More annual reports from Audio Pixels Holdings Limited:
2024 ReportAudio Pixels Holdings Limited
ACN 094 384 273
AnnUAL
RePoRt
2024
Directors
Fred Bart (Chairman)
Cheryl Bart AO
Mark Ureda (resigned 16 July 2024)
Shawn van Boheemen (appointed 16 July 2024)
Company secretary
Shawn van Boheemen
Registered off ice
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
Telephone: +61 2 9233 3915
Facsimile:
+61 2 9232 3411
Email:
shawn@audiopixels.com.au
Website
www.audiopixels.com.au
Auditor
Moore Australia
Level 44
600 Bourke Street
Melbourne VIC 3000
Australia
share Registry
Computershare Investor Services Pty Limited
6 Hope Street
Ermington NSW 2115
Australia
GPO Box 7045
Sydney NSW 1115
Australia
Telephone: 1300 855 080 or
+61 3 9415 5000 outside Australia
Facsimile:
1300 137 341
Israel off ice
3 Pekris Street
Rehovot
ISRAEL 76702
Telephone: + 972 73 232 4444
Facsimile:
+ 972 73 232 4455
Email:
danny@audiopixels.com
Bankers
St George Bank
200 Barangaroo Avenue
Barangaroo
SYDNEY NSW 2000
Australia
CORPORATE DIRECTORY
Directors’ Report ................................................................................................................................................... 2
Auditor’s Independence Declaration .......................................................................................14
Directors’ Declaration ................................................................................................................................ 15
Consolidated Statement of Profit or Loss and
Other Comprehensive Income ...................................................................................................... 16
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 .................................................................................................................................. 21
Consolidated Entity Disclosure Statement ................................................................. 54
Independent Audit Report ................................................................................................................. 55
ASX Additional Information ............................................................................................................... 59
Twenty Largest Ordinary Shareholders ............................................................................... 60
Contents
Audio Pixels Holdings Limited ACN 094 384 273
1
Annual Report 2024
The Directors of Audio Pixels Holdings Limited submit herewith the financial report of the company for the financial
year ended 31 December 2024. 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
Particulars
Fred Bart
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. He is a member of the Audit Committee and
a member of the Nomination and Remuneration Committee.
He is also Chairman of Noxopharm Limited and Chairman of Phoslock Environmental
Technologies Limited.
Cheryl Bart AO
Non‑executive director. Appointed to the Board on 26 November 2001. Cheryl Bart is a lawyer
and company director. She is Chairman of Tilt Renewables Limited and Ted X Sydney. Cheryl is a
non‑executive director of SG Fleet Group Limited and the Moriah College Foundation.
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.
Mark Ureda
Non‑executive director. Mr. Ureda brings to the company extensive executive experience
in audio systems, technology trends and product strategies. In 2010 he joined Harman
International as president of JBL Professional. He subsequently served as VP/CTO and then senior
vice president of Harman Professional. He retired in 2018 and joined Biamp Systems as executive
advisor and continues to serve on the boards of Loud Audio and Bose Professional.
Prior to joining Harman, Mr. Ureda was senior vice president of corporate strategy at Northrop
Grumman specializing in mergers and acquisitions and held board positions at Navia Aviation
AS, and Remotec UK Limited.
Shawn van
Boheeme
Non‑executive director. Mr. van Boheemen’s experience in commercial finance leadership
spans 30 years across various sectors, including healthcare, manufacturing, biotech and
financial services.
His expertise includes Australian ASX and ASIC reporting, SEC reporting in the USA, compliance
and regulatory affairs, internal and external audit work, taxation, business and financial analytics,
IP protection, as well as regulatory and financial reporting locally and in the United States.
He has held senior financial positions in both Australian and multinational organisations,
including Covance, Unomedical, M.D. Sass, and New York Life Insurance. He is currently CFO of
Noxopharm Limited (ASX: NOX) and a Non‑executive director/company secretary of Phoslock
Environmental Technologies Limited (ASX: PET).
Shawn holds a Master of Commerce degree with a major in Accounting (UWS) and a Bachelor
of Business degree in Accounting and Commercial Law (UWS). He is a Fellow of the Australian
Society of Certified Practising Accountants and a Justice of the Peace in NSW.
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
2
Annual Report 2024
DIRECTOR’S REPORT
Directorships of other listed companies
The abovenamed directors held office during the whole financial year except for:
Mr Mark Ureda – resigned 16 July 2024
Shawn van Boheemen – appointed 16 July 2024
Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are
as follows:
Name
Company
Period of directorship
Fred Bart
Weebit Nano Limited
Noxopharm Limited
Phoslock Environmental Technologies Limited
March 2018 to 27 June 2023
Since 8 May 2020
Since 18 January 2024
Mark Ureda
N/A
N/A
Cheryl Bart
SG Fleet Australia Limited
Since February 2014
Shawn van Boheemen
Phoslock Environmental Technologies Limited
Since 18 January 2024
Principal activities
The principal activity of the Company is holding 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 2024 was $8,170,538 (2023: $14,614,491).
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.
Review of operations
During the reporting period, the company’s achievements were primarily technical, focused on advancing our proven
Digital Sound Reconstruction (DSR) technology toward mass production and commercialisation.
Building on the success of our GEN‑I development platform, we have been transitioning from a company wholly dedicated
to R&D into an organization driven by commercial objectives and market opportunities.
Our efforts have been concentrated on delivering customer engineering samples in a manner that seamlessly scales
to large‑scale mass production. This process involves:
Close collaboration with vendors to refine and optimize fabrication techniques used during prototyping.
Redesign and fabrication of our embedded high‑voltage mixed‑signal controller (HVD) to meet commercial requirements.
Enhancements to chip assembly and packaging, ensuring alignment with performance and cost targets for the final
commercial product.
Additionally, we are placing strong emphasis on mitigating supply chain dependencies and expanding our intellectual
property portfolio, ensuring the maximum possible protection for our industry‑altering technology as it enters the market.
Management will continue to update stakeholders as specific milestones and developments are solidified.
Audio Pixels Holdings Limited ACN 094 384 273
3
Annual Report 2024
DIRECTOR’S REPORT
Review of operations (Cont.)
Placement to EarthMountain
Earth Mountain committed in writing to take 308,325
ordinary shares ($4,316,550) at $14.00 per share in the
placement announced on 24 August 2022 subject to
receiving approvals from Jiangsu Province Branch of the
Ministry of Commerce, National Development and Reform
Commission and the State Administration of Foreign
Exchange to settle their commitment. As at the date of
this report and as advised by Earth Mountain in writing
on 23 January 2024, EarthMountain had yet to receive the
necessary approvals from the Jiangsu Province Branch
of the Ministry of Commerce, National Development
and Reform Commission and the State Administration of
Foreign Exchange in China to settle their commitment.
Due to the prolonged delay in EarthMountain’s committed
placement stemming from continued regulatory obstacles
in China, until such time as EarthMountain provide a
meaningful and verifiable update, the Board can no longer
consider that the placement funds will be received.
Unsecured Loans
The total unsecured loans outstanding at 31 December
2024 from 4F Investments Pty Limited, a company
associated with Mr Fred Bart, was $5,188,353 (2023:
$2,469,988.) The outstanding unsecured loan attracts an
interest rate of 12% per annum (accruing from 1 January
2024 until maturity). The first $969,988 of the loan balance
is repayable on receipt of the EarthMountain placement
proceeds, with the balance of the loan repayable from the
proceeds of a capital raise by the Company. If a capital
raise in undertaken before the EarthMountain placement
funds are received, the entire loan balance and accrued
interest is repayable from the proceeds of the capital
raise. The unsecured loan facility has a maturity date of
31 December 2025.
Convertible Notes
Of the $5,000,000 of Convertible Notes issued during 2023,
2 note holders redeemed their notes on maturity (30 April
2024), and were repaid $450,000 in cash plus accrued
interest. The note issued to 4F Investments Pty Limited (a
Company controlled by Fred Bart, Chairman) in October
2023 for $500,000 was cancelled and converted into the
unsecured loan facility on 29 May 2024, as it was issued to
a related party without shareholder approval.
At 31 December 2024, the balance of the notes issued
during 2023 is $4,050,000.
These Convertible Notes were previously modified to
mature on 31 January 2024, however were subsequently
modified to mature on 30 April 2024, 30 September 2024
and 31 December 2025. The modifications have not
changed any other terms, these notes are unsecured,
unlisted and attract an interest rate of 12% per annum
payable quarterly in arrears and convertible into ordinary
shares at $9.04, based on the five‑day volume weighted
average share price of Audio Pixels Holdings Limited on
the date of the agreement, unless a share capital raise is
undertaken at a lower price, with a conversion price floor
of $5.00.
In order to meet ASX Listing Rule 6.1 requirements, the
Company obtained noteholder approval on 5 September
to include a conversion floor price of $5.00 to the existing
notes so the maximum dilutionary impact on conversion
of the notes can be calculated.
These modifications to the Notes issued during 2023
referenced above were not deemed substantial and have
been accounted for with a $711,270 modification gain and
$237,000 derivative liability loss on modification of the
Convertible Notes recorded during the year.
On 5 September 2024, 21 November 2024 and 9
December 2024, the Company announced it has issued
an additional aggregate $8,450,000 in Convertible Notes
to sophisticated investors. The terms of the Convertible
Note will include a maturity date of 31 December 2025,
are unsecured, attract an interest rate of 12% per annum
capitalised until the Note is fully repaid or converted
into Shares. The Notes are convertible to ordinary shares
at $9.04, or a lower price if the Company undertakes a
placement of ordinary shares at any time prior to the
expiry date. The Notes have conversion price floor of $5.00.
As an incentive for participating in the Notes, the investors
will receive 1,690,000 unlisted options (100,000 options
per $500,000 invested) at a strike price of 20% higher
than the conversion price of $9.04, namely $10.84. These
unlisted options expire on 4 May 2027.
Further information
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.
Changes in state of affairs
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.
Audio Pixels Holdings Limited ACN 094 384 273
4
Annual Report 2024
DIRECTOR’S REPORT
Review of operations (Cont.)
Significant events after balance date
On 26 March 2025, the Unsecured loans with carrying
amount of $5,188,353 as at 31 December 2024 was
approved and converted to Convertible Notes on the
same terms given to the existing convertible note
subscribers with 1,354,698 maximum number of ordinary
shares to be issued.
Other than the above, there has not been any other
matters 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 are in compliance with all
applicable environmental legislation and regulations.
The Directors have considered the environmental,
social and governance (ESG) aspects of the operations
of the consolidated entity and do not believe that
the consolidated entity is exposed to any material
climate‑related or other emerging risks.
Indemnification and Insurance of
Officers and Auditors
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 contract of insurance
prohibits disclosure of the nature of the liability and the
amount of the premium.
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.
Directors’ interests and benefits
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 2001 as at the date of this report are:
Name
Ordinary Shares
Fred Bart
5,984,480
Cheryl Bart
500,000
Shawn van Boheemen
Nil
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 standard employment contracts
for the executives of Audio Pixels Limited including at
will employment and a notice period of three months
for termination.
Audio Pixels Holdings Limited ACN 094 384 273
5
Annual Report 2024
DIRECTOR’S REPORT
Remuneration report (Audited) (Cont.)
The key management personnel of Audio Pixels Holdings Limited during the year were:
Fred Bart – Chairman and Chief Executive Officer
Cheryl Bart – Non executive director
Mark Ureda – Non‑executive director (resigned 16 July 2024)
Shawn van Boheemen – Non‑executive director and Company Secretary (appointed 16 July 2024)
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 director’s fees were increased to a total of $250,000 per
annum in line with the increased activities of the company. The actual director’s 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
2024
$
Year ended
31 December
2023
$
Year ended
31 December
2022
$
Year ended
31 December
2021
$
Year ended
31 December
2020
$
Income
248,771
286,824
482,841
108,691
191,434
Net (loss) before tax
(8,170,538)
(14,614,491)
(2,435,719)
(3,309,869)
(12,102,367)
Net (loss) after tax
(8,170,538)
(14,614,491)
(2,435,719)
(3,309,869)
(12,102,367)
Year ended
31 December
2024
$
Year ended
31 December
2023
$
Year ended
31 December
2022
$
Year ended
31 December
2021
$
Year ended
31 December
2020
$
Share price at start of year
8.18
10.00
22.50
24.05
15.35
Share price at end of year
6.20
8.18
10.00
22.50
24.05
Dividend Paid
0.00
0.00
0.00
0.00
0.00
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) as at the date of this report.
Ordinary
Shares
No.
Granted as
remuneration
No.
Received on
exercise of
options
No.
Number of
options over
ordinary
shares
No.
Purchases/
(Sales)
No.
Mr Fred Bart
5,984,480*
‑
‑
500,000*
‑
Mrs Cheryl Bart
500,000
‑
‑
‑
‑
Mr Danny Lewin
1,438,619
‑
‑
‑
‑
Mr Yuval Cohen
1,397,876
‑
‑
‑
‑
* Included in the above shareholdings in respect to both Fred Bart and Cheryl Bart are 782,777 (2023: 782,777) shares in Audio Pixels Holdings Limited held by
the Bart Superannuation Fund, in respect to which each has a relevant interest.
**Held by a related party to the Director.
Audio Pixels Holdings Limited ACN 094 384 273
6
Annual Report 2024
DIRECTOR’S REPORT
Remuneration report (Audited) (Cont.)
Transactions with related entities
All transactions with KMP and their related parties are made on terms equivalent for those that prevail in arm’s
length transactions.
During the year ended 31 December 2024, the Company paid a total of $109,355 (2023: $109,456) 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, the Company paid $45,000 (2023: $37,500) to Noxopharm Limited, a company associated with Mr Fred
Bart who is chairman, in respect of consulting fees for company secretarial and accounting services provided by Shawn van
Boheemen. At 31 December 2024 the Company has an accrued payable owing to Noxopharm Limited for $45,000.
The total unsecured loans outstanding at 31 December 2024 from 4F Investments Pty Limited was $5,188,353 (2023:
$2,469,988). The outstanding unsecured loan attracts an interest rate of 12% per annum (accruing from 1 January 2024
until maturity). The first $969,988 of the loan balance is repayable on receipt of the EarthMountain placement proceeds,
with the balance of the loan repayable from the proceeds of a capital raise by the Company. If a capital raise in undertaken
before the EarthMountain placement funds are received, the entire loan balance and accrued interest is repayable from the
proceeds of the capital raise. The unsecured loan facility has a maturity date of 31 December 2025.
During the year, the Company paid $74,709 (2023: $135,673) interest on the unsecured loan to 4F Investments Pty
Limited. Nominal interest has been accrued in the financial statements at 31 December 2024 of $520,542 (2023: $74,709).
In addition, an effective interest expense was recognised at 31 December 2024 of $335,567 (2023: Nil).
During the reporting period, 4F Investments Pty Limited purchased a convertible note from an existing note holder
for a face value of $250,000 with unlisted options of 25,000. There is no change to the original terms of the convertible
note agreement.
The lease in respect of office premises at Suite 3, Level 12, 75 Elizabeth Street Sydney expired on 30 March 2022.
The Company has not renewed the lease and continues to occupy the premises on a month to month basis. The Company
recharged rent and other tenancy charges of $36,045 (2023: $34,790) to 4F Investments Pty Limited, a company controlled
by Fred Bart.
All Executive KMPs are employed under a contract with the consolidated entity. The terms of the contracts are as follows:
(a) Danny Lewin
Contract term
Ongoing contract with no fixed term
Notice period
3 months
Termination rights Entitled to a 3 times the employee salary at the timer of termination
(b) Yuval Cohen
Contract term
Ongoing contract with no fixed term
Notice period
6 months
Termination rights in accordance with the relevant state laws
Audio Pixels Holdings Limited ACN 094 384 273
7
Annual Report 2024
Remuneration report (Audited) (Cont.)
The following table sets out the remuneration of each key management personnel of the Company:
Short Term
Long term employee benefits
Total
December 2024
Directors’
fees/Salary
$
Non-
monetary
$
Super
annuation
$
Social
Security
$
Long
service
leave
$
Fred Bart
60,864
‑
6,847
‑
‑
67,711
Cheryl Bart
37,415
‑
4,209
‑
‑
41,624
Mark Ureda
20,813
‑
‑
‑
‑
20,813
Shawn van Boheemen **
107,143
‑
1,971
-
-
109,114
Danny Lewin
220,411
‑
‑
65,054
‑
285,465
Yuval Cohen
267,300
38,352
30,071
‑
8,810
344,533
713,946
38,352
43,098
65,054
8,810
869,260
December 2023
Fred Bart
61,000
‑
6,925
‑
‑
67,925
Cheryl Bart
37,500
‑
4,031
‑
‑
41,531
Ian Dennis*
41,875*
‑
2,313
‑
‑
44,188
Mark Ureda
20,813
-
-
-
-
20,813
Danny Lewin
170,680
41,277
‑
62,337
‑
274,294
Yuval Cohen
255,150
24,260
27,459
‑
3,563
310,432
587,018
65,537
40,728
62,337
3,563
759,183
* The amounts disclosed for Ian Dennis include director’s fees of $24,188 and consulting fees of $20,000 (2023: directors fees $41,625 and consulting fees
$30,000).
** The amounts disclosed for Shawn van Boheemen include director’s fees of $19,114 and consulting fees of $90,000 (2023: consulting fees $37,500).
***The directors do not have share based payments.
Other non‑monetary benefits include annual leave and long service leave provision increases during the year.
END AUDITED REMUNERATION REPORT
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
8
Annual Report 2024
Audit Committee
The Audit Committee was formally constituted on 29 August 2014 with all three directors appointed to the Audit
Committee. Shawn van Boheemen is appointed chair of the Audit Committee.
Directors’ meetings
During the year the Company held three meetings of directors, one meeting of the Audit Committee and one meeting 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
Held
Attended
Held
Attended
Held
Attended
Mr Fred Bart
3
3
1
1
1
1
Mrs Cheryl Bart
3
3
1
‑
1
1
Mr Mark Ureda
3
3
1
1
1
1
Mr Shawn van Boheemen
‑
‑
‑
‑
‑
‑
All current board members are on the Audit Committee and the Nomination and Remuneration Committee.
Interests under options
As at the date of this report, the unissued ordinary shares of the Company under options are:
Grant date
Expiry date
Exercise Price
Number outstanding
16/4/21
16/4/25
$27.70
122,000
1/12/22
1/12/25
$14.00
30,000
1/12/22
1/2/26
$14.00
110,000
5/5/2023
4/5/2026
$7.59
500,000
22/5/2023
4/5/2026
$10.84
500,000
23/11/2023
4/5/2026
$10.84
400,000
5/9/2024
4/5/2027
$10.84
1,290,000
21/11/2024
4/5/2027
$10.84
200,000
9/12/2024
4/5/2027
$10.84
200,000
3,352,000
The holders of these options do not have any rights to participate in any share issue of the company or receive dividends
before the options are exercised.
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
9
Annual Report 2024
Ethical Labour
The consolidated entity has established measures
regarding fair labour practices and guidelines that create
a respectful and safe work environment for our employees
globally. We are committed to treat all of our employees
with respect and we strictly prohibit the use of slavery,
forced labour and human trafficking. To prevent the
occurrence of forced, compulsory or child labour, we have
implemented local labour policies and practices to comply
with the Modern Slavery Act.
Any person who applies for employment at AKP does so
on a voluntary basis and all employees are legally entitled
to leave upon reasonable notice without penalty.
In accordance with AKP’s global recruiting guidelines,
offers of employment must be conditional upon
completion of required background checks. Background
checks are required to protect the safety of employees and
to ensure that employees meet the standards of AKP.
Diversity
The Company values diversity and recognises the benefits
it can bring to the organisation’s ability to achieve its
goals. The Company’s diversity policy (“Diversity Policy”)
was updated on 31 December 2021 and outlines its
diversity policy in relation to gender, age, cultural
background, ethnicity, employment of veterans and other
factors to leverage the wides pool of available talent.
A copy of the Company’s Diversity Policy is available on
the Company’s web site.
Material Business Risks
Since its founding management has openly and frequently
delineated its assessment of the ongoing and emerging
risks, challenges and concerns that might influence
the company success and opportunities. In fact, as a
technology company engaged in transforming century
old technological conventions; continual analysis of risks
and failures have been baked into the company’s DNA as
the guiding principle of operation.
1. Technological Viability
AKP is engaged in revolutionizing an incumbent
technology that has been an important and prevalent
technological staple, used extensively by mankind, since
its advent by Alexander Graham Bell roughly 150 years
ago. The industry at large has unsuccessfully spent many,
many billions of dollars over decades searching for ways
to advance sound reproduction to the modern era. AKP’s
radical approach is the best chance the industry has to
succeed in its ambition to evolve sound reproduction into
the digital era, for example in the same manner that the
LCD has completely replaced the CRT and digital memory
has replaced magnetic media for data storage.
However, this effort requires the expansion and advent
of many technological disciplines, some of which were
either unknown or not fully understood. Achieving
sufficient understanding as to the intersection of varying
physical regimes prevalent in micro‑mechanical structures
was impossible before structures of this scale could be
physically fabricated and characterized. This achievement
alone required very deep understanding of the capabilities
and limitations of available microfabrication tools
and techniques.
AKP has and continues to be engaged in a comprehensive
research and development effort to bring our
technology to fruition. As such and until completion
of the technology, its products, production methods,
fulfillment of the technological vision and mission will by
its very nature maintain certain levels of technological
uncertainties and risks. Throughout and to the best of
reason, management has tried to share its assessment
at common sense intervals of the remaining risks,
challenges and concerns, based on technical progress
actualities, competitive concerns, and in consideration of
confidentiality and intellectual property considerations.
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
10
Annual Report 2024
Material Business Risks (Cont.)
2. Finance and Capital
The Company requires additional capital to execute and
support its plans. The company’s ability to secure capital
in a timely manner depends among other factors on its
development status, investor interest, as well as the financial
state of capital markets. The Directors have determined
that the best result for a capital raise at this stage of the
company, is obtainable after the company has the ability
to properly demonstrate its technologies to potential
investors. In the interim the Company has been funding its
operations utilising unsecured loans from related parties and
convertible notes. The directors continue to monitor in real
time the status of achieving the demonstration milestone
and may choose to take further unsecured loans and /or
convertible notes if the capital raise is further delayed.
3. Intellectual Property
As a pioneer, the company has managed to amass an
impressive technology portfolio covering over 200
patents (and counting) in over a dozen patent families.
Nonetheless financial and human constraints limit our
ability to:
a.
Legally protect every aspect of the technology; and
b.
Limit the jurisdictions in which we are able file and
maintain patent protection.
The Company is extremely diligent ensuring that all
developments are originated within the company using
licensed and authorised tools. However, the very nature
of multidisciplinary development entangling a multitude
of technologies and tools might expose the company to
claims of IP infringement by various third parties.
Since its founding the company has used Israel’s leading IP
firm to advise and guide our IP strategies. To the best of its
ability and available resources the company has developed
methods, procedures and strategies to ensure originality
and or legal license as well as to protect its IP worldwide.
The company also put in place routine procedures to
investigate and react if needed to possible infringement or
unauthorized replication of its technologies.
Furthermore, our IP portfolio includes considerable
knowhow. Inherent to the model of a fabless company
is the necessity to sharing of such knowhow with third
party partners, vendors and service providers. Given
our limited ability to control or monitor third parties
management maintains reasonable caution when divulging
certain critical aspects and knowhow of our technology.
The sharing of critical information when required is done in
a manner that tries to minimise the risk of IP leakage, which
at time can come at the expense of elongating timelines.
4. Development Timeline / Time
To Market
There are a number of factors that have, and will
continue, to influence the pace of progress (beyond the
technological uncertainties associated with research and
development as stated above), namely:
Fabrication – MEMS fabrication differs greatly when
compared to fabrication of “traditional” integrated
circuitry, despite the fact that they many of the
same tools, techniques and facilities are used;
mainly in that there are no rigid design rules and
highly standardized batch processing techniques in
MEMS. By its very nature MEMS designs vary in their
electro‑mechanical and operational requirements,
requiring fabrication processes flow to be tailored to
the specific materials, dimensions, tolerances, etc. This
“one design‑one process”, necessitates an iterative,
trial‑and‑error approach, whereby designs are
fabricated, results are characterized, and then either
the fabrication process flow, and or the design or
both are modified, refined, or optimized accordingly
in order to achieve the desired end results – often a
cycle that needs to be repeated a number of times.
Historically converting the company’s MEMS into
silicon has taken between 10 and 14 months for each
major integration cycle. Such timelines are more or
less confirmative with the cycle times throughout
the fabless MEMS sector, even though AKP’s
designs require extending the electromechanical
specifications beyond the conventional norms of
associated with MEMS fabrication. The Company
originally started its development works with Sony
Semiconductor as its primary MEMS fabricator, and
after evaluation of a number of additional Fabs
ultimately shifted priority to Tower Semiconductor in
attempt to reduce production cycle timelines. More
recently, the company established a relationship with
Earth Mountain a Chinese based entity having highly
advanced facilities and expansive resources.
After extensive evaluation EarthMountain was
deemed capable of delivering faster turnaround with
superior results, a collaboration that has recently
borne the success that management was hoping to
achieve. This collaboration was memorialized in Dec
2021 in a comprehensive manufacturing agreement
which is subject to confidentiality clauses, however
as has been reported the agreement includes
substantial production capacity, which comes at
a time that the industry at large is struggling to
overcome capacity shortages.
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
11
Annual Report 2024
Material Business Risks (Cont.)
Fab Prioritization ‑ The business models of silicon
foundries are rooted in volume production and
therefore the Fabs tend to avoid conducting any
kind of development work especially for innovative
and nonconforming fabless companies such as AKP.
It is understood that even when a fab undertakes
development work, such endeavors must play
“second fiddle” to production customers, influencing
timelines (always for the worse). Exacerbating the
situation are the unprecedented global shortages of
semiconductor capacity experienced worldwide. These
unprecedented shortages have impacted virtually
every industry in particular those that heavily rely on
semiconductors such as the automotive and consumer
electronic industries, forcing companies such as Apple
and Ford, to delay, suspend, or even shutdown various
aspects of their production. A popular countermeasure
by some industry conglomerates to stockpile inventory
and “acquire” long term capacity, has put even further
strain on smaller companies, such as AKP.
Unfortunately, Silicon production cannot be turned on
or off with the flick of a switch; any change to production
lines can take months; while adding additional capacity
can take years and hundreds if not many billions of
dollars. Absent of the company owning its own silicon
foundry, the reality is that it must endure disruption and
unpredictability within its supply chain.
5. Reliance on Third Parties for Supply
and Production
By its very nature a fabless company such as ours is wholly
dependent on the production and assembly services that
are provided by third party suppliers. Management works
very closely with its providers, most recently with Earth
Mountain and its ASIC foundry as well as a number of
other related vendors, to ensure continuity of production
and packaging requirements, however, any disruption to
their business, for any reason, may materially impact AKP.
6. Key Personnel and Competition for
Human Resources as we manage growth
As we near our commercialization objectives we anticipate
considerable attention and demand for our revolutionary
products technologies. To support this transition and
growth, additional resources will be required to be added
to the company.
Traditionally the technology sector, in Israel in particular,
experience unprecedented shortages of human
capital when segments of the industry experience
unprecedented growth, or when capital becomes
capital readily available, or during expansion cycles by
multinational companies in Israel. This reality not only
makes recruiting talent extremely competitive but
induces the “poaching” of our exceptionally talented staff.
Management continues to work on ways to enhance our
employee incentive programs to better attract, recruit, and
retain the talent needed to execute our plans.
7. Cyber Security
Like every company in the world AKP’s systems, data, and
networks are subject and vulnerable to malicious attacks,
including computer viruses, spyware, ransomware, and
hosts of other emerging security concerns. The company
has spent and continues to spend considerable
resources to prevent unauthorized accesses, data loss,
and cyber malicious attacks, using the best of breed
cyber security systems. As a company poised to disrupt
a multibillion‑dollar industry management must
also assume that the company is, or it will become a
heightened target for IP theft and disruption is therefore
applying every reasonable means possible to protect its
intellectual property.
8. Currency Fluctuation
As an Australian company our finances and financials are
rooted in the Australian dollar, however the overwhelming
portion of expenditures and cashflow requirements are
conducted in Israeli and US currencies. Any fluctuation in
any of these currencies may have adverse effects on the
company’s capital requirements.
9. Conflicts in Israel
With the ongoing geo‑political instability and conflict
in Israel, this increases the risk of conflict and instability,
which in turn pose a risk to the Israel operation due
to the potential for operations to be disrupted, supply
chains impacted or the economic conditions in Israel to
deteriorate. The Company continues to monitor these risks
to the Israel operations.
10. Goods and Services Costs
Global shortages throughout the semiconductors have
spurred a meaningful increase in the costs of obtaining
parts. Scarce components and services not only saw
a dramatic and continual increase in pricing, but also
demand for larger and longer‑term commitments in order
to secure product and services.
11. Taxation
As an Australian resident company dealing in several
foreign jurisdictions, we need to continually assess the
taxation position of the whole group and keep abreast
of any changes in legislation which may have affect
future income.
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
12
Annual Report 2024
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 (including Independence
Standards) 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 14.
Signed in accordance with a resolution of directors made
pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Fred Bart
Director
Dated at Sydney this 31 day of March 2025
DIRECTOR’S REPORT
Audio Pixels Holdings Limited ACN 094 384 273
13
Annual Report 2024
Audio Pixels Holdings Limited ACN 094 384 273
Annual Report 2024
14
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.
(e) the information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
Fred Bart
Director
Dated at Sydney this 31 day of March 2025.
Audio Pixels Holdings Limited ACN 094 384 273
15
Annual Report 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Note
Consolidated
Year ended
31 December
2024
$
Consolidated
Year ended
31 December
2023
$
Income
2
248,771
286,824
Administrative expenses
(1,378,451)
(1,251,112)
Amortisation
‑
(44,139)
Depreciation
(371,596)
(388,918)
Directors’ fees and superannuation
(149,262)
(154,456)
Foreign exchange (losses)
(18,426)
(96,037)
Finance costs
(2,462,138)
(4,373,002)
Goodwill impairment
‑
(2,399,168)
Intangible asset impairment
‑
(110,686)
Gain in fair value of derivative liability
136,000
373,000
Gain on modification of convertible notes
711,270
162,235
Loss on initial recognition of convertible notes
(71,000)
(2,678,000)
Research and development expenses
(4,644,969)
(3,433,939)
Share based payments
(170,737)
(507,093)
(Loss) before income tax
2
(8,170,538)
(14,614,491)
Income tax benefit
3
‑
‑
(Loss) for the year
(8,170,538)
(14,614,491)
Other comprehensive (loss)
Items that may be reclassified subsequently to profit and loss:
Exchange differences arising on translation of foreign operations
18
(29,130)
(756)
Other comprehensive income/(loss) for the year, net of tax
(29,130)
(756)
Total comprehensive (loss) for the year
(8,199,668)
(14,615,247)
Notes to the financial statements are included on pages 21 to 53.
Audio Pixels Holdings Limited ACN 094 384 273
16
Annual Report 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Note
Consolidated
Year ended
31 December
2024
$
Consolidated
Year ended
31 December
2023
$
(Loss) attributable to:
Owners of the company
(8,170,538)
(14,614,491)
Total comprehensive (loss) attributable to:
Owners of the company
(8,199,668)
(14,615,247)
Earnings per share
Basic and diluted (cents per share)
22
(27.97)
(50.15)
Notes to the financial statements are included on pages 21 to 53.
Audio Pixels Holdings Limited ACN 094 384 273
17
Annual Report 2024
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Note
Consolidated
December
2024
$
Consolidated
December
2023
$
CURRENT ASSETS
Cash and cash equivalents
5
5,452,690
2,279,051
Financial assets held at fair value through P&L
6
1,000,000
‑
Other receivables
7
256,965
336,356
Prepayment
8
618,039
619,699
TOTAL CURRENT ASSETS
7,327,694
3,235,106
NON‑CURRENT ASSETS
Right of use asset
9
52,915
151,430
Property, plant and equipment
10
698,679
614,153
Other receivables
7
13,994
12,771
TOTAL NON‑CURRENT ASSETS
765,588
778,354
TOTAL ASSETS
8,093,282
4,013,460
CURRENT LIABILITIES
Trade and other payables
11
1,901,620
1,748,977
Lease liabilities
12
31,544
111,286
Unsecured loans
13
5,188,353
2,469,988
Convertible notes
14
11,457,305
4,921,037
Provisions
15
571,280
311,578
TOTAL CURRENT LIABILITIES
19,150,102
9,562,866
NON‑CURRENT LIABILITIES
Lease liabilities
12
17,106
45,051
Provisions
15
26,288
17,478
TOTAL NON‑CURRENT LIABILITIES
43,394
62,529
TOTAL LIABILITIES
19,193,496
9,625,395
NET (LIABILITIES)/ASSETS
(11,100,214)
(5,611,935)
EQUITY
Issued capital
16
80,067,610
80,067,610
Reserves
18
(16,275,779)
(18,958,038)
Accumulated losses
19
(74,892,045)
(66,721,507)
Equity attributable to owners of the company
(11,100,214)
(5,611,935)
TOTAL DEFICIENCY IN EQUITY
(11,100,214)
(5,611,935)
Notes to the financial statements are included on pages 21 to 53.
Audio Pixels Holdings Limited ACN 094 384 273
18
Annual Report 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
December 2024 –
Consolidated
Issued
Capital
$
Equity
Settled
Option
Reserve
$
Exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Capital
Contri-
bution
Reserve
$
Accumul-
ated Losses
$
Total
$
Balance at 1 January 2024
80,067,610
12,925,519
(6,344,865)
(25,538,692)
‑
(66,721,507)
(5,611,935)
(Loss) for the year
‑
‑
‑
‑
-
(8,170,538)
(8,170,538)
Other comprehensive loss
for the year
‑
‑
(29,130)
‑
‑
‑
(29,130)
Total comprehensive (loss)
for the year
‑
‑
(29,130)
‑
‑
(8,170,538)
(8,199,668)
Capital contribution reserve
‑
‑
‑
‑
1,250,652
‑
1,250,652
Recognition of share‑based
payments
‑
170,737
‑
‑
‑
‑
170,737
Options issued
‑
1,290,000
‑
‑
‑
‑
1,290,000
Balance at 31 December 2024
80,067,610
14,386,256
(6,373,995)
(25,538,692)
1,250,652
(74,892,045)
(11,100,214)
December 2023 –
Consolidated
Issued
Capital
$
Equity
Settled
Option
Reserve
$
Exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Capital
Contri-
bution
Reserve
$
Accumul-
ated Losses
$
Total
$
Balance at 1 January 2023
77,752,597
6,385,427
(6,344,109)
(25,538,692)
‑
(52,107,016)
148,207
(Loss) for the year
‑
‑
‑
‑
-
(14,614,491)
(14,614,491)
Other comprehensive loss for
the year
‑
‑
(756)
‑
-
‑
(756)
Total comprehensive (loss)
for the year
‑
‑
(756)
‑
‑
(14,614,491)
(14,615,247)
Share placements at $14.00
2,315,013
‑
‑
‑
‑
‑
2,315,013
Recognition of share‑based
payments
‑
507,093
‑
‑
‑
‑
507,093
Options issued
‑
6,032,999
‑
‑
‑
‑
6,032,999
Balance at 31 December 2023
80,067,610
12,925,519
(6,344,865)
(25,538,692)
‑
(66,721,507)
(5,611,935)
Notes to the financial statements are included on pages 21 to 53.
Audio Pixels Holdings Limited ACN 094 384 273
19
Annual Report 2024
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Notes
Consolidated
Year ended
31 December
2024
$
Consolidated
Year ended
31 December
2023
$
Cash flows from operating activities
Receipts from rent
‑
22,939
Receipts from government grants
206,563
196,572
Payments to suppliers and employees
(5,590,531)
(4,840,177)
Interest paid
(639,693)
(456,397)
Interest received
75,538
12,521
Net cash (used by) operating activities
20
(5,948,123)
(5,064,542)
Cash flows from investing activities
Payment for property, plant and equipment
(288,035)
(308,348)
Purchase of financial assets
(1,000,000)
‑
Net cash (used by) investing activities
(1,288,035)
(308,348)
Cash flows from financing activities
Proceeds from unsecured loans
2,613,000
1,500,000
Repayment of convertible notes
14
(450,000)
‑
Proceeds from convertible notes
14
8,450,000
5,000,000
Repayment of lease liabilities
(139,929)
(197,065)
Net cash provided by financing activities
10,473,071
6,302,935
Net increase in cash and cash equivalents held
3,236,913
930,045
Cash and cash equivalents at the beginning of the financial year
2,279,051
1,339,961
Effects of exchange rate fluctuations on the balances of cash held
in foreign currencies
(63,274)
9,045
Cash and cash equivalents at the end of the financial year
5
5,452,690
2,279,051
Notes to the financial statements are included on pages 21 to 53.
Audio Pixels Holdings Limited ACN 094 384 273
20
Annual Report 2024
1. Summary of Material
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”). The financial
statements comprise the consolidated financials of the
Group. For the purposes of preparing the consolidated
financial statements, the Company is a for profit entity.
The consolidated financial statements were approved and
authorised for issue by the Directors on 31 March 2025.
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
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
2024. Their adoption has not had any material impact
on the disclosures or on the amounts reported in these
financial statements.
New and revised Australian Accounting
Standards and Interpretations on issue
but not yet effective
The following standards and amendments are not yet
effective but may have a material impact on the financial
statements of the consolidated entity in the future.
AASB 2024‑2 Amendment to Australian accounting
Standards – Classification and Measurement of
Financial Instruments
These amendments update AAS 9 Financial Instruments
and AASB 7 Financial Instruments: Disclosures to change
the requirements as to when a financial liability can be
derecognised when it is settled via electronic transfer
as well as when cash flows can be considered simply
payments of principal and interest and hence the ability to
classify assets as at amortised cost.
Whilst the consolidated entity is still assessing the
impacts, the current expectation is that the amendments
relating to the timing of derecognition of the liabilities
may impact consolidated entity’s financial liabilities,
however the amendment relating to the classification of
financial assets Is not expected to have an impact on the
consolidated entity.
AASB 18 Presentation and Disclosure of Financial Statements
This standard will replace AASB 101 Presentation of
Financial Statements. Whilst many of the requirements will
remain consistent, the new standard will have impacts on
the presentation of the Statement of Profit and Loss and
consequential impacts on the Statement of Cash Flows. It
will also require the disclosure of non‑IFRS management
performance measures and may impact the level of
aggregation and disaggregation throughout the primary
financial statements and the notes.
AASB 18 applies for periods beginning on or after
1 January 2027 and will be applied retrospectively.
The consolidated entity is still currently assessing the
impact that AASB 18 will have on the consolidated entity.
There are no other new standards or amendments
that are expected to have a material impact on the
consolidated entity.
1(d) Going Concern
The financial report has been prepared on the going
concern basis which assumes the continuity of normal
business activities and the realisation of assets and the
settlement of liabilities in the ordinary course of business.
As at 31 December 2024, the consolidated entity’s current
liabilities exceeded its current assets by $11,822,408 (2023:
$6,327,760). In addition, the consolidated entity incurred
a consolidated loss of $8,170,538 (2023: $14,614,491) and
used net cash in operating activities of $5,948,123 (2023:
$5,064,542). As at 31 December 2024, the consolidated
entity had cash of $5,452,690 (2023: $2,279,051) of which
$61,398 (2023: $61,343) is restricted as it secures future
lease payments. Together, these are indicators that a
material uncertainty exists.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
21
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
The consolidated entity has prepared a cash flow forecast
which extends 12 months from the date of signing these
financial statements and indicates that the consolidated
entity will have sufficient funds to meet its expenditure
commitments for this period based on that forecast. This
forecast excludes the repayment of convertible notes
and unsecured loans with carrying value of $16,645,658
maturing on 31 December 2025.
Within this forecast are key material uncertainties and
assumptions, namely:
No repayment of convertible notes and unsecured
loans with a carrying value of $16,645,658 for reasons
outlined below.
Base development spend to take the Company
through to its next milestone pre‑commercialisation.
Assumes no cash outflows associated with any
contingent liabilities and/or spend with the
company’s chip supplier for the fully tested packaged
production chips.
Nominal expenditure profile for the period; and
Possible further extensions of the unsecured loans
and convertible notes.
In the opinion of the directors, the ability of the
consolidated entity to continue as a going concern is
dependent upon:
The ability of the Company to negotiate with
the related party and convertible noteholders to
further defer the maturity of the loans with carrying
value of $16,645,658 beyond 31 December 2025.
The Board believes that this is reasonable given
that similar extensions have been granted and
received historically.
The receipt of the 40,000 pre‑production chips to
specification from Earth Mountain to enable testing
and subsequent demonstration of the product.
The successful completion of the current testing
phase of the technology, enabling the consolidated
entity to successfully demonstrate the technology’s
capabilities and negotiate commercial contracts with
interested parties; and
Further spend on development of the current chip
to enable full scale commercialisation not currently
included in the forecast.
If the consolidated entity is unable to achieve successful
outcomes in relation to the above matters, a material
uncertainty would exist that may cast significant doubt 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.
Further testing and enhancement of the technology is
continuing as the consolidated entity works towards
achievement of the demonstrator milestone to begin the
transition to volume production. Once this occurs the
consolidated entity plans to commit further spend for fully
tested packaged production chips.
1(e) Revenue Recognition
Interest revenue is recognised using the effective interest
rate method. Other income is largely comprised of the
Research and development (R&D) tax incentive. This
refundable research and development tax offset is accrued
when it can be reliably measured, and it is probable the
Company will receive the claim based on the AusIndustry
and Australian Taxation Office R&D guidelines. For
the year ended 31 December 2024, the research and
development tax offset is accounted for as a government
grant in accordance with AASB 120 ‑ Government Grants by
recognising a credit in profit or loss as other income with
the expected collection as an other receivable.
1(f) Financial instruments
Financial assets and financial liabilities are recognised in
the consolidated entity’s statement of financial position
when the consolidated entity becomes a party to the
contractual provisions of the instrument. Financial
assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
22
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
Financial assets
Financial assets which comprise cash and cash
equivalents, trade receivables, other assets and
investments in mutual funds are classified into the
following categories:
Financial assets at fair value through profit or loss
(“FVTPL”) (mutual funds); and
Financial assets at amortised cost (all others)
Financial assets at amortised cost
The amortised cost of a financial asset is the amount at
which the financial asset is measured at initial recognition
minus the principal repayments, plus the cumulative
amortisation using the effective interest method of any
difference between that initial amount and the maturity
amount, adjusted for any loss allowance. The gross
carrying amount of a financial asset is the amortised cost
of a financial asset before adjusting for any loss allowance.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being
measured at amortised cost or fair value through other
comprehensive income are measured at fair value through
profit or loss (FVTPL).
Financial assets at FVTPL are measured at fair value at the
end of each reporting period, with any fair value gains or
losses recognised in profit or loss to the extent they are
not part of a designated hedging relationship. The net
gain or loss recognised in profit or loss includes any
dividend or interest earned on the financial asset and is
included in the ‘Income’ line item (note 2).
Impairment
The consolidated entity assesses on a forward looking
basis the expected credit losses associated with its
financial assets carries at amortised cost. The impairment
methodology applied depends on whether there
has been a significant increase in credit risk. For trade
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.
1(g) Financial Liabilities
Financial Liabilities
All financial liabilities are measured subsequently at
amortised cost using the effective interest method
or at FVTPL.
Financial liabilities that are not (i) contingent consideration
of an acquirer in a business combination, (ii) held‑for
trading, or (iii) designated as at FVTPL, are measured
subsequently at amortised cost using the effective interest
rate method.
Compound and Derivative Financial Instruments
The component parts of compound instruments (convertible
notes) issued by the consolidated entity are classified
separately as financial liability and derivative in accordance
with the substance of the contractual arrangements and the
definitions of a financial liability and derivatives.
At the date of issue, the fair value of the liability
component is estimated using the prevailing market
interest rate for similar non‑convertible instruments.
The amount is recorded as a liability on an amortised
cost basis using the effective interest method until
extinguished upon conversion or at the instruments
maturity date.
Derivatives
Derivatives are initially recognised at fair value at the
date the derivative contract is entered into and are
subsequently remeasured to their value at the end of each
reporting period. Derivatives embedded in non‑derivative
host contract s are treated as separate derivatives when
they meet the definition of a derivative, their risk and
characteristics are not closely related to those of the host
contracts and the host contract are not measured at FVTPL.
Other financial liabilities
Other financial liabilities representing trade and other
payables and unsecured loans are subsequently measured
at amortised cost using effective interest method.
The effective interest rate method is a method of
calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees and
points paid or received that form an integral part of
the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the
financial liability, or (where appropriate) a shorter period,
to the amortised cost of a financial liability.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
23
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
Derecognition of financial liabilities
The consolidated entity derecognises financial liabilities
when, and only when, the consolidated entity’s
obligations are discharged, cancelled or have expired.
The difference between the carrying amount of the
financial liability derecognised and the consideration paid
or payable is recognised in the profit and loss.
When the consolidated entity exchanges with the existing
lender one debt instrument into another one with
substantially different terms, such exchange is accounted
for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
Similarly, the consolidated entity accounts for substantial
modification of terms of an existing liability or part of it as
an extinguishment of the original financial liability and the
recognition of a new liability.
It is assumed that the terms are substantially different
if the discounted present value of the cash flows under
the new terms, including any fees paid net of any fees
received and discounted using the original effective
interest rate is at least 10 per cent different from the
discounted present value of the remaining cash flows
of the original financial liability. If the modification is
not substantial, the difference between: (1) the carrying
amount of the liability before the modification; and (2)
the present value of the cash flows after modification is
recognised in profit or loss as the modification gain or loss
within other gains and losses.
1(h) 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.
1(i) 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 historic cost that are denominated in
foreign currencies are translated using historic rates.
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.
1(j) 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.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
24
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
1(k) 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).
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 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(l) 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(m) 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.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
25
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
1(n) 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 straight‑line 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.
The following estimated useful lives are used in the
calculation of depreciation:
Computers and related equipment
3 to 5 years
Leasehold improvements
3 to 4 years
Office furniture and equipment
5 to 15 years
1(o) 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.
At each reporting date, the group revises its estimate
of the number of equity instruments expected to vest
as a result of the effect of non‑market‑based vesting
conditions. The impact of the revision of the original
estimates, if any, is recognised in profit or loss such that
the cumulative expense reflects the revised estimate, with
a corresponding adjustment to reserves.
1(p) 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.
1(q) 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:
(a) Deferred tax
The directors made a critical judgement in relation to not
recognising the deferred tax assets described in Note 3(a).
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.
(b) Convertible Note and Option Valuation
The convertible notes and associated options were
externally valued during the reporting period. These
valuations involved a number of estimates used in the
valuation models, including the risk free interest rate
and share volatility. The risk free interest rate is estimated
based on the comparable yield on Commonwealth
Bonds matching the assumed life of the convertible
note and options. The share volatility is based on the
historical volatility of the consolidated entity’s shares
and comparable entities. These valuation estimates
can change over time, impacting the valuations of the
convertible notes and options.
The convertible note valuations at the end of the
reporting period included estimates of the risk free
interest rate of 3.8% and share volatility 60%.
At recognition date the value adopted for the debt
portion of the convertible note was calculated with
reference to the transaction price of the convertible note,
and the fair value of the embedded conversion option and
other financial instruments issued in conjunction with the
convertible note.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
26
Annual Report 2024
1. Summary of Material
Accounting Policies (Cont.)
During the first half of the period, the term on certain
convertible notes were modified and the modification
was determined to be substantial based on the change
in net present value of the modified debt based on the
original effective interest rate. The modification resulted
to a derecognition of the existing debt liability and a
recognition creation of a new liability based on the fair
value at the point in time. The associated modification
gain was recognised in the profit or loss during the period.
Further, during the second half of the period, the term of
these certain convertible notes were modified, and the
modification was not determined to be substantial based
on the change in net present value of the modified debt
based on the original effective interest rate. The gain
on the modification was recognised in the profit or loss
during the period.
The options were valued at the end of the reporting
period using the Black‑Scholes options pricing
model using a risk free interest rate of 3.8% and share
volatility of 60%.
The directors consider the estimates used in the valuations
to be appropriate.
(c) Research & Development refundable
taxation offset
The directors have calculated the estimated refundable
offset in respect of eligible research & development
expenditure incurred during the year ended 31 December
2024. An amount of $211,627 has been recorded
as other receivables and revenue in the year ended
31 December 2024 (2023: $253,449). Post year end, the
claim will be submitted. The directors consider that the
entity has complied with the conditions of the R & D
scheme and as such the grant will be received once the
claim is submitted.
(d) Share‑based Payments
The consolidated entity measures the cost of
equity‑settled share‑based payment transactions with
employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair
value is determined by using the Black Scholes model
considering the terms and conditions upon which the
instruments were granted. The accounting estimates
and assumptions relating to equity‑settled share‑based
payment transactions include the share price on date of
grant, the volatility applied, and the expected timeframe
to exercise the option. Judgement was applied for
these estimate and assumptions based on the facts and
circumstances that existed on grant date. The accounting
estimates and assumptions relating to equity‑settled
share‑based payment transactions would have no
significant impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may
impact profit or loss and equity.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
27
Annual Report 2024
2. (Loss) from operations
31 December
2024
$
31 December
2023
$
(a) Revenue
Interest income
84,030
12,521
Recharge rental income
‑
20,854
Government grant – R & D tax incentive
164,741
253,449
Total revenue
248,771
286,824
(b) Expenses
Amortisation
‑
44,139
Depreciation of property, plant and equipment
249,851
183,217
Depreciation of right‑of‑use assets
121,745
205,701
Interest expense
2,462,138
4,373,002
Employee benefits expense:
Salary and other employee benefits
2,795,293
2,710,730
Share based payments
170,737
507,093
Superannuation
43,099
40,728
3,009,129
3,258,551
3. Income taxes
(a) Income tax recognised in profit or loss
The Company is in a loss‑making position and therefore does not pay income tax in both Australia and Israel. Therefore
income tax payable is nil (2023: nil).
The Company does not recognise any deferred tax assets on balance sheet as management does not believe that there
will be sufficient taxable profits in the foreseeable future that deferred tax assets can be utilised against. The amount of
unrecognised deferred tax assets at reporting date is $8,716,665 (2023: $7,138,422). $2,545,804 (2023: $2,213,840) of this
unrecognised deferred tax relates to the parent company in Australia and $6,170,861 (2023: $4,924,582) relate to the
subsidiary in Israel. These unrecognised deferred tax assets are able to be carried forward indefinitely.
A corporate tax rate of 25% is payable by Australian corporate entities on taxable profits under Australian tax law and
23% (2023: 23%) under Israeli law. There has been no change in the corporate tax rate when compared with the previous
reporting period.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
28
Annual Report 2024
4. Remuneration of auditors
31 December
2024
$
31 December
2023
$
Audit or review of the financial reports
‑ Group*
128,000
‑
‑ Group (Other auditors)
39,799
184,968
‑ Subsidiary (Other auditors)
85,188
87,950
252,987
272,918
Statutory assurance services required by legislation to be provided by the auditor
‑
6,000
Other services by other auditors
‑ Taxation consulting service
8,150
‑
‑ Taxation consulting service (other auditors)
24,675
16,500
32,825
16,500
285,812
295,418
*The auditor of Audio Pixels Holdings Limited is Moore Australia Audit (Vic) for the financial statement audit. The auditor for the 31 December 2023
financial statements was Deloitte Touche Tohmatsu.
5. Cash and cash equivalents
31 December
2024
$
31 December
2023
$
Unrestricted cash
5,391,292
2,217,708
Restricted cash (non‑interest bearing)
61,398
61,343
Cash on hand and at bank
5,452,690
2,279,051
6. Financial Assets
31 December
2024
$
31 December
2023
$
Financial assets at fair value through profit or loss
Investments in Mutual Funds
1,000,000
‑
1,000,000
‑
The fair value of mutual fund investments is determined based on the quoted Net Asset Value (NAV) per unit as provided by
the fund managers. These investments are categorised as Level 1 financial assets under AASB 13 – Fair Value Measurement,
as they are actively traded in open markets.
There have been no transfers between levels during the year (2023: no transfers).
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
29
Annual Report 2024
7. Other receivables
31 December
2024
$
31 December
2023
$
Current
GST receivable
‑
11,496
Other receivables
256,965
324,860
256,965
336,356
Non Current
Other receivables
13,994
12,771
Other receivables comprise security deposits with government bodies and the Research & Development refundable offset
estimated receivable.
8. Prepayments
31 December
2024
$
31 December
2023
$
Prepayments other
31,185
32,845
Prepayments in respect of pre‑production chips
586,854
586,854
618,039
619,699
9. Right of use assets
31 December
2024
$
31 December
2023
$
Office premises – at cost
1,207,867
950,614
Less accumulated depreciation
(1,207,867)
(878,781)
‑
71,833
Motor vehicle – at cost
148,514
128,043
Less accumulated depreciation
(95,599)
(48,446)
52,915
79,597
Total net book value of Right of use assets
52,915
151,430
Cost
Office premises
Balance at 1 January
950,614
778,223
Additions
‑
172,348
Net foreign currency exchange differences
257,254
43
Balance as at 31 December
1,207,868
950,614
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
30
Annual Report 2024
31 December
2024
$
31 December
2023
$
Cost
Motor Vehicles
Balance at 1 January
128,043
46,467
Additions
‑
81,546
Net foreign currency exchange differences
20,471
30
Balance as at 31 December
148,514
128,043
Accumulated depreciation
Office premises
Balance as at 1 January
(878,781)
(698,628)
Net foreign currency exchange differences
(244,221)
‑
Depreciation expense
(84,865)
(180,153)
Balance at 31 December
(1,207,867)
(878,781)
Motor vehicle
Balance as at 1 January
(48,446)
(22,900)
Net foreign currency exchange differences
(10,273)
‑
Depreciation expense
(36,880)
(25,546)
Balance at 31 December
(95,599)
(48,446)
On 1 January 2019, the subsidiary company, Audio Pixels Limited exercised an option to renew a lease in respect of facilities
at 3 Pekris Street Rehovot, Israel for a period of twenty‑eight months to 31 May 2021. Effective on 1 June 2021, the subsidiary
company, Audio Pixels Limited exercised an option to renew a lease in respect of facilities at 3 Pekris Street Rehovot, Israel
for a period of twenty‑four months to 31 May 2023. This lease was extended on 31 May 2023 for a twelve month period until
31 May 2024. This lease was further extended on 31 May 2024 for a twelve month period until 31 May 2025.
Amounts recognised in profit and loss
Depreciation expense on right of use assets
121,745
205,701
Interest expense on lease liabilities
8,417
11,500
Expense relating to short term leases
110,950
157,350
The total cash outflow for leases amount to $139,929 including interest payments of $8,417 (2023: $197,065).
9. Right of use assets (Cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
31
Annual Report 2024
10. Property, Plant and Equipment
31 December
2024
$
31 December
2023
$
Computers and related equipment – at cost
1,254,064
959,939
Less accumulated depreciation
(887,470)
(665,925)
366,594
294,014
Leasehold improvements – at cost
414,930
378,688
Less accumulated depreciation
(351,926)
(307,307)
63,004
71,381
Office furniture and equipment – at cost
1,871,326
1,631,823
Less accumulated depreciation
(1,602,245)
(1,383,065)
269,081
248,758
Total net book value of Property, Plant and Equipment
698,679
614,153
Cost
Computers and related equipment
Balance at 1 January
959,939
689,197
Additions
202,256
279,487
Disposals
‑
(9,230)
Net foreign currency exchange differences
91,869
485
Balance as at 31 December
1,254,064
959,939
Leasehold improvements
Balance at 1 January
378,688
378,466
Net foreign currency exchange differences
36,242
222
Balance as at 31 December
414,930
378,688
Office furniture and equipment
Balance at 1 January
1,631,823
1,602,009
Additions
85,779
28,861
Disposals
(2,449)
‑
Net foreign currency exchange differences
156,173
953
Balance as at 31 December
1,871,326
1,631,823
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
32
Annual Report 2024
10. Property, Plant and Equipment (Cont.)
31 December
2024
$
31 December
2023
$
Accumulated depreciation
Computers and related equipment
Balance as at 1 January
(665,925)
(582,614)
Net foreign currency exchange differences
(70,951)
(366)
Disposal
‑
6,987
Depreciation expense
(150,594)
(89,932)
Balance at 31 December
(887,470)
(665,925)
Leasehold improvements
Balance as at 1 January
(307,307)
(293,256)
Net foreign currency exchange differences
(30,107)
(176)
Depreciation expense
(14,512)
(13,875)
Balance at 31 December
(351,926)
(307,307)
Office furniture and equipment
Balance as at 1 January
(1,383,065)
(1,302,862)
Net foreign currency exchange differences
(136,423)
(793)
Disposal
1,989
‑
Depreciation expense
(84,746)
(79,410)
Balance at 31 December
(1,602,245)
(1,383,065)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
33
Annual Report 2024
11. Trade and other payables
31 December
2024
$
31 December
2023
$
Current
Trade payables and accruals
1,901,620
1,748,977
The payables are non‑interest bearing and have an average credit period of 30 days.
12. Lease liabilities
31 December
2024
$
31 December
2023
$
Analysed as:
Current
31,544
111,286
Non‑Current
17,106
45,051
48,650
156,337
Disclosure required by AASB 16
Maturity Analysis
Year 1
34,709
111,286
Year 2
18,345
73,233
Year 3
‑
9,145
53,054
193,664
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 leases in Israel are denominated in Israeli shekels.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
34
Annual Report 2024
13. Unsecured loans
31 December
2024
$
31 December
2023
$
Face value of unsecured loans
5,582,988
2,469,988
Discount taken to capital contribution reserve
(1,250,652)
‑
Add finance charges amortisation
856,017
‑
Carrying value of unsecured loans
5,188,353
2,469,988
The Company has an unsecured loan facility with 4F Investments Pty Limited, a company associated with Mr Fred Bart,
with carrying amount of $5,188,353 (2023: $2,469,988) at an interest rate of 12% at 31 December 2024. The loan is repayable
in two components as follows:
a)
$969,988 is due for repayment on receipt of the placement monies of $4,316,550 (US$3m) from Earth Mountain or
upon the Company undertaking a capital raising.
b)
The balance is repayable on the Company undertaking a capital raising.
During the year, the fair value of the unsecured loans was measured using a market discount rate averaging 32.5%. As the
loans were provided by a related party, a key shareholder, the difference between the fair value and the carrying amount
was recognised as a capital contribution reserve (note 18).
During the year ended 31 December 2024, the Company paid $74,709 (2023: $208,997) on the unsecured loan to 4F
Investments Pty Limited. Nominal interest has been accrued in the financial statements at 31 December 2024 of $520,542
(2023: $74,709). In addition, an effective interest expense was recognised at 31 December 2024 of $335,567 (2023: Nil).
4F Investments Pty Limited have agreed to extend the expiry date of the unsecured loan agreement until
31 December 2025, with all accrued interest to be capitalised until the end of the loan term.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
35
Annual Report 2024
14. Convertible notes
31 December
2024
$
31 December
2023
$
Borrowings ‑ Convertible notes
Carrying amount at start of period
4,639,037
‑
Face value of notes issued
8,450,000
5,000,000
Face value of notes redeemed
(450,000)
‑
Face value of notes cancelled
(500,000)
-
Convertible notes conversion feature on issue
(573,000)
(655,000)
Value of options issued taken to equity settled share option reserve
(1,290,000)
(2,678,000)
10,276,037
1,667,000
Add Convertible note finance charges
1,102,538
456,272
Add – loss on initial recognition of convertible notes (equity component)
71,000
2,678,000
Less – net gain arising on the modification of convertible notes
(711,270)
(162,235)
Current Liability at end of period
10,738,305
4,639,037
Derivative liability
Carrying value at start of the period
282,000
‑
Fair value of the convertible note conversion feature at issue
573,000
655,000
Fair value movement on modification of the convertible notes
237,000
‑
Fair value movement to the end of the reporting period
(373,000)
(373,000)
Derivative liability
719,000
282,000
Total current liability
11,457,305
4,921,037
Face value of convertible notes
12,500,000
5,000,000
Of the $5,000,000 of Convertible Notes issued during 2023, 2 note holders redeemed their notes on maturity (30 April
2024), and were repaid $450,000 in cash. The note issued to 4F Investments Pty Limited (a Company controlled by Fred Bart,
Chairman) for $500,000 was cancelled and converted into the unsecured loan facility on 29 May 2024, as it was issued to a
related party without shareholder approval. On 5 September 2024 all remaining noteholders agreed to extend the maturity
date of their notes until 31 December 2025. The balance of the notes of that on issue as at 31 December 2024 is $4,050,000.
In order to meet ASX Listing Rule 6.1 requirements, the Company obtained noteholder approval on 5 September 2024 to
include a conversion floor price of $5 to the existing notes so the maximum dilutionary impact on conversion of the notes
can be calculated.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
36
Annual Report 2024
14. Convertible notes (Cont.)
On 5 September 2024, 21 November 2024 and 9 December 2024, the Company announced it has issued an additional
$8,450,000 in Convertible Notes to sophisticated investors. The terms of the Convertible Note include a maturity date of
31 December 2025, are unsecured, attract an interest rate of 12% per annum capitalised until the Note is fully repaid or
converted into Shares. The Notes are convertible to ordinary shares at $9.04, or a lower price if the Company undertakes a
placement of ordinary shares at any time prior to the expiry date. The Notes have conversion price floor of $5.00.
As an incentive for participating in the Notes, the investors received 1,690,000 unlisted options (100,000 options per
$500,000 invested) at a strike price of 20% higher than the conversion price of $9.04, namely $10.84. These unlisted options
expire on 4 May 2027. Outstanding unlisted options from prior year issuance of convertible notes is 900,000 at a strike price
of $10.84 expiring 4 May 2026.
During the first half of the period, the term on certain convertible notes were modified and the modification was
determined to be substantial based on the change in net present value of the modified debt based on the original effective
interest rate. The modification resulted to a derecognition of the existing debt liability and a recognition creation of a new
liability based on the fair value at the point in time. The associated modification gain was recognised in the profit or loss
during the period.
Further, during the second half of the period, the term of these certain convertible notes were modified, and the
modification was not determined to be substantial based on the change in net present value of the modified debt based
on the original effective interest rate. The gain on the modification was recognised in the profit or loss during the period.
15. Provisions
31 December
2024
$
31 December
2023
$
Current
Employee benefits
571,280
311,578
Non‑current
Employee benefits
26,288
17,478
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
37
Annual Report 2024
16. Issued Capital
31 December
2024
$
31 December
2023
$
Issued and paid up capital
Fully paid Ordinary Shares
Balance at the beginning of the financial year
80,067,610
77,752,597
Placements for cash at $14.00 per share
‑ 31 May 2023
‑
2,315,013
Balance at the end of the financial year
80,067,610
80,067,610
Number
Number
Fully paid Ordinary Shares
Balance at the beginning of the financial year
29,210,100
29,044,742
Placements for cash at $14.00 per share
‑ 31 May 2023
‑
165,358
Balance at the end of the financial year
29,210,100
29,210,100
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
The shares have no par value and the company does not have a limited amount of authorised capital.
Capital risk management
The consolidated entity manages its capital to ensure that entities in the consolidated entity will be able to continue as
going concerns while maximising the return to shareholders through the optimisation of the debt and equity balance.
The group’s overall strategy remains unchanged from 2023.
The capital structure of the consolidated entity consists of net debt and equity of the consolidated entity.
Debt is defined by the group as lease liabilities, unsecured loans and convertible notes (excluding derivatives) as disclosed in
notes 11, 13 and 14. Net debt is defined as debt after deducting cash and cash equivalents and investments in mutual funds.
Equity includes capital, reserves and retained earnings.
The consolidated entity is not subject to any externally imposed capital requirements.
Gearing ratio
31 December
2024
$
31 December
2023
$
Debt
15,975,309
7,265,362
Less: Cash and cash equivalents (including investments in mutual funds)
(6,452,690)
(2,279,051)
Net debt
9,522,619
4,986,311
Equity
(11,100,214)
(5,611,935)
Gearing ratio
(85.79%)
(88.89%)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
38
Annual Report 2024
17. 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
2024
2023
Number
Weighted
average
exercise price
$
Number
Weighted
average
exercise price
$
Balance at the beginning of the financial year (i)
287,000
19.82
287,000
19.82
Granted during the year (ii)
‑
‑
173,000
16.20
Exercised during the year (iii)
‑
‑
‑
‑
Forfeited and lapsed during the year (iv)
(25,000)
14.00
(173,000)
16.20
Balance at the end of the financial year (v)
262,000
20.38
287,000
19.82
Exercisable at end of the year
133,200
26.54
101,260
27.70
(i) Balance at the beginning of the year
Number
Grant date
Expiry date
Exercise Price
Fair value at
grant date
2024
122,000
16/4/21
16/4/25
$27.70
$1,241,960
30,000
1/12/22
1/12/25
$14.00
$124,800
135,000
1/12/22
1/2/26
$14.00
$662,850
287,000
2023
122,000
16/4/21
16/4/25
$27.70
$1,241,960
30,000
1/12/22
1/12/25
$14.00
$124,800
135,000
1/12/22
1/2/26
$14.00
$662,850
287,000
Staff options carry no rights to dividends and no voting rights.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
39
Annual Report 2024
17. Employee Share Option Plan (Cont.)
(ii) Granted during the year
Number
Grant date
Expiry date
Exercise Price
Fair value at
grant date
2024
Staff options
‑
‑
‑
‑
‑
2023
Staff options
173,000
5/6/23
17/12/23
16.20
$377,140
(iii) Exercised during the year
There were no options exercised during the year.
(iv) Forfeited and lapsed during the year
25,000 employee options was forfeited during the year (2023: 173,000 lapsed).
(v) Balance at the end of the financial year
Number
outstanding
Grant date
Expiry date
Exercise Price
Fair value at
grant date
2024
Staff options
122,000
16/4/21
16/4/25*
$27.70
$1,241,960
Staff options
30,000
1/12/22
1/12/25*
$14.00
$124,800
Staff options
110,000
1/12/22
1/2/26*
$14.00
$540,100
262,000
2023
Staff options
122,000
16/4/21
16/4/25*
$27.70
$1,241,960
Staff options
30,000
1/12/22
1/12/25*
$14.00
$124,800
Staff options
135,000
1/12/22
1/2/26*
$14.00
$662,850
287,000
Staff options carry no rights to dividends and no voting rights.
*All options granted to staff have a vesting condition that the employee must be employed by the consolidated entity at
the time of vesting. These options start to vest after two years continuous employment on the basis of one twelfth of the
total number each month for a twelve month period.
The difference between the total fair 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.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
40
Annual Report 2024
18. Reserves
31 December
2024
$
31 December
2023
$
Foreign currency translation
Balance at the beginning of the financial year
(6,344,865)
(6,344,109)
Translation of foreign operations
(29,130)
(756)
Balance at end of financial year
(6,373,995)
(6,344,865)
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
12,925,519
6,385,427
Add share based payments in respect of options vested immediately
1,290,000
6,032,999
Add recognition of share based payments to employees
170,737
507,093
Balance at end of financial year
14,386,256
12,925,519
The above equity‑settled option reserve relates to share options granted by the Company.
Capital contribution reserve
Balance at the beginning of the financial year
‑
‑
Add transfer to capital contribution reserve
1,250,652
‑
Balance at the end of the financial year
1,250,652
‑
The above capital contribution reserve relates to the difference in the fair value and carrying amount of the unsecured
loans received from related party (note 13).
Minority acquisition reserve
Balance at the beginning and end of the financial year
(25,538,692)
(25,538,692)
The above minority acquisition reserve relates to the difference between the purchase consideration paid for the
minority interest (non‑controlling interest) and the carrying amount of the minority interest acquired.
Total Reserves
(16,275,779)
(18,958,038)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
41
Annual Report 2024
19. Accumulated losses
31 December
2024
$
31 December
2023
$
Balance at the beginning of the financial year
(66,721,507)
(52,107,016)
(Loss) for the year attributable to owners of the Company
(8,170,538)
(14,614,491)
Balance at the end of the financial year
(74,892,045)
(66,721,507)
20. Notes to the statement of cash flows
(a) Reconciliation of cash and cash equivalents
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:
31 December
2024
$
31 December
2023
$
Cash and cash equivalents
5,452,690
2,279,051
(b) Restricted cash
Cash held as security for future lease payments
61,398
61,343
Restricted cash amounts are included in the cash and cash equivalents amounts above.
Reconciliation of (loss) for the period to net cash outflows
from operating activities
Loss after related income tax
(8,170,538)
(14,614,491)
Amortisation
‑
44,139
Depreciation
371,596
388,918
Foreign exchange gains
(3,628)
(41,059)
Loss on sale of property, plant and equipment
439
2,243
Share based payments
170,737
3,862,093
Goodwill impairment
‑
2,399,168
Intangible asset impairment
‑
110,686
Gain of movement in fair value of derivative liability
(136,000)
(373,000)
Loss on initial recognition of financial liabilities measured at fair value
71,000
2,678,000
Gain on modification of convertible notes
(711,270)
(162,235)
Finance charges on convertible notes
1,102,538
456,272
Finance charges on unsecured loan facility
856,017
‑
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
42
Annual Report 2024
31 December
2024
$
31 December
2023
$
Changes in assets and liabilities
(Increase)/decrease in assets
Current trade and other receivables
79,391
(75,982)
Prepayments
1,660
(32,845)
Non‑current trade and other receivables
(1,223)
(3,592)
Increase/(decrease) in liabilities
Provisions
268,512
38,621
Current trade payables
152,646
258,522
Net cash (used in) operating activities
(5,948,123)
(5,064,542)
Reconciliation of liabilities arising from financing transactions
2024
Balance as at
1 January
Cash
Movement
Non‑Cash
Movement
Balance as at
31 December
Unsecured loans
2,469,988
2,613,000
105,365
5,188,353
Convertible notes
4,921,037
8,000,000
(1,463,732)
11,457,305
Lease liabilities
156,377
(139,929)
32,202
48,650
2023
Balance as at
1 January
Cash
Movement
Non-Cash
Movement
Balance as at
31 December
Unsecured loans
3,285,000
1,500,000
(2,315,012)
2,469,988
Convertible notes
‑
5,000,000
(78,963)
4,921,037
Lease liabilities
99,477
(197,065)
253,925
156,337
20. Notes to the statement of cash flows (Cont.)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
43
Annual Report 2024
21. Related Party Transactions
(a) Directors
The Directors of Audio Pixels Holdings Limited in office during the year were Fred Bart, Cheryl Bart, Mark Ureda (resigned 16
July 2024) and Shawn van Boheemen (appointed 16 July 2024).
(b) KMP Remuneration
The aggregate compensation of the key management personnel of the company is set out below:
31 December
2024
$
31 December
2023
$
Short‑term employee benefits
752,297
652,555
Long term employee benefits
116,962
106,628
869,259
759,183
The remuneration above relates to directors fees, consultancy fees and superannuation paid to entities associated with Fred
Bart, Cheryl Bart Mark Ureda, Shawn van Boheemen and the remuneration of one senior executive of Audio Pixels Limited in
Israel and one senior executive of Audio Pixels Holdings Limited.
Transactions with related entities
During the year ended 31 December 2024, the Company paid a total of $109,355 (2023: $109,456) 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 2024, the Company paid a total of $45,000 to Noxopharm Limited, a company
associated with Mr Fred Bart (who is a Director of Noxopharm Limited) in respect of consulting fees for Mr. Shawn
van Boheemen. At 31 December 2024, the Company owes $45,000 to Noxopharm Limited for Mr. van Boheemen’s
consulting fees.
4F Investments Pty Limited holds an unsecured funding facility with the Company and advanced an additional $3,113,000
to the Company during the year. The carrying amount owing to 4F Investments Pty Limited at 31 December 2024 is
$5,188,353 (2023: $2,469,988) at an interest rate of 12% per annum (this interest is capitalised until maturity from 1 January
2024). The initial $969,988 of the loan balance is repayable on receipt of the EarthMountain placement proceeds, with
the balance of the loan repayable from the proceeds of a capital raise by the Company. The unsecured loan facility has a
maturity date of 31 December 2025.
During the reporting period, 4F Investments Pty Limited purchased a convertible note from an existing note holder for a
face value of $250,000 There is no change to the original terms of the convertible note agreement.
During the year, the Company paid $74,709 interest (2023: $135,673) on the unsecured loan to 4F Investments Pty
Limited. Interest owing to 4F Investments Pty Limited has been accrued in the financial statements at 31 December 2024
of $520,542 (2023: $74,709). In addition, an effective interest expense was recognised at 31 December 2024 of $335,567
(2023: Nil).
The lease in respect of office premises at Suite 3, Level 12, 75 Elizabeth Street Sydney expired on 30 March 2022.
The Company has not renewed the lease and continues to occupy the premises on a month to month basis. The Company
recharged rent and other tenancy charges of $39,356 (2023: $37,599) to 4F Investments Pty Limited, a company controlled
by Fred Bart.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
44
Annual Report 2024
22. Earnings per Share
31 December
2024
31 December
2023
Basic (loss) per share
(27.97) cents
(50.15) cents
Diluted (loss) per share (b)
(27.97) cents
(50.15) cents
(Loss) (a)
(8,170,538)
(14,614,491)
Weighted average number of Ordinary Shares
29,210,100
29,141,692
(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 122,000 unlisted employee options issued on
16 April 2021 at an exercise price of $27.70. These options expire on 16 April 2025. The unlisted employee options have
not been included in dilutive EPS, as they are anti–dilutive.
(c) There are potential ordinary shares to be issued in relation to the issue of 30,000 unlisted employee options issued on
1 December 2022 at an exercise price of $14.00. These options expire on 1 December 2026. The unlisted employee
options have not been included in dilutive EPS, as they are anti–dilutive.
(d) There are potential ordinary shares to be issued in relation to the issue of 110,000 unlisted employee options issued
on 1 December 2022 at an exercise price of $14.00. These options expire on 1 December 2027. The unlisted employee
options have not been included in dilutive EPS, as they are anti–dilutive.
(e) There are potential ordinary shares to be issued in relation to the issue of 500,000 unlisted options issued on
5 May 2023 at an exercise price of $7.59. These options expire on 4 May 2026. The unlisted options have not been
included in dilutive EPS, as they are anti–dilutive.
(f) There are potential ordinary shares to be issued in relation to the issue of 500,000 unlisted options issued on
22 May 2023 at an exercise price of $10.84. These options expire on 4 May 2026. The unlisted options have not been
included in dilutive EPS, as they are anti–dilutive.
(g) There are potential ordinary shares to be issued in relation to the issue of 400,000 unlisted options issued on
23 November 2023 at an exercise price of $10.84. These options expire on 4 May 2026. The unlisted options have not
been included in dilutive EPS, as they are anti–dilutive.
(h) There are potential ordinary shares to be issued in relation to the issue of 1,290,000 unlisted options issued on
5 September 2024 at an exercise price of $10.84. These options expire on 4 May 2027. The unlisted options have not
been included in dilutive EPS, as they are anti–dilutive.
(i)
There are potential ordinary shares to be issued in relation to the issue of 200,000 unlisted options issued on
21 November 2024 at an exercise price of $10.84. These options expire on 4 May 2027. The unlisted options have not
been included in dilutive EPS, as they are anti–dilutive.
(j)
There are potential ordinary shares to be issued in relation to the issue of 200,000 unlisted options issued on
9 December 2024 at an exercise price of $10.84. These options expire on 4 May 2027. The unlisted options have not
been included in dilutive EPS, as they are anti–dilutive.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
45
Annual Report 2024
23. 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
2023 report which is one segment.
The consolidated entity operates in Australia and Israel.
The consolidated entity in Israel is developing a digital speaker and has not reached the stage of generating any revenue
from the technology.
31 December
2024
$
31 December
2023
$
Segment Revenues
Digital speakers
248,771
286,824
Total of all segments
248,771
286,824
Digital speakers
(8,170,538)
(14,614,491)
(Loss) before income tax
(8,170,538)
(14,614,491)
Income tax gain/ (expense)
‑
‑
(Loss) for the period
(8,170,538)
(14,614,491)
Segment Assets and Liabilities
Assets
Liabilities
31 December
2024
$
31 December
2023
$
31 December
2024
$
31 December
2023
$
Digital speakers
8,093,282
4,013,460
19,193,496
9,625,395
Total all segments
8,093,282
4,013,460
19,193,496
9,625,395
Unallocated
‑
‑
‑
‑
Consolidated
8,093,282
4,013,460
19,193,496
9,625,395
Assets used jointly by reportable segments are allocated on the basis of the revenue earned by the individual
reportable segments.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
46
Annual Report 2024
23. Segment Information (Cont.)
Other Segment Information
Depreciation and amortisation
of segment assets
Acquisition of segment assets
31 December
2024
$
31 December
2023
$
31 December
2024
$
31 December
2023
$
Digital speakers
371,596
433,057
288,035
308,348
Total all segments
371,596
433,057
288,035
308,348
Unallocated
‑
‑
‑
‑
Consolidated
371,596
433,057
288,035
308,348
Information on Geographical Segments
31 December 2024
Geographical Segments
Revenue
$
Segment
Assets
$
Acquisition
of Segment
Assets
$
Australia
248,771
6,761,267
‑
Israel
‑
1,332,015
288,035
Total
248,771
8,093,282
288,035
31 December 2023
Geographical Segments
Revenue
$
Segment
Assets
$
Acquisition
of Segment
Assets
$
Australia
286,824
2,307,089
‑
Israel
‑
1,706,371
308,348
Total
286,824
4,013,460
308,348
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
47
Annual Report 2024
24. Financial risk management objectives and policies
The consolidated entity’s principal financial instruments held during the year comprise receivables, payables, borrowings,
investment in mutual funds, 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, short
term deposits, unsecured loans and convertible notes.
At balance date, the consolidated entity had the following mix of financial assets and liabilities exposed to Australian
interest rate risk that are not designated in cash flow hedges:
31 December
2024
$
31 December
2023
$
Financial assets: Variable interest rate
Cash and cash equivalents
5,452,690
2,279,051
Financial liabilities: Fixed interest rate
Unsecured loans
5,188,353
2,469,988
Convertible notes
10,738,305
4,639,037
15,926,658
7,109,025
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 2024, 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 Loss
Higher/(Lower)
Equity
Higher/(Lower)
31 December
2024
$
31 December
2023
$
31 December
2024
$
31 December
2023
$
Consolidated entity
+1% (100 basis points)
54,527
22,791
54,527
22,791
‑0.24% (0.00%)
(13,086)
(5,470)
(13,086)
(5,470)
The movements in losses are due to higher/lower interest rates on cash and cash equivalents balances. The above does not
include the impact of fixed rate measured at amortised cost.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
48
Annual Report 2024
24. 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:
Liabilities
Assets
31 December
2024
$
31 December
2023
$
31 December
2024
$
31 December
2023
$
Cash and cash equivalents
‑
‑
529,582
856,606
Other receivables
‑
‑
36,846
71,411
Trade and other payables
1,729,341
1,395,320
‑
‑
All US$ denominated financial instruments were translated to A$ at 31 December 2024 at the exchange rate of 0.6217
(2023: 0.6812).
At 31 December 2024 and 31 December 2023, 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)
2024
$
2023
$
2024
$
2023
$
Consolidated
AUD/USD +10%
492,601
415,559
492,601
415,559
AUD/USD ‑5%
(285,190)
(240,586)
(285,190)
(240,586)
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.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
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Annual Report 2024
24. 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 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 2024
Liabilities
Non interest bearing
0.00%
1,901,620
‑
‑
‑
Lease liabilities
-
‑
8,677
26,032
18,345
Unsecured loans
32.50%
‑
‑
6,773,489
‑
Convertible note issued May 2023
30.00%
‑
‑
2,800,000
‑
Convertible note issued November 2023
30.00%
‑
‑
1,736,000
‑
Convertible note issued September 2024
37.08%
‑
‑
7,472,104
‑
Convertible note issued November 2024
36.02%
‑
‑
1,133,151
‑
Convertible note issued December 2024
35.95%
‑
‑
1,127,233
‑
31 December 2023
Liabilities
Non interest bearing
0.00%
1,748,487
‑
‑
‑
Lease liabilities
‑
‑
27,821
83,465
82,378
Unsecured loans
12.00%
‑
‑
2,766,387
‑
Convertible note issued May 2023
42.05%
‑
‑
2,903,253
‑
Convertible note issued October 2023
51.29%
‑
‑
537,212
‑
Convertible note issued November 2023
53.79%
‑
‑
2,113,673
‑
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.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
50
Annual Report 2024
25. Subsequent events
On 26 March 2025, the Unsecured loans with carrying amount of $5,188,353 as at 31 December 2024 was approved and
converted to Convertible Notes on the same terms given to the existing convertible note subscribers with 1,354,698
maximum number of ordinary shares to be issued.
Other than the above, 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
The parent entity financial information shown below has been prepared using accounting policies consistent with those
applied in the consolidated financial statements. Set out below is material accounting policy information specific to the
parent entity financial information.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost.
Key sources of estimation uncertainty
The directors made a critical judgement in relation to the recoverability of loan receivables from Audio Pixels Limited.
The Company has provided loans to its subsidiary as part of its group financing arrangements. These loans are unsecured,
non‑interest bearing and no repayment term. As at 31 December 2024, the Company assessed the recoverability
of intercompany loan receivables and recognised an impairment loss of $4,454,961 (2023: $61,140,198) due to the
financial condition of the subsidiary. On commercialisation of Audio Pixels Limited’s technology, this intercompany loan
recoverability will be re‑assessed.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
51
Annual Report 2024
26. Parent entity disclosures (Cont.)
The following information relates to Audio Pixels Holdings Limited as a standalone entity, who is the parent entity of the
consolidated entity.
31 December
2024
$
31 December
2023
$
Financial position
Assets
Current assets
6,777,839
2,307,089
Non‑current assets
‑
‑
Total assets
6,777,839
2,307,089
Financial position
Liabilities
Current liabilities
17,036,903
7,908,719
Non‑current liabilities
26,288
17,478
Total liabilities
17,063,191
7,926,197
Net (liabilities)/assets
(10,285,352)
(5,619,108)
Equity
Issued capital
80,067,610
80,067,610
Reserves
(9,901,783)
(12,613,172)
(Accumulated losses)
(80,451,179)
(73,073,546)
Total deficiency in equity
(10,285,352)
(5,619,108)
Financial performance
(Loss) for the year
(7,377,632)
(68,629,549)
Other comprehensive income
‑
‑
Total comprehensive (loss) for the year
(7,377,632)
(68,629,549)
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
52
Annual Report 2024
27. Controlled Entity
Name of Entity
Country of
Incorporation
31 December
2024
%
31 December
2023
%
Parent Entity
Audio Pixels Holdings Limited
Australia
Controlled Entities
Audio Pixels Limited
Israel
100.00
100.00
Audio Pixels Technologies Pty Limited
Australia
100.00
100.00
28. Contingent Liabilities and Commitments
At 31 December 2024 the subsidiary company, Audio Pixels Limited of Israel has entered into agreements with strategic
suppliers for delivery of certain components which on delivery of components meeting the required specifications of the
Consolidated entity will result in final payments being due of $767,460 (2023: $761,227).
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 14 (2023: 14) employees.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
53
Annual Report 2024
Entity name
Entity type
Place formed
or incorporated
% of share
capital held *
Tax Residency
Jurisdiction
Audio Pixels Holdings Limited
Body corporate
Australia
‑
Australia
Audio Pixels Limited
Body corporate
Israel
100.00%
Israel
Audio Pixels Technologies Pty Limited
Body corporate
Australia
100.00%
Australia
*Represents the economic interest in the entity as consolidated in the consolidated financial statements.
Basis of preparation
This Consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and
include information for each entity that was part of the Consolidated Entity as at the end of the financial year in accordance
with AASB 10 Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment
Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be
adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax
Commissioner’s public guidance in Tax Ruling TR 2018/5.
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its
determination of tax residency to ensure applicable foreign tax legislation has been complied with (see section 295(3A)(vii)
of the Corporations Act 2001).
Partnerships and Trusts
None of the entities noted above were trustees of trusts within the consolidated entity, partners in a partnership within the
consolidated entity or participants in a joint venture within the consolidated entity.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
AS AT 31 DECEMBER 2024
Audio Pixels Holdings Limited ACN 094 384 273
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Annual Report 2024
Audio Pixels Holdings Limited ACN 094 384 273
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55
Audio Pixels Holdings Limited ACN 094 384 273
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56
Audio Pixels Holdings Limited ACN 094 384 273
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5 to 8
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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.
Substantial Shareholders
At 6 March 2025 the following substantial shareholders were registered:
Ordinary
Shares
Percentage of
total Ordinary
Shares
Fred Bart Group
5,984,480
20.49%
Link Traders (Aust) Pty Ltd
1,984,173
6.79%
Lee Ka Lau
1,537,374
5.26%
Voting Rights
At 6 March 2025 there were 2,347 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.
ASX ADDITIONAL INFORMATION
Audio Pixels Holdings Limited ACN 094 384 273
59
Annual Report 2024
ASX ADDITIONAL INFORMATION
Distribution of Shareholdings
At 6 March 2025 the distribution of ordinary shareholdings were:
Range
Ordinary
Shareholders
Number of
Shares
Percentage
of Shares
1‑1,000
1,352
469,398
1.61%
1,001 – 5,000
578
1,446,481
4.95%
5,001 – 10,000
203
1,586,443
5.43%
10,001 – 100,000
181
5,178,890
17.73%
100,001 and over
33
20,528,888
70.28%
2,347
29,210,100
100.00%
There were 330 ordinary shareholders with less than a marketable parcel.
There is no current on‑market buy‑back.
Twenty Largest Ordinary Shareholders
At 6 March 2025 the 20 largest ordinary shareholders held 63.58% of the total issued fully paid quoted ordinary shares
of 29,210,100.
Shareholder
Fully Paid
Ordinary Shares
Percentage
of Total
1
N & J PROPERTIES PTY LTD
3,565,000
12.20%
2
ALTSHULER SHAHAM TRUSTS LTD
2,862,997
9.80%
3
LINK TRADERS (AUST) PTY LTD
1,840,123
6.30%
4
BNP PARIBAS NOMINEES PTY LTD
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