ADRABBIT LIMITED (Formerly: AppsVillage Australia Limited)
ABN: 50 626 544 796
ANNUAL REPORT
31 DECEMBER 2021
Contents
Corporate Directory……………………………………………………………………………………………………………………………………….1
Chairman Review……………………………………………………………………………………………………………………………………..…..2
Directors’ Report……………………………………………………………………………………………………………………………………….….4
Auditor’s Independence Declaration……………………………………………………………………………………………………..…….24
Consolidated Statement of Profit or Loss and other Comprehensive Income……………………………………………...25
Consolidated Statement of Financial Position………………………………………………………………………………………………26
Consolidated Statement of Changes in Equity……………………………………………………………………………………………..27
Consolidated Statement of Cash Flows……………………………………………………………………………………………….…….…28
Notes to the consolidated financial statements……………………………………………………………………………….….……...29
Directors’ Declaration……………………………………………………………………………………………………………….………………...54
Independent Auditor’s Report……………………………………………………………………………………………………………………..55
Additional ASX Information………………………………………………………………………………………………………………………....57
1
AdRabbit Limited
Corporate Directory
31 December 2021
Directors
Noah Hershcoviz
Chairman and Non-Executive Director
Max Bluvband
Executive Director
Shahar Hajdu
Executive Director
Andrew Whitten
Non-Executive Director
Konstantin Lichtenwald
Non-Executive Director
Company Secretary
David Hwang
Registered Office
c/ Automic Group Level 5
126 Philip St
Sydney NSW 2000
Australia
Auditors (Australia)
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower
5 Spring St
Perth WA 6000
Australia
Legal Advisors
Automic Legal
Level 5
126 Philip St
Sydney NSW 2000
Australia
Share Registry
Automic Registry Services
Level 2
267 St Georges Terrace
Perth WA 6000
Australia
Stock Exchange Listing
Australia Securities Exchange
ASX Code: RAB (formerly: APV)
Toronto Stock Exchange
TSX Code: RABI
2
AdRabbit Limited 2022 Financial Report – Chairman Review
Dear Shareholders,
Welcome to the annual report of AdRabbit Limited (“the Company” or “AdRabbit”), the third since the Company listed on the Australian
Stock Exchange and Australian Securities Exchange in August 2019 and the first for the since the Company listed on the Toronto Stock
Exchange also the first for me personally since I was appointed Non-Executive Chairman of the Company in June 2021.
General
In 2020 and 2021, the world continued to change significantly following the COVID-19 pandemic. It not only changed the daily lives of
people around the world, but it also impacted, in varying degrees, the operating environment for most businesses. As the pandemic
continued to present mounting challenges in the physical world, SMBs shifted focus and began to aggressively seek out ways to build
their digital presence.
Since 2020, our company has proactively empowered them to do so by developing the first AI-powered SMB advertising platform,
AdRabbit. We strongly believe that SMBs now more than ever before will look to actively grow their presence online, whether it’s
through a website or e-commerce store. By using AdRabbit, SMBs will achieve greater visibility, increased engagement, and most
importantly, more sales, all while being able to concentrate on what they do best - running their own businesses.
The development of AdRabbit, in combination with its strong financial achievements, has also enabled the Company to dramatically
reduce its operational expenses while allowing the team to focus on profitability and sustainable growth moving forward.
Additionally, the paid advertising spend previously required to acquire customers has been greatly reduced, which is another positive
outcome of these efforts.
The impact of this strategy led to invoiced revenues falling by approximately $992,832 in 2020 to $406,883 in 2021. The decline in
spending for the business was far more dramatic, however, decreasing from approximately $4,341,767 in 2020 to $3,244,110 in
2021. This spending decrease has ushered in a more sustainable long-term business model that provides flexibility to increase
spending when market conditions show sustained improvement.
Name Change
On February 3, 2022, the Company completed its name change from "AppsVillage Australia Limited" to "AdRabbit Limited" and changed
its ticker code on the Australian Securities Exchange (“ASX”) to RAB.
Listing on the TSXV Stock Exchange and Collaboration with A-Labs
While the pandemic continued to spread, we also utilized our banking capabilities to strengthen the company with new institutional
investors and secured a dual-listing on another stock exchange, TSX. This was possible as a result of the value the company provides to
SMBs and its growth potential as an AdTech company.
In addition, AdRabbit cross-listed its shares on the TSX stock exchange under the ticker symbol RABI on February 7, 2022. The Ordinary
Shares will continue to trade on the ASX under the ticker RAB. The TSX listing was done with the help of A-Labs Finance and Advisory
Ltd.
AdRabbit appointed the Odyssey Trust Company as its co-transfer agent for the Ordinary Shares of the Company in Canada.
3
Outlook - Positioned for Growth in 2021
AdRabbit underwent a transformative year in 2021 in response to the challenges brought on by the COVID-19 pandemic. With
substantially reduced costs, the company is now focused on continued profitability and growth. New initiatives like JARVIS and
AdRabbit have been designed to support SMBs as they navigate the structural shift that is taking place from brick-and-mortar to
digital, and these initiatives will be the key drivers of revenue and growth for AdRabbit as we close out the 2021 Financial Year.
Throughout 2021, the Company also made a number of management and executive changes that were designed to enhance its
ability to execute on its strategic goals and milestones, and we’ll continue to make further appointments as the business continues to
grow. Furthermore, AdRabbit will continue to innovate its offerings in order to increase market share and become the go-to provider
for SMBs who are looking to build their digital strategy. The Company is committed to increasing shareholder value, and we believe
we’re well-situated to deliver on our operational and commercial targets in 2021.
Yours sincerely
Noah Hershcoviz
Chairman
4
AdRabbit Limited
Directors’ Report
31 December 2021
The Directors present their report, together with the financial statements of AdRabbit Limited (“the Company” or “AdRabbit”) and its
controlled entity (“the Group”) for the financial year ended 31 December 2021.
Directors
Name
Status
Appointed
Resigned
Max Bluvband
Executive Director and Chief Executive
Officer
21 May 2019
-
Shahar Hajdu
Executive Director and Chief Technology
Officer since Company’s inception
3 October 2019
-
Noah Hershcoviz
Chairman and Non-Executive Director
23 June 2021
-
Konstantin Lichtenwald
Non-Executive Director
19 October 2021
-
Andrew Whitten
Non-Executive
Director
and
Company
Secretary
10 June 2020
From
Company
Secretary on 12 March
2021
Barham Nour Omid
Chairman and Non-Executive Director
10 June 2020
19 October 2021
Yoav Ziv
Non-Executive Director
23 May 2019
19 October 2021
Principal Activities
AdRabbit (formerly: AppsVillage Australia Limited) is a software-as-a-service (‘SaaS”) company that commenced activities in 2016. In
2022, the Company completed its name change from "AppsVillage Australia Limited" to "AdRabbit Limited" (herein: "AdRabbit") and
changed its ticker code on the Australian Securities Exchange (“ASX”) to RAB, effective February 1 2022.
AdRabbit provides an easy and inexpensive SaaS solution that allows small-to-medium businesses to create and manage their own
mobile application as a means of connecting with their customers and growing their business.
AdRabbit's technology has automated the design, development, maintenance and marketing of mobile apps, allowing any business to
build, preview and launch their own application without have any code writing or digital marketing knowledge.
Dividends
No dividends have been paid or declared by the Group since the beginning of the financial year. No dividends were paid for the previous
financial year.
Review of Operations
Unless otherwise stated, all figures in this report are in the Company’s presentation currency US$.
Following the COVID 19 Lockdown there has been a significant impact on the ability of Small-Medium-Businesses ("SMB") to operate
their physical stores thus, the SMBS rushed to build their new digital assets and facing new challenge “how to bring traffic to their new
digital assets and grow their business”. AdRAbbit makes it easy for SMBs’ to advertise on the social networks and grow their business.
During 2021 the company kept reducing overall costs focusing on completion of R&D to enable timely rollout of the next generation
product (AdRabbit).
The company spent on sales and marketing $436k in 2021 compared to $2,172k in 2020, focusing on customers with clear return on
its investment in anticipation of the full rollout of its disruptive, next generation platform – AdRabbit.
The Company kept its full R&D staff spending $1,122k in 2021 compared to $790k in 2020 acknowledging that this is its most valued
asset that shall ensure the Company’s leadership as an SMBs’ advertising platform.
5
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
At the same time the Company has increased its administration and corporate costs of $1,349 in 2021 compared to $1,025k in 2020 to
ensure a timely listing on the TSX.
Since listing on ASX, AdRabbit has demonstrated its ability to rapidly scale customer and revenue growth and has now pivoted to focus
on executing its long-term growth strategy. This strategy specifically focuses on delivering profitable customer growth by significantly
improving customer value, retention, and Return-on-Investment ("ROI"). In doing so, the Company will deliver reduced customer
acquisition costs and improved customer retention rates.
AdRabbit continues execution of this strategy and is heavily focused on improving the usability and efficacy of its advertising and
promotional campaign AI platform (AdRabbit). Pilot and preliminary testing has delivered positive results and the Company remains
confident in its ability to add increasing value to its customers as it progresses its strategy.
The amount of SMBs subscribed to the platform as of December 31, 2021 was 1,351 compared to 3,879 in December 31, 2020.
AdRabbit had reduced its losses for the year ended 31 December 2021 to $2,908,588 (2020: $3,368,272). The 2021 loss included a non-
cash share-based payment of $216,297 (2020: $249,060).
The deficit of the Group is $1,858,181, compared to net assets $163,366 at 31 December 2020.
As at 31 December 2021, the Group’s cash and cash equivalents are $116,891 compared to $818,049 at 31 December 2020.
Shares Issuance
In February 2021, the company issued additional 5,454,545 shares at 0.086 per share, to raise $457,881.
During 2021 the Company has entered into agreements to secured a funding round in total amount of $2.25M in a premium price of
$0.04 (CAD $0.05). An amount of $1.05M was received during 2021 and the rest was received in 2022.
In February 2022 and upon the completion of the funding, conversion of $2,082,000 principal amount (and certain accrued interest on
such amount) under the Series B Convertible Loan have been released to the Company and $168,000 principal amount (and accrued
interest on such amount) remains outstanding and subject to conversion at a later date.
As part of the funding round the Company approved the issue and allotment of up to 78,262,709 CLA series A & B warrants and
78,262,709 CLA series A & B shares at a premium price of 0.04 (CAD $0.05).
The KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the funding round in total
amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 amount of warrants.
Corporate Director Changes
On October 19, 2021 Yoav Ziv resigned as non-executive company director.
On October 19, 2021 Bahram Nor Omid resigned as non-executive company director and Chairman of the board.
On March 12, 2021 David Hwang from the Automic Group was appointed as Company Secretary and Andrew Whitten resigned from
that role.
On June 23, 2021 Noah Hershcoviz was appointed as non-executive director and Chairman of the board.
On October 19, 2021 Konstantin Lichtenwald was appointed as non-executive director.
JARVIS
In June 2020, the Company launched JARVIS, an AI-based Facebook advertising campaign management agent for SMBs. JARVIS was
developed to serve as a virtual marketing manager to enable SMBs to build and manage intelligent online advertising and promotion
campaigns at a fraction of the cost of traditional human marketing managers which some SMBs may not be in a position to afford.
Since its launch, the results of JARVIS have been shown to significantly improve Facebook advertising campaigns across several sectors
in particular - retail, beauty and fitness. The Company has continued to work with SMBs to expand and improve the capabilities of
JARVIS to deliver better results for customers, leading to a significantly improved customer ROI. JARVIS has been shown to significantly
increase the number of new leads being generated for SMBs. Some Facebook campaigns have produced an increase in new leads versus
leads generated through a standard approach. The strong early results and effectiveness of JARVIS increased the Company’s focus on
making sure that JARVIS would be available to as many SMBs as possible.
6
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Launch of AdRabbit, AdRabbit’s artificial intelligence advertising agent for SMBs on social networks
AdRabbit launched the second generation of its advertising campaign management AI platform, AdRabbit, for intelligent automation
of online advertising, from you mobile.
AdRabbit was launched to serve as a virtual marketing manager for SMBs, enabling intelligent management of online advertisements
and promotional campaigns.
The algorithm leverages information from the SMBs existing social ads channel such as Facebook or Google and previous campaigns to
construct bespoke future campaign parameters that will yield improved customer reach, call to actions and user conversion results
including sales from your ecom site.
More specifically AdRabbit is intended to function as an automation of the full cycle of a digital advertising campaign for an SMB, from
Ad creation through running the campaign and managing leads all from your mobile device. The following are the key service features
of AdRabbit that are either currently available or planned for the commercial version:
•
the Company has developed AdRabbit which offers an automated, tailored ad offering for the SMB category, including the type
of offering, text and creatives, based on the particular vertical for each SMB (i.e., an SMB is not required to have a content
marketing writer or a graphic designer with respect to ad creation, but can use AdRabbit’s automated offering to suggest an
appropriate design and promotion based on the applicable vertical);
•
generate pre-made ad templates with dedicated content (text and images) and design or allow the user to upload its own
creatives;
•
template editor where the user can edit the template, text and graphics;
•
campaign intent indicating the call to action in respect of the lead generation via various contact methods (Phone call, WhatsApp,
Messenger & Contact forms);
•
ad demographics recommendations;
•
direct e-commerce integrations to user’s e-commerce site, such as Shopify, WooCommerce, etc. (this feature is still in
development and is subject to integration with these platforms in the future);
•
budget recommendations based on the type of SMB (this feature is still in development);
•
directing the SMB to the right social media and advertising platform that is most suitable for such SMB’s particular vertical (still
in development).
•
easy stats and insights reports.
TSX Listing
On February 7, 2022 the Company's Ordinary Shares commenced trading on the TSX under the ticker symbol RAB. The Ordinary Shares
will continue to trade on the ASX under the ticker RAB.
On 23 March, 2022 the Company submitted a formal application for delisting from the ASX.
7
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Events after the reporting period
Shares Issuance
During 2021 the Company has entered into agreements to secure a funding round in total amount of $2.25M in a premium price of
$0.04 (CAD $0.05). An amount of $1.05M was received during 2021 and the rest was received in 2022.
In February 2022 and upon the completion of the funding, conversion of $2,082,000 principal amount (and certain accrued interest on
such amount) under the Series B Convertible Loan have been released to the Company and $168,000 principal amount (and accrued
interest on such amount) remains outstanding and subject to conversion at a later date.
As part of the funding round the Company approved the issue and allotment of up to 78,262,709 CLA series A & B warrants and
78,262,709 CLA series A & B shares at a premium price of $0.04 (CAD $0.05).
The KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the funding round in total
amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 number of warrants.
Advisory Warrants and Fees
During the reporting period, the Company engaged A-LABS on a non-exclusive financial advisory service intended to assist with the
completion of the Company's investment round of up to $2,000,000 by mean of an unsecured convertible loan agreements prior and
contingent to the Company listing on the TSX. Upon the completion of the listing in the TSX and after receiving all the fund raising in
the investment round, in consideration of its services, the Company shall pay or issue to A-LABS: (i) a cash commission in the amount
of $150,000; (ii) a monthly cash retainer of $20,000; and (iii) subject to the shareholders' approval, Advisory warrants. Each Advisory
warrant is exercisable into one share at an exercise price of $0.01 until the second anniversary from the date of issuance.
On 3 February 2022, the Company has successfully completed the TSX listing and an amount of 3,792,000 Advisory warrants were
issued, in a fair value of $69,962.
Director's Options Plan
On January 24, 2022 The company's extraordinary general meeting approved the issuance of total 20,583,612 unlisted options with an
exercise price of 0.06 each, vesting monthly on a pro-rata basis over a 3 years period and expiring 5 years from vesting. An amount of
19,828,155 options were issued on February 3,2022.
There were no other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial
years.
8
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Information on Directors
Max Bluvband
Executive Director and Chief Executive Officer appointed on 21 May 2019
Qualifications
Bachelor of Science in Computer Science from Netanya Academic College.
Experience
Max Bluvband is the Chief Executive Officer and co-founder of AdRabbit. Max is an entrepreneur with
more than 18 years of experience and has founded multiple technology and mobile-focused companies.
In these companies, Max has led fundraising rounds from angel investors and top-tier venture capitalists,
such as Sequoia Capital, totaling more than 15 million (approximately A$20.2 million) in funding. Max has
also led merger and acquisition activity, sales and other strategic initiatives in his companies. Prior to co-
founding AdRabbit, Max founded and served as the Chief Executive Officer of Silent Communication Ltd.,
a company that provides device and network agnostic mobile client solutions. He led all activities with
Silent Communication Ltd., including multi-million dollar transactions with customers such as T-Mobile US
(NASDAQ:TMUS), Sony (TYO:6758), Metro PCS, Alltel, Alcatel Lucent (Euronext: ALU), France Telecom
(Euronext: ORA), A1, Ericsson (NASDAQ:ERIC), Sony Ericsson, Telecom Italia (BIT: TIT), MTS (MCX: MTSS)
and Safaricom, among others.
Interest in Shares and
Options at the date of
this report
5,625,486 ordinary shares
1,108,457 unlisted options expiring on or before 5 years from the date of quotation on ASX
4,700,000 unlisted options expiring on or before 5 years from the date of quotation on ASX
9,240,714 unlisted options expiring expiring 5 years from vesting
2,532,980 warrants expiring February 3, 2027
Directorships held in
other listed entities
(last 3 years)
Nil
Shahar Hajdu
Director appointed 3 October 2019 & Chief Technology Officer since Company’s inception
Qualifications
Bachelor of Science in Computer Science cum laude from The Technion – Israel Institute of
Technology.
Experience
Shahar Hajdu leads the research and development of AppsVillage’s SaaS platform. Over the last 26
years, Shahar has gained extensive experience in software development, in industries ranging from
communications to multimedia. Prior to co-founding AppsVillage, Shahar co-founded and served as
the Chief Technology Officer of Silent Communication Ltd., a company that provides device and
network agnostic mobile client solutions, working with mobile network operators, device
manufacturers, and value-added service providers to rapidly expand deployment and revenue
opportunities for mobile applications and services. There, Shahar lead the technology vision across
Silent Communication Ltd’s product line and worked with top-tier customer companies including
TMobile US (NASDAQ: TMUS), Sony (TYO: 6758), MetroPCS, Alltel, Alcatel Lucent (Euronext: ALU),
France Telecom (Euronext: ORA), A1, Ericsson (NASDAQ: ERIC), Sony Ericsson, Telecom Italia (BIT:
TIT), MTS (MCX: MTSS) and Safaricom among others.
Shahar was also a senior software developer and senior engineer at Elbit Systems Ltd. (TLV: ESLT),
an international high technology company engaged in a wide range of defence, homeland security,
and commercial programs.
Interest in Shares and
Options at the date of
this report
3,092,506 ordinary shares
1,108,457 unlisted options expiring on or before 5 years from the date of quotation on ASX
4,700,000 unlisted options expiring on or before 5 years from the date of quotation on ASX
9,240,714 unlisted options expiring expiring 5 years from vesting
Directorships held in
other listed entities
(last 3 years)
Nil
9
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Noah Hershcoviz
Non-Executive Director appointed on 23 June 2021
Qualifications
Noah holds a BA and LLB from the IDC Herzeliya, Israel. He is a Chartered Accountant and an Attorney.
Experience
Mr. Noah Hershcoviz is a Co-Founder of A-Labs Finance and Advisory Ltd. And serves as its Managing
Partner since 2017. Mr. Hershcoviz has a breadth of experience executing strategic transformation
projects and complex transactions across multiple international IPO’s, M&As, equity, debt, venture
investments and financial restructuring transactions. He serves as Non-Executive Director of
AppsVillage Australia Limited since June 22, 2021. He serves as Director at K.B. Recycling Industries
Ltd. Since June 2021. Mr. Hershcoviz serves as Chief Financial Officer and Corporate Secretary at A-
Labs Capital I Corp. and has been its Director since March 6, 2018. Mr. Hershcoviz serves as a Chief
Financial Officer, Secretary at A-Labs Capital II Corp. and has been its Director since September 5,
2018. From 2016 to 2017, he served as Vice President of Strategy at Mobile Care Expert Systems.
Noah resides in Tel Aviv.
Interest in Shares and
Options at the date of
this report
648,909 unlisted options expiring 5 years from vesting
Directorships held in
other listed entities
(last 3 years)
Noah serves as Director at K.B. Recycling Industries Ltd (TSX: AKMY) since June 2021
Konstantin
Lichtenwald
Non-Executive Director appointed on 19 October 2021
Qualifications
Konstantin holds a Bachelor degree in business administrations, and is a CPA (CGA) – BC, Canada,
ACCA (UK).
Experience
Konstantin has over 15 years of finance and accounting experience including corporate compliance,
accounting and financial management, initial public offering and reverse takeover services.
Konstantin has lived and worked in multiple Jurisdictions including Germany, Australia and Canada.
Konstantin is a director of a number of publicly listed companies in Canada and assumes a number
of CFO roles. Konstantin is based in Vancouver, British Colombia, Canada
Interest in Shares and
Options at the date of
this report
348,909 unlisted options expiring 5 years from vesting
Directorships held in
other listed entities
(last 3 years)
Nil
Andrew Whitten Non-Executive Director and Company Secretary appointed on 10 June 2020. Resigned as Company
secretary on 12 March 2021.
Qualifications
Bachelor of Arts (Economics) University of New South Wales, Master of Laws and Legal Practice,
University of Technology Sydney. Graduate Diploma in Applied Corporate Governance, Governance
Institute
Experience
Mr Whitten, who is based in Sydney, is a trained corporate lawyer, entrepreneur and investor.
Andrew has worked with many companies and has significant expertise across a wide range of
industry sectors, with an emphasis on technology.
10
Interest in Shares and
Options at the date of
this report
323,200 Ordinary Shares (via A&L Whitten Pty Ltd)
223,200 Ordinary Shares (via Landrew Investments Pty Ltd)
348,909 unlisted options expiring 5 years from vesting (via Landrew Investments Pty Ltd)
500,000 unlisted options expiring 12 months from vesting
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Information on Directors (continued)
Yoav Ziv
Non-Executive Director appointed on 23 May 2019 resigned on 19 October 2021
Qualifications
Yoav holds an MBA from Ben Gurion University, Israel, and is a Computer Science and Economics
graduate from Tel Aviv University, Israel.
Experience
Yoav Ziv is senior vice president and the General Manager of AT&T consumer,
media and advertising for Amdocs Limited (Amdocs), a leading software and
services provider to communications and media companies. Yoav resides in New
York City. From 2015 to 2017, Yoav was the global head of the quality engineering
services business unit within Amdocs. From 2013 to 2015, Yoav was the customer
business executive responsible for the Amdocs business at a tier 1 pay T provider
in New York.
From 2010 to 2013, Yoav was VP of marketing and strategic services at Realization,
a Silicon Valley technology and consulting firm specializing in project
management technologies and practices. Prior to 2010, Yoav filled numerous roles
in Amdocs in development, product management, sales, presales and operations
management.
Interest in Shares and
Options at the date of
this report
250,000 unlisted options expiring 3 years from issue
250,000 unlisted options expiring 1 year from vesting
446,429 ordinary shares
Bahram Nour-Omid
Non-Executive Director and Chairman of the board appointed on 10 June 2020 resigned on 19
October 2021
Qualifications
Dr. Nour-Omid earned a B.S. from the University of London’s Imperial College, and an M.S. in
Structural Engineering, M.A. in Mathematics and Ph.D. in Computer Simulation from the University
of California, Berkeley.
Experience
Dr. Nour-Omid has extensive executive leadership experience in the high-tech arena specifically with
Enterprise Software Solutions companies such as CRM, Supply Chain Management Systems, and E-
Commerce. Dr. Nour-Omid has been integrally involved in various aspects of running high-tech
businesses including product design, engineering, marketing as well as operations both domestic and
international. He began his career as a consulting scientist at the Lockheed Palo Alto Research
Laboratory, in 1982, where he conducted and directed research in the field of Scientific and high-
performance computing. In 1990, Dr. Nour-Omid co-founded Scopus Technology where he was the
Chief Technology Officer and served as a member of the Board of Directors of the company. Nour-
Omid was responsible for all the product development activities at Scopus while helping the company
maintain uninterrupted profitability from its inception, through a highly successful IPO in 1995. In
1998 the company merged into Siebel Systems, Inc. and ultimately acquired by Oracle Corporation.
In 1999 Dr. Nour-Omid Founded StudioXchange, Inc., a provider of production site, labor and
equipment procurement services for the entertainment industry and served as Chairman and Chief
Executive Officer. In 2000 StudioXchange was merged into iFilm and later acquired by MTV Networks.
In 2000 Dr. Nour-Omid became a founding member of Shelter Capital Partners, LLC., a private
Venture Capital firm with investments in Information Technology companies. While at Shelter, he
lead the investments and served on the board of; u-Nav microelectronics, a GPS solution provider
for the mobile location-based market, acquired by Atheros Communications (Nasdaq: ATHR now part
of Qualcomm); Kryptiq, a provider of secure clinical messaging and patient portal technologies,
acquired by SureScript, LLC; Integrated Decision Systems (IDS), an enterprise software solution for
Managed Accounts Industry, acquired by CheckFree (Nasdaq: CKFR, now part of Fisrv); Mobileum,
11
Inc., a provider of software solutions for the global wireless carrier market acquired by Audax Private
Equity.
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Information on Directors (continued)
In 2012 Dr. Nour-Omid assumed the Chairman and CEO role at Fuel Cycle, Inc. one of the portfolio
companies of Shelter Capital, bringing the company back to growth and profitability to create a
leading market research cloud that
combines both qualitative and quantitative data to power real-time business decisions, where he
remains as the executive chairman. In 2016 Dr. Nour-Omid became a founding member of Scopus
Ventures a founder-focused early-stage venture capital firm with investments in the US and Israel.
He is currently serving on the boards of AppsVillage, a provider of SaaS marketing solutions for SMBs;
Aperio Systems, Inc., a continuous monitoring of industrial control systems; and Emperical, a
provider of AI solutions for effective enterprise recruitment.
Interest in Shares and
Options at the date of
this report
700,000 unlisted options expiring 1 year from vesting
669,643 Ordinary Shares
Directorships held in
other listed entities
(last 3 years)
None
David Hwang
Company secretary, appointed on 12 March 2021
Qualifications
Bachelor of Laws from UNSW
Experience
David is an experienced corporate lawyer specialising in listings on ASX (IPOs and reverse
listings), equity capital markets, mergers & acquisitions and providing advice on corporate
governance and compliance issues. He is sought out for his expertise and guidance across a
range of legal, governance and ASX compliance matters that are commonly considered by
the Boards of unlisted (pre-IPO) and ASX listed entities at every stage of their growth, from
listings, secondary raisings and strategic acquisitions or investments.
Interest in Shares and
Options at the date of
this report
Nil
Meetings of Directors
Directors’ Meetings
Audit and Risk
Committee
Remuneration Committee
Director
Status
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Max Bluvband
Appointed May 2019
7
6
-
-
-
-
Shahar Hajdu
Appointed
October
2019
7
7
-
-
-
-
Noah Hershcoviz
Appointed June 2021
2
1
-
-
-
-
Konstantin
Lichtenwald
Appointed
October
2021
1
1
-
-
-
-
Andrew Whitten
Appointed June 2020
7
6
-
-
-
-
Bahram
Nour
Omid
Resigned
October
2021
6
6
-
-
-
-
Yoav Ziv
Resigned
October
2021
6
6
-
-
-
-
12
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Information on Directors (continued)
Committee membership
The Board has chosen not to establish an Audit and Risk Committee and a Remuneration committee. The Board considers that due to
the relatively small size of the Company, the interests of the Company are best served by the full Board completing the functions
normally delegated to an audit committee.
The processes that the Board employs to independently verify and safeguard the integrity of its corporate reporting include:
•
reviewing and adopting the Company’s quarterly, half year and annual report prior to release to shareholders and the ASX
and TSX;
•
overseeing the Company’s relationship with the external auditor, the external audit function generally and ensuring the
external audit engagement partner rotation is in accordance with the Corporations Code.
•
overseeing the adequacy of the Company’s financial risk management and internal controls.
Options
During the financial year, no options were exercised.
As of the reporting date, there were 10,447,494 options issued and at the date of this report, the company's extraordinary general
meeting approved the issuance of total 20,583,612 options. An amount of 19,828,155 options were issued on February 3, 2022 (2020:
7,182,822). Refer to Note 17 of the financial statements for details on options issued during the financial year.
The holders of these options do not have any rights under the options to participate in any share issue of the Company or any other
entity.
Proceedings on Behalf of Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group
for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
Indemnification and Insurance of directors and officers
The Group has indemnified the Directors and Executives of the Group for costs incurred, in their capacity as a director or Executive, for
which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Group paid a premium in respect of a contract to ensure the Directors and Executives of the Company
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
Environmental Regulations
The Directors are not aware of any significant environmental issues affecting the Group or its compliance with relevant environmental
issues affecting the Group or its compliance with relevant environmental agencies or regulatory authorities.
13
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Information on Directors (continued)
Likely Developments and Expected Results of Operations
AdRabbit launched the second generation of its advertising campaign management AI platform, AdRabbit, for intelligent automation
of online advertising, from you mobile.
AdRabbit was launched to serve as a virtual marketing manager for SMBs, enabling intelligent management of online advertisements
and promotional campaigns.
The algorithm leverages information from the SMBs existing social ads channel such as Facebook or Google and previous campaigns to
construct bespoke future campaign parameters that will yield improved customer reach, call to actions and user conversion results
including sales from your ecom site.
More specifically AdRabbit is intended to function as an automation of the full cycle of a digital advertising campaign for an SMB,
from Ad creation through running the campaign and managing leads all from your mobile device.
14
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Indemnification of Auditors
To the extent that is permitted by law, the Company has agreed to indemnity its auditors, BDO Audit (WA) Pty Ltd, as part of the terms
of the agreement against claims by third parties arising from their report on the financial report. No payment has been made to
indemnify BDO Audit (WA) Pty Ltd during or since the financial year.
Non-audit Services
The Company’s auditor, BDO Audit (WA) Pty Ltd, has provided 0 (2020: $0) in non-audit service and its network firm has provided
$5,000 in non-audit services to the Group during the year ended 31 December 2021 (2020: $4,500).
Full details of their remuneration can be found within the financial statements at Note 6.
In the event that non-audit services are provided by BDO Audit (WA) Pty Ltd, the Board has established certain procedures to ensure
that the provision of non-audit services are compatible with, and do not compromise the auditor independence requirements of the
Corporations Act 2001. These procedures include:
●
non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed by the
Board to ensure they do not impact the integrity and objectivity of the auditor; and
●
ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management or decision-
making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Auditor’s Independence Declaration
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
The auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21.
This report is made in accordance with a resolution of Directors.
15
AdRabbit Limited
Directors’ Report (Continued)
31 December 2021
Remuneration Report - Audited
The remuneration report for the year ended 31 December 2021 outlines the remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 (Cth), as amended (Act) and its regulations. The information has been audited as
required by section 308(3C) of the Act.
The remuneration report is presented under the following sections:
1.
Key management personnel covered in this report
2.
Remuneration governance
3.
Executive remuneration arrangements
4.
Non-executive director fee arrangements
5.
Details of remuneration
6.
Additional disclosures relating to equity instruments
7.
Loans to key management personnel (KMP) and their related parties
8.
Other transactions and balances with KMP and their related parties
9.
Voting of Shareholdings at last year’s annual general meeting
1.
Key management personnel covered in this report
Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the major activities of the
Group. KMP comprise the directors of the Company and identified key management personnel. Compensation levels for KMP are
competitively set to attract and retain appropriately qualified and experienced directors and executives. The Board may seek
independent advice on the appropriateness of compensation packages, given trends in comparable companies both locally and
internationally and the objectives of the Group’s compensation strategy.
Key management personnel covered in this report are as follows:
Name
Status
Appointed
Resigned
Noah Hershcoviz
Non-Executive Director and Chairman
23 June 2021
-
Max Bluvband
Executive Director and Chief Executive Officer since
Company’s inception
21 May 2019
-
Shahar Hajdu
Executive Director and Chief Technology Officer
since Company’s inception
3 October 2019
-
Konstantin Lichtenwald
Non-Executive Director
19 October 2021
-
Andrew Whitten
Non-Executive Director & Company Secretary
10 June 2020
-
Bahram Nour Omid
Non-Executive and Chairman
10 June 2020
19 October 2021
Yoav Ziv
Non-Executive Director
23 May 2019
19 October 2021
Other key management personnel
Gidi Krupnik
Chief Financial Officer
1 January 2019
-
Moshe Cohen
Vice President of Business Development
1 June 2018
3 February 2022 (i)
(i) The Company terminated Moshe Cohen's agreement and is not considered to be a KMP from this date.
2.
Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the establishment of a
separate remuneration committee. Accordingly, all matters are considered by the full Board of Directors, in accordance with a
Remuneration Committee Charter.
At this stage the Board does not consider the Group’s earnings- or earnings-related measures to be an appropriate key performance
indicator (KPI). In considering the relationship between the Group’s remuneration policy and the consequences for the Company’s
shareholder wealth, changes in share price are analysed as well as measures such as successful completion of business development
and corporate activities.
During the financial year, the Company did not engage any remuneration consultants.
16
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
3.
Executive remuneration arrangements
The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and
achieve the broader outcome of creation of value for shareholders. Compensation packages may include a mix of fixed compensation,
equity-based compensation, as well as employer contributions to social benefits/superannuation funds. There is no performance-based
remuneration.
The compensation of the executives is subject to the approval by the Board on a case-by-case basis.
Mr Max Bluvband
Mr Max Bluvband is the Co-Founder, Executive Director/ Chief Executive Officer (CEO). In July 2016, AppsVillage Israel entered into an
executive agreement with Max Bluvband pursuant to which Mr Bluvband was appointed as the CEO.
A summary of the agreement is as follows:
(a) (Term) Mr Bluvband’s service commenced on 1 July 2016 and continues in full force and effect until terminated in accordance
with the agreement.
(b) (Salary): Mr Bluvband is paid a gross monthly salary of NIS 37,800 and superannuation and social benefits of NIS 7,900
(approximately US$14,000 based on prevailing exchange rates) per month pursuant to the agreement. In July 2021, the gross
monthly salary was updated to NIS 50,000.
(c) (Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Bluvband commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which
are considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and
non-solicitation, confirmation of proprietary rights and other standard clauses.
Mr Shahar Hajdu
Mr Shahar Hajdu is the Co-Founder, Executive Director/Chief Technology Officer (CTO). In July 2016, AppsVillage Israel entered into
an agreement with Mr Shahar Hajdu pursuant to which Mr Hajdu was appointed as the CTO.
A summary of the agreement is as follows:
(a) (Term) Mr Hajdu’s service commenced on 1 July 2016 and continues in full force and effect until terminated in accordance
with the agreement.
(b) (Salary): Mr Hajdu is paid a gross monthly salary of NIS 37,800 and superannuation and social benefits of NIS 7,300
(approximately US$14,000 based on prevailing exchange rates) per month pursuant to the agreement. In July 2021, the gross
monthly salary was updated to NIS 50,000.
(c) (Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Hajdu commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which
are considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and
non-solicitation, confirmation of proprietary rights and other standard clauses.
17
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
Mr Moshe Cohen
Mr Moshe Cohen is Vice President of Business Development. In June 2018, AppsVillage Israel entered into an agreement with Mr
Moshe Cohen pursuant to which Mr Cohen was appointed as the Vice President of Business Development.
A summary of the agreement is as follows:
(a) (Term) Mr Cohen’s service commenced on 1 June 2018 and continues in full force and effect until terminated in accordance
with the agreement.
(b) (Salary): Mr Cohen is paid a monthly fee of $6,000 per month pursuant to the agreement.
(c) (Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Cohen commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which are
considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and non-solicitation,
confirmation of proprietary rights and other standard clauses.
The Company terminated Moshe Cohen's agreement on 3 February, 2022 and is not considered to be a KMP from this date.
Mr Gidi Krupnik
Mr Gidi Krupnik is Chief Financial Officer. In January 2019, AppsVillage Israel entered into an agreement with Mr Gidi Krupnik pursuant
to which Mr Krupnik was appointed as the Chief Financial Officer.
A summary of the agreement is as follows:
(a) (Term) Mr Krupnik’s service commenced on January 1, 2019 and continues in full force and effect until terminated in
accordance with the agreement.
(b) (Salary): Mr Krupnik is paid an hourly fee of $167 per hour pursuant to the agreement.
(c) (Events of Termination): the agreement is terminable by either party by 30 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Krupnik commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which are
considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and non-solicitation,
confirmation of proprietary rights and other standard clauses.
4.
Non-executive director fee arrangements
The Board policy is to remunerate non-executive directors at a level to comparable companies for time, commitment, and
responsibilities. Non-executive directors may receive performance related compensation. Directors’ fees cover all main Board activities
and membership of any committee. The Board has no established retirement or redundancy schemes in relation to non-executive
directors.
The maximum aggregate amount of fees that can be paid to non-executive directors is presently limited to an aggregate of
approximately $342,000 (A$500,000) per annum and any increase is subject to approval by shareholders. Fees for non-executive
directors are not linked to the performance of the Company. However, to align directors’ interests with shareholder interests, directors
are encouraged to hold shares in the Company.
Total fees for non-executive directors for the financial year were $168,405 (A$216,342) and cover main Board activities only. Non-
executive directors may receive additional remuneration for other services provided to the Group. All non-executive directors enter
into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and
terms, including remuneration, relevant to the office of director.
18
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
5.
Details of Remuneration
31 December 2021
Short term
salary, fees &
commissions
Superann
uation&
social
benefits
Non-
monetary
benefits
Bonus
Share-
based
payments
(iii)
Total
Performance
based
remuneration
Remunera
tion
consisting
of options
US$
US$
US$
US$
US$
US$
%
%
Executive Directors:
Max Bluvband
163,129
43,351
35,133
-
100,285
341,898
-
29.3%
Shahar Hajdu
Non-Executive
Directors:
163,129
43,146
28,332
-
100,285
334,892
-
29.3%
Noah Hershcoviz (ii)
22,589
-
-
-
107
22,696
-
0.5%
Konstantin
Lichtenwald(ii)
9,399
-
-
-
33
9,432
-
0.4%
Bahram Nour Omid (i)
54,641
-
-
-
-
54,641
-
-
Yoav Ziv (i)
34,685
-
-
-
-
34,685
-
-
Andrew Whitten
41,355
-
-
-
5,596
46,951
-
11.9%
Other KMP:
Moshe Cohen
66,303
-
-
-
-
66,303
-
-
Gidi Krupnik
75,958
-
-
-
-
75,958
-
-
Total
631,188
86,497
63,465
-
206,306
987,456
-
71.4%
(i)
Mr Yoav Ziv and Mr Bahram Nour Omid resigned on 19 October 2021. They are not considered to be a KMP from
these dates.
In January 2021 an amount of $94,728 directors fee was settled in issuance of 1,116,072 company's shares.
(ii)
Mr Konstantin Lichtenwald appointed on 19 October 2021, Mr Noah Hershcoviz appointed on 23 June 2021.
(iii)
Am amount of $1,425 share-based payments were subject to the shareholders meeting that was approved on 24
January 2022.
19
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
31 December 2020
Short term
salary, fees &
commissions
Superannuati
on & social
benefits
Non-
monetary
benefits
Bonus
Share-based
payments
Total
Performance
based
remuneration
US$
US$
US$
US$
US$
US$
%
Executive Directors :
Max Bluvband
131,769
35,037
31,109
-
-
197,915
-
Shahar Hajdu
131,769
35,420
26,699
-
-
193,888
-
Non-Executive Director
Yoav Ziv
41,330
-
-
-
-
41,330
-
Bahram Nour Omid (i)
42,000
-
-
-
-
42,000
-
Andrew Whitten (i)
28,931
-
-
-
-
28,931
-
Leanne Graham (ii)
13,777
-
-
-
-
13,777
-
Jonathan Hart (ii)
18,369
-
-
-
-
18,369
-
Other KMP
Moshe Cohen (i)
72,204
-
-
-
-
72,204
-
Gidi Krupnik
73,728
-
-
-
-
73,728
-
Total
553,877
70,457
57,808
-
-
682,142
-
(i)
Mr Nour Omid appointed on 10 June 2020, Mr Whitten appointed on 10 June 2020.
(ii)
Mrs Graham resigned on 10 June 2020, Mr Hart resigned on 10 June 2020.
They are not considered to be a KMP from these dates.
6.
Additional disclosures relating to equity instruments
The number of ordinary shares in AdRabbit Limited held by KMP of the Group during the financial year are as follows:
31 December 2021
Balance at start of the
year
Shares issued
during
the
year (iii)
Other
changes
during the year
Balance at end of the year
Directors
Max Bluvband
3,092,506
-
-
3,092,506
Shahar Hajdu
3,092,506
-
-
3,092,506
Noah Hershcoviz (ii)
-
-
-
-
Konstantin
Lichtenwald (ii)
-
-
-
-
Bahram Nour Omid (i)
2,624,669
2,008,928
-
4,633,597
Yoav Ziv (i)
40,000
446,429
-
486,429
Andrew Whitten
100,000
446,400
-
546,400
Other KMP
Gidi Krupnik
-
-
-
-
Moshe Cohen
7,979,261
2,809,855
-
10,789,116
Total
16,928,942
5,711,612
-
22,640,554
(i)
Mr Yoav Ziv and Mr Bahram Nour Omid resigned on 19 October 2021. They are not considered to be a KMP from these
dates and the balance at the end of the year represent the outstanding shares as of the date of the resignation.
In January 2021 an amount of $94,728 directors fee was settled in issuance of 1,116,072 company's shares
(ii)
Mr Konstantin Lichtenwald appointed on 19 October 2021, Mr Noah Hershcoviz appointed on 23 June 2021.
(iii)
Shares issued during the year reflects on market sales/on market purchases.
20
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
KMP Option Holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
31 December 2021
Balance at
start of the
year
Granted as
remunerati
on
Exercise
d during
the year
Options
subject to
shareholder's
approval (iii)
Other
changes
during the
year
Balance at
end of the
year
Vested and
exercisable
Unvested
and un-
exercisable
Executive Directors
Max Bluvband
10,295,957
4,700,000
-
9,240,714
(9,187,500)
15,049,171
1,718,553
13,330,618
Shahar Hajdu
10,295,957
4,700,000
-
9,240,714
(9,187,500)
15,049,171
1,718,553
13,330,618
Non-Executive
Directors
Noah Hershcoviz (ii)
-
-
-
648,909
-
648,909
-
648,909
Konstantin
Lichtenwald(ii)
-
-
-
348,909
-
348,909
-
348,909
Bahram Nour-Omid
(i)
-
700,000
-
-
-
700,000
-
700,000
Yoav Ziv (i)
250,000
250,000
-
500,000
-
500,000
Andrew Whitten
-
500,000
-
348,909
-
848,909
-
848,909
Other KMP
Gidi Krupnik
-
-
-
-
-
-
-
-
Moshe Cohen
3,375,000
454,546
-
-
(2,625,500)
1,204,046
1,204,046
-
Total
24,216,914
11,304,546
-
19,828,155
(21,000,500)
34,349,115
4,641,152
29,707,963
(i)
Mr Yoav Ziv and Mr Bahram Nour Omid resigned on 19 October 2021. They are not considered to be a KMP from these
dates and the balance at the end of the year represent the outstanding shares as of the date of the resignation.
(ii)
Mr Konstantin Lichtenwald appointed on 19 October 2021, Mr Noah Hershcoviz appointed on 23 June 2021.
(iii)
As of December 31, 2021 options are subject to the shareholders' approval. The shareholder's approval was given on
January 24, 2022. On February 3, 2022 an amount of 19,828,155 options were issued.
Options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until their
expiry date.
KMP Warrants Holdings
The number of warrants over ordinary shares held by each KMP of the Group during the financial year is as follows:
31 December 2021
Balance
at start
of
the
year
Granted
as
remunera
tion
Exercised
during
the year
Warrants
issued
during the
year
Other
changes
during
the year
Balance
at
end of the
year
Vested and
exercisable
Unvested
and
un-
exercisable
Executive Directors
Max Bluvband
-
-
-
-
-
-
-
-
Shahar Hajdu
-
-
-
-
-
-
-
-
Non-Executive Directors
Yoav Ziv
-
-
-
-
-
-
-
-
Konstantin Lichtenwald
-
Noah Hershcoviz
-
Bahram Nour Omid
-
-
-
-
-
-
-
-
Andrew Whitten
-
-
-
-
-
-
-
-
Other KMP
Gidi Krupnik
-
-
-
-
-
-
-
-
Moshe Cohen
300,000
-
-
-
-
300,000
300,000
-
Total
300,000
-
-
-
-
300,000
300,000
-
21
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
Warrants do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until their
expiry date.
Terms and conditions of the share-based payment arrangements
Directors' options
Options
Executives
Options (i)
Company's Stock Option Plan (ii)
Directors
Options (iii)
Number of options
9,400,000
1,450,000
19,828,155
Grant date
29 March 2021
29 March 2021
24 January 2021
Issue date
24 June 2021
24 June 2021
3 February, 2022
Exercise price AUD $
0.16
0.16
0.06
Expected volatility
120%
120%
100%
Vesting date
On a monthly basis
over 4 years starting 26
June 2021
24 June 2021
On a monthly basis
over 3 years starting
24 January 2022
Implied option life
5 years from vesting
1 year from vesting
5 years from vesting
Conditions
Conditional on
continued service of
the holder
Vesting 2 years from issue; or on
a change of control event which
results in a change of 50% or
more of the voting shares
Conditional on
continued service of
the holder
Expected dividend yield
Nil
Nil
Nil
Risk free rate
0.67%-1.57%
0.10%
1.34%-1.55%
Valuation per option AUD $
varies
0.044
varies
Exchange rate
0.761
0.761
0.7266
Valuation method
Black Scholes
Black Scholes
Black Scholes
Valuation per option USD $
varies
0.033
varies
(i) Included options to Max Bluvband (4,700,000) and Shahar Hajdu (4,700,000).
(ii)
Included options to the directors Bahram Nour-Omid (700,000), Yoav Ziv (250,000) whom resigned on 19 October 2021
and to Andrew Whitten (500,000).
(iii)
As of 31 December 2021, was subject to the shareholders' approval that was given on January 24, 2022. An amount of
19,828,155 options were issued on February 3, 2022 to Max Bluvband (9,240,714), Shahar Hajdu (9,240,714), Noah
Hershcoviz (648,109), Konstantin Lichtenwald (348,909) and Andrew Whitten (348,909).
Performance options
No performance options were granted during 2021 to Directors and other key management personnel.
7.
Loans from key management personnel (KMP) and their related parties
During 2021 the Company has entered into agreements to secured a funding round in total amount of $2.25M in a premium price of
$0.04 (CAD $0.05). An amount of $1.05M was received during 2021 and the rest was received in 2022.
In February 2022 and upon the completion of the funding, conversion of $2,082,000 principal amount (and certain accrued interest on
such amount) under the Series B Convertible Loan have been released to the Company and $168,000 principal amount (and accrued
interest on such amount) remains outstanding and subject to conversion at a later date.
As part of the funding round the Company approved the issue and allotment of up to 78,262,709 CLA series A & B warrants and
78,262,709 CLA series A & B shares at a premium price of $0.04 (CAD $0.05).
The KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the funding round in total
amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 amount of warrants.
In 2020 No loans are noted between the Group and key management personnel and their related parties.
22
AdRabbit Limited
Directors’ Report
31 December 2021
Remuneration Report - Audited (Continued)
8.
Other transactions and balances with KMP and their related parties
Transactions with related parties are entered into on terms equivalent to those that prevail in arm’s length transactions.
Related parties of the Group's key management personnel are as follows:
Mr Zignmund Bluvband – Executive Director and CEO Max Bluvband's Father
Mrs Hagit Bluvband – Executive Director and CEO Max Bluvband's wife
Pearl Cohen Zedek Latzer Baratz – CEO’s sister Anna Moshe is a partner of this legal firm
12.64 Fund (A-Labs group fund) – shareholders and Noah Hershcoviz's related party
AdRabbit Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
The Group has transactions with members of the Group’s key management personnel and/or their related parties during the year as
follows:
8(a) Share holdings by KMP related parties
As of December 31, 2021 no shareholding by KMP related parties.
In January 2021 an amount of $94,728 directors fee to Yoav Ziv and Bahram Nour Omid was settled in issuance of 1,116,072 company's
shares. They both resigned on 19 October 2021 and are not considered to be a KMP from this date.
After the reporting date, the KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the
funding round in total amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 amount of warrants. Furthermore, A-
Labs were granted 3,792,000 as an advisory service fee for the above-mentioned funding round.
8(b) Options Holdings by KMP Related Parties
31 December 2021
Balance at
start of the
year
Granted as
remuneration
Balance at the end
of the year
Hagit Bluvband
229,052
-
229,052
Pearl Cohen Legal
193,282
-
193,282
Total
422,334
-
422,334
8(c) Details of remuneration
31 December 2021
Short term salary,
fees & commissions
Superannuation &
social benefits
Non-Monetary benefits
Total
US$
US$
US$
US$
Hagit Bluvband
96,520
17,178
27,053
140,751
Pearl Cohen Legal(i)
23,491
-
-
23,491
Total
120,011
17,178
27,053
164,242
(i) This is the fee paid to Pearl Cohen Legal for legal consult service in 2021. The terms of the agreement is on an arm’s length basis.
23
AdRabbit Limited
ŝƌĞĐƚŽƌƐ͛ZĞƉŽƌƚ
31 December 2021
Remuneration Report - Audited (Continued)
9.
sŽƚŝŶŐŽĨƐŚĂƌĞŚŽůĚĞƌƐĂƚůĂƐƚLJĞĂƌ͛ƐĂŶŶƵĂůŐĞŶĞƌĂůŵĞĞƚŝŶŐ
The Company received 99.48% "Yes" Votes cast on its Remuneration Report for the 2020 financial year.
The company did not receive any specific feedback at the annual general meeting regarding its remuneration practices.
This is the end of the audited remuneration report
dŚŝƐĚŝƌĞĐƚŽƌƐ͛ƌĞƉŽƌƚŝƐƐŝŐŶĞĚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚĂƌĞƐŽůƵƚŝŽŶŽĨĚŝƌĞĐƚŽƌƐŵĂĚĞƉƵƌƐƵĂŶƚƚŽƐ͘Ϯϵϴ;ϮͿŽĨƚŚĞCorporations Act 2001.
On behalf of the Directors
ͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺ
Mr Max Bluvband
Chief Executive Officer
Tel Aviv, 31 March 2022
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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.
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF ADRABBIT LIMITED
As lead auditor of AdRabbit Limited for the year ended 31 December 2021, 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 audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AdRabbit Limited and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 31 March 2022
25
AdRabbit Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 December 2021
Note
2021
US$
2020
US$
Revenue from contracts with customers
2
406,883
992,832
Operating expenses
Cost of revenues – commissions
(35,835)
(106,086)
Research and development
(1,121,692)
(790,227)
Selling and marketing
(435,943)
(2,171,520)
General and administrative
(1,434,343)
(1,024,874)
Share-based payments
16
(216,297)
(249,060)
Listing and registration expenses
-
-
Loss before finance expenses
(2,837,227)
(3,348,935)
Finance income
3
-
9,310
Finance expense
3
(61,967)
(25,657)
Loss before income tax
(2,899,194)
(3,365,282)
Income tax expense
4
-
-
Loss for the year
(2,899,194)
(3,365,282)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation reserve
16(c)
(9,394)
(2,990)
Total comprehensive loss for the year attributable to owners of
the Company
(2,908,588)
(3,368,272)
Loss per share attributable to owners of the Company
Basic/diluted loss per share (cents per share)
7
(0.03)
(0.04)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
26
AdRabbit Limited
Consolidated Statement of Financial Position
As at 31 December 2021
Note
2021
US$
2020
US$
CURRENT ASSETS
Cash and cash equivalents
8
116,891
818,049
Restricted cash
9
43,819
44,772
Trade and other receivables
10
171,012
116,578
TOTAL CURRENT ASSETS
331,722
979,399
NON-CURRENT ASSETS
Plant and equipment
8,476
14,121
Right- of- use assets
21,895
46,920
TOTAL NON-CURRENT ASSETS
30,371
61,041
TOTAL ASSETS
362,093
1,040,440
CURRENT LIABILITIES
Trade and other payables
11
904,716
522,224
Employee provisions
12
176,389
154,116
Borrowings
13
1,060,110
-
Contract liability
14
58,187
153,659
Lease liabilities
20,872
27,268
TOTAL CURRENT LIABILITIES
2,220,274
857,267
NON-CURRENT LIABILITIES
Lease liabilities
-
19,807
TOTAL NON-CURRENT LIABILITIES
-
19,807
TOTAL LIABILITIES
2,220,274
877,074
NET ASSETS/ ( LIABILITIES)
(1,858,181)
163,366
SHAREHOLDERS’ EQUITY (DEFICIT)
Issued capital
15
10,258,780
9,588,036
Reserves
16
1,405,511
1,198,608
Accumulated losses
(13,522,472)
(10,623,278)
SHAREHOLDERS’ EQUITY (DEFICIT)
(1,858,181)
163,366
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
27
AdRabbit Limited
Consolidated Statement of Changes in Equity
As at 31 December 2021
Issued Capital
US$
Accumulated losses
US$
Share-based
payment reserve
US$
Foreign Currency Translation
Reserve
US$
Predecessor accounting
reserve
US$
Total
US$
Balance at 1 January 2020
7,967,290
(7,257,996)
951,397
160,343
(159,202)
1,661,832
Loss for the year
-
(3,365,282)
-
-
-
(3,365,282)
Other comprehensive income
-
-
-
(2,990)
-
(2,990)
Total comprehensive Income (loss)
for the year
-
(3,365,282)
-
(2,990)
-
(3,368,272)
Transactions with owners in their
capacity as owners:
Issue of shares – Note 15
1,800,159
-
-
-
-
1,800,159
Capital raising costs –Note 15
(179,413)
-
-
-
-
(179,413)
Share based payments –Note 17
-
-
249,060
-
-
249,060
Balance at 31 December 2020
9,588,036
(10,623,278)
1,200,457
157,353
(159,202)
163,366
Balance at 1 January 2021
9,588,036
(10,623,278)
1,200,457
157,353
(159,202)
163,366
Loss for the year
-
(2,899,194)
-
-
-
(2,899,194)
Other comprehensive income
-
-
-
(9,394)
-
(9,394)
Total comprehensive Income(loss)
for the year
-
(2,899,194)
-
(9,394)
-
(2,908,588)
Transactions with owners in their
capacity as owners:
Issue of shares– Note 15
670,744
-
-
-
-
670,744
Capital raising costs
-
-
-
-
-
-
Share based payments –Note 17
-
-
216,297
-
-
216,297
Balance at 31 December 2021
10,258,780
(13,522,472)
1,416,754
147,959
(159,202)
(1,858,181)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
28
AdRabbit Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2021
Note
2021
US$
2020
US$
CASH FLOWS USED IN OPERATING ACTIVITIES
Receipts from customers
311,412
798,761
Payments to suppliers and employees
(2,696,207)
(4,170,025)
Listing and registration expenses
(30,693)
-
Interest paid
(7,897)
(5,783)
Net used in operating activities
8(b)
(2,423,386)
(3,377,047)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
(1,498)
(9,399)
Net used in investing activities
(1,498)
(9,399)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of shares
14
708,053
1,769,970
Transaction costs related to issues of shares
-
(179,413)
Investments in restricted cash
953
(16,549)
Repayment of lease liability
(27,458)
(22,578)
Proceeds from borrowings
13
1,050,000
-
Net cash provided from financing activities
1,731,548
1,551,430
Net increase (decrease) in cash and cash equivalents
(693,336)
(1,835,016)
Cash and cash equivalents at the beginning of the financial year
818,049
2,662,198
Impact of movement in foreign exchange rates
(7,822)
(9,133)
Cash and cash equivalents at the end of the financial year
8
116,891
818,049
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Non- cash Investing Activities:
Right of Use Asset acquisition $22,761
29
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements cover AdRabbit Limited (Company) and its controlled entity (also referred to as Group).
AdRabbit Limited is a company limited by shares, incorporated and domiciled in Australia. The Group is a for-profit entity.
The nature of operations and principal activities of the Company are described in the Directors’ report.
Basis of preparation of the financial report
a)
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB)
and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded would
result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting
Standards.
b)
Basis of Measurement
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The amounts presented in the financial statements are presented in Unites States Dollars (US$) and all values are rounded to the
nearest dollar unless stated otherwise.
c)
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and
the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group incurred a loss for year ended
31 December 2021 of $2,899,194 (2020: $3,365,282) and net cash outflows from operating activities of $2,423,386 (2020: $3,377,047),
as of 31 December 2021 total net assets of $1,858,181 and a negative working capital of $1,888,552.
In context of this operating environment, the ability of the Group to continue as a going concern is dependent on securing additional
funding through debt or equity to continue to fund its operational and marketing activities.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity’s ability to continue as a going
concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The Directors believe that there will be sufficient funds available to continue to meet the Group’s working capital requirements as at
the date of this report and that sufficient funds will be available to finance the operations of the Group for the following reasons:
• the Directors have assessed the likely cash flow for the 12-month period from the date of signing this financial report and its impact
on the Group and believe there will be sufficient funds to meet the Group’s working capital requirements as at the date of this report;
• the Group has recently been successful in raising equity and subsequent to the reporting date has completed a fund raising in a total
amount of $2.25M. The funds were secured in convertible loan agreements and in February 2022, conversion of $2,082,000 principal
amount (and certain accrued interest on such amount) under the Series B Convertible Loan have been released to the Company and
$168,000 principal amount (and accrued interest on such amount) remains outstanding and subject to conversion at a later date (please
refer to note 24);
• the level of expenditure can be managed; and
• the Directors also have reason to believe that in addition to the cash flow currently available, additional funds from receipts are
expected through the provision of the Group’s services.
30
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other
than in the ordinary course of business, and at amounts that differ from those stated in the financial statements or raise additional
capital through equity or debts raisings and that the financial report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern
and meet its debts as and when they become due and payable. The directors plan to continue the Group’s operations on the basis as
outlined above and believe there will be sufficient funds for the Group to meet its obligations and liabilities for at least twelve months
from the date of this report.
d)
Principles of Consideration
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December 2021.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Specifically, the Group controls as investee if and only if the Group
has:
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
•
Exposure, or rights, to variable returns from its involvement with the investee, and
•
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
•
The contractual arrangement with the other vote holders of the investee,
•
Rights arising from other contractual arrangements,
•
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during
the year are included in the statement of profit or loss and other comprehensive income from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group,
and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting
policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:
•
De-recognises the assets (including goodwill) and liabilities of the subsidiary
•
De-recognises the carrying amount of any non-controlling interests
•
De-recognises the cumulative translation differences recorded in equity
•
Recognises the fair value of the consideration received
•
Recognises the fair value of any investments retained
•
Recognises any surplus or deficit in profit or loss
•
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss Accumulated losses as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
e)
Income Tax
Current income tax expense charged to the profit or loss is tax payable on taxable income calculated using applicable income tax rates
enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected
to be paid to (recovered from) the relevant taxation authority.
31
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred income tax expense reflects movements in the deferred tax asset and deferred tax liability balances during the year as well
unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax
relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in financial statements. Deferred tax assets also result where amounts have been fully expensed but future
tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is realised or the
liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner
in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
When temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset
where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
f)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the
contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value
through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit
or loss immediately. Financial instruments are classified and measured as set out below.
Classification and subsequent measurement
(i)
Receivables
Trade receivables are measured at amortised cost using the effective interest method, less any allowance for expected credit losses.
Trade receivables are generally due for settlement within 0 - 60 days.
(ii)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Gains or losses are
recognised in profit or loss though amortisation process and when the financial liability is derecognised.
Derivative instruments
The Group does not trade or hold derivatives.
Financial guarantees
The Group has no material financial guarantees.
32
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flow expires, or the asset is transferred to another
party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between
the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including
the transfer of non-cash assets or liabilities assumed, is recognised on profit or loss.
g)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks with original maturity of three months or
less.
h)
Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 0 - 60 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To
measure the expected credit losses, trade receivables have been grouped based on days overdue.
i)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement
conveys a right to use the asset.
Group as a lessee
Operating lease payments, where substantially all the risk and benefits remain with the lessor, are recognised as an expense in the
statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. Operating lease incentives are
recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction
of the liability.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
•
Variable lease payment that are based on an index or a rate
•
Amount expected to be payable by the lessee under residual value guarantees
•
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
•
Payments of penalties for termination the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset
of similar value in a similar economic environment with similar terms and conditions.
Right-of-use of assets are measured at cost comprising the following:
•
The amount of the initial measurement of lease liability
•
Any lease payments made at or before the commencement date less any lease incentives received
•
Any initial direct costs
•
Restoration cost
33
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in
profit or loss. Short term leases are leases with a lease term of 12 months or less. Low-value asset comprise IT equipment and small
items of office furniture.
j)
Revenue Recognition
The Group provides an online platform that enables users to create applications using their Facebook (‘FB’) pages and generates
revenue primarily from services related to such applications.
The Group recognises revenue when the customer obtains control over the promised services. The revenue is measured according to
the amount of the consideration to which the Group expects to be entitled in exchange for the services promised to the customer,
other than amounts collected for third parties.
Identifying the contract
The Group accounts for a contract with a customer only when the following conditions are met:
(a) The parties to the contract have approved the contract (in writing, orally or according to other customer business practices)
and they are committed to satisfying the obligations attributable to them;
(b) The Group can identify the rights of each party in relation to services that will be transferred;
(c) The Group can identify the payment terms for the service that will be transferred;
(d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to
change as a result of the contract); and
(e) It is probable the consideration, to which the Group is entitled to in exchange for its services transferred to customer, will be
collected.
For the purposes of paragraph (e) the Group examines, inter alia, the percentage of the advance payments received and the spread of
the contractual payments, past experience with the customer and the status and existence of sufficient collateral.
If a contract with a customer does not meet all the above criteria, consideration received from the customer is recognised as a contract
liability until the criteria are met or when one of the following events occurs; the Group has no remaining obligation to transfer services
to the customer and any considerations promised by the customer has been received and cannot be returned; or the contract has been
terminated and the consideration received from the customer cannot be refunded.
Identifying Performance Obligations
On the contract’s inception date, the Group assesses the services promised in the contract with the customer and identifies as a
performance obligation any promise to transfer to the customer one of the following:
(a) Services that are distinct; or
(b) A series of distinct services that are substantially the same and have the same pattern of transfer to the customer.
The Group identifies services promised to the customer as being distinct when the customer can benefit from the services on their own
or in conjunction with other readily available resources and the Group’s promise to transfer the services to the customer is separately
identifiable from other promises in the contract.
Determining the transaction price
The transaction price is the amount of the consideration to which the Group expects to be entitled in exchange for the services
promised to the customer, other than amounts collected for third parties.
Satisfaction of performance obligations
Revenue is recognised overtime when the Group satisfies a performance obligation by transferring control over promised services to
the customer.
34
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k)
Revenue Recognition
Interest income
Interest income 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.
l)
Research and development expenses
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding,
is recognised in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group has intention and sufficient resources to complete
development and to use or sell the asset.
As of 31 December 2021, the Group does not meet the conditions to capitalise any development expenditure, therefore, all expenditure
was recognised in profit or loss as incurred.
m) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
n)
Depreciation
Depreciation is a systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount is the cost of
the asset, less its residual value.
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to
operate in the manner intended by management.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item,
since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the assets.
The estimated useful lives for the current and comparative periods are as follows:
•
Computer and software
33%
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
o)
Goods and Services Tax (GST)/Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable.
Receivable and payables are stated inclusive of the amount of GST/VAT receivable or payable. The net amount of the GST/VAT
recoverable from, or payable to, the tax authorities is included with other receivables and payables in the statement of financial
position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST/VAT component of investing and financing
activities, which are disclosed as operating cash flows.
35
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
p)
Employee Benefits
Post-employment benefits
The liability for severance pay is in accordance its obligations under Israeli employment law (Section 14 of the Severance Compensation
Act, 1963). All Israel based employees are included under Section 14, and are entitled only to monthly deposits, at a rate of 8.33% of
their monthly salary, made in the employee’s name with insurance companies or pension funds. Under Israeli employment law,
payments in accordance with Section 14 release the employer from any future severance payments.
The funds are made available to the employee at the time the employer-employee relationship is terminated, regardless of the cause
of termination. The severance pay liabilities and deposits under Section 14 are not reflected in the statements of financial position as
the severance pay risks have been irrevocably transferred to the insurance companies or pension funds.
Short term employee benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided
or upon the actual absence of the employee when the benefit is not accumulated.
The employee benefits are classified, for measurement purposes, as short-term benefits or as other long-term benefits depending on
when the Group expects the benefits to be wholly settled.
q)
Equity-settled compensation
The Group measures the share-based expense and the cost of equity-settled transaction with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using the Black Scholes option valuation
model which takes into account the terms and conditions upon which the instruments are granted.
r)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are
unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and
are usually paid within 30 days of recognition.
s)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that
an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are measured using the best estimate
of the amounts required to settle the obligation at the end of the reporting period.
t)
Convertible notes
The financial instruments are only deemed to be convertible instruments upon shareholder approval being obtained. After which notes
automatically convert to shares in the Company upon a M&A or listing event or upon maturity. In such event the entire note fails the
equity classification and is recognised as a financial liability at fair value through profit or loss due to the underlying terms and
conditions.
u)
Equity and reserves
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are
deducted from share capital, net of any related income tax benefits. The Share-based payment reserve records the cost of share-based
payments.
36
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
v)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in US dollars which is the subsidiary’s functional currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost
continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at
the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised other comprehensive Income; otherwise the exchange difference is recognised in
profit or loss.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency
are translated as follows:
•
assets and liabilities are translated at year-end exchange rates prevailing at the reporting period;
•
income and expenses are translated at average exchange rates for the period; and
•
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised
in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These
differences are recognised in the profit or loss in the period which the operation is disposed of.
s)
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors
(the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Group’s sole
operating segment is consistent with the presentation of these consolidated financial statements.
t)
Share based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the equity instruments issued,
if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services
are received. The fair value of options is determined using the Black Scholes option valuation model. The number of shares and options
expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received
as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.
For performance options with non-market based vesting conditions, at each reporting date, the Company revises its estimate of the
number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or
loss over the remaining vesting period, with a corresponding adjustment to the option reserve.
u)
Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing:
•
the profit/(loss) attributable to member of the parent entity, excluding any costs of servicing equity other than ordinary
shares.
•
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year (if any).
37
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings/(loss) per share to take into account:
•
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of
all dilutive potential ordinary shares.
v)
Predecessor Accounting
Business combinations involving entities under capital reorganisation are accounted for using the predecessor accounting method.
Under this method;
•
Carrying values are not restated in the accounts of the acquiring entity, rather prior book values are maintained. As a result,
no fair value adjustments are recorded on the acquisition; and
•
The carrying value of net assets or liabilities acquired is recorded as a separate element of equity.
w) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the Group.
Key Estimates and judgements
Share based payments
The Group initially measures the cost of equity-settled transactions with employees, KMP and directors by reference to the fair value
of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the
share option, volatility and dividend yield and making assumptions about them, as well as an assessment of the probability of achieving
non-market-based vesting conditions.
The Directors make estimates and judgements in preparing the financial report based on historical knowledge and best available
current information. Estimates assume a reasonable expectation of future events based and are based on current trends and economic
data, obtained both externally and within the Group.
COVID – 19
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the
Group based on known information. This consideration extends to the nature of the products and services offered, customers, supply
chain, staffing and geographic regions in which the Group operates. Other than as addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or
conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-
19) pandemic. On 31 December 2021 the Group has reassessed all significant judgements and estimates included in the 31 December
2021 financial result and position, including but not limited to, provisions against debtors, impairment of non-current assets, and other
provisions and estimates.
38
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 2: REVENUE
The Group operates in one operating segment. In the following table sales are attributed to geographic distribution based on the
location of the customer:
2021
US$
2020
US$
Israel
5,992
17,160
United States
348,261
534,176
Other countries
52,630
441,496
Total revenue to external customers
406,883
992,832
Total revenues in both financial years are generated from provision of services that allow small-to-medium businesses to create and
manage their own mobile application as a means of connecting with their customers and growing their business. The revenue is
recognised over time in both periods
Disaggregation of revenue
2021
2021
US$
2020
US$
Revenue recognition at a point in time
-
56,011
Over time
406,883
936,821
406,883
992,832
NOTE 3: EXPENSES
2021
US$
2020
US$
Loss before income tax from continuing operations includes the following specific
expenses:
Payroll and related expenses
1,348,979
1,119,210
Professional services
562,965
383,089
Depreciation of plant and equipment
7,144
5,394
Depreciation of right of usage asset
25,762
24,031
Exchange rate differences
44,833
11,503
Finance expenses:
-
Interest income
(117)
(9,310)
-
Interest expenses
62,084
25,657
Total finance expenses
61,967
16,347
Share based payments expense
216,297
249,060
During the period the Group undertook several share-based payment transactions which are detailed in Note 17.
39
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 4: INCOME TAX
The financial accounts for the year ended 31 December 2020 comprise the results of AppsVillage Australia Limited and AppsVillage
Israel. The legal parent is incorporated and domiciled in Australia where the applicable tax rate is 26% (2020: 27.5%). The applicable
tax rate in Israel is 23% (2020: 23%).
a)
Income tax expense
2021
US$
2020
US$
Current tax
-
-
Deferred tax
-
-
-
-
b)
The income tax expense for the year can be reconciled to the accounting loss as follows:
2021
US$
2020
US$
Loss for the year before tax
(2,899,194)
(3,365,282)
Tax at the Australian tax rate of 26%
(753,790)
(925,453)
Effect of different tax rate of group entities operating in a different jurisdiction
66,914
143,093
Effect of expenses that are not deductible in determining taxable income
62,028
85,071
Effect of unused tax losses not recognised as deferred tax assets
624,848
697,289
-
-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised will be subject to the Group satisfying the requirements
imposed by regulatory taxation authorities. The benefits of deferred tax assets will only be recognised if:
-
Future assessable income is derived of a nature of an amount sufficient to enable the benefit to be realised.
-
The condition for deductibility imposed by tax legislation continues to be complied with; and
-
No changes in tax legislation adversely affect the Group in realising the benefit.
c)
Deferred tax losses not recognised at reporting date
2021
US$
2020
US$
Deferred tax assets not recognised at the reporting date
Unused tax losses
3,278,848
2,647,909
40
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 5: RELATED PARTY TRANSACTIONS
a)
Key Management Personnel Compensation
The totals of remuneration paid to KMP during the year are as follows:
2021
US$
2020
US$
Short term salary and fees
631,188
553,877
Social benefits
86,497
70,457
Non-Monetary benefits
63,465
57,808
Share based payments
206,306
-
Total KMP Compensation
987,456
682,142
b)
Other transactions
Transactions with related parties are entered into on terms equivalent to those that prevail in arm’s length transactions.
Related parties of the Group's key management personnel are as follows:
Mr Zigmund Bluvband – CEO's Father
Mrs Hagit Bluvband – CEO's Wife
Pearl Cohen Zedek Latzer Baratz – CEO’s sister Anna Moshe is a partner of this legal firm
12.64 Fund (A-Labs group fund) – shareholders and Noah Hershcoviz's related party
The Group has transactions with members of the Group’s key management personnel and/or their related parties during the year as
follows:
In January 2021 an amount of $94,728 directors fee to Yoav Ziv and Bahram Nour Omid was settled in issuance of 1,116,072 company's
shares. They both resigned on 19 October 2021 and are not considered to be a KMP from this date.
After the reporting date:
The KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the funding round in total
amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 amount of warrants, see Note 24.
A-Labs were granted 3,792,000 as an advisory service fee for the above-mentioned funding round, see Note 24.
b (1) Share holdings by KMP related parties
As of December 31, 2021 no shareholding by KMP related parties.
31 December 2020
Balance at start
of the year
Granted as
remuneration
Other changes during
the year(i)
Balance at end of
the year
Zigmund Bluvband
449,283
-
(449,283)
-
Total
449,283
-
(449,283)
-
(i)
Other changes during the year reflects on market sales / on market purchases.
b (2) Options Holdings by KMP Related Parties
31 December 2021
Balance at
start of the
year
Granted as
remuneration
Balance at the end
of the year
Hagit Bluvband
229,052
-
229,052
Pearl Cohen Legal
193,282
-
193,282
Total
422,334
-
422,334
41
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 5: RELATED PARTY TRANSACTIONS (Continued)
31 December 2020
Balance at
start of the
year
Granted as
remuneration
Balance at the end
of the year
Hagit Bluvband
229,052
-
229,052
Pearl Cohen Legal
193,282
-
193,282
Total
422,334
-
422,334
b (3) Details of remuneration
31 December 2021
Short term salary,
fees & commissions
Superannuation &
social benefits
Non-Monetary
Total
US$
US$
benefits
US$
Hagit Bluvband
55,739
18,148
30,031
103,918
Pearl Cohen Legal(i)
13,961
-
-
13,961
Total
69,700
18,148
30,031
117,879
(i)
This is the fee paid to Pearl Cohen Legal, for legal consult service in 2020. The terms of the agreement are on an arm’s
length basis
Advisory Warrants and Fees
During the reporting period, the Company engaged A-LABS on a non-exclusive financial advisory service intended to assist with the
completion of the Company's investment round of up to $2,000,000 by mean of an unsecured convertible loan agreements prior and
contingent to the Company listing on the TSX. Upon the completion of the listing in the TSX and after receiving all the fund raising in
the investment round, in consideration of its services, the Company shall pay or issue to A-LABS: (i) a cash commission in the amount
of $150,000; (ii) a monthly cash retainer of $20,000; and (iii) subject to the shareholders' approval, Advisory warrants. Each Advisory
warrant is exercisable into one share at an exercise price of 0.01 until the second anniversary from the date of issuance.
On 3 February 2022, the Company has successfully completed the TSX listing and an amount of 3,792,000 Advisory warrants were
issued, in a fair value of $69,962.
31 December 2020
Short term salary,
fees & commissions
Superannuation &
social benefits
Non-Monetary
Total
US$
US$
benefits
US$
Hagit Bluvband
52,289
17,178
27,053
96,520
Pearl Cohen Legal(i)
23,491
-
-
23,491
Total
75,780
17,178
27,053
120,011
(i)
This is the fee paid to Pearl Cohen Legal, for legal consult service in 2020. The terms of the agreement are on an arm’s length
basis.
42
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 6: AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices
and non-related audit firms:
2021
US$
2020
US$
Auditor remuneration
-
Auditing and reviewing the financial reports (BDO) – Australia*
43,109
29,751
-
Auditing and reviewing the financial reports (BDO) – Israel
66,000
66,000
109,109
95,751
Other non-audit remuneration
-
Tax service (BDO) – Israel
5,000
4,500
5,000
4,000
(*) Including review of March 2021 interim report for TSX listing
NOTE 7: LOSS PER SHARE
2021
US$
2020
US$
Loss per share (EPS)
a)
Loss used in calculation of basic EPS and diluted EPS
(2,899,194)
(3,365,282)
b)
Number of ordinary shares outstanding at year end used in
calculation of basic and diluted loss per share
105,470,217
85,695,992
NOTE 8a: CASH AND CASH EQUIVALENTS
2021
US$
2020
US$
Cash at bank
116,891
818,049
Total cash and cash equivalents in the statement of cash flows
116,891
818,049
NOTE 8b: RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
2021
US$
2020
US$
Loss after income tax
(2,899,194)
(3,365,282)
Non-cash flows in loss after income tax
-
Non-cash currency differences expenses
7,062
4,598
-
Share based payment expense
216,297
249,060
-
Non-cash expense related to borrowings
10,110
-
-
Depreciation and amortisation
32,905
29,425
-
Gains on settlement of financial liability– Note 15
(37,309)
-
Changes in assets and liabilities
-
(Increase) in trade and other receivables
(54,434)
22,306
-
Increase in trade and other payables
360,077
(183,622)
-
Increase in contract Liability
(95,472)
(194,071)
-
Increase/(decrease) in provisions
36,572
60,539
Cash flow used in operating activities
(2,423,386)
(3,377,047)
Non-Cash investing and financing activities
•
Right of Use Asset acquisition $22,761
43
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 9: RESTRICTED CASH
2021
US$
2020
US$
Restricted cash
43,819
44,772
NOTE 10: TRADE AND OTHER RECEIVABLES
CURRENT
2021
US$
2020
US$
Accounts receivables
1,715
1,616
Prepayments
99,496
-
Other receivables
69,801
114,962
171,012
116,578
All amounts are short-term. The net carrying value of trade and other receivables is considered a reasonable approximation of fair
value. The Group’s exposure to the risks associated with trade and other receivables are disclosed in Note 19.
NOTE 11: TRADE AND OTHER PAYABLES
CURRENT
2021
US$
2020
US$
Trade payables
188,101
184,531
Accrued expenses
512,766
219,682
Employee payables
203,849
118,011
904,716
522,224
All amounts are short-term. The carrying values of trade payables and other payables are considered to approximate fair value. The
Group’s exposure to the risks associated with trade and other payables are disclosed in Note 19.
NOTE 12: EMPLOYEE PROVISIONS
CURRENT
2021
US$
2020
US$
Annual leave
176,389
154,116
NOTE 13: BORROWINGS
CURRENT
2021
US$
2020
US$
Accrued interest
10,110
-
Principal
1,050,000
-
1,060,110
-
As of 31 December 2021, the notes are debt instruments with a 2% interest rate and did not carry rights to conversion until receipt of
shareholder approval which occurred at the General Meeting of the Company held on 24 January 2022 subsequent to year end. After
the reporting date, the notes were converted to shares as mentioned in note 24.
44
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 14: CONTRACT LIABILITY
2021
US$
2020
US$
Opening Balance
153,659
347,730
Payments received in advance
311,411
798,761
Transfer to Revenue
(406,883)
(992,832)
Closing Balance
58,187
153,659
NOTE 15: ISSUED CAPITAL
2021
Shares No.
2020
Shares No.
2021
US$
2020
US$
a)
Share Capital
Fully paid ordinary shares
107,538,748
99,182,445
10,258,780
9,588,036
b)
Movement in Ordinary Capital
Date
No.
Unit Price
US$
Total
US$
Opening balance as at 1 January 2021
99,182,445
n/a
9,588,036
Issue of shares in relation to Director's investment
21 January
2021
1,785,686
0.09
155,350
Issue of shares in relation to capital raising from
institutional investors
05 March 2021
5,454,545
0.08
457,881
Issue of shares in relation to Director's fee settlement (i)
21 January
2021
1,116,072
0.09
57,513
Costs of capital raising
-
-
-
-
Closing balance at 31 December 2021
107,538,748
10,258,780
(i) The Company recognized $37,309 gains on settlement of financial liability to directors Yoav Ziv and Bahram
Nour-Omid.
c)
Movement in Ordinary Capital
Date
No.
Unit Price
US$
Total
US$
Opening balance as at 1 January 2020 (i)
76,658,758
n/a
7,967,290
Issue of shares in relation to capital raising via
public offer
03 August 2020
19,164,688
0.08
1,531,488
Issue of shares under the SPP
28 August 2020
2,981,218
0.08
238,482
Issue of shares for professional services
16 October 2020
377,781
0.08
30,189
Costs of capital raising
-
-
-
(179,413)
Closing balance at 31 December 2020
99,182,445
9,588,036
d)
Capital Management
Due to the nature of the Group’s activities, the Group does not have ready access to credit facilities, with the primary source of funding
being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the
requirements of the Group to meet research and development programs and corporate overheads. The Group’s strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as
required. Any surplus funds are invested with major financial institution.
45
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 16: RESERVES
a)
Share Based Payment Reserve
2021
US$
2020
US$
10,447,494 (31 December 2020: 7,182,822) options on issue
1,405,511
1,198,608
b)
Movement in Share Based Payment Reserve
US$
Opening balance as at 1 January 2020
951,397
Expensed in the statement of profit or loss and other comprehensive income
Issue of 4,500,000 Advisor's options
226,253
Issue of 1,806,816 options
17,625
Issue of 547,494 options
3,740
Issue of 328,512 options
1,442
Opening balance as at 1 January 2021
1,200,457
Expensed in the statement of profit or loss and other comprehensive income
Issue of 9,400,000 Executives' options
199,317
Issue of 500,000 options
5,563
Issue of 547,494 options
9,992
19,828,155 options subject to the shareholders' approval (i)
1,425
Closing balance as at 31 December 2021
1,416,754
(i) The Shareholders' approval was given on January 24, 2022. On February 3,2022 the options were issued.
c)
Foreign currency translation Reserve
2021
US$
2020
US$
Foreign exchange reserve closing balance
147,959
157,353
The foreign currency translation reserve records exchange differences arising on translation from functional currency to presentation
currency.
d)
Predecessor Accounting Reserve
2021
US$
2020
US$
Predecessor accounting reserve closing balance
(159,202)
(159,202)
The reserve arises from the capital reorganisation and records the net liabilities of AdRabbit Limited (at the transaction date:
AppsVillage Australia Limited) as at the acquisition date of 26 August 2019.
46
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 17: SHARE BASED PAYMENTS
During the year ended 31 December 2021, the Company recorded the following share-based payments:
•
The issue of 500,000 options with an exercise price AUD$0.16 and a life of 12 months from vesting to Andrew Whitten
500,000, which was approved at the company's annual general meeting on 26 May 2021 as part of Director's option
plan in a total amount of 1,450,000 options which included options to the directors Bahram Nour-Omid (700,000), Yoav
Ziv (250,000) whom resigned on 19 October 2021 .
•
The issue of 9,400,000 options to the executives Max Bluvband (4,700,000) and Shahar Hadju (4,700,000) with an
exercise price of AUD$0.16 and a life of 5 years, which was approved at the company's annual general meeting on 26
May 2021.
•
The issue of 19,828,155 options to the executives Max Bluvband (9,240,714) and Shahar Hadju (9,240,714) and to
Directors Noah Hershcoviz (648,909) and Konstantin Lichtenwald (348,909) and to Andrew Whitten (348,909) with an
exercise price of AUD$0.06 and a life of 5 years, which was approved at the company's annual general meeting on 24
January 2022. On 3 February 2022, the options were issued.
Fair Value
Fair value is independently determined using a Black-Scholes option pricing model that takes into account the effective exercise price,
the terms of the option, the share price at grant date and expected price volatility of the underlying share value. This valuation
technique also applies to the Broker options as the value of the service performed could not be reliably determined. The Black Scholes
inputs and valuations were as follows:
Options
Executives
Options
Company's Stock
Option Plan (i)
Company's Stock
Option Plan
Directors
Options (iii)
Number of options
9,400,000
1,450,000
547,494
19,828,155
Grant date
29 March 2021
29 March 2021
28 October 2019
24 January 2021
Issue date
24 June 2021
24 June 2021
28 October 2019
3 February, 2022
Exercise price AUD $
0.16
0.16
0.16
0.06
Expected volatility
120%
120%
100%
100%
Implied option life
5 years from vesting
1 year from
vesting
10 years from
issue date
5 years from
vesting
Expected dividend yield
Nil
Nil
Nil
Nil
Risk free rate
0.67%-1.57%
0.10%
0.8%
1.34%-1.55%
Valuation per option
AUD $
varies
0.044
0.0593
varies
Exchange rate
0.761
0.761
0.7046
0.7266
Valuation per option
USD $
varies
0.033
0.0418
varies
Total valuation USD $
(ii)
$199,317
$5,563
$9,992
$1,425
(i) During the year an amount of 950,000 options were cancelled upon resignation of Yoav Ziv and Bahram Nour-Omid.
(ii) The total fair valuation of options in FY21 is $216,297.
(iii) As of 31 December 2021, was subject to the shareholders' approval that was given on 24 January ,2022. On 3 February 2022, the
options were issued.
47
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 17: SHARE BASED PAYMENTS (Continued)
Options
Broker Options
Warrants
Directors Options
Number of options
5,000,000
2,000,000
750,000
Grant date
8 August 2019
8 August 2019
8 August 2019
Issue date
27 August 2019
27 August 2019
27 August 2019
Exercise price AUD $
0.30
0.30
0.30
Expected volatility
100%
100%
100%
Implied option life
3 years from date of the
official quotation to
ASX
2.5 years from date of
the official quotation
to ASX
3 years from date of
the official quotation
to ASX
Expected dividend yield
Nil
Nil
Nil
Risk free rate
0.69%
0.69%
0.69%
Valuation per option AUD $
0.1074
0.0972
0.1074
Exchange rate
0.6763
0.6763
0.6763
Valuation per option USD $
0.0726
0.0657
0.0726
Total valuation USD $
$363,210
$131,499
$54,497
All options and warrants vest immediately.
Share Based Payments expense
Non-cash share-based payment expense for the full year is comprised as follows:
2021
US$
2020
US$
Issue of 9,400,000 Executives options
199,317
-
Issue of 1,450,000 Director's options
5,563
-
Issue of 547,494 options
9,992
3,740
19,828,155 options subject to the shareholders' approval (i)
1,425
-
Issue of 1,806,815 options
-
17,625
Issue of 4,500,000 Advisor's options
-
226,253
Issue of 328,512 options
-
1,442
Total share-based payments expense recognised in profit or loss
216,297
249,060
(i) The Shareholders' approval was given on January 24, 2022. On 3 February 2022, an amount of 19,828,155 options were issued.
NOTE 18: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors
(the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Group’s sole
operating segment is consistent with the presentation of these consolidated financial statements.
48
AdRabbit Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2021
NOTE 19: FINANCIAL INSTRUMENTS
a)
Capital management
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Given the nature of the business, the Group monitors capital on the basis of current business operations and cash flow requirements.
There were no changes in the Group’s approach to capital management during the year.
b)
Categories of financial instruments
2021
US$
2020
US$
Financial Assets
Cash and cash equivalents
116,891
818,049
Restricted cash
43,819
44,772
Trade and other receivables
171,012
116,578
331,722
979,399
Financial liabilities
Trade and other payables and lease liabilities
412,822
349,617
Borrowings
1,050,000
-
1,462,822
349,617
The fair value of the above financial instruments approximates their carrying values.
c)
Financial risk management policies
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes
the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative
information in respect of those risks is presented throughout these financial statements.
The board has overall responsibility to the determination of the Group’s risk management objectives and policies and, whilst retaining
ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group’s finance function. The Group’s risk management policies and objectives
are therefore designed to minimise the potential impacts of those risks on the Group where such impacts mat be material. The board
receives financial reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets. The overall objective of the board is to set policies that see to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility.
d)
Market risk
Market risk for the Group arises from the use of interest-bearing financial instruments. It is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in interest rate (see (e) below).
49
AdRabbit Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2021
NOTE 19: FINANCIAL INSTRUMENTS (Continued)
e)
Interest rate risk management
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The table indicates the impact on how
profit or equity values reported at reporting date would have been affected by changes in the relevant risk variable that management
considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other
variables.
Floating
Interest
Rate
Fix Interest
Rate
Non-interest
bearing
2021 Total
Floating
Interest
Rate
Non-interest
bearing
2020
Total
US$
US$
US$
US$
US$
US$
US$
Financial assets
- Within one year
Cash and cash equivalents
116,891
-
-
116,891
818,049
-
818,049
Restricted cash
43,819
-
43,819
44,772
-
44,772
Trade and other receivables
-
-
171,012
171,012
-
116,578
116,578
Total financial assets
160,710
-
171,012
331,722
862,821
116,578
979,399
Interest rate
0% to 1.5%
0% to 1.5%
Financial Liabilities
- Within one year
Trade and other Payables and
lease liabilities
-
-
412,822
412,822
-
349,617
349,617
Borrowings
-
1,050,000
-
1,050,000
-
-
-
Total financial liabilities
-
1,050,000
412,822
1,462,822
-
349,617
349,617
Interest rate
2%
Net financial
assets/liabilities
160,710
(1,050,000)
(241,810)
(1,131,100)
862,821
(233,039)
629,782
Movement in Profit
US$
Movement in Equity
US$
Year ended 31 December 2021
+/-1% in interest rates
1,607
(1,607)
Year ended 31 December 2020
+/-1% in interest rates
8,180
8,180
f)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of
investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the
Group uses other publicly available information and its own trading records to rates its major customers. The Group’s exposure and
the credit ratings of its counterparties are continuously monitored, and the aggregate value of transactions concluded is spread
amongst approved counterparties.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-
rating agencies.
50
AdRabbit Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2021
NOTE 19: FINANCIAL INSTRUMENTS (Continued)
g)
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
The following are the contractual maturities of financial liabilities based on the actual rates at the reporting date excluding interest
payments:
2021
Interest
rate
Less than 6
months
US$
6-12
months
US$
1-2
years
US$
2-5
years
US$
Over 5
years
US$
Total contractual
cash flows
US$
Carrying
amount
US$
Trade
and
other payables
and
lease
liabilities
-
393,920
18,902
-
-
-
412,822
412,822
Borrowings
2%
1,060,110
-
-
-
-
1,060,110
1,050,000
1,454,030
18,902
-
-
-
1,472,932
1,462,822
2020
Interest
rate
Less than 6
months
US$
6-12
months
US$
1-2
years
US$
2-5
years
US$
Over 5
years
US$
Total contractual
cash flows
US$
Carrying
amount
US$
Trade
and
other
payables
-
302,542
-
27,268
19,807
-
349,617
349,617
-
302,542
-
27,268
19,807
-
349,617
349,617
h)
Net fair value of financial assets and liabilities
Fair value estimation
Due to the short-term nature of the receivables and payables, the carrying value approximates fair value.
i)
Foreign currency risk
The currency risk is that risk that the value of financial instruments will fluctuate due to change in foreign exchange rates. Currency risk
arises when future commercial transactions and recognised assets and liabilities.
are denominated in a currency that is not the Company’s function currency. The Company is exposed to foreign exchange risk arising
from various currency exposures primarily with respect to the US Dollar (the functional currency of the subsidiary company), the New
Israeli Shekel, the Australian Dollar (functional currency of the parent company). No sensitivity analysis is disclosed as the balances in
foreign currency are immaterial.
51
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 20: PARENT ENTITY FINANCIAL INFORMATION
The following information of the legal parent AdRabbit Limited has been prepared in accordance with Australian Accounting Standards
and the accounting policies as outlined in Note 1.
a)
Financial Position of AdRabbit Limited
2021
US$
2020
US$
ASSETS
Current assets
162,086
304,429
Non-current assets
-
-
TOTAL ASSETS
162,086
304,429
LIABILITIES
Current liabilities
1,326,672
141,063
Non-current liabilities
693,594
-
TOTAL LIABILITIES
2,020,266
141,063
NET ASSETS/ (LIABILITIES)
(1,858,181)
163,366
SHAREHOLDERS’ EQUITY (DEFICIT)
Issued capital
10,258,780
9,563,646
Reserves
1,405,511
1,225,398
Accumulated losses
(13,522,472)
(10,625,678)
SHAREHOLDERS’ EQUITY (DEFICIT)
(1,858,181)
163,366
b)
Statement of profit or loss and other comprehensive
income
Loss for the year
(2,896,794)
(3,935,558)
Other comprehensive income
(180,113)
609,142
Total comprehensive loss
(3,076,907)
(3,326,416)
c)
Guarantees entered into by AdRabbit Limited for the debts of its subsidiary
There are no guarantees entered into by AdRabbit.
d)
Contingent liabilities of AdRabbit Limited
There were no contingent liabilities as at 31 December 2021 (2020: nil).
e)
Commitments by AdRabbit Limited
There were no commitments as at 31 December 2021 (2020: nil).
NOTE 21: CONTROLLED ENTITIES
The ultimate legal parent entity of the Group is AdRabbit Limited , incorporated and domiciled in Australia. The consolidated financial
statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policies
described in Note 1.
Controlled entity
Country of incorporation
Percentage owned
2021
2020
Parent entity
AdRabbit Limited
Australia
Subsidiaries of AppsVillage Australia Limited
AppsVillage Ltd
Israel
100%
100%
The proportion of ownership interest is equal to the proportion of voting power held.
52
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
NOTE 22: COMMITMENTS
There are no material commitments at 31 December 2021 (31 December 2020:Nil).
NOTE 23: CONTINGENT LIABILITIES
The Company engaged A-LABS on a non-exclusive financial advisory service, see note 24 (Advisory Warrants and fees).
As at 31 December 2020, there were no material contingent liabilities requiring disclosure.
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
TSX Listing
On February 7, 2022 the Company's Ordinary Shares commenced trading on the TSX under the ticker symbol RAB. The Ordinary Shares
will continue to trade on the ASX under the ticker RAB.
On 23 March, 2022 the Company submitted a formal application for delisting from the ASX.
Shares Issuance
During 2021 the Company has entered into agreements to secure a funding round in total amount of $2.25M in a premium price of
$0.04 (CAD $0.05). An amount of $1.05M was received during 2021 and the rest was received in 2022.
In February 2022 and upon the completion of the funding, conversion of $2,082,000 principal amount (and certain accrued interest on
such amount) under the Series B Convertible Loan have been released to the Company and $168,000 principal amount (and accrued
interest on such amount) remains outstanding and subject to conversion at a later date.
As part of the funding round the Company approved the issue and allotment of up to 78,262,709 CLA series A & B warrants and
78,262,709 CLA series A & B shares at a premium price of $0.04 (CAD $0.05).
The KMPs 12.64 Fund, Mr Max Bluvband (Company's CEO) and Mr Zigmund Bluvband have participated in the funding round in total
amount of $1.25M and were allocated 31,905,989 shares and 31,905,989 number of warrant.
Advisory Warrants and Fees
During the reporting period, the Company engaged A-LABS on a non-exclusive financial advisory service intended to assist with the
completion of the Company's investment round of up to $2,000,000 by mean of an unsecured convertible loan agreements prior and
contingent to the Company listing on the TSX. Upon the completion of the listing in the TSX and after receiving all the fund raising in
the investment round, in consideration of its services, the Company shall pay or issue to A-LABS: (i) a cash commission in the amount
of $150,000; (ii) a monthly cash retainer of $20,000; and (iii) subject to the shareholders' approval, Advisory warrants. Each Advisory
warrant is exercisable into one share at an exercise price of 0.01 until the second anniversary from the date of issuance.
On 3 February 2022, the Company has successfully completed the TSX listing and an amount of 3,792,000 Advisory warrants were
issued, in a fair value of $69,962.
53
AdRabbit Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2021
Director's Options Plan
On January 24, 2022 The company's extraordinary general meeting approved the issuance unlisted options with an exercise price of
0.06 each, vesting monthly on a pro-rata basis over a 3 years period and expiring 5 years from vesting. A total amount of 19,828,155
options were issued on 3 February,2022.
The method used to value the Director Option was the Black Scholes methodology. The fair value attributed to the Director Option is
as follows:
Director
Number of Director
Options issued
Total fair value
Noah Hershcoviz
648,909
13,921
Max Bluvband
9,240,714
163,433
Konstantin Lichtenwald
348,909
8,701
Shahar Hadju
9,240,714
163,433
Andrew Whitten
349,909
8,701
There were no other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial
years.
NOTE 25: APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the board of directors and authorised for issue 31 March 2022.
The directors are unaware of any other significant event or circumstance that has arisen since 31 December 2021 that has significantly
affected the Group’s operations, results or state of affairs, or may do so in future years other than those disclosed above.
NOTE 26: APPLICATION OF NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS
New, revised or amending Accounting Standards and Interpretations issued and adopted
There are no Australian accounting standards and Interpretations that have recently been issued or amended but are not yet effective
and have not been adopted by the Group for the year ended 31 December 2021 which are expected to have a material impact on the
Group in future reporting periods.
54
AdRabbit Limited
Directors' declaration
For the Year Ended 31 December 2021
/ŶƚŚĞŝƌĞĐƚŽƌ͛ƐŽƉŝŶŝŽŶ͗
1)
The consolidated financial statements and notes set out on pages 25 to 53 are in accordance with the Corporations Act 2001,
including:
a)
complying with Australian Accounting Standards, Corporations Regulations 2001 and other mandatory professional
reporting requirements, noting the matters documented in Note 1(a);
b)
ŐŝǀŝŶŐĂƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁ͕ƚŚĞĐŽŶƐŽůŝĚĂƚĞĚĞŶƚŝƚLJ͛ƐĨŝŶĂŶĐŝĂůƉŽƐŝƚŝŽŶĂs at 31 December 2021 and of its performance
for the year ended on that date; and
2)
There are reasonable grounds to believe that the Company will be able to pay its debts ad and when they become due and
payable.
3)
This declaration has been made after receiving the declaration required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2021.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:
Max Bluvband
Chief Executive Officer
Tel Aviv, 31 March 2022
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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.
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
INDEPENDENT AUDITOR'S REPORT
To the members of AdRabbit Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of AdRabbit Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Accounting for Share-Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31 December
2021, the Group issued equity instruments, to
eligible directors and employees, which have
been accounted for as share-based payments, as
disclosed in Note 17 to the financial report.
The Group’s policy for accounting for share-based
payments and significant judgements applied to
these arrangements are disclosed in Note 1.
Share-based payments are a complex accounting
area and due to the complex and judgemental
estimates used in determining the fair value of
share-based payments, we consider the Group’s
accounting for share-based payments to be a key
audit matter.
Our audit procedures in respect of this area
included but were not limited to the following:
•
Reviewing relevant supporting
documentation to obtain an understanding of
the contractual nature and terms and
conditions of the share-based payment
arrangements;
•
Reviewing management’s determination of
the fair value of the share-based payments
granted, considering the appropriateness of
the valuation models used and assessing the
valuation inputs;
•
Assessing the competency and objectivity of,
and work performed by management’s ex-
pert in respect to the valuation of share-
based payments;
•
Assessing the allocation of the share-based
payment expense over management’s
expected vesting period; and
•
Assessing the adequacy of the disclosure in
Note 1 and Note 17 in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2021, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 23 of the directors’ report for the
year ended 31 December 2021.
In our opinion, the Remuneration Report of AdRabbit Limited, for the year ended 31 December 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 31 March 2022
57
ADDITIONAL ASX INFORMATION
The shareholder information set out below was applicable as of 24 March 2022.
As at 24 March 2022 there were 892 holders of Ordinary Fully Paid Shares.
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
Subject to any rights or restrictions for the time being attached to any shares or class of shares of the Company, each member of the
Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of
hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a
general meeting represents personally or by proxy, attorney or representation more than one member, on a show of hands the
person is entitled to one vote only despite the number of members the person represents.
On a poll each eligible member has one vote for each fully paid share held.
There are no voting rights attached to any of the options and deferred securities that the Company currently has on issue. Upon
exercise of the options, the shares issued will have the same voting rights as existing ordinary shares.
TWENTY (20) LARGEST SHAREHOLDERS
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Full Paid Shares
Holder Name
Holding
% IC
CANADIAN REGISTER CONTROL A/C
56,885,502
30.62%
1264 FUND
25,578,506
13.77%
BNP PARIBAS NOMINEES PTY LTD
15,076,967
8.11%
OPENSKY OPPORTUNITIES
7,589,814
4.08%
MR MAX EITAN BLUVBAND,
5,625,486
3.03%
MR DROR ATZMON
5,063,205
2.73%
MR SHAHAR HAJDU
3,092,506
1.66%
GNAT PTY LTD
2,736,251
1.47%
SCOPUS VENTURES FUND I LP
2,625,669
1.41%
MR CHENBING LI
2,563,505
1.38%
ARMAND GOLDBERG
2,338,966
1.26%
MR XUZHI LI
1,548,512
0.83%
LEARNICON LLC
1,339,285
0.72%
MISS SAMIRA ABDULRAZAK
1,334,317
0.72%
ILIYA SOFKOV
1,306,964
0.70%
LIBI HOLDINGS LTD
1,266,427
0.68%
MR ABDULKARIM ABDULRAZAK
1,171,970
0.63%
MR DAN GOTLIEB
1,166,493
0.63%
MR KA LU
1,063,000
0.57%
DR BENJAMIN CHACKO JACOB
1,032,062
0.56%
TOTAL
140,405,407
75.57%
Total issued capital - selected security class(es)
185,801,457
100.00%
58
SUBSTANTIAL HOLDERS
The names of the substantial shareholders disclosed to the Company as substantial shareholders as at 24 March 2021 are:
Name
No of Shares
Held
% of Issued
Capital
CANADIAN REGISTER CONTROL A/C
56,885,502
30.62%
1264 FUND
25,578,506
13.77%
BNP PARIBAS NOMINEES PTY LTD
15,076,967
8.11%
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Holding Ranges
Holders
Total Units
% Issued Share Capital
1 - 1,000
30
8,776
0.00%
1,001 - 5,000
153
535,150
0.29%
5,001 - 10,000
166
1,386,099
0.75%
10,001 - 100,000
417
14,751,441
7.94%
100,001 - 9,999,999,999
126
169,119,991
91.02%
Totals
892
185,801,457
100.00%
Unmarketable Parcels – 599 Holders with a total of 6,888,222 shares, based on the last trading price of $ 0.0150 on 28 March 2022.
UNQUOTED SECURITIES
As at 24 March 2022, the following unquoted securities are on issue:
Unlisted Options Expiring 5 years from quotation @ NIS0.01 – 4 Holders
Holders with more than 20%
Holder Name
Holding
% IC
MR MAX EITAN BLUVBAND
1,108,457
42%
MR SHAHAR HAJDU & MS RONI HAJDU
1,108,457
42%
Unlisted Options Expiring 3 years from date of issue @ A$0.30 – 19 Holders
Holders with more than 20%
Holder Name
Holding
% IC
GNAT PTY LTD
2,578,500
44.84%
Warrants Expiring 30 months from date of issue A$0.30 – 7 Holders
Holders with more than 20%
Holder Name
Holding
% IC
ARMAND GOLDBERG & HERTZEL ROSENBLUM
600,000
30%
VICTORIA LINDENBAUM
600,000
30%
59
Unlisted Options Expiring 5 years from quotation @ NIS0.01 issue – 4 Holders
Holders with more than 20%
Holder Name
Holding
% IC
NEXTAGE CONSULTING SERVICES (2008) LTD
193,282
47.13%
ILAY RON
114,526
27.93%
Unlisted Options Expiring 5 years from vesting @ A$0.16 – 2 Holders
Holders with more than 20%
Holder Name
Holding
% IC
MR MAX EITAN BLUVBAND
4,700,000
50%
MR SHAHAR HAJDU & MS RONI HAJDU
4,700,000
50%
Unlisted Options Expiring 1 year from vesting @ A$0.16 – 3 Holders
Holders with more than 20%
Holder Name
Holding
% IC
BAHRAM NOUR-OMID
700,000
48.28%
ANDREW WHITTEN
500,000
34.48%
Unlisted Warrants Expiring 5 years from quotation @ C$0.05 – 11 Holders
Holders with more than 20%
Holder Name
Holding
% IC
12.64 FUND
25,578,506
32.68%
Unlisted Options Expiring 5 years from vesting @ A$0.06 – 5 Holders
Holders with more than 20%
Holder Name
Holding
% IC
MR MAX EITAN BLUVBAND
9,240,714
46.60%
MR SHAHAR HAJDU & MS RONI HAJDU
9,240,714
46.60%
Unlisted Warrants Expiring 2 years from quotation @ $0.01– 1 Holder
Holders with more than 20%
Holder Name
Holding
% IC
A-LABS FINANCE & ADVISORY LTD
3,792,000
100%
60
ON-MARKET BUY BACK
There is currently no on-market buyback program.
CORPORATE GOVERNANCE STATEMENT
The Directors of the Company support the principles of corporate governance. The Company’s corporate governance statement is
located in the Company’s website at https://ad-rabbit.com/corporate.