Dotz Nano Limited
ABN 71 125 264 575
Annual Report - 31 December 2022
Dotz Nano Limited
Contents
31 December 2022
Corporate directory
Chairman's Letter
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Dotz Nano Limited
Additional Shareholder Information
General information
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51
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56
The financial statements cover Dotz Nano Limited as a consolidated entity consisting of Dotz Nano Limited and the entities
it controlled at the end of, or during, the year. The financial statements are presented in US dollars.
Dotz Nano Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Level 14
330 Collins Street
Melbourne VIC 3000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 23 March 2023. The
directors have the power to amend and reissue the financial statements.
1
Dotz Nano Limited
Corporate directory
31 December 2022
Directors
Mr Bernie Brookes AM
Mr Doron Eldar
Ms Kerry Harpaz
Company secretary
Mr Ian Pamensky
Registered office
Share register
Auditor
Level 14
330 Collins Street
Melbourne VIC 3000
Automic Registry Services
Level 5, 126 Phillip Street
SYDNEY NSW 2000
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
PERTH WA 6000
Stock exchange listing
Dotz Nano Limited shares are listed on the Australian Securities Exchange (ASX
code: DTZ)
2
Dotz Nano Limited
Chairman's Letter
31 December 2022
Dear fellow shareholders,
2022 was a productive year for Dotz as we saw evidence of the tangible difference our technology makes for companies and
our potential to scale. Through the year, we secured distributors and first purchase orders and made advances to
commercialise our technology with industries with an established need for authentication and tracking and tracing.
A major achievement this year has been the agreement with a leading Oil & Gas company to advance trials of Dotz corrosion
inhibitors on-site quantification kit within complex operational settings, taking the technology one step closer to full
commercialisation in that sector. There is a growing demand within the crude oil and lubricants industry for solutions to address
high rates of adulteration and counterfeiting that cause enormous loss throughout complex supply chains. Our authentication
technology has significant competitive advantages to assist companies to combat the $2.2 trillion market in lubricants
counterfeiting market.
We collaborated with global biotech leader Orgenesis to examine possible ways to co-develop a new cell and gene therapy
identification standards, a good demonstration of the innovation and versatility of our end-to-end authentication technology.
Initial work with subsidiary Carmi Biotech Ltd has already developed a more effective and accurate tagging solution for Orgenis
mobile units and labs.
This year was not without challenges. While we have received significant purchase orders and some payments for our rapid
diagnostics test kits jurisdictions have evolved their responses to COVID-19 at a local level, demand for these products has
significantly decreased while competition has become even more fierce. We are also experiencing delays on obtaining US
FDA Emergency Use Authorisation due to reduced priority from COVID regulatory bodies. While we await this outcome, we
continue to explore new applications for our virus detection technology.
To support Dotz’s growth through its next phase, we welcomed Chief Operating Officer Zohar Birman who brings a wealth of
strategic and hands-on management experience in start-ups and global multi-site companies. Two other recent significant
appointments bringing significant commercialisation and product development expertise were Yair Poplawski as Chief
Business Officer and Davidi Tulipman as Chief Product Officer. This month, the Company appointed Ms Liat Bar Ziv
Alperovitz as the new Chief Financial Officer, following the departure of Mr Guy Khavia and the appointment of Mr Sharon
Malka as the new Chief Executive Office, following the departure of Gideon Shmuel. We thank Mr Khavia and Mr Shmuel for
their outstanding service.
On behalf of the Board, I’d like to thank the Dotz team for their hard work, passion and commitment to opening new markets
for our technology and promoting Dotz as an industry-leader in marking and verification technology.
And lastly, thank you to our loyal shareholders. We will continue to build on the solid progress we made this year to build
commercially viable partnerships, expand into new markets, and capitalise on the opportunities to deliver value.
Bernie Brookes AM
Chairman
3
Dotz Nano Limited
Directors' report
31 December 2022
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 2022.
Directors
The names and the particulars of the Directors of the Company during or since the end of the financial year are:
Name
Appointed
Resigned
Status
Mr Bernie Brookes AM
Mr Doron Eldar
Ms Kerry Harpaz
Mr Gideon Shmuel
Mr Ian Pamensky
Mr Garry Browne AM
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
CEO and Executive Director
Non-Executive Director
Non-Executive Director
15 January 2020
15 January 2020
2 September 2021
2 September 2021
25 September 2020
19 May 2021
-
-
-
6 April 2022
11 August 2022
24 August 2022
Principal activities
The principal continuing activities of the Group during the year is developing, manufacturing and commercialising tagging,
tracing, verification solutions and diagnostic activity.
Dividends
There were no dividends paid, recommended during the financial year ended 31 December 2022 (2021: Nil)
Financial review
Dotz Nano Limited had a loss for the year of $5,373,346 (31 December 2021: $7,935,940). This included a non-cash amount
of ($21,001) share-based payments (31 December 2021: $3,131,433).
The Group was in net assets position from $4,062,471 at 31 December 2021 to net liabilities of $244,585 at 31 December
2022.
In September 2022 Dotz secured $5,150,000 from New-York based Lind Partners, an institutional fund manager, to
accelerate marketing and development of cell and gene therapy devices, treatments and processing systems as part of the
Theracell Labs Project, scale up the commercialisation of Dotz solutions in the and Oil & Gas sector, and support further
R&D. The funding also allows Dotz to develop commercial partnerships across authentication, bio-medical and bio-
processing, which will underpin long-term growth in shareholder value.
As at 31 December 2022, the Group's cash and cash equivalents balance was $3,048,878 (31 December 2021: $4,137,046)
and had working capital of $2,604,909 ( 31 December 2021 : $3,568,141).
Unless otherwise stated all figures in this report are in the Company’s presentation currency US$.
Review of operations
In 2022, Dotz continued to commercialise its end-to-end solutions within the authentication and diagnostic domains. The
Company’s significant activities in 2022 are outlined below.
Authentication
In April 2022, Dotz entered a co-development, supply and licensing collaboration agreement with Theracell Labs Ltd - a
subsidiary of NASDAQ-listed global biotech Orgenesis Inc. In December, Dotz, entered into a service agreement with
Greece -based company Axis medical as part of the first deliverables of the collaboration agreement with Theracell Labs
for the design, planning, integration, and implementation of its tagging solution in the Orgenesis mobile processing units
and labs (OMPULs).
During the year, Dotz conducted several product tests, pilots and field trials of Carbon and Graphene Quantum Dots (GQDs)
with companies in the oil & gas, nutrients, and art security sectors. GQDs can be embedded directly into a range of materials
within extreme conditions without affecting their structure. Following the success of the projects, Dotz is reasonably confident
that some may result in future customer agreements.
In July 2022, Dotz was granted a new patent for bulk liquid tagging, identifying and authentication in the United States. The
patent called uses a new approach to allow in-field, real-time and simple detection and quantification solution of materials
and chemicals utilised in the oil & gas sector and other industries.
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Dotz Nano Limited
Directors' report
31 December 2022
Following successful small-scale isolated pilots conducted at both Dotz and an Oil & Gas service provider’s setting, Dotz
received its first purchase order in December 2022 from a leading NASDAQ-listed oilfield technology and services company
(with a market capitalisation of more than US$5 billion) to expand in-field trials of a new technology to monitor corrosion
inhibitors. The expanded trials enable companies to obtain reliable, valuable data in industrial settings within significantly
reduced timeframes and operational costs and provide greater insights into how the technology can be applied more broadly
within the oil & gas sector.
As a result of its successful trials, Dotz has identified high demand for its solutions within the crude oil and lubricants industries
to address the high rates of adulteration and counterfeiting that cause enormous loss throughout complex supply chains.
Diagnosis
During the year, Dotz generated revenue from its COVID test kit sales through its distribution partners in Thailand, Malaysia,
Paraguay, UAE, Egypt and The Sudan. However, with jurisdictions increasingly managing their responses to COVID-19 on
a local level, sales remain intermittent.
Dotz Test Kits has the CE Mark, clearing the product for sale in the European Union for both the distribution and/or use of
its Dotz Test Kits in respect of both nasopharyngeal swab and saliva samples. The application to obtain US FDA Emergency
Use Authorisation is ongoing due to a reduced priority from COVID regulatory bodies.
Dotz continues to explore possible new applications for its virus detection technology with other viral infections where
nasopharyngeal swab and saliva test kits would assist in the coordinated management of those conditions.
Leadership
In May 2022, appointed Mr Zohar Birman as Chief Operating Officer. Mr Birman has more than 20 years of strategic and
hands-on management experience in start-ups and global multi-sites companies. His managerial experience in operations
and supply chain management has demonstrated a proven record of team building, M&A, and post-merge integration in a
changing global environment.
In March 2023, the Company appointed Mr Sharon Malka as Chief Executive Officer, following the resignation of Mr Gideon
Shmuel last year.
In early 2023 three other significant appointments were made that boost the commercialisation and product development
capability of the company. Yair Poplawski was appointed Chief Business Officer, Davidi Tulipman was hired as Chief Product
Officer in August 2022 and Ms Liat Bar Ziv Alperovitz was appointed as the new Chief Financial Officer, following the
departure of Mr Guy Khavia in March 2023.
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Dotz Nano Limited
Directors' report
31 December 2022
Material Business Risks
The key risk factors affecting the Company are set out below. The occurrence of any of the risk below could adversely
impact the Company’s operating or financial performance.
Company's current operations risks
(a) Development and commercialisation of the technology
The Company is in the business of development and commercialisation of anti-counterfeiting, authentication and
tracing solutions, as well as other applications of its expertise in the advanced materials industry, such as in respect
of the Dotz Test Kit.
The success of the Company will depend upon the Company's ability to commercialise its technology. A failure to
successfully commercialise the technology in commercial quantities, could impact the Company's operating results
and financial position.
The Company continues to focus its commercialisation activities in areas that are considered new markets for its
technology. There is a risk that products produced by the Company will not be accepted by market participants in
these fields (or other fields) (such as anti-counterfeiting, authentication and tracing solutions). Failure to create a
market in these fields will have an adverse effect on the Company's potential profitability.
The Company is seeking to develop its technology with organisations that provide chemical production industry
services. If the Company is successful in developing the technology, there may be further additional risks associated
with how the technology fits within industry standards (including legal and regulatory standards), and issues faced with
production.
The global marketplace for most products is ever changing due to new technologies, new products, changes in
preferences, changes in regulation and other factors influencing market acceptance or market rejection. This market
volatility and risk exists despite the best endeavours of market research, promotion, and sales and licensing
campaigns. There is a risk that if the Company's technology is not accepted by the market or its products are not
utilised in the Company's proposed markets or continuing to be utilised in the existing markets that currently use the
technology, the Company will not be able to commercialise its products which could adversely impact the Company's
operations.
Even if the Company does successfully commercialise its technology, there is a risk the Company will not achieve a
commercial return and will not be able to sell products and services to clients at a rate which covers its operating and
capital costs.
(b) Competition and new technologies
The industries in which the Company are involved is subject to increasing domestic and global competition which is
fast-paced and fast-changing. While the Company undertakes all reasonable due diligence in its business decisions
and operations, the Company will have no influence or control over the activities or actions of its competitors, whose
activities or actions may positively or negatively affect the operating and financial performance of the Company's
projects and business. For instance, new technologies could result in the Company's technology not being
differentiated to other similar offerings.
The size and financial strength of some of the Company's competitors may make it difficult for it to maintain a
competitive position in the technology market. In particular, the Company's ability to acquire additional technology
interests could be adversely affected if it is unable to respond effectively and/or in a timely manner to the strategies
and actions of competitors and potential competitors or the entry of new competitors into the market. This may in turn
impede the financial condition and rate of growth of the Company.
The key competition risk is in achieving appreciable market share and differentiation from its key competitors.
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Dotz Nano Limited
Directors' report
31 December 2022
(c)
Staff risk
There is a risk that knowledge will be lost in the event that development staff who have knowledge of the technology
and business resign or retire. This involves the risk that those staff will have information in respect of the Company's
intellectual property which has a commercial value to the Company as well as an opportunity cost for replacement of
those staff and subsequent training.
This risk is mitigated as the Company has historically had low levels of staff turnover in the development teams. In
addition, all staff contracts contain express provisions with respect to ownership of intellectual property and restraints
of trade to limit any potential loss suffered by the Company to the maximum extent possible. Furthermore, the
Company has taken measures to mitigate this risk by expanding its research staff so that technological intellectual
property is not converged into one person but is disbursed among several people within the Company.
(d) Outsourcing
The Company outsources to consultants for expert advice and contracts organisations for some manufacturing,
marketing and distribution services and there is no guarantee that such experts or organisations will be available as
required or will meet expectations.
(e)
Licensing and regulatory risks
Development, production and sale of the company’s products in most markets are subject to local laws and regulations,
including personal and environmental protection existing laws or regulations, or future laws or regulations that may
adversely affect the Company. Compliance with such laws or regulations may significantly increase the Company’s
operating expenses.
(f)
Protection of intellectual property rights
If the Company fails to protect its intellectual property rights adequately, competitors may gain access to its technology
which may harm its business.
While the Company has developed its own method, process and intellectual property for manufacturing graphene and
carbon quantum dots which it believes is valuable and material to its business, it has not yet been granted patents for
these methods and processes and the Company is in the process of applying for patents in respect thereof. As noted
below, there can be no guarantee that such patents will ultimately be granted.
Securing rights to intellectual property is an integral part of securing potential product value from the development of
information technology. Competition in retaining and sustaining protection of intellectual property and the complex
nature of intellectual property can lead to expensive and lengthy patents disputes for which there can be no guaranteed
outcome.
Legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are
uncertain. Effective patent, trademark, copyright and trade secret protection may not be available to the Company in
every country in which the technology may eventually be sold. Accordingly, despite its efforts, the Company may not
be able to prevent third parties from infringing upon or misappropriating the intellectual property.
Market conditions depending, the Company may be required to incur significant expenses in monitoring and protecting
future intellectual property rights. It may initiate or otherwise be involved in litigation against third parties for
infringement, or to establish the validity, of its rights. Any litigation, whether or not it is successful, could result in
significant expense to the Company and cause a distraction to management.
In addition, unauthorised use of the "Dotz" brand in counterfeit products or services may not only result in potential
revenue loss, but also have an adverse impact on its brand value and perceptions of its product qualities.
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Dotz Nano Limited
Directors' report
31 December 2022
(g) Currency risk
The Company expects to derive a majority of its revenue in US dollars. The Company will also be required to pay fees
in the currency for the State of Israel (shekel). Accordingly, changes in the exchange rate between the US dollar and
the Australian dollar or the Israeli shekel and the Australian dollar would be expected to have a direct effect on the
performance of the Company.
(h) Contractual risk
The operations of the Company requires involvement of a number of third parties. As with any contract generally, there
is a risk that the business could be disrupted in situations where there is a disagreement or dispute in relation to a
term of the contract. Should such a disagreement or dispute occur, this may have an adverse impact on the Company's
operations and performance generally. It is not possible for the Company to predict or protect itself against all such
risks.
General risks relating to the Company
(i)
Additional requirements for capital
The Company's activities require substantial expenditure and depend on numerous factors. The Company anticipates
that it will require further financing in the future.
If the Company is unable to use debt or equity to fund its business development activities after the substantial
exhaustion of its cash reserves, there can be no assurances that the Company will have sufficient capital resources
for that purpose, or other purposes, or that it will be able to obtain additional resources on terms acceptable to the
Company or at all. Any additional equity financing may be dilutive to Shareholders and any debt financing, if available,
may involve restrictive covenants, which may limit the Company's operations and business strategy.
The Company's failure to raise capital if and when needed could delay or suspend the Company's business strategy
and could have a material adverse effect on the Company's activities, including its ability to continue as a going
concern. Unfavourable market conditions may also adversely affect the Company's ability to raise additional funding
regardless of the Company's operating performance.
(j)
Reliance on key management
The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends
substantially on its senior management and directors. There can be no assurance that there will be no detrimental
impact on the performance of the Company or its growth potential if one or more of these employees cease their
employment and suitable replacements are not identified and engaged in a timely manner.
The Company is focused on ensuring the Board is of an appropriate size and collectively has the skills, commitment
and knowledge of the Company and the industry in which it operates to enable it to discharge its duties effectively and
add value. As part of this focus, the Company anticipates further Board changes to be made as and when appropriate.
(k)
Trading price of Shares
The Company's operating results, economic and financial prospects and other factors will affect the trading price of
the Shares. In addition, the price of Shares is subject to varied and often unpredictable influences on the market for
equities, including, but not limited to general economic conditions including the performance of the Australian dollar
on world markets, inflation rates, foreign exchange rates and interest rates, variations in the general market for listed
stocks in general, changes to government policy, legislation or regulation, industrial disputes, general operational and
business risks and hedging or arbitrage trading activity that may develop involving the Shares.
In particular, the share prices for many companies have been and may in the future be highly volatile, which in many
cases may reflect a diverse range of non-company specific influences such as global hostilities and tensions relating
to certain unstable regions of the world, acts of terrorism and the general state of the global economy. No assurances
can be made that the Company's market performance will not be adversely affected by any such market fluctuations
or factors.
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Dotz Nano Limited
Directors' report
31 December 2022
(l)
Litigation risks
The Company is exposed to possible litigation risks including intellectual property claims, contractual disputes,
occupational health and safety claims, employee claims, shareholder claims and disputes in relation to regulatory
matters.
Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any
such claim or dispute if proven, may impact adversely on the Company's operations, financial performance and
financial position. As at the date of this Report the Company is not involved in any litigation proceedings against the
Company which are currently on foot.
(m) Economic risks
General economic conditions, movements in interest and inflation rates and currency exchange rates may have an
adverse effect on the Company's activities, as well as on its ability to fund those activities.
Further, share market conditions may affect the value of the Company's Securities regardless of the Company's
operating performance. Share market conditions are affected by many factors such as: general economic outlook;
interest rates and inflation rates; currency fluctuations; changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and terrorism or other hostilities.
(n)
Force majeure
The Company, now or in the future, may be adversely affected by risks outside the control of the Company including
labour unrest, civil disorder, war, subversive activities or sabotage, extreme weather conditions, fires, floods,
explosions or other catastrophes, epidemics or quarantine restrictions.
(o) Acquisitions and business developments
As part of its business strategy, the Company may make acquisitions of, or significant investments in, companies,
products, technologies and/or products that are complementary to the Company's business. Similarly the Company
may continue to develop its technology in a way that it may be applied to new industries and for new purposes.
Any such future transactions or business developments are accompanied by the risks commonly encountered in
making acquisitions of companies, products and technologies, or moving into new areas, such as integrating cultures
and systems of operation, relocation of operations, short term strain on working capital requirements, achieving the
sales and margins anticipated and retaining key staff and customer and supplier relationships.
(p)
Infectious disease pandemics
Infectious disease pandemics such as the coronavirus, whilst opening up various new opportunities for the deployment
of the Company's technology, have the potential to interrupt the Company's operations, impair deployment of its
products to customers and prevent suppliers or distributors from honouring their contractual obligations. Such
pandemics could also cause hospitalisation or death of the Company's existing and potential customers and staff.
(q) Cyber risks and security breaches
The Company stores data in its own systems and networks and also with a variety of third-party service providers. A
malicious attack on the Company’s systems, processes or people, from external or internal sources, could put the
integrity and privacy of customers’ data and business systems at risk. It could prevent customers from using the
products for a period of time, put its users’ premises at risk and could also lead to unauthorised disclosure of data.
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Dotz Nano Limited
Directors' report
31 December 2022
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Significant events after the reporting period
On 1 March 2023, the Company announced the appointment of Ms Liat Bar Ziv Alperovitz as the new Chief Financial Officer,
following the departure of Mr Guy Khavia.
On 23 March 2023, the Company announced the appointment of Mr Sharon Malka as the new Chief Executive Office,
following the resignation of Mr Gideon Shmuel and an extended search.
No other matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future
financial years.
Information on directors
Name:
Title:
Qualifications:
Experience:
Mr Bernie Brookes AM
Non-Executive Chairman
BA, Dip Ed
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 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.
Nil
Other current directorships:
Former directorships (last 3 years): Funtastic Limited (resigned 26 November 2020)
Special responsibilities:
Interests in shares:
Interests in options:
Nil
2,665,000 Ordinary Shares
500,000 unlisted options with exercise price of AU$0.20 and expiry date of 31
December 2023
Name:
Title:
Qualifications:
Experience:
Mr Doron Eldar
Non-Executive Director
BA in Business Economics
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.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
1,965,371 Ordinary Shares
Interests in shares:
500,000 unlisted options with exercise price of AU$0.20 and expiry date of 31
Interests in options:
December 2023
10
Dotz Nano Limited
Directors' report
31 December 2022
Name:
Title:
Qualifications:
Ms Kerry Harpaz
Non-Executive Director
LL.B - College of Management Academic Studies, Israel
Practical Legal Training- The Collage Of law, Sydney, Australia
Mind, Brain and Behaviour 1 – Psychology Course – Melbourne University, Australia
Sustainability and Corporate Responsibility – Macquarie University, Australia
Positive Psychology – Tel Aviv University, Israel
Mrs Harpaz, LLB, has more than 17 years of experience in senior management and
leadership with speciality in building large teams with a focus on coaching and
mentoring to build successful cultures.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
26,902,690 Ordinary Shares
Interests in shares:
Experience:
Experience:
Name:
Title:
Qualifications:
Mr Gideon Shmuel (resigned 6 April 2022)
CEO and Executive Director
MA, Marketing Management, 1995 - 1996
BA, Business Studies, 1992 - 1995
Mr Shmuel is a highly-experienced CEO and senior executive with strong sales,
business development and marketing expertise. He has extensive experience scaling
innovative tech companies globally, and is the previous CEO of AI computer vision
company Cipia and aerospace digital e-commerce platform ePlane. More recently, Mr
Shmuel is a venture partner at London-based venture capital firm Downing Ventures.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
265,000 Ordinary Shares
Interests in shares:
Experience:
Name:
Title:
Qualifications:
Mr Garry Browne AM (resigned 24 August 2022)
Non- Executive Director
University of Technology Sydney - Bachelor of Business
Harvard Business School - OPM
Mr Browne has more than 40 years’ senior management and Board experience across
government, not-for-profit and corporate entities, including as the former CEO and
current Chair of FMCG company Stuart Alexander & Co. Mr Browne is on the Board of
the Australian War Memorial ANZAC Foundation and the UNSW International House
Residential College.
Nil
Other current directorships:
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
288,550 Ordinary Shares*
Interests in shares:
*includes 28,550 shares held by his son.
Name:
Title:
Qualifications:
Experience:
Mr Ian Pamensky (resigned 11 August 2022)
Non-Executive Director
B.Com, BAccS (Hons), CA
Mr. Pamensky has over 25 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.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
705,000 Ordinary Shares
Interests in shares:
250,000 unlisted options with exercise price of AU$0.20 and expiry date of 31
Interests in options:
December 2023
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
11
Dotz Nano Limited
Directors' report
31 December 2022
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Ian Pamensky
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:
Name
Appointed
Resigned
Mr Bernie Brookes AM
Mr Doron Eldar
Ms Kerry Harpaz
Mr Gideon Shmuel
Mr Garry Browne AM
Mr Ian Pamensky
15 January 2020
15 January 2020
2 September 2021
2 September 2021
19 May 2021
25 September 2020
-
-
-
6 April 2022
24 August 2022
11 August 2022
DIRECTORS'
MEETING
DIRECTORS'
MEETING
Number
eligible
to attend
Number
attended
11
11
10
1
7
6
11
11
11
2
7
6
Unissued shares under options
At the date of this report, the unissued ordinary shares Dotz Nano Limited under option are as follows:
Expiry Date
Grant Date
Exercise Price
Number Under Option
19 October 2023
31 December 2023
31 December 2023
25 November 2023
4 August 2023
10 July 2024
14 September 2026
31 May 2027
31 May 2027
31 May 2027
1 March 2027
1 March 2027
1 March 2027
20 March 2028
20 March 2028
20 March 2028
20 March 2028
20 March 2029
Total
19 October 2020
30 July 2020
29 July 2021
25 August 2021
3 August 2021
10 July 2021
23 September 2022
30 September 2022
30 September 2022
30 September 2022
13 March 2023
13 March 2023
13 March 2023
20 March 2023
20 March 2023
20 March 2023
20 March 2023
20 March 2023
AU$0.380
AU$0.200
AU$0.200
AU$0.250
AU$0.230
AU$0.200
AU$0.475
AU$0.400
AU$0.500
AU$0.330
AU$0.500
AU$0.400
AU$0.330
AU$0.298
AU$0.367
AU$0.436
AU$0.505
AU$0.573
5,000,000
2,450,000
1,250,000
4,000,000
1,500,000
250,000
7,118,644
1,700,000
1,700,000
2,162,500
565,000
565,000
565,000
2,000,000
2,000,000
2,000,000
2,000,000
1,375,000
38,201,144
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
Shares issued on the exercise of options
There were 19,194,260 ordinary shares of Dotz Nano Limited issued on the exercise of options during the year ended 31
December 2022 and up to the date of this report. A total of $570,425 was paid during the year on the exercise of options and
an amount $284,017 remains unpaid.
Performance Shares
At the date of this report, there were no performance shares on issue.
12
Dotz Nano Limited
Directors' report
31 December 2022
Proceedings on behalf of the 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 regulation
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, multiple applications, including biomedical, in-product authentication, tracing, lighting and sensors-
specifically using 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 9 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 2022 has been received and can be found on page
18 of the financial report.
Remuneration report (audited)
This remuneration report for the year ended 31 December 2022 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.
13
Dotz Nano Limited
Directors' report
31 December 2022
The remuneration report is set out under the following main sections:
(1) Introduction
(2) Remuneration governance
(3) Executive remuneration arrangement
(4) Non-executive Director fee arrangement
(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
Status
Appointed
Resigned
Bernie Brookes AM
Doron Eldar
Kerry Harpaz
Gideon Shmuel
Ian Pamensky
Garry Browne AM
Michael Shtein
Guy Khavia
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
CEO & Executive Director
Non-Executive Director
Non-Executive Director
Chief Technology Officer
Chief Financial Officer
15 January 2020
15 January 2020
2 September 2021
2 September 2021
2 September 2021
19 May 2021
1 August 2015
17 March 2022
Tomer Segev
Chief Financial Officer
1 January 2019
-
-
-
6 April 2022
11 August 2022
24 August 2022
-
Chief Financial Officer until 26
March 2023 and employed
until 26 June 2023
Chief Financial Officer until 17
March 2022 and employed to
31 March 2022
2. Remuneration governance
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.
During the financial year, the Company did not engage any remuneration consultants.
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.
During the year ended 31 December 2022 the Company had four appointed executives, being Dr Michael Shtein as the Chief
Technology Officer and Mr Guy Khavia as the Chief Financial Officer, Mr Gideon Shmuel as CEO and Executive Director
(resigned 6 April 2022) Mr Tomer Segev as the Chief Financial Officer (resigned on 17 March 2022). The terms of their
Executive Employment Agreements with Dotz Nano Limited are summarised in the following table.
Dr Michael Shtein
●
●
Executive compensation of US$15,000 per month for 75% position, plus company leased car;
Reimbursement of reasonable business expenses incurred in the ordinary course of the business in accordance with
the Group’s reimbursement policies; and
This agreement may be terminated by either party with 30 days' notice from Dr Michael Shtein and 3 months’ notice
from the Company.
●
14
Dotz Nano Limited
Directors' report
31 December 2022
Mr Guy Khavia
●
●
●
Executive gross salary is set at NIS45,000 plus NIS3,500 per month to cover transportation.
Entitled to an annual bonus of up to 20% of his salary, according to the Company's sole discretion.
The agreement may be terminated by either party at any time, by giving the other party 60 days advance notice.
Mr Gideon Shmuel
●
●
●
●
●
Executive gross salary of ILS 66,400 (~US$21,350)* and car expenses of ILS 3,500 (~US$1,125) per month. In addition,
employee is entitled to full social benefits (Pension fund, study fund and disability insurance)
Annual bonus of up to 30% subject to performance against the KPI’s
Reimbursement of reasonable business expenses incurred in the ordinary course of the business in accordance with
the Group’s reimbursement policies; and
This agreement may be terminated by either party on 6 months’ notice.
Long term incentives: 500,000 unlisted options with an exercise price of zero and expiry date of 29 March 2024;
2,000,000 unlisted options with an exercise price of AU41.25 cents and expiry date of 29 March 2023; 2,500,000 unlisted
options with an exercise price of AU48.12 cents and expiry date of 29 March 2024; and 2,500,000 unlisted options with
an exercise price of AU55 cents and expiry date of 29 March 2025
The options were subject to shareholder approval which was not granted.
Mr Tomer Segev
●
Executive gross salary of ILS 38,000 for 75% position (~US$12,218) per month. In addition, employee is entitled to full
social benefits (Pension fund, study fund and disability insurance) plus Company leased car from 1 December 2019;
Reimbursement of reasonable business expenses incurred in the ordinary course of the business in accordance with
the Group’s reimbursement policies; and
This agreement may be terminated by either party on 3 months’ notice.
●
●
In addition to the above appointed executives Mr Doron Eldar is as a director in Dotz Nano Ltd in Israel. His remuneration
for this role is included in the fees received for his role as Director of Dotz Nano Limited.
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.
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 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 result 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. During the year ended 31 December 2022
a total of 5,562,500 options have been issued under this plan, out of which 1,817,500 were issued to KMP(31 December
2021: 5,035,000 options).
Group Performance
The table below shows the performance of the Group over the last 5 reporting periods:
15
Dotz Nano Limited
Directors' report
31 December 2022
Financial year
2022
2021
2020
2019
2018
Loss for the year
Loss per share (cents)
Share price
5,373,346
1.21
0.30
7,935,940
1.98
0.46
3,968,996
1.24
0.24
3,746,564
1.72
0.062
5,736,672
3.59
0.083
4. Non-executive Director fee arrangement
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 $467,213 (31 December 2021: $357,586) and cover Board activities and interim management of the
business operations since departure of former CEO. Non-executive Directors may receive additional remuneration for other
services provided to the Group.
5. Details of remuneration
31 December 2022
Directors:
Bernie Brookes
Doron Eldar
Kerry Harpaz
Gideon Shmuel1
Ian Pamensky2
Garry Browne3
Key management:
Michael Shtein
Guy Khavia4
Tomer Segev4
Short Term
Salary, Fees
&
Commissions
Post-
Employment
Superannuation
Share-based
Payments5
Other
US$
US$
US$
US$
150,087
104,227
78,865
250,767
10,221
123,812
200,642
170,824
75,453
1,164,898
-
-
-
-
-
-
-
-
-
-
-
-
-
1,673
-
-
-
2,091
4,013
80,325
80,325
-
(271,630)
40,163
-
25,146
37,590
(41,906)
7,777
(49,987)
1,122,688
Performance
based
remuneratio
n
%
-
-
-
-
-
-
-
-
-
Total
US$
230,412
184,552
78,865
(19,190)
50,384
123,812
225,788
210,505
37,560
* Other includes benefits such as car lease, fuel and etc paid to KMP.
1 Resigned on 6 April 2022.
2 Resigned on 11 August 2022
3 Resigned on 24 August 2022
4 Mr Guy Khavia appointed as CFO and Mr Tomer Segev resigned as CFO on 17 March 2022.
5 Share-based payment expense is recorded pro-rata over the vesting period. Refer to Section 6 Additional disclosures
relating to equity instruments for further information. For Mr Gideon Shmuel and Mr Tomer Segev amount include reversals
of previously recognised expenses which lapsed.
16
Dotz Nano Limited
Directors' report
31 December 2022
31 December 2021
Directors:
Bernie Brookes
Doron Eldar
Ian Pamensky
Gideon Shmuel1
James Cotton2
Garry Browne2
Kerry Harpaz3
Key management:
Michael Shtein
Tomer Segev
Short Term
Salary, Fees
&
Commissions
Post-
Employment
Superannuation
Other*
Share-based
payments4
US$
US$
US$
US$
162,266
112,685
18,030
240,819
17,206
27,867
19,532
203,286
199,852
-
-
-
6,438
-
-
-
312,996
312,996
153,189
388,755
-
-
-
-
19,399
244,347
177,654
-
-
-
-
-
-
-
-
-
-
Performan
ce based
remunerati
on
%
-
-
-
-
-
-
-
-
-
Total
US$
475,262
425,681
171,219
636,012
17,206
27,867
19,532
447,633
396,905
Total
1,001,543
25,837
1,589,937
2,617,317
* Other includes benefits such as car lease, fuel and etc paid to KMP.
1 Appointed as CEO and Executive Director on 2 September 2021. The total salary and other includes $135,211 and $3,886
relating to services prior to appointment as CEO and Executive Director of the Company.
2 Mr James Cotton resigned on 19 May 2021 and Mr Garry Browne was appointed on 19 May 2021.
3 Ms Kerry Harpaz appointed on 2 September 2021 as non-executive director.
4 Share-based payment expense is recorded pro-rata over the vesting period. Refer to Section 6 Additional disclosures
relating to equity instruments for further information.
6. Additional disclosures relating to key management personnel
KMP shareholdings
The number of ordinary shares in Dotz held by each KMP of the Group during the financial year is as follows:
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
No.
No.
No.
No.
No.
1,225,000
370,371
27,352,894
-
-
288,550
7,146,201
-
2,000,000
38,383,016
-
-
-
-
-
-
-
-
-
-
1,440,0003
1,440,0003
-
500,0002
705,0004
-
1,000,0002
-
1,000,0002
-
155,000
(450,204)
(500,000)
-
-
2,665,000
1,965,371
26,902,690
-
705,000
288,550
-
-
-
8,146,201
-
3,000,000
6,085,000
(795,204)
43,672,812
Directors:
Bernie Brookes
Doron Eldar
Kerry Harpaz
Gideon Shmuel1
Ian Pamensky1
Garry Browne1
Key Management:
Michael Shtein
Guy Khavia
Tomer Segev1
Total
1 Balance at date of resignation
2 Share issued at $nil exercise price
3 Shares issued at following exercise price: 440,000 each at A$0.07, 500,000 each at A$0.12 and 500,000 each at A$0.12
4 Shares issued at following exercise price: 205,000 at A$0.07, 250,000 at A$0.12 and 250,000 at A$0.12
17
Dotz Nano Limited
Directors' report
31 December 2022
Options awarded, vested and lapsed during the year
The table below discloses the number of share options granted, vested or lapsed during the year.
Share options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been
met, until their expiry date.
KMP Option holding
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
31 December 2022
Balance at
the start of
the year
Granted as
remuneration
Exercised
Other
changes
Balance at
the end of
the year
Vested and
exercisable
Unvested
and un-
exercisable
No.
No.
No.
No.
No.
No.
No.
Directors:
Bernie Brookes
Doron Eldar
Kerry Harpaz
Gideon Shmuel
Ian Pamensky2
Garry Browne2
Key Management:
Michael Shtein
Guy Khavia
Tomer Segev2
1,940,000
1,940,000
-
-
955,000
-
2,000,000
-
2,000,000
- (1,440,000)
- (1,440,000)
-
-
(500,000)
500,000
(705,000)
-
-
-
-
-
-
-
-
-
500,000
500,000
-
-
250,000
-
500,000
500,000
-
-
250,000
-
-
-
-
-
-
-
1,817,500
- (1,000,000)
-
- (1,000,000) (1,000,000)
- 1,000,000 1,000,000
- 1,817,500
-
-
1,817,500
-
-
8,835,000
2,317,500 (6,085,000) (1,000,000) 4,067,500 2,250,000 1,817,500
2 Balance at date of resignation.
The following options were granted and issued to KMP during the year ended 31 December 2022:
(1) The issue of 250,000 options with exercise price of A$Nil and expiry date of 31 May 2025 to the Former CEO Mr Gideon
Shmuel. The options were issued on 31 May 2022 and vest immediately. During the year ended 31 December 2022 a
total of $58,562 was recognised as an expense.
(2) The issue of 250,000 options with exercise price of A$Nil and expiry date of 30 September 2025 to the Former CEO Mr
Gideon Shmuel. The options were issue on 31 May 2022 and vest on 30 September 2022, the day Mr Shmuel ceases
employment with the Company. During the year ended 31 December 2022 a total of $58,562 vested and was recognised
as an expense.
(3) The issue of 687,500options (Tranche 1) under the Employee Share Option Plan with exercise price of AU$0.33 and
expiry date of 31 May 2027 to Mr Guy Khavia. The options were issued on 30 September 2022 and vest on 1 June
2023 provided that the employee of the Company at all times during the period from the date of issue and ending on
the vesting date. During the year ended 31 December 2022 a total of $25,387 was recognised as an expense.
(4) The issue of 565,000 options (Tranche 2) under the Employee Share Option Plan with exercise price of AU$0.40 and
expiry date of 31 May 2027 to Mr Guy Khavia. The options were issued on 30 September 2022 and vest on 1 June
2024 provided that the employee of the Company at all times during the period from the date of issue and ending on
the vesting date. During the year ended 31 December 2022 a total of $7,779 was recognised as an expense.
(5) The issue of 565,000 options (Tranche 3) under the Employee Share Option Plan with exercise price of AU$0.50 and
expiry date of 31 May 2027 to Mr Guy Khavia. The options were issued on 30 September 2022 and vest on 1 June
2025 provided that the employee of the Company at all times during the period from the date of issue and ending on
the vesting date. During the year ended 31 December 2022 a total of $4,425 was recognised as an expense.
18
Dotz Nano Limited
Directors' report
31 December 2022
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Grant Date
Expiry Date
31/05/2022
31/05/2022
30/09/2022
30/09/2022
30/09/2022
31/05/2025
30/09/2025
31/05/2027
31/05/2027
31/05/2027
Exercise
Spot Price
(AU$)
Price
(AU$)
Expected
Volatility
Risk Free
Rate
grant date
(AU$)
grant date
(US$)
Fair Value at
0.350
0.350
0.255
0.255
0.255
-
-
0.330
0.400
0.500
N/A
N/A
75%
75%
75%
-
-
3.86%
3.86%
3.86%
87,500
87,500
99,266
75,668
68,515
62,826
62,826
63,996
48,782
44,300
7. Loans to key management personnel (KMP) and their related parties
On 10 December 2021 Company entered into a Loan Agreement of up to A$300,000 (excluding interest) with Marzameno
Ltd (Marzameno), related to Director Kerry Harpaz. The purpose of the loan was for funding the payment of the exercise of
up to 1/3 of 10,000,000 Options (each with an exercise price of AU$0.09 and exercisable on or before 11 December
2021). The loan was unsecured, accrued interest at 6% per annum and was payable on 31 March 2022. The loan and the
accrued interest was repaid on 10 June 2022.
Balance at the start of year
Loan advanced
Interest paid and payable from Marzamemo for the year
Repayment received
Balance at the end of the year
Highest indebtedness during the year
2022
218,227
-
4,902
(223,129)
-
223,129
2021
-
218,227
394
-
218,227
218,227
On 28 December 2022 Company entered into a Loan Agreement of up to A$416,667 (excluding interest) with Southern Israel
Bridging Fund LP (SIBF), related to Director Doron Eldar. The purpose of the loan was for funding the payment of the exercise
of up to 4,629,630 Options each with an exercise price of AU$0.09. The loan is unsecured, accrues 6% interest per annum
and matures on 30 April 2023.
Balance at the start of year
Loan advanced
Interest paid and payable from SIBF for the year
Repayment received
Balance at the end of the year
Highest indebtedness during the year
2022
-
284,017
187
-
284,204
284,204
2021
-
-
-
-
-
-
No write-downs or allowances for doubtful receivables have been recognised in relation to this loan.
8. Other transactions and balances with KMP and their related parties
. The Group acquired the following services from entities that are controlled by members of the group’s key management
personnel.
Some Directors have held positions in other companies, where it is considered they control or significantly influence the
financial or operating policies of those entities. In the last financial year, the following entities provided company secretarial
and advisory services to the Group. Transactions between related parties are on normal commercial terms and conditions
no more favourable than those available to other parties unless otherwise stated.
19
Dotz Nano Limited
Directors' report
31 December 2022
Entity
Nature of
transactions
Key Management
Personnel
Total Transactions
Payable
Balance
Payable
Balance
2022
US$
2021
US$
2022
US$
2021
US$
CFO 2 Grow
Oxen 9 Ltd
Company
secretarial services
Advisory services
Ian Pamensky
Doron Eldar
50,029
67,183
54,089
72,377
4,090
-
4,624
-
9. Voting of shareholders at last year’s annual general meeting (AGM)
At the AGM held on 31 May 2022, 99.87% of the votes received supported the adoption of the remuneration report for the
year ended 31 December 2021. The company did not receive any specific feedback at the AGM regarding its remuneration
practices.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Bernie Brookes AM
Chairman
23 March 2023
20
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF DOTZ NANO
LIMITED
As lead auditor of Dotz Nano Limited for the year ended 31 December 2022, 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.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth
23 March 2023
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.
Dotz Nano Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
Revenue
Revenue from contracts with customers
Cost of sales
Gross profit
Expenses
Research and development expenses
General, administrative, selling and marketing expenses
Share based compensation
Finance costs
Loss before income tax expense
Income tax expense
Note
2022
US$
2021
US$
4
191,900
(139,593)
52,307
304,595
(122,190)
182,405
5
6
22
(1,266,705)
(3,683,816)
21,001
(496,133)
(1,519,442)
(3,357,675)
(3,131,433)
(109,795)
(5,373,346)
(7,935,940)
7
-
-
Loss after income tax expense for the year attributable to the owners of Dotz
Nano Limited
(5,373,346)
(7,935,940)
Other comprehensive income loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Other comprehensive income loss for the year, net of tax
Total comprehensive income loss for the year attributable to the owners of
Dotz Nano Limited
(68,515)
(231,713)
(68,515)
(231,713)
(5,441,861)
(8,167,653)
Cents
Cents
Basic loss per share
Diluted loss per share
10
10
(1.21)
(1.21)
(1.98)
(1.98)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
22
Dotz Nano Limited
Consolidated statement of financial position
As at 31 December 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Loans to related parties
Inventory
Other assets
Total current assets
Non-current assets
Plant and equipment
Right-of-use assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Financial liability
Derivative financial instrument
Total non-current liabilities
Total liabilities
Net (liabilities)/assets
Equity
Issued capital
Reserves
Accumulated losses
Total (deficiency)/equity
Note
2022
US$
2021
US$
11
13
16
14
15
17
15
15
18
19
3,048,878
34,321
284,017
7,543
747,598
4,122,357
4,137,046
78,589
218,227
47,743
73,013
4,554,618
189,296
264,613
453,909
235,380
540,741
776,121
4,576,266
5,330,739
1,202,875
276,560
38,013
1,517,448
575,941
321,930
88,606
986,477
-
2,612,463
690,940
3,303,403
281,791
-
-
281,791
4,820,851
1,268,268
(244,585)
4,062,471
20
21
33,718,491 32,864,049
6,489,479
(35,291,057)
6,701,327
(40,664,403)
(244,585)
4,062,471
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
23
Dotz Nano Limited
Consolidated statement of changes in equity
For the year ended 31 December 2022
Issued
Capital
Options
Reserve
Foreign
Currency
reserve
Accumulated
losses
US$
US$
US$
US$
Total in
equity
US$
Balance at 1 January 2021
28,971,254
3,312,190
277,569
(27,355,117)
5,205,896
Loss after income tax expense for the year
Other comprehensive income loss for the year,
net of tax
Total comprehensive income loss for the year
Transactions with owners in their capacity as
owners:
Issue of shares (note 20)
Exercise of options (note 20)
Share based payments (note 22)
-
-
-
-
-
-
-
(7,935,940)
(7,935,940)
(231,713)
-
(231,713)
(231,713)
(7,935,940)
(8,167,653)
591,268
3,301,527
-
-
-
3,131,433
-
-
-
-
-
-
591,268
3,301,527
3,131,433
Balance at 31 December 2021
32,864,049
6,443,623
45,856
(35,291,057)
4,062,471
Issued
Capital
Options
Reserve
Foreign
Currency
Reserve
Accumulated
losses
Total in
equity
US$
US$
US$
US$
US$
Balance at 1 January 2022
32,864,049
6,443,623
45,856
(35,291,057)
4,062,471
Loss after income tax expense for the year
Other comprehensive income loss for the year,
net of tax
Total comprehensive income loss for the year
Transactions with owners in their capacity as
owners:
Exercise of options (note 20)
Options issued to Lind (note 18)
Share-based payments (note 22)
-
-
-
-
-
-
-
(5,373,346)
(5,373,346)
(68,515)
-
(68,515)
(68,515)
(5,373,346)
(5,441,861)
854,442
-
-
301,363
(21,001)
-
-
-
-
854,442
301,363
(21,001)
Balance at 31 December 2022
33,718,491
6,723,986
(22,659)
(40,664,403)
(244,585)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
24
Dotz Nano Limited
Consolidated statement of cash flows
For the year ended 31 December 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Note
2022
US$
2021
US$
188,588
(5,015,945)
31,965
(14,142)
291,629
(4,348,322)
7,355
(108,346)
Net cash used in operating activities
12
(4,809,534)
(4,157,684)
Cash flows from investing activities
Payments for plant and equipment
Proceeds from disposal of investments
Loans to related parties
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from exercise of options
Proceeds from issue of funding arrangement
Proceeds from repayment of related party loan
Repayment of lease liabilities
Transaction costs relating to borrowings
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
20
20
18
13
(2,000)
15,000
(284,017)
(165,861)
29,274
-
(271,017)
(136,587)
-
854,441
3,386,115
218,227
(304,019)
(98,375)
591,268
3,088,234
-
-
(221,060)
-
4,056,389
3,458,442
(1,024,162)
4,137,046
(64,006)
(835,829)
5,259,087
(286,212)
Cash and cash equivalents at the end of the financial year
11
3,048,878
4,137,046
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
25
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 1. Reporting entity
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 23 March 2023.
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 2. Significant accounting policies
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.
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 2022 of US$5,373,346 (31 December 2021: US$7,935,940) and net cash outflows from
operating activities of US$4,809,534 ( 31 December 2021 : US$4,157,684). The ability of the Group to continue as a going
concern is dependent on successfully raising further debt and/or equity.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity's ability to continue as
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 are 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.
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.
●
●
●
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 interim 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.
26
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 2. Significant accounting policies
Adoption of new and amended accounting standards
The Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to
its operations and effective for annual reporting periods beginning on or after 1 January 2022. It has been determined by the
Group that there is no impact, material or otherwise, of the new and revised standards and interpretations on its business
and therefore no change is necessary to Group accounting policies. No retrospective change in accounting policy of material
reclassification has occurred during the year.
Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December
2022. 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
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 or 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.
Other income
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
27
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 2. Significant accounting policies (continued)
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.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
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 Group's
presentational 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.
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.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. There are no critical accounting judgements, estimates and assumptions
that are likely to affect the current or future financial years.
28
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Revenue from contract with customer
The Group applied the following judgements that significantly affect the determination of the amount and timing of revenue
from contracts with customers:
Identifying performance obligations
The Group provides marking units, being the marker technology implemented as a sticker or by embedding into a material;
to include an encrypted QR code and Carbon Dots based marker with detection capability all aimed for personal protective
equipment. The obligation is satisfied at a point in time which is the date of delivery of the product.
Determining amount to be recognised over time
Where contracts include multiple deliverables that are separate performance obligations, judgement is required in
determining the allocation of the transaction price to each performance obligation based on the stand-alone selling prices.
Where these are not directly observable, they are estimated based on expected cost-plus margin.
Share based payments
The Group initially measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of
the share option, volatility and dividend yield and making assumptions about them, as well as an assessment of the probability
of achieving non-market based vesting conditions.
The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 22
'Share-based payments'
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. As the Company currently does not expect to generate revenues from the
development under this grant the fair value of the liability at reporting date was determined to be nil. The Company will
continue from time to time to evaluate the probability of revenue generation from the development made under this grant.
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.
Financial liability
Included in Note 18 is a financial liability in relation to share subscription arrangements. There are significant estimates and
judgements involved in determining the fair value of the various components of the hybrid instrument.
Note 4. Revenue from contracts with customers
Revenue recognised at a point of time:
- Revenue from contract with customers
2022
US$
2021
US$
191,900
304,595
29
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 4. Revenue from contracts with customers (continued)
Accounting policy for revenue from contracts with customers
Revenue from contracts with customers
The Group provides anti-counterfeiting and brand-protection solution to various customers as agreed per terms agreed in
individual contracts.
The revenue associated with anti-counterfeiting and brand-protection solution is recognised in accordance with AASB 15,
that is in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the Group is expected to be entitled in exchange for those goods or services. Revenue from customer
contracts is recognised upon satisfaction of a performance obligation under those contracts either over time or a point in time
when control passes the customer under those contracts.
The Group has no material contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices
for the time value of money.
Contract assets and liabilities
AASB 15 uses the terms "contract asset" and "contract liability" to describe what is commonly known as "accrued revenue"
and "deferred revenue." Deferred revenue arises where payment is received prior to work being performed and is allocated
to the performance obligations within the contract and recognised on satisfaction of the performance obligation.
Contract fulfilment costs
Costs generally incurred prior to the commencement of a contract may arise due to setup costs as these costs are incurred
to fulfil a contract. Where the costs are expected to be recovered, they are capitalised and expensed over the period of
revenue recognition. Where the costs, or a portion of these costs, are reimbursed by the customer, the amount received is
recognised as deferred revenue.
In the year ended 31 December 2022, the group incurred costs of $686,142 in respect of existing contracts. The costs relate
directly to the contract, generate resources that will be used in satisfying the contract and are expected to be recovered.
They were therefore recognised as an asset from costs to fulfil a contract. The asset is amortised on a straight line basis
over the term of the specific contract it relates to, consistent with the pattern of recognition of the associated revenue.
Note 5. Research and development expenses
Wages and benefits
Consulting fees
Lab expenses
Other R&D expenses
Fair value change in grant liability
Total
2022
US$
2021
US$
728,462
335,662
129,918
7,825
64,838
561,389
597,344
167,394
53,111
140,204
1,266,705
1,519,442
Accounting policy research and development expenses
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.
30
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 6. General, administrative, selling and marketing expenses
Wages and benefits
Consulting fees
Sales and marketing expenses
Director fees
Other expenses
Total
2022
US$
2021
US$
960,598
305,891
919,916
467,213
1,030,198
683,436
529,541
475,699
357,131
1,311,868
3,683,816
3,357,675
Accounting policy for operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
Note 7. Income tax
The financial accounts for the year ended 31 December 2022 comprise the results of Dotz Nano Limited ("Dotz Australia")
and Dotz Nano Ltd ("Dotz Israel"). The legal parent is incorporated and domiciled in Australia where the applicable tax rate
is 25% (2021: 27.5%). The applicable tax rate in Israel is 23% (2021: 23%).
(a) Income tax expense
Current tax
Deferred tax
(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 expense/(benefit) on operating loss at 25% (2021: 27.5%)
Non-deductible items
Non-deductible expenditure
Adjustment for difference in tax rates
Temporary differences not recognised
Income tax attributable to operating income/(loss)
Deferred tax assets
Tax losses
Black hole expenditure
Unrecognised deferred tax asset
Set-off deferred tax liabilities
Less deferred tax assets not recognised
Net assets
Deferred tax liabilities
Set-off deferred tax assets
Net deferred tax liabilities
2022
US$
2021
US$
-
-
-
-
-
-
-
-
(1,343,336)
-
118,984
(55,175)
1,279,527
-
(2,182,384)
-
918,374
93,867
1,170,143
-
-
1,300,477
36,496
1,336,973
-
1,056,420
70,391
1,126,811
-
-
(1,336,973)
(1,126,811)
-
-
-
-
-
-
-
-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
-
6,841,599
-
6,126,939
31
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 7. Income tax (continued)
Carry forward losses
Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 31
December 2022, because the Directors do not believe it is appropriate to regard realisation of the future income tax benefits
as probable.
Accounting policy for 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.
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.
Note 8. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in note 28.
a) Key management personnel compensation
Details of key management personnel compensation are disclosed in audited remuneration reports and the totals of
remuneration paid to KMP during the year are summarised below:
32
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 8. Related party transactions (continued)
Short-term salary, fees and commissions
Other
Share based payments (Refer Note 22)
Total KMP Compensation
2022
US$
2021
US$
1,164,898
7,777
380,674
1,001,543
25,837
1,589,937
1,553,349
2,617,317
b) Other related party transactions
Details of other related party transactions is provided in remuneration report and summarised below:
Entity
Nature of
transactions
Key Management
Personnel
2022
US$
2021
US$
2022
US$
2021
US$
Total
Transactions
Total
Transactions
Payable
Balance
Payable
Balance
CFO 2 Grow
Oxen 9 Ltd
Company
secretarial services
Advisory services
Ian Pamensky
Doron Eldar
50,029
67,183
54,089
72,377
4,090
-
4,624
-
c) Loans to related parties
As disclosed in note 13, the Company provided loans to entities related to directors Kerry Harpaz and Doron Eldar.
Note 9. 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 10. Loss per share
2022
US$
2021
US$
34,187
48,125
82,312
33,833
37,350
71,183
2,432
282
2,714
3,005
6,609
9,614
2022
US$
2021
US$
Loss after income tax attributable to the owners of Dotz Nano Limited
(5,373,346)
(7,935,940)
Weighted average number of ordinary shares used in calculating basic loss per share
443,711,096 400,324,106
Weighted average number of ordinary shares used in calculating diluted loss per share
443,711,096 400,324,106
Number
Number
Basic loss per share
Diluted loss per share
33
Cents
Cents
(1.21)
(1.21)
(1.98)
(1.98)
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 10. Loss per share (continued)
Accounting policy for loss per share
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to the owners of Dotz Nano Limited, 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 financial year.
Diluted loss per share
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 shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Note 11. Cash and cash equivalents
Cash at bank
2022
US$
2021
US$
3,048,878
4,137,046
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Note 12. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation
Share-based payments (benefit)/expense
Foreign exchange
Amortisation of right of use asset
Finance expense
Change in operating assets and liabilities:
Decrease in trade and other receivables
Increase in prepayments
Increase in trade and other payables
Increase/(decrease) in other provisions
Increase in unearned revenue
Net cash used in operating activities
2022
US$
2021
US$
(5,373,346)
(7,935,940)
82,359
(21,001)
35,967
276,128
424,779
74,007
3,131,433
35,143
283,235
-
59,267
(674,585)
391,290
40,200
(50,592)
140,163
(44,653)
142,275
(33,269)
49,922
(4,809,534)
(4,157,684)
Non-cash investing and financing activities
During the year ended 31 December 2022 and 31 December 2021, there were no non-cash investing and financing activities.
Other
For risk exposure refer to Note 24.
34
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 13. Loans to related parties
Current assets
Loan to related party
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous
financial year are set out below:
Opening balance
Loan advanced to Southern Israel Bridging Fund LP
Interest paid and payable to Marzameno for the year
Repayment received
Closing balance
2022
US$
2021
US$
284,017
218,227
218,227
284,017
4,902
(223,129)
-
217,834
393
-
284,017
218,227
On 10 December 2021 Company entered into a Loan Agreement of up to A$300,000 (US$218,227) (excluding interest) with
Marzameno Ltd (Marzameno), related to Director Kerry Harpaz. The purpose of the loan was for funding the payment of the
exercise of up to 1/3 of 10,000,000 Options (each with an exercise price of $0.09 and exercisable on or before 11 December
2021). The loan was unsecured, accrued interest at 6% per annum and was payable on 31 March 2022. The loan and the
accrued interest were repaid on 10 June 2022.
On 28 December 2022 Company entered into a Loan Agreement of up to A$416,667 (US$284,017) (excluding interest) with
Southern Israel Bridging Fund LP (SIBF), related to Director Doron Eldar. The purpose of the loan was for funding the
payment of the exercise of up to 4,629,630 Options each with an exercise price of $0.09. The loan is unsecured, accrues
6% interest per annum and matures on 30 April 2023.
Accounting policy for loans to related parties
Loans at amortised cost
A financial asset is classified at amortised cost if the objective of the business model is to hold the financial asset for the
collection of the contractual cash flows and the contractual cash flows under the instrument represent solely payments of
principal and interest (SPPI) on the principal outstanding.
At each reporting date, the Group measures the loss allowance on loans at an amount equal to the lifetime expected credit
losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not
increased significantly since initial recognition, the Group shall measure the loss allowance at an amount equal to 12-month
expected credit losses. Significant financial difficulties of the counterparty, probability that the counterparty will enter
bankruptcy or financial reorganisation, and default in payments are all considered indicators that a loss allowance may be
required. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated
based on the gross carrying amount adjusted for the loss allowance.
Note 14. Plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
2022
US$
2021
US$
622,372
(433,076)
586,097
(350,717)
189,296
235,380
35
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 14. Plant and equipment (continued)
Opening balance at reporting date
Additions
Disposal
Depreciation
Balance at the end of the year
235,380
36,275
-
(82,359)
214,958
167,991
(73,563)
(74,006)
189,296
235,380
Accounting policy for property, 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 property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
3-10 years
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Note 15. Right-of-use assets
i. AASB 16 related amounts recognised in the statement of financial position
Motor vehicles - right-of-use
Office space - right-of-use
Net carrying amount
2022
US$
2021
US$
-
264,613
11,513
529,228
264,613
540,741
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.
ii. Lease liabilities included in the statement of financial position
Current
Non-current
Total lease liabilities
iii. AASB 16 related amounts recognised in the statement of profit and loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
276,560
-
321,930
281,791
276,560
603,721
276,128
44,254
283,235
68,189
320,382
351,424
36
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 15. Right-of-use assets (continued)
iv. AASB 16 related amounts recognised in the statement of cash flows
Cash outflows in financing activities
Cash outflows in operating activities
304,019
14,142
221,059
97,241
318,161
318,300
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
($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.
Accounting policy for 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.
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
· 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 asset
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
Right-of-use assets that meet the definition of investment property are measured at fair value where the consolidated entity
has adopted a fair value measurement basis for investment property assets.
37
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 15. Right-of-use assets (continued)
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Note 16. Other assets
Current assets
Costs to fulfill contract (note 4)
Prepayments
Note 17. Trade and other payables
Current liabilities
Trade payables
Accruals
2022
US$
2021
US$
686,142
61,456
747,598
-
73,013
73,013
2022
US$
2021
US$
651,429
551,446
192,365
383,576
1,202,875
575,941
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
All amounts are short-term. The carrying values are considered to approximate fair value. For risk exposure refer to Note 24.
Note 18. Financial liability
Non-current liabilities
Financial liability at amortised cost
2022
US$
2021
US$
2,612,463
-
On 15 September 2022, Dotz Nano Limited ("Company") entered into an agreement with Lind Global Fund II, LP, a fund
managed by The Lind Partners ("Lind"), for an investment of A$5,150,000 (US$3,386,115) ("Funding Agreement"). The
Funding Facility provided by Lind a hybrid instrument which includes a combination of ‘debt’ financial liability that represents
the contractual cashflows and a derivative financial liability that represents the conversion feature. The conversion feature is
an embedded derivative liability which is required to be recognised at fair value through profit or loss (Refer to note 19)
38
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 18. Financial liability (continued)
A reconciliation of the funding arrangement:
Proceeds received
Financial liability
Embedded derivative liability
Option issued (a)
Financial liability at inception
Less: transaction costs
Finance cost (accretion of debt)
Foreign exchange impact
Financial liability at 31 December 2022
Embedded derivative liability at inception
Net gain/ loss on ED
Embedded derivative liability at 31 December 2022
US$
3,386,115
2,536,877
547,875
301,363
2,536,877
(223,634)
197,490
101,730
2,612,463
547,875
143,065
690,940
(a) The issue of 7,118,644 options with exercise price of A$0.475 and expiry date of 14 September 2026 to Lind Partners.
39
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 18. Financial liability (continued)
The key terms of the Funding Agreement are detailed below:
● On 23 September 2022, the Company received $3,386,115 (AU$5,150,000) (“Advance Payment”) in return for the Options
and a credit amount worth $3,714,864 (AU$5,650,000) (“Advance Payment Credit”), which may be used to subscribe to
shares during the term.
● On Advance Payment date, the Company paid a fee of $98,625 (AU$150,000) (“Commitment Fee”) to Lind and issued
5,500,000 ordinary fully paid shares (“Initial Shares”).
● On 23 September 2022, the Company also issued to Lind 7,118,644 options, with an exercise price of AU$0.475 per share,
expiring 48 months after the date of issue. The options were issued on 23 September 2022.
● The Placement Shares may be issued at two different prices, being:
· AU$0.45 per share (“Fixed Subscription Price”); or
· 90% of the average of the five lowest daily VWAPs during the 20 days the Company's shares trade on the ASX prior to
the date on which the price is to be determined, rounded down to the lowest 0.01 (“Variable Subscription Price”).
● Lind can subscribe for Placement Shares during the term at:
· Until 28 February 2023, the Fixed Subscription Price;
· From 1 March 2023 until 31 August 2023, the Fixed Subscription Price or the Variable Subscription Price, however
Lind may only subscribe for shares at the Variable Subscription Price up to a maximum amount of $197,249 (AU$300,000)
during this period; and
· From 1 September 2023 until 31 August 2024; the lesser of the Fixed Subscription Price and the Variable Subscription
Price.
● Unused Advance Payment Credit (initially $3,714,864 (AU$5,650,000)) will be depleted by the value of shares subscribed
for by Lind during the term.
● The term is 24 months after the Advance Payment Date, subject to Lind's right to extend for 6 months.
● Following a subscription request by Lind, the Company has the right to pay an amount to Lind instead of issuing shares,
with this amount being the number of shares applied for multiplied by the daily VWAP on the trading day immediately prior
to the subscription request.
● The Company may elect to repay the entire Unused Advance Payment Credit at any time by providing notice to Lind. If the
Company does so, Lind has the right to apply to subscribe to shares to the aggregate value of one-third of the Unused
Advanced Payment Credit, at either the Fixed Subscription Price or the Variable Subscription Price.
● If any amount of the Advance Payment Credit is unused at the end of the Term, the Company will issue shares to Lind to
the extent that no amount of the Advance Payment Credit remains unused.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current
liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting
period.
The component of the financial liability that exhibits characteristics of a liability is recognised as a liability in the statement of
financial position, net of transaction costs.
40
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 18. Financial liability (continued)
The funding arrangement is a hybrid financial instrument which includes a combination of debt financial liability, a derivative
financial liability that represents the conversion feature to convert the debt instrument into a variable number of equity
instruments and a derivative equity component representing the options issued.
On initial recognition, the embedded derivatives are recognised at fair value and the debt host liability is initially recognised
based on the residual value from deducting the fair value of the embedded derivatives from the amount of consideration
received from issuing the instruments.
The debt component is subsequently recognised as a financial liability at amortised cost, net of transaction costs. The
difference between the fair value of the debt component on initial recognition and the redemption amount, is recognised in
profit or loss over the period of the instrument using the effective interest method.
The derivative liability is subsequently measured at fair value through profit or loss, with all gains or losses in relation to the
movement of fair value being recognised in the profit or loss.
Transaction costs are apportioned to the debt liability, the embedded derivative and equity component in proportion to the
allocation proceeds. The transaction costs attributed to the conversion feature are expensed immediately and the transaction
costs attributed to the debt and equity components are offset against these components.
Financial liabilities are removed when the obligation specified in the contract is discharged, cancelled or expired. The
difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is
recognised in profit or loss as other income or finance costs.
Note 19. Derivative financial instrument
Embedded derivative - financial liability at fair value through P&L
2022
US$
690,940
2021
US$
-
Refer to note 18 for further information.
Note 20. Issued capital
(a) Share Capital
Ordinary shares - fully paid
Capital raising costs
(b) Reconciliation of Share Capital
Opening balance at 1 January 2021
Shares issued on exercise of options
Shares issued under the Placement
Closing balance at 31 December 2021
Shares issued on exercise of options
Shares issued to Lind Partners
Closing balance at 31 December 2022
2022
Shares
2021
Shares
2022
US$
2021
US$
458,878,964 434,184,704 33,718,490 33,664,693
(800,644)
-
-
-
458,878,964 434,184,704 33,718,490 32,864,049
376,382,378 28,971,254
3,301,527
54,602,326
591,268
3,200,000
434,184,704 32,864,049
19,194,260
5,500,000
854,441
-
458,878,964 33,718,490
41
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 20. 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
The were no performance shares on issue as at 31 December 2022 (31 December 2021: Nil).
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 21. Reserves
(a) Reserves
Foreign currency reserve
Options reserve
(b) Options reserve
Opening balance at 1 January 2021
Options issued
Options exercised
Options cancelled
Vesting of options from prior periods
Closing balance at 31 December 2021
Opening balance at 1 January 2022
Options issued
Options exercised
Options cancelled
Reversal of exercise related to options
Closing balance at 31 December 2022
(c) Foreign currency translation reserve
Opening balance
Difference arising on translation
Balance at the end of the year
42
2022
US$
2021
US$
(22,658)
6,723,986
45,856
6,443,623
6,701,328
6,489,479
No.
US$
82,547,879
14,535,000
(54,602,326)
(6,086,293)
-
3,312,190
2,054,958
-
-
1,076,475
36,394,260
6,443,623
36,394,260
13,931,144
(19,194,260)
(3,000,000)
-
6,443,623
531,537
-
(159,960)
(91,214)
28,131,144
6,723,986
US$
US$
45,856
(68,514)
277,569
(231,713)
(22,658)
45,856
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 21. Reserves (continued)
Accounting policy for reserves
Foreign currency reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled
subsidiary.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Note 22. Share-based payments
The following new share-based payment arrangements existed at 31 December 2022:
(a) The issue of 250,000 options with exercise price of A$Nil and expiry date of 31 May 2025 to the Former CEO Mr Gideon
Shmuel. The options were issued on 31 May 2022 and vest immediately. During the year ended 31 December 2022 a
total of $58,562 was recognised as an expense.
(b) The issue of 250,000 options with exercise price of A$Nil and expiry date of 30 September 2025 to the Former CEO Mr
Gideon Shmuel. The options were issue on 31 May 2022 and vest on 30 September 2022, the day Mr Shmuel ceases
employment with the Company. During the year ended 31 December 2022 a total, being $58,562 vested and was
recognised as an expense.
(c) The issue of 2,162,500 options (Tranche 1) under the Employee Share Option Plan with exercise price of AU$0.33 and
expiry date of 31 May 2027. The options were issued on 30 September 2022 and vest on 1 June 2023 provided that
the employee of the Company at all times during the period from the date of issue and ending on the vesting date.
During the year ended 31 December 2022 a total of $79,853 was recognised as an expense.
(d) The issue of 1,700,000 options (Tranche 2) under the Employee Share Option Plan with exercise price of AU$0.40 and
expiry date of 31 May 2027. The options were issued on 30 September 2022 and vest on 1 June 2024 provided that
the employee of the Company at all times during the period from the date of issue and ending on the vesting date.
During the year ended 31 December 2022 a total of $23,404 was recognised as an expense.
(e) The issue of 1,700,000 options (Tranche 3) under the Employee Share Option Plan with exercise price of AU$0.50 and
expiry date of 31 May 2027. The options were issued on 30 September 2022 and vest on 1 June 2025 provided that
the employee of the Company at all times during the period from the date of issue and ending on the vesting date.
During the year ended 31 December 2022 a total of $13,314 was recognised as an expense.
For the year ending 31 December 2022 a share-based payment expense of (US$21,001) (2021: US$3,131,433) was
recognised in profit and loss in line with option vesting periods and after reversal of prior year expense relating to options not
vested due to vesting conditions not being satisfied.
Share based compensation comprises of the following:
Vested options relating to prior reporting period
Reversal of options not vested
Issue of options on 19 March 2021
Issue of options on 3 May 2021
Issue of options under Employees Share Option Plan, 29 July 2021
Issue of options on 17 July 2021
Issue of options on 6 August 2021
Issue of options on 6 August 2021
Vesting of CEO options (Tranche 1 - 4)
Issue of options to former CEO, 31 May 2022
Issue of options under Employee Share Option Plan, 30 September 2022
Total
2022
US$
2021
US$
260,706
(515,403)
-
-
-
-
-
-
-
117,125
116,571
712,324
-
34,989
368,072
779,182
38,617
561,471
248,023
388,755
-
-
(21,001)
3,131,433
43
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 22. Share-based payments (continued)
Set out below are summaries of options granted under the plan:
Outstanding at the beginning of the financial year
Granted
Forfeited
Exercised
Expired
Number of
options
2022
13,735,000
5,562,500
(3,800,000)
(8,685,000)
-
Average
exercise price
2022
Number of
options
2021
Average
exercise price
2021
A$0.94 17,950,000
5,035,000
A$0.41
(5,400,000)
A$0.00
(3,850,000)
A$0.04
-
A$0.00
A$0.07
A$0.11
A$0.07
A$0.00
A$0.00
Outstanding at the end of the financial year
6,812,500
A$0.36 13,735,000
A$0.09
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry Date
Spot price
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
rate
Fair value
at grant
date (AU$)
Fair value
at grant
date (US$)
31/05/2022 31/05/2025 AU$0.350
31/05/2022 30/09/2025 AU$0.350
30/09/2022 31/05/2027 AU$0.255
30/09/2022 31/05/2027 AU$0.255
30/09/2022 31/05/2027 AU$0.255
AU$Nil
AU$Nil
AU$0.330
AU$0.400
AU$0.500
N/A
N/A
75%
75%
75%
N/A
N/A
Nil%
Nil%
Nil%
N/A
N/A
3.86%
3.86%
3.86%
AU$87,500 US$62,826
AU$87,500 US$62,826
AU$312,238 US$201,297
AU$227,673 US$146,779
AU$206,752 US$133,291
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The 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.
Note 23. Operating segments
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.
Note 24. 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.
44
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 24. Financial instruments (continued)
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:
Floating
Interest Ra
te
US$
Fixed
Interest
Rate (6%)
US$
Non-
interest
bearing
US$
Floating
Interest Ra
te
US$
Fixed
Interest
Rate (6%)
US$
Non-
interest
bearing
US$
2022 Total
US$
2021 Total
US$
Financial assets
- Within one year
Cash and cash
equivalents
Trade and Other
receivables
Total financial
assets
Financial
Liabilities
- Within one year
Trade and other
Payables
Lease liabilities
Financial liability
Total financial
liabilities
Net financial
assets
3,048,877
-
-
3,048,878
4,137,046
-
-
4,137,046
-
284,017
34,322
318,339
-
218,277
8,481
226,758
3,048,877
284,017
34,322
3,367,217
4,137,046
218,277
8,481
4,363,804
-
-
-
(1,205,536)
(276,560)
(1,205,536)
-
-
(276,560)
(2,612,463) (2,612,463)
-
(4,094,559)
(4,094,559)
-
-
-
-
-
(351,406)
(603,721)
(351,406)
(603,721)
-
(955,127)
(955,127)
3,048,877
284,017
(4,060,237)
(727,342)
4,137,046
218,277
(946,646)
3,408,677
Weighted average interest rate 31 December 2022 16.07% and 31 December 2021 0.19%
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.
45
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 24. Financial instruments (continued)
Year ended 31 December 2022
+/-1% in interest rates
Year ended 31 December 2021
+/-1% in interest rates
Movement
in Profit
US$
Movement
in Equity
US$
26,125
26,125
46,981
46,981
(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.
Cash and cash equivalents - AA Rated
Related party loans – BBB Rated
2022
US$
2021
US$
3,048,878
284,017
4,137,046
218,227
(c) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
The 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.
46
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 24. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest
rate
%
2022
Less than
6 months
US$
6-12
months
US$
1-2 years
US$
2-5 years
US$
Over 5
years
US$
Total
contractual
cash flows
US$
Carrying
amount
(liabilities)
US$
Financial liabilities
at amortised cost
Trade and other
payables
Lease liabilities
- Office lease
- Car lease
Interest-bearing -
fixed rate
Total non-
derivatives
Derivatives
Embedded
derivatives
Total derivatives
-
-
-
-
-
-
-
(2,612,463)
(1,205,536)
-
(138,280)
-
(138,280)
-
-
-
-
(1,343,816)
(138,280)
(2,612,463)
-
-
-
-
(690,940)
(690,940)
-
-
-
-
-
-
-
-
-
(2,612,463)
-
(1,205,536)
(1,205,536)
-
-
(276,560)
-
(276,560)
-
-
(1,482,096)
(4,094,559)
-
-
-
-
(690,940)
(690,940)
Weighted
average
interest
rate
%
2021
Less than
6 months
US$
6-12
months
US$
1-2 years
US$
2-5 years
US$
Over 5
years
US$
Total
contractual
cash flows
US$
Carrying
amount
(liabilities)
US$
Financial liabilities
at amortised cost
Trade and other
payables
Lease liabilities
- Office lease
- Car lease
Total non-
derivatives
-
-
-
(351,406)
-
-
(163,023)
(6,985)
(163,023)
(2,328)
(326,045)
-
(521,414)
(165,351)
(326,045)
-
-
-
-
-
(351,406)
(351,406)
-
-
(652,091)
(9,313)
(652,091)
(9,313)
-
(1,012,810)
(1,012,810)
(d) 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 New Israeli Shekel, the Swiss Franc and Euro.
The Company’s policy is not to enter into any currency hedging transactions.
47
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 24. Financial instruments (continued)
Cash and cash equivalents
New Israeli Shekels
Swiss Franc
Euro
Note 25. Fair value measurement
2022
2021
Foreign
Currency
USD
Equivalent
Foreign
Currency
USD
Equivalent
589,544
26,197
1,696
167,532
28,402
1,808
493,730
26,197
-
158,756
28,678
-
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
2022
Liabilities
Embedded derivatives
Total liabilities
Level 1
US$
Level 2
US$
Level 3
US$
Total
US$
-
-
690,940
690,940
-
-
690,940
690,940
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Unquoted investments have been valued using a discounted cash flow model.
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the use
of observable market data where it is available and relies as little as possible on entity specific estimates.
Accounting policy for fair value measurement
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
48
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 26. Contingent liabilities
The Company has a contingent liability related to the grant received from BIRD. As stated under Note 2 the company currently
does not expect to generate revenues from the development made under this grant. As the liability is contingent on
royalty payments on developed products, should this assumption change the Company will be required to pay royalties to
BIRD (2021: Nil).
There were no other continent liabilities for the year ended 31 December 2022 and 31 December 2021.
Note 27. Parent entity information
Assets
Current assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Accumulated losses
Shareholders equity
2022
US$
2021
US$
2,925,616
3,206,430
97,508
3,303,403
3,400,911
99,437
-
99,437
6,553,605
348,999,688 348,145,246
6,341,760
(356,028,588) (351,380,013)
3,106,993
(475,295)
(b) Statement of profit or loss and other comprehensive income
Loss for the year
Total comprehensive loss
(4,648,576)
(8,334,468)
(4,648,576)
(8,334,468)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2022 and 31 December
2021.
Contingent liabilities
The Company’s subsidiary Dotz Nano Ltd has a contingent liability related to the grant received from BIRD. As stated under
Note 2 the company currently does not expect to generate revenues from the development made under this grant. As the
liability is contingent on royalty payments on developed products, should this assumption change the Company will be
required to pay royalties to BIRD.
Capital commitments
The parent entity had no capital commitments as at 31 December 2022 and 31 December 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except
for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
49
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2022
Note 28. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance
with the accounting policy described in note 2:
Name
Dotz Nano Ltd
Note 29. Events after the reporting period
Principal place of business /
Country of incorporation
Ownership interest
2021
2022
%
%
Israel
100%
100%
On 1 March 2023, the Company announced the appointment of Ms Liat Bar Ziv Alperovitz as the new Chief Financial Officer,
following the departure of Mr Guy Khavia.
On 23 March 2023, the Company announced the appointment of Mr Sharon Malka as the new Chief Executive Office,
following the resignation of Mr Gideon Shmuel and an extended search.
No other matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future
financial years.
50
Dotz Nano Limited
Directors' declaration
31 December 2022
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
31 December 2022 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Bernie Brookes AM
Chairman
23 March 2023
51
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9 Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
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 2022, 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 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 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 Financial Liability
Key audit matter
How the matter was addressed in our audit
During the year, Dotz Nano Limited ("Company")
entered into a Share Subscription Agreement with
Lind Global Fund II, refer Note 3 and 18 for further
details.
The Funding Facility provided by Lind is a hybrid
instrument which includes a combination of a debt
financial liability that represents the contractual
cashflows and a derivative financial liability that
represents the conversion feature. The conversion
feature is an embedded derivative liability which
is required to be recognised at fair value through
profit or loss.
We have identified the accounting and valuation
of the financial liability as a key audit matter due
to the complexity and judgements involved in
determining the conversion features which can
have a significant effect on the classification of
the components of this instrument together with
complexities as to the initial and subsequent
measurement of the identified components.
Our audit procedures regarding this matter
included, but were not limited to:
• Reviewing the Share Subscription
Agreement to understand the key terms
and conditions of the arrangement;
• Assessing whether management’s
assessment of the classification of the
components contained within the
funding agreement was in accordance
with the accounting standards;
• Reviewing management’s independent
expert’s valuation of the instrument,
including assessing the valuation
methodology used. This included
consulting with our internal valuation
specialist on the appropriateness of the
valuation and valuation methodology
applied;
• Assessing the qualifications, competence
and objectivity of management’s
external expert;
• Reviewing management’s accounting
treatment adopted for the financial
liability; and
• Assessing the adequacy of the related
disclosures within Note 3 and 18 of 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 2022, 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 (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 20 of the directors’ report for the
year ended 31 December 2022.
In our opinion, the Remuneration Report of Dotz Nano Limited, for the year ended 31 December 2022,
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
Ashleigh Woodley
Director
Perth, 23 March 2023
ADDITIONAL ASX INFORMATION
The shareholder information set out below was applicable as at 15 March 2023.
As at 15 March 2023 there were 837 holders of Ordinary Fully Paid Shares.
CORPORATE GOVERNANCE
The Company’s Corporate Governance Statement has been released as a separate document and is also located on our website at
https://www.dotz.tech/investors/
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
(a)
(b)
at meetings of members each member entitled to vote may vote in person or by proxy or attorney; 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 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
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MARZAMENO LTD
IBI TRUST MANAGEMENT
AVOCADO VENTURES INC
IBI TRUST MANAGEMENT
SOUTHERN ISRAEL BRIDGING FUND LP
ROMFAL SIFAT PTY LTD
LIND GLOBAL FUND II LP
DR ZVI GRAUBARD
BNP PARIBAS NOMINEES PTY LTD
MR NATANEL HARPAZ
MR GAREN AZOYAN SUTISY & MRS ARMINEH MOSES
MINASKANIANS
IBI TRUST MANAGEMENT
IBI TRUST MANAGEMENT
HORSELAND SADDLERY PTY LTD
MR BRUNO NOSEK
BROOKES FAMILY INVESTMENTS PTY LIMITED < BROOKES
INVESTMENT A/C>
GO RND PTY LTD
Total
Total issued capital - selected security class(es)
Holding
123,922,205
90,074,287
82,621,084
20,689,882
11,746,611
10,270,548
8,146,201
7,114,816
5,668,133
5,402,154
5,002,261
4,781,504
3,712,708
3,163,158
3,000,000
2,993,461
2,500,000
2,100,000
2,040,000
1,985,371
396,934,384
461,378,964
% IC
26.86%
19.52%
17.91%
4.48%
2.55%
2.23%
1.77%
1.54%
1.23%
1.17%
1.08%
1.04%
0.80%
0.69%
0.65%
0.65%
0.54%
0.46%
0.44%
0.43%
86.03%
100.00%
SUBSTANTIAL HOLDERS
The names of the substantial shareholders disclosed to the Company as substantial shareholders as at 15 March 2023 are:
Name
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
No of Shares Held % of Issued Capital
123,922,205
90,074,287
82,621,084
26.86%
19.52%
17.91%
56
ADDITIONAL ASX INFORMATION
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
Holders
162
193
133
230
122
840
Total Units
10,063
561,933
1,088,859
8,667,991
451,050,118
461,378,964
% Issued Share
Capital
0.00%
0.12%
0.24%
1.88%
97.76%
100.00%
Based on the price per security, number of holders with an unmarketable holding: 225, with total 110,659, amounting to 0.02% of Issued Capital
(based on share price of $0.225)
RESTRICTED SECURITIES
As at 15 March 2023 the following shares are subject to escrow:
•
4,629,630 - DTZESC2 – Voluntary ESCROW SHARES - TO 30 April 2023
UNQUOTED SECURITIES
As at 15 March 2023, the following unquoted securities are on issue:
DTZAQ - 5,000,000 Options Expiring 19/10/23 @ $0.37.5 – 1 Holders (DTZOPT30)
Holders with more than 20%
Holder Name
KETOM PTY LTD
Holding
5,000,000
% IC
100%
DTZAS - 2,450,000 Options ESOP T3 VEST 31/12/21 EXP 31/12/23 – 06 Holders (DTZESOPT8)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
IBI TRUST MANAGEMENT
< MICHAEL SHTEIN A/C>
< YONIT BOGUSLAVSKY A/C>
Holding
1,000,000
500,000
% IC
40.8%
20.4%
DTZAAF - 250,000 Options Expiring 10/07/24 @ $0.20 – 1 Holders (DTZOPT34)
Holders with more than 20%
Holder Name
NUBS GROUP TECHNOLOGIES LTD
DTZAAB - 1,250,000 Options Expiring 31/12/2023 @ $0.20 – 3 Holders (DTZESOPT12)
Holders with more than 20%
Holder Name
BROOKES FAMILY INVESTMENTS
GO RND PTY LTD
LORIAN PTY LTD
PTY LIMITED
DTZAAG - 4,000,000 Options Expiring 25/11/23 @ $0.252 – 2 Holders (DTZOPT35)
Holders with more than 20%
Holder Name
HILHAR PTY LTD
TT MEDICAL UAE
DTZAAH - 1,500,000 Options Expiring 04/08/23 @ $0.23 – 1 Holders (DTZOPT36)
Holders with more than 20%
Holder Name
V2 TECH DISTRIBUTORS PTY LTD
DTZAAL - 7,118,644 Options Expiring 14/09/26 @ $0.475 – 1 Holders (DTZOPT37)
Holders with more than 20%
Holding
250,000
% IC
100%
Holding
500,000
500,000
250,000
% IC
40.00%
40.00%
20.00%
Holding
2,000,000
2,000,000
% IC
50.00%
50.00%
Holding
1,500,000
% IC
100%
Holder Name
LIND GLOBAL FUND II LP
Holding
7,118,644
% IC
100%
57
ADDITIONAL ASX INFORMATION
DTZAAM - 2,162,500 Options Expiring 31/05/2027 @ $0.33 – Vest 1 June 2023 – 10 Holders (DTZUQSOPT1 - DTZ ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
687,500
% IC
31.8%
DTZAAN – 565,000 Options Expiring 31/05/2027@ $0.40 – Vest 1 June 2024 – 8 Holders (DTZUQSOPT2 - DTZ - ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
IBI TRUST MANAGEMENT
LIND GLOBAL FUND II LP
Holding
365,000
365,000
565,000
% IC
21.5%
21.5%
33.2%
DTZAAO - 1,700,000 Options Expiring 31/05/2027 @ $0.50 – Vest 1 June 2025 – 8 Holders (DTZOPT38 - ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
IBI TRUST MANAGEMENT
LIND GLOBAL FUND II LP
Holding
365,000
365,000
565,000
% IC
21.5%
21.5%
33.2%
DTZAAP – 565,000 Options Expiring 01/03/2027 @ $0.33 – Vest 1 March 2024 – 1 Holders (DTZUQSOPT1 - DTZ ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
565,000
% IC
100%
DTZAAQ - 565,000 Options Expiring 01/03/2027 @ $0.40 – Vest 1 March 2025 – 1 (DTZOPT39 - ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
565,000
% IC
100%
DTZAAR - 565,000 Options Expiring 01/03/2027 @ $0.50 – Vest 1 March 2026 – 1 Holders (DTZOPT40 - ESOP U-Q Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
565,000
% IC
100%
TBC – 2,000,000 Options Expiring 20/03/2028 @ $0.298 – Vest 20 March 2024 – 1 Holders (DTZESOPT15 - DTZ ESOP U-Q T1 Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
2,000,000
% IC
100%
TBC – 2,000,000 Options Expiring 20/03/2028 @ $0.367 – Vest 20 March 2025 – 1 Holders (DTZESOPT16 - DTZ ESOP U-Q T2 Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
2,000,000
% IC
100%
TBC – 2,000,000 Options Expiring 20/03/2028 @ $0.436 – Vest 20 March 2026 – 1 Holders (DTZESOPT17 - DTZ ESOP U-Q T3 Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
2,000,000
% IC
100%
TBC – 2,000,000 Options Expiring 20/03/2028 @ $0.505 – Vest 20 March 2027 – 1 Holders (DTZESOPT18 - DTZ ESOP U-Q T4 Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
2,000,000
% IC
100%
TBC – 1,375,000 Options Expiring 20/03/2029 @ $0.573 – Vest 20 March 2028 – 1 Holders (DTZESOPT19 - DTZ ESOP U-Q T5 Employee Options)
Holders with more than 20%
Holder Name
IBI TRUST MANAGEMENT
Holding
1,375,000
% IC
100%
58
ADDITIONAL ASX INFORMATION
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.
59