Vast Renewables Limited Announces Operational and Financial Results for First Half of Fiscal 2024
*Operational and Funding Highlights*· Investment of €10.0 million from EDF Australia, a subsidiary of EDF Group
· Equity investment from the Canberra Airport Group valued at USD $9.2 million
· Subsequently announced funding agreements for up to AUD $40.0 million from the Australian and German governments to construct the Solar Methanol 1 project along with consortium partner Mabanaft in January 2024
· Closed business combination with Nabors Energy Transition Corp. on December 18, 2023
*Financial Metrics for Six Months Ending December 31, 2023*
· Total revenue consisting of $768,000, made up of both customer and grant revenue
· Available cash and equivalents of $16.5 million
· Net loss of ($281.5) million primarily attributable to non-cash listing expenses of ($106.0) million and derivative losses of ($164.3) million related to the close of the business combination
· Total diluted common shares outstanding as of December 31, 2023 of 29,291,884
SYDNEY, Australia, March 28, 2024 (GLOBE NEWSWIRE) -- Vast Renewables Limited (“Vast” or the “Company”) (Nasdaq: VSTE), a renewable energy company specializing in concentrated solar thermal power (“CSP”) energy systems that generate zero-carbon, utility-scale electricity and industrial process heat today announced operational and financial results for the first half of the Company’s fiscal 2024, comprising the six months ended December 31, 2023.
*Funding Commitments*
During the first half of fiscal year 2024, Vast announced several funding commitments from strategic partners. In connection with the closing of Vast’s business combination, EDF Australia, a subsidiary of France’s EDF Group, which operates in more than 25 countries worldwide, executed on its capital commitment to Vast of a capital commitment of €10 million in conjunction with an agreement between the companies to partner on development of Australian CSP projects. In addition, Canberra Airport Group executed on its capital commitment valued at $9.2 million.
“The support Vast has received from our strategic partners has been very meaningful to the progress of our company, both from a financial as well as operational standpoint,” said Craig Wood, CEO of Vast. “Canberra Airport Group and EDF Australia have shown their enthusiasm for CSP and their commitment to the clean energy transition through their commitments to Vast, with each bringing their own strategic imperatives to the partnerships with an eye to sustainable aviation fuel production and clean energy production. We are very excited to progress and expand our relationships with these two firms.”
Subsequent to the end of the first half of the Company’s fiscal 2024, Vast announced the award of a total of up to approximately AUD $40.0 million in conditional funding agreements, in conjunction with the Company’s consortium partner, Mabanaft. As a result of the Solar Methanol 1 (SM1) project’s selection for funding from the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE), Vast will receive up to AUD $19.5 million from the Australian Renewable Energy Agency (ARENA), and Mabanaft is to receive up to €12.4 million from Projektträger Jülich on behalf of the German government. The funding relates to development of Vast’s Solar Methanol 1 (SM1) project in Port Augusta, South Australia, which aims to produce green methanol through use of Vast’s CSP v3.0 technology.
*Operational Events*
During the first half of fiscal year 2024, Vast continued to make progress on its first utility-scale project for power generation, known as VS1, located in Port Augusta in South Australia.
On June 6, 2023 Vast announced the award to Worley Ltd. of contracts for basic engineering and front-end engineering and design (FEED) work for the VS1 project.
“I am pleased by the progress on Vast’s VS1 project and excited by the partnership we have so far forged with Worley,” said Mr. Wood. “Bringing VS1 online using our CSP v3.0 technology will be a team effort, and we could not have selected a better teammate. Initial engineering on this first-of-its-kind project is crucial to its success, and we are confident in Worley’s approach. As VS1 moves forward through calendar 2024, we will look to further expand our world-class team.”
*Key Hires and Board of Directors*
On August 23, 2023, Vast announced the hiring of Marshall D. (Mark) Smith as chief financial officer. Based between Vast’s Sydney headquarters and Houston, Texas, Mr. Smith brings more than 30 years of experience to the position, including energy industry expertise and leadership in operations, capital allocation, business development, and financial management. Most recently, he was CFO for a Texas-based privately held oil and gas company, having previously served as CFO for Guidon Energy, an oil and gas company that was Blackstone Energy Partners’ largest energy-focused investment. Mr. Smith also held executive positions at California Resources Corporation, Occidental Petroleum, Ultra Petroleum, and J.M. Huber Energy. Prior to that, he served as a Managing Director of Investment banking at Nesbitt Burns Securities (now BMO Capital Markets).
On September 9, 2023, the Company announced the hiring of Federico Sandoval as project director for the VS1 project. Mr. Sandoval brings a wealth of CSP expertise and a global track record of success to this role. His previous role as construction manager at Noor Energy in the UAE and his prior experiences with multiple CSP projects worldwide should make him an invaluable contributor to the Vast team and the delivery of VS1.
On January 12, 2024, the Company announced its complete seven-member board of directors. Vast’s board of directors is comprised of Chairman Peter Botten, an experienced energy executive, including over 26 years as managing director of Oil Search; Vast CEO Craig Wood; William Restrepo, chief financial officer of Nabors Industries Inc.; Colleen Calhoun, formerly of General Electric and Quaise Energy; Tom Quinn, an experienced energy and infrastructure executive with global experience; Colin Richardson, an experienced investment banker; and John Yearwood, an experienced board member and former CEO, President and COO of Smith International, Inc.
*Financial Results*
For the six months ending December 31, 2023 Vast reported total revenue of $768,000, compared to $547,000 for the same period in 2022. This included approximately $440,000 in revenue received in the form of grants and approximately $328,000 in revenue received from customers. The overall increase in revenue during the six months ending December 31, 2023 was related to (a) increased activity in relation to the design, engineering and project management services for a solar facility owned by Commonwealth Scientific and Industrial Research Organization (CSIRO), and (b) higher estimated refundable Research & Development tax rebate recoveries due to higher spend incurred on eligible activities.
During the period, Vast reported a net loss of ($281.5) million compared to a net loss of ($3.9) million during the previous year’s period. This is equal to diluted loss per share of ($66.44) for the six months ended December 31, 2023 as compared to diluted loss per share of ($1.83) for the same period in 2022. The increase in net loss was primarily related to non-cash accounting activities related to the close of the business combination, predominantly (a) share based listing expense recognized upon consummation of the business combination, amounting to $106.0 million, and (b) the loss realized recorded upon conversion of Convertible financial instruments previously issued by Vast, immediately prior to the consummation of the business combination, amounting to $170.4 million.
On December 31, 2023, the Company had total available cash and equivalents of $16.5 million compared to $2.1 million on June 30, 2023. The Company reported total debt outstanding of $5.4 million as of December 31, 2023, compared to $26.9 million as of June 30, 2023.
As of December 31, 2023, Vast had total diluted common shares outstanding of 29,291,884.
*About Vast*
Vast is a renewable energy company that has CSP systems to generate, store, and dispatch carbon-free, utility-scale electricity and industrial heat, and to enable the production of green fuels. Vast’s CSP v3.0 approach to CSP utilizes a proprietary, modular sodium loop to efficiently capture and convert solar heat into these end products.
On December 19, 2023, Vast was listed on the Nasdaq under the ticker symbol “VSTE”, while remaining headquartered in Australia.
Visit www.vast.energy for more information.* *
*Contacts*
For Investors:
Caldwell Bailey
ICR, Inc.
VastIR@icrinc.com
For US media:
Matt Dallas
ICR, Inc.
VastPR@icrinc.com
For Australian media:
Nick Albrow
Wilkinson Butler
nick@wilkinsonbutler.com
*Forward Looking Statements*
The information included herein and in any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included herein, regarding Vast’s ability to regain and maintain compliance with Nasdaq listing requirements, Vast’s future financial performance, as well as Vast’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used herein, including any oral statements made in connection herewith, the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “project,” “should,” “will,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward looking statements are based on Vast management’s current expectations and assumptions, whether or not identified in this press release, about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Vast disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. Vast cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Vast. These risks include, but are not limited to, general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the inability to recognize the anticipated benefits of Vast’s recent business combination; costs related to that business combination; Vast’s ability to manage growth; Vast’s ability to execute its business plan, including the completion of the Port Augusta project, at all or in a timely manner and meet its projections; Vast’s ability to comply with its, and its counterparties’ respective compliance with their, respective obligations under the funding agreements related to SM1, the agreement with CYD, the agreement with Worley Ltd and Vast’s other financing and commercial agreements; potential litigation, governmental or regulatory proceedings, investigations or inquiries involving Vast or its subsidiairies, including in relation to the recent business combination; changes in applicable laws or regulations, Vast’s ability to regain and maintain compliance with Nasdaq listing standards and general economic and market conditions impacting demand for Vast’s products and services. Additional risks are set forth in the section titled “Risk Factors” in the final prospectus, dated March 11, 2024, and other documents filed, or to be filed with the SEC by Vast. Should one or more of the risks or uncertainties described herein and in any oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact Vast’s expectations can be found in Vast’s periodic filings with the SEC. Vast’s SEC filings are available publicly on the SEC’s website at www.sec.gov.
*Vast Renewables Limited (formerly Vast Solar Pty Ltd) and Controlled Entities*
*ABN 37 136 258 574*
*Condensed Consolidated Financial Statements for the Half-Years Ended December 31, 2023 and 2022*
*Vast Renewables Limited *
*Condensed consolidated statements of profit or loss and other comprehensive income (unaudited)*
*Six Months Ended *
*December 31,* *Note* *2023* *2022* *(In thousands of US Dollars, except per share amounts)*
Revenue:
Revenue from customers 3 $ 328 $ 208
Grant revenue 4 440 339
Total revenue 768 547
Expenses:
Employee benefits expenses 2,016 1,305
Consultancy expenses 2,200 416
Administrative and other expenses 5 5,485 1,318
Share based listing expenses 19 106,017 -
Raw materials and consumables used 586 208
Depreciation expense 27 23
Finance costs, net 5 1,509 1,154
Share in loss of jointly controlled entities 120 132
(Gain)/loss on derivative financial instruments 16 164,296 (5 )
Total expenses 282,256 4,551
Net loss before income tax (281,488 ) (4,004 )
Income tax benefit 6 2 67
Net loss (281,486 ) (3,937 )
Other comprehensive income that will not be reclassified to profit or loss:
(Loss)/gain on foreign currency translation 14 (241 ) 232
Total comprehensive loss for the year $ (281,727 ) $ (3,705 )
Net loss per share:
Basic $ (66.44 ) $ (1.83 )
Diluted $ (66.44 ) $ (1.83 )
Weighted-average number of common shares outstanding:
Basic 13 4,236,782 2,148,887
Diluted 13 4,236,782 2,148,887
The accompanying notes form part of the condensed consolidated financial statements
*Vast Renewables Limited*
*Condensed consolidated statements of financial position (unaudited)*
*December 31,* *June 30,* *Note* *2023* *2023* *(In thousands of US Dollars)*
Assets
Current assets:
Cash and cash equivalents $ 16,509 $ 2,060
Trade and other receivables 7 965 314
R&D tax incentive receivable 461 638
Prepaid expenses 8 2,590 44
Total current assets 20,525 3,056
Non-current assets:
Investment in joint venture accounted for using the equity method 12 1,201 1,300
Loans and advances to related parties 331 225
Property, plant and equipment 38 30
Right-of-use-assets 29 45
Total non-current assets 1,599 1,600
Total assets $ 22,124 $ 4,656
Liabilities
Current liabilities:
Borrowings 11 $ - $ 19,812
Derivative financial instruments 11 - 18
Trade and other payables 9 9,411 5,624
Warrants liability 10 2,767 -
Lease liabilities 36 26
Deferred consideration payable 12 976 955
Provisions 239 183
Total current liabilities 13,429 26,618
Non-current liabilities:
Lease liabilities - 28
Borrowings 11 5,404 7,134
Provisions 122 117
Derivative financial instruments 11 950 174
Total non-current liabilities 6,476 7,453
Total liabilities $ 19,905 $ 34,071
Equity:
Issued capital 13 $ 297,618 $ 2,354
Share-based payment reserve 14 22,692 4
Foreign currency translation reserve 14 3,044 3,285
Capital contribution reserve 14 - 4,591
Accumulated losses 15 (321,135 ) (39,649 )
Total equity / (deficit) $ 2,219 $ (29,415 )
Total liabilities and equity $ 22,124 $ 4,656
The accompanying notes form part of the condensed consolidated financial statements
*Vast Renewables Limited*
*Condensed consolidated statements of changes in equity (unaudited)*
*Reserves*
(In thousands of US Dollars) *Issued Capital* *Share-based Payment Reserve* *Capital Contribution Reserve* *Foreign Currency Translation Reserve* *Accumulated Losses* *Total **Equity/*
*(Deficit)*
Note 13 14 14 14 15
As of July 1, 2022 $ 2,354 $ 4 $ 3,452 $ 2,394 $ (24,432 ) $ (16,228 )
Net loss - - - - (3,937 ) (3,937 )
Other comprehensive income - - - 232 - 232
Related to shareholder loans, net of tax - - 200 - - 200
As of December 31, 2022 $ 2,354 $ 4 $ 3,652 $ 2,626 $ (28,369 ) $ (19,733 )
As of July 1, 2023 $ 2,354 $ 4 $ 4,591 $ 3,285 $ (39,649 ) $ (29,415 )
Net loss - - - - (281,486 ) (281,486 )
Other comprehensive income - - - (241 ) - (241 )
Share based compensation – earnout shares - 22,688 - - - 22,688
Issuance of shares to employees 638 - - - - 638
Conversion of debt to equity 208,800 - (4,591 ) - - 204,209
Shares issued to acquire NETC 67,799 - - - - 67,799
Pipe funding 17,506 - - - - 17,506
Shares issued as settlement of transaction expenses 2,057 - - - - 2,057
Transaction costs accounted for as a deduction from equity (1,536 ) - - - - (1,536 )
As of December 31, 2023 $ 297,618 $ 22,692 $ - $ 3,044 $ (321,135 ) $ 2,219
The accompanying notes form part of the condensed consolidated financial statements
*Vast Renewables Limited *
*Condensed consolidated statements of cash flows (unaudited)*
*Six Months Ended December 31,* *2023* *2022* (In thousands of US Dollars)
Cash from operating activities:
Net loss $ (281,486 ) $ (3,937 )
Adjustments to net loss:
Share in loss of jointly controlled entities 120 132
Share based listing expense 106,017 -
Share based payments expense 750 -
Depreciation and amortization expense 27 23
Non-cash finance costs recognised in profit or loss 1,509 1,154
Loss on derivative financial instruments 164,296 (5 )
Deferred income tax expense/(benefit) (2 ) (67 )
Changes in operating assets and liabilities:
Trade and other receivables (650 ) 42
Prepaid expenses (2,547 ) (12 )
R&D tax incentive receivable 177 (331 )
Contract liabilities (2 ) (59 )
Trade and other payables ^(1) (15,986 ) 60
Provisions 61 14
Foreign exchange differences (246 ) 155
Net cash used in operating activities $ (27,962 ) $ (2,831 )
Cash flows from investing activities:
Interest received 17 (1 )
Loans and advances paid to related parties (86 ) (77 )
Purchases of property, plant and equipment (34 ) (6 )
Net cash used in investing activities $ (103 ) $ (84 )
Cash flows from financing activities:
Payment of deferred consideration - (562 )
Proceeds from borrowings 33,333 3,291
Proceeds from capital reorganization 9,203 -
Repayment of lease liabilities (5 ) (21 )
Net cash generated by financing activities $ 42,531 $ 2,708
Net increase/(decrease) in cash and cash equivalents 14,466 (207 )
Effect of exchange rate changes on cash (17 ) (3 )
Cash and cash equivalents at the beginning of the period $ 2,060 $ 423
Cash and cash equivalents at the end of the period $ 16,509 $ 213
No cash interests were paid during the half-year ended December 31, 2023 or the half-year ended December 31, 2022.
No cash taxes were paid during the half-year ended December 31, 2023 or the half-year ended December 31, 2022.
^(1) This movement includes (19.8) million of payables from NETC that were extinguished upon consummation of the BCA. Refer to note 19 - Capital reorganization (the “SPAC Merger”) for further details.
The accompanying notes form part of the consolidated financial statements
*Notes to the condensed consolidated financial statements*
1. *General information*
The consolidated financial statements comprise of Vast Renewables Limited (formerly Vast Solar Pty Ltd) and the entities it controls. Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “Vast” mean Vast Renewables Limited and the entities it controls.
Vast is an Australian public company limited by shares incorporated on March 27, 2009. We are a leading renewable energy company that has developed concentrated solar power (CSP) systems to generate, store and dispatch carbon free, utility-scale electricity and industrial heat, and to enable the production of green fuels. Our unique approach to CSP utilizes a proprietary, modular sodium loop to efficiently capture and convert solar heat into these end products. Our vision is to provide continuous carbon-free energy globally by deploying our CSP technology and complementary technologies (e.g., intermittent solar PV and wind) to deliver renewable and dispatchable electricity, heat and storage on a continuous basis. We believe our CSP technology is capable of providing competitive, dispatchable and carbon-free power for on- and off-grid power generation applications, energy storage, process heat, and has the potential to unlock green fuels production.
Vast's registered office and principal place of business is as follows:
Level 7, Suite 02, 124 Walker Street
North Sydney
NSW 2060
With consummation of the SPAC Merger with Nabors Energy Transition Corp. (“NETC”) on December 18, 2023 (the “Closing Date”) as provided in note 19, this transaction is accounted for as a capital reorganization. The SPAC Merger, which is not within the scope of IFRS 3 as NETC does not meet the definition of a business in accordance with IFRS 3, is accounted for within the scope of IFRS 2. As such, the SPAC Merger was achieved with the Company issuing shares to NETC shareholders in exchange for the net liabilities of NETC ($11.2 million) as of the Closing Date, accompanied by a share recapitalization. The net liabilities of NETC are stated at historical cost, with no goodwill or other intangible assets recorded. Any excess of the fair value of the Company’s shares issued considering a fair value of the Vast Ordinary Shares of $11.99 per share (price of Vast Ordinary Shares at the Closing Date) over the fair value of NETC’s identifiable net liabilities acquired represents compensation for the service of a share exchange listing for its shares and is expensed as incurred (“share based listing expense”) and further details of share based listing expense is provided in note 19.
As a result of the SPAC Merger, NETC became a wholly-owned direct subsidiary of the Company. On December 19, 2023, the Ordinary Shares and public Vast Warrants commenced trading on the Nasdaq Stock Market, or “Nasdaq,” under the symbols “VSTE” and “VSTEW,” respectively.
The following table provides information relating to our directors and executive officers as of the date of approving these condensed financial statements.
*Name* *Age* *Position*
Craig Wood 46 Chief Executive Officer and Director
Marshall (Mark) D. Smith* 63 Chief Financial Officer
Kurt Drewes 50 Chief Technology Officer
Alec Waugh 57 General Counsel
Sue Opie 56 Chief People Officer
Peter Botten* 68 Chairman
Colleen Calhoun* 57 Director
Thomas Quinn* 62 Director
William Restrepo* 63 Director
Colin Richardson* 62 Director
John Yearwood* 64 Director
* appointed during the six months ended December 31, 2023 or since, before approving these condensed financial statements.
2. *Significant accounting policies*
a) *Basis of preparation*
The condensed consolidated interim financial statements for the half-year reporting period ended December 31, 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting. These financial statements comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), as applicable to interim financial reporting.
The condensed consolidated financial statements do not include all the notes of the type normally included in an annual financial report. Therefore, these financial statements should be read together with the annual financial statements for the fiscal year ended June 30, 2023.
The accounting policies adopted are consistent with those applied in the Company’s 2023 annual financial statements, except as disclosed below in note 1 (c).
Functional and presentation currency
The functional currency of Vast is Australian dollars (“AUD”) being the primary economic environment in which it operates. The presentation currency of Vast is United States (“US” or “$”) dollars.
b) *Going concern*
Vast incurred a net loss of $281.5 million and $3.9 million for the half-years ended December 31, 2023 and 2022, respectively and used net cash in operating activities of $28.0 million and $2.8 million for the half-years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had net current assets of $7.1 million and total net assets of $2.2 million. As of December 31, 2023, promissory notes totalling $5.4 million held by EDF were outstanding and included in the Company’s liabilities.
On January 12, 2024, Vast issued an additional 681,620 Ordinary Shares to Nabors Lux 2 S.a.r.l (“Nabors”) for a consideration of $7.0 million pursuant to the Nabors Backstop Agreement, as contemplated in the Business Combinations Agreement (“BCA”). In addition, under the BCA, Nabors granted Vast a term loan in the form of the Backstop Loan Agreement in an amount of up to $5.0 million which Vast expects to draw upon within the next 12 months.
The Company is forecasting that it will continue to incur significant operating cash outflows to fund the contracting, construction and commissioning of its current projects and to meet all of its obligations, including interest and principal payments on the outstanding debt. In particular, the development and delivery of projects “VS1” (a 30 MW / 288 MWh reference CSP plant located in Port Augusta, South Australia) and “SM1” (a 20 ton per day solar methanol demonstration facility that will be co-located with and partially powered by VS1) will require substantial funding. These projects are expected to rely on outside sources of financing. The Australian Renewable Energy Agency’s (ARENA) has announced funding of up to AUD 65 million on February 13, 2023 for VS1. On January 27, 2023, ARENA also announced that Vast will receive up to AUD 19.5 million from ARENA and Vast’s consortium partner, Mabanaft will receive up to EUR 12.4 million from Projektträger Jülich on behalf of the German government for SM1, in each case as part of the HyGATE Program. The funding awards for VS1 and SM1 are each subject to multiple conditions precedent, including but not limited to the ability to provide sufficient equity to meet the balance of funding requirements for the projects, the projects achieving financial close prior to specified dates and securing relevant permitting and approvals such as a grid connection. In addition, the Australian Federal government has announced financial support for the development of VS1 of up to AUD 110 million, the terms and conditions of which (including, inter alia, achievement of financial close of VS1 by a specified date) are to be negotiated with the Department of Climate Change, Energy, the Environment and Water and approved by the Australian Federal Government.
Vast intends to raise additional funding through an external capital raise commencing early in the financial year ending June 30, 2025. Vast’s ability to pursue its growth strategy and to continue as a going concern is principally dependent on the ability of the Company to meet its cash flow forecasts and to raise additional funding as and when necessary.
As a result of the above, there is material uncertainty related to events or conditions that may cast significant doubt (or raise substantial doubt as contemplated by PCAOB standards) on Vast’s ability to continue as a going concern, and therefore, that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
c) *Application of new and amended accounting standards adopted by the group*
A number of amended standards became applicable for the current reporting period. The group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.
3. *Revenue from customers* *Six Months Ended December 31,* *2023* *2022* *(In thousands of US Dollars)*
Consulting fees $ 326 $ 146
Margin fees 2 62 $ 328 $ 208
*
Consulting fees*
Revenue from consulting fees is recognised predominantly in relation to the design, engineering and project management services for a solar facility owned by Commonwealth Scientific and Industrial Research Organisation (CSIRO), based on the actual services provided to them at the end of the reporting period as a proportion of the total services to be provided. Revenue is recognised over time as the customer receives and uses the benefits from consulting services simultaneously. This is determined based on the actual labour hours spent relative to the total expected labour hours for each project or contract.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenue or costs are reflected in profit or loss in the period in which the circumstances that give rise to the change become known by management.
In the case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by Vast exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
*Margin fees*
In relation to the facility mentioned above, Vast is charging a margin fee in the form of 10% administration and handling fee for the procurement of equipment, components, and materials on behalf of CSIRO. The Company recognises revenue from procurement service at a point in time when goods are acquired and are presented net of relevant gross receipts and gross payments.4. *Grant revenue*
*Research and Development tax incentives*
In order to encourage the industry to invest more in R&D, the Australian government offers a tax incentive that reduces the Company’s R&D costs by offering tax offsets for eligible R&D expenditure. Under the R&D Tax Incentive, Vast is eligible to receive a refundable R&D tax offset in respect of its eligible R&D expenditure.
*R&D tax incentives * *Six Months Ended December 31,* *2023* *2022* *(In thousands of US Dollars)*
Refundable R&D tax offset for the half-year $ 440 $ 339
R&D Tax credit recoveries recognised as grant income $ 440 $ 3395. *Expenses*
Net loss includes the following expenses:
*Six Months Ended December 31,* *2023* *2022* *(In thousands of US Dollars)*
Administrative and other expenses:
Share based payment expenses^ (^1^) $ 750 $ -
Legal and accounting expenses 3,781 1,050
Other expenses 954 268 $ 5,485 $ 1,318
Gain/loss on derivative financial instruments:
Realised loss on Convertible Notes 3, 4 and 4, and Senior Convertible Notes issued to AgCentral^ (^2^) $ 170,376 $ -
Unrealised gain on Convertible Notes 3, 4 and 4, and Senior Convertible Notes issued to AgCentral - (5 )
Unrealised gain on Promissory Note issued to EDF ^ (^2^) (4,666 ) -
Unrealised gain on NETC Warrants ^ (^2^) (1,414 ) - $ 164,296 $ (5 )
^(^1^) Refer to note 14 – Reserves for more details relating to share based payment expenses.
^(^2^) Refer to note 16 – Financial Instruments – Fair values and financial risk management for further details.
Finance costs:
Interest expense on Convertible Note 3 – AgCentral $ 431 $ 449
Interest expense on Convertible Note 4 – AgCentral 506 459
Interest expense on Convertible Note 5 – AgCentral 58 61
Interest expense on Senior Convertible Notes – AgCentral & Nabors 309 -
Interest expense on Loans from shareholders – AgCentral 159 118
Interest expense on Promissory Note – EDF 43 -
Other 3 67 $ 1,509 $ 1,154
6. *Income tax expense*
The standard rate of corporations’ tax applied to taxable profit is 25% for the six months ended December 31, 2023 and 2022.
As at December 31, 2023, Vast has unused tax losses of $6.2 million for which no deferred tax asset has been recognised. Deferred tax assets have not been recognised for the unused tax losses as they are not likely to generate taxable income in the foreseeable future. Income tax expense is recognised based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year. As management has determined that the recognition criteria associated with Deferred Tax Assets, including Deferred Tax Assets arising from unused losses is not satisfied, whereby it must be probable that future taxable profits will arise, no income tax expense has been recorded and therefore there is no effective tax rate for the six months ended December 31, 2023 and December 31, 2022.
During the half-year ended December 31, 2023, as part of the BCA, Vast entered into a Noteholder Support and Loan Termination Agreement whereby each of the convertible promissory notes held by AgCentral Energy were discharged and terminated in exchange for Vast shares, as repayment of all the principal outstanding and accrued interest immediately prior to the BCA. As such requirements of the Commercial Debt Forgiveness provisions of the income tax legislation applied, and a gain on forgiveness arose where the market value of the commercial debt amount released was greater than the market value of the shares issued. The net forgiven amount upon consummation of the BCA was $17.1 million. The gain on forgiveness was applied to reduce the tax losses brought forward as at June 30, 2023, certain expenditure amounts incurred in previous income years, and the cost base of certain Capital Gains Tax assets.
*7. **Trade and other receivables* *December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
Trade receivables 624 4
Goods and Service Tax receivable 170 204
Other receivables 171 106 965 314
*
*
*8. **Prepaid expenses* *December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
Prepaid insurance 2,566 29
Other prepaid expenses 24 15 2,590 44
As at December 31, 2023, the balance of prepaid insurance is predominantly made of the one year cover for Directors and Officers, effective from the date of the SPAC Merger.
*
*
*9. **Trade and other payables* *December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
Trade payables 5,207 1,265
Accrued expenses 3,994 4,280
Other payables 210 79 9,411 5,624
Trade payables and accrued expenses as at December 31, 2023 are predominantly made of business combination related consulting and advice costs, and an accrual for excise tax ($2.9 million) to reflect the cash payment of the U.S. Federal Government Inflation Reduction Act of 2022 1% excise tax for the repurchases of stock. The Inflation Reduction Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. As at December 31, 2022, trade payables and accrued expenses were predominantly made of consulting, legal and consulting fees payable or accrued.
*10. **Warrants liability* *December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
Warrants liability 2,767 - 2,767 -
Vast Warrants exchanged in lieu of NETC Warrants consist of 27,529,987 potential ordinary shares, made of: (i) 13,799,987 Ordinary Shares that are issuable by us upon the exercise of 13,799,987 Public Warrants, and (ii) 13,730,000 Ordinary Shares that are issuable by us upon the exercise of 13,730,000 Private Warrants. Each Warrant entitles the holder to purchase one Ordinary Shares at an exercise price of $11.50 per share, with substantially the same terms as those of the NETC Warrant Agreements.
· NETC Warrants Issuance date: November 16, 2021, transferred to Vast on December 18, 2023
· Maturity date: 5 years from the date of consummation of the BCA
· Exercisable: at any time after 30 days from the date of consummation of the BCA
· Private Warrants may not be sold or transferred for 30 days from the date of consummation of the BCA
· Public Warrants may be redeemed by the issuer at a nominal price if the stock price, when the Warrant is exercisable, reaches a threshold price for 20 out of 30 consecutive days as follows:
· Redemption price: $0.01
· Threshold price: $18.00Effective upon consummation of the BCA,
· each Vast Warrant is exercisable solely for Vast Ordinary Shares;
· the number of Vast Ordinary Shares issued upon exercise of each Vast Warrant is equal to the number of shares of NETC Class A Common Stock issued upon exercise of the applicable NETC Warrant;
· the per share exercise price for the Vast Ordinary Shares issuable upon exercise of such Vast Warrant is equal to the per share exercise price for the shares of NETC Class A Common Stock subject to the applicable NETC Warrant, as in effect immediately prior to the consummation of the BCA.Both Public and Private Warrants are accounted for as liabilities under IFRS 9 following consummation of the BCA and valued at the Public Warrants trading price. Accordingly, they will be subject to ongoing mark-to-market adjustments through the statement of profit or loss.
As at December 31, 2023, the fair value of Private and Public Warrants has been determined as the quoted price of $0.10.
*11. **Borrowings* *December 31,* *June 30,* *2023* *2023* *Current* *Non-current* *Current* *Non-current* *(In thousands of US Dollars)*
Convertible Notes – AgCentral - - 14,281 -
Senior Convertible Notes - AgCentral and Nabors Lux - - - 7,134
Shareholder Loan – AgCentral - - 5,531 -
Promissory Note – EDF - 5,404 - - - 5,404 19,812 7,134
*a) **Promissory Note – EDF*
On December 19, 2023, Vast Intermediate HoldCo Pty Ltd (HoldCo) issued a Promissory Note to EDF Australia Pacific Pty Ltd (EDF). The key contractual terms of the Promissory Note have been summarised below:
1. The Noteholder is EDF Australia Pacific Pty Ltd.
2. The Promissory Note has a Face Value equivalent to EURO 10,000,000 converted into US $10,831,953 at the USD:EUR exchange rate on Bloomberg on the Closing Date.
3. The Promissory Note will accrue interest at 3% per annum. Interest accrues daily on the daily balance of the Outstanding Principal Amount.
4. The Promissory Note has a term of 5 years from the date of issuance; however the Maturity Date may be extended for a period of 2 years at HoldCo’s option by written notice to EDF. On written notice from HoldCo, EDF must extend.
5. EDF has the right to exchange all or any portion of the outstanding principal amount and interest on the Promissory Note at an exchange rate of US $10.20 per share for a period of 5 years (7 years, if extended) following closing. Any partial exchange cannot be less than US$2,000,000. The exchange is conditional on satisfaction of an exchange condition being, EDF has invested at least US$20,000,000 in the project entity of a CSP Project. The project entity of a CSP Project pertains to the standalone entity incorporated for the purpose of developing the CSP project. EDF can elect an amount up to 75% of its equity contribution to the project entity. The remaining portion is Vast's contribution. A separate Joint Venture agreement will also be entered into for each approved CSP project. This is governed by the ‘Joint Development Agreement’ entered into between Vast Parent and EDF in connection with the ‘Note Purchase Agreement’. Please refer to note 17 - Contingent assets, liabilities & commitment for further discussion on the Joint Development Agreement.
6. New investment clause:
1. If Vast enters into an agreement with certain parties, pursuant to which these parties will pay or contribute funds to Vast, the terms of the agreement in respect to security or priority; duration; or interest rate should not be more favourable than that of the Promissory Note. If the terms are more favourable, then the terms to the agreement will be automatically amended to match such other parties’ terms.
2. If Vast enters into an agreement to raise capital from third party strategic investors through a privately negotiated transaction and any such funds are used to repay the Nabors Backstop then the terms should be no less favourable than the terms of the Promissory Note. If so, the terms of the Promissory Note shall be automatically amended.
As at December 31, 2023, management has evaluated that HoldCo remains in compliance with all covenants, financial (including a prohibition on the declaration or payment of dividends) and non-financial, with respect to the EDF Promissory Note such that non-current classification of the liability is appropriate on the Condensed Statement of Financial Position.
As at December 31, 2023, Vast has evaluated its issuance of the note to determine if the components qualify as derivatives requiring separate recognition in its financial statements. The Company has determined the New investment clause, conversion and interest settlement features at the option of noteholder, to be an ‘embedded derivative’ requiring recognition separate from the borrowings. After the recognition of the embedded derivative, the Company recognises the promissory note at amortised cost, with interest expense recognised on an effective yield basis over the tenure of the note.
The result of this accounting treatment is that the fair value of the embedded derivative is revalued at each balance sheet date and recorded as a liability, and the change in fair value during the reporting period is recorded in other income (expense) in the consolidated statement of profit or loss. The current or non-current classification of derivative instruments is reassessed at the end of each reporting period.
The embedded derivative as part of such contracts have been tabulated below:
*December 31,* *June 30,*
*Component* *Particulars* *2023* *2023* *(In thousands of US Dollars)*
Embedded derivative Promissory Note – EDF 950 - 950 -
On issuance date, the Embedded derivative liability was recognised for $5.5 million. The Company’s closing share price on the first day of trading, i.e. $11.99 was used, being the closest observable market price to the valuation date. As at December 31, 2023 the valuation of the instrument was measured at $1.0 million, the reduction being predominantly driven by the significant decrease in the Company’s share price during the period since issuance ($5.19 as at December 31, 2023). The conversion option was measured at fair value through profit or loss, driving an unrealised gain of $4.5 million during the period ended December 31, 2023. Refer to volatility and effective interest rate assumptions discussed in note 16 - Financial Instruments – Fair values and financial risk management.
*Six Months Ended
*December 31,***
* *2023* *2022*
Interest expense by applying effective interest rate Promissory Note – EDF 43 - 43 -
The average effective interest rate applied during the half-year ended December 31, 2023 is 17.47%.
*b) **Convertible Notes – AgCentral and Nabors Lux*
Below is the detailed breakdown of the face value for each convertible note issuance (excluding the issuance of incremental notes by way of capitalised coupon payments) and the timing of their respective tranche payments, up to October 24, 2023, last tranche payment prior to the consummation of the BCA:
*Note* *Face Value per note (AUD)* *Tranche* *Issuance Date* *No. of notes issued* *Total Face value *
*(In thousands of AU Dollars)* *Total Face value *
*(In thousands of US Dollars)*
Convertible Note 3
349.34
1 June 30, 2016 26,802 9,363 6,548
2 September 15, 2016 715 250 172
3 November 23, 2016 715 250 170 9,863 6,890
Convertible Note 4 17.68 1 January 18, 2018 62,216 1,100 876
2 January 31, 2018 5,656 100 81
3 February 7, 2018 11,312 200 158
4 February 26, 2018 8,484 150 118
5 March 23, 2018 25,452 450 347
6 May 23, 2018 11,313 200 151
7 May 28, 2018 11,313 200 152
8 June 12, 2018 47,511 840 640
9 September 10, 2019 105,602 1,867 1,280
10 September 25, 2019 70,701 1,250 848 6,357 4,651
Convertible Note 5
0.01
1 August 11, 2020 87,500,000 875 628
2 April 27, 2021 87,500,000 875 682 1,750 1,310
Senior Convertible Note
USD1.00
1 February 15, 2023 2,500,000 3,604 2,500
2 April 13, 2023 2,500,000 3,731 2,500
3 June 27, 2023 2,500,000 3,725 2,500
4 August 15, 2023 2,500,000 3,839 2,500
5 October 24, 2023 2,500,000 3,931 2,500 18,830 12,500 *36,800* *25,351*Convertible Notes 3, 4 and 5 issued by Vast were subjected to the same terms, which are as follows:
1. The Noteholder is AgCentral Energy Pty Ltd, the parent entity of Vast.
2. The Noteholder can elect to convert any or all outstanding convertible notes into ordinary shares by providing written notice to Vast. Each outstanding note can be converted into one ordinary share (‘conversion’).
3. Coupon interest is payable at the rate of 8% per annum on the principal outstanding. Interest accrues daily and is payable every six months.
4. Within the first 18 months of issuance, Vast has the option to settle interest payments in cash or by issuance of additional convertible notes. After the first 18 months, the Noteholder has the option to choose settlement of interest by payment in cash or by issuance of additional convertible notes (‘interest settlement’). As of June 30, 2023, there has been no conversion election from the Noteholder. Refer to note 13 – Issued capital for details on conversion of these notes upon consummation of the BCA.
5. The latest modified maturity date of all convertible notes was October 31, 2021 prior to the extensions noted below.On June 25, 2021, Vast received an interest waiver from the noteholder, where interest was forgiven from January 1, 2021 to December 31, 2021 on all convertible notes along with a revised maturity date of December 31, 2022. On May 24, 2022, Vast received another interest waiver, where interest was forgiven from January 1, 2022 to December 31, 2022 on all convertible notes, along with a revised maturity date of December 31, 2023. Further, on June 30, 2023, Vast received another interest waiver, where interest on Convertible notes 3, 4 and 5 was forgiven from January 1, 2023 to the earlier of the effective date of the BCA and December 31, 2023.
Senior Convertible Notes issued by Vast were subjected to the following terms:
1. The Noteholder of Tranche 2 is AgCentral Energy Pty Ltd, the parent entity of Vast. The Noteholder of Tranches 1 and 3 is Nabors Lux 2 S.a.r.l.
2. The Senior Convertible Notes will accrue interest at 4% per annum, ceasing when the Senior Convertible Notes are either redeemed or converted into ordinary shares. Interest is payable six months in arrears. The Company may, at its discretion (but with notice to the Noteholders), pay interest in cash or capitalise interest to the principal amount outstanding for each Senior Convertible Note.
3. If the Company undergoes a business combination, the Senior Convertible Notes will mandatorily be converted to ordinary shares in this instance, with the conversion price based on the market price of shares at a 25% discount.
4. If the Company undergoes a Special Purpose Acquisition Company (“SPAC”) transaction, the Senior Convertible Notes will mandatorily be converted to ordinary shares in this instance, with the conversion price fixed at $10.20. Refer to note 13 – Issued capital for details on conversion of these notes upon consummation of the BCA.
5. If the Company undergoes an event of default or change of control, the Noteholders may choose to either redeem the Senior Convertible Notes for cash or convert them into ordinary shares. In a conversion event, the conversion price will be based on the market price of shares at a 25% discount.
6. The conversion of the notes is at the discretion of Vast (other than in a scenario where conversion is mandated), if they are held to maturity. Each Senior Convertible Note has a term of 18 months from the date of issuance.
Up to the consummation of the BCA, Vast has evaluated its issuance of each convertible note, including Senior Convertible Notes, to determine if the components qualify as derivatives requiring separate recognition in its financial statements. The Company has determined the conversion and interest settlement features at the option of noteholder, to be an ‘embedded derivative’ requiring recognition separate from the borrowings. After the recognition of the embedded derivative, the Company recognises the convertible notes at amortised cost, with interest expense recognised on an effective yield basis over the tenure of convertible notes.
The result of this accounting treatment is that the fair value of the embedded derivative is revalued at each balance sheet date and recorded as a liability, and the change in fair value during the reporting period is recorded in other income (expense) in the consolidated statement of profit or loss. The current or non-current classification of derivative instruments is reassessed at the end of each reporting period. Refer to note 16 - Financial Instruments - Fair values and financial risk management for further details.
The embedded derivative as part of such hybrid contracts i.e. convertible notes have been tabulated below:
*December 31,* *June 30,*
*Component* *Particulars* *2023* *2023* *(In thousands of US Dollars)*
Embedded derivative
Convertible Note 3 - -
Convertible Note 4 - -
Convertible Note 5 - 18 Senior Convertible Note - 174 - 192
*Six Months Ended*
*December 31,* *2023* *2022*
Interest expense by applying respective effective interest rate applicable to the tranches
Convertible Note 3 431 462
Convertible Note 4 506 471
Convertible Note 5 58 62 Senior Convertible Note 309 - 1,304 995
The average effective interest rate applied during the half-year ended December 31, 2023 is 22.63% (half-year ended December 31, 2022: 25.37%).
*c) **Loans from shareholder – AgCentral*
Vast historically received interest free loans without any covenants of approximately $5.5 million from AgCentral Energy Pty Ltd to fund its short-term working capital requirements. The maturity date of all the shareholder loans were the earlier of December 31, 2023 and the effective date of the BCA, with all other terms remaining unchanged.
The average effective interest rate applied during the half-year ended December 31, 2023 is 5.90% (half-year ended December 31, 2022: 5.90%).
*Six Months Ended
December 31,* *2023* *2022*
Interest expense by applying effective interest rate Loans from shareholder – AgCentral 159 118 159 118
*12. **Interest in other entities*
*a) **Subsidiaries*
*Name *
*Type*
*Place of incorporation *
*Ownership interest*
*December 31, 2023* *June 30, **2023*
Nabors Transition Energy Corp
Neptune Merger Sub, Inc. Subsidiary
Subsidiary United States
United States 100%
0% 0%
100%
NWQHPP Pty Ltd Subsidiary Australia 100% 100%
Solar Methanol 1 Pty Ltd Subsidiary Australia 100% 100%
Vast Solar Aurora Pty Ltd Subsidiary Australia 100% 100%
Vast Solar 1 Pty Ltd Subsidiary Australia 100% 100%
Vast Solar Consulting Pty Ltd Subsidiary Australia 100% 100%
Vast Employee Shareholdings Pty Ltd Subsidiary Australia 100% 0%
Vast Intermediate HoldCo Pty Ltd Subsidiary Australia 100% 0%
Vast Australia HoldCo Pty Ltd Subsidiary Australia 100% 0%
HyFuel Solar Refinery Pty Ltd Subsidiary Australia 100% 0%
Vast Renewables HoldCo Corp Subsidiary United States 100% 0%
Vast Renewables Management Services LLC Subsidiary United States 100% 0%
Vast US Projects HoldCo Corp Subsidiary United States 100% 0%
El Paso ProjectCo LLC Subsidiary United States 100% 0%
Vast has fourteen wholly owned subsidiaries, incorporated in Australia and the United States as at December 31, 2023 (six as at June 30, 2023). The subsidiaries have share capital consisting solely of ordinary shares that are held directly by Vast and the proportion of ownership interests held equals the voting rights held by Vast.
NWQHPP Pty Ltd, Vast Solar 1 Pty Ltd, Solar Methanol 1 Pty Ltd and Vast Solar Consulting Pty Ltd are non-operational, with no activities performed during the half-years ended December 31, 2023 and 2022.
Vast Intermediate HoldCo Pty Ltd, Vast Australia HoldCo Pty Ltd, HyFuel Solar Refinery Pty Ltd, Vast Renewables HoldCo Corp and El Paso ProjectCo LLC were incorporated during the half-year ended December 31, 2023 and are non-operational with no activities performed during the period.
Under the steps of the BCA, Neptune Merger Sub, Inc. merged with and into the SPAC, with the SPAC surviving the merger as Nabors Transition Energy Corp, a wholly owned subsidiary of Vast. Up to its merger with Neptune Merger Sub Inc., Nabors Transition Energy Corp reported under the Security Exchange Act of 1934 with a financial year ended December 31.
During the half-year ended December 31, 2023 Vast formed :
· Vast Renewables Management Services LLC, a Delaware corporation providing services to Vast under its Intercompany Services Agreement.
· Vast Employee Shareholdings Pty Ltd, acting under the Employee Share Trust Deed as the first trustee of the Trust for the benefit of participants in Vast’s Equity Remuneration Schemes.
*b) **Joint venture*
During the year ended June 30, 2022, Vast Solar Aurora Pty Ltd (“VSA”), a wholly owned subsidiary of the Company, entered into an arrangement to co-develop the Aurora Energy Project commissioned by SiliconAurora. Vast acquired 50% of the shares in SiliconAurora on June 15, 2022 from 14D for consideration of $0.07 million as an initial payment and $1.58 million as deferred consideration. The deferred consideration of $0.62 million was paid in July 2022 from the short term loan obtained from Vast’s shareholder and the remainder of $0.96 million is expected to be paid by October 31, 2024, subject to the joint venture receiving a written offer/ notice to connect from the relevant network service provider. The Company intends to undertake fundraising activities. The funds raised from those activities are intended to be used to settle the acquisition of SiliconAurora by repaying the remaining component of deferred consideration and fund Vast's on-going operational expenditure.
SiliconAurora Pty Ltd will be “the legal and beneficial owner” of all the existing assets comprising the project. From a measurement perspective, Vast applies the equity method and accounts for its share as follows.
*(In thousands of US Dollars)*
Initial investment in SiliconAurora Pty Ltd 69
Transaction costs 56
Deferred consideration 1,578
Total consideration 1,703
Relating to:
· Call option issued to shareholder
96
· 50% interest in SiliconAurora Pty Ltd
1,607
Carrying value of interest in joint venture at June 30, 2023 1,300
Vast recognises its 50% share of profit of the joint venture for the half-year ended December 31, 2023:
Legal and consultancy (85 )
Interest expense & other fees (20 )
Amortisation & depreciation (11 )
Other expenses (3 )
Net loss (119 )
Fair value adjustments on deferred consideration and loan advances to SiliconAurora Pty Ltd (10 )
Foreign exchange differences 30
Carrying value of interest in joint venture at December 31, 2023 1,201
Further, Vast has recognised an interest-free shareholder loan of $0.33 million for its share of project expenses incurred and on-charged to SiliconAurora. The loan has a three-year term with the entire amount repayable on maturity.
*Commitments and contingent liabilities in respect of joint ventures:*
*December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
Commitment to provide funding for joint venture’s commitments, if called 436 278
As part of the transaction, 14D issued call options to AgCentral, allowing AgCentral to purchase ordinary shares in 14D subject to achieving specific/ general approval obtained in their annual general meeting. Vast has estimated the fair value of the call options to be $0.1 million at the transaction date and has recognised it as part of the acquisition of the investment in SiliconAurora.
13. *Issued capital*
*December 31,* *June 30,* *2023* *2023* *(In thousands of US Dollars)*
25,129,140 fully paid ordinary shares ^(1) - 2,354
29,291,884 fully paid following completion of the SPAC Merger, net of transaction costs 297,618 -
Total Issued capital 297,618 2,354
Ordinary shareholders participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. The ordinary shares have no par value. The Company does not have a limited amount of authorised capital.^(1) Calculation of the earnings per share for the half-year ended December 31, 2022 on the Condensed consolidated statements of profit or loss and other comprehensive income are adjusted retrospectively to reflect 25,129,140 ordinary shares converting into 2,148,887 ordinary shares upon consummation of the BCA.
*December 31, 2023**
* *(In number of shares)* *(In thousands of US Dollars)*
Issuance of shares to employees ^(1^a,b^) 2,301,433 638
Conversion of debt to equity ^(1c) (2) 15,956,925 208,800
Shares issued to acquire NETC ^(3) (4) (5) 5,654,616 67,799
Pipe funding ^(6) 1,715,686 17,506
Shares issued as settlement of transaction expenses ^(7) 171,569 2,057
Transaction costs accounted for as a deduction from equity (IAS 32) - (1,536 )
Movement in Issued capital 25,800,229 295,264
At the Effective Time, Vast issued:
1. As a result of a share consolidation exercise, Vast issued 20,499,999 ordinary shares immediately prior to completion of the SPAC Merger. In a reverse stock split the equity of the merged entity shall reflect the original carrying value of the target’s equity (i.e. Vast) plus the net proceeds received from NETC. Shares issued to Legacy Vast shareholders:
1. 2,036,900 Ordinary Shares issued to MEP Share holders under the MEP Deed dated on or around July 30, 2020, as amended on February 14, 2023 pursuant to the MEP De-SPAC Side Deed. These were exchanged on 1 to 1 basis using carrying value determined just prior to share consolidation exercise. Refer to Note 14 – Reserves for further details;
2. 264,533 Ordinary Shares granted to certain employees of Vast and issued to an employee share trust until such time they are vested, out of the previous MEP share pool, which had not been previously granted to any employees prior to the BCA. Vast consolidates the trust. These shares are treated as treasury shares with Nil carrying value as at December 31, 2023. Refer to Note 14 – Reserves for further details;
3. 18,198,566 Ordinary Shares issued to AgCentral Energy Pty Ltd in exchange for settlement and cancellation of:
1. 25,129,140 Legacy Vast Shares for which AgCentral paid an average price of approximately $0.09 per share. On exchange date, the Company recognised the new issued shares at the carrying amount of Legacy Vast Shares from the condensed statement of financial position (including the Capital Contribution Reserve associated to AgCentral, forming part of Vast’s opening reserves as of July 1, 2023), and
2. convertible notes and other indebtedness of Vast towards AgCentral. On conversion to equity, the Company derecognised the financial liabilities at their carrying amount from the condensed statement of financial position and recognised them as issued capital. This includes the derivative financial liabilities associated with the notes.
2. An aggregate of 1,250,014 Ordinary Shares upon conversion of Senior Convertible Notes held by AgCentral and Nabors Lux.
3. An aggregate of 804,616 Ordinary Shares upon conversion of shares of NETC Class A Common Stock to the holders thereof. Pursuant to the Business Combination Agreement, each share of NETC Class A Common Stock (other than Redemption Shares) issued and outstanding immediately prior to the Effective Time were exchanged for a number of Ordinary Shares. This includes 633,250 shares of NETC Class A Common Stock purchased by CAG to satisfy its’ financing obligations.
4. An aggregate of 3,000,000 Ordinary Shares upon conversion of Founder Shares (On March 30, 2021, NETC was funded with $25,000 for which it issued 8,625,000 shares of Class F common stock, par value $0.0001 per share - the “Founder Shares”) to the holders thereof, and an aggregate of 1,500,000 Ordinary Shares to former membe