Elsight Limited
Preliminary final report
Appendix 4E
1. Details of reporting period
Name of entity:
Elsight Limited ("the Company")
ABN:
98 616 435 753
Reporting period:
31 December 2024
Previous period:
31 December 2023
2. Results for announcement to the market
31 December 31 December
Increase/
Amount
2024
2023
(Decrease)
Change
US$
US$
US$
%
Revenues from ordinary activities
2,028,737
1,541,168
487,569
32%
Loss after tax from ordinary activities attributable to members
(3,870,954)
(3,683,532)
187,422
5%
Loss after tax attributable to members
(3,870,954)
(3,683,532)
187,422
5%
3. 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.
4. Dividend reinvestment plans
Not applicable.
5. Net tangible assets/(liabilities)
Reporting
period
Previous
period
Cents
Cents
Net tangible assets/(liabilities) per ordinary security
0.52
(1.29)
6. Control gained over entities
Not applicable.
7. Loss of control over entities
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
Elsight Limited
Preliminary final report
Appendix 4E
9. Foreign entities
Not applicable.
10. Audit qualification or review
This report is based on accounts which have been audited. Refer to the Auditor’s Report on page 57 of the 2024 Annual Report.
11. Attachments
Details of attachments (if any):
The Annual Report of Elsight Limited for the year ended 31 December 2024 is attached.
12. 2025 Annual General Meeting
Elsight Limited advises that its Annual General Meeting (AGM) will be held on or about Thursday, 29 May 2025. The time and
other details relating to the AGM will be advised in the Notice of Meeting to be sent to all shareholders and released to the
ASX immediately after despatch.
In accordance with the ASX Listing Rules and Company’s Constitution, valid nominations for the position of director are required
to be lodged at the registered office of the Company by 5:00pm (Sydney time) on Monday, 14 April 2025.
13. Signed
David Furstenberg
Executive Director
27 February 2025
Elsight Limited
ABN 98 616 435 753
Annual Report - 31 December 2024
Elsight Limited
Annual Report
Contents
31 December 2024
1
Corporate directory
2
Chairman's letter
3
Directors' report
4
Auditor's independence declaration
22
Consolidated statement of profit or loss and other comprehensive income
23
Consolidated statement of financial position
24
Consolidated statement of changes in equity
25
Consolidated statement of cash flows
27
Notes to the consolidated financial statements
28
Consolidated entity disclosure statement
56
Directors' declaration
57
Independent auditor's report
58
Additional ASX Information
61
General information
These consolidated financial statements cover Elsight Limited (Company) and its controlled entities (also referred to as Group).
Elsight Limited is a listed public company limited by shares, incorporated and domiciled in Australia. The Group is a for-profit
entity.
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is
not part of the financial statements.
The financial statements were issued by the board of directors on 27 February 2025.
Elsight Limited
Annual Report
Corporate directory
31 December 2024
2
Directors
Major General (ret) Ami Shafran – Non-Executive Chairman
Mr David Furstenberg – Executive Director
Mr Howard Digby – Non-Executive Director
Mr Joshua (Jim) Landau – Non-Executive Director
Company secretary
Mr Mark Licciardo
Registered office
Level 7
330 Collins Street
Melbourne VIC 3000
AUSTRALIA
Ph: +61 3 8689 9997
Email: info@el-sight.com
Share registry
Automic Registry Services
Level 5, 191 St Georges Terrace
Perth WA 6000
AUSTRALIA
Phone: 1300 288 664 (within Australia) +61 2 9698 5414 (outside Australia)
Fax: +61 8 9321 2337
Email: hello@automic.com.au
Web: www.automic.com.au
Auditor
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Tower
Perth WA 6000
AUSTRALIA
Securities exchange listing
Elsight Limited shares are listed on the Australian Securities Exchange (ASX code: ELS)
Website
www.elsight.com
3
Dear Shareholders,
As we reflect on the year 2024, I am pleased to report a year of continued growth, strategic expansion, and operational
excellence for Elsight Limited. The year was characterized by strong financial performance, significant milestones, and a
reinforced positioning in the defense and homeland security sectors, paving the way for sustained future growth.
Financial and Operational Performance
Elsight achieved a 32% year-over-year increase in annual revenue, surpassing $2 million, with 51% of total revenue derived
from the defense sector, compared to 37% in 2023. This growth reflects our focused approach to penetrating high-value
markets, adding regional partners and expanding our customer base globally.
Recurring revenue, a key driver of sustainable growth, increased by 83% year-over-year, demonstrating the strength of our
subscription-based connectivity solutions. Additionally, our burn rate continued to decline, reinforcing our commitment to
operational efficiency and financial prudence.
Strategic Milestones and Market Expansion
2024 marked our largest order to date in the defense market, a multi-year contract with a leading global defense contractor.
This strategic win proves our market fit in critical military communications and is expected to drive significant revenue growth
in 2025 and beyond.
We also expanded our global footprint into the defense market, securing key contracts with Lockheed Martin (U.S.), Telespazio
(Europe), and ST Engineering, a Southeast Asian aerospace and defense group. In addition, a new design-win customer is a
supplier of UAVs to the European defense market. Furthermore, our new partnership with Tukom, a major defense distributor
in the DACH region, will provide enhanced market access in Europe.
Innovation and Product Development
R&D remains as a cornerstone of our strategy. This year, we introduced DroneCommX, an after-market connectivity solution,
designed to enhance two drone models of the world’s most popular drone company DJI, used primarily in the homeland
security and public safety sectors. The successful launch of this product underscores our ability to develop innovative solutions
that cater to evolving industry demands and the aftermarket.
Strengthening Financial Stability
A major highlight of 2024 was the conversion of $7.35 million in convertible notes, effectively eliminating company debt and
improving our financial flexibility. This development reflects investor confidence in Elsight’s long-term potential and positions
us for accelerated growth.
Looking Ahead
As we enter 2025, we remain focused on scaling our defense sector engagements, deepening strategic partnerships, and
expanding our technological offerings. The long term longer sales cycle in the government and defense markets is expected
to translate into a more stable, high-value contracts, and with material revenue growth beginning already in Q1 2025.
With a solid foundation in place and an expanding market presence, Elsight is well-positioned to drive sustained growth and
deliver long-term value to our shareholders.
On behalf of the Board, I extend my gratitude to our investors, customers, partners, and employees for their unwavering
support. I look forward to another successful year ahead.
Sincerely yours,
Major General (ret.) Ami Shafran
Non-ExecuƟve Chairman
Elsight Limited
Annual Report
Directors' report
31 December 2024
4
Your directors present their report, together with the financial statements of Elsight 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
Major General (ret) Ami Shafran
Non-Executive Chairman
2 June 2017
-
Mr David Furstenberg
Executive Director
2 June 2017
-
Mr Howard Digby
Non-Executive Director
13 December 2016
-
Mr Joshua (Jim) Landau
Non-Executive Director
1 October 2021
-
Company Secretary
Mr Mark Licciardo (Appointed 15 March 2019)
Principal activities
The principal activities of the Group during the year were the development and commercialisation of Halo in the Unmanned
Aerial Vehicle ("UAV") market.
Dividends
There were no dividends paid or recommended during the financial year ended 31 December 2024 (31 December 2023: Nil)
Review and results of operations
Unless otherwise stated all figures in this report are in the Group's presentation currency US$.
Elsight Limited incurred a loss for the year of $3,870,954 (31 December 2023: loss of $3,683,532).
The net assets of the Group have increased by $2,811,960, from net liabilities of $1,660,975 at 31 December 2023 to net assets
of $1,150,985 at 31 December 2024.
As at 31 December 2024, the Group’s cash and cash equivalents decreased from a balance of $2,702,593 at 31 December 2023
to a balance of $873,953 at 31 December 2024.
As at 31 December 2024 the Group has a working capital of $972,978 (31 December 2023: working capital of $3,148,709).
Excluded from the 31 December 2023 working capital are convertible notes with a balance of US$4,983,627 which the Group
has converted before their 30 December 2024 maturity date.
Elsight Limited
Annual Report
Directors' report
31 December 2024
5
REVIEW OF ACTIVITIES AND BUSINESS UPDATE
2024 Annual Performance Highlights
Main Metrics
Elsight is pleased to report an annual 32% revenue increase
(approximately USD $0.5M) reaching over $2 million in
2024 over 2023. As projected, the proporƟon of the
revenue derived from the defence sector soared to 51% in
contrast to only 37% in 2023.
Annually, 2024 recurrent revenue increased over 2023 by
83% (USD $340K). 32 new Design-Win customers were
acquired in 2024. Significant orders from recurring
customers included two defence EMEA contractors and
others such as Farada (Poland), one mulƟnaƟonal group
based in Southeast Asia, and CenSys (US). Also significant
was a distributor agreement signed with Tukom, a defence-
focused company in the DACH region.
News Highlights:
o RepeaƟng mulƟnaƟonal aerospace technology customer
in Southeast Asia, in the defence and public security
sectors was the first to receive BVLOS cerƟficaƟon in its
home country for its drones used in surveillance,
inspecƟon and delivery.
o A new design-win customer is a supplier of UAVs to the
European defence market with a solid pipeline.
o Customer Phoenix Air Unmanned (PAU) announced the
successful compleƟon of a 320-mile pipeline patrol in
just 7.6 flight hours using a single unmanned aircraŌ
system (UAS) empowered by the Halo. Conducted for
giant Shell Pipeline Company (SPLC) in Louisiana, the
achievement surpasses the project’s goal of patrolling
300 miles in a single flight day. The flights were
performed under PAU’s naƟonwide beyond visual line of
sight
(BVLOS)
regulatory
approval,
showcasing
advancements in criƟcal infrastructure inspecƟon.
Market penetraƟon
During the year, the Company added 32 new
design wins and signed with Tukom, an acƟve
defence distributor in the DACH region. Part of
that customer increase included major defence
contractors including two in EMEA, one (Lockheed
MarƟn) in the U.S.
It is worth noƟng that the sales cycle in the
Government/Defence sector is significantly more
demanding and longer (1-2.5 years), while the
long-term revenue potenƟal is significantly higher.
2024 can be characterized as a year of deal
development and incubaƟon that will see its
fruits materializing during during 2025 and
beyond, e.g. our ASX Announcement (“ELS Wins
Largest Order with Leading Defense Contractor”),
aŌer an R&D development effort, as planned, will
start delivering quarterly material revenues by the
end of Q1/2025.
ConverƟble notes conversion
The Company completed the conversion of all
converƟble notes, eliminaƟng the debt
previously accrued.
Split between defence and commercial
revenues
The year 2024 ended with 51% of the total
revenue from the defence sector, in contrast to
only 37% in 2023.
Elsight Limited
Annual Report
Directors' report
31 December 2024
6
Elsight Limited (ASX: ELS) (Elsight or the Company), the carrier agnostic, AI-powered connectivity solutions company, is
pleased to provide the following Business Update, outlining the Company’s achievements throughout the year 2024.
Table 1 This chart sets out the unaudited annual revenue
Major milestones in 2024
The 2024 annual revenue of the Company is $2M, an increase of 32% (approximately USD $0.5M) over the 2023 annual
revenue. This achievement may be primarily attributed to the Company’s deeper focus on the defense sector which soared to
51% of total revenue this year from 37% in 2023. As the year unfolded with world conflict constantly in the headlines, both the
use of unmanned aerial and ground vehicles was on the uptake, making it clear to Elsight that the fit and the high potential of
the Halo remain on the rise. E.g. In the recent years, Ukraine was not considered as a major manufacturer in the defense and
the drone arena. On October 02, 2024, President Zelensky announced that “Ukraine can produce four million drones a year”.
Furthermore, the Company is experiencing a growing interest from large and small global players for its solutions in the defense
sector, resulting in a promising healthy sales pipeline that is expected to translate into material revenues during 2025. This
includes exposure to US, European and Asian markets.
It is worth noting that the sales cycle in the Government/Defense sector is significantly more demanding and longer (1-2.5
years), while the long-term revenue potential is significantly higher. So, in some respects, 2024 can be viewed as a year of deal
incubation and development that will see its fruits materializing during 2025 and beyond. For example, our ASX announcement
(“ELS Wins Largest Order with Leading Defense Contractor”), after an R&D development effort, as planned, will start delivering
revenues by the end of Q1/2025 (This project was not included in 2024 revenue results).
Throughout 2024 members of our executive team spoke and participated in various large industry events, particularly those in
the defense and first responder sectors. During these events, we learned that our Halo fulfills many of the requirements of a
large number of critical applications in the evolving world of combat, surveillance, disaster relief, and recovery (DFR). For the
military arena our value is particularly pronounced in that the Halo overcomes the critical challenges of a single point of failure
in communications, offers robust non-line-of-sight capabilities, and is extremely portable with a fast set-up in areas with limited
infrastructure.
Since September, the Company has continued its development of a brand-new product which is an evolution of Halo. It
leverages cellular and other communication technologies to support various applications of both portable and stationary
sensors for high-scale deployments in large quantities. This new product is very close to completion and becoming GA (General
Availability). A second version of it is due for release to support new customers in various commercial industries soon as well.
Leading industry associations
In June Elsight Co-Founder and Chief Technology Officer Roee Kashi was elected as Co-Chair of the GSMA Drone Interest Group,
alongside Kapil Mittal as Co-Chair, Global Head Digital Airspace at Ericsson. Roee’s will contribute by exploring new revenue
initiatives with advanced use of LTE and 5G technology. GSMA is an international organisation of more than 1,000 mobile
operators and businesses across the globe.
Elsight Limited
Annual Report
Directors' report
31 December 2024
7
Recurrent revenues
Annually, 2024 recurrent revenue increased over 2023 by 83% demonstrating the high value of our subscription-based
connectivity solutions.
First sales of the Company’s new product, DroneCommX, for the HLS/public safety sector
Elsight’s new after-market product DroneCommX which is designed to give owners of the most popular DJI Matrice 30 and 350
major drones upgrades to more secured BVLOS flights among others was sold to its first customer. These multiple units will be
used by a U.S. drone service provider in the field of law enforcement and security and are expected to create significant growth
in 2025 by addressing administration fear and resentment toward China made communication products.
New customers and re-orders from existing customers
32 new Design-Win customers were acquired during 2024, and significant orders were received from several recurring
customers including the two defense EMEA contractors and other commercial customers such as Farada (Poland), one in
Southeast Asia, Airobotics (U.S.), CenSys Technologies (U.S.) and Phoenix Air Unmanned (U.S.). A new 2024 customer in
Southeast Asia, ST Engineering, is the first to receive BVLOS certification in its country for its drone services in surveillance,
inspection, and delivery.
Through our regional partner, Navicom Aviation, Japan’s largest drone manufacturer, ACSL, became a customer mid-year. ACSL
has been using the Halo for both mail delivery to mountainous regions, and in disaster recovery during the Noto Peninsula
earthquake and heavy rains. Drones were used for damage assessment, transport of materials and real-time monitoring.
Another customer Phoenix Air Unmanned announced the successful completion of a 320-mile pipeline patrol of the giant Shell
Pipeline Company (SPLS) in just 7.6 flight hours using a single unmanned aircraft system (UAS), an achievement empowered
by the Elsight Halo. The flights were performed under PAU’s nationwide beyond visual line of sight (BVLOS) regulatory approval,
showcasing advancements in critical infrastructure inspection.
The Farada Group, based in Poland, which focuses on the design, production and implementation of unmanned aerial vehicles
(UAVs) in both the defense and medical delivery markets has has had approximately 150 Halo units ordered this year.
By the end of the year, DroneUp, one of the Company’s important clients in the embryonic parcel delivery market, ended its
its contract with Walmart. This development was influenced by market dynamics, including competitive pressures (offering
free-of-charge deliveries) that were beyond DroneUp’s control and not related to the Company’s products and services.
Considering the significant and successful shift toward the defense market in time, this loss is not expected to have a material
impact on Elsight’s 2025 financial performance. Elsight’s annual plan for 2025 incorporates only minimal revenue contributions
from new orders related to this client (less than US$15K in new orders during 2025).
Conversion of convertible notes eliminating Company debt
At the end of 2024, the Company announced the completion of the conversion of AUD$7.35 million (approximately US$5.6M)
of convertible notes into ordinary shares.
Burn rate
Acting frugal: The Company decreased its Burn rate from 2022 to 2023 by 36%. This past year, the annual Burn Rate was further
decreased from 2023 to 2024 by an additional 27% (USD $661K), reflecting tighter financial planning and management. This
cost reduction together with the increased move toward the defense sector and revenue increase places the Company in an
excellent position and solid foundation toward 2025.
Business risk disclosure
Material business risks that could affect future operational and financial growth of the Group are as follows:
Currency and Foreign Exchange Risk
There is a currency risk in relation to the value of financial instruments, possibly fluctuating due to changes in foreign exchange
rates. This currency risk may arise when future commercial transactions and recognized assets and liabilities are denominated
in a currency that is not the Company’s functional currency.
The Company is also exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US
Dollar and the New Israeli Shekel. Any reasonable fluctuation in exchange rates is not expected to have a material impact on
Elsight Limited
Annual Report
Directors' report
31 December 2024
8
either profit or equity. However, the Company acknowledges that currency risk and/or foreign exchange risk remains a
potential future risk for the Group, and the Company continually monitors this.
Competition in key markets
The industry in which the Group is involved is subject to domestic and international competition. Whilst the Group undertakes
reasonable due diligence in business decisions and its operations, the Group has no influence or level of control over the
activities of its competitors.
The Company has worked diligently on its product innovation to ensure that it remains as the market leader in BVLOS (Beyond
Visual Line-Of-Sight) communication solutions (Products), and through its Design-Win program, has partnered with over 100
different drone and UAV manufacturers and service providers who are all using the Company’s Products as their connectivity
solution, in many cases embedding the Product in the design of the drone and proceeding to regulatory certification of their
drone with the Product onboard. Furthermore, the Company is increasing its product offering.
The Company’s technology (which comprises its Products) is protected by multiple patents, and ELS is constantly following
potential competition to make sure that the Company stays ahead of the market. Additionally, the Company considers that its
design-win concept of the Products provides significant protection against the Company’s potential competition, as it makes it
very hard to change critical components like ours once an entity has designed its solution around the Products, and in many
cases, once an entity has gone through the long certifications process with the Products included in their own product.
Furthermore, as part of our stickiness effort - the Company is providing the best professional support and speed of order
delivery to its partnering customers who clearly recognize this.
Reliance on Key Personnel and Consultants
The Company’s success largely depends on the core competencies of its directors, management and third-party consultants
and their familiarization with, and ability to operate in, the telecommunications and related industries. The financial
performance of the Company and the value of an investment in the Company party depend on the ability of the Company to
retain these key personnel and consultants.
General Economic Conditions
The Company’s operating and financial performance is influenced by a variety of general economic and business conditions
including the level of inflation, interest rates and government fiscal, monetary and regulatory policies. Prolonged deterioration
in general economic conditions, including an increase in interest rates, could be expected to have a corresponding adverse
impact on the Company’s operating and financial performance.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Likely developments and expected results of operations
The Group’s principal continuing activity is the development and commercialisation of the Halo and its derivative product
offering. The Group’s future developments, prospects and business strategies are to continue to develop and commercialise
this technology.
Matters subsequent to the reporting period
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Elsight Limited
Annual Report
Directors' report
31 December 2023
9
Information on Directors
Name:
Major General (ret) Ami Shafran
Title:
Non-Executive Chairman (Appointed 2 June 2017)
Qualifications:
-
Experience:
Major General Shafran is the former Head of the Israeli Defence Force Information and
Communications Technology Command. In addition, he is serving as the Chairman of
the University’s Executive Committee, and the Head of the Center for Cyber Technology
at Ariel University in Israel.
Over the course of his extensive career Major General Shafran held numerous
prestigious and prominent positions in the Defence and Intelligence forces of the Israeli
Defence Force, including serving as its Chief Scientist, service as Chief of Staff of the
Ministry of Defence, and the Research and Development Attaché at the Israeli Embassy
in Washington DC.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
222,891 Ordinary shares
Interests in options:
Nil
Name:
Mr David Furstenberg
Title:
Executive Director (Appointed 2 June 2017)
Qualifications:
-
Experience:
Mr Furstenberg has held various senior CEO, Chairman, Board member and VP Global
sales positions in a number of publicly traded and privately owned companies, including
Comverse (NASDAQ: CNSI) and Audiocodes (NASDAQ: AUDC), Enure, and Vista (a
subsidiary of Israel Aerospace Industries).
Most recently MR Furstenberg was the active Chairman at NovelSat and the CEO at
InsurBit, as well as a board director at White Cyber Knight Ltd and Insurix Inc., all
companies involved in cyber and security businesses in some form.
Mr Furstenberg has built a speciality in assisting with the turnaround of high-tech
companies through product and market repositioning (as opposed to reduction in force).
He transitioned from non-Executive to Executive Director of the Company from 1
November 2020.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
222,892 Ordinary shares
Interests in options:
Nil
Elsight Limited
Annual Report
Directors' report
31 December 2024
10
Name:
Mr Howard Digby
Title:
Non-Executive Director (Appointed 13 December 2016)
Qualifications:
Bachelor of Engineering (Mechanical) (Honours)
Experience:
Mr Digby began his career at IBM and has spent 25 years managing technology related
businesses in the Asia Pacific region, of which 12 years were spent in Hong Kong, ending
with with The Economist Group as Regional Managing Director. Prior to this, he held
senior regional management roles at Adobe and Gartner. Upon returning to Perth, Mr
Digby served as Executive Editor of WA Business News and now spends his time as a
company director, advisor and investor, having played key roles in several M&A and
reverse takeover transactions.
Other current directorships:
4DS Memory Limited (Non-Executive Director)
Singular Health Group Limited (Non-Executive Chairman)
Former directorships (last 3 years):
Spenda Limited previously known as Cirralto Limited (Non-Executive Director) (resigned
21 November 2024)
Special responsibilities:
Nil
Interests in shares:
2,228,096 Ordinary shares
Interests in options:
Nil
Name:
Mr Joshua (Jim) Landau
Title:
Non-Executive Director (Appointed 1 October 2021)
Qualifications:
FCPA, FINSIA, AICD, BEE (Hon)
Experience:
Mr Landau has over 40 years’ experience as a technology entrepreneur and mentor and
brings significant experience as both a senior leader and director of numerous listed and
unlisted companies. He currently serves as a Chair for an Australian TEC group of
managing directors from diverse industries and is a non-executive director of the private
equity Leading Technology Group.
Mr Landau was the co-founder of one of Australia’s first listed software companies,
Software Corporate of Australia, which was listed on the second Board of the ASX and
was the managing director of Australia’s first main board listed IT services company,
Datronics Corporation. He was the former chairman of Centricom the developer of the
Poli Payments platform, a director of Collaborate Corporation and as director or advisor
to several other cutting edge technology companies, including those involved with the
emerging UAV industry.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
100,000 Ordinary shares
Interests in options:
Nil
Elsight Limited
Annual Report
Directors' report
31 December 2024
11
Information on Key Management Personnel
Name:
Mr Yoav Amitai
Title:
Chief Executive Officer
Qualification:
BSc Mechanical Engineering
Experience:
Mr Amitai has been with Elsight for eight years. Prior to becoming the Company’s Chief
Executive Officer, most recently as Chief Operating Officer and as Chief Innovation &
Product Officer before that.
With a degree in Mechanical Engineering from the Ben-Gurion University of the Negev
and a rich resume that includes serving as General Manager of Agor Engineering, Mr
Amitai brings extensive managerial, business strategy, and technical experience to the
Elsight table. Yoav played a major part in initiating and executing Elsight’s strategic
transition from project-based to product-oriented company, leveraging its advanced
technology and shaping its technological and business vision. Mr Amitai is well-versed in
product design, manufacturing, and "creative engineering" solutions and is a perfect fit
to lead Elsight’s team.
Name:
Mr Roee Kashi
Title:
Chief Technology Officer
Qualification:
-
Experience:
Mr Kashi commenced his career in the Israeli Defence Force and has over ten years of
experience and expertise in building and developing digital video systems.
Mr Kashi has been responsible for some major technological achievements including the
development of the core software of El-Sight Israel’s digital video recorder that is
responsible for video encoding and transmission, user interface design and construction
of the system, handheld software development (Pocket PC, Smartphone), moving
cameras, smart searches, and send notification email recordings to name a few.
'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.
Information on Company secretary
Name:
Mr Mark Licciardo
Qualifications:
B.Bus (Acc), GradDip CSP, FGIA, FCIS, FAICD
Experience:
Mr Mark Licciardo, of Acclime Corporate Services, has extensive experience working with
Boards of ASX listed companies in the areas of corporate governance, accounting and
finance and company secretarial practice. His expertise is in developing and guiding
effective governance and he is considered a leader in this sector. His 40-year corporate
career has encompassed executive roles in banking and finance, funds management,
investment and infrastructure development. Mr Licciardo was the Managing Director
and founder of Mertons Corporate Services which was acquired by Acclime in 2022 and
is currently Partner and Managing Director of Acclime’s Listed Services division and a
Non-executive Director of various public and private companies.
Elsight Limited
Annual Report
Directors' report
31 December 2024
12
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:
DIRECTORS' MEETINGS
DIRECTORS' MEETINGS
Directors
Appointment dates
Number eligible to attend
Number attended
Ami Shafran
Appointed 2 June 2017
10
10
David Furstenberg
Appointed 2 June 2017
10
10
Howard Digby
Appointed 13 December 2016
10
10
Joshua Landau
Appointed 1 October 2021
10
10
Shares under options
Unissued shares under option
At the date of this report, the unissued ordinary shares of Elsight Limited under option are as follows:
Issue Date
Expiry Date
Status
Exercise Price
Number Under
Option
29 June 2020
23 April 2025
Unlisted
A$0.28
550,000
29 June 2020
15 May 2025
Unlisted
A$0.34
50,000
29 June 2020
12 June 2025
Unlisted
A$0.32
100,000
2 February 2021
1 February 2026
Unlisted
A$0.43
130,000
15 September 2021
14 September 2026
Unlisted
A$0.42
427,000
15 September 2021
14 September 2026
Unlisted
A$0.48
695,000
15 December 2021
14 December 2026
Unlisted
A$0.38
50,000
15 December 2021
14 December 2026
Unlisted
A$0.44
200,000
26 April 2022
25 April 2027
Unlisted
A$0.43
200,000
26 May 2022
25 May 2027
Unlisted
A$0.48
2,687,589
21 September 2022
30 August 2027
Unlisted
A$0.37
2,439,000
18 January 2023
18 January 2028
Unlisted
A$0.37
43,000
10 May 2024
26 March 2029
Unlisted
A$0.36
3,153,000
25 July 2024
25 July 2029
Unlisted
A$0.46
625,000
22 August 2024
22 August 2029
Unlisted
A$0.38
105,000
11 November 2024
21 August 2029
Unlisted
A$0.60
750,000
11 November 2024
21 August 2029
Unlisted
A$0.90
1,000,000
11 November 2024
21 August 2029
Unlisted
A$1.30
1,000,000
11 November 2024
21 August 2029
Unlisted
A$1.80
1,250,000
15,454,589
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
Elsight Limited
Annual Report
Directors' report
31 December 2023
13
Shares issued on the exercise of options
During the year ended 31 December 2024 a total of 741,145 options were converted to ordinary shares as follows:
65,625 options exercisable at A$0.30 on or before 27 July 2025;
95,833 options exercisable at A$0.28 on or before 23 April 2025;
37,500 options exercisable at A$0.37 on or before 30 August 2027;
50,000 options exercisable at A$0.28 on or before 23 April 2025;
50,000 options exercisable at A$0.37 on or before 18 July 2025;
100,000 options exercisable at A0.35 on or before 23 June 2024;;
32,812 options exercisable at A$0.37 on or before 30 August 2027;
35,000 options exercisable at A$0.42 on or before 14 September 2026;
100,000 options exercisable at A$0.28 on or before 23 April 2025;
34,375 options exercisable at A$0.42 on or before 14 September 2026; and
140,000 options exercisable at A$0.37 on or before 30 August 2027.
During the year ended 31 December 2023 5,000 options exercisable at A$0.37 on or before 30 August 2027 were exercised to
ordinary shares.
Shares issued on the conversion of Convertible Notes
During the year ended 31 December 2024, a total of 25,583,333 conversion notes were converted to ordinary shares as follows:
183,333 conversion notes converted to 201,522 ordinary shares at an issue price of $0.30 each;
83,333 convertible notes converted to 92,324 ordinary shares at an issue price of $0.30 each;
233,333 conversion notes converted to 261,632 ordinary shares at an issue price of $0.30 each; and
25,083,334 conversion notes converted to 29,420,007 ordinary shares at an issue price of $0.30 each.
During the year ended 31 December 2023, no convertible notes were converted to ordinary shares.
No amounts are unpaid on any of the shares.
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 and insurance of 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.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM Australia Partners, as part of the terms
of its audit engagement agreement against claims by third parties arising from their report on the financial report.
Elsight Limited
Annual Report
Directors' report
31 December 2023
14
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
In the event that non-audit services are provided by RSM Australia Partners, the Board has established certain procedures to
ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor independence
requirements of the Corporations Act 2001. These procedures include:
●
non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed
by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
●
ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest dollar.
Auditor's independence declaration
The auditor’s independence declaration as required under section 307C for the year ended 31 December 2024 has been
received and can be found on page 22 of the financial report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
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 and its regulations. This information has been audited as
required by section 308(3C) of the Act.
The remuneration report is presented under the following sections:
(1) Introduction
(2) Remuneration governance
(3) Executive remuneration governance
(4) Non-executive Director fee arrangements
(5) Details of remuneration
(6) Additional disclosures relating to equity instruments
(7) Loans from key management personnel (KMP) and their related party
(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.
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.
Key management personnel covered in this report are as follows:
Elsight Limited
Annual Report
Directors' report
31 December 2024
15
Name
Status
Appointment dates
Resignation
dates
Major General (ret) Ami Shafran
Non-Executive Chairman
2 June 2017
-
Mr David Furstenberg
Executive Director
2 June 2017
-
Mr Howard Digby
Non-Executive Director
13 December 2016
-
Mr Joshua Landau
Non-Executive Director
1 October 2021
-
Mr Yoav Amitai
Chief Executive Officer
1 November 2020
-
Mr Roee Kashi
Chief Technology Officer
2 June 2017
-
2. Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the
establishment of a separate remuneration committee. Accordingly, all matters are considered by the full Board of Directors, in
accordance with a remuneration committee charter.
During the financial year, the Company did not engage any remuneration consultants.
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 and equity-based compensation, as well as employer contributions to superannuation funds. Shares
and options may only be issued to directors subject to approval by shareholders in a general meeting.
At the date of this report the Company has three appointed executives, Mr David Furstenberg as Executive Director, Mr Yoav
Amitai as Chief Executive Officer and Mr Roee Kashi as Chief Technology Officer. The terms of their Employment Agreements
with Elsight Limited are summarised in the following table.
Executive Name
Services Agreement Summary
Mr David Furstenberg
- Executive salary of AUD $50,000 per annum (based on the exchange rate at 31
December 2024, equals approximately US$31,000 per annum).
- Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with Group's reimbursement policies.
- The agreement commenced on 1 June 2017 and may be terminated by either party
with no notice period.
Mr Yoav Amitai
- For the year ended 31 December 2024, executive salary of ILS 756,000 per annum
(based on the exchange rate at 31 December 2024, equals approximately US$207,000).
- Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with Group's reimbursement policies.
- The agreement commenced on 1 November 2020 and may be terminated by either
party on 104 days’ notice. It may be terminated immediately with justifiable cause.
Mr Roee Kashi
- For the year ended 31 December 2024, executive salary of ILS 756,000 per annum
(based on the exchange rate at 31 December 2024, equals approximately US$207,000).
- Reimbursement of reasonable business expenses incurred in the ordinary course of the
business in accordance with Group's reimbursement policies.
- The agreement commenced on 6 April 2017 and may be terminated by either party on
180 days’ notice. It may be terminated immediately with justifiable cause.
As the Group is still in the process of developing and commercialising its products the Board does not consider the Group’s
earnings or earnings related measures to be an appropriate Key Performance Indicator (KPI). In considering the relationship
between the Group’s remuneration policy and the consequences for the Company’s shareholder wealth, changes in share price
are analysed as well as measures such as successful completion of business development and corporate activities.
Elsight Limited
Annual Report
Directors' report
31 December 2024
16
Employee Share Option Plan
The Group has established and maintains the Elsight Limited Employee Share Option Plan (Plan) to provide ongoing incentives
to Eligible Participants of the Company. Eligible Participants include:
●
a director (whether executive or non-executive) of the Group;
●
a full or part time employee of the Group;
●
a casual employee or contractor of the Group; or
●
a prospective participant, being a person to whom the offer was made but who can only accept the offer if arrangement
has been entered into that will resulting in the person becoming an Eligible Participant.
The Board adopted the Plan to allow Eligible Participants to be granted options to acquire shares in the Company.
The purpose of the Plan is to assist in the reward and motivation of Eligible Participants and link the reward of Eligible
Participants to performance and the creation of shareholder value. It is designed to align the interest of Eligible Participants
more closely to the interests of shareholders by providing an opportunity for Eligible Participants to receive shares. It provides
the Eligible Participants with the opportunity to share in any future growth in value of the Company and provides greater
incentives for Eligible Participants to focus on the Company’s longer-term goals.
4,000,000 options were issued to Chief Executive Officer Yoav Amitai and 645,000 options were issued to Chief Technology
Officer Roee Kashi under the Plan during the 31 December 2024 financial year.
Elsight Limited
Annual Report
Directors' report
31 December 2024
17
Group Performance
The table below shows the performance of the Group over the last 5 reporting periods:
Financial Year
31 Dec 2024
31 Dec 2023
31 Dec 2022
31 Dec 2021
31 Dec 2020
Loss for the year
US$,3,870,954
US$3,683,532
US$4,306,433
US$6,043,694
US$3,880,688
Loss per share (cents)
US$2.56
US$2.45
US$2.97
US$4.53
US$3.62
Share price
A$0.37
A$0.38
A$0.34
A$0.38
A$0.425
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
A$300,000 (US$186,000) 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 US$109,996 (2023: US$110,586) and cover main Board
activities only. Non-executive directors may receive additional remuneration for other services provided to the Group.
All non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter
summarises the board policies and terms, including remuneration, relevant to the office of director.
5. Details of remuneration
The Key Management Personnel of Elsight Limited includes the current and former Directors of the Company and Key
Management Personnel of Elsight during the year ended 31 December 2024.
31 December
2024
Short term benefits
Post-
employment
Share-
based
payments
Performance
based
remuneration
Total
Salary &
fees
Other (i)
Non-
monetary
benefits
Bonuses
retirement
benefits
(ii)
(iii)
US$
US$
US$
US$
US$
US$
%
US$
Directors:
Ami Shafran
32,983
-
-
-
-
-
-
32,983
David
Furstenberg
32,983
-
-
-
-
-
-
32,983
Howard Digby
32,979
-
-
-
-
-
-
32,979
Joshua Landau
39,581
-
-
-
4,453
-
-
44,034
Key
management:
Yoav Amitai
205,017
15,121
14,842
-
30,305
144,937
35%
410,222
Roee Kashi
222,196
15,121
12,195
-
30,302
93,399
25%
373,213
Total
565,739
30,242
27,037
-
65,060
238,336
926,414
(i) Israeli social benefits.
(ii) Share-based payment expense is recorded pro-rata over the vesting period. Refer to Section 6 Additional disclosures relating
to equity instruments for further information.
(iii) Performance based remuneration relates to options issued as share based payments.
Elsight Limited
Annual Report
Directors' report
31 December 2024
18
31 December
2023
Short term benefits
Post-
employment
Share-
based
payment
s
Performance
based
remuneration
Total
Salary &
fees
Other(i)
Non-
monetary
benefits
Bonuses
retirement
benefits
(ii)
(iii)
US$
US$
US$
US$
US$
US$
%
US$
Directors:
Ami Shafran
33,221
-
-
-
-
-
-
33,221
David
Furstenberg
33,221
-
-
-
-
-
-
33,221
Howard Digby
33,215
-
-
-
-
-
-
33,215
Joshua Landau
39,865
-
-
-
4,285
-
-
44,150
Peter Marks
-
-
-
-
-
-
-
-
Key
management:
-
Yoav Amitai
179,813
15,041
14,844
-
26,550
52,757
18%
289,005
Roee Kashi
218,006
15,122
8,319
-
30,418
125,337
32%
397,202
537,341
30,163
23,163
-
61,253
178,094
830,014
(i) Israeli social benefits.
(ii) Share-based payment expense is recorded pro-rata over the vesting period. Refer to Section 6 Additional disclosures relating
to equity instruments for further information.
(iii) Performance based remuneration relates to options issued as share based payments.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed Remuneration
STI - cash bonus
LTI - Options
Name
31 December
2024
31 December
2023
31 December
2024
31 December
2023
31 December
2024
31 December
2023
Directors:
Ami Shafran
100%
100%
-
-
-
-
David Furstenberg
100%
100%
-
-
-
-
Howard Digby
100%
100%
-
-
-
-
Joshua Landau
100%
100%
-
-
-
-
Other Key Management
Personnel:
Yoav Amitai
65%
82%
-
-
35%
18%
Roee Kashi
75%
68%
-
-
25%
32%
There were no bonuses during the years ended 31 December 2024 and 31 December 2023.
6. Additional disclosures relating to equity instruments
KMP Shareholding
There were no shares issued as KMP remuneration during the 31 December 2024 financial year (31 December 2023: nil).
There were 4,645,000 options issued as KMP remuneration during the 31 December 2024 financial year (31 December
2023: nil).
Elsight Limited
Annual Report
Directors' report
31 December 2024
19
The number of ordinary shares in Elsight Limited held by each KMP of the Group during the financial year is as follows:
Balance at the
start of the year
Shares
purchased on
market during
the year
Options
exercised and
converted to
shares during
the year
Shares sold on
market during
the year
Balance at the
end of the year
Directors:
Ami Shafran
132,070
70,396
-
-
202,466
David Furstenberg
132,071
70,396
-
-
202,467
Howard Digby
2,171,096
57,000
-
-
2,228,096
Joshua Landau
100,000
-
-
-
100,000
Key Management:
Yoav Amitai
-
-
100,000
-
100,000
Roee Kashi
6,317,454
-
-
(8,600)
6,308,854
Total
8,852,691
197,792
100,000
(8,600)
9,141,883
KMP Option holdings
Options awarded, vested and lapsed during the year
The tables below disclose 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.
The number of options over ordinary shares held by each KMP of the Group (and/or their related party) during the financial
year is as follows:
Balance at
Granted
Exercised
Expired/
Balance at
the start of
during
during
forfeited/
the end of
the year
the year
the year(i)
Other(ii)
the year
Options over ordinary shares
Directors:
Ami Shafran
-
-
-
-
-
David Furstenberg
-
-
-
-
-
Howard Digby
-
-
-
-
-
Joshua Landau
-
-
-
-
-
Key management:
Yoav Amitai
3,783,452
4,000,000
(100,000)
(895,863)
6,787,589
Roee Kashi
1,550,000
645,000
-
-
2,195,000
Total
5,333,452
4,645,000
(100,000)
(895,863)
8,982,589
(i)There were 100,000 A$0.35, 23 June 2024 options exercised during the year ended 31 December 2024.
(ii) In May 2022 Yoav Amitai was issued a total of 3,583,452 ESOP options in four tranches of 895,863. Tranche 1 options to be
vested subject to the achievement of a revenue performance milestone of US$3.0M in one (1) year in each of 2022 or 2023.
The milestone was not achieved at 31 December 2023 at which time the previously recognised share based payment expense
was reversed. The 895,863 Tranche 1 options and were cancelled during the year ended 31 December 2024 and had no impact
on 2024 remuneration.
Details of vested and unvested options at year end is as follows:
Elsight Limited
Annual Report
Directors' report
31 December 2024
20
Vested and
Unvested and
Balance at the
exercisable
un-exercisable
end of the year
Options over ordinary shares
Key management:
Yoav Amitai
659,914
6,127,675
6,787,589
Roee Kashi
915,625
1,279,375
2,195,000
Total
1,575,539
7,407,050
8,982,589
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting are as follows:
Value per
option
Option class
Number
granted
Grant date
Vesting and
exercise date
Expiry date
Exercise
price
at grant date
(vi)
Vested %
ESOP Options
200,000
10/05/2020
(i)
23/04/2025
A$0.28
US$0.22
100%
ESOP Options
2,687,589
26/05/2022
(ii)
26/05/2027
A$0.48
US$0.17
20.83%
ESOP Options
1,450,000
30/08/2022
(iii)
30/08/2027
A$0.37
US$0.18
56.25%
ESOP Options
645,000
10/05/2024
(iv)
26/03/2029
A$0.36
US$0.15
-
ESOP Options
750,000
22/10/2024
(v)
21/08/2029
A$0.60
US$0.12
-
ESOP Options
1,000,000
22/10/2024
(v)
21/08/2029
A$0.90
US$0.11
-
ESOP Options
1,000,000
22/10/2024
(v)
21/08/2029
A$1.30
US$.09
-
ESOP Options
1,250,000
22/10/2024
(v)
21/08/2029
A$1.80
US$.07
-
(i) 50% of the 200,000 options vested on 23 April 2021, with the remaining 50% vesting over a period of 3 years quarterly. A
total of 16,660 options vested during the year ended 31 December 2024. There are no performance milestones applicable to
the ESOP Options.
(ii) The 2,687,589 ESOP options were issued in tranches of 895,863 Options each vesting subject to the achievement of the
following Performance Milestones:
- Tranche 2 – Closing 20-day Volume Weighted Average Price (VWAP) of A$0.90 commencing 1 January 2023 until 31 December
2024, or closing 45- day VWAP of A$0.90 until 31 December 2022. These options are not vested and not expected to vest at
31 December 2024.
- Tranche 3 – Closing 20-day VWAP of A$1.80 commencing 1 January 2023 until 31 December 2024, or closing 45-day VWAP
of A$1.80 until 31 December 2023. These options are not vested and not expected to vest at 31 December 2024.
- Tranche 4 – Service condition only – 25% on 26 May 2023 and an additional 6.25% at the end of each quarter of continuous
services thereafter. A total of 223,966 options vested during the year ended 31 December 2024.
The fair value of Tranches 2 and 3 was determined using a Monte Carlo simulation model. The Black Scholes option pricing
model was used to determine the fair value of Tranche 4.
The likelihood of achieving the Tranche 2 and 3 Performance Milestones is built into the Monte Carlo Simulation model. At 31
December 2024 the likelihood of achieving the Tranche 4 service condition has been assessed 100% (2023: 100%).
(iii) 25% of the 1,450,000 options vested on 30 August 2023, with an additional 6.25% vesting at the end of each quarter of
continuous service thereafter. 362,500 options vested during the year ended 31 December 2024 . There are no performance
milestones applicable to the ESOP Options.
(iv) 25% of the 645,000 options vest on 26 March 2025, with an additional 6.25% vesting at the end of each quarter of
continuous service thereafter. There are no performance milestones applicable to the ESOP Options.
Elsight Limited
Annual Report
Directors' report
31 December 2024
21
(v) The 4,000,000 options were issued in four tranches. Tranche 1 is comprised of 750,000 options vesting 22 August 2025.
Tranche 2 is comprised of 1,000,000 options vesting 22 August 2026. Tranche 3 is comprised of 1,000,000 options vesting 22
August 2027. Tranche 4 is comprised of 1,250,000 options vesting 22 August 2028. There are no performance milestones
applicable to the ESOP options.
(vi) Except as otherwise noted above, the value per option at grant date has been determined using a Black Scholes option
pricing model. Where noted the options have been valued using Monte Carlo simulation models. Share-based payment
expense is recorded pro-rata over the vesting period.
7. Loans to key management personnel (KMP) and their related parties
There are no loans between the Group and key management personnel.
8. Other transactions and balance with KMP and their related parties
There were no other transactions with KMP or their related parties at 31 December 2024 (2023: none).
At 31 December 2024 the following balances are recorded in relation to KMP or their related parties:
Key Management Personnel and their Related Party
Nature of transaction
Payable balance
US$
Ami Shafran
Director and consulting fees
12,339
David Furstenberg
Director and consulting fees
12,339
Yoav Amitai
Salary and salary related expenses
20,797
Roee Kashi
Salary and salary related expenses
27,542
9. Voting of shareholders at last year's annual general meeting
The Company received 99.60% “Yes” votes cast on its Remuneration Report for the 31 December 2023 financial year. The
Company did not receive any specific feedback at the AGM regarding its remuneration practices.
REMUNERATION REPORT (END)
This concludes the remuneration report, which has been audited and signed in accordance with a resolution of the Board of
Directors.
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
___________________________
Mr David Furstenberg
Executive Director
27 February 2025
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Elsight Limited for the year ended 31 December 2024, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 27 February 2025
Partner
Elsight Limited
Annual Report
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
23
Revenue from contracts with customers
4
2,028,737
1,541,168
Cost of sales
(861,227)
(733,644)
Gross profit
1,167,510
807,524
Other income
5
340,274
202,627
Selling, general and administrative expenses
6
(3,935,725)
(3,641,306)
Net share-based payments expense
25
(458,684)
(400,949)
Loss before finance expense
(2,886,625)
(3,032,104)
Net finance expenses
7
(984,329)
(651,428)
Loss before income tax expense
(3,870,954)
(3,683,532)
Income tax expense
9
-
-
Loss after income tax expense for the year attributable to the owners of Elsight
Limited
(3,870,954)
(3,683,532)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation, net of tax
24
464,565
(244,250)
Other comprehensive loss for the year, net of tax
464,565
(244,250)
Total comprehensive loss for the year attributable to the owners of Elsight Limited
(3,406,389)
(3,927,782)
Cents
Cents
Loss per share attributable to owners of the Company attributable to the owners of
Elsight Limited
Basic loss per share
8
(2.56)
(2.45)
Diluted loss per share
8
(2.56)
(2.45)
Elsight Limited
Annual Report
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
24
Assets
Current assets
Cash and cash equivalents
12
873,953
2,702,593
Trade and other receivables
14
585,176
661,753
Inventory
15
502,654
689,267
Total current assets
1,961,783
4,053,613
Non-current assets
Plant and equipment
16
95,712
107,092
Right-of-use assets
17
176,217
242,262
Intangible assets
26,152
33,590
Total non-current assets
298,081
382,944
Total assets
2,259,864
4,436,557
Liabilities
Current liabilities
Trade and other payables
18
666,004
529,116
Contract liabilities
19
215,000
196,664
Convertible notes
21
-
4,983,627
Lease liabilities
20
107,801
179,123
Total current liabilities
988,805
5,888,530
Non-current liabilities
Convertible notes
21
-
93,349
Lease liabilities
20
72,301
68,891
Provisions
22
47,773
46,762
Total non-current liabilities
120,074
209,002
Total liabilities
1,108,879
6,097,532
Net assets/(liabilities)
1,150,985
(1,660,975)
Equity
Issued capital
23
29,510,159
23,750,494
Reserves
24
627,723
666,567
Accumulated losses
(28,986,897)
(26,078,036)
Total equity/(deficiency)
1,150,985
(1,660,975)
Elsight Limited
Annual Report
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
25
Issued
Share-based
payment
Foreign
Exchange
Predecessor
Accounting
Equity
Accumulated
Total
Equity/
(Deficiency)
capital
Reserve
Reserve
Reserve
Reserve
Losses
US$
US$
US$
US$
US$
US$
US$
Balance at 1 January 2023
23,749,095
1,852,331
(762,039)
(296,796) 718,413
(23,411,508)
1,849,496
Loss after income tax
expense for the year
-
-
-
-
-
(3,683,532)
(3,683,532)
Other comprehensive loss
for the year, net of tax
-
-
(244,250)
-
-
-
(244,250)
Total comprehensive loss
for the year
-
-
(244,250)
-
-
(3,683,532)
(3,927,782)
Transactions with owners in
their capacity as owners:
Issue of Shares, net of
transaction costs (note 23)
1,399
-
-
-
-
-
1,399
Share-based payments (note
25)
-
400,949
-
-
-
-
400,949
Exercise, expiry and
cancellation of options
-
(1,017,004)
-
-
-
1,017,004
-
Financial instruments
recognised in equity (note
21)
-
-
-
-
14,963
-
14,963
Balance at 31 December
2023
23,750,494
1,236,276
(1,006,289)
(296,796) 733,376
(26,078,036) (1,660,975)
Elsight Limited
Annual Report
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
26
Issued
Share-
based
payment
Foreign
Exchange
Predecessor
Accounting
Equity
Accumulated
Total
Equity/
(Deficiency)
capital
Reserve
Reserve
Reserve
Reserve
Losses
US$
US$
US$
US$
US$
US$
US$
Balance at 1 January 2024
23,750,494
1,236,276
(1,006,289)
(296,796)
733,376
(26,078,036) (1,660,975)
Loss after income tax
expense for the year
-
-
-
-
-
(3,870,954) (3,870,954)
Other comprehensive loss
for the year, net of tax
-
-
464,565
-
-
-
464,565
Total comprehensive loss for
the year
-
-
464,565
-
-
(3,870,954) (3,406,389)
Transactions with owners in
their capacity as owners:
Issue of Shares, net of
transaction costs (note 23)
5,759,665
-
-
-
-
-
5,759,665
Share-based payments (note
25)
-
458,684
-
-
-
-
458,684
Exercise, expiry and
cancellation of options
-
(228,717)
-
-
-
228,717
-
Financial instruments
recognised in equity (note
21)
-
-
-
-
(733,376)
733,376
-
Balance at 31 December
2024
29,510,159
1,466,243
(541,724)
(296,796)
-
(28,986,897)
1,150,985
Elsight Limited
Annual Report
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
27
Cash flows from operating activities
Receipts from customers
2,358,959
1,338,606
Payments to suppliers and employees
(4,389,397)
(3,891,150)
Interest received
39,265
184,804
Interest paid
(12,596)
(14,718)
Proceeds from government grants
235,827
190,135
Net cash used in operating activities
13
(1,767,942)
(2,192,323)
Cash flows from investing activities
Purchase of plant and equipment
(8,079)
Purchase of intangible assets
(16,890)
(36,000)
Net cash used in investing activities
(16,890)
(44,079)
Cash flows from financing activities
Proceeds from convertible notes
-
69,685
Net proceeds from the issue of shares
166,031
1,231
Principal elements of lease payments
(203,525)
(190,338)
Net cash used in financing activities
(37,494)
(119,422)
Net decrease in cash and cash equivalents
(1,822,326)
(2,355,824)
Cash and cash equivalents at the beginning of the financial year
2,702,59
5,194,794
Effects of exchange rate changes on cash and cash equivalents
(6,314)
(136,377)
Cash and cash equivalents at the end of the financial year
12
873,953
2,702,593
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
28
Note 1. Material Accounting Policy Information
These consolidated financial statements cover Elsight Limited (Company) and its controlled entities (also referred to as Group).
Elsight 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 on 27 February 2025 by the directors of the Company.
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.
a) Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting Standard Board
(AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded
would result in financial statements containing relevant and reliable information about transactions, events, and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards.
b) Basis of measurement and reporting conventions
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical
costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and
financial liabilities. The amounts presented in the financial statements have been rounded off to the nearest dollar unless
stated otherwise.
c) Going concern
The financial statements are prepared on the going concern basis, which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
As disclosed in the financial statements, the Group recorded a net loss of US$3,870,954 and had net cash outflows from
operating activities of US$1,767,942 for the year ended 31 December 2024.
The Directors have approved a detailed cashflow forecast which indicates that the Group will be required to raise additional
funds in order to provide additional working capital and to continue to fund the proposed level of business activities. The
ability of the Group to continue as a going concern is dependent on securing such additional funding by capital raise or other
means.
This condition indicates a material uncertainty that may cast a significant doubt on the Group’s ability to continue as a going
concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The directors believe that there are reasonable grounds that the Group will be able to continue as a going concern, after
consideration of the following factors:
The Group’s ability to issue additional shares under the Corporations Act 2001 to raise further working capital; and
The ability of the Group to further scale back certain parts of its activities that are non-essential to conserve cash.
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is appropriate to adopt
the going concern basis in the preparation of the financial report.
Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities
other than in the normal course of business and at amounts different to those stated in the financial statements. The financial
statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the
amount and classification of liabilities that might result should the Group be unable to continue as a going concern and meet
its debts as and when they fall due.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 1. Material Accounting Policy Information
29
d) 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.
e) Principles of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December
2024. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:
●
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
●
Exposure, or rights, to variable returns from its involvement with the investee, and
●
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
●
The contractual arrangement with the other vote holders of the investee,
●
Rights arising from other contractual arrangements,
●
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of profit or loss and other comprehensive income from
the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it:
●
De-recognises the assets (including goodwill) and liabilities of the subsidiary
●
De-recognises the carrying amount of any non-controlling interests
●
De-recognises the cumulative translation differences recorded in equity
●
Recognises the fair value of the consideration received
●
Recognises the fair value of any investments retained
●
Recognises any surplus or deficit in profit and loss
●
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
f) Predecessor accounting
Business combinations involving entities under common control are accounted for using the predecessor accounting method.
Under this method;
●
carrying values are not restated in the accounts of the acquiring entity, rather prior book values are maintained. As a
result no fair value adjustments are recorded on the acquisition; and
●
the carrying value of net assets or liabilities acquired is recorded as a separate element of equity.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 1. Material Accounting Policy Information
30
g) 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 United States 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 recognised 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 operations with functional currencies other than United States 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 of.
h) Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office (ATO).
Receivable and payables are stated inclusive of the amount of GST receivable or payable. The net amount of the GST
recoverable from, or payable to, the ATO is included with other receivables and payables in the statement of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
i) Intangible assets
Development costs that are directly attributable to the design and testing of identifiable and unique products controlled by
the Group are recognised as intangible assets when the following criteria are met:
●
it is technically feasible to complete the product so that it will be available for use;
●
management intends to complete the product and use or sell it;
●
there is an ability to use or sell the product;
●
it can be demonstrated how the product will generate probable future economic benefits;
●
adequate technical, financial and other resources to complete the development and to use or sell the product are
available, and
●
the expenditure attributable to the product during its development can be reliably measured.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 1. Material Accounting Policy Information
31
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for
use over a period of 3 – 7 years.
Research expenditure and development expenditure that do not meet the criteria in set out above are recognised as an
expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent
period.
Note 2. New accounting standards for application in future periods
There are no Australian accounting standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the year ended 31 December 2024 which are expected to have a material
impact on the Group in future reporting periods.
Note 3. Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the consolidated financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based
on current trends and economic data, obtained both externally and within the Group.
Trade receivables
Management assess impairment of the Group’s trade receivables based on assumptions about risk of default and expected
loss rates. The Group uses judgement in making these assumptions and selecting the inputs for the expected credit loss model
under AASB 9 and impairment calculation, based on the Group’s past history, existing market conditions as well as forward-
looking estimates at the end of each reporting period.
Assumptions made regarding the collectability of the Group’s receivables are disclosed at note 14.
Note 4. Revenue from contracts with customers
31 December
2024
31 December
2023
US$
US$
Revenue recognised at a point in time:
- Sale of physical goods
1,244,265
1,003,865
Revenue recognised over a period of time:
- Data usage
445,997
305,467
- Service level agreements and other services
338,475
193,535
- Halo as a service
-
38,301
Total revenue
2,028,737
1,541,168
The Group has recognised the following assets and liabilities related to contracts with
customers:
- Contract liabilities (note 19)
215,000
76,608
There were no significant movements in contract assets or liabilities during the year.
Accounting policy for revenue
The Group revenues consist of the following elements:
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 4. Revenue from contracts with customers (continued)
32
●
physical products which are sent to the customer, where revenue is recognised upon shipment or arrival of goods,
dependent on the terms that have been agreed with the customer;
●
data usage, which is recognised over the usage period;
●
installation fees, which are recognised upon the completion of product installation; and
●
other revenue including cloud services fees which are recognised over the service period; software license fees which are
recognised over the license period; and service level agreements which are recognised over the agreement period.
In relation to cloud services, software license and service level agreements, the Group recognises a contract liability where
payments received exceed the services rendered.
The Group has no material contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices
for the time value of money.
Revenue is measured at the transaction price allocated to the performance condition. Revenue is recognised to the extent that
it is probable that the economic benefits will flow to the Group and can be reliably measured.
Note 5. Other income
31 December
2024
31 December
2023
US$
US$
Net foreign exchange gain
-
67,745
Israeli Innovation Authority government grant income
247,710
134,882
Other grant income
41,229
-
Recovery of bad debts
51,335
-
Total Other income
340,274
202,627
Accounting policy for other income
Grant income from Israeli Innovation Authority is recognised when the Group recognises the related expenses for which the
grants are intended to compensate.
Note 6. Selling, general and administrative expenses
31 December
2024
31 December
2023
US$
US$
Research
1,559,744
1,446,234
Sales, marketing and exhibitions
868,326
709,054
Salaries and related expenses
446,916
486,076
Professional services
309,897
361,663
Office expenses
211,832
139,304
Amortisation of right of use asset
201,715
192,878
Depreciation of plant and equipment and amortisation of intangible asset
34,680
59,766
Travel
69,775
45,431
Other expenses
232,840
200,900
Total selling, general and administrative expenses
3,935,725
3,641,306
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 6. Selling, general and administrative expenses (continued)
33
Accounting policy for operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
Note 7. Finance expenses/(income)
31 December
2024
31 December
2023
US$
US$
Interest income
(39,265)
(184,805)
Accrued and effective interest on convertible notes (note 21)
1,010,997
821,315
Interest on borrowings and bank fees
5,274
7,275
Implied interest on leases
7,323
7,643
Total net finance expenses
984,329
651,428
Note 8. Loss per share
31 December
2024
31 December
2023
US$
US$
Loss after income tax attributable to the owners of Elsight Limited
(3,870,954)
(3,683,532)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
151,191,778
150,320,019
Weighted average number of ordinary shares used in calculating diluted earnings per share
151,191,778
150,320,019
Cents
Cents
Basic loss per share
(2.56)
(2.45)
Diluted loss per share
(2.56)
(2.45)
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Elsight 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 earnings 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 9. Income tax
The financial accounts for the year ended 31 December 2024 comprise the results of Elsight Australia and its controlled entities.
The legal parent is incorporated and domiciled in Australia where the applicable tax rate is 30% (31 December 2023: 30%). The
applicable tax rate in Israel is 23% (31 December 2023: 23%).
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 9. Income tax (continued)
34
31 December
2024
31 December
2023
US$
US$
(a) Income tax expense
Current tax
-
-
Deferred tax
-
-
Aggregate income tax expense
-
-
Numerical reconciliation of income tax and tax at the statutory rate
Loss before income tax expense
(3,870,954)
(3,683,532)
Tax at the statutory tax rate of 28.39% (2023: 27.37%)
(1,099,048)
(1,008,071)
Non-deductible items
Non-deductible expenditure
340,614
583,497
Deferred tax assets not recognised
758,434
424,574
-
-
Deferred tax assets
Investments and loans
5,639,859
5,677,154
Accruals
3,800
5,980
Provisions
54,113
54,864
Tax losses
5,688,836
5,066,111
Less deferred tax assets not recognised
(11,386,608)
(10,804,109)
Deferred tax liabilities
Other
-
-
Net deferred tax liabilities
-
-
Income tax expense
-
-
Carry forward losses
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 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.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 9. Income tax (continued)
35
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and
it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Note 10. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in note 29.
a) Key Management Personnel Compensation
The totals of remuneration paid to KMP during the year are as follows:
31 December
2024
31 December
2023
US$
US$
Short-term salary and fees
565,739
537,341
Retirement benefits
65,060
61,253
Non-monetary benefits
27,037
23,163
Other
30,242
30,163
Share based payments
238,336
178,094
Total KMP Compensation
926,414
830,014
b) Other related party transactions
There were no other transactions with related parties during the year ended 31 December 2024 (31 December 2023: Nil).
As at 31 December 2024 the following balances are recorded in relation to KMP or their related parties:
Key management
personnel
Nature of transaction
Payable balance
or their related party
31 December
2024
31 December
2023
US$
US$
Ami Shafran
Director fees
12,339
6,738
David Furstenberg
Director fees
12,339
6,738
Yoav Amitai
Salary and related expenses
20,797
18,653
Roee Kashi
Salary and related expenses
27,542
23,348
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 10. Related party transactions (continued)
36
c) Loans from key management personnel (KMP) and their related parties
There were no loans to or from related parties at the current and previous reporting date or during the financial year.
Note 11. Auditor's remuneration
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
31 December
2024
31 December
2023
US$
US$
Auditor remuneration
- Auditing and reviewing the financial reports (RSM) - Australia
33,232
31,560
- Auditing and reviewing the financial reports (BDO) - Australia
-
2,692
- Auditing and reviewing the financial reports (BDO) - Israel
29,000
27,000
62,232
61,252
Note 12. Cash and cash equivalents
31 December
2024
31 December
2023
US$
US$
Current
Cash at bank - unrestricted
824,048
2,666,722
Cash at bank - restricted
49,905
35,871
Total cash and cash equivalents in the consolidated statement of cash flows
873,953
2,702,593
Restricted cash relates to bank deposits in place as security guarantees.
The Group's exposure to the risks associated with cash are disclosed in note 27.
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.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
37
Note 13. 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
(3,870,954)
(3,683,532)
Non-cash flows in loss after income tax:
Share-based payments
458,684
400,949
Foreign exchange differences
(14,962)
(54,932)
Amortisation of right of use lease asset
201,715
192,878
Depreciation of plant and equipment and amortisation of intangible assets
34,680
59,766
Interest expense
1,010,997
821,315
Change in assets and liabilities:
Increase in trade and other receivables
79,935
(311,889)
(Increase)/decrease in inventory
180,228
230,533
Increase/(decrease) in trade and other payables
142,172
70,563
Increase in provisions
1,283
1,116
Increase in contract liabilities
8,280
80,910
Net cash used in operating activities
(1,767,942)
(2,192,323)
Non-cash investing and financing activities
There were no material non-cash investing and financing activities during the year ended 31 December 2024 or 31 December
2023.
Note 14. Trade and other receivables
31 December
2024
31 December
2023
US$
US$
Current
Trade receivables
572,091
726,209
Allowance for doubtful accounts
(118,568)
(171,586)
453,523
554,623
Prepaid expenses
101,978
87,947
Short term deposits
11,717
11,780
Israeli Innovation Authority government receivable
11,015
-
GST receivable
6,943
7,403
585,176
661,753
All amounts are short-term. The net carrying value of trade and other receivables is considered a reasonable approximation of
fair value. The Group’s exposure to the risks associated with trade and other receivables is disclosed in Note 27.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 14. Trade and other receivables (continued)
38
Accounting policy for trade and other receivables
Trade receivables are amounts due from customers for goods or services performed in the ordinary course of business. They
are generally due for settlement within 45 days and therefore are all classified as current. Trade receivables are recognised
initially at the amount of consideration that is unconditional which is considered to be fair value; none of the Group’s trade
receivables contain a financing component. The Group holds the trade receivables with the objective to collect the contractual
cashflows and therefore measures them subsequently at amortised cost using the effective interest method.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and
the days past due. The expected loss rates are based on the Group’s past history, existing market conditions and forward-
looking estimates at the end of each reporting period.
Note 15. Inventory
31 December
2024
31 December
2023
US$
US$
Inventory
502,654
689,267
The annual expense on written down of inventory to net realisable value amounted to US$9,322 (31 December 2023:
US$8,281).
Inventories recognised as an expense during the year ended 31 December 2024 amounted to US$388,190 (31 December 2023:
US$411,032).
Accounting policy for inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the average principle
and includes expenditure incurred in acquiring the inventories and the costs incurred in bringing them to their existing location
and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
Note 16. Plant and equipment
31 December
2024
31 December
2023
US$
US$
Cost
451,207
439,786
Accumulated depreciation
(355,495)
(332,694)
Net carrying amount
95,712
107,092
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 16. Plant and equipment (continued)
39
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Computers
Motor
vehicles
Office
furniture and
equipment
Installation
and leasehold
improvements
Total
US$
US$
US$
US$
US$
Balance at 1 January 2023
10,499
6,279
45,363
77,973
140,114
Additions
10,166
-
-
-
10,166
Foreign currency translation adjustment
(148)
(187)
(1,350)
(2,321)
(4,006)
Depreciation expense
(9,747)
(6,092)
(9,012)
(14,331)
(39,182)
Balance at 31 December 2023
10,770
-
35,001
61,321
107,092
Additions
11,219
-
2,876
-
14,095
Foreign currency translation adjustment
2,938
-
(150)
(335)
2,453
Depreciation expense
(9,850)
-
(3,826)
(14,252)
(27,928)
Balance at 31 December 2024
15,077
-
33,901
46,734
95,712
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.
Accounting policy for depreciation
Depreciation is a systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount is the
cost of the asset, less its residual value.
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it
to operate in the manner intended by management.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset
item, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the
assets.
The estimated useful lives for the current and comparative periods are as follows:
●
Computers – 3 years
●
Furniture and equipment – 7-17 years
●
Motor vehicles – 7 years
Leasehold improvements are depreciated over the shorter of the lease period or the useful life of the leasehold improvement.
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if
appropriate.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
40
Note 17. Right-of-use assets
31 December
2024
31 December
2023
US$
US$
Motor vehicles
213,675
203,005
Less: Accumulated amortisation
(71,890)
(133,856)
141,785
69,149
Office space at cost
275,462
530,963
Less: Accumulated amortisation
(241,030)
(357,850)
34,432
173,113
176,217
242,262
The right of use assets recognised at 31 December 2024 and 31 December 2023 relate to motor vehicle leases and office space.
Accounting policy for right-of-use assets
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities included the net
present value of fixed lease payments.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
Lease payments are allocated between principal 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.
Right-of-use assets are measured at cost comprising the following:
●
The amount of the initial measurement of lease liability;
●
Any lease payments made at or before the commencement date less any lease incentives received;
●
Any initial direct costs; and
●
Restoration costs.
The Group’s leasing activities and how these are accounted for
The Group leases an office in Or Yehuda and various motor vehicles. Rental contracts are typically made for fixed period of 1 –
3 years but may have extension options. Lease terms are negotiated on an individual basis and contain a range of terms and
conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are
held by the lessor. Leased assets may not be used as security for borrowings purposes.
The lease payments are discounted using the interest rate implicit in the lease. If the rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
●
where possible uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in the financing conditions since third-party financing was received;
●
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the individual
lessee, which does not have recent third-party financing; and
●
makes adjustments specific to the lease, e.g. term, country and security.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 17. Right-of-use assets (continued)
41
If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which
has a similar payment profile to the lease, then the group entities use that rate as a starting point to determine the incremental
borrowing rate.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right-of-use asset.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a
purchase option. Low-value assets comprise IT equipment and small items of office furniture.
Extension and termination options
Extension and termination options are included in the Group’s office lease, exercisable at the option of the Group.
Determining the lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only
included in the lease term if the lease is reasonably certain to be extended (or not terminated).
For the Group’s leases, the following factors are normally the most relevant:
●
If there are significant penalty payments to terminate (or not extend), the Group is typically reasonably certain to extend
(or not terminate).
●
If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain
to extend (or not terminate).
●
Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption
required to replace the leased asset.
There are no extension options in office and vehicles leases that have not been included in the lease liability because the Group
expects to exercise the extension options.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or
not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee. There was no impact of revising
lease terms in current or previous financial year.
Note 18. Trade and other payables
31 December
2024
31 December
2023
US$
US$
Current
Trade payables
146,710
108,941
Other payables and accrued expenses
519,294
420,175
666,004
529,116
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 18. Trade and other payables (continued)
42
All amounts are short-term. The carrying values of trade payables and other payables are considered to approximate fair value.
The Group’s exposure to the risks associated with trade and other payables are disclosed in note 27.
Accounting policy for trade and other payables
Liabilities for trade creditors and other amounts carried at cost which is the fair value of the consideration to be paid in the
future for goods and services received, whether or not billed to the Group. Interest, when charged by the lender, is recognised
as an expense on an accruals basis.
Note 19. Contract liabilities
31 December
2024
31 December
2023
US$
US$
Current
Contract liabilities - deferred revenue
215,000
76,608
Contract liabilities - Israel Innovation Authority government grant
-
120,056
215,000
196,664
Accounting policy for contract liabilities - revenue
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer.
Accounting policy for contract liabilities – Israel Innovation Authority government grant
Contract liabilities represent grant proceeds received in excess of expenses incurred for which the grants are intended to
compensate.
Note 20. Lease liabilities
31 December
2024
31 December
2023
US$
US$
Current
107,801
179,123
Non-current
72,301
68,891
180,102
248,014
The lease liabilities relate to the Group's office lease and motor vehicle leases. Lease liabilities have been measured at the
present value of the lease payments, discounted using the Group’s incremental borrowing rate in effect on lease execution
date. Incremental borrowing rates applied range from 3.09% – 4.38%.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less
any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed
in the period in which they are incurred.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 20. Lease liabilities (continued)
43
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
Note 21. Convertible notes
31 December
2024
31 December
2023
US$
US$
Current
Convertible notes
-
4,983,627
Non-current
Convertible notes
-
93,349
Net carrying amount of convertible notes
-
5,076,976
At 31 December 2023 the Group had on issue 25,583,333 convertible notes with a face value of A$0.30 each, secured over all
assets of the Company and its subsidiary. The current liability is comprised of 25,149,500 convertible notes with a maturity
date of 30 December 2024. The non-current liability is comprised of 433,833 convertible notes maturing on 5 April 2025.
The 25,583,333 notes were converted to ordinary shares in the Company at various dates during the year ended 31 December
2024 at a rate of 1 ordinary share for each note held at at a conversion price of A$0.30.
The notes bear interest at 8%, with interest capitalised and settled through the issue of ordinary shares on conversion.
A reconciliation of the convertible note facility is as follows:
US$
Opening balance at 1 January 2023
4,138,048
Face value of 433,833 convertible notes
87,912
Transaction costs adjustment
13,078
Conversion option recognised in equity, net
(14,963)
Accrued interest
405,644
Effective interest
415,671
Foreign currency translation adjustment
31,586
Value recognised at 31 December 2023
5,076,976
Accrued interest
466,476
Effective interest
544,521
Foreign currency translation adjustment
(492,745)
25,583,333 convertible notes converted to fully paid ordinary shares
(5,595,228)
Value recognised at 31 December 2024
-
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 21. Convertible notes (continued)
44
The fair value of the liability recognised on inception has been determined based on the net present value of convertible note
contractual cashflows using a discount rate of 17%. The difference between the fair value of the liability component and the
face value of convertible notes has been recognised in equity on inception and recorded to profit or loss as effective interest
over the life of the convertible notes. Transaction costs incurred in relation to the convertible note have been recognised pro-
rata against the liability and equity components.
Accounting policy for convertible notes
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.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of
financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Note 22. Provisions
31 December
2024
31 December
2023
US$
US$
Non-current
Accrued severance pay
50,820
49,791
Severance pay fund
(3,047)
(3,029)
47,773
46,762
Movements in provisions
Movements in each class of provision during the current financial year and previous financial year are set out below:
31 December
2024
31 December
2023
US$
US$
Carrying amount at the start of the year
46,762
47,028
Decrease in provision
1,029
(360)
Severance pay fund utilised
(18)
94
Carrying amount at the end of the year
47,773
46,762
Accounting policy for provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
Note 22. Provisions (continued)
45
Post-employment benefits
The Company has a post-employment benefit plan in place in accordance with its obligations under Israeli employment law.
Under Israeli employment law, in the event of termination of an employee, the Group is obligated to pay the employee their
last monthly salary multiplied by the number of years the employee was employed. The value of this severance pay obligation
is recorded net of accumulated severance fund benefits as a liability for employees’ severance benefits in the Group’s
statement of financial position.
Short term employee benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided or upon the actual absence of the employee when the benefit is not accumulated.
The employee benefits are classified, for measurement purposes, as short-term benefits or as other long-term benefits
depending on when the Group expects the benefits to be wholly settled.
Note 23. Issued capital
31 December
2024
31 December
2023
31 December
2024
31 December
2023
Shares
Shares
US$
US$
Share capital
181,041,211
150,324,581
29,510,159
23,750,494
Movements in ordinary share capital
Details
Date
Shares
Issue price
US$
Balance
1 January 2023
150,319,581
23,749,095
Issue of shares on conversion of options
30 November 2023
5,000
US$0.28
1,399
Balance
31 December 2023
150,324,581
23,750,494
Issue of shares on conversion of convertible notes
7 March 2024
201,522
US$0.20
39,511
Issue of shares on conversion of options
5 April2 2024
161,458
US$0.19
30,272
Issue of shares on conversion of convertible notes
12 April 2024
92,324
US$0.20
18,075
Issue of shares on conversion of convertible notes
6 June 2024
261,632
US$0.20
52,191
Issue of shares on conversion of options
18 June 2024
37,500
US$0.24
9,163
Issue of shares on conversion of options
20 June 2024
100,000
US$0.23
23,341
Issue of shares on conversion of options
20 June 2024
50,000
US$0.25
12,337
Issue of shares on conversion of options
20 June 2024
50,000
US$0.19
9,337
Issue of shares on conversion of options
4 July 2024
32,812
US$0.25
8,121
Issue of shares on conversion of options
15 July 2024
35,000
US$0.28
9,969
Issue of shares on conversion of options
31 October 2024
274,375
US$0.23
61,897
Issue of shares on conversion of convertible notes
30 December 2024
29,420,007
US$0.19
5,485,451
Balance
31 December 2024
181,041,211
29,510,159
Capital management
Due to the nature of the Group’s activities, the Group does not have ready access to credit facilities, with the primary source
of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital
position against the requirements of the Group to meet research and development programs and corporate overheads. The
Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required. Any surplus funds are invested with major financial institutions.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 23. Issued capital (continued)
46
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does
not have a limited amount of authorised capital.
Accounting policy for equity
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of
shares are deducted from share capital, net of any related income tax benefits.
Ordinary shares are classified as equity.
Note 24. Reserves
31 December
2024
31 December
2023
US$
US$
Share Based Payment Reserve
1,466,243
1,236,276
Foreign Exchange Reserve
(541,724)
(1,006,289)
Predecessor Accounting Reserve
(296,796)
(296,796)
Convertible note reserve
-
733,376
627,723
666,567
31 December
2024
31 December
2023
(a) Share Based Payment Reserve
US$
US$
15,454,589 Options (31 December 2023: 9,952,452 Options)
1,466,243
1,236,276
(b) Movement in Share Based Payment Reserve
No
US$
Opening balance at 1 January 2023
34,541,104
1,852,331
Expense of options issued in prior periods, prior to cancellations
-
446,908
Issue of ESOP options
50,000
4,301
Issue of ESOP options
43,000
2,797
Options exercised and converted to fully paid ordinary shares
(5,000)
(883)
Expiry of options
(23,539,652)
(932,812)
Vested options cancelled on termination of employment
(468,500)
(83,309)
Unvested options cancelled on termination of employment
(668,500)
(53,057)
Closing balance at 31 December 2023
9,952,452
1,236,276
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 24. Reserves (continued)
47
No
US$
Opening balance at 1 January 2024
9,952,452
1,236,276
Expense of options issued in prior periods, prior to cancellations
-
233,292
Issue of ESOP options
3,643,000
213,133
Issue of ESOP options
625,000
22,405
Issue of ESOP options
105,000
2,562
Issue of ESOP options
4,000,000
72,044
Options exercised and converted to fully paid ordinary shares
(741,145)
(157,944)
Vested options cancelled on termination of employment
(286,875)
(70,773)
Unvested options cancelled on termination of employment
(1,842,843)
(84,752)
Closing balance at 31 December 2024
15,454,589
1,466,243
Share based payment options on issue at 31 December 2024 have a weighted average exercise price of AUD$0.62 (31
December 2023: AUD$0.42) and a weighted average remaining contractual life of 3.34 years (31 December 2023: 3.08 years).
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration,
and other parties as part of their compensation for services.
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees are measured at the fair value
of the instruments issued and amortised over the vesting periods. The fair value of performance right options is determined
using the satisfaction of certain performance criteria (Performance Milestones). The number of shares option and performance
rights expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for
services received as consideration for the equity instruments granted is based on the number of equity instruments that
eventually vest. The fair value is determined using Black Scholes and Monte Carlo simulation models.
2024
2023
US$
US$
c) Foreign Exchange Reserve
(541,724)
(1,006,289)
The foreign currency translation reserve records exchange differences arising on translation from functional currency to
presentation currency.
2024
2023
US$
US$
d) Predecessor Accounting Reserve
(296,796)
(296,796)
The reserve arises from the capital reorganisation and records the net liabilities of Elsight Limited as at the acquisition date of
2 June 2017.
2024
2023
US$
US$
e) Equity Reserve
-
733,376
The equity reserve holds the equity component of the convertible notes and is not remeasured from inception. The value was
transferred to accumulated losses on convertible note conversions during the year ended 31 December 2024.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
48
Note 25. Share-based payments
Options issued in Prior Periods
Options issued in prior periods that impact the year ended 31 December 2024 are as follows:
Options on
issue at
Net pro-rata
income/
(expense) at
Description
Grant date
Exercise price
Expiry date
31 December
2024
Vesting
conditions
31 December
2024
AUD
ESOP Options
10/05/2020
$0.28
23/04/2025
450,000
(i)
(44)
ESOP Options
09/08/2020
$0.30
27/07/2025
-
(ii)
3,393
ESOP Options
02/02/2021
$0.43
01/02/2026
130,000
(iii)
(1,526)
ESOP Options
15/09/2021
$0.42
14/09/2026
427,000
(iv)
(4,850)
ESOP Options
15/09/2021
$0.48
14/09/2026
695,000
(iv)
9,740
ESOP Options
15/12/2021
$0.38
14/12/2026
50,000
(v)
(3,307)
ESOP Options
15/12/2021
$0.44
14/12/2026
200,000
(v)
(4,631)
ESOP Options
26/04/2022
$0.43
25/04/2027
200,000
(vi)
(4,456)
ESOP Options
26/05/2022
$0.48
26/05/2027
2,687,589
(vii)
(72,883)
ESOP Options
30/08/2022
$0.37
30/08/2027
2,439,000
(viii)
(68,562)
ESOP Options
18/01/2023
$0.37
18/01/2028
43,000
(ix)
(1,414)
7,321,589
(148,540)
(i) 50% on 23 April 2021 and an additional 4.17% at the end of each quarter of continuous service thereafter. The options fully
vested on 22 April 2024.
(ii) Options cancelled on termination of employment during the year ended 31 December 2024.
(iii) 50% on 2 February 2023 and an additional 6.25% at the end of each quarter of continuous service thereafter. The options
will become fully vested on 1 February 2025.
(iv) 25% on 15 September 2022 and an additional 6.25% at the end of each quarter of continuous service thereafter. The
options will become fully vested on 15 September 2025.
(v) 25% on 15 December 2022 and an additional 6.25% at the end of each quarter of continuous service thereafter. The options
will become fully vested on 15 December 2025.
(vi) 25% on 26 April 2023 and an additional 6.25% at the end of each quarter of continuous service thereafter. The options will
become fully vested on 26 April 2026.
(vii) The options vest in 3 tranches of 895,863 Options, subject to the achievement of the following Performance Milestones:
- Tranche 2 – Closing 20-day Volume Weighted Average Price (VWAP) of A$0.90 commencing 1 January 2023 until 31 December
2024, or closing 45-day VWAP of A$0.90 until 31 December 2022 (not achieved).
- Tranche 3 – Closing 20-day VWAP of A$1.80 commencing 1 January 2023 until 31 December 2024, or closing 45-day VWAP of
A$1.80 until 31 December 2023 (not achieved).
- Tranche 4 – Service condition only – 25% on 26 May 2023 and an additional 6.25% at the end of each quarter of continuous
services thereafter. The options become fully vested on 26 May 2026.
(viii) 25% on 30 August 2023 and an additional 6.25% at the end of each quarter of continuous service thereafter. The options
will become fully vested on 30 August 2026.
(ix) 25% on 18 January 2024 and an additional 6.25% at the end of each quarter of continuous service thereafter. The options
will become fully vested on 18 January 2027.
Share Based Payments Issued During the Year Ended 31 December 2024
During the year ended 31 December 2024 the Group recorded the following share based payments:
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 25. Share-based payments (continued)
49
●
The issue of 3,643,000 Employee Share Plan Options exercisable at A$0.36, on or before 26 March 2029 to employees of
the Group, exercisable after the satisfaction of the following vesting conditions, 25% on 26 March 2025 and an additional
6.25% at the end of each quarter of continuous service thereafter, resulting in an expense of US$213,133 at 31 December
2024. The Black Scholes option pricing model was used to determine the fair value of the unlisted options issued.
●
The issue of 625,000 Employee Share Plan Options exercisable at A$0.46, on or before 24 July 2029 to an employee of the
Group, exercisable after the satisfaction of the following vesting condition, 25% on 25 July 2025 and an additional 6.25%
at the end of each quarter of continuous services thereafter, resulting in an expense of US$22,405 recorded at 31
December 2024. The Black Scholes option pricing model was used to determine the fair value of the unlisted options
issued.
●
The issue of 105,000 Employee Share Plan Options exercisable at A$0.38, on or before 22 August 2029 to an employee of
the Group, exercisable after the satisfaction of the following vesting condition, 25% on 22 August 2025 and an additional
6.25% at the end of each quarter of continuous services thereafter, resulting in an expense of US$2,562 recorded at 31
December 2024. The Black Scholes option pricing model was used to determine the fair value of the unlisted options
issued.
●
The issue of 4,000,000 Employee Share Plan Options in four tranches to the CEO of the Group, resulting in an expense of
US$72,044 recorded at 31 December 2024. The options vest and are exercisable as follows:
- Tranche 1 – 750,000 options exercisable at A$0.60, vesting 22 August 2025;
- Tranche 2 – 1,000,000 options exercisable at A$0.90, vesting 22 August 2026;
- Tranche 3 – 1,000,000 options exercisable at A$1.30, vesting 22 August 2027; and
- Tranche 4 – 1,250,000 options exercisable at A$1.80, vesting 22 August 2028.
There are no performance milestones applicable to the ESOP options. The Black Scholes option pricing model was used
to determine the fair value of the unlisted options issued.
Fair Value
Option fair values were determined using the following option pricing models and inputs:
Options
ESOP
Options
ESOP
Options
ESOP
Options
ESOP
Options
ESOP
Options
ESOP
Options
ESOP
Options
Option pricing model
Black
Scholes
Black
Scholes
Black
Scholes
Black
Scholes
Black
Scholes
Black
Scholes
Black
Scholes
Number of options
3,643,000 625,000
105,000
750,000
1,000,000
1,000,000
1,250,000
Grant date
10/05/24
25/07/24
22/08/24
22/10/24
22/10/24
22/10/24
22/10/24
Issue date
10/5/2024 25/07/24
22/08/24
11/11/24
11/11/24
11/11/24
11/11/24
Exercise price
A$0.36
A$0.46
A$0.38
A$0.60
A$0.90
A$1.30
A$1.80
Expected volatility
70%
65%
65%
65%
65%
65%
65%
Implied option life
4.88 years 5 years
5 years
4.78 years
4.78 years
4.78 years
4.78 years
Expected dividend yield
nil
nil
nil
nil
nil
nil
nil
Risk free rate
4.35%
4.01%
3.56%
4.02%
4.02%
4.02%
4.02%
Valuation per option A$
$0.23
$0.23
$0.19
$0.20
$0.17
$0.14
$0.11
Exchange rate
$0.67
$0.62
$0.62
$0.62
$0.62
$0.62
$0.62
Valuation per option US$
$0.15
$0.14
$0.12
$0.12
$0.11
$0.09
$0.07
Total valuation US$
$546,450
$87,500
$12,600
$90,000
$110,000
$90,000
$87,500
Share Based Payment Expense
Share based payment expense is comprised as follows:
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 25. Share-based payments (continued)
50
31 December
2024
US$
Expense of options issued in comparative and prior periods
233,292
Reversal of expense recognised in comparative and prior periods
(84,752)
Issue of 3,643,000 ESOP options
213,133
Issue of 625,000 ESOP options
22,405
Issue of 105,000 ESOP options
2,562
Issue of 4,000,000 ESOP options
72,044
Total net expense recognised in profit or loss
458,684
Accounting policy for share-based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the
goods or services are received. The fair value of options is determined using an appropriate valuation models. The number of
options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for
services received as consideration for the equity instruments granted is based on the number of equity instruments that
eventually vest.
Note 26. Operating segments
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The
Group’s sole operating segment is consistent with the presentation of these consolidated financial statements.
For the year ended 31 December 2024, the Group’s revenues have been derived from the following geographical locations:
· Israel – 37% (2023: 43%)
· United States of America – 30% (2023: 34%)
· Other foreign countries – 33% (2023: 23%)
For year ended 31 December 2024, the Group has three major customers contributing 11%, 10% and 8% of total revenues (31
December 2023: three major customers contributing 19%, 11% and 9%). All major customers are from the UAV sector, with
one major customer located in the United States of America, one located in Israel and one in Poland.
Note 27. Financial instruments
Financial risk management policies
The Group’s financial instruments consist mainly of deposits with banks, trade and other debtors and trade and other payables.
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are market risk (including fair value and interest rate
risk) and cash flow interest rate risk, credit risk and liquidity risk.
(a) Interest rate risk
From time to time the Group has significant interest bearing assets, but they are as a result of the timing of equity raising and
capital expenditure rather than a reliance on interest income. The interest rate risk arises on the rise and fall of interest rates.
The Group’s income and operating cash flows are not expected to be materially exposed to changes in market interest rates in
the future. The exposure to interest rates arises from the cash and cash equivalents balances.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 27. Financial instruments (continued)
51
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial
liabilities, is not considered to be material.
(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 consolidated financial statements.
Credit risk related to balances with banks and other financial institutions and trade and other receivables, and is managed by
the Group in accordance with approved Board policy. 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.
Note
31 December
2024
31 December
2023
US$
US$
Cash and cash equivalents held in Australian banks - A+ Rated
12
19,239
64,423
Cash and cash equivalents held in Israel banks - A Rated
12
854,714
2,638,170
Trade and other receivables - no rating
14
585,176
661,753
Impaired trade receivables
The Group assesses expected credit losses associated on a forward looking basis. For trade receivables, the Group applies the
simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of
the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure or a debtor to engage in a repayment plan with the Group, and a
failure to make contractual payments for a period of greater than 120 days past due.
At 31 December 2024 the Group recognised a gain on recovery of bad debts of US$51,335. There were no gains or losses
recognised in profit or loss in relation to impaired receivables in the year ended 31 December 2023.
As at 31 December 2024, trade receivables of US$102,488 (31 December 2023: US$141,476) were past due but not impaired.
These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these
trade receivables is as follows:
31 December
2024
31 December
2023
US$
US$
0 to 3 months overdue
60,678
5,338
3 to 6 months overdue
19,838
34,196
Over 6 months overdue
21,972
101,942
102,488
141,476
(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.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 27. Financial instruments (continued)
52
The following are the contractual maturities of financial liabilities based on the actual rates at the reporting date excluding
interest payments:
31 December
2024
Less than 6
6 - 12
1- 2
2 - 5
Over 5
Total
contractual
Carrying
Interest
rate
months
months
years
years
years
cash flow
amount
%
US$
US$
US$
US$
US$
US$
US$
Financial
liabilities at
amortised cost
Trade and other
payable
-
666,004
-
-
-
-
666,004
666,004
Lease liabilities
3.53%
74,820
36,830
56,671
18,067
-
186,388
180,102
740,824
36,830
56,671
18,067
-
852,392
846,106
31 December
2023
Less than 6
6 - 12
1 - 2
2 - 5
Over 5
Total
contractual
Carrying
Interest
rate
months
months
years
years
years
cash flow
amount
%
US$
US$
US$
US$
US$
US$
US$
Financial
liabilities at
amortised cost
Trade and other
payable
-
529,116
-
-
-
-
529,116
529,116
Lease liabilities
3.15%
95,912
87,900
62,836
7,554
-
254,202
248,014
Borrowings
8.00%
-
5,989,053
103,312
-
-
6,092,365
5,076,976
625,028
6,076,953
166,148
7,554
-
6,875,683
5,854,106
(d) Net fair value of financial assets and liabilities
Fair value estimation
Due to the short term nature of the receivables and payables the carrying value approximates fair value.
(e) Currency risk
The currency risk is the risk that the value of financial instruments will fluctuate due to change in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the Company’s functional currency. The Company is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the US Dollar and the New Israeli Shekel. Any reasonable fluctuation in exchange rates is
not expected to have a material impact on either profit or equity.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 27. Financial instruments (continued)
53
United States Dollar
31 December
2024
31 December
2023
US$
US$
Cash and cash equivalents
661,189
2,235,468
Trade and other receivables
287,908
385,750
Trade and other payables
(12,444)
(2,041)
Net exposure
936,653
2,619,177
Accounting policy for financial instruments
Classification
The Group classifies its financial assets in the following measurement categories:
●
those to be measured subsequently at fair value (either through OCI, or through profit or loss), and
●
those to be measured at amortised cost.
The classification depends on how the Group manages the financial assets and the contractual terms of the cash flows. At year
end, all of the Group’s financial assets have been classified as those to be measured at amortised cost.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Impairment
The Group assesses expected credit losses associated on a forward-looking basis. For trade receivables, the Group applies the
simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of
the receivables.
Note 28. Parent entity information
The following information of the legal parent Elsight Limited has been prepared in accordance with Australian Accounting
Standards and Group accounting policies.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2024
Note 28. Parent entity information (continued)
54
Statement of financial position
Parent
31 December
2024
31 December
2023
US$
US$
Total current assets
52,232
101,297
Total non-current assets
1,150,619
3,365,863
Total assets
1,202,851
3,467,160
Total current liabilities
51,866
5,034,787
Total non-current liabilities
-
93,349
Total liabilities
51,866
5,128,136
Net assets/(liabilities)
1,150,985
(1,660,976)
Equity
Issued capital
29,504,010
23,744,345
Foreign Exchange Reserve
(3,925,946)
(2,442,536)
Share Based Payment Reserve
1,466,243
1,236,275
Convertible note reserve
-
733,376
Accumulated losses
(25,893,322)
(24,932,436)
Total equity/(deficiency)
1,150,985
(1,660,976)
Statement of profit or loss and other comprehensive income
Parent
31 December
2024
31 December
2023
US$
US$
Loss after income tax
(1,922,974)
(3,872,008)
Other comprehensive loss for the year, net of tax
(1,483,410)
(55,775)
Total comprehensive loss
(3,406,384)
(3,927,783)
Guarantees entered into by Elsight Limited for the debts of its subsidiary
There are no guarantees entered into by Elsight Limited.
Contingent liabilities of Elsight Limited
There were no contingent liabilities as at 31 December 2024 (31 December 2023: Nil).
Commitments by Elsight Limited
There were no commitments as at 31 December 2024 (31 December 2023: Nil).
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed in note 1, except
as follows:
Investment in subsidiary
The investment in subsidiary is accounted for at cost less impairment in the financial statements of the parent entity.
Elsight Limited
Annual Report
Notes to the consolidated financial statements
31 December 2023
55
Note 29. Controlled entities
The ultimate legal parent entity of the Group is Elsight Limited, incorporated and domiciled in Australia. The consolidated
financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the Group's
accounting policies.
Ownership interest
Principal place of business /
31 December
2024
31 December
2023
Name
Country of incorporation
%
%
El-Sight Ltd
Israel
100%
100%
Elsight LLC
USA
100%
100%
The proportion of ownership interest is equal to the proportion of voting power held.
Note 30. Commitments
The Group has no commitments as at 31 December 2024 (2023 : nil).
Note 31. Contingent liabilities
In 2023 the Group obtained a grant from the Israel Innovation Authority in relation to its Halo Beyond the Visual Line of Sight
(BVLOS) project. The total grant amount is approximately US$426,000 (ILS 1,570,624), of which a total of US$383,000 has been
received to 31 December 2024. The balance of US$43,000 is expected in be received in 2025. In return for the grant, the Group
is obligated to pay royalties amounting to 3% of future Halo revenues up to the total amount of the grant. No repayments are
required during the project period which concluded 31 December 2024. Repayments will commence from 1 January 2025
based on Halo revenue generated from that date forward, contingent upon the successful outcome of the Group’s research
and development programs and attainment of sales. The Group has no obligation to repay these grants if sales are not
generated. If the project fails the Group has no obligation to repay any grant received. Repayments are linked to the exchange
rate of the US dollar and bear interest at annual LIBOR rates.
The Group has no other known contingent liabilities as at 31 December 2024.
Note 32. Events after the reporting period
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Elsight Limited
Annual Report
Consolidated entity disclosure statement
31 December 2024
56
EnƟty name
EnƟty type
Country of IncorporaƟon
Ownership interest
Tax residency
El-Sight Ltd
Limited liability
Israel
100%
Israel
El-Sight LLC
Limited liability
United States of America
100%
United States of America
Elsight Limited
Annual Report
Directors' declaration
31 December 2024
57
In the Director's opinion:
1.
The consolidated financial statements and notes are in accordance with the Corporations Act 2001, including:
a) complying with Australian Accounting Standards, Corporations Regulations 2001 and other mandatory
professional reporting requirements, noting the matters documented in Note 1; and
b) giving a true and fair view, the consolidated entity’s financial position as at 31 December 2024 and of its
performance for the year ended on that date.
2.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
3.
The information disclosed in the attached consolidated entity disclosure statement is true and correct.
4.
This declaration has been made after receiving the declaration required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2024.
This declaration is made in accordance with a resolution of the Board of Directors pursuant to section 295(5)(a) of the
Corporations Act 2001 and is signed for and on behalf of the Directors by:
___________________________
Mr David Furstenberg
Executive Director
27 February 2025
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ELSIGHT LIMITED
Opinion
We have audited the financial report of Elsight Limited (the Company) and its controlled entities (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 statements, including
material accounting policy information, 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 then ended; 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 auditor independence requirements of 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 1, which indicates that the Group incurred a net loss of $3,870,954 and had net cash
outflows from operating activities of $1,767,942 for the year ended 31 December 2024. As stated in Note 1, these
events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that
may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
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.
Key Audit Matter
How our audit addressed this matter
Revenue from Contracts with Customers
Refer to Note 4 in the financial statements
Revenue from contracts with customers for the year
ended 31 December 2024 was $2,028,737. The
primary revenue source is sale of physical goods to
customers.
Revenue was identified as a key audit matter due to:
•
The balance is material to the Group, and there
are
risks
associated
with
management
judgements,
including
the
identification
of
contracts
and
performance
obligations,
determination of the transaction price and the
timing of revenue recognition; and
•
Revenue recognition is a presumed fraud risk
under the Australian Auditing Standards.
Our audit procedures included:
•
Assessing
whether
the
Group’s
revenue
recognition accounting policies are in accordance
with Australian Accounting Standards;
•
Obtaining a detailed understanding of each of the
revenue streams and the process for determining
and recognising revenue;
•
On a sample basis, testing revenue recognised to
supporting documentation;
•
Testing a sample of revenue transactions before
and after the reporting date to assess whether
revenue is recognised in the correct financial
period; and
•
Assessing the disclosures in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
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 accordingly 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 (other than the consolidated entity disclosure statement) 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 (other than the consolidated entity disclosure statement) 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 have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description
forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 31 December
2024.
In our opinion, the Remuneration Report of Elsight 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.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 27 February 2025
Partner
61
Elsight Limited
Annual Report
Additional ASX Information
31 December 2024
The shareholder information set out below was applicable as at 23 February 2025.
As at 23 February 2025 there were 181,041,211 ordinary fully paid shares held by 958 individual shareholders.
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;
b) on a show of hands each person present who is a member has one vote; and
c) 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 as of 23 February 2025 are listed below.
Ordinary Fully Paid Shares
Holder Name
Holding
% of Issued
Share
Capital
1
CITICORP NOMINEES PTY LIMITED
41,581,116
22.97
2
UBS NOMINEES PTY LTD
23,763,911
13.13
3
BNP PARIBAS NOMINEES PTY LTD
18,090,413
9.99
4
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
14,498,830
8.01
5
BUTTONWOOD NOMINEES PTY LTD
13,117,821
7.25
6
RIGI INVESTMENTS PTY LIMITED
5,348,000
2.95
7
MR NIR GABAY
4,564,053
2.52
8
BNP PARIBAS NOMS PTY LTD
4,357,531
2.41
9
THE LF POINT PTY LTD
3,006,000
1.66
10
MR JASON FRANCO BATTISTESSA
2,261,500
1.25
MR JASON FRANCO BATTISTESSA
2,261,500
1.25
11
MR JASON FRANCO BATTISTESSA
2,100,000
1.16
12
TENBAGGA RESOURCES PTY LTD
1,875,500
1.04
13
MR NIR GABAY
1,835,899
1.01
14
LAMMA NOMINEES PTY LTD
1,750,000
0.97
15
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,583,087
0.87
16
JB TORO PTY LTD
1,215,000
0.67
17
MISS KWAI-KUIN LEE & MR JASON BATTISTESSA
1,153,000
0.64
18
ALBION HAWTHORN PTY LTD
1,057,315
0.58
19
GLENEAGLE ASSET MANAGEMENT LIMITED
1,043,315
0.58
20
TDF PROPERTIES PTY LTD
1,022,000
0.56
Total
147,485,791
81.47
Total Issued Capital
181,041,211
100.00
62
Elsight Limited
Annual Report
Additional ASX Information
SUBSTANTIAL HOLDERS
The names of the substantial shareholders (holders over 5%) disclosed to the Company as substantial shareholders as at 23
February 2025 are:
Name
Number of Shares Held
% of Issued Share Capital
CITICORP NOMINEES PTY LIMITED
41,581,116
22.97
UBS NOMINEES PTY LTD
23,763,911
13.13
BNP PARIBAS NOMINEES PTY LTD
18,090,413
9.99
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED -
A/C 2
14,498,830
8.01
BUTTONWOOD NOMINEES PTY LTD
13,117,821
7.25
DISTRIBUTION OF EQUITY SECURITIES
The distribution of issued quoted equity securities as at 23 February 2025 were as follows:
Holding Ranges
Number of
Shareholders
Total Units
% Issued Share
Capital
above 0 up to and including 1,000
125
52,717
0.03
above 1,000 up to and including 5,000
321
830,311
0.46
above 5,000 up to and including 10,000
142
1,142,918
0.63
above 10,000 up to and including
100,000
279
10,234,921
5.65
above 100,000
91
168,780,344
93.23
Total
958
181,041,211
100.00
There were 180 holders with unmarketable parcels totaling 116,666 shares based on the share price (A$0.3750) as at close
of business on 21 February 2025.
RESTRICTED SECURITIES
As at 23 February 2025 there are no shares held under escrow.
ON-MARKET BUY BACK
As at 23 February 2025 there is no current on-market buyback.
63
Elsight Limited
Annual Report
Additional ASX Information
UNQUOTED SECURITIES
As at 23 February 2025, the following unquoted securities are on issue:
Security Code
Security Name
Total Holders
Total Holdings
ELSEO7
EMP OPTS EXP 25 APRIL 2027 @ $0.43
1
200,000
ELSEO9
EMP OPTS EXP 25 MAY 2027 @ $0.48
1
2,687,589
ELSOPT12
OPTIONS EXPIRING 23 APRIL 2025 @ $0.28
6
550,000
ELSOPT13
OPTIONS EXPIRING 15 MAY 2025 @ $0.34
1
50,000
ELSOPT15
UNL OPTS EXP 1 FEBRUARY 2026 @ $0.43
2
130,000
ELSOPT17
UNLISTED OPTIONS EXP 14/12/2026 @ $0.38
1
50,000
ELSOPT18
UNLISTED OPTIONS EXP 14/12/2026 @ $0.44
1
200,000
ELSOPT19
UNLISTED OPTIONS EXP 14/09/2026 @ $0.42
5
427,000
ELSOPT20
UNLISTED OPTIONS EXP 14/09/2026 @ $0.48
2
695,000
ELSOPT21
UNLISTED OPTIONS EXP 30/08/2027 @ $0.37
11
2,439,000
ELSOPT22
UNLISTED OPTIONS EXP 18/01/2028 @ $0.37
1
43,000
ELSOPT24
UNLISTED OPTIONS EXP 12 JUNE 2025 @$0.32
1
100,000
ELSEO10
UNLISTED OPTIONS EXP 26 MARCH 2029 @ $0.36
14
3,153,000
ELSOPT25
UNLISTED OPTIONS EXP 25 JULY 2029 @ $0.46
1
625,000
ELSOPT26
UNLISTED OPTIONS EXP 22 AUG 2029 @ $0.38
1
105,000
ELSOPT27
UNLISTED OPTIONS EXP 21 AUG 2029 @ $0.60
1
750,000
ELSOPT28
UNLISTED OPTIONS EXP 21 AUG 2029 @ $0.90
1
1,000,000
ELSOPT29
UNLISTED OPTIONS EXP 21 AUG 2029 @ $1.30
1
1,000,000
ELSOPT30
UNLISTED OPTIONS EXP 21 AUG 2029 @ $1.80
1
1,250,000
TOTAL
53
15,454,589