Dotz Nano Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
Dotz Nano Limited
ABN:
71 125 264 575
Reporting period:
For the year ended 31 December 2024
Previous period:
For the year ended 31 December 2023
2. Results for announcement to the market
US$
Revenue from continuing operations
down
-
to
-
Loss from ordinary activities after tax attributable to the owners of Dotz
Nano Limited
down
12.3%
to
(5,758,440)
Loss for the year attributable to the owners of Dotz Nano Limited
down
12.3%
to
(5,758,440)
Comments
The loss for the consolidated entity after providing for income tax amounted to US$5,758,440 (31 December 2023:
US$6,569,473).
3. Net tangible assets
Reporting
period
Previous
period
Cents
Cents
Net tangible assets per ordinary security
(0.62)
(0.36)
4. Control gained over entities
Not applicable.
5. Loss of control over entities
Not applicable.
6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Details of associates and joint venture entities
Not applicable.
8. Foreign entities
Dotz Nano Limited
Dotz Nano Limited
Appendix 4E
Preliminary final report
3452-6826-2197, v. 2
Controlled entity
Country of incorporation
Percentage owned
Percentage owned
2024
2023
Dotz Nano Ltd
Israel
100%
100%
9. Audit qualification or review
Refer to Annual Report, page 56.
10. Signed
Signed ___________________________
Date: 28 February 2025
Dotz Nano Limited
ABN 71 125 264 575
Annual Report - 31 December 2024
Capture The Future
Dotz Nano Limited
Contents
31 December 2024
1
Corporate directory
2
Chairman's letter
3
CEO report
4
Directors' report
5
Auditor's independence declaration
25
Consolidated statement of profit or loss and other comprehensive income
26
Consolidated statement of financial position
27
Consolidated statement of changes in equity
28
Consolidated statement of cash flows
29
Notes to the consolidated financial statements
30
Directors' declaration
56
Independent auditor's report to the members of Dotz Nano Limited
57
Consolidated entity disclosure statement
61
ASX
additional
information
61
General information
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 are:
Registered Office:
Principal Place of Business:
c/ Kardos Scanlan Lawyers
1 Atir Yeda
Level 5, 44 Martin Place
Kefar-Sava
Sydney NSW 2000
Israel 4464301
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 28 February 2025. The
directors have the power to amend and reissue the financial statements.
Dotz Nano Limited
Corporate directory
31 December 2024
2
Directors
Mr Bernie Brookes AM
Mr Sharon Malka
Mr Doron Eldar
Ms Kerry Harpaz
Mr Glenn Kelly
Mr Mitchell Board
CEO
Mr Sharon Malka
Company secretary
Mr Bernie Brookes AM
Registered office
c/ Kardos Scanlan Lawyers
Level 5, 44 Martin Place
Sydney NSW 2000
Principal place of business
1 Atir Yeda
Kefar-Sava
Israel 4464301
Share register
Automic Registry Services
Level 5, 126 Phillip Street
SYDNEY NSW 2000
Auditor
BDO Audit Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
PERTH WA 6000
Stock exchange listing
Dotz Nano Limited shares are listed on the Australian Securities Exchange (ASX code:
DTZ) and on Over-the-Counter (OTC) and American Depositary Receipts (ADR)
(Codes: DTZZF and DTZNY)
Dotz Nano Limited
Chairman's letter
31 December 2024
3
3452-6826-2197, v. 2
Dear Stakeholders,
As we reflect on 2024, I am filled with immense pride in the progress Dotz has made toward our mission of shaping a
sustainable, carbon-neutral future. This year has been one of pivotal milestones, strategic advancements, and a deepening
commitment to innovation in the carbon capture and energy sectors. Our collective achievements have strengthened our
foundation, positioning Dotz to accelerate growth and expand our impact in the years ahead.
2024: A Year of Strategic Success
We set ambitious goals for 2024, and I am pleased to report that we not only met but, in many cases, exceeded them. One of
our most notable accomplishments was the first commercial sale of DotzShield corrosion inhibitors monitoring solution,
marking a critical step in the commercialization of our tagging solutions. The successful sale signals the market’s recognition
of our technology’s value, and we are excited to see its continued uptake.
Our work with carbon management solutions made significant progress as well. Through the integration of our game-changing
sorbents into both direct air capture (DAC) and point source capture applications, we advanced our technology readiness
level. This leap forward represents a major step in ensuring that our solutions are ready for large-scale demonstration, and it
underscores the tangible impact we can have on reducing carbon emissions in the coming years.
Further, the insights gained from our pilot programs have been invaluable, enabling us to refine and optimize our sorbents
and build the foundation for the next phase of innovation. As we continue to optimize these solutions, we are more confident
in their potential to revolutionize the way industries approach carbon capture and sustainability.
Looking Forward to 2025
As we look to the future, 2025 promises to be an exciting year for Dotz. We are committed to advancing the technology
readiness of DotzEarth, with a clear focus on scaling our solutions through outdoor pilot demonstrations and ongoing
optimization. We are also dedicated to further expanding the commercial footprint of DotzShield, ensuring that our tagging
solution reaches more industries.
Our vision for the future is one of accelerated innovation, collaboration, and measurable impact. We believe that the
advancements we’ve made in 2024 have laid a strong foundation for achieving our long-term goals, and with continued focus
and dedication, we are positioned to drive even greater success in 2025 and beyond.
In closing, I would like to express my sincere gratitude to all of our stakeholders - our employees, partners, and investors - for
your unwavering support and belief in Dotz’s mission. Together, we are making meaningful strides toward a more sustainable
and carbon-neutral world. I look forward to the journey ahead and to all that we will achieve together in 2025 and beyond.
Bernie Brookes AM
Dotz Nano Chairman
Dotz Nano Limited
CEO report
31 December 2024
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3452-6826-2197, v. 2
Dear fellow shareholders,
2024 has been a pivotal year for Dotz as we made significant strides towards our mission of leading the transition to a
sustainable, carbon-neutral world. Our commitment to advancing carbon management affordable solutions has been at the
forefront of our efforts, and this year, we executed on our strategic priorities with a focus on innovation, sustainability, and
collaboration.
We are very encouraged as we look back at our accomplishments for the year:
A landmark achievement for the company, DotzShield's first commercial sale for corrosion inhibitors monitoring marks the
successful introduction of our tagging solution to the market and specifically to the oil & gas industry.
Our work in advancing carbon management technology has reached significant milestones. We made substantial progress
integrating our innovative sorbents into both direct air capture (DAC) and point source capture applications. This integration
has elevated our technology readiness level (TRL) to TRL 5, a critical step towards scaling these solutions for towards
commercial viability.
Our lab-scale pilots have provided valuable insights, and we are now positioned to continue advancing these technologies to
a larger scale. The feedback from our early-stage pilot programs has been instrumental in refining and optimizing our sorbents,
further driving the development of our carbon capture solutions.
We recently signed a strategic collaboration agreement with Bar-Ilan University (BIU) to pilot an innovative electrochemical
DAC technology, developed by BIU. The parties have been awarded a non-dilutive development grant from Israel Innovation
Authority for the development of an electrochemical pilot system for DAC.
We secured a strategic funding agreement of up to A$12 million with US-based investment fund, of which AU$7 million drawn
to date. This funding agreement, together with the private placement we completed in July 2024, providing the Company with
the runway needed in the near-term so that we can execute our plans for growth.
With a solid foundation in place, we are poised for a year of accelerated innovation, collaboration, and impact. Our strategic
priority will be to advance the technology readiness of DotzEarth while further commercializing our corrosion inhibitors
monitoring solution, DotzShield.
We will prioritize pilot demonstrations and the optimization of our sorbents to elevate DotzEarth towards higher technology
readiness levels, paving the way for future strategic partnerships and collaborations towards global scaling and
commercialization. We remain committed to pushing the boundaries of technology in carbon capture, with ongoing research
and development aimed at improving efficiency and scalability across all our solutions.
As we reflect on the accomplishments of 2024, we are more confident than ever in our ability to drive meaningful change in
the carbon capture and energy solution sectors. The path forward is clear, and with continued focus on innovation and strategic
collaboration, we are positioned for a successful and impactful 2025.
Our commitment to excellence, coupled with the passion of our team, positions us well for continued growth and success.
Together, we are making substantial progress toward a sustainable future. Thank you for your continued support and
dedication to Dotz’s mission.
Sharon Malka
Dotz Nano Chief Executive Officer
Dotz Nano Limited
Directors' report
31 December 2024
5
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 2024.
Directors
The names and the particulars of the Directors of the Company during or since the end of the financial year are:
Name
Status
Appointed
Resigned
Mr Bernie Brookes AM
Non-Executive Chairman
15 January 2020
-
Mr Doron Eldar
Non-Executive Director
15 January 2020
-
Ms Kerry Harpaz
Non-Executive Director
2 September 2021
-
Mr Sharon Malka
CEO and Executive Director
22 March 2024
-
Mr Glenn Kelly
Non-Executive Director
7 March 2024
-
Mr Mitchell Board
Non-Executive Director
15 February 2024
-
Principal activities
The principal continuing activities of the Group during the year is developing, manufacturing and commercialising innovate
solutions addressing global environmental and industrial challenges, utilising its carbon-based nano technologies. The Group
two main areas of focus are:
●
In-product tagging technology, with the first commercial solution for corrosion inhibitors monitoring for the oil & gas
industry;
●
Carbon dioxide (CO2) management technologies, for both Direct Air Capture (DAC) and Point Source Capture (PSC)
applications, lead towards a carbon-neutral future.
Dividends
There were no dividends paid, recommended during the financial year ended 31 December 2024 (2023: Nil)
Financial review
Dotz Nano Limited had a loss for the year of $5,758,440 (31 December 2023: $6,569,473). This included a non-cash amount
of ($488,603) share-based payments (31 December 2023: ($711,052)).
The Group had a net asset position of $369,738 at 2024 (31 December 2023: net asset $2,399,666).
As at 31 December 2024, the Group's cash and cash equivalents balance was $799,853 (31 December 2023: $ 1,345,529).
The Directors are satisfied that the Group will have access to sufficient cash to fund its operation and meet its obligations and
liabilities for a period of at least twelve months from the date of signing this report. Accordingly, the Directors consider the
going concern basis of preparation to be appropriate.
Unless otherwise stated all figures in this report are in the Company’s presentation currency US$.
Review of operations
The Company’s significant activities in 2024 are outlined below.
Dotz Nano Limited
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31 December 2024
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3452-6826-2197, v. 2
Overview
Dotz Nano is a pioneering nanotechnology company specializing in carbon capture and product authentication solutions. By
harnessing the power of nanotechnology, Dotz is delivering groundbreaking solutions to some of the world’s most pressing
environmental and industrial challenges.
Committed to a sustainable future, the company focuses on advancing carbon management technologies that facilitate the
transition to a carbon-neutral world. At the heart of Dotz Nano's mission are innovative carbon management solutions, which
include: Direct Air Capture (DAC) - Efficiently removes CO2 directly from the atmosphere and Point Source Capture (PSC)
- Effectively capture CO2 from industrial diluted flue gases before release to the atmosphere.
The Company's unique strategy integrates novel porous sorbents with advanced process designs, enabling low-cost carbon
capture and removal applications. Dotz's technology offers low-cost carbon capture solutions with vast scaling potential,
backed by a network of global partnerships ready to monetize our innovations.
Simultaneously, the Company is continuing to further commercializing its tagging technology, DotzShield, with a focus on its
corrosion inhibitor monitoring solution to the oil & gas industry.
In-product tagging Technology
First commercial sale of Dotz Shield tagging solution for corrosion inhibitors monitoring
During the fourth quarter of 2024, Dotz received the first commercial order of DotzShield corrosion inhibitors (CI) monitoring
solution, from a leading U.S. service and chemistry solution provider to the Oil & Gas companies worldwide.
The order marks a pivotal milestone for Dotz in its commercialisation journey of DotzShield, validating the Company’s
innovative solution for real-time detection and dosage management of CI, as well as its potential market opportunity. The
order follows a long-term collaboration between Dotz and ChampionX to develop, scale-up, and field test this unique solution
across various locations in North America, delivering an advanced approach to CI management.
DotzShield technology provides an effective means to detect and quantify CI within oilfield premises, enabling on-site dosage
management resulting with significant savings on maintenance cost associated with corrosion inhibitor overdosing and
underdosing. Additionally, it greatly reduces the time needed to obtain reliable and valuable data in industrial settings.
This milestone signals the market’s recognition of our technology’s value, and we are excited to see its continued uptake.
Carbon management solutions
Lab-scale pilot demonstration of Dotz Earth technology
Dotz successfully completed a lab-scale pilot demonstration of its proprietary nano-porous point source sorbent utilising a
moving bed temperature swing adsorption capture unit, simulating Waste-to-Energy flue gas conditions.
This accomplishment marked the advancement of DotzEarth’s Technology Readiness Level (“TRL”) to TRL 4-5, a significant
step forward on the path to viability.
The lab-scale pilot testing was operated at defined process conditions - according to an adsorbent benchmarking protocol
established by SINTEF [1]. The protocol demonstrated the superior results of the Dotz sorbent compared with existing
commercial activated carbon sorbent. Most importantly, use of the Dotz nano-porous sorbent yielded higher adsorption
capacity, and higher in situ desorption purity relative to the commercially available sorbent. In addition, stable performance of
the Dotz sorbent was demonstrated over approximately 140 desorption/adsorption cycles.
These results corroborated the process simulations results previously conducted by SINTEF, which demonstrated the
potential to significantly drive down the cost of CO2 capture.
[1] SINTEF is one of Europe’s largest independent research organizations. SINTEF is Norway's largest research institute for energy and
climate technology.
Dotz Nano Limited
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Scale-Up of Sorbent Production Capabilities
Dotz successfully completed a 1000x scale-up of the plastic waste-to-CO2 sorbent synthesis process. This achievement has
resulted in a significant increase in the Company’s manufacturing capabilities, allowing to produce hundreds of grams in a
single batch.
Characterisation of the sorbents from the scaled-up process has validated a superior absorption and selectivity of Dotz
sorbents compared with existing commercial sorbents, indicating the potential to drive down the cost of carbon capture.
Importantly, the scale-up also provides Dotz with production capacity to independently supply sorbent to potential partners
for carbon capture demonstration at scale, which has facilitated discussions with multiple industrial players for potential co-
development partnerships.
Developed an innovative modified sorbent for DAC and low concentration
Dotz developed an innovative functionalized microporous sorbent with ideal features for direct air capture (DAC) and low-
concentration CO2 industrial point-source applications. The functionalized sorbent is a proprietary surface-modified,
microporous polymeric-based sorbent, which has been designed to maximize its adsorption properties. This yielded with a
superior adsorbent material, specifically tailored for efficient capture of CO2 in very low concentrations including DAC and
low-concentration CO₂ industrial emissions.
Validation testing and process modelling conducted by Dotz's development partner, SINTEF and by industrial third parties,
confirmed that Dotz’s new surface-modified polymeric sorbent demonstrates exceptional adsorption capacity at very low
CO2 concentrations, and specifically for DACture. The results of DAC application modelling indicated excellent sorbent
kinetics and low affinity for moisture and most notably, it demonstrated higher productivity of CO2 adsorption and low energy
usage compared to commercial PEI-sorbents.
Strategic collaboration agreement with Bar Ilan University
Recently, Dotz entered into a technology collaboration agreement with BIRAD Research and Development Ltd. (BIRAD), the
technology licensing subsidiary of Bar-Ilan University (BIU), to piloting a pioneering electrochemical pilot system for DAC.
Under the collaboration agreement, the parties will jointly design, construct, and operate an outdoor field pilot system to
demonstrate the technology in real life. The BIU research team will lead the development program, leveraging BIRAD’s
extensive experience and knowledge in electrochemical technologies and gas separation capabilities. The parties have
received a non-dilutive grant from the Israel Innovation Authority (IIA) to fund the development of a pilot unit.
Funding and capitalization
On 5 February 2024, the Company has entered into a funding agreement with Mercer Street Global Opportunity Fund, LLC
(Mercer), a US-based investment fund to raise up to A$12 million (US$8.2) via the issue of convertible notes (Convertible
Securities Agreement).
During the first quarter of 2024, the Company issued Mercer Convertible Notes commencement shares and options at $0.35
per share with a 36-month maturity in consideration of A$5 million investment. The funds raised were allocated primarily with
respect to the acceleration of DotzEarth development programs, as well as repayment of unsecured loan and general
working capital requirements.
On 27 November 2024, Mercer and the Company executed a deed of variation in respect to Convertible Securities
Agreement. Under the deed of variation, Mercer agreed to invest additional A$2.0 million in the Company, of which A$1.5
million was invested in November 2024. In addition, following the obtainment of shareholder approval on 9 January 2025.
Mercer invested additional A$0.5 million and the minimum conversion price of the convertible notes issued under the
Agreement was amended to $0.04 (See subsequent events).
The subsequent investment demonstrates Mercer’s continued confidence in Dotz’s strategy and the DotzEarth carbon
capture technology. The funds will be used to maintain the strong momentum currently underway in the development of the
DotzEarth carbon capture technology.
In August 2024, the Company raised AU$2.3 million (US$1.5 million) via private placement offering (“Placement”) to a
combination of existing and new institutional and sophisticated investors. The funds from the placement were used primarily
to accelerate the development and exploitation of carbon capture technology – Dotz Earth, and support the Company’s
Dotz Nano Limited
Directors' report
31 December 2024
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general working capital requirements.
The Company will continue to evaluate its capital needs and alternatives to fund its capital requirements to ensure that it has
the appropriate financial pathway to fund its operation towards the commercialisation of the DotzEarth technology.
The Company believes that it has access to sufficient funds to continue to meet its working capital requirements as at the
date of this report.
On 31 May 2024, the shareholders approved a Long-Term Incentive Plan (Plan) and granting options and rights to
executives and employees.
Dotz’s shares commence trading on the OTCQB market and ADR program became effective
In response to increasing interest from institutional and retail investors in the U.S., Dotz’s ordinary shares became available
for quotation on the OTCQB® Venture Market, a U.S. trading platform that is operated by the OTC Markets Group Inc. in
New York, under the symbol DTZZF. In addition, the Company has an effective American Depositary Receipts (“ADR”) plan
in place under the symbol DTZNY, and the ADRs will also be quoted on OTCQB.
The Company’s shares will retain its primary listing on the Australian Stock Exchange (ASX).
Business continuity
Dotz confirms that it has a business continuity plan and procedures in place, ensuring operational and financial continuity.
As a result, Dotz’s operations and development activities are not impacted by the current situation in Israel.
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. The Company is committed to high standards of corporate governance
designed to enable the Company to meet its performance objectives and better manager its risks. The Audit and Risk
Committee Charter requires that the Audit and Risk Committee (or, in its absence, the Board) should, at least annually, satisfy
itself that the Company’s risk management framework continues to be sound and that the Company is operating with due
regard to the risk appetite set by the Board
Company's current operations risks
(a) Research and development
The Company can make no representation that any of its research into or development of its technologies will be successful
or that they will be developed into products that are commercially exploitable. There are many risks inherent in the
development of carbon-based nano technologies products, particularly where the products are in the early stages of
development. Projects can be delayed or fail to demonstrate any benefit, or research may cease to be viable for a range of
scientific and commercial reasons.
(b) Commercialisation of the technology
The Company is in the business of development and commercialisation innovate solutions addressing global environmental
and industrial challenges, utilising its carbon-based nano technologies.
The success of the Company will depend upon the Company's ability to commercialise its technologies. A failure to
successfully commercialise the technologies 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 technologies 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.
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
Dotz Nano Limited
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31 December 2024
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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.
(c) Competition and new technologies
The industries in which the Company is involved are 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.
(d) 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.
(e) Outsourcing
The Company outsources to consultants for expert advice and contracts organisations for some development, manufacturing,
marketing and distribution services and there is no guarantee that such experts or organisations will be available as required
or will meet expectations.
(f) 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.
(g) 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, know-how 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.
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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 competing 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.
(h) 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.
(i) Contractual risk
The operations of the Company necessitate 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
(j) 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.
(k) 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.
(l)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. Further, the U.S.
over-the-counter (OTC) market can be affected by the US stock market and accordingly the Company’s American Depositary
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Receipts (ADRs) which are traded on the U.S. OTC market may be impacted by any such influences flowing from the U.S.
stock market through to the U.S. OTC market.
(m) 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.
(n) 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.
(o) 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.
(p) 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.
(q) Infectious disease pandemics
Infectious disease pandemics such as the coronavirus, 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.
(r) 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.
(s) Risk of an Israeli company
The Company’s Israeli operations remain unaffected by military activities and attacks on Israel. All of the Company’s
employees have a home office setup in which they can work remotely if needed. However, any escalation of military activities
in and attacks on Israel could adversely affect the Company’s Israeli operations, the available of the Company’s employees
and negatively impact its financial performance.
The Company’s research and development facilities are based in Israel and accordingly, political, economic and military
conditions in Israel and the surrounding region, and national, company, consumer and other boycotts, may directly affect the
Company’s business. Furthermore, several countries, principally in the Middle East, restrict business with Israel and Israeli
companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies whether as
a result of hostilities or otherwise. In addition, there have been increased efforts by activists to cause companies and
consumers to boycott Israeli goods based on Israeli government policies. Such actions, particularly if they become more
widespread, may have an adverse impact on the Company’s ability to commercialise its products, its business operations and
financial performance.
Dotz Nano Limited
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31 December 2024
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3452-6826-2197, v. 2
(t) Effect of global political situations
Political unrest and wars, such as the conflicts between Russia and Ukraine and Israel and Palestine (Ukraine and Gaza
Conflicts), are impacting global economic markets and could delay or disrupt business activity, and if such political unrest
escalates or spills over to or otherwise impacts additional regions, it could also heighten many of the other risk factors
described in this Annual Report.
Further, any governmental or industry measures taken in response to the Ukraine and Gaza Conflicts, including limitations on
travel and changes to import/export restrictions and arrangements involving the relevant countries may adversely impact the
Company’s operations and are likely to be beyond the control of the Company. The Company is monitoring the situation
closely and considers the impact of the Ukraine and Gaza Conflicts on the Company’s business and financial performance to,
at this stage, be limited. However, the situation is continually evolving, and the consequences are therefore inevitably
uncertain.
(u) Insurance risk
Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation
in the Middle East. The reinstatement value of direct damages that are caused by terrorist attacks or acts of war that the Israeli
government is currently committed to covering might not be maintained or, if maintained, might not be sufficient to compensate
us fully for damages incurred. Accordingly, the occurrence of an event that is not covered or fully covered by insurance could
have a material adverse effect on our operations, financial condition and results of the Company’s operations.
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
Asset Purchase Agreement
On January 15, 2025, the Company and H2B signed a third amendment to the Asset Purchase Agreement and general
release. Under this third amendment and following the achievement of certain milestones, the Company issued H2B 11.5
million shares, of which 2.5 million shares are subject to voluntary escrow until 15 January 2026 and 2.5 million unlisted
options, become fully vested and exercisable on 15 January 2026 at price per ordinary share of A$0.165, and expired 24
months thereafter.
In addition, each of the parties has discharged and extinguished all obligations and liabilities toward the other in connection
with the Asset Purchase Agreement . No further securities are required to be issued under the Asset Purchase Agreement
and no further payments are required to be made.
Mercer Funding Agreement
On 22 January 2025, following obtaining shareholder approval, the Company issued 550,000 convertible notes and 1,428,571
options for A$500,000 invested by Mercer. In addition, the Deed of Variation amends the minimum conversion price of the
convertible notes issued under the Agreement to $0.04.
Grant of Securities
On 4 February 2025, the Board of Directors approved the grant of 770,000 options to employees and 1,117,300 RSUs to
executives. The options are vested over a period of 3 years and exercisable at A$0.10, subject to continued employment and
expire five years from issue date. The RSUs are vested over a period of 3 months, subject to continued employment and
expire five years from issue date. In addition, the Board approved the issue of 750,000 shares to the CEO.
No other matter or circumstance has arisen since 31 December 2024 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.
Dotz Nano Limited
Directors' report
31 December 2024
13
Information on directors
Name:
Mr Bernie Brookes AM
Title:
Non-Executive Chairman
Qualifications:
BA, Dip Ed
Experience:
Mr. Brookes is an experienced Australian executive, CEO and Chairman with substantial
expertise in retail, supply chain management, wholesale operations and IT systems. He
has more than four decades of business management experience. Previously he was a
senior Executive at Woolworths, CEO of Myer Holdings Limited for nine years and
Edcon South Africa for three years.
Mr. Brookes 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.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
3,340,000 Ordinary Shares
Interests in options:
3,000,000 Unlisted Options with exercise price of AU$0.19 and expiry date of 02 May
2029
Name:
Mr Doron Eldar
Title:
Non-Executive Director
Qualifications:
BA in Business Economics
Experience:
Mr. Eldar brings more than a decade of experience in senior leadership roles and is
currently a Melbourne-based partner at venture capital fund SIBF and Oxen9. Mr Elder
has extensive experience within start-up and pre-revenue companies, executing the
development of new business models, channel growth and effective go-to-market
strategies.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
1,990,371 Ordinary Shares
Interests in options:
1,500,000 Unlisted Options with exercise price of AU$0.19 and expiry date of 02 May
2029
Name:
Ms Kerry Harpaz
Title:
Non-Executive Director
Qualifications:
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
Experience:
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
Special responsibilities:
Nil
Interests in shares:
26,902,690 Ordinary Shares
Interests in options:
1,500,000 Unlisted Options with exercise price of AU$0.19 and expiry date of 02 May
2029
Dotz Nano Limited
Directors' report
31 December 2024
14
3452-6826-2197, v. 2
Name:
Mr Sharon Malka
Title:
CEO and Executive Director
Qualifications:
CPA, B.Sc in Business Administration, MBA
Experience:
Mr Malka is an accomplished senior executive with over 20 years of strategic,
operational, commercial and financial leadership in innovative technology companies.
Prior to joining Dotz, Mr Malka served as Chief Executive Officer of MediWound Ltd, a
Nasdaq-listed biopharmaceutical company. Prior to that, he was a partner at Variance
Economic Consulting Ltd., a multi-disciplinary consulting boutique, specialising in
financial services for international and local Hi-Tech clients.
Mr. Malka is a certified CPA and holds a B.Sc. in Business Administration from the
Business Management College in Israel and an M.B.A. from Bar Ilan University, Israel.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Interests in shares:
605,880 Ordinary Shares
Interests in options:
2,000,000 Unlisted Options with exercise price of AU$0.30 and expiry date of 20 March
2028
2,000,000 Unlisted Options with exercise price of AU$0.37 and expiry date of 20 March
2028
2,000,000 Unlisted Options with exercise price of AU$0.44 and expiry date of 20 March
2028
2,000,000 Unlisted Options with exercise price of AU$0.51 and expiry date of 20 March
2028
1,375,000 Unlisted Options with exercise price of AU$0.57 and expiry date of 20 March
2029
1,467,750 Unlisted Options with exercise price of AU$0.15 and expiry date of 02 May
2029
Interests in rights:
2,000,000 Performance Rights
Name:
Mr Glenn Kelly
Title:
Non- Executive Director
Qualifications:
B.Sc (Hons) in Civil Engineering, MBA
Experience:
Glenn Kelly has over 35 years of operational, business development and strategic
leadership in the natural resources and clean technology sectors. Mr. Kelly holds an
Honours B.Sc. degree in Civil Engineering from Queen’s University and an MBA from
Laval University.
He started his career in oil and gas exploration for Chevron Canada Resources. Mr.
Kelly then undertook to develop underground storage of natural gas in Eastern Canada,
as founder and President of Intragaz Inc. He was then named President of Rabaska
Inc., a $1 billion LNG import terminal project, after which he was named President and
CEO of CO2 Solutions, which developed proprietary carbon capture technologies used
for greenhouse gas reductions. In 2013 he was named Vice-President and COO of
Orbite Aluminae, a producer of high purity alumina used in the fabrication of lithium-ion
batteries. He was promoted to President in 2014 until the sale of the company to an
Australian mining company in 2019. Mr. Kelly now serves on various boards and acts
as a strategic consultant to technology companies.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
Nil
Interests in options:
1,000,000 Unlisted Options with exercise price of AU$0.21 and expiry date of 28
September 2028
1,000,000 Unlisted Options with exercise price of AU$0.27 and expiry date of 28
September 2028
1,000,000 Unlisted Options with exercise price of AU$0.34 and expiry date of 28
September 2028
1,500,000 Unlisted Options with exercise price of AU$0.19 and expiry date of 02 May
2029
Dotz Nano Limited
Directors' report
31 December 2024
15
3452-6826-2197, v. 2
Name:
Mr Mitchell Board
Title:
Non-Executive Director
Qualifications:
B.Sc (Hons) in Economic and Social Sciences, EMBA
Experience:
Mitchell Board is an experienced executive with over 15 years of experience in carbon
markets, global commodities trading, and renewables infrastructure investment. He has
worked at top-tier firms, including Trafigura and Mercuria across the UK, Switzerland,
Singapore, and Australia.
Mitchell has built and grown international businesses with experience in trading,
leadership, management, analysis, investment, contract negotiation, commercial
development, logistics and strategy. Mr. Board holds an Honours B.Sc. degree in
Economic and Social Sciences from University of Sydney and an EMBA from Quantic
School of Business and Technology. Mr. Board also holds an Energy Innovation and
Emerging Technologies Engineering Certificate from Stanford University School of
Engineering. As Chief Investment Officer and Head of Markets at Climate Friendly, Mr.
Board is responsible for the management of one of the world’s leading carbon removal
portfolios and growth of the company’s customer base.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
30,000 Ordinary Shares
Interests in options:
1,500,000 Unlisted Options with exercise price of AU$0.19 and expiry date of 02 May
2029
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'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 Bernie Brooks (Appointed 1 December 2024)
Qualification:
BA, Dip Ed
Experience:
Mr. Brookes is an experienced Australian executive, CEO and Chairman
with substantial expertise in retail, supply chain management, wholesale
operations and IT systems. He has more than four decades of business
management experience. Previously he was a senior Executive at
Woolworths, CEO of Myer Holdings Limited for nine years and Edcon
South Africa for three years.
Mr Andrew Ritter (Resigned 1 December 2024)
Qualification:
B.Com, CA, FGIA, FCG (CS, GCP)
Experience:
Mr Ritter is an experienced Company Secretary, a Chartered Company
Secretary and a Fellow of the Chartered Governance Institute with more
than 20 years' experience, having worked with many ASX listed
companies across a variety of industry sectors
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:
Dotz Nano Limited
Directors' report
31 December 2024
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3452-6826-2197, v. 2
DIRECTORS'
MEETING
DIRECTORS'
MEETING
Number
eligible
Number
Name
Appointed
Resigned
to attend
attended
Mr Bernie Brookes AM
15 January 2020
-
18
18
Mr Doron Eldar
15 January 2020
-
18
18
Ms Kerry Harpaz
2 September 2021
-
18
17
Mr Sharon Malka
22 March 2024
-
13
13
Mr Glenn Kelly
7 March 2024
-
13
12
Mr Mitchell Board
15 February 2024
-
14
9
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
14 September 2026
23 September 2022
AU$0.475
7,118,644
31 May 2027
30 September 2022
AU$0.400
1,035,000
31 May 2027
30 September 2022
AU$0.500
1,035,000
31 May 2027
30 September 2022
AU$0.330
1,035,000
1 March 2027
13 September 2023
AU$0.500
565,000
1 March 2027
13 September 2023
AU$0.400
565,000
1 March 2027
13 September 2023
AU$0.330
565,000
20 March 2028
20 March 2023
AU$0.298
2,000,000
20 March 2028
20 March 2023
AU$0.367
2,000,000
20 March 2028
20 March 2023
AU$0.436
2,000,000
20 March 2028
20 March 2023
AU$0.505
2,000,000
20 March 2029
20 March 2023
AU$0.573
1,375,000
1 April 2028
1 April 2023
AU$0.330
365,000
1 April 2028
1 April 2023
AU$0.400
365,000
1 April 2028
1 April 2023
AU$0.500
365,000
1 August 2025
1 August 2023
AU$0.350
9,903,750
15 August 2026
15 August 2023
AU$0.800
8,000,000
15 August 2026*
15 August 2023
AU$0.850
8,000,000
15 August 2026*
15 August 2023
AU$0.900
8,000,000
15 August 2026*
15 August 2023
AU$0.950
9,000,000
15 August 2028
28 September 2023
AU$0.210
1,000,000
15 August 2028
28 September 2023
AU$0.270
1,000,000
15 August 2028
28 September 2023
AU$0.340
1,000,000
31 January 2027
5 February 2024
AU$0.350
2,857,143
19 March 2027
19 March 2024
AU$0.350
2,142,857
19 March 2027
19 March 2024
AU$0.350
2,142,857
2 August 2026
2 August 2024
AU$0.165
10,350,000
2 August 2026
9 August 2024
AU$0.165
6,000,000
2 August 2026
9 October 2024
AU$0.165
1,000,000
2 August 2026
4 November 2024
AU$0.165
560,000
2 August 2026
12 November 2024
AU$0.165
1,750,000
2 May 2029
26 September 2024
AU$0.190
9,000,000
2 May 2029
26 September 2024
AU$0.150
1,467,750
2 May 2029
26 September 2024
AU$0.150
2,205,625
2 November 2027
28 November 2024
AU$0.175
4,285,714
Total
112,054,340
* The vesting of these options is subject to achievement of certain milestones, as defined in the Asset Purchase Agreement
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
Dotz Nano Limited
Directors' report
31 December 2024
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3452-6826-2197, v. 2
Shares Issue on Exercise of Options
During the year ended 31 December 2024, nil shares were issued on exercise of options (31 December 2023: 1,000,000).
Convertible Notes
At the date of this report, there are 6,918,307 Convertible Notes on issue, which have a face value each of AU$1 and a
maturity date of 18 months from the date of issue (5 February 2024).
Performance Shares
At the date of this report, there were no performance shares on issue.
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. The Company’s primary focus is the advancement of carbon management technologies offering an efficient
and sustainable approach, as an enabler of carbon neutrality. Dotz Nano's mission are groundbreaking carbon management
solutions, which include direct air capture and point source capture. 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 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.
Dotz Nano Limited
Directors' report
31 December 2024
18
Non-audit services
During the year, BDO Audit 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 8 Auditor’s Remuneration.
The directors are of the opinion that the services as disclosed in Note 8 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
Auditor's independence declaration
The auditor’s independence declaration for the year ended 31 December 2024 has been received and can be found on page
25 of the financial report.
Remuneration report (audited)
This remuneration report for the year ended 31 December 2024 outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act 2001 (Cth), as amended (Act) and its regulations. This information
has been audited as required by section 308(3C) of the Act.
The remuneration report is 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
Non-Executive Chairman
15 January 2020
-
Doron Eldar
Non-Executive Director
15 January 2020
-
Kerry Harpaz
Non-Executive Director
2 September 2021
-
Sharon Malka
CEO & Executive Director
20 March 2023 (CEO), 22
March 2024 (Director)
-
Glenn Kelly
Non-Executive Director
7 March 2024
-
Mitchell Board
Non-Executive Director
15 February 2025
-
Michael Shtein
Chief Technology Officer
1 August 2015
-
Liat Bar Ziv Alperovitz
Chief Financial Officer
1 March 2023
-
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.
Dotz Nano Limited
Directors' report
31 December 2024
19
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, variable compensation subject to the performance achievements, 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 2024 the Company had three appointed executives, being Dr Michael Shtein as the Chief
Technology Officer, Mr Sharon Malka as CEO and Executive Director and Ms Liat Bar Ziv Alperovitz as the Chief Financial
Officer. The terms of their Executive Employment Agreements with Dotz Nano Limited are summarised in the following table.
Dr Michael Shtein
●
Executive compensation of NIS40,000 (approximately $11,300) per month for 50% position;
●
Reimbursement of reasonable business expenses incurred in the ordinary course of the business in accordance with the
Group’s reimbursement policies;
●
This agreement may be terminated by either party with 30 days' notice from Dr Michael Shtein and 3 months’ notice from
the Company.
Mr Sharon Malka
●
Executive gross salary is set as NIS 77,000 (approximately $21,100) per month.
●
Entitled to an annual bonus up to 30% of base remuneration, subject to the performance of the Executive.
●
Entitled to 9,375,000 Options in accordance with the Company's Incentive Option Plan and subject to the approval of the
Australian Company's board of directors and shareholders.
●
The agreement may be terminated by either party at any time, by giving the other party 6 months advance notice.
Mr Liat Bar Ziv Alperovitz
●
Executive gross salary is set at NIS 45,000 (approximately $12,325) per month, which is the sum of gross monthly salary
of NIS 35,000 (approximately $9,586) and gross monthly global compensation for overtime work-hours of NIS 10,000
(approximately $2,838).
●
Entitled to an annual bonus of up to 20% of base remuneration, according to the Company's sole discretion.
●
Entitled to 1,695,000 Options in accordance with the Company's Incentive Option Plan and subject to the approval of the
Australian Company's board of directors and shareholders.
●
The agreement may be terminated by either party at any time, by giving the other party 60 days advance notice.
Short-term Incentive Plan (STI)
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 performance measures such as
successful completion of research & development business development and corporate activities.
The STI performance measures align with our strategic priorities, shareholder value and fostering talented and engaged
people and included the following: (i) ssecuring and manage capital to support the company's growth; (ii) climbing technology
readiness level (TRL) of DotzEarth towards TRL 4; (iii) securing strategic partnerships and collaborations; and (iv) individual
performance evaluation.
In addition, the board has discretion to adjust remuneration outcomes up or down to prevent any inappropriate reward
outcomes, including reducing any deferred STI award.
Performance Conditions Linked to Remuneration
The incentive payments for the year ended 31 December2024 have been approved by the Board on 4 February 2025.
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;
●
an 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.
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3452-6826-2197, v. 2
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 2024 a
total of 12,673,375 (31 December 2023: 12,165,000) options have been issued under this plan, out of which 12,530,250 were
issued to KMP (31 December 2023: 11,070,000 options).
Group Performance
The table below shows the performance of the Group over the last 5 reporting periods:
Financial year
2024
2023
2022
2021
2020
Loss for the year
5,758,440
6,569,473
5,373,346
7,935,940
3,968,996
Loss per share (cents)
1.08
1.37
1.21
1.98
1.24
Share price
0.10
0.17
0.30
0.46
0.24
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$600,000 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 $354,266 (31 December 2023: $332,861). During the year ended 31 December 2024 a total of 9,000,000
(31 December 2023: Nil) options have been issued under the Plan. Non-executive Directors may receive additional
remuneration for other services provided to the Group.
5. Details of remuneration
31 December 2024
Short Term
Salary, Fees &
Commissions
Bonus*
Other**
Equity
Settled***
Performance
based
remuneration
Total
US$
US$
US$
US$
%
US$
Directors:
Bernie Brookes
117,707
-
-
18,460
-
136,167
Doron Eldar
58,853
-
-
9,230
-
68,083
Kerry Harpaz
58,853
-
-
9,230
-
68,083
Sharon Malka
347,992
39,073
7,869
295,752
7.83%
690,686
Glenn Kelly
60,000
-
-
86,187
-
146,187
Mitchell Board
58,853
-
-
9,230
-
68,083
Key management:
Michael Shtein
146,753
8,226
7,208
11,116
4.75%
173,303
Liat Bar Ziv Alperovitz
207,712
8,226
3,028
60,430
2.94%
279,396
-
-
-
-
-
-
1,056,723
55,525
18,105
499,635
1,629,988
Dotz Nano Limited
Directors' report
31 December 2024
21
3452-6826-2197, v. 2
* Cash bonus is based on actual achievements of performance measures, which were partially achieved (~30% of max bonus)
plus board discretion bonus in accordance with the Company’s compensation policy.
** Other includes benefits such as car lease, fuel and etc paid to KMP.
*** Relates to equity settled options and performance rights.
31 December 2023
Short Term
Salary, Fees &
Commissions
Post-
Employment
Superannuation
Other*
Equity
Settled**
Performance
based
remuneration
Total
US$
US$
US$
US$
%
US$
Directors:
Bernie Brookes
141,525
-
-
-
-
141,525
Doron Eldar
98,470
-
-
-
-
98,470
Kerry Harpaz
79,732
-
-
-
-
79,732
Glenn Kelly
10,000
-
-
-
-
10,000
Mitchell Board
13,134
-
-
-
-
13,134
Key management:
Sharon Malka
262,354
-
6,862
287,382
-
556,598
Michael Shtein
209,701
-
3,362
-
-
213,063
Liat Bar Ziv Alperovitz
170,002
-
1,854
59,665
-
231,521
Guy Khavia
115,649
-
679
39,542
-
155,870
1,100,567
-
12,757
386,589
1,499,913
* Other includes benefits such as car lease, fuel and etc paid to KMP.
** Relates to equity settled options and performance rights.
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:
31 December 2024
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 the
end of the year
No.
No.
No.
No.
No.
Directors
Bernie Brookes
3,340,000
-
-
-
3,340,000
Doron Eldar
1,990,371
-
-
-
1,990,371
Kerry Harpaz
26,902,690
-
-
-
26,902,690
Sharon Malka
-
605,880
-
-
605,880
Glenn Kelly
-
-
-
-
-
Michell Board
30,000
-
-
-
30,000
Key Management:
Michael Shtein
8,146,201
-
-
-
8,146,201
Liat Bar Ziv Alperovitz
-
174,148
-
-
174,148
Total
40,409,262
780,028
-
-
41,189,290
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.
Dotz Nano Limited
Directors' report
31 December 2024
22
3452-6826-2197, v. 2
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 2024
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
-
3,000,000
-
-
3,000,000
-
3,000,000
Doron Eldar
-
1,500,000
-
-
1,500,000
-
1,500,000
Kerry Harpaz
-
1,500,000
-
-
1,500,000
-
1,500,000
Sharon Malka
9,375,000
1,467,750
-
- 10,842,750
2,000,000
8,842,750
Glenn Kelly
3,000,000
1,500,000
-
-
4,500,000
2,000,000
2,500,000
Mitchell Board
1,500,000
1,500,000
1,500,000
-
-
-
-
-
-
-
Key Management:
Michael Shtein
-
500,000
-
-
500,000
-
500,000
Liat Bar Ziv Alperovitz
1,695,000
562,500
-
-
2,257,500
565,000
1,692,500
14,070,000
11,530,250
-
- 25,600,250
4,565,000 21,035,250
Performance Rights Holding
The number of performance shares over ordinary shares held by each KMP of the Group during the financial year is as
follows:
31 December 2024
Balance at
the start of
the year
Granted as
remuneration
Vested
Expired/for
feited/
other
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
-
-
-
-
-
-
-
Sharon Malka
-
2,000,000
-
-
2,000,000
-
2,000,000
Glenn Kelly
-
-
-
-
-
-
-
Mitchell Board
-
-
-
-
-
-
-
Key Management:
Michael Shtein
-
-
-
-
-
-
-
Liat Bar Ziv Alperovitz
-
-
-
-
-
-
-
-
2,000,000
-
-
2,000,000
-
2,000,000
Dotz Nano Limited
Directors' report
31 December 2024
23
Terms and conditions of the share-based payment arrangements
Options
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
Share
price at
grant date
Exercise
price
Expected
volatility
Number of
options
Risk-free
rate
Fair value
at grant
date (AU$)
Fair value
at grant
date (US$)
Maximum
value yet
to vest
(US$)
26/09/2024
02/05/2029
AU$0.089
AU$0.190
75%
9,000,000
3.57% AU$360,716 US$247,884
US$180,501
26/09/2024
02/05/2029
AU$0.089
AU$0.150
75%
1,467,750
3.57% AU$130,630
US$89,769
US$69,388
01/08/2024
02/05/2029
AU$0.110
AU$0.150
75%
2,205,625
3.57% AU$242,619 US$166,728
US$117,177
Vesting:
9,000,000 director options vest as follows: half the options will vest on 19 July 2025 and the remainder will vest on 19 July
2026.
1,467,750 CEO options and 2,205,625 executive options will vest as follows: one third will vest on 19 July 2025, another third
will vest on 19 July 2026 and the remainder will vest on 19 July 2027.
Performance Rights
Effective as of 25 January 2024, the Company granted 2,000,000 Performance Rights to the CEO of the Company, which
were subject to obtaining shareholders’ approval, received in May 2024. The Performance Rights vest subject to achievement
of operational milestones as set by the Board and a summarised below within 12 months of the commencement of the plan,
and the performance rights would be subject to a 2 year escrow period:
●
Milestone 1 - Capital Management - 750,000 performance rights will vest upon securing AU$10m or more.
●
Milestone 2 - Strategic Investment - 250,000 performance rights will vest upon securing AU$1m from strategic investor.
●
Milestone 3 - Carbon Capture Technology Development - 300,000 performance rights will vest on achieving successful
development, testing and operation of carbon capture technology up to Technology Readiness Level 4 (TRL4).
●
Milestone 4- Market Capitalisation - 700,000 performance rights will vest on upon achieving a sustained increase in
enterprise value with market capitalisation of 120m and maintaining this value as an average over a period of 90 days.
The fair value of the Performance Rights was measured based on Management’s estimation as to the probability of meeting
each of the milestones for Milestones 1 to 3.
The fair value of Milestone 4 performance rights were valued using Hoadley Option Valuation Model using the following inputs:
Milestone 4 performance rights were valued using Monte Carlo valuation methodology using the following inputs:
Exercise
price
Price target
Implied
barrier
Days to
vesting
Days to
expiry
Volatility
Dividend
yield
Nil
AU$0.229
AU$0.386
239
5,583
72%
Nil
Ordinary Shares
During the reporting period, the Company granted 1,049,982 ordinary shares as short term incentives to the CEO, CFO and
Company Secretary. The value of these shares was determined based on market price at issue date and totalled to
AU$96,598/US$64,845.
Dotz Nano Limited
Directors' report
31 December 2024
24
7. Loans to key management personnel (KMP) and their related parties
2024
2023
Balance at the start of year
-
284,017
Interest paid and payable
-
(7,403)
Repayment received
-
(276,614)
Highest indebtedness during the year
-
284,017
No write-downs or allowances for doubtful receivables have been recognised in relation to this loan.
8. Other transactions and balances with KMP and their related parties
The Group acquired the following services from entities that are controlled by members of the group’s key management
personnel.
Some Directors have held positions in other companies, where it is considered they control or significantly influence the
financial or operating policies of those entities. In the last financial year, the following entities provided services to the Group.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
Total Transactions
Payable
Balance
Payable
Balance
Entity
Nature of
transactions
Key Management
Personnel
2024
2023
2024
2023
US$
US$
US$
US$
Kerry Harpaz
Loan payable
Kerry Harpaz
-
51,041
-
51,041
RGO Family Trust –
Doron Eldar
Rent
Doron Eldar
9,417
-
2,977
-
RGO Family Trust –
Doron Eldar
Investor relations
Doron Eldar
27,465
-
8,685
-
Kerry Harpaz
Interest paid
Kerry Harpaz
6,539
-
-
-
Mitchell Broad
Interest paid
Mitchell Broad
9,808
-
-
-
9. Voting of shareholders at last year’s annual general meeting (AGM)
At the AGM held on 31 May 2024, 99.76% of the votes received supported the adoption of the remuneration report for the
year ended 31 December 2023. 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
28 February 2025
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian
company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international
BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
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 2024, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Dotz Nano Limited and the entity it controlled during the period.
Ashleigh Woodley
Director
BDO Audit Pty Ltd
Perth
28 February 2025
Dotz Nano Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2024
Note
31 December
2024
31 December
2023
US$
US$
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
26
Revenue from contracts with customers
-
53,025
Cost of revenue
-
(12,517)
Gross profit
-
40,508
Expenses
Research and development expenses
4
(1,314,079)
(1,224,635)
General, administrative, selling and marketing expenses
5
(2,934,035)
(3,585,608)
Share based compensation
22
(488,603)
(711,052)
Operating loss
(4,736,717)
(5,480,787)
Finance costs
(1,021,723)
(1,088,686)
Loss before income tax expense
(5,758,440)
(6,569,473)
Income tax expense
6
-
-
Loss after income tax expense for the year
(5,758,440)
(6,569,473)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
21
(74,820)
69,312
Other comprehensive income/(loss) for the year, net of tax
(74,820)
69,312
Total comprehensive income loss for the year
(5,833,260)
(6,500,161)
Cents
Cents
Basic and diluted loss per share
9
(1.08)
(1.37)
Dotz Nano Limited
Consolidated statement of financial position
As at 31 December 2024
Note
31 December
2024
31 December
2023
US$
US$
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
27
Assets
Current assets
Cash and cash equivalents
10
799,853
1,345,529
Trade and other receivables
27,657
187,069
Inventories
-
7,319
Other assets
14
94,298
132,165
Total current assets
921,808
1,672,082
Non-current assets
Plant and equipment
12
230,710
250,490
Right-of-use assets
13
224,667
469,755
Intangible assets
15
4,158,765
4,265,100
Total non-current assets
4,614,142
4,985,345
Total assets
5,535,950
6,657,427
Liabilities
Current liabilities
Trade and other payables
16
991,987
852,655
Lease liabilities
13
239,528
256,250
Financial liability
17
2,938,239
2,875,324
Derivative financial instrument
18
900,653
-
Provisions
58,584
46,352
Liability for unissued shares
19
37,221
-
Total current liabilities
5,166,212
4,030,581
Non-current liabilities
Lease liabilities
13
-
227,180
Total non-current liabilities
-
227,180
Total liabilities
5,166,212
4,257,761
Net assets/ (liabilities)
369,738
2,399,666
Equity
Issued capital
20
43,702,146
40,701,153
Reserves
21
9,659,908
8,932,389
Accumulated losses
(52,992,316)
(47,233,876)
Total (equity/ (deficiency)
369,738
2,399,666
Dotz Nano Limited
Consolidated statement of changes in equity
For the year ended 31 December 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
28
Issued
Capital
Performance
Rights
Reserve
Options
Reserve
Foreign
Currency
Reserve
Accumulated
losses
Total in
equity
US$
US$
US$
US$
US$
US$
Balance at 1 January 2023
33,718,491
-
6,723,986
(22,659)
(40,664,403)
(244,585)
Loss after income tax expense
for the year
-
-
-
-
(6,569,473)
(6,569,473)
Other comprehensive income for
the year, net of tax
-
-
-
69,312
-
69,312
Total comprehensive
income/(loss) for the year
-
-
-
69,312
(6,569,473)
(6,500,161)
Transactions with owners in
their capacity as owners:
Issue of shares (note 20)
4,958,190
-
-
-
-
4,958,190
Exercise of options (note 20)
92,712
-
-
-
-
92,712
Share-based payments (note
22)
1,931,760
-
2,161,750
-
-
4,093,510
Balance at 31 December 2023
40,701,153
-
8,885,736
46,653
(47,233,876)
2,399,666
Issued
Capital
Performance
Rights
Reserve
Options
Reserve
Foreign
Currency
Reserve
Accumulated
losses
Total in
equity
US$
US$
US$
US$
US$
US$
Balance at 1 January 2024
40,701,153
-
8,885,736
46,653
(47,233,876)
2,399,666
Loss after income tax expense
for the year
-
-
-
-
(5,758,440)
(5,758,440)
Other comprehensive income
loss for the year, net of tax
-
-
-
(74,820)
-
(74,820)
Total comprehensive income
loss for the year
-
-
-
(74,820)
(5,758,440)
(5,833,260)
Transactions with owners in
their capacity as owners:
Issue of shares(note 20)
2,936,148
-
-
-
-
2,936,148
Share-based payments (note
22)
64,845
15,289
787,050
-
-
867,184
Balance at 31 December 2024
43,702,146
15,289
9,672,786
(28,167)
(52,992,316)
369,738
Dotz Nano Limited
Consolidated statement of cash flows
For the year ended 31 December 2024
Note
31 December
2024
31 December
2023
US$
US$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
29
Cash flows from operating activities
Receipts from customers
7,050
61,746
Payments to suppliers and employees
(3,106,148)
(4,682,271)
Interest received
4,026
18,443
Interest paid
(19,344)
(12,366)
Net cash used in operating activities
11
(3,114,416)
(4,614,448)
Cash flows from investing activities
Payments for plant and equipment
(81,688)
(138,706)
Payment for intellectual property
-
(562,294)
Proceeds from disposal of investments
-
7,000
Net cash used in investing activities
(81,688)
(694,000)
Cash flows from financing activities
Proceeds from issue of shares
20
1,755,937
2,597,763
Proceeds from exercise of options
20
-
92,712
Proceeds from issue of convertible loan
17
4,204,017
-
Proceeds from repayment of related party loan
-
277,250
Proceeds from borrowings
575,767
1,003,812
Repayment of borrowings
(3,210,331)
-
Repayment of lease liabilities
(273,496)
(276,560)
Transaction costs relating to borrowings
(374,669)
(73,375)
Proceeds from unissued shares
37,222
-
Net cash from financing activities
2,714,447
3,621,602
Net decrease in cash and cash equivalents
(481,657)
(1,686,846)
Cash and cash equivalents at the beginning of the financial year
1,345,529
3,048,878
Effects of exchange rate changes on cash and cash equivalents
(64,019)
(16,503)
Cash and cash equivalents at the end of the financial year
10
799,853
1,345,529
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
30
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 28 February 2025.
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. Material 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 2024 of US$5,758,440 (31 December 2023: US$6,569,473) and net cash outflows from operating
activities of US$3,114,416 ( 31 December 2023 : US$4,614,448). The Group had working capital deficit of US$70,176 (31
December 2023: working capital of US$819,427).
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 Group has prepared a cash flow forecast, which indicates that the entity will be required to raise funds to provide additional
working capital and to continue to fund its business activities.
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 Company has access to additional financing through facility with Mercer Street Global Opportunity Fund, LLC (refer
to note 17)
●
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 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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies (continued)
31
3452-6826-2197, v. 2
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 2024. 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.
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.
The accounting policies that are material to the consolidated entity are set out either in the respective notes or below. The
accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated.
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. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 3. Critical accounting judgements, estimates and assumptions (continued)
32
3452-6826-2197, v. 2
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 17 is a financial liability in relation to convertible securities agreement. There are significant estimates
and judgements involved in determining the fair value of the various components of the hybrid instrument.
Acquisition of intangible assets
The Group initially measured the cost of equity-based contingent consideration, with regards to the acquisition of technology-
based assets, by reference to the fair value of the equity instruments at the date of the acquisition. This estimate requires
determination of the probability of future events to occur or conditions to be met.
Note 4. Research and development expenses
31 December
2024
31 December
2023
US$
US$
Wages and benefits
510,399
571,408
Consulting fees
186,039
413,458
Lab expenses
199,237
24,604
SRA, patent & Licence fee
156,322
154,619
Amortisation of intangible assets
106,335
-
Other expenses
155,747
60,546
Total
1,314,079
1,224,635
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
33
Note 5. General, administrative, selling and marketing expenses
31 December
2024
31 December
2023
US$
US$
Wages and benefits
1,102,541
1,426,555
Consulting fees
467,366
356,899
Sales and marketing expenses
294,666
785,044
Director fees
353,836
341,462
Depreciation of right-of-use-assets
245,090
285,038
Depreciation of Fixed assets
78,926
68,385
Other expenses
391,610
322,225
Total
2,934,035
3,585,608
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 6. Income tax
The financial accounts for the year ended 31 December 2024 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
30% (2023: 25%). The applicable tax rate in Israel is 23% (2023: 23%).
31 December
2024
31 December
2023
US$
US$
(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 30% (2023: 25%)
(1,727,532)
(1,642,368)
Non-deductible items
-
-
Non-deductible expenditure
653,512
384,005
Adjustment for difference in tax rates
(19,768)
(115,242)
Temporary differences not recognised
1,093,788
1,373,605
Income tax attributable to operating income/(loss)
-
-
Deferred tax assets
-
-
Tax losses
1,110,528
1,401,259
Other deductions
30,779
37,673
Unrecognised deferred tax asset
1,141,307
1,438,932
Set-off deferred tax liabilities
-
-
Less deferred tax assets not recognised
(1,141,307)
(1,438,932)
Net assets
-
-
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 6. Income tax (continued)
34
3452-6826-2197, v. 2
Deferred tax liabilities
-
-
Set-off deferred tax assets
-
-
Net deferred tax liabilities
-
-
Tax losses
-
-
Unused tax losses for which no deferred tax asset has been recognised
10,408,390
8,517,986
Carry forward losses
As at 31 of December 2024, the Dotz Nano Ltd had carried forward losses and other temporary differences amounting to
$21,144,473 and a capital loss of $494,410. Dotz Nano Limited had carried forward losses and other temporary differences
of A$8,938,546.
Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 31 December
2024, 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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
35
Note 7. 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:
31 December
2024
31 December
2023
US$
US$
Short-term salary, fees and commissions
1,056,723
1,100,567
Bonus and other
73,630
12,757
Share based payments (Refer Note 22)
499,635
386,589
Total KMP Compensation
1,629,988
1,499,913
b) Other related party transactions
All transactions were made on normal commercial terms and conditions and at market rates. Details of other related party
transactions is provided in remuneration report and summarised below:
Total
Transactions
Total
Transactions
Payable
Balance
Payable
Balance
Entity
Nature of
transactions
Key Management
2024
2023
2024
2023
Personnel
US$
US$
US$
US$
Kerry Harpaz
Loan payable
Kerry Harpaz
-
51,041
-
51,041
RGO Family Trust –
Doron Eldar
Rent
Doron Eldar
9,417
-
2,977
-
RGO Family Trust –
Doron Eldar
Investor relations
Doron Eldar
27,465
-
8,685
-
Kerry Harpaz
Interest paid
Kerry Harpaz
6,539
-
-
-
Mitchell Broad
Interest paid
Mitchell Broad
9,808
-
-
-
Note 8. Auditor's remuneration
31 December
2024
31 December
2023
US$
US$
Remuneration of the auditor of the Group for:
- Auditing and reviewing the financial reports (BDO) - Australia
59,311
51,198
- Auditing and reviewing the financial reports (BDO) - Israel
44,625
44,625
103,936
95,823
Non-assurance services
- Tax (BDO) - Australia
9,678
3,350
- Tax (BDO) - Israel
4,000
2,964
13,678
6,314
Note 9. Loss per share
31 December
2024
31 December
2023
US$
US$
Loss after income tax attributable to the owners of Dotz Nano Limited
(5,758,440)
(6,569,473)
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 9. Loss per share (continued)
36
3452-6826-2197, v. 2
Number
Number
Weighted average number of ordinary shares used in calculating basis and diluted loss per
share
531,474,957
478,844,807
Cents
Cents
Basic and diluted loss per share
(1.08)
(1.37)
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 10. Cash and cash equivalents
31 December
2024
31 December
2023
US$
US$
Cash at bank
762,632
1,345,529
Restricted cash
37,221
-
Total cash and cash equivalents in the statement of cash flows
799,853
1,345,529
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.
Cash on hand that is not used for ongoing operations is invested in bank deposits in Australian Dollar.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
37
Note 11. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
31 December
2024
31 December
2023
US$
US$
Loss after income tax expense for the year
(5,758,440)
(6,569,473)
Adjustments for:
Depreciation
78,926
68,385
Loss on disposal of fixed assets
22,542
-
Share-based payments expense
488,603
711,053
Foreign exchange
68,134
49,604
Amortisation
351,423
285,038
Finance expense
1,278,236
1,050,681
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
159,412
(150,086)
Decrease in prepayments
37,867
615,433
Decrease in inventory
7,319
225
Increase/(decrease) in trade and other payables
139,330
(683,646)
Increase in other provisions
12,232
8,338
Net cash used in operating activities
(3,114,416)
(4,614,448)
Non-cash investing and financing activities
During the year ended 31 December 2023 Dotz Nano Ltd acquired the technology assets of H2 Blue Tech Limited, with part
of the consideration being settled in issue of shares and options, refer to Note 15 for further information.
Other
For risk exposure refer to Note 24.
Changes in liabilities arising from financing activities
US$
Balance at 1 January 2023
1,871,513
Net cash from financing activities
1,281,062
Other changes
(277,251)
Balance at 31 December 2023
2,875,324
Net cash from financing activities
1,194,784
Other changes
(1,131,869)
Balance at 31 December 2024
2,938,239
Note 12. Plant and equipment
31 December
2024
31 December
2023
US$
US$
Non-current assets
Plant and equipment - at cost
761,819
751,951
Less: Accumulated depreciation
(531,109)
(501,461)
230,710
250,490
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 12. Plant and equipment (continued)
38
3452-6826-2197, v. 2
Opening balance at reporting date
250,490
189,296
Additions
81,688
129,579
Disposal
(22,542)
-
Depreciation
(78,926)
(68,385)
Balance at the end of the year
230,710
250,490
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
3-10 years
Plant and equipment
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 13. Right-of-use assets
31 December
2024
31 December
2023
US$
US$
i. AASB 16 related amounts recognised in the statement of financial position
Office space - right-of-use
224,667
469,755
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.
ii. Lease liabilities included in the statement of financial position
Current
239,528
256,250
Non-current
-
227,180
Total lease liabilities
239,528
483,430
iii. AASB 16 related amounts recognised in the statement of profit and loss
Depreciation charge related to right-of-use assets
245,090
285,038
Interest expense on lease liabilities (under finance cost)
12,873
12,504
257,963
297,542
iv. AASB 16 related amounts recognised in the statement of cash flows
Cash outflows in financing activities
243,901
283,309
Cash outflows in operating activities
12,873
12,504
256,774
295,813
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 13. Right-of-use assets (continued)
39
3452-6826-2197, v. 2
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.
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
40
Note 14. Other assets
31 December
2024
31 December
2023
US$
US$
Current assets
Prepayments
94,298
132,165
Note 15. Intangible assets
31 December
2024
31 December
2023
US$
US$
Non-current assets
Intangible assets - at cost, net of amortisation
4,158,765
4,265,100
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Total
US$
Balance at 1 January 2023
-
Additions on acquisition
4,265,100
Balance at 31 December 2023
4,265,100
Amortisation expense
(106,335)
Balance at 31 December 2024
4,158,765
On 19 May 2023, the Company entered into an asset purchase agreement with H2 Blue Tech Ltd to acquire its innovative
Carbon Dioxide (C02) capture technology as amended on 3 August 3 2023 and on 30 January 2024 (“Asset Purchase
Agreement”). The transaction was subject to shareholder approval which was granted on 31 May 2023.
Under the terms of the Asset Purchase Agreement, Dotz acquired H2 Blue’s assets and technology for upfront consideration
of 19,500,000 Shares and 8,000,000 Options in Dotz as well as US$450,000 in cash plus additional deferred consideration of
up to a further 24,300,000 Shares and 25,000,000 Options in Dotz and US $1,630,000 in cash, which may be payable for
achievement of certain performance milestones, outlined below. These milestones can be satisfied at any time within 3 years
of completion and in any order.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 15. Intangible assets (continued)
41
3452-6826-2197, v. 2
Shares
Options
Cash
Timing
Total Max. consideration payable upon
achievements of certain performance
milestones
40.0m
33.0m
$2,380,000
On closing
19.5m
8.0m (e.p2 $0.80)
$450,000
Earn out A
upon successful scale-up production of
Carbon-based Sorbent from recycled
plastic that meets pre-defined
performance parameters
7.5m
8.0m (e.p $0.85)
-
Earn out B
upon lab scale pilot unit with a capacity of
capturing 1 tonne per day of CO2,
capturing at an efficiency rate of 90%
7.5m
8.0m (e.p $0.90)
$550,000
Earn out C
upon (i) a non-diluting and non-
refundable grant funding of $5m and (ii)
partnership with at least US$3 million
investment in the CO2 captured activity
with a major strategic partner
7.9m
9.0m (e.p $0.95)
$550,000
Earn out D
upon successful recruitment of carbon
capture leadership team and special
matter experts
1.4m
$530,000
Under the Asset Purchase Agreement the consideration comprised of the following:
●
Cash consideration of $450,000 and associated costs of $141,731, paid upon closing.
●
Issue of consideration ordinary shares (15,700,000 at A$0.19) valued at $1,931,761 (refer to Note 21).
●
●
Issue of consideration options (8,000,000 @ exercise price of A$0.80) valued at $159,598 using Black and Scholes
option valuation (refer to Note 22)
•
Payable upfront payment balance of $300,000. On February 5, 2024, the company signed a second
amendment to the Asset Purchase Agreement, according to which the Company will issue 3,800,000 Ordinary
shares in lieu of cash upfront payment of $300,000.
●
Non-cash consideration being settled by issuance of shares and option measured as of the acquisition date valued at
$1,282,010.
●
The achievement of the milestones has been assessed to have a probability of between 30-50% in the next few years.
This judgement is based on the early stage development and uncertainty with regards to the time the key milestones will
be achieved.
On 15 January 2025, the parties signed a third amendment to the Asset Purchase Agreement and general release. As a
result, no further securities are required to be issued under the Asset Purchase Agreement and no further payments are
required to be made (see Note 29).
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 15. Intangible assets (continued)
42
3452-6826-2197, v. 2
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets
are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of
the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected
pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Given the asset technology readiness level at the date of the acquisition it was not yet available for use. As such, the asset,
was initially classified as having an indefinite useful life upon acquisition. The Group tests whether carrying value of intangible
assets not yet ready for use have suffered any impairment on an annual basis in accordance with AASB 136. For the 2023
reporting period, the recoverable amount of the intangible asset was determined based on the fair value less costs of disposal
methodology.
Following substantial development advancements made during 2024 and completion of development milestones and in light
of the asset’s operational status and the evolving nature of the technology industry, the initial classification of an indefinite
useful life no longer applies. Hence, the Group reclassified the asset to having finite useful life and estimated a useful life of
10 years, which reflects the period during which the Group believes that the asset is expected to generate economic benefits.
As a result, the asset is amortized over its estimated useful life. The amortization method will be straight-line based on the
company’s accounting policies.
Accounting policy for variable payments in an asset acquisition:
Contingent cash consideration in an asset acquisition is recognised as a financial liability only when the consideration is
contingent upon future events that are beyond Dotz's control. In cases where the payment is within Dotz's control, the liability
is recognised only as from the date when the contingent payment crystallises.
Contingent non-cash consideration, settled by equity instruments, are measured by refence to the fair value of the equity
instruments at the date of the acquisition
Note 16. Trade and other payables
31 December
2024
31 December
2023
US$
US$
Current liabilities
Trade payables
431,657
150,550
Accruals
560,330
702,105
991,987
852,655
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
43
Note 17. Financial liability
31 December
2024
31 December
2023
US$
US$
Current liabilities
Financial liability - Mercer
2,938,239
-
Financial liability - Lind
-
1,871,513
Financial liability - Other
-
1,003,811
2,938,239
2,875,324
31 December
2024
31 December
2023
US$
US$
Opening balance
1,871,513
2,612,463
Less repayment of Lind liability
(1,871,513)
Financial liability at inception
2,833,627
Less: transaction costs
(564,150)
Finance cost (accretion of debt)
1,040.019
(740,950)
Partial settlement of financial liability
(228,755)
Foreign exchange impact
(142,502)
Financial liability at closing date
2,938,239
1,871,513
(i) Financial Liability - Mercer
On 5 February 2024, the Company and Mercer Street Global Opportunity Fund, LLC (Mercer) entered into a convertible
securities agreement (Convertible Securities Agreement). Under the Convertible Securities Agreement the Company will issue
to Mercer (or its nominees) up to 13,200,000 convertible notes with a face value of A$1 (Convertible Notes) in consideration
for investment of up to A$12,000,000. Upon issuance of convertible notes, the Company will issue to Mercer Initial
Commencement Shares, options at $0.35 per share with a 36-month maturity pro-rata with each investment amount.
The key terms of the Convertible Securities Agreement are detailed below:
●
The maturity date of Convertible notes is 18 months from date of issuance.
●
Mercer may (at its absolute discretion) convert the Convertible Notes at any time prior to the date which is 18 months
from their date of issue, by giving the Company a conversion notice.
●
Conversion price: if the conversion notice is given on or before the date that is three months after the first closing,
conversion price will be 120% of the VWAP during the preceding ten (10) trading days. if the conversion notice is given
after the date that is three months following the first closing, conversion price will be the lesser of 90% of the two lowest
daily VWAPs during the preceding twenty (20) trading days on which shares were traded in the ordinary course of
business or a minimum conversion price of A$0.09.
●
The Company may elect in writing to repurchase all of the Convertible Notes on issue at a 1.03 times premium, subject
to compliance with the law and ASX Listing Rule
The funding facility provided by Mercer is 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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 17. Financial liability (continued)
44
3452-6826-2197, v. 2
Investment by Mercer:
On 5 February 2024, the Company issued Mercer 2,200,000 Convertible Notes, 2,857,143 Options and 475,889 Initial
Commencement Shares, in consideration for A$2 million investment;
On 19 March 2024, the Company issued Mercer 3,300,000 Convertible Notes, 4,285,714 Options and 475,889 Initial
Commencement Shares, in consideration for A$2 million investment;;
On 27 November 2024, the Company and Mercer executed a deed of variation in respect to the Convertible Securities
Agreement, for which the Company obtained shareholders’ approval on 9 January 2025. According to the variation deed
Mercer invested additional A$2 million in consideration for convertible notes, options at $0.175 per share with a 36-month
maturity and commencement shares for nil consideration as follow:
●
On 27 November 2024, the Company issued Mercer 1,650,000 Convertible Notes, 4,285,714 Options and 666,244 Initial
Commencement Shares in consideration for A$1.5 million investment;
●
On 5 February 2025, the Company issued Mercer 550,000 Convertible Notes and 1,428,571 Options in consideration for
A$0.5 million investment (See Note 29).
In addition, the deed of variation amends the minimum conversion price of the convertible notes issued under the
Agreement to $0.04 (See Note 29).
Under the Convertible Securities Agreement further Convertible Notes to raise up to maximum of AU$5 million (Subsequent
Investment Amount), are available subject to satisfaction of customary conditions.
Convertible notes conversions:
On 21 May 2024, the Company converted AU$200,000 into 1,792,115 ordinary shares at a price of A$0.116 per share, as
per the Convertible Securities Agreement.
On 13 December 2024, the Company converted AU$150,000 into 2,202,643 ordinary shares at a price of $0.068 per share,
as per the Convertible Security Agreement.
Following 31, December 2024, the Company converted AU$431,693 into 5,796,259 ordinary shares at a price of $0.074 per
share, as per the Convertible Security Agreement (see note 29).
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 17. Financial liability (continued)
45
3452-6826-2197, v. 2
ii) Financial Liability – Lind
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) in return for options and a credit
amount of AU$5.65 million (US$3.71 million) ("Funding Agreement"). The Funding Facility provided by Lind a hybrid instrument
which includes a combination of ‘debt’ financial liability that represents the contractual cashflows and a derivative financial
liability that represents the conversion feature. The conversion feature is an embedded derivative liability which is required to
be recognised at fair value through profit or loss.
On 9 January 2024 the Company has issued 3,333,334 fully paid ordinary shares in the capital of the Company as a deemed
issue price of AU$ 0.12 in connection to the Funding Agreement.
On 19 January 2024 the Company repaid to Lind the whole of the Unused Advance Payment Credit of AU$2,350,000
(US$1,546,356).
(iii) Financial Liability – Other
On 28 December 2023, the Company entered into short term loan agreements with various parties totalling to AU$1,475,000
(US$959,330), out of which AU$75,000 (US$48,779) is with a related party (director Kerry Harpaz). The loan term is for one
month or such longer time as determined by the Lender. The interest rate applicable is 5% of the principal loan amount for
each month the loan remains outstanding.
In January 2024, the Company entered into short term loan agreements with various parties totalling to AU$875,000
(US$569,094), out of which AU$75,000 (US$48,779) is with a related party (director Kerry Harpaz) and AU$100,000
(US$65,039) is with a related party (director Mitch Board). The loan term is for one month or such longer time as determined
by the Lender. The interest rate applicable is 5% of the principal loan amount for each month the loan remains outstanding.
In February and March 2024? AU$2,350,000 (US$1,546,356) loans and accrued interest were fully repaid out of which
AU$250,000 (US$162,598) were paid to directors Kerry Harpaz and Mitch Board.
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 17. Financial liability (continued)
46
3452-6826-2197, v. 2
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 18. Derivative financial instrument
31 December
2024
31 December
2023
US$
US$
Current liabilities
Embedded derivative - financial liability at fair value through P&L
900,653
-
31 December
2024
31 December
2023
US$
US$
Opening balance
-
690,940
Embedded derivate liability at inception
1,395,867
-
Partial settlement of embedded derivative
(194,206)
(690,940)
Fair value movement on embedded derivative
(301,008)
-
Closing balance
900,653
-
Refer to note 17 for further information.
Note 19. Liability for unissued shares
31 December
2024
31 December
2023
US$
US$
Current liabilities
Liability for unissued shares
37,221
-
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
47
Note 20. Issued capital
(a) Share Capital
31 December
2024
31 December
2023
31 December
2024
31 December
2023
Shares
Shares
US$
US$
Ordinary shares - fully paid
547,340,977
513,884,881
43,702,146
40,701,153
No
US$
(b) Reconciliation of Share Capital
Opening balance at 1 January 2023
458,878,964
33,718,491
Shares issued on exercise of options
1,000,000
92,712
Shares issued under the placement
19,807,500
2,597,763
Shares issued in leu of payment
250,000
30,435
Shares issued to Lind Partners
18,248,417
2,403,367
Shares issued to H2 Blue Tech Limited
15,700,000
1,931,761
Less: capital raising costs
-
(73,376)
Closing balance at 31 December 2023
513,884,881
40,701,153
(b) Reconciliation of Share Capital
Opening balance at 1 January 2024
513,884,881
40,701,153
Consideration from Lind Partners for initial shares
-
435,710
Shares issued under the placement
19,660,000
1,320,227
Shares issued under share option plan
1,049,982
64,845
Shares issued on convertible loans
8,946,114
788,993
Shares issued to H2 Blue Tech Limited
3,800,000
421,364
Less: capital raising costs
-
(30,146)
Closing balance at 31 December 2024
547,340,977
43,702,146
(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 2024 (31 December 2023: 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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
48
Note 21. Reserves
(a) Reserves
31 December
2024
31 December
2023
US$
US$
Foreign currency reserve
(28,167)
46,653
Options reserve
9,672,786
8,885,736
Performance rights
15,289
-
9,659,908
8,932,389
(b) Options reserve
No.
US$
Opening balance at 1 January 2023
28,131,144
6,723,986
Options issued
25,068,750
515,249
Options issued on H2B acquisition
33,000,000
1,441,608
Options exercised
(1,000,000)
-
Options cancelled
(15,820,000)
-
Vesting of exercise related to options
-
204,893
Closing balance at 31 December 2023
69,379,894
8,885,736
Opening balance at 1 January 2024
69,379,894
8,885,736
Options issued to Mercer
11,428,571
309,410
Options issued attaching to the Placement
19,660,000
-
Options issued to Directors
9,000,000
55,380
Options issued to CEO
1,467,750
16,035
Options issued to executives and employees
2,205,625
41,477
Vesting of exercise related to options
-
364,748
Closing balance at 31 December 2024
113,141,840
9,672,786
(c) Performance rights reserve
Performance rights issued to CEO
2,000,000
15,289
Closing balance at 31 December 2024
2,000,000
15,289
(d) Foreign currency translation reserve
US$
US$
Opening balance
46,653
(22,659)
Difference arising on translation
(74,820)
69,312
Balance at the end of the year
(28,167)
46,653
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
49
Note 22. Share-based payments
The following new share-based payment arrangements existed at 31 December 2024:
Options
Set out below are summaries of options granted during the year:
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
31 December
2024
31 December
2024
31 December
2023
31 December
2023
Outstanding at the beginning of the financial year
16,107,500
US$0.35
6,812,500
US$0.36
Granted
12,673,375
US$0.18
12,165,000
US$0.42
Forfeited
(837,500)
US$0.12
(1,620,000)
US$0.41
Expired
-
US$0.00
(1,250,000)
US$0.20
Outstanding at the end of the financial year
27,943,375
US$0.00
16,107,500
US$0.35
The weighted average remaining contractual life of options outstanding at the end of the financial year was 3.34 years (2023:
3.99 years).
The weighted average fair value of options granted during the year was A$0.058 (2023: A$0.12)
For the year ending 31 December 2024 a share-based payment expense of ($488,602) (31 December 2023: US$711,052)
was recognised in profit and loss in line with option vesting periods.
The terms of options granted during the year ended 31 December 2024 are summarised below:
Share based compensation comprises of the following:
31 December
2024
31 December
2023
US$
US$
SBP expense for options under employee share option plan
340,552
599,187
SBP expense for shares under employee share option plan
64,845
120,956
SBP expense for rights under employee share option plan
15,289
-
SBP expense for external advisors/ vesting of prior year options
67,917
120,956
SBP issued for asset acquisition (shares) – refer to Note 15
421,365
1,931,760
SBP issued for asset acquisition (options)
-
159,598
SBP non issued for asset acquisition (shares & options)
-
1,282,010
Total
909,967
4,214,467
Vesting:
9,000,000 director options vest as follows: half the options will vest on 19 July 2025 and the remainder will vest on 19 July
2026.
1,467,750 CEO options and 2,205,625 executive options will vest as follows: one third will vest on 19 July 2025, another third
will vest on 19 July 2026 and the remainder will vest on 19 July 2027.
The options were valued using the Black and Scholes valuation methodology. The terms of options granted during the year
ended 31 December 2024 are summarised below:
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 22. Share-based payments (continued)
50
3452-6826-2197, v. 2
Grant date
Expiry
Date Spot price
Exercise
price
Expected
volatility
Number of
options
Risk-free
rate
Fair value
at grant
date (AU$)
Fair value
at grant
date (US$)
Maximum
value yet to
vest (US$)
26/09/2024 02/05/2029 AU$0.089
AU$0.190
75%
9,000,000
3.57% AU$360,716 US$247,884 US$180,501
26/09/2024 02/05/2029 AU$0.089
AU$0.150
75%
1,467,750
3.57% AU$130,630
US$89,769
US$69,388
01/08/2024 02/05/2029 AU$0.110
AU$0.150
75%
2,205,625
3.57% AU$242,619 US$166,728 US$117,177
Performance Rights
Effective as of 25 January 2024, the Company granted 2,000,000 Performance Rights to the CEO of the Company, which
were subject to obtaining shareholders’ approval, received in May 2024. The Performance Rights vest subject to achievement
of operational milestones as set by the Board and a summarised below within 12 months of the commencement of the plan,
and the performance rights would be subject to a 2 year escrow period:
●
Milestone 1 - Capital Management - 750,000 performance rights will vest upon securing AU$10m or more.
●
Milestone 2 - Strategic Investment - 250,000 performance rights will vest upon securing AU$1m from strategic investor.
●
Milestone 3 - Carbon Capture Technology Development - 300,000 performance rights will vest on achieving successful
development, testing and operation of carbon capture technology up to Technology Readiness Level 4 (TRL4).
●
Milestone 4- Market Capitalisation - 700,000 performance rights will vest on upon achieving a sustained increase in
enterprise value with market capitalisation of 120m and maintaining this value as an average over a period of 90 days.
The fair value of the Performance Rights was measured based on Management’s estimation as to the probability of meeting
each of the milestones for Milestones 1 to 3.
The fair value of Milestone 4 performance rights were valued using Hoadley Option Valuation Model using the following inputs:
Spot price
Exercise
price Price target
Implied
barrier
Days to
vesting
Days to
expiry
Volatility
Dividend
yield
AU$0.160
Nil
AU$0.229
AU$0.386
239
5,583
72%
Nil
Ordinary Shares
During the reporting period, the Company granted 1,049,982 ordinary shares as short term incentives to the CEO, CFO and
Company Secretary. The value of these shares was determined based on market price at issue date and totalled to
AU$96,598/US$64,845.
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
51
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 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 and financial
liabilities. The main purpose of non-derivative financial instruments is to raise finance for Group’s operations.
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are market risk (including fair value and interest rate
risk) and cash flow interest rate risk, credit risk and liquidity risk.
(a) Interest rate risk
The Group’s exposure to material interest rate risk is on movements in financial liability, which is the risk that a financial
instrument’s value will fluctuate as a result of changes in market interest rates as shown below:
Floating
Interest Rat
e
Fixed
Interest
Rate (6%)
Non-
interest
bearing
31
December
2024 Total
Floating
Interest Rat
e
Fixed
Interest
Rate (6%)
Non-
interest
bearing
31
December
2023 Total
US$
US$
US$
US$
US$
US$
US$
US$
Financial
Liabilities
- Within one year
Financial liability
-
- (3,838,892) (3,382,737)
- (1,003,811) (1,871,513) (2,875,324)
Weighted average interest rate 31 December 2024 Nil% and 31 December 2023 16.07%
Sensitivity Analysis
The following table illustrates that the Group does not have material exposures to the 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. These sensitivities assume that the movement in a particular variable is independent of other variables.
Movement
in Profit
Movement
in Equity
US$
US$
Year ended 31 December 2024
+/-1% in interest rates
10,541
10,541
Year ended 31 December 2023
+/-1% in interest rates
21,972
21,972
(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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 24. Financial instruments (continued)
52
3452-6826-2197, v. 2
31 December
2024
31 December
2023
US$
US$
Cash and cash equivalents - AA Rated
623,492
1,194,269
Cash and cash equivalents - BBB Rated
176,361
151,260
799,853
1,345,529
(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 access to credit standby facility with Mercer (refer to note 17). 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.
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.
Less than 6
months
6-12
months
1-2 years
2-5 years
Over 5
years
Total
contractual
cash flows
Carrying
amount
(liabilities)
31 December 2024
US$
US$
US$
US$
US$
US$
US$
Financial liabilities at amortised
cost
-
- (2,938,239)
-
-
- (2,938,239)
Trade and other payables
(991,985)
-
-
-
-
-
(991,985)
Lease liabilities
- Office lease
(126,949)
(126,949)
-
-
-
-
(239,828)
Total non-derivatives
(1,118,934)
(126,949) (2,938,239)
-
-
- (4,184,122)
Less than 6
months
6-12
months
1-2 years
2-5 years
Over 5
years
Total
contractual
cash flows
Carrying
amount
(liabilities)
31 December 2023
US$
US$
US$
US$
US$
US$
US$
Financial liabilities at amortised
cost
(1,871,513)
-
-
-
-
- (1,871,513)
Trade and other payables
(752,655)
-
-
-
-
-
(752,655)
Lease liabilities
- Office lease
(130,687)
(131,238)
(245,658)
-
-
-
(507,583)
Other loans
(1,003,811)
-
-
-
-
- (1,003,811)
Total non-derivatives
(3,758,666)
(131,238)
(245,658)
-
-
- (4,135,562)
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 24. Financial instruments (continued)
53
3452-6826-2197, v. 2
(d) Currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial
assets and financial liabilities denominated in a currency that is not the entity's functional currency.
2024
2023
Foreign
Currency
USD
Equivalent
Foreign
Currency
USD
Equivalent
Cash and cash equivalents
Australian Dollar
1,225,230
760,194
34,475
9,505
New Israeli Shekels
144,636
39,659
34,475
9,505
Euro
-
-
1,611
1,782
Note 25. Fair value measurement
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
Level 1
Level 2
Level 3
Total
2024
US$
US$
US$
US$
Liabilities
Financial liability
-
2,938,239
-
2,938,239
Derivative financial instrument
-
-
900,653
900,653
Total liabilities
-
2,938,239
900,653
3,838,892
Level 1
Level 2
Level 3
Total
31 December 2023
US$
US$
US$
US$
Liabilities
Financial liability
-
2,875,324
-
2,875,324
Total liabilities
-
2,875,324
-
2,875,324
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.
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 25. Fair value measurement (continued)
54
3452-6826-2197, v. 2
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.
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.
Note 27. Parent entity information
31 December
2024
31 December
2023
US$
US$
Assets
Current assets
650,564
1,278,555
Total assets
650,564
1,278,555
Liabilities
Current liabilities
334,215
2,957,957
Non-current liabilities
3,838,892
-
Total liabilities
4,173,107
2,957,957
Shareholders' equity
Issued capital
358,983,230
355,982,351
Reserves
9,512,188
8,784,667
Accumulated losses
(372,017,960) (366,446,420)
Shareholders equity
(3,522,542)
(1,679,402)
(b) Statement of profit or loss and other comprehensive income
Loss for the year
(5,571,540)
(10,417,832)
Total comprehensive loss
(5,571,540)
(10,417,832)
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 2024 and 31 December
2023.
Contingent liabilities
The parent entity did not have contingent liabilities at 31 December 2024 (31 December 2023: Nil)
Capital commitments
The parent entity had no capital commitments as at 31 December 2024 and 31 December 2023.
Material accounting policy information
Dotz Nano Limited
Notes to the consolidated financial statements
31 December 2024
Note 27. Parent entity information (continued)
55
3452-6826-2197, v. 2
The accounting policies of the parent entity are consistent with those of the consolidated entity.
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:
Ownership interest
Principal place of business /
31 December
2024
31 December
2023
Name
Country of incorporation
%
%
Dotz Nano Ltd
Israel
100.00%
100.00%
Note 29. Events after the reporting period
Asset Purchase Agreement
On January 15, 2025, the Company and H2B signed a third amendment to the Asset Purchase Agreement and general
release. Under this third amendment and following the achievement of certain milestones, the Company issued H2B 11.5
million shares, of which 2.5 million shares are subject to voluntary escrow until 15 January 2026 and 2.5 million unlisted
options, become fully vested and exercisable on 15 January 2026 at price per ordinary share of A$0.165, and expired 24
months thereafter.
In addition, each of the parties has discharged and extinguished all obligations and liabilities toward the other in connection
with the Asset Purchase Agreement . No further securities are required to be issued under the Asset Purchase Agreement
and no further payments are required to be made.
Mercer Funding Agreement
On 22 January 2025, following obtaining shareholder approval, the Company issued 550,000 convertible notes and 1,428,571
options for A$500,000 invested by Mercer. In addition, the Deed of Variation amends the minimum conversion price of the
convertible notes issued under the Agreement to $0.04.
Grant of Securities
On 4 February 2025, the Board of Directors approved the grant of 770,000 options to employees and 1,117,300 RSUs to
executives. The options are vested over a period of 3 years and exercisable at A$0.10, subject to continued employment and
expire five years from issue date. The RSUs are vested over a period of 3 months, subject to continued employment and
expire five years from issue date. In addition, the Board approved the issue of 750,000 shares to the CEO under its incentive
plan and subject to shareholder approval.
No other matter or circumstance has arisen since 31 December 2024 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.
Dotz Nano Limited
Directors' declaration
31 December 2024
56
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 2024 and of its performance for the financial year ended on that date;
●
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Bernie Brookes AM
Chairman
28 February 2025
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of A.C.N. 050 110 275 Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit Pty Ltd and A.C.N. 050 110 275 Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
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 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
2
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 financial year, Dotz Nano Limited
("Company") executed a funding facility with Mercer
Street Global Opportunity Fund , LLC, refer Note 17
for further details.
The facility 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 convertible note 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 convertible note agreement,
subscription notices and other correspondence to
understand the key terms and conditions of the
arrangement and related transactions;
•
Assessing whether management’s determination of
the classification of the components contained
within the convertible note 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 expert;
•
Reviewing management’s accounting treatment for
the initial recognition and subsequent
measurement of the components of the convertible
instrument;
•
Agreeing partial settlements throughout the year
to shares issued and share prices as reported on
the ASX; and
•
Assessing the adequacy of the related disclosures
within Note 17 of the financial report.
3
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 2024, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a) the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i) the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error; and
ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf
4
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 18 to 23 of the directors’ report for the
year ended 31 December 2024.
In our opinion, the Remuneration Report of Dotz Nano Limited, for the year ended 31 December 2024,
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 Pty Ltd
Ashleigh Woodley
Director
Perth, 28 February 2025
Dotz Nano Limited
Consolidated entity disclosure statement
As at 31 December 2024
61
Place formed /
Ownership
interest
Entity name
Entity type
Country of incorporation
%
Tax residency
Dotz Nano Ltd
Limited Liability
Israel
100.00%
Israel
ASX Additional Information
62
The shareholder information set out below was applicable as at 27 February 2025.
As at 27 February 2025 there were 738 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)
at meetings of members each member entitled to vote may vote in person or by proxy or attorney; and
(b)
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
Holding
% IC
CITICORP NOMINEES PTY LIMITED
159,381,474
28.14%
BNP PARIBAS NOMS PTY LTD
126,524,572
22.34%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
97,784,277
17.27%
MARZAMENO LTD
21,689,882
3.83%
DR ZVI GRAUBARD
13,789,735
2.43%
H2 BLUE TECH LTD
10,900,000
1.92%
AVOCADO VENTURES INC
10,270,548
1.81%
SOUTHERN ISRAEL BRIDGING FUND TWO LP
9,650,464
1.70%
IBI TRUST MANAGEMENT
7,846,611
1.39%
SOUTHERN ISRAEL BRIDGING FUND LP
7,114,816
1.26%
BNP PARIBAS NOMINEES PTY LTD
6,280,788
1.11%
BNP PARIBAS NOMINEES PTY LTD
5,671,791
1.00%
MR YOAD REITER
5,014,567
0.89%
HAC COMMODITIES PTE LTD
5,000,000
0.88%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED -
A/C 2
4,153,454
0.73%
MR NATANEL HARPAZ
3,712,708
0.66%
MR GAREN AZOYAN SUTISY &
MRS ARMINEH MOSES MINASKANIANS
3,163,158
0.56%
IBI TRUST MANAGEMENT
2,993,461
0.53%
BT PORTFOLIO SERVICES LIMITED
2,500,000
0.44%
ROMFAL SIFAT PTY LTD
2,400,000
0.42%
Total
505,842,306
89.32%
Total issued capital – Ordinary Fully Paid Shares
566,327,236
100.00%
ASX Additional Information
63
SUBSTANTIAL HOLDERS
Per the Company’s register, the names of the substantial shareholders as at 27 February 2025 are:
Name
No of Shares
held
% of Issued
Capital
CITICORP NOMINEES PTY LIMITED
159,381,474
28.14%
BNP PARIBAS NOMS PTY LTD
126,524,572
22.34%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
97,784,277
17.27%
DISTRIBUTION OF EQUITY SECURITIES
The number of shareholders, performance rights holders, option holders and convertible note holders by size of holding are:
Holding
Number of Shareholders
Number of Shares
Issued Share Capital (%)
1-1,000
135
9,533
0.00%
1,001 - 5,000
172
499,542
0.09%
5,001 - 10,000
124
997,928
0.18%
10,001 - 100,000
214
7,500,249
1.32%
100,001 and over
93
557,319,984
98.41%
Total
738
566,327,236
100.00%
Holding
Performance Right
Holders
Number of Rights
Issued Capital (%)
1-1,000
-
-
-
1,001 - 5,000
-
-
-
5,001 - 10,000
-
-
-
10,001 - 100,000
-
-
-
100,001 and over
1
2,000,000
100.00%
Total
1
2,000,000
100.00%
Holding
Option Holders
Number of Options
Issued Capital (%)
1-1,000
-
-
-
1,001 - 5,000
-
-
-
5,001 - 10,000
-
-
-
10,001 - 100,000
23
1,257,500
1.07%
100,001 and over
44
116,415,411
98.93%
Total
67
117,672,911
100.00%
Holding
Convertible Note Holders
Number of Notes
Issued Capital (%)
1-1,000
-
-
-
1,001 - 5,000
-
-
-
5,001 - 10,000
-
-
-
10,001 - 100,000
-
-
-
100,001 and over
2
6,918,307
100.00%
Total
2
6,918,307
100.00%
RESTRICTED SECURITIES
There were 10,900,000 fully paid ordinary shares subject to voluntary escrow, of which 8,400,000 are escrowed until 15
August 2025 and 2,500,000 are escrowed until 15 January 2026.
UNMARKETABLE PARCELS
Based on a share price per security of $0.0830, there were 331 Shareholders holding less than a marketable parcel totaling
643,195 fully paid ordinary shares, amounting to 0.11% of issued capital.
SHARE BUYBACK
There is no current on-market share buy-back.