202"
Annual Report
The builders of global digital finance
digitalx.com
ASX:DCC
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Contents
Letter from the Chair
Directors’ report
Directors
Highlights
Auditor’s Independence declaration
Auditor’s report
Consolidated statement of profit or
loss & other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
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Operating & financial review
Remuneration report
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Consolidated statement of cash flows
Notes to the consolidated
financial statements
Corporate directory
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Letter from the Chairman
Dear Shareholders,
The results for Financial Year 2024 are disappointing. Amongst a return to strong digital asset prices and in a year
where our two cornerstone funds were ranked in the top 3 performing funds in Australia, the financial year loss is
simply disappointing. Notwithstanding that, the Company maintains a strong balance sheet and the fundamental
building blocks to turn the financial result around.
The Company’s two fundamental businesses, funds management and the Sell My Shares business, both performed
well, with Sell My Shares continuing to break month-on-month records for transactions and revenues. As highlighted
above, the Company’s Bitcoin wholesale Fund and the wholesale Digital Asset Fund both performed extremely well,
ranking as leading performers in the Australian market. However, growing new funds under management continued
to be a challenge.
The Company’s biggest move in Financial Year 2024 came to fruition in early July 2024, after the end of the Financial
Year, with the listing of the Company’s spot Bitcoin ETF on the Australian Securities Exchange. This was a truly
remarkable achievement for the Company, to be the first Australian-based company to list a Bitcoin ETF on the ASX,
and it speaks to the depth of knowledge and talent within the Company’s ranks. Labeled ‘the People’s ETF’, the
Bitcoin ETF is the first opportunity Australian retail investors have had to gain direct exposure to Bitcoin on the ASX
(other than buying DCC shares) without buying and holding the Bitcoin themselves. Heading into the new Financial
Year, the Bitcoin ETF will form the cornerstone of our funds management business.
The digital asset space continues to evolve slowly, but it is clear that concepts and processes that are the centerpiece
of digital asset technologies are slowly gaining traction and, importantly, understanding amongst the broader
community. Real world asset tokenization continues to be a concept spoken about enthusiastically amongst the
digital asset community, however it has been slower in its adoption in traditional investment markets.
Notwithstanding that, DigitalX remains ready to be a first mover as this space continues to develop.
With the lessons from 2024 behind us, and with a very strong balance sheet underpinning our business, the
Company’s focus in the coming financial year will be on diligent cost control to ensure that as we continue to work
on growing our revenues, the Company chooses the correct path back to break even and profitability for the benefit
of all shareholders.
On behalf of the Board, I would like to thank shareholders for their continued support in 2024.
Sincerely
Toby Hicks
Non-Executive Chair
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Interim CEO Report
As Interim CEO since September 2024, my primary focus has been on understanding the required changes
necessary in the business to reach profitability as quickly as possible. During the initial phase, I conducted a
thorough analysis of the staff's activities and meticulously reviewed the FY25 budget
Based on this analysis, I have identified several short-term objectives critical for directing the business toward
sustained profitability and summarised below.
1.
Improve Sales capability
2.
Assess the possible merger of the Bitcoin Fund into BTXX
3.
Tighten SMS control environment and improve operational efficiency
4.
Enhance product roadmap for Drawbridge
5.
Launch global distribution and retail channels for the Real World Asset Tokenisation (RWAx) fund
6.
Optimise and redirect marketing budget to focus on sales channels for BTXX and the active strategy
DigitalX Fund
7.
Explore low-risk opportunities to generate revenue from the Bitcoin held on the balance sheet
8.
Ensure robust expense management processes in place.
I am actively monitoring progress on each of these short-term goals, whilst collaborating with the Board to identify
and appoint a permanent CEO for DigitalX.
Regards
Greg Dooley
Non-Executive Director and Interim CEO
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Directors
The Company’s Directors present their report together with the financial report on the consolidated entity (referred
to hereafter as the Group or Consolidated entity) consisting of DigitalX Limited (DigitalX or the Company) and the
entities it controlled at the end of, or during, the year ended 30 June 2024. Information contained within this report
and the financial report is presented in Australian Dollars ($AUD).
The following persons were Directors of DigitalX during the financial year and up to the date of this report, unless
stated otherwise:
Mr Toby Hicks
Non-Executive Chairman
Term of Appointment
Appointed 10 July 2019
Status Independent Non-Executive
Current Directorships
None
Previous Directorships of Listed Entities within past 3 years
None
Experience
Mr Hicks is a Partner of Steinepreis Paganin Lawyers & Consultants with over 20 years’ experience advising
companies, both public and private, on matters relating to corporate governance, capital raisings and mergers and
acquisitions, as well as general commercial and strategic legal advice. He acts for a number of ASX-listed companies.
Mr Hicks holds a Bachelor of Business (Management) and a Bachelor of Laws as well as a Graduate Diploma in
Company Secretarial Practice from the Governance Institute and is a Chartered Secretary.
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Mr Hicks spent 16 years as a Governor at the University of Notre Dame Australia and served for 14 years on the
University’s Finance, Audit and Risk Committee and 4 years on the Law School Advisory Board (Fremantle).
Interests in securities held as at the date of the report
- 9,002,965 fully paid ordinary shares.
Mr Peter Rubinstein
Non-Executive Director
Term of Appointment
Appointed 10 July 2019
Status Independent Non-Executive
Current Directorships Genetic Technologies Limited
Since 31 January 2018
Previous Directorships of Listed Entities within past 3 years
None
Experience
Mr Peter Rubinstein has over 20 years’ experience in early-stage technology commercialisation through to public
listings on the ASX. He is a lawyer by training, having worked at one of the large national firms prior to moving in-
house at Montech, the commercial arm of Monash University.
Mr Rubinstein has had significant exposure to the creation, launch and management of a diverse range of technology
companies including: biotech, digital payments and renewable energy.
Mr Rubinstein is also Chairman of EasyPark ANZ - an early adopter of the “Smart City” opportunities for digital
parking, which recently launched in the city of Perth. He is also Chairman of Genetic Technologies Limited - a world
leader in Genomics for assessment of risk of serious disease.
Interests in securities held as at the date of the report
- 37,847,777 fully paid ordinary shares.
Mr Greg Dooley
Non-Executive Director
Term of Appointment
Appointed 3 August 2021
Status Independent Non-Executive
Current Directorships
None
Previous Directorships of Listed Entities within past 3 years
None
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Experience
Mr Dooley is an experienced corporate executive and was formerly the Managing Director of leading international
share registry company, Computershare Investor Services Pty Limited for 13 years before retiring in July 2020. During
his time at Computershare Mr Dooley also served as Managing Director of the Computershare Fund Services division,
which offered registry services for unlisted Funds.
Mr Dooley holds a Bachelor of Economics from Macquarie University, a Diploma of Applied Finance and Investment
and has completed the Australia Institute of Company Directors’ Company Directors course.
Interests in securities held as at the date of the report
- 1,773,601 fully paid ordinary shares.
Company Secretary
Mark Licciardo was appointed Company Secretary on 1 December 2023.
Mark was the founder and Managing Director of Mertons Corporate Services, and following Mertons’ acquisition
by Acclime, is Managing Director, Listed Company Services for Acclime Australia. Acclime provides a range of
professional services including company secretarial and corporate governance consulting to ASX listed and unlisted
public and private companies. He is also a former Company Secretary of ASX listed companies Transurban Group
and Australian Foundation Investment Company Limited.
Mark holds a Bachelor of Business Degree (Accounting) and a Graduate Diploma in Company Secretarial Practice, is
a Fellow of the Australian Institute of Company Directors, the Governance Institute of Australia, and The Chartered
Governance Institute.
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Highlights
Corporate
භ
Treasury holdings (including cash and fund units) increased by $19.1m or 88.7% over the 12 month period
to $40.6m.
භ
The value of the Company's 114.9 direct Bitcoin holdings (excluding fund units) increased by 61.6% to
$10.8m.
භ
In Mid-December 2023, DigitalX launched a Share Purchase Plan at $0.046, which raised a total of
$1,885,108.10.
භ
In mid-March 2024, the Company launched a Private Placement at $0.067, which raised a total of
$5,300,000.
භ
As part of the use of proceeds from both raises, the Company purchased up to $1 million worth of units in
its DigitalX Digital Asset Fund. An additional $1 million was invested to seed the Company’s Real World
Asset Tokenisation Fund.
භ
The Company was pleased to announce the launch of its brand-new educational platform, the DigitalX Ed
Hub in June 2024.
Funds
භ
The total revenue earned from management and performance fees over the 12 month period amounted
to $756,198, a 188.1% increase (2023: $262,516).
භ
Both the Company’s flagship funds, the DigitalX Bitcoin Fund and the DigitalX Fund, increased 101.8% and
88.9% respectively during the 12 month reporting period ended June 2024.
භ
In January 2024, the Australian Financial Review reported that the DigitalX Bitcoin Fund and the DigitalX
Fund were ranked the 1st and 3rd best performing Australian funds over 2023 by Morningstar.
භ
The DigitalX Bitcoin Fund retained its rating from prestigious research house SQM Research over the
reporting period.
භ
On 12 January 2024, the application for DigitalX’s Bitcoin ETF was lodged with the ASX by the fund’s
Responsible Entity, K2 Asset Management.
Sell My Shares
භ
Sell My Shares continues to perform strongly, generating $2.5m in revenue over FY24. This is the highest
12 month revenue figure on record and represented an increase of 26.1% (2023 $1.98m).
භ
Sell My Shares continued its growing revenue trend over the period, completing over 10,000 trades.
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Sell My Shares in October 2023 transitioned to a new AFSL provider and executing broker to take
advantage of operating efficiencies resulting in improved margins
භ
Total volume of Sell My Shares transactions hit $360 million since acquisition in October 2021.
Partnerships
භ
On 13 November 2023 DigitalX was pleased to announce it had entered into a strategic partnership in the
form of a non-binding Memorandum of Understanding with Canadian-regulated digital asset fund
manager 3iQ.
භ
DigitalX announced that it would be working alongside ASX-listed K2 Asset Management to act as the
Responsible Entity for its DigitalX Bitcoin ETF, leveraging their many years of experience in managing ASX-
listed ETFs.
භ
On 14 May 2024 DigitalX announced that it had signed a distribution agreement with 3iQ Corp to promote
and grow 3iQs QMAP product in the Asia-Pacific Region.
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Operating and financial review
DigitalX continued its strategic focus on growing revenues through its established business units, reducing costs
and inefficiencies, and driving shareholder returns.
During the financial year, the principal activities of the Group included:
භ
Share sales via the Sell My Shares division,
භ
Funds under management, and
භ
Blockchain based product development
Operating Results
For the year ended 30 June 2024, the consolidated loss attributable to members of the consolidated entity before
providing for income tax amounted to AUD$4,792,901 (2023: loss of AUD$7,584,749). Total comprehensive
income for the year was AUD$6,184,026, a significant improvement from the previous year's comprehensive loss
of AUD$3,415,538. This improvement is primarily attributable to an increase in the fair value of digital assets. The
consolidated entity increased its revenue by $987,282 or 44% from operations in 2024 to AUD$3,255,469 (2023:
AUD$2,268,187), with the Sell My Share Business increasing its revenue by $517,720 or 26% and the funds
business $493,682 or 188%. Diluted earnings per share also improved to -0.61 cents (2023: -1.02). The
consolidated entity's net assets increased substantially to AUD$37,028,273 (2023: AUD$23,937,582), an increase
of 55% and net tangible assets per share increased by 38% to 4.03 cents per share (2023: 2.92 cents per share).
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Likely developments and expected results of operations
Looking forward, DigitalX is well placed to capitalise on its strengthened financial position and continue its efforts
of driving revenue growth through its digital assets funds management business via its wholesale and new Bitcoin
ETF (BTXX) retail channel, Sell my Shares Business and Web 3.0 channels. With a continued focus on educating the
market on digital assets, focus on optimising operating costs and driving shareholder value.
Refer to the Operating and Financial Review and the CEO Outlook, which form part of the Directors report, for
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Corporate
Treasury
The Company’s digital asset treasury holdings (including fund units) increased by $19.1 million or 88.7% over the 12
month period, from $22.5 million at the end of June 2023 to $40.6 million at 30 June 2024. The increase in value can
be attributed to the appreciation in the price of Bitcoin and broader digital assets, namely due to increased demand
from retail and institutional investors following the US Securities and Exchange Commission's approval of US-based
spot Bitcoin ETFs in early January 2024.
The price of Bitcoin increased 106.3% over the 12 month period to AU$94,052, while the value of the Company's
Bitcoin holdings increased by 61.6%. The discrepancy in performance of the Company’s treasury holdings was due
in large part to DigitalX management selling down a portion of its Bitcoin holdings held in Treasury (~23%) in
September 2023. As at 30 June 2024, DigitalX Limited held 114.9 BTC in its treasury (not including fund units).
Private Placement
In mid-March 2024, the Company launched a Private Placement to raise $3,000,000 (before costs). Having generated
significant interest and receiving strong support from new and existing institutional and sophisticated investors, the
Company raised a total of $5,300,000 under the Placement. The Company issued 79,104,479 new DCC Ordinary
Shares at a price of $0.067 per share, with 89,104,479 attached options exercisable at $0.10 which expire 30
September 2024. The Issue Price represented a discount of 19.2% to the closing Share Price of $0.083 on 13 March
2024.
Share Purchase Plan
In mid-December 2023, the Company launched a Share Purchase Plan to raise up to $2.5 million. The Plan entitled
Eligible Shareholders, irrespective of the size of their shareholding in DigitalX, to purchase up to $30,000 worth of
Shares at an issue price of $0.046 per Share. As at the closing date of 25 January 2024, the Company was pleased to
announce that it raised a total of $1,885,108.10, with 40,980,513new DCC OrdinarySharesissued to eligible
applicants. Each of the Company’s Directors elected to subscribe for their full entitlement under the SPP.
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Use of Proceeds from Company Raises
As part of the use of proceeds from both raises, the Company purchased $1 million worth of units in its DigitalX
Digital Asset Fund and an additional $1 million was invested to seed the Company’s DigitalX Real World Asset
Tokenisation Fund (RWAx). The balance of funds raised is being used for working capital.
Environment, Social and Governance (ESG)
The ESG Dashboard (provided by ESG technology partner, Socialsuite) provides a snapshot of DigitalX’s progress to
30 June 2024. The Company recognises the impact of its activities and is committed to implementing ESG awareness
across its activities. The business has a number of assessments to be carried out by SocialSuite over the coming
quarter.
Mt Gox
DigitalX is pursuing legal action to secure the rights to Bitcoin that has been recovered by the liquidators of historical
crypto exchange, Mt Gox. During the reporting period, the Company was awaiting the decision of the Federal Court
of Australia on the Company's summary judgment application in this matter. Following the end of the reporting
period, the Court released its decision, which was announced on 9 July 2024.announcementliŶŬ
DigitalX Education Hub
The Company was pleased to announce the launch of the DigitalX Ed Hub over the final quarter. The DigitalX Ed
Hub is the Company’s brand new educational platform designed to empower and educate investors about the
dynamic world of digital assets.
The initiative was led by the Company’s recognition of the importance of providing robust educational resources to
support informed investment decisions.
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Business Unit Performance
DigitalX Asset Management
Name
Value ($USD) as at 30 June 2024
Bitcoin
$60,931
Ethereum
$3,375
Source: CoinGecko, as at 30 June 2024. https://www.coingecko.com/
With the recently approved US-based spot Bitcoin ETFs posting assets under management of up to ~US$53.5 billion
in under 6 months, the price of Bitcoin managed to surpass US$73,000 during March 2024, achieving a new all time
high. At the conclusion of the period, funds under management increased to $37.6 million, representing a period-
on-period increase of 86.2% due to the continued volatility in digital asset prices continuing into the 2024 financial
year.
Both the Company’s flagship Funds in the DigitalX Bitcoin Fund (“DXBF”) and the DigitalX Fund (“DXF”) increased
101.8% and 88.9% during the 12 month reporting period ended June 2024. By comparison, the S&P Cryptocurrency
Top 10 Equal Weight Index (AUD) increased 82.4%, AUD gold rose 21.3%, and the All Ordinaries Index increased
8.3% over the 12 month period ended 30 June 2024.
In January 2024, the Australian Financial Review reported that the DigitalX Bitcoin Fund and the DigitalX Fund were
ranked the 1st and 3rd best performing Australian funds over 2023 by Morningstar. The DigitalX Bitcoin Fund
returned 149.0%, while the DigitalX Fund returned 116.1% over the calendar year ending 31 December 2023.
During the reporting period, DigitalX Asset Management was pleased to announce that the DigitalX Fund and DigitalX
Bitcoin Fund were ranked 3rd and 4th among the top-performing APAC cryptocurrency hedge funds for Q4 2023 by
Preqin, and 3rd and 5th for H2 2023. In Q1 2024, the DigitalX Bitcoin Fund and DigitalX Fund maintained strong
performance, ranking 2nd and 5th respectively. Additionally, the DigitalX Bitcoin Fund concluded the H1 period
ending 30 June 2024 as the 3rd top-performing fund.
The Company was pleased to have the DigitalX Bitcoin Fund retain its rating from prestigious research house SQM
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Research over the reporting period. The DigitalX Bitcoin Fund managed to maintain its ranking as the number one
performing fund by independent research house SQM Research over both a 1 year and 3 year annualised period, as
at the conclusion of June 2024. All DigitalX Fund assets are secured with an institutional grade custodian with
insurance.
As part of the DigitalX Fund Quarterly Performance Fee announcement released to market on 12 April 2024, as at
the Quarter ending March 2024 the DigitalX Fund earned a quarterly performance fee of $271,883. As per the
DigitalX Fund IM this fee is accrued monthly and locked in when quarterly performance surpasses the high water
mark. With the addition of the performance fee, the total revenue earned from management and performance fees
over the 12 month period amounted to $756,198, a 188.1% increase from FY23’s $262,516.
DigitalX continues to demonstrate that it offers a safe pair of hands for investors seeking exposure to digital assets.
Digital asset management presents new risks and requires a distinctly unique set of skills, such as new investment
processes, understanding of digital wallets, secure asset storage, and methods of valuing assets via real-time on-
chain data. All DigitalX fund assets are secured with an institutional grade custodian with insurance.
DigitalX Bitcoin ETF (ASX: BTXX)
On 12 January 2024, the application for DigitalX’s Bitcoin ETF was lodged with the ASX by the fund’s Responsible
Entity, K2 Asset Management. The application follows the Company’s November Quarterly announcement that
stated that DigitalX intends to be launching a spot Bitcoin ETF on the ASX. This was in partnership with K2 Asset
Management (an ASX-listed diversified financial services firm with $4 billion in assets under management) and 3iQ
(Canadian digital asset manager with 10+ years investment experience).
Subsequent to the conclusion of the period, DigitalX Asset management successfully launched its flagship spot
Bitcoin ETF on the Australian Securities Exchange (ASX). The ETF commenced trading on the ASX on 12 July 2024.
DigitalX Real World Asset Tokenisation Fund (RWAx)
Since launching the RWAx Fund in June of 2023, the Company has been focusing on securing cornerstone investors,
identifying distribution channels, and improving the operational efficiency of the investment selection process.
Incorporating feedback from various investment groups and financial institutions, the Fund has been able to create
a portfolio with enhanced returns and liquidity to meet 30-day redemptions, and has now been seeded with $1m.
Discussions are ongoing to expand this Australian-first funds management product to offer investors exposure to
multiple pools of digital tokens backed by different classes of traditional assets, distributed domestically and
internationally to investors.
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Sell My Shares
Sell My Shares continues to perform strongly, generating $2.5 million in revenue over FY24 (2023: $1.98 million).
This is the highest 12 month revenue figure on record with SMS recording a great result in the 2024 financial year,
increasing 26.1% from FY23.
Sell My Shares continued its growing revenue trend over the period, completing over 10,000 trades (2023: 8,400).
Total volume of Sell My Shares transactions was greater than $360 million since acquisition in October 2021. Overall,
the strategic initiatives executed by current management have been the primary reason for the increase to Sell My
Shares revenue. A referral link to our partner, Raiz, has also gone live via the Sell My Shares website and email
correspondence with customers, which generates income through a commission arrangement.
As part of the Company's new strategic initiatives, Sell My Shares transitioned in October 2023 it’s AFSL provider and
executing broker. The transition has resulted in improved margins of >10%.
Product Development
Investment Process Automation - DigitalX Playlist
The team continued work on encoding the portfolio composition component of the investment process, which is
called the DigitalX “Playlist”. The team is exploring and prototyping decentralised alternatives to traditional methods
of portfolio construction, sourcing and analysis of asset data. The development is being conducted internally and
with partners, including the Digital Finance CRC (DFCRC). This approach presents opportunities for comparative
assessment, synergies, and differentiation across DigitalX product offerings. It may also provide additional revenue
opportunities that are complementary to traditional Funds Under Management models.
Digital Distribution Channels
The product team continues assisting with identifying and prototyping distribution options for the Company’s RWAx
Fund. This is to support scaling customer access for the target customer segments and asset classes selected by the
Funds business. During the quarter this included creating a roadmap of opportunities and requirements to be able
to facilitate offshore and onshore distribution platforms.
Retail Support
The team continued to support the DigitalX Bitcoin ETF launch with project processes and tooling. In addition, the
product team is participating in a process review of the SMS business with a view to enhancing SMS’s tooling.
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Strategic Partnerships
On 13 November 2023, DigitalX announced that it had entered into a strategic partnership in the form of a non-
binding Memorandum of Understanding (“MoU”) with Canadian-regulated digital asset fund manager 3iQ to work
on the distribution of its digital asset investments products and to investigate and undertake the work to launch a
spot Bitcoin ETF on the ASX.
Following ongoing discussions, DigitalX and 3iQ identified the desire to work together to develop and distribute their
digital asset investment solutions in Australia and internationally. The MoU enables DigitalX and 3iQ to leverage each
other's digital asset investment expertise and global distribution networks for its existing products, as well as
collaborate on future fund product development. This aligned with the Company’s 14 May 2024 announcement
which stated that DigitalX and 3iQ had signed a distribution agreement to promote and grow 3iQs QMAP product in
the Asia-Pacific Region.
The Agreement details that DigitalX will receive a referral fee for introducing potential investors to 3iQ’s QMAP
platform, with the intention of generating revenue for the Product within the territory of Australia and the broader
Asia-Pacific (APAC) region, excluding Japan.
During the period, DigitalX also announced that it would be working alongside ASX-listed K2 Asset Management to
act as the Responsible Entity for the DigitalX Bitcoin ETF, leveraging their many years of experience in managing ASX-
listed ETFs, compliance systems, and Australian financial services licence requirements.
On 5 April 2024, DigitalX announced via its social media channels, an exclusive partnership with Liquidity. The
partnership allows Liquidity members the ability to invest directly through the platform into DigitalX’s own wholesale
fund products, including the DigitalX Fund and DigitalX Bitcoin Fund.
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DigitalX Limited
Directors' report
30 June 2024
The directors present their report, together with the financial statements on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of DigitalX Limited (referred to hereafter as 'DigitalX' or the 'company') and the entities it
controlled at the end of, or during, the year ended 30 June 2024. Information contained within this report and the financial
statements is presented in Australian Dollars ($AUD).
Directors
The following persons were directors of DigitalX Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Toby Hicks
Non-Executive Chair
Peter Rubinstein
Non-Executive Director
Greg Dooley
Non-Executive Director
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
●
Share sales via the Sell My Shares division;
●
Funds under management; and
●
Blockchain product development.
Risks
As a business operating in the digital asset ecosystem, the company considers the risks and uncertainties associated with the
digital assets and distributed ledger platforms largely related to technology, safekeeping of digital assets, fluctuation of asset
prices, regulatory and compliance, and the continually evolving nature of the digital asset markets.
References made to the DigitalX Bitcoin Fund, DigitalX Digital Asset Fund and DigitalX Real World Assets Tokenisation Fund
('RWAx') (previously known as the DigitalX Asset Reference Token Fund) will be herein collectively referred to as the 'funds'.
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DigitalX Limited
Directors' report
30 June 2024
Key Risks
Impact
Mitigation
Price risk of digital
assets
The consolidated entity holds digital assets as a
balance sheet asset and manages digital assets
on behalf of clients through the funds
management business. Price volatility of digital
assets may cause impact to the consolidated
entity ’s performance.
Price volatility is inherent to the digital asset
markets. The company’s position has been as a
long-term holder of Bitcoin but as the market has
begun to mature the company has started to
diversify into other digital asset holdings such as
Ethereum. The company will, during periods of
heightened volatility, review its core positions
from an acquisition or divestment perspective.
The funds business will review the holdings
monthly as part of the investment committee
process and limits exposure to any one asset to
40% in line with the investment memorandum.
Safeguarding of digital
assets
Due to the emerging nature of digital assets,
there is a heightened risk around the security
and management of access to digital assets.
The company and the funds both utilise a best-
in-class custodian (Bitgo) to manage the security
and management of digital assets with the
objective to maximise the amount held in cold
storage.
The custodian also maintains its own insurance
policy over digital asset balances which
proportionally covers digital assets held in cold
storage.
Blockchain technology
Blockchain technology is a new and nascent
technology that continues to evolve from a
technological perspective. The company’s funds
and product development business both utilise
blockchain technology.
The company mitigates this risk through a
number of different mechanisms such as, hiring
staff experienced in digital assets and blockchain
technology and supporting ongoing training and
development, rigorous deployment processes for
products and due diligence and testing on new
blockchain technology service providers such as
custodians, wallets, exchanges and smart
contracting languages.
Regulatory regime
around digital assets
Digital assets are an evolving asset class and
the regulation regime around digital assets
continues to change.
Where applicable, the company maintains an
Australian Financial Services Licence
authorisations for dealing in digital assets and
has done so since 2018.
The company continues to monitor ongoing
changes in legislation for impacts on the
business. Most recently, the
company responded to the Treasury
Consultation paper on Crypto Asset Secondary
Service Providers.
During the prior year, as part of the ongoing
evolution and uplift in risk practices,
the company also implemented a fortnightly
financial service compliance meeting, in addition
to its quarterly review, and appointed a Chief
Risk Officer.
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DigitalX Limited
Directors' report
30 June 2024
Key Risks
Impact
Mitigation
Impact of climate
The company’s current environmental impact is
primarily through its physical office locations,
travel and technology infrastructure and has
limited exposure to physical assets such as
plant, machinery and equipment. However, the
environmental impact of digital assets continues
to be a complex and evolving matter.
During the period the company migrated its core
technology infrastructure to a Tier 1 service
provider with carbon neutral emissions from its
data centres.
The consolidated entity has also begun
commencing offset the carbon emissions from its
Bitcoin holding as disclosed in its ESG Baseline
Report.
Furthermore, the company has also begun to
diversify its digital asset portfolio to assets that
utilise lower energy consensus mechanisms
such as Ethereum’s proof of stake.
Business continuity and
cyber
As a technology business focussed on digital
assets business continuity with respect to cyber
and IT are an increasing risk in the current
environment with the ongoing adoption of remote
working and adoption of software as a service for
key business applications.
To mitigate risks the company has a cloud first
approach to managing its technology
infrastructure and applications reducing the
reliance on physical office locations supported by
the use of best practices suitable to the size and
nature of the organisation (such as white labelled
IP, multifactor authentication etc.). Further to
this, each year staff undertake a cyber security
refresher led by the company’s Chief Technology
Officer.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
Message from the Board of Directors
The directors present this Remuneration report, which forms part of the Directors’ report for the financial year ended 30 June
2024.
The directors note that director and executive remuneration continues to be an area that receives stakeholder focus and
scrutiny, as such the Remuneration report has been structured in an attempt to provide transparency and clarity to readers
around the framework, policies and remuneration of DigitalX’s directors and its executives.
The remuneration report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
For the year ended 30 June 2024, the Board of Directors ('the Board') as a whole determined and reviewed compensation
arrangements for the Executive Director and where applicable the Executive Team. The Board assessed the appropriateness
of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum shareholder benefit from the retention of a high-quality team. The
objective of the company’s remuneration framework was to ensure reward for performance was competitive and appropriate
to the results delivered.
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DigitalX Limited
Directors' report
30 June 2024
Base pay
Directors and executives are offered a competitive base salary. Base pay for executives is reviewed annually by the Board to
ensure that individual executive’s pay is competitive with the market and is also reviewed upon promotion or additional
responsibilities.
There is no guarantee of base pay increases fixed in any executive or director contracts.
Commission
There is no entitlement to commissions-based remuneration.
Short term incentives (STI)
Chief Executive Officer
To align the remuneration of the CEO and the performance of the company, the CEO was issued STI in the form of
performance rights during the financial year under her executive services agreement.
Long term incentives (LTI)
There were no LTI issued for the year ended 30 June 2024.
Performance metrics
At 30 June 2024, the following STI were in place with performance metrics:
Item
Tranche 1
Tranche 2
Tranche 3
Volatility (%)
N/A
N/A
N/A
Risk-free interest rate (%)
N/A
N/A
N/A
Expected life of option (years)
1 year
1 year
1 year
Exercise price per terms & conditions
$0
$0
$0
Underlying security spot price
$0.048
$0.048
$0.048
Grant date
17/11/2023
17/11/2023
17/11/2023
Expiry date
15/07/2025
15/07/2025
15/07/2025
Valuation per right
$0.0480
$0.0480
$0.0480
Number issued
2,410,713
2,410,713
535,714
Vesting condition
Non-market,
performance. The
company having a
normalised cash flow
positive run rate by the
end of the 2023/2024
Financial year
Non-market,
performance.
The consolidated entity
holding funds under
management (FUM) of
not less than AUD$100
million by 30 June
2024.
Non-market,
performance.
Achievement of eNPS
(employee net promoter
score) higher than 30
June 2023.
At 30 June 2024, there were no LTI in place with performance metrics.
Relationship between the remuneration policy and company performance
The Board seeks to align the interests of the Executive Team with those of the shareholders when setting future short and
long-term benefits. For the year ended 30 June 2024 the total remuneration is reflective of the remuneration strategy with
adjustments made to reflect the current state of the consolidated entity and the change in performance from the previous year,
this is evident from the relationship between:
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DigitalX Limited
Directors' report
30 June 2024
●
Total KMP reported remuneration decreased 28.0% from $948,977 to $683,303, primarily reflective of reduced number
of KMP in the current year. This reduction in KMP aligns with the company’s strategic decision to streamline the executive
team and improve operational efficiency. This is reflected in the reduction in operating expenditure (excluding fund
management expenses and non-cash items) relative to income, which saw a 17% improvement over the same period.
Total base remuneration (including other benefits) was down 27.9% from $761,480 to $549,189, aligned with the above
reduction in KMP. At-risk remuneration was down 28.5% from $187,496 to $134,113, in line with the share-based
compensation granted during the financial year, which reduced in line with the reduction in members of KMP.
●
Decrease in vested at-risk remuneration to $66,398 from $95,328 (30.3% decrease from the prior year) reflects the
company’s performance against key performance indicators (KPIs) such as achievement of a cash flow positive run rate,
funds under management hurdles and improvement in the employee net promoter ('eNPS') score. This decrease
demonstrates the direct link between the company’s performance and the remuneration outcomes for the Executive
Team, ensuring that remuneration is aligned with the shareholders’ interests.
The consolidated entity is not yet at stage of its development where it considers benchmark returns against an ASX peer
group (blockchain focused) relevant based on limited inclusions and comparable data.
Non-executive directors
Non-executive directors remuneration arrangements include compensation in the form of annual directors’ fees in accordance
with their relevant service agreement. The non-executive directors from time to time may receive incentive compensation in
the form of share-based payments (as approved by shareholders). The maximum aggregate directors fee pool limit is
$350,000 which was approved on 21 November 2019.
For the year ended 30 June 2024, all non-executive directors received a base fee of $AUD50,000 exclusive of entitlements,
the chairman is entitled to an additional $AUD25,000 for fulfilling the duties of the chair.
Amounts payable to director-controlled entities for services provided by directors for the year ending 30 June 2024 is detailed
in the 'Details of remuneration' table of this report. The consolidated entity may carry out consulting activities with the directors
on an arm’s length basis in the normal course of business.
Future remuneration developments
The directors note at last year’s annual general meeting the remuneration report passed unanimously on a poll and there were
no comments on the remuneration report. There are no future developments planned.
Use of remuneration consultants
During the financial year ended 30 June 2024, the consolidated entity, did not engage the services of a remuneration
consultant.
Details of remuneration
Key Management Personnel
The Key Management Personnel ('KMP') of the consolidated entity consist of the Board and Executives. This is the case due
to the size and scale of the consolidated entity’s current operations. All the named persons held their current position for the
whole or part of the financial year and since the end of the financial year unless otherwise stated.
Position
Status
Term as KMP
Chairman and Non-Executive
Director
Non-Executive KMP
Full Year
Non-Executive Director
Non-Executive KMP
Full Year
Non-Executive Director
Non-Executive KMP
Full Year
KMP
Toby Hicks
Peter Rubinstein
Greg Dooley
Lisa Wade (resigned 3
September 2024)
Chief Executive Officer
Executive KMP
Full Year
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
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DigitalX Limited
Directors' report
30 June 2024
Short-term benefits
Post-
employme
nt benefits
Long-term
benefits
Share-based payments
Cash
salary
Director
Other
Super-
Long
service
Options
and
performanc
e
Ordinary
and fees
fees
benefits
annuation
leave
rights1
shares
Total
2024
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Toby Hicks
-
75,000
-
8,250
-
-
-
83,250
Peter Rubinstein
-
50,000
-
5,500
-
-
-
55,500
Greg Dooley
-
49,980
-
5,500
-
-
-
55,480
Other Key
Management
Personnel:
Lisa Wade2, 3
353,691
-
-
1,269
-
96,513
37,600
489,073
353,691
174,980
-
20,519
-
96,513
37,600
683,303
1 Refer to 'Share options and performance rights granted to key management personnel' and 'Shareholdings of key
management personnel' for additional details.
2 On 25 July 2023, Ms Wade's contract was varied from an Executive Services Agreement, to a Contractor Agreement.
Therefore, superannuation paid above is reflective of statutory superannuation paid during Ms Wade's tenure under the
Executive Services Agreement for the current financial year.
3 Resigned 3 September 2024.
Short-term benefits
Post-
employme
nt benefits
Long-term
benefits
Share-
based
payments
Short-term
benefits
Cash
salary
Director
Other
Super-
Long
service
Options
and
performanc
e
Cash
and fees
fees
benefits
annuation
leave
rights
bonus
Total
2023
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Toby Hicks
-
68,750
-
7,219
-
-
-
75,969
Peter Rubinstein
-
45,833
-
4,813
-
-
-
50,646
Greg Dooley
-
54,153
-
4,813
-
-
-
58,966
Other Key
Management
Personnel:
Lisa Wade
300,000
-
20,942
25,292
-
127,196
11,538
484,968
Jonathon Carley
123,679
-
(36,880)
9,773
-
20,150
-
116,722
David Beros
142,020
-
(24,030)
15,104
-
20,150
8,462
161,706
565,699
168,736
(39,968)
67,014
-
167,496
20,000
948,977
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DigitalX Limited
Directors' report
30 June 2024
30 June 2024 30 June 2023 30 June 2022 30 June 2021 30 June 2020
$AUD
$AUD
$AUD
$AUD
$AUD
Revenue and other income from operations
3,609,833
2,293,767
2,536,586
9,985,893
554,210
Net profit/(loss) before tax
(4,792,901)
(7,584,749)
(2,839,468)
6,756,954
(7,108,771)
Total reported in remuneration report
683,303
948,977
856,560
1,334,879
934,692
Remuneration - base
549,190
761,481
787,965
774,008
574,173
Remuneration - at risk
96,513
167,496
68,594
560,871
360,519
30 June 2024 30 June 2023 30 June 2022 30 June 2021 30 June 2020
Cents
Cents
Cents
Cents
Cents
Basic earnings/(loss) per share
(0.610)
(1.020)
(0.380)
1.000
(0.800)
Diluted earnings/(loss) per share
(0.610)
(1.020)
(0.380)
1.000
(0.800)
Share price at the start of year
4.100
2.600
4.900
1.700
5.500
Share price at the end of year
4.100
4.100
2.600
4.900
1.700
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors:
Toby Hicks
100%
100%
-
-
-
-
Peter Rubinstein
100%
100%
-
-
-
-
Greg Dooley
100%
100%
-
-
-
-
Other Key Management
Personnel:
Lisa Wade (resigned 3
September 2024)
73%
71%
27%
29%
-
-
Jonathon Carley (ceased as
KMP on 31 October 2022)
-
83%
-
17%
-
-
David Beros (ceased as KMP on
3 February 2023)
-
82%
-
18%
-
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Ms Lisa Wade (resigned 3 September 2024)
Title:
Chief Executive Officer
Agreement commenced:
24 February 2022 (amended 25 July 2023)
Term of agreement:
The employment will be ongoing until it is terminated in accordance with Ms Wade’s
Contractor Agreement (the 'Agreement'). The Agreement may be terminated by either
party giving 3 months’ written notice. Ms Wade will be under restraint and non-
solicitation clauses for up to 6 months after the termination of the Agreement.
Details:
On 25 July 2023, Ms Wade's contract was varied from an Executive Services
Agreement, to a Contractor Agreement. Below covers the key details prior to and post
the date of the contract variation.
From 25 July 2023: Ms Wade’s salary is $AUD330,000 per annum (exclusive of GST)
and her reasonable expenses, will also be paid by the company. The company is not
responsible for superannuation contributions on behalf of Ms Wade.
24 February 2022 to 24 July 2023: Ms Wade’s salary is $AUD300,000 per annum
(exclusive of superannuation) subject to annual salary reviews and her reasonable
expenses will also be paid by the company.
Under the agreements above, the company, in its absolute discretion acting reasonably, can assign and transfer the
employment to any of the company’s Related Bodies Corporate.
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24
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DigitalX Limited
Directors' report
30 June 2024
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year ended 30
June 2024 are set out below:
Name
Shares
Date
Issue price
Fair value
$
Lisa Wade
(resigned 3 September 2024)
800,000 2 February 2024
$0.047
37,000
Shares granted as part of remuneration were not subject to performance conditions and were awarded at the discretion of the
Board for the year ended 30 June 2024.
Options
Details of options over ordinary shares granted and vested for directors and other key management personnel as part of
compensation during the year ended 30 June 2024 are set out below:
Name
Number of
options
granted
Grant date
Vesting date
and
exercisable
date
Expiry date
Exercise
price
Fair value
per option
at grant
date
% vested
Max value
yet to vest
%
$
Lisa Wade*
1,415,094 4 April 2022
4 April 2024
11 April 2027
$0.091
$0.059
100.00%
-
Lisa Wade*
1,470,588 4 April 2022
4 April 2025
11 April 2027
$0.118
$0.057
77.46%
18,892
Lisa Wade*
1,530,612 4 April 2022
4 April 2026
11 April 2027
$0.153
$0.054
57.57%
35,073
Lisa Wade*
1,630,435 4 April 2022
4 April 2027
11 April 2027
$0.199
$0.052
45.80%
45,952
*Resigned 3 September 2024.
Options granted carry no dividend or voting rights.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Name
Number of
rights granted Grant date
Vesting date
Expiry date
Fair value
per right at
grant date*
% vested
Max value
yet to vest
%
$
Lisa Wade1, 2
2,410,713 17 November 2023
30 June 2024
15 July 2024
$0.048
-
115,714
Lisa Wade1, 2
2,410,713 17 November 2023
30 June 2024
15 July 2024
$0.048
-
115,714
Lisa Wade1, 2
535,714 17 November 2023
30 June 2024
15 July 2024
$0.048
-
25,714
1 Rights did not vest at 30 June 2024, therefore nil expense has been recorded as a vesting charge during the year ended 30
June 2024.
2 Resigned 3 September 2024.
* The value at grant date is calculated in accordance with AASB 2 Share-based Payment for performance rights granted
during the year as part of remuneration. No performance rights granted were exercised during the financial year.
Performance rights granted carry no dividend or voting rights.
25
25
25
DigitalX Limited
Directors' report
30 June 2024
Total opportunity
Expected to be
Options and
rights*
Ordinary
shares
Cash
Awarded
Forfeited
2024
$
$
$
%
%
Lisa Wade (resigned 3 September 2024)
353,656
37,600
-
34%
66%
* The value at grant date is calculated in accordance with AASB 2 Share-based Payment for performance rights granted
during the year as part of remuneration. No performance rights granted were exercised during the financial year.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Net other
the end of
30 June 2024
the year
remuneration
Additions
changes
the year
Ordinary shares
Toby Hicks
8,350,792
-
652,173
-
9,002,965
Peter Rubinstein
37,195,604
-
652,173
-
37,847,777
Greg Dooley
871,428
-
652,173
-
1,523,601
Lisa Wade (resigned 3 September 2024)
500,000
800,000
-
-
1,300,000
Total
46,917,824
800,000
1,956,519
-
49,674,343
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other members
of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
30 June 2024
the year
Granted
Exercised
other
the year
Options over ordinary shares
Toby Hicks
2,500,000
-
-
(2,500,000)
-
Peter Rubinstein
4,500,000
-
-
(4,500,000)
-
Greg Dooley
2,500,000
-
-
(2,500,000)
-
Lisa Wade (resigned 3 September 2024)
6,046,729
-
-
-
6,046,729
15,546,729
-
-
(9,500,000)
6,046,729
Performance rights holding
The number of performance rights over ordinary shares in the company held during the financial year by each director and
other members of key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
30 June 2024
the year
Granted
Vested
other
the year
Performance rights over ordinary shares
Lisa Wade (resigned 3 September 2024)
5,357,141
5,357,140
-
(5,357,141)
5,357,140
5,357,141
5,357,140
-
(5,357,141)
5,357,140
Other transactions with key management personnel and their related parties
During the year, the consolidated entity paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby Hicks is
a partner, $AUD45,565 for legal services rendered on various matters.
Future remuneration developments
The directors note at last year’s Annual General Meeting the Remuneration report passed with 94.60% voting for its adoption
and there were no comments on the Remuneration Report. There are no future developments planned.
26
26
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DigitalX Limited
Directors' report
30 June 2024
This concludes the remuneration report, which has been audited.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and the Risk Committee held during the year ended
30 June 2024, and the number of meetings attended by each director and/or committee member were:
Full Board
Risk Committee
Attended
Held
Attended
Held
15
15
-
-
14
15
-
-
15
15
4
4
-
-
4
4
Peter Rubinstein
Toby Hicks
Greg Dooley
Lisa Wade
Frances Cranston*
-
-
4
4
Held: represents the number of meetings held during the time the director or committee member held office.
* Frances Cranston was the company's Chief Risk Officer until her date of resignation on 12 July 2024. Ms. Cranston was
engaged by the company under a contractor arrangement and was not deemed a member of key management.
Shares under option
Unissued ordinary shares of DigitalX Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
18/12/2020
18/12/2024
$0.100
1,000,000
11/04/2022
11/04/2027
$0.091
1,415,094
11/04/2022
11/04/2027
$0.118
1,470,588
11/04/2022
11/04/2027
$0.153
1,530,612
11/04/2022
11/04/2027
$0.199
1,630,435
05/07/2022
29/08/2025
$0.110
5,240,000
12/05/2023
12/05/2027
$0.100
9,000,000
26/03/2024
30/09/2024
$0.100
89,104,479
110,391,208
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of the company issued on the exercise of options during the year ended 30 June 2024 and up
to the date of this report.
Shares under performance rights
Unissued ordinary shares of DigitalX Limited under performance rights at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under rights
17/11/2023
15/07/2024
$0.000
6,392,509
17/11/2023
15/07/2024
$0.000
6,392,522
17/11/2023
15/07/2024
$0.000
535,714
08/05/2024
30/06/2025
$0.000
2,500,000
15,820,745
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the company or of any other body corporate.
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DigitalX Limited
Directors' report
30 June 2024
Shares issued on the exercise of performance rights
There were no ordinary shares of DigitalX Limited issued on the exercise of performance rights during the year ended 30 June
2024 and up to the date of this report.
Indemnity and insurance of officers and auditors
During the financial period, the company paid a premium in respect of a contract ensuring the Directors, secretary and officers
of the company and of any related body corporate against a liability incurred as such a Director, Secretary or Officer to the
extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and
the amount of the premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the consolidated entity, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
The company has executed a Deed of Protection for each of the Directors. The company has not otherwise, during or since
the financial period, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate
against a liability incurred as such an officer or auditor.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility
on behalf of the company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf
of the company with leave of the Court under section 237 of the Corporations Act 2001.
Matters subsequent to the end of the financial year
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected the consolidated entity’s
operations, results or state of affairs, or may do so in future years other than those set out below.
Date of event
1 July 2024
9 July 2024
9 July 2024
3 September 2024
September 2024
Details of event
The company announced the expiry of 5,000,000 options without exercise, with a date of
cessation being 30/06/2024.
The company confirmed that on 9 July 2024 the Federal Court of Australia handed down
Orders in relation to the company's application for summary judgement in the matter between
two of the company's subsidiaries and Mr Alex Karis, a former director of the company. The
company's application for summary judgement in the matter was not granted, however Mr
Karis has been ordered to provide security for the company's costs of the proceeding for the
period until completion of discovery and court-directed mediation in the amount of $150,000
by payment to the Court within 28 days of the date of the orders, and his claim against the
company is stayed until payment of that security.
The company announced the approval of its DigitalX spot Bitcoin ETF ("ASX:BTXX") for
quotation on the Australian Stock Exchange ("ASX"). The DigitalX Bitcoin ETF provides a
simple, liquid and regulated structure for investors to gain exposure to the emerging digital
asset sector without the requirement to hold a digital wallet. The DigitalX Bitcoin ETF
commenced trading on 12 July 2024
Lisa Wade tendered her resignation as CEO and with agreement of the Board left the
company on 3 September 2024. Mr Greg Dooley, Non- Executive Director, has been
appointed as Interim Chief Executive Officer on a part time basis. At present, and pursuant to
ASX listing Rule 3.14.4, Mr Dooley will receive remuneration of $10,000 per month in addition
to his current Director fees. It is expected that Mr Dooley's appointment will be for a period of
no more than six months.
Due to the volatile nature and the materiality of the digital assets held, we disclose the value
of material digital assets held by the consolidated entity, excluding the DigitalX Fund and
DigitalX BTC Fund and unlisted digital assets, as at the close date of the 6eptember 2024.
28
28
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DigitalX Limited
Directors' report
30 June 2024
$AUD
$AUD
Number of coins
held at 30 June 2024
Spot price at 30
June 2024
$AUD
Spot price at 30
September 2024
Pro-forma impact
Coin
BTC
114.90
94,024
9
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 23 to the financial statements.
Consolidated
2024
2023
$
$
Other services - BDO Services Pty Ltd
Tax compliance
16,119
18,129
The directors are satisfied that the provision of non-audit services during the financial 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 as disclosed in note 23 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 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 APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and
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.
Officers of the company who are former partners of BDO Audit Pty Ltd
There are no officers of the company who are former partners of BDO Audit Pty Ltd.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
The Directors’ Report is signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the
Corporations Act 2001.
On behalf of the directors.
Toby Hicks
Chair
September 2024
29
29
Toby Hicks
29
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form
part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF DIGITALX LIMITED
As lead auditor of DigitalX Limited for the year ended 30 June 2024, I declare that, to the best of my
knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of DigitalX Limited and the entities it controlled during the period.
Phillip Murdoch
Director
BDO Audit Pty Ltd
Perth
30 September 2024
30
DigitalX Limited
Contents
30 June 2024
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Consolidated entity disclosure statement
Directors' declaration
Independent auditor's report to the members of DigitalX Limited
Shareholder information
General information
The financial statements cover DigitalX Limited as a consolidated entity consisting of DigitalX Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is DigitalX
Limited's functional and presentation currency.
DigitalX Limited is incorporated and domiciled in Australia. Its registered office and principal place of business is:
Suite 2, Level 4, 66 Kings Park Road
West Perth WA 6005
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on September 2024. The
directors have the power to amend and reissue the financial statements.
31
31
31
DigitalX Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Note
2024
2023
$
$
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Revenue from operations
4
3,255,469
2,268,187
Other income
5
354,364
25,580
Expenses
Professional and consultancy fees
6
(1,489,738)
(936,083)
Corporate expenses
(217,222)
(235,111)
Advertising, media and investor relations
(877,306)
(784,200)
Employee benefits expense
(3,582,755)
(3,916,059)
Share-based payments
30
(181,539)
(273,092)
Depreciation and amortisation
(193,286)
(250,269)
Realised and unrealised foreign exchange losses
(5,261)
(14,382)
Fair value movement of financial assets
(240,000)
(2,049,031)
Finance costs
8
(36,442)
(33,197)
Other expenses
7
(1,892,231)
(1,519,042)
Decrease in net assets attributable to unit holders
16
313,046
131,950
Loss before income tax expense
(4,792,901)
(7,584,749)
Income tax expense
9
-
-
Loss after income tax expense for the year attributable to the owners of
DigitalX Limited
19
(4,792,901)
(7,584,749)
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Fair value increase in digital asset holdings, net of tax
10,949,172
4,204,564
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of operations
27,755
(35,353)
Other comprehensive income for the year, net of tax
10,976,927
4,169,211
Total comprehensive income for the year attributable to the owners of DigitalX
Limited
6,184,026
(3,415,538)
Cents
Cents
Basic earnings per share
29
(0.61)
(1.02)
Diluted earnings per share
29
(0.61)
(1.02)
32
32
32
DigitalX Limited
Consolidated statement of financial position
As at 30 June 2024
Note
2024
2023
$
$
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Assets
Current assets
Cash and cash equivalents
10
6,054,713
3,380,080
Trade and other receivables
11
515,922
381,737
Digital assets
13
48,874,582
27,173,520
Other current assets
255,393
247,133
Investments
12
497,720
497,720
Total current assets
56,198,330
31,680,190
Non-current assets
Investments
12
-
240,000
Property, plant and equipment
29,315
52,291
Right-of-use assets
287,513
362,517
Intangibles
14
2,098,677
2,188,364
Total non-current assets
2,415,505
2,843,172
Total assets
58,613,835
34,523,362
Liabilities
Current liabilities
Trade and other payables
15
1,063,223
1,110,550
Lease liabilities
65,878
57,029
Net assets attributable to unit holders
16
14,482,863
9,108,506
Total current liabilities
15,611,964
10,276,085
Non-current liabilities
Lease liabilities
243,174
309,052
Deferred tax
9
5,730,424
643
Total non-current liabilities
5,973,598
309,695
Total liabilities
21,585,562
10,585,780
Net assets
37,028,273
23,937,582
Equity
Contributed equity
17
65,675,698
59,120,476
Reserves
18
19,661,336
9,475,031
Accumulated losses
19
(48,308,761)
(44,657,925)
Total equity
37,028,273
23,937,582
33
33
33
DigitalX Limited
Consolidated statement of changes in equity
For the year ended 30 June 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Issued
Accumulated
Total equity
capital
Reserves
losses
$
$
$
$
Balance at 1 July 2022
59,028,586
5,128,053
(37,073,176)
27,083,463
Loss after income tax expense for the year
-
-
(7,584,749)
(7,584,749)
Other comprehensive income for the year, net of tax
-
4,169,211
-
4,169,211
Total comprehensive income for the year
-
4,169,211
(7,584,749)
(3,415,538)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 17)
91,890
-
-
91,890
Share-based payments (note 30)
-
177,767
-
177,767
Balance at 30 June 2023
59,120,476
9,475,031
(44,657,925)
23,937,582
Issued
Accumulated
Total equity
capital
Reserves
losses
$
$
$
$
Balance at 1 July 2023
59,120,476
9,475,031
(44,657,925)
23,937,582
Loss after income tax expense for the year
-
-
(4,792,901)
(4,792,901)
Other comprehensive income for the year, net of tax
-
10,976,927
-
10,976,927
Total comprehensive income for the year
-
10,976,927
(4,792,901)
6,184,026
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 17)
6,517,622
-
-
6,517,622
Share-based payments (note 30)
37,600
351,443
-
389,043
Convertible note reserve transferred to accumulated losses
(note 18)
-
(91,051)
91,051
-
Share-based payment reserve transferred to accumulated
losses on expiry of warrants and options (note 18)
-
(1,051,014)
1,051,014
-
Balance at 30 June 2024
65,675,698
19,661,336
(48,308,761)
37,028,273
34
34
34
DigitalX Limited
Consolidated statement of cash flows
For the year ended 30 June 2024
Note
2024
2023
$
$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
Cash flows from operating activities
Receipts from customers (inclusive of GST)
2,340,231
2,158,938
Payments to suppliers and employees (inclusive of GST)
(7,612,526)
(7,498,091)
(5,272,295)
(5,339,153)
R&D tax incentive received
5
211,280
-
Interest received
15,775
226
Other income
5
50,658
14,588
Sale of Human Protocol Tokens
-
1,110,901
Receipts from/(payments for) security deposits
38,174
(47,430)
Interest and other costs of finance paid
8
(7,103)
(11,643)
Interest paid on lease liability
8
(29,339)
(13,881)
Net cash used in operating activities
28
(4,992,850)
(4,286,392)
Cash flows from investing activities
Payments for Bricklet deposit
12
-
(497,720)
Acquisition of property, plant and equipment
-
(44,554)
Payments for purchase of digital assets
13
(4,894,186)
(1,848,166)
Proceeds from sale of digital assets
13
8,501,325
4,507,118
Other
37,569
(10,000)
Net cash from investing activities
3,644,708
2,106,678
Cash flows from financing activities
Proceeds from issue of shares
17
7,185,104
-
Share issue transaction costs
17
(459,977)
-
Payments for redemptions of units in funds
(3,376,973)
(934,092)
Proceeds from applications for units in funds
730,000
391,423
Principal elements of lease payments
(57,032)
(176,421)
Net cash from/(used in) financing activities
4,021,122
(719,090)
Net increase/(decrease) in cash and cash equivalents
2,672,980
(2,898,804)
Cash and cash equivalents at the beginning of the financial year
3,380,080
6,278,410
Foreign exchange movement in cash
1,653
474
Cash and cash equivalents at the end of the financial year
10
6,054,713
3,380,080
35
35
35
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 1. Basis of preparation
Consolidated entity
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of DigitalX Limited ('company' or
'parent entity') as at 30 June 2024 and the results of all subsidiaries for the year then ended. DigitalX Limited and its
subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Material accounting policies
Basis of preparation
The financial report is a general-purpose financial report which has been prepared in accordance with Australian Accounting
Standards (AASBs) and interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. All amounts are presented in Australian Dollars, unless otherwise noted.
Compliance with IFRS
The financial report of the consolidated entity also complies with International Financial Reporting Standards ('IFRS') as issued
by the International Accounting Standards Board (IASB).
Note 2. Critical accounting judgements, estimates and assumptions
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.
Critical judgements in developing and applying accounting policies
The following are the critical judgements, apart from those involving estimations (see notes below), that the directors have
made in the process of applying the consolidated entity’s accounting policies and that have the most significant effect on the
amounts recognised in the consolidated financial statements.
• Revenue recognition (note 4)
• Digital assets, including fair value of digital assets (note 13)
• Fair value of investments (note 12)
• Consolidation of DigitalX Funds (note 26)
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of
the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
• Valuation of share-based payments (note 30)
• Impairment testing of goodwill and investments (note 14)
Going concern
At the date of this report the consolidated entity has a strong working capital position and its cash flow forecast indicates that
it expects to be able to meet its minimum commitments and working capital requirements for the twelve-month period from
the date of signing the financial report.
Presentation and functional currency
Presentation currency
The consolidated financial report is presented in Australian Dollars.
Functional currency
The individual financial statements of each entity are presented in the currency of the primary economic environment in which
the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial
position of each group entity are expressed in Australian dollars (‘$AUD’), which is the functional currency of the company
and the presentation currency for the consolidated financial statements. Due to the nature of these activities for all entities in
the consolidated entity the functional currency has been determined to be $AUD.
36
36
36
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 2. Critical accounting judgements, estimates and assumptions (continued)
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of
each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Current and non-current classification
An asset is current when it is:
• expected to be realised or intended to be sold or consumed in normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the reporting period; or
• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.
The consolidated entity classifies all other assets as non-current.
A liability is current when it is:
• expected to be settled in normal operating cycle;
• held primarily for the purpose of trading;
• due to be settled within twelve months after the reporting period; or
• there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The consolidated entity classifies all other liabilities as non-current.
Historical cost convention
The consolidated financial report has been prepared under the historical cost convention, except for digital assets that are
measured at fair value at the end of each reporting period, as explained in the accounting policies below. Cost is based on
the fair value of the consideration given in exchange for assets.
Note 3. Operating segments
Identification of reportable operating segments
AASB 8 requires operating segments to be identified based on 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
its performance.
Based on the information used for internal reporting purposes by the Chief Operating Decision Maker (CODM), being the
Board, which makes strategic decisions, at 30 June 2024 the consolidated entity operated three segments, Product
Development, Asset Management and Other. There have been no changes to operating segments from the corresponding
period ended 30 June 2023.
Segment description
Product Development ('PD')
The consolidated entity develops its own products such as, RegTech (Drawbridge), and FinTech (Sell My Shares), as well as
providing consulting, technical due diligence, solution design and development to businesses by utilising distributed ledger
solutions and best of breed blockchain technologies.
Asset Management ('AM')
The AM division was setup in 2018 to give high net worth and institutional investors access to a portfolio of digital assets.
DigitalX operates three funds focused on digital assets, the DigitalX Fund, DigitalX BTC Fund, DigitalX Real World Assets
Tokenisation Fund ('RWAx') and has incurred upfront costs for the DigitalX spot Bitcoin ETF ('ASX:BTXX') (refer note 32 for
subsequent event on launch).
Other
Amounts disclosed as other, primarily relate to consolidated entity-wide functions including governance, finance, legal, risk
management, company secretarial and management of the corporate entity. This is not a segment as defined under AASB 8.
37
37
37
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 3. Operating segments (continued)
Segment performance and position
Product
development
Asset
management
Other
Total
Consolidated - 2024
$
$
$
$
Revenue
Segment revenue
2,499,271
756,198
-
3,255,469
Total revenue
2,499,271
756,198
-
3,255,469
Segment result*
124,269
(1,462,428)
(3,538,060)
(4,876,219)
Interest expense
(36,442)
Depreciation and amortisation
(193,286)
Decrease in net assets attributable to unit holders
313,046
Loss before income tax expense
(4,792,901)
Income tax expense
-
Loss after income tax expense
(4,792,901)
Assets
Segment assets**
2,895,481
303,653
55,414,701
58,613,835
Total assets
58,613,835
Liabilities
Segment liabilities
105,894
46,764
21,432,904
21,585,562
Total liabilities
21,585,562
Product
development
Asset
management
Other
Total
Consolidated - 2023
$
$
$
$
Revenue
Segment revenue
1,981,551
262,516
24,120
2,268,187
Intersegment revenue
-
-
-
-
Total revenue
1,981,551
262,516
24,120
2,268,187
Segment result
(691,823)
(1,544,699)
(5,196,711)
(7,433,233)
Interest expense
(33,197)
Depreciation and amortisation
(250,269)
Decrease in net assets attributable to unit holders
131,950
Loss before income tax expense
(7,584,749)
Income tax expense
-
Loss after income tax expense
(7,584,749)
Assets
Segment assets
3,307,917
261,208
30,954,237
34,523,362
Total assets
34,523,362
Liabilities
Segment liabilities
71,559
22,097
10,492,124
10,585,780
Total liabilities
10,585,780
Revenue earned from external customers by geography and major customer information is not able to be disclosed as the
information is not available to the consolidated entity.
For the purpose of segment reporting, the Funds Under Management segment does not include the operating results, segment
assets or segment liabilities of the DigitalX Fund, DigitalX BTC Fund, Real World Assets Tokenisation Fund and Digital Bitcoin
ETF as the CODM reviews the Funds on a fair value basis of the consolidated entity’s interest in the fund.
38
38
38
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 3. Operating segments (continued)
*Other segment result is comprised of the following:
- Operating expenses of the company: $2,655,501
- Funds management expenses of the consolidated entity, excluding the segments disclosed above: $480,481
- Other expenses of the consolidated entity, excluding the company and segments disclosed above: $402,078
**Other segment assets is comprised of the following:
- Digital assets of the company: $11,155,003
- Digital assets of the funds: $37,409,046
- Cash of the company and the funds: $5,388,971
- Investment in Bricklet: $497,720
- Right-of-use assets of the company: $287,513
- Trade and other receivables of the company and the funds: $211,910
- Other assets of the consolidated entity, excluding the company, funds and segments disclosed above: $464,538
***Other segment liabilities is comprised of the following:
- Net liabilities attributable to unitholders: $14,482,863
- Deferred tax liabilities: $5,730,424
- Trade and other payables of the company and funds: $910,565
- Lease liabilities of the company: $309,052
Note 4. Revenue from operations
Consolidated
2024
2023
$
$
Asset management fee revenue
756,198
262,516
Licensing revenue
-
24,120
Brokerage fee revenue
2,499,271
1,981,551
Revenue from operations
3,255,469
2,268,187
Accounting policy for revenue recognition
The consolidated entity recognises revenue as follows:
Asset management fee revenue
Revenue from contracts with clients is recognised when there is a right to invoice the client at an amount that reflects the
consideration to which the consolidated entity expects to be entitled in exchange for those services. This method corresponds
directly with the delivery of performance obligations by the consolidated entity to its clients.
Management fees are based on a percentage of the portfolio value of the fund and calculated in accordance with the
Investment Management Agreement or Constitution.
Performance fee arrangements give rise to variable consideration. An estimate of the variable consideration is recorded when
it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when
the associated uncertainty with the variable consideration is subsequently resolved. The consolidated entity’s entitlement to a
performance fee for any given performance period is dependent on outperforming certain hurdles.
Licensing revenue
Revenue from licensing is recognised over time as the services provided under licensing contract are provided over time and
the customer simultaneously receives and consumes the benefit of the service.
Brokerage fee revenue
Revenue from brokerage is recognised at point time once the sale has been completed.
39
39
39
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 5. Other income
Consolidated
2024
2023
$
$
Interest received
92,426
10,992
R&D tax incentive income
211,280
-
Bricklet income
33,274
4,484
Other income
17,384
10,104
Other income
354,364
25,580
Note 6. Professional and consultancy fees
Consolidated
2024
2023
$
$
Legal fees
66,874
233,414
Consulting fees
422,659
259,435
Funds management expenses
688,561
269,224
Tax consulting fees
193,194
72,069
Audit fees
118,450
101,941
1,489,738
936,083
Note 7. Other expenses
Consolidated
2024
2023
$
$
Regulatory, licensing and compliance
1,057,191
897,437
Occupancy
264,685
283,584
Other expenses
552,355
338,021
Bad debt expense
18,000
-
1,892,231
1,519,042
Note 8. Expenses
Consolidated
2024
2023
$
$
Loss before income tax includes the following specific expenses:
Finance costs
Interest and finance charges paid/payable
7,103
17,963
Interest charges paid/payable on lease liabilities
29,339
15,234
Finance costs expensed
36,442
33,197
Superannuation expense
Defined contribution superannuation expense
264,337
309,012
40
40
40
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 9. Income tax
Consolidated
2024
Restated*
2023
$
$
Income tax expense
Current tax expense
-
-
Deferred tax expense
-
-
Aggregate income tax expense
-
-
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
(4,792,901)
(7,584,749)
Tax at the statutory tax rate of 25%
(1,198,225)
(1,896,187)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible share-based payment
45,385
73,398
Assessable income not recognised through profit & loss
707,107
-
Other
(73,649)
(26,535)
Effect of different tax rates of subsidiaries operating in other jurisdictions
51
399
Tax losses and other timing differences not recognised
519,331
1,848,925
Income tax expense
-
-
Consolidated
2024
2023
$
$
Deferred tax asset
The balance comprises temporary differences attributable to:
Tax losses
4,617,236
3,811,885
Employee benefits
53,276
51,842
Leases
5,385
9,962
Accrued expenses
63,044
42,439
Blackhole deductions
156,205
100,938
Deferred tax asset not recognised
(4,895,146)
(4,017,066)
Deferred tax asset
-
-
Consolidated
2024
2023
$
$
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Revaluation of digital assets at fair value through other comprehensive income
5,729,781
-
Other
643
643
Deferred tax liability
5,730,424
643
41
41
41
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 9. Income tax (continued)
Consolidated
2024
2023
$
$
Provision for income tax
Provision for income tax
-
-
* The income tax note for the year ended 30 June 2023 has been revised to more accurately reflect tax losses and other
timing differences not recognised.
Deferred tax assets and liabilities
As at 30 June 2024, the consolidated entity has tax losses available to be applied in the future periods in the Australia and
the United States estimated to be $AUD16.5 million (2023: $AUD13 million) and $USD4.8 million (2023: $USD4.8 million)
respectively. The losses in respect of the consolidated entity’s operations in Hong Kong are immaterial. In addition, the
consolidated entity has gross capital losses in Australia estimated at $AUD1.54 million at 30 June 2024 (2023: $AUD1.54
million).
The future recovery of these losses is subject to the consolidated entity satisfying the requirements imposed by the regulatory
taxation authorities and passing the required continuity of ownership and same business test rules at the time the losses are
expected to be utilised. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only
if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Estimates and judgement – taxation
Income taxes
The consolidated entity operates in a newly emerging industry and the application of taxation laws in relation to
the consolidated entity’s activities may change from time to time. Changes in the taxation laws or in assessments or
interpretation or decisions in respect of, but not limited to the following, may have a significant impact on the consolidated
entity’s results:
• Jurisdiction in which and rates at which income is taxed;
• Jurisdiction in which and rates at which expenses are deductible;
• The nature of income taxes levied, for example whether taxes are assessed on the revenue account or on the capital account;
• Requirements to file tax returns; and
• The availability of credit for taxes paid in other jurisdictions, for example through the operation of double taxation treaties.
In recognition of the limited trading and tax history of the consolidated entity, management do not consider there is sufficient
evidence of probability of the ability to utilise temporary differences and tax losses and hence no deferred tax asset has been
recognised as at 30 June 2024 in relation to these assets. The consolidated entity will continue to assess the performance
and may in the future recognise some or all of these assets.
The consolidated entity has taken the approach to calculate income tax expense on the basis that all revenue and expenses
attributable to its operations are taxable in Australia and all revenue and expenses attributable to its foreign operations are
immaterial.
42
42
42
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 10. Cash and cash equivalents
Consolidated
2024
2023
$
$
Current assets
Cash at bank
3,046,539
2,890,080
Term deposit
3,008,174
-
Cash deposits at call
-
490,000
6,054,713
3,380,080
Cash deposits at call include cash balances on exchanges. The balance originates following a liquidation of digital assets.
Term deposit comprises cash held in a term deposit for a term of less than 90 days.
The term deposit of $3,008,174 entered into on 28 June 2024, earning 3.18% interest per annum, has a term of 30 days and
matures on 28 July 2024. This term deposit has subsequently been rolled forward for a further 30 day term.
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Note 11. Trade and other receivables
Consolidated
2024
2023
$
$
Current assets
Trade receivables
300,012
235,656
Less: Allowance for expected credit losses
-
-
300,012
235,656
Other receivables
-
37,509
Deposits
74,382
108,572
74,382
146,081
BAS receivable
141,528
-
515,922
381,737
43
43
43
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Investments
Consolidated
2024
2023
$
$
Current assets
Investment in Bricklet
497,720
497,720
Non-current assets
Investment in Bullion Asset Management Pte Ltd (BAM)
-
240,000
497,720
737,720
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous financial
year are set out below:
Opening fair value
737,720
2,290,994
Additions through Bricklet deposit
-
497,720
Fair value decrements through profit or loss
(240,000)
(2,050,994)
Closing fair value
497,720
737,720
Refer to note 22 for further information on fair value measurement.
Investment in Bullion Asset Management Pte Ltd (BAM)
Given the decision of Bullion Asset Management Pte Ltd to wind up its operations on 17 July 2024, the Board have made the
decision to apply a fair value adjustment to the valuation of the investment, reducing its value to nil (2023: $240,000).
Investment in Bricklet
During the prior year, the consolidated entity entered into a strategic partnership with Bricklet, a Sydney-based property tech
company. The partnership aims to combine technology, expertise, and resources to facilitate home ownership for everyday
Australians. Bricklet's blockchain-supported Homeowner Equity Share program enables buyers without a standard 20% home
deposit but with sufficient income to purchase residential property. A commitment of up to $500,000 in balance sheet funds
was made by DigitalX for Bricklet's property deals as seed capital for the RWAx Fund launch. Three Bricklet property deals
were funded during the 2023 financial year, as reflected above.
Investment in DigitalX Funds
The consolidated entity has provided seed capital to the DigitalX Fund (a unit trust), DigitalX BTC Fund (a unit trust) and
DigitalX Real World Asset Tokenisation Fund ('RWAx') (a unit trust), for the purpose of investing in and generating returns on
digital assets. As noted in note 3, the Board reviews the performance of the funds at fair value based on the reported fund net
asset value (NAV) each period. However, as the company also provides fund management services for the funds it is deemed
that the consolidated entity meets the definition of control under AASB10: Consolidated Financial Statements and as a result,
the financial position and performance of the DigitalX funds have been included in the consolidated entity financial statements.
The consolidated entity will continue to assess its position with respect to control of the funds at each reporting period and
there have been no changes to the consolidated entity’s assessment for the year ended 30 June 2024.
At 30 June 2024, the company’s holdings were as follows:
- DigitalX Fund: 53.41% (30 June 2023: 37.06%)
- DigitalX BTC Fund: 63.93% (30 June 2023: 60.82%)
- DigitalX RWAx Fund: 99.01% (30 June 2023: N/A)
Subsequent to period end, the intention is to transfer the Bricklet deposit into the RWAx fund. At the date of this report, the
transfer mechanism and date of transfer have been finalised for one of three properties.
44
44
44
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Investments (continued)
Consolidated
2024
2023
NAV at year end
DigitalX Fund
1.7029
0.9417
DigitalX BTC Fund
8.3449
4.1407
DigitalX RWAx Fund
0.9958
-
Note 13. Digital assets
Consolidated
2024
2023
$
$
Current assets
Bitcoin1,2
44,090,758
24,095,777
Other listed digital assets1,3
4,783,824
3,077,622
Non-listed digital assets4
-
121
48,874,582
27,173,520
1 Digital assets were measured at fair value using quoted prices as at 30 June 2024. Refer to note 32 for prices at the date of
this report.
2 The amount includes $AUD29,205,071 held by the DigitalX BTC Fund and $AUD8,203,975 held by the DigitalX Fund.
3 Includes all tokens that are not Bitcoin that are listed on an exchange. The amount includes $AUD4,121,645 held by the
DigitalX Fund.
4 Includes all tokens not listed on an exchange.
All digital assets have been recognised using the intangible asset method detailed in the accounting policy note below for all
periods presented.
Intangible
asset
$
Opening balance at 1 July 2022
23,568,863
Net trading activity
(2,658,952)
Revaluation
6,263,609
Closing balance at 30 June 2023
27,173,520
Opening balance at 1 July 2023
27,173,520
Net trading activity
(3,607,139)
Revaluation
25,308,201
Closing balance at 30 June 2024
48,874,582
Net trading activity is the net purchase and sale of digital assets and includes monthly rebalance for the DigitalX Fund and
DigitalX BTC Fund.
45
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45
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 13. Digital assets (continued)
Accounting policy for digital assets
Digital assets are assets such as Bitcoin and Ethereum, which use an open-source software-based online system where
transactions are recorded in a public ledger (blockchain) using its own unit of account. Digital Assets are an emerging
technology and asset class, and as such there are no specific accounting standards that cover the treatment, rather digital
assets are assessed by applying existing accounting standards in conjunction with guidance released by the accounting
standard setting bodies such as the IASB. Management consider it appropriate to group digital assets into a single balance in
the Consolidated Financial Statements and providing users with a reconciliation by category in the notes to the Financial
Statements. For the purpose of fair value disclosures, the consolidated entity has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
below.
Digital assets – accounted for using intangible asset methodology
The consolidated entity consider that any digital asset that does not fall under the inventory or financial asset methodology
and meet the recognition criteria (identifiable, controllable and capable of generation future economic benefits) are considered
to be intangible assets.
For digital assets that meet the criteria of AASB138: Intangible Assets, the consolidated entity measures digital assets at its
fair value in accordance with the revaluation model (provided there is an active market), with increase in fair value being
recognised in other comprehensive income and credited to a revaluation reserve, unless it reverses a revaluation deficit of
the same asset previously recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent
that it offsets an existing surplus on the same asset recognised in the revaluation reserve. Digital assets classified as intangible
assets are considered to be indefinite life intangible assets given their nature.
Digital assets are derecognised when the consolidated entity disposes of the asset or when the consolidated entity otherwise
loses control and, therefore, access to the economic benefits associated with ownership of the digital asset.
Estimates and judgements
(a) Digital assets
Management note that the topic of digital assets and the accounting for digital assets continues to be considered by the
International Accounting Standards Board (IASB) and continues to monitors new comments and interpretations released by
the Board and other standard setters from around the world.
In line with this, the consolidated entity has considered its position for the year ending 30 June 2024 and has determined that
the consolidated entity’s digital assets are most appropriately classified under the intangible asset method (the method noted
by the IASB in its most recent deliberations).
Management notes that under the method noted above, the treatment continues to be to measure digital assets at fair value
(unless otherwise disclosed and provided certain conditions are met) under the respective accounting standards.
Management have also classified Digital assets as current assets to reflect their liquidity, being readily convertible to cash
within the normal operating cycle or within 12 months without significant financial penalty. These assets are viewed by
management as forming part of the company's treasury function, as they can be sold and converted to cash to facilitate
operations, where required. Presenting digital assets as current assets appropriately provides users of the financial statements
with a clearer understanding of the consolidated entity's ability to meet its short-term obligations.
Digital assets (including Bitcoin) are measured at fair value using the quoted price in United States dollars on from a number
of different sources with the primary being Coin Market Cap (www.coinmarketcap.com) at closing Coordinated Universal Time.
Management considers this fair value to be a Level 1 input under the AASB 13 Fair Value Measurement fair value hierarchy
as the price on the quoted price (unadjusted) in an active market for identical assets.
Management uses a number of exchanges including Binance, Bitgo, Independent Reserve and others in order to provide the
consolidated entity with appropriate size and liquidity to provide reliable evidence of fair value for the size and volume of
transactions that are reasonably contemplated by the consolidated entity.
Refer to the table below for the break-down of fair value levels.
46
46
46
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 13. Digital assets (continued)
2024
2023
Level
Description
$
$
Level 1
Level 1 fair value digital assets are those assets that are actively traded on a
digital asset exchange or decentralised exchange for which there is an active
market with sufficient volume.
48,874,582
27,173,399
Level 2
Level 2 fair value digital assets are those assets measured at fair value but the
market prices are not actively quoted and determined using a market matrix
approach (AASB13.B7). This is most common for digital assets where an active
trading pair does not existing with a FIAT currency but may exist for a trading pair
such as Ethereum or Bitcoin which can then be measured using the level 1 input.
-
121
Level 3
Level 3 fair value digital assets are those assets carried at fair value where fair
value has been determined by reference to the entity’s own data and financial
data provided by the project such as comparable projects, financial forecasts and
equity transactions.
-
-
Note 14. Intangibles
Consolidated
2024
2023
$
$
Goodwill
1,888,304
1,888,304
Less: Impairment
-
-
1,888,304
1,888,304
Development - at cost
3,427,346
3,432,847
Less: Accumulated amortisation
(238,066)
(148,379)
Less: Accumulated provision for impairment
(2,978,907)
(2,984,408)
210,373
300,060
2,098,677
2,188,364
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Development
Goodwill
Total
Consolidated
$
$
$
Balance at 1 July 2022
389,747
1,888,304
2,278,051
Additions
63,479
-
63,479
Provision for impairment of assets
(63,478)
-
(63,478)
Amortisation expense
(89,688)
-
(89,688)
Balance at 30 June 2023
300,060
1,888,304
2,188,364
Exchange differences
(5,501)
-
(5,501)
Provision for impairment of assets
5,501
-
5,501
Amortisation expense
(89,687)
-
(89,687)
Balance at 30 June 2024
210,373
1,888,304
2,098,677
Impairment testing
Goodwill acquired through business combinations has arisen entirely due to the acquisition of the Sell My Shares cash
generating unit ('CGU').
47
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47
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 14. Intangibles (continued)
The recoverable amount of the consolidated entity's goodwill has been determined by a value-in-use calculation using a
discounted cash flow model, based on a 1 year projection period approved by management and extrapolated for a further 4
years using a steady rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive.
The following key assumptions were used in the discounted cash flow model for the Sell My Shares CGU:
●13.4% (2023: 14%) pre-tax discount rate;
●9% (2023: 9%) per annum projected revenue growth rate;
●1.5% (2023: 1.5%) perpetual revenue growth rate; and
●8% (2023: 10%) per annum increase in net profit.
The discount rate of 13.4% pre-tax reflects management’s estimate of the time value of money and the consolidated entity’s
weighted average cost of capital adjusted for the Sell My Shares CGU, the risk free rate and the volatility of the share price
relative to market movements.
Management believes that the projected 9% revenue growth rate is prudent and well-supported. Actual results have exceeded
the prior year's projections, reinforcing confidence in the prior year estimate. While acknowledging that growth rates can
fluctuate over time, management has chosen to maintain the prior year's growth projection, reflecting a balanced outlook that
accounts for potential variability.
Sensitivity
As disclosed in note 2, the directors have made judgements and estimates in respect of impairment testing of goodwill. Should
these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities are as
follows:
●Revenue would need to decrease by more than 85% for the Sell My Shares CGU before goodwill would need to be
impaired, with all other assumptions remaining constant.
●The discount rate would be required to increase by 62% for the Sell My Shares CGU before goodwill would need to be
impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of Sell My
Shares CGU's goodwill is based would not cause the CGU's carrying amount to exceed its recoverable amount.
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill is based, this would
result in an impairment charge for the Sell My Shares CGU's goodwill.
Note 15. Trade and other payables
Consolidated
2024
2023
$
$
Current liabilities
Trade payables
395,156
499,324
Accrued expenses
294,847
168,441
Employee entitlements
312,488
424,591
Statutory payables
51,829
18,194
Other payables
8,903
-
1,063,223
1,110,550
Refer to note 21 for further information on financial instruments and risk management.
48
48
48
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 16. Net assets attributable to unit holders
Consolidated
2024
2023
$
$
Current liabilities
Net assets attributable to unit holders
14,482,863
9,108,506
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous financial
year are set out below:
Opening balance
9,108,506
6,211,747
Loss for the year attributable to non-controlling interests
(313,046)
(131,950)
Other comprehensive income attributable to non-controlling interests
7,678,815
3,318,020
Net change in units on issue
(1,827,085)
(260,477)
Other
(164,327)
(28,834)
Closing balance
14,482,863
9,108,506
In accordance with the trust deed for the DigitalX BTC Fund, DigitalX Fund and the DigitalX Real World Assets Tokenisation
Fund if there is taxable income at 30 June 2024 it must be distributed to the unit holders. At 30 June 2024, no amount was
payable.
Accounting policy for net assets attributable to unit holders
In accordance with AASB 132 Financial Instruments, specific instruments are categorised as equity in the separate financial
statements of a subsidiary or other entity controlled by the consolidated entity. These instruments represent non-controlling
interests in the consolidated financial statements, and they are categorised as liabilities in the consolidated financial
statements of the consolidated entity to the extent that the non-controlling interest holds a preferential claim to the net assets
of the subsidiary over shareholders of the parent. Changes in the net assets are recognised in the profit or loss, except for
distributions to unit holders and subscription of units.
Note 17. Contributed equity
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
866,404,031
745,519,039
65,675,698
59,120,476
Dividends
There are no dividends paid or declared during the period.
49
49
49
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 17. Contributed equity (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
1 July 2022
742,444,039
59,028,586
Issue of employee shares
29 August 2022
3,075,000
$0.030
95,325
Share issue costs
(3,435)
Balance
30 June 2023
745,519,039
59,120,476
Issue of shares via Share Purchase Plan
31 January 2024
40,980,513
$0.046
1,885,104
Share issue costs - Share Purchase Plan
(81,301)
Issue of employee shares
2 February 2024
800,000
$0.047
37,600
Issue of shares via Private Placement
26 March 2024
77,604,154
$0.067
5,199,478
Issue of shares via Private Placement
27 March 2024
1,037,638
$0.067
69,522
Issue of shares via Private Placement
2 April 2024
462,687
$0.067
31,000
Share issue costs - Private Placement
(378,676)
Share issue costs - Lead manager options
(207,505)
Balance
30 June 2024
866,404,031
65,675,698
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital
risk management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2023 Annual Report.
50
50
50
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 18. Reserves
Consolidated
2024
2023
$
$
Share-based payments reserve
2,492,051
3,191,622
Convertible note reserve
-
91,051
Foreign currency reserve
(20,059)
(47,814)
Asset revaluation reserve
17,189,344
6,240,172
19,661,336
9,475,031
Nature of reserves
Share-based payments reserve
Reserve is established to record balances pertaining to share options and
performance rights granted for services provided to the company by employees and
vendors.
Convertible note reserve
Reserve is established to record amounts required to be recognised in equity for
convertible notes that meet the definition of compound instruments.
Foreign currency reserve
Exchange differences arising on translation of the foreign controlled entity are
recognised in other comprehensive income and accumulated in a separate reserve
within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
Asset revaluation reserve
Reserve is established to record the fair value movement in digital assets.
Share-based
payments
reserve
Convertible
note reserve
Foreign
currency
reserve
Asset
revaluation
reserve
Total
Consolidated
$
$
$
$
$
Balance at 1 July 2023
3,191,622
91,051
(47,814)
6,240,172
9,475,031
Share-based payment expense
143,939
-
-
-
143,939
Fair value of options granted, recorded as
share issue costs
207,504
-
-
-
207,504
Expiry of warrants
(336,014)
-
-
-
(336,014)
Expiry of options
(715,000)
-
-
-
(715,000)
Transfer from convertible note reserve to
accumulated losses
-
(91,051)
-
-
(91,051)
Exchange differences on translation of
operations
-
-
27,755
-
27,755
Fair value increase in digital asset holdings, net
of tax
-
-
-
10,949,172
10,949,172
Balance at 30 June 2024
2,492,051
-
(20,059)
17,189,344
19,661,336
Note 19. Accumulated losses
Consolidated
2024
2023
$
$
Accumulated losses at the beginning of the financial year
(44,657,925)
(37,073,176)
Loss after income tax expense for the year
(4,792,901)
(7,584,749)
Transfer from share-based payments reserve
1,051,014
-
Transfer from convertible note reserve
91,051
-
Accumulated losses at the end of the financial year
(48,308,761)
(44,657,925)
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51
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 20. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 21. Financial instruments and risk management
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks, including but not limited to:
- Foreign currency risk;
- Digital asset price risk;
- Interest rate risk;
- Credit risk; and
- Liquidity risk.
The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, foreign exchange and liquidity risk.
The capital structure of the consolidated entity consists of equity attributable to equity holders of the company, comprising
issued capital, reserves and retained earnings.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. Finance reports to the Board on a monthly basis.
The consolidated entity holds the following financial assets and financial liabilities:
Consolidated
2024
2023
$
$
Financial assets
Cash and cash equivalentsAC
6,054,713
3,380,080
InvestmentsFV
497,720
737,720
Trade receivablesAC
300,012
235,656
6,852,445
4,353,456
Financial liabilities
Trade payablesAC
395,156
499,324
Lease liabilitiesAC *
309,052
366,081
Net assets attributable to unit holdersAC
14,482,863
9,108,506
15,187,071
9,973,911
AC – Amortised cost
FV – Fair value through profit or loss
* The comparative period has been restated to reflect the non-current lease liability.
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DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Financial instruments and risk management (continued)
Market risk
Foreign currency risk
The consolidated entity and the company operate internationally, and during the period were exposed to foreign exchange
risk arising from currency exposures, primarily with respect to the USD/AUD dollar rates.
Foreign exchange risks arise from future commercial transactions and recognised assets and liabilities that are denominated
in a currency that is not the consolidated entity’s functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
Management regularly monitors exposure to foreign exchange risk, but do not have a current hedging policy in place. It is
intended that this policy will be continuously assessed in line with funding requirements for each of the investment
opportunities.
As at 30 June 2024, the consolidated entity had exposure to foreign currency risk within its recognised assets and liabilities.
The cash and cash equivalents held $USD 6,804 (2023: $USD 7,367) in bank accounts. The consolidated entity has no
derivative liabilities in $USD (2023: $nil) and nil $USD in finance liabilities (2023: $USD nil).
The average exchange rates and reporting date exchange rates applied were as follows:
Average exchange rates
Reporting date exchange
rates
2024
2023
2024
2023
Australian dollars
US dollars
1.5253
1.4882
1.4984
1.5012
AUD strengthened
AUD weakened
Consolidated - 2024
% change
Effect on
profit before
tax
% change
Effect on
profit before
tax
US dollars
10%
(1,021)
10%
1,021
AUD strengthened
AUD weakened
Consolidated - 2023
% change
Effect on
profit before
tax
% change
Effect on
profit before
tax
US dollars
10%
(1,146)
10%
1,146
Digital asset price risk
The consolidated entity maintains digital assets as a balance sheet asset and manages them on behalf of clients through its
funds management business. It is important to note that the price volatility inherent in digital asset markets may impact
the consolidated entity's financial performance.
As a long-term holder of Bitcoin, the consolidated entity has traditionally maintained this position; however, as the digital asset
market has matured, the entity has diversified into other digital assets such as Ethereum. During periods of heightened
volatility, the consolidated entity will assess its core positions for potential acquisitions or divestments. The funds business
conducts monthly reviews of holdings as part of the investment committee process and adheres to exposure limits, ensuring
that no single asset constitutes more than 40% of the portfolio, in accordance with the investment memorandum.
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DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Financial instruments and risk management (continued)
Average price increase
Average price decrease
Consolidated - 2024
% change
Effect on
other
comprehensi
ve income
before tax
Effect on
equity
% change
Effect on
other
comprehensi
ve income
before tax
Effect on
equity
Digital assets
10%
4,857,336
4,857,336
(10%)
(4,857,336)
(4,857,336)
Average price increase
Average price decrease
Consolidated - 2023
% change
Effect on
other
comprehensi
ve income
before tax
Effect on
equity
% change
Effect on
other
comprehensi
ve income
before tax
Effect on
equity
Digital assets
10%
2,717,352
2,717,352
(10%)
(2,717,352)
(2,717,352)
Interest rate risk
The consolidated entity is exposed to interest rate risk as entities in the consolidated entity deposit funds at both short-term
fixed and floating rates of interest. The consolidated entity’s exposure to interest rates on financial assets and liabilities is
detailed in the liquidity risk management section of this note.
A change in interest rates would not have a material impact on the profit and equity for the current and previous periods of the
consolidated entity or the company.
Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables. Credit risk is managed on a group basis. For banks and financial institutions,
the consolidated entity aims to hold deposits with independently rated parties with a rating of ‘A2’ or above based on Moody’s
ratings. From time to time the consolidated entity may hold deposits with unrated institutions (i.e. exchanges) after trading in
digital assets. The consolidated entity’s credit risk exposure is set out below. Due to the nature of the customers the
consolidated entity engages with ratings are not commonplace. Credit risk is therefore factored into the transaction price for
services often in the form of bonus tokens or a discount to public token sale rate. At 30 June 2024, no customers had a
published credit rating.
Consolidated
2024
2023
$
$
Rating
A1
-
5,470
A2
5,254,510
1,891,526
Unrated
800,203
1,483,084
6,054,713
3,380,080
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who oversee a liquidity risk management
framework for the management of the consolidated entity’s funding and liquidity management requirements.
The consolidated entity manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring there
are appropriate plans in place to finance these future cash flows.
54
54
54
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Financial instruments and risk management (continued)
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2024
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
395,156
-
-
-
395,156
Other payables
-
668,067
-
-
-
668,067
Net assets attributable to
unitholders
-
14,482,863
-
-
-
14,482,863
Interest-bearing - fixed rate
Lease liability
8.80%
100,580
190,568
83,641
-
374,789
Total non-derivatives
15,646,666
190,568
83,641
-
15,920,875
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
499,324
-
-
-
499,324
Other payables
-
611,226
-
-
-
611,226
Net assets attributable to
unitholders
-
9,108,506
-
-
-
9,108,506
Interest-bearing - variable
Lease liability
8.80%
86,368
89,823
274,209
-
450,400
Total non-derivatives
10,305,424
89,823
274,209
-
10,669,456
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
55
55
55
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Financial instruments and risk management (continued)
Impairment of financial assets
AASB 9’s impairment model uses forward looking information to recognise expected credit losses - the ‘expected credit losses
('ECL') model’. The application of the impairment model depends on whether there has been a significant increase in credit
risk.
The consolidated entity considers a broad range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability
of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit
risk (‘Stage 1’); and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not
low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised
for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Financial assets at fair value through other comprehensive income
The consolidated entity recognises 12 months expected credit losses for financial assets at FVOCI. As most of these
instruments have a high credit rating, the likelihood of default is deemed low. However, at each reporting date the consolidated
entity assesses whether there has been a significant increase in the credit risk of the instrument.
In assessing these risks, the consolidated entity relies on readily available information such as the credit ratings issued by the
major credit rating agencies for the respective asset. The consolidated entity only holds simple financial instruments for which
specific credit ratings are usually available. In the unlikely event that there is no or only little information on factors influencing
the ratings of the asset available, the consolidated entity would aggregate similar instruments into a portfolio to assess on this
basis whether there has been a significant increase in credit risk.
In addition, the consolidated entity considers other indicators such as adverse changes in business, economic or financial
conditions that could affect the borrower’s ability to meet its debt obligation or unexpected changes in the borrowers operating
results.
Should any of these indicators imply a significant increase in the instrument’s credit risk, the consolidated entity recognises for
this instrument or class of instruments the lifetime expected credit losses.
Note 22. Fair value measurement
The consolidated entity measures financial instruments and non-financial assets at fair value at each balance sheet date.
Also, fair values of financial instruments measured at amortised cost are disclosed. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes
place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the consolidated entity. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling
it to another market participant that would use the asset in its highest and best use.
56
56
56
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 22. Fair value measurement (continued)
The consolidated entity uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
For assets and liabilities that are recognised in the financial statements on a recurring basis, the consolidated entity determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the consolidated entity has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above
At 30 June 2024 all assets carried at fair value are deemed to be level 1 based on observable prices in an active market with
the exception of:
• Investment in Bullion Asset Management – note 12
• Investment in Bricklet – note 12
Fair value estimation
The Directors consider that the carrying amount of financial assets and financial liabilities, as recorded in the financial
statements, represent or approximate their respective fair values.
Note 23. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Ltd, the auditor of
the company. The BDO entity performing the audit of the group transitioned from BDO Audit (WA) Pty Ltd to BDO Audit Pty
Ltd on 8 May 2024. The disclosures include amounts received or due and receivable by BDO Audit (WA) Pty Ltd, BDO Audit
Pty Ltd and their respective entities.:
Consolidated
2024
2023
$
$
Audit services - BDO Audit Pty Ltd
Audit or review of the financial statements
118,450
101,941
Other services - BDO Services Pty Ltd
Tax compliance
16,119
18,129
Tax advice
28,617
14,111
44,736
32,240
163,186
134,181
Note 24. Commitments and contingencies
Commitments of the consolidated entity
The consolidated entity did not have any capital commitments as at 30 June 2024 (2023: none).
57
57
57
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 24. Commitments and contingencies (continued)
Guarantees entered into by the consolidated entity
There were no guarantees entered into by the consolidated entity as at 30 June 2024 (2023: none).
Contingent liabilities of the consolidated entity
The consolidated entity did not have any contingent liabilities as at 30 June 2024 (2023: none).
Note 25. Related party transactions
(a) Parent entity
DigitalX Limited is the parent entity.
(b) Subsidiaries
Interests in subsidiaries are set out in note 26. Balances and transaction between the company and its subsidiaries, which are
related parties of the company, have been eliminated on consolidation and are not disclosed in this note.
(c) Transactions with key management personnel
Consolidated
2024
2023
$
$
Short term employee benefits
Salaries and fees
391,291
585,699
Director fees
174,980
168,736
Other benefits
-
(39,968)
Post-employment benefits
Superannuation
20,519
67,014
Share-based payments
Options and performance rights1
96,513
167,496
683,303
948,977
1 Refer to note 18 and note 30 for details of the events relating to performance rights and options effecting key management
personnel.
Transactions with Director related entities
Year ended 30 June 2024
●
During the year, the consolidated entity paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby
Hicks is a partner, $AUD45,565 for legal services rendered on various matters.
Year ended 30 June 2023
●
During the year, the consolidated entity paid Steinepreis Paganin, a law firm of which Non-Executive Chairman Toby
Hicks is a partner, $AUD47,787 for legal services rendered on various matters.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 26. Interests in subsidiaries
Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in . All controlled entities are included in the consolidated financial statements. The parent
entity does not guarantee to pay the deficiency of its controlled entities in the event a winding up of any controlled entity. The
period end of the controlled entities is the same as that of the parent entity, except for the US companies listed below which
use a 31 December year end.
58
58
58
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 26. Interests in subsidiaries (continued)
Ownership
interest
Ownership
interest
Principal place of business /
20241
20231
Name
Country of incorporation
Status
%
%
Digital CC Management Pty
Ltd
Australia
Dormant
100.00%
100.00%
Digital CC Trading Pty Ltd
Australia
Dormant
100.00%
100.00%
Digital CC IP Pty Ltd
Australia
Dormant
100.00%
100.00%
Digital CC Ltd
Hong Kong
Dormant
100.00%
100.00%
Digital CC IP Ltd
Hong Kong
Dormant
100.00%
100.00%
Digital CC Holdings Pty Ltd
Australia
Dormant
100.00%
100.00%
Digital CC Holdings USA Inc
United States
Dormant
100.00%
100.00%
Digital CC USA LLC
United States
Dormant
100.00%
100.00%
Digital CC USA Services LLC United States
Dormant
100.00%
100.00%
DigitalX Real World Asset
Tokenisation Pty Ltd
(previously known as Digital
CC Ventures Pty Ltd)
Australia
Dormant
100.00%
100.00%
Pass Petroleum Pty Ltd
Australia
Dormant
100.00%
100.00%
Pass Petroleum LLC2
United States
Dormant
100.00%
100.00%
Airpocket International Pty Ltd Australia
Dormant
100.00%
100.00%
AirPocket LLC
United States
Dormant
100.00%
100.00%
DigitalX Fund
Australia
Active
53.41%
36.47%
DigitalX Bitcoin Fund
Australia
Active
63.93%
60.82%
DigitalX Asset Management
Pty Ltd
Australia
Active
100.00%
100.00%
Sell My Shares Pty Ltd
Australia
Active
100.00%
100.00%
DigitalX Real World Assets
Tokenisation Fund
Australia
Active
99.01%
-
DigitalX (BVI) Ltd2
British Virgin Islands
Dormant
100.00%
100.00%
Verus Energy USA, Inc.2
United States
Dormant
100.00%
100.00%
1DigitalX Funds Management Pty Ltd has been removed from the current and comparative period as the entity was
deregistered on 4 July 2021.
2DigitalX (BVI) Ltd, Verus Energy USA, Inc. and Pass Petroleum LLC. were not disclosed in the comparative period on the
basis these entities are dormant. For consistency and comparability with the Consolidated entity disclosure statement in
accordance with the Corporations Act 2001, the company have opted to disclose these in the current year.
Judgement for investments in DigitalX Fund, DigitalX Bitcoin Fund and DigitalX Real World Assets Tokenisation
Fund (the 'funds')
As detailed in note 12, the company provides fund management services for the funds and it is deemed that the consolidated
entity meets the definition of control under AASB10: Consolidated Financial Statements. As a result, the financial position and
performance of the funds have been included in the consolidated entity financial statements. The consolidated entity will
continue to assess its position with respect to control of the funds at each reporting period and there have been no changes
to the consolidated entity’s assessment for the year ended 30 June 2024.
Note 27. Parent entity information
Parent
2024
2023
$
$
Loss after income tax
(4,185,120)
(2,521,782)
Total comprehensive income
(4,185,120)
(2,521,782)
59
59
59
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 27. Parent entity information (continued)
Statement of financial position
Parent
Restated*
Parent
2024
2023
$
$
Total current assets
16,165,165
13,979,814
Total non-current assets
26,636,049
23,759,633
Total assets
42,801,214
37,739,447
Total current liabilities
858,900
1,001,639
Total non-current liabilities
2,460,362
309,052
Total liabilities
3,319,262
1,310,691
Issued capital
65,675,698
59,120,476
Reserves
14,028,959
13,345,865
Accumulated losses**
(40,222,705)
(36,037,585)
Total equity
39,481,952
36,428,756
* Comparative period has been restated to reflect an adjustment to issued capital and non-current assets. In addition, there is
a reclassification to present the non-current portion of the lease liability in the parent. These restatements do not impact the
consolidated financial statements.
** Of the accumulated losses as at 30 June 2024, $1,051,014 relates to transfers from share-based payments reserve (refer
note 19).
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2024 and 30 June 2023.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in the Notes to
the consolidated financial statements, except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
60
60
60
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 28. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2024
2023
$
$
Loss after income tax expense for the year
(4,792,901)
(7,584,749)
Non-cash flows in profit/(loss)
Depreciation and amortisation
193,286
250,269
Fair value adjustment of investments
240,000
2,049,031
Finance costs
36,442
30,001
Increase in net assets attributable to unitholders
(317,237)
(131,950)
Non-cash interest received (staking)
(76,652)
(10,766)
Other non-cash expenses including foreign exchange
3,318
463,739
Share-based payments
181,539
273,092
Change in assets and liabilities:
(Increase)/decrease in trade and other receivables
(64,356)
81,505
(Increase)/decrease in prepayments, deposits and other assets
(207,434)
47,915
(Decrease)/increase in trade and other payables
(188,855)
245,521
Net cash used in operating activities
(4,992,850)
(4,286,392)
Non-cash investing and financing activities
In addition to the above, the consolidated entity also had the following non-cash investing and financing activities that impacted
on the Statement of Profit and Loss and Other Comprehensive Income and the Statement of Financial Position.
Current year
●
Movement in prices of digital assets (note 13)
●
Shares issued as compensation (note 17)
Prior year
●
Movement in prices of digital assets (note 12)
●
Shares issued as compensation (note 16)
●
Additions to right-of-use asset
Note 29. Earnings per share
Consolidated
2024
2023
$
$
Loss after income tax attributable to the owners of DigitalX Limited
(4,792,901)
(7,584,749)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
783,265,077
745,013,560
Weighted average number of ordinary shares used in calculating diluted earnings per share
783,265,077
745,013,560
Cents
Cents
Basic earnings per share
(0.61)
(1.02)
Diluted earnings per share
(0.61)
(1.02)
61
61
61
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 29. Earnings per share (continued)
Diluted earnings per share
Options and performance rights outstanding would decrease the loss per share reported above and hence, have been treated
as antidilutive. The number of options outstanding at 30 June 2024 would convert to 115,391,208 ordinary shares if
exercised. The number of performance rights outstanding at 30 June 2024 would convert to 15,820,745 ordinary shares if
exercised.
Refer to note 30 for details on options and performance rights outstanding at 30 June 2024.
Note 30. Share-based payments
As at 30 June 2024, there are 115,391,208 options and 15,820,745 performance rights to subscribe for ordinary shares in the
company.
Share-based payments expense for the year ended 30 June 2024 is $181,539, comprised of:
- Ordinary shares issued to key management of $37,600
- Grant date fair value of options, warrants and performance rights, expensed proportionately through to vesting date of
$143,939.
$207,504 was recognised as costs of capital raising in the statement of changes in equity.
Options
Set out below are summaries of options granted and outstanding at the end of the financial year:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
10/12/2018
10/12/2023
$0.220
2,000,000
-
-
(2,000,000)
-
10/12/2018
10/12/2023
$0.250
3,000,000
-
-
(3,000,000)
-
10/12/2018
10/12/2023
$0.300
4,000,000
-
-
(4,000,000)
-
11/07/2019
30/06/2024
$0.100
2,500,000
-
-
(2,500,000)
-
18/12/2020
18/12/2024
$0.100
1,000,000
-
-
-
1,000,000
06/12/2021
30/06/2024
$0.100
2,500,000
-
-
(2,500,000)
-
11/04/2022
11/04/2027
$0.091
1,415,094
-
-
-
1,415,094
11/04/2022
11/04/2027
$0.118
1,470,588
-
-
-
1,470,588
11/04/2022
11/04/2027
$0.153
1,530,612
-
-
-
1,530,612
11/04/2022
11/04/2027
$0.199
1,630,435
-
-
-
1,630,435
05/07/2022
29/08/2025
$0.110
5,240,000
-
-
-
5,240,000
12/05/2023
12/05/2027
$0.100
9,000,000
-
-
-
9,000,000
26/03/2024
30/09/2024
$0.100
-
89,104,479
-
-
89,104,479
35,286,729
89,104,479
-
(14,000,000)
110,391,208
Weighted average exercise price
$0.151
$0.100
$0.000
$0.206
$0.103
The weighted average share price during the financial year was $0.058 (2023: $0.039).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.65 years (2023:
2.25 years).
62
62
62
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 30. Share-based payments (continued)
Set out below are the options exercisable at the end of the financial year:
2024
2023
Grant date
Expiry date
Number
Number
10/12/2018
10/12/2023
-
2,000,000
10/12/2018
10/12/2023
-
3,000,000
10/12/2018
10/12/2023
-
4,000,000
11/07/2019
30/06/2024
-
2,500,000
18/12/2020
18/12/2024
1,000,000
1,000,000
06/12/2021
30/06/2024
-
2,500,000
11/04/2022
11/04/2027
1,415,094
-
26/03/2024
30/09/2024
89,104,479
-
91,519,573
15,000,000
The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of
the company or any other body corporate or registered scheme.
Options issued
2024
Free-attaching options
issued to participants in
Private Placement
Issued to lead manager
Item
Tranche 1 - 26 March 2024
Tranche 2 - 26 March 2024
Volatility (%)
N/A
144.27%
Risk-free interest rate (%)
N/A
3.65
Expected life of option (years)
0.25 years
0.25 years
Exercise price per terms and conditions
$0.1000
0.1000
Underlying security spot price
$0.0700
0.0700
Grant date
26/03/2024
26/03/2024
Expiry date
30/09/2024
30/09/2024
Valuation per option
$0.0000
$0.0208
Number issued
79,104,479
10,000,000
Vesting condition
No vesting conditions. Vested
on grant date.
No vesting conditions. Vested
on grant date.
Performance rights
Set out below are summaries of performance rights granted and outstanding at the end of the financial year:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
10/10/2022
29/09/2023
$0.000
1,964,285
-
-
(1,964,285)
-
10/10/2022
29/09/2023
$0.000
1,964,285
-
-
(1,964,285)
-
10/10/2022
29/09/2023
$0.000
1,428,571
-
-
(1,428,571)
-
08/05/2024
30/06/2025
$0.000
-
2,500,000
-
-
2,500,000
17/11/2023
15/07/2025
$0.000
-
6,392,509
-
-
6,392,509
17/11/2023
15/07/2025
$0.000
-
6,392,522
-
-
6,392,522
17/11/2023
15/07/2025
$0.000
-
535,714
-
-
535,714
5,357,141
15,820,745
-
(5,357,141)
15,820,745
Weighted average exercise price
$0.000
$0.000
$0.000
$0.000
$0.000
63
63
63
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 30. Share-based payments (continued)
No performance rights are exercisable at the end of the financial year.
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.03
years (2023: 0.25).
Performance rights issued to Chief Executive Officer and Employees
Item
Tranche 1*
Tranche 2*
Tranche 3*
Volatility (%)
N/A
N/A
N/A
Risk-free interest rate (%)
N/A
N/A
N/A
Expected life of option (years)
1 year
1 year
1 year
Exercise price per terms & conditions
$0
$0
$0
Underlying security spot price
$0.048
$0.048
$0.048
Grant date
17/11/2023
17/11/2023
17/11/2023
Expiry date
15/07/2025
15/07/2025
15/07/2025
Valuation per right
$0.0480
$0.0480
$0.0480
Number issued
2,410,713
2,410,713
535,714
Vesting condition
Non-market,
performance.
The company having a
normalised cash flow
positive run rate by the
end of the 2023/2024
Financial year.
Non-market,
performance.
The consolidated entity
holding funds under
management (FUM) of
not less than AUD$100
million by 30 June
2024.
Non-market,
performance.
Achievement of eNPS
(employee net promoter
score) higher than 30
June 2023.
* Probability of rights vesting is deemed less than likely, therefore nil expense has been recorded as a vesting charge during
the year ended 30 June 2024.
Valuation of performance rights
For performance rights with non-market conditions, fair value is measured using the closing share price at grant date. Vesting
is based on management's best estimate of performance conditions being met.
Warrants
Set out below are summaries of warrants granted and outstanding at the end of the financial year:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
09/03/2021
09/03/2024
$0.100
48,981,582
-
-
(48,981,582)
-
09/03/2021
09/03/2024
$0.113
6,857,421
-
-
(6,857,421)
-
Weighted average exercise price
$0.102
$0.000
$0.000
$0.102
$0.000
All warrants disclosed above are exercisable at the end of the current and prior financial year.
The weighted average remaining contractual life of warrants outstanding at the end of the financial year was N/A (2023: 0.69
years).
Shares issued during the period
There were 120,884,992 shares issued during the period, of these 800,000 were issued to Lisa Wade.
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
64
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64
DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 30. Share-based payments (continued)
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether
the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
For performance rights with non-market conditions, the fair value is measured using the closing share price at grant date.
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent
to which the vesting period has expired and the number of awards that, in the opinion of the Directors, will ultimately vest.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Note 31. New accounting standards and interpretations
Standards and Interpretations issued but not yet adopted
The company has reviewed the standards that have been issued but not yet effective and have determined there will be no
material impact on adoption of the standards.
Note 32. Events after the reporting period
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected the consolidated entity’s
operations, results or state of affairs, or may do so in future years other than those set out below.
65
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DigitalX Limited
Notes to the consolidated financial statements
30 June 2024
Note 32. Events after the reporting period (continued)
Date of event
1 July 2024
9 July 2024
9 July 2024
3 September 2024
30 September 2024
Details of event
- The company announced the expiry of 5,000,000 options without exercise, with a date of
cessation being 30/06/2024.
- The company announced the approval of its DigitalX spot Bitcoin ETF ("ASX:BTXX") for
quotation on the Australian Stock Exchange ("ASX"). The DigitalX Bitcoin ETF provides a
simple, liquid and regulated structure for investors to gain exposure to the emerging digital
asset sector without the requirement to hold a digital wallet. The DigitalX Bitcoin ETF
commenced trading on 12 July 2024.
- The company confirmed that on 9 July 2024 the Federal Court of Australia handed down
Orders in relation to the company's application for summary judgement in the matter between
two of the company's subsidiaries and Mr Alex Karis, a former director of the company. The
company's application for summary judgement in the matter was not granted, however Mr
Karis has been ordered to provide security for the company's costs of the proceeding for the
period until completion of discovery and court-directed mediation in the amount of $150,000
by payment to the Court within 28 days of the date of the orders, and his claim against the
company is stayed until payment of that security.
- Lisa Wade tendered her resignation as CEO and, with agreement of the Board, left the
company on 3 September 2024. Mr Greg Dooley, Non- Executive Director, has been
appointed as Interim Chief Executive Officer on a part time basis. At present, and pursuant to
ASX listing Rule 3.14.4, Mr Dooley will receive remuneration of $10,000 per month in addition
to his current Director fees. It is expected that Mr Dooley's appointment will be for a period of
no more than six months.
- Due to the volatile nature and the materiality of the digital assets held, we disclose the value
of material digital assets held by the consolidated entity, excluding the DigitalX Fund and
DigitalX BTC Fund and unlisted digital assets, as at the close date of the 30 September 2024.
$AUD
$AUD
Number of coins held
at 30 June 2024
Spot price at 30 June
2024
$AUD
Spot price at 30
September 2024
Pro-forma impact
Coin
BTC
114.90
94,024
95,192
134,169
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DigitalX Limited
Consolidated entity disclosure statement
As at 30 June 2024
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and
includes 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
Australian tax law generally does not contain corresponding residency tests for partnerships and trusts and these entities are
typically taxed on a flow-through basis. Additional disclosures on the tax status of partnerships and trusts have been provided
where relevant.
Place formed /
Ownership
interest
Entity name
Entity type
Country of incorporation
%
Tax residency
DigitalX Ltd
Body Corporate
Australia
100.00% Australia
Digital CC Management
Pty Ltd
Body corporate
Australia
100.00% Australia
Digital CC Trading Pty Ltd Body corporate
Australia
100.00% Australia
Digital CC IP Pty Ltd
Body corporate
Australia
100.00% Australia
Digital CC Ltd
Body corporate
Hong Kong
100.00% Hong Kong
Digital CC IP Ltd
Body corporate
Hong Kong
100.00% Hong Kong
Digital CC Holdings Pty
Ltd
Body corporate
Australia
100.00% Australia
Digital CC Holdings USA
Inc
Body corporate
United States
100.00% United States
Digital CC USA LLC
Body corporate
United States
100.00% United States
Digital CC USA Services
LLC
Body corporate
United States
100.00% United States
DigitalX Real World Asset
Tokenisation Pty Ltd
(previously known as
Digital CC Ventures Pty
Ltd)
Body corporate
Australia
100.00% Australia
Pass Petroleum Pty Ltd
Body corporate
Australia
100.00% Australia
Pass Petroleum LLC
Body corporate
United States
100.00% United States
Airpocket International Pty
Ltd
Body corporate
Australia
100.00% Australia
AirPocket LLC
Body corporate
United States
100.00% United States
DigitalX Fund
Trust
Australia
53.41% Australia
DigitalX Bitcoin Fund
Trust
Australia
63.93% Australia
DigitalX Asset
Management Pty Ltd
Body corporate
Australia
100.00% Australia
Sell My Shares Pty Ltd
Body corporate
Australia
100.00% Australia
DigitalX Real World
Assets Tokenisation Fund Trust
Australia
99.01% Australia
DigitalX (BVI) Ltd
Body corporate
British Virgin Islands
100.00% British Virgin Islands
Verus Energy USA, Inc
Body corporate
United States
100.00% United States
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DigitalX Limited
Directors' declaration
30 June 2024
In the directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
30 June 2024 and of its performance for the financial year ended on that date;
●
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Toby Hicks
Chair
September 2024
68
68
Toby
Hicks
68
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form
part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
INDEPENDENT AUDITOR'S REPORT
To the members of DigitalX Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of DigitalX Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
69
Accounting for Digital Assets
Key audit matter
How the matter was addressed in our audit
DigitalX has holdings in a number of digital assets
currently held as intangible assets disclosed in Note 13
of the financial report.
There is no specific accounting standard that
addresses the accounting treatment for digital assets
and accordingly significant judgement is applied to
evaluate whether these digital assets are accounted
for appropriately.
This was determined to be a key audit matter as it has
required significant judgement in determining the
recognition and presentation of the digital assets and
confirming existence at the reporting date.
Our audit procedures included, but were not limited
to:
•
Obtaining an understanding of the control
environment through which digital assets are
held;
•
Evaluating management’s recognition and
presentation of the digital assets as
intangible assets against accounting
principles;
•
Independently confirming the existence of
digital assets held by the custodian;
•
Assessing control of the digital assets held at
year-end;
•
Agreeing inputs used to determine the digital
assets fair value to external market
information; and
•
Assessing the adequacy of the disclosures in
Note 13 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2024, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
70
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a) the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages to of the directors’ report for the year
ended 30 June 2024.
In our opinion, the Remuneration Report of DigitalX Limited, for the year ended 30 June 2024, complies
with section 300A of the Corporations Act 2001.
71
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Phillip Murdoch
Director
Perth, 30 September 2024
72
DigitalX Limited
Shareholder information
30 June 2024
The shareholder information set out below was applicable as at 21 August 2024.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Options over ordinary
shares
% of total
% of total
Number
shares
Number
shares
of holders
issued
of holders
issued
1 to 1,000
245
0.01
-
-
1,001 to 5,000
1,952
0.66
-
-
5,001 to 10,000
1,357
1.25
-
-
10,001 to 100,000
2,914
12.27
28
1.69
100,001 and over
1,033
85.81
164
98.31
7,501
100.00
192
100.00
Holding less than a marketable parcel
3,704
-
-
-
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
BNP Paribas Nominees Pty Ltd Acf Clearstream
49,879,069
5.76
NRB International Llc
33,180,000
3.83
Irwin Biotech Nominees Pty Ltd
26,336,049
3.04
Citicorp Nominees Pty Limited
16,524,824
1.91
BNP Paribas Nominees Pty Ltd 'Ib Au Noms Retailclient Drp'
14,723,930
1.70
Atcho Super Pty Ltd 'Atcheson Super Fund A/C'
12,000,000
1.39
Emboodhu Pty Ltd 'Ta And El Hicks Family A/C'
8,846,617
1.02
Acl Investment Australia Pty Ltd 'Acl Family A/C'
8,397,221
0.97
Mj & A Lind Pty Ltd 'Lind Family S/F A/C'
7,629,245
0.88
Mr Basil Micos
7,395,781
0.85
Valueadmin Com Pty Ltd
7,200,000
0.83
Mr Yi Wang
7,192,729
0.83
Mrs Annette Lind & Mr Michael Josef Lind
7,057,291
0.81
Mr Hing Wa Chan
6,326,993
0.73
Hsbc Custody Nominees (Australia) Limited
6,324,217
0.73
Mr Stephen Dennis Davies & Mrs Jennifer Helen Davies
5,985,974
0.69
Ozstudy Group Pty Ltd
5,182,750
0.60
Brixton Capital Pty Ltd
5,090,618
0.59
Mr Richard James Ansell
5,055,905
0.58
Shelley Properties Pty Limited 'Butcher Super Fund A/C'
4,913,207
0.57
245,242,420
28.31
Unquoted equity securities
Number
Number
on issue
of holders
Options, rights and warrants over ordinary shares issued
126,211,953
192
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DigitalX Limited
Shareholder information
30 June 2024
The following person holds 20% or more of unquoted equity securities:
Employee options expiring 12 May 2027: 9,000,000 options, held by:
- Firecat Investments Pty Ltd: 2,976,996 options (33.08%)
- Jaime Underdown: 2,165,088 (24.06%)
Unlisted options exercisable at $0.10 expiring 18 December 2024: 1,000,000 options, held by:
- Pareto Nominees Pty Ltd: 500,000 options (50.00%)
- Shaw and Partners Limited: 500,000 options (50.00%)
Unlisted options exercisable at $0.091 expiring 11 April 2027: 1,415,094 options, held by:
- Ms Elisabeth Louse Wade: 1,415,094 options (100.00%)
Unlisted options exercisable at $0.118 expiring 11 April 2027: 1,470,588 options, held by:
- Ms Elisabeth Louse Wade: 1,470,588 options (100.00%)
Unlisted options exercisable at $0.153 expiring 11 April 2027: 1,530,612 options, held by:
- Ms Elisabeth Louse Wade: 1,530,612 options (100.00%)
Unlisted options exercisable at $0.199 expiring 11 April 2027: 1,630,435 options, held by:
- Ms Elisabeth Louse Wade: 1,630,435 options (100.00%)
Unlisted options exercisable at $0.11 expiring 29 August 2025: 5,240,000 options, held by:
- Mr Benjamin Hartnett: 1,200,000 options (22.90%)
Unlisted options exercisable at $0.10 expiring 30 September 2024: 89,104,479 options, held by:
- None*
Unlisted performance rights: 6,392,509 performance rights (note 30), held by:
- Ms Elisabeth Louse Wade: 2,410,713 (37.71%)
Unlisted performance rights: 6,392,522 performance rights (note 30), held by:
- Ms Elisabeth Louse Wade: 2,410,713 (37.71%)
Unlisted performance rights: 535,714 performance rights (note 30), held by:
- Ms Elisabeth Louse Wade: 535,714 (100.00%)
Unlisted performance rights: 2,500,000 performance rights (note 30), held by:
- Omer Mohammed: 2,500,000 (100.00%)
*No person or entity holds 20% or more of this unquoted security.
Substantial holders
Substantial holders in the company are set out below:
Ordinary shares
% of total
shares
Number held
issued
BNP Paribas Nominees Pty Ltd Acf Clearstream
49,879,069
5.76
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
There are no other classes of equity securities.
74
DigitalX Limited
Shareholder information
30 June 2024
Restricted securities
There are no restricted securities on issue at the date of this report.
On-market buy back
There is no current on-market buyback.
Annual General Meeting
The company advises that the scheduled date of the Annual General Meeting (AGM) of the company is yet to be determined.
75
Corporate directory
Directors
Toby Hicks
Greg Dooley
Peter Rubinstein
Company secretary
;O`Y :WQQWO`R]
ABN
59 009 575 035
Registered office and
principle place of business
Suite 2, Level 4, 66 Kings Park Road
West Perth WA 6005
Share register
Automic Pty Ltd
Level 5, 126 Phillip Street
Sydney, NSW 2000
Auditor
BDO Audit Pty Ltd
Level 9, Mia Yellagonga Tower 2, 5 Spring Street
Perth WA 6000
Stock exchange listing
DigitalX Limited shares are listed on the
Australian Securities Exchange (ASX code: DCC)
Website
digitalx.com
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digitalx.com
ASX:DCC
77