DOTZ NANO LIMITED
ABN 71 125 264 575
ANNUAL REPORT
31 DECEMBER 2019
CONTENTS
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
Additional ASX Information
1
2
21
22
59
60
63
73
CORPORATE DIRECTORY
Directors
Bernie Brookes – Non-Executive Chairman
Uzi Breier – CEO, Executive Director
Doron Eldar – Non-Executive Director
Company Secretary
Ian Pamensky
Registered Office
Level 14
330 Collins Street
Melbourne VIC 3000
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
PO Box 700
Subiaco WA 6008
Share Registry
Automic Registry Services
Level 29, 201 Elizabeth Street
Sydney NSW 2000
Securities Exchange Listing
ASX Limited
Level 4 North Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX Code – DTZ
1 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
Uzi Breier
Doron Eldar
Volker Mirgel
John Bullwinkel
DIRECTORS’ REPORT
Your Directors present their report, together with the financial statements of Dotz Nano Limited (“the Company”) and
controlled entities (“the Group”) for the financial year ended 31 December 2019.
Directors
The names and the particulars of the Directors of the Company during or since the end of the financial year are:
Name
Status
Appointed
Resigned
Bernie Brookes AM
Non-Executive Chairman
Appointed 15 January 2020
CEO and Executive Director
Appointed 18 May 2018
Non-Executive Director
Appointed 15 January 2020
-
-
-
Non-Executive Chairman
Appointed 3 April 2018
Resigned 1 December 2019
Non-Executive Director
Appointed 21 March 2018
Resigned 23 March 2020
Interim Chairman
Appointed 1 December 2019
Resigned 15 January 2020
Ashley Krongold
Non-Executive Director
Appointed 31 October 2016
Resigned 23 March 2020
Steve Bajic
Non-Executive Director
Appointed 31 October 2016
Resigned 15 January 2019
Principal Activities
The principal continuing activities of the Group during the year is developing, manufacturing and commercialising tagging, ,
tracing and verification solutions.
Dividends
There were no dividends paid or recommended during the financial year ended 31 December 2019 (2018: Nil).
Review of operations
Dotz Nano Limited had a loss for the year of $3,746,564 (2018: $5,736,672 loss). This included a non-cash amount of $731,308
share-based payments (2018: $1,451,763).
The net assets of the Group have increased from $731,482 at 31 December 2018 to $1,299,665 at 31 December 2019.
As at 31 December 2019, the Group's cash and cash equivalents balance was $1,371,275 (2018: $508,572) and had working
capital of $1,106,596 (2018: $431,751).
Unless otherwise stated all figures in this report are in the Company’s presentation currency US$.
The following events occurred during the year:
o
o
o
o
o
On 14 January 2019, it was announced that the Company has secured a commercial Purchase Order (PO) of Validotz
markers from a Swiss based company providing Secured-Plastic-Packaging Solutions, valued at US$100,000.
On 15 January 2019, the Company announced the resignation of Mr Steve Bajic as a Non-Executive Director.
On 22 January 2019, the Company announced the appointment of Mr Tomer Segev as the new Chief Financial Officer
and the resignation of Mr Eran Gilboa as the Chief Financial Officer of the Group.
On 30 January 2019, the Company announced a $300,000 PO of Validotz security-markers in lubricants sector
expected to be realized during 2019 and 2020.
On 8 February 2019, shareholders approved the issue of 10,666,632 Ordinary Fully Paid Shares and 2,666,659
Unquoted Options (exercisable at AU$0.12 each on or before 30 June 2020). The shares were issued on conversion
of the Convertible Loans Facility and accrued interest (Facility). The AUD $0.85 million Facility was announced on the
9 January 2019. The Facility had the following terms:
o
o
Facility Limit AUD $1,000,000,
Simple Interest to accrue at 8% p.a.,
2 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Review of operations (continued)
o
1:4 Options for each converted share, and
o Automatic conversion upon shareholders’ approval
o
o
o
o
o
o
o
o
o
o
o
o
The Company issued 1,500,000 Ordinary Shares with 12 month holding lock to 15 February 2020 and 2,000,000
Unquoted Options, exercisable at AU$0.12 each before 15 February 2024 to the CEO of the Company.
The Company issued 1,000,000 Unquoted Options to the Chairman exercisable at AU$0.13 each on or before 15
February 2024 provided that Chairman is an employee or consultant of the Company at all times before the expiry
date.
The Company issued 1,000,000 Unquoted Options exercisable at nil on or before 15 February 2023 to an employee
under the Company’s Employee Share Option Plan. The options vest on 9 December 2019 and require that the option
holder is an employee or consultant of the Company at all times during the period ending on the vesting date.
On 1 May 2019, the Company announced that it had successfully raised AU$1.5 million via a share placement (“Share
Placement") to sophisticated and professional investors. The placement included the issue of 25,000,000 shares at
AU$0.06 per share, including 12,500,005 free attaching options. The options are exercisable at AU$0.09 on or before
7 May 2021.
On 6 May 2019, the Company announced that it had successfully used its BioDotz security markers in an in-plant
tracing and anti-counterfeiting proof of concept (“POC”) to be used for the cannabis market’s tracing. The Company
filed a patent application for use of BioDotz in plant tagging, including cannabis, to enable increased levels of security
and supply-chain monitoring. Plants with a close biological structure to cannabis were used for the testing as for legal
reasons cannabis could not be used.
On 19 June 2019, the Company issued 5,000,000 Unquoted Options to the Lead Manager who managed the Share
Placement. The options are exercisable at AU$0.10 each and expiring 2 years after the date of issue.
On 2 July 2019, the Company announced that a new study lead by Dotz’s scientific advisor Prof. James Tour of Rice
University in Houston Texas, has found that Graphene Quantum Dots (GQD) manufactured from coal, can fight
oxidative stress to assist in treatment of conditions such as brain injuries, strokes and heart attacks. Dotz holds the
exclusive licence to manufacturing of GQD from coal and has reached commercial production capacity.
On 8 July 2019, the Company announced that it had partnered with a licenced cannabis producer Seàch Medical to
develop global in-plant cannabis tagging.
On 29 July 2019, the Company completed AU$1 million share placement AU$0.062 to sophisticated and professional
investors. The placement included the issue of 16,129,045 fully paid ordinary shares and 8,064,526 free attaching
options. The attaching options are exercisable at AU$0.09 on or before 29 July 2021.
On 30 July 2019, the Company received confirmation of deregistration for DotzBlue Ltd.
On 8 August 2019, the 10,000,000 unlisted options with exercise price of AU$0.20 expired.
On 12 August 2019, the Company lodged a Notice of General Meeting to be held on 11 September 2019 for approval
of the following resolutions:
o
o
o
o
Resolution 1 – Ratification of issued Placement Securities
Resolution 2 – Approval to issue Lead Manager Shares
Resolution 3 – Approval to issue Lead Manager Options
Resolution 4 – Approval to issue Proposed Placement Securities
For more details on the resolutions refer to announcement made by the Company on 12 August 2019.
3 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Review of operations (continued)
o
o
o
On 15 August 2019, the Company announced that it had secured AU$296,000 to support its development of BioDotz
sales in the Canada cannabis market. Subsequent to the balance sheet date, the Company has further announced
that the initial payment fee of A$296,000 is currently “on hold” until market conditions improve market and the
initiative can be re-examined.
On 19 August 2019, the Company announced that it had signed an AU$500,000 conditional order for Validotz security
markers.
On 29 August 2019, the Company issued 210,000 unquoted Options exercisable at nil on or before 22 August 2024 to
an employee under the Company’s Employee Share Option Plan. 70,000 options vest on the date which is 12 months
from the date of issue and remaining 140,000 Options shall vest in 8 consecutive equal instalments upon the lapse of
each 3 months period thereafter, provided that the option holder is an employee of the Company at all times during
the period ending on the vesting date
o
On 12 September 2019, the Company issued the following:
- 300,000 fully paid Ordinary Shares issued in lieu of cash for prior services provided to the Company by third party
unrelated to the Company – subject to a voluntary holding lock until the earlier of 12 months from 19 August 2019
and the lodgement of cleansing prospectus by the Company.
- 695,000 fully paid Ordinary Shares issued on exercised of Unquoted Employee Options at nil on or before 1 October
2021.
- 1,465,000 unquoted Employee Options were cancelled.
- 1,000,000 fully paid Ordinary Shares were issued to Lead Manager at nil consideration as per the Everblu Capital Pty
Ltd mandate agreement.
- 10,000,000 Unquoted Options to the Lead Manager as per the EverBlu Capital Pty Ltd mandate agreement exercisable
at AU$0.10 each on or before 11 September 2021.
- 100 fully paid ordinary shares at AU$0.05 as per prospectus dated 12 September 2019.
On 19 September 2019, the Company has successfully embedded its non-toxic BioDotzTM markers in cannabis plants,
creating unique in-plant security identifiers that can’t be forged or removed.
On 31 October 2019, the 4,500,000 Unlisted Options with exercise price of AU$0.40 and 1,000,000 Unlisted Options
with exercise price of AU$0.30 expired.
On 31 October 2019, Dotz Singapore Pty Ltd is in the process of de-registered.
On 26 November 2019, the Company secured AU$3 million via placement. This includes $2m to Australian-Israeli
venture capital fund SIBF, this includesAU$1 million via Deferred Share Placement from SIBF. The keys terms of the
Deferred Placement are as follows:
o
o
o
o
- Settlement date: Tranche 1 – 1 April 2020 and Tranche 2 – 1 August 2020
- Maximum Application: AU$500,000 for each tranche
- Deferred Placement: Each tranche amount will convert to shares at an issue price of AU$0.036 per share inclusive of
a 1 for 3 option valid for 2 years and exercisable at AU$0.09 each.
The funds raised will be used to execute the commercialisation strategy. The Company has entered into 2-year
advisory agreement with SIBF to provide strategic support for a monthly fee of AU$8,000 and SIBF shall also nominate
a Director to the Board of the Company.
o
On 1 December 2019, the Company announced that Chairman Mr Volker Mirgel had retired from his position as Chair
and Director, Mr John Bullwinkel, was appointed as Interim Chairman until a the appointment of Mr Bernie Brookes.
From January 2020, the Company has appointed Mr Doron Eldar as a Non-Executive Director to the Board.
4 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Review of operations (continued)
o
o
o
On 8 December 2019, the Company issued 2,500,000 ordinary shares to consultant, Silverella at nil consideration as
per the agreement.
On 12 December 2019, the Company appointed Mr Bernie Brookes to lead the Board as Non-Executive Director and
Chairman, commencing 15 January 2020.
On 31 December 2019, the following options were cancelled:
- 1,000,000 unquoted options exercisable at $0.13 each and expiring on 15 February 2024.
- 1,000,000 unquoted options exercisable at $0.00 each and expiring on 1 October 2022.
o
On 31 December 2019, the following shares were issued:
- 1,000,000 ordinary shares were issued as retention bonus to Mr Uzi Breier at nil consideration, the shares are subject
escrow.
Significant events after the reporting period
Since the reporting date the following significant events have occurred:
o
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new
strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community
as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11
March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Company is therefore
uncertain as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of
operations during 2020.
Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global
responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results
of operations, financial condition, or liquidity for the 2020 financial year.
Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if
the pandemic continues, it may have a material adverse effect on the Company’s results of future operations,
financial position, and liquidity in fiscal year 2020.
On 11 March 2020, administrative error was made on 31 December 2019 regarding the issue of 1,000,000 shares to
CEO, Mr Uzi Breier. The Company subsequently entered into a holding lock deed with Mr Breier for a period from the
date of the deed and ending on the date the Company receives shareholder approval.
On 23 March 2020 the Company announced the resignation of Mr John Bullwinkel and Mr Ashley Krongol0d.
o
o
Other than these matters, no matters have arisen since the end of the financial year to the date of this report of a material
and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
5 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Information on Directors
Mr Uzi Breier
CEO and Executive Director
Qualifications
B.Sc, MBA
Experience
Mr. Breier has held senior positions at fortune-500 companies and served as CEO for both
technology start-ups and established companies. He currently dedicates efforts to promote some
of the exciting characteristics of Israel – entrepreneurship, innovation and leadership.
Interest in Shares and
Options
2,500,000 Ordinary Shares
2,000,000 Unquoted Options
Special Responsibilities
Nil
Directorship held in other
listed entities (last 3
years)
Nil
Mr Bernie Brookes
Non-Executive Chairman (Appointed 15 January 2020)
Qualifications
BA, Dip Ed
Experience
Mr. Brookes is an experienced Australian executive, CEO and Chairman with substantial expertise
in retail, supply chain management, wholesale operations and IT systems. He has more than four
decades of business management experience. Previously he was a senior Executive at Woolworths,
CEO of Myer Holdings Limited for nine years and Edcon South Africa for three years.
Mr. Brookes’s strengths include expertise in business management, displaying energy and self-
confidence with the ability to find solutions to complex situations through analytical, conceptual
and entrepreneurial skills. Ultimately, he is motivated by results.
Mr Brookes is on the Advisory Board of the World Retail Congress as Australia’s representative and
is on the Grand Jury for the World Retail Awards. He was awarded an Order of Australia for his
efforts in retail and Philanthropy and for over 30 years has been the Patron of Australia’s largest
retail industry award.
Interest in Shares and
Options
Nil
Special Responsibilities
Nil
Directorship held in other
listed entities (last 3
years)
Funtastic Limited (current)
6 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Information on Directors
Mr Doron Eldar
Non-Executive Director (Appointed 15 January 2020)
Qualifications
BA in Business Economics
Experience
Mr. Eldar brings more than a decade of experience in senior leadership roles and is currently a
Melbourne-based partner at venture capital fund SIBF and Oxen9. Mr Elder has extensive
experience within start-up and pre-revenue companies, executing the development of new
business models, channel growth and effective go-to-market strategies.
Interest in Shares and
Options
277,778 Ordinary Shares
92,593 Unquoted Options
Special Responsibilities
Nil
Directorships held in other
listed entities (last 3 years)
Nil
Mr John Bullwinkel
Non-Executive Director (Resigned 23 March 2020)
interim Chairman (Resigned 15 January 2020)
Qualifications
Dip.FS, FIPA
Experience
Mr. Bullwinkel is Managing Director of Business Partners Pty Ltd, a boutique advisory and
investment consulting company and is based in Melbourne. He has held senior Private Banking
roles at Macquarie Private Bank, ANZ Private Bank, Deutsche Bank and Merrill Lynch. He has also
held senior positions at Citibank and NatWest in Corporate Commercial Banking.
Interest in Shares and
Options
Nil
Special Responsibilities
Nil
Directorships held in
other listed entities (last
3 years)
Nil
Mr Ashley Krongold
Non-Executive Director (Resigned 23 March 2020)
Qualifications
B.Com
Experience
Mr. Krongold has spent 15 years in the Investment Banking and Accounting industries. He was a
founding member of Investec Bank Australia and is currently CEO of the Krongold Group and a
non-executive director of Weebit Nano Ltd (ASX: WBT). He is also a founding General Partner of
global equity crowd-funding platform, OurCrowd.
Interest in Shares and
Options
1,875,032 Ordinary shares
544,946 Performance shares
Special Responsibilities
Nil
Directorship held in
other listed entities (last
3 years)
Weebit Nano Limited (current)
G-Medical Innovations Ltd (resigned 23 April 2018)
7 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Information on Directors
Mr Steve Bajic
Non-Executive Director (Resigned 15 January 2019)
Qualifications
Dip.FM
Experience
Mr. Bajic has been in the finance industry for 20 years and has helped raise capital in various
industries at all levels of company advancement. He has an extensive resume of current and past
private and public director and officer positions.
Interest in Shares and
Options
100,000 Ordinary Shares (at resignation date)
Special Responsibilities
Nil
Directorships held in
other listed entities (last
3 years)
Nil
Dr Volker Mirgel
Non-Executive Chairman (resigned 1 December 2019)
Qualifications
PhD Organic Chemistry
Experience
Dr. Mirgel is a former Bayer Senior Vice President and member of the Bayer’s Global Leadership
Team. After receiving his PhD in Organic Chemistry from University of Cologne he joined the
German chemical and pharmaceutical company Bayer AG. During his 34-year career with Bayer
he has served in multiple technical, marketing and general management functions, in Europe, Asia
Pacific and United States.
In 2013, Dr. Mirgel retired from Bayer to serve as an independent consultant for executive clients
in the chemical and advance materials industry.
Interest in Shares and
Options
1,000,000 Unquoted Options (at resignation date)
Special Responsibilities
Nil
Directorship held in
other listed entities (last
3 years)
Nil
8 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Information on Key Management
Dr Michael Shtein
Chief Technology Officer (appointed 1 August 2015)
Qualifications
Ph.D. Nano Technology
Experience
Dr. Shtein holds a Ph.D. in Nano Technology interdisciplinary studies from Ben-Gurion University,
together with and M.Sc in Chemical Engineering and MBA. He was the Chief Material Engineer –
R&D Development for the Israeli Ministry of Defence and has developed several new materials and
compounds. His main research topic is composite nanomaterials (CNT, Graphene, WS2).
Mr Tomer Segev
Chief Financial Officer (appointed 1 January 2019)
Qualifications
BA, MBA, CPA
Experience
Mr. Segev is an experienced executive with extensive knowledge of investment banking and
international finance. He has previous CFO experience with various commercialised start-up
companies, including APPFRONT, RoundForest and NorthBit.
Mr Segev has worked in the United States as an Associate Vice President at CSG Partners and as a
Senior Analyst at PWC. Later he was Head of M&A for investment bank Rosario Capital.
Mr Yoni Engel
VP Business Development (appointed 1 November 2019)
Qualifications
PhD Chemistry and Nanotech, M.Sc. Energy engineering
Experience
Dr. Engel brings a unique mix of broad scientific and technical expertise, both in academia and in
industry. He developed an ultrasensitive system for the detection of explosives which was later
commercialized (Tracesense ltd.) and lead the scientific development for several mega engineering
projects for ICL Fertilizers. He was a post-doctoral research fellow in the University of
Massachusetts, and holds a PhD in Chemistry from Tel-Aviv University and a M.Sc in Energy
engineering (O&NG) from the Technion.
Mr Avigdor Kaner
VP Business Development (Resigned 31 December 2019)
Qualification
BA, MBA
Experience
Mr. Avigdor Kaner has a multitude of experience in business development. He has held many senior
marketing positions including Head of Business Development for Baran Technologies. He has also
worked in the USA market for a variety of organisations as a freelance consultant. Mr Kaner holds
an MA from Tel-Aviv University and is currently finishing his PhD degree.
9 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Information on Company Secretary
Mr Ian Pamensky
Company Secretary
Qualifications
B.Com, BAccS (Hons), CA
Experience
Mr. Pamensky has over 22 years’ experience in the finance and secretarial sector for both SME and
ASX-listed entities. Since 1997, Mr Pamensky has held various roles with ASX-listed companies.
Meetings of Directors
The number of formal meetings of Directors held during the period and the number of meetings attended by each director was
as follows:
Uzi Breier
Appointed 18 May 2018
Volker Mirgel
Appointed 3 April 2018, Resigned 1 December 2019
Ashley Krongold
Appointed 31 October 2016, Resigned 23 March 2020
John Bullwinkel
Appointed 21 March 2018, Resigned 23 March 2020
Steve Bajic
Appointed 31 October 2016, Resigned 15 January 2019
Note: Bernie Brookes AM and Doron Eldar were appointed on 15 January 2020
DIRECTORS’ MEETINGS
Number eligible
to attend
Number
Attended
7
6
7
7
-
7
6
7
7
-
10 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Options
Unissued shares under option
At the date of this report, the unissued ordinary shares Dotz Nano Limited under option are as follows:
Expiry Date
14 June 2020
1 November 2020
20 April 2020
20 April 2020
20 April 2020
1 August 2020
1 October 2021
1 October 2021
Grant Date
13 May 2016
10 May 2018
10 May 2018
10 May 2018
10 May 2018
1 August 2018
27 November 2018
27 November 2018
15 February 2023
13 February 2019
30 June 2020
8 February 2019
15 February 2024
8 February 2019
7 May 2021
19 June 2021
29 July 2021
7 May 2019
19 June 2019
29 July 2019
22 August 2024
22 August 2019
11 September 2021
12 September 2019
11 December 2021
3 December 2019
11 December 2021
26 November 2019
Exercise Price
Number Under Option
AU$0.20
Nil
Nil
AU$0.105
AU$0.20
AU$0.20
Nil
Nil
Nil
AU$0.12
AU$0.13
AU$0.085
AU$0.10
AU$0.09
Nil
AU$0.10
AU$0.09
AU$0.09
AU$0.20
5,000,000
1,000,000
1,000,000
425,000
1,000,000
1,500,000
2,025,000
2,000,000
1,000,000
2,666,659
2,000,000
12,500,005
5,000,000
8,064,526
210,000
10,000,000
10,000,000
18,333,337
83,724,527
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
During the year ended 31 December 2019 910,000 ESOP options exercisable at nil were exercised and converted to ordinary
shares (2018: Nil).
Performance Shares
At the date of this report, the performance shares of the Company are as follows:
Expiry Date
Grant Date
Milestone
31 October 2020
31 October 2016
Milestone 3
Number of Performance
Shares
22,000,000
22,000,000
Class
Expiry
Milestone
Milestone 3
31/10/2020 Upon Dotz achieving the production and distribution of an aggregate of 100 kilograms of
GQDs through formal off-take agreements with a reputable third party in any 12-month
period within 48 months from the date of issue of the Performance Shares.
No value has been allocated to the Performance Shares due to the significant uncertainty of meeting the performance
milestones which are based on future events. To date, none of the Milestones have been met.
11 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Proceedings on behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those
proceedings.
The Company was not a party to any such proceedings during the year.
Indemnifying Officers
The Company indemnifies each of its Directors, officers and company secretary. The Company indemnifies each director or
officer to the maximum extent permitted by the Corporations Act 2001 from liability to third parties, except where the liability
arises out of conduct involving lack of good faith, and in defending legal and administrative proceedings and applications for
such proceedings.
The Company must use its best endeavours to insure a director or officer against any liability, which does not arise out of
conduct constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The Company must also use its
best endeavours to insure a Director or officer against liability for costs and expenses incurred in defending proceedings
whether civil or criminal.
Insurance premiums
During the year the Company paid insurance premiums to insure directors and officers against certain liabilities arising out of
their conduct while acting as an officer of the Group. Under the terms and conditions of the insurance contract, the nature of
the liabilities insured against and the premium paid cannot be disclosed.
Environmental Regulations
In the normal course of business, there are no environmental regulations or requirements that the Company is subject to.
Future Developments, Prospects and Business Strategies
The Company’s principal continuing activity is the development and commercialisation of technologies in the advanced
materials industry, specifically graphene quantum dots (GQDs). The Company’s future developments, prospects and business
strategies are to continue to develop and commercialise these technologies.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO Audit (WA) Pty Ltd, as part of the terms
of its audit engagement agreement against claims by third parties arising from their report on the financial report.
Non-audit Services
During the year, BDO Audit (WA) Pty Ltd, the Company’s auditor did not provide any services other than their statutory audits.
Other BDO firms and divisions provided tax services to the Group. Details of their remuneration can be found within the
financial statements at Note 6 Auditor’s Remuneration.
In the event that non-audit services are provided by BDO Audit (WA) Pty Ltd, the Board has established certain procedures to
ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor independence
requirements of the Corporations Act 2001. These procedures include:
•
•
non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed
by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management or
decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2019 has been received and can be found on page 21
of the financial report.
12 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
This remuneration report for the year ended 31 December 2019 outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act 2001 (Cth), as amended (Act) and its regulations. This information
has been audited as required by section 308(3C) of the Act.
The remuneration report is presented under the following sections:
Introduction
1.
2. Remuneration governance
3. Executive remuneration arrangements
4. Non-executive Director fee arrangements
5. Details of remuneration
6. Additional disclosures relating to equity instruments
7.
Loans to key management personnel (KMP) and their related parties
8. Other transactions and balances with KMP and their related parties
9. Voting of shareholders at last year’s annual general meeting
1.
Introduction
Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the major
activities of the Group. KMP comprise the directors of the Company and identified key management personnel.
Key management personnel covered in this report are as follows:
Name
Uzi Breier
Status
Appointed
Resigned
CEO and Executive Director
Appointed 18 May 2018
Doron Eldar
Non-Executive Director
Appointed 15 January 2020
Bernie Brookes AM
Non-Executive Chairman
Appointed 15 January 2020
Michael Shtein
Chief Technology Officer
Appointed 1 August 2015
Tomer Segev
Chief Financial Officer
Appointed 1 January 2019
VP Business Development
Appointed 1 November 2019
Yoni Engel
Steve Bajic
-
-
-
-
-
-
Non-Executive Director
Appointed 31 October 2016
Resigned 15 January 2019
Avigdor Kaner
VP Business Development
Appointed 1 November 2016
Resigned 31 December 2019
Volker Mirgel
Non-Executive Chairman
Appointed 3 April 2018
Resigned 1 December 2019
John Bullwinkel
Non-Executive Director
Appointed 21 March 2018
Resigned 23 March 2020
Interim Chairman
Appointed 1 December 2019
Resigned 15 January 2020
Ashley Krongold
Non-Executive Director
Appointed 31 October 2016
Resigned 23 March 2020
Compensation levels for KMP are competitively set to attract and retain appropriately qualified and experienced directors
and executives. The Board may seek independent advice on the appropriateness of compensation packages, given trends in
comparable companies both locally and internationally and the objectives of the Group’s compensation strategy.
2. Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of a separate remuneration committee. Accordingly, all matters are considered by the full Board of Directors,
in accordance with a remuneration committee charter.
During the financial year, the Company did not engage any remuneration consultants.
13 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
3. Executive remuneration arrangements
The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of creation of value for shareholders. Compensation packages may include a
mix of fixed compensation, equity-based compensation, as well as employer contributions to superannuation funds. Shares
and options may only be issued subject to approval by shareholders in a general meeting.
At the date of this report the Company has four appointed executives, being Mr Uzi Breier as the Executive Director and CEO,
Dr Michael Shtein as the Chief Technology Officer, Mr Yoni Engel as the VP of Business Development, and Mr Tomer Segev
as the Chief Financial Officer. The terms of their Executive Employment Agreements with Dotz Nano Limited are summarised
in the following table.
Executive Name
Mr Uzi Breier
Dr Michael Shtein
Mr Tomer Segev
Mr Yoni Engle
Remuneration
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Executive salary of US$240,000 per annum, plus company leased car.
Annual bonus of 25% of yearly salary based upon the performance targets established by
the Board (No bonus was payable for the year ended 31 December 2019); and
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies
This agreement commenced on 7 May 2018 and may be terminated by either party on 6
months’ notice, but it is for a minimum period of three years.
Executive salary of US$20,000 per month for the period until 30 April 2019, for the period
from 1 May 2019 until 31 December 2019 the Executive Salary and position capacity was
reduced to 50%, plus company leased car; and
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies
This agreement commenced on 1 August 2015 and may be terminated by either party
with 30 days notice from Dr Michael Shtein and 3 months’ notice from the Company.
Executive gross salary of ILS 22,500 (~$6,510) per month for 50% position and from 1 April
2019 ILS 27,000 (~$7,812) per month for 60% position. In addition, employee is entitled
to full social benefits (Pension fund, study fund and disability insurance) plus Company
leased car from 1 December 2019; and
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies; and
This agreement commenced 9 December 2018 with position commencement on 1 January
2019 and may be terminated by either party on 3 months’ notice.
Executive gross salary of ILS 34,000 (~$9,838) per month for full time position. In addition,
employee is entitled to full social benefits (Pension fund, study fund and disability
insurance) plus Company leased car or replacement benefit of ILS 2,750 (~$796) per
month; and
One time bonus of ILS 15,000 on January 2020; and
This agreement, as it relates to Mr. Engle’s officer position commenced on 1 November,
2019 and may be terminated by either party on 1 month notice
Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with the Group’s reimbursement policies
*Amounts stated in USD are based on the exchange rate at the date of the report.
At this stage the Board does not consider the Group’s earnings- or earnings-related measures to be an appropriate key
performance indicator (KPI). In considering the relationship between the Group’s remuneration policy and the consequences
for the Company’s shareholder wealth, changes in share price are analysed as well as measures such as successful completion
of business development and corporate activities.
14 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
4. Non-executive Director fee arrangements
The Board policy is to remunerate Non-executive Directors at a level to comparable companies for time, commitment, and
responsibilities. Non-executive Directors may receive performance related compensation. Directors’ fees cover all main Board
activities and membership of any committee. The Board has no established retirement or redundancy schemes in relation to
Non-executive Directors.
The maximum aggregate amount of fees that can be paid to Non-executive Directors is presently limited to an aggregate of
AU$500,000 per annum and any change is subject to approval by shareholders at the General Meeting. Fees for Non-
executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with shareholder
interests, the Directors are encouraged to hold shares in the Company. Total fees for the Non-executive Directors for the
financial year were $195,946 (2018: $237,605) and cover main Board activities only. Non-executive Directors may receive
additional remuneration for other services provided to the Group.
Performance Conditions Linked to Remuneration
The Group has established and maintains Dotz Nano Limited Employee Incentive Option Plan (Plan) to provide ongoing
incentives to Eligible Participants of the Company. Eligible Participants include:
•
•
•
•
a Director (whether executive or non-executive) of any Group Company;
a full or part time employee of any Group Company;
a casual employee or contractor of a Group Company; or
a prospective participant, being a person to whom the Offer was made but who can only accept the Offer if arrangement
has been entered into that will resulting in the person becoming an Eligible Participant.
The Board adopted the Plan to allow Eligible Participants to be granted Options to acquire shares in the Company.
The purpose of the Plan is to assist in the reward and motivation of Eligible Participants and link the reward of Eligible
Participants to performance and the creation of Shareholder value. It is designed to align the interest of Eligible Participants
more closely to the interests of Shareholders by providing an opportunity for Eligible Participants to receive shares. It provides
the Eligible Participants with the opportunity to share in any future growth in value of the Company and provides greater
incentives for Eligible Participants to focus on the Company’s longer-term goals. At 31 December 2019 a total of 4,210,000
options have been issued under this plan.
15 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
5. Details of Remuneration
* Other includes termination benefits to Volker Mirgel US$25,000 and other benefits such as car lease, fuel and etc paid to KMP.
Short Term
Salary, Fees &
Commissions
US$
Post-
Employment
Superannuation
US$
Other*
Share-based
payments
US$
US$
31-Dec-19
Directors:
Uzi Breier
Volker Mirgel1
John Bullwinkel2
Steve Bajic3
Ashley Krongold3
Key management:
Michael Shtein
Avigdor Kaner
Tomer Segev4
Yoni Engle5
Total
31-Dec-18
Directors:
Uzi Breier
Volker Mirgel1
John Bullwinkel3
Faldi Ismail6
Moti Gross
Steve Bajic2
Menashe Baruch7
Ashley Krongold3
Antony Sormann6
Key management:
Ariel Malik8
Eran Gilboa7
Michael Shtein
Avigdor Kaner
Tomer Segev
Short Term
Salary, Fees &
Commissions
Post-
Employment
Superannuation
Other*
Share-based
payments
Total
Performance
based
remuneration
US$
US$
US$
US$
US$
25,507
25,000
197,185
34,593
237,470
100,000
34,765
1,414
34,768
160,046
110,917
116,007
26,335
821,722
-
-
-
-
-
-
-
-
-
-
-
-
-
21,328
17,038
3,628
427
92,928
460,162
159,593
34,765
1,414
34,768
260,915
171,669
182,750
29,611
0%
0%
0%
0%
0%
0%
5.68%
0%
0%
-
-
-
79,541
43,714
63,115
2,849
420,997
1,335,647
Total
US$
176,496
74,167
28,030
3,737
14,428
-
-
-
-
-
-
-
148,867
55,032
320,899
-
3,926
-
-
16,787
29,820
16,407
25,040
-
-
-
-
-
132,983
163,247
85,119
159,927
-
37,373
21,935
37,373
5,224
347,954
407,870
386,774
367,510
5,534
Performance
based
remuneration
0%
0%
0%
0%
17%
0%
0%
0%
0%
31%
37%
0%
0%
0%
162,068
74,167
28,030
3,737
117,000
37,373
18,009
37,373
5,224
198,184
214,803
285,248
182,543
5,534
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
* Other includes termination benefits to Moti Gross US$135,113 and other benefits such as car lease, fuel and etc paid to KMP.
2,220,876
1,369,293
255,275
596,308
-
1 Resigned 1 December 2019
2 Resigned 23 March 2020
3 Resigned 15 January 2019
4 Appointed as Chief Financial Officer on 22 January 2019
5 Appointed as VP Business Development on 1 November 2019. Remuneration disclosed above is from the date of becoming a KMP.
6 Resigned 1 February 2018
7 Resigned 21 March 2018
8 Resigned 31 December 2018
16 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
6. Additional disclosures relating to equity instruments
KMP Shareholdings
The number of ordinary shares in Dotz held by each KMP of the Group during the financial year is as follows:
31-Dec-19
Balance at the start
of the year
Granted as
Remuneration
during the
year**
Issued on
exercise of
options during
the year
Other changes
during the year
Balance at
end of Year
Directors:
Uzi Breier**
Volker Mirgel*
John Bullwinkel
Steve Bajic*
Ashley Krongold
Key management:
Michael Shtein
Avigdor Kaner
Tomer Segev
Yoni Engle
Total
31-Dec-18
Directors:
Uzi Breier
Volker Mirgel
John Bullwinkel
Faldi Ismail*
Moti Gross*
Steve Bajic
Menashe Baruch*
Ashley Krongold
Antony Sormann
Key management:
Ariel Malik1
Eran Gilboa1
Michael Shtein
Avigdor Kaner
Tomer Segev
Total
-
-
-
100,000
1,884,838
2,446,201
-
-
-
4,431,039
1,000,000
-
-
-
-
-
-
-
-
1,000,000
-
-
-
-
-
-
-
-
-
-
1,500,000
-
-
-
(9,806)
-
-
-
-
1,490,194
2,500,000
-
-
100,000
1,875,032
2,446,201
-
-
-
6,921,233
Balance at the start
of the year
Granted as
Remuneration
during the year
Issued on
exercise of
options during
the year
Other changes
during the year
Balance at
end of Year
-
-
-
2,916,667
3,260,687
100,000
242,198
1,884,838
-
11,746,611
1,816,486
2,446,201
-
-
24,413,688
-
-
-
-
-
-
-
-
-
1,530,000
2,080,000
-
-
-
3,610,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,530,000)
(2,080,000)
-
-
-
(3,610,000)
-
-
-
2,916,667
3,260,687
100,000
242,198
1,884,838
-
11,746,611
1,816,486
2,446,201
-
-
24,413,688
1 Resigned 31 December 2018.
* Balances are at resignation date.
** Refer to note 16 Share Based Payment for details
Options awarded, vested and lapsed during the year
The table below discloses the number of share options granted, vested or lapsed during the year.
Share options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been
met, until their expiry date.
17 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
6. Additional disclosures relating to equity instruments (continued)
KMP Options Holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
31-Dec-19
Directors:
Uzi Breier
Volker Mirgel*
John Bullwinkel
Steve Bajic *
Ashley Krongold
Key management:
Michael Shtein
Avigdor Kaner
Tomer Segev
Yoni Engle **
Total
KMP Options Holdings
31-Dec-18
Directors:
Uzi Breier
Volker Mirgel
John Bullwinkel
Faldi Ismail*
Moti Gross
Steve Bajic
Menashe Baruch
Ashley Krongold
Antony Sormann
Key management:
Ariel Malik*
Eran Gilboa
Michael Shtein
Avigdor Kaner
Tomer Segev
Total
Balance at
the start of
the year
Granted as
remuneration
during the
year***
Exercised
during the
year
Other
changes
during the
year
Balance at
the end of
the year
Vested
and
exercisable
Vested
and un-
exercisable
-
-
-
-
-
3,700,000
3,500,000
-
-
7,200,000
2,000,000
1,000,000
-
-
-
-
-
1,000,000
-
4,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
1,000,000
-
-
-
(1,000,000)
(652,023)
-
495,000
(1,157,023)
2,700,000
2,847,977
1,000,000
495,000
10,042,977
2,000,000
-
-
-
-
2,700,000
2,847,977
1,000,000
495,000
9,042,977
-
-
-
-
-
-
-
-
-
-
Balance at the
start of the
year
Granted as
remuneration
during the
year
Exercised
during the
year
Other
changes
during the
year
Balance at
the end of
the year
Vested
and
exercisable
Vested and
un-
exercisable
-
-
-
1,333,334
-
-
-
-
-
-
-
-
-
-
1,333,334
-
-
-
-
-
-
-
-
-
1,500,000
-
3,700,000
3,500,000
-
8,700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,333,334
-
-
-
-
-
1,500,000
-
3,700,000
3,500,000
-
10,033,334
-
-
-
1,333,334
-
-
-
-
-
1,000,000
-
1,200,000
2,000,000
-
5,533,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Balances are at resignation date.
** Balances are at appointment date.
*** Refer to note 16 Share Based Payment for details
KMP performance rights holdings
22,000,000 performance rights on issue as at 31 December 2019, (2018: 44,000,000 performance rights). 22,000,000
performance rights were expired during the current financial year (2018: Nil).
18 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
6. Additional disclosures relating to equity instruments (continued)
KMP performance shares holdings
The number of performance shares held by each KMP of the Group during the financial year is as follows:
31-Dec-19
Directors:
Uzi Breier
Volker Mirgel*
Steve Bajic*
Ashley Krongold
John Bullwinkel
Key management:
Michael Shtein
Avigdor Kaner
Tomer Segev
Total
Balance at
the start of
the year
Granted as
Remuneration
during the year
Other changes
during the year
Balance at
end of Year
-
-
-
1,089,892
-
1,630,801
-
-
2,720,693
-
-
-
-
-
-
-
-
-
-
-
-
(544,946)
-
(815,400)
-
-
-
-
-
544,946
-
815,401
-
-
(1,360,346)
1,360,347
* Balances are at resignation date.
KMP performance shares holdings
31-Dec-18
Directors:
Uzi Breier
Volker Mirgel
John Bullwinkel
Faldi Ismail*
Moti Gross*
Steve Bajic
Menashe Baruch*
Ashley Krongold
Key management:
Ariel Malik*
Eran Gilboa
Michael Shtein
Avigdor Kaner
Antony Sormann
Total
Balance at
the start of
the year
Granted as
Remuneration
during the year
Other changes
during the year
Balance at
end of Year
-
-
-
1,866,667
3,160,687
-
242,198
1,634,838
11,746,611
1,816,486
2,446,201
-
-
22,913,688
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,053,562)
-
(80,733)
(544,946)
(3,915,537)
(605,495)
(815,400)
-
-
(7,015,673)
-
-
-
1,866,667
2,107,125
-
161,465
1,089,892
7,831,074
1,210,991
1,630,801
-
-
15,898,015
* Balances are at resignation date.
7.
Loans to key management personnel (KMP) and their related parties
There were no loans made to key management personnel during the financial year (2018: nil).
19 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ REPORT
Remuneration Report (Audited)
8. Other transactions and balances with KMP and their related parties
Purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. The Group
acquired the following services from entities that are controlled by members of the group’s key management personnel.
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered they
control or significantly influence the financial or operating policies of those entities. In the last financial year, the following
entities provided corporate services and rental to the Group. Transactions between related parties are on normal commercial
terms and conditions no more favourable than those available to other parties unless otherwise stated.
Entity
Nature of transactions
Otsana Capital Pty Ltd* Capital raising fee
Otsana Capital Pty Ltd*
Adamantium Holdings
Pty Ltd
Sharon Malik
Corporate advisor retainer
Rent and registered office
fee
Marketing fee
Key
Management
Personnel
Faldi Ismail
Faldi Ismail
Faldi Ismail
Ariel Malik
Total Transactions
Payable Balance
2019
US$
-
-
-
-
2018
US$
-
22,424
2,990
114,075
2019
US$
-
-
-
-
2018
US$
-
7,047
-
-
*Otsana Pty Ltd is a company controlled by former Director Faldi Ismail.
On 26 November 2019, the Company secured AU$2 million via placement by Australian-Israeli venture capital fund SIBF and
AU$1 million via Deferred Share Placement from SIBF. Of which, AU$10,000 was receipt from Doron Eldar and AU$1.1 million
from SIBF who Doron Eldar has significant influence.
9. Voting of shareholders at last year’s annual general meeting (AGM)
At the AGM held on 31 May 2019, 93% of the votes received supported the adoption of the remuneration report for the year
ended 31 December 2018. The company did not receive any specific feedback at the AGM regarding its remuneration
practices.
REMUNERATION REPORT (END)
Signed in accordance with a resolution of the Board of Directors.
Bernie Brookes
Non-Executive Chairman
30 March 2020
20 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF DOTZ NANO LIMITED
As lead auditor of Dotz Nano Limited for the year ended 31 December 2019, 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 Dotz Nano Limited and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 March 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
Revenue
Other income
Cost of Sales
Administrative expenses
Consulting fees
Depreciation and amortisation of expenses
Directors fees
Executive remuneration
Administrative remuneration
Finance expenses
Insurance
Intangible write off expense
Legal and professional fees
Finance and accounting expenses
Motor vehicle expense
Occupancy costs
Marketing and Investor relations
Research and development
Share based compensation
SRA and patent expense
Travel and accommodation
Loss before income tax
Income tax expense
Loss for the year
Note
2
2
2
2,11
2
16
3
2019
US$
33,731
770
(21,041)
(184,262)
(29,869)
(213,547)
(186,747)
(237,470)
(101,901)
(21,626)
(90,650)
(190,000)
(87,803)
(227,179)
(75,255)
(10,787)
(527,920)
2018
US$
15,395
1,408
(5,388)
(187,958)
(73,902)
(74,024)
(237,605)
(609,250)
(239,752)
(38,521)
(72,462)
-
(142,570)
(305,298)
(173,778)
(90,203)
(593,225)
(707,647)
(1,025,675)
(731,308)
(1,451,763)
(22,962)
(113,091)
(107,309)
(324,792)
(3,746,564)
(5,736,672)
-
-
(3,746,564)
(5,736,672)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
15
(26,880)
(117,014)
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
-
-
(3,773,444)
(5,853,686)
Basic loss per share (cents per share)
6
(1.72)
(3.59)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
22 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Inventory
Note
7(a)
8
2019
US$
1,371,275
144,592
34,141
4,312
2018
US$
508,572
230,722
117,626
-
TOTAL CURRENT ASSETS
1,554,320
856,920
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Intangible assets
Right-of-use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated losses
SHAREHOLDERS’ EQUITY
8
10
11
9
12
9
13
9
14
15
27,914
283,239
-
174,663
485,816
44,575
322,592
175,000
-
542,167
2,040,136
1,399,087
270,432
28,967
148,325
447,724
257,481
35,266
292,747
410,718
14,451
-
425,169
242,436
-
242,436
740,471
667,605
1,299,665
731,482
22,627,901
18,762,675
2,057,885
1,608,364
(23,386,121)
(19,639,557)
1,299,665
731,482
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
23 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Issued Capital
Option
Reserve
US$
US$
Foreign
Currency
Reserve
US$
Accumulated
Losses
US$
Total
US$
Balance at 1 January 2018
15,900,912
856,065
99,283
(13,902,885)
2,953,375
Loss for the year
Other comprehensive income
Total comprehensive loss for
the year
Transactions with owners,
recognised directly in equity
-
-
-
Issue of shares (net of costs)
2,861,763
-
-
-
-
Issue of options
-
770,030
-
(5,736,672)
(5,736,672)
(117,014)
-
(117,014)
(117,014)
(5,736,672)
(5,853,686)
-
-
-
-
2,861,763
770,030
731,482
Balance at 31 December 2018
18,762,675
1,626,095
(17,731)
(19,639,557)
Balance at 1 January 2019
18,762,675
1,626,095
(17,731)
(19,639,557)
731,482
Loss for the year
Other comprehensive income
Total comprehensive loss for
the year
Transactions with owners,
recognised directly in equity
Issue of shares (net of cost)
Share based payments
-
-
-
3,597,954
267,272
-
-
-
-
476,401
-
(3,746,564)
(3,746,564)
(26,880)
-
(26,880)
(26,880)
(3,746,564)
(3,773,444)
-
-
-
-
3,597,954
743,673
Balance at 31 December 2019
22,627,901
2,102,496
(44,611)
(23,386,121)
1,299,665
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
24 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Note
2019
US$
2018
US$
34,792
2,820
(2,659,687)
(4,449,910)
(42,917)
-
428
1,408
Net cash used in operating activities
7(b)
(2,667,384)
(4,445,682)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Disposal/ (acquisition) of investments
Payment for intellectual property
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds for the issue of shares
Proceeds from convertible note
Repayment to lenders
Grants
Repayment of the lease liabilities
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Foreign exchange
(34,739)
(123,399)
25,225
35,295
11
(15,000)
-
(24,514)
(88,104)
2,993,204
2,108,357
604,750
-
-
(31,730)
43,484
239,198
9
(100,165)
-
3,541,273
2,315,825
849,375
(2,217,961)
508,572
2,835,485
13,328
(108,952)
Cash and cash equivalents at the end of the financial year
7(a)
1,371,275
508,572
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
25 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
These consolidated financial statements cover Dotz Nano Limited (Company) and its controlled entities as a consolidated
entity (also referred to as Group). Dotz Nano Limited is a company limited by shares, incorporated and domiciled in Australia.
The Group is a for-profit entity.
The financial statements were issued by the board of directors of the Company on 30 March 2020.
The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation and
presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation of the financial report
a) Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting Standard Board
(AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded
would result in financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards.
b) Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group incurred a
loss for year ended 31 December 2019 of US$3,746,564 (2018: US$5,736,672) and net cash outflows from operating activities
of US$2,667,384 (2018: US$4,445,682).
Subsequent to reporting date, on 31 January 2020, the World Health Organisation (WHO) announced a global health
emergency because of a new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the
international community as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure
globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic. These events are having a significant
negative impact on world stock markets, currencies and general business activities. The timing and extent of the impact and
recovery from COVID-19 is unknown but it may have an impact on Group’s activities and potentially impact on being able to
raise capital in an uncertain market.
In context of this operating environment, the ability of the Group to continue as a going concern is dependent on securing
additional funding through debt or equity to continue to fund its operational and technology development activities.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity’s ability to continue as a
going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of
business.
The Directors believe that there will be sufficient funds available to continue to meet the Group’s working capital
requirements as at the date of this report and that sufficient funds will be available to finance the operations of the Group
for the following reasons:
•
•
•
The Directors of Dotz Nano Limited have assessed the likely cash flow for the 12 month period from the date of signing
this financial report and its impact on the Group and believe there will be sufficient funds to meet the Group’s working
capital requirements as at the date of this report.
The Group has the ability to reduce its expenditure to conserve cash.
The Group has historically demonstrated its ability to raise funds to satisfy its immediate cash requirements, including
securing AU$3 million as announced on 26 November 2019 in which AU$2 million has been secured via placement and
26 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) Going Concern (continued)
an additional AU$1million via a Deferred Share Placement with Southern Israel Bridging Fund (SIBF). Other capital
raisings during the financial year include, AU$0.85 million by issue of convertible loans with conversion in February
2019, AU$1.5 million in May 2019 and AU$1million in July 2019 via share placements. As stated above, the Group is
also expecting two investments of AUD$0.5 million each which are scheduled in 2020.
The Directors of Dotz Nano also have reason to believe that in addition to the cash flow currently available, additional
funds from receipts are expected through the commercialisation of the Group’s products.
Is continuing to explore alternative options in an effort to mitigate the possible impact of COVID-19.
•
•
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities
other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements or
raise additional capital through equity or debts raisings and that the financial report does not include any adjustments relating
to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not
continue as a going concern and meet its debts as and when they become due and payable. The directors plan to continue
the Group’s operations on the basis as outlined above and believe there will be sufficient funds for the Group to meet its
obligations and liabilities for at least twelve months from the date of this report.
c) Adoption of new and amended accounting standards
In the current year, the Group, for the first time, has applied IFRS 16 Leases (as issued by the IASB in January 2016). The
standard replaces AASB 117 'Leases' and for lessees eliminates the classifications of operating leases and finance leases.
The group leases office space and vehicles. Rental contracts are typically made for a fixed period of 1-3 years, with extension
options available on the office lease. Lease terms are negotiated on an individual basis and contain a range of terms and
conditions. The lease agreements impose standard covenants such as mileage limitation, but leased assets may not be used
as security for borrowing purposes.
Until the 2018 financial year, leases were classified as operating leases. Payments made under the group’s operating leases
(net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the
lease.
From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The right of use asset is depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of fixed lease payments (including in-substance fixed payments), less any lease incentive receivable.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
Right of use assets are measured at cost comprising the following:
•
•
•
•
The amount of the initial measurement of lease liability;
Any lease payments made at or before the commencement date less any lease incentives received;
Any initial direct costs; and
Restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets may comprise
IT-equipment and small items of office furniture.
27 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c) Adoption of new and revised accounting standards (Continued)
Impact of the New Accounting Policy on Amounts Recognised in the Financial Statements
The change in accounting policy affected the following items in the balance sheet on 1 January 2019:
•
•
Lease liabilities – increase by US$256,088; and
Right of use assets – increase by US$256,088;
The net impact on accumulated losses on 1 January 2019 was nil.
Impact on the statement of cash flows
The application of AASB 16 has an impact on the consolidated statement of cash flows of the Group.
Under AASB 16, leases must present
•
•
•
Short-term lease payments, payments of leases of low-value assets and variable lease payments not included in the
measurement of the lease liabilities as part of the operating activities (the Group has included these payments as part
of payments to suppliers and employees)
Cash paid for the interest portion of lease liabilities as either operating activities or financing activities as permitted by
AASB 107 Statement of Cash Flows (The Group has opted to include interest paid as part of operating activities)
Cash payments for principal portion of leases liabilities, as part of financing activities.
Impact on segment disclosures and earnings per share
The adoption of AASB 16 had no impact on the group’s segment disclosures.
The adoption of AASB 16 did not have significant impact on the Company’s earnings per shares.
Lease liabilities
On adoption of AASB 16 the group recognised lease liabilities in relation to one office lease and 2 vehicle leases which had
previously been classified as operating leases under the principles of AASB 117 Leases. These liabilities were measured at the
present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 January
2019. The weighted average lessee’s incremental borrowing rate (the discount rate) applied to the office lease liabilities on
1 January 2019 was 12.95% and average interest rate implicit in the car lease liability on 1 January 2019 was 14.61%.
The interest rate implicit in the lease has been used for car leases and the incremental borrowing rate has been used for
office lease as there is no late implicit in that lease.
Lease liabilities recognised at 1 January 2019 are as follows:
Operating lease commitments on 1 January 2019
Less than one year as of 1 January 2019
Less: Discount applied
Operating lease commitments discounted using the lessee’s incremental borrowing rate at the date of
initial application
Add: finance lease liabilities recognised as at 31 December 2018
Lease liability recognised as at 1 January 2019
1 January 2019
US$
327,904
(26,797)
(38,904)
262,203
-
262,203
The lease liability of US$262,203 recognised at 1 January 2019 is comprised of minimum lease payments over the lease
contract.
28 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c) Adoption of new and revised accounting standards (Continued)
The Group had no finance leases at 31 December 2019.
As of 1 January 2019, the Group had 4 short term car leases (less than 12 months remaining on the contracts) not meeting
the recognition criteria of AASB 16.
Right of use assets
The associated right of use assets for property and vehicle leases were measured on a modified retrospective basis as if the
new rules had always been applied.
As of 1 January 2019, the Group had 4 short term car leases (less than 12 months remaining on the contracts) not meeting
the recognition criteria of AASB 16. Other than that, there were no other right of use assets and no onerous lease contracts
that would have required an adjustment to the right of use assets at the date of initial application.
The recognised right of use assets relates to the following types of assets:
Office space
Motor vehicles
Total right of use assets
1 January 2019
US$
184,311
77,892
262,203
The value of the right of use asset at 1 January 2019 has been determined solely with direct reference to the lease liability
value at the same date. There are no leases with initial direct costs or removal and restoration costs requiring an adjustment
to the value of the right of use asset.
Right of use assets are subsequently measured using the cost model, that is, right of use asset less accumulated amortisation
and accumulated impairment losses, adjusted for any remeasurements. Leases are to be remeasured upon occurrence of any
of the following events:
•
•
•
Change in original assessment of lease term or purchase/termination options;
Change in estimate of residual guarantee; and/or
Change in index or rate affecting payments.
Practical expedients applied
In applying AASB 16 for the first time, the group has used the following practical expedients permitted by the standard:
The use of a single discount rate to a portfolio of leases with reasonably similar characteristics; and
The use of hindsight in determining the lease term where the contract contains options to extend or terminate the
Operating leases with remaining lease term of less than 12 months, as 1 January 2019 are treated as short-term leases.
The Group has also elected not to reassess whether a contract is, or contains a lease, at the date of initial application. Instead,
for contracts entered into before the transition date the Group relied on its assessment made applying AASB 117 and
Interpretation 4 Determining whether an Arrangement contains a Lease.
d) Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December
2019. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
29 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
•
•
lease.
•
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d) Principles of Consolidation (Continued)
•
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangement with the other vote holders of the investee,
Rights arising from other contractual arrangements,
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
•
•
•
•
•
•
De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investments retained
Recognises any surplus or deficit in profit and loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities
e)
Income Tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured
at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using applicable income
tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the
amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
30 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e)
Income Tax (continued)
Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or loss when the
tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been
fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition
of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
f)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
Group as a lessee
Operating lease payments, where substantially all the risk and benefits remain with the lessor, are recognised as an expense
in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. Operating
lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between
rental expense and reduction of the liability.
From 1 January 2019, leases are recognised as a right-of-use asset and corresponding liability at the date at which the leased
asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate
Amount expected to be payable by the lessee under residual value guarantees
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
31 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
f)
Leases
•
Payments of penalties for termination the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use of assets are measured at cost comprising the following:
•
•
•
•
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs
Restoration cost
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short term leases are leases with a lease term of 12 months or less. Low-value asset comprise IT
equipment and small items of office furniture.
g)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party
to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transaction costs where the instrument is not classified as at
fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are
expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.
Classification and subsequent measurement
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
(i) Financial Assets
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss
(ii) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Derivative instruments
The Group does not trade or hold derivatives.
Financial guarantees
The Group has no material financial guarantees.
32 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g)
Financial Instruments (continued)
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has been
impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred
‘loss event’) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can
be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flow expires or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
h)
Impairment of non-financial assets
At the end of each reporting period, the Directors assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information, including dividends received
from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits.
If any such indication exists, an impairment test is carried out on the asset by comparing the asset’s recoverable amount,
being the higher of its fair value less costs to sell and its value in use, to the asset’s carrying amount. Any excess of the
asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss. Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating
unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
i)
Intangible assets
Acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets
acquired in a business combination are measured on initial recognition at fair value at the acquisition date.
Intangible assets with a finite useful life are amortised over their useful life and reviewed for impairment whenever there is
an indication that the assets may be impaired. The amortisation period and the amortisation method for an intangible asset
are reviewed at least at each year end.
Intangible assets with indefinite useful lives are not systematically amortised and are tested for impairment annually or
whenever there is an indication that the intangible assets may be impaired. The useful life of these assets is reviewed annually
to determine whether their indefinite life assessment continued to be supportable. If the events and circumstances do not
continue to support the assessment, the change in the useful life assessment from indefinite to finite
is accounted for prospectively as a change in accounting estimate and on that date the asset is tested for impairment. The
intangible assets are considered to be with indefinite useful life.
j)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks with original maturity of three
months or less.
33 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k) Revenue and other income
Revenue is measured at the fair value of the consideration received or receivable. Interest income is brought to account
on an accruals basis using the effective interest rate method and, if not received at the end of the reporting period, is
reflected in the statement of financial position as a receivable
l) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
m) Goods and Services Tax (GST) and Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST or VAT, except where the amount of GST or VAT
incurred is not recoverable from the Australian Tax Office (ATO) and Israel Tax Authority (ITA).
Receivable and payables are stated inclusive of the amount of GST or VAT receivable or payable. The net amount of the
GST or VAT recoverable from, or payable to, the ATO or ITA is included with other receivables and payables in the statement
of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST or VAT component of investing
and financing activities, which are disclosed as operating cash flows.
n) Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their
expected useful lives.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
o) Research and development
Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised only if
the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic
benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or
sell the asset. Otherwise, it is recognised in profit or loss as incurred.
p) Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of
the reporting period. Employee benefits that are expected to be settled within 12 months have been measured at the
amounts expected to be paid when the liability is settled. Employee benefits payable later than 12 months have been
measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wages increases and the probability that the employee may satisfy any vesting
requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity
that match the expected timing of cash flows attributable to employee benefits.
34 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
p) Employee Benefits (continued)
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees are measured at the fair
value of the instruments issued and amortised over the vesting periods. The fair value of performance right options is
determined using the satisfaction of certain performance criteria (Performance Milestones). The number of share option
and performance rights expected to vest is reviewed and adjusted at the end of each reporting period such that the amount
recognised for services received as consideration for the equity instruments granted is based on the number of equity
instruments that eventually vest. The fair value is determined using either a Black Scholes, Binominal or Monte Carlo
simulation model depending on the type of share-based payment.
q) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are
measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
r)
Equity and reserves
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of
shares are deducted from share capital, net of any related income tax benefits. The option reserve records the value of
share-based payments.
s)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in USA dollars which is the
Parent’s functional currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured
at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognized other comprehensive Income; otherwise the exchange
difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
35 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
s)
Foreign currency transactions and balances (continued)
Exchange differences arising on translation of foreign operations with functional currencies other than USA dollars are
recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of
financial position. These differences are recognised in profit or loss in the period in which the operation is disposed.
t)
Segment Information
Identification of reportable segments
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The Group’s sole operating segment is consistent with the presentation of these consolidated financial statements.
u) Earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit attributable to member of the parent entity, excluding any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year (if any).
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
•
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
v) Critical Accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group.
Key Estimates and judgements
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on
expected future cash flows and uses an interest rate to discount them. The company reviews goodwill and other intangible
assets for impairment once a year or more frequently if events or changes in circumstances indicate that there is impairment.
Goodwill is allocated at initial recognition to each of the Company’s cash-generating units that are expected to benefit from
synergies of the business combination giving rise to the goodwill. An impairment loss is recognised if the recoverable amount
of the cash-generating unit to which goodwill has been allocated is lower than the carrying value of the cash generating unit.
Any impairment is first allocated to goodwill. As at 31 December 2019, the management fully impaired the intangibles of the
Company, refer to Note 12 for the basis of impairment. .
Share based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date
the goods or services are received. The fair value of options is determined using either the Black-Scholes, Binominal or Monte
Carlo valuation models. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised for services received as consideration for the equity instruments granted
is based on the number of equity instruments that eventually vest.
36 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
v) Critical Accounting estimates and judgements (continued)
Bird Grant Liability
Government grant liability reflects the grant received from the Bird Foundation. The grant is repayable upon the Group
commencing product commercialisation and generating revenue from sale of product, with repayments being based on 5%
of each dollar of revenue related to the grant’s sponsored development. The total repayment is based on the timing of the
repayment and ranges from the grant amount to 150% of the grant amount. As required by AASB 9 Financial Instruments,
the liability has been recognised at fair value on initial recognition and subject to management’s estimate of discount rate,
and the timing and quantity of future revenues.
Lease term and discount rate used
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise option, or not exercise option a termination option. Extension options (or period after termination options) are only
included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The determination of the Group’s discount rate is set by reference to the market yields at the end of the reporting period on
government bonds.
NOTE 2: EXPENSES
Note
2019
US$
2018
US$
Loss before income tax from continuing operations includes the following specific
expenses:
Executive Remuneration
- CEO and Executive Director
- VP International Finance (Former)
Finance expense:
- Interest expense
- Gain on exchange rate differences
Depreciation expense:
-
- Depreciation charge related to right-of-use assets
- Depreciation charge related to fixed assets
Intangible write off expense:
- License write off
Research and development:
-
Employee costs
- Lab expenses
(237,470)
(411,066)
-
(198,184)
(237,470)
(609,250)
(52,577)
30,951
(21,626)
(38,521)
-
(38,521)
9
10
(125,442)
(88,105)
(213,547)
-
(74,024)
(74,024)
11
(190,000)
(190,000)
-
-
(611,178)
(933,277)
(96,469)
(92,398)
(707,647)
(1,025,675)
37 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 3: INCOME TAX
The financial accounts for the year ended 31 December 2019 comprise the results of Dotz Australia and Dotz Israel. The legal
parent is incorporated and domiciled in Australia where the applicable tax rate is 27.5% (2018: 27.5%). The applicable tax
rate in Israel is 23% (2018: 23%).
(a) Income tax expense
Current tax
Deferred tax
2019
US$
-
-
2018
US$
-
-
(b) The prima facie tax payable on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Income tax benefit on operating loss at 27.5% (2018: 27.5%)
(1,030,305)
(1,577,585)
Non-deductible items
Non-deductible expenditure
Non-assessable income
Adjustment for difference in tax rates
Temporary differences not recognised
Income tax attributable to operating income/(loss)
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
Deferred tax assets
Tax losses
Black hole expenditure
Unrecognised deferred tax asset
Set-off deferred tax liabilities
Net deferred tax assets
Less deferred tax assets not recognised
Net assets
Deferred tax liabilities
Other
Set-off deferred tax assets
Net deferred tax liabilities
Tax losses
225,255
419,196
106,117
698,933
-
Nil%
Nil
674,966
87,137
762,103
-
762,103
(762,103)
-
-
-
-
154,080
1,004,309
-
Nil%
Nil
977,429
101,959
1,079,388
-
1,079,388
(1,079,388)
-
-
-
-
Unused tax losses for which no deferred tax asset has been recognised
3,334,392
3,135,080
Carry forward losses
Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 31
December 2019, because the Directors do not believe it is appropriate to regard realisation of the future income tax benefits
as probable.
38 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 4: RELATED PARTY TRANSACTIONS
a) Key Management Personnel Compensation
With exception of Mr Breier, and Dr Mirgel, the non-executive directors entered contracts to each be paid AUD$4,167 per
month, for the year ended 31 December 2019. The salary of Mr Breier is set at US$240,000 and the salary of Dr Mirgel is set
at US$100,00 (resigned 1 December 2019). The contracts remain in place until the Directors either resign or are not re-elected
at an AGM.
The totals of remuneration paid to KMP during the year are as follows:
Short-term salary, fees and commissions
Other
Share based payments
Total KMP Compensation
b) Other related party transactions
2019
US$
821,722
92,928
420,997
2018
US$
1,369,293
255,275
596,308
1,335,647
2,220,876
Purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. The Group
acquired the following services from entities that are controlled by members of the group’s key management personnel.
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered they
control or significantly influence the financial or operating policies of those entities. During the year, there was no related
party transactions. In last financial year, the following entities provided corporate services and rental to the Group.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
Entity
Nature of transactions
Key
Management
Personnel
Otsana Capital Pty Ltd
Adamantium Holdings
Pty Ltd
Sharon Malik
Corporate advisor retainer
Rent and registered office
fee
Marketing fee
Faldi Ismail
Faldi Ismail
Ariel Malik
Total Transactions
Payable Balance
2019
US$
-
-
-
2018
US$
22,424
2,990
114,075
2019
US$
-
-
-
2018
US$
7,047
-
-
*Otsana Pty Ltd is a company controlled by former Director Faldi Ismail.
On 26 November 2019, the Company secured AU$2 million via placement by Australian-Israeli venture capital fund SIBF and
AU$1 million via Deferred Share Placement from SIBF. Of which, AU$10,000 was receipt from Doron Eldar and AU$1.1 million
from SIBF who Doron Eldar has significant influence.
39 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 5: AUDITOR’S REMUNERATION
Remuneration of the auditor of the Group for:
-
-
Auditing and reviewing the financial reports (BDO) – Australia
Auditing and reviewing the financial reports (BDO) – Israel
Non-assurance services
-
-
Tax (BDO) – Australia
Tax (BDO) – Israel
NOTE 6: LOSS PER SHARE
(Loss) per share (EPS)
2019
US$
26,615
29,070
55,685
9,179
3,230
12,409
2019
US$
2018
US$
27,736
30,600
58,336
3,756
6,961
10,717
2018
US$
a)
Loss used in calculation of basic EPS and diluted EPS
(3,746,564)
(5,736,672)
b) Weighted average number of ordinary shares outstanding during the
year used in calculation of basic and diluted loss per share
218,410,831
159,808,324
NOTE 7 a: CASH AND CASH EQUIVALENTS
Cash at bank
Total cash and cash equivalents in the statement of cash flows
NOTE 7 b: CASH FLOW INFORMATION
Loss after income tax
Non-cash flows in loss after income tax
Depreciation
Impairment expense
Share based payment expense
Foreign exchange
Changes in assets and liabilities
Decrease/(Increase) in receivables
Decrease/(Increase) in prepayments
Increase in inventory
Decrease in payables
Decrease in other payables
Increase in provisions
Cash flow used in operating activities
2019
US$
1,371,275
1,371,275
2018
US$
508,572
508,572
2019
US$
2018
US$
(3,746,564)
(5,736,672)
213,547
190,000
731,308
(22,719)
41,555
55,569
(4,312)
74,024
-
1,451,763
29,866
(5,149)
(18,746)
-
(16,040)
(162,263)
(124,244)
14,516
(82,166)
3,661
(2,667,384)
(4,445,682)
40 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 7 b: CASH FLOW INFORMATION (Continued)
Credit Standby Facilities
The Group has no credit standby facilities.
Non-Cash investing and financing activities
During the year ended 31 December 2019, the following were the non-cash financing activities of the Group:
o
On 08 May 2019, the Company issued the following:
- 283,672 fully paid ordinary shares issued in lieu of cash for purchase of asset;
On 12 September 2019, the Company issued the following:
- 1,000,000 fully paid Ordinary Shares were issued to Lead Manager at nil consideration as per the Everblu Capital
o
Pty Ltd mandate agreement.
During the year ended 31 December 2019, the following were the non-cash investing activities of the Group:
-
In February 2019 10,662,632 fully paid ordinary shares were issued on conversion of convertible loan.
NOTE 8: TRADE AND OTHER RECEIVABLES
CURRENT
Other receivables
NON-CURRENT
Other receivables
2019
US$
2018
US$
144,592
144,592
230,722
230,722
27,914
27,914
44,575
44,575
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair
value.
NOTE 9: RIGHT-OF-USE ASSETS & LEASE LIABILITIES
i.
AASB 16 related amounts recognised in the statement of financial position
Office space – right-of use
Motor vehicles – right-of-use
Net carrying amount
2019
US$
95,841
78,822
174,663
The group leases office space and vehicles. Rental contracts are typically made for a fixed period of 1-3 years, with extension
options available on the office lease. Lease terms are negotiated on an individual basis and contain a range of terms and
conditions. The lease agreements impose standard covenants such as mileage limitation, but leased assets may not be used
as security for borrowing purposes.
41 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 9: RIGHT-OF-USE ASSETS & LEASE LIABILITIES (CONTINUED)
ii.
Lease liabilities included in the Statement of financial position at 31
December2019
Current
Non-current
Total lease liabilities
iii.
AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right-of-use assets (note 3)
Interest expense on lease liabilities (under finance cost)
Short-term leases expense
Low-value asset leases expense
(iii) AASB 16 related amounts recognised in the statement of cash flows
Cash outflows in financing activities
Cash outflows in operating activities
2019
US$
148,325
35,266
183,591
2019
US$
125,442
37,079
-
-
2019
US$
100,165
42,499
142,664
Short -term leases and leases of low-value assets
The Group at the end of the year had non-material short-term leases.
The Group applies the low-value assets recognition exemption to leases of office equipment that are considered low value
(AUD 10,000 or less). Lease payments on short-term leases and leases of low-value assets are recognised as expense on
straight-line basis over the lease term.
NOTE 10: PLANT AND EQUIPMENT
Plant and equipment at costs
Accumulated depreciation
Opening balance at reporting date
Additions
Depreciation (note 3)
Balance at the end of the year
2019
US$
2018
US$
512,053
513,827
(228,814)
(191,235)
283,239
322,592
322,592
48,752
(88,105)
283,239
244,743
151,873
(74,024)
322,592
42 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 11: INTANGIBLE ASSETS
Balance at the beginning of the year
Acquisition of License Agreement with William Marsh Rice University
Annual license fee
Adjustments to accrued license fees (a)
Intangible write off expense (note 2)
Balance at the end of the year
2019
US$
175,000
-
15,000
2018
US$
245,000
30,000
-
-
(100,000)
(190,000)
-
-
175,000
(a) At 31 December 2017, the acquisition of Licence Agreement amount $100,000 was an accrual which was payable on 1
January 2018. The agreement was amended as noted below, therefore the amount $100,000 was not paid and was reversed
in year ended 31 December 2018.
In December 2014, the Company signed an exclusive technology transfer license agreement (“the License Agreement”) with
William Marsh Rice University (“Rice”) located in Houston Texas. The License Agreement grants the Company an exclusive
license, sub-license, assignable, worldwide license to make, develop, use, import, commercialise offer for sale, sell, produce,
lease, distribute or otherwise transfer Rice patents covered by the agreement, specifically Rice technology “Coal as an
abundant source of GQD’s” and “Bandgap Engineering of Carbon Quantum Dotz”. The License initial basic fee was US$85,000.
In the original agreement applicable to financial year ended 31 December 2017, the Company was required pay Rice
University royalties as follows:
o
o
o
o
Royalties of 4% of adjusted gross sales attributable to the Company
Royalties of 4% of adjusted gross sales attributable to the Company’s sublicense
The company to pay Rice University 25% of any cash and non-cash consideration received for sublicense initiation fee,
annual fee, sub-license milestone payments, or other such non-sale-based royalty payable by a sub-licensee
The Company was required to pay Rice University the following annual minimum royalties: US$10,000 on 1 January
2016, US$50,000 on 1 January 2017, US$100,000 on 1 January 2018, US$450,000 on 1 January 2019 and US$1,000,000
from 1 January 2020 and each year thereafter (the payments starting from 1 January 2018 were varied as noted below).
The Licence Agreement was amended during the financial year ended 31 December 2018. Under the amended Licence
Agreement, the Company was required to make the following payments:
o
o
o
A non-refundable, non-creditable, license amendment fee of US30,000 due and payable within 30 days from invoicing
from Rice.
Annual License Maintenance Fees of US$15,000 due and payable on each January 1st, starting January 1st 2019 and
due annually on each January 1st thereafter; provided, however that Licensee’s obligations to pay the licensee
Maintenance Fee shall cease on January 1st of the calendar year following the date of first commercial sale
Annual Minimum Royalties: if royalties paid to Rice do not reach the following minimum amounts: US$20,000 for the
calendar year immediately following the year in which first commercial sale occurred: US$50,000 for second calendar
year following the year in which first commercial sale occurred; and US$100,000 for each calendar year thereafter
(“Annual Minimum Royalty”), Licensee shall pay to Rice on or before the quarter royalty payment deadline for the last
calendar quarter of the stated calendar year an additional amount equal to the difference between the stated Annual
Minimum Royalty and the actual Royalties paid to Rice in that calendar year. For clarity and avoidance of doubt, after
first commercial sale of Rice Licensed Product, the corresponding Annual Minimum royalty shall continue to be due and
payable (on or before the quarterly royalty payment deadline) for the last calendar quarter of the given calendar year
for duration of the term, regardless of whether any sales occur in a given calendar year
The Company terminated the License Agreement by giving written notice to Rice University prior to 31 December 2019. Based
on this notice at t 31 December 2019, the intangibles were fully impaired.
43 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 12: TRADE AND OTHER PAYABLES
Trade and other payables
Accruals
All amounts are short-term. The carrying values are considered to approximate fair value.
NOTE 13: BORROWINGS
NON-CURRENT
Grant at fair value
Refer to Note 1 (v) and note 18 (d) for additional information.
2019
US$
156,136
114,296
270,432
2018
US$
179,743
230,975
410,718
2019
US$
2018
US$
257,481
257,481
242,436
242,436
44 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 14: ISSUED CAPITAL
(a) Share Capital
2019
US$
2018
US$
295,004,274 fully paid ordinary shares (31 December 2018: 180,714,622)
22,627,901
18,762,675
(b) Reconciliation of Share Capital
Opening balance at 1 January 2018
Shares issued under Placement, 5 February 2018
Shares issued to Lead Manager, 5 February 2018
Shares issued under Placement, 10 May 2018
Shares issued in lieu of cash payment, 10 May 2018
Shares issued in lieu of cash payment, 29 June 2018
Shares issued under Placement, 1 August 2018
Shares issued under Cleansing Prospectus, 15 August 2018
Shares issued in lieu of cash payment, 2 November 2018
Less: capital raising fees
Closing balance at 31 December 2018
No.
US$
140,818,135
15,900,912
2,777,778
396,050
500,000
363,108
5,385,000
775,000
71,289
49,312
423,956
54,372
27,777,778
1,848,790
100
7
2,317,723
153,354
-
(135,367)
180,714,622
18,762,675
Opening balance at 1 January 2019
180,714,622
18,762,675
Shares issued on conversion of Convertible Loan, 15 February 2019
9,791,632
554,833
Shares issued to the CEO, 15 February 2019
16a
1,500,0001
Shares issued on conversion of Convertible Loan, 19 February 2019
Shares issued under Placement, 7 May 2019
Shares issued under Placement, 8 May 2019
Shares issued in lieu of cash payment, 8 May 2019
Shares issued under Placement, 29 July 2019
Shares issued in lieu of cash payment, 12 September 2019
16g
Issue of shares on conversion of options
875,000
19,750,000
5,250,100
283,672
16,129,145
300,000
695,000
86,058
49,917
830,804
220,662
13,730
690,975
11,324
-
Shares issued to Lead Manager, 12 September 2019
16h
1,000,000
42,551
Shares issued under Placement, 26 November 2019
55,000,003
1,349,931
Shares issued to Consultant, 8 December 2019
Shares issued to CEO, 31 December 2019
Shares issued under Cleansing Prospectus, 31 December 2019
Shares issued to Employee on vesting options, 31 December 2019
Less: capital raising fees
1Subject to voluntary holding lock until 15 February 2020.
2Subject to voluntary holding lock until shareholder approval.
16j
16k
2,500,000
1,000,0002
100
215,000
70,130
43,479
3
-
-
(99,171)
295,004,274
22,627,901
45 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 14: ISSUED CAPITAL (CONTINUED)
(c) Capital Management
Due to the nature of the Group’s activities, the Group does not have ready access to credit facilities, with the primary source
of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital
position against the requirements of the Group to meet research and development programs and corporate overheads. The
Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view
to initiating appropriate capital raisings as required. Any surplus funds are invested with major financial institutions.
(d) Performance Shares
In addition to the number of shares disclosed above, there are also 22,000,000 performance shares on issue as at 31
December 2019, (2018: 44,000,000 performance shares, of which 22,000,000 expired on 30 April 2019 as milestone 2 not
met). The performance shares will convert to ordinary shares on 1:1 basis subject to the performance milestones being met
prior to expiry date. The performance shares are summarized below:
Class
Expiry
Milestone
Milestone 3
31/10/2020 Upon Dotz achieving the production and distribution of an aggregate of 100 kilograms of
GQDs through formal off-take agreements with a reputable third party in any 12-month
period within 48 months from the date of issue of the Performance Shares.
(e) Convertible Note
On 8 February 2019, shareholders approved the issue of 10,666,632 Ordinary Fully Paid Shares and 2,666,659 Unquoted
Options (exercisable at AU$0.12 each on or before 30 June 2020). The shares were issued on conversion of the Convertible
Loan Facility and accrued interest (Facility).
46 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 15: RESERVES
a) Reserves
91,224,527 Option Reserves (31 December 2018: 40,325,000)
Foreign currency translation reserve
b) Options Reserve
Opening balance at 1 January 2018
Issue of Joint Lead Manager Options, 5 February 2018
Issue of options to employees and consultants, 10 May 2018
Issue of options to Lead Manager, 1 August 2018
Issue of options under Employee Share Option Plan, 27 November 2018
Ref
15b
15c
2019
US$
2018
US$
2,102,496
1,626,095
(44,611)
(17,731)
2,057,885
1,608,364
No.
20,500,000
6,000,000
3,425,000
1,500,000
8,900,000
US$
856,065
289,873
197,239
38,025
244,893
Closing balance at 31 December 2018
40,325,000
1,626,095
Opening balance at 1 January 2019
Issue of free attaching options on conversion of Convertible Loan, 15 February
2019
Issue of options to directors, 15 February 2019
Issue of options to employee, 15 February 2019
16b
16c
Issue of free attaching options on conversion of Convertible Loan, 19 February
2019
Issue of free attaching options under Placement, 7 May 2019
Issue of free attaching options under Placement, 8 May 2019
40,325,000
1,626,095
2,447,909
-
3,000,000
1,000,000
218,750
9,875,005
2,625,000
103,780
58,344
-
-
-
Issue of options to Lead Manager, 19 June 2019
16d
5,000,000
122,302
Issue of free attaching options under Placement, 29 July 2019
Broker options expired, 8 August 2019
Issue of options under Employees Share Option Plan, 22 August 2019
Employees Share Option Plan cancellation
Exercised options under Employees Share Option Plan
8,064,526
(10,000,000)
210,000
(1,465,000)
(695,000)
-
-
849
(5,625)
-
Issue of options to Lead Manager, 31 October 2019
16f
10,000,000
26,110
Options expired, 31 October 2019
(5,500,000)
-
Issue of options to consultant, 3 December 2019
16i
10,000,000
14,344
Issue of placement options
Conversion of options to shares, 31 December 2019
Options cancellation, 31 December 2019
Options cancellation of Tranche 3 options under Employees Share Option Plan
Vested Tranche 1 options under Employees Share Option Plan*
Vested Tranche 2 options under Employees Share Option Plan*
Vested Tranche 3 options under Employees Share Option Plan*
18,333,337
(215,000)
(1,000,000)
(1,000,000)
-
-
-
-
-
-
-
4,155
138,232
13,910
Closing balance at 31 December 2019
91,224,527
2,102,496
47 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 15: RESERVES (CONTINUED)
Ref
2019
2018
c)
Foreign currency translation reserve
Opening balance
Difference arising on translation
Balance at the end of the year
US$
(17,731)
(26,880)
(44,611)
US$
99,283
(117,014)
(17,731)
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled
subsidiary.
NOTE 16: SHARE BASED PAYMENTS
The following new share-based payment arrangements existed at 31 December 2019:
a)
1,500,000 Director’s Shares
1,500,000 Director’s Shares were issued on 15 February 2019 with a nil issue price have been valued using the market
share price.
b) 3,000,000 Directors’ Options
3,000,000 Director’s Options were issued on 15 February 2019 with an exercise price of AU$0.13 per option expiring
on 15 February 2024. These options have been valued using binomial valuation model taking into account the terms
and conditions upon which the options were granted, which is the Option holder is an employee or consultant of the
Company at all times before the expiry date. Of which, 1,000,000 options were forfeited for Mr Volker Mirgel on his
resignation. Options were fully vested on grant date.
c) 1,000,000 Employee Options
1,000,000 Employee Options were issued on 15 February 2019 with a nil exercise price per option expiring on 15
February 2023 subject to vesting on 9 December 2019 provided that the Option holder is an employee or consultant
of the Company at all times during the period ending on the Vesting Date. These options have been valued using
market share price taking into account the terms and conditions upon which the options were granted.
d) 5,000,000 Lead Manager Options
5,000,000 Lead Manager Options were issued on 19 June 2019 with an exercise price of AU$0.10 per option expiring
on 19 June 2021, as per Hunter Capital Advisor Pty Ltd mandate agreement. These options have been valued using
the Black and Scholes option valuation methodologies taking into account the terms and conditions upon which the
options were granted.
e) 210,000 Employee Options
210,000 Employee Options were issued on 29 August 2019 with a nil exercise price each option expires on 22 August
2024 under the Company’s Employee Share Option Plan with the following vesting condition with a third of the
options vested after one year and the remainder on a quarterly basis . These options have been valued using market
share price taking into account the terms and conditions upon which the options were granted, additional detail
follows at the end of the note in the summary of inputs.
f)
10,000,000 Lead Manager Options
10,000,000 Lead Manager Options were issued on 12 September 2019 with exercise price of AU$0.10 each expiring
on 11 September 2021 as per the EverBlu Capital Pty Ltd mandate agreement. These options have been valued at
fair value of AU38,000 as per the mandate.
48 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
g) 300,000 Shares to Unrelated party
300,000 Shares were issued on 12 September 2019 with a nil issue price have been valued based on the value of the
service provided.
h) 1,000,000 Lead Manager Shares
1,000,000 Lead Manager Shares were issued on 12 September 2019 with a nil issue price. These shares have been
valued using the value of the services provided.
i)
10,000,000 Consultant Options
10,000,000 Consultant Options were issued on 8 December 2019 with exercise price of AU$0.09 each expiring on 11
December 2021. As the value of the service provided could not be reliably measured therefore these options have
been valued using the Black and Scholes option valuation methodologies taking into account the terms and
conditions upon which the options were granted, additional detail follows at the end of the note in the summary of
inputs.
j)
2,5000,000 Consultant Shares
2,500,000 Consultant Shares were issued on 8 December 2019 with issue price of AU$0.04 per share. The shares
have been valued based on the value of the services provided.
k) 1,000,000 Director’s Shares
1,000,000 Director’s Shares were issued on 31 December 2019 with a nil issue price subject to voluntary holding lock
until shareholder approval. Shares have been valued using the market share price. The shares will be revalued on the
date the Company receives shareholder approval at the Company Annual General Meeting to be held before 31 May
2020.
A summary of the inputs used in the valuation of the options and shares is as follows:
Options and Shares
Director’s
shares
Directors’
Options
Employee
Options
Lead
Manager
Options
Employee
Options
Consultant
Shares
Lead
Manager
Options
Lead
Manager
Shares
Financial year
Exercise price
2019
N/A
2019
AU$0.13
2019
N/A
2019
AU$0.10
2019
N/A
2019
N/A
2019
AU$0.10
Price at measurement
AU$0.081
AU$0.081
AU$0.09
AU$0.076
AU$0.09
AU$0.06
(c)
2019
N/A
(c)
Grant date
Vesting date
Expected volatility (i)
Expiry date
Expected dividends
Risk free interest rate
Value per option or
share
N/A
N/A
N/A
N/A
8-Feb-19
8-Feb-19
13-Feb-19
19-June-19
22-Aug-19
12-Sep-19
12-Sep-19
12-Sep-19
8-Feb-19
8-Feb-19
86.95%
(a)
N/A
19-June-19
100%
(b)
N/A
8-Feb-24
15-Feb-23
19-June-21
22-Aug-24
N/A
1.71%
N/A
N/A
N/A
0.98%
N/A
N/A
12-Sep-19
12-Sep-19
12-Sep-19
N/A
N/A
N/A
N/A
N/A
11-Sep-21
N/A
N/A
(c)
N/A
N/A
N/A
N/A
AU$0.06
AU$0.081
AU$0.4884
AU$0.09
AU$0.035
AU$0.05
AU$0.06
Number of options
1,500,000
3,000,000
1,000,000
5,000,000
210,000
300,000
10,000,000
1,000,000
Total value in AUD
AU$121,500 AU$146,520 AU$90,000 AU$175,268 AU$10,500 AU$16,500 AU$38,000 AU$62,000
Total value in USD
US$85,747
US$102,897 US$63,516 US$121,873 US$7,410
US$11,473 US$26,423 US$43,112
49 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
A summary of the inputs used in the valuation of the options and shares is as follows:
Consultant Options
Consultant
Shares
Director’s Shares
(e)
Options and Shares
Financial year
Exercise price
Price at measurement
Grant date
Vesting date
Expected volatility (i)
Expiry date
Expected dividends
Risk free interest rate
2019
AU$0.09
AU$0.044
3-Dec-19
(d)
71.24%
3-Dec-21
N/A
0.79%
2019
N/A
AU$0.04
8-Dec-19
8-Dec-19
N/A
N/A
N/A
N/A
2019
N/A
AU$0.062
31-Dec-19
31-Dec-19
N/A
N/A
N/A
N/A
AU$0.062
1,000,000
Value per option or share
AU$0.0084
AU$0.04
Number of options
10,000,000
2,500,000
Total value in AUD
AU$21,114
AU$100,000
AU$62,000
Total value in USD
US$14,681
US$69,535
US$43,755
(i) Volatility was determined in reference to similar companies for the same period.
50 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
A summary of the inputs used in the valuation of the options and shares is as follows:
(a) Vest subject to service conditions as at 31 December 2019
(b) Vest subject to service conditions, 33% shall vest on the date which is 12 months from the date of issue provided,
and remaining 66.67% shall vest in 8 consecutive equal instalments upon the lapse of each 2 months period
thereafter, provided that she is an employee of the Company at all times during the period.
(c) Shares to be recorded on invoice at $62,000 (being the share price at the 23 July, the date DTZ announced the
completion of the placement). Broker Options per mandate to be recorded on invoice at $38,000 being the
residual left over from $100k (which was the cash to be paid if the shares/options were not issued)
(d) Vest subject to the following:
-
-
-
-
25% shall vest immediately upon issue.
25% shall, subject to the agreement remaining on foot, vest on the date that is 6 months following the date of
execution of this agreement.
25%, subject to the agreement remaining on foot, vest on the date that is 12 months following the date of
execution of this agreement.
25%, subject to the agreement remaining on foot, vest on the date that is 12 months following the date of
execution of this agreement.
(e) As announced on 11 March 2020 in relation to administrative error regarding the issue of 1,000,000 shares to
CEO, Mr Uzi Breier, the grant date of the shares will be the date the Company receives shareholder approval at
the Annual General Meeting, to be held before 31 May 2020.
For the year ending 31 December 2019 a share-based payment expense of US$731,308 (2018: US$1,451,763) was
recognised in line with option vesting periods, in which US$140,885 was recognised as a vesting expense from options
issued in a prior period.
Share based compensation comprises of the following:
Shares issued to Uzi Breier on 15-Feb-19
Options issued to Uzi Breier on 15-Feb-19
Options issued to Volker Mirgel on 15-Feb-19
Options issued under the ESOP to Tomer Segev on 13-Feb-19
Options issued to lease manager on 19-Jun-19
Options issued under the ESOP to Inna Sasson on 22-Aug-19
Options issued to lease manager on 12-Sep-19
Shares issued to unrelated party in lieu of cash payment on 12-Sep-19
Shares issued to lead manager on 12-Sep-19
Options issued to Australian Strategic Consultant on 3-Dec-19
Shares issued to consultant on 8-Dec-19
Shares issued to Uzi Breier on 31-Dec-19
Options issued under the ESOP on 27-Nov-18
2019
US$
(85,747)
(68,936)
(33,961)
(63,516)
(121,873)
(7,410)
(26,423)
(11,473)
(43,112)
(14,681)
(69,535)
(43,755)
(140,886)
(731,308)
51 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 16: SHARE BASED PAYMENTS (CONTINUED)
Share based compensation comprises of the following:
Options issued to lead manager on 5-Feb-18
Shares issued to lead manager on 5-Feb-18
Options issued to employees and consultants on 10-May-18
Shares issued to employees, consultants and corporate advisor on 10-May-18
Shares issued to former CEO Moti Gross on 29-Jun-18
Options issued to lead manager on 1-Aug-18
Shares issued to consultants on 2-Nov-18
Options issued to employees on 27-Nov-18
Options issued to employees on 27-Nov-18
NOTE 17: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
2018
US$
(273,539)
(67,272)
(198,998)
(419,248)
(55,032)
(38,434)
(159,383)
(221,974)
(17,883)
(1,451,763)
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The Group’s sole operating segment is consistent with the presentation of these consolidated financial statements.
NOTE 18: FINANCIAL INSTRUMENTS
Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, other debtors and accounts payable. The main
purpose of non-derivative financial instruments is to raise finance for Group’s operations.
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are market risk (including fair value and interest rate
risk) and cash flow interest rate risk, credit risk and liquidity risk.
(a) Interest Rate Risk
From time to time the Group has significant interest-bearing assets, but they are as a result of the timing of equity raising and
capital expenditure rather than a reliance on interest income. The interest rate risk arises on the rise and fall of interest rates.
The Group’s income and operating cash flows are not expected to be materially exposed to changes in market interest rates
in the future and the exposure to interest rates is limited to the cash and cash equivalents balances.
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial
liabilities, is below:
52 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
Floating
Interest
Rate
Non-interest
bearing
2019
Total
Floating
Interest
Rate
Non-interest
bearing
2018
Total
US$
US$
US$
US$
US$
US$
Financial assets
- Within one year
Cash and cash equivalents
1,371,275
-
1,371,275
508,572
-
508,572
Trade and Other receivables
-
11,228
11,228
-
34,975
34,975
Total financial assets
1,371,275
11,228
1,382,503
508,572
34,975
543,547
Weighted average interest rate
0.08%
0.08%
Financial Liabilities
- Within one year
Trade and other Payables
Other Liabilities
Lease liabilities
Bird Grant
Total financial liabilities
Weighted average interest rate
-
-
-
-
-
84,782
84,782
-
-
148,325
148,325
257,481
257,481
490,588
490,588
-
-
-
-
-
410,718
410,718
14,451
14,451
-
-
-
-
425,169
425,169
Net financial assets
1,371,275
(479,360)
891,915
508,572
(390,194)
118,378
Sensitivity Analysis
The following table illustrates sensitivities to the Consolidated Entity’s exposures to changes in interest rates. The table
indicates the impact on how profit and equity values reported at reporting date would have been affected by changes in the
relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement
in a particular variable is independent of other variables.
Movement in
Movement in
Profit
US$
Equity
US$
Year ended 31 December 2018
+/-1% in interest rates
17,000
17,000
Year ended 31 December 2019
+/-1% in interest rates
9,364
9,364
(b) Credit risk
The maximum exposure to credit risk is limited to the carrying amount, net of any provisions for impairment of those assets,
as disclosed in the Statement of Financial Position and notes to the financial statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with
approved Board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard and
Poor’s rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money
market securities based on Standard and Poor’s counterparty credit ratings.
53 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(b) Credit risk
Cash and cash equivalents - AA Rated
(c) Liquidity risk
Note
7a
2019
US$
1,371,275
2018
US$
508,572
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that
it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place. The financial
liabilities of the Group are confined to trade and other payables as disclosed in the Statement of Financial Position. All trade
and other payables are non-interest bearing and due within 12 months of the reporting date.
2019
Interest
rate
Less than 6
months
6-12
months
1-2 years
2-5 years
Over 5
years
Total
contractual
cash flows
US$
US$
US$
US$
US$
US$
Carrying
amount
assets/
(liabilities)
US$
Financial
liabilities at
amortised cost
Trade and other
payables
Lease liabilities
- Office lease
- Car lease
Bird Grant1
2018
Financial
liabilities at
amortised cost
Trade and other
payables
12.95%
15.65%
N/A
Interest
rate
N/A
(84,782)
-
-
-
(53,240)
(25,574)
-
(163,596)
(53,239)
(25,573)
-
(78,812)
(8,873)
(36,070)
-
(44,943)
-
(11,619)
(530,873)
(542,492)
-
-
-
-
-
(84,782)
(84,782)
(115,352)
(98,836)
(530,873)
(829,843)
(108,577)
(75,015)
(257,481)
(525,855)
Less than 6
months
6-12
months
1-2
years
2-5
years
Over 5
years
Total
contractual
cash flows
US$
US$
US$
US$
US$
US$
Carrying
amount
assets/
(liabilities)
US$
N/A
(410,718)
(410,718)
-
-
-
-
-
-
-
-
(410,718)
(410,718)
(410,718)
(410,718)
1 Contractual cash outflow is dependent on the generation of revenue.
54 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 18: FINANCIAL INSTRUMENTS (CONTINUED)
(d) Net fair Value of financial assets and liabilities
Fair value estimation
Due to the short-term nature of the receivables and payables the carrying value approximates fair value.
The following table provides the level of the fair value hierarchy within which the disclosed fair value measurements are
categorised in their entirety and a description of the valuation technique(s) and inputs used:
Description
Fair Value Hierarchy
Level
Bird Grant
3
Valuation Technique(s)
Inputs Used
Income approach using
discounted cash flow
methodology
•
•
Company discount rate
Future expected royalty
payment
(e) Financial arrangements
The company had no other financial arrangements in place at 31 December 2019 based on the information available to the
current board.
(f) Currency risk
The currency risk is the risk that the value of financial instruments will fluctuate due to change in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the Company’s functional currency. The company is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the US Dollar (the functional currency), the New Israeli Shekel, the Australian Dollar, the
Swiss Franc and Euro.
The Company’s policy is not to enter into any currency hedging transactions.
2019
2018
Cash and cash equivalents
Foreign Currency
USD Equivalent
Foreign Currency
USD Equivalent
New Israeli Shekels
Australian Dollar
Swiss Franc
Euro
646,935
915,548
7,163
1,573
187,192
642,074
7,037
1,404
141,463
327,001
-
958
37,744
230,641
-
1,097
55 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 19: PARENT ENTITY FINANCIAL INFORMATION
The following information has been extracted from the books and records of the legal parent Dotz Nano Limited which have
been prepared in accordance with Australian Accounting Standards and the accounting policies as outlined in note 1.
(a)
Financial Position of Dotz Nano Limited
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated Losses
SHAREHOLDERS’ EQUITY
(b) Statement of profit or loss and other comprehensive income
Loss for the year
Total comprehensive loss
2019
US$
1,385,967
1,385,967
86,303
86,303
1,299,664
2018
US$
864,148
864,148
132,666
132,666
731,482
337,962,811
1,824,716
(338,487,863)
1,299,664
334,043,873
1,442,692
(334,755,083)
731,482
(3,732,780)
(3,732,780)
(9,295,339)
(9,295,339)
(c) Guarantees entered into by Dotz Nano Limited for the debts of its subsidiary
There are no guarantees entered into by Dotz Nano Limited (2018: Nil).
(d) Contingent liabilities of Dotz Nano Limited
There were no known contingent liabilities as at 31 December 2019 (2018: Nil).
(e) Commitments by Dotz Nano Limited
Known commitments as at 31 December 2019 are disclosed in the consolidated entities in Note 22 below (2018: Nil).
NOTE 20: CONTROLLED ENTITIES
Controlled entity
Dotz Nano Ltd
Dotz Blue Ltd*
Graphene Materials Ltd**
Country of
Incorporation
Israel
Israel
Israel
Dotz Nano Singapore PTE Ltd***
Singapore
100%
*De-registered July 2019
**De-registered December 2019
***De-registration submitted, approval expected in 2020
Percentage Owned
2019
100%
-
-
2018
100%
100%
100%
100%
56 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 21: COMMITMENT
The Group has no commitments which are not recorded on the statement of financial position as at 31 December 2019.
Operating lease commitments:
No longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
Other expenditure commitments:
No longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
2018
US$
10,977
-
-
10,977
62,271
58,315
-
120,271
NOTE 22: CONTINGENT LIABILITIES
The Group has no known contingent liabilities as at 31 December 2019 (2018: Nil).
NOTE 23: EVENTS SUBSEQUENT TO REPORTING DATE
Since the reporting date the following significant events have occurred:
o
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new
strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community
as the virus spreads globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11
March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Company is therefore
uncertain as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of
operations during 2020.
Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity,
operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global
responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results
of operations, financial condition, or liquidity for the 2020 financial year.
Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if
the pandemic continues, it may have a material adverse effect on the Company’s results of future operations,
financial position, and liquidity in fiscal year 2020.
On 11 March 2020, administrative error was made on 31 December 2019 regarding the issue of 1,000,000 shares to
CEO, Mr Uzi Breier. The Company subsequently entered into a holding lock deed with Mr Breier for a period from the
date of the deed and ending on the date the Company receives shareholder approval.
On 23 March 2020 the Company announced the resignation of Mr John Bullwinkel and Mr Ashley Krongold,
o
o
Other than these matters, no matters have arisen since the end of the financial year to the date of this report of a material
and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
57 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
NOTE 24: NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
Australian accounting standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 31 December
2019. Relevant Standards and Interpretations are outlined in the table below.
AASB
Title and Affected
Nature of Change
Application date:
Impact on Initial Application
reference
Standard(s):
AASB 2018-6
Amendments to
(issued
Australian Accounting
December
Standards - Definition
2018)
of a Business
Clarifies the definition of a ‘business’ in AASB 3 to assist in
determining whether a transaction should be accounted
for as a business combination or as an asset acquisition.
The main amendments include:
• Narrowing the definition of ‘outputs’ and a ‘business’
to focus on returns from selling goods and services to
customers, rather than on cost reductions
• Amending guidance on inputs, processes and outputs
to align with the new definition of a ‘business’
• Clarifying that to be considered a ‘business’, an
acquired set of activities and assets must include, as a
minimum, an input and a substantive process, that
together significantly contribute to the ability to
create outputs, and
• An optional ‘concentration test’ as a short-cut way of
concluding that certain types of acquisitions are not
business combinations.
Acquisitions occurring on
There will be no impact on the financial statements
or after the beginning of
when these amendments are first adopted because
the first annual period
they apply prospectively to acquisitions occurring on
beginning on or after 1
or after the beginning of the first annual reporting
January 2020
period beginning on or after 1 January 2020, i.e. on
or after 1 January 2020.
The Group has decided not to early adopt any of the new and amended pronouncements. The impact of the above standards is yet to be determined unless noted otherwise above.
58 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
DIRECTORS’ DECLARATION
In the Director’s opinion:
1.
The consolidated financial statements and notes set out on pages 22 to 58 are in accordance with the Corporations
Act 2001, including:
a)
complying with Australian Accounting Standards and Corporations Regulations 2001;
b) giving a true and fair view, the consolidated entity’s financial position as at 31 December 2019 and of its
performance for the year ended on that date; and
2.
3.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
This declaration has been made after receiving the declaration required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2019.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Bernie Brookes
Non-Executive Chairman
30 March 2020
59 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Dotz Nano Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Dotz Nano Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2019 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 (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Accounting for Share-Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31
December 2019, the Group issued equity
instruments, in the form of shares and
options, to eligible directors, employees
and other consultants, which have been
accounted for as share-based payments, as
disclosed in Note 16 to the financial
report.
The Group’s policy for accounting for
share-based payments and significant
judgements applied to these arrangements
are disclosed in Note 1.
Share-based payments are a complex
accounting area and due to the complex
and judgemental estimates used in
determining the fair value of share-based
payments, we consider the Group’s
accounting for share-based payments to be
a key audit matter.
Our audit procedures in respect of this area included
but were not limited to the following:
• Reviewing relevant supporting documentation
to obtain an understanding of the contractual
nature and terms and conditions of the share-
based payment arrangements;
• Reviewing management’s determination of the
fair value of the share-based payments
granted, considering the appropriateness of the
valuation models used and assessing the
valuation inputs;
•
Involving our valuation specialists to assess the
assumptions and inputs used in the valuation;
• Assessing management’s determination of
achieving non-market vesting conditions of the
performance shares issued;
• Assessing the allocation of the share-based
payment expense over management’s expected
vesting period; and
•
Assessing the adequacy of the disclosure in
Note 1 and Note 16 in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2019, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.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 13 to 20 of the directors’ report for the
year ended 31 December 2019.
In our opinion, the Remuneration Report of Dotz Nano Limited, for the year ended 31 December 2019,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 30 March 2020
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 30 March 2020 and has been approved by the Board of the Company.
A description of the Group’s main corporate governance practices is set out below. All these practices, unless otherwise
stated, were in place and complied with all the ASX Corporate Governance Principles and Recommendations 3rd edition
(Principles and Recommendations) for the entire year ending 31 December 2019 (reporting period).
Although the 4th edition of the ASX Corporate Governance Principles and Recommendations is not required to be reported
against until the financial year ending 30 June 2021, the Company has early adopted, such that it was compliant with the 4th
edition from 1 July 2019.
The Company has adopted Corporate Governance Policies (Corporate Governance Plan) which provide written terms of
reference for the Company’s corporate governance practices and has been following these practices since 1 July 2016. The
Board of the Company has not yet formed an audit committee, nomination committee, risk management committee or
remuneration committee.
During 2020, the Company plans to review its Corporate Governance policies and charters with a view to ensuring the
Company’s Corporate Governance is fit for purpose and reflects the Company’s strategies and development plans.
The Company’s Corporate Governance Policies are contained within the Corporate Governance Plan and available on the
Company’s website at https://www.dotz.tech/investors/
Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The role of the Board is to provide overall strategic guidance and effective oversight of management. The Board derives its
authority to act from the Company’s Constitution.
The Board is responsible for and has the authority to determine all matters relating to the strategic direction, policies,
practices, establishing goals for management and the operation of the Company. The Board delegates responsibility for the
day-to-day operations and administration of the Company to the Managing Director/Chief Executive Officer.
The role of management is to support the Managing Director/Chief Executive Officer and implement the running of the
general operations and financial business of the Company, in accordance with the delegated authority of the Board.
In addition to matters it is expressly required by law to approve, the Board has reserved the following matters to itself:
•
•
•
Driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and
monitoring management’s performance;
Appointment, and where necessary, the replacement, of the Managing Director/Chief Executive Officer and other
senior executives and the determination of their terms and conditions including remuneration and termination;
Approving the Company’s remuneration framework;
• Monitoring the timeliness and effectiveness of reporting to Shareholders;
•
•
•
•
•
•
Reviewing and ratifying systems of audit, risk management and internal compliance and control, codes of conduct and
legal compliance to minimise the possibility of the Company operating beyond acceptable risk parameters;
Approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions
and divestitures;
Approving and monitoring the budget and the adequacy and integrity of financial and other reporting such that the
financial performance of the company has sufficient clarity to be actively monitored;
Approving the annual, half yearly and quarterly accounts;
Approving significant changes to the organisational structure;
Approving decisions affecting the Company’s capital, including determining the Company’s dividend policy and
declaring dividends;
63 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
•
•
•
Ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and
responsible decision making;
Procuring appropriate professional development opportunities for Directors to develop and maintain the skills and
knowledge needed to perform their role as Directors effectively;
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted,
and that its practice is consistent with, a number of guidelines including:
Corporate Code of Conduct;
Continuous Disclosure Policy;
Diversity Policy;
Performance Evaluation;
Risk Management;
Trading Policy;
Shareholder Communication Strategy; and
−
−
−
−
−
−
−
− Whistleblower Policy.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board delegates to the Managing
Director/Chief Executive Officer responsibility for the management and operation of the Company. The Managing
Director/Chief Executive Officer is responsible for the day-to-day operations, financial performance and administration of the
Company within the powers authorised to him from time-to-time by the Board. The Managing Director/Chief Executive
Officer may make further delegation within the delegations specified by the Board and will be accountable to the Board for
the exercise of those delegated powers.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter which is contained within
the Corporate Governance Plan on the Company’s website at https://www.dotz.tech/investors/
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director or putting that person forward as a
candidate to ensure that person is competent, experienced, and would not be impaired in any way from undertaking the
duties of director. The Company provides relevant information to shareholders for their consideration about the attributes
of candidates together with whether the Board supports the appointment or re-election.
The terms of the appointment of a non-executive director, executive directors and senior executives are agreed upon and set
out in writing at the time of their appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper
functioning of the Board, including agendas, Board papers and minutes, advising the Board and its Committees (as applicable)
on governance matters, monitoring that the Board and Committee policies and procedures are followed, communication
with regulatory bodies and the ASX and statutory and other filings.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
of separate committees at this time including audit and risk, remuneration or nomination committees, preferring at this stage
of the Company’s development, to manage the Company through the full Board of Directors. The Board assumes the
responsibilities normally delegated to the audit and risk, remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will be reviewed by
the Board and implemented if considered appropriate.
64 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
Diversity
The Board has adopted a Diversity Policy which provides a framework for the Company to establish and achieve measurable
diversity objectives, including in respect to gender, age, ethnicity and cultural diversity. The Diversity Policy allows the Board
to set measurable gender diversity objectives (if considered appropriate) and to assess annually both the objectives (if any
have been set) and the Company’s progress towards achieving them.
The Board considers that, due to the size, nature and stage of development of the Company, setting measurable objectives
for the Diversity Policy at this time is not appropriate. The Board does not presently intend to set measurable gender diversity
objectives because:
a)
b)
c)
it is the Board’s view that the existing Directors and senior executives have sufficient skill and experience to carry out
the Company’s plans;
if it becomes necessary to appoint any new Directors or senior executives, the Board will consider the application of a
measurable gender diversity objective requiring a specified proportion of women on the Board and in senior executive
roles will, given the small size of the Company and the Board, unduly limit the Company from applying the Diversity
Policy as a whole and the Company’s policy of appointing based on skills and merit; and
the respective proportions of men and women on the Board, in senior executive positions and across the whole
organisation (including how the entity has defined “senior executive’s” for these purposes) for each financial year will
be disclosed in the Company’s Annual Report.
The participation of women in the Company at the date of this report is as follows:
• Women employees in the Company
• Women in senior management positions
• Women on the Board
40%
0%
0%
The Company’s Diversity Policy is contained within the Corporate Governance Plan on the Company’s website at
https://www.dotz.tech/investors/
Board & Management Performance Review
On an annual basis, the Board conducts a review of its structure, composition and performance.
The annual review includes consideration of the following measures:
•
•
•
•
•
•
comparing the performance of the Board against the requirements of its Charter;
assessing the performance of the Board over the previous 12 months having regard to the corporate strategies,
operating plans and the annual budget;
reviewing the Board’s interaction with management;
reviewing the nature and timing of information provided to the Board by management;
reviewing management’s performance in assisting the Board to meet its objectives; and
identifying any necessary or desirable improvements to the Board Charter.
The method and scope of the performance evaluation will be set by the Board and may include a Board self-assessment
checklist to be completed by each Director. The Board may also use an independent adviser to assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive Directors, in conjunction
with them, having particular regard to:
•
•
•
•
contribution to Board discussion and function;
degree of independence including relevance of any conflicts of interest;
availability for and attendance at Board meetings and other relevant events;
contribution to Company strategy;
65 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
•
•
membership of and contribution to any Board committees; and
suitability to Board structure and composition.
The Board conducts an annual performance assessment of the Managing Director/Chief Executive Officer against agreed key
performance indicators.
The Managing Director/Chief Executive Officer conducts an annual performance assessment of senior executives against
agreed key performance indicators.
Given the fact the Company was only reinstated under its present structure on 14 November 2016 and there have been a
number of Board changes over the last few years, no formal appraisal of the Board or any senior executive has been
conducted.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in fulfilling their duties
and responsibilities, to seek independent external professional advice as considered necessary at the expense of the
Company, subject to prior consultation with the Chairman. A copy of any such advice received is made available to all
members of the Board.
Principle 2: Structure the board to be effective and add value
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
of separate committees at this time including audit and risk, remuneration or nomination committees, preferring at this stage
of the Company’s development, to manage the Company through the full Board of Directors. The Board assumes the
responsibilities normally delegated to the audit and risk, remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will be reviewed by
the Board and implemented if considered appropriate.
Board Composition
Board is comprised of the following members at 30 March 2020:
Mr Uzi Breier
Chief Executive Officer and Managing Director (appointed 18 May 2018);
Mr Bernie Brookes AM
Independent - Non-Executive Chairman (appointed 15 January 2020); and
Mr Doron Eldar
Independent - Non-Executive Director (appointed 15 January 2020).
Dotz Nano has adopted a definition of 'independence' for Directors that is consistent with the Recommendations.
The Board comprises a majority of non-executive directors, two of whom are considered independent.
Details of the Directors interests, positions, associations and relationships have been included in the 2019 Annual Report.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required in order to effectively
govern Dotz Nano. The Board believes that orderly succession and renewal contributes to strong corporate governance and
is achieved by careful planning and continual review.
The Board is responsible for the nomination and selection of directors. The Board reviews the size and composition of the
Board regularly and at least once a year as part of the Board evaluation process.
66 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
The Company does not comply with the recommendation as the Company’s Board was not of a relevant size to consider
formation of a separate Nomination Committee to deal with the selection and appointment of new directors or executives
and as such a Nomination Committee has not been formed.
Nominations of new Directors or executives are considered by the full Board. If any vacancies arise on the Board or at
executive level, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that
the full Board will hold special meetings or sessions as required. The full Board also assesses its balance of skills, knowledge,
experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.
Under the Nomination Committee Charter (in the Company’s Corporate Governance Plan), the Nomination Committee (or,
in its absence, the Board) is required to prepare a Board skill matrix setting out the mix of skills and diversity that the Board
currently has (or is looking to achieve) and to review this at least annually against the Company’s Board skills matrix to ensure
the appropriate mix of skills and expertise is present to facilitate successful strategic direction.
The Board has developed a specific skill matrix. The composition of the Board is to be reviewed regularly to ensure the
appropriate mix of skills and expertise is present to facilitate successful strategic direction. This role will be performed by the
Nomination Committee (or, in its absence, the Board). The Company will disclose the Board skill matrix in, or in conjunction
with, its Annual Reports.
The Board Skills Matrix will includes the following areas of knowledge and expertise:
strategic expertise;
specific industry knowledge;
executive management;
human capital;
sales and marketing;
external communication
•
•
•
•
•
•
• Going global;
•
•
•
•
accounting and finance;
risk management;
experience with financial markets; and
investor relations.
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions of their appointment,
including Director's duties, rights and responsibilities, the time commitment envisaged, and the Board's expectations
regarding involvement with any Committee work.
An induction program is in place and new Directors are encouraged to engage in professional development activities to
develop and maintain the skills and knowledge needed to perform their role as Directors effectively.
New Directors are provided with key materials such as the Code of Business Conduct and the Company’s Security Trading
Policy. The Company will consider site visits and professional development where appropriate.
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
Company Values
The Board has approved the Company’s statement of values, the Code and related policies, and charged the Executive Team
with the responsibility of instilling those values across the organisation. This includes ensuring that all employees receive
appropriate training on the values and senior executives continually reference and reinforce those values in their interactions
with staff (i.e. setting the “tone at the top”), in order to instil and continually reinforce a culture across the organisation of
acting lawfully, ethically and responsibly.
All directors of the Company also agree to comply with the Board governance protocols which outline, amongst other matters,
the directors’ duties and the conduct expected of them as directors
67 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
Code of Conduct
The Company has implemented a Code of Conduct, which provides a framework for decisions and actions in relation to ethical
conduct in employment. It underpins the Company’s commitment to integrity and fair dealing in its business affairs and to a
duty of care to all employees, clients and stakeholders.
All employees and Directors are expected to:
•
•
•
•
•
•
behave honestly and with integrity and report other employees who are behaving dishonestly;
carry out your work with integrity and to a high standard and in particular, commit to the Company’s policy of producing
quality goods and services;
operate within the law at all times;
act in the best interests of the Company;
follow the policies of the Company; and
act in an appropriate business-like manner when representing the Company in public forums.
An employee that breaches the Code of Conduct may face disciplinary action including, in the cases of serious breaches,
dismissal. If an employee suspects that a breach of the Code of Conduct has occurred or will occur, he or she must report
that breach to the Company Secretary, or in their absence, the Chairman. No employee will be disadvantaged or prejudiced
if he or she reports in good faith a suspected breach. All reports will be acted upon and kept confidential.
Whistleblower Policy, Securities Trading and Antibribery & Corruption Policy
Supporting good corporate governance and strengthening the Company’s core values, the Company’s Whistleblower,
Securities Trading and Antibribery & Corruption policies apply to all directors and employees, as well as contractors,
consultants and any other person who might be engaged by the Company to perform services for or on behalf of the Company
where appropriate. The Company encourages employees to report known or suspected instances of inappropriate conduct,
including breaches of the Code or any of the Company’s policies. The Company will protect a whistleblower, including their
identity to the extent permitted by law, and will not allow any detrimental treatment to happen to a whistleblower because
of the whistleblower’s report of any misconduct or improper state of affairs or circumstances. A copy of these policies is
available on the Company’s website along with other corporate governance policies of the Company.
The Company adopted a Whistleblower Policy on 7 January 2020.
The Company adopted an Antibribery & Corruption Policy on 27 March 2020.
Any material breaches of the Code of Conduct, Whistleblower policy, Securities Trading policy or Antibribery & Corruption
Policy, are to be reported to the Board immediately. For non-material breaches/matters, reporting to the Board/ Audit & Risk
Committee is scheduled on a six-monthly basis.
Principle 4: Safeguard integrity in corporate reporting
Given the size and scale of the Company’s operations, the full Board undertakes the role of the Audit Committee as detailed
in the Audit Committee Charter.
The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the
independence of the external auditors. The Board sets aside time to deal with issues and responsibilities usually delegated to
the Audit Committee to ensure the integrity of the financial statements of the Company and the independence of the auditor.
The Board reviews the audited annual and half-year financial statements and any reports which accompany published
financial statements and recommends their approval to the members.
The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor
when any vacancy arises. Candidates for the position of external auditor must demonstrate complete independence from
the Company throughout the engagement period. The Board may otherwise select an external auditor based on criteria
relevant to the Company’s business and circumstances. The Board also reviews annually the performance of the external
auditor, the appointment of the external auditor, their independence and their fees.
68 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
The Board receives regular reports from management and from external auditors. It also meets with the external auditors as
and when required.
The external auditors attend Dotz Nano's AGM and are available to answer questions from security holders relevant to the
audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external auditor. There are qualitative
limits on this non-audit work to ensure that the independence of the auditor is maintained.
There is also a requirement that the lead engagement partner responsible for the audit not perform in that role for more
than five years.
The Board is also responsible for establishing policies on risk oversight and management. The Company has not formed a
separate Risk Management Committee due to the size and scale of its operations.
CEO and CFO Certifications
The Board, before it approves the entity’s financial statements for a financial period, receives from its CEO and CFO (or the
persons fulfilling those functions) a declaration provided in accordance with Section 295A of the Corporations Act that, in
their opinion, the financial records of the entity have been properly maintained and that the financial statements comply
with the appropriate accounting standards and give a true and fair view of the financial position and performance of the
entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which
is operating effectively.
External Corporate Reports
Non-audited corporate reports receive extensive management review prior to release to the market, whilst the Corporate
Governance Statement is reviewed and endorsed by Board prior to approval.
Principle 5: Make timely and balanced disclosure
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the Company as required under
the ASX Listing Rules and Corporations Act. The policy is designed to ensure that procedures are in place so that the market
is properly informed of matters which may have a material impact on the price at which Company securities are traded.
The Company’s practice on disclosure is consistent with the Principles and Recommendations. The Board strictly adheres to
the Company’s Continuous Disclosure Policy and procedures are in place to ensure compliance with ASX Listing Rule
disclosure requirements, which includes the requirement that any new or substantive information is released on the ASX
Market Announcements Platform ahead of being provided to analysts and investors during a one-on-one or group briefing
The Board considers whether there are any matters requiring disclosure in respect of each and every item of business that it
considers in its meetings. Individual Directors are required to make such a consideration when they become aware of any
information in the course of their duties as a Director of the Company.
The Company is committed to ensuring all investors have equal and timely access to material information concerning the
Company.
The Board has designated the Company Secretary as the person responsible for communicating with the ASX. All key
announcements at the discretion of the Managing Director are to be circulated to and reviewed by all members of the Board.
The Chairman, the Board, Managing Director and the Company Secretary are responsible for ensuring that:
a)
b)
company announcements are made in a timely manner, that announcements are factual and do not omit any material
information required to be disclosed under the ASX Listing Rules and Corporations Act; and
company announcements are expressed in a clear and objective manner that allows investors to assess the impact of
the information when making investment decisions.
The Continuous Disclosure Policy and the Shareholder Communication Policy are available on the Company’s website.
69 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
The Board and the Executive Team are included in an email distribution list to receive a copy of all ASX market announcements
made by the Company to ensure they have visibility of the nature and quality of the information being disclosed to the market,
and the frequency of such disclosures.
All material presentations by the Company are released to the ASX and posted on the Company’s website.
Principle 6: Respect the rights of security holders
The Company recognises the value of providing current and relevant information to its shareholders. The Board of the
Company aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of
affairs.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is
committed to:
•
•
communicating effectively with shareholders through releases to the market via ASX, the company website, information
posted or emailed to shareholders and the general meetings of the Company;
giving shareholders ready access to clear and understandable information about the Company; and
• making it easy for shareholders to participate in general meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to make enquiries of the
Company. These contact details are available on the “Contact Us” page of the Company’s website.
Shareholders may elect to, and are encouraged to, receive communications from Dotz Nano and Dotz Nano's securities
registry electronically. The contact details for the registry are accessible from the “For Investors” page of the Company’s
website.
The Company maintains information in relation to its Constitution, governance documents, Directors and senior executives,
Board and committee charters, annual reports and ASX announcements on the Company’s website.
From 1 January 2020, the Company will ensure that all substantive resolutions at a meeting of security holders are decided
by a poll rather than by a show of hands, allowing all shareholders to vote based on of the number of shares held by them,
also providing access to register their vote regardless of whether they attend or not.
The Company’s policies and procedures, and in particular the Shareholder Communication Policy, comply with the Principles
and Recommendations in relation to the rights of shareholders.
Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout Dotz Nano's business activities.
The risk committee is combined with the audit committee and is subject to the same Charter.
The Board is responsible for the oversight of the Company’s risk management and internal compliance and control framework
(Further information is disclosed in Principle 2 and 4 above). The Company does not have an internal audit function.
Responsibility for control and risk management is delegated to the appropriate level of management within the Company
with the Managing Director having ultimate responsibility to the Board for the risk management and internal compliance
and control framework. Dotz Nano has established policies for the oversight and management of material business risks.
Dotz Nano's Risk Management and Internal Compliance and Control Policy recognises that risk management is an essential
element of good corporate governance and fundamental in achieving its strategic and operational objectives. Risk
management improves decision making, defines opportunities and mitigates material events that may impact security holder
value.
Dotz Nano believes that explicit and effective risk management is a source of insight and competitive advantage. To this end,
Dotz Nano is committed to the ongoing development of a strategic and consistent enterprise wide risk management program,
underpinned by a risk conscious culture.
70 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
Dotz Nano accepts that risk is a part of doing business. Therefore, the Company’s Risk Management and Internal Compliance
and Control Policy is not designed to promote risk avoidance. Rather Dotz Nano's approach is to create a risk conscious
culture that encourages the systematic identification, management and control of risks whilst ensuring the Company does
not enter into unnecessary risks or enter into risks unknowingly.
Dotz Nano assesses its risks on a residual basis; that is it evaluates the level of risk remaining and considering all the mitigation
practices and controls. Depending on the materiality of the risks, Dotz Nano applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal compliance and control
system to manage Dotz Nano’s material business risks. It receives regular reports on specific business areas where there may
exist significant business risk or exposure. The Company faces risks inherent to its business, including economic risks, which
may materially impact the Company’s ability to create or preserve value for security holders over the short, medium or long
term. The Company has in place policies and procedures, including a risk management framework (as described in the
Company’s Risk Management and Internal Compliance and Control Policy), which is developed and updated to help manage
these risks.
During the reporting period, the Board determined that it did not have any material exposure to economic, environmental
and social sustainability risks. The Board does note however that the Company is subject to general economic risks, and
economic risks associated with the Company’s proposed products seeking to develop new markets. In addition, there are
inherent risks associated with the Company’s research and development facilities and team being located in Israel, due to
the political and military instability, obligations of Israeli citizens to perform military service, and the potential for other
countries to impose boycotts over Israeli produced products and companies.
The Company’s process of risk management and internal compliance and control includes:
•
•
•
identifying and measuring risks that might impact upon the achievement of the Company’s goals and objectives, and
monitoring the environment for emerging factors and trends that affect those risks;
formulating risk management strategies to manage identified risks, and designing and implementing appropriate risk
management policies and internal controls; and
monitoring the performance of, and improving the effectiveness of, risk management systems and internal compliance
and controls, including regular assessment of the effectiveness of risk management and internal compliance and
control.
The Board review’s the Company’s risk management framework at least annually to ensure that it continues to effectively
manage risk.
Management reports to the Board as to the effectiveness of Dotz Nano’s management of its material business risks at each
Board meeting.
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation
a dedicated internal audit function. The Company may consider to periodically engages external consultants to perform
internal control reviews.
Principle 8: Remunerate fairly and responsibly
The Board as a whole fulfils to the functions normally delegated to the Remuneration Committee (Further information is
disclosed in Principle 2 above) as detailed in the Remuneration Committee Charter.
Dotz Nano has implemented a Remuneration Policy which was designed to recognise the competitive environment within
which Dotz Nano operates and also emphasise the requirement to attract and retain high calibre talent in order to achieve
sustained improvement in Dotz Nano’s performance. The overriding objective of the Remuneration Policy is to ensure that
an individual’s remuneration package accurately reflects their experience, level of responsibility, individual performance and
the performance of Dotz Nano.
The key principles are to:
•
review and approve the executive remuneration policy to enable the Company to attract and retain executives and
71 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
CORPORATE GOVERNANCE STATEMENT
Directors who will create value for shareholders;
•
•
•
•
•
ensure that the executive remuneration policy demonstrates a clear relationship between key executive performance
and remuneration;
fairly and responsibly reward executives having regard to the performance of the Group, the performance of the
executive and the prevailing remuneration expectations in the market;
remunerate fairly and competitively in order to attract and retain top talent;
recognise capabilities and promote opportunities for career and professional development; and
review and approve equity-based plans and other incentive schemes to foster a partnership between employees and
other security holders.
The Board determines the Company’s remuneration policies and practices and assesses the necessary and desirable
competencies of Board members. The Board is responsible for evaluating Board performance, reviewing Board and
management succession plans and determines remuneration packages for the Managing Director, Non-Executive Directors
and senior management based on an annual review.
Dotz Nano’s executive remuneration policies and structures and details of remuneration paid to directors and key
management personnel (where applicable) are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their services, the
reimbursement of reasonable expenses and, in certain circumstances options.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is AU$500,000 per annum.
The Directors set the individual Non-Executive Directors fees within the limit approved by shareholders.
Executive directors and other senior executives (where appointed) are remunerated using combinations of fixed and
performance-based remuneration. Fees and salaries are set at levels reflecting market rates and performance-based
remuneration is linked directly to specific performance targets that are aligned to both short and long term objectives.
The Company prohibits Directors and employees from entering into any transaction that would have the effect of hedging or
otherwise transferring the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to any
other person.
There is currently no minimum holding of the Company’s securities required by a non-executive director.
The Company’s equity-based incentive schemes to which the Executive Team and other employees are eligible to participate
in are presented to shareholders for approval at the AGM every three years, the last approval having been received on 2
March 2020.
The Securities Trading Policy contains a prohibition against directors and employees altering the economic benefit derived
by the director or employee in relation to an equity-based incentive award or grant made by the Company.
Detailed information on remuneration of directors and other Key Management Personnel is contained in the Remuneration
Report.
Further details in relation to the company’s remuneration policies are contained in the Remuneration Report, within the
Directors’ report.
72 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
ADDITIONAL SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 19 March 2019.
As at 19 March 2019 there were 1,170 holders of Ordinary Fully Paid Shares.
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
(a)
(b)
(c)
at meetings of members each member entitled to vote may vote in person or by proxy or attorney;
on a show of hands each person present who is a member has one vote; and
on a poll each person present in person or by proxy or by attorney has one vote for each ordinary share held.
There are no voting rights attached to any of the options and performance shares that the Company currently has on issue.
Upon exercise of these options, the shares issued will have the same voting rights as existing ordinary shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Fully Paid Shares
Holder Name
CITICORP NOMINEES PTY LIMITED
IBI TRUST MANAGEMENT
IBI TRUST MANAGEMENT
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
ORNA SIMA LUBLINER
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
IBI TRUST MANAGEMENT
BUZZ CAPITAL PTY LTD
102 CAPITAL MANAGEMENT
MR TONY PETER VUCIC & MRS DIANE VUCIC
IBI TRUST MANAGEMENT
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
ROMFAL SIFAT PTY LTD
DANNY EDGAR
IBI TRUST MANAGEMENT
SUKHMOHAN ATHWAL
MR BRUNO NOSEK
NOAM COHEN
Total
Total issued capital - selected security class(es)
Holding
% IC
38,951,708
20.19%
11,988,809
11,746,611
9,432,832
6,270,548
5,945,409
4,341,256
3,160,687
3,000,000
2,993,461
2,500,000
2,446,201
2,363,333
2,315,025
2,266,667
2,222,222
2,051,855
2,000,000
1,963,200
1,889,795
6.22%
6.09%
4.89%
3.25%
3.08%
2.25%
1.64%
1.56%
1.55%
1.30%
1.27%
1.23%
1.20%
1.18%
1.15%
1.06%
1.04%
1.02%
0.98%
119,849,619
62.14%
192,881,254
100.00%
73 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
ADDITIONAL SHAREHOLDER INFORMATION
SUBSTANTIAL HOLDERS
The names of the substantial shareholders disclosed to the Company as substantial shareholders as at 19 March 2019 are:
Name
Amiram Bornstein
Ariel Malik
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
No of Shares Held
% of Issued Capital
11,988,809
11,746,611
6.22%
6.09%
Holders
Total Units
% Issued Share
Capital
134
174
191
510
161
1,170
5,788
581,211
1,592,113
18,794,367
171,907,775
192,881,254
0.00%
0.30%
0.83%
9.74%
89.13%
100.00%
Unmarketable Parcels – 323 Holders (based on share price of $0.09)
RESTRICTED SECURITIES
As at 19 March 2019 the following shares are subject to escrow:
• Nil
UNQUOTED SECURITIES
As at 19 March 2019, the following unquoted securities are on issue:
44,000,000 Performance Shares1 escrowed - 59 Holders
There are no holders with more than 20%
5,000,000 Options Expiring 14/06/2020 @ $0.20 escrowed until 21 December 2018 – 12 Holders
Holders with more than 20%
Holder Name
Buzz Capital Pty Ltd
Holding
% IC
2,395,000
47.90%
4,500,000 Options Expiring 31/10/2019 @ $0.40 escrowed until 21 December 2018 – 6 Holders
Holders with more than 20%
Holder Name
Attollo Investments Pty Ltd
Otsana Pty Ltd
Holding
% IC
2,516,666
55.93%
1,000,000
22.22%
1 Details on the performance conditions surrounding the Performance Shares are contained within the Directors’ Report.
74 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
ADDITIONAL SHAREHOLDER INFORMATION
1,000,000 Options Expiring 31/10/2019 @ $0.30 escrowed until 21 December 2018 – 2 Holders
Holders with more than 20%
Holder Name
Bull Equities
Oran Dorel
10,000,000 Options Expiring 08/08/2019 @ $0.20 – 14 Holders
Holders with more than 20%
Holder Name
SUNSET TIDAL PTY LTD
6,000,000 Options Expiring 05/02/2020 @ $0.30 – 7 Holders
Holders with more than 20%
Holder Name
LTL CAPITAL PTY LTD
2,666,659 Options Expiring 30/06/2020 @ $0.12 – 6 Holders
Holders with more than 20%
Holder Name
ORNA SIMA LUBLINER
3,700,000 Options Expiring 01/10/2021 @ $nil – 11 Holders
Holders with more than 20%
Holder Name
MICHAEL SHTEIN
3,200,000 Options Expiring 01/10/2021 @ $nil – 6 Holders
Holders with more than 20%
Holder Name
MICHAEL SHTEIN
2,000,000 Options Expiring 01/10/2022 @ $nil – 2 Holders
Holders with more than 20%
Holder Name
TALSBAR CONSULTING LTD
MICHAEL SHTEIN
Holding
% IC
500,000
50.00%
500,000
50.00%
Holding
% IC
4,000,000
40.00%
Holding
% IC
5,600,000
93.33%
Holding
% IC
1,567,637
58.79%
Holding
% IC
1,200,000
32.43%
Holding
% IC
1,500,000
46.88%
Holding
1,000,000
1,000,000
% IC
50%
50%
75 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
ADDITIONAL SHAREHOLDER INFORMATION
3,000,000 Options Expiring 01/10/2022 @ $0.13 – 2 Holders
Holders with more than 20%
Holder Name
KNAZ-BREIER LTD
VMCONNECT LLC
1,000,000 Options Expiring 15/02/2023 @ $nil – 1 Holders
Holders with more than 20%
Holder Name
TOMER SEGEV
1,000,000 Options Expiring 20/04/2020 @ $nil – 1 Holders
Holders with more than 20%
Holder Name
TALSBAR CONSULTING LIMITED
1,000,000 Options Expiring 01/11/2020 @ $nil – 1 Holders
Holders with more than 20%
Holder Name
TALSBAR CONSULTING LIMITED
500,000 Options Expiring 20/04/2020 @ $0.20 – 1 Holders
Holders with more than 20%
Holder Name
CHANGING THE WORLD TECHNOLOGIES LTD
212,500 Options Expiring 20/04/2020 @ $0.105 – 1 Holders
Holders with more than 20%
Holder Name
KANAYAMA CORPORATION LTD
212,500 Options Expiring 20/04/2020 @ $0.105 – 1 Holders
Holders with more than 20%
Holder Name
KANAYAMA CORPORATION LTD
500,000 Options Expiring 20/04/2020 @ $0.20 – 1 Holders
Holders with more than 20%
Holder Name
COREY PATTEN
Holding
% IC
2,000,000
66.67%
1,000,000
33.33%
Holding
1,000,000
% IC
100%
Holding
1,000,000
% IC
100%
Holding
1,000,000
% IC
100%
Holding
500,000
% IC
100%
Holding
212,500
% IC
100%
Holding
212,500
% IC
100%
Holding
500,000
% IC
100%
76 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019
ADDITIONAL SHAREHOLDER INFORMATION
1,500,000 Options Expiring 01/08/2020 @ $0.20 – 1 Holders
Holders with more than 20%
Holder Name
GLENEAGLE SECURITIES (AUST) PTY LTD
Holding
1,500,000
% IC
100%
ON-MARKET BUY BACK
There is currently no on-market buyback program.
ASX LISTING RULE 4.10.19
The Company has used its cash and assets in a form readily convertible to cash that it had at the time of reinstatement of
the Company’s securities to quotation in a way consistent with its business objectives.
77 I Dotz Nano Limited ABN 71 125 264 575 - Annual Report 31 December 2019