Integrated Media Technology : Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)

About this update from Integrated Media Technology Limited

OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of the financial condition and results of operations of IMTE should be read in conjunction with the audited consolidated financial statements as at and for the fiscal year ended December 31, 2025, as at and for the year ended December 31, 2024, and for the year ended December 31, 2023, together with the notes thereto included elsewhere in this Annual Report. The financial information contained in this Annual Report is derived from the financial statements, which were prepared in accordance with IFRS. A. Operating Results IMTE is an Australian incorporated company and it is engaged in the business of trading in Halal products, the manufacture and sale of electronic glass and nano coated plates for filters. In 2024 the Company focused on the sale of Halal Products and smartglass lamination operation. In December 2024 a new CEO was appointed and in early 2025, management decided to rationalize the Company's operations and overhead by disposing of its digital assets trading platform and new energy products and solutions, and moving its Malaysia sales operation to Australia. Management's intention is to focus and build up the trading of Halal products and smartglass lamination operation, and if resources are available then the Company would revisit the investment in other businesses. For a description of the milestones that we have achieved since inception and through to the date of this report, see "Item 4. Information on the Company - A. History and Development of the Company." Overview In 2020 The Company started the businesses in nano-coated plate filter products and switchable glass in 2020; and (i) the provision of certification halal products and processes, and the sale of halal products and (ii) the setting up of a marketplace (Ouction) for trading in digital assets in 2022. Due to Covid 19 restrictive environment, the Company developed its businesses cautiously in 2022. For our halal business, we appointed distributors in London, Paris, and Kuala Lumpur and recorded modest revenue from this business unit in 2022. The other business units were in set up stage or early development stage and did not bring in any revenue. In early 2022, due to the geopolitical issues between the United States and China, the then Board decided to divest its businesses operation and investments in Hong Kong and China, and to shift the focus our investments and operations to Malaysia and Europe, including relocating our corporate headquarters and main business operations to Kuala Lumpur. By September 2022, we disposed substantially all our Hong Kong and China operation, which was mainly our switchable glass investment in China and Hong Kong. We also transferred our NFT operation to Kuala Lumpur with a view of setting up the digital assets operation in Singapore or Dubai. In 2023, we continued to develop our Halal and smartglass business. We streamlined our Halal business and started a cooperation with a national direct sales company in Malaysia to grow this business through this direct sales network. For the smartglass business, we planned to set up the operation base for our lamination operation in Malaysia to sell to customers in our initial markets in Southeast Asia and Middle East. In 2024, Halal sales declined due to economic situation in Malaysia. In the second half of 2024 we had changes to our Board and we also appointed a new CEO in December 2024. The Board decided to only focus on the businesses of Halal and smartglass operations going forward, until the financial situation in the Company was more stable. In line with this strategy, the corporate structure was simplified so that non-core businesses namely digital assets, air filter and new energy businesses were written off and or disposed to curtail our operating costs. The Company intends to re-visit investments in these businesses in the future when the Company has sufficient resources. In the meantime, the Company will focus on its primary businesses of Halal products and smartglass. In addition, the Company rationalize its operating costs by downsizing our Malaysia operation and moved the principal operation to Australia. The Company outsourced Halal products sales operation using consultants and sales agents for our sales activities. For the smartglass operation we planned to either set up the manufacturing ourselves, subject to sufficient resources, or seek to work with operating partners (with manufacturing experience, operating team, funding, sales network and or market access) to cooperate on setting up and operating the lamination operation in 2026. For the years ended December 31, 2025, 2024, and 2023, we have funded our operations primarily through the sale of equity securities in the Company and issuances of convertible notes and from operation cash flows. For details of the business overview, see "Item 4. Information on the Company - B. Business Overview." Recent Acquisitions See "Item 4. Information on the Company - A. History and Development of the Company." Results of Operations The following table sets forth our condensed consolidated statements of operations by amount and as a percentage of our total operating revenues for the periods indicated: For the years ended December 31, 2025 2024 2023 Amount $ % of Net Revenues Amount $ % of Net Revenues Amount $ % of Net Revenues Revenues: Services 71,580 100.0 - - - - Products - - 60,471 100.0 85,454 100.0 Total operating revenues 71,580 100.0 60,471 100.0 85,454 100.0 Cost and expenses Cost of sales (33,000 ) (46.1 ) (30,322 ) (50.1 ) (261,566 ) (306.1 ) Employee benefit expenses (286,887 ) (400.8 ) (338,532 ) (559.8 ) (517,547 ) (605.6 ) Financial costs (732,037 ) (1,022.7 ) (845,481 ) (1,398.2 ) (84,420 ) (98.8 ) Depreciation and amortization expenses - - (1,441,653 ) (2,384.0 ) (789,282 ) (923.6 ) Professional and consulting expenses (547,228 ) (764.5 ) (470,262 ) (777.7 ) (1,189,108 ) (1,391.5 ) Travel and accommodation expenses (181 ) (0.3 ) (135 ) (0.2 ) (5,932 ) (6.9 ) Other expenses (3,694 ) (5.2 ) (62,780 ) (103.8 ) (1,149,430 ) (1,345.1 ) Other (losses)/gains (790 ) (1.1 ) 345,924 572.0 14,885 17.4 Gain / (loss)on fair value change in warrant 231,161 322.9 (252,969 ) (418.3 ) - - Total cost and expenses (1,372,656 ) (1,917.7 ) (3,096,210 ) (5,020.2 ) (3,982,400 ) (4,660.3 ) Operating loss before income tax (1,301,076 ) (1,817.7 ) (3,035,739 ) (5,020.2 ) (3,896,946 ) (4,560.3 ) Non-operating income Interest income - - 18 0.0 4 0.0 Gain on exchange of convertible note for reduction of equipment deposit 583,484 815.1 - 0.0 - 0.0 Gain on fair value change in derivative financial instruments 448,154 626.1 1,304,598 2,157.4 (596,491 ) (698.0 ) Gain on derecognition of derivative liability - - - - 1,292,424 1,512.4 Gain on conversion of convertible notes liability - - - - 987,318 1,155.4 Other income 1,061 1.5 2,122 3.5 10,137 11.9 Net loss before income taxes (268,377 ) (374.9 ) (1,729,001 ) (2,859.2 ) (2,203,554 ) (2,578.6 ) Income tax expense - - - - - - Net loss (268,377 ) (374.9 ) (1,729,001 ) (2,859.2 ) (2,203,554 ) (2,578.6 ) Comparison of Year Ended December 31, 2025 to Year Ended December 31, 2024 Revenue The following table sets forth revenues by sources and the percentage of our total operating revenues for the period indicated: For the years ended December 31, 2025 2024 Amount $ % of Net Revenues Amount $ % of Net Revenues Products Halal products and services 71,580 100 60,471 100.0 Revenues. The revenue from operating activities for the year ended December 31, 2025 was $71,580 as compared to the prior year of $60,471, an increase of $11,109, or 18.4% from the prior year. The main source of revenue for the year was the provision of consulting services for the Halal process. In 2024, the revenue earned was the sale of Halal products. The growth in sales compared to the previous year was due to demand and the general economic situation in the Malaysia market. Cost of Sales . The following table sets forth cost of sales by sources of revenues by amount and as a percentage of net revenues for the years indicated: Years ended December 31, 2025 2024 Amount $ % of Net Revenues Amount $ % of Net Revenues Services 33,000 46.1 - - Products - - 30,322 50.1 33,000 46.1 30,322 50.1 Cost of sales increased by 8.8% to $33,000 in 2025 from $30,322 in 2024, which was changed from products to services. Gross Profit and Gross Margin. Gross profit increased from $30,149 in 2024 to $38,580 in 2025. This was changed from products to services. Interest income. Interest income decreased from $18 in 2024 to $0 in 2025 due to less bank interest received in 2025. Gain on fair value change in derivate financial instruments. For the year ended December 31, 2025, the fair value change of derivative financial instruments relating to convertible promissory notes decreased from a net gain of $1,046,070 as compared to a net gain of $1,304,598 in the prior year. Other income Other income decreased from $2,122 in 2024 to $1,061 in 2025. Expenses The operating expenses for the year ended December 31, 2025 were $1,372,656 as compared to the prior year of $3,096,210. The decrease of $1,723,554 in total operating expenses was mainly attributable to the following: - A decrease of $51,645 in employee benefit expenses from $338,532 in 2024 to $286,887 in 2025, which was primarily decrease directors remuneration; - A decrease of $113,444 in finance costs from $845,481 in 2024 to $732,037 in 2025 which was mainly attributable to a decrease in interest expense charges on convertible note; - A decrease of $1,441,653 in depreciation and amortization expenses from $1,441,653 in 2024 to $0 in 2025 due to the property, plant and equipment were fully depreciated in 2024; - An increase of $76,966 in professional and consulting expenses from $470,262 in 2024 to $547,228 in 2025 resulting from the increase in corporate activities thus higher legal and professional fees and the increase in consulting services in 2025; - A decrease of $59,086 in other expenses of $62,780 in 2024 to $3,694 in 2025; - A decrease of $346,714 in other losses which was the result of a gain of $345,924 in 2024 as compared to a loss of $790 in 2025. The decrease was mainly attributable to the gain on disposal of subsidiaries in 2024; - A decrease of $484,130 in the fair value change in warrants from a gain $252,969 in 2024 to a loss of $231,161 in 2025. Income tax No income tax expenses were recognized during the year ended December 31, 2025. Net Profit/(Loss) We recorded a net loss of $268,377 for the year ended December 31, 2025 as compared to a net loss of $1,729,001 recorded for the year ended December 31, 2024. Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 Revenue The following table sets forth revenues by sources and the percentage of our total operating revenues for the period indicated: For the years ended December 31, 2024 2023 Amount $ % of Net Revenues Amount $ % of Net Revenues Products Halal products 60,471 100 85,454 100.0 Revenues . The revenue from operating activities for the year ended December 31, 2024 was $60,471 as compared to the prior year of $85,454, a decrease of $24,983 or 29.2% from the prior year. The main source of revenue for the year was the sale of Halal products. The decline in sales compared to the previous year was due to demand and the general economic situation in the Malaysia market. Cost of Sales . The following table sets forth cost of sales by sources of revenues by amount and as a percentage of net revenues for the years indicated: Years ended December 31, 2024 2023 Amount $ % of Net Revenues Amount $ % of Net Revenues Halal products 30,322 50.1 261,566 306.1 Cost of sales decreased by 88.4% to $30,322 in 2024 from $261,566 in 2023, which was primarily attributed to decreased demand. Gross Profit and Gross Margin. Gross profit sales in 2023 that did not materialize and their related products were written off to cost of sales. Interest income. Interest income increased from $4 in 2023 to $18 in 2024 mainly due to bank balance increases. Gain on fair value change in derivate financial instruments. For the year ended December 31, 2024, the fair value change of derivative financial instruments relating to convertible promissory notes was a net gain of $1,304,598 as compared of loss of $596,491 in the prior year. Gain on conversion of convertible notes. For the year ended December 31, 2023, the gain arising from conversion of convertible note comprises from i) gain on conversion of convertible note was $987,318, and ii) gain on derecognize of derivative liability was $1,292,424. There were no convertible notes converted in 2024. Other income Other income decreased from $10,137 in 2023 to $2,122 in 2024. In 2023, other income was mainly the waiver of debts. Expenses The operating expenses for the year ended December 31, 2024 was $3,096,210 as compared to the prior year of $3,982,400. The decrease of $886,190 in total operating expenses was mainly attributable to the following: - A decrease of $179,015 in employee benefit expenses from $517,547 in 2023 to $338,532 in 2024, which was primarily due to decrease in number of staff in 2024 as compared to 2023; - An increase of $761,061 in finance costs from $84,420 in 2023 to $845,481 in 2024 which was mainly attributable to an increase in interest expense charges on convertible notes; - An increase of $652,371 in depreciation and amortization expenses from $789,282 in 2023 to $1,441,653 in 2024. This change is attributed to the management's decision to fully depreciate machinery as of December 31, 2024; due to a change in estimated useful lives. - A decrease of $718,846 in professional and consulting expenses from $1,189,108 in 2023 to $470,262 in 2024 resulting from the decrease in corporate activities thus lower legal and professional fees in 2024 and the decrease in consulting services; - A decrease of $1,086,650 in other expenses of $1,149,430 in 2023 to $62,780 in 2024 was primarily attributed to written off of operating assets, amount due from former companies, inventory, bad debt, other receivable and other current assets in the year 2023; - A decrease of $331,039 in other losses which was a result from a gain of $14,885 in 2023 to a gain of $345,924 in 2024. The decrease was mainly attributable to the loss on disposal of subsidiaries in 2024; - An increase of $252,969 in the fair value change in warrant from a $0 in 2023 to a loss of $252,969 in 2024. Income tax No income tax expenses were recognized during the year ended December 31, 2024. Net Loss We recorded a net loss of $1,729,001 for the year ended December 31, 2024 as compared to a net loss of $2,203,554 recorded for the year ended December 31, 2023. Off Balance Sheet Arrangements There were no off-balance sheet arrangements that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations. New, Revised or Amending Accounting Standards and Interpretations New standards and amendments to standards are effective for annual periods beginning after 1 January 2026 and earlier application is permitted; however, the Group has not early adopted them in preparing these Consolidated Financial Statements. New or Amended Standard Forthcoming requirements Title of the Standard Effective for Annual Periods Beginning on or After Classification and measurement of Financial Statements Amendments to IFRS 7 and IFRS 9 January 1, 2026 Annual Improvements to IFRS Annual Improvements to IFRS Accounting Standards Volume 11 January 1, 2026 Presentation and Disclosures of Financial Statements IFRS 18 January 1, 2027 Subsidiaries without Public Accountability: Disclosures IFRS 19 January 1, 2027 The amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods. B. Liquidity and Capital Resources Since our inception, our operations have mainly been financed through the issuance of equity securities. Additional funding has come through shareholder advances and convertible notes. For the past 3 years, we have recorded losses of $268,377, $1,729,001 and $2,181,158 for the fiscal years ended December 31, 2025, 2024, and 2023 respectively. Equity Issuances The following table summarizes our issuance of Ordinary Shares for cash, from the conversion debts and share based payments. We did not issue shares for executive compensation in the last 3 fiscal years. Fiscal Year Number of Shares Net Proceeds (in $) Share issuance for cash 2023 29,999 * 90,000 Share issuance in respect of payment to a consultant 2023 66,145 * 294,850 Share issuance for cash 2023 607,817 1,443,408 Share issuance in respect of payments to consultants 2023 114,116 228,232 Share issuance in respect of acquisition of subsidiaries 2023 300,000 750,000 Share issuance in respect of conversion of convertible notes 2023 240,000 600,000 Share issuance for cash 2024 21,000 52,500 Share issuance in respect of payments to a consultant 2025 15,000 18,000 * Adjusted for post share consolidation of 10 shares for 1 share on October 16, 2023. Capital Requirements As of December 31, 2025, we had total current assets of $1,425,732 which mainly consisted of $160 in cash and cash equivalents, $1,425,572 in trade receivable and other receivables. Our current liabilities on December 31, 2025 totaled $1,987,225 which mainly consisted of $1,693,225 in trade and other liabilities, $16,352 in derivatives in financial instruments, $255,840 in convertible promissory notes and $21,808 in warrant liabilities. Our net current liabilities at December 31, 2025 was $561,493 as compared to $14,792,773 at December 31, 2024. Our current cash and cash equivalents are insufficient to fund our capital expenditures in the next 12 months based on our budget, realization of our current assets, and forecast revenue. We will still be required to raise funds from the capital or debt markets in 2026 to roll out our full business plans. If we are unable to raise additional capital when required or on acceptable terms or if we do not realize our anticipated operating and sales plans, we may have to significantly delay, scale back or discontinue some, if not all, our operations. Cash Flows The following table summarizes our cash flows for the periods presented: Fiscal Year Ended December 31, 2025 2024 2023 $ $ $ Net cash used in operating activities (9,994 ) (1,066,792 ) (913,323 ) Net cash (outflows) / inflows in investing activities - (1,335 ) 1,760 Net cash inflows by financing activities - 402,500 1,533,408 Net (decrease)/increase in cash and cash equivalents (9,994 ) (665,627 ) 621,845 Cash and cash equivalents at beginning of year 10,154 675,781 53,936 Cash and cash equivalents at end of year 160 10,154 675,781 Net cash used in operating activities were $9,994, $1,066,792 and $913,323, during the years ended December 31, 2025, 2024 and 2023 respectively. Net cash used in operating activities for the year ended December 31, 2025 were mainly due to the fair value change in derivative financial instruments and the net inflows from the changes in working capital from operations. For the year ended December 31, 2024, net cash inflows in operating activities were mainly due to the loss for the year, depreciation and amortization expenses. For the year ended December 31, 2023, the net cash outflow in operating activities was mainly due the loss for the year and the net inflows from the changes in working capital from operations and fair value change in derivative financial instruments and changes in fair value of warrants. Net cash used in investing activities were cash outflows of $1,335, and cash inflows of $1,760 for the years ended December 31, 2024 and 2023 respectively. In 2024, net cash outflow was on the disposal of subsidiaries. In 2023, the net cash inflows in investing activities were mainly due to cash acquired on purchase of assets. Net cash inflows in financing activities were $402,500, and $1,533,408 for the years ended December 31, 2024 and 2023 respectively. Net cash inflows in financing activities during the year ended December 31, 2024 were attributable to the issuance of shares and convertible promissory notes. Net cash inflows in financing activities during the year ended December 31, 2023, were attributable to the issuance of shares. We had net cash and bank balance of $160, $10,154, and $675,781 as at December 31, 2025, 2024 and 2023 respectively. C. Research and Development, Patents and Licenses The Company did not conduct any research and development activities and incur no expenses for R&D in 2025, 2024 and 2023. D. Trend Information We are still developing our business operations and it is not possible for us to predict with any degree of accuracy the outcome of our business in the future. Our operations are mainly dependent on further development and commercialization of our business and technologies. E. Critical Accounting Estimates Our consolidated financial statements are prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). In preparing our consolidated financial statements, we make judgements, estimates and assumptions about the application of our accounting policies which affect the reported amounts of assets, liabilities, revenue and expenses. Our critical accounting judgements and sources of estimation uncertainty are described in Note 3 to our consolidated financial statements, which are included elsewhere in this Annual Report. F. Reserved

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