Annual
Report
AUDITED FINANCIAL STATEMENTS
30 JUNE 2020
IXUP LIMITED
ABN 85 612 182 368
EVOLVING ATTITUDES ON PRIVACY
87% of Australians want
more control and choice
over the collection
and use of their
personal information.*
ANNUAL GENERAL MEETING:
The Annual General meeting will be held
on 26 November 2020.
Table of Contents
1.
INTRODUCTION
2. CHAIRMAN AND CEO’S REPORT
3. CORPORATE DIRECTORY
4. DIRECTORS’ REPORT
5.
INDEPENDENCE DECLARATION
6. FINANCIAL STATEMENTS:
• STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
• STATEMENT OF FINANCIAL POSITION
• STATEMENT OF CHANGES IN EQUITY
• STATEMENT OF CASH FLOWS
7. NOTES TO THE FINANCIAL STATEMENTS
8. DIRECTORS’ DECLARATION
9.
INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF IXUP LIMITED
10. SHAREHOLDER INFORMATION
3
4
12
14
35
38
39
40
41
42
72
74
78
*Australian Community Attitudes to Privacy Survey (ACAPS) 2020
1
Introducing IXUP.
Expose insights,
not data.
Risk v reward: the double-edged
sword of big data
As the digital era accelerates, big data has become a
driving force behind innovation, productivity, growth and
profits. But as the rewards grow, so do the privacy and
security risks.
High profile data hacks, global social media scandals,
ever tightening regulations and heightened consumer
awareness have made the penalties and consequences of
data breaches more serious than ever.
While analysing your own data is valuable, much richer
insights, accurate forecasts and exponential value can
be unlocked by sharing data sets across departments,
industries, regions or even between competitors.
Traditionally this meant rolling the dice of handing
over commercially sensitive data to a third party and/
or decrypting your data during the process. As well as
being slow and costly, the loss of control exposes you to
reputational and legal risks of data loss and misuse.
IXUP is a world-leading encrypted data collaboration
platform that enables sharing and analysis of data sets
from multiple sources with 100% control, security and
privacy.
Incorporating homomorphic encryption, the software
lets you perform complex and specific calculations on
multiple data sets without ever needing to decrypt it. Unlike
traditional techniques, IXUP encrypts data at every step in
the process – in use, in transit and at rest – so at no point
is it vulnerable to the risk of data loss or misuse.
The result: organisations can now perform joint
analytics and share insights on confidential, sensitive
or personal data without ever unlocking, identifying or
losing control of their data.
3
CHAIRMAN
AND CEO’S
REPORT
Chairman and CEO’s Report
The Board and Management remain positive that there
will be growing demand for the IXUP platform due to the
exponential increase in data acquisition and desire to
monetise data assets without risk.
Dear Shareholders
The 2020 financial year has seen unprecedented
economic and environmental challenges across Australia,
including the global COVID-19 pandemic.
We are pleased that, despite the effect of the COVID-19
pandemic on the global economy and the subsequent
slowdown in global IT spending and delay of IT projects,
IXUP continued to make progress in FY2020 and remains
resilient, with a pipeline of sales opportunities and a large
addressable global market.
IXUP offers a unique platform that delivers the opportunity
to undertake privacy preserving analytics across
sensitive datasets. IXUP’s world leading encrypted data
collaboration platform enables the sharing and analysis
of data sets from multiple sources with complete control,
security and privacy, allowing clients to share data sets
in an encrypted form and run in-depth analytics without
needing to decrypt them. The platform also significantly
reduces the threat of cyber-attacks, fraud and data theft.
This enables IXUP’s clients to unlock the value of their
data, with complete security and to monetise potential
cross-sector dynamics. IXUP’s unique encryption and
analytic capabilities assist to mitigate risk in business
planning, improve operations, and better serve customer
needs and has wide application across government and
intelligence and the private sector.
The Board and Management remain positive that there
will be growing demand for the IXUP platform due
to the exponential increase in data acquisition and
desire to monetise data assets without risk. Additional
demand for IXUP’s platform is expected to be driven
through artificial intelligence (AI), which uses process
automation, machine learning and natural language
processing to give computers the ability to learn from
their environments and make predictions which guide
additional analytical processes. Access to data from
multiple sources combined with unprecedented use of
powerful processors have transformed how industries
use AI across the world, and this market is expected to
experience exponential growth in future years.
"Despite the effect of the
COVID-19 pandemic...
IXUP continued to make
progress in FY2020 and
remains resilient, with a
pipeline of sales opportunities
and a large addressable
global market."
COMMERCIALISATION REMAINS
CORE FOCUS
Commercialisation of the IXUP platform remained a core
focus in FY2020. During the period IXUP undertook a
number of paid “proof of concept” trials and broader
technical trials with clients and prospective clients,
including Velocity Frequent Flyers and Nib NZ and also
expanded its relationships within channel partner, Deloitte
Touche Tohmatsu Australia.
IXUP has also validated its strategic decision to simplify
the way that clients can implement the unique IXUP
platform. The inclusion of an on-demand, software as
a service (SaaS) model that complements our existing
platform as a service (PaaS) capability was a significant
development that extends our market and leverages
growing industry demand for flexible cloud
computing services.
Our go-to-market strategy continues to focus on delivery
via channel partners that have strong domain expertise
to complement our market leading technical expertise.
We are excited by the opportunities being opened
through these partnerships and will continue to focus on
the partner channel in FY2021 in addition to pursuing
direct opportunities.
Our target markets continue to include government and
private organisations in healthcare, financial services and
marketing that are deeply dependent on data governed by
privacy regulation. Companies and agencies in these areas
need to satisfy consumers’ expectations of trust while
providing high-quality insights and advice to their clients.
CAPITAL MANAGEMENT
We moved to strengthen the working capital base of
IXUP during the year and subsequent to year end via two
rights issues and a private placement. As part of these
processes, IXUP has raised over $6 million to support
general working capital and the continued commercial roll
out of the IXUP platform.
With the onset of the COVID-19 pandemic a key focus
of the Board and Management was disciplined cash
management and tightening of operational expenses.
The continued focus on disciplined cost management
resulted in a significant reduction in operating costs in
FY2020 (~30% PCP). Government subsidies, including
the JobKeeper Wage Subsidy (Round 1), provided
additional support during the second half of FY2020.
The focus on reducing costs must and will continue into
FY2021 as we rationalise our running costs and continue
to scrutinise spending across all areas.
"Our target markets continue to
include government and private
organisations in healthcare,
financial services and marketing
that are deeply dependent
on data governed by privacy
regulation."
5
CHAIRMAN
AND CEO’S
REPORT
IXUP continues to have a tremendous
global opportunity to capitalise on the
trend of enterprises using analytics
to generate value.
LEADERSHIP AND REMUNERATION
EVOLVING THE BOARD
Given our ongoing focus on prudent management of
costs, there was a reduction in staff hours and fixed
remuneration from April 2020, with a focus on retaining
core sales and technical support functions to focus on
closing commercialisation opportunities. In addition, no
awards were made under the IXUP STI program
for FY2020.
Non-Executive Directors also elected to receive reduced
Directors’ fees with Freya Smith’s and Scott Wilkie’s
fees reduced by 50% effective 16 April 2020 and Grant
Paterson electing to waive his Chairman’s fee from
1 April 2020.
Peter Leihn stepped down as CEO and Managing
Director on 31 July 2020. Executive Director and Founder,
Dean Joscelyne, has taken on the role of acting CEO and
Managing Director until the Board confirms a suitable
replacement for Mr Leihn.
We would like to thank Peter for his contribution to the
advancement of the business during his tenure.
The Board is committed to ensuring that it has a strong
and diverse set of skills to guide the commercialisation of
IXUP’s proprietary platform.
The Board has evolved since listing in 2017, with the
addition of new and relevant skills and experience in the
appointments of two new Non-Executive Directors,
Freya Smith and Scott Wilkie.
Scott Wilkie resigned from the Board effective 31 July
2020 to take up a role with one of IXUP’s partners. We
would like to thank Scott for his contribution to IXUP’s
development and commercialisation journey.
Given the unprecedented nature of the COVID-19
pandemic and resulting volatility, it is difficult to forecast
with accuracy the likely impact on IXUP’s business in
FY2021.
IXUP continues to have a tremendous global opportunity
to capitalise on the trend of enterprises using analytics
to generate value. We have put in place the building
blocks for growth and believe that future demand
for the unique IXUP platform will increase due to the
exponential increase in data acquisition occurring globally,
the convergence of big data with AI and a desire for
organisations to monetise new data assets with
minimal risk.
The Board and Management remain committed to
maintaining a conservative balance sheet and a strong
funding and liquidity profile. We believe these inherently
defensive characteristics will position IXUP well to
capitalise on its opportunities and deliver growth for
our employees and for our shareholders as we face the
challenges ahead.
When you can trust that
your data is truly secure,
the real-world applications
are endless.
We would like to thank all the members of the IXUP team
for their dedication and hard work, and our channel
partners for their relentless efforts and achievements
during a challenging year.
We would like to thank you, our shareholders, for your
continued support and we look forward to working with
you as we continue to respond and adapt to COVID-19.
We look forward to updating you on IXUP’s progress
in the years ahead.
Grant Paterson
Chairman
Dean Joscelyne
Acting CEO and Managing Director
7
IXUP PLATFORM VALUE ENHANCEMENTS
IXUP has continued to enhance the privacy preserving
analytics platform to meet evolving privacy demands
and with feedback from customer projects.
RELEASE
By 2023, 65% of the world’s population
will have its personal information covered
under modern privacy regulations.*
APRIL 2019
OCT 2019
NOV 2019
FEB 2020
MAY 2020
•
•
•
OFFERING FOR EXTENDED CUSTOMER OPTIONS
INTRODUCTION OF FIVE SAFES
GOVERNANCE MODULE
INTRODUCTION OF WEB-BASED INGESTION
VIA ENCRYPTION GATEWAY TO IMPROVE
CLIENT SECURITY
3.0 • ESTABLISHMENT OF SEPARATE SAAS AND PAAS
3.6
3.7 • OPTIMISED HOMOMORPHIC ENCRYPTION KEY
4.0 • EXPANDED DATA MODELLING AND
INTRODUCTION OF “PRIVATE ANALYSIS”
MODULE TO ENHANCE PROTECTED
ADVANCED ANALYTICS
• EXPANDED CANVAS MODELLING FLEXIBILITY
IMPROVED DATA OUTPUT TYPE MANAGEMENT
MANAGEMENT FOR IMPROVED EFFICIENCY
ENRICHMENT CAPABILITY
•
4.1 •
INTRODUCTION OF DETAILED PROJECT
MANAGEMENT AND COSTING MODULE
• REAL-TIME COLLABORATION COSTING
CAPABILITY INTRODUCED
AT MODELLING LEVEL
*Gartner Predictions on Privacy 2020, January 2020
9
The Leadership Team
DEAN JOSCELYNE
Acting CEO and Managing Director
DAVID FRANKS
Chief Financial Officer
PAUL COE
Chief Technical Officer
Dean founded IXUP in 2011 in response
to identifying a gap in the market to help
organisations make better decisions using
more powerful data insights. Dean has over
25 years’ experience driving enterprise
transformation and improving customer
experience.
David has over 25 years’ experience in
finance and governance (including company
secretarial and corporate finance), is a
Chartered Accountant, Fellow of the Financial
Services Institute of Australia, Fellow of the
Governance Institute of Australia, Justice
of the Peace, Registered Tax Agent and
holds a Bachelor of Economics (Finance and
Accounting) from Macquarie University.
Paul brings more than 15 years’ experience
in large transformation programs that deliver
complete enterprise business end-to-end
solutions. Prior to IXUP, Paul held
roles at Corum Group Australia,
Study Group and PBL Media.
WARREN BRADEY
Chief Commercial Officer
From August, 2019
Warren brings more than 25 years’ experience
in commercialising early stage businesses and
converting deep technology into commercial
reality. Warren has led many organisations
including research entities, early stage
investor funds and start-ups through to listing
with a focus on commercial strategy and
operational execution.
11
CORPORATE DIRECTORY
DIRECTORS
Grant Paterson (Chairman and Non-
Executive Director)
Dean Joscelyne (Executive Director)
Freya Smith (Non-Executive Director)
(Appointed 2 July 2019)
Peter Leihn (Managing Director)
(Appointed 2 July 2019 and resigned
31 July 2020)
Scott Wilkie (Non-Executive Director)
(Appointed 2 July 2019 and resigned
31 July 2020)
Cliff Rosenberg (Non-Executive Director)
(Resigned 2 July 2019)
COMPANY SECRETARY
Andrew Whitten
REGISTERED OFFICE AND
PRINCIPAL PLACE OF
BUSINESS
Level 3
5-7 Ross St
Parramatta NSW 2150
SHARE REGISTER
AUDITOR
SOLICITORS
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Telephone: 1300 554 474
Email: registrars@linkmarketservices.com.au
William Buck Audit (WA) Pty Ltd
Level 3,15 Labouchere Road
South Perth WA 6151
Automic Legal Pty Ltd
(An Automic Group company)
BANKERS
St George Bank Limited
SECURITIES EXCHANGE
LISTING
IXUP Limited shares are listed on
the Australian Securities Exchange.
ASX code: IXU
WEBSITE
www.ixup.com
PLACE OF INCORPORATION
Victoria, Australia
By 2022, 75% of enterprise-generated
data will be created and processed
outside the traditional, centralised data
centre or cloud — an increase from
the less than 10% generated today.*
*Gartner Predictions on Privacy 2020, January 2020
13
DIRECTORS’
REPORT
The directors present their report, together with the financial statements, on the
consolidated entity (referred to hereafter as the ‘consolidated entity’) consisting of IXUP
Limited (referred to hereafter as the ‘Company’, ‘parent entity’ or ‘IXUP’) and the entities
it controlled at the end of, or during, the year ended 30 June 2020.
DIRECTORS
HIGHLIGHTS OF THE YEAR INCLUDE:
The following persons were directors of IXUP Limited
during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Grant Paterson – Chairman and Non-Executive Director
Dean Joscelyne – Executive Director
Freya Smith – Non-Executive Director
(Appointed 2 July 2019)
Peter Leihn – Managing Director
(Appointed 2 July 2019 and resigned 31 July 2020)
Scott Wilkie – Non-Executive Director
(Appointed 2 July 2019 and resigned 31 July 2020)
Cliff Rosenberg – Non-Executive Director
(Resigned 2 July 2019)
DIVIDENDS
There were no dividends paid, recommended or declared
during the current or previous financial year.
RESULT OF OPERATIONS
The loss for the consolidated entity after providing for
income tax amounted to $3,774,992 (30 June 2019:
$6,588,667).
REVIEW OF OPERATIONS
During the year IXUP extended the features offered across
the IXUP privacy preserving analytics platform through
the release of three further platform updates which has
strengthened the commercial offering of its technology.
This truly unique capability is designed to remove the risk
of data loss and misuse, in an environment that is seeing
unprecedented remote business activity and increased
instances of cyber attacks. The Company believes that
future demand for the IXUP platform will increase due
to the exponential increase in data acquisition occurring
globally, and a desire to monetise new data assets
without risk.
• Commencement of paid Proof of Concept trials with
Nib NZ and Velocity Frequent Flyers;
• Undertaking various technical proof of concept trials
with various potential partners or customers;
• Expansion of relationships within Deloitte Touche
Tohmatsu Australia;
• Signing of Reseller agreement with emerging
analytics platform, Wejugo Pty Ltd;
• Participation in US Launchpad facility in
San Francisco;
• Strengthening of commercialisation capability with
appointment of Chief Commercial Officer;
• Continued membership of international homomorphic
encryption standards group with Microsoft, Google
and Intel;
• Successful completion of first audit for ISO/IEC
27001 information security certification;
• Commencement of SOC2 security certification
process;
• Disciplined cash management and tightening of
operational expenses due to slowing economy and
impact from COVID-19 effects; and
• Successful capital raising via rights issue and new
placement (subsequent to balance date) to raise
approximately $2.228 million (before costs) for
working capital purposes.
LARGE ADDRESSABLE MARKET
The Company is investing in innovation and
technology leadership to capitalise on the fast growth
big data analytics market, in which there is forecast
significant growth.
SOFTWARE DEVELOPMENT AND
COMMERCIALISATION
Investment continued in the Company’s platform which
secures data analytics and delivers insights across
encrypted data. IXUP provides a unique environment where
data is loaded and encrypted at cell level; and then layered,
indexed and matched in encrypted repositories, allowing
participating organisations to retain complete control of
their encrypted data and to access control rules.
IXUP continues to offer access to the IXUP platform
through either platform as a service (PaaS) or Software
as a Service (SaaS) options on a monthly licence based
offering linked to client usage The SaaS offering is hosted
in Microsoft Azure’ enterprise grade cloud computing
platform and all data is encrypted on client servers prior to
running across the IXUP platform to undertake encrypted
analytics. This offers clients an alternative low cost entry to
IXUP through a scalable, monthly recurring revenue model.
The benefits to clients include:
•
realising unique insights from sensitive datasets which
cannot be obtained in other ways;
• ability to securely combine data while the data
remains in the complete control of its owners;
• prevention of data loss or misuse;
•
•
leading governance and compliance frameworks; and
security of using the Microsoft Azure cloud
environment.
PARTNERSHIPS
The Company continued selling its services through
channel partners during the year. This complements the
direct sales model and allows IXUP partners to manage
further value added customisation and implementation
of the IXUP platform according to client needs. The
partnership model provides a cost-effective and faster
way for IXUP to implement its technology without the
need for a large sales team.
During the year IXUP expanded the relationship within
Deloitte Touche Tohmatsu Australia; and signed a new
Reseller agreement with emerging analytics platform
group Wejugo Pty Ltd.
APPROVED SUPPLIER TO GOVERNMENT
The Company continues as a pre-approved cloud
services supplier to all levels of government, being
appointed a new supplier through the federal
government’s Digital Transformation Agency’s cloud
services panel in June 2019.This increases fairness
helping government agencies to manage their own
procurement. The panel accounts for more than 40%
of the government’s cloud spend and has a 55%
growth rate.
MANAGEMENT TEAM
Noting the resignation of Mr Peter Leihn effective 31 July
2020, the board has increased management strength
through the appointment of Mr Warren Bradey as Chief
Commercial Officer. IXUP Founder and Executive Director,
Mr Joscelyne will take on the majority of the CEO’s
responsibilities along with the remaining leadership team
while the board searches for a suitable candidate to fill the
position of CEO and Managing Director.
COVID-19
IXUP is continuing to closely monitor the developments
related to COVID-19. Given the continuing uncertainty of
the duration and impact of the COVID-19 pandemic, IXUP
has taken steps to reduce cash outflows and extend its
cash operating runway.
Specific actions taken include:
• Staff hours and fixed remuneration reduced with
focus on retaining core sales and technical support
functions to focus on closing commercialisation
opportunities;
• Successful application for the Federal Government’s
JobKeeper Wage Subsidy (Round 1) for all eligible
staff, with eligible roles of staff not critical in pursuing
commercialisation opportunities reduced in hours and
fixed remuneration to the amount affordable by the
JobKeeper Wage Subsidy; and
• Reduction in costs relating to essential services and
infrastructure cost.
These actions reflect the continued focus of the Board
and Management on preserving cash and long-term
shareholder value while maintaining focus on service of
existing and prospective customers and conversion of
IXUP’s sales pipeline.
15
DIRECTORS’
DIRECTORS’
REPORT
REPORT
CAPITAL RAISE
In November 2019 the Company successfully completed
a pro rata non-renounceable 2-for-5 entitlement offer
raising approximately $3.2 million (before costs). The
Entitlement Offer was fully underwritten by Cygnet
Capital Pty Ltd (Cygnet). These funds were raised to fund
commercial roll out of the Company’s encrypted data
collaboration platform, sales and marketing in the US and
Australia, and general working capital requirements.
On 24 June 2020 the Company announced a 1-for-
1 non-renounceable, pro rata rights issue to raise
$2,228,401 (before costs) via the issue of 222,840,158
fully paid ordinary shares at an issue price of $0.01 per
Share. The Entitlement Offer was fully underwritten by
Cygnet.
Subsequent to the year end, the Company completed
the above mentioned pro rata non-renounceable 1-for-1
Entitlement Offer, raising approximately $2.228 million
(before costs).
As part of the noted Entitlement Offer, if the shortfall
is less than 50,000,000 Shares, the underwriter has a
top-up right to ensure that the total number of Shares to
be allocated by it, including any shortfall, is not less than
50,000,000 Shares, subject to shareholder approval.
Given the strong interest in the Entitlement Offer and the
ongoing economic uncertainty created by the COVID-19
pandemic, the Company believes it is prudent, and has
therefore agreed with Cygnet, that the total number of
Shares to be allocated by Cygnet pursuant to the Top-
Up Right will be increased to 150,000,000 Shares at
$0.01 per Share to raise up to $1.5 million (before costs),
subject to shareholder approval (Placement).
BOARD APPOINTMENTS
Subsequent to the end of the financial year, on 31 July
2020 Mr Peter Leihn resigned as CEO and Managing
Director and Mr Scott Wilkie resigned as Non-Executive
Director.
FINANCIAL POSITION
The Company reported sales revenue of $88,500 (2019:
$158,500) for the financial year ended 30 June 2020.
IXUP is in the early stages of commercialisation with
version 4 of the SaaS and PaaS platform released in April
2020. The Company continues to invest in its technology
platform and at 30 June 2020 had cash and term
deposits of $1,537,365 (excluding Entitlements Offer and
Placements funds referred to above).
During the year the Company received an Australian Tax
Office R&D tax rebate of $932,782 (2019: $712,498).
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
Other than discussed above, there were no other
significant changes in the state of affairs of the
consolidated entity during the financial year.
MATTERS SUBSEQUENT TO THE END
OF THE FINANCIAL YEAR
Other than as discussed above, no other matter or
circumstance has arisen since 30 June 2020 that has
significantly affected, or may significantly affect the
consolidated entity’s operations, the results of those
operations, or the consolidated entity’s state of affairs in
future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Since the listing, the Company has been focused on
building out its team, developing its product, defining its
brand and expanding its capability to commercialise the
IXUP platform.
The Company continues to progress discussions with
potential users of the IXUP platform and to progress
discussions with potential partners as well as explore
additional opportunities in the market.
The Company continues to monitor developments related
to COVID-19, with past actions reflecting the focus of the
Board and Management on preserving cash and long-
term shareholder value while maintaining focus on service
of existing and prospective customer and conversion of
IXUP’s sales pipeline.
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE
Our environmental commitment
IXUP is committed to being a responsible and sustainable
business. We believe it makes good business sense to
have environmental, social and governance (ESG) policies
and programs where doing the right thing by our people,
our partners, our environment and the communities in
which we operate is part of our ethos.
Although the consolidated entity is not subject to any
significant environmental regulation under Australian
Commonwealth State or Territory law, the Company is
seeking to undertake in the future, an analysis of Company
objectives that can reduce its environmental footprint.
Corporate governance
IXUP’s Board of Directors is responsible for the corporate
governance of IXUP Limited. The Board guides and
monitors the business affairs of the Group on behalf
of stakeholders and its activities are governed by the
Constitution.
Our Corporate Governance Statement is founded on
the ASX Corporate Governance Council’s principles and
recommendations. The statement is periodically reviewed
and, if necessary, revised to reflect the changing nature of
the industry.
The responsibilities of the Board of Directors and those
functions reserved to the Board, together with the
responsibilities of the Chief Executive Officer are set out
in our Board Charter. To assist with governance IXUP has
established policies.
For copies of policies and charters notes in this section,
please visit the IXUP website and navigate to Investors >
Corporate governance.
80% of CISO’s either are or
are planning to introduce
cloud encryption in the
next 12 months.*
* Forester State of Data
Security Report, February 2020
17
DIRECTORS’
REPORT
Information on directors
NAME : Dean Joscelyne
TITLE: Executive Director and Founder
Dean founded IXUP and is an Executive Director and the
EXPERIENCE AND EXPERTISE:
Head of Strategy & Innovation. He has over 25 years’ experience in business, leading large
scale organisational change and is known for innovative thinking and enhancing the customer
experience to amplify customer satisfaction and engagement. Dean created IXUP in 2011
because he saw a blind spot and an opportunity to solve universal problems for organisations
who needed more powerful data insights, to underpin differentiating growth strategies. Dean’s
ability to identify problems through a unique lens and apply creative thinking led him to design
a novel data collaboration platform.
OTHER CURRENT DIRECTORSHIPS: Nil
FORMER DIRECTORSHIPS (LAST 3 YEARS): Nil
INTERESTS IN SHARES: 31,193,302
INTERESTS IN OPTIONS: 25,200,000
INTERESTS IN RIGHTS: Nil
NAME: Cliff Rosenberg (Resigned 2 July 2019)
TITLE: Non-Executive Director
Cliff has spent more than 20 years working at digital companies
EXPERIENCE AND EXPERTISE:
leading innovation and change in the industry both as an entrepreneur and senior executive.
Cliff was a senior executive and the Managing Director of LinkedIn for South East Asia, Australia
and New Zealand for over 7 years where he led the expansion of LinkedIn in this region. Prior to
LinkedIn, Cliff was Managing Director at Yahoo Australia and New Zealand, and previously the
founder and Managing Director of iTouch Australia and New Zealand, one of the biggest mobile
content and application service providers in Australia. Prior to iTouch Cliff was the head of
strategy for Vodafone Australasia.
Cliff has a Bachelor of Business Science (Honours) degree and a Master of Science in
Management and is a Member of the Australia Institute of Company Directors
OTHER CURRENT DIRECTORSHIPS: Non-Executive Director of ASX listed companies Nearmap
Limited, Cabcharge Australia Limited and Technology One Pty Limited.
FORMER DIRECTORSHIPS (LAST 3 YEARS): Afterpay Touch Group Limited and Pureprofile Ltd
INTERESTS IN SHARES: Nil (At resignation date)
INTERESTS IN OPTIONS: 500,000 (At resignation date, which lapsed on 31 December 2019)
INTERESTS IN RIGHTS: 1,250,000 (At resignation date, which lapsed on 31 December 2019)
NAME: Grant Paterson
TITLE: Chairman and Non-Executive Director
EXPERIENCE AND EXPERTISE: Grant brings significant experience in guiding the progress of
emerging small-cap companies, having been involved with numerous technology companies
listed on the Australian Securities Exchange (ASX), and providing corporate advice across a
variety of sectors.
In addition to his Chairmanship of the IXUP Board, Grant is also an experienced corporate lawyer,
who founded Perth-based firm GTP Legal in 2011. GTP Legal specialises in corporate law
including advising on the Corporations Act, ASX Listing Rules, IPOs and re-compliance listings,
mergers and acquisitions, capital raisings, due diligence and general development primarily in the
resources and technology sectors. Through his work at GTP Legal, Grant has a wide range of
experience in all areas of commercial and corporate law, with a particular focus on equity capital
markets and mergers and acquisitions.
Mr Paterson holds a Bachelor of Law and a Bachelor of Commerce.
OTHER CURRENT DIRECTORSHIPS: Nil
FORMER DIRECTORSHIPS (LAST 3 YEARS): Nil
INTERESTS IN SHARES: 14,583,008
INTERESTS IN OPTIONS: 2,750,000
INTERESTS IN RIGHTS:
750,000
2,750,000
NAME: Freya Smith (Appointed 2 July 2019)
TITLE: Non-Executive Director
EXPERIENCE AND EXPERTISE: Ms Freya Smith is currently the General Counsel and Company
Secretary of Claim Central Consolidated, an Australian headquartered global Insurtech and claims
solutions business. Previously Freya was the Chief Legal Officer and Company Secretary of OFX
Group Limited and Chair and a Non-Executive Director of the Sydney Fringe Festival. Both as
a practising lawyer and company secretary, Freya has counselled many of Australia’s leading
and emerging companies on a number of significant matters of ethics, compliance, corporate
governance and risk and reputation management.
Ms Smith holds a Bachelor of Commerce and a Bachelor of Laws (Hons), a Master of Laws
(High Distinction) and a Graduate Diploma of Applied Corporate Governance from the
Governance Institute of Australia. She is also admitted in the High Court of Australia, the
Federal Court of Australia and the Supreme Court of New South Wales and is a member of the
Association of Corporate Counsel; Fellow of the Governance Institute of Australia; and a member
of the Australian Institute of Company Directors.
OTHER CURRENT DIRECTORSHIPS: Nil
FORMER DIRECTORSHIPS (LAST 3 YEARS): Nil
INTERESTS IN SHARES: Nil
INTERESTS IN OPTIONS: 500,000
INTERESTS IN RIGHTS: 1,500,000
19
DIRECTORS’
REPORT
Information on directors
NAME: Scott Wilkie (Appointed 2 July 2019 and resigned 31 July 2020)
TITLE: Non-Executive Director
EXPERIENCE AND EXPERTISE: Mr Scott Wilkie is an experienced corporate and investment
banking senior executive and is the Founding Director of Sovereign Cloud Australia (“AUCloud”),
a classified provider of sovereign cloud-based technology services to the Australian government,
defence, health and critical national industries. Mr Wilkie has over 25 years’ experience advising
and raising capital for many global leading and emerging companies on their corporate growth,
innovation and security strategies including digital transformation and governance, analytics,
artificial intelligence and cloud computing.
Mr Wilkie has held both Executive and Director roles in his career during which time he obtained
multiple professional qualifications and associations including with the Securities and Exchange
Commission USA, Australian Securities and Investments Commission and is a Member of
the Australian Institute of Company Directors. He is additionally a Member of the Australian
Information Security Association, has been a guest lecturer at the National Security College and
played a role in development of the Australian Cyber Security Strategy
OTHER CURRENT DIRECTORSHIPS: Nil
FORMER DIRECTORSHIPS (LAST 3 YEARS): Nil
INTERESTS IN SHARES: Nil
NAME: Peter Leihn (Appointed 2 July 2019 and resigned 31 July 2020)
TITLE: CEO (and Managing Director from 2 July 2019)
EXPERIENCE AND EXPERTISE: Peter has over 25 years' business experience in senior
technology roles in both industry and government, with expertise in data availability, privacy, data
innovation models and tech commercialisation. He joined the Company as CEO on 8 November
2018.
Prior to joining IXUP, Peter was the Global Head of Commercial, based in San Francisco for
Data61, the Australian Government CSIRO specialist data and technology innovator, where he
was responsible for driving its global growth and strategy.
Peter’s previous leadership roles include Director of the Office of the Chief Scientist for the State
of NSW where he led science policy development and had oversight for strategic investment
in the innovation ecosystem. This followed a long career in the Asia Pacific with global ICT
companies Hewlett-Packard and Autodesk.
A graduate of the Australian Institute of Company Directors (AICD), Peter holds a Bachelor’s
in Applied Science from the Southern Cross University; Graduate Diploma in Marketing from
Monash University; Masters in Environmental Science and Law from University of Sydney and
he is currently completing his PhD in Innovation Economics, with a focus on commercialisation
strategies, at Swinburne University of Technology.
INTERESTS IN OPTIONS: 500,000 (At resignation which may be exercised any time until expiry)
INTERESTS IN RIGHTS: 750,000 (At resignation)
750,000 (At resignation)
OTHER CURRENT DIRECTORSHIPS: Nil
FORMER DIRECTORSHIPS (LAST 3 YEARS): Nil
INTERESTS IN SHARES: Nil
INTERESTS IN OPTIONS: 750,000 (At resignation which may be exercised any time until expiry)
INTERESTS IN RIGHTS: 3,000,000 (At resignation)
‘Other current directorships’ quoted above are current directorships for listed entities only and exclude directorships of all
other types of entities.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and
exclude directorships of all other types of entities, unless otherwise stated.
Company Secretary
NAME: Andrew Whitten
TITLE: Company secretary
• Andrew is an admitted solicitor and an Executive Director of the Automic Group of
Companies, Australia’s only professional service provider that delivers a complete and
integrated ecosystem of Registry, Company Secretarial, Legal, CFO and Accounting services.
• Andrew is currently the company secretary for a number of publicly listed companies. He has
been involved in numerous corporate and investment transactions including IPOs on the ASX
and NSX, corporate reconstructions, reverse mergers and takeovers over two decades.
• Andrew holds a Bachelor of Arts (Economics, UNSW); Master of Laws and Legal Practice
(Corporate Finance and Securities Law, UTS); Graduate Diploma in Applied Corporate
Governance from the Governance Institute and is an elected Associate of that institute.
21
DIRECTORS’
REPORT
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board
of Directors (‘the Board’) held during the year ended
30 June 2020, and the number of meetings
attended by each director were:
Dean Joscelyne
Grant Paterson
Scott Wilkie
Freya Smith
Peter Leihn
FULL BOARD
ATTENDED
HELD
9
10
10
10
10
10
10
10
10
10
Held: represents the number of meetings held
during the time the director held office.
REMUNERATION REPORT (AUDITED)
The remuneration report details the Key Management
Personnel (KMP) remuneration arrangements for the
consolidated entity, in accordance with the requirements
of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and
responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including
all directors. In this report “Executive KMP” refers to
members of the Executive team that are KMP and
includes Mr Peter Leihn, as an Executive Director from 2
July 2019.
The remuneration report is set out under the following
main headings:
• Principles used to determine the nature and amount
of remuneration
• Details of remuneration
• Service agreements
• Share-based compensation
• Additional information
PRINCIPLES USED TO DETERMINE THE
NATURE AND AMOUNT OF REMUNERATION
The objective of the consolidated entity’s Executive KMP
reward framework is to ensure reward for performance
is competitive and appropriate for the results delivered.
The framework aligns Executive KMP reward with the
achievement of strategic objectives and the creation of
value for shareholders, and it is considered to conform to
the market best practice for the delivery of reward. The
Board of Directors (‘the Board’) ensures that Executive
KMP reward satisfies the following key criteria for good
reward governance practices:
• Competitiveness and reasonableness
• Acceptability to shareholders
• Performance linkage / alignment of executive
compensation
• Transparency
The Board is responsible for determining and reviewing
remuneration arrangements for its KMP. The performance
of the consolidated entity depends on the quality of its
directors and executives. The remuneration philosophy is
to attract, motivate and retain high performance and high
quality personnel.
The reward framework is designed to align Executive
KMP reward to shareholders’ interests. The Board have
considered that it should seek to enhance shareholders’
interests by:
• Having economic profit as a core component of plan
design;
• Focusing on sustained growth in shareholder wealth,
consisting of share price growth and delivering
constant or increasing return on assets as well as
focusing the executive on key non-financial drivers of
value; and
• Attracting and retaining high calibre executives.
Additionally, the reward framework should seek to
enhance executives’ interests by:
• Additional disclosures relating to KMP
• Rewarding capability and experience;
• Reflecting competitive reward for contribution to
growth in shareholder wealth; and
• Providing a clear structure for earning rewards.
In accordance with best practice corporate governance,
the structure of non-executive director and executive
director remuneration is separate.
NON-EXECUTIVE DIRECTOR’S REMUNERATION
STI is currently awarded to Executive KMP in 100% cash.
Fees and payments to Non-Executive Directors reflect the
demands and responsibilities of their role. Non-Executive
Directors’ fees and payments are reviewed annually by
the Board. The Board may, from time to time, receive
advice from independent remuneration consultants to
ensure Non-Executive Directors’ fees and payments are
appropriate and in line with the market. The Chairman’s
fees are determined independently to the fees of other
Non-Executive Directors based on comparative roles in
the external market. The Chairman is not present at any
discussions relating to the determination of his
own remuneration.
ASX listing rules require the aggregate Non-Executive
Directors’ remuneration be determined periodically by
a general meeting. As outlined in the prospectus dated
3 October 2017 released to the ASX on 14 November
2017, the aggregate remuneration of Non-Executive
Directors has been set at an amount not to exceed
$500,000 per annum.
EXECUTIVE KMP REMUNERATION
The consolidated entity aims to reward Executive KMP
based on their position and responsibility, with a level and
mix of remuneration which has both fixed and variable
components and includes:
• Base pay and non-monetary benefits;
• Short-term performance incentives;
• Share-based payments; and
• Other remuneration such as superannuation
and long service leave.
The combination of these comprises the Executive KMP’s
total remuneration.
Fixed remuneration, comprising of base salary,
superannuation and non-monetary benefits, is reviewed
annually by the Board based on individual and business
performance and benchmarking.
Executive KMP may receive their fixed remuneration in
the form of cash or other fringe benefits where it does not
create any additional costs to the company and provides
additional value to the Executive KMP.
The short-term incentive (‘STI’) plan is designed to align
the targets of the business with the performance hurdles
of Executive KMP. STI is an annual “at risk” opportunity
awarded to Executive KMP based on specific annual
targets and key performance indicators. Performance
conditions are clearly defined and measurable and
designed to support the financial and strategic direction
of the business and in turn translate to shareholder return.
The long-term benefits (‘LTB’) plan includes long
service leave and share-based payments. Options and
Performance Rights are awarded to Executive KMP over
a period of three years based on long-term incentive
measures. These include increase in shareholder value
relative to the entire market and the increase compared to
the consolidated entity’s direct competitors.
DETAILS OF REMUNERATION
Amounts of remuneration
Details of the remuneration of KMP of the consolidated
entity are set out in the following tables.
The KMP of the consolidated entity consisted of the
following directors of IXUP Limited:
• Dean Joscelyne – Executive Director
• Cliff Rosenberg – Non-Executive Director
(Resigned 2 July 2019)
• Grant Paterson – Chairman and
Non-Executive Director
• Scott Wilkie – Non-Executive Director
(Appointed 2 July 2019 and resigned 31 July 2020)
• Freya Smith – Non-Executive Director
(Appointed 2 July 2019)
• Peter Leihn – CEO
(Managing Director from 2 July 2019 and
resigned 31 July 2020)
23
DIRECTORS’
REPORT
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG-TERM
BENEFITS
SHARE-BASED
PAYMENTS
CASH SALARY
AND FEES
CASH BONUS
NON-
MONETARY*
SUPER-
ANNUATION
LONG
SERVICE
LEAVE
EQUITY-
SETTLED
2020
$
$
$
$
$
$
TOTAL
$
NON-EXECUTIVE DIRECTORS:
GRANT PATERSON
FREYA SMITH
SCOTT WILKIE
EXECUTIVE DIRECTORS:
DEAN JOSCELYNE
PETER LEIHN
20,000
49,087
49,087
110,507
336,891
565,572
*
Salary and fees paid in shares.
–
–
–
–
30,000
30,000
25,000
–
–
41,160
–
66,160
–
4,664
4,664
14,409
34,855
58,592
–
–
–
–
–
37,405
40,724
40,724
82,405
94,475
94,475
–
166,076
230,934
632,680
–
349,787
1,070,111
The proportion of remuneration linked to performance and the fixed proportion are as follows:
FIXED REMUNERATION
AT RISK – STI
AT RISK – LTI
2020
2019
2020
2019
2020
2019
NON-EXECUTIVE DIRECTORS:
CLIFF ROSENBERG
GRANT PATERSON
FREYA SMITH
SCOTT WILKIE
EXECUTIVE DIRECTORS:
TIM EBBECK
DEAN JOSCELYNE
–
55%
57%
57%
–
100%
OTHER KEY MANAGEMENT PERSONNEL:
DAVID BONHAM
PETER LEIHN
–
57%
37%
63%
–
–
84%
100%
90%
92%
–
–
–
–
–
–
–
5%
–
–
–
–
–
–
7%
–
–
45%
43%
43%
–
–
_
38%
63%
37%
–
–
16%
–
3%
8%
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG-TERM
BENEFITS
SHARE-BASED
PAYMENTS
CASH SALARY
AND FEES
CASH BONUS
NON-
MONETARY
SUPER-
ANNUATION
LONG
SERVICE
LEAVE
EQUITY-
SETTLED
2019
$
$
$
$
$
$
TOTAL
$
NON-EXECUTIVE DIRECTORS:
CLIFF ROSENBERG
GRANT PATERSON*
EXECUTIVE DIRECTORS:
TIM EBBECK**
DEAN JOSCELYNE
60,242
38,000
93,564
260,000
–
–
–
–
OTHER KEY MANAGEMENT PERSONNEL:
DAVID BONHAM***
303,677
25,000
PETER LEIHN****
227,051
–
982,534
25,000
–
–
–
–
–
–
–
–
–
–
24,700
29,438
21,560
75,698
–
–
–
–
–
–
–
100,828
161,070
22,751
60,751
17,370
110,934
–
284,700
13,546
20,665
371,661
269,276
175,160
1,258,392
* Grant Paterson was appointed as acting Chairman and Non-Executive Director on 13 November 2018.
** Tim Ebbeck resigned as Director on 13 November 2018.
*** David Bonham resigned as Chief Financial Officer on 24 May 2019.
**** Peter Leihn had a bonus accrued as at 30 June 2019 in the amount of $32,850 which was paid in July 2019.
Peter was employed from 8 November 2018 as CEO and also became Managing Director from 2 July 2019.
25
DIRECTORS’
REPORT
Service agreements
Remuneration and other terms of employment for Executive KMP are formalised in service agreements. Details of these
agreements are as follows:
NAME
Dean Joscelyne
TERM OF AGREEMENT:
The principal terms of Dean Joscelyne’s current agreement are as follows:
From 1 July 2019 to 1 January 2020
(i) A base salary of $260,000 per annum (exclusive of statutory superannuation).
(ii) A bonus of 13% of the base salary at the Company’s discretion.
(iii) Entitlement to participate in employee and executive incentive plans and the
Company may provide additional bonus and incentives. Mr Joscelyne has been
granted 1,000,000 Plan Options pursuant to the Option Plan. These have since
been cancelled at Mr Joscelyne’s request as announced to the market on 13
July 2018.
(iv) The agreement has no fixed term and may be terminated
(A) by either party without cause with 12 weeks’ notice, or in the case of the
Company, immediately with payment in lieu of notice; or
(B) by the Company with immediate effect following serious breach of the
agreement or for serious misconduct.
(v) Other industry standard provisions for a senior executive of a public listed
company.
From 1 February 2020
(i) For the month of February, consultancy fees at the same rate per annum paid
to Mr Joscelyne as an employee (exclusive of GST). Services to be provided a
minimum of 5 days a week.
(ii) From 1 March 2020, consultancy fees of $120,000 per annum (exclusive of
GST). Services to be provided a minimum of 2 days a week.
(iii) Entitlement to 25 days leave where the consultant will be paid as if the
consultant had been providing consultancy services. Other than these 25 days
there is no right of leave accruing or right to any further leave with pay.
(iv) The agreement has no fixed term and may be terminated:
(A) by either party without cause with giving 3 months written notice to
the other party
(B) by the Company with immediate effect following serious breach of the
agreement or for serious misconduct.
(v) Other industry standard provisions for a senior executive of a public
listed company.
NAME
Peter Leihn (Resigned 31 July 2020)
TERM OF AGREEMENT:
The principal terms of Peter Leihn’s agreement are as follows:
(i) A base salary of $350,000 per annum (exclusive of statutory superannuation).
In response to the impact of COVID-19, effective 15 April 2020 Peter Leihn’s
hours and salary were reduced to 50%.
(ii) Entitlement to participate in employee and executive incentive plans up to a
maximum annual incentive of $150,000
(iii) The agreement has no fixed term and may be terminated:
(A) by either party without cause with 3 months’ notice, or in the case of the
Company, immediately with payment in lieu of notice; or
(B) by the Company with immediate effect following serious breach of the
agreement or for serious misconduct.
(iv) Initial ESOP Grant of 1,500,000 options vesting over 3 years and at strike
price in accordance with scheme. 9,000,000 IXUP performance share rights,
being 3,000,000 Class A, 3,000,000 Class B and 3,000,000 Class C rights.
Performance criteria for all classes of performance rights:
(A) 2 years of continuous employment, and
(B) The company achieving Cumulative Contracted Revenue of:
• Class A AU$5m
• Class B AU$10m
• Class C AU$15m
(iv) Other industry standard provisions for a senior executive of a public listed
company
27
DIRECTORS’
REPORT
The Constitution of the Company provides that the
remuneration of Non-Executive Directors will not be more
than the aggregate fixed sum determined by a general
meeting of Shareholders or, until so, by the Directors.
The aggregate remuneration for Non-Executive Directors
as outlined in the Prospectus dated 3 October 2017
has been set at an amount not to exceed $500,000 per
annum. The Board has resolved that the Non-Executive
Directors’ base fee will be $60,000 per annum for Non-
Executive Directors (inclusive of statutory superannuation)
and an additional $10,000 per annum (inclusive of
statutory superannuation) for each Board committee that
they participate in commencing on Official Quotation.
Mr Grant Paterson, Mr Wilkie and Ms Smith are Non-
Executive Directors. Mr Wilkie and Ms Smith’s fees were
reduced by 50% effective 16 April 2020 and Mr Paterson
has waived his fees from 1 April 2020 to date in response
to the impact of COVID-19.
SHARE-BASED COMPENSATION
Issue of shares
Shares issued to directors and Executive KMP as part of
compensation during the year ended 30 June 2020 are
as follows:
• Grant Paterson was issued 216,207 shares on 14
February 2020 in lieu of Directors fees and Executive
Remuneration.
• Dean Joscelyne was issued 593,301 shares on 14
February 2020 in lieu of Directors fees and Executive
Remuneration.
• Grant Paterson was issued 209,464 shares on 27
April 2020 in lieu of Directors fees and Executive
Remuneration.
There were no shares issued to directors and Executive
KMP as part of compensation during the year ended
30 June 2019.
Options over equity instruments
Performance rights
The terms and conditions of each grant of options
and performance rights over ordinary shares affecting
remuneration of directors and Executive KMP in this
financial year or future reporting years are as follows:
Issued in the year ended 30 June 2018
•
Dean Joscelyne was issued 25,200,000 unlisted
options (Issued 1 September 2017 option holder
is entitled to purchase one fully-paid share in the
Company for $0.25 per option over the 5-year life
of the option to 14 November 2022). In addition,
Dean Joscelyne was issued 1,000,000 plan options
(Issued 15 November 2017, unlisted and unvested,
exercisable at $0.25 per option, expire 14 November
2022). These plan options were cancelled on 13 July
2018 at Mr Joscelyne’s request.
• Tim Ebbeck was issued 1,250,000 plan options
(Issued 15 November 2017, unlisted and unvested,
exercisable at $0.25 per option, expire 14 November
2022). 416,666 plan options were forfeited on 13
November 2018 upon resignation and 833,334
plan options lapsed on 11 February 2019 as not
exercised.
• Cliff Rosenberg was issued 500,000 plan options
(Issued 15 November 2017, unlisted and unvested,
exercisable at $0.25 per option, expire 14 November
2022). These plan options lapsed on 31 December
2019 as not exercised.
Issued in the year ended 30 June 2019
• Grant Paterson was issued 750,000 plan options
(Issued 20 December 2018, exercisable at 25 cents
per option, expire on 20 December 2023).
• David Bonham was issued 1,750,000 plan options
(Issued 20 December 2018, unlisted and unvested,
exercisable at $0.25 per option, expire 20 December
2023). 1,166,667 plan options were forfeited on 24
May 2019 upon resignation.
• Peter Leihn was issued 1,500,000 unlisted options
(Issued 2 July 2019, unlisted and unvested,
exercisable at 25 cents per option, expire on 10 April
2024). 750,000 options were forfeited on 31 July
2020 upon resignation.
Issued in the year ended 30 June 2020
•
Freya Smith was issued 500,000 unlisted options
(Issued 2 July 2019, unlisted and unvested,
exercisable at 25 cents per option, expire on 14
November 2022).
• Scott Wilkie was issued 500,000 unlisted options
(Issued 2 July 2019, unlisted and unvested,
exercisable at 25 cents per option, expire on 14
November 2022).
Performance rights over ordinary shares issued to directors
and Executive KMP as part of compensation that were
outstanding as at 30 June 2020 are as follows:
Issued in the year ended 30 June 2018
•
Tim Ebbeck was issued 3,000,000 performance
rights on 15 November 2017 (1,000,000 unlisted
and unvested Class A performance rights; 1,000,000
unlisted and unvested Class B - Performance Rights;
1,000,000 unlisted and unvested Class C Performance
Rights). These were forfeited on resignation on 13
November 2018.
• Cliff Rosenberg was issued 1,250,000 performance
rights on 15 November 2017 (416,667, unlisted and
unvested Class A Performance Rights; 416,667
unlisted and unvested Class B Performance Rights;
416,666 unlisted and unvested Class C Performance
Rights). These rights lapsed on 31 December 2019.
Issued in the year ended 30 June 2019
• Grant Paterson was issued 750,000 performance
rights on 20 December 2018 (250,000 unlisted and
unvested Class A Performance Rights; 250,000
unlisted and unvested Class B Performance Rights
and 250,000 unlisted and unvested Class C
Performance Rights).
Issued in the year ended 30 June 2020
• Freya Smith was issued 1,500,000 performance rights
on 2 July 2019 (500,000 unlisted and unvested Class
A Performance Rights; 500,000 unlisted and unvested
Class B Performance Rights and 500,000 unlisted and
unvested Class C Performance Rights).
• Scott Wilkie was issued 1,500,000 performance rights
on 2 July 2019 (500,000 unlisted and unvested Class
A Performance Rights; 500,000 unlisted and unvested
Class B Performance Rights and 500,000 unlisted
and unvested Class C Performance Rights). 750,000
performance rights were forfeited on 31 July 2020
upon resignation.
• Peter Leihn was issued 9,000,000 performance rights
on 2 July 2019 (3,000,000 unlisted and unvested
Class A Performance Rights; 3,000,000 unlisted and
unvested Class B Performance Rights and 3,000,000
unlisted and unvested Class C Performance Rights).
6,000,000 performance rights were forfeited on 31
July 2020 upon resignation, being 2,000,000 unlisted
and unvested Class A Performance Rights; 2,000,000
unlisted and unvested Class B Performance Rights
and 2,000,000 unlisted and unvested Class C
Performance Rights.
29
DIRECTORS’
REPORT
ADDITIONAL INFORMATION
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
REVENUE
88,500
158,500
120,000
153,695
247,610
OPTIONS OVER ORDINARY SHARES
PROFIT/(LOSS) AFTER INCOME TAX
(3,774,992)
(6,588,667)
(8,679,456)
(2,993,668)
(4,461,184)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
SHARE PRICE AT FINANCIAL YEAR END ($)
BASIC EARNINGS PER SHARE (CENTS PER SHARE)
2020
0.01
(1.93)
2019
0.07
(4.16)
2018
0.28
(7.04)
2017
2016
–
–
(6.62)
(7.30)
DEAN JOSCELYNE*
CLIFF ROSENBERG**
PETER LEIHN***
GRANT PATERSON****
FREYA SMITH
SCOTT WILKIE
ADDITIONAL DISCLOSURES RELATING TO KMP
Shareholding
The number of shares in the Company held during the financial year by each director and Executive KMP of the consolidated entity,
including their personally related parties, is set out below:
ORDINARY SHARES
DEAN JOSCELYNE*
GRANT PATERSON**
BALANCE AT
THE START OF
THE YEAR
RECEIVED
AS PART
OF REMUN-
ERATION
ADDITIONS
DISPOSALS/
OTHER
BALANCE AT
THE END OF
THE YEAR
25,500,001
593,301
5,100,000
4,904,167
425,671
1,961,666
30,404,168
1,018,972
7,061,666
–
–
–
31,193,302
7,291,504
38,484,806
*
Dean Joscelyne holds his interests in shares indirectly through the Joscelyne Investments Pty Ltd atf Joscelyne Investments
Unit Trust of which he is the ultimate controlling party.
** Grant Paterson holds his interests indirectly through Brown Bricks Pty Ltd.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and Executive
KMP of the consolidated entity, including their personally related parties, is set out below:
GRANTED
EXERCISED
EXPIRED/
FORFEITED/
OTHER
BALANCE AT
THE END OF THE
YEAR
BALANCE AT
THE START OF
THE YEAR
25,200,000
500,000
1,500,000
2,750,000
–
–
500,000
500,000
29,950,000
1,000,000
–
–
–
–
–
–
–
–
25,200,000
(500,000)
–
–
–
–
–
1,500,000
2,750,000
500,000
500,000
(500,000)
30,450,000
*
**
***
Dean Joscelyne holds his interests in shares indirectly through the Joscelyne Investments Pty Ltd atf Joscelyne Investments
Unit Trust of which he is the ultimate controlling party.
Cliff Rosenberg resigned as director 2 July 2019. These options lapsed on 31 December 2019.
Peter Leihn resigned as director 31 July 2020. 750,000 of these options lapsed on resignation.
**** Grant Paterson holds his interests indirectly through Brown Bricks Pty Ltd.
Performance rights
The number of performance rights over ordinary shares in the company held during the financial year by each Director and Executive
KMP of the consolidated entity, including their personally related parties, is set out below:
GRANTED
EXERCISED
EXPIRED/
FORFEITED/
OTHER
BALANCE AT
THE END OF THE
YEAR
BALANCE AT
THE START OF
THE YEAR
1,250,000
750,000
–
–
–
1,500,000
1,500,000
9,000,000
2,000,000
12,000,000
–
–
–
–
–
_
(1,250,000)
–
–
–
750,000
1,500,000
1,500,000
9,000,000
(1,250,000)
12,750,000
PERFORMANCE RIGHTS
CLIFF ROSENBERG*
GRANT PATERSON
FREYA SMITH
SCOTT WILKIE**
PETER LEIHN***
*
**
Cliff Rosenberg resigned as director 2 July 2019. These performance rights lapsed on 31 December 2019.
Scott Wilkie resigned as director 31 July 2020. 750,000 of these performance rights lapsed on resignation.
***
Peter Leihn resigned as director 31 July 2020. 6,000,000 of these performance rights lapsed on resignation.
This concludes the remuneration report, which has been audited.
31
–
–
–
–
–
–
DIRECTORS’
DIRECTORS’
REPORT
REPORT
SHARES UNDER OPTION
Unissued ordinary shares of IXUP under option at the date of this report are as follows:
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER UNDER OPTION
1 September 2017
1 September 2017
1 September 2017
15 November 2017
15 November 2017
20 December 2018
10 April 2019
2 July 2019
9 December 2019
30 July 2020
14 November 2022
14 November 2022
14 November 2022
14 November 2022
14 November 2022
20 December 2023
10 April 2024
14 November 2022
30 November 2023
31 July 2024
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.10
$0.02
30,000,000
11,426,470
2,000,000
15,000,000
1,140,000
3,001,666
1,633,333
1,000,000
10,000,000
20,000,000
95,201,469
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
SHARES UNDER PERFORMANCE RIGHTS
Unissued ordinary shares of IXUP under performance rights at the date of this report are as follows:
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
15 November 2017
20 December 2018
4 July 2019
14 November 2022
14 November 2022
14 November 2022
$0.00
$0.00
$0.00
NUMBER
UNDER RIGHTS
1,000,000
1,750,000
12,000,000
14,750,000
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate
in any share issue of the Company or of any other body corporate.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no ordinary shares of IXUP issued on the exercise of options during the year ended 30 June 2020 and up to
the date of this report.
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE RIGHTS
There were no ordinary shares of IXUP issued on the exercise of performance rights during the year ended 30 June 2020
and up to the date of this report.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
NON-AUDIT SERVICES
There were no non-audit services provided during the financial year by the auditor.
OFFICERS OF THE COMPANY WHO ARE FORMER DIRECTORS OF WILLIAM BUCK
AUDIT (WA) PTY LTD
There are no officers of the company who are former directors of William Buck Audit (WA) Pty Ltd.
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 immediately after this directors’ report.
AUDITOR
William Buck Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
Grant Paterson
Chairman
31 August 2020
33
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AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF IXUP LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (WA) Pty Ltd
ABN 67 125 012 124
Conley Manifis
Director
Dated this 31st day of August, 2020
35
FINANCIALS
EVOLVING ATTITUDES ON PRIVACY
85% of Australians say they have
a clear understanding of why they should
protect their personal information but
49% don’t know how.*
Table of Contents
1. STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
2. STATEMENT OF FINANCIAL POSITION
3. STATEMENT OF CHANGES IN EQUITY
4. STATEMENT OF CASH FLOWS
5. NOTES TO THE FINANCIAL STATEMENTS
6. DIRECTORS’ DECLARATION
7.
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF IXUP LIMITED
8. SHAREHOLDER INFORMATION
38
39
40
41
42
72
74
78
*Australian Community Attitudes to Privacy Survey (ACAPS) 2020
37
FINANCIALS
GENERAL INFORMATION
The consolidated financial report covers IXUP Limited (the “Company”) and its controlled entities
(together the “Consolidated Entity” or “Group”).
IXUP Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Level 3
5-7 Ross Street
Paramatta NSW 2150
A description of the nature of the consolidated entity’s operations and its principal activities are included
in the directors’ report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2020.
The directors have the power to amend and reissue the financial statements.
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement is available on the Company’s website at ixup.com
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
NOTE
2020
2019
REVENUE
Revenue
Cost of sales
Gross profit
Other income
Interest revenue calculated using the effective interest method
Research & Development Tax rebate
EXPENSES
Employee benefits expense
Other Personnel costs (Share-based costs)
Depreciation and amortisation expense
Occupancy cost
Administration costs
Finance costs
LOSS BEFORE INCOME TAX EXPENSE
Income tax expense
LOSS AFTER INCOME TAX EXPENSE FOR THE YEAR
ATTRIBUTABLE TO THE SHAREHOLDERS OF IXUP LIMITED
Other comprehensive income for the year, net of tax
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
ATTRIBUTABLE TO THE SHAREHOLDERS OF IXUP LIMITED
Basic earnings per share
Diluted earnings per share
7
8
6
8
34
8
8
8
8
9
22
33
33
88,500
(2,741)
85,759
212,652
16,778
932,782
158,500
(59,608)
98,892
–
116,095
712,498
(2,809,909)
(4,264,363)
(481,358)
(74,892)
(125,625)
(465,416)
(571,409)
(218,446)
(1,521,680)
(1,989,812)
(9,499)
(6,706)
(3,774,992)
(6,588,667)
–
–
(3,774,992)
(6,588,667)
–
–
(3,774,992)
(6,588,667)
Cents
(1.93)
(1.93)
Cents
(4.16)
(4.16)
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
CONSOLIDATED
NOTE
2020
2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other financial assets
Prepayments
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
10
11
12
13
14
16
17
18
19
20
21
22
1,537,365
109,400
–
29,240
2,005,194
35,184
250,000
49,350
1,676,005
2,339,728
18,442
19,936
38,378
47,515
–
47,515
1,714,383
2,387,243
–
292,705
22,634
148,720
464,059
–
52,257
52,257
516,316
–
542,885
–
263,600
806,485
–
–
–
806,485
1,198,067
1,580,758
18,611,718
16,038,325
8,442,017
7,840,393
(25,855,668)
(22,297,960)
1,198,067
1,580,758
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
The above statement of financial position should be read in conjunction with the accompanying notes.
39
FINANCIALS
FINANCIALS
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
ISSUED CAPITAL
RESERVES
ACCUMULATED
LOSSES
TOTAL
EQUITY
CONSOLIDATED
$
$
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Balance at 1 July 2018
16,038,325
7,799,992
(16,134,308)
7,704,009
Receipts from customers
Payments to suppliers and employees
CONSOLIDATED
NOTE
2020
2019
25,000
198,000
(4,714,851)
(6,501,847)
7,362
1,104,774
150,259
875,130
(6,588,667)
(6,588,667)
Interest received
–
–
Government grants and tax incentives (R&D Incentive,
JobKeepers Rebate, Cash Boost, EMD Grant)
–
–
–
(6,588,667)
(6,588,667)
Net cash used in operating activities
31
(3,577,715)
(5,278,458)
Loss after income tax expense for
the year
Other comprehensive income for the
year, net of tax
Total comprehensive loss for the year
Transactions with shareholders in
their capacity as shareholders:
Share-based payments (note 34)
Transfer relating to options and rights
expired and/or cancelled
–
–
–
–
–
465,416
(425,015)
–
465,416
425,015
–
Balance at 30 June 2019
16,038,325
7,840,393
(22,297,960)
1,580,758
ISSUED CAPITAL
RESERVES
ACCUMULATED
LOSSES
TOTAL EQUITY
CONSOLIDATED
$
$
$
$
Balance at 1 July 2019
16,038,325
7,840,393
(22,297,960)
1,580,758
Adjustment for change in accounting
policy
–
–
(4,850)
(4,850)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
13
Payments for investments in term deposits
Proceeds from investments in term deposits
Net cash from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment for share issue costs
Net cash from financing activities
(6,261)
(875,000)
1,129,885
248,624
3,168,872
(307,610)
2,861,262
(94,831)
(250,000)
6,052,356
5,707,525
–
–
–
Balance at 1 July 2019 – restated
16,038,325
7,840,393
(22,302,810)
1,575,908
Net increase/(decrease) in cash and cash equivalents
(467,829)
429,067
–
(3,774,992)
(3,774,992)
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial year
10
2,005,194
1,537,365
1,576,127
2,005,194
–
(3,774,992)
(3,774,992)
The above statement of cash flows should be read in conjunction with the accompanying notes
Loss after income tax expense for
the year
Other comprehensive income for the
year, net of tax
Total comprehensive loss for the year
Transactions with shareholders in
their capacity as shareholders:
Share-based payments (note 34)
Issue of shares
Issue of shares in lieu of
remuneration
Share issue costs
Issue of options as cost of capital
raising
Transfer relating to options and rights
expired and/or forfeited
–
–
–
3,168,872
66,159
(319,238)
(342,400)
481,358
–
–
–
342,400
–
–
–
–
–
481,358
3,168,872
66,159
(319,238)
–
–
–
(222,134)
222,134
Balance at 30 June 2020
18,611,718
8,442,017
(25,855,668)
1,198,067
The above statement of changes in equity should be read in conjunction with the accompanying notes
41
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the
preparation of the financial statements are set out below.
These policies have been consistently applied to all the
years presented, unless otherwise stated.
NEW OR AMENDED ACCOUNTING STANDARDS AND
INTERPRETATIONS ADOPTED
The consolidated entity has adopted all of the new or
amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(‘AASB’) that are mandatory for the current reporting
period.
There have been no new and revised standards that have
had a significant impact on the measurement or disclosure
requirements of the Group, except as noted below.
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1
July 2019. The standard replaces AASB 117 ‘Leases’
and for lessees eliminates the classifications of operating
leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use assets and
corresponding lease liabilities are recognised in the
statement of financial position. Straight-line operating lease
expense recognition is replaced with a depreciation charge
for the right-of-use assets (included in operating costs)
and an interest expense on the recognised lease liabilities
(included in finance costs). In the earlier periods of the
lease, the expenses associated with the lease under AASB
16 will be higher when compared to lease expenses under
AASB 117. However, EBITDA (Earnings Before Interest,
Tax, Depreciation and Amortisation) results improve as the
operating expense is now replaced by interest expense
and depreciation in profit or loss. For classification
within the statement of cash flows, the interest portion is
disclosed in operating activities and the principal portion of
the lease payments are separately disclosed in financing
activities. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases.
The impact on the financial performance and position of
the consolidated entity from the adoption of AASB 16 is
detailed in note 3.
BASIS OF PREPARATION
IXUP Limited is domiciled in Australia. The consolidated
financial statements comprise the results of IXUP
Limited ("the Company") and its controlled entities
("the Group"). The consolidated financial statements
have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by
the Australia Accounting Standards Board ('AASB') and
the Corporations Act 2001, as appropriate for for-profit
oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued
by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the
historical cost convention, except for, where applicable,
the valuation of share-based payments.
Critical accounting estimates
The preparation of the 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 in
note 2.
The significant accounting policies adopted in the
preparation of these financial statements are presented
below.
PARENT ENTITY INFORMATION
In accordance with the Corporations Act 2001, these
financial statements present the results of the Group only.
Supplementary information about the parent entity is
disclosed in note 28.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the
financial statements of the Company and the entities
controlled by the Company. Control is achieved when the
Company:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its
involvement with the investee; and
• Has the ability to use its power to affect its returns.
The Company reassesses 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
listed above.
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members
of the IXUP Group are eliminated in full on consolidation.
FOREIGN CURRENCIES
In preparing the financial statements, transactions in
currencies other than the Group's functional currency
(foreign currencies) are recognised at the rates of
exchange prevailing at the dates of the transactions.
REVENUE RECOGNITION
All revenue is stated net of the amount of goods and
services tax (GST).
The core principle of AASB 15 is that revenue is
recognised on a basis that reflects the transfer of
promised goods or services to customers at an amount
that reflects the consideration the Company expects to
receive in exchange for those goods or services. Revenue
is recognised by applying a five-step process outlined in
AASB 15 which is as follows:
Step 1: Identify the contract with a customer;
Step 2: Identify the performance obligations in the
contract and determine at what point they are satisfied;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance
obligations;
Step 5: Recognise revenue as the performance
obligations are satisfied.
(i) Identification of performance obligations
The Group has determined that for new software sales,
the licenses and implementation services are quoted
as separate line items and have separate list prices and
therefore are not distinct performance obligations as the
customer is purchasing customisable software which
requires not only the licenses to be provisioned but the
software to be installed by a qualified implementation
consultant.
Licensing and technical support which is purchased
by software customers to assist with their ongoing
use of the software and is separate from the software
implementation performance obligation.
(ii) Satisfaction of performance obligations
The performance obligation for the implemented software
is satisfied at the point in time when the software has
been installed and is operating materially as contractually
required. It is when the customer has full access to and
control of the software.
The performance obligation for providing software
customers with licensing and technical support remains
throughout the contract period so is satisfied over the
contract period.
In addition to contracts with customers, the Group
receives interest income from monies held in its bank
accounts, Interest income is recognised on an accruals
basis based on the interest rate, deposited amount and
time which lapses before the reporting period end date.
The expected future Research and Development incentive,
for past qualifying Research and Development expenditure
is accrued as other income when it is established that the
conditions of the Research and Development incentive have
been met and that the expected amount of the incentive
can be reliably measured.
GOVERNMENT GRANTS
Government grants are recognised when there is
reasonable assurance that the Company will comply
with the conditions attaching to the grant and that the
grant will be received. Government grants are recognised
in profit or loss on a systematic basis over the periods
in which the entity recognises as expenses the related
costs for which grants are intended to compensate. If
the grant relates to expenses or losses already incurred
by the entity, or to provide immediate financial support
to the entity with no future related costs, the income is
recognised int eh period in which it becomes receivable.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprises cash on hand,
demand deposits and short-term investments which are
readily convertible to known amounts of cash and which
are subject to an insignificant risk of change in value.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets
Financial assets are initially measured at fair value.
Transaction costs are included as part of the initial
measurement, except for financial assets at fair value
through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending
on their classification. Classification is determined based on
both the business model within which such assets are held
and the contractual cash flow characteristics of the financial
asset unless, an accounting mismatch is being avoided.
43
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
For financial assets measured at fair value through other
comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the
loss allowance is recognised in profit or loss.
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 allowance for expected
credit losses. Trade receivables are generally due for
settlement within 30 days.
The Group has applied the simplified approach to
measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit
losses, trade receivables have been grouped based on
days overdue.
PROPERTY, PLANT AND EQUIPMENT
Each class of property, plant and equipment is carried
at cost less, where applicable, any accumulated
depreciation and impairment losses. Plant and equipment
are measured using the cost model.
Costs include purchase price, other directly attributable
costs and the initial estimate of the costs of dismantling
and restoring the asset, where applicable.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their
useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a
prospective basis. An individual asset will be depreciated
in full at the time of purchase if any of the following criteria
is met:
• The cost of the asset is less than $2,000, or
• The asset has an expected useful life of less than 12
months, or
• The asset will become technically obsolete
(particularly relating to computer equipment) in less
than 12 months.
Financial assets are derecognised when the rights to
receive cash flows have expired or have been transferred
and the Group has transferred substantially all the risks
and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset,
it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or
at fair value through other comprehensive income are
classified as financial assets at fair value through profit
or loss. Typically, such financial assets will be either: (i)
held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making a
profit, or a derivative; or (ii) designated as such upon initial
recognition where permitted. Fair value movements are
recognised in profit or loss.
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other comprehensive
income include equity investments which the Group
intends to hold for the foreseeable future and has
irrevocably elected to classify them as such upon initial
recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected
credit losses on financial assets which are either
measured at amortised cost or fair value through other
comprehensive income. The measurement of the loss
allowance depends upon the Group's assessment at the
end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since
initial recognition, based on reasonable and supportable
information that is available, without undue cost or effort
to obtain.
Where there has not been a significant increase in
exposure to credit risk since initial recognition, a
12-month expected credit loss allowance is estimated.
This represents a portion of the asset's lifetime expected
credit losses that is attributable to a default event
that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the
loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability
weighted present value of anticipated cash shortfalls
over the life of the instrument discounted at the original
effective interest rate.
RIGHT-OF-USE ASSETS
A right-of-use asset is recognised at the commencement
date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease
liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any
lease incentives received, any initial direct costs incurred
and included in an estimate of costs expected to be
incurred for dismantling and removing the underlying
asset and restoring the site or asset.
Right-of-use assets are depreciated on a straight-
line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is the
shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a
right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and
leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
INTANGIBLE ASSETS
Expenditure on research activities is recognised as an
expense in the period in which it is incurred. Where
no internally-generated intangible can be recognised,
development expenditure is recognised in profit or loss in
the period in which it is incurred.
An internally-generated intangible asset arising from
development (or from the development phase of an
internal project) is recognised if, and only if, all of the
following have been demonstrated:
• The technical feasibility of completing the intangible
asset so that it will be available for use or sale;
• The intention to complete the intangible asset and
use or sell it;
• The ability to use or sell the intangible asset; and
• How the intangible asset will generate probable future
economic benefits.
Amortisation is recognised so as to write off the cost
of internally-generated assets over their useful lives,
using the straight-line method. The estimated useful
lives and amortisation method are reviewed at the end
of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis. The
following useful lives are used in the calculation of
amortisation:
• Software 3.33 years
• Trademarks and other intangibles 8 years
LEASE LIABILITIES
A lease liability is recognised at the commencement
date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made
over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, the consolidated entity's incremental
borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate,
amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the
exercise of the option is reasonably certain to occur, and
any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using
the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future
lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a
purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset is fully
written down.
45
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EMPLOYEE BENEFITS
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date
are measured at the amounts expected to be paid when
the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not
expected to be settled within 12 months of the reporting
date are measured at the present value of expected
future payments to be made in respect of services
provided by employees up to the reporting date using
the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of
employee departures and periods of service. Expected
future payments are discounted using market yields at
the reporting date on high quality corporate bonds with
terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Equity-settled share-based payments to employees and
others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details
regarding the determination of the fair value of equity-
settled share-based transactions are set out in the notes
to the accounts.
Equity-settled transactions are awards of shares, or
options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled
transactions are awards of cash for the exchange of
services, where the amount of cash is determined by
reference to the share price.
The costs of equity-settled transactions are measured
at fair value on grant date. Fair value is independently
determined using the Black-Scholes option pricing model
that takes into account the exercise price, the term of
the option, the impact of dilution, the share price at grant
date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest
rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group
receives the services that entitle the employees to
receive payment. No account is taken of any other
vesting conditions.
The costs of equity-settled transactions are recognised
as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or
loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are
likely to vest and the expired portion of the vesting period.
The amount recognised in profit or loss for the period is
the cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at
each reporting date until vested, determined by applying
the Black-Scholes option pricing model, taking into
consideration the terms and conditions on which the
award was granted. The cumulative charge to profit or
loss until settlement of the liability is calculated as follows:
• During the vesting period, the liability at each reporting
date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
• From the end of the vesting period until settlement of
the award, the liability is the full fair value of the liability
at the reporting date.
All changes in the liability are recognised in profit or loss.
The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
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 increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the
Group or employee, the failure to satisfy the condition
is treated as a cancellation. If the condition is not within
the control of the Group or employee and is not satisfied
during the vesting period, any remaining expense for the
award is recognised over the remaining vesting period,
unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it
has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement
award is substituted for the cancelled award, the
cancelled and new award is treated as if they were
a modification.
GOODS AND SERVICES TAX (‘GST’) AND
OTHER SIMILAR TAXES
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of GST.
The net amount of GST recoverable from, or payable to,
the ATO is included as part of receivables or payables in
the statement of financial position.
CURRENT TAX
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from profit before tax as
reported in the statement of profit or loss and other
comprehensive income because of items of income or
expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group’s
current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the
reporting period.
Current tax liabilities are therefore measured at the
amounts expected to be paid to / recovered from the
relevant taxation authority.
DEFERRED TAX
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary
differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it
is probable that taxable profits will be available against
which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from the
initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
NEW ACCOUNTING STANDARDS AND
INTERPRETATIONS NOT YET MANDATORY OR
EARLY ADOPTED
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the
consolidated entity for the annual reporting period ended
30 June 2020. There are no standards that are not yet
effective and that are expected to have a material impact
on the entity in the current or future reporting periods and
on foreseeable future transactions.
47
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
NOTE 3. IMPACT ON THE ADOPTION OF AASB 16
In the application of the Group’s accounting policies, which are described in Note 1, the directors are required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period. Alternatively, if the
revision affects both current and future periods, the revision to the accounting estimate is recognised in the period of
the revision as well as in future periods.
CORONAVIRUS (COVID-19) PANDEMIC
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the consolidated entity based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated
entity operates. Other than as addressed in note 4, there does not currently appear to be either any significant impact
upon the financial statements or any significant uncertainties with respect to events or conditions which may impact
the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19)
pandemic.
SHARE-BASED PAYMENT TRANSACTIONS
The Group 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 model
taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets
and liabilities within the next annual reporting period but may impact profit or loss and equity.
ESTIMATION OF USEFUL LIVES OF ASSETS
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
RECOVERY OF DEFERRED TAX ASSETS
Change in accounting policy
The consolidated entity has adopted AASB 16 using the modified retrospective approach where the cumulative effect
of adopting the standard is recognised in opening retained earnings at 1 July 2019, with no restatement of prior year
comparative information. As a result of adopting AASB 16, the consolidated entity has changed its accounting policies
which are included in note 1. Practical expedients applied on transition and the impact on the adoption of AASB 16
are detailed below.
Practical expedients applied on transition
In applying AASB 16 for the first time, the consolidated entity has used the following practical expedients on transition:
• elected not to reassess whether a contract is, or contains a lease at the date of the initial application. Instead for
contracts entered into before the transition date, the consolidated entity relied on assessments made applying
AASB 117 Leases and Interpretation 4: Determining whether an Arrangement contains a lease;
•
•
•
the accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short
term leases;
reliance on previous assessments on whether leases are onerous;
the use of hindsight in determining the lease term where the contract contains options to extend or terminate the
lease, and
•
the use of a single discount rate to a portfolio of leases with similar characteristics.
Impact of adoption
On the date of initial application, the consolidated entity recognised lease liabilities in relation to leases which has
previously been classified as 'operating leases' under the principals of AASB 117 Leases. The lease liabilities are
measured at the present value of minimum lease payments for the lease term, discounted using a weighted average
incremental borrowing rate of 10.0%.
The associated right-of-use assets for property and equipment leases were measured on a retrospective basis as if the
new rules had always been applied.
Reconciliation of lease liabilities from non-cancellable operating lease commitments at 30 June 2020 to lease liabilities
recognised is shown below:
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
RECONCILIATION OF LEASE LIABILITIES:
Non-cancellable operating leases at 30 June 2020
Discounted using leasee's incremental borrowing rate of at the date of initial application
Short-term leases not recognised as at a right-of-use asset
Lease liabilities recognised on 1 July 2019
CONSOLIDATED
2020 $
264,054
(5,239)
(194,157)
64,658
The change in accounting policy affected the following items in the Statement of Financial Position as on 1 July 2019.
Right-of-use assets
Lease Liabilities
The net impact on accumulated losses on 1 July 2019 was an increase of $4,850.
1 JULY 2019
30 JUNE 2020
$
59,807
64,657
$
19,936
22,634
49
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. COVID-19 IMPACT
NOTE 7. REVENUE
Given the uncertainty of the duration and impact of COVID-19 pandemic, IXUP has taken steps to reduce cash
outflows and extend its cash operating runway.
Further specific actions taken include:
• Staff hours and fixed remuneration reduced with focus on retaining jobs for long term and on retaining core sales
and technical support functions to focus on closing commercialisation opportunities;
• Successful application for Federal Government's Job Keeper Wage Subsidy for all eligible staff with eligible roles of
staff not critical in pursuing commercialisation opportunities reduced in hours and fixed remuneration to the amount
afforded by the JobKeeper Wage Subsidy;
• Reduction in costs relating to essential services and infrastructure costs;
• Temporary freeze on all travel and entertainment; and
• Temporary freeze on all external marketing expenditure, including PR and conferences.
Also subsequent to the year end, the Company completed a pro rata non-renounceable 1-for-1 Entitlement Offer,
raising approximately $2.228 million (before costs). As part of the noted Entitlement Offer, if the shortfall is less than
50,000,000 Shares, the underwriter has a top-up right to ensure that the total number of Shares to be allocated by it,
including any shortfall, is not less than 50,000,000 Shares, subject to shareholder approval. Given the strong interest
in the Entitlement Offer and the ongoing economic uncertainty created by the COVID-19 pandemic, the Company
believes it is prudent, and has therefore agreed with Cygnet, that the total number of Shares to be allocated by Cygnet
pursuant to the Top-Up Right will be increased to 150,000,000 Shares at $0.01 per Share to raise up to $1.5 million
(before costs), subject to shareholder approval (Placement).
These actions reflect the continued focus of the Board and Management on preserving cash and long-term shareholder
value while maintaining focus on service of existing and prospective customer and conversion of IXUP's sales pipeline. The
Company will continue to closely monitor developments related to COVID-19, and take appropriate actions as required.
NOTE 5. OPERATING SEGMENTS
Identification of reportable operating segments
The Group currently operates in one operating segment being the software industry. The Group continues to consider
new projects in this sector and others by way of acquisition or investment. The Group currently operates in one
geographic segment that being Australia.
The Group determines and presents segments based on information provided by the Board of directors who
collectively are the Group's Chief Operating Decision Maker. An operating segment is a component of the Group that
engages in business activities from which it may earn revenues and incur expenses.
NOTE 6. OTHER INCOME
Net foreign exchange gain
Government grants
ATO COVID-19 Cashflow Boost
ATO COVID-19 JobKeeper Subsidy
Other income
CONSOLIDATED
2020
$
(2)
42,654
50,000
120,000
212,652
2019
$
–
–
–
–
–
Software revenue
CONSOLIDATED
2020
$
2019
$
88,500
158,500
51
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. EXPENSES
NOTE 9. INCOME TAX EXPENSE
CONSOLIDATED
2020
$
2019
$
CONSOLIDATED
2020
$
2019
$
2,741
59,608
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
(3,774,992)
(1,038,123)
(6,588,667)
(1,811,883)
NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE
AND TAX AT THE STATUTORY RATE
Loss before income tax includes the following specific expenses:
COST OF SALES
Cost of sales
DEPRECIATION
Depreciation
ADMINISTRATIVE COSTS
Professional adviser and legal costs
Consulting costs paid to entities related to the directors
Recruitment costs
Advertising and promotion
Travel and accommodation
Software licenses
Bad debt expense
Other
EMPLOYEE BENEFITS EXPENSE
Wages and salaries
Superannuation costs
Other employee benefits
OCCUPANCY COSTS
Rent (short term lease payments)
Other occupancy costs
FINANCE COSTS
Interest costs
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
SHARE-BASED PAYMENTS EXPENSE
Share-based payments expense
74,892
571,409
683,988
50,432
22,667
139,543
105,099
63,730
1,000
455,221
1,521,680
675,532
319,349
108,882
255,546
173,257
21,790
–
435,456
1,989,812
2,573,343
3,527,760
242,499
(5,933)
297,829
438,774
2,809,909
4,264,363
90,042
35,583
125,625
4,925
4,574
9,499
174,343
44,103
218,446
6,706
–
6,706
Tax effect amounts which are not deductible/(taxable) in
calculating taxable income:
Share-based payments
Non assessable Research & Development refund
Current year temporary differences not recognised
Income tax expense
132,378
(256,515)
127,989
(195,937)
(1,162,260)
(1,879,831)
1,162,260
1,879,831
–
–
CONSOLIDATED
2020
$
2019
$
TAX LOSSES NOT RECOGNISED
Unused tax losses for which no deferred tax asset has been recognised
17,694,490
14,570,752
Potential tax benefit @ 27.5%
4,865,985
4,006,957
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test
is passed.
The tax rate used for the reconciliation above is the relevant corporate tax rate payable by the Company on taxable
profits under Australian tax law.
DEFERRED TAX ASSETS AND LIABILITIES
DEFERRED TAX ASSETS NOT RECOGNISED
Deferred tax assets not recognised comprises temporary differences attributable to:
Employee benefits
Entertainment
Depreciation
Payroll accrual
481,358
465,416
Tax losses carried forward
Deferred tax assets used to offset deferred tax liabilities
Deferred tax assets not brought into account
Total deferred tax assets recognised
CONSOLIDATED
2020
$
2019
$
(17,221)
2,750
141,625
(11,976)
(6,596)
9,124
2,219
145,846
427
(33,738)
4,865,985
4,006,957
(4,974,567)
(4,130,835)
–
–
53
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9. INCOME TAX EXPENSE (CONTINUED)
NOTE 13. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT
DEFERRED TAX LIABILITY
Accrued expenses
Deferred tax assets used to offset deferred tax liabilities
CONSOLIDATED
2020
$
2019
$
(23,986)
23,986
–
(42,441)
42,441
–
Deferred tax assets have not been recognised in respect of the above items because it is not possible at this stage of
development to explicitly confirm the probability that future taxable profit will be available against which the Company
can utilise these benefits.
NOTE 10. CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits
Term deposits have maturity dates of less than 3 months.
NOTE 11. CURRENT ASSETS – OTHER RECEIVABLES
Trade receivables
Other receivables
GST
CONSOLIDATED
2020
$
407,450
1,129,915
1,537,365
2019
$
2,005,194
–
2,005,194
CONSOLIDATED
2020
$
2019
$
27,600
61,856
19,944
109,400
1,100
–
34,084
35,184
Allowance for expected credit losses
The consolidated entity has recognised a loss of $nil (2019: $nil) in profit or loss in respect of the expected credit losses
for the year ended 30 June 2020.
NOTE 12. CURRENT ASSETS – OTHER FINANCIAL ASSETS
Term deposits
Term deposits have maturity dates of more than 3 months but less than 12 months.
CONSOLIDATED
2020
$
2019
$
–
250,000
Leasehold improvements – at directors' valuation
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Office equipment – at cost
Less: Accumulated depreciation
CONSOLIDATED
2020
$
2019
$
73,269
(58,695)
14,574
74,200
(70,332)
3,868
75,922
(75,922)
–
18,442
73,269
(29,388)
43,881
68,253
(64,619)
3,634
75,922
(75,922)
–
47,515
RECONCILIATIONS
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
CONSOLIDATED
Balance at 1 July 2018
Additions
Depreciation expense
Balance at 30 June 2019
Additions
Depreciation expense
Balance at 30 June 2019
LEASEHOLD
IMPROVEMENTS
COMPUTER
EQUIPMENT
OFFICE
EQUIPMENT
$
73,189
–
(29,308)
43,881
–
(29,307)
14,574
$
–
20,088
(16,454)
3,634
5,947
(5,713)
3,868
$
–
4,625
(4,625)
–
–
–
–
TOTAL
$
73,189
24,713
(50,387)
47,515
5,947
(35,020)
18,442
55
NOTES TO THE FINANCIAL STATEMENTS
NOTE 14. NON-CURRENT ASSETS – RIGHT-OF-USE ASSETS
Right-of-use asset
Less: Accumulated depreciation
CONSOLIDATED
2020
$
2019
$
119,615
(99,679)
19,936
–
–
–
The consolidated entity leases two buildings for its offices, with lease terms of 3 years. Both leases commenced on
1 January 2018 and terminate on 31 December 2020 with an option to renew for a period of 3 years. In December
2019 the Company gave notice that it would cancel the lease of one of its offices early at the end of February 2020.
This is deemed to be a short-term lease and has been expensed as incurred and not capitalised as right-of-use asset.
Depreciation for the year for the right-of-use asset was $39,872.
NOTE 15. NON-CURRENT ASSETS – INTANGIBLES
Development – at cost
Less: Accumulated amortisation
RECONCILIATIONS
CONSOLIDATED
2020
$
2019
$
1,731,909
1,731,909
(1,731,909)
(1,731,909)
–
–
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
CONSOLIDATED
$
$
DEVELOPMENT
INTELLECTUAL
PROPERTY
TOTAL
$
Balance at 1 July 2018
Amortisation expense
Balance at 30 June 2019
Balance at 30 June 2020
479,185
(479,185)
41,059
(41,059)
520,244
(520,244)
_
_
_
_
_
_
The Company reviews its intangible assets for impairment when events or changes in circumstances indicate the
carrying value may not be recoverable.
As at 30 June 2020, the gross carrying value of Developed Software equated to $1,731,909 (2019;$1,731,909). This
asset was originally capitalised at this gross value with effect September 2015 and is being depreciated on a straight-line
basis at 30% per annum.
Accumulated depreciation of this software totalled $1,731,909 (2019; $1,731,909), giving net written down value of $nil
(2019:nil) at financial year end.
EVOLVING ATTITUDES ON PRIVACY
59% of Australians had a problem
with how their data was used
over the past year.*
*Australian Community Attitudes to
Privacy Survey (ACAPS) 2020
57
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. CURRENT LIABILITIES –
TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
PAYG withholding payable
Superannuation payable
Income in advance
Wages payable
Other payables
CONSOLIDATED
2020
$
2019
$
106,111
132,228
45,075
33,202
34,830
–
73,487
–
292,705
92,406
75,926
78,379
37,500
113,159
13,287
542,885
Refer to note 24 for further information on financial instruments.
The average credit period allowed by trade creditors to the Group which are not related parties is approximately 24 days.
NOTE 20. EQUITY – ISSUED CAPITAL
CONSOLIDATED
2020
SHARES
2019
SHARES
2020
$
2019
$
Ordinary shares – fully paid
222,840,158
158,443,751
18,611,718
16,038,325
MOVEMENTS IN ORDINARY SHARE CAPITAL
DETAILS
Balance
Balance
Issue of shares
Issue of shares
Issue of unlisted options to Cygnet Capital as fees
Issue of shares
Issue of shares
Share issue costs
Balance
DATE
SHARES
$
1 July 2018
30 June 2019
158,443,751
16,038,325
158,443,751
16,038,325
26 November 2019
6 December 2019
39,490,590
23,886,845
1,974,530
1,194,342
14 February 2020
27 April 2020
–
(342,400)
809,508
209,464
56,156
10,003
–
(319,238)
30 June 2020
222,840,158
18,611,718
NOTE 17. CURRENT LIABILITIES – LEASE LIABILITIES
Options (Refer to note 34 for further information on Options)
Lease liability
CONSOLIDATED
2020
$
2019
$
22,634
–
Refer to note 24 for further information on financial instruments.
This balance relates to the application of accounting standard AASB 16 in effect from 1 July 2019.
Refer to note 14 for details.
NOTE 18. CURRENT LIABILITIES – PROVISIONS
Annual leave
NOTE 19. NON-CURRENT LIABILITIES – PROVISIONS
Long service leave
CONSOLIDATED
2020
$
2019
$
148,720
263,600
CONSOLIDATED
2020
$
2019
$
52,257
–
DETAILS
Balance
Issue of unlisted options
DATE
OPTIONS
1 July 2018
20 December 2018
Issue of plan options to employees and directors
10 April 2019
Expired and/or cancelled during the year
Balance
30 June 2019
Issue of plan options to employees and directors
2 July 2019
Issue of unlisted options to Cygnet Capital
9 December 2019
Cancelled due to forfeiture during the period
63,496,470
5,685,000
1,900,000
(5,163,334)
65,918,136
1,000,000
10,000,000
(1,716,667)
Balance
30 June 2020
75,201,469
Performance Rights (Refer to note 34 for further information on Performance Rights)
DETAILS
Balance
DATE
1 July 2018
Expired and/or cancelled during the period
Issue of performance rights to directors
20 December 2018
Issue of performance rights to employees
20 December 2018
Balance
Issue of performance rights to directors
Cancelled due to forfeiture during the period
Balance
30 June 2019
2 July 2019
30 June 2020
PERFORMANCE
RIGHTS
5,250,000
(3,000,000)
750,000
1,000,000
4,000,000
12,000,000
(1,250,000)
14,750,000
59
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. EQUITY – ISSUED CAPITAL (CONTINUED)
NOTE 21. EQUITY – RESERVES (CONTINUED)
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
CAPITAL RISK MANAGEMENT
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern,
so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
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 consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current Company's share price at the time of the investment. The consolidated entity is not
actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in
order to maximise synergies.
NOTE 21. EQUITY – RESERVES
Equity-settled reserves
Options reserve
EQUITY-SETTLED RESERVE
CONSOLIDATED
2020
$
1,839,662
6,602,355
8,442,017
2019
$
1,839,662
6,000,731
7,840,393
On 19 October 2016, 11,426,470 warrants were issued to Asia Principal Capital Group Pte Ltd as part of a restructure of the
IXUP Group. Subject to the terms of the warrant deed, the warrants entitled the holder to subscribe for the number of ordinary
shares in the Company equal to 15% of the fully diluted outstanding capital of the Company. These warrants were cancelled
and equivalent options were issued in their place on 1 September 2017.
To determine the fair value of the warrants, the IXUP Group engaged the support of a professional adviser, who estimated the
fair value of the warrants using a widely accepted valuation methodology and assumptions based on historical data for similar
publicly-listed securities.
OPTIONS RESERVE
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration
as part of their compensation for services.
MOVEMENTS IN RESERVES
Movements in each class of reserve during the current and previous financial year are set out below:
CONSOLIDATED
Balance at 1 July 2018
Share based payments
Transfer relating to options and rights expired and/or
cancelled
EQUITY-SETTLED
RESERVE
$
OPTIONS
RESERVE
$
TOTAL
$
1,839,662
5,960,330
7,799,992
–
–
465,416
(425,015)
465,416
(425,015)
Balance at 30 June 2019
1,839,662
6,000,731
7,840,393
Issue of options as part of capital raising
Share based payments
Transfer relating to options and rights expired and/or
cancelled
–
–
–
342,400
481,358
342,400
481,358
(222,134)
(222,134)
Balance at 30 June 2020
1,839,662
6,602,355
8,442,017
NOTE 22. EQUITY – ACCUMULATED LOSSES
CONSOLIDATED
2020
$
2019
$
Accumulated losses at the beginning of the financial year
(22,297,960)
(16,134,308)
Adjustment for change in accounting policy
(4,850)
–
Accumulated losses at the beginning of the financial year – restated
(22,302,810)
(16,134,308)
Loss after income tax expense for the year
(3,774,992)
(6,588,667)
Transfer relating to options and rights expired and/or cancelled
222,134
425,015
Accumulated losses at the end of the financial year
(25,855,668)
(22,297,960)
NOTE 23. EQUITY – DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous financial year.
NOTE 24. FINANCIAL INSTRUMENTS
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group’s finance function provides services to the business, co-ordinates access to banking facilities, and monitors
and manages the financial risks relating to the operations of the Group in accordance with the decisions of the directors.
In the reporting period, the Group was not exposed to material financial risks of changes in foreign currency exchange
rates. Accordingly, the Group did not employ derivative financial instruments to hedge currency risk exposures.
61
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. (CONTINUED) FINANCIAL INSTRUMENTS
NOTE 24. (CONTINUED) FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
Cash and cash equivalents
Other receivables and other assets
Other financial assets
FINANCIAL LIABILITIES
Trade and other payables
Lease Liabilities
MARKET RISK
Interest rate risk
Interest rate risk is the risk that the future cash flows of
a financial instrument will fluctuate because of changes
in market interest rates. The group's exposure to the
risk of changes in market interest rates relates primarily
to the group's cash held on term deposit. A sensitivity
analysis was performed and the assessment determined
that a movement in interest rates is not considered to be
material to the group's profit and loss.
CONSOLIDATED
2020
$
2019
$
1,537,365
2,005,194
138,640
–
84,534
250,000
1,676,005
2,339,728
292,705
22,634
315,339
542,885
–
542,885
WEIGHTED
AVERAGE
INTEREST RATE
1 YEAR OR
LESS
BETWEEN 1
AND 2 YEARS
BETWEEN 2
AND 5 YEARS
OVER 5
YEARS
REMAINING
CONTRACTUAL
MATURITIES
CONSOLIDATED – 2020
%
$
$
$
$
$
NON-DERIVATIVES
Non-interest bearing
Trade payables
Other payables
Interest-bearing –
variable
–
–
106,111
186,594
Lease liability
10.00%
Total non-derivatives
22,634
315,339
–
–
–
–
–
–
–
–
customers of the consolidated entity based on recent
sales experience, historical collection rates and forward-
looking information that is available. The consolidated
entity has assessed the expected credit losses to trade
receivables and concluded that no allowance is required.
Generally, trade receivables are written off when there is
no reasonable expectation of recovery. Indicators of this
include the failure of a debtor to engage in a repayment
plan, no active enforcement activity and a failure to make
contractual payments for a period greater than 1 year.
WEIGHTED
AVERAGE
INTEREST
RATE
1 YEAR OR
LESS
BETWEEN 1
AND 2 YEARS
BETWEEN 2
AND 5 YEARS
OVER 5
YEARS
CONSOLIDATED – 2019
%
$
NON-DERIVATIVES
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
–
–
–
132,228
410,657
542,885
$
–
–
–
$
–
–
–
–
–
–
–
$
–
–
–
106,111
186,594
22,634
315,339
REMAINING
CONTRACTUAL
MATURITIES
$
132,228
410,657
542,885
Credit risk
Liquidity risk
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy
of only dealing with creditworthy counterparties and
obtaining sufficient collateral, where appropriate, as
a means of mitigating the risk of financial loss from
defaults.
The Group does not have significant credit risk exposure
to any single counterparty at the reporting date.
The credit risk on liquid cash funds is limited because
the counterparties are banks with high credit-ratings
assigned by international credit-rating agencies. The
Group is not exposed to credit risk in relation to financial
guarantees given to banks, because it has no such
guarantees outstanding at the reporting date.
The consolidated entity has adopted a lifetime expected
loss allowance in estimating expected credit losses to
trade receivables through the use of a provisions matrix
using fixed rates of credit loss provisioning. These
provisions are considered representative across all
Ultimate responsibility for liquidity risk management rests
with the board of directors, which periodically reviews
the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages
liquidity risk by maintaining reserves and banking
facilities, by continuously monitoring forecast and actual
cash flows, and by matching the maturity profiles of
financial assets and liabilities where possible.
Remaining contractual maturities
The following tables detail the consolidated entity's
remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the
undiscounted cash flows of financial liabilities based
on the earliest date on which the financial liabilities are
required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their
carrying amount in the statement of financial position.
The cash flows in the maturity analysis above are not
expected to occur significantly earlier than contractually
disclosed above.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The directors consider that the carrying amounts of
financial assets and financial liabilities recognised in the
consolidated financial statements approximate their fair
values.
CAPITAL MANAGEMENT
The Group manages its capital to ensure that entities in
the Group will be able to continue as going concerns
while maximising the return to stakeholders. The capital
structure of the Group consists of net cash (there were no
borrowings at year end offset by cash as detailed in note
10 and note 12) and equity (detailed in note 20).
As at reporting date, the Group had net assets of
$1,198,067 (2019: $1,580,758) and issued capital of
$18,611,718 (2019:16,038,325).
63
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. KEY MANAGEMENT PERSONNEL DISCLOSURES
NOTE 27. RELATED PARTY TRANSACTIONS
DIRECTORS
The following persons were directors of IXUP Limited during the financial year:
Grant Paterson
Chairman and Non-Executive Director
Dean Joscelyne
Executive Director
Freya Smith
Peter Leihn
Scott Wilkie
Non-Executive Director (Appointed 2 July 2019)
CEO and Managing Director (Appointed 2 July 2019 and resigned 31 July 2020)
Non-Executive Director (Appointed 2 July 2019 and resigned 31 July 2020)
Cliff Rosenberg
Non-Executive Director (Resigned 2 July 2019)
COMPENSATION
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
CONSOLIDATED
2020
$
661,732
58,592
349,787
2019
$
1,007,534
75,698
175,160
1,070,111
1,258,392
NOTE 26. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by William Buck Audit (WA) Pty Ltd, the
auditor of the Company:
AUDIT SERVICES – WILLIAM BUCK AUDIT (WA) PTY LTD
Audit or review of the financial statements
33,800
36,000
CONSOLIDATED
2019
2020
$
PARENT ENTITY
IXUP Limited is the parent entity.
SUBSIDIARIES
Interests in subsidiaries are set out in note 29.
KEY MANAGEMENT PERSONNEL
Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the directors'
report.
TRANSACTIONS WITH RELATED PARTIES
Mr Dean Joscelyne is the ultimate controlling party of YDCJ Pty Ltd atf YDCJ Unit Trust and Destria Pty Ltd.
Mr Cliff Rosenberg is the beneficial owner of Rosenberg Trading Pty Ltd.
Mr Tim Ebbeck is the beneficial owner of Ebbeck Family Trust t/as Ebbeck TIG Consulting.
Mr Grant Paterson is a partner in GPT Legal
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note. The following transactions occurred with related parties and are
GST inclusive:
Payment for goods and services:
Payment to Rosenberg Trading Pty Ltd for consulting services
Payment to Ebbeck Family Trust t/as Ebbeck TIG Consulting for consulting
services
Payment to YDCJ Pty Ltd atf YDCJ Unit Trust as landlord
for company premises
Payment to Mr Dean Joscelyne as landlord for company
premise and office services
Payment to GPT Legal for Director fees (2019: from date
of appointment of Mr Paterson)
Receivable from and payable to related parties:
The following balances are outstanding at the reporting date in relation to
transactions with related parties
CONSOLIDATED
2020
$
2019
$
–
–
66,266
102,920
111,664
159,675
67,514
62,397
55,475
41,800
CONSOLIDATED
2020
$
2019
$
Amounts owed to related parties:
YDCJ Pty Ltd atf YDCJ Unit Trust
Mr Dean Joscelyne
Rosenberg Trading Pty Ltd
Loans to/from related parties
–
73,487
–
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
13,735
5,481
11,000
65
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 28. PARENT ENTITY INFORMATION
NOTE 29. INTERESTS IN SUBSIDIARIES
Set out below is the supplementary information about the parent entity.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries in
accordance with the accounting policy described in note 1:
Loss after income tax
Total comprehensive loss
STATEMENT OF FINANCIAL POSITION
Total current assets
Total assets
Total current liabilities
Total liabilities
EQUITY
Issued capital
Equity-settled reserves
Options reserve
Accumulated losses
Total equity
PARENT
2020
$
(1,913,977)
(1,913,977)
2019
$
(1,506,439)
(1,506,439)
PARENT
2020
$
2019
$
1,562,787
2,308,933
10,307,375
11,053,521
(13,255,899)
(11,026,581)
NAME
PRINCIPAL ACTIVITIES
PRINCIPAL PLACE
OF BUSINESS /
COUNTRY OF
INCORPORATION
IXUP Operations Pty Ltd
Software development Australia
IXUP IP Pty Ltd
Software patents
Australia
PARENT
OWNERSHIP
INTEREST
OWNERSHIP
INTEREST
2020
%
100%
100%
2019
%
100%
100%
NOTE 30. EVENTS AFTER THE REPORTING PERIOD
CAPITAL RAISE
On 24 June 2020 the Company announced a 1-for-1 non-renounceable, pro rata rights issue to raise $2,228,401 (before
costs) via the issue of 222,840,158 fully paid ordinary shares at an issue price of $0.01 per Share. The Entitlement Offer
was fully underwritten by Cygnet Capital Pty Ltd (Cygnet).
(13,255,899)
(11,026,581)
Subsequent to the year end, the Company completed the above mentioned pro rata non-renounceable 1-for-1
Entitlement Offer, raising approximately $2.228 million (before costs).
18,611,719
16,038,326
1,839,662
6,602,355
1,839,662
6,000,731
(3,490,462)
(1,798,617)
23,563,274
22,080,102
GUARANTEES ENTERED INTO BY THE PARENT ENTITY IN RELATION TO THE DEBTS OF ITS SUBSIDIARIES
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
CONTINGENT LIABILITIES
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
CAPITAL COMMITMENTS - PROPERTY, PLANT AND EQUIPMENT
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
As part of the noted Entitlement Offer, if the shortfall is less than 50,000,000 Shares, the underwriter has a top-up
right to ensure that the total number of Shares to be allocated by it, including any shortfall, is not less than 50,000,000
Shares, subject to shareholder approval.
Given the strong interest in the Entitlement Offer and the ongoing economic uncertainty created by the COVID-19
pandemic, the Company believes it is prudent, and has therefore agreed with Cygnet, that the total number of Shares
to be allocated by Cygnet pursuant to the Top-Up Right will be increased to 150,000,000 Shares at $0.01 per Share to
raise up to $1.5 million (before costs), subject to shareholder approval (Placement).
BOARD APPOINTMENTS
Subsequent to the end of the financial year, on 31 July 2020 Mr Peter Leihn resigned as CEO and Managing Director
and Mr Scott Wilkie resigned as Non-Executive Director.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect
the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future
financial years.
67
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 31. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED
IN OPERATING ACTIVITIES
NOTE 34. SHARE-BASED PAYMENTS AND PERFORMANCE RIGHTS
Loss after income tax expense for the year
(3,774,992)
(6,588,667)
CONSOLIDATED
2020
$
2019
$
ADJUSTMENTS FOR:
Depreciation and amortisation
Share-based payments
CHANGE IN OPERATING ASSETS AND LIABILITIES:
(Increase)/decrease in other receivables and other assets
(Increase)/decrease in Tax R&D benefit receivable
Decrease in trade and other payables
(Decrease)/Increase in provisions
74,892
481,358
571,409
465,416
(54,108)
–
(242,242)
(62,623)
123,768
162,632
(46,194)
33,178
NET CASH USED IN OPERATING ACTIVITIES
(3,577,715)
(5,278,458)
NOTE 32. NON-CASH INVESTING AND FINANCING ACTIVITIES
During the current year, the Group entered into the following non-cash investing and financing activities, which are
not reflected in the consolidated statement of cash flows:
(i) The Company issued 10,000,000 Unlisted Options to Cygnet Capital as part of their fees for providing underwriting
and offer management services.
During the year ended 30 June 2019, the Group did not enter into any non-cash investing and financing activities.
NOTE 33. EARNINGS PER SHARE
CONSOLIDATED
2020
$
2019
$
Loss after income tax attributable to the shareholders of IXUP Limited
(3,774,992)
(6,588,667)
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of ordinary shares used in calculating diluted
earnings per share
NON-DILUTIVE SECURITIES
CENTS
CENTS
(1.93)
(1.93)
(4.16)
(4.16)
NUMBER
NUMBER
195,884,647
158,443,751
195,884,647
158,443,751
During the year ended 30 June 2017 IXUP issued 7,070,000 Plan Options to employees. Vesting occurs over 3 years
in equal instalments. The Plan Options have been valued using the Black Scholes Model with independent advice. The
calculated Black Scholes Valuation is $0.134 per Plan Option which is $403,513 recognised during the year ended 30
June 2018 as part of Share-based payments.
In September 2017 IXUP issued 30,600,000 Unlisted Options to Directors and advisory board members. The Unlisted
Options have vested and are escrowed. The Unlisted Options have been valued using the Black Scholes Model with
independent advice. The calculated Black Scholes Valuation is $0.106 per Unlisted Option which equates to $3,243,600
recognised during the year ended 30 June 2018 as part of Share-based payments.
In November 2017 IXUP issued 15,000,000 Unlisted Options to Cygnet Capital. The Unlisted Options have vested and
are escrowed. The Unlisted Options have been valued using the Black Scholes Model with independent advice. The
calculated Black Scholes Valuation is $0.139 per Unlisted Option which equates to $2,085,000 and this has been offset
against Issued Capital as these options relate to the capital raising.
In September 2017 IXUP converted warrants held by Asia Principal Capital Limited to 10,826,470 Unlisted Options. The
strike price of each option is $0.25 and term is 5 years from the grant date. The remeasurement of the fair value of the
unlisted options after the conversion was not taken into account in accordance with AASB 2 Share-based payments as it
resulted in a decrease in the fair value of the equity instruments granted.
In September 2017 IXUP issued 5,250,000 Performance Rights to directors and advisory board members. The rights
have been valued with reference to market price, adjusted for probability of vesting between 40% to 90% and an
expense of $291,667 had been recognised during the year ended 30 June 2018 as part of Share-based payments.
Vesting occurs in equal instalments subject to revenue targets and tenure conditions being achieved.
During the year ended 30 June 2019 IXUP issued 5,685,000 Plan Options to employees. Vesting occurs over 3 years in
equal instalments. The Plan Options have been valued using the Black Scholes Model by the Company. The calculated
Black Scholes Valuation is $0.047 per Plan Option which is $89,417 recognised during the year ended 30 June 2019 as
part of Share-based payments.
During the year ended 30 June 2019 IXUP issued 1,900,000 Plan Options to employees. Vesting occurs over 3 years
in equal instalments. The Plan Options have been valued using the Black Scholes Model with independent advice. The
calculated Black Scholes Valuation is $0.043 per Plan Option which is $27,645 recognised during the year ended 30
June 2019 as part of Share-based payments.
During the year ended 30 June 2020 IXUP issued 1,000,000 Unlisted Options to directors with an exercise price of 25
cents and an expiry date of 14 November 2022. Vesting occurs over 3 years in equal instalments and have no other
vesting conditions besides the holder continuing to act as a director of the Company. The Unlisted Options have been
valued using the Black Scholes Model with independent advice. The calculated Black Scholes Valuation is $0.022 per
Unlisted Option which is $11,449 recognised during the year ended 30 June 2020 as part of Share-based payments.
During the year ended 30 June 2020 IXUP issued 10,000,000 Unlisted Options to Cygnet Capital with an exercise price
of 10 cents and an expiry date of 31 November 2023. The Unlisted Options have been valued using the Black Scholes
Model with independent advice. The calculated Black Scholes Valuation is $0.043 per Unlisted Option which is $342,400
recognised during the year ended 30 June 2020 as part of Capital raising costs.
During the year ended 30 June 2020 $42,892 was recognised relating to Plan Options issued in 2017 to employees and
directors.
During the year ended 30 June 2020 $62,318 was recognised relating to Plan Options issued in 2018 to employees and
directors.
During the year ended 30 June 2020 $23,833 was recognised relating to Plan Options issued in 2019 to employees and
directors.
As at reporting date, 95,201,469 Unlisted Options (which represent 95,201,469 potential Ordinary Shares) were
considered non-dilutive as they would decrease the loss per share.
69
.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 34. (CONTINUED) SHARE-BASED PAYMENTS AND PERFORMANCE RIGHTS
NOTE 34. (CONTINUED) SHARE-BASED PAYMENTS AND PERFORMANCE RIGHTS
During the year ended 30 June 2020 1,716,667 Plan Options were forfeited relating to employees and directors who left
the Company and did not meet vesting conditions.
During the year ended 30 June 2020 IXUP issued 12,000,000 Performance Rights in July 2019 to directors with nil
exercise price. The rights have been valued with reference to market price, adjusted for probability of vesting between
40% to 90% and an expense of $280,000 has been recognised during the year ended 30 June 2020 as part of Share-
based payments. Vesting occurs in equal instalments subject to revenue targets and tenure conditions being achieved.
During the year ended 30 June 2020 $58,333 was recognised relating to Performance Rights issued in 2018.
During the year ended 30 June 2020 $11,111 was recognised relating to Performance Rights issued in 2017.
During the year ended 30 June 2020 1,250,000 Performance Rights were cancelled relating to directors who left the
Company and did not meet the vesting conditions.
Set out below are summaries of options issued during the year:
2020
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
BALANCE AT
THE START OF
THE YEAR
GRANTED
EXERCISED
EXPIRED/
FORFEITED/
OTHER
BALANCE AT END
OF THE YEAR
01/09/2017
14/11/2022
$0.25
10,826,470
01/09/2017
15/11/2017
01/09/2017
15/11/2017
20/12/2018
10/04/2019
02/07/2019
09/12/2019
14/11/2022
14/11/2022
14/11/2022
14/11/2022
20/12/2023
10/04/2024
14/11/2022
30/11/2023
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.10
30,600,000
15,000,000
2,000,000
1,740,000
3,851,666
1,900,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(600,000)
(850,000)
(266,667)
–
–
10,826,470
30,600,000
15,000,000
2,000,000
1,140,000
3,001,666
1,633,333
1,000,000
10,000,000
75,201,469
–
1,000,000
– 10,000,000
65,918,136
11,000,000
–
(1,716,667)
Weighted average exercise price
$0.25
$0.11
$0.00
$0.25
$0.23
2019
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
BALANCE AT
THE START OF
THE YEAR
GRANTED
EXERCISED
EXPIRED/
FORFEITED/
OTHER
BALANCE AT END
OF THE YEAR
01/09/2017
01/09/2017
15/11/2017
01/09/2017
15/11/2017
20/12/2018
10/04/2019
14/11/2022
14/11/2022
14/11/2022
14/11/2022
14/11/2022
20/12/2023
10/04/2024
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
10,826,470
30,600,000
15,000,000
2,000,000
5,070,000
–
–
63,496,470
–
–
–
–
–
5,685,000
1,900,000
7,585,000
–
–
–
–
–
–
–
–
–
–
–
–
(3,330,000)
(1,833,334)
–
(5,163,334)
10,826,470
30,600,000
15,000,000
2,000,000
1,740,000
3,851,666
1,900,000
65,918,136
Weighted average exercise price
$0.25
$0.25
$0.00
$0.25
$0.25
Set out below are the options exercisable at the end of the financial year (released from escrow on 10 November 2019
GRANT DATE
EXPIRY DATE
01/09/2017
14/11/2022
15/11/2017
14/11/2022
2020
NUMBER
30,000,000
15,000,000
45,000,000
2019
NUMBER
30,000,000
15,000,000
45,000,000
The weighted average exercise share price during the financial year was $0.23 (2019: $0.25).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.5 years
(2019: 3.5 years).
Set out below are summaries of performance rights granted during the year:
2020
GRANT DATE
EXPIRY DATE
BALANCE AT
THE START OF
THE YEAR
GRANTED
EXERCISED
20/12/2018
14/11/2022
4,000,000
–
02/07/2019
14/11/2022
–
12,000,000
4,000,000
12,000,000
2019
GRANT DATE
EXPIRY DATE
BALANCE AT
THE START OF
THE YEAR
GRANTED
EXERCISED
20/12/2018
14/11/2022
5,250,000
1,750,000
5,250,000
1,750,000
EXPIRED/
FORFEITED/
OTHER
(1,250,000)
–
(1,250,000)
BALANCE AT END
OF THE YEAR
2,750,000
12,000,000
14,750,000
EXPIRED/
FORFEITED/
OTHER
(3,000,000)
(3,000,000)
BALANCE AT END
OF THE YEAR
4,000,000
4,000,000
–
–
–
–
–
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was
2.4 years (2019: 3.4 years)
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at
the grant date, are as follows:
GRANT DATE
EXPIRY DATE
SHARE PRICE
AT GRANT DATE
EXERCISE
PRICE
EXPECTED
VOLATILITY
DIVIDEND
YIELD
RISK-FREE
INTEREST
RATE
FAIR VALUE AT
GRANT DATE
02/07/2019
14/11/2022
09/12/2019
30/11/2023
$0.07
$0.08
$0.25
$0.10
88.00%
88.00%
–
–
0.97%
0.64%
$0.002
$0.042
* Note that the fair value has been further adjusted to reflect the probability of the options being vested for the purpose of
determining the expense recognised in the share-based payment.
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
GRANT DATE
EXPIRY DATE
SHARE PRICE
AT GRANT DATE
PROBABILITY OF
VESTING T1
VESTING T2
VESTING T3
02/07/2019
14/11/2022
$0.07
$90.00
70.00%
40.00%
71
Directors’ declaration
In the directors’ opinion:
.
•
•
•
•
the attached financial statements and notes comply
with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements;
the attached financial statements and notes comply
with International Financial Reporting Standards as
issued by the International Accounting Standards
Board as described in note 1 to the financial
statements;
the attached financial statements and notes give a
true and fair view of the consolidated entity's financial
position as at 30 June 2020 and of its performance
for the financial year ended on that date; and
there are reasonable grounds to believe that the
Company will be able to pay its debts as and when
they become due and payable.
The directors have been given the declarations required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors
made pursuant to section 295(5)(a) of the Corporations
Act 2001.
On behalf of the directors
Grant Paterson
Chairman
31 August 2020
IXUP lets you unlock the power
of big data by removing the
threat of data breaches or misuse
to reveal the insights you need
to build a better business.
73
IXUP Limited
Independent auditor’s report to members
IXUP Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of IXUP Limited (the Company and its subsidiaries
(the Group)), which comprises the consolidated statement of financial position as at 30
June 2020, 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 a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and
of its financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of the Company, would be in the same terms if
given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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.
IXUP Limited
Independent auditor’s report to members
RELATED PARTY TRANSACTIONS
Area of focus
Refer also to Remuneration Report on pages 9 to 16
and Note 27
There have been numerous related party
transactions with entities where key
management personnel of the Group have
interests and/or are directors. As, such, there is
a risk that not all related party transactions are
disclosed in the financial report or that related
party transactions have been made on non-
arm’s length basis. This could result in
insufficient information being provided in order
to enable the reader to understand the nature
and effect of the various related party
relationships and transactions.
How our audit addressed it
Our audit procedures included:
— Comparing the list of related parties
provided by the directors with internal and
external sources;
— Conducting an ASIC search for external
directorships held by the board members
and key management personnel to evaluate
whether all related party relationships and
transactions had been appropriately
identified and disclosed; and
— Assessing whether related party
transactions were conducted at arm’s length
by comparing the basis of the transactions
to external sources.
For each class of related party transaction, we
compared the financial statement disclosures
against the underlying transactions and the
accounting and Corporations Act 2001
requirements.
SHARE BASED PAYMENTS
Area of focus
Refer also to Remuneration Report on pages 9 to 16
and Note 34
The Group issued plan options and performance
rights to employees and directors under
Employee Incentive Plans which included
performance, contribution and service
conditions.
Under the Employee Incentive Plan the Group
issued 1,000,000 planned options exercisable at
$0.25 on or before 14 November 2022.
Under the Employee Incentive Plan the Group
also issued 12,000,000 performance rights
exercisable on or before 14 November 2022.
The above arrangement required significant
judgements and estimations by management,
including the following:
— The evaluation of the grant date for the
arrangement, and the evaluation of the fair
How our audit addressed it
Our audit procedures included:
— In determining the grant date, we evaluated
what was the most appropriate date based
on the terms and conditions of the share-
based payment arrangement;
— Evaluating the fair value of the share-based
payment arrangement by agreeing
assumptions to third party evidence; and
— For the specific application of the Black
Scholes model, we assessed the
experience of the company secretary who
advised the value of the arrangement. We
retested some of the assumptions used in
the model and recalculated those fair
values. We considered that the forecast
volatility applied in the model to be
appropriately reasonable and within industry
norms.
75
IXUP Limited
Independent auditor’s report to members
value of the underlying share price of the
company as at the grant date;
— The evaluation of key inputs into the Black
Scholes option pricing model, including the
significant judgement of the forecast
volatility of the share option over its exercise
period.
The results of these share-based payment
arrangements materially affect the disclosures.
Other Information
For options issued we compared the financial
statement disclosures against the underlying
transactions and the Australian Accounting
Standard requirements. We also reconciled the
vesting of the share-based payment
arrangement to disclosures made in note 34.
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
IXUP Limited
Independent auditor’s report to members
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 16 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of IXUP Limited, for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
William Buck Audit (WA) Pty Ltd
ABN 67 125 012 124
Conley Manifis
Director
Dated this 31st day of August, 2020
77
Shareholder information
The shareholder information set out below was applicable as 13 October, 2020.
DISTRIBUTION OF EQUITABLE SECURITIES
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
EQUITY SECURITY HOLDERS:
Twenty largest quoted equity security holders
NUMBER OF
HOLDERS OF
ORDINARY SHARES
NUMBER OF
HOLDERS OF
OPTIONS OVER
ORDINARY SHARES
27
124
84
325
249
809
203
–
–
–
1
32
33
–
The names of the twenty largest security holders of quoted equity securities are listed below:
ORDINARY SHARES
NUMBER HELD
% OF TOTAL
SHARES ISSUED
RANSDALE INVESTMENTS PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
JOSCELYNE INVESTMENTS PTY LTD
KEA HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HOLDREY PTY LTD
WHITE SWAN NOMINEES PTY LTD
POOLSIDE INVESTMENTS PTY LTD
BROWN BRICKS PTY LTD
AUBURY PTY LTD
TERRA CAPITAL MANAGEMENT PTY LTD
SL CURTIS PTY LTD
MAHSOR HOLDINGS PTY LTD
WHITE SWAN NOMINEES PTY LTD
VISTA GROVE INVESTMENTS PTY LTD
RACCOLTO INVESTMENTS PTY LTD
MOSCH PTY LTD
PRENDERGAST MANAGEMENT CONSULTANTS PTY LTD
MR DANIEL THOMAS O'BRIEN
MR MATTHEW LINDSAY ROBERTS
52,500,000
44,394,625
31,193,302
28,771,714
22,486,972
21,380,000
19,247,358
17,950,212
14,583,008
13,500,000
13,000,000
11,800,000
11,110,263
10,354,222
8,293,725
8,000,000
7,650,000
7,500,000
7,380,000
7,259,777
8.81
7.45
5.24
4.83
3.78
3.59
3.23
3.01
2.45
2.27
2.18
1.98
1.87
1.74
1.39
1.34
1.28
1.26
1.24
1.22
Total
358,355,178
60.16
Unquoted equity securities
There are no unquoted equity securities.
SUBSTANTIAL HOLDERS
Substantial holders in the company are set out below:
REGAL FUNDS MANAGEMENT PTY LTD
RANSDALE INVESTMENTS PTY LTD
JOSCELYNE INVESTMENTS PTY LTD
ORDINARY SHARES
NUMBER HELD
% OF TOTAL
SHARES ISSUED
DATE OF FORM 604
53,810,114
52,500,000
31,193,302
9.03
8.81
5.24
11/09/2020
20/10/2020
11/09/2020
VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
ANNUAL GENERAL MEETING
The Annual General meeting will be held on 26 November 2020.
79
NOTES
NOTES
81
LEVEL 3
5-7 ROSS ST
PARRAMATTA
NSW 2150