Challenging market conditions in US impact half year result

Results announcement
for Equity Security issuer



Results for announcement to the market
Name of issuer Blis Technologies Limited
Reporting Period 6 months to 30 September 2021
Previous Reporting Period 6 months to 30 September 2020
Currency NZ dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$3,893 (33%)
Total Revenue $3,893 (33%)
Net profit/(loss) from
continuing operations
($1,798) (268%)
Total net profit/(loss) ($1,798) (268%)
Interim/Final Dividend
Amount per Quoted Equity
Security
The Company does not propose to pay a dividend to its
shareholders
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.0085 $0.0045
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to the Chair and Chief Executive’s Report in the
accompanying unaudited financial statements.
Authority for this announcement
Name of person

authorised
to make this announcement
Richard Wingham
Contact person for this
announcement
Richard Wingham
Contact phone number 021 284 0446
Contact email address richard.wingham@blis.co.nz
Date of release through MAP

18 November 2021

Unaudited financial statements accompany this announcement.

---

Blis Technologies Limited1
REPORT
HALF YEAR
For the Six Months to
30 September 2021

Half Year Report2Half Year Report2
Contents.
HY22 Summary 3
Half Year Report 4
Financial Statements 7
Company Directory 17

Blis Technologies Limited3Blis Technologies Limited3
HY22 Summary3
Half Year Report4
Financial Statements7
Company Directory17
HY22 Summary.
Probi partnership
•Long term strategic partnership
•
Cash share issue $9.2m
Canada retail launch
BLIS
®
finished product range available in
pharmacies and health retailers
Unconditional
Skincare Co launch
NZ eCommerce launch
Capability Build
•New director appointments
–Tom Rönnlund (Probi CEO)
–Aimee McCammon
•Ecommerce Di
rector
•Global Ing
redients Account Manager
•People and Culture
Manager
Regulatory approval
India approval BLIS K12™ and BLIS M18™
Ingredient revenue
-
51
%
Revenue
Finished goods revenue
EBITDA loss
Growth in eCommerce sales
along with early impacts of
new launches
•
investment in Canada
launch
•
investment in Skin
launch
•
investment in R&D
33
%
decline
$
3.9m
+
37
%
$
1.5m
Primarily weak USA
ingredient sales

Half Year Report4
Chair & Chief Executive’s Report
Half year
report.
Financial Performance
Despite the positive developments noted above, COVID-19
continues to present short term challenges for the business.
HY22 was significantly impacted by lower ingredient revenue,
particularly in the USA market.
Revenue from ingredient sales was down by 51%, which
was primarily due to a 79% reduction in the USA ingredient
business. This reduction was offset in part by a 37% increase in
revenue from the BLIS PROBIOTICS™ range. Overall revenue was
down by 33% to $3.9m.
The reduction in revenue from the ingredient business is
consistent with reported results from other global probiotics
companies. In the early stages of the covid pandemic, it is now
apparent that our customer base actively built inventories in
order to respond to the pandemic. We also saw several new
online customers enter the market. In HY22 however we have
seen a reset with customers tightly managing stock holdings
in response to weaker and more uncertain market conditions.
Customers are also moving to a more “just in time’’ reorder
schedule to reduce market risk.
Total expenses for the business were up 24% compared with
the same period last year (HY21) as we invested in new roles to
build capability across the company, invested in new market
development and continued R&D to support our long-term
priorities.
The decline in revenue and increased investment in launch
activities has resulted in an EBITDA deficit of $1.5m, a net deficit
for the period of $1.8m and net operating cash outflows of
$1.4m. The cash issue of shares to Probi in July 2021 introduced
$9.2m of cash, resulting in cash balances held at the end of
September 2021
of $9.6m and also strengthening closing equity
to $13.0m.
The first half year (HY22) has
seen a continued focus on
growing revenue from the
BLIS PROBIOTICS™ range
and on positioning the
Company for future growth.
Undoubtedly the main
highlight during this period is
the completion of a long-
term strategic partnership
with Probi, establishing a
license agreement to drive
future revenue and R&D
collaboration opportunities.
Key revenue initiatives include the launch of the BLIS
PROBIOTICS™ range into Canada and the launch of the Live
Probiotic Hydration Serum under the new Unconditional
Skincare Co brand. These initiatives highlight our ability to
bring unique probiotic propositions to market.
Our focus continues to be growing our Blis branded range of
products to complement our ingredient sales, which by their
nature can be more variable. Growing our Blis branded range
increases our direct connection with the end consumer.

Blis Technologies Limited5
Staff
Our sincere thanks to all of the Company’s staff who continue
to work hard to present our wider range of products, both
ingredients and finished products into global markets. Covid
restrictions have required new ways of working to retain our
presence in our key markets.
New market initiatives
The 37% increase in Blis branded finished products reflects
the ongoing growth in eCommerce channels, along with new
revenue streams from skincare and the Canada launch.
With the appointment of an eCommerce director and additional
investment in building eCommerce capability, we are pleased
with the early growth across the mix of eCommerce platforms.
Overall eCommerce sales grew by 67% compared with HY21.
We remain enthusiastic regarding the growth prospects of this
channel and see momentum building across the mix of
relatively new initiatives in this space.
Canada
We launched our products on the Canada Amazon platform in
March 2021, with retail availability progressively building from
April 2021. Early retail activity has concentrated on working with
our distribution partner Purity Life establishing retail ranging.
This ranging activity is exceeding expectations with significant
interest in stocking our products. The Amazon eCommerce
platform and other established ecommerce sites are being used
to support this retail activity.
Skin
We continue to receive positive product reviews that validate
this breakthrough innovation. However, we do recognise the
uniqueness of our product offer and that it will take time to
build awareness and trial of our product. Since the launch in late
March 2021 we have seen steady increases in sales and
importantly a solid proportion of repeat business.
To build awareness and cut through in a crowded market we
are constantly refining our promotional mix in the market. We
are encouraged by the positive coverage we are getting from
influential media and the influencer community which will
continue to be an important part of our activity. Along with this
increased product sampling is providing good rates of
conversion to full product purchase.
Chair & Chief Executive’s Report continued
HALF YEAR REPORT
Strategic Partnership with Probi
In July 2021 we announced the long-term strategic
partnership with Probi establishing a licence and supply
agreement under which Probi has rights to manufacture and
sell BLIS K12™ and BLIS M18™, leveraging their established
global customer base. The strategic partnership also provides
for R&D collaboration to leverage joint strengths in probiotic
innovation to enhance our respective product innovation
pipelines.
We have made a positive start to the long-term collaboration
with Probi with significant early activity including the
technical transfer of proprietary knowledge to facilitate
Probi’s production, training and supporting Probi’s sales
team, and R&D engagement to identify synergies and
opportunities for sharing expertise.
Probi’s sales teams have attended major trade shows in
Europe and the USA during October 2021, promoting our
probiotic strains BLIS K12™ and BLIS M18™ at a time when
our Blis staff are unable to travel internationally. Probi has
reported strong interest from their network of customers and
are enthusiastic of the growth potential of the Blis strains.
New revenues from this relationship are unlikely to be
recognised until FY23 at the earliest, noting the relatively long
sales cycles associated with these types of products.
HY21
HY22
Finished GoodsIngredients
$
1.5m
$
1.1m
$
2.2m
$
4.6m
Over the second half of FY22, we will continue to refine our
promotional mix and plan for other market launches.
Cross border eCommerce China (CBEC)
Since the launch on Alibaba Tmall platform in January this
year, activity has been solely focused on the platform with
our agency and logistics partner, RooLife. We have recently
started to complement this activity with more off platform
activity constantly testing the mix and refining our
promotional strategy. Given travel restrictions Daigou sales
remain only a small contributor but important to our overall
brand building activity.
Revenue breakdown ($M
+
37
%
+
67
%
-
4
%
Finished
GoodseCommerceRetail

Half Year Report6
Chair & Chief Executive’s Report continued
HALF YEAR REPORT
We are also encouraged by the early engagement with Probi
regarding R&D collaboration opportunities, the two companies
share a focus of probiotic innovation but target different health
and wellness areas. The capabilities and expertise across both
teams o
ffer attractive synergies for new innovation which we
will actively explore over time.
Regional performance
Asia Pacific
Asia Pacific revenue was up 5% on the same period last
year. The 17% decline in ingredient sales and a decline in NZ
pharmacy sales, was offset by growth in finished product sales
from our blis.co.nz web store and early skincare launch sales.
Ingredient sales declined based on the phasing of orders from
the Japanese market.
Reordering from our Japanese distributor
to meet market demand came through late in September, with
supply outside the HY22 cut off. Retail sales into the Pharmacy
channel remain down on pre COVID-19 levels based on an
overall decline in the winter season cold and flu category. Once
again, we have seen light cold and flu seasons as populations
adhere to COVID-19 prevention strategies.
Europe Middle East
In Europe ingredient sales declined by 3%. There remains
significant market uncertainty regarding the COVID-19
pandemic outlook and we are seeing limited commitment to
early ordering and stock build for the northern hemisphere
winter. Ordering continues to be on a just in time basis but we
are seeing a lift in orders for the second half of the year (2HY22).
North America
HY21 saw exceptional growth in our ingredient business,
presenting a strong comparator against HY22. In HY21 we saw
specific new customer activity that has not been repeated in the
current year to date. Overall, the region revenue declined by
57% in HY22 driven by the ingredient decline of 79% compared
with HY21.
Our finished products sales in the region, made up by Amazon
USA sales plus early launch sales into the Canadian market
grew by 63%.
R&D activity
In HY22 we have continued to build our intangible asset
portfolio with a new provisional patent filing. We also continue
to strengthen our evidence base and the scientific backing
of our unique probiotic strains with several new scientific
publications and clinical reviews.
Our new product development pipeline has been further
strengthened with good progress on our probiotic toothpaste
and complementary skincare offers to expand the skincare
range.  Our probiotic toothpaste prototype is now ready for
consumer testing following significant internal sensory testing
and optimisation.
Brian Watson
Chief Executive Officer
Other initiatives include the release of the first batch of a dairy
free BLIS K12™ in August 2021 and positive progress on a BLIS
M18™ dairy free offer.
D
irectors
Following the Annual Shareholder Meeting in July 2021, Tony
Offen stood down as Chair of the Board with Geoff Plunket
taking over this role. Tony has assumed the role of Chair of the
Audit and Risk Committee and will remain on the Board
through to the next Annual Shareholder Meeting. We thank
Tony for his significant contribution as Chair.
Following the share issue to Probi in July 2021, Tom Rönnlund
(Probi CEO) was appointed to the Board. Tom brings a wealth of
experience from across various international
biopharmaceutical companies and provides the Board with an
international perspective on global markets.
In October 2021, Aimee McCammon was appointed to the
Board. Aimee, who is currently CEO of the Augusto Group, has
considerable experience in brand building and strategy, with
deep consumer marketing knowledge.
Outlook
We remain optimistic that the new revenue streams we have
established will provide growth into the future, however the rate
of growth will be subject to global market conditions impacted
by the COVID-19 pandemic.
We expect to see a stabilisation of our ingredient sales as we
move into the northern hemisphere winter and the uncertain
trading conditions stabilise, returning our existing business to
growth.
We have made a strong start to the Probi relationship having
trained the Probi sales team and transferred technical
knowledge to facilitate their customer engagement and
ultimately, the production of our products. Our outlook for this
relationship remains extremely positive and we expect royalty
revenues to commence in the new financial year, FY23.
Guidance is for full year revenue to be between $8.6m and
$9.1m with an EBITDA deficit in the range of $2.3m to $2.7m.
Geoff Plunket
Chairman

Blis Technologies Limited7
Brian Watson
Chief Executive Officer
Blis Technologies Limited7
Financial
Statements
For the six months
ended 30 September
2021

Half Year Report8
Consolidated Statement of
Comprehensive Income.
For the six months ended 30 September 2021
Notes Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
$’000 $’000 $’000
REVENUES
Revenue 3.1 3,893 5,794 10,613
Other income 3.2 341 153 226
Total Revenue and Other Income 4,234 5,947 10,839
EXPENSES
Distribution expenses 88 152 257
Marketing expenses 1,932 1,148 2,533
Occupancy expenses 33 33 66
Employee benefits 1,864 1,394 2,566
Raw materials and consumables 680 957 1,877
Operating expenses 1,407 1,184 2,950
Finance expenses 28 12 26
Total Expenses 6,032 4,880 10,275
SURPLUS / (DEFICIT) BEFORE TAX (1,798) 1,067 564
Income tax expense - - -
SURPLUS / (DEFICIT) FOR THE PERIOD (1,798) 1,067 564
Other comprehensive income - - -
TOTAL COMPREHENSIVE INCOME (1,798) 1,067 564
Earnings / (deficit) per share:
Basic (cents per ordinary share) (0.14) 0.10 0.05
Diluted (cents per ordinary share) (0.14) 0.10 0.05

Blis Technologies Limited9
Consolidated Statement of
Changes in Equity.
For the six months ended 30 September 2021
Share based
Retained payments Total
Share earnings/ equity attributable
Capital (deficit) reserve to Group
$’000 $’000 $’000 $’000
OPENING EQUITY – 1 APRIL 2021 37,469 (31,830) 23 5,662
Surplus / (deficit) for the period - (1,798) - (1,798)
Other comprehensive income - - - -
Total comprehensive income - (1,798) - (1,798)
Share capital issued 9,188 - - 9,188
Capital raising costs paid (55) - - (55)
CEO share option equity reserves - - - -
Employee performance rights plan reserve - - 20 20
9,133 - 20 9,153
CLOSING EQUITY – 30 SEPTEMBER 2021 46,602 (33,628) 43 13,017
OPENING EQUITY – 1 APRIL 2020 37,424 (32,394) 26 5,056
Surplus / (deficit) for the period - 1,067 - 1,067
Other comprehensive income - - - -
Total comprehensive income - 1,067 - 1,067
Share capital issued - - - -
Capital raising costs paid - - - -
CEO share option equity reserve - - - -
Employee performance rights plan reserve - - - -
- - - -
CLOSING EQUITY – 30 SEPTEMBER 2020 37,424 (31,327) 26 6,123
Unaudited

Half Year Report10
Consolidated
Balance Sheet.
As at 30 September 2021
Note Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
$’000 $’000 $’000
ASSETS
Current Assets
Cash and short term deposits 9,590 3,083 2,187
Trade and other receivables 1,176 1,594 1,572
Prepayments 169 142 308
Inventory 1,251 942 1,004
NZX Bond 75 75 75
Foreign exchange contracts 5 - -
TOTAL CURRENT ASSETS 12,266 5,836 5,146
Non Current Assets
Property, plant and equipment 490 491 471
Finite life intangible assets 1,649 859 1,711
Right-of-use-assets 601 300 478
TOTAL NON CURRENT ASSETS 2,740 1,650 2,660
TOTAL ASSETS 15,006 7,486 7,806
LIABILITIES
Less Current Liabilities
Trade and other payables 1,307 922 1,549
Current borrowings 47 45 46
Lease liabilities 200 76 200
Foreign exchange contracts - 22 17
TOTAL CURRENT LIABILITIES 1,554 1,065 1,812
Non Current Liabilities
Non current borrowings 13 61 37
Lease liabilities 422 237 295
TOTAL NON CURRENT LIABILITIES 435 298 332
TOTAL LIABILITIES 1,989 1,363 2,144
NET ASSETS 13,017 6,123 5,662
OWNERS EQUITY
Share capital 5 46,602 37,424 37,469
Retained earnings / (deficits) (33,628) (31,327) (31,830)
Share based payment equity reserves 43 26 23
TOTAL EQUITY 13,017 6,123 5,662
Geoff Plunket / Chairman Tony Offen / Director
These financial statements have been authorised for issue 18 November 2021.

Blis Technologies Limited11
Consolidated Statement
of Cashflows.
For the six months ended 30 September 2021
Note Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
$’000 $’000 $’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from / (applied to):
Receipts from customers 4,622 5,931 10,853
Interest received 17 9 22
Payments to suppliers and employees (6,024) (5,450) (10,260)
Finance costs (27) (12) (26)
Net cash inflow / (outflow) from operating activities 4 (1,412) 478 589
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from / (applied to):
Capitalise intangible assets (64) (542) (1,443)
Purchase of property, plant and equipment (88) (49) (96)
Sale of property, plant and equipment - 57 56
Net cash inflow / (outflow) from investing activities (152) (534) (1,483)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from / (applied to):
Repayment of borrowings (24) (22) (45)
Repayment of lease liabilities (99) (39) (127)
Proceeds from share capital issued 9,188 - -
Capital raising costs paid (55) - -
Repayment of share option - - 33
Net cash inflow / (outflow) from financing activities 9,010 (61) (139)
Net increase / (decrease) in cash held 7,446 (117) (1,033)
Add cash and short-term deposits at start of period 2,187 3,214 3,214
Foreign exchange differences (43) (14) 6
Balance at end of period 9,590 3,083 2,187
COMPRISED OF:
Cash and short-term deposits 9,590 3,083 2,187
9,590 3,083 2,187

Half Year Report12
1. BASIS OF REPORTING
Reporting Entity
The unaudited consolidated condensed interim financial
statements presented are those of Blis Technologies Limited
(the “Company”) and its subsidiary Blis Functional Foods
Limited (the “Group”).
The Group’s principal activity is developing healthcare products
based on strains of bacteria that produce bacteriocin activity for
sale in New Zealand and overseas.
Statutory base
The Company is a profit-oriented entity, domiciled in New
Zealand, registered under the Companies Act 1993 and listed
on the New Zealand Stock Exchange. The Company is an FMC
reporting entity under the Financial Markets Conduct Act 2013.
The financial statements have been prepared in line with the
requirements of these Acts and the Financial Reporting Act
2013.
Basis of Preparation
The unaudited consolidated condensed interim financial
statements have been prepared in accordance with New
Zealand 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 2021.
The unaudited consolidated condensed interim financial
statements were authorised for issue by the Board of Directors
on 18 November 2021.
Basis of Measurement
The unaudited consolidated condensed interim financial
statements have been prepared on the historical cost basis,
except for the derivative financial instruments that are
measured at fair value at the end of each reporting period.
Historical cost is based on the fair values of the consideration
given in exchange for assets.
Notes to and Forming
Part of the Consolidated
Financial Statements.
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 same accounting policies and critical judgements,
estimates and assumptions are applied in these unaudited
consolidated condensed interim financial statements as were
applied in the preparation of the Group’s consolidated financial
statements for the year ended 31 March 2021.
The unaudited consolidated condensed interim financial
statements are presented in thousands of New Zealand dollars.
The New Zealand dollar is the Group’s functional currency.
The unaudited consolidated condensed interim financial
statements do not include all the information required for full
financial statements.
Critical Judgements, Estimates and Assumptions
In the application of NZ IFRS, the Directors are required to make
judgements, estimates and assumptions about carrying values
of asset and liabilities that are not readily apparent from other
sources. The judgements estimates and assumptions used in
the preparation of these unaudited consolidated condensed
interim financial statements are consistent with those used
in the Group’s consolidated financial statements for the year
ended 31 March 2021.
Significant Accounting Policies
Except as described below, the accounting policies in the
unaudited consolidated condensed interim financial statements
are the same as those applied in the Group’s consolidated
financial statements for the year ended 31 March 2021.

Blis Technologies Limited13
Notes to and Forming Part of the Consolidated Financial Statements continued
2. SIGNIFICANT TRANSACTIONS AND EVENTS FOR THE CURRENT PERIOD
The following significant transactions and events affected the financial performance and financial position of the Group for the six-
month period ended 30 September 2021:
Probi Strategic Partnership
During the period, Blis entered a long-term strategic partnership with Nasdaq Stockholm-listed Probi AB (Probi), a global leader in
probiotics based in Sweden. Future revenues are expected from a licence and supply agreement granting Probi the right to manufacture
and sell Blis K12
TM
and Blis M18
TM
as ingredients and finished goods products as well as collaboration in research and development to
leverage joint strengths in probiotic innovation.
Probi also made a strategic investment in the Company for a cash issue of 166,148,034 new ordinary shares for a total value of
$9,187,986. This was settled in full on the 8 July 2021. The newly issued ordinary shares represent 13.04% of the total shares on issue.
Tom Rönnlund, CEO of Probi, joined the Board of Directors effective 22 July 2021.
3. REVENUE AND OTHER INCOME
3.1 REVENUE
Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
($’000) ($’000) ($’000)
Revenue consists of the following items:
Point in time recognition:
Sale of goods – domestic sales
Finished goods 568 637 1,115
Ingredients 26 13 27
Sale of goods – export sales
Finished goods 909 439 969
Ingredients 2,222 4,587 8,203
Over time recognition:
Right to access 168 118 299
3,893 5,794 10,613
3.2 OTHER INCOME
Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
($’000) ($’000) ($’000)
Grant income 324 142 201
Other income - 2 3
Interest income 17 9 22
341 153 226

4. RECONCILIATION OF NET SURPLUS/ (DEFICIT) WITH CASHFLOWS FROM OPERATING ACTIVITIES
Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
($’000) ($’000) ($’000)
NET SURPLUS / (DEFICIT) FOR THE PERIOD (1,798) 1,067 564
Adjustments for non-cash items:
Amortisation 126 73 122
Depreciation property, plant and equipment 69 69 137
Depreciation right of use assets 100 41 134
Foreign exchange loss / (gain) 21 1 (14)
ECL provision - - -
PSR expense 20 - 10
Loss / (gain) on fair value of foreign exchange contracts (5) 22 17
Loss on disposal of intangible assets - 14 14
Loss on disposal of fixed assets - - (1)
(1,467) 1,287 983
Movement in working capital
Trade and other receivables 404 (6) 2
Prepayments 139 59 (106)
Inventories (247) (263) (319)
Trade and other payable (241) (599) 29
55 (809) (394)
NET CASH INFLOW / (OUTFLOW) FROM OPERATING ACTIVITIES (1,412) 478 589
5. SHARE CAPITAL
30 Sep 21 30 Sep 20 31 Mar 21
(Unaudited) (Unaudited) (Audited)
No. of shares $’000 No. of shares $,000 No. of shares $’000
Balance at the beginning
of the period (fully paid) 1,107,653,565 37,469 1,107,653,565 37,424 1,107,653,565 37,424
Share capital issued 166,148,034 9,188 - - - -
Capital raising costs paid - (55) - - - -
Shares pursuant to CEO share plan - - - - - 45
Balance at the end of the year 1,273,801,599 46,602 1,107,653,565 37,424 1,107,653,565 37,469
6. CAPITAL COMMITMENTS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES
There are no capital commitments or material contingent assets or contingent liabilities as at 30 September 2021 (30 September 2020: $Nil).
7. INVESTMENT IN SUBSIDIARY
Subsidiary Percentage Held Balance Date Principal Activity
30 Sep 21 30 Sep 20 31 Mar 21
Blis Functional Foods Limited 100% 100% 100% 31 March Non-trading
Notes to and Forming Part of the Consolidated Financial Statements continued
Half Year Report14

Notes to and Forming Part of the Consolidated Financial Statements continued
8. SEGMENTAL REPORTING
8.1 Operating Segments
The Group is internally reported as a single operating segment to the chief operating decision-maker.
8.2 Revenue from major products and services
Six Months Six Months 12 Months
30 Sep 2021 30 Sep 2020 31 Mar 2021
(Unaudited) (Unaudited) (Audited)
($’000) ($’000) ($’000)
The Group’s revenues from its major products and services were as follows:
BLIS products 3,893 5,794 10,613
Non-core business 341 153 226
Total Revenue 4,234 5,947 10,839
Non-core revenues include interest received, grant revenue and contract manufacturing revenue of non BLIS branded products
8.3 Revenue from major products and services
Revenue from external Customers Non current Assets
Six Months Six Months 12 Months Six Months Six Months 12 Months
30 Sep 21 30 Sep 20 31 Mar 21 30 Sep 21 30 Sep 20 31 Mar 21
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Audited)
($’000) ($’000) ($’000) ($’000) ($’000) ($’000)
New Zealand 601 651 1,148 2,740 1,650 2,660
Asia Pacific (excl. NZ) 615 511 1,301 - - -
EMEA 1,252 1,288 3,101 - - -
North America 1,425 3,344 5,063 - - -
Total revenue 3,893 5,794 10,613 2,740 1,650 2,660
Grant revenue 324 142 201 - - -
Other revenue - 2 3 - - -
Interest revenue 17 9 22 - - -
Total revenue & other income 4,234 5,947 10,839 2,740 1,650 2,660
Revenues for the six months to 30 September 2021 include $1,252k, $540k, and $451k, which arose from sales to the Group’s three
largest customers.
Revenues for the six months to 30 September 2020 include $2,818k, $1,282k, and $409k, which arose from sales to the Group’s three
largest customers.
Revenues for the year ended 31 March 2021 include $4,038k and $3,084k which arose from sales to the Group’s two largest customers.
Web sales are allocated to the region where the end consumer is based.
9. SUBSEQUENT EVENTS
There were no subsequent events post 30 September 2021 (2020: Nil).
Blis Technologies Limited15

Half Year Report16Half Year Report16

Blis Technologies Limited17
Company
Directory.
Company number
1042367

Issued capital
1,273,801,599 Ordinary Shares

Registered office
Blis Technologies Limited
442 Moray Place
Dunedin 9016
Shareholders
Listed on the NZX main board

Share registrar
Link Market Services Limited
Deloitte Centre, 80 Queen Street
Auckland
Directors
G Plunket
A Balfour
T Offen
Dr B Richardson
Dr A Stewart
T Rönnlund (appointed 22 July 2021)
A McCammon (appointed 21 October 2021)

Chief executive
B Watson

Auditors
Deloitte Limited
PO Box 1245
Dunedin
Bankers
Bank of New Zealand
Dunedin

Solicitors
Anderson Lloyd
Private bag 1959
Dunedin 9054
Downie Stewart Lawyers
PO Box 1345
Dunedin 9054

Goldsmith Law
PO Box 40
Dunedin 9054

Website
www.blis.co.nz
www.unconditionalskin.com
Facebook
www.facebook.com/BLISTechnologiesLtd
www.facebook.com/unconditionalskin
Instagram
www.instagram.com/blisprobiotics
www.instagram.com/unconditionalskin
Blis Technologies Limited17

Half Year Report18
Physical Address
Blis Technologies Limited
Ground Floor
442 Moray Place
Dunedin 9016
Postal Address
PO Box 2208
Dunedin 9044
New Zealand
Email
info@blis.co.nz
Telephone
+64 3 474 0988
www.blis.co.nz

---

18 November 2021

Challenging market conditions in US impact half year results

The first half year (HY22) has seen a continued focus on growing revenue from the BLIS
PROBIOTICS™ range and on positioning the Company for future growth. Undoubtedly the main
highlight during this period is the completion of a long-term strategic partnership with Probi,
establishing a license agreement to drive future revenue and R&D collaboration opportunities.


Key revenue initiatives include the launch of the BLIS PROBIOTICS™ range into Canada and the
launch of the Live Probiotic Hydration Serum under the new Unconditional Skincare Co brand. These
initiatives highlight our ability to bring unique probiotic propositions to market.

Our focus continues to be growing our Blis branded range of products to complement our ingredient
sales, which by their nature can be more variable. Growing our Blis branded range increases our
direct connection with the end consumer.

Financial Performance
COVID-19 continues to present short term challenges for the business and HY22 was significantly
impacted by lower ingredient revenue, particularly in the USA market. Revenue from ingredient
sales was down by 51%, which was primarily due to a 79% reduction in the USA ingredient business.
This reduction was offset in part by a 37% increase in revenue from the BLIS PROBIOTICS™ range.
Overall revenue was down by 33% to $3.9m.

The reduction in revenue from the ingredient business is consistent with reported results from other
global probiotics companies. In the early stages of the covid pandemic, it is now apparent that our
customer base actively built inventories in order to respond to the pandemic. We also saw several
new online customers enter the market. In HY22 however we have seen a reset with customers
tightly managing stock holdings in response to weaker and more uncertain market conditions.
Customers are also moving to a more “just in time’’ reorder schedule to reduce market risk.


Total expenses for the business were up 24% compared with the same period last year (HY21) as we
invested in new roles to build capability across the company, invested in new market
development and R&D to support our long-term priorities.

The decline in revenue and increased investment in launch activities has resulted in an
EBITDA deficit of $1.5m, a net deficit for the period of $1.8m and net operating cash outflows
of $1.4m. The cash issue of shares to Probi in July introduced $9.2m of cash, resulting in cash
balances held at the end of September 2021 to $9.6m, also strengthening closing equity to $13.0m.



New market initiatives
The 37% increase in Blis branded finished products reflects the ongoing growth in
eCommerce channels, along with new revenue streams from skincare and the Canada launch.

Blis Technologies Limited: Ground Floor, 442 Moray Place, Dunedin Central 9016, PO Box 2208, Dunedin 9012, New Zealand
T:+64 3 474 0988 E: info@blis.co.nz W: www.blis.co.nz
Canada
We launched our products on the Canada Amazon platform in March 2021, with retail
availability progressively building from April 2021. Early retail activity has concentrated on working
with our distribution partner Purity Life establishing retail ranging. This ranging activity is exceeding
expectations with significant interest in stocking our products. The Amazon eCommerce platform
and other established ecommerce sites are being used to support this retail activity.


Skin

We continue to receive positive product reviews that validate this breakthrough
innovation. However, we do recognise the uniqueness of our product offer and that it will take time
to build awareness and trial of our product. Since the launch we have seen steady increases in sales
and importantly a solid proportion of repeat business. Over the second half of the year, we will
continue to refine our promotional mix and plan for other market launches.



Strategic Partnership with Probi
In July we announced the long-term strategic partnership with Probi establishing a licence and
supply agreement under which Probi has rights to manufacture and sell BLIS K12™ and BLIS M18™,
leveraging their established global customer base. The strategic partnership also provides for R&D
collaboration to leverage joint strengths in probiotic innovation to enhance our respective product
innovation pipelines.
We have made a positive start to the long-term collaboration with Probi with
significant early activity including the technical transfer of proprietary knowledge to
facilitate Probi’s production, training and supporting Probi’s sales team, and R&D engagement to
identify synergies and opportunities for sharing expertise.


R&D activity

In HY22 we have continued to build our intangible asset portfolio with a new
provisional patent filing. We also continue to strengthen our evidence base and the scientific backing
of our unique probiotic strains with several new scientific publications and clinical reviews.

Our new product development pipeline has been further strengthened with good progress on
our probiotic toothpaste and complementary skincare offers to expand the skincare range.
Our probiotic toothpaste prototype is now ready for consumer testing following significant internal
sensory testing and optimisation.

Other initiatives include the release of a first batch of a dairy free BLIS K12™ released, and positive
progress on a BLIS M18™ dairy free offer.



Outlook:
We remain optimistic that new revenue streams we have established will provide growth into the
future, however the rate of growth will be subject to global market conditions impacted by the
COVID-19 pandemic.

We expect to see a stabilisation of our ingredient sales as we move into the northern hemisphere
winter and the uncertain trading conditions stabilise returning our existing business to growth.

We have made a strong start to the Probi relationship having trained the Probi sales team and
transferred technical knowledge to facilitate their customer engagement and ultimately
production of our products. Our outlook for this relationship remains extremely positive and we
expect royalty revenues to commence in the new financial year, FY23.

Blis Technologies Limited: Ground Floor, 442 Moray Place, Dunedin Central 9016, PO Box 2208, Dunedin 9012, New Zealand
T:+64 3 474 0988 E: info@blis.co.nz W: www.blis.co.nz
Guidance is for full year revenue to be between $8.6m and $9.1m with an EBITDA deficit in the range
of $2.3m to $2.7m.


Ends

For further information, please contact:

Brian Watson
CEO
+64 27 705 9133


About Blis Technologies Ltd

Delivering proven health benefits through evidence-based, advanced probiotics
Blis Technologies is an NZX-listed manufacturer of advanced probiotic strains that go beyond the gut.
Combining innovation with evidence-based research and the highest quality production controls enables
the delivery of probiotic solutions for specific health targets including throat health, halitosis (bad breath),
immune support, teeth and gum health and skin health. BLIS® products are sold throughout New Zealand
and in Australia, Asia, Europe and the USA. More information about Blis Technologies Ltd can be found at
www.blis.co.nz.

Website: www.unconditionalskin.com
Instagram: @unconditionalskin #BLISQ24 #USC
Facebook: @unconditionalskin