More annual reports from Audio Pixels Holdings Limited:
2023 ReportAudio Pixels Holdings Limited
ACN 094 384 273
www.audiopixels.com.au
www.audiopixels.com.au
ANNUAL REPORT
2019
CORPORATE DIRECTORY
Directors
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Company secretary
Ian Dennis
Registered off ice
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
Israel off ice
3 Pekris Street
Rehovot
ISRAEL 76702
Telephone: +61 2 9233 3915
Facsimile: +61 2 9232 3411
Email:
iandennis@audiopixels.com.au
Telephone: + 972 73 232 4444
+ 972 73 232 4455
Facsimile:
danny@audiopixels.com
Email:
Bankers
St George Bank
200 Barangaroo Avenue
Barangaroo
SYDNEY NSW 2000
Australia
Website
www.audiopixels.com.au
Auditor
Deloitte Touche Tohmatsu
Chartered Accountants
Brindabella Circuit
Brindabella Business Park
Canberra Airport ACT 2609
Australia
share Registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
GPO Box 7045
Sydney NSW 1115
Australia
Telephone: 1300 855 080 or
Facsimile:
+61 3 9415 5000 outside Australia
1300 137 341
4997 Designed and Produced by RDA Creative www.rda.com.au
Contents
2
9
10
Directors’ Report
Auditor’s Independence Declaration
Independent Audit Report
14 Directors’ Declaration
15
Consolidated Statement of Profit or Loss and Other Comprehensive Income
17 Consolidated Statement of Financial Position
18 Consolidated Statement of Changes in Equity
19 Consolidated Statement of Cash Flows
20 Notes To and Forming Part of the Financial Statements
53 ASX Additional Information
54 Twenty Largest Ordinary Shareholders
1
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
The Directors of Audio Pixels Holdings Limited submit herewith the financial report of the company for the financial year
ended 31 December 2019. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
The names and particulars of the directors of the company during or since the end of the financial year are:
name
Fred Bart
Ian Dennis
Cheryl Bart
AO
Particulars
Chairman and Chief Executive Officer. A director since 5 September 2000. He has been Chairman
and Managing Director of numerous private companies since 1980, specialising in manufacturing,
property and marketable securities. Mr Bart is also a director of Immunovative Therapies Limited,
an Israeli company involved in the manufacture of cancer vaccines for the treatment of most
forms of cancer. He is a member of the Audit Committee and a member of the Nomination and
Remuneration Committee.
Non‑executive director and Company Secretary. Ian is a chartered accountant with experience
as director and secretary in various public listed and unlisted technology companies. He has
been involved in the investment banking industry and stockbroking industry for the past thirty
years. Prior to that, Ian was with KPMG, Chartered Accountants in Sydney. Appointed to the
Board on 5 September 2000. He is a member of the Audit Committee and Nomination and
Remuneration Committee.
Non‑executive director. Appointed to the Board on 26 November 2001. Cheryl Bart is a lawyer and
company director. She is Chairman of Powering Australian Renewables and Ted X Sydney. Cheryl is a
non‑executive director of SG Fleet Australia Limited, ME Bank, and the Invictus Games. She is a fellow
of the Australian Institute of Company Directors, Patron of SportsConnect and a member of Chief
Executive Women. She is a member of the Audit Committee and a member of the Nominations and
Remuneration Committee.
Directorships of Other Listed Companies
Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are
as follows:
name
Fred Bart
Ian Dennis
Cheryl Bart
Company
Electro Optic Systems Holdings Limited
Weebit Nano Limited
Electro Optic Systems Holdings Limited
SG Fleet Australia Limited
Principal Activities
Period of directorship
Since May 2000
Since March 2018
Since May 2000
Since February 2014
The principal activity of the Company is an investment in Audio Pixels Limited of Israel. Audio Pixels Limited is engaged in
the development of digital speakers.
Results
The net loss for the financial year ended to 31 December 2019 was $6,231,930 (31 December 2018 ‑ $4,519,721).
Dividends
The directors recommend that no dividend be paid and no amount has been paid or declared by way of dividend since the
end of the previous financial year and up to the date of this report.
2
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Review of Operations
Achievements during the reporting period were technical
in nature, focused on advancing the company’s proven
prototype technologies into a mass‑produced product.
The primary accomplishment of the period has been
fabrication of devices that reliably contend with the
operational instabilities associated with electrostatically
driven actuators and overcoming challenges related to
processing the back side of the wafer. Achievement of
this critical milestone enabled, for the first time, accurate
assessment and optimization of the acoustic output of our
MEMS transducer.
As has been covered in past reports, electrostatic actuators
suffer from operational instability, sometimes called
charge‑trapping. Achieving control over the instabilities
of charge trapping is considered by the industry to be
perhaps the’ primary challenge in the development of
micro‑actuators, certainly in higher voltages and longer
travel actuators such as ours. In practice, charge trapping
related effects cause stiction, adhesion, slow release,
arching and other concerns which not only lead to device
failure but also place significantly greater constraints
on fabrication processes and tolerances. The company
in close collaboration with its fabrication partner(s)
has expended considerable time, effort, and resources
overcoming this gating item to the advancement of
our technology.
The company devised and simultaneously implemented
a number of approaches to manage the adverse effects
of electrostatic actuation ‑ some of which worked better
than others. One particular approach however proved
overtime to be far superior as it reliably and repeatably
overcame the associated challenges.
Another challenge had to do with our need to process the
back sides of the wafers. This requires placing the wafers,
face down on the chucks of several different machines.
The delicate structures on the face of the wafers were
often damaged by the handling robots or scratched by
microscopic particles left on the chucks. The (conductive)
silicon fragments, broken off the structures, sometimes
cause shorts if they fell into the pixels, rendering the
chips inoperable. The company and its vendors tried
numerous “standard” solutions, protecting the delicate
structures, using a variety of different coatings. In some
cases, the damage penetrated through the coating and
in others, the coating proved to be difficult to remove.
The company invented a new protection scheme (patents
for which are being drafted), which proved to be highly
effective, leaving the delicate structures pristine and not
requiring complex coating removal steps. The number of
damages resulting from back‑side processing dropped
from thousands to 3 or less per wafer. Having at long last
devices that were short‑free and proven to reliably actuate
with the required electromechanical precision enabled
the company to shift focus to the acoustic output of
the device.
Acoustic characterization revealed that while the devices
produced sound throughout the spectrum (including
the playing of speech and music), the performance
deviated from expectations. The company designed and
built extremely sophisticated measurement equipment
and methods in order to trace the origins of the problem
and discovered the presence of disruptive waves.
These unexpected disruptive waves were ultimately traced
to subtle deviation from manufacturing tolerances that
were only detectable when we overcame the adverse
effects of the electrostatic actuation.
In response to this finding, the company devised and
introduced relatively minor design changes to the
structure that both return the spec to compliance and
diminishing the sensitivity to manufacturing tolerance.
These changes were introduced into the MEMS
manufacturing process with deliveries of fully functional
devices expected in March 2020.
As we anticipate substantive and dramatic improvement
to the acoustic output of the devices, our current plan
is focused on having demonstratable technology on or
about the end of March. In preparation, demonstration
boards and systems are being designed and built by
the company.
During the period the company has also advanced other
critical aspects of the technology, such as completing
development of the metal module for the MEMS chip.
Deposition of “metals” on the MEMS chip is required for
connection (wire bonding) in the assembly and packaging
process. In conjunction the company began runs with
its packaging partner in attempt to insure smooth and
efficient assembly and packaging of the upcoming
chip deliveries.
The company also expanded its testing abilities and
capacity. The company is building several additional
testing stations. Some of these stations would be placed
at the vendors’ facility, allowing them to quickly assess the
quality of the produced wafers, while the material is still
in the clean room (once a wafer left the fab’s clean room,
it is practically impossible to bring it back in due to risk of
cross contamination).
Management continues to remain intimately engaged
with its future customers, routinely conducting
confidential communications as to the progress, potential,
applications and demand for its impending products.
Management has also been intensifying discussions
with our fabrication partners, reviewing and planning
the actions required to transition from development to
mass‑production.
Further information concerning the operations and
financial condition of the entity can be found in the
financial report and in releases made to the Australian
Stock Exchange (ASX) during the year.
3
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Changes in State of Affairs
Directors’ Interests and Benefits
There was no significant change in the state of affairs of
the company or the consolidated entity other than that
referred to in the financial statements or notes thereto.
The relevant interest of each director in the share capital of
the Company as notified by the directors to the Australian
Stock Exchange in accordance with Section 205G(1) of the
Corporations Act as at the date of this report are:
name
Fred Bart
Ian Dennis
Cheryl Bart
ordinary shares
5,819,122
320,167
1,282,777
During the year, a superannuation fund for the benefit
of Fred Bart and Cheryl Bart purchased 38,482 ordinary
shares on market at a cost of $493,382.
Remuneration Report (Audited)
Since the end of the previous financial year no director of
the Company has received or become entitled to receive
any benefit (other than a benefit included in the aggregate
amount of remuneration received or due and receivable
by directors as shown in the financial statements) because
of a contract made by the Company or related corporation
with the director or with a firm of which the director is a
member, or with a company in which the director has a
substantial financial interest. There are no employment
contracts for any of the directors.
This report outlines the remuneration arrangements in
place for Directors and key management personnel of the
Company. The Directors are responsible for remuneration
policies and packages applicable to the Board members of
the Company. The entire Board makes up the Nomination
and Remuneration Committee. The Board remuneration
policy is to ensure the remuneration package properly
reflects the person’s duties and responsibilities.
There are currently no performance based incentives to
directors or executives based on the performance of the
Company. There are no employment contracts in place with
any Director of the Company. There are standard employment
contracts for the executives of including at will employment
and a notice period of three months for termination.
Significant Events After
Balance Date
There has not been any matter or circumstance that has
arisen since the end of the financial year which is not
otherwise dealt with in this report or in the financial
statements, that has significantly affected or may
significantly affect the operations of the company or the
consolidated entity, the results of those operations or the
state of affairs of the company or the consolidated entity
in subsequent financial years.
Future Developments
The consolidated entity will continue to focus on the
development of its digital speaker technology.
Environmental Regulations
In the opinion of the directors the company and the
consolidated entity is in compliance with all applicable
environmental legislation and regulations.
Indemnification and Insurance
of Officers and Auditors
During the financial year, the company paid a premium in
respect of a contract insuring the Directors and Officers
of the Company and any related body corporate against a
liability incurred as such a Director or Officer to the extent
permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the
coverage provided and the amount of the premium.
The Company has agreed to indemnify the current
Directors, Company Secretary and Executive Officers
against all liabilities to other persons that may arise from
their position as Directors or Officers of the Company
and its controlled entities, except where to do so would
be prohibited by law. The agreement stipulates that the
Company will meet the full amount of any such liabilities,
including costs and expenses.
The Company has not, during or since the financial year
indemnified or agreed to indemnify an auditor of the
company or of any related body corporate against any
liability incurred as such an auditor.
4
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The key management personnel of Audio Pixels Holdings Limited during the year were:
Fred Bart
Cheryl Bart
Ian Dennis
Chairman and Chief Executive Officer
Non executive director
Non executive director and company secretary
Danny Lewin
CEO and director of Audio Pixels Limited
Yuval Cohen
Chief Technical Officer of Audio Pixels Holdings Limited
The Directors fees are not dependent on the earnings of the Company and the consequences of the Company’s
performance on shareholder wealth. On 24 September 2010, the maximum total directors fees were increased to a
total of $250,000 per annum in line with the increased activities of the company. The actual directors fees paid were
within the approved limit of $250,000 per annum approved by shareholders at the Annual General Meeting held on
24 September 2010.
The table below sets out summary information about the Company’s earnings and movements in shareholder wealth for
the last 5 financial years.
Year ended
31 December
2019
$
Year ended
31 December
2018
$
Year ended
31 December
2017
$
Year ended
31 December
2016
$
Year ended
31 December
2015
$
Revenue
Net (loss) before tax
Net (loss) after tax
272,520
(6,231,930)
(6,231,930)
86,961
(4,519,721)
(4,519,721)
65,624
(5,914,957)
(5,914,957)
103,630
(5,054,771)
(5,054,771)
25,073
(1,840,940)
(1,840,940)
Year ended
31 December
2019
$
Year ended
31 December
2018
$
Year ended
31 December
2017
$
Year ended
31 December
2016
$
Year ended
31 December
2015
$
20.22
15.35
0.00
16.82
20.22
0.00
14.15
16.82
0.00
8.45
14.15
0.00
9.86
8.45
0.00
Share price at start of
year/period
Share price at end of
year/period
Dividend Paid
The aggregate compensation of the key management personnel of the Company is set out below:
Short‑term employee benefits
Post employment benefits
31 December
2019
$
31 December
2018
$
613,183
92,762
705,945
763,526
99,387
862,913
5
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The following table sets out each key management personnel’s equity holdings (represented by holdings of fully paid
ordinary shares in Audio Pixels Holdings Limited).
Balance at
1/1/19
no.
Granted as
remuneration
no.
Received on
exercise of
options
no.
Mr Fred Bart*
Mrs Cheryl Bart*
Mr Ian Dennis
Mr Danny Lewin
Mr Yuval Cohen
5,780,640
1,244,295
320,167
1,430,819
1,430,819
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
net other
change
no.
38,482
38,482
‑
7,800
‑
Balance at
31/12/19
no.
5,819,122
1,282,777
320,167
1,438,619
1,430,819
* Included in the above shareholdings in respect to both Fred Bart and Cheryl Bart are 782,777 (2018: 744,295) shares in Audio Pixels Holdings Limited held by
the Bart Superannuation Fund, in respect to which each has a relevant interest.
In the previous year, a convertible note of $1,500,000 was exercised on 7 November 2018 and resulted in the issue of
154,959 ordinary shares to 4F Investments Pty Limited, a company controlled by Fred Bart, at a price of $9.68.
Transactions with Related Entities
During the year ended 31 December 2019, the Company paid a total of $107,857 (year ended 31 December 2018 ‑ $107,857)
to 4F Investments Pty Limited, a company associated with Mr Fred Bart in respect of directors fees and superannuation for
Mr Fred Bart and Mrs Cheryl Bart.
During the year ended 31 December 2019, the Company paid interest of Nil (year ended 31 December 2018 ‑ $125,918) on
convertible notes to 4F Investments Pty Limited, a company associated with Mr Fred Bart.
During the year ended 31 December 2019, the Company paid a total of $41,063 (year ended 31 December 2018 ‑ $41,063)
to Dennis Corporate Services Pty Limited, a company associated with Mr Ian Dennis in respect of directors fees
and superannuation.
During the year, the Company paid $30,000 (31 December 2018 ‑ $30,000) to Dennis Corporate Services Pty Limited,
a company associated with Mr Ian Dennis in respect of consulting fees for company secretarial and accounting services.
On 1 June 2018, the company exercised an option to renew a lease in respect of office premises at Suite 3, Level 12,
75 Elizabeth Street Sydney for a period of forty eight months to 30 March 2022. The Company recharged $30,441
(year ended 31 December 2018 ‑ $28,441) of the rent and other tenancy charges to Electro Optic Systems Holdings Limited,
a company of which Fred Bart and Ian Dennis are directors and $30,441 (year ended 31 December 2018 ‑ $28,441) to
4F Investments Pty Limited, a company controlled by Fred Bart.
6
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The following table sets out the remuneration of each key management personnel of the Company:
short term
Post employment
total
December 2019
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
December 2018
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
Shay Kaplan
Directors fees/
salary
$
non‑monetary
$
superannuation
$
social
security
$
61,000
37,500
67,500*
170,962
220,008
556,970
61,000
37,500
67,500*
159,034
220,008
118,528
663,570
‑
‑
‑
41,828
14,385
56,213
‑
‑
‑
54,499
21,810
23,647
99,956
5,794
3,563
3,563
‑
18,996
31,916
5,794
3,563
3,563
‑
18,996
‑
31,916
‑
‑
‑
60,846
‑
60,846
‑
‑
‑
38,627
‑
28,844
67,471
$
66,794
41,063
71,063
273,636
253,389
705,945
66,794
41,063
71,063
252,160
260,814
171,019
862,913
* The amounts disclosed for Ian Dennis include directors fees of $37,500 and consulting fees of $30,000.
Audit Committee
The Audit Committee was formally constituted on 29 August 2014 with all three directors appointed to the Audit Committee.
Ian Dennis was appointed chair of the Audit Committee.
Directors’ Meetings
During the year the Company held three meetings of directors, two meetings of the Audit Committee and no meetings of
the Nomination and Remuneration Committee. The attendances of the directors at meetings of the Board were:
Board of directors
Audit committee
nomination and
Remuneration committee
Directors
Mr Fred Bart
Mrs Cheryl Bart
Mr Ian Dennis
Held
Attended
Held
Attended
Held
Attended
3
3
3
3
3
3
2
2
2
2
2
2
‑
‑
‑
‑
‑
‑
All current board members are on the Audit Committee and the Nomination and Remuneration Committee.
7
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Non‑audit Services
Details of amounts paid or payable to the auditor for non‑audit services provided during the year by the auditor are
outlined in Note 4 to the financial statements.
The directors are satisfied that the provision of non‑audit services, during the year, by the auditor (or by another person
or firm on the auditor’s behalf ) is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services disclosed in Note 4 to the financial statements do not compromise the
external auditors’ independence for the following reasons:
All non‑audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor, and
None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board,
including reviewing or auditing the auditor’s own work, acting in a management or decision‑making capacity for the
company, acting as advocate for the company or jointly sharing economic risks and rewards.
Auditor’s Independence Declaration
The auditor’s independence declaration is included on page 9.
Signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
I A Dennis
Director
Dated at Sydney this 27 day of February 2020
8
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 9
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 10
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 11
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 12
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 4 to 7
13
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoRs’ DeCLARAtIon
The directors declare that:
(a) in the directors’ opinion, there are reasonable grounds to believe the company will be able to pay its debts as and when
they become due and payable;
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards and give a true and fair view of the financial position and
performance of the company and the consolidated entity;
(c) the directors have been given the declarations required by s.295A of the Corporations Act 2001; and
(d) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in
note 1 to the financial statements.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
I A Dennis
Director
Dated at Sydney this 27 day of February 2020.
14
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 ConsoLIDAteD stAteMent oF PRoFIt oR Loss AnD
otHeR CoMPReHensIVe InCoMe
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
Consolidated
Year ended
31 December
2019
$
Consolidated
Year ended
31 December
2018
$
note
Revenue
2
272,520
86,961
Administrative expenses
Amortisation
Depreciation
Directors fees and superannuation
Exchange (losses)/gains
Interest expense
Fair value movement of derivative liability
Gain/(Loss) on amendment of terms of convertible notes
Profit/(Loss) on sale of property, plant and equipment
Marketing
Research and development expenses
(Loss) before income tax
Income tax benefit
(Loss) for the year
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit and loss
(1,040,527)
(84,565)
(405,840)
(148,920)
15,190
(30,462)
‑
‑
411
(1,224)
(916,399)
(79,159)
(70,881)
(148,920)
2,723,660
(1,511,514)
(940,264)
(525,415)
(198)
(3,983)
2
3
(4,808,513)
(3,133,609)
(6,231,930)
(4,519,721)
‑
‑
(6,231,930)
(4,519,721)
Exchange differences arising on translation of foreign operations
17
(190,559)
(2,461,611)
Other comprehensive income/(loss) for the year, net of tax
(190,559)
(2,461,611)
Total comprehensive (loss) for the year
(6,422,489)
(6,981,332)
Notes to the financial statements are included on pages 20 to 52.
15
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273
ConsoLIDAteD stAteMent oF PRoFIt oR Loss AnD
otHeR CoMPReHensIVe InCoMe
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
Consolidated
Year ended
31 December
2019
Consolidated
Year ended
31 December
2018
note
(6,231,930)
(4,519,721)
(6,422,489)
(6,981,332)
(Loss) attributable to:
Owners of the company
Total comprehensive (loss) attributable to:
Owners of the company
Earnings per share
Basic and diluted (cents per share)
21
(22.02)
(16.67)
Notes to the financial statements are included on pages 20 to 52.
16
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 ConsoLIDAteD stAteMent oF FInAnCIAL PosItIon
As At 31 DeCeMBeR 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Goodwill
Intangible asset
Right of use asset
Property, plant and equipment
Trade and other receivables
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON‑CURRENT LIABILITIES
Lease liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/(LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of the company
TOTAL EQUITY
Consolidated
December
2019
$
Consolidated
December
2018
$
note
5
6
7
8
9
10
6
11
13
14
13
15
17
18
5,823,291
142,314
5,965,605
11,019,092
173,565
11,192,657
2,334,763
402,110
575,153
469,517
5,960
3,787,503
9,753,108
1,648,566
337,014
262,784
2,248,364
271,208
271,208
2,326,483
483,848
‑
329,858
5,525
3,145,714
14,338,371
987,849
‑
203,960
1,191,809
‑
‑
2,519,572
1,191,809
7,233,536
13,146,562
66,217,433
66,217,433
(24,724,836)
(25,043,740)
(34,259,061)
(28,027,131)
7,233,536
7,233,536
13,146,562
13,146,562
Notes to the financial statements are included on pages 20 to 52.
17
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 ConsoLIDAteD stAteMent oF CHAnGes In eQUItY
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
December 2019 ‑
Consolidated
Balance at
1 January 2019
Other comprehensive
income for the year
(Loss) for the year
Recognition of share
based payments
Balance at
31 December 2019
December 2018 ‑
Consolidated
Balance at
1 January 2018
Other comprehensive
income for the year
(Loss) for the year
Issue of shares
for cash
Issue of shares
on conversion of
convertible notes
equity
settled
option
Reserve
$
Issued
Capital
$
exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Convertible
note equity
Reserve
$
Accumulated
Losses
$
total
$
66,217,433
4,532,439
(4,037,487)
(25,538,692)
‑
‑
‑
‑
‑
509,463
(190,559)
‑
‑
‑
‑
‑
66,217,433
5,041,902
(4,228,046)
(25,538,692)
‑
‑
‑
‑
‑
(28,027,131)
13,146,562
‑
(190,559)
(6,231,930)
(6,231,930)
‑
509,463
(34,259,061)
7,223,536
equity
settled
option
Reserve
$
Issued
Capital
$
exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Convertible
note equity
Reserve
$
Accumulated
Losses
$
total
$
45,228,931
4,512,898
(1,575,876)
(25,538,692)
666,893
(23,507,410)
(213,256)
‑
‑
9,500,003
10,773,402
‑
‑
‑
‑
‑
(2,461,611)
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
(715,097)
‑
‑
(2,461,611)
(4,519,721)
(4,519,721)
‑
‑
‑
‑
9,500,003
10,773,402
‑
19,541
48,204
‑
48,204
‑
‑
19,541
‑
66,217,433
4,532,439
(4,037,487)
(25,538,692)
‑
(28,027,131)
13,146,562
Notes to the financial statements are included on pages 20 to 52.
Transfer from reserve
715,097
Recognition of share
based payments
Equity reserve on issue
of convertible notes
Balance at
31 December 2018
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Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 ConsoLIDAteD stAteMent oF CAsH FLoWs
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Consolidated
Year ended
31 December
2019
$
Consolidated
Year ended
31 December
2018
$
notes
121,763
‑
(4,917,915)
(4,148,731)
(30,462)
150,757
(530,959)
86,961
Net cash (used by) operating activities
19
(4,675,857)
(4,592,729)
Cash flows from investing activities
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (used by) from investing activities
Cash flows from financing activities
Proceeds from share placement
Convertible note
Repayment of lease liabilities
Net cash (used by)/provided by financing activities
(223,556)
244
(223,312)
‑
‑
(286,890)
(286,890)
(46,043)
316
(45,727)
9,500,003
3,500,000
‑
13,000,003
15
Net increase/(decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
(5,186,059)
11,019,092
8,361,547
2,700,577
Effects of exchange rate fluctuations on the balances of cash held in
foreign currencies
(9,742)
(43,032)
Cash and cash equivalents at the end of the financial year
5
5,823,291
11,019,092
Notes to the financial statements are included on pages 20 to 52.
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Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
1. Summary of Significant
Accounting Policies
1(a) statement of compliance
The financial report is a general purpose financial
report which has been prepared in accordance with
the Corporations Act 2001, Accounting Standards and
Interpretations, and complies with other requirements
of the law. Accounting Standards include Australian
equivalents to International Financial Reporting Standards
(“AASBS”). Compliance with AASBS ensures that the
financial statements and notes comply with International
Financial Reporting Standards (“IFRS”). For the purposes
of preparing the consolidated financial statements,
the Company is a for profit entity.
The date of initial application of AASB 16 for the
consolidated entity was 1 January 2019.
The consolidated entity has applied AASB 16 using the
modified retrospective approach with the cumulative
effect of initially applying the Standard recognised at the
date of initial application in Accumulated Losses.
Impact on Lessee Accounting
Former operating leases
AASB 16 changes how the consolidated entity accounts
for leases previously classified as operating leases under
AASB 117, which were off‑balance‑sheet.
Applying AASB 16, for all leases (except as noted below),
the consolidated entity:
The financial statements were authorised for issue by the
Directors on 27 February 2020.
a)
recognises right‑of‑use assets and lease liabilities
in the consolidated statement of financial position,
initially measured at the present value of future
lease payments;
b)
recognises depreciation of right‑of‑use assets and
interest on lease liabilities in the consolidated
statement of profit or loss; and
c) separates the total amount of cash paid into a
principal portion (presented within financing
activities) and interest (presented within operating
activities) in the consolidated statement of cash flows.
Lease incentives (e.g. free rent period) are recognised as
part of the measurement of the right‑of‑use assets and
lease liabilities whereas under AASB 117 they resulted in
the recognition of a lease incentive liability, amortised as a
reduction of rental expense on a straight‑line basis.
Under AASB 16, right‑of‑use assets are tested for
impairment in accordance with AASB 136 Impairment
of Assets. This replaces the previous requirement to
recognise a provision for onerous lease contracts.
For short‑term leases (lease term of 12 months or less)
and leases of low‑value assets, the consolidated entity has
opted to recognise a lease expense on a straight‑line basis
as permitted by AASB 16. This expense is presented within
other expenses in the consolidated statement of profit or
loss as applicable.
1(b) Basis of preparation
The financial report has been prepared on the basis of
historical cost. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts
are expressed in Australian dollars.
1(c) Adoption of new and
revised standards
New and amended IFRS Standards that
are effective for the current year
Impact of initial application of AAsB 16 Leases
In the current year, the consolidated entity has applied
AASB 16 Leases that is effective for annual periods that
begin on or after 1 January 2019.
AASB 16 introduces new or amended requirements with
respect to lease accounting. It introduces significant
changes to the lessee accounting by removing the
distinction between operating and finance leases and
requiring the recognition of a right‑of‑use asset and a
lease liability at the lease commencement for all leases,
except for short‑term leases and leases of low value
assets. In contrast to lessee accounting, the requirements
for lessor accounting have remained largely unchanged.
Details of these new requirements and the impact of the
adoption of AASB 16 on the consolidated entity’s financial
statements are described below.
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FoR tHe YeAR enDeD 31 DeCeMBeR 2019
Impact of other standards
In the current year, the consolidated entity has applied
a number of amendments to AASB Standards and
Interpretations issued by the IASB that are effective for
an annual period that begins on or after 1 January 2019.
Their adoption has not had any material impact on
the disclosures or on the amounts reported in these
financial statements.
AASB 2017‑6 Amendments to Australian
Accounting Standards ‑ Prepayment Features
with Negative Compensation
AASB 2017‑7 Amendments to Australian Accounting
Standards ‑ Long‑term Interests in Associates and
Joint Ventures
AASB 2018‑1 Amendments to Australian Accounting
Standards ‑ Annual Improvements 2015‑2017 Cycle
AASB 2018‑2 Amendments to Australian
Accounting Standards ‑ Plan Amendment,
Curtailment or Settlement
AASB 2018‑3 Amendments to Australian Accounting
Standards ‑ Reduced Disclosure Requirements
Interpretation 23 Uncertainty over Income Tax
Treatments and AASB 2017‑4 Amendments to
Australian Accounting Standards ‑ Uncertainty over
Income Tax Treatments
1. Summary of Significant
Accounting Policies (Cont.)
Impact on Lessor Accounting
AASB 16 does not change substantially how a lessor
accounts for leases. Under AASB 16, a lessor continues to
classify leases as either finance leases or operating leases
and account for those two types of leases differently.
However, AASB 16 has changed and expanded the
disclosures required, in particular regarding how a lessor
manages the risks arising from its residual interest in the
leased assets.
Under AASB 16, an intermediate lessor accounts for the
head lease and the sublease as two separate contracts.
The intermediate lessor is required to classify the sublease
as a finance or operating lease by reference to the
right‑of‑use asset arising from the head lease (and not by
reference to the underlying asset as was the case under
AASB 117).
Financial impact of initial application of AAsB 16
The initial application of AASB 16 resulted in:‑
i.
The creation of a right‑of‑use asset of $895,297 and a
lease liability of $895,297 as at 1 January 2019.
ii. A difference of $470,416 between the operating
lease commitments disclosed in applying AASB 117
in the 31 December 2018 annual report, discounted
using the weighted average rate in (iii) below and the
lease liability in (i) above. This difference is primarily
attributable to the inclusion of certain leases as part
of the opening adjustment that were previously not
disclosed as operating lease commitments.
iii. When measuring lease liabilities, the consolidated
entity discounted lease payments using the rate
implicit in the lease. Where this could not be
determined, the consolidated entity’s incremental
borrowing rate was used. The weighted average rate
applied is 5%.
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1. Summary of Significant Accounting Policies (Cont.)
New and revised Australian Accounting Standards and Interpretations on issue
but not yet effective
At the date of authorisation of the financial statements, the consolidated entity has not applied the following new and
revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective:
standard/amendment
AASB 2014‑10 Amendments to Australian Accounting Standards ‑ Sale or Contribution
of Assets between an Investor and its Associate or Joint Venture [AASB 10 & AASB 128],
AASB 2015‑10 Amendments to Australian Accounting Standards ‑ Effective Date of
Amendments to AASB 10 and AASB 128 and AASB 2017‑5 Amendments to Australian
Accounting Standards ‑ Effective Date of Amendments to AASB 10 and AASB 128 and
Editorial Corrections
effective for annual
reporting periods
beginning on or after
1 January 2022 (Editorial
corrections in AASB
2017‑5 applied from
1 January 2018)
AASB 2018‑6 Amendments to Australian Accounting Standards ‑ Definition of a Business
1 January 2020
AASB 2018‑7 Amendments to Australian Accounting Standards ‑ Definition of Material
1 January 2020
AASB 2019‑1 Amendments to Australian Accounting Standards ‑ References to the
Conceptual Framework
AASB 2019‑3 Amendments to Australian Accounting Standards ‑ Interest Rate
Benchmark Reform
AASB 2019‑5 Amendments to Australian Accounting Standards ‑ Disclosure of the Effect
of New IFRS Standards Not Yet Issued in Australia
1 January 2020
1 January 2020
1 January 2020
The Directors do expect these new and revised standards issued but not effective to have a material effect on the
financial statements.
1(d) Going Concern
The financial report has been prepared on the going concern basis which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The consolidated entity incurred a net loss during the year of $6,231,930. Net cash used by operating activities was
$4,675,857. As at 31 December 2019, the consolidated entity had cash of $5,823,291 and net current assets of $3,717,241
Development work on the technology is continuing and it is anticipated that the available net working capital will be
consumed in the coming 12 months.
In the opinion of the directors, the ability of the consolidated entity to continue as a going concern and pay its debts as
and when they become due and payable is dependent upon:
the ability of the company to secure additional funding from existing or new investors to fund continued
development. The directors consider that the company has a number for financing options available to it at this stage
of the commercialisation of the product;
the successful completion of the development stage of the technology; and
the future trading prospects of the consolidated entity including obtaining commercial contracts.
If the consolidated entity is unable to achieve successful outcomes in relation to the above matters, significant uncertainty
would exist as to the ability of the consolidated entity to continue as a going concern and therefore, it may be required
to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from
those stated in the financial report.
No adjustments have been made to the financial report relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not
continue as a going concern.
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1. Summary of Significant
Accounting Policies (Cont.)
1(e) Revenue Recognition
Interest revenue is recognised on an accrual basis.
Recharged revenue/income is recognised on an
accrual basis.
1(f) Financial assets
Classification
The consolidated entity classifies its financial assets in the
following measurement categories:
Those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and
Those to be measured at amortised cost.
The classification depends on the consolidated entity’s
business model for managing financial assets and the
contractual terms of the cash flows. For assets measured at
fair value, gains and losses will either be recorded in profit
or loss or other comprehensive income. For investments
in debt instruments, this will depend on the business
model in which the investment is held. For investments in
equity instruments that are not held for trading, this will
depend on whether the consolidated entity has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
other comprehensive income. The consolidated entity
reclassifies debt investments when and only when its
business model for managing those assets changes.
Measurement
At initial recognition, the consolidated entity measures a
financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed in
profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends
on the consolidated entity’s business model for managing
the asset and the cash flow characteristics of the asset.
There are two measurement categories into which the
consolidated entity classifies its debt instruments:
Amortised cost: Assets that are held for collection
of contractual cash flows where those cash flows
represent solely payments of principal and interest
are measured at amortised cost. A gain or loss on
a debt investment that is subsequently measured
at amortised cost and is not part of a hedging
relationship is recognised in profit or loss when the
asset is derecognised or impaired. Interest income
from these financial assets is included in finance
income using the effective interest rate method.
Fair value through profit or loss (FVPL): Assets that do
not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss. A gain
or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is
not part of a hedging relationship is recognised in
profit or loss and presented net in the statement of
profit or loss within other gains/(losses) in the period
in which it arises. No such assets are currently held by
the consolidated entity.
equity instruments
The consolidated entity subsequently measures all equity
investments at fair value. Where the consolidated entity’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair value
gains and losses to profit or loss following the derecognition
of the investment. Dividends from such investments
continue to be recognised in profit or loss as other income
when the consolidated entity’s right to receive payments is
established. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are
not reported separately from other changes in fair value.
Changes in the fair value of financial assets at fair value
through profit or loss are recognised in other expenses in
the statement of profit or loss as applicable.
Impairment
The consolidated entity assesses on a forward looking
basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI.
The impairment methodology applied depends on
whether there has been a significant increase in credit
risk. For trade receivables, and lease receivables, the
consolidated entity applies the simplified approach
permitted by AASB 9, which requires expected lifetime
losses to be recognised from initial recognition of
the receivables.
23
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
1. Summary of Significant
Accounting Policies (Cont.)
1(g) Financial Liabilities
Interest bearing liabilities
All loans and borrowings are initially recognised at
fair value, being the amount received less attributable
transaction costs. After initial recognition, interest bearing
liabilities are stated at amortised cost with any difference
between cost and redemption value being recognised
in the statement of profit or loss over the period of the
borrowings on an effective interest basis.
trade and other payables
Liabilities are recognised for amounts to be paid for
goods or services received. Trade payables are settled on
terms aligned with the normal commercial terms in the
consolidated entity’s countries of operation.
Derivative liabilities
Derivative liabilities are initially recognised at fair value
on issue. After initial recognition, they are subsequently
measured at fair value through profit or loss.
Classification as debt or equity
During the year the Company had on issue convertible
notes. The component parts of the convertible notes
issued by the consolidated entity are classified separately
as borrowings, derivative liability and equity in accordance
with the substance of the contractual arrangements and the
definitions of a financial liability and an equity instrument.
A conversion option that will be settled by the exchange of
a fixed amount of cash or another financial asset for a fixed
number of the Company’s own equity instruments is an
equity instrument. A conversion option that will be settled
by the exchange of a fixed amount of cash or another
financial asset for a variable number of the Company’s own
equity instruments is a derivative liability instrument.
The value of a conversion option classified as a derivative
liability instrument is recognised at fair value on issue.
The derivative liability is subsequently measured at fair
value through profit or loss.
The conversion option classified as equity is determined
by deducting the amount of liability component from the
fair value of the compound instrument as a whole. This is
recognised and included in equity and is not subsequently
remeasured. This will remain in equity until the conversion
option is exercised or at maturity. No gain or loss is
recognised in profit or loss upon expiration or conversion.
On initial recognition, the face borrowing or liability
component is measured at fair value. This is subsequently
recognised on an amortised cost basis using the effective
interest method until extinguished upon conversion or at
the instrument’s maturity date.
1(h) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand,
cash in banks and investments in money market
instruments maturing within less than 3 months at the
date of acquisition, net of outstanding bank overdrafts.
Bank overdrafts are shown within borrowings in current
liabilities in the Statement of Financial Position.
1(i) employee benefits
Provision is made for benefits accruing to employees
in respect of wages and salaries, annual leave, and long
service leave when it is probable that settlement will be
required and they are capable of being measured reliably.
Provisions made in respect of short term employee benefits
are measured at their nominal values using the remuneration
rate expected to apply at the time of settlement.
Provisions made in respect of long term employee
benefits are measured as the present value of the
estimated future cash outflows to be made by the
consolidated entity in respect of services provided by
employees up to the reporting date.
Defined contribution plans ‑ Contributions to defined
benefit contribution superannuation plans are expensed
when incurred.
1(j) Foreign currency
Foreign currency transactions
All foreign currency transactions during the financial
year are brought to account using the exchange rate in
effect at the date of the transaction. Foreign currency
monetary items at reporting date are translated at the
exchange rate existing at reporting date. Non‑monetary
assets and liabilities carried at fair value and historic cost
that are denominated in foreign currencies are translated
at the rates prevailing at the date when the fair value
was determined.
Exchange differences are recognised in profit and loss in
the period they arise.
Foreign operations
On consolidation, the assets and liabilities of the
consolidated entity’s overseas operations are translated at
exchange rates prevailing at the reporting date. Income and
expense items are translated at the average exchange rates
for the period unless exchange rates fluctuate significantly.
Exchange differences arising, if any, are recognised in the
foreign currency translation reserve, and recognised in
profit and loss on disposal of the foreign operation.
24
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FoR tHe YeAR enDeD 31 DeCeMBeR 2019
1. Summary of Significant
Accounting Policies (Cont.)
1(k) Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
i. where the amount of GST incurred is not recoverable
from the taxation authority, it is recognised as part of
the cost of acquisition of an asset or as part of an item
of expense; or
ii.
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables.
Cash flows are included in the Statement of Cash Flows
on a gross basis. The GST component of cash flows
arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
1(l) Goodwill
Goodwill arising in a business combination is recognised
as an asset at the date that control is acquired
(the acquisition date). Goodwill is measured as the excess
of the sum of the consideration transferred, the amount
of any non‑controlling interests in the acquire, and the
fair value of the acquirer’s previously held equity interest
in the acquire (if any) over the net of the acquisition‑date
amounts of the identifiable assets acquired and the
liabilities assumed.
If, after reassessment, the consolidated entity’s interest
in the fair value of the acquiree’s identifiable net assets
exceeds the sum of the consideration transferred,
the amount of any non‑controlling interests in the
acquiree and the fair value of the acquirer’s previously
held equity interest in the acquire (if any), the excess
is recognised immediately in profit or loss as a bargain
purchase gain.
Goodwill is not amortised but is reviewed for impairment
at least annually. For the purpose of goodwill impairment
testing, there was one cash‑generating unit, relating
to the digital speakers segment. The cash‑generating
unit is tested for impairment annually. If the recoverable
amount of the cash‑generating unit is less than its
carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro‑rata
on the basis of the carrying amount of each asset in the
unit. An impairment loss recognised for goodwill is not
reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of
goodwill is included in the determination of the profit or
loss on disposal.
1(m) Impairment of assets
At each reporting date, the entity reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are
independent from other assets, the entity estimates the
recoverable amount of the cash‑generating unit to which
the asset belongs.
If the recoverable amount of an asset (or cash‑generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash‑generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash‑generating unit)
is increased to the revised estimate of its recoverable
amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would
have been determined had no impairment loss been
recognised for the asset (cash‑generating unit) in prior
years. A reversal of an impairment loss is recognised in
profit or loss immediately.
1(n) Income tax
Current tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax
for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
25
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
1. Summary of Significant
Accounting Policies (Cont.)
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amount of assets and liabilities in
the financial statements and the corresponding tax base
of those items.
In principle, deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that
sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses
and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result
of business combination) which affects neither taxable
income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period(s) when
the assets and liability giving rise to them are realised or
settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the entity expects, at the reporting
date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the company intends to settles its current
tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or
income in profit or loss, except when it relates to items
credited or debited directly to equity, in which case
the deferred tax is also recognised directly in equity, or
where it arises from the initial accounting for a business
combination, in which case it is taken into account in the
determination of goodwill or excess.
1(o) Intangible assets
Intangible assets acquired in a
business combination
Intangible assets acquired in a business combination are
identified and recognised separately from goodwill where
they satisfy the definition of an intangible asset and their
fair value can be measured reliably. Subsequent to initial
recognition, intangible assets acquired in a business
combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the
same basis as intangible assets acquired separately.
The intangible asset acquired is written off on a straight
line basis. Expenditure on research activities is recognised
as an expense in the period in which it is incurred.
1(p) Leases
Policies applicable from 1 January 2019
(See Note 1(c))
The consolidated entity assesses whether a contract
is or contains a lease, at inception of a contract.
The consolidated entity recognises a right‑of‑use asset
and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short‑term
leases (defined as leases with a lease term of 12 months
or less) and leases of low value assets. For these leases,
the consolidated entity recognises the lease payments
as an operating expense on a straight‑line basis over the
term of the lease unless another systematic basis is more
representative of the time pattern in which economic
benefits from the leased asset are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the consolidated entity uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
fixed lease payments (including in‑substance fixed
payments), less any lease incentives;
variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee
under residual value guarantees;
the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is presented as a separate line in the
consolidated statement of financial position.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
26
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
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1. Summary of Significant
Accounting Policies (Cont.)
The consolidated entity remeasures the lease liability
(and makes a corresponding adjustment to the related
right‑of‑use asset) whenever:
the lease term has changed or there is a change in
the assessment of exercise of a purchase option,
in which case the lease liability is remeasured by
discounting the revised lease payments using a
revised discount rate.
the lease payments change due to changes in an
index or rate or a change in expected payment
under a guaranteed residual value, in which cases
the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate
(unless the lease payments change is due to a change
in a floating interest rate, in which case a revised
discount rate is used).
a lease contract is modified and the lease
The right‑of‑use assets are presented as a separate line in
the consolidated statement of financial position.
The consolidated entity applies AASB 136 Impairment
of Assets to determine whether a right‑of‑use asset is
impaired and accounts for any identified impairment
loss per the accounting policy disclosed in note 1(m).
Variable rents that do not depend on an index or rate
are not included in the measurement the lease liability
and the right‑of‑use asset. The related payments are
recognised as an expense in the period in which the event
or condition that triggers those payments occurs and are
included in the line “other expenses” in the statement of
profit or loss.
As a practical expedient, AASB 16 permits a lessee not
to separate non‑lease components, and instead account
for any lease and associated non‑lease components as a
single arrangement. The consolidated entity has not used
this practical expedient.
Policies applicable prior to 1 January 2019
modification is not accounted for as a separate
lease, in which case the lease liability is remeasured
by discounting the revised lease payments using a
revised discount rate.
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
The consolidated entity did not make any such
adjustments during the period.
The right‑of‑use assets comprise the initial measurement
of the corresponding lease liability, lease payments made
at or before the commencement day and any initial
direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the consolidated entity incurs an obligation for
costs to dismantle and remove a leased asset, restore the
site on which it is located or restore the underlying asset
to the condition required by the terms and conditions
of the lease, a provision is recognised and measured
under AASB 137. The costs are included in the related
right‑of‑use asset, unless those costs are incurred to
produce inventories.
Right‑of‑use assets are depreciated over the shorter period
of lease term and useful life of the underlying asset. If a
lease transfers ownership of the underlying asset or the
cost of the right‑of‑use asset reflects that the consolidated
entity expects to exercise a purchase option, the related
right‑of‑use asset is depreciated over the useful life
of the underlying asset. The depreciation starts at the
commencement date of the lease.
the consolidated entity as lessor
Income from operating leases is recognised on a
straight‑line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognised on a straight‑line basis
over the lease term.
the consolidated entity as lessee
Operating lease payments are recognised as an expense
on a straight‑line basis over the lease term, except where
another systematic basis is more representative of the
time pattern in which economic benefits from the leased
asset are consumed. Contingent rentals arising under
operating leases are recognised as an expense in the
period in which they are incurred. In the event that lease
incentives are received to enter into operating leases,
such incentives are recognised as a liability. The aggregate
benefit of incentives is recognised as a reduction of rental
expense on a straight‑line basis, except where another
systematic basis is more representative of the time
pattern in which economic benefits from the leased asset
are consumed.
27
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
1(s) Property, plant and equipment
Property, plant and equipment are stated at cost
less accumulated depreciation and accumulated
impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives, using the straightline method. The estimated useful
lives, residual values and depreciation method are reviewed
at each year end, with the effect of any changes in estimate
accounted for on a prospective basis.
Assets and disposal groups are classified as held for sale
if their carrying amount will be recovered principally
through a sale transaction rather than through
continuing use. This condition is regarded as met only
when the sale is highly probable and the non‑current
asset (or disposal group) is available for immediate
sales in the present condition. Management must be
committed to the sale, which should be expected to
qualify as a completed sale within one year from the date
of classification. Non‑current assets (and disposal groups)
classified as held for sale are measured at the lower of
their previous carrying amount and fair value less costs to
sell. The following estimated useful lives are used in the
calculation of depreciation:
Computers and related equipment
5 to 15 years
Leasehold improvements
Office furniture and equipment
3 to 5 years
5 to 15 years
Depreciation in relation to right‑of‑use‑assets is outlined
in Note 1(p).
1(t) share based payments
Equity‑settled share‑based payments are measured at
fair value at the date of the grant. Fair value is measured
by use of a Black‑Scholes Option Pricing model.
The expected life used in the model has been adjusted,
based on management best estimates, for the effects of
non‑transferability, exercise restrictions and behavioural
considerations. The fair value determined at the grant date
of the equity‑settled share based payments is expensed
on a straight‑line basis over the vesting period, based
on the consolidated entity’s estimate of shares that will
eventually vest.
1. Summary of Significant
Accounting Policies (Cont.)
1(q) Provisions
Provisions are recognised when the entity has a present
obligation as a result of a past event, the future sacrifice
of economic benefits is probable, and the amount of the
provision can be measured reliably.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it
is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured
using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of
those cash flows.
1(r) Basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company. Control is achieved when
the Company:
Has power over the investee;
Is exposed, or has rights, to variable returns from its
involvement with the investee; and
Has the ability to use its power to affect its returns.
The Company reassesses 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
listed above.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated
statement of profit or loss and other comprehensive
income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
All intragroup assets and liabilities, equity, expenses
and cash flows relating to transactions between
members of the consolidated entity are eliminated in full
on consolidation.
28
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1. Summary of Significant
Accounting Policies (Cont.)
1(u) Critical accounting judgements
In the application of the consolidated entity’s accounting
policies, management is required to make judgements,
estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions
are based on historical experience and various other
factors that are believed to be reasonable under the
circumstance, the results of which form the basis of
making these judgements. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future periods if the revision
affects both current and future periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning the
future, and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of
causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year:
Intangible asset/Goodwill
The directors made a critical judgement in relation to the
value of the intangible asset included in Note 8 and the
impairment model used in assessing the carrying amount
of the goodwill (see Note 7).
Deferred tax
The directors made a critical judgement in relation to
not recognising the deferred tax balances described in
Note 3(b). Given the current stage of development, the
directors do not currently consider it’s probable that
sufficient taxable amounts will be available against which
deductible temporary differences can be utilised.
Valuation of and conversion of borrowings
and derivative liability
The directors made a critical judgement in relation to the
interest rate applied in valuing the borrowing and the
expected share price volatility used to value the derivative
liability included in Note 11. Furthermore significant
judgements were made in determining the impact
of the change in conversion terms for all convertible
note on issue.
Functional Currency
The directors made a critical judgement in relation to
the functional currency of Audio Pixels Holdings Limited.
The directors consider AUD to be the appropriate
functional currency, as financing activities of the entity
occur in AUD.
Investment in subsidiary and
intercompany receivable
The directors made a critical judgement in relation to
the recoverability of the investment in subsidiary ‑ Audio
Pixels Limited and the receivable from this subsidiary.
The assessment of the recoverability of these assets is
considered concurrently with the recoverability of the
intangible asset/goodwill. These assets are discussed in
Note 26 as part of current and non‑current assets:
Investment in subsidiary ‑$2,957,213
(non‑current assets)
Intercompany receivable ‑ $33,958,648
(included in current assets)
29
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
Consolidated
Year ended
31 December
2019
$
Consolidated
Year ended
31 December
2018
$
150,757
121,763
272,520
84,565
85,706
320,134
30,462
‑
‑
‑
‑
86,961
‑
86,961
79,159
70,881
‑
1,511,514
147,906
(113,763)
34,143
940,264
1,907,571
1,390,360
509,463
31,916
19,541
31,916
2,448,950
1,441,817
‑
‑
‑
‑
(6,231,930)
(4,519,721)
84,565
509,463
79,159
19,541
‑
2,446,233
(5,637,902)
(1,974,788)
2. (Loss) from Operations
(a) Revenue
Interest received ‑ other entities
Recharge income
Total revenue
(b) Expenses
Amortisation
Depreciation of property, plant and equipment
Depreciation of right‑of‑use assets
Interest expense
Rental payments
Rental amounts recharged to sub tenants
Net rental expense
Fair value movement in derivative liability
Employee benefits expense:
Salary and other employee benefits
Share based payments
Superannuation
3. Income Taxes
(a) Income tax recognised in profit or loss
Tax expense comprises:
Deferred tax expense/(income)
Total tax expense/(income)
The prima facie income tax expense on pre‑tax accounting profit reconciles to the
income tax expense in the financial statements as follows:
(Loss) from operations
Amortisation
Share based payments
Convertible note adjustments
30
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
3. Income Taxes (Cont.)
Income tax expense calculated at 30%
Effect of different tax rates of subsidiaries operating in other jurisdictions
Deferred tax benefit not brought to account
31 December
2019
$
31 December
2018
$
(1,691,371)
358,983
1,332,388
‑
(592,436)
237,099
355,337
‑
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law and 23% (2018:25%) under Israeli law. There has been no change in the corporate
tax rate when compared with the previous reporting period.
(b) Unrecognised deferred tax balances
The following deferred tax assets have not been bought to account as assets:
Tax losses ‑ revenue
Tax losses ‑ capital
Temporary differences
(c) Franking account balance
Adjusted franking account balance
(d) Israeli tax Ruling
7,100,657
5,768,269
168,038
66,041
168,038
54,246
7,334,736
5,990,553
86,721
86,721
On July 16th 2012 a Tax Ruling was issued by the Israeli Tax Authorities (ITA) under which the ITA confirmed that the Merger
carried out between Audio Pixels Ltd, a private Israeli company (P.C 513853606) and Audio Pixels Holdings Limited, a public
Australian company, complied with the conditions stipulated in Section 103T of the Israeli Ordinance. Consequently, the
transfer of the rights by the transferring rights holders in exchange for the issuance of shares in the Australian company is
not taxable at the date of the Merger pursuant to the provisions of Section 103T of the Israeli Ordinance.
31
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
4. Remuneration of Auditors
(i) Auditor of the parent entity
Audit or review of the financial statements
Taxation service
(ii) Network firm of the parent entity auditor
Audit or review of the financial statements
Taxation service
The auditor of Audio Pixels Holdings Limited is Deloitte Touche Tohmatsu.
5. Cash and Cash Equivalents
Cash on hand and at bank
Weighted average interest rate received on cash
6. Trade and Other Receivables
Current
GST receivable
Prepayments and other debtors
Non Current
Other debtors
Other debtors comprise security deposits with government bodies.
31 December
2019
$
31 December
2018
$
40,478
3,990
44,468
19,187
2,132
21,319
38,388
2,993
41,381
18,167
2,019
20,186
5,823,291
11,019,092
1.19%
2.24%
8,948
133,366
142,314
65,347
108,218
173,565
5,960
5,525
32
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
7. Goodwill
Being goodwill acquired on the acquisition of Audio Pixels Limited. The goodwill
is allocated to the cash generating unit of digital speakers by Audio Pixels Limited
of Israel.
Balance at 1 January
Net foreign currency exchange
Balance at 31 December
31 December
2019
$
31 December
2018
$
2,334,763
2,326,483
2,326,483
8,280
2,334,763
2,189,025
137,458
2,326,483
The recoverable amount of this cash generating unit is determined based on a fair value less costs of disposal calculation
which uses cash flow projections based on financial budgets approved by the directors covering an 11 year period,
with a growth rate reflecting the expected future growth in the product market, and a discount rate of 24% per annum.
The assumed growth rate is based on the forecast future global MEMS market. Given the nature of the product, the forecast
cash flows are managements’ best estimate and reflect the risks inherent in the initial take up of the product. The cash flow
projections used in the impairment model extend beyond 5 years as the intangible assets generating the cash flows within
relate to new technology and hence reflect a longer operating cycle and time to market. Cash flow projections during
the budget period are based on the same expected gross margins and raw materials price inflation during the budget
period and factor in a probability of the viability of the product. The fair value less costs of disposal calculation is sensitive
to changes in the percentage likelihood of completion. Increases in the percentage likelihood of completion increases the
recoverable amount and vice versa. Movements in the value of the goodwill are a result of the retranslation of the goodwill
from the functional currency of the cash generating unit to which it is attributed.
8. Intangible Asset
Being the independent valuation of In Process Development determined at the
acquisition date of 24 September 2010 by Ernst & Young, Israel in their report dated
17 August 2011.
Exchange differences on translation
Less accumulated amortisation
868,000
204,048
(669,938)
402,110
868,000
201,221
(585,373)
483,848
The intangible asset is allocated to the digital speaker cash‑generating unit when assessed for impairment. Refer to Note 7
for commentary on the cash‑generating unit.
33
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273
notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
9. Right of use assets
Office premises ‑ at cost
Less accumulated depreciation
Motor vehicle ‑ at cost
Less accumulated depreciation
Total net book value of Right of use assets
Cost
Office premises
Balance recorded on transition to AASB 16
Net foreign currency exchange differences
Balance as at 31 December
Motor vehicle
Balance recorded on transition to AASB 16
Additions
Disposals
Net foreign currency exchange differences
Balance as at 31 December
31 December
2019
$
31 December
2018
$
895,297
(320,144)
575,153
‑
‑
‑
575,153
895,287
‑
895,287
‑
33,676
(33,676)
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
34
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FoR tHe YeAR enDeD 31 DeCeMBeR 2019
31 December
2019
$
31 December
2018
$
9. Right of use assets (Cont.)
Accumulated depreciation
Office premises
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
Motor vehicle
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
‑
‑
(320,144)
(320,144)
‑
‑
‑
‑
On 1 June 2018, the parent company exercised an option to renew a lease in respect of office premises at Suite 3, Level
12, 75 Elizabeth Street Sydney for a period of forty‑eight months from 31 March 2018 to 30 March 2022.
Amounts recognised in profit and loss
Depreciation expense on right of use assets
Interest expense on lease liabilities
The total cash outflow for leases amount to $317,352.
320,134
30,462
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
35
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
10. Property, Plant and Equipment
Computers and related equipment ‑ at cost
Less accumulated depreciation
Leasehold improvements ‑ at cost
Less accumulated depreciation
Office furniture and equipment ‑ at cost
Less accumulated depreciation
31 December
2019
$
31 December
2018
$
507,937
(421,385)
86,552
366,797
(244,875)
121,922
1,315,628
(1,054,585)
261,043
394,491
(374,022)
20,469
360,094
(252,699)
107,395
1,201,446
(999,452)
201,994
Total net book value of Property, Plant and Equipment
469,517
329,858
Cost
Computers and related equipment
Balance at 1 January
Additions
Disposals
Net foreign currency exchange differences
Balance as at 31 December
Leasehold improvements
Balance at 1 January
Additions
Net foreign currency exchange differences
Balance as at 31 December
394,491
110,938
‑
2,508
507,937
360,094
4,415
2,288
366,797
351,372
13,064
(7,157)
37,212
394,491
324,269
1,484
34,341
360,094
36
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
10. Property, Plant and Equipment (Cont.)
Office furniture and equipment
Balance at 1 January
Additions
Disposals
Net foreign currency exchange differences
Balance as at 31 December
Accumulated depreciation
Computers and related equipment ‑ at cost
Balance as at 1 January
Net foreign currency exchange differences
Disposals
Depreciation expense
Balance at 31 December
Leasehold improvements
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
Office furniture and equipment
Balance as at 1 January
Net foreign currency exchange differences
Disposals
Depreciation expense
Balance at 31 December
31 December
2019
$
31 December
2018
$
1,201,446
108,203
(1,660)
7,639
1,315,628
(374,022)
(2,525)
‑
(44,838)
(421,385)
(252,699)
21,036
(13,212)
(244,875)
(999,452)
(29,112)
1,635
(27,656)
(1,054,585)
1,059,881
31,495
(2,175)
112,245
1,201,446
(331,920)
(35,861)
7,157
(13,398)
(374,022)
(216,887)
(14,274)
(21,538)
(252,699)
(862,105)
(103,037)
1,635
(35,945)
(999,452)
37
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
11. Trade and Other Payables
Current
Trade payables and accruals
The payables are non‑interest bearing and have an average credit period of 30 days.
31 December
2019
$
31 December
2018
$
1,648,566
987,849
12. Borrowings
On 29 December 2017, the Company reached agreement with existing holders of the convertible notes amounting to
$3,000,000 to extend the expiry date by 12 months to 31 December 2018. Shareholder approval for the extension of the
convertible note held by 4F Investments Pty Limited was obtained at the next Annual General Meeting of the Company
held on 7 May 2018.
For accounting purposes these extensions were treated as the derecognition of the original convertible notes and the
recognition of two new convertible note instruments. The difference in valuation was recognised as a gain or loss in profit
and loss.
These notes were unsecured, not listed and were convertible to ordinary shares based on the lower of the five day volume
weighted average share price of Audio Pixels Holdings Limited on the date of the original agreement ($9.68) or the five day
volume weighted average share price of Audio Pixels Holdings Limited immediately prior to conversion. These convertible
notes were converted to 309,918 ordinary shares on 7 November 2018, following receipt of agreement to the early
conversion from noteholders.
On 5 January 2018, The Company announced it had raised $4,500,000 from a new convertible note issue to sophisticated
unrelated investors pursuant to agreements dated 29 December 2017. In addition, 4F Investments Pty Limited, a company
associated with Mr Fred Bart also agreed to take up a further $500,000 of convertible notes on the same terms and
conditions subject to shareholder approval that was obtained at the Annual General Meeting of the Company held on
7 May 2018.
These new convertible notes had a term of 12 months to 31 December 2018, were unsecured, not listed and convertible
into ordinary shares based on the five day volume weighted average share price of Audio Pixels Holdings Limited on the
date of the agreement ($16.71).
On 7 November 2018, the Directors agreed with all the holders of the $5m convertible note to exercise their notes
earlier at a discounted price of $15.19. Shareholder approval was required for the $500,000 of convertible notes held by
4F Investments Pty Limited and this was received on 21 December 2018. $4.5m of these convertible notes were converted
to 296,246 ordinary shares on 7 November 2018 and the remaining $500,000 of convertible notes were converted to 32,916
ordinary shares on 21 December 2018.
38
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
13. Lease liabilities
Analysed as:
Current
Non‑Current
Disclosure required by AASB 16
Maturity Analysis
Year 1
Year 2
Year 3
Less: unearned interest
31 December
2019
$
31 December
2018
$
‑
‑
‑
337,014
271,208
608,222
31 December
2019
$
337,014
247,933
28,000
(15,431)
608,222
The consolidated entity does not face a significant liquidity risk with regard to its lease liabilities. All lease obligations in
Australia are denominated in Australian dollars and the lease in Israel is denominated in Israeli shekels.
Disclosure required by AASB 117
Non‑cancellable operating lease payables
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
14. Provisions
Employee benefits
‑
‑
‑
‑
140,352
315,792
‑
456,144
262,784
203,960
39
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
15. Issued Capital
Issued and paid up capital
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Placement for cash at $13.00 per share
Conversion of $3m of convertible notes at $9.68
Conversion of $5m of convertible notes at $15.19
Transfer from convertible note equity reserve
Balance at the end of the financial year
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Placement for cash at $13.00 per share
Conversion of $3m notes at $9.68
Conversion of $5m notes at $15.19
Balance at the end of the financial year
31 December
2019
$
31 December
2018
$
66,217,433
45,228,931
‑
‑
‑
‑
9,500,003
5,416,932
5,356,470
715,097
66,217,433
66,217,433
number
number
28,301,720
26,893,409
‑
‑
‑
769,231
309,918
329,162
28,301,720
28,301,720
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
Changes in the Corporations Law abolished the authorised capital and par value concept in relation to share capital from
1 July 1998. Therefor the company does not have a limited amount of authorised capital and issued shares do not have a
par value.
40
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
16. Employee Share Option Plan
The consolidated entity has an ownership‑based compensation scheme for employees (including directors) of the
company. In accordance with the provisions of the scheme, as approved by shareholders at a previous annual general
meeting, employees with more than three months service with the company may be granted options to purchase ordinary
shares at exercise prices determined by the directors based on market prices at the time the issue of options were made.
Each share option converts to one ordinary share in Audio Pixels Holdings Limited. No amounts are paid or payable by
the recipient on receipt of the options. The options carry neither rights to dividends nor voting rights. Options may be
exercised at any time from the date of vesting to the date of expiry.
The number of options granted is determined by the directors and takes into account the company’s and individual
achievements against both qualitative and quantitative criteria.
On 13 January 2011, shareholders approved the adoption of an Employee Share Option Plan.
(a) Unlisted Options issued under the Employee Share Option Plan
2019
2018
Weighted
average
exercise price
$
number
203,000
16.20
‑
‑
‑
203,000
‑
‑
‑
‑
16.20
‑
number
‑
203,000
‑
‑
203,000
‑
Balance at the beginning of the
financial year (i)
Granted during the year (ii)
Exercised during the year (iii)
Lapsed during the year (iv)
Balance at the end of the financial year (v)
Exercisable at end of the year
(i) Balance at the beginning of the year
2019
2018
number
203,000
‑
Grant date
expiry date
exercise Price
17/12/18
17/12/21*
‑
‑
16.20
‑
Staff options carry no rights to dividends and no voting rights.
Weighted
average
exercise price
$
‑
16.20
‑
‑
16.20
‑
Fair value at
grant date
$1,421,406
‑
41
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
16. Employee Share Option Plan (Cont.)
(ii) Granted during the year
2019
Staff options
2018
Staff options
number
Grant date
expiry date
exercise Price
Fair value at
grant date
‑
‑
‑
‑
‑
203,000
17/12/18
17/12/21*
$16.20
$1,421,406
The options issued were priced using the Black‑Scholes Option Pricing model. Where relevant, the expected life used in the
model has been adjusted based on management’s best estimate for the effects of non‑transferability, exercise restrictions
and behavioural conditions. Expected volatility is based on the historical share price volatility.
The following inputs were used in the model for the option grants made on 17 December 2018:
Dividend yield
Expected volatility (linearly interpolated)
Risk free interest rate
Expected life of options
Grant date share price
Exercise price
‑
65.40%
1.96%
1,095 days *
$15.90
$16.20
* These options commence to vest after 17 December 2020 and continuous employment on the basis of one twelfth of the total number each month in the
twelve month period to 17 December 2021.
(iii) exercised during the year
There were no options exercised during the year.
(iv) Lapsed during the year
No Staff options lapsed during the year.
(v) Balance at the end of the financial year
2019
Staff options
2018
Staff options
number
Grant date
expiry date
exercise Price
Fair value at
grant date
203,000
17/12/18
17/12/21*
$16.20
$1,421,406
203,000
17/12/18
17/12/21*
$16.20
$1,421,406
Staff options carry no rights to dividends and no voting rights.
All options granted to staff on 17 December 2018 commence to vest after 17 December 2020 and continuous employment
on the basis of one twelfth of the total number each month in the twelve month period to 17 December 2021.
The difference between the total market value of the options issued during the financial year, at the date of issue, and
the total amount received from the employees (nil) is recognised in the financial statements over the vesting period as
disclosed in Note 15 to the financial statements.
42
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
17. Reserves
Foreign currency translation
Balance at the beginning of the financial year
Translation of foreign operations
Balance at end of financial year
Foreign currency translation
31 December
2019
$
31 December
2018
$
(4,037,487)
(190,599)
(4,228,046)
(1,575,876)
(2,461,611)
(4,037,487)
Exchange differences relating to the translation of the results and net assets of the consolidated entity’s foreign operations
from their functional currencies to the consolidated entity’s presentation currency (i.e. Australian dollars) are recognised
directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences
previously accumulated in the foreign currency translation reserve are reclassified to profit and loss on the disposal of the
foreign operation.
Equity settled option reserve
Balance at the beginning of the financial year
Add share based payments in respect of options
Balance at end of financial year
The above equity‑settled option reserve relates to share options granted by the Company.
Minority acquisition reserve
Balance at the beginning of the financial year
Balance at end of financial year
The non‑controlling interest reserve comprises amounts related to the acquisition of
a non‑controlling interest shareholding in a subsidiary company in a prior period.
Convertible Note Equity Reserve
Balance at the beginning of the financial year
Increase as a result of derivative recognised on the issue of convertible notes
treated as equity
Transfer to contributed equity on conversion
Balance at end of financial year
4,532,439
509,463
5,041,902
4,512,898
19,541
4,532,439
(25,538,692)
(25,538,692)
(25,538,692)
(25,538,692)
‑
‑
‑
‑
666,893
48,204
(715,097)
‑
Total Reserves
(24,724,836)
(25,043,740)
43
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
18. Accumulated Losses
Balance at the beginning of the financial year
(Loss) for the year attributable to owners of the company
Balance at the end of the financial year
19. Notes to the Statement of Cash Flows
(a) Reconciliation of cash and cash equivalents
31 December
2019
$
31 December
2018
$
(28,027,131)
(23,507,410)
(6,231,930)
(4,519,721)
(34,259,061)
(28,027,131)
For the purposes of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial
institutions, investments in money market instruments maturing within less than 3 months at the date of acquisition.
Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to the
related items in the statement of financial position as follows:
Cash and cash equivalents
5,823,291
11,019,092
(b) Restricted cash
Cash held as security for future lease payments
60,167
54,959
Restricted cash amounts are included in the cash and cash equivalents amounts above.
c) Ronciliation of (loss) for the period to net cash flows from operating activities
(Loss) after related income tax
Amortisation
Convertible note adjustments
Depreciation
Foreign exchange gains
(Gain)/Loss on sale of property, plant and equipment
Share based payments
Changes in assets and liabilities
(Increase)/decrease in assets
Current trade and other receivables
Non‑current trade and other receivables
Increase /(decrease) in liabilities
Provisions
Current trade payables
(6,231,930)
(4,519,721)
84,565
‑
405,840
(193,741)
(411)
509,463
31,251
(435)
58,824
660,717
79,159
2,446,233
70,881
(2,635,871)
198
19,541
(127,452)
10,583
(36,359)
100,079
Net cash (used in) operating activities
(4,675,857)
(4,592,729)
44
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
20. Related Party Transactions
(a) Directors
The Directors of Audio Pixels Holdings Limited in office during the year were Fred Bart, Ian Dennis and Cheryl Bart.
(b) KMP Remuneration
The aggregate compensation of the key management personnel of the company is set out below:
Short‑term employee benefits
Post employment benefits
31 December
2019
$
31 December
2018
$
613,183
92,762
705,945
763,526
99,387
862,913
The remuneration above relates to directors fees, consultancy fees and superannuation paid to entities associated with Fred
Bart, Cheryl Bart and Ian Dennis and the remuneration of the two senior executives of Audio Pixels Limited in Israel.
(c) Transactions with related entities
During the year ended 31 December 2019, the Company paid a total of $107,857 (year ended
31 December 2018 ‑ $107,857) to 4F Investments Pty Limited, a company associated with Mr Fred Bart in respect of
directors fees and superannuation for Mr Fred Bart and Mrs Cheryl Bart.
During the year ended 31 December 2019, the Company paid a total of $41,063 (year ended 31 December 2018 ‑ $41,063)
to Dennis Corporate Services Pty Limited, a company associated with Mr Ian Dennis in respect of directors fees
and superannuation.
During the year ended 31 December 2019, the Company paid interest of $Nil (year ended 31 December 2018 ‑ $125,918)
on a convertible note to 4F Investments Pty Limited, a company associated with Mr Fred Bart.
During the year, the Company paid $30,000 (31 December 2018 ‑ $30,000) to Dennis Corporate Services Pty Limited,
a company associated with Mr Ian Dennis in respect of consulting fees for company secretarial and accounting services.
On 1 June 2018, the company exercised an option to renew a lease in respect of office premises at Suite 3, Level 12,
75 Elizabeth Street Sydney for a period of forty eight months to 30 March 2022. The Company recharged $30,441
(year ended 31 December 2018 ‑ $28,441) of the rent and other tenancy charges to Electro Optic Systems Holdings
Limited, a company of which Fred Bart and Ian Dennis are directors and $30,441 (year ended 31 December 2018 ‑ $28,441)
to 4F Investments Pty Limited, a company controlled by Fred Bart and $60,882 (year ended 31 December 2018 ‑ $56,882)
to another tenant who is a shareholder in the company.
In the previous year, a convertible note of $1,500,000 was exercised on 7 November 2018 and resulted in the issue of
154,959 ordinary shares to 4F Investments Pty Limited, a company controlled by Fred Bart, at a price of $9.68.
45
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
21. Earnings per Share
Basic (loss) per share
Diluted (loss) per share (b)
(Loss) (a)
31 December
2019
31 December
2018
(22.02) cents
(16.67) cents
(22.02) cents
(16.67) cents
(6,231,930)
(4,519,721)
Weighted average number of Ordinary Shares
28,301,720
27,112,427
(a)
(Loss) used in the calculation of basic earnings per share are the same as the net (loss) in the Statement of profit or loss
and other comprehensive income.
(b) There are potential ordinary shares to be issued in relation to the issue of 203,000 unlisted employee options issued on
17 December 2018 at an exercise price of $16.20. These options expire on 17 December 2023. The unlisted employee
options have not been included in dilutive EPS, as they are anti‑dilutive.
22. Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the consolidated
entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and
to assess performance.
The identification of the consolidated entity’s reportable segments has not changed from those disclosed in the previous
2018 report.
The consolidated entity operates in Australia and Israel.
Products and services within each segment
Digital speakers
The subsidiary company in Israel is developing a digital speaker and has not reached the stage of generating any revenue
from the technology.
Segment Revenues
Digital speakers
Total of all segments
Segment Results
Digital speakers
(Loss) before income tax
Income tax gain/(expense)
(Loss) for the period
46
272,520
272,520
86,961
86,961
(6,231,930)
(6,231,930)
‑
(4,519,721)
(4,519,721)
‑
(6,231,930)
(4,519,721)
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
22. Segment Information (Cont.)
segment Assets and Liabilities
Digital speakers
Total all segments
Unallocated
Consolidated
Assets
Liabilities
31 December
2019
$
31 December
2018
$
31 December
2019
$
31 December
2018
$
9,753,108
9,753,108
‑
14,338,371
14,338,371
‑
2,519,572
2,519,572
‑
1,191,809
1,191,809
‑
9,753,108
14,338,371
2,519,572
1,191,809
Assets used jointly by reportable segments are allocated on the basis of the revenue earned by the individual reportable segments.
other segment Information
Depreciation and amortisation
of segment assets
Acquisition of segment assets
31 December
2019
$
31 December
2018
$
31 December
2019
$
31 December
2018
$
490,405
490,405
‑
150,040
150,040
‑
223,556
223,556
‑
409,405
150,040
223,556
46,403
46,403
‑
46,403
Digital speakers
Total all segments
Unallocated
Consolidated
Information on Geographical segments
Geographical segments
31 December 2019
Australia
Israel
Total
31 December 2018
Australia
Israel
Total
Revenue
from external
Customers
$
150,757
‑
150,757
86,168
793
86,961
segment
Assets
$
8,394,835
1,358,273
9,753,108
13,473,871
864,500
14,338,371
Acquisition
of segment
Assets
$
‑
223,556
223,556
‑
46,403
46,403
47
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
23. Financial Risk Management Objectives and Policies
The consolidated entity’s principal financial instruments held during the year comprise receivables, payables, cash and
short term deposits.
Due to the small size of the consolidated entity significant risk management decisions are taken by the board of directors.
These risks include market risk (including fair value interest rate risk, cash flow interest rate risk and price risk), credit risk
and liquidity risk. The Directors do not plan to eliminate risk altogether, rather they plan to identify and respond to risks in
a way that creates value for the company and its shareholders. Directors and shareholders appreciate that in order for the
consolidated entity to compete and grow, a long term strategy needs to involve risk taking for reward.
The consolidated entity does not use derivative financial instruments to hedge these risk exposures.
Risk exposures and Responses
(a) Interest rate risk
The consolidated entity’s exposure to market interest rates relates primarily to the consolidated entity’s cash holdings and short
term deposits.
At balance date, the consolidated entity had the following mix of financial assets exposed to Australian interest rate risk that are
not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
31 December
2019
$
31 December
2018
$
5,823,291
11,019,092
The consolidated entity constantly analyses its interest rate exposure. Within this analysis consideration is given to potential
renewals of existing positions, alternative financing and the mix of fixed and variable interest rates.
At 31 December 2019, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post tax (loss) and equity would have been affected as follows:
Judgements of reasonably
possible movements
Post tax Profit
Higher/(Lower)
equity
Higher/(Lower)
Consolidated entity
+1% (100 basis points)
‑0.5% (50 basis points)
31 December
2019
$
31 December
2018
$
31 December
2019
$
31 December
2018
$
53,135
(26,567)
110,191
(55,095)
53,135
(26,567)
110,191
(55,095)
The movements in profits are due to higher/lower interest rates on cash and cash equivalents balances. The cash and cash
equivalents balances were lower in December 2019 than in December 2018 and accordingly the sensitivity is lower.
48
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
23. Financial Risk Management Objectives and Policies (Cont.)
(b) Foreign currency risk
The consolidated entity has a foreign currency risk since the acquisition of Audio Pixels Limited. Audio Pixels Limited
operates in Israel and all transfer of funds to Audio Pixels Limited are denominated in US dollars. The consolidated entity
does not hedge its US dollar exposure.
The carrying amounts of the consolidated entity’s foreign currency (US$) denominated monetary assets and monetary
liabilities at the end of the reporting period are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Liabilities
Assets
31 December
2019
$
31 December
2018
$
31 December
2019
$
31 December
2018
$
‑
‑
‑
‑
1,423,733
933,743
510,598
129,106
‑
1,518,208
74,268
‑
All US$ denominated financial instruments were translated to A$ at 31 December 2019 at the exchange rate of 0.7013
(2018: 0.7058).
At 31 December 2019 and 31 December 2018, had the Australian Dollar moved, as illustrated in the table below, with all
other variables held constant, post tax loss and equity would have been affected as follows:
Judgements of reasonably
possible movements
Post tax Loss
Higher/(Lower)
equity
Higher/(Lower)
Consolidated
AUD/USD +10%
AUD/USD ‑5%
2019
$
2018
$
2019
$
2018
$
512,526
(296,725)
307,883
(144,973)
512,526
(296,725)
307,883
(144,973)
Management believes the balance date risk exposures are representative of risk exposure inherent in financial instruments.
(c) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the
consolidated entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties which
are continuously monitored.
The credit risk on liquid funds is limited because the counterparties are major banks with high credit‑ratings assigned by
international credit agencies.
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Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
23. Financial Risk Management Objectives and Policies (Cont.)
(d) Liquidity risk management
The consolidated entity’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. The consolidated entity’s investments in money market instruments all have a
maturity of less than 3 months.
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate risk
management framework for the management of the consolidated entity’s short, medium and long term funding and liquidity
requirements. The consolidated entity manages liquidity by maintaining adequate cash reserves by continuously monitoring
forecast and actual cash flows and managing maturity profiles of financial assets.
The following tables detail the consolidated entity’s remaining contractual maturity for its non‑derivative financial assets and
non‑derivative financial liabilities. The tables have been drawn up based on the undiscounted contractual maturities of the
financial assets and financial liabilities including interest that will be earned on these assets except where the consolidated
entity anticipates that the cash flow will occur in a different period.
Weighted
average effective
interest rate
%
Less than
1 month
$
1‑3 months
$
3 months
to 1 year
$
1‑5 years
$
31 December 2019
Assets
Non interest bearing
Fixed rate instruments
31 December 2018
Assets
Non‑interest bearing
Fixed rate instruments
0.00
1.19
0.00
2.24
509,839
2,318,723
‑
3,010,544
225,827
2,039,617
‑
9,041,050
‑
‑
‑
‑
‑
‑
‑
‑
All financial liabilities are expected to be settled under commercial terms of within 12 months.
(e) Commodity price risk
The consolidated entity has no exposure to commodity price risk.
(f) Other price risks
The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the
financial statements approximate their fair values.
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Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
24. Financial Instruments
Fair value of financial instruments
This note provides information about how the consolidated entity determines fair values of various financial assets and
financial liabilities.
Financial liabilities
(a)
In the prior financial year, convertible notes with a face value of $3,000,000 included a derivative liability to which a
fair value was ascribed. The derivative liability was valued using the Black‑Scholes option pricing model. An input into
the Black‑Scholes option pricing model was the expected share price volatility over the remaining term of the options.
The expected share price volatility used in the option valuation at reporting date was 50.00% which was based on
historical share price volatility.
The fair value of the derivative liability was sensitive to changes in share price volatility. Increases in volatility increase the
fair value of the derivative liability and vice versa.
The fair value hierarchy was Level 3. The convertible note was converted to equity prior to the end of the
comparative period.
25. Subsequent Events
The Directors are not aware of any significant events since the end of the financial year and up to the date of this report.
26. Parent Entity Disclosures
Financial position
Assets
Current assets
Non‑current assets
Total assets
Liabilities
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
(Accumulated losses)
Total equity
Financial performance
(Loss) for the period
Other comprehensive income
31 December
2019
$
31 December
2018
$
5,317,712
37,247,213
42,564,925
39,786,411
2,447,750
42,234,161
260,349
190,264
119,730
‑
450,613
42,114,312
119,730
42,114,431
66,217,433
66,217,433
(20,496,789)
(21,006,253)
(3,606,332)
42,114,312
(3,096,749)
42,114,431
(509,583)
(1,053,434)
‑
‑
(509,583)
(1,053,434)
51
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2019
27. Controlled Entity
name of entity
Parent Entity
Audio Pixels Holdings Limited
Controlled Entities
Audio Pixels Limited
Audio Pixels Technologies Pty Limited
28. Commitments
Country of
Incorporation
31 December
2019
%
31 December
2018
%
Australia
Israel
Australia
100.00
100.00
100.00
100.00
The subsidiary company, Audio Pixels Limited of Israel has entered into various purchase orders and commitments of
$794,566 (2018: $286,427) with various strategic partners which will become payable once qualified products are delivered
to the company.
29. Additional Company Information
Audio Pixels Holdings Limited is a listed public company, incorporated and operating in Australia.
Registered office and Principal Place of Business
Suite 3, Level 12
75 Elizabeth Street
Sydney NSW 2000
Australia
Tel: (02) 9233 3915
Fax: (02) 9232 3411
www.audiopixels.com.au
The Company has 15 (2018: 10) employees.
52
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 AsX ADDItIonAL InFoRMAtIon
Additional information required by the Australian Stock Exchange Listing Rules and not disclosed elsewhere in this report.
Home Exchange
The Company’s ordinary shares are quoted on the Australian Stock Exchange Limited under the trading symbol “AKP”.
The Home Exchange is Sydney. The Company also has a Level 1 American Depositary Receipts (ADR) program and
quotation on the OTC market in the United State of America under the code “ADPXY” which is under the NASDAQ
International Designation program.
Substantial Shareholders
At 21 February 2020 the following substantial shareholders were registered:
Fred Bart Group
Link Traders (Aust) Pty Ltd
Voting Rights
ordinary shares
Percentage of total
ordinary shares
5,819,122
1,641,647
20.56%
5.80%
At 21 February 2020 there were 2,174 holders of fully paid ordinary shares.
Rule 74 of the Company’s Constitution stipulates the voting rights of members as follows:
“Subject to any rights or restrictions for the time being attached to any class or classes of shares and to this Constitution:
(a) on a show of hands every person present in the capacity of a Member or a proxy, attorney or representative (or in more
than one of these capacities) has one vote; and
(b) On a poll every person present who is a Member or proxy, attorney or representative has member present has:
(i) For each fully paid share that the person holds or represents ‑ one vote; and
(ii) For each share other than a fully paid share that the person holds or represents ‑ that proportion of one vote that
the amount paid (not credited) on the shares bears to the total amount paid and payable on the share (excluding
amounts credited).”
Other Information
In accordance with Listing Rule 4.10.19, the Company has used the cash and assets in a form readily convertible to cash that
it had at the time of admission in a way consistent with its business objectives.
Distribution of Shareholdings
At 21 February 2020 the distribution of ordinary shareholdings were:
Range
1‑1,000
1,001 ‑ 5,000
5,001 ‑ 10,000
10,001 ‑ 100,000
100,001 and over
There were 36 ordinary shareholders with less than a marketable parcel.
There is no current on‑market buy‑back.
ordinary
shareholders
number of
shares
1,223
550
200
163
38
2,174
477,300
1,403,233
1,605,067
4,343,653
20,472,467
28,301,720
53
Annual Report 2019 • Audio Pixels Holdings Limited ACN 094 384 273 CORPORATE DIRECTORY
tWentY LARGest oRDInARY sHAReHoLDeRs
Twenty Largest Ordinary Shareholders
Directors
At 21 February 2020 the 20 largest ordinary shareholders held 63.53% of the total issued fully paid quoted ordinary shares
of 28,301,720.
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Fully Paid
ordinary shares
Percentage of
total
shareholder
1. Landed Investments (NZ) Limited
Company secretary
2. Altshuler Shacham Trusts Ltd
3. HSBC Custody Nominees (Australia) Limited
Ian Dennis
4. Link Traders (Aust) Pty Limited
5. BNP Paribus Nominees Pty Ltd
Registered off ice
6. Frederick Bart
7. Bart Superannuation Pty Limited
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
8. James John Bart
9. Kam Superannuation Fund Pty Limited
Israel off ice
3 Pekris Street
Rehovot
ISRAEL 76702
10. Jamber Investments Pty Ltd
11. Cheryl Bart
Telephone: +61 2 9233 3915
Facsimile: +61 2 9232 3411
Email:
12. Citicorp Nominees Pty Limited
iandennis@audiopixels.com.au
13. Decante Pty Limited
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