoneyBlis
®
– Lozenges with BLIS K12
®
and NZ honey (Kamahi and Manuka honey) to soothe
and protect the throat.

Page 4

o Fresh Breath Kit
®
– BLIS K12
®
Lozenges plus a specially-formulated mouth wash and tongue
scraper to treat halitosis and maintain fresh breath.
o TravelProtect
TM
– BLIS K12
®
based regimen for immunity protection when travelling.
o ElitePro
TM
- Developed in collaboration with High Performance Sport NZ; this is a BLIS K12
®

regimen to provide immunity support for the travelling athlete; it is World Anti-Doping Agency
(WADA) approved.
o ToothGuard
TM
and ToothGuard Junior
TM
- high dose BLIS M18
®
for healthy teeth and gums.
• Lodging an Australian Therapeutic Goods Administration (TGA) complementary medicine application in
preparation for product portfolio launch in Australia.
• Repositioning of the website to increase international e-commerce sales and social media educational
activity.
• Testing market activity for a finished product powder for China.
• New distribution relationships for the dental channel and the broader health professionals channel in NZ
as models that can be replicated in other markets internationally.

Supply Chain:

Developing internal expertise and processes as a means of managing the supply chain is a critical aspect in
controlling key facets of the business. Quality control is a focus to ensure delivery of a safe and efficacious
product. We see the Company as the core source of knowledge about our BLIS™ products. In line with this
priority, during HY18, we have:
• Developed plans for our manufacturing site to work towards GMP accreditation.
• Initiated technology transfer activity with overseas fermentation specialists to meet international capacity
needs in the long term.
• Ordered a new tablet press to meet capacity and quality requirements and align with GMP requirements.


Product Pipeline:

Utilising our scientific knowledge to develop new product opportunities is the third area of focus. The science and
technology base (from research and development through clinical studies to the end-product) is at the core of the
business and our science and clinical base underpin our brand. To accelerate both new strain development and
new product development (NPD) during the period we are:
• Continuing NPD to further enhance our portfolio – output has included Travel Protect, Tooth Guard and
Tooth Guard Junior, Daily Defence and Daily Defence Junior
• Undertaking intensive development activity related to the patented BLIS Q24
TM
, the skin probiotic strain in
our pipeline.
• Characterising Latent IP – this represents key BLIS Intellectual Property (IP) which we have identified as
having potential value outside of our core business focus, or IP that we have not commercialised because
of a lack of the required resources.

REGULATORY

We have initiated a study in South Korea to meet long-term regulatory needs, including support of claims.

A Therapeutic Goods Administration (TGA) application was lodged in Australia for use of BLIS K12
®
in finished
goods as a listed complimentary medicine. This will allow us to fully access the second-fastest growing probiotic
supplement market globally and the 6
th
largest by current value. Advice to date indicates we are making good
progress towards obtaining TGA approval.


CLINICAL TRIALS

The Company continues to support and monitor clinical trials to enhance the evidence base of our products.

One clinical trial has been published by independent researchers during the period:

Page 5

• Trials in patients with chronic periodontitis (gum disease) have shown that treatment with BLIS probiotic
resulted in significant improvement in clinical and microbial endpoints compared with an untreated group
1
.


OUTLOOK

While performance in HY18 is below expectations, the Board anticipates an improvement in the second half of the
financial year ending 31 March 2018. Contributors to this improvement include a move into the peak sales period
for BLIS K12
®
based products over the northern hemisphere winter, new market and new customer launches in
several markets and a return to normal ordering patterns following a correction in stock holding within the supply
chain. Along with this, the investment in revising the BLIS
®
finished product portfolio and upgrading our marketing
collateral, including our on-line presence has put us in a stronger position to progress plans for finished product
launches into key new markets.






Tony Offen
Chairman Brian Watson
Chief Executive

20
th
day of November 2017







1
Mani A et al Experiment Dent Sci 2017;6(1):6-13 Efficacy of Oral Probiotics as an adjunct to scaling and root planning in nonsurgical treatment of
generalized chronic periodontal patients. A clinico-microbiological study.

Page 6

BLIS TECHNOLOGIES LIMITED
CONSOLIDATED CONDENSED INTERIM INCOME STATEMENT
For the 6 Months Ended 30 September 2017

Notes 6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
(Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s
REVENUES
Trading revenue 6.3 2,069 3,836 6,543
Interest received 3 3 4
────── ─────── ───────
2,072 3,839 6,547

LESS
Distribution expenses 42 23 64
Marketing expenses 330 31 94
Occupancy expenses 98 85 161
Operating expenses 2,553 3,065 5,848
Finance expenses 1 - -
Other expenses 294 207 404
────── ────── ──────
3,318 3,411 6,571
────── ────── ──────
SURPLUS / (DEFICIT) BEFORE TAX (1,246) 428 (24)

Income tax expense - - -
_______ _______ _______

SURPLUS / (DEFICIT) FOR THE PERIOD (1,246) 428 (24)
══════ ══════ ═══════

Surplus/(deficit) for the period is attributed to:

Equity holders of the parent (1,246) 428 (24)
_______ _______ _______

(1,246) 428 (24)
══════ ══════ ═══════



Earnings per Share:

Basic (cents per ordinary share) (0.11) 0.04 (0.00)
Diluted (cents per ordinary share) (0.11) 0.04 (0.00)

Page 7

BLIS TECHNOLOGIES LIMITED
CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the 6 Months Ended 30 September 2017
6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
Notes (Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s

Surplus/(deficit) for the period (1,246) 428 (24)
Other comprehensive income - - -
────── ────── ──────
Total Comprehensive Income/(Deficit) for the Period (1,246) 428 (24)
══════ ══════ ══════



CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY


EQUITY AT BEGINNING OF THE PERIOD 4,017 3,987 3,987

Total comprehensive income (deficit) for the period (1,246) 428 (24)
Issue of share capital - 164 -
Share option equity reserve - - 54

────── ────── ──────
EQUITY AT END OF PERIOD 2,771 4,579 4,017
══════ ══════ ══════

Page 8

BLIS TECHNOLOGIES LIMITED
CONSOLIDATED CONDENSED INTERIM BALANCE SHEET
As at 30 September 2017

30 Sep 17 30 Sep 16 31 Mar 17
Notes (Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s


CURRENT ASSETS
Cash and short term deposits 526 1,750 1,140
Accounts receivable 808 791 1,150
Prepayments 46 43 97
Inventory 281 370 349
─────── ────── ───────
1,661 2,954 2,736

LESS CURRENT LIABILITIES
Accounts payable 435 438 476
Income in advance 1 6 -
Foreign exchange contracts 5 - 7
─────── ─────── ───────
441 444 483

WORKING CAPITAL 1,220 2,510 2,253


NON CURRENT ASSETS
Property, plant and equipment 570 728 646
Finite life intangible assets 981 1,177 1,118
Related party advance 3 - 164 -
─────── ──────── ────────
1,551 2,069 1,764

─────── ──────── ────────
NET ASSETS 2,771 4,579 4,017
═══════ ════════ ════════


OWNERS’ EQUITY
Share capital 3 37,298 37,462 37,298
Share option equity reserve 54 - 54
Retained earnings/(deficits) (34,581) (32,883) (33,335)
______ ______ ______
TOTAL EQUITY 2,771 4,579 4,017
═══════ ════════ ════════




Tony Offen Brian Watson
Chairman Chief Executive Officer

These Financial Statements have been authorised for issue 20
th
September 2017

Page 9





BLIS TECHNOLOGIES LIMITED
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASHFLOWS
For the 6 Months Ended 30 September 2017
Note 6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
(Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s
CASH FLOWS FROM OPERATING ACTIVITIES

Cash was provided from (applied to):
Receipts from customers 2,410 4,252 6,570
Interest received 3 3 4
Payments to suppliers and employees (2,958) (3,565) (6,330)
_______ _______ _______

Net cash inflow/ (outflow) from operating activities 2 (545) 690 244

CASH FLOWS FROM INVESTING ACTIVITIES

Cash was provided from (applied to):
Capitalised intangible costs (54) (41) (179)
Purchase of property, plant and equipment (26) (111) (136)
────── ────── ──────
Net cash inflow (outflow) from investing activities (80) (152) (315)

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash inflow (outflow) from financing activities - - -

─────── ─────── ───────
Net increase/ (decrease) in cash held (625) 538 (71)


Add cash and short term deposits at start of period 1,140 1,209 1,209
Foreign exchange differences 11 3 2
─────── ─────── ───────
Balance at end of period 526 1,750 1,140
═══════ ═══════ ═══════

COMPRISED OF:

Cash and short term deposits 526 1,750 1,140
________ ________ _______
Total 526 1,750 1,140
═══════ ═══════ ══════

Page 10

BLIS TECHNOLOGIES LIMITED
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL
STATEMENTS
For the 6 Months Ended 30 September 2017
1. SUMMARY OF ACCOUNTING POLICIES
Statement of Compliance
The unaudited condensed interim consolidated financial statements presented are those of Blis Technologies
Limited and its non-trading subsidiary Blis Functional Foods Limited (Group). The principal activity of Blis
Technologies Limited (referred to as Blis or the Company) is developing healthcare products based on strains of
bacteria that produce Bacteriocin-Like Inhibitory Substances (BLIS). The Company is a profit oriented entity,
registered in New Zealand under the Companies Act 1993. The Company is a "FMC Reporting Entity" for the
purposes of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013 and its annual financial
statements comply with these Acts.
The unaudited interim financial statements are prepared in accordance with Generally Accepted Accounting Practice
(NZ GAAP) and comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS),
as appropriate for interim financial statements (NZ IAS 34). The interim financial statements should be read in
conjunction with the Group annual report for the year ended 31 March 2017.
Basis of Preparation
The financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the
consideration given in exchange for assets.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information
satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions
or other events is reported.
The financial statements are presented in thousands of New Zealand dollars.
The condensed interim financial statements do not include all the information required for full financial statements.
The same accounting policies and methods of computation are followed in these interim financial statements as
were applied in the preparation of the Company’s financial statements for the year ended 31 March 2017.

Page 11


BLIS TECHNOLOGIES LIMITED

NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL
STATEMENTS
Going Concern
The financial statements have been prepared based on an assumption of going concern.
The Group has recorded a net deficit of $1,246k for HY18 (HY17: surplus $428k).
The Directors believe the going concern assumption is valid, reaching such a conclusion after having regard to the
circumstances which they consider reasonably likely to affect the Group during the period of one year from the date
these financials statements are approved.
Specifically, the Group held cash reserves of $526k as at 30 September 2017 which is considered sufficient to meet
its working capital requirements. The Company is investing in a new tablet press and has finance in place to fund
this. It is also upgrading the plant to a fully-accredited “Good Manufacturing Practice” (GMP) status, regulatory
approvals and new product launches as part of the Company’s growth strategy. Depending on progress, the
Company may consider options to support its growth and may seek additional capital by way of a placement and/or
share plan.
Based on management budgets and plans, the Group will be able to meet financial obligations for at least 12 months
from the date of approval of interim financial statements.
The Directors believe that there is no material uncertainty in respect of the Group’s ability to continue as a going
concern for the period assessed above due to the level of its current cash holdings and ability to generate operating
cash flows. Nevertheless, in the event it fails to achieve planned profitability, the Group may not be able to continue
as a going concern.
If the Group were unable to continue as a going concern, and pay debts as, and when, they become due and
payable, adjustments to the carrying value of assets would have to be made to reflect the situation. In such
circumstances, assets may need to be realised and liabilities extinguished, other than in the normal course of
business and at amounts which could differ significantly from the amounts at which they are currently recorded in
the balance sheet. This situation would likely impact, in particular, on the carrying value of plant and equipment and
intangible assets

Page 12

BLIS TECHNOLOGIES LIMITED
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL
STATEMENTS
For the 6 Months Ended 30 September 2017


2. RECONCILIATION OF NET SURPLUS/ (DEFICIT) WITH CASHFLOWS FROM OPERATING ACTIVITIES
6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
(Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s

NET SURPLUS/ (DEFICIT) FOR THE PERIOD (1,246) 428 (24)

Adjustments for non-cash items:

Depreciation 102 96 204
Amortisation of capitalised product development costs 120 166 313
Amortisation of patents 48 41 91
Amortisation of website development 23 4 1
CEO share plan costs - - 54
Foreign exchange loss/(gain) (11) (3) (2)
Loss/(Gain) on fair value of foreign exchange contracts (2) - 7
Loss/(Gain) on disposal of fixed asset - - 2
─────── ─────── ───────
(966) 304 646
Movement in working capital
Accounts receivable 342 416 57
Prepayments 51 13 (41)
Accounts payable and income in advance (40) (429) (397)
Inventories 68 (42) (21)
─────── ─────── ───────
421 (42) (402)
─────── ─────── ───────
NET CASH INFLOW (OUTFLOW) FROM OPERATING (545) 690 244
ACTIVITIES ═══════ ═══════ ═══════


3 SHARE CAPITAL - ORDINARY SHARES

Balance at beginning of period 37,298 37,298 37,298
Issue of share capital - -
────── ────── ──────
Balance at end of period 37,298 37,298 37,298
══════ ══════ ══════


NUMBER OF SHARES ON ISSUE (000’S)

Balance at beginning of period 1,107,654 1,102,154 1,102,154
Issue of shares - 5,500 5,500
────── ────── ──────
Balance at end of period 1,107,654 1,107,654 1,107,654
══════ ══════ ══════

Page 13

BLIS TECHNOLOGIES LIMITED
NOTES TO AND FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
For the 6 Months Ended 30 September 2017


Net tangible assets 6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
(Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s

Total assets 3,212 5,023 4,500
Less intangible assets (981) (1,177) (1,118)
Less total liabilities (441) (444) (483)
──────── ──────── ────────
Net tangible assets 1,790 3,402 2,899
──────── ──────── ────────
Number of shares outstanding (‘000) 1,107,654 1,107,654 1,107,654
──────── ──────── ────────
Net tangible assets per share (cents) 0.16 0.31 0.26
════════ ════════ ════════

4. CAPITAL COMMITMENTS, CONTINGENT LIABILITIES

The budgeted capital commitments as at 30 September 2017 were $260,000 (30 September 2016: $110,000). This
relates to the purchase of a new tablet press.



5. INVESTMENT IN SUBSIDIARY

Subsidiary Percentage Held Balance Date Principal Activity
2017 2016

Blis Functional Foods Limited 100% 100% 31 March Non trading


6. SEGMENTAL REPORTING

6.1 Adoption of NZ IFRS 8 Operating Segments
The Group is internally reported as a single operating segment to the chief operating decision-maker.

6.2 Revenue from major products and services
The Group’s revenues from its major products and services were as follows:

6 mths 6 mths 12 mths
30 Sep 17 30 Sep 16 31 Mar 17
(Unaudited) (Unaudited) (Audited)
$’000s $’000s $’000s

BLIS™ products 2,047 3,711 6,325
Non-core business 25 128 222
──────── ──────── _______
Total revenue 2,072 3,839 6,547
════════ ════════ ══════

Non-core revenues include interest received and contract manufacturing revenue of non-BLIS products.

Page 14

BLIS TECHNOLOGIES LIMITED
NOTES TO AND FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
For the 6 Months Ended 30 September 2017

6.3 Information about geographical areas
The Group operates in 4 principal geographical areas: Australasia, Asia (incl China), Europe and North America.
The Group’s revenue from external customers and information about its assets by geographical location (of the
customer) are detailed below:
Revenue from external customer’s Non-current assets
6 mths 30 Sept 6 mths 30 Sept 12 mths 30 Sept 30 Sept 12 mths
2017 2016 2017 2017 2016 2017
31 Mar 17 31 Mar 17
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Audited)
$’000 $’000 $’000 $’000 $’000
Trading Revenue
Australasia 484 677 1,092 1,551 2,069 1,764
North America 310 1,173 1,682 - - -
Asia 220 936 1,322 - - -
Europe 1,019 986 2,316 - -
Rest of World 36 64 124 - - -
Total Trading Revenue 2,069 3,836 6,536

Interest received 3 3 4
Grant Revenue - - 7
──────── ──────── ────── ──────── ──────── ────────
Total Revenue 2,072 3,839 6,547 1,551 2,069 1,764
════════ ════════ ══════ ════════ ════════ ════════
Revenues for the 6 months to 30 September 2017 include $1,019k, $347k and $310k, which arose from sales to the
Group's three largest customers.
Revenues for the 6 months to 30 September 2016 include $1,173k, $974k and $846k, which arose from sales to the
Group's three largest customers.
Revenues for year ended 31 March 2017 include $2,285k, $1,671k and $1,153, which arose from sales to the
Group's three largest customers.
7. SUBSEQUENT EVENTS
There were no subsequent events of note post 30 September 2017.
8. ADDITIONAL STOCK EXCHANGE INFORMATION
Refer to the half year preliminary announcement.