Announcement PDF WISR LIMITED • APPENDIX 4D HALF-YEAR REPORT 1. Company details Name of entity: Wisr Limited ABN: 80 004 661 205 Reporting period: For the half-year ended 31 December 2022 Previous period: For the half-year ended 31 December 2021 2. Results for announcement to the market Key information $A’000 Revenues from ordinary activities Up 65% to 43,241 Loss from ordinary activities after tax attributable to members Down 4% to (6,576) Loss for the year attributable to members Up 113% to (5,453) Dividends paid and proposed There were no dividends declared or paid in the reporting period. Explanation of key information and dividends An explanation of the above figures is contained in the Review of Operations included within the attached Directors’ Report. The Directors have determined not to pay dividends at this time. 3. Net tangible assets Reporting period Cents Previous period Cents 4.97 5.08 Net tangible asset per ordinary security 4. Control gained over / loss of entities having material effect Not applicable. 5. Details of associates and joint venture entities Not applicable. 6. Significant information Refer to Review of Operations included within the attached Directors’ Report below. 7. Attachments The Interim Report of Wisr Limited for the half-year ended 31 December 2022 is attached. 1 WISR LIMITED • APPENDIX 4D 8. Signed ............................................................... JOHN NANTES DIRECTOR SYDNEY 28 February 2023 2 WISR LIMITED ABN: 80 004 661 205 INTERIM REPORT For the half-year ended 31 December 2022 3 WISR LIMITED CONTENTS Page Directors’ report 5 Auditor’s independence declaration 11 Consolidated statement of profit or loss and other comprehensive income 12 Consolidated statement of financial position 13 Consolidated statement of changes in equity 14 Consolidated statement of cash flows 15 Notes to the financial statements 16 Directors’ declaration 30 Independent auditor’s review report 31 4 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or the ‘Group’ or ‘Wisr’) consisting of Wisr Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2022. DIRECTORS The following persons were directors of the Company during the whole of the financial half-year and up to the date of this report, unless otherwise stated: Name Position John Nantes Executive Chairman Craig Swanger Non-Executive Director Matthew Brown Non-Executive Director Cathryn Lyall Non-Executive Director Kate Whitney Non-Executive Director PRINCIPAL ACTIVITIES During the financial half-year, the Group’s primary activity was writing personal loans and secured vehicle loans for 3, 5 and 7-year maturities to Australian consumers, and funding these loans through the warehouse funding structures. REVIEW OF OPERATIONS Key Group highlights include: • Operating revenue up 65% to $43.2M (H1FY22: $26.2M) • Total loan originations $1.5B as at 31 December 2022 • New loan originations up 13% to $302M (H1FY22: $268M) • Total portfolio 90+ Day arrears of 1.07% as at 31 December 2022 (H1FY22 0.81%) • Wisr’s loan book (WH1, WH2, Freedom21, Freedom22 and on-balance sheet) is $916M as at 31 December 2022, an increase of 62% (H1FY22 $565M) • An additional $25M 1 debt facility secured to strengthen the balance sheet • H1FY23 Cash EBTDA was $(1.3)M, a 66% improvement on H1FY22 $(3.8)M; Q2FY23 delivered positive Cash EBTDA of $0.5M 1 $20M drawn initially, with a further $5M available subject to certain milestones which were achieved in February 2023. 5 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 Review of operations (cont.) • The Company is well capitalised with a $58.0M cash balance ($24.5M unrestricted cash); in addition, there were $2.4M liquid loan assets available for sale as at 31 December 2022 (H1FY22: $75.3M cash, $26.3M unrestricted cash and $18.4M liquid loan assets) • 28% increase in the Wisr Financial Wellness Platform, with over 704,000 profiles as at 31 December 2022 (552,000 as at 31 December 2021) • Launch of the Company’s new technology product, Wisr Today, in Q2FY23 with over 19K downloads • Climbed five places to #7 in the 2022 AFR Fast 100 Awards (#12 2021) • Won two awards in the 2022 Pause Awards for Diversity and Workplace Culture (Diverse Co. and Work Sweet Work) • Placed #8 as a first-time entrant of the Smart50 Fastest Growing Company Awards FOCUS ON PROFITABLE GROWTH In early FY23, Wisr took prudent steps in light of macroeconomic conditions to reduce operating costs to deliver profitability 2 within 12 months while maintaining a robust cash-balance sheet. The material cost reductions and strategic decisions made by management in Q1FY23 have had an immediate material impact, with the Company delivering a positive operating cash flow and Cash EBTDA quarter (Q2FY23) while delivering 65% revenue growth for H1FY23 (H1FY23 $43.2M vs H1FY22 $26.2M). In addition, the Company has achieved significant milestones that have shored up its position as it continues to navigate an uncertain short-term environment. Wisr has strengthened its balance sheet with an additional $25M debt facility, $20M was drawn initially, with a further $5M available subject to certain milestones being achieved (achieved post-reporting date). The facility is drawn at the head company (Wisr Limited) level, and the scheduled maturity date is 1 July 2025. Wisr used part of the proceeds to repay its existing $6.5M debt facility, which matures in May 2023. Wisr has rolled forward Wisr Warehouse (WH1) and Wisr Secured Vehicle Warehouse (WH2) for another 12 months and received credit approval from another Big Four bank for a third warehouse facility. This new facility will further diversify Wisr’s funding sources, enhance growth through funding capacity and add further balance sheet robustness. The market will be updated on further developments as they become available. The Company is on track to meet its guidance to the market of an additional warehouse facility being operational in FY23. Wisr also received credit approval from a Big Four bank for an intraday credit facility (at a 0% interest rate) to further alleviate balance sheet pressure and remains committed to strong cost control in the near term. Loan originations As at 31 December 2022, Wisr reached $1.5B in total loan originations since inception, and H1FY23 delivered $302M in new loan originations, a 13% increase on H1FY21 ($268M). Profitability is on a run-rate Cash EBTDA basis and is subject to broader market conditions, including any significant volatility events, the level of global inflation and interest rates, and the impact of any geopolitical events. 2 6 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 Review of operations (cont.) LOAN BOOK, RISK AND FINANCIAL POSITION As at 31 December 2022, WH1, WH2, Freedom21, Freedom22 and on-balance sheet had a combined loan book balance of $916M, an increase of 62% (H1FY22 $565M). Wisr continued to write prime quality credit during H1FY23. Total portfolio arrears were well within risk appetite, with 90+ Day arrears of 1.07% as at 31 December 2022 (H1FY22 0.81%). AASB 9 requires a forecast of lifetime expected credit losses that uses a three-staged approach based on the credit profile of the receivable. The Group calculates Expected Credit Loss (“ECL”) using three main components, the exposure at default, the probability of default and the loss given default. The total provision held as at 31 December 2022 is $23.2M (2.52%), a slight increase from 2.42% as at 30 June 2022. The total loan impairment expense for H1FY23 was $9.7M, representing a 1.05% charge compared to portfolio balances as at 31 December 2022. The Company is well capitalised with a $58.0M cash balance ($24.5M unrestricted cash) in addition, there were $2.4M liquid loan assets available for sale as at 31 December 2022. EBTDA AND EXPENSES In H1FY22, Wisr continues its path to profitability, with the Company reporting an overall Cash EBTDA of $(1.3)M, a 66% improvement on H1FY22 $(3.8)M. Wisr’s revenue growth also delivered a positive Cash EBTDA of $0.5M for Q2FY23 (Q1FY23: $(1.8)M). The operational leverage in the business is evidenced by 65% operating revenue growth compared to a 14% decrease in operating expenses (“Opex”) (H1FY23 Opex $17.9M vs H1FY22 Opex $20.8M). A significant cost reduction process in Q1FY23 drove this. WISR FINANCIAL WELLNESS PLATFORM Wisr is well on track to reach its goal of 1M customer profiles. The Wisr Financial Wellness Platform grew by 28%, with over 704,000 profiles as at 31 December 2022 (552,000 as at 31 December 2021). The Wisr Financial Wellness Platform suite of products was bolstered by the launch of the Company’s new technology product, Wisr Today, a psychology-led money coaching app that helps users build smarter habits and improve holistic financial health. Wisr Today has been developed with clinical psychology advisors and behaviour science consultants, including organisational psychologist and founder of behavioural science consultancy Inventium, Dr Amantha Imber. The Wisr Today app applies research-proven, science-based interventions, such as Cognitive Behavioural Therapy (CBT) and Acceptance and Commitment Therapy (ACT), to inform behaviour change. Wisr Finance Pty Ltd 3 holds a financial services licence (AFSL 458572) to provide general financial product advice via the Wisr Today app. Since its launch, there have been over 19K downloads, and the app is available Australia-wide via Google Play and the Apple App Store with one-year, six-month and one-month subscriptions creating a brand-new revenue stream for the Company. 3 A 100% subsidiary of Wisr Limited 7 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 Review of operations (cont.) GOVERNANCE Wisr faces a broad range of risks reflecting its business operations as a non-bank neo-lender. The Board is responsible for setting risk appetite and approving and reviewing the risk management strategy and framework; this includes the 14-point Enterprise Risk Management Register. The Board also ensures senior management has identified key risks, that those risks are managed and controlled appropriately and endorses the Risk Management plan, which is set out to manage all risks to remain in risk appetite. Management is then responsible for implementing the Board approved risk management strategy and risk management plan. External auditors provide independent assurance to the Board on the adequacy and effectiveness of management controls for risk. Wisr has the following Committees in place to foster innovation and continuous improvement in efficiencies across all business operations: • Quarterly Board Audit and Risk Committee, Chaired by Non-Executive Director, Matt Brown • Risk Management Committee, Chaired by Chief Risk and Data Officer, Joanne Edwards • Credit Committee, Chaired by Chief Risk and Data Officer, Joanne Edwards To further protect the security of the business, and in preparation for joining the Open Banking environment, in H1FY23 Wisr increased its scope of privacy protections and cyber security framework. Chief Product Officer, Ben Berger, leads the protection of customer information and information assets, and the Risk Management Committee oversees its management. OUTLOOK – H2FY23 AND BEYOND Wisr is a growth Company and will remain a growth Company for the next decade or more. However, recognising current market conditions, prudent fiscal management is required to deliver both profitability 4 in the short-term and sustainable long-term profitability. To maintain a strong balance sheet and deliver a highly profitable business, Wisr has prudently and proactively adjusted the business strategy and cost base to position the Company for longterm sustainable growth. Initiatives already delivered and will be continued in H2FY23, accelerating the path to profitability: Focus on near-term profitability • Significant reduction in short-term growth aspirations in lending in response to the macro environment, switching from high to moderate growth, will positively impact Cash EBTDA (as evidenced by Q2FY23 result) Profitability is on a run-rate Cash EBTDA basis and is subject to broader market conditions, including any significant volatility events, the level of global inflation and interest rates, and the impact of any geopolitical events. 4 8 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 Review of operations (cont.) • Wisr has materially increased front book loan origination yield to protect net interest margin given the rising cost of funds Cost management • A material reduction in headcount and external spend Strategic adjustments • Pausing all new credit product expansion, innovation and go-to-market expenditure • Exited any continued support for Arbor investment in the EU market, and any short-term growth ambitions for geographical expansion • Material overall reduction in investment in the Wisr Financial Wellness Platform to further drive push to profitability Now that the Company has delivered a profitable quarter (Q2FY23), the focus is on sustainable long-term profitability. The Company has the resources and capability to safeguard the business and a strategy and platform that is setting Wisr up to be a company of significant size and scale with a genuine competitive advantage in the years to come. EVENTS SINCE THE END OF THE FINANCIAL HALF-YEAR In February 2023: • The Group met the required milestones for the drawdown of an additional $5 million available under the $25 million corporate debt facility, with $20m drawn to date; and • The Group settled the $200 million Wisr Independence Trust 2023-1, the first asset-backed securities deal for the secured vehicle loan product. SIGNIFICANT CHANGES IN STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group during the financial halfyear other than those discussed in the Review of operations. OPERATING SEGMENT The Group has one operating segment under AASB 8 Operating Segments. This reflects the way the business is monitored, and resources are allocated. The Group’s revenues and activities are predominately domiciled in Australia. AUDITOR'S INDEPENDENCE DECLARATION A copy of the auditor's independence declaration, as required under section 307C of the Corporations Act 2001, is set out on page 11. 9 WISR LIMITED DIRECTORS’ REPORT For the half-year ended 31 December 2022 This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. ............................................................... JOHN NANTES DIRECTOR Sydney 28 February 2023 10 Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au Level 11, 1 Margaret St Sydney NSW 2000 Australia DECLARATION OF INDEPENDENCE BY TIM AMAN TO THE DIRECTORS OF WISR LIMITED As lead auditor for the review of Wisr Limited for the half-year ended 31 December 2022, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Wisr Limited and the entities it controlled during the period. Tim Aman Director BDO Audit Pty Ltd Sydney, 28 February 2023 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. WISR LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the half-year ended 31 December 2022 Note 31 Dec 2022 $ 31 Dec 2021 $ 2 43,240,749 26,242,816 - 31 Employee benefits expense (10,529,674) (8,514,230) Marketing expense (1,399,442) (8,243,219) Customer processing costs (2,638,457) (1,436,037) (31,124) (34,362) Other expenses (3,445,550) (2,617,093) Finance costs (21,080,770) (7,501,018) (445,703) (405,573) REVENUE Other income EXPENSES Property expenses Depreciation and amortisation expense Provision for expected credit loss expense 4 (9,694,964) (3,705,684) Share based payment expense 11 (551,031) (622,670) (6,575,966) (6,837,039) - - Loss after income tax for the period (6,575,966) (6,837,039) Loss for the year is attributable to: Owners of Wisr Limited (6,575,966) (6,837,039) Earnings per share for loss attributable to the owners of Wisr Limited Cents Cents Basic earnings per share (0.48) (0.51) Diluted earnings per share (0.48) (0.51) 1,122,767 4,279,356 1,122,767 4,279,356 Total comprehensive loss for the period (5,453,199) (2,557,683) Total comprehensive loss for the period is attributable to: Owners of Wisr Limited (5,453,199) (2,557,683) Loss before income tax Income tax expense Other comprehensive loss Gain arising from changes in fair value of cash flow hedging instruments entered into Other comprehensive loss for the period, net of tax 10 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 12 WISR LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2022 Note 31 Dec 2022 $ 30 Jun 2022 $ 3 57,995,033 71,489,070 1,101,804 1,065,176 897,941,162 764,838,727 Property, plant and equipment 399,083 487,866 Other assets 2,104,025 1,562,249 ASSETS Cash and cash equivalents Trade and other receivables Loan receivables 4 Right of use assets 6 691,831 1,037,746 Derivative financial instruments 8 26,603,637 24,856,717 Intangible assets 5 5,607,052 2,736,735 992,443,627 868,074,286 Trade and other payables 2,811,268 5,435,693 Provision for employee benefits 1,327,668 1,307,554 Total assets LIABILITIES Lease liability 6 835,168 1,203,052 Borrowings 7 914,526,058 782,282,354 Total liabilities 919,500,162 790,228,653 Net assets 72,943,465 77,845,633 EQUITY Issued capital 9 144,477,325 144,477,325 Reserves 10 29,580,500 27,906,702 Accumulated losses 10 (101,114,360) (94,538,394) 72,943,465 77,845,633 Total equity The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 13 WISR LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 December 2022 Issued capital $ Reserves $ Accumulated losses $ Total equity $ 143,678,390 3,250,454 (74,672,545) 72,256,299 Loss after income tax expense for the half-year - - (6,837,039) (6,837,039) Other comprehensive loss for the half-year, net of tax - 4,279,356 - 4,279,356 Total comprehensive loss for the half-year - 4,279,356 (6,837,039) (2,557,683) (64,062) - - (64,062) - 688,713 - 688,713 Transfer of share based reserve to issued capital on exercise of options 818,997 (818,997) - - Issue of shares for services rendered 44,000 (44,000) - (39,058) 39,058 - Balance at 31 Dec 2021 144,477,325 7,316,468 (81,470,526) 70,323,267 Balance at 1 Jul 2022 144,477,325 27,906,702 (94,538,394) 77,845,633 Loss after income tax expense for the period - - (6,575,966) (6,575,966) Other comprehensive gain for the period, net of tax - 1,122,767 - 1,122,767 Total comprehensive loss for the period - 1,122,767 (6,575,966) (5,453,199) - 551,031 - 551,031 144,477,325 29,580,500 (101,114,360) 72,943,465 Balance at 1 Jul 2021 Transactions with owners in their capacity as owners: Costs of raising capital Share based payment expense (Note 11) Transfer of share-based payment reserve - Transactions with owners in their capacity as owners: Share based payments (Note 11) Balance at 31 Dec 2022 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 14 WISR LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS For the half-year ended 31 December 2022 31 Dec 2022 $ 31 Dec 2021 $ Receipts from customers 41,899,393 24,831,564 Payments to suppliers and employees (21,788,174) (21,883,806) 20,111,219 2,947,758 Interest received on investments and cash 102,042 6,858 Management fees received 177,643 378,920 (19,887,101) (7,101,848) - 280,164 503,803 (3,488,148) (38,112) (129,408) Payments for investments - (1,168,695) Transfer for term deposit - (561,629) (2,851,342) (930,695) Net movement in customer loans (140,604,155) (180,414,175) Net cash used in investing activities (143,493,609) (183,204,602) - (148,183) Repayment of borrowings – secured notes (6,500,000) - Proceeds from issuance of borrowings 137,652,609 170,608,644 Transaction costs related to borrowings (1,288,956) (570,670) (367,884) (329,511) Net cash provided by financing activities 129,495,769 169,560,280 Net decrease in cash and cash equivalents (13,494,037) (17,132,470) Cash and cash equivalents at the beginning of the financial year 71,489,070 92,409,558 Cash and cash equivalents at the end of the financial half-year 57,995,033 75,277,088 Note CASH FLOWS FROM OPERATING ACTIVITIES Interest and other finance costs paid Proceeds from R&D tax incentive Net cash from / (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Payments for technology assets 5 CASH FLOWS FROM FINANCING ACTIVITIES Costs of raising capital paid Payments for right of use asset The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 15 WISR LIMITED NOTES TO THE FINANCIAL STATEMENTS For the half-year ended 31 December 2022 The financial statements cover Wisr Limited as a consolidated entity, consisting of Wisr Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars ($), which is Wisr Limited's functional and presentation currency. Wisr Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 4, 55 Harrington Street, The Rocks NSW 2000. A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report. NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements for the interim half-year reporting period ended 31 December 2022 have been prepared in accordance with Australian Accounting Standard AASB 134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’. These financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2022 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated below. The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and do not distinguish between current and noncurrent. All balances are expected to be recovered within 12 months except for intangible assets, right of use assets, property, plant and equipment, investments, and financial instruments, for which expected term is disclosed. The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 February 2023. a. New and revised accounting standards and interpretations The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. There was no material impact on the Group’s interim financial statements on the adoption of these Standards and Interpretations. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 16 WISR LIMITED FINANCIAL REPORT | NOTES TO THE FINANCIAL STATEMENTS For the half-year ended 31 December 2022 NOTE 2. REVENUE CONSOLIDATED 31 Dec 2022 $ 31 Dec 2021 $ Interest income on financial assets Interest income on financial assets Effective interest income on financial assets 42,789,904 25,609,280 Other revenue from financial assets 134,532 163,424 Interest on cash 102,042 6,858 43,026,478 25,779,562 Total income from financial assets Revenue from contracts with customers Management fees 214,271 463,254 Total revenue from contracts with customers 214,271 463,254 43,240,749 26,242,816 Total revenue DISAGGREGATION OF REVENUE The above provides a breakdown of revenue by major revenue stream. The categories above depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic data. As disclosed in the directors’ report, the Group has one operating segment. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: 2.1 Interest income on financial assets a. Interest income Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. b. Loan establishment fees Loan establishment fees are deferred and recognised as an adjustment to the effective interest rate as these fees are an integral part of generating an involvement with the resulting financial instrument 2.2 Revenue from contracts with customers Management fees Management fees are earned through the contracts with funders (customers) which entitle the consolidated entity to fees as a result of satisfying the performance obligation, being the monthly management of the associated loan portfolio. Revenue is recognised on an over-time basis. The allocation of the transaction price is calculated as a percentage of the loan balance managed by the consolidated entity on a monthly basis, being the satisfaction of the performance obligation. 17 WISR LIMITED FINANCIAL REPORT | NOTES TO THE FINANCIAL STATEMENTS For the half-year ended 31 December 2022 Note 2. Revenue (cont.) Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring services to a customer. The consolidated entity invoice on a monthly basis which aligns to the recognition criteria noted above and as a result, there is no recognition of contract assets or liabilities required. NOTE 3. CASH AND CASH EQUIVALENTS CONSOLIDATED 31 Dec 2022 $ 30 Jun 2022 $ Cash at bank 24,527,536 23,339,472 Restricted cash 33,467,497 48,149,598 Total 57,995,033 71,489,070 Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, bank overdrafts, and restricted cash. Restricted cash is held by the Wisr Warehouse Trusts and is utilised for loan funding and not available to pay creditors of other entities within the Group. NOTE 4. LOAN RECEIVABLES A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income (OCI). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. 4.1 Impairment of financial assets The Group recognises a loss allowance for ECL on financial assets which are either measured at amortised cost or fair value th