IXUP Limited
ABN 85 612 182 368
Annual Report - 30 June 2023
IXUP Limited
Corporate directory
30 June 2023
Directors
Dean Joscelyne (Non-Executive Director) (Retired 29 July 2022)
Freya Smith (Non-Executive Director)
Julian Babarczy (Non-Executive Chairman)
Marcus Gracey (Executive Director, Director Corporate Development & Strategy)
(Retired 2 February 2023)
Ian Penrose (Non-Executive Director)
Company secretary
David Franks
Registered office and Principal
Place of Business
Tenancy 1004, Building 10
Fleet Workshops North Sub Base Platypus
120 High Street
North Sydney, NSW, 2060
Share register
Auditor
Solicitors
Bankers
Automic Group Limited
Level 5, 126 Philip Street
Sydney NSW 2000
Telephone +61 2 8072 1400
Email: info@automic.com.au
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
Subiaco WA 6008
Thomson Geer
St George Bank Limited
Stock exchange listing
IXUP Limited shares are listed on the Australian Securities Exchange. ASX code: IXU
Website
www.ixup.com
Place of Incorporation
Victoria, Australia
1
IXUP Limited
Directors report
30 June 2023
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 2023.
Directors
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:
Dean Joscelyne
Freya Smith
Julian Babarczy
Marcus Gracey
Ian Penrose
Non-Executive Director (Retired 29 July 2022)
Non-Executive Director
Non-Executive Chairman
Executive Director, Director Corporate Development & Strategy (Retired
2 February 2023)
Non-Executive Director
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 $26,561,261 (30 June 2022: $13,662,608).
Review of operations
During the year IXUP expanded the features offered across the IXUP privacy preserving analytics platform through the
release of 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.
Highlights of the year include:
●
●
Operational changes reflect IXUP’s strategic focus on emerging compliance and integrity opportunities
Completed successful capital raise to fund ongoing commercialization efforts for IXUP’s world-leading data collaboration
technologies
Acquisition of PlayPause strengthens IXUP position in responsible gaming sector
●
● Material cost reduction program implemented across the organization to maximize cash runway and align cost base with
commercial opportunity set
Enters New product Development and Commercialization Agreement with Cipher Sports Technology Group
Further strengthens Team to drive responsible gaming initiatives
Dean Joscelyne founder and Non-Executive Director retires
●
●
●
● Marcus Gracey Director, Corporate Development & Strategy retires
●
Enters the Australian regulatory technology compliance market via acquisition of the BetStop national self exclusion
register contract
Appoints Warren Steven as Chief Operating Officer
Restructure of agreements with Cipher
●
●
Operational Changes
On 18 August 2022, the Company made operational changes to reflect IXUP’s strategic focus on emerging compliance and
integrity opportunities for its core technology within global online gaming and wagering markets.
The operational changes included, Marcus Gracey transitioning from CEO to Corporate Development & Strategy, key advisor
Tekkorp Capital and Matt Davey retained to oversee strategic opportunities and the Appointment of Kevin Vonasek as a US-
based consultant to oversee all US commercialisation opportunities.
An Advisory Committee has been formed to provide strategic, commercial and operational guidance and oversight to the
management team whilst the recruitment process of a CEO was underway. The committee includes Julian Babarczy (currently
the Non-Executive Chairman of IXUP), Ian Penrose (currently a Non-Executive Director of IXUP) and Jonathan Rosham
(Founding Director of Cygent Capital and IXUP’s Corporate Advisor).
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IXUP Limited
Directors report
30 June 2023
Capital Raise
On 29 August 2022, the Company announced that it was looking to raise $5.15m via a pro-rata non-renounceable entitlement
offer to existing eligible shareholders and supported by Directors and Management. On 30 September, the company
announced that it had received $1.82m from shareholders and $2.3m firm subscription to the shortfall from Cygnet Capital Pty
Ltd. The remaining shortfall was placed on 17 November.
This will be used to fund ongoing commercialisation efforts for its world-leading data collaboration technologies, as well as
related working capital.
Acquisition of PlayPause core intellectual property rights related assets
On 30 September 2022, the Company acquired the intellectual property rights and related assets of PlayPause as a key step
in position in the US market.
The acquisition will enhance the active discussions and negotiations with various industry stakeholders, including existing
compliance related entities, large betting operators and leading state-based regulatory bodies
Material Cost Reduction Program
On 24 October 2022, the Company announced that in response to the downturn in funding markets for earlier stage
technology companies and to better align the cost base of the Company to the expected commercialisation timeframe of key
initiatives, a Company wide cost reduction program was implemented to ensure cash burn of the business can be
appropriately managed, while protecting all key commercial opportunities.
Significant success has been achieved, with monthly cash operating costs across the organization having been reduced by
nearly one third, from c.$900,000 to c.$650,000. This has further improved to c.$550,000 by the end of the period.
Enters into New product Development & Commercialisation Agreement with Cipher Sports Technology Group
On 31 October 2022, the Company announced that it had entered into a JV agreement to jointly develop and commercialise
several new products for the worldwide gaming and wagering markets. The JVCo will be provided with a license to IXUP’s
unique and world-leading secure data collaboration platform, with Cipher contributing its product development and sales and
marketing expertise to drive rapid commercialisation efforts.
The Company and Cipher have jointly assessed the potential for multi-million dollars per annum of recurring product sales
from this initiative, subject to successful product development and commercialisation efforts. The intention is to have these
products in market by 1QCY23.
Strengthens Team to Drive Responsible Gaming Initiatives
On 8 December 2022, the Company announced that consultants Mick d’Ancona and Warren Steven with join Kevin Vonasek
to drive it’s global responsible gaming initiatives. The expansion follows several presentations and follow-up meetings
showcasing the Company’s planned technology solution at G2E in Las Vegas in October. Following positive feedback, the
Company is now in discussions with several stakeholders regarding a US pilot program which is aimed to be conducted in the
coming quarters.
Board Changes
On 29 July 2022, the company announced the retirement of founder and Non-Executive Dean Joscelyne to pursue other
opportunities. Dean will remain on to advise the board on commercial opportunities. On 2 February 2023, the company
announced the retirement of Marcus Gracey. Marcus will continue to consult to the business on strategy, business
development and corporate matters.
Acquires BetStop Operating Contract
On 1 May 2023, the company announced it had entered into a binding agreement to purchase the intellectual property and
associated government contracts of Big Village Australia Pty Ltd (Administrator Appointed) for $1.325m, plus agreed
employee entitlements. The acquisition principally comprises the contract to deliver and operate BetStop National Self
Exclusion Register.
3
IXUP Limited
Directors report
30 June 2023
At the same time the company announced a $3m convertible note offering to fund the acquisition.
On 13 May 2023, the company successfully completed the acquisition and has subsequently gone live on the 21st of August
2023.
Appoints Warren Steven as Chief Operating Officer
On 17 May 2023, the company announced it has appointed Warren Steven as its Chief Operating officer. Warren has been
instrumental in assisting with the development of IXUP’s responsible gaming technology (RegTech) strategy, both in Australia
and Internationally.
Restructures Cipher agreement
On 29 June 2023, the company announced that as a result of the recent purchase of the intellectual property and associated
government contracts of Big Village Australia Pty Ltd, the company confirmed that the Convertr joint venture announced on 1
October 2022 has been mutually agreed to be dissolved, in favour of an arms length Technology Services Agreement,
whereby Cipher will have access to the IXUP secure data collaboration technology to allow it to develop and exploit its own
products for its various markets of focus.
Financial position
The Company reported sales revenue of $1,256,161 (30 June 2022: $977,172) for the financial year ended 30 June 2023.
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 2023 had cash and term deposits of $1,642,869 (30
June 2022: $4,816,710).
During the year the Company received an Australian Tax Office R&D tax rebate of $1,104,398 (30 June 2022: $261,291).
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
On the 2 of August 2023, the Company announced a capital raise to support increased commercialization and
growth opportunities. The capital raise comprised:
•
•
The Placement, being a placement of 33,333,334 new fully paid ordinary shares in IXUP, together with
one (1) free attaching new option for every two (2) new shares issued, to raise A$2.0 million; and
The Entitlement Offer, being a one (1) for thirty (30) pro rate non-renounceable entitlement offer of
34,516,423 New Shares, together with one (1) free attaching new options for every two (2) new shares
issued, on the same terms as the placement options, to raise approximately A$2.1 million.
The Placement was completed successfully with shares being issued on the 11th of August. The entitlement offer
was completed with $766,958.64 received from shareholders and a shortfall of $1,304,027.04, with shares being
issued on the 31st of August 2023. Inbound interest in the shortfall has already been received from existing
shareholders and the shortfall is intended to be placed by Cygnet Capital in consultation with the Directors in the
next three months.
No other matters or circumstances have arisen since 30 June 2023 that have significantly affected, or may significantly affect
the consolidated Company’s operations, the results of those operations, or the consolidated entity's state of affairs in future
financial years.
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IXUP Limited
Directors report
30 June 2023
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 were 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.
Risk Management
Identifying and mitigating business risks that may affect the Company’s strategy and financial performance is an essential
part of the governance framework. This section outlines some of the key risks identified by the Company. They are not listing
in importance or likelihood to materialize
RISK AREA
TECHNOLOGY AND
SOFTWARE
INTELLECTUAL
PROPERTY AND
OBLIGATIONS
REGULATION
SECURITY SOFTWARE
TECHNOLOGY
BREACHES AND
IMPROPER ACCESS
TO PERSONAL DATA
CUSTOMER
ENVIRONMENT
DESCRIPTION
The Company’s business is based on software, source code, technology and computer
programs which comprise it’s data privacy platforms. There is a risk that this technology
and/or software may be superseded or displaced in the market by new technology offerings
or software which customers perceive have advantages over the Company’s offerings.
Furthermore the Company’s systems can be affected by numerous factors including by not
limited to data losses, computer system faults, failures of or suspension from key data
feeds, data network failures, and catastrophic events such as a natural disaster, computer
viruses of power failure.
There is a risk that failure or inability to protect intellectual property rights may have a
significant adverse effect on operations, financial performance and competitive advantage.
Further, there is a risk that the operations, products, services or platforms may infringe the
intellectual property rights of third parties. If any claim of litigation is bought against the
Company which alleges an infringement on another party’s intellectual property rights, this
could result in the Company being subject to significant liability for damages or losing the
right to use the intellectual property.
Regulation relating to the privacy of personal data continues to evolve in various
jurisdictions. Accordingly, there is an exposure to a range of risks relating to compliance
with, changes to, or uncertainty in, the relevant legal and regulatory regimes in those
jurisdictions. Changes to laws and regulations or failure to comply may have a material
adverse effect on the Company’s business, financial position and prospects.
By their nature, information technology systems are susceptible to cyber-attacks with third
parties seeking unauthorized access to data, networks, systems and databases. Further
third party suppliers may receive and store information from the company or its customers
and although this information is limited and subject to confidentiality obligations, if third party
suppliers fail to adopt or adhere to robust security practices, any such information may be
improperly accessed, used or disclosed.
The Company provides its customers with technology and data solutions that support data
protection and ability to securely share data between different customers. Changes in
relation to customers perception of the ability to protect data and cost associated with that
may have a direct financial impact on the Company customers and therefore an indirect on
the Company’s financial performance.
5
IXUP Limited
Directors report
30 June 2023
Reconciliation of the Annual Report to the 4E
As part of the finalisation of the business combination (Note 31) it was identified that a Deferred Tax Liability and an adjustment
to employment entitlements would arise as part of the final purchase price of the acquisition of the BetStop contract.
The following table provides a reconciliation of the Annual Report to the 4E:
Loss from ordinary activities after tax attributable to members per 4E
Income Tax (Expense)/Benefit *
Employee Entitlements
($26,987,113)
$336,141
$89,711
Loss from ordinary activities after tax attributable to members per the annual report (pg. 21)
*The Deferred Tax Liability arising on the acquisition of BetStop was subsequently offset against Deferred Tax Assets not recognized on the balance sheet.
($26,561,261)
Directors believe this information is useful to provide investors with transparency on the underlying performance of the business.
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.
Information on directors
Name:
Title:
Experience and expertise:
Dean Joscelyne
Non-Executive Director (Retired 29 July 2022)
Dean founded IXUP and is a Non-Executive Director and the 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
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Member of the Audit and Risk Committee
31,193,302
Nil
Nil
6
IXUP Limited
Directors report
30 June 2023
Name:
Title:
Experience and expertise:
Freya Smith
Non-Executive Director
Ms. Freya Smith is currently the General Counsel and Company Secretary for Cuscal
Limited, a leading Australian payments company. Before joining Cuscal, Freya was the
Group General Counsel and Company Secretary for Claim Central Consolidated, a
global insurtech business and prior to that she was Chief Legal Officer and Company
Secretary for ASX listed global payments company of OFX Group Limited
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 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
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years): nil
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Name:
Title:
Experience and expertise:
Chair of the Audit and Risk Committee and Member of the Nomination and
Remuneration Committee
Nil
6,000,000
Nil
Julian Babarczy
Non-Executive Chairman
Mr. Babarczy is a finance industry professional with a career spanning 23 years, almost
two-thirds of which was as a key member of Australia’s largest actively managed hedge
funds, Regal Funds Management. Julian was a key member of the investment and
leadership team at Regal and was instrumental in growing funds under management.
Julian undertook a range of roles during his tenure at Regal, including Analyst &
Portfolio Manager and Head of Australian Equities and was responsible for investments
across a range of sectors, in both listed and unlisted companies. In the latter stages of
his career at Regal, Julian transitioned his investment style to include board
memberships of listed and unlisted companies, and a more active and hands-on
investment style.
Mr. Babarczy holds a Bachelor of Business, a Chartered Financial Analyst from CFA
Institute and a Graduate Diploma of Mineral Exploration Geosciences from Curtin
University.
Perpetual Resources Limited (ASX: PEC)
Member of the Audit and Risk Committee and Member of the Nomination and
Remuneration Committee
21,839,814
10,000,000
4,000,000
Marcus Gracey (Retired 2 February 2023)
Director, Corporate Development & Strategy (Executive Director Appointed 22 October
2020, appointed CEO/Managing Director 11 November 2020 and appointed Director,
Corporate Development Strategy 18th of August 2022)
Mr. Gracey is an experienced corporate and legal executive with a diverse professional
background in law, business, innovation and technology commercialisation, with
demonstrated experience that spans numerous industries, sectors and countries in
both private and public companies. Previous roles and responsibilities have included
regional and global positions in addition to having significant experience as a
professional public company director and governance professional.
Mr. Gracey holds a Bachelor of Laws and a Bachelor of Economics. He also holds a
Master of Laws (Intellectual Property) and an Executive Master of Business
Administration (EMBA)
Nil
Other current directorships:
Former directorships (last 3 years): Nil
Interests in shares:
Interests in options:
Interests in rights:
6,000,000
Nil
12,000,000
7
IXUP Limited
Directors report
30 June 2023
Name:
Title:
Experience and expertise:
Ian Penrose
Non-Executive Director
Mr. Penrose is a highly experienced board member and global executive who has
achieved a successful career focusing on international gaming, technology, leisure and
sporting industries. In these roles, Ian has consistently fostered innovation and added
to shareholder value, while never losing sight of the importance of maintaining high
standards of corporate governance
Mr. Penrose has a Bachelor of Science (Management Sciences) from the University of
Manchester. He has been licensed by regulators in several countries and is also a
chartered Accountant.
Other current directorships:
Senior Independent Director of Playtech plc
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Interests in rights:
Chair of the Nomination and Remuneration Committee
6,915,028
15,000,000
11,000,000
'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
David Franks from the Automic Group acting as Company Secretary.
David Franks is a Principal of the Automic Group. He 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. With over 30 years’ experience in finance, governance
and accounting, Mr. Franks has been CFO, Company Secretary and/or Director for numerous ASX listed and unlisted public
and private companies, in a range of industries covering energy retailing, transport, financial services, mineral exploration,
technology, automotive, software development and healthcare. Mr. Franks is currently the Company Secretary for the
following ASX Listed entities: Applyflow Limited, COG Financial Services Limited, Cogstate Limited, Exopharm Limited, IRIS
Metals Limited, JCurve Solutions Limited, Noxopharm Limited, Nyrada Inc, White Energy Company Limited and ZIP Co
Limited. He was also a Non-Executive Director of JCurve Solutions Limited from 2014 to 2021.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2023, and the number of meetings attended by each director were:
Full Board
Audit and Risk
Committee
Nomination and
Remuneration
Committee
Attended
0
9
4
9
9
Held
0
9
4
9
9
Attended
0
3
-
3
3
Held
0
3
-
3
3
Attended
-
2
-
2
2
Held
-
2
-
2
2
Dean Joscelyne*
Freya Smith
Marcus Gracey**
Julian Babarczy
Ian Penrose
* Resigned 29 July 2022
** Resigned 2 February 2023
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
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IXUP Limited
Directors report
30 June 2023
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. Marcus Gracey for the period in which he was Chief Executive Officer for the reporting period, Mr.
Matthew Johnson as Chief Financial Officer and Mr. Warren Stevens as Chief Operations Officer.
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
Additional disclosures relating to KMP
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 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:
●
●
●
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
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.
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IXUP Limited
Directors report
30 June 2023
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. STI is currently awarded to Executive KMP in 100%
cash.
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.
Dean Joscelyne - Non-Executive Director (Retired 29 July 2022)
Freya Smith - Non-Executive Director
Julian Babarczy - Non-Executive Chairman
The KMP of the consolidated entity consisted of the following directors of IXUP Limited:
●
●
●
● Marcus Gracey - Director and CEO (Retired 2 February 2023)
●
● Matthew Johnson – CFO
Ian Penrose - Non-Executive Director
10
IXUP Limited
Directors report
30 June 2023
2023
Dean Joscelyne*
Freya Smith
Julian Babarczy**
Ian Penrose
Marcus Gracey
Matthew Johnson
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
$
Total
$
90,023
54,795
111,667
59,838
247,780
280,000
844,103
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,753
-
-
17,908
29,400
53,062
-
-
-
85,200
- 142,000
213,000
-
-
-
152,000
-
592,200
-
90,023
145,748
253,667
272,838
265,689
461,400
1,489,364
* Paid through Destria Pty Ltd a company associated to Dean Joscelyne. From 1 March 2021 Dean Joscelyne transitioned
to a Non-Executive role and he remains a key consultant to the Company.
** Paid through Jigsaw Consulting Pty Ltd a company associated to Julian Babarczy.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2022
Dean Joscelyne*
Freya Smith
Julian Babarczy**
Ian Penrose
Marcus Gracey
Matthew Johnson
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
90,274
54,795
55,000
20,283
291,667
161,538
673,557
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000
5,479
-
-
24,248
16,154
46,881
-
-
-
-
-
-
-
91,274
-
60,274
-
55,000
-
328,711
308,428
315,915
-
29,994
207,686
338,422 1,058,860
* Paid through Destria Pty Ltd a company associated to Dean Joscelyne. From 1 March 2021 Dean Joscelyne transitioned
to a Non-Executive role and he remains a key consultant to the Company.
** Paid through Jigsaw Consulting Pty Ltd a company associated to Julian Babarczy.
11
IXUP Limited
Directors report
30 June 2023
The proportion of remuneration paid linked to performance and the fixed proportion are as follows:
Name
Dean Joscelyne
Freya Smith
Julian Babarczy
Marcus Gracey
Ian Penrose
Matthew Johnson
Fixed remuneration
2022
2023
At risk - STI
2023
2022
At risk - LTI
2023
2022
100%
42%
44%
100%
22%
67%
100%
100%
100%
92%
6%
86%
-
-
-
-
-
-
-
-
-
-
-
-
-
58%
56%
-
78%
33%
-
-
-
8
94%
14%
Service agreements
Remuneration and other terms of employment for Executive KMP are formalised in service agreements. Details of these
agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Marcus Gracey
Director, Corporate Development & Strategy
The principal terms of the Executive Director agreement for Mr. Gracey were as follows:
(i) A base salary of $10,000 per month (exclusive of statutory superannuation).
(ii) The agreement has a fixed term to 30 June 2023 and may be extended beyond the
term.
Name:
Title:
Agreement commenced:
Term of agreement:
Matthew Johnson
Chief Financial Officer
06 December 2021
The principal terms of the Executive agreement for Mr. Johnson were as follows:
(i) A base salary of $280,000 per annum (exclusive of statutory superannuation).
(ii) Entitlement to participate in employee and executive incentive plans and the
Company to provide additional bonus and incentives. Mr. Johnson has been granted
with 4,000,000 Performance Rights.
(iii) The agreement has no fixed term and may be terminated with a 3 month notice by
either party.
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 $10,000 per annum (inclusive
of statutory superannuation) for each Board committee that they participate in commencing on Official Quotation. Mr.
Babarczy, Mr. Penrose and Ms. Smith are Non-Executive Directors as at the date of this report.
Share-based compensation
Issue of shares
There were no shares issued to directors and Executive KMP as part of compensation during the year ended 30 June 2023
or during the year ended 30 June 2022.
12
IXUP Limited
Directors report
30 June 2023
Share-based compensation (Cont.)
Options over equity instruments
The terms and conditions of each grant of options and performance rights over ordinary shares affecting remuneration of
directors and Executive KMP in this financial year or future reporting years are as follows:
FINAN
CIAL
YEAR
OPENING NO. OPTIONS
AWARDED
DURING THE
YEAR NO.
NO. OF
LAPSED
DURING
YEAR
CLOSING
NO.
AWARD
DATE
FAIR VALUE
PER OPTION
AT DATE ($)
VESTING
DATE
EXERCISE
PRICE
EXPIRY
DATE
VALUE OF
OPTIONS
GRANTED
DURING THE
YEAR
2021
4,000,000
2021
2023
2021
2,272,727
-
10,000,000
-
-
10,000,000
-
4,000,000
-
3/2/21
$0.095
3/2/21
$0.10
3/2/23
-
2,272,727
-
10,000,000
-
11/11/20
10,000,000 16/12/22
22/10/20
-
$0.014 16/12/22
$0.020 22/10/20
$0.06 16/12/24 $142,000
$0.08 16/10/22
-
2023
25,200,000
-
25,200,000
-
1/9/17
$0.106
1/9/17
$0.25 14/11/22
-
2023
-
15,000,000
-
15,000,000 16/12/22
$0.014 16/12/33
$0.06 16/12/24 $213,000
2020
500,000
-
500,000
-
2/7/2019
$0.081
2/7/19
$0.25 14/11/22
-
2023
-
6,000,000
-
6,000,000 16/12/22
$0.014 16/12/22
$0.06 16/12/24 $85,200
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
-
-
-
-
-
-
-
JULIAN
BABARCZY
MARCUS
GRACEY
DEAN
JOSCELYN
IAN
PENROSE
FREYA
SMITH
Performance rights
Performance rights over ordinary shares issued to directors and Executive KMP as part of compensation that were
issued during the year ended 30 June 2023 are as follows:
JULIAN
BABARCZY
MARCUS
GRACEY
MATTHEW
JOHNSON
IAN
PENROSE
FINANCIAL
YEAR
TRANCHE
PERFORMANCE
RIGHTS (PR)
AWARDED
DURING THE
YEAR NO.
FAIR VALUE
PER PR AT
DATE ($)
2021*
Tranche 2
2,000,000
$0.093
2021*
2021**
Tranche 3
Tranche 2
2,000,000
6,000,000
$0.091
$0.093
2021**
2022***
Tranche 3
-
6,000,000
488,717
$0.091
$0.105
2023***
2022****
-
Tranche 1
4,000,000
2,500,000
$0.125
$0.210
2022****
2022****
Tranche 2
Tranche 3
2,500,000
6,000,000
$.0210
$0.210
EXERCISE
PRICE
EXPIRY
DATE
NO. OF VESTED
DURING YEAR
NO. OF
LAPSED
DURING
YEAR
VALUE OF PR
GRANTED
DURING THE
YEAR
VALUE OF PR
EXERCISED
DURING THE
YEAR
-
-
-
-
-
-
-
3/2/26
3/2/26
3/2/26
3/2/26
21/12/22
3/2/26
31/3/25
31/3/25
31/3/25
-
-
-
-
-
-
-
18,000,000
488,717
-
-
-
-
-
-
152,000
-
-
-
-
-
-
-
-
-
-
*Julian Babarczy was issued 6,000,000 performance rights on 3 February 2021 (2,000,000 Tranche 1 Performance Rights vested in FY22; 2,000,000; Tranche 2 Performance
Rights which vest on the last to occur of: (i) the date the customer goes live on commercial use of the Company’s core technology pursuant to a commercial contract; (ii) the
20 day VWAP of the Company's shares being equal to or greater than $0.10; and 2,000,000 Tranche 3 Performance Rights which vest on the last to occur of: (i) IXUP achieving
revenue in any financial year equal to, or greater than, $5 million; and (ii) the 20 day VWAP of the Company's shares being equal to or greater than $0.125.)
**Marcus Gracey was issued 18,000,000 performance rights on 3 February 2021 (6,000,000 Tranche 1 Performance Rights vested in FY22; 6,000,000 Tranche 2 Performance
Rights which vest on the last to occur of: (i) the date the customer goes live on commercial use of the Company’s core technology pursuant to a commercial contract; (ii) the
20 day VWAP of the Company's shares being equal to or greater than $0.10; and 6,000,000 Tranche 3 Performance Rights which vest on the last to occur of: (i) IXUP achieving
revenue in any financial year equal to, or greater than, $5 million; and (ii) the 20 day VWAP of the Company's shares being equal to or greater than $0.125.)
***Matthew Johnson was issued 488,717 performance rights on the 23rd of December 2021. All rights will vest in the measurement period: 1) Continuous service and 2) 20
day VWAP of IXUP’s shares meeting or exceeding a level 30% higher than the closing price for IXUP shares at the grant date and the board determines, in its discretion, that
the recipient contributed to such an increase.
***Matthew Johnson was issued 4,000,000 performance rights on the 3rd of February 2023. All rights will vest in the measurement period a) Signed commercial revenue
generating contracts; b) Revenue targets c) Successful US Pilot and d) Individual KPI’s
****Ian Penrose was issued 11,000,000 performance rights on 7 October 2021. (5,000,000 Class A Rights where a) 2.5m Rights vest upon introduction and completion of 1
or more transactions that add an aggregate of at least A$2.5m in revenue to the Group in any Measurement Period; b) 2.5m Rights vest upon introduction and completion of
1 or more transactions that add an aggregate of at least A$6.5m in revenue to the Group in any Measurement Period; and c) provided that, as soon as the A$6.5m revenue
threshold above is reached or exceeded in a particular Measurement Period as a result of one or more transactions introduced, all 5m Rights vest) (6,000,000 Class B
Performance Rights, upon the last to occur of each of a) the VWAP of IXUP shares trading on ASX during any rolling period of 20 continuous trading days meets or exceeds a
level which is 33% higher than the closing price for IXUP shares as at the grant date; b) the Group achieves revenue of at least A$5m in any Measurement Period; and c) the
recipient has been engaged by the Group for a continuous period of 3 yrs.)
13
IXUP Limited
Directors report
30 June 2023
Additional information
The earnings of the consolidated entity for the five years to 30 June 2023 are summarised below:
2023
$
2022
$
2021
$
2020
$
2019
$
Revenue
Profit/(loss) after income tax
1,256,161
(26,561,261)
977,172
(13,662,608)
16,750
(5,424,785)
88,500
(3,774,992)
158,500
(6,588,667)
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)
Additional disclosures relating to KMP
2023
0.05
(2.67)
2022
0.05
(1.59)
2021
0.19
(0.88)
2020
0.01
(1.93)
2019
0.07
(4.16)
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*
Julian Babarczy**
Ian Penrose***
Marcus Gracey
Matthew Johnson
Balance at
the start of
the year
Received
as part of
remuneration
31,193,302
14,297,338
5,876,827
7,500,000
50,000
58,917,467
-
-
-
-
-
-
Disposals/
other
Balance at
the end of
the year
-
-
-
1,500,000
-
1,500,000
31,193,302
21,839,814
8,438,404
6,000,000
332,143
67,803,663
Additions
-
7,542,476
2,561,579
-
282,143
10,386,198
*
**
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.
Julian Babarczy holds his interests in shares indirectly through Vaucluse Investment Holdings of which he is a
beneficiary.
*** Ian Penrose holds 1,000,000 shares indirectly through Dundaswood Limited of which he and his wife are controlling
parties
14
IXUP Limited
Directors report
30 June 2023
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:
Options over ordinary shares
Dean Joscelyne*
Freya Smith
Marcus Gracey
Julian Babarczy**
Ian Penrose
Balance at
the start of
the year
25,200,000
500,000
10,000,000
6,272,727
-
41,972,727
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
6,000,000
-
10,000,000
15,000,000
31,000,000
25,200,000
-
-
500,000
- 10,000,000
6,272,727
-
-
-
41,972,727
-
-
6,000,000
-
10,000,000
15,000,000
31,000,000
*
**
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.
Julian Babarczy holds his interests in shares indirectly through Vaucluse Investment Holdings and Jigsaw
Investments Holdings both of which he is a beneficiary.
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:
Performance rights
Freya Smith
Marcus Gracey
Matthew Johnson
Julian Babarczy*
Ian Penrose
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
1,500,000
12,000,000
488,717
4,000,000
11,000,000
-
-
4,000,000
-
-
-
- 1,500,000
12,000,000
-
-
4,000,000
488,717
-
-
-
4,000,000
- 11,000,000
-
28,988,717
4,000,000
-
1,988,717
31,000,000
*
Julian Babarczy holds his interests in shares indirectly through Vaucluse Investment Holdings of which he is a
beneficiary.
This concludes the remuneration report, which has been audited.
15
IXUP Limited
Directors report
30 June 2023
Shares under option
Unissued ordinary shares of IXUP under option at the date of this report are as follows:
Grant date
20 December 2018
10 April 2019
9 December 2019
29 January 2021
30 July 2021
16 December 2022
2 June 2023
13 June 2023
Expiry date
20 December 2023
10 April 2024
30 November 2023
03 February 2025
30 August 2023
16 December 2024
30 June 2026
30 June 2025
Exercise
price
Number
under option
$0.25
$0.25
$0.10
$0.10
$0.20
$0.06
$0.06
$0.06
3,001,666
883,333
5,000,000
40,000,000
25,000,000
156,000,000
30,000,000
24,000,000
283,884,999
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
13 September 2021
5 October 2021
9 December 2021
3 February 2023
Expiry date
31 December 2023
31 March 2025
31 December 2024
3 February 2026
Exercise
price
Number
under rights
$0.00
$0.00
$0.00
$0.00
3,000,000
11,000,000
50,000,000
36,757,299
100,757,299
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 2023 and up to the
date of this report.
16
IXUP Limited
Directors report
30 June 2023
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 2023
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 (Cth) 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 Hall Chadwick WA Audit Pty Ltd
There are no officers of the company who are former directors of Hall Chadwick WA Audit 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
Hall Chadwick WA Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
17
IXUP Limited
Directors report
30 June 2023
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
Julian Babarczy
Chairman
22 September 2023
18
To the Board of Directors,
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
As lead audit Director for the audit of the financial statements of IXUP Limited for the financial year
ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• any applicable code of professional conduct in relation to the audit.
Yours Faithfully
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated Perth, Western Australia this 22nd day of September 2023
IXUP Limited
Contents
30 June 2023
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members of IXUP Limited
Shareholder information
General information
21
22
23
24
25
58
59
65
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:
Tenancy 1004, Building 10
Fleet Workshops North
Sub Base Platypus
120 High Street
North Sydney, NSW, 2060
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 22 September 2023.
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 http://www.ixup.com.
20
IXUP Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Revenue
Revenue
Cost of sales
Gross profit
Consolidated
Note
2023
$
2022
$
5
6
1,256,161
(605,623)
977,172
(436,869)
650,538
540,303
Interest revenue calculated using the effective interest method
Research & Development Tax rebate
35,870
1,104,398
1,212
261,291
Expenses
Employee benefits expense
Share-based costs
Depreciation and amortisation expense
Doubtful Debt expense
Impairment of Goodwill
Loss on disposal of assets
Occupancy cost
Administration costs
Finance costs
Loss before income tax expense
Income tax (expense)/benefit
6
38
6
9
6
6
6
6
7
(5,471,660)
(2,985,526)
(1,070,307)
(110,077)
(13,189,096)
-
(19,302)
(5,799,652)
(42,588)
(6,062,004)
(2,591,332)
(1,083,755)
-
-
(154)
(45,143)
(4,670,037)
(12,989)
(26,897,402)
(13,662,608)
336,141
-
Loss after income tax expense for the year attributable to the shareholders of
IXUP Limited
24
(26,561,261)
(13,662,608)
Other comprehensive income for the year, net of tax
(136,855) 93,074
Total comprehensive loss for the year attributable to the shareholders of IXUP
Limited
(26,698,116) (13,569,534)
Basic earnings per share
Diluted earnings per share
Cents
Cents
37
37
(2.68)
(2.68)
(1.59)
(1.59)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
21
IXUP Limited
Consolidated statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Investments
Deposits
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Other financial liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2023
$
2022
$
8
9
1,642,869
978,164
-
65,248
2,686,281
4,816,710
612,139
341,200
254,371
6,024,420
10
11
12
13
14
56,868
155,024
3,967,722
36,761
233,151
18,388,152
359,020 - 182
153,920 52,666
4,692,553 18,710,730
7,378,834
24,735,150
15
16
17
18
19
20
21
22
1,015,739
1,625,296
74,566
68,593
600,390
338,472
40,251 ____ 80,229
1,509,006
2,334,531
146,347
2,618,087
90,697
2,375,000
37,295
159,291
204,498 118,043
3,059,630 2,689,629
5,394,161
4,198,635
1,984,674
20,536,515
23
24
24
52,355,200
18,219,805
47,821,869
16,115,343
(68,590,332) (43,400,697)
1,984,674
20,536,515
The above statement of financial position should be read in conjunction with the accompanying notes
22
IXUP Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Consolidated
Balance at 1 July 2021
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
26,530,941
11,650,987
(31,049,894)
7,132,034
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
-
-
- 93,074
(13,662,608)
(13,662,608)
- 93,074
Total comprehensive loss for the year
-
93,074
(13,662,608)
(13,569,534)
Issue of shares
Share issue costs
22,258,143
(967,215)
-
-
-
-
22,258,143
(967,215)
Transactions with shareholders in their capacity as
shareholders:
Share-based payments (note 38)
Options Exercised
Contingent consideration for DataPOWA acquisition
-
-
-
2,591,332
(1,311,805)
3,091,755
-
1,311,805
-
2,591,332
-
3,091,755
Balance at 30 June 2022
47,821,869
16,115,343
(43,400,697)
20,536,515
Consolidated
Balance at 1 July 2022
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
47,821,869
16,115,343
(43,400,697)
20,536,515
-
- (136,855)
-
(26,561,261)
(26,561,261)
- (136,855)
Total comprehensive loss for the year
-
(136,855)
(26,561,261)
(26,698,116)
Issue of shares
Share issue costs - Cash
Share issue costs - equity
5,099,837
(359,524)
(355,000)
-
-
355,000
-
-
-
5,099,837
(359,524)
-
Transactions with shareholders in their capacity as
shareholders:
Share-based payments (note 38)
Options related to Convertible note
Options Expired
Contingent consideration for DataPOWA acquisition
-
-
148,018
2,985,527
272,416
(1,371,626)
-
-
-
1,371,626
-
2,985,527
272,416
-
148,018
Balance at 30 June 2023
52,355,200
18,219,805
(68,590,332) 1,984,674
The above statement of changes in equity should be read in conjunction with the accompanying notes
23
IXUP Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Interest and other finance costs paid
Payments to suppliers and employees
Interest received
Government grants and tax incentives (R&D Incentive, JobKeepers Rebate, Cash
Boost, EMD Grant)
Consolidated
Note
2023
$
2022
$
681,339
(32,600)
594,244
(1,096)
(11,144,412) (11,290,667)
1,482
18,051
1,045,507
290,305
Net cash used in operating activities
35
(9,432,115) (10,405,732)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Payments for investments in term deposits
Payments for Investments in Convertible Notes
Other - GST on DataPOWA acquisition
Other - DataPOWA cash on acquisition
10
12
(43,407)
(1,364,955)
(18,900)
(28,215)
(3,250,000)
(142,941)
- ( 341,200)
318,855
-
8,353
-
Net cash used in investing activities
(1,427,262)
(3,435,148)
Cash flows from financing activities
Proceeds from issue of shares
Payment for share and issue transaction costs
Proceeds from issue of options
Proceeds of issue of Convertible Note
Repayment of borrowings
Repayment of lease liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
5,099,837
(360,986)
-
3,000,000
(6,022)
(84,350)
10,000,000
(964,408)
4,908,545
-
(9,524)
(52,511)
7,648,479
13,882,102
(3,210,898)
4,816,710
41,222
4,824,960
37,057 (49,472)
Cash and cash equivalents at the end of the financial year
8
1,642,869
4,816,710
The above statement of cash flows should be read in conjunction with the accompanying notes
24
IXUP Limited
Notes to the financial statements
30 June 2023
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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The financial report has been prepared on a going concern basis which assumes the settlement of liabilities and the
realisation of assets in the normal course of business.
The Group has incurred a loss of $26,561,261 (2022: $13,662,608) and experienced net cash outflows from operating
activities of $9,432,115 (2022: $10,405,732). As at 30 June 2023, the Group had cash and cash equivalents of $1,642,869
(2022: $4,816,710).
The Group’s ability to continue as a going concern, to recover the carrying value of its assets and meet its commitments as
and when they fall due is dependent on the ability of the Group to raise additional capital or obtain external financing in the
next few months. The Board is assessing capital raising opportunities as at the date of this report.
The Directors believe that the Group will be able to continue as a going concern after consideration of the following factors:
The ability of the Company to raise the additional capital, for which it has a successful history in doing so;
●
● Commercialisation of its intellectual property, to deliver future revenue; and
● Recognising that the priority of the Board and management remains revenue growth and cost reductions.
Whilst the directors acknowledge there are timing risks associated with the completion of successful capital raisings which
have a direct impact on the Company's ability to meet liabilities when due, the directors believe that this will be successful.
However, if the capital raising and other factors mentioned above do not eventuate, there is a material uncertainty that may
cast significant doubt as to whether the Company will continue as a going concern and, therefore, whether the Company will
realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial
statements.
The financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts
nor to the amounts and classification of liabilities that might be necessary should the Company not continue as a going
concern.
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.
25
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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 30.
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.
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.
26
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
Derivative financial instruments
Hedges of a net investment
Hedges of a net investment in a foreign operation include monetary items that are considered part of the net investment.
Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised directly in equity whilst
gains or losses relating to the ineffective portion are recognised in profit or loss. On disposal of the foreign operation, the
cumulative value of any such gains or losses recognised directly in equity is transferred to profit or loss.
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.
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.
Compound financial instruments
The component parts of convertible loan notes issued by the Group are classified separately as financial liabilities and equit in
accordance with the substance of the contractual arrangements and definitions of a financial liability and an equity instrument.
A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed
number of the Company’s own equity instruments is an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar
non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument’s maturity date.
The Conversion option classified as equity is determined by deducting the amount of the liability component from the fair
value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effect, and is not
subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion
27
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
option is exercised, in which case the balance is recognized in equity will be transferred to the Share premium account.
Where the conversion option remains unexercised at the maturity date of the convertible loan note, the balance recognized in
equity will be transferred to retained earnings. No gain or loss is recognized in profit or loss upon conversion or expiration of
the conversion option Transaction costs that relate to the issue of the convertible loan notes are allocated to the liability and
equity components in proportion to the allocation of gross proceeds. Transaction costs relating to the equity component are
recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the
liability component and are amortised over the lives of the convertible loan notes using the effective interest method. Refer to
note 26 for further information on financial instruments.
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.
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.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
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:
28
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
- 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.
Buildings
Leasehold improvements
Plant and equipment
Computer equipment
40 years
3-10 years
3-7 years
3-5 years
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
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Research and development
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.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Website
Significant costs associated with the development of the revenue generating aspects of the website, including the capacity
of placing orders, are deferred and amortised on a straight-line basis over the period of their expected benefit, being their
finite life of 10 years.
29
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
Intellectual property
Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 5 years.
Trademarks and other intangibles including customer contracts
Significant costs associated with Trademarks and other intangibles are deferred and amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 8 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 3.33 years.
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are
recognised when a customer pays consideration, or when the consolidated entity recognises a receivable to reflect its
unconditional right to consideration (whichever is earlier) before the consolidated entity has transferred the goods or services
to the customer.
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.
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 an appropriate option valuation 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
30
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
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.
Fair value measurement
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
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.
31
IXUP Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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 2023. 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.
Note 2. Critical accounting judgements, estimates and assumptions
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 3, 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.
Note 3. COVID-19 impact
IXUP is continuing to closely monitor and respond to the effects of the COVID-19 virus, ensuring it adheres with Government
advice and recommendations, which represents a material uncertainty in the wider business environment. During the year
IXUP took a number of steps to ensure responsible cash management and extend its cash operating runway.
Specific actions taken during the year included:
● Staff hours and fixed remuneration reduced with focus on maintaining core sales and technical support functions;
● Successful application for the Federal Government's JobKeeper Wage Subsidy (Round 1) for all eligible staff;
● Reduction in costs relating to essential services and infrastructure costs;
The Company will continue to closely monitor developments related to COVID-19, and take appropriate actions as required.
32
IXUP Limited
Notes to the financial statements
30 June 2023
Note 4. 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 operated in three geographic segments that
being Australia, UK and US.
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.
Operating segment information
FY2023
AUSTRALIA
UK
US
TOTAL
ADJUSTMENTS
AND
ELIMINATIONS
CONSOLIDATED
REVENUE ($)
Sales to external
customers
Interest Income
Total Revenue
Income/(Expenses)
Other Income
Employee Expenses
Depreciation and
Amortisation
Other expenses
Segment Profit
Total Assets
Total Liabilities
634,026
35,870
669,897
867,791
(6,967,494)
(13,876,416)
(5,206,503)
(24,480,151)
5,787,615
5,245,580
278,905
343,229
1,256,161
-
278,905
-
343,229
35,870
1,292,031
236,607
(1,255,427)
(382,987)
(1,032,833)
(2,188,309)
752,319
147,800
-
(234,265)
-
(1,766)
107,198
838,900
781
1,104,398
(8,457,186)
(14,259,403)
(6,241,102)
(26,561,261)
7,378,834
5,394,161
-
-
-
-
-
-
-
-
-
-
1,256,161
35,870
1,292,031
1,104,398
(8,457,186)
(14,259,403)
(6,241,102)
(26,561,261)
7,378,834
5,394,161
FY2022
AUSTRALIA
UK
US
TOTAL
ADJUSTMENTS
AND
ELIMINATIONS
CONSOLIDATED
-
-
-
423,945
553,227
977,172
-
423,945
-
553,227
977,172
262,503
(7,278,604)
(725,792)
(3,211,401)
(10,953,294)
23,642,557
3,777,718
-
(1,079,147)
(357,963)
(1,076,374)
(2,089,539)
703,332
762
-
(295,585)
-
(877,417)
(619,775)
389,261
420,155
262,503
(8,653,336)
(1,083,755)
(5,165,192)
(13,662,608)
24,735,150
4,198,635
REVENUE ($)
Sales to external
customers
Interest Income
Total Revenue
Income/(Expenses)
Other Income
Employee Expenses
Depreciation and
Amortisation
Other expenses
Segment Profit
Total Assets
Total Liabilities
Note 5. Revenue
Software revenue
-
-
-
-
-
-
-
-
-
-
977,172
977,172
262,503
(8,653,336)
(1,083,755)
(5,165,192)
(13,662,608)
24,735,150
4,198,635
Consolidated
2023
$
2022
$
1,256,161
977,172
33
IXUP Limited
Notes to the financial statements
30 June 2023
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Cost of sales
Cost of sales
Depreciation
Depreciation
Amortisation
Total depreciation and amortisation
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
Other
Employee benefits expense
Wages and salaries
Superannuation costs
Other employee benefits
Occupancy costs
Rent (short term lease payments)
Other occupancy costs
Consolidated
2023
$
2022
$
(605,623)
(436,869)
97,034
973,273
136,817
937,213
1,070,307
1,074,030
2,697,506
171,550
39,830
85,318
422,404
829,794
1,553,250
1,759,644
60,000
76,449
100,415
160,138
752,069
1,761,322
5,799,652
4,670,037
4,746,458
315,737
409,465
5,233,849
409,266
418,889
5,471,660
6,062,004
19,302
-
20,424
24,719
19,302
45,143
Finance costs
Interest costs
8,603
Interest and finance charges related to Convertible note 30,947 -
4,386
Interest and finance charges paid/payable on lease liabilities
9,784
1,857
Finance costs expensed
Share-based payments expense
Share-based payments expense
Impairment of Goodwill
Impairment of Goodwill related to DataPOWA Acquisition
Write back of contingent consideration liability
Impairment of Goodwill
42,588
12,989
2,985,526
2,591,332
15,269,731
( 2,080,635)
13,189,096
-
-
-
34
IXUP Limited
Notes to the financial statements
30 June 2023
Note 7. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25% (2022: 25%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
Non deductible Impairment of Goodwill
Non assessable other income
Non assessable Research & Development refund
Current year temporary differences not recognised
Income tax expense/(benefit)
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at statutory tax rates
Consolidated
2023
$
2022
$
(26,561,261)
(13,662,608)
(6,640,315)
(3,415,652)
746,382
3,297,274
-
216,948
647,833
-
340,093
-
(2,379,712)
2,043,571
(2,427,726)
2,427,726
(336,141)
-
Consolidated
2023
$
2022
$
35,338,783 30,365,148
6,508,873
7,591,287
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
Consolidated
2023
$
2022
$
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Employee benefits 102,366
(402)
Entertainment
1,722
Depreciation
(5,880)
Payroll accrual
648,227
Deferred tax assets used to offset deferred tax liabilities
8,809,220
Tax losses carried forward
(9,555,253)
Deferred tax assets not brought into account
31,890
-
4,134
14,825
(21,540)
7,591,287
(7,260,596)
Total deferred tax assets recognised
-
-
35
IXUP Limited
Notes to the financial statements
30 June 2023
Note 7. Income tax expense (continued)
Deferred tax liability
Accrued expenses
Acquisition of Customer Contracts
Deferred tax assets used to offset deferred tax liabilities
Consolidated
2023
$
2022
$
(312,086)
(86,161)
(336,141) -
86,161
648,227
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 8. Current assets - cash and cash equivalents
-
-
Cash at bank
Term deposits
Term deposits has an interest rate of 2.30% p.a.
Note 9. Current assets - Trade and other receivables
Trade receivables
Other receivables
GST
Provision for doubtful debts
Consolidated
2023
$
2022
$
1,542,869 4,716,710
100,000 100,000
1,642,869
4,816,710
Consolidated
2023
$
2022
$
994,066
414,723
- 145,849
51,567
-
94,175
(110,077)
978,164
612,139
Allowance for expected credit losses
The consolidated entity has recognised a doubtful debts expense of $110,077 (2022: $nil) in profit or loss in respect of the
expected credit losses for the year ended 30 June 2023.
Trade
Receivables
($)
Not past Due
Past due up to
30 days
Past due 31
days to 90
days
Past due over
90 days
Gross 2023
Impaired 2023 Net 2023
Past due but
no impaired
2023
Gross 2022
Impaired 2022 Net 2022
Past due but
not impaired
2022
814,089
-
-
-
-
-
814,089
-
-
-
-
-
387,401
-
-
179,977
(110,077)
69,900
69,900
27,322
994,066
(110,077)
883,989
69,900
414,723
-
-
-
-
-
387,401
-
-
-
-
-
27,322
27,322
414,723
27,322
36
IXUP Limited
Notes to the financial statements
30 June 2023
Note 10. Non-current assets - property, plant and equipment
Consolidated
2023
$
2022
$
Computer equipment - at cost. 149,966 112,011
(96,158) (78,694)
Less: Accumulated depreciation
53,808 33,317
Less: Accumulated depreciation
Office equipment - at cost 16,035 13,780
(12,975) (10,336)
3,060 3,444
56,868 36,761
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Computer
Office
equipment
$
equipment
$
Total
$
28,153
Balance at 1 July 2021
Additions
34,132
Additions through business combinations (note 32) 7,956 740 8,696
Disposals (12,450) - (12,450)
Exchange differences (303) (13) (316)
Reversal of depreciation on disposals 978 - 978
(22,432)
Depreciation expense
(20,023) (2,409)
26,235
30,924
1,918
3,208
Balance at 30 June 2022
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2023
Note 11. Non-current assets - right-of-use assets
Right-of-use asset
Less: Accumulated depreciation
33,317
39,038
(2,398)
554
(16,703)
3,444
2,154
(93)
36,761
41,191
(2,491)
- 554
(19,147)
(2,444)
53,808
3,060
56,868
Consolidated
2023
$
2022
$
230,928
(75,904)
350,479
(117,328)
155,024
233,151
The consolidated entity leases an office with 3 parking spaces, with lease terms of 3.3 years. Both commenced 1 June 2022.
Depreciation for the year for the right-of-use asset was $78,127.
37
IXUP Limited
Notes to the financial statements
30 June 2023
Note 11. Non-current assets - right-of-use assets (continued)
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 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Note 12. Non-current assets - intangibles
Goodwill - at cost
Right-of-use
asset
$
Total
$
74,691
272,845
(114,385)
74,691
272,845
(114,385)
233,151
-
(78,127)
233,151
-
(78,127)
155,024
155,024
Consolidated
2023
$
2022
$
406,288 15,269,731
Customer Contracts - at cost
1,344,465 -
Development - at cost
Less: Accumulated amortisation
Website - at cost
Less: Accumulated amortisation
Intellectual Property
Less: Accumulated amortisation
1,731,909
(1,731,909)
-
1,731,909
(1,731,909)
-
1,194,680 1,120,389
(763,268)
(342,341)
431,412 778,048
3,014,316
(1,228,859)
1,785,457
2,974,360
(633,987)
2,340,373
3,967,722
18,388,152
38
IXUP Limited
Notes to the financial statements
30 June 2023
Note 12. Non-current assets - Intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Goodwill
$
Customer
Contracts
$
Website
$
Intellectual
Property
$
Total
$
Balance at 1 July 2021
Additions through business combinations (Note
32)
Amortisation expense
-
15,269,731
-
-
1,120,389
2,935,245
-
2,935,245
16,390,120
-
-
(342,341) (594,872)
(937,213)
Balance at 30 June 2022
15,269,731
-
778,048
2,340,373
18,388,152
Additions 406,288 1,344,465 74,291 39,956 1,865,099
Amortisation expense
(594,872) (1,015,799)
Impairment expense (15,269,731) - - - (15,269,731)
-
(420,927)
-
Balance at 30 June 2023
406,288 1,344,465
431,412
1,785,457
3,967,722
The Company reviews its intangible assets for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable.
Goodwill
Goodwill and website relate to the acquisition of DataPOWA Ltd in August 2021. Based on the current market conditions,
including interest rates increasing materially and general view on loss making tech businesses the board has taken the
conservative view to write off the good will in DataPOWA. The business continues to operate and is building and converting
a pipeline of new business on it’s way to breakeven.
During the financial year the company purchased the contract to operate and develop BetStop – The National Self Exclusion
register for $1,325,000. The identification and fair value measurement of the assets and liabilities acquired from the BetStop
acquisition are provisional and amendments may be made to these figures up to 12 months following the date of acquisition.
Per note 31 $406,288 has been recognized as Goodwill in relation to the acquisition.
Goodwill is subject to impairment testing on an annual basis or whenever there is an indication of impairment. Capitalised
development costs, website and software costs are subject to impairment testing whenever there is an indication of
impairment.
Customer Contracts
During the financial year the company purchased the contract to operate and develop BetStop – The National Self Exclusion
register for $1,325,000. The identification and fair value measurement of the assets and liabilities acquired from the BetStop
acquisition are provisional and amendments may be made to these figures up to 12 months following the date of acquisition.
Per note 32 $1,344,465 has been recognized as Customer Contracts in relation to the acquisition.
Customer Contracts are impaired over the period of the contract length.
Website
During the year ended 30 June 2023, the gross carrying value of Website equated to $1,194,680 (2022;$1,120,389). This
asset is being depreciated on a straight-line basis at 33% per annum.
Accumulated depreciation of this Website totaled $763,268 (2022; $342,341), giving net written down value of $431,412
(2022: $778,048) at financial year end.
Intellectual Property
During the year ended 30 June 2021, the company completed the strategic acquisition of the entire intellectual property of
Data Republic Pty Ltd. The acquisition is capitalised at cost of $2,974,360 and is being depreciated on a straight-line basis
at 20% per annum. During the financial period the Company purchased the trademark, URL and other intellectual property
of Playpause for $25,000 USD
39
IXUP Limited
Notes to the financial statements
30 June 2023
Accumulated depreciation of this Intellectual Property totaled $594,872, giving net written down value of $1,785,457 at
financial year end.
Based on the replacement value to develop the intellectual property of Data Republic and the ongoing commercialisation of
the software no indicators of impairment were identified as at 30 June 2023.
Note 13. Non-current assets - Investments
Investments in other entities
Consolidated
2023
$
2022
$
359,020
-
IXUP invested in a convertible note in Ziroh Labs Inc, on 18 April 2022 for $240k USD. The note had a 12 month maturity
date, 5% per annum interest rate and option to be repaid or converted to common stock. Participation in the note allowed
IXUP to purchase a 10 year royalty free licence for Ziroh Labs Inc. products including homomorphic libraries for $10k USD.
IXUP converted the note to common stock.
Note 14. Non-current assets - Deposits
Security Deposit
Consolidated
2023
$
2022
$
153,920
52,666
This amount represents two security deposits for the office space rented and US payroll supplier. On termination or
cancellation of both contracts the deposits will be refunded.
Note 15. Current liabilities - trade and other payables
Trade payables
Accrued expenses
PAYG withholding payable
Superannuation payable
Wages payable
Other payables
Consolidated
2023
$
2022
$
795,024
669,589
137,734
81,793
14,198
44,646
478,119
151,114
233,754
113,687
21,962
17,103
1,625,296
1,015,739
Refer to note 26 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 16. Current liabilities – lease liabilities
Lease liability
Consolidated
2023
$
2022
$
68,593
74,566
Refer to note 26 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 11 for details.
The consolidated entity leases an office with 3 parking spaces, with lease terms of 2.3 years. Both commenced 1 June 2022.
40
IXUP Limited
Notes to the financial statements
30 June 2023
Note 17. Current liabilities – provisions
Annual leave 365,416 338,472
-
Long Service Leave
234,974
600,390 338,472
Note 18. Current liabilities – Deferred revenue
Consolidated
2023
$
2022
$
Deferred revenue
Note 19. Non-Current liabilities – Other financial liabilities
Contingent Consideration
Consolidated
2023
$
2022
$
40,251
80,229
Consolidated
2023
$
2022
$
146,347 2,375,000
The provision represents the obligation to pay contingent consideration following the acquisition of DataPOWA Limited. For
more information refer to note 31.
Note 20. Non-Current liabilities – Borrowings
Bank Loans
Convertible Note
Consolidated
2023
$
30,515
2,587,572
2022
$
37,295
-
2,618,087
37,295
The Convertible notes were issued on 13 June 2023 at an issue price of $1 per note, with 3,000,000 issued. The notes are
convertible into ordinary shares prior to an expiry term of 24 month term from date of issue and a conversion price of $0.06
per share. The note has a conversion incentive if the holder converts in the first 12 months of the note term, the holders will
receive a free attaching 1:2 option with a 10c strike expiring 3rd Feb 2025.
If the notes have not been converted, interest of 15% annually, to be paid quarterly.
The net proceeds received from the issue of the convertible notes have been split between the financial liability element and
an equity component, representing the fair value of the embedded option to convert the financial liability into equity of the
company as follows:
Proceeds of issue of convertible note
Transactions costs
Net proceeds from issue of convertible note
$3,000,000
($150,000)
$2,850,000
41
IXUP Limited
Notes to the financial statements
30 June 2023
Note 20. Non-Current liabilities – Borrowings (Cont.)
Equity Component
Liability component at date of issue (net of transaction costs)
Interest charged (using effective interest rate)
Interest paid
Carrying amount of liability component at 30 June 2023
272,416
$2,850,000
($272,416)
$9,988
$2,587,572
The equity component of $272,416 has being credited to the option premium on convertible notes reserve.
The interest expensed for the year is calculated by applying an effective interest rate of 20% to the liability
component for the 1 months period since the loans were issued. The liability component is measured at amortised
cost. The difference between the carrying amount of the liability component at the date of issue and the amount
reported in the reporting period at 30 June 2023 represents the effective interest rate less interest paid to that date.
Note 21. Non-Current liabilities – lease liabilities
Lease liability
Refer to note 26 for further information on financial instruments.
Note 22. Non-current liabilities - provisions
Long service leave
Consolidated
2023
$
90,697
2022
$
159,291
Consolidated
2023
$
2022
$
204,498
118,043
42
IXUP Limited
Notes to the financial statements
30 June 2023
Note 23. Equity - issued capital
Consolidated
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
1,035,492,675 902,076,031 52,355,200
47,821,869
Movements in ordinary share capital
Details
Balance
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Share issue costs
Balance
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Share issue costs
Balance
Options
Details
Balance
Issue of unlisted options to Cygnet Capital
Options exercised during the year
Options exercised during the year
Balance
Cancelled due to forfeiture during the year
Issue of plan options to contractors and directors
Issue of plan options to consultants
Issue of plan options to consultants
Balance
43
Date
Shares
$
30 June 2021
3 August 2021
17 August 2021
17 August 2021
30 September 2021
30 September 2021
30 September 2021
29 October 2021
24 November 2021
7 December 2021
9 December 2021
703,995,838
47,872,340
28,000,000
22,182,045
5,000,000
10,000,000
1,625,000
3,736,863
235,374
71,428,571
8,000,000
-
26,530,941
7,420,213
560,000
2,218,205
500,000
1,000,000
162,500
373,686
23,537
10,000,000
-
(967,213)
30 June 2022
30 September 2022
20 October 2022
29 November 2022
8 December 2022
9 March 2023
902,076,031
45,558,882
51,000,000
24,437,055
6,500,000
5,920,707
-
47,821,869
1,822,355
2,040,000
977,482
260,000
148,048
(714,524)
30 June 2023
1,035,492,675 52,355,200
Date
Options
30 June 2021
30 June 2021
30 June 2022
15 November 2022
16 December 2022
2 June 2023
13 June 2023
30 June 2023
226,954,125
25,000,000
(70,779,282)
181,174,843
(107,289,844)
156,000,000
30,000,000
24,000,000
283,884,999
IXUP Limited
Notes to the financial statements
30 June 2023
Note 23. Equity - issued capital (Continued)
Performance Rights
Details
Date
Performance
Rights
Balance
Issue of performance rights to Advisors
Issue of performance rights to Ian Penrose
Issue of performance rights to Tekkorp Capital LLC
Vesting of performance rights
Issue of performance rights to employees
Balance
Cancelled due to forfeiture during the year
Issue of performance rights to employees
30 June 2021
13 September 2021
5 October 2021
9 December 2021
9 December 2021
21 December 2021
30 June 2022
3 February 2023
31,250,000
3,000,000
11,000,000
50,000,000
(8,000,000)
3,155,649
90,405,649
(11,398,350)
21,750,000
Balance
30 June 2023
100,757,299
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.
44
IXUP Limited
Notes to the financial statements
30 June 2023
Note 24. Equity - reserves
Consolidated
2023
$
2022
$
Foreign currency reserve (43,781)
6,480,672
Equity-settled reserves
Options reserve
11,782,914
93,074
6,208,256
9,814,013
Equity-settled reserve
18,219,805
16,115,343
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. It is also used to recognise the value of equity benefits issued to
advisors.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Foreign
currency
reserve
$
Equity-settled
reserve
$
Options
reserve
$
Total
$
Balance at 1 July 2021
Foreign currency translation
Contingent consideration for DataPOWA acquisition
Share based payments as consideration for goods/services
Transfer relating to options exercised
-
93,074
-
-
-
1,839,662
9,811,325
-
-
3,091,755
-
-
2,591,332
(1,311,805) -
11,650,987
93,074
3,091,755
2,591,332
(1,311,805)
16,115,343
Balance at 30 June 2022
(136,855)
Foreign currency translation
Share based payments
2,985,527
Options related to Convertible Note - 272,416 - 272,416
Options Expired - - (1,371,626) (1,371,626)
Share issue costs - Equity
93,074
(136,855)
-
6,208,256
-
-
9,814,013
-
2,985,527
- -
355,000
355,000
Balance at 30 June 2023
(43,781) 6,480,672 11,782,914 18,219,805
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfer relating to options and rights expired and/or cancelled
Accumulated losses at the end of the financial year
45
Consolidated
2023
$
2022
$
(43,400,697)
(26,561,261)
(31,049,894)
(13,662,608)
1,371,626 1,311,805
(68,590,332)
(43,400,697)
IXUP Limited
Notes to the financial statements
30 June 2023
Note 25. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 26. 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.
Financial assets
Cash and cash equivalents
Other receivables
Financial liabilities
Trade and other payables
Lease Liabilities
Market risk
Consolidated
2023
$
2022
$
1,642,869
978,164
2,731,110
4,816,710
145,803
4,962,513
1,625,296
159,290
1,784,586
668,298
233,857
902,155
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.
Credit 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.
46
IXUP Limited
Notes to the financial statements
30 June 2023
Note 26. Financial instruments (Continued)
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 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.
Liquidity risk
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.
Consolidated - 2023
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
795,024
830,272
-
-
-
-
-
-
795,024
830,272
10.00%
68,593 72,103 18,595
1,693,890 72,103 18,595
-
159,291
- 1,784,587
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
478,119
190,179
-
-
-
-
-
-
478,119
190,179
10.00%
74,566 68,593 90,698
742,864 68,593 90,698
- 233,857
902,155
-
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.
47
IXUP Limited
Notes to the financial statements
30 June 2023
Note 26. Financial instruments (Continued)
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 9 and equity (detailed in note 23).
As at reporting date, the Group had net assets of $1,984,673 (2022: $20,536,515) and issued capital of $52,355,200 (2022:
$47,821,869).
Note 27. Key management personnel disclosures
Directors
The following persons were directors and KMP's of IXUP Limited during the financial year:
Julian Babarczy
Dean Joscelyne
Freya Smith
Marcus Gracey
Ian Penrose
Matthew Johnson
Chairman and Non-Executive Director
Non-Executive Director (Retired 29 July 2022)
Non-Executive Director
Director Corporate Development & Strategy (Retired 2 February
2023)
Non-Executive Director
CFO
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
Note 28. Remuneration of auditors
Consolidated
2023
$
2022
$
844,103
53,062
592,200
673,557
46,881
338,422
1,489,364
1,058,860
During the financial year the following fees were paid or payable for services provided by Hall Chadwick WA Audit Pty Ltd,
the auditor of the Company:
Audit services - Hall Chadwick WA Audit Pty Ltd
Audit or review of the financial statements
Note 29. Related party transactions
Parent entity
IXUP Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Consolidated
2023
$
2022
$
34,000
36,000
Key management personnel
Disclosures relating to key management personnel are set out in note 27 and the remuneration report included in the
directors' report.
48
IXUP Limited
Notes to the financial statements
30 June 2023
Note 29. Related party transactions (continued)
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 Julian Babarczy is one of the ultimate controlling parties of Jigsaw Consulting Pty Ltd.
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:
Consolidated
2023
$
2022
$
90,023
111,667
91,274
55,000
Payment for goods and services:
Payment to Destria Pty Ltd for consulting services and Director fees
Payment to Jigsaw Consulting Pty Ltd for consulting services
Receivable from and payable to related parties
There were no receivables to or from related parties at the current and previous reporting date.
Loans to/from related parties
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.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Parent
2023
$
2022
$
(19,463,509) (30,422,850)
(19,463,509)
(30,422,850)
49
IXUP Limited
Notes to the financial statements
30 June 2023
Note 30. Parent entity information (continued)
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
2023
$
2022
$
2,069,680 4,734,195
3,668,587 23,382,424
1,643,765
311,618
1,683,913
2,845,909
47,759,289
1,720,129
9,814,014
46,213,460
2,354,290
9,814,014
(57,308,757) (37,845,249)
1,984,674
20,536,515
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 2023 and 30 June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
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:
●
● Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
indicator of an impairment of the investment.
Note 31. Business combinations
During the financial year the company purchased the contract to operate and develop BetStop – The National Self Exclusion
register for $1,325,000. The identification and fair value measurement of the assets and liabilities acquired from the BetStop
acquisition are provisional and amendments may be made to these figures up to 12 months following the date of acquisition.
Upfront consideration
On completion of the Acquisition, the company made a cash payment to the administrator of $1.325 million.
50
IXUP Limited
Notes to the financial statements
30 June 2023
Note 31. Business combinations (continued)
The acquired business contributed revenues of $634,026 to the consolidated entity for the period from 10 June 2023 to 30
June 2023. The values identified in relation to the acquisition of the contract are provisional as at 30 June 2023.
Details of the acquisition are as follows:
Assets
Contracts: National Self Exclusion Register Agreement
Prepayments
Liabilities
Deferred Tax Liability
Employee Leave
Acquisition-date fair value of the total consideration transferred
Representing:
Acquisition-date fair value of total consideration transferred
Goodwill
Net cash used to acquire business
Fair value
$
1,344,565
27,976
(336,141)
(117,688)
918,712
$918,712
$406,208
$1,325,000
The identification and fair value measurement of the assets and liabilities acquired from the BetStop acquisition are
provisional and amendments may be made to these figures up to 12 months following the date of acquisition.
Note 32. Fair value measurement
Fair value hierarchy
The contingent consideration payable on meeting the £2,000,000 revenue target referred to in note 15 has been reported as
a financial liability as it will be paid through the issue of a variable number of shares amounting to a maximum of $1,875,000
and a bonus of $500,000.
This financial liability is measured at fair value by applying management’s assessment of the probability of the revenue target
being met to maximum fair value payable. and therefore, the fair value is deemed to be a level 3 valuation under AASB 13
Fair Value as it is based on unobservable inputs. Change in fair value arising from changes in management’s assessment
of the likelihood of the target being met are recognised in profit and loss. Changes in management’s assessment of the
likelihood of the targets being met would change the fair value of the consideration payable in accordance with the terms
summarised in Note 15.
Note 33. Interests in subsidiaries
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:
Parent
Ownership
interest
Ownership
interest
Name
Principal activities
Principal place of business /
Country of incorporation
2023
%
2022
%
IXUP Operations Pty Ltd
IXUP IP Pty Ltd
DataPOWA Ltd
IXUP INC
Software development
Software patents
Software development
Software development
Australia
Australia
UK
US
100%
100%
100%
100%
100%
100%
100%
100%
51
IXUP Limited
Notes to the financial statements
30 June 2023
Note 34. Events after the reporting period
On the 2 of August 2023, the Company announced a capital raise to support increased commercialization and
growth opportunities. The capital raise comprised:
• The Placement, being a placement of 33,333,334 new fully paid ordinary shares in IXUP, together with
one (1) free attaching new option for every two (2) new shares issued, to raise A$2.0 million; and
• The Entitlement Offer, being a one (1) for thirty (30) pro rate non-renounceable entitlement offer of
34,516,423 New Shares, together with one (1) free attaching new options for every two (2) new shares
issued, on the same terms as the placement options, to raise approximately A$2.1 million.
The Placement was completed successfully with shares being issued on the 11th of August. The entitlement offer
was completed with $766,958.64 received from shareholders and a shortfall of $1,304,027.04, with shares being
issued on the 31st of August 2023. Inbound interest in the shortfall has already been received from existing
shareholders and the shortfall is intended to be placed by Cygnet Capital in consultation with the Directors in the
next three months.
Note 35. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2023
$
2022
$
Loss after income tax expense for the year
(26,698,116)
(13,662,608)
Adjustments for:
Depreciation and amortisation
Share-based payments
Goodwill amortisation
Change in operating assets and liabilities:
(Increase)/decrease in other receivables and other assets
Increase in trade and other payables
(Decrease)/Increase in provisions
Net cash used in operating activities
1,070,307
2,985,526
13,597,624
1,074,030
2,591,332
-
(1,076,222)
569,579
119,187
(1,159,574)
609,911
141,177
(9,432,115) (10,405,732)
52
IXUP Limited
Notes to the financial statements
30 June 2023
Note 36. 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:
During the year ended 30 June 2023, 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 25,000,000 Unlisted Options to Cygnet Capital as part of their fees for providing underwriting and
offer management services.(ii) The Company issued 3,000,000 Unlisted Options to Advisors as part of their fees for
professional services.
During the year ended 30 June 2022, the Group entered into the following non-cash investing and financing activities, which
are not reflected in the consolidated statement of cash flows:
(ii) The Company issued 25,000,000 Unlisted Options to Cygnet Capital as part of their fees for providing underwriting and
offer management services.(ii) The Company issued 3,000,000 Performance Rights to Advisors as part of their fees for
professional services.
(iii) The Company issued 50,000,000 Performance Rights to Tekkorp Capital LLC as part of their fees for providing
underwriting and offer management services.
Note 37. Earnings per share
Consolidated
2023
$
2022
$
Loss after income tax attributable to the shareholders of IXUP Limited
(26,561,261)
(13,662,608)
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.67)
(2.67)
(1.59)
(1.59)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
998,462,422 857,593,159
Weighted average number of ordinary shares used in calculating diluted earnings per share
998,462,422 857,593,159
Non-Dilutive Securities
As at reporting date, 283,884,999 Unlisted Options (which represent 283,884,999 potential Ordinary Shares) were considered
non-dilutive as they would decrease the loss per sha
53
IXUP Limited
Notes to the financial statements
30 June 2023
Note 38. Share-based payments and Performance Rights
Shares under option
Unissued ordinary shares of IXUP under option at the date of this report are as follows:
Grant date
20 December 2018
10 April 2019
9 December 2019
29 January 2021
30 July 2021
16 December 2022
2 June 2023
13 June 2023
Expiry date
20 December 2023
10 April 2024
30 November 2023
03 February 2025
30 August 2023
16 December 2024
30 June 2026
30 June 2025
Exercise
price
Number
under option
$0.25
$0.25
$0.10
$0.10
$0.20
$0.06
$0.06
$0.06
3,001,666
883,333
5,000,000
40,000,000
25,000,000
156,000,000
30,000,000
24,000,000
283,884,999
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
13 September 2021
5 October 2021
9 December 2021
3 February 2023
Expiry date
31 December 2023
31 March 2025
31 December 2024
3 February 2026
Exercise
price
Number
under rights
$0.00
$0.00
$0.00
$0.00
3,000,000
11,000,000
50,000,000
36,757,299
100,757,299
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.
A summary of the Company options and performance rights issued in the financial year is as follows:
Class of SBP
Quantity
Share price at
Grant date
Value recognized
during the year
Unlisted Options
Julian Babarczy
Unlisted Options
Mick d’Ancona
Unlisted Options
Ian Penrose
Unlisted Options
Freya Smith
Unlisted Options
Warren Stevens
Unlisted Options
Kevin Vonasek
Unlisted Options
Kevin Vonasek
Unlisted Options
Ironside
Unlisted Options
Tekkorp
Unlisted Options
Cygnet Capital
Stephen O’Malley Unlisted Options
Unlisted Options
Thomas Smith
Performance Rights
Staff EIP
Vesting of SBP
Previous Years
Forfeiture/Lapse of SBP
Total SBP for the year
Share issue costs
recognized as capital
raising cost
10,000,000
12,000,000
15,000,000
6,000,000
30,000,000
10,000,000
6,000,000
25,000,000
40,000,000
50,000,000
3,000,000
3,000,000
20,757,299
$0.038
$0.025
$0.038
$0.038
$0.053
$0.038
$0.025
$0.038
$0.038
$0.038
$0.025
$0.025
$0.030
$44,375
$293,560
$66,563
$26,625
$903,434
$44,375
$146,780
$310,522
$177,500
$465,938
$73,390
$73,390
$311,359
$828,804
(426,088)
$3,340,527
($355,000)
Share-base payments recognized in the profit and loss
$2,985,527
54
Value to be
recognized in
future years
$97,625
-
$146,437
$58,575
-
$97,625
-
$189,478
$390,500
$244,063
-
-
$1,045,514
IXUP Limited
Notes to the financial statements
30 June 2023
The fair value of the options and performance rights over ordinary shares granted to Executives, Directors and Consultants have
been valued using a Black-Methodology:
Issued
December
Options
16
2022
Options
30 June 2023
issued
Performance Rights
issued 3 February
2023
$0.06
$0.038
16/12/22
90%
Black-Scholes
16/12/24
3.226%
-
156,000,000
$2,306,568
$1,135,897
$0.06
$0.053
30/6/23
90%
Black-Scholes
30/6/26
3.226%
-
54,000,000
$1,430,554
$1,430,554
-
$0.03
3/2/23
90%
Black-Scholes
30/6/26
4.06%
-
20,757,299
$1,356,874
$311,359
Exercise Price
Grant Price
Grant Date
Volatility
Model Used
Expiry
Risk free interest rate
Vesting period
Number of Options
Total Value
Value recognized
during the period
A summary of the Company options and performance rights issued in the previous financial year is as follows:
Class of SBP
Quantity
Share price at
Grant date
Value recognized
during the year
Cygnet Capital
Advisors
Ian Penrose
Advisors
Executives
Unlisted Options
Performance Rights
Performance Rights
Performance Rights
Performance Rights
25,000,000
3,000,000
11,000,000
50,000,000
3,155,649
$0.155
$0.14
$0.21
$0.14
$0.135
$1,574,591
$64,654
-
-
$41,664
$1,680,909
Value to be
recognized in
future years
$143,145
$122,501
-
-
$36,927
$302,573
The fair value of the options over ordinary shares granted to Executives, Directors and Consultants have been valued using a
Black-Methodology:
Exercise Price
Grant Price
Grant Date
Volatility
Model Used
Expiry
Risk free interest rate
Vesting period
Number of Options
Total Value of options
Value recognized
during the period
Options Issued 2
August 2021
$0.02
$0.20
2/8/21
95%
Black-Scholes
2/8/23
2.00%
-
25,000,000
$1,717,736
$858,868
55
IXUP Limited
Notes to the financial statements
30 June 2023
Set out below are summaries of performance rights movements during the year:
2023
Grant date
Expiry date
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
14/11/2022
14/11/2022
03/02/2026
31/12/2023
31/03/2025
31/12/2024
20/12/2024
03/02/2026
20/12/2018
02/07/2019
29/01/2021
13/09/2021
05/10/2021
09/12/2021
21/12/2021
03/02/2023
2022
Grant date
Expiry date
20/12/2018
02/07/2019
29/01/2021
13/09/2021
05/10/2021
09/12/2021
21/12/2021
14/11/2022
14/11/2022
03/02/2026
31/12/2023
31/03/2025
31/12/2024
20/12/2024
-
2,000,000
-
5,250,000
16,000,000
16,000,000
3,000,000
3,000,000
11,000,000
11,000,000
50,000,000
50,000,000
3,155,649
-
- 21,750,000 - (992,701) 20,757,299
(11,398,350) 100,757,299
-
-
-
-
-
-
-
- (3,155,649)
-
-
-
-
-
-
-
(2,000,000)
(5,250,000)
-
-
-
-
21,750,000
90,405,649
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
2,000,000
5,250,000
24,000,000
-
-
-
-
31,250,000
-
-
-
3,000,000
11,000,000
50,000,000
3,155,649
-
-
(8,000,000)
-
-
-
-
67,155,649
(8,000,000)
-
-
-
-
-
-
-
-
2,000,000
5,250,000
16,000,000
3,000,000
11,000,000
50,000,000
3,155,649
90,405,649
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 2.5
years (2022: 2.5 years)
For the performance rights granted or vesting 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
13/09/2021
05/10/2021
09/12/2021
21/12/2021
03/02/2023
31/12/2023
31/03/2025
31/12/2024
20/12/2024
03/02/2026
Share price
at grant date
Vesting T1
Probability of
Vesting T2
Vesting T3
Risk-free
interest rate
Fair value
at grant date
$0.14
$0.21
$0.14
$0.14
$0.05
50.00%
40.00%
40.00%
50.00%
50.00%
-
25.00%
25.00%
-
-
-
15.00%
-
-
-
2%
2%
2%
2%
4%
$0.1248
$0.1928
$0.0000
$0.1048
$0.1248
The performance rights have the following vesting conditions with a grant date of 13/09/2021.
T1 – upon introduction by the recipient and subsequent completion of one or more transactions that add an aggregate of at
least A$2.0m in revenue to the IXUP Group of companies in a Measurement Period
T2 – The volume weight average price (VWAP) at which IXUP shares trade on the ASX during the rolling period of 20
continuous trading days meets or exceeds a level which is 33% higher than the closing price for IXUP shares on the ASX as
at the grant date and the board determines, in its discretion, that the recipient material contributed to such increase.
The performance rights have the following vesting conditions with a grant date of 05/10/2021.
T1 – 2.5m Rights vest upon the introduction and completion of 1 or more transactions that add an aggregate of at least
A$2.5m in revenue to the Group in any measurement Period.
T2 - 2.5m Rights vest upon the introduction and completion of 1 or more transactions that add an aggregate of at least
A$6.5m in revenue to the Group in any measurement Period.
T3 – a) the VWAP of IXUP shares trading on ASX during any rolling period 20 continuous trading days meets or exceeds a
level which is 33% higher than the closing price for the IXUP shares at the grant date; b) the group achieves revenue of at
least A$5m in any Measurement Period; c) the recipient has been engaged by the group for a continuous period of 3 yrs.
56
IXUP Limited
Notes to the financial statements
30 June 2023
The performance rights have the following vesting conditions with a grant date of 09/12/2021.
T1 – 25m will vest upon introduction by the recipient and completion of one or more transactions that add an aggregate of
at least A$5m in revenue to the Group in any Measurement period
T2 - 25m will vest upon introduction by the recipient and completion of one or more transactions that add an aggregate of at
least A$10m in revenue to the Group in any Measurement period
The performance rights have the following vesting conditions with a grant date of 21/12/2021.
T1 – a) Continuous service; b) 20-day volume weighted average price (VWAP) of IXUP’s shares meeting or exceeding a
level which is 30% higher than the closing price for IXUP shares at the grant date and the Board determines, in its discretion
that the recipient contributed to such increase.
The performance rights have the following vesting conditions with a grant date of 03/02/2023.
T1 – Measured up to Year 3, a) Signed commercial revenue generating contracts; b) Revenue targets c) Successful US
Pilot and d) Individual KPI’s
57
IXUP Limited
Directors' declaration
30 June 2023
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 2023 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
Julian Babarczy
Chairman
22 September 2023
58
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IXUP LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of IXUP Limited (“the Company”) and its subsidiaries (“the
Consolidated Entity”), which comprises the consolidated statement of financial position as at 30 June
2023, 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 the
directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2023
and of its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
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 Consolidated Entity in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report which indicates that the Consolidated Entity incurred
a net loss of $26,561,261 during the year ended 30 June 2023. As stated in Note 1, these events or
conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that
may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. Our
opinion is not modified in this respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Accounting for share based payments
Our procedures amongst others included:
• Analysing agreements to identify the key
terms and conditions of share based
payments issued and relevant vesting
conditions in accordance with AASB 2
Share Based Payments;
• Evaluating management’s Black-Scholes
Valuation Models and assessing the
assumptions and inputs used;
• Assessing the amount recognised during
the period in accordance with the vesting
conditions of the agreements; and
the adequacy of
the
disclosures included in Note 38 to the
financial statements.
• Assessing
As disclosed
financial
statements, during the period ended 30 June
in note 38
the
to
2023 the Group incurred share based payments
of $2,985,526.
Share based payments are considered to be a
key audit matter due to
•
•
•
the value of the transactions;
the
complexities
involved
in
the
recognition and measurement of these
instruments; and
the judgement involved in determining
the inputs used in the valuations.
Management used the Black-Scholes option
valuation model to determine the fair value of the
options granted. This process involved significant
estimation and judgement required to determine
the fair value of the equity instruments granted.
Key Audit Matter
Impairment of goodwill
How our audit addressed the Key Audit Matter
Our procedures amongst others included:
During the year, the carrying value of the Group’s
goodwill of $13,189,096 was impaired which was
the net of $2,080,635 which related to the
reversal of deferred consideration relating to
DataPower acquisition.
•
The recoverability of the Group’s intangible
assets is a Key Audit Matter due to:
• The significance of the balance to the
Consolidated Entity’s financial position;
and
• The presence of impairment indicators
and judgement required in assessing the
value in use of the cash generating units
(“CGU’s”) to which the intangible assets
relate.
Acquisition of BetStop
As disclosed in note 31 of the financial report, the
Group completed the acquisition of BetStop –
The National Self exclusion
for
$1,325,000. The acquisition constituted a
business combinations in accordance with AASB
3 Business Combinations.
register
Accounting for the acquisition constituted a key
audit matter due to:
• The size and scope of the acquisition;
• The complexities inherent in such a
transaction; and
• The judgement required in determining
consideration
the
of
the
value
transferred.
In respect of Goodwill, we assessed the
CGU’s performance against
management’s previous forecasts
utilised for the value in use calculations
including analysis of key assumptions
and inputs such as discount rates and
assessing the reasonableness of the
forecasts and impairment models
prepared in comparison to actual
results; and
• Assessed the appropriateness of the
disclosures included in the relevant notes
to the financial report.
Our procedures amongst others included:
• Reviewing the acquisition agreements to
understand the key terms and conditions
of the transactions;
• Assessing the fair value of consideration
transferred with reference to the terms of
the acquisition agreement;
• Verifying the acquisition date balance
sheets of the acquiree to underlying
supporting documentation;
• Assessing management’s determination
of the fair value of the assets and
liabilities at the date of acquisition and
consider any impairment requirements;
• Agreeing valuation assumptions of
identifiable intangible assets identified as
part of the purchase price allocation; and
the appropriateness of
• Assessing
disclosures in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 30 June 2023, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of 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 Note 1, the directors also state in accordance with Australian Accounting Standard AASB 101
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s
ability 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
Consolidated Entity 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Consolidated Entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Consolidated Entity’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Consolidated Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Consolidated Entity
audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2023. The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of IXUP Limited, for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated in Perth, Western Australia this 22nd day of September 2023
IXUP Limited
Shareholder Information
30 June 2023
The shareholder information set out below was applicable as at 4 September 2023.
There is one class of quoted securities, fully paid ordinary shares.
Distribution of Equitable Securities
Analysis of number of equitable security holders by size of holding:
Fully Paid Ordinary Shares
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Ordinary shares
Number
of holders
Ordinary Shares
Number
of units
Ordinary shares
% Issued
Share Capital
45
179
146
479
455
1,304
15,074
589,710
1,190,468
19,458,529
1,060,354,872
1,081,608,653
0.00%
0.05%
0.11%
1.80%
98.04%
100.00%
Marketable Parcel
There are 302 shareholders with less than a marketable parcel (basis price of $0.058) as at 4 September 2023.
On-Market Buy-Back
There is no on-market buy-back scheme in operation for the Company’s quoted shares.
Unlisted Options
Unlisted Options
Number
of holders
Unlisted Options
Number
of units
Unlisted Options
% Issued
Share Capital
Unlisted Options at $0.25, exp 20/12/23
10,001 to 100,000
100,001 and over
Unlisted Options at $0.25, exp 10/04/24
100,001 and over
Unlisted Options at $0.10, exp 30/11/23
100,001 and over
Unlisted Options at $0.25, exp 10/04/24
100,001 and over
Unlisted Options at $0.10, exp 03/02/25
100,001 and over
Unlisted Options at $0.06, exp 16/12/24
100,001 and over
Unlisted Options at $0.06, exp 30/06/25
100,001 and over
Unlisted Options at $0.06, exp 30/06/26
100,001 and over
Unlisted Options at $0.10, exp 04/09/25
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
50,000
2,951,666
1.67%
98.33%
133,333
100.00%
5,000,000
100.00%
750,000
100.00%
40,000,000
100.00%
156,000,000
100.00%
24,000,000
30,000,000
100.00%
100.00%
15,708
70,441
79,775
1,556,322
31,335,786
0.05%
0.21%
0.24%
4.71%
94.79%
1
8
1
1
1
1
11
4
1
50
31
12
36
42
65
IXUP Limited
Shareholder Information
30 June 2023
Performance Rights
Performance Rights
5,001 to 10,000
100,001 and over
Convertible Notes
10,001 to 100,000
100,001 and over
Equity Security Holders
Performance
Rights
Number
of holders
Performance
Rights
Number
of units
Performance
Rights
% Issued
Share Capital
1
19
7,299
100,750,000
0.01%
99.99%
Convertible Notes
Number
of holders
Convertible Notes Convertible Notes
Number
of units
% Issued
Share Capital
1
8
50,000
2,950,000
1.67%
98.33%
Twenty Largest Quoted Equity Security Holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number held
% of total
shares
issued
94,112,341
77,697,186
72,899,852
55,466,667
43,488,572
41,619,508
31,193,302
28,600,862
18,900,000
17,928,333
17,560,000
16,858,258
13,985,759
13,950,000
13,330,000
13,150,004
12,916,667
12,875,000
11,981,947
11,583,333
620,097,591
1,081,608,653
8.70%
7.18%
6.74%
5.13%
4.02%
3.85%
2.88%
2.64%
1.75%
1.66%
1.62%
1.56%
1.29%
1.29%
1.23%
1.22%
1.19%
1.19%
1.11%
1.07%
57.33%
100.00
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
KEA HOLDINGS PTY LTD
JAGGER HOLDINGS PTY LTD
DECK CHAIR HOLDINGS PTY LTD
HOLDREY PTY LTD
VISTA GROVE INVESTMENTS PTY LTD
JOSCELYNE INVESTMENTS PTY LTD
DREAVER INVESTMENTS AUSTRALIA PTY LTD
KOLLEY PTY LTD
MIKONOS INVESTMENTS PTY LTD
KEMBLA NO 20 PTY LTD
CITICORP NOMINEES PTY LIMITED
WHITE SWAN NOMINEES PTY LTD
AUBURY PTY LTD
DIGITAL INVESTMENTS PTY LTD
RACCOLTO INVESTMENTS PTY LTD
FNL INVESTMENTS PTY LTD
PJP GROUP PTY LTD
WILLIAM ROBERT WALLACE
FNL INVESTMENTS PTY LTD
Totals
Total Issued Capital
66
IXUP Limited
Shareholder Information
30 June 2023
Unquoted Equity Securities – Unlisted Options
Holders of 20% or more of Unlisted Options on issue
Unlisted Options at $0.10, exp 30/11/23
KEA HOLDINGS PTY LTD
Unlisted Options at $0.25, exp 10/04/24
PETER LEIHN
Unlisted Options at $0.10, exp 03/02/25
TEKKORP CAPITAL LLC
Unlisted Options at $0.06, exp 16/12/24
WHITE SWAN NOMINEES PTY LTD
TEKKORP CAPITAL LLC
Unlisted Options at $0.10, exp 04/09/25
DREAVER INVESTMENTS AUSTRALIA PTY LTD
Unquoted Equity Securities – Performance Rights
Holders of 20% or more of Performance Rights on issue
Unlisted Options
Number
of units
Unlisted Options
% Issued
Share Capital
5,000,000
100.00%
750,000
100.00%
40,000,000
100.00%
50,000,000
40,000,000
32.05%
25.64%
5,208,334
15.76%
Performance
Rights
Number
of units
Performance
Rights
% Issued
Share Capital
TEKKORP CAPITAL LLC
50,000,000
62.50%
Unquoted Equity Securities – Convertible Notes
Holders of 20% or more of Convertible Notes on issue
Performance
Rights
Number
of units
Performance
Rights
% Issued
Share Capital
DREAVER INVESTMENTS AUSTRALIA PTY LTD
600,000
20.00%
Substantial holders
Substantial holders in the Company are set out below:
Ordinary Shares
% of
total
Number
held
shares
issued
Date of
ASX
notice
JAGGER HOLDINGS PTY LTD
RANSDALE INVESTMENTS PTY LTD
JONATHAN SAUL ROSHAM
125,850,000
12.22%
09/03/23
52,500,000
8.81%
20/10/20
117,178,768
11.32%
26/06/23
67
IXUP Limited
Shareholder Information
30 June 2023
Restricted Securities
There are no restricted securities on issue.
There are no other classes of equity securities.
Voting Rights
Fully Paid Ordinary Shares
There are 1,304 holders of ordinary shares. On a show of hands every member present at a meeting in person or by proxy will have one
vote and upon a poll each share shall have one vote.
Unlisted Options
There are no voting rights attached to Unlisted Options.
Performance Rights
There are no voting rights attached to Performance Rights.
Convertible Notes
There are no voting rights attached to Convertible Notes.
Corporate Governance
The Company’s Corporate Governance Statement as at 30 June 2023 as approved by
https://investors.ixup.com/investor-centre/?page=corporate-governance
the Board can be viewed at
Stock Exchange on which the Company’s Securities are Quoted
The Company’s listed equity securities are quotes on the Australian Securities Exchange
Review of Operations
A review of operations is contained in the Directors Report.
Annual General Meeting
The Company advises that the Annual General Meeting ('AGM') of the company is scheduled for 24 November 2023.
Further to Listing Rule 3.13.1, Listing Rule 14.3 and clause 6.2(f) of the Company's Constitution, nominations for election of directors at
the AGM must be received not less than 35 Business Days before the meeting, being no later than Friday, 6 October 2023.
68