Identitii Limited
Annual Report FY24
Contents
A letter from our Chairperson ............................................................................... 3
A letter from our CEO ........................................................................................... 4
Directors Report .................................................................................................... 6
Auditor’s Independence Declaration .................................................................. 19
Consolidated Statement of Profit or Loss and Other Comprehensive Income 20
Consolidated Statement of Financial Position ................................................... 22
Consolidated Statement of Changes in Equity .................................................. 23
Consolidated Statement of Cash Flows ............................................................. 25
Notes to the Consolidated Financial Statements ............................................... 26
Consolidated Entity Disclosure Statement ......................................................... 52
Directors’ Declaration ......................................................................................... 53
Independent Auditor’s Report .......................................................................... 54
Additional ASX Information .............................................................................. 58
Corporate Directory ........................................................................................... 62
About Identitii
Identitii is on a mission to connect the world’s payment data. We’re
payments, data and technology specialists at heart. We believe that
the future of digital commerce will be enabled by greater access to
and sharing of data within and across the boundaries of geography,
residency and technology. It is with this belief that we seek to bring
people, data and payments together.
Identitii Limited
Annual Report FY24
Chairperson’s Letter
3
A letter from our
Chairperson
Dear fellow Shareholders,
I want to acknowledge and thank you for your
continued support again this year. I also want to
assure you that the Board’s focus continues to
drive a strategy that enhances shareholder value
quickly and sustainably. During the past year, the
Board has actively supported our CEO and
Executive team in identifying and pursuing
strategic opportunities to increase revenue and
position Identitii for far greater success in the
future:
Strategic and Performance Focus
The expanded strategic focus addresses four key
Board expectations;
1.
Move towards profitability
A relentless focus on sales activity. Focus on
additional opportunities to grow revenue, utilising
existing technology and resources, including
potential sector and geographic expansion.
2.
Be known for data sharing
Evolve our existing platform and leverage our
payment customers to seize the emerging
payments data challenge and establish Identitii as
a global market leader in accessing and sharing
payment data.
3.
Be easier to work with
Identify ways to reduce barriers to sales and focus
on simplifying sales and onboarding processes for
emerging digital markets.
4.
Build for the future
Actively explore opportunities to acquire revenue
by exploring M&A opportunities in adjacent
technology businesses.
Leadership and team
The board has considerable confidence in our
small but highly competent team. They remain
focused and committed and work tirelessly to
achieve the Company’s objectives.
Although John Rayment, as CEO, is ultimately
responsible for delivering all outcomes against the
strategy, we have asked him to primarily focus on
strategy 1. Moving toward profitability (Sales) and
strategy 4. Building for the future.
Tim Dickinson, our innovative CTO, is focused on
strategy 2. Being known for data sharing (including
sector and geographic expansion) and strategy 3.
Being easier to work with.
Through extensive consultation with shareholders,
potential investors, and existing and potential
payments data customers, along with geographic
and sector market entry advisers, the board has
already observed considerable progress in these
areas.
The board is also pleased that we have continued
reducing
operating
costs
without
impacting
strategic operational aspirations. This has been
possible due to the efforts of our CFO, Rebecca
White, and the support of the leadership team.
Thanks to the dedication of our Head of
Operations, Ben Jackson, we continue to meet
world-class compliance levels in the information
security space. This would ordinarily be a
significant risk for a company working in the highly
regulated payments data sector. However, our
systems and processes are world-leading and
actively protect our reputation and value.
The Board continues to actively oversee the
management of additional assets, including the
patent litigation and our investment in Payble. We
are cautious yet optimistic about their future value
for Shareholders.
Again, thank you for your support. We remain
dedicated to improving shareholder value for
everyone.
Tim Phillipps, Board Chairperson
Identitii Limited
Annual Report FY24
A letter from our CEO
4
A letter from
our CEO
Dear Shareholders,
Looking back on the past year, we’re proud of the
work we have delivered and excited for what lies
ahead. Despite rapid change and challenges both
internally and externally, Identitii has remained
steadfast in its mission to address the underlying
friction
in
cross-border
payments.
Through
innovation, disciplined execution, and strong
industry relationships, we’ve strengthened our
position and set the stage for sustained growth.
Payments data challenge is growing
Identitii operates in the $190 trillion global cross-
border payments market, which is expected to
grow by 50% over the next seven years. That value
includes
all
types
of
cross-border
money
movements, such as B2B payments, consumer
remittances, international trade settlements and
cross-border e-commerce transactions. It is a large
and growing industry with many players, including
banks, payment processors, Fintech companies,
remittance providers and e-commerce platforms.
It's a highly regulated industry, with strict Anti-
Money
Laundering
and
Counter-Terrorism
Financing (AML/CTF) laws designed to prevent,
detect, and combat the flow of illicit funds through
the financial system. The laws require the industry
to have complex AML/CTF programs in place, with
a
comprehensive
framework
for
detecting,
preventing,
and
reporting
potential
money
laundering and terrorism financing activities.
Complying with the laws is an expensive exercise,
the industry spent over $206bn last year alone.
It's also an industry that is facing massive
disruption. There are tens of thousands of
companies all over the world competing to move
money across borders, the market is highly
competitive
and
becoming
increasingly
fragmented. Companies are focusing on market
segments and solving one or some of the industry
challenges to stand out from the crowd, optimising
their
proposition
for
speed,
or
cost,
or
transparency, as examples. We believe this is like
treating the symptoms instead of treating the
cause.
The underlying cause that connects all of the
challenges with cross-border payments is data.
Specifically, the ability to collect and share enough
payments data to keep money moving around the
world. Data about the people and the companies
sending and receiving money, where the money
came from and where it’s going. Whilst competition
in the global cross-border payments industry is
both significant and growing, very few companies
are focused on addressing the underlying cause of
friction.
Identitii was founded to solve this problem
Over the past twelve months, the Company has
focused on progressing two streams to create
shareholder value. The primary focus has been
connecting cross-border payment companies to
our cloud platform to grow our recurring SaaS
revenue while paying close attention to costs and
making savings where possible. Additionally, we
have also focused on protecting the Company’s
intellectual property, filing a claim for patent
infringement against JP Morgan Chase in the
United States.
Growing our recurring SaaS revenue
Identitii’s platform is used to solve the underlying
friction that exists in the way money is moved
around the world today. The platform provides
structured, repeatable
information
workflows,
creating an ecosystem of participants within a
payments network. The result is improved security
and control of sensitive data as it moves within and
between payments organisations. Having had our
platform in the market for several years, this is the
use-case we see the most demand from the
industry for.
In previous years Identitii pursued revenue from
bespoke projects and professional services, and
whilst these did generate revenue, they also
incurred significant cost and left little we could
easily resell to other customers. This year we
focused on developing recurring SaaS revenue, at
the expense of bespoke projects and professional
services. Whilst revenue is lower than previous
year, the strategy has delivered a product we can
resell in the future, and sustainably lowered costs
to improve our net result.
We welcomed several new customers this year,
growing recurring SaaS revenue with one of
Australia’s
top
ten
banks,
an
Australian
International payments company, and a company
providing compliance services to the financial
Identitii Limited
Annual Report FY24
A letter from our CEO
5
services industry. In addition to progressing
commercial opportunities with several different
customer types, which provides encouragement
that there is wider demand for our platform, we are
delighted that all of our customers are now using
the Identitii SaaS platform.
Protecting our intellectual property
In 2015 Identitii filed its first patent application in the
United States and was eventually awarded the
patent in 2021. Over the next few years, following
the initial application in 2015, the Company
participated in workshops with various financial
institutions to bring the patent idea to life. One of
the workshop participants (under non-disclosure
agreement)
was
JP
Morgan
Chase,
who
subsequently launched the Interbank Information
Network in 2017 after participating in our
workshops.
In 2019 the Company was notified by the United
States Patent and Trademark Office that they had
rejected a patent application from JPMC, citing the
Identitii patent application as prior art. It is the
Company’s view that the Interbank Information
Network, which was later rebranded Liink, was
launched using Identitii’s intellectual property. This
view is also supported by the Company’s US patent
attorneys Bunsow de Mory, and the Company’s US
litigation fund, Curiam Capital.
Following the lodgement of our claim for patent
nfringement in the Delaware Court this year, as
expected JPMC made several defensive moves.
They filed motions to dismiss our claim with the
Delaware Court and they filed petitions to invalidate
our patent with the USPTO. Subsequent to year
end, we were delighted to receive news that the
USPTO had rejected both applications from JPMC
to invalidate our patent. At the time of writing, we
are waiting for the Delaware Court to rule on the
motions to dismiss.
Summarising the year
This year we made great progress on a number of
key initiatives that will deliver future revenue and
shareholder value growth. We repositioned our
brand and our website, improved our product-
market fit and reduced the complexity and ongoing
cost of our platform, leaving us tremendously well-
placed for the years ahead. We also saw the
culmination of several years of work invested to
protect our intellectual property, with a genuine
claim for patent infringement filed in the United
States and externally funded
There is genuine optimism right across the
Company, which is based on the progress outlined
above, together with consistent industry feedback
we’re receiving, about the problems that exist and
our growing ability to solve them. We’re very
thankful to shareholders that supported our capital
raising activities this year, to ultimately help us
continue in the pursuit of our mission to connect the
world’s payments data.
My sincere thanks to our dedicated team, for
putting so much effort into working towards our
mission to connect the world’s payments data. And
of course my sincere thanks to our shareholders for
your continued support of the Board, the Executive
and our Team.
Regards,
John Rayment
Chief Executive Officer
Identitii Limited
Annual Report FY24
Directors Report
6
Directors Report
The Directors present their report together with the consolidated financial statements of the Group comprising of Identitii
Limited (the Company) and its subsidiaries for the year ended 30 June 2024 and the auditor’s report thereon.
Directors
The Directors of the Company at any time during the year ended 30 June 2024 and up to the date of this report are:
Name, qualification and independence status
Experience, special responsibilities and other
directorships
Executive
Mr. John Rayment
Dip Proj Mgt, Dip Bus Mgmt., Dip Bus Mktg
Executive Director
John brings a wealth of experience to Identitii, having
supported many early-stage ventures through sharp
periods of growth. He has held board and executive
roles at Travelex across the globe and has proven
success in helping businesses to scale in line with
rapidly expanding customer demand.
John is the Chief Executive Officer/Managing Director
of the Company.
Non-Executive
Mr. Timothy Phillipps
Dip Arts
Independent Non-Executive Director
Chairperson
Tim is a Financial Crime and RegTech expert with 45
years of industry experience, most recently at Deloitte,
where he held Global and Asia-Pacific roles in financial
crime compliance and analytics, and prior to that with
ASIC as Director of Enforcement.
Member of the Audit and Risk Committee and member
of the Nomination and Remuneration Committee.
Ms. Rhyll Gardner
B. Comm, B. Econ, M. Applied Finance, MBA (Exec), F
FIN, GAICD
Independent Non-Executive Director
Rhyll is an active and experienced Non-Executive
Director, building on 35 years of senior executive
experience in banking and finance with ASX listed
banks including St. George, Westpac, BOQ and
Suncorp. She also brings to the Company over 15 years
of board and committee experience across multiple
sectors.
Chair of the Audit and Risk Committee.
Mr. Simon Griffin
BA (Economics)
Independent Non-Executive Director
Simon brings over 14 years’ experience in global
financial services, having worked in senior and
executive roles in companies including Macquarie
Bank, OFX, HiFX and XE.com. He also brings
significant expertise in scaling technology businesses
including Propsa and Car Next Door.
Chair of the Nomination and Remuneration Committee.
Identitii Limited
Annual Report FY24
Directors Report
7
Company secretary
Elissa Hansen has over 20 years’ experience advising boards and management on corporate governance, compliance,
investor relations and other corporate related issues. She has worked with boards and management on a range of ASX
listed companies including assisting companies through the IPO process. Elissa is a Chartered Secretary who brings best
practice governance advice, ensuring compliance with the Listing Rules, Corporations Act and other relevant legislation.
Directors’ meetings
The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the
financial year are:
Board of Directors
Audit and Risk
Committee
Nomination and
Remuneration
Committee
A
B
A
B
A
B
Timothy Phillipps
14
14
4
4
3
3
John Rayment
13
13
-
-
-
-
Rhyll Gardner
14
14
4
4
3
3
Simon Griffin
14
14
-
-
3
3
A
Eligible to attend
B
Attended
Principal activities
Identitii is a software company that helps financial services businesses and other regulated entities securely manage
information collection and sharing, reducing the growing burden of data compliance requirements around the world.
Identitii’s mission is to seamlessly connect the world’s payment data. Current data sharing methods are manual and
unstructured, exposing organisations to inefficiencies and elevated risk. Our platform is used by more than 200 teams
across the world, to structure and automate information sharing, improving the security and control of sensitive data as it
moves within and between payments organisations. We fundamentally believe that the future of digital commerce will be
enabled by greater access to, and sharing of, payments data within and across the boundaries of geography, residency
and technology.
The strategic highlights for the year ended 30 June 2024 are noted below.
Review of operations
During the year ended 30 June 2024, the Group achieved the following:
•
On 5 September 2023, the Company announced that its Rights Issue closed on 30 August 2023, and raised
$1,338,160 before costs, with a shortfall balance of $789,735. The Rights Issue was a pro-rata non-renounceable
entitlement issue to eligible shareholders of one (1) New Share for every one (1) Existing Share held by eligible
shareholders on the Record Date, at an issue price of $0.01 per New Share. 133,816,609 New Shares were issued
and allotted on 5 September 2023.
•
On 21 September 2023, the Company announced that it had successfully completed the Shortfall Offer, raising a
further $789,735 via the issue of shortfall shares at the issue price of $0.01 per Share, bringing the total capital raised
under the Rights Issue to $2,127,895 before costs.
•
On 28 September 2023, the Company announced $1.0M in annualised cost savings, to further extend its cash runway.
The operational changes to realise $1.0M in annualised cost savings have all been put into effect, and the Company
expects to see the resulting decreases in cash outflows materialise in the coming quarters. Savings have been realised
in cloud infrastructure (consolidating multiple suppliers), legal costs (finalising patent strategy work), operational costs
(office downsizing and licence cancellations) and headcount (including some reallocations to offshore roles).
Additionally, all three Non-Executive Directors on our Board have elected to reduce the cash component of their
Identitii Limited
Annual Report FY24
Directors Report
8
remuneration by 25%, substituting the reduced cash component for ordinary shares in the Company, subject to
shareholder approval.
•
On 4 October 2023, the Company filed a claim against JP Morgan Chase for patent infringement of U.S. Patent No.
10,984,413. The claim was filed in the United States District Court for the District of Delaware, alleging Onyx by JP
Morgan Chase infringes the patent granted to the Company on 20 April 2021.
•
On 15 November 2023, the Company received a refund of $1,494,150 under the Australian Research and
Development Tax Incentive (R&DTI) Scheme. The claim covers the financial year ended 30 June 2023. This is an
increase of $300,484 compared to the claim for the previous financial year, despite an overall reduction in operating
expenses, highlighting the ongoing focus by management on research and development and continued investment in
innovation and platform improvement. On 1 December 2023, the Company announced that its contract with HSBC
Australia to build, maintain and service a bespoke regulatory reporting platform would not be renewed and would
expire on 31 December 2023. The bespoke version of the Identitii platform built for HSBC Australia was subsequently
decommissioned.
•
On 19 December 2023, the Company sold 48% (24,108 shares) of its shareholding in Payble Pty Ltd (‘Payble’) to Our
Innovations Fund III, LP (“OIF Ventures”) for $1.0 million, as part of OIF Ventures’ larger investment into Payble.
Identitii will use funds raised from the transaction for working capital, extending the Company’s runway towards FY25.
After the transaction, Payble is valued at $10.5 million and Identitii retains an 11.4% shareholding. Payble will use the
$2.5 million in new funding from OIF Ventures to continue to capitalise on strong demand for its citizen-centric payment
solution.
•
On 8 May 2024, the Company announced that it was undertaking a pro-rata non-renounceable Entitlement Issue to
Eligible Shareholders of one (1) fully paid ordinary share (New Share) for every two (2) existing Shares held by Eligible
Shareholders on the Record Date, at an issue price of $0.01 per New Share, to raise up to $2,151,190 (before costs)
(Rights Issue). The New Shares issued under the Rights Issue will rank equally with the existing shares on issue on
the Record Date.
•
On 5 June 2024, the Company announced that major shareholder, Beauvais Capital Pty Ltd (Beauvais Capital) as
trustee for the Reginald Hector Trust, had entered into an underwriting agreement with the Company to partially
underwrite the Company’s rights issue offer up to the amount of $900,000 (90,000,000 Shares). In addition to the
underwriting commitment, Beauvais Capital and its related entities also applied for their full entitlement under the offer.
The closing date for the offer was also extended to Thursday, 4 July 2024 to allow extra time for Eligible Shareholders
to take up their entitlements.
Review of financial conditions
The Group reported revenue from contracts with customers of $748,292 for the year ended 30 June 2024 (30 June
2023: $1,363,063), a decrease of 45% from the prior year. The Group reported a net loss after tax of $3,543,516 for
the year ended 30 June 2024 (30 June 2023: $5,997,504), a decrease of $2,453,988 or 41%, primarily due to:
•
A gain of 114,435 recorded for the sale of the Company’s investment in Payble Pty Ltd upon the partial sell
down of its shares.
•
A $694,918 gain recorded on the revaluation of the Company’s remaining investment in Payable Pty Ltd post
the partial sell down of its shares.
•
A $2,768,988 (31%) decrease in operating expenses for the financial year due to the Company’s ongoing
company-wide cost reduction program.
The Group had a positive net current asset balance of $79,509 (30 June 2023: $855,569) and a positive overall net asset
balance of $1,179,739 (30 June 2023: $2,324,906) at 30 June 2024.
The Group had $643,761 of cash and cash equivalents on hand at 30 June 2024 (30 June 2023: $1,287,005) and reported
a net cash outflow from operating activities of $3,728,724 during the year ended 30 June 2024 (30 June 2023: $5,203,726).
Significant changes in the state of affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Group that occurred during
the year ended 30 June 2024.
Identitii Limited
Annual Report FY24
Directors Report
9
Dividends
No dividends were declared or paid by the Company during the financial year ended 30 June 2024 (30 June 2023: Nil).
Events subsequent to reporting date
Subsequent to the balance date the Group announced the following material events:
•
On 3 July 2024, the Group incorporated BNDRY Pty Ltd, a new wholly owned subsidiary.
•
On 9 July 2024, the Company announced that its Rights Issue closed on 4 July 2024, and raised $1,659,445
before costs, with a shortfall balance of $491,745. The Rights Issue was a pro-rata non-renounceable entitlement
issue to eligible shareholders of one (1) New Share for every two (2) existing Shares held by eligible shareholders
on the Record Date, at an issue price of $0.01 per New Share. 165,944,526 New Shares were issued and allotted
on 11 July 2024. It was further announced on 3 September 2024 that the shortfall was placed, raising a further
$491,745.
•
On 26 August 2024, the Company announced that it had defeated two challenges from JPMC to the validity of its
U.S. Patent No. 10,984,413 (“the ’413 patent”). Ruling on both of JPMC’s challenges, the USPTO found that “the
information presented fails to show a reasonable likelihood that JPMC would prevail in establishing the
unpatentability” of the Company’s ’413 patent.
Other than the matters discussed above, there has not arisen in the interval between the end of the year and the date
of this report any item, transaction, or event of a material and unusual nature likely, in the opinion of the Directors, to
affect significantly in future financial years the operations of the Group, the results of those operations, or the state of
affairs of the Group.
Likely developments
The Group will continue to develop the Identitii platform whilst continuing to serve existing customers, sign new customers
and grow its pipeline of partners. This will require further investment in product and business development and marketing.
Further information about likely developments in the operations of the Group and the expected results of those operations
in future financial years has not been included in this report because disclosure of the information would likely result in
unreasonable prejudice to the Group.
Environmental regulation
The Group’s operations are not regulated by any significant law of the Commonwealth or of a State or Territory relating to
the environment.
Directors’ interests
The relevant interest of each Director in the shares and options over shares issued by the companies within the Group, as
notified by the Directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is
as follows:
Ordinary shares
Options over
ordinary shares
Timothy Phillipps
5,087,606
211,538
John Rayment (1)
6,096,824
8,397,652
Rhyll Gardner
3,079,795
-
Simon Griffin
1,500,000
-
(1)
Shares and 397,652 Options held by Elorey Pty Ltd, of which John Rayment is a beneficiary.
Identitii Limited
Annual Report FY24
Directors Report
10
Shares issued on exercise of options
During or since the end of the financial year, 1,650,000 ordinary shares of the Company were issued by the Group as a
result of the exercise of performance rights.
Risks and governance
The following is a summary of material business risks that could adversely affect our financial performance and growth
potential in future years and how we propose to mitigate such risks.
a)
Company Specific Risks
Competition
The business of providing enterprise software for the financial services industry in order to solve challenges for international
wire transfers is highly competitive and includes companies with significantly greater financial, technical, human, research
and development and marketing resources than the Company. There is also currently significant interest in adopting
blockchain technology for this purpose, including among banks, financial intermediaries, financial technology start-ups and
others. The Company’s competitors may discover and develop products in advance of the Company and/or products that
are more effective than those developed by the Company. As a consequence, the Company’s current and future
technologies and products may become obsolete or uncompetitive resulting in adverse effects on revenue, margins and
profitability.
Failure to attract new customers
The Company may fail to attract new customers for a number of reasons, such as the failure to meet customer expectations
or requirements, poor customer service, pricing or competition. The Company’s ability to retain and renew existing
contracts and win new contracts may also be impacted by broader external factors, including a slowdown in economic
activity, changes to law or changes to regulation. If the Company fails to retain its existing customers, attracts further
business from those existing customers and attracts new customers, the Company’s future operating and financial
performance may be adversely affected, and its reputation may be damaged.
Product disruption
The rapid pace of innovation and development within the industry, together with the high number of competitors means
that there are no guarantees the Company’s products will be effective or economic. There is a risk that any of the
Company’s competitors’ products, services or offerings may render the Company’s products, services or offerings obsolete
or uncompetitive. In particular, the enterprise software market and financial services industry has been rapidly evolving,
with both new entrants and established participants operating in specific areas of expertise.
Business strategy risk
The Company’s future growth and financial performance is dependent on the Company’s ability to successfully execute its
business strategy. This will be impacted by a number of factors, including the Company’s ability to expand through new
channels and develop within Australian and international financial services markets for its current commercialised products
and services; ability to successfully commercialise its current products and services and being able to provide these
products and services; innovate and successfully commercialise new products that are appealing to customers; and comply
with regulatory requirements (reflecting the sensitive regulatory nature or highly regulated environment in which the
Company’s customers operate their business).
Inability to retain key staff
The Company currently employs a number of key management personnel and the Company’s future depends on retaining
appropriately qualified and experienced personnel. The loss of any of these employee’s services could materially and
adversely affect the Company and may impede the achievement of its product development and commercialisation
objectives. Furthermore, the successful development of the Company will require the services of additional appropriately
qualified and experienced staff. There can be no assurance that the Company will be able to attract appropriately qualified
and experienced additional staff and this may adversely affect the Company’s prospects of success.
Identitii Limited
Annual Report FY24
Directors Report
11
b) Risks associated with the Company’s intellectual property and trade secrets
Dependence on technology rights and intellectual property
Obtaining and protecting intellectual property rights over all the technologies and products connected with the Company’s
products, services or offerings will be essential to commercialisation and realising its growth potential. The prospects of
the Company’s products, services and offerings generating a profit and increasing in value depend significantly on its ability
to obtain interests in all relevant intellectual property, maintain trade secret protection and operating without infringing the
proprietary rights of third parties. In this regard, the Company and its Directors offer no assurance that any intellectual
property which it develops or acquires will afford the Company or the holder commercially significant protection of its
products or technologies, or that any of the projects that may arise from technologies will have commercial applications
the Company expects. However, no assurance can be given that any measures taken to protect its interests in intellectual
property will be sufficient. There is a risk that as yet unknown third parties may assert intellectual property claims in relation
to blockchain, including any of the technologies or services associated with the Company’s blockchain based products,
services or offerings. Irrespective of the merit of any rights or claims asserted by third parties, such claims may adversely
affect the Company. There is also a risk that the Company’s investment may be indirectly adversely affected if a third party
claim or asserted right reduces confidence in the longer-run viability of the blockchain industry.
Patent risk
The Company’s patent applications in the United States and Singapore have been granted. However, there is no guarantee
that the Company’s patent will provide adequate protection for the intellectual property, or that third parties will not infringe
or misappropriate its patents or any other rights. In addition, there can be no assurance that the Company will not have to
pursue litigation against other parties to assert its rights. The Company has filed a claim in the United States District Court
for the District of Delaware against JP Morgan Chase for patent infringement of U.S. Patent No. 10,984,413. The litigation
is ongoing.
Infringement of third party intellectual property rights
If a third party accuses the Company of infringing its intellectual property rights or if a third party commences litigation
against the Company for the infringement of patent or other intellectual property rights, the Company may incur significant
costs in defending such action, whether or not it ultimately prevails. Costs that the Company incurs in defending third party
infringement actions would also include diversion of management’s and technical personnel’s time. In addition, parties
making claims against the Company may be able to obtain injunctive or other equitable relief that could prevent the
Company from further developing discoveries or commercialising its products and services. In the event of a successful
claim of infringement against the Company, it may be required to pay damages and obtain one (1) or more licences from
the prevailing third party. If it is not able to obtain these licences at a reasonable cost, if at all, it could encounter delays in
product and service delivery and loss of substantial resources while it attempts to develop alternative products and
services. Defence of any lawsuit or failure to obtain any of these licences could prevent the Company from commercialising
available products and services and could cause it to incur substantial expenditure.
Trade secret risks
The Company relies on its trade secrets, which include information relating to the development of its technology and
integration with its customers. The protective measures that the Company employs may not provide adequate protection
for its trade secrets. This could erode the Company’s competitive advantage and materially harm its business. The
Company cannot be certain that others will not independently develop the same or similar technologies on their own or
gain access to trade secrets or disclose such technology, or that the Company will be able to meaningfully protect its trade
secrets and unpatented know-how and keep them secret.
Indemnification and insurance of officers and auditors
The Company has entered into a director protection deed with each Director. Under these deeds, the Company indemnifies
the Directors against all liabilities to another person that may arise from their position as Director of the Company and its
controlled entities.
The Company has not indemnified or made a relevant agreement for indemnifying against a liability to any person who is
or has been an auditor of the Group.
The Group paid insurance premiums in respect of Directors’ and Officers’ liability and legal expenses insurance contracts
for the year ended 30 June 2024 and subsequent to the year end. Such insurance contracts insure against certain liability
(subject to specific exclusions), persons who are or have been Directors or Executive Officers of the Group.
Identitii Limited
Annual Report FY24
Directors Report
12
Non-audit services
The Directors received the Auditor’s Independence Declaration under s.307 of the Corporations Act 2001, which is set out
on page 19. The external auditor did not provide non-audit services to the Company during the year ended 30 June 2024.
Officers of the Company who are former partners of RSM
There are no officers of the Company who are former partners of RSM.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to
which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings.
The Group was not a party to any such proceedings during the year.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 19 and forms part of the Directors’ report for the year ended 30 June 2024.
Rounding of amounts to the nearest dollar
In accordance with ASIC Corporations (Rounding of Financial/Directors’ Reports) Instrument 2016/191, the amounts in the
Directors’ Report and consolidated financial statements have been rounded to the nearest dollar.
Identitii Limited
Annual Report FY24
Directors Report
13
Audited Remuneration Report
The Directors present the Remuneration Report (the Report) for the Company and its subsidiaries (the Group) for the year
ended 30 June 2024. This Report forms part of the Directors’ Report and has been audited in accordance with Section
300A of the Corporations Act 2001. The Report details the remuneration arrangements for the Group’s Key Management
Personnel (KMP):
•
Executive Directors and other KMP
•
Non-Executive Directors
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling
the major activities of the Group.
1. Principles of remuneration
The performance of the Group depends upon the quality and commitment of the Directors and Executives. The philosophy
of the Directors in determining remuneration levels is to:
•
set competitive remuneration packages to attract and retain high calibre employees;
•
link executive rewards to shareholder value creation; and
•
establish appropriate hurdles for variable executive remuneration.
The Nomination and Remuneration Committee reviews and make recommendations to the Board on the Group’s
remuneration policies, procedures and practices. It also defines the individual packages offered to Executive Directors and
KMP, for recommendation to the Board.
The Board may consider engaging an independent remuneration consultant to advise the Board on appropriate levels of
remuneration relative to its industry peer group.
In accordance with Corporate Governance best practice (Recommendation 8.2), the structure of Non-Executive Director
and Executive remuneration is separate and distinct as follows:
a)
Non-Executive Directors
Fixed and variable remuneration
The Board seeks to set Non-Executive Directors’ remuneration at a level that provides the Group with the ability to
attract and retain Directors of a high calibre whilst incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from
time to time by a general meeting. This amount has been fixed by the Company at $250,000. The amount of aggregate
remuneration and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers
advice from shareholders and takes into account the fees paid to Non-Executive Directors of comparable companies
when undertaking the annual review process.
Non-Executive Directors’ base fees cover all main board activities and membership of all committees; however, they
do not receive performance-related compensation and are not provided with retirement benefits apart from statutory
superannuation. Non-executive Directors are entitled to participate in the Equity Incentive Plan.
Year ended to
30 June 2024
$
30 June 2023
$
Chairman’s fee
75,000
75,000
Non-Executive Directors fee
50,000
50,000
Identitii Limited
Annual Report FY24
Directors Report
14
b)
Executives and Executive Director remuneration
Remuneration for Executives and Executive Directors consists of fixed and variable remuneration only.
Fixed remuneration
Fixed remuneration is reviewed annually by the Directors. The process consists of a review of relevant comparative
remuneration in the employment market and within the Group. The Group may engage an independent remuneration
consultant to advise the Board on appropriate levels of remuneration for the Group’s Executive Directors relative to
its industry peer group.
Variable remuneration
Variable remuneration is provided in the form of share options under the Group Equity Incentive Plan (EIP). Under
the EIP, one share option entitles the holder to one share in the Company subject to vesting conditions. Executives
and Executive Directors vesting conditions are linked to continued years of service and may be linked to performance
hurdles. The Board have the discretion to settle share options with a cash equivalent payment. Participants in the
EIP will not pay any consideration for the grant of the share option unless determined otherwise. Share options will
not be listed and may not be transferred, assigned or otherwise dealt with unless approved by the Directors. If the
executive’s employment terminates before the share options have vested, the share options will lapse, unless
approved otherwise by the Board.
2. Details of remuneration
Details of the remuneration of the KMP as defined in AASB 124 Related Party Disclosures are set out in Table 1 which
follows.
The KMP of the Group have authority and responsibility for planning, directing and controlling the activities of the Group.
The KMP make or participate in making decisions that affect the whole, or a substantial part, of the business or who have
the capacity to affect significantly the Group’s financial standing.
The KMP of the Group are the Executive and Non-Executive Directors and the Chief Financial Officer.
Identitii Limited
Annual Report FY24
Directors Report
15
Details of the nature and amount of each major element of remuneration of each Director of the Company, and other KMP of the Group are:
Table 1
Short-term benefits
Post-employment
Other long-term
benefits
Termination
benefits
Share-based
payments
Total
% Share-based
payments
Salary
Superannuation
(A)
Share options (B)
(variable)
Year ended 30 June 2024
$
$
$
$
$
$
Executive Directors
John Rayment
335,000 (1)
34,100
12,160
-
138,438
519,698
27%
Non-Executive Directors
Timothy Phillipps
75,000 (2)
-
-
-
-
75,000
-
Rhyll Gardner
50,000 (3)
-
-
-
-
50,000
-
Simon Griffin
51,903 (4)
4,678
-
-
-
56,581
-
Other KMP
Rebecca White
126,250
-
-
-
-
126,250
-
Total
638,153
38,778
12,160
-
138,438
827,529
(1) Inclusive of a $25,000 bonus paid during the year.
(2) Inclusive of $14,043 in Directors’ fees accrued but not yet paid.
(3) Inclusive of $9,375 in Directors’ fees accrued but not yet paid.
(4) Inclusive of $9,375 in Directors’ fees accrued but not yet paid, and $1,903 in for the provision of additional consulting services during the year.
(A) In accordance with AASB 119 Employee Benefits, annual leave is classified as other long-term employee benefits.
(B) The fair value of share options is calculated at the grant date using an option-pricing model and allocated to each reporting period from grant date to vesting date depending on the vesting conditions
attached to the options. The value disclosed is the portion of the fair value of the options recognised as an expense in the reporting period.
Identitii Limited
Annual Report FY24
Directors Report
16
Table 1
Short-term benefits
Post-employment
Other long-term
benefits
Termination
benefits
Share-based
payments
Total
% share-based
payments
Salary
Superannuation
(A)
Share options (B)
(variable)
Year ended 30 June 2023
$
$
$
$
$
$
Executive Directors
John Rayment
310,000
32,550
20,159
-
162,568
525,277
31%
Non-Executive Directors
Timothy Phillipps
75,000
-
-
-
-
75,000
-
Rhyll Gardner
50,000
-
-
-
-
50,000
-
Simon Griffin
53,978
5,668
-
-
-
59,646
-
Other KMP
Catherine Lin (1)
48,710
5,115
-
-
-
53,825
-
Rebecca White
59,750
-
-
-
-
59,750
-
Total
597,438
43,333
20,159
-
162,568
823,498
(1) Resigned 8 January 2023.
(2) Appointed 8 January 2023.
(A) In accordance with AASB 119 Employee Benefits, annual leave is classified as other long-term employee benefits.
(B) The fair value of share options is calculated at the grant date using an option-pricing model and allocated to each reporting period from grant date to vesting date depending on the vesting conditions
attached to the options. The value disclosed is the portion of the fair value of the options recognised as an expense in the reporting period.
Identitii Limited
Annual Report FY24
Directors Report
17
3.
Service agreements
The following is a summary of the current major provisions of the agreement relating to remuneration of the Executive
Director.
John Rayment – Chief Executive Officer
John Rayment is the Chief Executive Officer of the Group and is considered a key member of the Group’s management
team.
John receives a base salary of $310,000 per annum plus superannuation and holds 8,000,000 share options with attached
service and performance vesting conditions.
During the year ended 30 June 2024, a $25,000 bonus was paid to John Rayment.
Employment Conditions
Commencement date: 19 March 2020
Term: Ongoing until notice is given by either party
Review: Annually
Notice period required on termination: 3 months by either party
Termination benefits: None
Independent Review
To ensure the Group complies with industry best practice in relation to the remuneration of its Executive Director, the Non-
Executive Directors of the Group will consider engaging the services of a remuneration consultant to conduct an
independent assessment of the remuneration packages negotiated with its Executive Director.
4.
Equity instruments
All share options refer to options over ordinary shares of Identitii Limited, which are exercisable on a one-for-one basis
under the Equity Incentive Plan (EIP).
a)
Options over equity instruments granted as compensation
All options expire on the earlier of their expiry date or termination of the individual’s employment. Vesting is
conditional on the individual remaining in employment during the vesting period unless determined by the Board
otherwise.
Share options were granted to KMP as compensation during the year ended 30 June 2024 as noted in the table
below.
b)
Analysis of movements in equity instruments
The movement during the year in the number of options over ordinary shares in Identitii Limited held, directly,
indirectly or beneficially, by each KMP, including their related parties, is as follows:
Held at
1 July 2023
Granted/
(forfeited)
during the
year
Held at 30
June 2024
Vested
during the
year
Vested at 30
June 2024
Exercisable at
30 June 2024
Timothy Phillipps
211,538
-
211,538
-
-
-
John Rayment
8,397,652
-
8,397,652
500,000
1,500,000
1,500,000
Rhyll Gardner
-
-
-
-
-
-
Simon Griffin
-
-
-
-
-
-
Rebecca White
-
-
-
-
-
-
Identitii Limited
Annual Report FY24
Directors Report
18
5.
KMP transactions
a)
Loans from KMP and their related parties
There were no loans outstanding at the end of the year from KMP and their related parties.
b)
Other transactions with KMP
A number of KMP, or their related parties, hold positions in other entities that result in them having control, or joint
control, over the financial or operating policies of that entity.
Terms and conditions of transactions with KMP and their related parties are no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to non-KMP related
entities on an arm’s length basis.
c)
Movement in shares
The movement during the year in the number of ordinary shares in Identitii Limited held, directly, indirectly or
beneficially, by each KMP, including their related parties, is as follows:
Held at 1 July
2023
Acquired
Held at 30 June
2024
Timothy Phillipps
1,269,232
2,122,505
3,391,737
John Rayment
2,385,912
2,385,912
4,771,824
Rhyll Gardner
-
2,000,000
2,000,000
Simon Griffin
-
1,000,000
1,000,000
Rebecca White
-
-
-
This Directors’ Report is signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
27 September 2024
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 13, 60 Castlereagh Street
Sydney
NSW 2000
Australia
T +61 (02) 8226 4500
F +61 (02) 8226 4501
rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Identitii Limited for the year ended 30 June 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 PARTNERS
Gary Sherwood
Partner
Sydney NSW
Dated: 27 September 2024
19
Identitii Limited
Annual Report FY24
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
20
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Note
30 June 2024
$
30 June 2023
$
Revenue from contracts with customers
2
748,292
1,363,063
Research and development tax incentive
996,640
1,490,084
Government grants
36,600
36,303
Interest income
4,679
21,114
Gain on sale of investment
21
114,435
-
Gain on revaluation of financial assets
23
694,918
-
Total revenue and other income
2,595,564
2,910,564
Expenses
Salaries and employee benefit expenses
1,747,861
2,179,630
Share based payments
14
235,849
405,977
Consultants fees
308,925
564,062
Advertising and marketing
7,571
148,983
Depreciation and amortisation
12,940
13,875
General expenses
670,069
738,465
Interest expense
75,181
52,694
Legal expenses
106,021
163,532
Office expenses
405,640
537,878
Travel and accommodation
122,374
191,926
Short-term lease payments
37,166
55,449
Reversal of impairment on trade receivables
-
(749)
Research and development expenses
2,291,125
3,425,480
Share of equity-accounted investee loss
21
118,358
430,866
Total expenses
6,139,080
8,908,068
Identitii Limited
Annual Report FY24
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
21
Note
30 June 2024
$
30 June 2023
$
Loss before income tax
(3,543,516)
(5,997,504)
Income tax expense
3
-
-
Loss for the year
(3,543,516)
(5,997,504)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(163)
(19,528)
Total comprehensive loss for the year
(3,543,679)
(6,017,032)
Basic and diluted loss per share (cents)
4
(0.92)
(2.90)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with accompanying notes
Identitii Limited
Annual Report FY24
Consolidated Statement of Financial Position
22
Consolidated Statement of Financial Position
Note
30 June 2024
$
30 June 2023
$
Assets
Cash and cash equivalents
6
643,761
1,287,005
Research and development tax incentive receivable
996,640
1,490,084
Trade and other receivables
7
339,039
211,708
Current assets
1,979,440
2,988,797
Property, plant and equipment
16,142
49,860
Investment in equity-accounted investees
8
-
1,392,307
Financial assets
9
1,083,318
-
Other non-current assets
770
27,170
Non-current assets
1,100,230
1,469,337
Total assets
3,079,670
4,458,134
Liabilities
Trade and other payables
10
437,018
583,029
Employee provisions
11
332,212
251,820
Contract liabilities
2
241,886
318,379
Borrowings
12
888,815
980,000
Current liabilities
1,899,931
2,133,228
Total liabilities
1,899,931
2,133,228
Net assets
1,179,739
2,324,906
Equity
Share capital
13
35,646,913
33,438,200
Share options reserve
14
4,417,290
4,306,491
Foreign currency translation reserve
(20,049)
(19,886)
Retained losses
(38,864,415)
(35,399,899)
Total equity
1,179,739
2,324,906
The above Consolidated Statement of Financial Position should be read in conjunction with accompanying
notes
Identitii Limited
Annual Report FY24
Consolidated Statement of Changes in Equity
23
Consolidated Statement of Changes in Equity
Note
Share
capital
$
Share option
reserve
$
Foreign
currency
translation
reserve
$
Retained
losses
$
Total equity
$
Balance at 1 July 2023
33,438,200
4,306,491
(19,886)
(35,399,899)
2,324,906
Loss after tax
-
-
-
(3,543,516)
(3,543,516)
Other comprehensive income
-
-
(163)
-
(163)
Total comprehensive loss
-
-
(163)
(3,543,516)
(3,543,679)
Issue of ordinary share capital
13
2,207,896
-
-
-
2,207,896
Costs of equity raising
13
(45,233)
-
-
-
(45,233)
Exercise of performance rights
13
46,050
(46,050)
-
-
-
Equity-settled share-based payments
14
-
235,849
-
-
235,849
Expired options and performance rights
14
-
(79,000)
-
79,000
-
Balance at 30 June 2024
35,646,913
4,417,290
(20,049)
(38,864,415)
1,179,739
Identitii Limited
Annual Report FY24
Consolidated Statement of Changes in Equity
24
Note
Share
capital
$
Share option
reserve
$
Foreign
currency
translation
reserve
$
Retained
losses
$
Total equity
$
Balance at 1 July 2022
32,934,833
3,900,514
(358)
(29,402,395)
7,432,594
Loss after tax
-
-
-
(5,997,504)
(5,997,504)
Other comprehensive income
-
-
(19,528)
-
(19,528)
Total comprehensive loss
-
-
(19,528)
(5,997,504)
(6,017,032)
Issue of ordinary share capital
13
541,976
-
-
-
541,976
Costs of equity raising
13
(38,609)
-
-
-
(38,609)
Equity-settled share-based payments
14
-
405,977
-
-
405,977
Balance at 30 June 2023
33,438,200
4,306,491
(19,886)
(35,399,899)
2,324,906
The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes
Identitii Limited
Annual Report FY24
Consolidated Statement of Cash Flows
25
Consolidated Statement of Cash Flows
Note
30 June 2024
$
30 June 2023
$
Cash flows from operating activities
Receipts from customers
692,247
1,847,455
Payments to suppliers and employees
(5,856,251)
(8,218,360)
Cash flows utilised in operations
(5,164,004)
(6,370,905)
Receipts from government grants and tax incentives
1,526,684
1,240,015
Interest received
4,679
987
Interest and other costs of finance paid
(96,083)
(73,823)
Total cash flows used in operating activities
15
(3,728,724)
(5,203,726)
Cash flows from investing activities
Cash flows from loans to equity-accounted investees
-
12,386
Sale of investments in associates
21
999,984
-
Total cash flows from investing activities
999,984
12,386
Cash flows from financing activities
Proceeds from the issue of shares
13
2,157,896
416,868
Transaction costs related to the issue of shares
(53,922)
(36,109)
Proceeds from borrowings
12
888,815
980,000
Repayment of borrowings
12
(980,000)
-
Transaction costs related to borrowings and leases
(16,491)
-
Total cash flows from financing activities
1,996,298
1,360,759
Net (decrease) in cash held
(732,442)
(3,830,581)
Opening cash balance
1,287,005
5,074,133
Effect of movement in exchange rates
89,198
43,453
Closing cash balance
6
643,761
1,287,005
The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying notes
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
26
Notes to the Consolidated Financial Statements
1.
Significant Accounting Policies
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out either in
the respective notes or below. These policies have been consistently applied to all the periods presented, unless otherwise
stated. The financial statements are for the Group including Identitii Limited and its subsidiary.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (“AASB”). The financial statements also comply with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The
financial statements comprise the consolidated financial statements of the Group which is a for-profit entity for financial
reporting purposes under Australian Accounting Standards.
Historical cost convention
The consolidated financial statements, except for the 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.
Critical accounting estimates
The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed throughout the financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at the end of the reporting period.
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 and 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 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.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
27
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a loss for the year ended 30 June 2024 of $3,543,516
and total cash outflows from operating activities of $3,728,724. As at that date, the Group had net current assets of $79,509
and net assets of $1,179,739. As such the Group needs to raise additional capital to support its operating activities.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as a
going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business
and at the amounts stated in the financial report.
The Directors believe there are reasonable grounds that the Group will continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report after considering the following:
•
The Group has $643,761 in cash and cash equivalents as at the balance date;
•
The Group successfully raised $888,815 in debt funding during the year and is evaluating plans to secure additional
debt funding later in the year;
•
The Group successfully raised equity funding of $2,113,735 during the financial year; and
•
On 9 July 2024, the Company announced that its Rights Issue closed on 4 July 2024, and raised $1,659,445 before
costs, with a shortfall balance of $491,745. The Rights Issue was a pro-rata non-renounceable entitlement issue to
eligible shareholders of one (1) New Share for every two (2) existing Shares held by eligible shareholders on the
Record Date, at an issue price of $0.01 per New Share. 165,944,526 New Shares were issued and allotted on 11
July 2024. It was further announced on 3 September 2024 that the shortfall was placed, raising a further $491,745.
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.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the Group does not continue as a going concern.
Functional and presentation currency
These consolidated financial statements are presented in Australian dollars which is the Group’s functional currency. The
Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in
accordance with that instrument, amounts in the consolidated financial statements and directors’ report have been rounded
off to the nearest Australian dollar, unless otherwise stated.
Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Group at the exchange rates at the dates
of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the
exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency
are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items
that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the
transaction. Foreign currency differences are generally recognised in profit or loss and presented within general expenses.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is current when it is expected to be realized or intended to be sold or consumed in normal operating cycle; it is
held primarily for the purpose of trading; it is expected to be realized within 12 months after the reporting period; or the
asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is current when it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading;
it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
28
Current and non-current classification (continued)
of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-
current.
Deferred tax assets and liabilities are always classified as non-current.
Research and development tax incentive
The R&D tax incentive encourages companies to engage in R&D benefiting Australia, by providing a tax offset (or a cash
refund if in a tax loss position) for eligible R&D activities. The Group recognises the R&D tax incentive in profit or loss when
the Group incurs the eligible R&D expenditure. The R&D tax incentive income is presented on a gross basis and is not
netted off against the R&D costs to which it relates.
Goods and services tax (GST)
Revenues, expenses, and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
New, revised or amended accounting standards adopted
The Group has retrospectively adopted, as at the date of incorporation, all of the new, revised or amended Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the International
Financial Reporting Interpretations Committee (IFRIC) that are relevant to its operations and effective for the year
commencing 1 July 2023. There was no material impact on the group’s financial statements on the adoption of these
Standards and Interpretations.
Revised or amending Accounting Standards or Interpretations that are not yet mandatory for the year ended 30 June 2024
have not been early adopted.
2.
Revenue
The Group generates revenue primarily from the licensing of software and the provision of professional and maintenance
services to its customers. During the period the Group also generated revenue from its new Software-as-a-Service (SaaS)
platform.
a)
Disaggregation of revenue
In the following table, revenue is disaggregated by nature of product and service and is done so in conjunction with
the Group’s reporting segment.
For the year ended 30 June
2024
$
2023
$
Nature of product and service
License and usage fees
634,920
645,703
Maintenance fees
-
21,827
Professional services
53,372
635,533
SaaS fees
60,000
60,000
Revenue from contracts with customers
748,292
1,363,063
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
29
2.
Revenue (continued)
b)
Timing of revenue recognition
The following table, revenue is disaggregated by timing of revenue recognition
For the year ended 30 June
2024
$
2023
$
Services transferred at a point in time
53,372
635,533
Services transferred over time
694,920
727,530
c)
Contract balances
The following table provides information about trade receivables, contract assets and contract liabilities from contracts
with customers.
30 June 2024
$
30 June 2023
$
Trade receivables
22,000
17,049
Contract assets
-
-
Contract liabilities
(241,886)
(318,379)
Reconciliation of the written down values of contract assets and contract liabilities at the beginning and end of the
current and prior financial year are set out below:
Contract assets
30 June 2024
$
30 June 2023
$
Opening balance 1 July
-
120,250
Additions
-
-
Transfer to trade receivables
-
(120,250)
Closing balance 30 June
-
-
Contract liabilities
30 June 2024
$
30 June 2023
$
Opening balance 1 July
318,379
259,712
Payments received in advance
499,439
603,424
Transfer to revenue – in opening balance
(318,379)
(259,712)
Transfer to revenue – other balances
(257,553)
(285,045)
Closing balance 30 June
241,886
318,379
No information has been provided about remaining performance obligations at 30 June 2024 that have an original
expected duration of one year or less, as allowed by AASB 15.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
30
2. Revenue (continued)
Accounting Policy - Revenue
Under its contracts, the Group grants a licence to the customer for the use of its software. The contract will specify the
term of the licence, the jurisdictions in which the licence may be utilised and protocols to be followed to extend the licence
beyond the agreed licence term.
The contracts also facilitate the provision of certain software, training, maintenance, customisation and configuration or
other services from the Group in consideration for the payment of fees. The customer is granted, for the term of each
contract, a non-exclusive, perpetual, irrevocable and royalty-free licence to use the software in a specific use case. The
Group retains all rights, title and interest in the intellectual property of the software.
The Group is currently recognising revenue under these enterprise level and SaaS contracts for licence fees, maintenance
fees, usage fees and professional services, each regarded as a separate performance obligation. Revenue is measured
based on the consideration specified in the contract and is recognised when the Group transfers control over the product
or service to the customer. Charges are determined by a number of factors including transaction volume, customisation
requirements, ongoing support and maintenance and new feature releases. Pricing changes for each renewal term are to
be mutually agreed in writing.
The following table provides information about the nature and timing of the satisfaction of performance obligations in its
contracts with customers including the related revenue recognition policies.
Product and services
Nature and timing of satisfaction of performance obligations
Licence fees
The contracts require the Group to undertake maintenance and software enhancement
activities throughout the licence period that significantly affects the intellectual property (IP)
to which the customers have rights. The nature of the Group’s performance obligation in
granting a licence is regarded as a right to access the IP and thus the Group recognises
licence fee revenue over time.
Licence fee revenue is recognised in equal monthly instalments from the date the licence is
first transferred and for the term of the contract. The licence fee is a fixed annual fee as
specified in the contract.
Maintenance fees
Maintenance (software, equipment and hosted services maintenance) is to be provided to
customers on an ongoing basis from the date the licence is first transferred and throughout
the term of the contract.
The maintenance fee is a fixed annual fee as specified in the contract.
Under AASB 15, the performance obligation to provide maintenance services is first met upon
transfer of the licence and is ongoing throughout the term of the contract. The total
maintenance fee revenue to be billed under the contract is recognised in equal monthly
instalments over time from the date the licence is first transferred.
Usage fees
Usage fee revenue is determined by the number of successful transactions (as defined in the
contract) and is based on information provided to the Group by the customer. Usage fees are
recognised only when the later of the usage occurs and the licence fee obligation has been
satisfied. Usage fees are variable fees and may be subject to an annual cap as specified in
the contract.
The Group recognises usage fee revenue over time based on when the usage occurs.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
31
2.
Revenue (continued)
Accounting Policy - Revenue (continued)
Professional services
(Including setup,
training, and other
support costs)
Professional services include setup, training, and support costs as well as individual
customisation projects that are separate and distinct performance obligations.
The Group recognises revenue at a point in time based on time and materials incurred
in delivering the product and services to its customers as per the terms and prices
specified in the contract. Invoices are generated on confirmation of product and
service delivery and revenue is recognised at that point in time.
Where revenue is billed in advance, a contract liability is recognised and amortised over the period of the invoice. Where
revenue is billed in arrears, a contract asset is recognised at the time of revenue recognition and transferred to trade
receivables when the invoice is generated.
Warranties, returns and refunds
The warranty period will run from the licence start date and over a specified period of time. Under the warranty period the
Group undertakes that the product and services supplied are of satisfactory quality and fit for purpose, free from defects
in design, operate in accordance with the contract and that appropriate master copies are maintained by the Group.
In the event of an unresolved third-party intellectual property rights claim, customers may elect to return all deliverables
under the contract and be refunded in full for all charges paid by the customer to date. Revenue is recognised to the extent
that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Due to
the absence of any third-party intellectual property rights claims during the current and prior period, no adjustment has
been made to revenue recognised during the period for expected returns.
Customers may terminate or partially terminate the contract by written notice to the Group. Due to the absence of any such
written notices to the Group during the current and prior period, no adjustment has been made to revenue recognised
during the period for expected refunds on termination.
Accounting policy - Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group
is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Accounting policy - Contract liabilities
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.
3.
Income tax expense
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates
to items recognised directly in equity.
a)
Amounts recognised in profit or loss
30 June 2024
$
30 June 2023
$
Current tax expense
-
-
Deferred tax expense
-
-
Aggregate income tax expense
-
-
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
32
3.
Income tax expense (continued)
b)
Reconciliation of accounting loss to taxable loss
30 June 2024
$
30 June 2023
$
Loss before tax
(3,543,516)
(5,997,504)
Adjustments to accounting loss
Non-deductible expenses
3,376,607
4,066,247
Tax exempt income
(2,006,685)
(1,566,921)
Taxable loss
(2,173,594)
(3,498,178)
Income tax expense
-
-
The Group is in a net tax loss position and does not recognise a deferred tax asset.
c)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future
taxable profit will be available against which the Group can use the benefits therefrom.
30 June 2024
30 June 2023
Gross amount
$
Tax effect
$
Gross amount
$
Tax effect
$
Tax losses
21,646,340
5,411,585
19,472,746
4,868,187
Accounting Policy - Income Tax Expense
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. The amount of tax payable or receivable is the best estimate
of the tax amount expected to be paid or received that reflects uncertainty related to incomes taxes, if any. It is measured
using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax liability arising
from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss; and
•
temporary differences related to investments in subsidiaries to the extent that the Group is able to control the timing
of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
33
3.
Income tax expense (continued)
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Future taxable profits are
determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, the future taxable profits, adjusted for reversals of existing temporary
differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax
consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
4.
Loss per share
The calculation of basic and diluted loss per share has been based on the following loss attributable to ordinary
shareholders and weighted-average number of ordinary shares outstanding.
30 June 2024
$
30 June 2023
$
Loss for the year attributable to owners of Identitii Limited
(3,543,516)
(5,997,504)
Weighted-average number of ordinary shares
Issued ordinary shares at 1 July
212,798,462
200,809,923
Effect of shares issued during the year
173,920,188
6,041,066
Weighted-average number of ordinary shares at 30 June
386,718,650
206,850,989
Basic and diluted loss per share (cents)
(0.92)
(2.90)
Share based payment options have not been included in the calculation of diluted loss per share as these are considered
anti-dilutive as at 30 June 2024 and 30 June 2023.
5.
Operating segments
An operating segment is a component of the Group:
•
that engages in business activities from which it may earn revenues and incur expenses (including revenue and
expenses relating to transactions with the Group’s other components), and
•
whose operating results are reviewed regularly by the Group’s chief operating decision maker for the purpose of
making decisions about allocating resources to the segment and assessing its performance.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
34
5.
Operating segments (continued)
The Group currently has one reportable segment, which develops and licenses software for regulated entities. The
revenues and profits generated by the Group’s operating segment and segment assets are summarised below:
Software Development and Licensing
For the year ended 30 June
2024
$
2023
$
Sales to external customers
748,292
1,363,063
Other revenue and income
1,033,240
1,526,387
Total segment revenue and income
1,781,532
2,889,450
Unallocated revenue:
Interest revenue
4,679
21,114
Gain on sale of investment
114,435
-
Gain on revaluation of financial assets
694,918
-
Total revenue and other income
2,595,564
2,910,564
Software Development and Licensing
For the year ended 30 June
2024
$
2023
$
EBITDA
(4,269,427)
(5,952,049)
Depreciation and amortisation
(12,940)
(13,875)
Interest revenue
4,679
21,114
Gain on sale of investment
114,435
-
Gain on revaluation of financial assets
694,918
-
Interest expense
(75,181)
(52,694)
Loss before income tax
(3,543,516)
(5,997,504)
Income tax expense
-
-
Loss for the year
(3,543,516)
(5,997,504)
Segment assets
3,079,670
4,458,134
Segment liabilities
1,899,931
2,133,228
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
35
5.
Operating segments (continued)
Geographic information
The Group’s main operations and place of business is in Australia, with majority of its revenue being derived in the US.
Revenue from contracts with customers
30 June 2024
$
30 June 2023
$
Asia
-
292,493
Australia
241,988
623,988
United States of America
506,304
446,582
748,292
1,363,063
Revenue is based on the location of the customer. Refer to Note 2 for further detail on major customers, products, and
services.
Location of non-current assets
30 June 2024
$
30 June 2023
$
Australia
1,100,230
1,469,337
1,100,230
1,469,337
Non-current assets include intangibles, property, plant and equipment, investment in and loans to equity-accounted
investees.
6.
Cash and cash equivalents
30 June 2024
$
30 June 2023
$
Bank balances
643,761
1,287,005
643,761
1,287,005
Accounting Policy - Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
7.
Trade and other receivables
30 June 2024
$
30 June 2023
$
Trade receivables
22,000
17,046
Prepayments
257,069
145,012
Other receivables
59,970
49,650
339,039
211,708
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
36
7.
Trade and other receivables (continued)
Accounting Policy - Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables generally have 30 to 45 day payment terms.
Collectability of trade receivables is reviewed on an ongoing basis in accordance with the expected credit loss (“ECL”)
model. Credit losses are measured at the present value of all cash shortfalls (i.e. the difference between the cash flows
due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are
discounted at the effective interest rate of the financial asset.
The ECL assessment completed by the Group as at 30 June 2024 has resulted in an immaterial credit loss and no
impairment allowance has been recognised by the Group (30 June 2023: $Nil).
8.
Equity-accounted investees
30 June 2024
$
30 June 2023
$
Investment in associates – Payble Pty Ltd (“Payble”)
-
1,392,307
On 19 December 2023, Identitii sold 48% of its Payble shareholding to OIF Ventures for 999,984. Post transaction, Identitii
retained an 11.4% shareholding. As a result, the residual investment has been transferred to a financial asset (see Note 9
and Note 21 below).
Movement:
2024
$
2023
$
Opening carrying amount
1,392,307
903,154
Forgiveness of loan in exchange for shares
-
920,019
Share of associate loss after tax
(118,358)
(430,866)
Cash received on sale on investment
(999,984)
-
Gain on sale of investment
114,435
-
Fair value post sell down of investment in associate and transfer to
financial asset
(388,400)
-
Closing carrying amount
-
1,392,307
9.
Financial assets
30 June 2024
$
30 June 2023
$
Investment in Payble (Note 23)
1,083,318
-
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
37
9.
Financial assets (continued)
Movement:
2024
$
2023
$
Opening carrying amount
-
-
Fair value post sell down of investment in associate and transfer to
financial asset
388,400
-
Gain on revaluation of financial assets
694,918
-
Closing carrying amount
1,083,318
-
10. Trade and other payables
30 June 2024
$
30 June 2023
$
Trade payables
203,979
399,014
Other payables and accruals
233,039
184,015
437,018
583,029
Accounting Policy - Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature, they are measured at amortized cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
11. Employee provisions
30 June 2024
$
30 June 2023
$
Provision for annual leave
205,318
184,538
Superannuation payable
58,559
67,282
Employee taxes withheld
68,335
-
332,212
251,820
Amounts not expected to be settled within the next 12 months
The provision for annual leave includes all unconditional entitlements where employees have completed the required
period of service and also where employees are entitled to pro-rata payments in certain circumstances. The entire amount
is presented as current, since the Group does not have an unconditional right to defer settlement. However, based on past
experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within
the next 12 months.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
38
11. Employee provisions (continued)
Accounting Policy - Employee Provisions
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid under short‑term cash bonus or profit‑sharing plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Other long‑term employee benefits
The Group’s net obligation in respect of long‑term employee benefits is the amount of future benefit that employees have
earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value.
Re-measurements are recognised in profit or loss in the period in which they arise.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and
when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of
the reporting date, they are discounted.
12. Borrowings
30 June 2024
$
30 June 2023
$
Current
R&D loan facility
888,815
980,000
888,815
980,000
R&D loan facility
On 5 June 2024, the Company entered into a new term loan facility of $888,815, secured against future R&D refunds to
be received by the Company. The facility is a prepayment of the forecasted R&D tax incentive claim for the year ended 30
June 2024, with a termination date of 30 October 2024. The facility attracts interest at a rate of 18% p.a., which has been
fully paid in advance on the date of draw down. At 30 June 2024 the balance of the facility was $888,815. The balance of
$980,000 in relation to the prior year was paid out the proceeds on the FY23 R&D refund received in the year under review.
Accounting Policy - Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest rate method.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
39
13. Share capital
Ordinary shares
30 June 2024
30 June 2023
$
Number of
shares
$
Number of
shares
In issue at beginning of the year
33,438,200
212,798,462
32,934,833
200,809,923
Issued for cash, net of costs of equity – rights
issue
2,113,735
215,789,552
378,278
10,421,706
Issued not for cash – consideration for investor
relation services
49,250
5,000,000
105,089
1,189,474
Issued not for cash - consideration to employee
in accordance with employment contract
-
-
20,000
377,359
Issued not for cash – exercise of performance
rights
45,728
1,650,000
-
-
In issue at end of the year – authorised,
fully paid and no par value
35,646,913
435,238,014
33,438,200
212,798,462
All ordinary shares rank equally with regard to the Company’s residual assets.
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share at
general meetings of the Company.
Issue of ordinary shares
On 5 September 2023, as part of a rights issue to existing shareholders, the Board approved the issue of 133,816,009
ordinary shares in the Company. The shortfall was placed on 21 September 2023 resulting in the issuance of a further
78,973,543 shares in the Company. On 12 December 2023, a further 3,000,000 shares were issued to related parties who
participated in the rights issue, post shareholder approval at the Company’s 2023 Annual General Meeting. All shares were
issued at a price of $0.01 per share and share issue costs of $44,161 were incurred in relation to this issuance.
On 5 October 2023, the Company issued 1,650,000 shares were issued to employees upon the conversion of performance
rights following the vesting of performance criteria. Share issue costs of $322 were incurred in relation to this issuance.
On 25 June 2024, the Company issued 5,000,000 shares at a price of $0.01 per share to a consultant as consideration for
investor relation services. Share issue costs of $750 were incurred in relation to this issuance.
Accounting policy - Share capital
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity. Income
tax relating to transaction costs of an equity transaction is accounted for in accordance with AASB 112.
Capital management
The Group’s objective is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the Group may
issue new shares or sell assets to reduce debt.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
40
14. Share based payment arrangements
For the year ended 30 June 2024, the Group recognised a share-based payment expense of $235,848 in the statement of
profit or loss (30 June 2023: $405,977) under the following share-based payment arrangements.
Share options & performance rights
30 June 2024
30 June 2023
Share options
reserve $
Number of
options
Share options
reserve $
Number of
options
Director options
1,117,741
12,358,082
979,674
12,358,082
PAC Partners options
-
-
79,196
5,000,000
Equity incentive plan - options
3,252,513
10,728,769
3,188,760
10,728,769
Equity incentive plan - performance rights (i)
47,036
2,150,000
58,861
3,800,000
Options issued on rights offering
(ii)
-
5,210,834
-
5,210,834
On issue at end of year
4,417,290
30,447,685
4,306,491
37,097,685
The number and weighted-average exercise price of share options under the share-based payment arrangements noted
above were as follows:
Number of options
Weighted average
exercise price
Number of
options
Weighted average
exercise price
2024
2024
2023
2023
Outstanding at 1 July
33,297,685
$0.20
33,599,487
$0.26
Forfeited during the year
-
-
(2,766,344)
$0.15
Expired during the year
(5,000,000)
$0.24
(2,746,292)
$0.75
Granted during the year
-
-
5,210,834
$0.08
Outstanding at 30 June
28,297,685
$0.19
33,297,685
$0.20
(i)
Performance Rights Issued
On 6 March 2023, the Company granted a total of 3,800,000 Performance Rights in the following tranches:
•
Tranche 1: 1,650,000 Rights, vesting 1 July 2023, expiring 31 December 2024. All Tranche 1 rights were
executed during the year.
•
Tranche 2: 1,650,000 Rights, vesting 1 July 2024, expiring 31 December 2024.
•
Tranche 3: 500,000 Rights, vesting on satisfaction of set Milestones, expiring 31 October 2027.
All Rights have nil exercise prices.
The tranches have the following vesting conditions:
•
Tranche 1: Maintain continuous employment to 1 July 2023.
•
Tranche 2: Maintain continuous employment to 1 July 2024.
•
Tranche 3: Maintain continuous employment to 1 July 2024, and Identitii recording revenue of at least $5 million
in the preceding 12-month period.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
41
14. Share based payment arrangements (continued)
The Rights have no exercise price, and as such have been valued as per the ID8 share price as at the date of
acceptance, weighted based on the likelihood of the vesting conditions being met.
(ii)
Options Issued on Rights Offering
On 20 December 2022 the Non-Renounceable Rights Offering closed, with 5,210,834 share options granted to participants
on 29 December 2022. No expense has been recognised in respect of these options for the period ended 30 June 2024,
as they were issued to equity shareholders in their capacity as shareholders. The options have an exercise price of $0.08
and vest over a two-year period.
Accounting Policy - Share-based payments
Equity Incentive Plan (EIP)
On 10 January 2018 the Group established the Equity Incentive Plan (EIP). This is a long-term plan under which share
options or performance rights to subscribe for shares may be offered to eligible employees and consultants as selected by
the Directors at their discretion. Currently only share options have been awarded under the EIP.
Under the EIP, one share option entitles the holder to one share in the Company subject to vesting conditions such as the
satisfaction of performance hurdles and/or continued employment. The Board have the discretion to settle share options
with a cash equivalent payment.
Participants in the EIP will not pay any consideration for the grant of the share option unless determined otherwise. Share
options will not be listed and may not be transferred, assigned or otherwise dealt with unless approved by the Board.
If the employee’s employment terminates before the share options have vested, the share option will lapse, unless
approved otherwise by the Board. Eligible employees holding a share option pursuant to the EIP have no rights to dividends
and are not entitled to vote at shareholder meetings until that share option is vested and, where required, exercised.
Share based payment arrangements
Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of
shares, or options over shares, that are provided to employees in exchange for the rendering of services.
The cost is measured at fair value on grant date using a suitable option pricing model such as Black Scholes, Binomial or
Monte Carlo.
The grant date fair value of equity settled share-based payment arrangements is recognised as an expense, with a
corresponding increase in equity over the vesting period of the award. The amount recognised as an expense is adjusted
to reflect the number of awards for which the related service and non-market performance conditions are expected to be
met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-
market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true up for differences between expected and actual outcomes.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increase the total fair
value of the share based compensation benefit as at the date of modification.
The share-based payment reserve in equity is transferred to retained earnings when the unexercised option expires.
Critical accounting judgements, estimates and adjustments
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black Scholes option pricing
model, using the assumptions noted above.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
42
15. Reconciliation of cash flows from operating activities
30 June 2024
$
30 June 2023
$
Loss for the year
(3,543,516)
(5,997,504)
Adjustments for:
Equity settled share-based payment transactions
235,848
405,977
Depreciation and amortisation
12,940
37,054
Loss on disposal of asset
7,119
257
Gain on sale of investment
(114,435)
-
Gain on revaluation of financial assets
(694,918)
-
Bank revaluation and unrealised FX gains and losses
220
(62,033)
Interest (income)/expense and other finance costs
(4,679)
(21,129)
Bad and doubtful debts
-
(749)
Equity settled consulting fees
50,000
123,750
Share of equity-accounted investee loss
118,358
430,866
Other non-cash generating expenses
(19,662)
(12,592)
(3,952,725)
(5,096,103)
Changes in:
Trade and other receivables
(127,331)
300,682
R&D tax receivable
493,444
(296,121)
Contract assets
-
120,250
Trade and other payables
(146,011)
(61,288)
Employee provisions
80,392
(229,813)
Contract liabilities
(76,493)
58,667
Net cash used in operating activities
(3,728,724)
(5,203,726)
16. Financial instruments – fair values and risk management
i.
Accounting classifications and fair values
The carrying amount of the Group’s financial assets and financial liabilities is a reasonable approximation of fair value due
to their short-term nature.
ii.
Financial risk management
The Group has exposure to the following risks arising from financial instruments:
•
credit risk (see ii (b))
•
liquidity risk (see ii (c))
•
foreign currency risk (see ii (d))
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
43
15. Financial instruments – fair values and risk management (continued)
a)
Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Board of Directors has established the Audit and Risk Committee, which is responsible
for developing and monitoring the Group’s risk management policies.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are
reviewed regularly to reflect changes in market conditions and the Group’s activities.
b)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s receivables from customers. The carrying amount
of financial assets and contract assets represents the maximum credit exposure. Impairment losses on financial
assets and contract assets recognised in profit or loss are as follows:
30 June 2024
$
30 June 2023
$
Decrease in impairment loss on trade receivables and contract
assets arising from contracts with customers
-
(749)
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
Management also considers the factors that may influence the credit risk of its customer base including the default
risk associated with the industry and country in which the customers operate.
The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 45
days for corporate customers.
Expected credit loss assessment for corporate customers
The Group uses a provision matrix to measure ECLs of trade receivables from corporate customers, which comprise
of a small number of large balances.
The Group is still in its early stages of revenue generation with a small customer base and therefore doesn’t have
extensive historical information on which to base its loss rates. Its loss rates are management’s best estimate based
on industry comparatives and will be updated at every reporting period to reflect current and forecast credit conditions
including other business, financial and economic factors. To date no customer balances have been written off or credit
impaired at the reporting date.
For the year ending 30 June 2024, an ECL of nil has been assessed as the closing trade receivables balance of
$22,000 is considered immaterial.
Cash and cash equivalents and other receivables
The Group held cash and cash equivalents of $643,761 at 30 June 2024 (30 June 2023: $1,287,005). The majority of
cash and cash equivalents are held with financial institution counterparties, which are rated A- to AA, based on credit
agency ratings. The Group considers its cash and cash equivalents to have low credit risk based on the external credit
ratings of the counterparties.
The Group held other receivables of $317,040 at 30 June 2024 (30 June 2023: $194,662). The Group considers its
other receivables to have low credit risk based on historical data available, the reputation of the counterparties and
the systematic ease with which the receivables are recoverable.
The Group did not recognise an impairment allowance for cash and cash equivalents and other receivables during the
current and prior year under review.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
44
15. Financial instruments – fair values and risk management (continued)
Movements in the allowance for impairment in respect of trade receivables, contract assets and other financial
assets
The movement in the allowance for impairment in respect of trade receivables, contract assets and other financial
assets during the year was as follows.
30 June 2024
$
30 June 2023
$
Balance at 1 July
-
749
Net remeasurement of loss allowance
-
(749)
Balance at 30 June
-
-
c)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is
to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate, but manageable,
borrowing facilities are maintained. The Group also monitors the level of expected cash inflows on trade and other
receivables together with expected cash outflows on trade and other payables.
Exposure to liquidity risk
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are gross,
undiscounted and include contractual interest payments where applicable.
Contractual cash flows
30 June 2024
Carrying
amount
$
Total
$
2 months or
less
$
2-12 months
$
12 months or
more
$
Trade and other payables
437,018
437,018
437,018
-
-
Borrowings
888,815
888,815
-
888,815
-
1,325,833
1,325,833
437,018
888,815
-
Contractual cash flows
30 June 2023
Carrying
amount
$
Total
$
2 months or
less
$
2-12 months
$
12 months or
more
$
Trade and other payables
583,029
583,029
583,029
-
-
Borrowings
980,000
980,000
-
980,000
-
1,563,029
1,563,029
583,029
980,000
-
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
45
15. Financial instruments – fair values and risk management (continued)
d)
Foreign currency risk
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the
currencies in which sales, purchases, receivables, and borrowings are denominated and the respective functional
currencies of the Group companies. The Group’s exposure to foreign currency risk is concentrated primarily in cash
and trade receivables as some customers are invoiced in United States Dollars (USD). The Group reduces this foreign
currency risk by using the USD from customer sales to pay expenses that are incurred in USD. Other foreign currency
risk is not material at present.
Exposure to foreign currency risk
The following is the summary quantitative data about the Group’s exposure to currency risk as reported to the
management of the Group:
30 June 2024
USD
30 June 2023
USD
Cash and cash equivalents
42,229
588,140
Trade receivables
-
-
Trade payables
(2,540)
(60,219)
Net statement of financial position exposure
39,689
527,921
Sensitivity analysis
If foreign exchange rates were to increase / decrease by 10 per cent from rates used to determine fair values as at
the end of the reporting period, assuming all other variables that might impact fair value remain constant, then the
impact on profit or loss for the year would be as follows:
Impact on profit after tax
30 June 2024
$
30 June 2023
$
10% increase in USD/AUD exchange rate
6,657
22,311
10% decrease in USD/AUD exchange rate
(5,447)
(10,993)
There has been no change in assumptions or method used to determine foreign currency sensitivity from the prior
year.
16. Commitments
The Group has no commitments or contingencies.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
46
17. Auditors’ remuneration
During the financial year the following fees were paid or payable for services provided by RSM, the auditor of the Company,
its network firms and unrelated firms:
30 June 2024
$
30 June 2023
$
Audit and review services
RSM (Australia)
Audit and review of financial statements
66,200
63,750
RSM (Hong Kong)
Audit and review of financial statements
-
5,685
66,200
69,435
18. Related parties
Parent and ultimate controlling party
Identitii Limited is the parent and ultimate controlling party of the Group.
Transactions with Key Management Personnel (KMP)
a)
KMP compensation
KMP compensation comprised the following:
Compensation by category
30 June 2024
$
30 June 2023
$
Short-term employment benefits
638,153
597,438
Post-employment benefits
38,778
43,333
Other long-term employment benefits
12,160
20,159
Termination benefits
-
-
Share-based payments
138,438
162,568
827,529
823,498
Compensation of the Group’s KMP includes salaries, non-cash benefits and mandatory contributions to post-
employment superannuation and provident funds. Certain Directors as well as senior employees of the Group are
entitled to participate in the Equity Incentive Plan.
b)
KMP transactions
KMP of the Company control approximately 2.6% of the voting shares of the Company as at 30 June 2024.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
47
19. Related parties (continued)
Terms and conditions of transactions with KMP and their related parties are no more favourable than those available,
or which might reasonably be expected to be available, on similar transactions to non-KMP related entities on an
arm’s length basis.
20. List of subsidiaries
The table below lists the controlled entities of the Group as at 30 June 2024.
Name
Principal place of business
Ownership interest
30 June 2024
30 June 2023
Identitii Hong Kong Limited
Hong Kong
100%
100%
The Company provided $7,877 (30 June 2023: $6,152) of financial support during the year to Identitii Hong Kong Limited
to assist with the payment of operating costs relating to ongoing compliance requirements.
21. Investment in associates
The Company ceased to have significant influence over Payable Pty Limited in the year under review. The investment in
associates was accounted for using the equity method of accounting. Information relating to associates that were material
to the Group are set out below:
Name
Principal place of business
Ownership interest
30 June 2024
30 June 2023
Payble Pty Ltd
Australia
11.4%
32.8%
The following table summarises the financial information of Payble, as included in its own financial statements, and
reconciles it to the carrying amount of the Group’s interest in Payble.
The information presented in the 30 June 2024 table includes the results of Payble for the period from 1 July 2023 to 19
December 2023 when Payble was an equity-accounted investee.
Payble Pty Ltd
19 December 2023
$
30 June 2023
$
Summarised statement of financial position
Current assets
3,231,739
679,891
Non-current assets
1,019,075
1,017,908
Total assets
4,250,814
1,697,799
Current liabilities
777,460
348,248
Non-current liabilities
-
-
Total liabilities
777,460
348,248
Net assets
3,473,354
1,349,551
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
48
21. Investment in associates (continued)
Payble Pty Ltd
19 December 2023
$
30 June 2023
$
Summarised statement of profit or loss and other
comprehensive income
Loss after tax
360,846
1,312,416
Total comprehensive loss
360,846
1,312,416
Reconciliation of the carrying amount in associate
Opening carrying amount
1,392,307
903,154
Forgiveness of loan in exchange for shares
-
920,019
Share of associate loss after tax
(118,358)
(430,866)
Cash received on sale on investment
(999,984)
-
Gain on sale of investment
114,435
-
Fair value post sell down of investment in associate and transfer to
financial asset (Note 23)
(388,400)
-
Closing carrying amount
-
1,392,307
Accounting Policy - Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes
in the Group’s share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of
the investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and
recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of
the retained investment and proceeds from disposal is recognised in profit or loss.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
49
22. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2024, the parent entity of the Group was Identitii Limited.
30 June 2024
$
30 June 2023
$
Results of parent entity
Total comprehensive loss for the year
(3,535,133)
(5,983,799)
Financial position for the parent entity
Current assets
1,976,543
4,023,778
Parent entity disclosures (continued)
Total assets
4,123,141
5,493,114
Current liabilities
1,887,799
2,121,151
Total liabilities
1,887,799
2,121,151
Total equity of the parent entity
Share capital
35,646,894
33,438,181
Reserves
4,417,289
4,292,785
Retained losses
(37,828,841)
(34,359,003)
Total equity
2,235,342
3,371,963
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Capital commitments
The parent entity had no capital commitments for property, plant, and equipment as at 30 June 2024 and 30 June 2023.
23. Fair value measurements
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair using a three-level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date;
•
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and
•
Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is
significant to fair value and therefore which category the asset or liability is placed in can be subjective.
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
50
23. Fair value measurements (continued)
30 June 2024
Level 1
$
Level 2
$
Level 3
$
Level 4
$
Assets
Financial assets
-
-
1,083,318
-
Total assets
-
-
1,083,318
-
The were no fair valued financial assets as at 30 June 2023.
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables are assumed to approximate their fair value due to their short-term
nature.
The following valuation techniques are used for instruments categorised in Level 3:
•
Financial assets (Level 3) – The fair value of this investment was determined based on a transaction completed
on 19 December 2023, where Identitii Limited sold 48% (24,108 shares) of its holding in Payble Pty Ltd at $41,28
per share. The sale transaction was supported by a share placement of 60,271 shares issued at the same price.
Financial assets
$
Balance at 1 July 2023
-
Recognition of a financial asset for the investment in Payble Pty Ltd
upon reclassification from investment in equity-accounted investee
(Note 21)
388,400
Gain on revaluation of financial assets
694,918
Balance at 30 June 2024
1,083,318
Sensitivity analysis
If the share price of Payble Pty Ltd were to increase / decrease by 10 per cent from the price used to determine the fair
value as at the end of the reporting period, assuming all other variables that might impact fair value remain constant, then
the impact on profit or loss for the year would be as follows:
Impact on profit after tax
30 June 2024
$
10% increase in the share price of Payble Pty Ltd
108,332
10% decrease in the share price of Payble Pty Ltd
(98,483)
Identitii Limited
Annual Report FY24
Notes to the Consolidated Financial Statements
51
24. Subsequent events
Subsequent to the balance date the Group announced the following material events:
•
On 9 July 2024, the Company announced that its Rights Issue closed on 4 July 2024, and raised $1,659,445
before costs, with a shortfall balance of $491,745. The Rights Issue was a pro-rata non-renounceable entitlement
issue to eligible shareholders of one (1) New Share for every two (2) existing Shares held by eligible shareholders
on the Record Date, at an issue price of $0.01 per New Share. 165,944,526 New Shares were issued and allotted
on 11 July 2024. It was further announced on 3 September 2024 that the shortfall was placed, raising a further
$491,745.
•
On 26 August 2024, the Company announced that it had defeated two challenges from JPMC to the validity of its
U.S. Patent No. 10,984,413 (“the ’413 patent”). Ruling on both of JPMC’s challenges, the USPTO found that “the
information presented fails to show a reasonable likelihood that JPMC would prevail in establishing the
unpatentability” of the Company’s ’413 patent.
Other than the matters discussed above, there has not arisen in the interval between the end of the year and the date
of this report any item, transaction, or event of a material and unusual nature likely, in the opinion of the Directors, to
affect significantly in future financial years the operations of the Group, the results of those operations, or the state of
affairs of the Group.
Identitii Limited
Annual Report FY24
Consolidated entity disclosure statement
52
Entity name
Entity type
Trustee in a Trust,
Partner in a
Partnership or a
participant in a
Joint Venture
Place formed /
Country of
incorporation
Ownership
interest
%
Tax
residency
Identitii Limited
Body corporate N/A
Australia
-
Australia
Identitii Hong Kong Limited Body corporate N/A
Hong Kong
100.00% Hong Kong
Identitii Limited
Annual Report FY24
Directors’ Declaration
53
Directors’ Declaration
1.
In the opinion of the Directors of Identitii Limited (‘the Company’):
a.
the consolidated financial statements and notes that are set out on pages 20 to 51 are in
accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its
performance for the financial year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
c.
The information disclosed in the attached consolidated entity disclosure statement on page 52 is
true and correct.
2.
The Directors draw attention to Note 1 to the financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
3.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2024.
Signed in accordance with a resolution of the Board of Directors:
Timothy Phillipps
Chairperson
Sydney
27 September 2024
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 13, 60 Castlereagh Street
Sydney
NSW 2000
Australia
T +61 (02) 8226 4500
F +61 (02) 8226 4501
rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Identitii Limited
Opinion
We have audited the financial report of Identitii Limited (the Company) and its controlled entity (the Group), which
comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
material accounting policy information, the consolidated entity disclosure statement and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial
performance for the year 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 (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 Group, would be on 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 of the financial report, which indicates that the Group incurred a net loss of $3,543,516
and net operating cash flows use of $3,728,724 during the year ended 30 June 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.
54
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.
Key Audit Matter
How our audit addressed this matter
Financial Assets and Investments in Associate
Refer to Note 8, Note 9, note 21and Note 23 in the financial statements.
The Group has previously equity accounted for an
investment in an associate caried at $1,392,000 as
at 30 June 2023. During the year under review, the
Group sold down a significant portion of its
investment and ceased to have significant influence
over the investee company. The accounting policy in
relation to this investment changed from equity
accounting to fair value through profit and loss in the
year under review. The investment is carried at
$1,083,318 as at 30 June 2024 and is reflected as a
financial asset.
The various transactions in relation to this
investment have resulted in a gain on the sale of
investment of $114,435, and a gain on the
revaluation of financial assets of $694,918. Up until
the time that the company ceased to have significant
influence over the investee, its share of equity
accounted investee losses was $118,358.
We consider this to be a key risk due to the following
reasons:
Accounting for investments in associates is
non-routine and can be technically complex in
nature.
The derecognition of the investment in
associate and the resulting financial asset is
also non-routine and technically complex.
There is an element of judgement and
estimation uncertainty in relation to the
quantification of the fair value of the financial
assets.
The carry value of the investment and the
resulting gain on the revaluation of financial
assets is material to the financial statements.
Our audit procedures included the following:
Discuss
the
various
transactions
with
management
and
critically
evaluate
their
assessment that they no longer exert significant
influence over the investee company.
Recalculated the percentage equity interest in
the investee company.
Inspected the documentation in relation to the
shares sold in the year under review.
Recalculated the gain on sale of investment.
Obtained management’s assessment of the fair
value per share of the remaining share held as
financial
assets.
Critically
evaluated
managements assumptions in the determination
of fair value.
Recalculated the carrying value of the financial
assets and the resulting gain on revaluation of
financial assets.
Obtained managements calculation of the share
of equity accounted losses up to the date that the
company continued to exert significant influence
over the investee company.
Traced the proceeds on the shares sold during
the year to bank statements.
Assessed
the
adequacy
of
the
related
disclosures in relation to the investment in
associate and the subsequent financial asset
including fair value measurement disclosures.
55
Key Audit Matter
How our audit addressed this matter
Share Capital – Refer to Note 13 and Note24 in the financial statements.
During the year under review, the Company has
issued share capital of $2,208,713. As reflected in
Note 24, additional share capital of $2,151,190 was
issued subsequent to year end up to the ate of this
report.
We consider this to be a key risk due to the following
reasons:
•
It is significant by virtue of the materiality of
the transaction.
•
The additional share capital is a significant
factor in consideration of the Group’s ability
to continue as a going concern.
Our audit procedures in relation to the share-based
payments included the following:
Reconcile to share register and ASIC records
to the Company’s accounting records.
Review the movements in the share register
and test that where applicable, the shares
issued for cash could be traced to bank
statements.
Verify that the subsequent event and going
concern disclosures in relation to the capital
raised subsequent to year end is consistent
with the ASX announcements and could be
traced to bank statements.
Review the adequacy of the disclosures
included in the financial statements.
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 30 June 2024 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and 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.
56
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://www.auasb.gov.au/auditors_responsibilities/ar2.pdf
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 18 of the directors' report for the year ended
30 June 2024.
In our opinion, the Remuneration Report of Identitii Limited, for the year ended 30 June 2024, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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 PARTNERS
G N Sherwood
Partner
Sydney, NSW
Dated: 27 September 2024
57
Identitii Limited
Annual Report FY24
Additional ASX Information
58
Additional ASX Information
In accordance with ASX Listing Rule 4.10, the Directors provide the following information as at 19 September
2024.
Securities on issue
Type
Description
Number of
Securities
Number of
Holders
Listed - ID8
Fully Paid Ordinary Shares
650,607,540
1,950
Listed - ID8O
Options Exercisable at $0.08, Expiring 29 December 2024
5,210,834
136
Unlisted
Options Exercisable at $0.15, Expiring 21 October 2025
10,000,000
2
Unlisted
Options Exercisable at $0.25, Expiring 8 July 2024
2,000,000
2
Unlisted
Options Exercisable at $0.75, Expiring 1 August 2028
1,708,082
2
Unlisted
Employee Options
9,478,769
31
Unlisted
Employee Performance Rights
10,150,000
12
Substantial Holders
Identitii has the following substantial holders as disclosed in substantial holding notices given to the
Company under the Corporations Act:
Name
Number of Votes
Voting Power %
Cameron Beavis
223,227,905
37.13
Fred Bart
31,240,240
7.31
Voting rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting
or by proxy has one vote on a show of hands. No other securities on issue have voting rights.
Distribution of shareholders
Fully paid ordinary shares
holding ranges
Holders
Number of shares
% of issued capital
1-1,000
56
15,080
0.000
1,001-5,000
326
1,047,226
0.160
5,001-10,000
343
2,630,518
0.400
10,001-100,000
819
31,978,278
4.920
100,001-9,999,999,999
406
614,936,438
94.520
Totals
1,950
650,607,540
100.000
Identitii Limited
Annual Report FY24
Additional ASX Information
59
Distribution of Listed Option holders
Listed Option Holdings
Ranges
Holders
Number of Options
% of Options on Issue
1-1,000
15
7,340
0.140
1,001-5,000
51
129,410
2.480
5,001-10,000
18
128,700
2.470
10,001-100,000
39
1,467,620
28.160
100,001-9,999,999,999
13
3,477,764
66.740
Totals
136
5,210,834
100.000
Marketable Parcels
Identitii has 1,276 shareholders holding less than a marketable parcel (i.e. less than $500 per parcel of shares)
based on the closing price of AUD 0.011 on 19 September 2024 representing a total of 16,546,235 shares.
Restricted securities
Identitii does not have any restricted securities on issue.
On-Market Buy-Back
Identitii is not undertaking an on-market buy-back.
Twenty largest shareholders (ID8)
Shareholder
Number of Shares
held
% of issued
capital
1
Beauvais Capital Pty Ltd
201,215,390
30.927%
2
Link Traders (Aust) Pty Ltd
30,822,412
4.737%
3
O'Dwyer Technology Training Pty Limited
27,000,000
4.150%
4
Mr Cameron Beavis
22,012,515
3.383%
5
Mr Frederick Bart
21,669,740
3.331%
6
Bilgola Nominees Pty Limited
12,500,000
1.921%
7
Bart Superannuation Pty Limited <4F Investments
Superfund A/C>
11,608,500
1.784%
8
Mr Steven Robert Heath
10,000,000
1.537%
9
Mr Evan Philip Clucas & Ms Leanne Jane Weston
8,976,000
1.380%
10 Spark Plus Pte Ltd
7,500,000
1.153%
11 Pat Property Pty Ltd
6,829,837
1.050%
Identitii Limited
Annual Report FY24
Additional ASX Information
60
12 Elorey Pty Ltd
6,096,824
0.937%
13 Netwealth Investments Limited
5,532,525
0.850%
14 Citicorp Nominees Pty Limited
5,383,402
0.827%
15 Mr Timothy Graham Phillipps
5,087,606
0.782%
16 Hsbc Custody Nominees (Australia) Limited - A/C 2
5,023,604
0.772%
17 Bannaby Investments Pty Limited
4,723,790
0.726%
18 Netwealth Investments Limited
4,530,809
0.696%
19 Mr Sureshkumar Rajalingam
4,463,702
0.686%
20 Suparose Pty Ltd
4,050,596
0.623%
Total Securities of Top 20 Holdings
405,027,252
62.254%
Total Securities
650,607,540
Twenty Largest Listed Option Holders (ID8O)
Option Holder
Number of Options
held
%
1
O'Dwyer Technology Training Pty Limited
842,500 16.168%
2
Bannaby Investments Pty Limited
524,865 10.073%
3
Elorey Pty Ltd
397,652
7.631%
4
Mr Mathew Oliver & Mrs Ingbritt Amanda Oliver
250,000
4.798%
5
Pat Property Pty Ltd
250,000
4.798%
6
Mr Timothy Graham Phillipps
211,538
4.060%
7
Timarc Nominees Pty Ltd
200,000
3.838%
8
Bannaby Investments Pty Limited
194,829
3.739%
9
Mr Wern Chian Tye
150,000
2.879%
10
Mrs Pauline Mary Paolucci
125,000
2.399%
11
Citicorp Nominees Pty Limited
115,200
2.211%
12
Plutus Pty Ltd
110,616
2.123%
13
Mr Louis Alan Lardi
105,564
2.026%
14
Ms Clare Rhodes
100,000
1.919%
15
Erskinomics Consulting Pty Limited
91,718
1.760%
16
Market Capital Group Pty Ltd
86,632
1.663%
17
Alex Harney Superannuation Pty Ltd
86,012
1.651%
18
Mr Wayne Philip Ward
81,536
1.565%
19
Mr Kenneth Charles Taylor
75,000
1.439%
20
Serenety Holdings Pty Ltd
75,000
1.439%
Identitii Limited
Annual Report FY24
Additional ASX Information
61
Total Securities of Top 20 Holdings
4,073,662 78.177%
Total of Securities
5,210,834
62
Corporate Directory
Directors
Timothy Phillipps, Chairperson
John Rayment, CEO
Rhyll Gardner
Simon Griffin
Company Secretary
Elissa Hansen
Registered Office
Level 8
210 George Street
Sydney NSW 2000
Telephone: (02) 9056 4160
ABN 83 603 107 044
Company Website
https://identitii.com/
Auditors
RSM Australia Pty Ltd
Level 13
60 Castlereagh Street
Sydney
NSW 2000
Solicitors
Law Squared
Level 13
50 Carrington St
Sydney
NSW 2000
Securities Exchange Listing
Identitii Limited shares are
Listed on the Australian
Securities Exchange.
ASX Code: ID8
Share Registry
Boardroom Pty Limited
Level 8
210 George Street
Sydney NSW 2000
Telephone: (02) 9290 9600
64