2020 ANNUAL REPORT
Jaxsta Limited (formerly known as Mobilarm Limited)
ABN 15 106 513 580
Credit where credit is due
Photo credit: Obafemi Moyosade
Table of Contents
FY20 Milestone spread
Jaxsta By The Numbers
Chair’s Letter
Chief Executive Officer Report
Directors’ Report
Remuneration Report
Consolidated Financial Statements
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 Consolidated Financial Statements
Director’s Declaration
Auditors’ Independence Declaration
Independent Auditor’s Report
Additional Shareholder Information
Corporate Directory
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32
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93
2020 FY Milestones
30th July 2019
22nd November 2019
22nd April 2020
APRA AMCOS CDAA
Contract signed
Jaxsta.com Pro Beta
Goes Live (Hard Launch)
Jaxsta Pro provided FREE in
response to COVID 19
25th October 2019
1st April 2020
13th May 2020
Recording Academy’s Behind the
Record Day - supported by Jaxsta.
A new social media initiative to
highlight all of the creators that
made your favorite albums and
records possible
Ms. Linda Jenkinson is appointed
as Jaxsta Chair
Adam Lambert’s episode of Jaxsta’s
Humans of Music podcast has been
downloaded 10, 000 times
Photo credit: Manuel Nägeli
1
22nd May 2020
13th June 2020
30th June 2019
10,000
Subscribers
We have hit 10,000 Jaxsta Pro
Subscribers
1st
Jaxsta Beta Go Live
Anniversary
Happy 1 Year Anniversary for the Go
Live of Jaxsta Beta and here’s to 20K
Jaxsta Pro Members!
18,000
Profile Claims
Over 18,000 Jaxsta profile claims
11th June 2020
30th June 2020
Jaxsta’s News page launches with
dedicated Industry News with
articles from 115+ news channels
including Billboard and Pitchfork. It
also includes Original Features by
Rod Yates, our Head of Content &
Humans of Music Podcast host
30,000
Subscribers
We have hit 30,000 Jaxsta Pro
subscribers!
2
Jaxsta By The Numbers
115,000,000+
Individual Music Credits
47,500,00+
Pages on Jaxsta
37,000,000+
Artist Credits
30,000,000+
Songwriter Credits
12,000,000+
Individual Profiles
4,500,000+
Producer Credits
560,000+
Recording Engineer Credits
446,000+
Drums Credits
*Numbers are as of the 30th September 2020
Photo credit: Danny Howe
3
100,000+
Credits Ingested Daily
83,000+
Trombone Credits
66,500+
Jaxsta Pro Members
20,000+
Jaxsta Profiles Claimed
16,000+
Harp Credits
107+
Countries Humans of Music Podcast has been downloaded in
45
1
Years it Would Take to View Every Page of Jaxsta
Leading Official Music Credits Database: Jaxsta
4
Official music credits
Photo credit: Sheep .
5
Chair’s Letter
Dear Shareholder,
On behalf of the Board, it is a pleasure to present Jaxsta’s second annual report. I am pleased to share the
progress we have made during 2020.
Jaxsta’s vision has always been to tell the story behind the music and give credit where credit is due for
millions of artists, songwriters, producers and music makers. We are pleased to report that this year
saw the launch of the Company’s core product, Jaxsta Pro, being our first revenue stream. That said, in
response to the global pandemic COVID-19 which severely impacted the music industry, the Company
offered Jaxsta Pro for free until at least 31 December 2020 as a way to support our core user base. We
have continued strong, positive membership growth since the launch of this initiative on 22 April 2020.
We have continued to grow the number of data partnerships in 2020 and remain committed to be the
primary source for industry metadata. The combination of the official metadata and our proprietary
engine to de-duplicate and deep-link the data means we can provide incredible value to all members in
the music industry. I would like to thank our data partners who provided further assistance during the
COVID-19 period to help provide this incredible resource to the industry members.
On behalf of the Board, I’d like to take this opportunity to thank CEO and Co-founder Jacqui Louez Schoorl
and the entire Jaxsta team for their outstanding efforts and dedication.
I would like to thank my fellow Board members for their contribution during this difficult year, and thank
our shareholders for their continued support. We do not take this for granted.
We look forward to another exciting year ahead as Jaxsta prepares for the launch it’s big data solutions
offering and the launch of its tier-based Jaxsta Pro in the later half of financial year 2021.
Yours Sincerely,
Linda Jenkinson
Independent, non-Executive Chair
Image of Linda Jenkinson by Unknown Photographer
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Chief Executive Officer’s Report
2020 has been a challenging year across the globe for many
reasons. The impact of COVID-19 had a major impact on
the global music industry. The lockdown measures affected
the performing sector of the industry as well as changed the
dynamics of the recording aspect of the industry. More than
ever, the value of Jaxsta was very clear especially during these
trying times.
We found ways to support the industry and help those in
the industry that needed more ways to be identified for
opportunities during the lockdown periods to have their
credits be the voice for their next project.
In the meantime we have advanced our strategy to achieve the
original goals of being the authoritative source of credits in the
industry and to commercialise the business. We had various
initiatives that we have achieved during the year which have
led us to this exciting stage at Jaxsta.
Songtradr
On 10 September 2020 we announced an investment and
commercial arrangement with Songtradr to provide Jaxsta
Pro users with additional benefits that can be provided by
Songtradr who will utilise our commercial API solution to
enhance their neighbouring rights service. This partnership
shows the value that our commercial API can provide to
external parties.
Sales and Marketing activities
The bulk of our marketing activities during the year centered
around the launch of Jaxsta Pro and the activities to promote
the platform through our social campaigns. As of the date
of this report, the company has increased its Jaxsta Pro
membership to over 66,500 members since launch.
Launch of Jaxsta Pro
Future Outlook
The launch of Jaxsta Pro was a significant milestone for the
Company and we are pleased to have achieved this in line
with the business model outlined in our Prospectus dated 28
September 2018. The platform is positioned to be the world’s
first dedicated database of official music credits.
To date, it holds over 115 million individual credits across
more than 47.5 million pages which are updated daily
to reflect the latest information from our data partners.
Developing this bespoke product from the ground up and
entirely in-house, using cutting-edge and innovative solutions,
was a significant technical achievement.
Feedback from our current user base has been positive and
encouraging. We continue to improve the platform to enhance
the user experience and are using this feedback to inform and
refine our core subscription product. We expect to introduce
paid tiers of the service in the coming year in line with the
feedback from customers.
Jaxsta Data Solutions
During the year we had our first API with The Recording
Academy. This free initiative was proof of the power of the
Jaxsta service to deliver bespoke data solutions in the future.
We would like to take this opportunity to thank everyone
on the Jaxsta team for the fantastic effort to get Jaxsta Pro
launched and for the continued effort as we prepare further
ways to enhance our platform to be the authority on credits
for the industry.
The year ahead is full of many opportunities and exciting
steps for Jaxsta as it commercialises its operations. Jaxsta
Pro will migrate to a tiered subscription service. Our Jaxsta
Data Solutions will deploy our first paid commercial APIs and
we will continue to show the value of metadata as a tool to
enhance businesses. Lastly we will look to further diversify
our business through our Jaxsta E-commerce and Marketing
Solutions.
We thank all our shareholders, commercial partners and our
members who are supporting the mission to tell the story
behind the music and give credit where credit is due for
millions of artists, songwriters, producers and music makers.
We are excited at the outlook for this coming year and look
forward to delivering a transformative year for all.
We are working with various customers to deliver the first
commercial APIs during the first half of the 2021 financial
year and diversify the revenue streams of the Company. Our
goal is to become the metadata superstore.
Jacqui Louez Schoorl
Chief Executive Officer
& Co-Founder
Photo credit: Hollie Adams
7
Image of Jacqui Louez Schoorl
Photo credit: Hollie Adams
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Directors’ Report
The Directors present their report on the consolidated entity (referred to hereafter as the
consisting of Jaxsta Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the
entities it controlled at the end of, or during, the year ended 30 June 2020 (the
The Directors’ Report together with the Financial Statements commencing on page
Jaxsta’s 2020 Annual Report (the
Directors’ Report).
2 constitute
Group)
3
Report).
Directors and Chair
The following persons were Directors of Jaxsta during the whole of the financial year and up to the
date of this Report, unless otherwise stated:
●
●
●
●
●
Brett Cottle (Non-Executive Director and Chair) - ceased as Chair on 31 March 2020 (but
continued as a Non-Executive Director);
Jacqueline Louez Schoorl (Executive Director);
Linda Jenkinson (Non-Executive Director and Chair) - appointed as Chair on 31 March 2020;
Jorge Nigaglioni (Non-Executive Director) - Executive Director from 20 July 2020; and
Robert Gaunt (Non-Executive Director) - appointed 23 March 2020.
Principal Activities
The principal activities of the Group during the full year were creating an online platform to hold
official music metadata and to develop a repository of official music-related information,
comprising liner notes and label copy.
Dividends
No dividends were paid or declared during the current financial year.
Review of operations
The last financial year was a transitional period for Jaxsta as it moved from pre-commercial
development to its initial commercial phase. The Company launched its Jaxsta Pro subscription
service in November 2019 in its beta form. The Company was able to use the beta experience to
start identifying the additional customer requirements needed to fully commercialise its
subscription platform. Its launch was subsequently affected by the COVID-19 global economic
impact as the music industry was a sector that was heavily affected by lockdown measures to the
touring and performing side of the industry. The Jaxsta team used this opportunity to promote
Jaxsta Pro to the industry as a tool to improve visibility of musicians, especially during lockdown,
in order to maximise their benefit once these measures are lifted and the industry can operate in
its customary fashion.
During the financial year ended 30 June 2020, the Company used its cash assets in a manner
consistent with the prospectus issued on 7 September 2018.
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Jaxsta Limited
2020 Annual Report | Director’s Report
2020 Annual Report | Directors’ Report
Key financial matters
●
●
●
●
Employee Benefit Expense of $3,808,769 (2019: $2,736,521) includes a non-cash component of
$374,754 (2019: $358,557) to record share-based compensation expenses. The growth during
the year was primarily spent during the first three quarters of the year in the lead up to the
deployment of Jaxsta Pro.
Product Development Expense of $2,055,583 (2019: $757,230) includes a non-cash component
of $816,503 (2019: $177,529) to record share-based compensation expenses. The growth was
primarily driven by the lead up to the deployment of Jaxsta Pro and the associated data
licensing costs to test the site for go live.
Impairment expenses of $4,025,904 (2019: $823,813) relating to the write off of goodwill during
the current year as the current economic environment created a lack of an active market price
and the Group is unable to value goodwill based on the uncertainty about the scope and
timing of future revenues and its value in use at the early stage revenue that the company is at,
at the time of this report. The prior year impairment was related to the write down of the MRT
receivable as part of its restructuring with the buyer.
Cash & Cash equivalents at 30 June 2020 of $2,404,848 (2019: $2,452,760).
For further commentary please refer to Notes to the Consolidated Financial Statements
commencing on page 32 of this Report.
Development update
Jaxsta has developed an online platform to hold official music metadata to become a repository of
official music-related information, comprising liner notes and label copy. The customer facing site
at Jaxsta.com was launched on 13 June 2019. On 22 November 2019, Jaxsta launched its B2B
subscription-based service, Jaxsta Pro Beta which includes features normally only available to paid
users. On 22 April 2020 in response to the significant impact COVID-19 had on the global music
industry, the Company offered Jaxsta Pro Beta for free to music industry professionals for the rest of
the 2020 calendar year. As at 30 June 2020, Jaxsta Pro Beta had 30,395 members and 18,891 profiles
claimed.
As at 30 June 2020, Jaxsta had renewed a number of existing commercial data access agreements,
and metadata and artwork agreements, with relevant data owners continuing to access and
supply updates of their data into its platform, creating an official source for much of this data.
Business strategies and prospects for future years
Jaxsta’s near term focus is to commercialise its three business segments:
●
●
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Jaxsta Pro - Subscription and industry tools.
Jaxsta Data Solutions - Jaxsta’s large volume data solutions, including its commercial
Application Programming Interface (API) and other bespoke solutions.
Jaxsta Marketing & E-Commerce - Jaxsta’s marketing initiatives to promote users and sponsors
of its services, as well as third party affiliate sales.
In order to achieve the near term goals for the segments, the development focus on FY2021 is to
deliver its commercial API for its initial customers in the first half of the year, complete the
integration of the Songtradr Neighbouring Rights solution into Jaxsta Pro and roll out the
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
customer tiers of Jaxsta Pro in the later half of the year as we look to start commercialising the key
tiers in late FY2021.
The Group is still reliant on the support of its data partners who provide the data upon which the
platform is based and on the acceptance of the product by the music industry. These two items
will be key in the commercial rollout in FY2021.
Significant changes in the state of affairs
Capital Raising
On 11 December 2019, Jaxsta successfully completed a capital raising of $2,704,199 before capital
raising costs of $208,938 by issuing 15,023,329 ordinary shares at $0.18 per share.
On-going consideration for disposal of material assets
In May 2018, Jaxsta (known at the time as Mobilarm Limited) entered into an agreement to sell all
of the shares in its operating subsidiary, Marine Rescue Technologies Limited ( MRT ), to Secure2Go
Limited ( S2G ) and that agreement was subsequently amended to incorporate JJC Capital Pte Ltd
( JJC ) as a partial purchaser (S2G and JJC, together the MRT Purchasers ). The sale of MRT was
completed on 28 December 2018 with the outstanding balance as noted below.
During the financial year, the MRT Purchasers and Jaxsta have entered into a further agreement
amending key terms of the MRT sale (as detailed in Note 13 of the Notes to Consolidated Financial
Statements on page 60 of Report). The Company has already received $4,220,687 in connection
with the sale and a remaining aggregate receivable of $382,500 at 30 June 2020 with the following
outstanding payment schedule agreed:
●
●
4 month payments of $31,500 due on the last day of each month up to and including
November 2020; and
$225,000 due on 28 December 2020.
There were no other significant changes in the state of affairs of the consolidated entity during the
financial year.
COVID-19
The Group adjusted its operations as a result of COVID-19 by offering its Jaxsta Pro service for free
for at least the remainder of the 2020 calendar year. The performance/touring and recording
sectors of the music industry had to cancel activities during the year affecting the income of many
music professionals. The Group’s action provided music professionals a tool to maximise the
potential for their careers during and post COVID-19 by having their profiles with official credits be
ready for their next engagement.
The Group reduced costs including the forfeit of director’s fees during the last quarter of the
financial year. Our mandate has been prudent use of our cash resources in line with achieving
strategic goals of platform acceptance by the target market.
As a pre-revenue venture, the focus was on safely continuing operations and continuing the
development of our platform whilst engaging customers during the free membership promotion.
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2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
The safety of our employees was paramount and we implemented security measures to be able to
work remotely.
Matters subsequent to the end of the financial year
On 10 September 2020, the Company entered into a convertible note agreement with Songtradr
Inc. for a principal value of $1,420,000. Conversion would result in the issue of 40,571,429 fully
paid ordinary Jaxsta shares for the principal value of the note. The conversion is at the right of the
noteholder, except if:
●
●
the Company registers a full year net profit of $5,000,000 at which time 100% of the note is
converted automatically; or
the Company registers a full year net profit of $2,500,000 at which time 50% of the note is
converted automatically.
The noteholder can convert or seek repayment of the note at the expiration of the term of the
note. The note has a term of up to 3 years and carries a coupon rate of 7.5% which will be accrued
and paid at the end of the term or capitalised and converted at the time of conversion or
repayment. The note is secured by a first ranking security over the assets of the Company and its
subsidiaries.
In addition, on 10 September 2020 the Company also entered into a five year commercial
agreement with Songtradr to deliver an end-to-end integrated platform solution for Jaxsta Pro
members to use Songtradr’s neighbouring rights collection service, powered by Jaxsta’s global
performer metadata. The Group expects the integration to be completed by November 2020. The
agreement includes an upfront license fee of $500,000 paid by Songtradr to Jaxsta (the “License
Fee”) and provides Jaxsta with 20% of net neighbouring rights revenues received by Songtradr
from Jaxsta users adopting the service a�er recoupment of the License Fee.
Proceedings on behalf of the Company
No person has applied under Section 237 of the Corporations Act for leave of court to bring
proceedings on behalf of Jaxsta or intervene in any proceedings to which Jaxsta is a party for the
purpose of taking responsibility on behalf of Jaxsta for all or any part of those proceedings.
Jaxsta was not a party to any such proceedings during the year.
Environmental Regulation and Performance
The Group’s operations are not regulated by any significant environmental regulations under a law
of the Commonwealth or of a State or Territory in Australia.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Options and Warrants
At the date of this Report, the unissued ordinary shares of Jaxsta under option are as set out
below.
Grant Date
Date of Expiry
Exercise Price
Number under Option or
Warrant
16 November 2018
16 November 2023
16 November 2018
16 November 2023
14 March 2019
31 March 2027
14 March 2019
31 March 2028
15 March 2019
31 March 2027
15 March 2019
31 March 2028
28 March 2019
28 March 2026
28 March 2019
28 March 2025
18 June 2019
18 June 2019
30 July 2019
30 July 2019
31 May 2027
31 May 2028
31 July 2027
31 July 2028
30 September 2019
1 October 2026
30 September 2019
1 October 2027
30 September 2019
30 September 2024
10 March 2020
31 August 2027
$0.20
$0.30
$0.01
$0.01
$0.01
$0.01
$0.00
$0.651
$0.01
$0.01
$0.01
$0.01
$0.23
$0.23
$0.20
$0.01
20,000,000
1,000,000
713,105
2,139,315
675,573
675,573
150,000
601,923
562,978
562,977
234,574
234,574
150,000
150,000
6,000,000
2,048,554
35,899,146
Neither the option holders nor the warrant holders have any rights to participate in any issues of
shares or other interests of Jaxsta or any other Group member.
Other than the options and warrants disclosed above, there have been no options or warrants
granted over unissued shares or interests of any controlled entity within the Group during or since
the end of the reporting period.
For details of options issued to Directors and executives as remuneration, refer to the
Remuneration Report.
No person entitled to exercise the option had or has any right by virtue of the option to participate
in any share issue of any other body corporate.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Information Relating to Directors and Company Secretary
Brett Cottle
Qualifications
Experience
Non-Executive Director and Chair (until 31 March 2020)
Bachelor of Laws
Order of Australia
Brett was the Chief Executive of Australasian Performing Right
Association Ltd (APRA) for 28 years until stepping down in June 2018. For
the last 21 of those years Brett also held the position of Chief Executive of
Australasian Mechanical Copyright Owners Society Ltd (AMCOS)
following the merger of back offices of those organisations in 1997. APRA
AMCOS administers performance, broadcast, online and recording rights
in musical works on behalf of songwriters and music publishers, and is
the largest music industry body in Australasia with annual turnover
exceeding $430 million. Brett holds a law degree from Sydney University,
is a past Director of the Australian Copyright Council and a past member
of the Copyright Law Review Committee. Between 1991 and 2018 Brett
was a Director of the International Confederation of Societies of Authors
and Composers (CISAC) and is the only Australian to have served as Chair
of that international body, a position he held between 2005 and 2010.
Interest in Shares
Interest in Options
Special Responsibilities
166,668
3,000,000
Chair of Remuneration and Nomination Committee
Member of Audit & Risk Committee
Directorships held in other listed
entities during the three years
prior to the current year
None
Jacqueline Louez Schoorl
Chief Executive Officer and Executive Director
Qualifications
Experience
Australian Institute of Company Directors graduate and member
Jacqui’s career spans over two decades across music, film and television,
working for the likes of Channel 9, IF Magazine, George Lucas’ private
company on the Star Wars Episodes II and III movies, Baz Luhrmann and
Catherine Martin on their ‘Chanel No. 5’ campaign, Amalgamated
Holdings (now Event Hospitality) and EMI Music. A regular panelist,
Jacqui’s speaking engagements have included Commonwealth Bank’s
Women In Focus conference, BigSound, General Assembly, Australian
Music Week and Music Australia, ARIA Masterclass series and ARIA Week,
Indie Week A2IM, MusicBiz Conference, CDBabyDIY Conference, Lets Dew
Lunch webinar series, The Future of What, Music Tectonics, Short Black &
Kick Ass Chicks podcasts and Vivid Ideas festival. Jacqui also spends her
time working as the Founder of Women In Music Sydney, a non-profit
organisation bringing together a dynamic group of dedicated music
professionals to network, learn and in the process create a supportive
community. She is also a Dementia Australia advocate o�en speaking on
her family's experience with Alzheimers where she helps to shed some
light on the journey for those with Dementia or Alzheimer’s. Jacqui is an
alumni of Commonwealth Bank of Australia’s Women In Focus Program.
Interest in Shares
Interest in Options
Special Responsibilities
Directorships held in other listed
entities during the three years
prior to the current year
25,920,004
20,000,000
None
None
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Jorge Nigaglioni
Non-Executive Director.
Executive Director and Company Secretary (from 20 July 2020)
Qualifications
Master of Business Administration
Experience
Bachelor of Science in Business Administration
Australian Institute of Company Director graduate and member
Certificate in Governance Practice and Administration from Chartered
Secretaries Australia
Jorge has over 24 years of experience in accounting and finance roles in
both public and private companies. Jorge has worked with start up
companies and has been CFO for three publicly listed companies in the
United States and Australia. As a Controller at Agilent Technologies, he
was involved in turning around two divisions to profitability. In his last
two years at PricewaterhouseCoopers he was involved in auditing and
consulting for start up companies, where he has focused his expertise to
launch early ventures to success. Jorge has a Masters of Business
Administration from the University of Wisconsin-Madison and a
Bachelor’s of Science degree in Business Administration from Bryant
University.
Interest in Shares
650,179
Special Responsibilities
Chair of Audit & Risk Committee (from 21 May 2020 - 20 July 2020)
Member of Remuneration & Nomination Committee (from 21 May 2020 -
20 July 2020)
Directorships held in other listed
entities during the three years
prior to the current year
None
Robert Kenneth Gaunt
Non-Executive Director (from 23 March 2020)
Qualifications
Experience
-
Zimbabwean born Robert Kenneth ('Ken') Gaunt is a successful
entrepreneur and investor with over 30 years of experience in sales
management, corporate advisory and early-stage business development.
A�er emigrating to Australia from Cape Town in 1997, Ken co-founded
and was the managing director of Electronic Banking Solutions Pty Ltd
which he grew into Australia’s largest independent ATM operator. A�er
guiding that company through a successful merger with Cashcard
Australia Limited, in 2005 Ken completed the $330 million sale of the
merged financial services operation to an American private investment
firm. Ken is an experienced board member holding various national and
international board positions throughout his career including as a
director on the multi-award winning, iconic tourist attraction, Sydney
Seaplanes, as a board member of Hong Kong-based Fintronics Holding
Company Limited and as a non-executive director of the Australian listed
oil and gas company, K2 Energy Limited. Ken was CEO of Mobilarm
Limited, the company which Jaxsta Limited completed a successful
reverse takeover with in late 2018. He has recently joined the Jaxsta
board as a non-executive director.
Interest in Shares
Special Responsibilities
Directorships held in other listed
entities during the three years
prior to the current year
5,451,818
None
K2 Energy Ltd
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Linda Jenkinson
Qualifications
Experience
Non-Executive Director
Chair (from 31 March 2020)
Bachelor of Business Studies
Master of Business Administration
New Zealand CPA (non-current)
Linda is a successful businesswomen and entrepreneur with over 25
years of general management and consulting experience. She’s founded
numerous businesses and was the first New Zealand woman to list a
company on the NASDAQ stock exchange, with DMSC, the $250 million
on-demand courier company she co-founded. She also co-founded a
global customer and employee experience platform, which was sold to
the Accor hotel group, and WOW for Africa which was a social venture
fund supporting women entrepreneurs in Senegal. Linda is an
experienced company director, sitting on multiple boards including Air
New Zealand, Eclipx Group and Guild Group. She’s received a number of
awards including EY Master Entrepreneur of the Year New Zealand in
2013, World Class New Zealander in 2016 and is a Top 100 Most
Influential Women in San Francisco. Linda is currently the Chair of Unicef
New Zealand. She has been based for many years in San Francisco and
during this time for five years served on the Board of the Bay Area Red
Cross and was Chair of the fund raising committee. Prior to her
entrepreneurial career, Linda was a Partner at A.T. Kearney in the Global
Financial Services practice where she worked with some of the world’s
largest financial institutions. Linda holds a Master of Business
Administration from The Wharton School, University of Pennsylvania in
Finance and a Bachelor of Business Studies from Massey University in
Data Processing and Accounting & Finance. She qualified for her New
Zealand CPA (ACA). Linda is currently building Level-Up, a program to
supercharge high-growth companies who are expanding globally. She is
a New Zealand citizen who holds residency in the United States and
co-locates between Wellington and San Francisco. Linda will be
considered independent in her role as Non- Executive Director following
completion of the Acquisition.
Interest in Options
3,000,000
Special Responsibilities
Chairman of Audit & Risk Committee (until 21 May 2020)
Member of Remuneration and Nomination Committee
Directorships held in other listed
entities during the three years
prior to the current year
Air New Zealand Limited, Eclipx Group Limited, Guild Group Holdings &
Subsidiaries and Harbour Asset Management
Shelley Burger
Qualifications
Experience
Company Secretary (ceased on 22 July 2020)
Bachelor of Design Computing (Honours)
Bachelor of Laws
Shelley has over 12 years’ experience in legal practice and governance
and has worked with ASX-listed entities in the financial services,
technology and telecommunications industries. Shelley is admitted in
the High Court of Australia, the Federal Court of Australia and Supreme
Court of New South Wales.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Directors’ Report
2020 Annual Report | Director’s Report
Meetings of Directors
The number of meetings of Jaxsta’s Board of Directors (the Board ) held during the year ended 30
June 2020, and the number of meetings attended by each Director were:
Board
Audit & Risk
Committee
Remuneration &
Nominations
Committee
Eligible
Attended
Eligible
Attended
Eligible
Attended
Brett Cottle
Jacqui Louez Schoorl
Linda Jenkinson
Jorge Nigaglioni
20
20
20
20
20
20
17
20
7
-
7
1
-
Robert Kenneth Gaunt*
* Robert Kenneth Gaunt commenced as a director on 23 March 2020.
6
7
7
-
7
1
-
4
-
4
1
-
4
-
4
1
-
17
17
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Remuneration Report (audited)
Introduction
The Directors of Jaxsta present the remuneration report contained on pages 18 to 29 for the Group
for the financial year ended 30 June 2020 (the Remuneration Report ). The Remuneration Report
forms part of the Directors’ Report.
The Remuneration Report is made in accordance with a resolution of Directors and details the
remuneration arrangements of the Group’s Key Management Personnel ( KMP ). It has been
prepared in accordance with the requirements of the Corporations Act 2001 (Cth) (the
Corporations Act ) and its Regulations and has been audited as required by section 308(3C) of the
Corporations Act.
The Remuneration Report is set out into the following key sections:
●
●
●
●
●
principles used to determine the nature and amount of remuneration;
details of remuneration;
service agreements;
share-based compensation; and
additional disclosures relating to KMP.
This Remuneration Report has been prepared for FY2020 and a resolution will be put to the 2020
AGM to ask shareholders to approve it.
Voting and Comments Made at the Company’s Last Annual General
Meeting
The Group received 98.98% of ‘yes’ votes on its Remuneration Report for the financial year ended
30 June 2019. The Company received no specific feedback on its Remuneration Report at the
Annual General Meeting.
18
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Jaxsta Limited
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2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Key Management Personnel
KMP are those persons having authority and responsibility for planning, directing and controlling
the activities of the Group, directly or indirectly, including all Directors. The following table details
the Group’s KMP during FY20 and up to the date of this Report.
Name
Role
Full year or part year
Executive Director
Jacqui Louez Schoorl
Jorge Nigaglioni
Non-Executive Directors
Co-Founder & Chief Executive Officer (CEO)
Chief Financial Officer & Company Secretary
Full year
Commenced on 20 July 2020*
Brett Cottle
Non-Executive Director
Full year
Chair
Part year - ceased 31 March 2020
Linda Jenkinson
Non-Executive Director
Full year
Chair
Jorge Nigaglioni
Non-Executive Director
Robert Kenneth Gaunt
Non-Executive Director
Part year - commenced 31 March
2020
Full year*
Part year - commenced 23 March
2020
Other KMPs
Philip Morgan
Renee Bryant
Iain Bartram
Chief Information Officer
Full year
Chief Financial Officer
Chief Financial Officer
Part year - ceased 2 March 2020
Part year - commenced 2 March
2020 - ceased 31 July 2020
Part year - 11 February 2020
Shaun Alexander
Head of Growth
* Mr Nigaglioni served as a non-executive director of the Company for the full year and up to 20 July 2020 when he was
appointed Chief Financial Officer and Company Secretary. He will continue as an executive director from 20 July 2020
onwards.
Following a review of the changing roles within the Group, the Board determined that Richard
Huey, Head of Partnerships, no longer met the definition of KMP for FY20.
Principles used to determine the nature and amount of remuneration
The remuneration policy of Jaxsta has been designed to align KMP objectives with the Group’s
vision, values and overall business objectives. The objective of the remuneration policy is to
provide a fixed remuneration component and offer specific long-term incentives to ensure reward
for performance is competitive and appropriate for the results delivered.
The Board believes the remuneration policy to be appropriate and effective in its ability to attract
and retain high-quality KMP to run and manage the Group.
The Board ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
fair and reasonable;
create value for shareholders; and
linking performance of the Group to the individual and the general external market
environment.
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Jaxsta Limited
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2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
The Remuneration & Nominations Committee is responsible for determining and reviewing
remuneration arrangements for Jaxsta’s directors and the Group’s executives. The performance of
the Group 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 reward to shareholders’ interests. The Board
has considered that it should seek to enhance shareholders’ interests by:
● motivating KMP to pursue the Group's long-term growth and success;
●
●
demonstrate a clear relationship between the Group's overall performance and the
performance of KMP; and
align the interests of KMP with the creation of value for shareholders.
Additionally, the reward framework seeks 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 directors’
and executive directors’ remuneration is separate.
Non-Executive Remuneration
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment
and responsibilities. The Remuneration & Nominations Committee 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 Chair’s fees are determined
independently to the fees of other Non-Executive Directors based on comparative roles in the
external market. The Chair is not present at any discussions relating to the determination of their
own remuneration.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined
periodically by a general meeting. At the extraordinary meeting of shareholders held on 17 August
2018, the current maximum annual aggregate remuneration for Non-Executive Directors of
$500,000 was approved. The current aggregate Non-Executive Directors’ remuneration level is
within this approved range.
Executive Remuneration
The Group aims to reward executives based on their position and responsibility, with a level and
mix of remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
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 comprise the executive’s total remuneration.
20
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Jaxsta Limited
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2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Fixed remuneration consisting of base salary, superannuation and non-monetary benefits, are
reviewed annually by the Remuneration & Nominations Committee based on individual and
business unit performance, the overall performance of the Group and the general external pay
environment.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for
example parking). Tax effective salary sacrifice arrangements are encouraged where this does not
create any additional costs to the Group and provides additional value to the executive.
The short-term incentives ( STI ) program will be designed to align the targets of the business units
with the short-term performance hurdles of executives. STI payments are based on specific annual
targets and key performance indicators ( KPIs ) being achieved. KPIs include client (data partner)
engagement, leadership contribution and product development.
The longer-term incentives ( LTI ), including share-based payments (for example tax effective
incentive options) exercisable over a 2 to 4 year period, are awarded to key staff and executives as
part of a long-term retention strategy.
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Jaxsta Limited
2020 Annual Report | Remuneration Report
Remuneration Details
Amounts of Remuneration
Details of the remuneration of KMP of the consolidated Group are set out in the following tables.
Short term benefits
Post-employm
Long-term
Share-based
ent benefits
benefits
payments
Total
Cash salary
Cash bonus
Non-
Super-
Long Service
Equity-Settled
and fees
monetary
annuation
Leave
*
Jacqui Louez Schoorl (5)
262,500
92,500
19,314
5,586
132,000
511,900
Total for period 1 July 2019
984,007
92,500
8,271
284,317
1,446,547
Other Key Management Personnel:
2020
Non-Executive Directors:
Brett Cottle ( 1 & 2)
Linda Jenkinson ( 1 & 3)
Jorge Nigaglioni (1)
Robert Gaunt (1 & 4)
Executive Director:
Philip Morgan
Renee Bryant (6)
Iain Bartram (7)
Shaun Alexander (8)
to 30 June 2020:
2019
Non-Executive Directors:
Brett Cottle (9)
Linda Jenkinson (10)
Jorge Nigaglioni (10)
Lorna Inman (11)
Executive Director:
Other Key Management Personnel:
Philip Morgan
Renee Bryant
Richard Huey (12)
Robert Kenneth Gaunt (13)
Sir Tim McClement (13)
Jorge Nigaglioni (14)
90,000
49,275
45,000
-
206,749
190,803
78,400
61,280
60,000
32,850
30,000
10,950
202,113
200,360
125,627
883,059
410,282
161,488
377,065
948,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,550
4,275
-
-
19,527
14,751
5,251
5,784
77,452
5,700
2,850
-
-
-
-
-
35,281
35,821
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48,707
48,707
147,257
97,982
49,275
-
54,903
3,384
(847)
80
68
-
-
-
-
-
-
-
-
-
-
-
-
-
-
284,563
204,707
83,731
67,132
65,700
32,850
32,850
10,950
279,420
224,228
162,190
410,282
161,488
412,346
984,116
22
19,087
19,000
12,292
4,868
45,928
35,563
65,375
40,250
148,395
1,138,079
Total for period 1 July 2018
1,831,894
to 30 June 2019:
101,196
40,250
148,395
2,122,195
Jacqui Louez Schoorl
221,159
18,738
23,090
66,904
329,891
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Remuneration Details
Amounts of Remuneration
Details of the remuneration of KMP of the consolidated Group are set out in the following tables.
Short term benefits
Cash salary
and fees
Cash bonus
Non-
monetary
Post-employm
ent benefits
Super-
annuation
Long-term
benefits
Long Service
Leave
Share-based
payments
Equity-Settled
*
Total
2020
Non-Executive Directors:
Brett Cottle ( 1 & 2)
Linda Jenkinson ( 1 & 3)
Jorge Nigaglioni (1)
Robert Gaunt (1 & 4)
Executive Director:
90,000
49,275
45,000
-
-
-
-
-
Jacqui Louez Schoorl (5)
262,500
92,500
Other Key Management Personnel:
Philip Morgan
Renee Bryant (6)
Iain Bartram (7)
Shaun Alexander (8)
206,749
190,803
78,400
61,280
-
-
-
-
Total for period 1 July 2019
to 30 June 2020:
984,007
92,500
2019
Non-Executive Directors:
Brett Cottle (9)
Linda Jenkinson (10)
Jorge Nigaglioni (10)
Lorna Inman (11)
60,000
32,850
30,000
10,950
Executive Director:
Jacqui Louez Schoorl
221,159
Other Key Management Personnel:
Philip Morgan
Renee Bryant
Richard Huey (12)
Robert Kenneth Gaunt (13)
Sir Tim McClement (13)
Jorge Nigaglioni (14)
202,113
200,360
125,627
883,059
410,282
161,488
377,065
948,835
Total for period 1 July 2018
to 30 June 2019:
1,831,894
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,550
-
4,275
-
-
-
-
-
48,707
48,707
-
-
147,257
97,982
49,275
-
19,314
5,586
132,000
511,900
19,527
14,751
5,251
5,784
77,452
5,700
-
2,850
-
3,384
(847)
80
68
54,903
-
-
-
284,563
204,707
83,731
67,132
8,271
284,317
1,446,547
-
-
-
-
-
-
-
-
65,700
32,850
32,850
10,950
18,738
23,090
66,904
329,891
19,087
19,000
-
12,292
4,868
45,928
-
-
35,563
279,420
224,228
162,190
65,375
40,250
148,395
1,138,079
-
-
35,281
35,821
-
-
-
-
-
-
-
-
410,282
161,488
412,346
984,116
101,196
40,250
148,395
2,122,195
22
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Jaxsta Limited
2020 Annual Report | Remuneration Report
Jaxsta Limited
2020 Annual Report | Remuneration Report
* Represents the value of equity based compensation recognised during the year, not the value of the award given during the year
Note 1: To assist the business during the coronavirus pandemic the board waived 100% of their fees during the Apr-Jun 2020 quarter.
Note 2: Represents remuneration as a Non-Executive Director for the full year and as Chair between 1 July 2019 and 31 March 2020
(being the date that Mr Cottle resigned as Chair).
Note 3: Represents remuneration as a Non-Executive Director for the full year and as Chair between 31 March 2020 and 30 June 2020
(being the date that Ms Jenkinson was appointed as Chair).
Note 4: Represents remuneration from 23 March 2020 (being the date of appointment as a Director) and 30 June 2020.
Note 5: To assist the business during the coronavirus pandemic the CEO waived 50% of her base salary during the Apr-Jun 2020
quarter.
Note 6: Represents remuneration until 2 March 2020 (being Ms Bryant’s last day of employment). The compensation includes a
termination payment of $37,887. Long service leave was negative as the previously accrued balance was not required as Ms Bryant’s
service was less than 5 years.
Note 7: Represents remuneration from 1 March 2020 (being the date of Mr Bartram’s appointment as interim CFO).
Note 8: Represents remuneration from 11 February 2020 (being the date of Mr Alexander’s appointment as Head of Growth).
Note 9: Represents remuneration as Chair between 28 December 2018 and 30 June 2019.
Note 10 Represents remuneration as a Non-Executive Director between 28 December 2018 and 30 June 2019.
Note 11 Represents remuneration as a Non-Executive Director between 28 December 2018 and 25 February 2019, being the date of
resignation of the director.
Note 12: In addition to fixed fee payment, the contractor is eligible for a 20% (US$20,000) Performance bonus / at risk STI.
Note 13: Represents remuneration between 1 July 2018 to 28 December 2018, being date of resignation of director.
Note 14: Represents remuneration between 1 July 2018 to 28 December 2018, being date of resignation of executive role.
The proportion of remuneration linked to performance and the fixed proportion is set out below.
Name
Fixed remuneration
At risk - STI
At risk - LTI
2020
2019
2020
2019
2020
2019
Non-Executive Directors:
Brett Cottle
(1 & 2)
Linda Jenkinson
(1 & 3)
Jorge Nigaglioni
Robert Ken Gaunt
67%
50%
100%
n/a
100%
100%
100%
n/a
-
-
-
-
-
-
n/a
n/a
33%
50%
-
n/a
Executive Directors:
Jacqui Louez Schoorl
56%
50%
18%
50%
26%
Other Key Management Personnel:
Philip Morgan
Renee Bryant
Iain Bartram
Shaun Alexander
81%
81%
100%
100%
100%
100%
n/a
n/a
-
19%
-
-
-
-
n/a
n/a
19%
-
-
-
-
-
-
n/a
-
-
-
n/a
n/a
Jacqui Louez Schoorl was paid a bonus in FY2020 related to the completion of the data deal with
Music and Entertainment Rights Licensing Independent Network B.V. (Merlin) and the launch of
Jaxsta Pro. No other KMPs received cash bonuses during the year.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Service Agreements
Remuneration and other terms of employment for KMPs are formalised in service agreements.
Details of these agreements are set out below.
Jacqueline Louez Schoorl
Title:
Co-founder & Chief Executive Officer
Agreement commenced:
16 November 2018
Term of agreement:
No fixed term
Details:
Amendment:
Philip Morgan
Title:
Base salary for the year ended 30 June 2020 is $300,000 per annum,
plus superannuation. Salary package to be reviewed annually by the
Remuneration & Nominations Committee. 12-month termination
notice by either party provided that notice cannot be given by either
party before 16 November 2020.
By formal agreement dated 2 April 2020, base salary was reduced by
50% for the period between 1 April 2020 and 30 June 2020
(inclusive). Other terms remain unchanged.
Chief Information Officer
Agreement commenced:
4 April 2016
Term of agreement:
No fixed term
Details:
Base salary for the year ended 30 June 2020 is $221,200 per annum
inclusive of superannuation, plus phone allowance. Salary package
to be reviewed annually by the Remuneration & Nominations
Committee. 3-month termination notice by either party.
Renee Bryant
Title:
Chief Financial Officer
Agreement commenced:
26 March 2018
Term of agreement:
No fixed term
Details:
Iain Bartram
Title:
Base salary for year ended 30 June 2020 is $200,000 per annum, plus
superannuation, plus phone allowance and parking. Salary package
to be reviewed annually by the Remuneration & Nominations
Committee. 3-month termination notice by either party.
Interim Chief Financial Officer
Agreement commenced:
1 March 2020
Term of agreement:
Initial 12 week period to be extended by mutual agreement
Details:
Base salary for the year ended 30 June 2020 is $204,984 per annum
for three days of service per week, plus superannuation, plus phone
allowance and parking. Salary package to be reviewed annually by
the Remuneration & Nominations Committee. 4-week termination
notice by either party.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Shaun Alexander
Title:
Head of Growth
Agreement commenced:
11 February 2020
Term of agreement:
No fixed term
Details:
Base salary for year ended 30 June 2020 is $200,000 per annum,
including superannuation, plus phone allowance and parking.
Performance bonus of $20,000 paid in full or part based on mutually
agreed success factors.
Salary package and bonus entitlement to be reviewed annually by
the Remuneration & Nominations Committee. 1-month termination
notice by either party.
Share-based compensation
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of
Directors and other KMPs in this financial year or future reporting years are as set out below.
Issuance
Grant Date Vesting date
Expiry Date
and
exercisable
date
Exercise
Price
Fair value per
option at grant
date
Non-Executive Directors
Linda Jenkinson
30-Sep-19
Variable*
30-Sep-24
Brett Cottle
30-Sep-19
Variable*
30-Sep-24
$0.20
$0.20
$0.107
$0.107
* vesting tranches of 750,000 options for each $0.10 increase in the company's share price (measured on a VWAP basis so
that each increment increase has to exist for at least 30 consecutive ASX trading days) from A$0.20.
Options granted carry no dividend or voting rights.
All options were granted over unissued fully paid ordinary shares in the Company. Options vest
based on the provision of service over the vesting period whereby the executive becomes
beneficially entitled to the option on vesting date. Options are exercisable by the holder as from
the vesting date. There has not been any alteration to the terms or conditions of the grant since
the grant date. There are no amounts paid or payable by the recipient in relation to the granting of
such options other than on their potential exercise.
25
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
The number of options over ordinary shares granted to and vested by Directors and other KMPs as
part of compensation during FY20 is set out below.
Name
Jacqui Louez Schoorl
Philip Morgan
Linda Jenkinson
Brett Cottle
Total for period
Number of options granted during the
year
Number of options vested during the
year
2020
2019
2020
2019
-
-
3,000,000
3,000,000
6,000,000
20,000,000
1,000,000
675,000
-
-
75,000
750,000
750,000
-
75,000
-
-
20,675,000
2,575,000
75,000
Values of options over ordinary shares granted, exercised and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2020 are set out
below.
Name
Value of options
granted during the
year **
Value of options
exercised during the
year
Value of options
lapsed during the
year
Remuneration
consisting of options
for the year
$
$
$
%
Jacqui Louez Schoorl
Philip Morgan*
Linda Jenkinson
Brett Cottle
-
-
320,902
320,902
-
58,500
-
-
Total for period 1 Jul 2019 to
30 June 2020
641,804
58,500
0%
0%
50%
33%
-
-
-
-
-
* Mr Morgan exercised 150,000 vested options granted over ordinary shares on 30 September 2019. However, these
options were granted in FY19 as part of the reverse acquisition. They do not represent part of his remuneration for
FY2020.
** Expensed over the period they vest, as such the whole value presented here is not expensed in the year they are
granted.
Performance Rights
There were no performance rights over ordinary shares issued to Directors and other KMPs as part
of compensation that were outstanding as at 30 June 2020.
There were no performance rights over ordinary shares granted to or vested by Directors and other
KMPs as part of compensation during the year ended 30 June 2020.
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Jaxsta Limited
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2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Additional disclosures relating to KMP
KMP shareholdings
The number of ordinary shares in Jaxsta held by each KMP of the Group during the financial year is
set out below.
Name
Balance at the
start of the year*
Received as part
of remuneration
Additions
Disposals / Other
Balance at the
end of the year
Brett Cottle
Jorge Nigaglioni *
166,668
650,179
Jacqui Louez Schoorl
25,920,004
Philip Morgan
Renee Bryant
10,000
266,669
Robert Kenneth Gaunt**
5,451,818
Total for period 1 Jul
2019 to 30 June 2020
32,465,338
-
-
-
-
-
-
-
-
-
-
150,000
-
-
150,000
-
-
-
-
-
-
-
166,668
650,179
25,920,004
160,000
266,669
5,451,818
32,615,338
* Shares held in Mr Nigaglioni's own name and in the name of Jaeanai Technologies Pty Ltd.
** Shares held
https://drive.google.com/open?id=1-pwVYQEMLxBgsKFcbKT2xY9TqaOyZ5Hr&authuser=nick.karras%40jaxsta.com&usp=
drive_fsin the name of Blazzed Pty Limited as of 23 March 2020 when Mr Gaunt joined the board of Jaxsta as a
non-executive director.
Option Holding
The number of options over ordinary shares in the company held during the financial year by each
Director and other KMP of the Group, including their personally related parties, is set out below.
Option holdings
Balance at the
start of the year
Granted
Exercised
Expired/
forfeited /other
Balance at the
end of the year
Jacqui Louez Schoorl
20,000,000
Philip Morgan
Richard Huey
Linda Jenkinson
Brett Cottle
675,000
150,000
-
-
3,000,000
3,000,000
-
-
-
-
(150,000)
-
-
-
Total for period 1 Jul 2019
to 30 June 2020
20,825,000
6,000,000
(150,000)
27
-
-
-
-
-
-
20,000,000
525,000
150,000
3,000,000
3,000,000
26,675,000
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Other equity-related KMP transactions
There have been no other transactions involving equity instruments apart from those described in
the tables above relating to options, rights and shareholdings.
Other transactions with KMP and/or their Related Parties
During the financial year:
●
payments for music industry liaison services and product development services provided by
Jaxsta Co-Founder, Louis Schoorl from New Holland Pty Limited (related to Jacqui Louez
Schoorl) of $15,400 (ex GST) were made.
There were no other transactions between the Group and KMP or their related parties, apart from
those disclosed above relating to equity, compensation and loans, that were conducted other than
in accordance with normal employee, customer or supplier relationships on terms no more
favourable than those reasonably expected under arm’s length dealings with unrelated persons.
This concludes the Remuneration Report, which has been audited.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the
Corporations Act appears on page 83 of this Report.
Indemnity and insurance of officers
Jaxsta has indemnified the Directors and officers of the Group for costs incurred, in their capacity
as a Director or officers, for which they may be held personally liable, except where there is a lack
of good faith. During the financial year, Jaxsta paid a premium in respect of a contract to insure the
Directors and officers of the Group against a liability to the extent permitted by the Corporations
Act. The contract of insurance prohibits disclosure of the nature of the liability and the amount of
the premium.
Indemnity and insurance of auditor
Jaxsta has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Group or any related entity against a liability incurred by the auditor. During the
financial year, Jaxsta has not paid a premium in respect of a contract to insure the auditor of the
Group or any related entity.
Non-audit services
There were no non-audit services provided by the Group’s auditor, Grant Thornton Audit Pty Ltd.
28
28
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Remuneration Report
2020 Annual Report | Remuneration Report
Rounding of amounts
Jaxsta is a type of entity referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this Report have
been rounded off in accordance with the aforementioned Corporations Instrument to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Corporate Governance
The Group’s Corporate Governance Statement and Appendix 4G checklist are released to ASX on
the same day the Report is released. The Corporate Governance Statement and Corporate
Governance Manual can be found on Jaxsta’s website at https://www.jaxsta.com . This Report is
made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act.
This Report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of
the Corporations Act.
On behalf of the directors
JLS Signature
Jacqueline Louez Schoorl
Chief Executive Officer
30 September 2020
Sydney, New South Wales
29
29
Claimed Profiles on Jaxsta
The claimed tick means an artist themselves, their management/labels or other verfied sources have claimed their profile on Jaxsta
30
Claimed Profiles on Jaxsta
31
Jaxsta Limited
2020 Annual Report | Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Consolidated Financial Statements
Consolidated Financial Statements
Consolidated Statement of profit or loss and other
comprehensive income for the year ended 30 June 2020
Consolidated Statement of Financial Position
for the year ended 30 June 2020
Consolidated Statement of changes in equity
for the year ended 30 June 2020
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Notes to the Consolidated Financial Statements
Questlove’s Profile on Jaxsta | Credit to Jaxsta.com
32
32
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Consolidated Statement of Profit or Loss and Other
2020 Annual Report | Consolidated Statement of profit or loss and other
Comprehensive Income for the year ended 30 June 2020
comprehensive income for the year ended 30 June 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
30 June 2020
$
30 June 2019
(Restated)
$
Revenue from continuing operations
Revenue
Cost of sales
Gross profit
Interest income
Other income
Expenses
Employee benefits expense
Marketing expenses
Occupancy expenses
Professional fees
Product development expense
Depreciation and amortisation expense
Finance costs
Other expenses
Listing expenses
Impairment of goodwill expense
Impairment of financial asset expense
Fair value movement on financial assets
Total Expenses
Loss before income tax
Income tax expense
Loss a�er income tax expense for the year
attributable to the owners of Jaxsta Limited
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable
to the owners of Jaxsta Limited
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
5
6
6
6
13
6
13
11
11
9,520
(234)
9,286
4,465
2,119,854
(3,808,769)
(571,245)
(119,877)
(618,289)
(2,055,583)
(83,427)
(27,230)
(688,946)
-
(4,025,904)
-
(573,000)
(12,572,270)
(10,438,665)
-
(10,438,665)
-
-
-
-
3,649
701,314
(2,736,521)
(498,605)
(145,536)
(793,060)
(757,230)
(42,993)
(18,887)
(745,191)
(8,527,231)
-
(823,813)
-
(15,089,067)
(14,384,104)
-
(14,384,104)
-
(10,438,665)
(14,384,104)
(0.04)
(0.04)
(0.11)
(0.11)
The accompanying notes should be read in conjunction with these consolidated financial statements.
33
33
Jaxsta Limited
2020 Annual Report | Consolidated Statement of Financial Position
Jaxsta Limited
for the year ended 30 June 2020
2020 Annual Report | Consolidated Statement of Financial Position
for the year ended 30 June 2020
Consolidated Statement of Financial Position
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Goodwill
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
Reserves
TOTAL EQUITY
12
13
16
13
14
15
15
17
18
19
19
20
22
30 June 2020
$
30 June 2019
(Restated)
$
2,404,848
1,518,106
223,414
4,146,368
-
47,880
-
336,534
384,414
2,452,760
705,248
187,402
3,345,410
3,176,187
42,019
4,025,904
367,941
7,612,051
4,530,782
10,957,461
571,033
390,009
206,669
1,167,711
32,314
32,314
1,200,025
599,692
26,597
159,389
785,678
88,902
88,902
874,580
3,330,757
10,082,881
32,792,654
(30,922,370)
1,460,473
3,330,757
29,969,770
(20,483,705)
596,816
10,082,881
The accompanying notes should be read in conjunction with these consolidated financial statements.
34
34
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Consolidated Statement of changes in equity
2020 Annual Report | Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
for the year ended 30 June 2020
Consolidated Statement of Changes in Equity
Contributed
equity
(Restated)
$
Reserves
$
Accumulated
losses
(Restated)
$
Total equity
$
As at 1 July 2018
7,974,578
Loss a�er income tax expense for the year (originally
reported)
Adjustment on error correction
4
Reported loss for the year (Restated)
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
-
-
-
-
-
-
-
(6,099,601)
1,874,977
(20,084,398)
5,700,294
(20,084,398)
5,700,294
(14,384,104)
(14,384,104)
-
-
(14,384,104)
(14,384,104)
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction cost
Adjustment on error correction
Share-based payments
27,695,486
(5,700,294)
-
4
22
-
-
596,816
-
-
-
27,695,486
(5,700,294)
596,816
Balance at 30 June 2019 (Restated)
29,969,770
596,816
(20,483,705)
10,082,881
Refer to note 4 for explanation on comparatives
As at 1 July 2019 (Restated)
29,969,770
596,816
(20,483,705)
10,082,881
Loss a�er income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction cost
Share-based payments
Options exercised
Balance at 30 June 2020
-
-
-
2,495,284
-
-
-
-
-
1,191,257
327,600
(327,600)
20
22
22
(10,438,665)
(10,438,665)
-
-
(10,438,665)
(10,438,665)
-
-
-
2,495,284
1,191,257
-
32,792,654
1,460,473
(30,922,370)
3,330,757
The accompanying notes should be read in conjunction with these consolidated financial statements.
35
35
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Consolidated Statement of Cash Flows
2020 Annual Report | Consolidated Statement of Cash Flows
for the year ended 30 June 2020
for the year ended 30 June 2020
Consolidated Statement of Cash Flows
CASH FLOW FROM OPERATING ACTIVITIES
Receipts from grants - research & development
Receipts from customers
COVID-19 government assistance
Payments to suppliers and employees
Interest received
Interest paid
Net cash flows (used in) operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Payments for plant and equipment
Payment for intangibles
Cash acquired from acquisition of subsidiary
Proceeds from deferred MRT transaction
Net cash flows provided by investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Proceeds from borrowings - related parties
Loan repayments made to related parties
Net cash flows provided by financing activities
30 June 2020
30 June 2019
$
$
810,877
31,476
176,000
(6,686,289)
4,465
(6,712)
696,745
-
-
(6,891,396)
3,649
(11,537)
(5,670,183)
(6,202,539)
(29,471)
(28,411)
-
2,845,143
2,787,261
2,704,222
(208,938)
446,528
(106,802)
-
-
2,835,010
(15,297)
(75,157)
5,332,655
-
5,242,201
4,471,645
(604,731)
77,056
(54,451)
465,654
(988,374)
3,366,799
21
14
15
13
20
20
Net (decrease)/increase in cash held
(47,912)
2,406,461
Cash at beginning of financial year
2,452,760
46,299
Cash at the end of the period
12
2,404,848
2,452,760
The accompanying notes should be read in conjunction with these consolidated financial statements.
36
36
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Note 1. General information
The financial statements contained on pages 33 to 36 of this Report cover Jaxsta Limited ( Jaxsta ,
company or parent ) as a consolidated entity consisting of Jaxsta Limited and the entities it
controlled at the end of, or during, the financial year ( consolidated entity or the Group ) ended 30
June 2020 (the Financial Statements ). The Financial Statements are presented in Australian
dollars, which is Jaxsta presentation currency. The functional currency of Jaxsta Holdings Pty Ltd
is Australian dollars and Jaxsta is Australian dollars.
Jaxsta is a listed public company limited by shares, incorporated and domiciled in Australia.
A description of the nature of the Group's operations and its principal activities are included in the
Directors' Report (pages 9 to 17 of this Report). The Directors’ Report is not part of the Financial
Statements.
The Financial Statements were authorised for issue, in accordance with a resolution of Directors,
on 30 September 2020. The Directors have the power to amend and reissue the Financial
Statements.
Note 2. Significant accounting policies and basis of preparation
The Financial Statements are general purpose, consolidated financial statements which have been
prepared in accordance with the Corporations Act, Australian Accounting Standards and
Interpretations of the Australian Accounting Standards Board and in compliance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. The
Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Material accounting policies adopted in the preparation of the Financial Statements are presented
below and have been consistently applied unless stated otherwise.
Except for cash flow information, the Financial Statements have been prepared on an accrual basis
and are based on historical costs, modified, where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
The principal accounting policies adopted in the preparation of the Financial Statements are set
out either in the respective notes or below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
COVID-19 impact
The COVID-19 pandemic has created further uncertainty around estimates used for the
preparation of these consolidated financial statements. The uncertainty relates to:
●
●
The extent and duration of the disruption to the business as part of government measures to
manage the pandemic impact;
The extent and duration of the economic downturn created by the pandemic, especially as it
affects the music industry in general, both from an industry spending and consumer spending
point of view. This also impacts the capital markets, credit markets and employment markets
that the Group may need to access during the related period;
37
37
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
●
The economic measures provided by governments and business partners to assist businesses
during this time.
The Group has developed estimates in these consolidated financial statements based on forecasts
of economic conditions which reflect our estimates and assumptions as at 30 June 2020 about the
future outlook that the Directors believe are reasonable under the current circumstances.
The basis of the forecasts used contain a considerable degree of judgement. Actual conditions are
likely to be different from those forecasted and some of the assumptions are subject to
uncertainties outside the control of the Group.
Accordingly, those uncertainties will most likely create differences to actual conditions and the
effect of those differences may impact the accounting estimates included in these consolidated
financial statements.
New, revised or amending Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not
mandatory for the 30 June 2020 reporting period. The Directors’ assessment of the impact of these
new standards and interpretations is that they will result in no material changes to the amounts
recognised in the Financial Statements but may impact the type of information disclosed in the
Financial Statements.
Going concern basis of accounting
The Group incurred a loss a�er tax for the year of $10,438,665 (2019: restated loss: $14,384,104),
which includes non cash expenses of $ 5,873,587 (2019: 9,929,984 ) comprised of share-based
payment expenses of $1,191,256 (2019: 535,816), $4,025,904 (2019: nil) of goodwill impairment, fair
value movement on financial assets expenses of $573,000 (2019: nil) from the MRT receivable due
to re-structured terms and depreciation and amortisation of $83,427 (2019: $42,993), in addition to
impairment expenses of the MRT receivable in the prior year of $823,813 and listing expenses in
the prior year of $8,527,231. The Group also had a net cash outflow from operations of $5,670,183
(2019: $6,202,539) for the period ended 30 June 2020 and had net current assets of $2,978,657
(2019: $2,559,732) and net tangible assets of $2, 994,223 (201 9: $5,689,036) as at that date. As at 30
June 2020, the Group had cash assets of $2,404,848. The consolidated entity has its Jaxsta Pro
commercial platform operating under a freemium model as it builds its customer base to a level
that it can successfully launch its paid version. In addition it is in the process of launching other
commercial applications during the year in its data solutions and marketing solutions segments
with the intention of deriving sales. The company derived $9,520 in product sales from the beta
launch of Jaxsta Pro prior to its shi� to the freemium model.
The Group adjusted its operations as a result of COVID-19 by offering its Jaxsta Pro service for free
for at least the remainder of the 2020 calendar year. The performance/touring and recording
sectors of the music industry had to cancel activities during the year affecting the income of many
music professionals.
Management has prepared cash flow forecasts for the Group for the perio d ending 30 September
2021 which assumes continuity of business on the basis of the followin g events occurring:
38
38
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
1)
2)
3)
4)
the continuation of the Jaxsta Beta Metadata platform resulting in the subsequent
commercialisation, accordingly cash receipts from revenues from platform use have been
forecast;
the receipt of a R&D tax concession for the financial year ended 30 June 2020 and
establishing a line of credit secured against the future R&D tax concessions that the Group
expects to receive in respect of FY2021;
the receipt of the deferred consideration receivables in respect of the MRT sale:
a) $157,500 in monthly payments of $31,500 and;
b) $225,000 due no later than 28th December 2020.
the receipt of the Songtradr convertible note of $1,420,000 and advance license fee of
$500,000 as detailed in Note 31 and;
5) a potential capital raising within the next 12 months.
The Directors believe that the Group is a going concern and that the above events will eventuate in
the short term and accordingly the Financial Statements have been prepared on a going concern
basis.
In the event that the above assumptions do not eventuate, there are material uncertainties that
cast significant doubt over the ability of the Group to continue as a going concern.
In the event that the Group does not achieve the conditions stated above by the Directors, the
ability of Jaxsta and therefore the Group to continue as a going concern may be impacted. As a
result, the Group may not be able to realise its assets and extinguish its liabilities in the ordinary
course of operations and at the amounts stated in the Financial Statements.
No adjustments have been made to the recoverability and classification of recorded asset values
and the amount and classification of liabilities that might be necessary should Jaxsta and the
Group not continue as a going concern.
Principles of consolidation
The Financial Statements incorporate the assets and liabilities of all subsidiaries of Jaxsta as at 30
June 2020 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated
entity controls an entity when the consolidated entity is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the consolidated entity. They are de-consolidated from the date
that control ceases.
The acquisition of Jaxsta Holdings Pty Limited by Jaxsta in December 2018 has been
accounted as a share-based payment in accordance with AASB 2 ‘Share-based Payments’ and
the Interim Financial Statements represent a continuation of the financial statements of
Jaxsta Holdings. The comparative information is related to Jaxsta Holdings Pty Limited and
its controlled entities operations and not those of Jaxsta. Refer to ‘Business Combination’
accounting policy below of this Report for further explanation of the accounting for this
transaction.
39
39
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Intercompany transactions, balances and unrealised gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the
consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction,
where the difference between the consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative
translation differences recognised in equity. The consolidated entity recognises the fair value of
the consideration received and the fair value of any investment retained together with any gain or
loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information
presented is on the same basis as the internal reports provided to the Chief Operating Decision
Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments
and assessing their performance.
Revenue recognition
Revenue was measured at the fair value of the consideration received or receivable a�er taking
into account any trade discounts and volume rebates allowed. When the inflow of consideration
was deferred, it was treated as the provision of financing and was discounted at a rate of interest
that is generally accepted in the market for similar arrangements. The difference between the
amount initially recognised and the amount ultimately received was interest revenue.
The Group accounts for a contract with a customer when all of the following criteria are met:
●
●
●
●
●
the parties to the contract have approved the contract and are committed to perform their
respective obligations;
the Group can identify each party’s rights regarding the goods or services to be transferred;
the Group can identify the payment terms for the goods or services to be transferred;
the contract has commercial substance; and
it is probable that the entity will collect the consideration to which it will be entitled in
exchange for the goods or services that will be transferred to the customer.
Interest
Interest is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the
relevant period using the effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of
the financial asset.
40
40
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs are
expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the
expected useful life of the related asset.
Research & Development tax incentive
Research and development tax incentive is recognised on an accrual basis
Jaxsta has adopted the income approach to accounting for research and development tax
incentive pursuant to AASB 120 ‘Accounting for Government Grants and Disclosure of
Government Assistance’ whereby the concession is recognised in profit or loss on a systematic
basis in the periods in which the entity recognises the eligible expenses. It is recognised when
it can be measured reliably, when there is reasonable assurance that the company will comply
with the conditions attaching to the incentive and that the incentive will be received.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary differences, unused tax losses and the
adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates
expected to be applied when the assets are recovered or liabilities are settled, based on those tax
rates that are enacted or substantively enacted, except for:
● when the deferred income tax asset or liability arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a business combination and that, at the time of
the transaction, affects neither the accounting nor taxable profits; or
● when the taxable temporary difference is associated with interests in subsidiaries, associates
or joint ventures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each
reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer
probable that future taxable profits will be available for the carrying amount to be recovered.
Previously unrecognised deferred tax assets are recognised to the extent that it is probable that
there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset
current tax assets against current tax liabilities and deferred tax assets against deferred tax
liabilities; and they relate to the same taxable authority on either the same taxable entity or
different taxable entities which intend to settle simultaneously.
41
41
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and
non- current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the entity's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months a�er the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability for at least 12
months a�er the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months a�er the reporting period; or there is no unconditional right to defer the settlement of the
liability for at least 12 months a�er the reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are always classified as non-current.
Property, plant and equipment
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less
accumulated depreciation and any accumulated impairment. In the event the carrying amount of
plant and equipment is greater than the estimated recoverable amount, the carrying amount is
written down immediately to the estimated recoverable amount and impairment losses are
recognised. A formal assessment of recoverable amounts is made when impairment indicators are
present.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not
in excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s
useful life to the consolidated group commencing from the time the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the
lease or the estimated useful lives of the improvements.
42
42
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property,
plant and equipment over their expected useful lives as follows:
Computer Equipment
Office Equipment
2 to 3 years
5 to 10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
Plant and equipment under lease are depreciated over the unexpired period of the lease or the
estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the consolidated entity. Gains and losses between the carrying amount and
the disposal proceeds are taken to profit or loss.
Financial Instruments
(I) Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost,
fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With the
exception of trade receivables that do not contain a significant financing component or for which
the Group has applied the practical expedient, the Group initially measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction
costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price.
In order for a financial asset to be classified and measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on
the principal amount outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both. Financial assets
classified and measured at amortised cost are held within a business model with the objective to
hold financial assets in order to collect contractual cash flows while financial assets classified and
measured at fair value through OCI are held within a business model with the objective of both
holding to collect contractual cash flows and selling.
43
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Classification and subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
●
●
●
●
Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt
instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)
Financial assets at fair value through profit or loss.
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest (EIR)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the
asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost
includes trade receivables, and loan to an associate and loan to a director included under other
non-current financial assets.
Financial assets at fair value through OCI (debt instruments)
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the statement of profit or loss and computed in
the same manner as for financial assets measured at amortised cost. The remaining fair value
changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in
OCI is recycled to profit or loss. The Group’s debt instruments at fair value through OCI includes
investments in quoted debt instruments included under other non-current financial assets.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under
IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is
determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been
established, except when the Group benefits from such proceeds as a recovery of part of the cost
of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated
at fair value through OCI are not subject to impairment assessment. The Group elected to classify
irrevocably its non-listed equity investments under this category.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position
at fair value with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had
not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments
are recognised as other income in the statement of profit or loss when the right of payment has
been established.
44
44
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within 12
months of the end of the reporting period are classified as current assets. All other receivables are
classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method, less any expected credit loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement
of financial position) when:
●
●
The rights to receive cash flows from the asset have expired or;
The Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘pass-through’ arrangement; and either:
o
o
the Group has transferred substantially all the risks and rewards of the asset, or;
the Group has neither transferred nor retained substantially all the risks and rewards
of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a
passthrough arrangement, it evaluates if, and to what extent, it has retained the risks and rewards
of ownership. When it has neither transferred nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset, the Group continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group also
recognises an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
Impairment
For debt instruments at fair value through OCI, the Group applies the low credit risk simplification.
At every reporting date, the Group evaluates whether the debt instrument is considered to have
low credit risk using all reasonable and supportable information that is available without undue
cost or effort. In making that evaluation, the Group reassesses the internal credit rating of the debt
instrument. In addition, the Group considers that there has been a significant increase in credit
risk when contractual payments are more than 30 days past due.
45
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
The Group’s debt instruments at fair value through OCI are comprised solely of quoted bonds that
are graded in the top investment category (Very Good and Good) by the Good Credit Rating Agency
and, therefore, are considered to be low credit risk investments. It is the Group’s policy to measure
expected credit losses (ECLs) on such instruments on a 12-month basis. However, when there has
been a significant increase in credit risk since origination, the allowance will be based on the
lifetime ECL. The Group uses the ratings from the Good Credit Rating Agency both to determine
whether the debt instrument has significantly increased in credit risk and to estimate ECLs.
The Group considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Group may also consider a financial asset to be in default when
internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
(II) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net of directly attributable transaction
costs. The Group’s financial liabilities include trade and other payables, loans and borrowings
including bank overdra�s, and derivative financial instruments.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
●
●
Financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost (loans and borrowings)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the
statement of profit or loss. Financial liabilities designated upon initial recognition at fair value
through profit or loss are designated at the initial date of recognition. The Group has not
designated any financial liability as at fair value through profit or loss.
Financial liabilities at amortised cost (loans and borrowings)
This is the category most relevant to the Group. A�er initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses
are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
46
46
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
is included as finance costs in the statement of profit or loss. This category generally applies to
interest-bearing loans and borrowings.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end
of the reporting period and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30
days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest
method.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Intangibles
Goodwill
Goodwill is calculated as the excess of the sum of:
1)
the consideration transferred;
2) any non-controlling interest; and
3)
4) over the acquisition date fair value of any identifiable assets acquired in a business
the acquisition date fair value of any previously held equity interest;
combination.
Under the ‘full goodwill method’, the fair values of the non-controlling interests are determined
using valuation techniques which make the maximum use of market information where available.
Goodwill is not amortised but is tested for impairment annually and is allocated to the Group’s
cash generating units or groups of cash generating units, which represent the lowest level at which
goodwill is monitored but where such level is not larger than an operating segment. Gains and
losses on the disposal of an equity interest include the carrying amount of goodwill related to the
entity sold.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do
not affect the carrying values of goodwill.
Trademarks
Trademarks are recognised at cost of acquisition. They have an indefinite useful life and are
carried at cost less any impairment losses.
47
47
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Platform Development Costs
Platform Development Costs are recognised at cost of acquisition. They have a finite life and are
carried at cost less any accumulated amortisation and any impairment losses. Platform
Development Costs are amortised over their useful lives of 3 years as determined by the Directors.
Impairment of non-financial assets
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.
At the end of each reporting period, the Group assesses whether there is any indication that an
asset may be impaired. The assessment will include the consideration of external and internal
sources of information including dividends received from subsidiaries, associates or joint ventures
deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess
of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or
loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in
accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any
impairment loss of a revalued asset is treated as a revaluation decrease in accordance with the
respective Accounting Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and
intangible assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or
cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is the currency of the primary economic
environment in which that entity operates. The Financial Statements are presented in Australian
dollars, which is the parent entity’s functional currency.
48
48
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss,
except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
other comprehensive income to the extent that the underlying gain or loss is recognised in other
comprehensive income; otherwise the exchange difference is recognised in profit or loss.
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 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 as 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 expect 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.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to
employees in exchange for the rendering of services.
The costs of equity-settled transactions are measured at fair value on grant date. Fair value is
independently determined using either the Binomial or Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the impact of dilution, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the consolidated entity receives the services that entitle the employees to
receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is 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
49
49
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
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.
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 consolidated entity or employee, the failure
to satisfy the condition is treated as a cancellation. If the condition is not within the control of the
consolidated entity 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.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of
whether equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets
transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of
the acquiree and the amount of any non-controlling interest in the acquiree. For each business
combination, the non- controlling interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as
incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the
contractual terms, economic conditions, the consolidated entity's operating or accounting policies
and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at the acquisition-date fair value and the difference
between the fair value and the previous carrying amount is recognised in profit or loss.
50
50
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date
fair value. Subsequent changes in the fair value of the contingent consideration classified as an
asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and
any non-controlling interest in the acquiree and the fair value of the consideration transferred and
the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the
consideration transferred and the pre-existing fair value is less than the fair value of the
identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is
recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only a�er
a reassessment of the identification and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer
retrospectively adjusts the provisional amounts recognised and also recognises additional assets
or liabilities during the measurement period, based on new information obtained about the facts
and circumstances that existed at the acquisition-date. The measurement period ends on either
the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
Acquisition of Jaxsta Limited:
During the previous financial year on 28 December 2018, Mobilarm Limited, an ASX listed entity
(subsequently renamed Jaxsta Limited), acquired 100% of Jaxsta Holdings Pty Ltd. This
transaction is accounted for by applying the principles of reverse acquisition accounting in
accordance with AASB 3 ‘Business Combinations’.
Because the consolidated financial statements represent a continuation of the financial
statements of Jaxsta Holdings Pty Ltd, the principles and guidance on the preparation and
presentation of the consolidated financial statements in a reverse acquisition set out in AASB 3
have been applied:
●
●
●
●
Fair value adjustments arising at acquisition were made to Mobilarm Limited’s (now renamed
Jaxsta Limited) assets and liabilities, not those of Jaxsta Holdings Pty Ltd;
The cost of the acquisition, and amount recognized as issued capital to affect the transaction,
is based on the notional amount of shares that Jaxsta Holdings Pty Ltd would have needed to
issue to acquire the same shareholding percentage in Mobilarm Limited (now renamed Jaxsta
Limited) at the acquisition date and the value of the existing Mobilarm Limited’s options at the
date of the acquisition;
Retained earnings and other equity balances in the consolidated financial statements at
acquisition date are those of Jaxsta Holdings Pty Ltd;
A share-based payment transaction arises whereby Jaxsta Holdings Pty Ltd is deemed to have
issued shares in exchange for the net assets of Mobilarm Limited (now renamed Jaxsta
Limited) (together with its listing status). The listing status does not quality for recognition as
an intangible asset and has therefore been expensed in the profit or loss as a share based
payment listing expense;
51
51
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
●
●
The equity structure in the consolidated financial statements (the number and type of equity
instruments issued) at the date of the acquisition reflects the equity structure of Mobilarm
Limited (now renamed Jaxsta Limited), including the equity instruments issued by Mobilarm
Limited (now renamed Jaxsta Limited) effect the acquisition; and
The results for the year ended 30 June 2019 comprised the consolidated results for the half
year of Jaxsta Holdings Pty Ltd together with the results of Mobilarm Limited (now renamed
Jaxsta Limited) from 28 December 2018 to 30 June 2019.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow
can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation
at the end of the reporting period.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance
costs are expensed in the period in which they are incurred.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Jaxsta
Holdings Pty Limited, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements or share splits in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per
share to take into account the a�er income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax (GST) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the
GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the
cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the tax authority is included in other receivables or
other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the tax authority, are
presented as operating cash flows.
52
52
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the tax authority.
Adoption of new Accounting Standards & Interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the Group for the annual reporting
period ended 30 June 2020. The Group has not yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
The following new accounting standards which apply from 1 July 2019 have been adopted.
●
AASB 16 Leases
AASB 16 Leases replaces AASB 117 Leases along with three Interpretations (Interpretation 4
Determining whether an Arrangement contains a Lease, Interpretation 115 Operating
Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease).
The application of this standard has no impact on this financial report as the Group does not
hold any long term leases.
●
Interpretation 23 Uncertainty Over Income Tax Treatments
Interpretation 23 relates to AASB 101 Presentation of Financial Statements, AASB 108 Accounting
Policies, Changes in Accounting Estimates and Errors, AASB 110 Events a�er the Reporting Period
and AASB 112 Income Taxes.
The application of this Interpretation has no impact on the financial report as the Group is of the
view that there are no material uncertain positions which impact the Group’s accounting for
income taxes.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including expectations of future events;
management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates
and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
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 either the Binomial or Black-Scholes model taking into account the terms and conditions
upon which the instruments were granted. The key estimate used in the valuation is the expected
stock price volatility.
53
53
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
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.
Goodwill
Goodwill arises as a result of a business combination and represents the excess of the fair value of
the consideration over the fair value of the net assets acquired, which involved judgement. The
Group tests goodwill for impairment annually or more frequently if events or changes in
circumstances indicate the goodwill may be impaired. The Group estimates the future cash flows
for cash generating units to assess their value. The Group also considers the value of assets on the
basis of a trade sale.
Segment Reporting
The group currently operates only one operating segment. Operating segments are presented
using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their
performance.
Research & Development tax incentive
Research & development tax incentive is recognised on an accrual basis. Management
estimates the income based on actual expenditure eligible for the tax incentive for the year
ended 30 June 2020 and believes the estimate to be reasonable under the circumstances.
Reverse acquisition and listing expense
The deemed acquisition cost is based on the notional amount of shares that Jaxsta Holdings
Pty Limited would have needed to issue to acquire the same shareholding percentage in
Mobilarm Limited at the acquisition date. The fair value of assets acquired and liabilities
assumed are estimated by the group taking into consideration all available information at the
reporting date.
Recoverability of MRT receivable
In assessing recoverability, management estimates the recoverable amount of the receivable
based on expected future cash flows.
Note 4. Acquisition accounting and comparative information
Correction of prior period error
On 28 December 2018, Jaxsta Limited (the ‘legal parent’) acquired Jaxsta Holdings Pty Ltd
(the ‘legal subsidiary’). For accounting purposes, the acquisition has been accounted for as a
share-based payment and the principles of reverse acquisition have been applied.
Listing expenses recorded in the Consolidated Statement of Profit or Loss and Comprehensive
Income for the year ended 30 June 2019 has been restated as a result of a review of the
application of AASB 3 Business Combinations which was overstated due to the use of the
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Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
incorrect share price. This error has been rectified by restating each of the affected financial
statement line items for prior periods as follows:
Statement of financial position
(extract)
Contributed equity
Accumulated losses
Statement of profit of loss and
other comprehensive income
(extract)
Listing expenses
Total Expenses
Loss before income tax
Loss a�er income tax expense
Total comprehensive income
attributable to the owners of Jaxsta
Limited
Basic earnings per share (cents)
Diluted earnings per share(cents)
Previous
amount
$
35,670,064
(26,183,999)
Previous
amount
$
(14,227,525)
(20,789,361)
(20,084,398)
(20,084,398)
30 June 2019
Adjustment
Restated
$
(5,700,294)
5,700,294
$
29,969,770
(20,483,705)
30 June 2019
Adjustment
Restated
$
5,700,294
5,700,294
5,700,294
5,700,294
$
(8,527,231)
(15,089,067)
(14,384,104)
(14,384,104)
(20,084,398)
5,700,294
(14,384,104)
(0.15)
(0.15)
(0.04)
(0.04)
(0.11)
(0.11)
55
55
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 5. Other income
Research and development tax incentive
Government COVID-19 support
Other income
Total other income
30 June 2020
30 June 2019
$
$
1,936,146
176,000
7,708
2,119,854
665,657
-
35,657
701,314
The government COVID support represents amounts received under the Jobkeeper and Cash Flow
Boost government programs.
Note 6. Loss for the year
30 June 2020
$
30 June 2019
(Restated)
$
Loss before income tax includes the following specific expenses:
Other Expenses including the following material expenses:
Professional advisers fees
Board fees
Commission
Employee benefit expenses includes the following:
Salary and wages
Share-based payments expense
Superannuation expense
Total employee benefit expenses
Product development expenses
Product development cash expenses
Product development equity based payments
Total product development expense
Listing expenses include the following:
Share-based payment listing expense
Legal and professional expenses
Total listing expenses
88,778
196,399
42,349
3,181,051
374,754
252,964
3,808,769
1,239,080
816,503
2,055,583
-
-
-
102,803
258,446
66,566
2,201,414
358,557
176,550
2,736,521
579,971
177,259
757,230
8,175,506
351,725
8,527,231
56
56
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 7. Tax expense
The prima facie tax loss from ordinary activities before income
tax is reconciled to income tax as follows:
Prima facie tax payable on losses from ordinary activities before
income tax rate at @ 27.5% (2019: 27.5%)
Add:
Tax effect amounts which are not deductible/taxable in
calculating taxable income:
Permanent differences
R&D upli�
Listing expenses
Impairment of financial instruments
Impairment of goodwill
Current year tax losses not recognised
Income tax attributable to the group
Tax losses not recognised
30 June 2020
$
30 June 2019
(Restated)
$
(2,870,633)
(3,955,629)
309,464
-
157,575
1,264,699
1,138,895
-
222,991
2,345,024
226,549
-
1,161,065
-
Unused tax losses for which no deferred tax asset has been recognised is $32,713,504 (2019:
$28,721,530). Potential tax benefits at statutory tax rates for the tax jurisdictions amount to
$8,996,214 (2019: $7,898,421).
The potential tax benefit for tax losses has not been recognised in the statement of financial
position.
Utilisation of the carry forward tax losses may be subject to a substantial annual
limitation due to the ownership change limitations and the same business test, accordingly the
recovery of this benefit is not considered probable.
Note 8. Key management personnel compensation
Refer to the Remuneration Report contained in the directors’ report for details of the remuneration
paid or payable to each member of the Group’s key management personnel (KMP) for the year
ended 30 June 2020.
The totals of remuneration paid to KMP of the company and the Group during the year are as
follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
57
30 June 2020
30 June 2019
$
$
1,076,507
77,452
8,271
284,317
1,446,547
883,059
65,375
40,250
149,394
1,138,078
57
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Chair and non-executive
directors as well as all salaries, paid leave benefits, fringe benefits and cash bonuses awarded to
executive directors and other KMP.
Post-employment benefits
These amounts are superannuation contributions made during the year.
Other long-term benefits
These amounts represent long service leave benefits accruing during the year, long-term disability
benefits and deferred bonus payments.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit
schemes as measured by the fair value of the options, rights and shares granted on grant date.
Share-based payments are detailed on Note 22 on page 67.
Note 9. Auditor's remuneration
Remuneration of the auditor for:
Auditing or reviewing the financial statements by Grant
Thornton for the year ended 30 June 2020
Auditing or reviewing the financial statements by Walker
Wayland Audit (WA) Pty Ltd for the year ended 30 June 2019
Auditing or reviewing the financial statements by Ernst & Young
for the three years ended 30 June 2016, 2017 and 2018
30 June 2020
30 June 2019
$
$
79,500
-
-
-
53,403
170,600
Total auditor remuneration
79,500
224,003
Note 10. Dividends
There were no dividends paid, recommended or declared during the current or previous financial
year.
58
58
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 11. Earnings per share
Loss a�er income tax attributable to the owners of Jaxsta
Limited
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
30 June 2020
$
30 June 2019
(restated)
$
(10,438,665)
(14,384,104)
Number
Number
239,869,594
133,873,975
239,869,594
133,873,975
Cents
Cents
(0.04)
(0.04)
(0.11)
(0.11)
36,739,145 unlisted options & warrants have been excluded from the above calculations as they
were anti-dilutive.
Note 12. Cash and cash equivalents
Cash on hand
Cash at bank
Term deposits
30 June 2020
30 June 2019
$
$
390
2,354,458
50,000
2,404,848
101
2,432,659
20,000
2,452,760
(i)
(i) The term deposit will mature on 3 October 2020 with a 31 day early withdrawal notice facility
available. The interest rate is 1.5%.
59
59
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 13. Trade and other receivables
Current
GST receivable
R&D incentive
Other receivables
30 June 2020
30 June 2019
$
$
(i)
(ii)
8,313
1,125,323
384,470
1,518,106
74,735
-
630,513
705,248
(i) The Group accrued for the Research & Development tax incentive during the financial year
ended 30 June 2020 as it is now able to reasonably estimate the amount receivable as detailed in
Note 3. As a result, it recognised a receivable for the concession as at 30 June 2020 and none as at
30 June 2019.
(ii) $382,500 (2019: $623,813) of other receivables relates to the deferred compensation in relation
to the sale of the MRT business which is due from Secure2Go Group Ltd on or before 28 December
2020. The terms include monthly repayments of $31,500 and a final payment of $225,000 by 28
December 2020.
Non Current
Other receivables
Provision for impairment
(iii)
30 June 2020
30 June 2019
$
$
-
-
-
4,000,000
(823,813)
3,176,187
Total Current and Non Current
1,518,106
3,881,435
(iii) The original receivable from Secure2Go Group Ltd was $4,000,000 and it has been negotiated
down by a further $573,000 during the year ended 30 June 2020. The receivable was not impaired
as at 30 June 2 0 20 ( 2019: $823,813). The total current and non current Secure2Go receivable a�er
the impairment provision as at 30 June 2020 is $382,500 (2019: $3,800,000).
The following table details the Group’s trade and other receivables exposed to credit risk with
ageing analysis and impairment provided for thereon. Amounts are considered as “past due” when
the debt has not been settled, with the terms and conditions agreed between the Group and the
customer or counterparty to the transaction. Receivables that are past due are assessed for
impairment by ascertaining solvency of the debtors and are provided for where there are specific
circumstances indicating that the debt may not be fully repaid to the Group.
60
60
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
The balances of receivables that remain within initial trade terms (as detailed in the table) are
considered to be of high credit quality.
Expected credit losses (days overdue)
Gross
Amount
Impaired
<30
31-60
61-90
>90
Within
initial trade
terms
$
$
$
$
$
$
$
2020
GST receivable
Other receivables
8,313
1,970
R&D Rebate receivable
1,125,323
MRT receivables
Total
2019
GST receivable
Other receivables
382,500
1,518,106
74,735
6,700
-
-
-
-
-
-
-
-
1,970
-
-
1,970
-
4,569
-
MRT receivables
4,623,813
(823,813)
Total
4,705,248
(823,813)
4,569
Note 14. Property, plant and equipment
Office equipment - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,313
-
1,125,323
382,500
1,516,136
74,735
2,131
-
-
3,800,000
2,131 3,874,735
30 June 2020
30 June 2019
$
$
43,602
(22,751)
20,851
145,430
(118,401)
27,029
41,446
(16,147)
25,299
118,116
(101,396)
16,720
Total property, plant and equipment
47,880
42,019
61
61
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Movements in Carrying Amounts
Movements in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year:
Consolidated Group:
Balance at 30 June 2018
Additions
Depreciation expense
Balance at 30 June 2019
Additions
Depreciation expense
Balance at 30 June 2020
Note 15. Intangible assets
Platform development costs
Less: Accumulated amortisation
Trademark
Less: Accumulated depreciation
Goodwill
Less: Impairment
Office
Equipment
Computer
Equipment
$
$
Total
$
26,188
4,275
(5,164)
25,299
2,157
(6,604)
20,851
13,959
11,024
(8,263)
16,720
27,314
40,147
15,299
(13,427)
42,019
29,470
(17,005)
(23,609)
27,029
47,880
30 June 2020
30 June 2019
$
$
(i)
(ii)
(iii)
178,963
(62,596)
116,367
220,167
-
220,167
4,025,904
(4,025,904)
-
178,963
(2,778)
176,185
191,756
-
191,756
4,025,904
-
4,025,904
Total intangible assets
336,534
4,393,845
i)
Platform Development costs
Development costs have been capitalised at cost. They have a finite life and are carried at
cost less any accumulated amortisation and any impairment losses. Platform
Development Costs are amortised over their useful lives, being 3 years as determined by
the Directors. Amortisation commenced on 13 June 2019 being the date it was available
for use.
62
62
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
ii)
Trademark
Trademarks are assessed to have an indefinite useful life and will not be amortised.
iii)
Goodwill
Goodwill has been capitalised at the amount in excess of the consideration paid over the purchase
of Jaxsta Enterprise Pty Ltd.
Impairment tests for goodwill and indefinite life intangible assets
Result of Impairment testing
Goodwill and trademarks are tested annually for impairment. Goodwill and trademarks are
allocated to one cash-generating unit (‘CGU’) which is based on the consolidated entity’s sole
operating segment. The Directors have determined that the recoverable amount is the same
whether the basis of value in use or fair value less costs to sell is used.
The CGU experienced adverse market conditions during the year as a result of the disruption to the
music industry. This led to significant disruption of the roll out of the Group’s B2B
subscription-based service, Jaxsta Pro (beta), which has been offered free to music industry
professionals for the rest of the 2020 calendar year despite the features normally only being
available to paid users. The force of the macroeconomic event, combined with the uncertain timing
of a recovery, has reduced the current valuation of this CGU. As a result the Group’s result includes
an impairment charge of $4,025,904, recognised against goodwill. The recoverable amount of the
cash generating unit is $336,534.
The Group’s impairment charges are recorded in the consolidated income statement.
Key assumptions used for valuation calculations
The calculation of the recoverable amount for the CGU is most sensitive to the ability to generate
future revenues from sales of its subscription based service.
Sensitivity to changes in assumptions
Following the impairment loss recognised in relation to this CGU, the recoverable amount is equal
to the carrying amount. Therefore, any adverse change in certain key assumptions, could result in
further impairment.
63
63
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Movements in Carrying Amounts
Movements in the carrying amounts for each class of intangible assets between the beginning and
the end of the current financial year:
Consolidated Group:
Balance at 30 June 2018
Additions
Amortisation charge
Impairment losses
Platform
Development
Costs
Trademark
Goodwill
Total
$
$
$
153,508
25,455
(2,778)
-
142,056
49,700
-
-
4,025,904
4,321,468
-
-
-
75,155
(2,778)
-
Balance at 30 June 2019
176,185
191,756
4,025,904
4,393,845
Additions
Amortisation charge
Impairment losses
-
28,411
(59,818)
-
-
-
-
-
28,411
(59,818)
(4,025,904)
(4,025,904)
Balance at 30 June 2020
116,367
220,167
-
336,534
Note 16. Other assets
Prepayments
Rental Bond
Note 17. Trade and other payables
Unsecured liabilities:
Trade Creditors
Other creditors and accruals
30 June 2020
30 June 2019
$
$
197,014
26,400
223,414
161,002
26,400
187,402
30 June 2020
30 June 2019
$
$
309,121
261,912
571,033
300,707
298,985
599,692
64
64
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 18. Loans and borrowings
R&D rebate financing
Insurance financing
30 June 2020
30 June 2019
$
$
(1)
(2)
365,037
24,972
390,009
26,597
-
26,597
1) The company entered into an agreement with Radium Capital (Innovation Structured
Finance LLC) to get an advance of their estimated R&D tax incentive for the financial year.
The facility carries an interest rate of 15% and is secured by the Company’s R&D Tax
Incentive Claim.
Insurance funding is a ten months short term loan with an fixed interest rate of 5.85%
2)
Note 19. Provisions
Current
Employee benefits - annual
Non-current
Employee benefits - long service
30 June 2020
30 June 2019
$
$
206,669
206,669
32,314
32,314
156,389
156,389
88,902
88,902
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for annual leave and long service
leave.
The current portion for this provision includes the total amount accrued for annual leave
entitlements and the amounts accrued for long service leave entitlements that have vested due to
employees having completed the required period of service. Based on past experience, the Group
does not expect the full amount of annual leave or long service leave balances classified as current
liabilities to be settled within the next 12 months. However, these amounts must be classified as
current liabilities since the Group does not have an unconditional right to defer the settlement of
these amounts in the event employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave
entitlements that have not yet vested in relation to those employees who have not yet completed
the required period of service.
65
65
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 20. Issued Capital
The share capital dollar value represents the continuation of Jaxsta Holdings Pty Ltd. The number
of shares on issue reflect those of Jaxsta Limited.
Refer to the Business Combinations section of Note 2 on page 50 for further details of the
accounting principles applied.
30 June 2020
30 June 2019
30 June 2020
30 June 2019
(Restated)
Shares
$
Ordinary shares - fully paid
247,190,330
231,326,901
32,792,654
29,969,770
247,190,330
231,326,901
32,792,654
29,969,770
The movement of ordinary shares is listed below:
Date
Issue
Price
No. of Shares
$
Balance
Share consolidation 1 for 10
Conversion of performance shares
Performance shares
Conversion of loan
Shares to effect the acquisition of Jaxsta
Holdings Pty Ltd
Notional reverse acquisition adjustment
(Restated)
1 July 2018
17 August 2018
28 December 2018
28 December 2018
28 December 2018
28 December 2018
28 December 2018
Shares issued on capital raising
28 December 2018
Shares issued on capital raising
14 May 2019
0.00
0.00
0.13
0.20
0.20
0.25
493,119,559
7,974,578
(448,307,453)
5,000,000
550,000
-
-
-
32,000,000
4,000,000
109,399,795
21,879,959
-
(11,854,036)
26,345,000
13,220,000
-
5,269,000
3,305,000
(604,731)
30 June 2019
231,326,901
29,969,770
10 October 2019
0.39
445,000
173,550
Shares issue transaction costs
Balance
Shares issued on exercise of employee
options
Shares issued on capital raising
18 December 2019
Shares issued in cleansing statement
18 December 2019
Shares issued on exercise of employee
options
Shares issue transaction costs
13 March 2020
0.18
0.18
0.39
15,023,329
2,704,199
100
395,000
23
154,050
(208,938)
Balance
30 June 2020
247,190,330
32,792,654
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at shareholder meetings.
66
66
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 21. Cash flow information
Reconciliation of Cash Flows from Operating Activities
with Loss a�er Income Tax Loss for the Period
Cash flows excluded from loss attributable to operating
activities
Non-cash flows in loss:
-
-
-
-
-
-
-
-
Depreciation and amortisation
Write-off capitalised expenditure
Net foreign currency losses/(gains)
Impairment expenses
Fair value adjustments
Listing expenses
Employee share scheme expense
Supplier share scheme expense
Changes in assets and liabilities:
30 June 2020
30 June 2019
$
$
(10,438,665)
(14,384,104)
83,427
-
(4,018)
4,025,904
573,000
-
374,754
816,503
42,993
41,204
7,350
823,813
-
8,175,506
358,557
177,259
(increase)/decrease in trade and term receivables
(1,157,194)
-
-
-
-
-
-
(increase)/decrease in prepayments
(decreased)/increase in trade payables and accruals
(decrease)/increase in provisions
(increase)/decrease in other current assets
Cash flows from operating activities
Note 22. Reserves
(36,013)
130,085
(28,659)
(9,307)
(5,670,183)
(22,000)
(79,303)
(1,507,315)
163,501
(6,202,539)
Share-based payment reserve
1,460,473
596,816
30 June 2020
30 June 2019
$
$
Balance at the beginning of the year
CEO share options exercise
Lead Manager options expense
Employee option plan
Employee incentive option plan expense
NED option plan expense
Data Partner warrants granted
Credit adjustment for options exercised during the year
Balance at the end of the year
596,816
132,000
-
105,788
39,552
97,414
816,503
(327,600)
1,460,473
-
66,903
61,000
280,313
11,341
-
177,259
-
596,816
67
67
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
The following share-based payment arrangements existed as at 30 June 2020
CEO Options
Number of
Options
Exercise
Price ($)
Granted
Date
Status
Vesting Conditions
Expiry Date
Note
20,000,000
0.20
16-Nov-18
Granted
Vest in tranches of 1,000,000
options for every share price
increase of $0.10 from the initial
price of $0.20 on a trailing 30-day
VWAP basis
16-Nov-23
1 & 2
20,000,000
Total CEO Options
Lead Manager (share issue)
333,333
0.30
16-Nov-18
Vested
333,333
0.30
16-Nov-18
Granted
333,334
0.30
16-Nov-18
Granted
1,000,000
Total Lead Manager Options
This tranche vests when the share
price hits $0.30 for a period of 5
consecutive trading days
This tranche vests when the share
price hits $0.40 for a period of 5
consecutive trading days
This tranche vests when the share
price hits $0.50 for a period of 5
consecutive trading days
16-Nov-23
3
16-Nov-23
3
16-Nov-23
3
Employee Options
75,000
75,000
-
-
28-Mar-19
Vested
100% exercisable from 1 May 2019
until expiry
28-Mar-26
1 & 2
28-Mar-19
Vested
100% exercisable a�er the 28 of
March 2020 until expiry
28-Mar-26
1 & 2
150,000
Total Employee Options
Employee Incentive Options
169,711
0.651
28-Mar-19
Vested
169,712
0.651
28-Mar-19
Granted
131,250
0.651
28-Mar-19
Granted
131,250
0.651
28-Mar-19
Granted
601,923
Total Employee Incentive Options
NED options
Subject to exercise restrictions
from grant date to 1st anniversary
28-Mar-25
Subject to exercise restrictions
from grant date to 2nd anniversary
28-Mar-25
Subject to exercise restrictions
from grant date to 3rd anniversary
28-Mar-25
Subject to exercise restrictions
from grant date to 4th anniversary
28-Mar-25
4
4
4
4
3,000,000
0.20
30-Sep-19
Granted
Vest in tranches of 750,000 options
for every share price increase of
30-Sep-24
1 & 6
68
68
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
3,000,000
0.20
30-Sep-19
Granted
Data Partner Warrants
713,105
0.01
14-Mar-19
Granted
713,105
0.01
14-Mar-19
Vested
713,105
0.01
14-Mar-19
Granted
713,105
0.01
14-Mar-19
Granted
675,573
0.01
15-Mar-19
Vested
675,573
0.01
15-Mar-19
Granted
562,978
0.01
18-Jun-19
Vested
562,977
0.01
18-Jun-19
Granted
$0.10 from the initial price of $0.20
on a trailing 30-day VWAP basis
Vest in tranches of 750,000 options
for every share price increase of
$0.10 from the initial price of $0.20
on a trailing 30-day VWAP basis
30-Sep-24
1 & 6
Vesting (on the last day of the
month) 12 months a�er date of
issue and subject to other
non-market vesting conditions
Vesting (on the last day of the
month) 12 months a�er date of
issue
14-Mar-26
5
14-Mar-26
5
Vesting 24 months a�er date of
issue
14-Mar-26
Vesting 24 months a�er date of
issue and subject to other
non-market vesting conditions
14-Mar-26
Vesting 12 months a�er date of
issue
15-Mar-27
Vesting 24 months a�er date of
issue
15-Mar-28
Vesting (on the last day of the
month preceding) 12 months a�er
the date of issue
18-Jun-27
5
5
5
5
5
Vesting (on the last day of the
month preceding) 24 months a�er
the date of issue
18-Jun-28
5
1,024,278
1,024,276
234,574
234,574
150,000
150,000
0.01
0.01
0.23
0.23
0.01
0.01
10-Mar-20
Granted
10-Mar-20
Granted
30-Jul-19
Vested
30-Jul-19
Granted
30-Sep-19
Vested
30-Sep-19
Granted
Vesting 12 months a�er date of
issue
Vesting 24 months a�er date of
issue
Vesting 12 months a�er date of
issue
Vesting 24 months a�er date of
issue
Vesting on date of issue
Vesting 12 months a�er date of
issue
09-Mar-28
09-Mar-29
29-Jul-26
29-Jul-27
29-Sep-26
29-Sep-26
5
5
5
5
5
5
8,147,223
Total Data Partner Warrants
Notes:
Issued under the terms of Incentive Option Plan (Jaxsta). Refer to the table for terms.
1)
2) Vesting basis to remain employed by Jaxsta at vesting date (ranging from 0 to 1,825 days).
3)
Issued pursuant to the 2018 rights issue document dated 28 December 2018.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
4)
Issued pursuant to the 2019 rights issue document dated 28 March 2019. 5 Warrants to
various data partners between 14 March 19 and 18 June 2019.
5) All options and warrants granted are in respect of ordinary shares in Jaxsta Limited and
confer a right of one ordinary share for each option held.
Issued pursuant to a shareholder vote at the general meeting on 13 June 2019.
6)
Movement in the number of share options on issue
30 June 2020
30 June 2020
30 June 2019
30 June 2019
Number of options
and warrants
Weighted Average
Exercise Price ($)
Number of options
and warrants
Weighted Average
Exercise Price ($)
27,921,443
0.169
-
-
8,817,702
0.317
27,921,443
0.169
-
(840,000)
-
35,872,223
35,872,223
-
-
-
-
-
-
0.210
0.210
27,921,443
27,921,443
-
-
-
0.169
0.169
Total options and warrants
Outstanding at the beginning of the
year
Granted
Forfeited
Exercised
Expired
Outstanding at year end
Exercisable at year end
Options Reserve
The fair value of issued CEO share options is calculated to be $0.033 per option totalling $660,000
(2019: $660,000). The number of options granted during the year pursuant to the Incentive Option
Plan (Jaxsta) was NIL (2019: (20,000,000).
The fair value of issued NED share options is calculated to be $0.107 per option totalling $641,804
(2019: $NIL). The number of options granted during the year pursuant to the Incentive Option Plan
(Jaxsta) was 6,000,000 (2019: NIL).
The fair value of issued Employee share options is calculated to be $0.1539 per option totalling
$386,100 (2018: $386,100). The number of options granted during the year pursuant to the
Employee Incentive Option Plan (Jaxsta) was NIL (2019: (990,000).
The fair value of issued Employee Incentive share options is calculated to be $0.137 per option
totalling $82,463 (2019: $82,463). The number of options granted during the year pursuant to the
Employee Incentive Option Plan (Jaxsta) was NIL (2019: 601,923).
The fair value of issued Data partner Warrants is calculated to be $0.137 per warrant totalling
$1,256,671 (2019: $1,033,627). The number of warrants granted during the year pursuant to the
Incentive Option Plan (Jaxsta) was 2,817,702 (2019: 5,329,521).
In September 2019, the company granted some Non Executive Directors 6,000,000 options with an
exercise price of Nil, exercisable 34 days from grant date. The value of these options is $641,804.
Included under employees and contractor costs in the statement of profit and loss and other
comprehensive income is a share-based payments expense of $374,754 (2019: 358,557),
representing the expense for the current reporting period.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Included under product development expenses in the statement of profit and loss and other
comprehensive income is a share-based payments expense of $816,503 (2019: 177,259),
representing the expense for the current reporting period.
Included in Equity as a cost of capital raising is a share-based payment expense of $NIL (2019:
$61,000) for Lead Manager Options.
The value of share options issued during the financial year has been calculated by using a
binomial option pricing model applying the following inputs:
CEO
Options
Lead
Manager
Employee
Options
Employee
Incentive
NED
Options
Data
Partner
Exercise prices
$0.20
Underlying share prices
$0.20
$0.30
$0.20
$0.00
$0.39
$0.651
$0.20
$0.055-
$0.39
$0.255
Days to expiration
1,825
1,825
365 to 2,555
2,190
1,825
$0.055-
$0.240
2,730 to
3,285
Days to vesting
0 to 1,825
1 to 1,825
34 to 272
365 to 1,367
0 to 1,825
365 to 730
Expected share price
volatility
50%*
50%*
50%*
50%
50%
50%-150%
Risk free interest rate
2.02%
2.02%
2.02%
2.02%
1.21%
0.87%-
2.02%
* Expected share price volatility has been based using comparable entities listed on the ASX which operate in the same
industry group as Jaxsta Limited (Jaxsta). The Directors believed this to be a fair representation of Jaxsta’s expected
volatility at the time of issue in the absence of its own share volatility at the time.
The life of the options is based on the contracted expiry date.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 23. Related Party Disclosures
(a)
The Group’s main related parties are as follows:
Entities exercising control over the Group:
1) The ultimate parent entity that exercises control over the Group is Jaxsta Limited, which is
incorporated in Australia.
2) Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including any director (whether executive
or otherwise) of that entity, are considered key management personnel. For details of
disclosures relating to key management personnel, refer to Note 7 on page 57.
(b)
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Trade and other receivables
Loans to other related party - Mobilarm Ltd
Beginning of the year
Loans advanced
Loan repayment received
End of the year
30 June 2020
30 June 2019
$
$
-
-
-
-
750,000
-
(750,000)
-
This loan was interest free, unsecured and at call. It was extinguished in cash on the acquisition of
Jaxsta Holdings Pty Ltd on 28 December 2018.
Loans and borrowings
Loans from other related party - New Holland Pty Ltd
30 June 2020
30 June 2019
$
$
Beginning of the year
Loans advanced
Loan repayment received
End of the year
-
-
-
-
272,680
-
(272,680)
-
This loan was interest free and was repaid in cash in January 2019.
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Loans from other related party - Marine Rescue
Technologies Ltd
Beginning of the year
Loans advanced
Loan repayment received
End of the year
30 June 2020
30 June 2019
$
$
-
-
-
-
549,758
465,654
(1,015,412)
-
This loan was interest free and $715,695 was repaid in cash in January 2019 with the remaining
balance settled through the issues of shares in Jaxsta Limited.
Loans from other related party - Jacqui Louez Schoorl
and Louis Schoorl
Beginning of the year
Loans advanced
Loan repayment received
End of the year
30 June 2020
30 June 2019
$
$
-
-
-
-
300,000
-
(300,000)
-
This loan was interest free, and was settled through the issue of shares in Jaxsta Limited.
The following related party transactions occurred during the financial period:
Brett Cottle received a directors fee of $90,000 for the financial year and is paid to himself. Any
other transactions throughout the year relate to reimbursements for expenses incurred by Jaxsta
Ltd or his related entities on behalf of the Group.
Jorge Nigaglioni received a salary and directors fee of $45,000 for the financial year and is paid to
himself. Any other transactions throughout the year relate to reimbursements for expenses
incurred by Jaxsta Ltd or his related entities on behalf of the Group.
Linda Jenkinson received a directors fee of $49,275 for the financial year and is paid to herself. Any
other transactions throughout the year relate to reimbursements for expenses incurred by Jaxsta
Ltd or her related entities on behalf of the Group.
Jacqui Louez Schoorl received a salary and directors fee of $355,000 for the financial year and is
paid to herself, accordingly. Any other transactions throughout the year relate to reimbursements
for expenses incurred by her or her related entities on behalf of the Group.
Louis Schoorl received payments of $15,400 for music industry liaison services and product
development services from New Holland Pty Limited (related to Jacqui Louez Schoorl).
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
73
73
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 24. Financial Risk Management
The group's financial instruments consist mainly of deposits with banks, accounts receivable and
payable.
The totals for each category of financial instruments, measured in accordance with AASB 9 as
detailed in the accounting policies to these financial statements, are as follows:
Financial assets at amortised cost
Cash and cash equivalents
Loans and receivables
MRT receivables
Total financial assets
Financial liabilities at amortised cost
Trade payables
Loans and borrowings
Total financial liabilities
Note
30 June 2020
30 June 2019
$
$
12
13
13
17
18
2,404,848
1,135,606
382,500
3,922,954
309,121
390,009
699,130
2,452,760
81,435
3,800,000
6,334,195
300,707
26,597
327,304
Financial Risk Management Policies
The directors overall risk management strategy seeks to assist the group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Risk management
policies are approved and reviewed by the Board of Directors on a regular basis. These include the
credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the group is exposed to through its financial instruments are credit risk, liquidity
risk and market risk consisting of interest rate risk, foreign currency risk and price risk.
There have been no substantive changes in the types of risks the group is exposed to, how these
risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks
from the previous period.
(a)
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the group.
Credit risk is managed through the maintenance of procedures (such as the utilisation of systems
for the approval, granting and renewal of credit limits, regular monitoring of exposures against
such limits and monitoring of the financial stability of significant customers and counterparties),
and ensuring to the extent possible that customers and counterparties to transactions are of
sound credit worthiness. Such monitoring is used in assessing receivables for impairment.
74
74
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Depending on the division within the Group, credit terms are generally 14 to 30 days from the
invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high
credit rating.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the
reporting period excluding the value of any collateral or other security held, is equivalent to the
carrying amount (net of any provisions) as presented in the statement of financial position. Credit
risk also arises through the provision of financial guarantees, as approved at the board level, given
to parties securing the liabilities of certain subsidiaries.
Other receivables is deferred consideration in relation to the sale of the MRT business which is due
from Secure2go Group Ltd on or before 28 December 2020. Refer to Note 13 on page 60.
The group has a significant concentration of credit risk with MRT receivables. Details with respect
to credit risk of trade and other receivables are provided in Note 12 and Note 30.
Trade and other receivables that are neither past due nor impaired are considered to be high
credit quality. These aggregated amounts are detailed in Note 13 on page 60.
Credit risk related to balances with banks and other financial institutions is managed by the group
in accordance with approved board policy. Such policy requires that surplus funds are only
invested with major financial institutions.
(b)
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The Group manages this
risk through the following mechanisms:
●
preparing forward-looking cash flow analyses in relation to its operational, investing and
financing activities;
● monitoring undrawn credit facilities;
● maintaining a reputable credit profile;
● managing credit risk related to financial assets;
●
●
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial
assets.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflects the earliest contractual settlement dates
and does not reflect management’s expectations that banking facilities will be rolled forward.
75
75
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Financial liability and financial asset maturity analysis
Within 1 year
1 to 5 years
Total
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
Financial liabilities due for payment
Loans and borrowings
Trade payables
Total contractual outflows
Total expected outflows
390,009
26,597
309,121
300,707
699,130
353,901
699,130
353,901
-
-
-
-
-
-
-
-
390,009
26,597
309,121
300,707
699,130
353,901
699,130
353,901
Within 1 year
1 to 5 years
Total
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
Financial assets cash flows realisable
Cash and cash equivalents
2,404,848
2,452,760
Trade and loan receivables
1,518,106
705,248
Total anticipated inflows
3,922,954
3,158,008
Net (outflow)/inflow on financial
instruments
3,922,954
3,158,008
-
-
-
-
-
2,404,848
2,452,760
3,176,187
1,518,106
3,881,435
3,176,187
3,922,954
6,334,195
3,176,187
3,922,954
6,334,195
(c)
(i)
Market risk
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the
end of the reporting period whereby a future change in interest rates will affect future cash flows
or the fair value of fixed rate financial instruments.
The financial instruments that primarily expose the Group to interest rate risk are borrowings,
foreign currency, and cash and cash equivalents.
(ii)
Foreign exchange risk
Other price risk relates to the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices largely due to demand and supply factors (other
than those arising from interest rate risk or foreign currency risk) for commodities.
76
76
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Sensitivity analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates,
exchange rates and commodity and equity prices. The table indicates the impact of how profit and
equity values reported at the end of the reporting period would have been affected by changes in
the relevant risk variable that management considers to be reasonably possible. These
sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2020
+/- 1% in interest rates
Year ended 30 June 2019
+/- 1% in interest rates
Profit
$
Equity
$
3,900
3,900
266
266
+/1
+/1
There have been no changes in any of the methods or assumptions used to prepare the above
sensitivity analysis from the prior year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and
can be compared to their carrying amounts as presented in the statement of financial position.
Refer to Note 24 on page 74 for detailed disclosures regarding the fair value measurement of the
Group’s financial assets and financial liabilities.
These sensitivities assume that the movement in a particular variable is independent of other
variables.
2020
2019
Note
Net carrying
value
$
$
value
$
$
Net fair value Net carrying
Net fair value
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
12
13
2,404,848
2,404,848
2,452,760
2,452,760
1,518,106
1,518,106
3,881,435
3,881,435
3,922,954
3,922,9548
6,334,195
6,334,195
2020
2019
Note
Net carrying
value
$
$
value
$
$
Net fair value Net carrying
Net fair value
Financial liabilities
Trade payables
Loans and borrowings
Total financial liabilities
17
18
309,121
390,009
309,121
390,009
300,707
26,597
300,707
26,597
699,130
699,130
327,204
327,304
77
77
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Cash and cash equivalents, trade and other receivables, loans and advances and trade and other
payables are short- term instruments in nature whose carrying amounts are equivalent to their fair
values.
Note 25. Fair Value Measurements
The carrying amounts of cash and cash equivalents, trade and other receivables, loans and
advances and trade and other payables are carried at their amortised cost less any impairment.
The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at the current interest rate that is valuable for similar financial liabilities.
Note 26. Contingent Assets and Contingent Liabilities
There were no contingent assets or contingent liabilities which would have a material effect on the
consolidated entity's financial statements as at 30 June 2020 (2019: $ nil).
Note 27. Contractual Commitments
Jaxsta Limited had no contractual commitments as at 30 June 2020.
78
78
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 28. Parent Entity Information
Parent entity information
Statement of financial position
Assets
Current assets
Non-current assets
TOTAL ASSETS
Liabilities
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
Equity
Issued capital
Retained earnings
Option reserve
TOTAL EQUITY
Statement of profit or loss and other comprehensive income
Total loss
TOTAL COMPREHENSIVE LOSS
Contingent liabilities
30 June 2020
$
30 June 2019
Restated
$
2,727,895
4,169,468
6,897,363
-
-
-
32,792,654
(27,355,764)
1,460,473
6,897,363
3,352,624
1,664,300
5,016,923
43,109
-
43,109
29,969,770
(25,592,772)
596,816
4,973,814
(1,762,992)
(1,762,992)
(1,319,520)
(1,319,520)
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Contractual commitments
The parent entity had no contractual commitments as at 30 June 2020 and 30 June 2019.
79
79
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
2020 Annual Report | Notes to the Consolidated Financial Statements
Note 29. Interests in subsidiaries
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares which are held
directly by the Group. The proportion of ownership interests held equals the voting rights held by
the Group. Each subsidiary’s principal place of business is also its country of incorporation.
Name of subsidiary
Country of incorporation
Ownership interest held by the
Group
2020
2019
Financial liabilities
Jaxsta Holdings Pty Ltd
Jaxsta Enterprise Pty Ltd
Jaxsta Inc.
Note 30. Registered Office
Australia
Australia
United States of America
100%
100%
100%
100%
100%
100%
The registered office of the company is:
The principal place of business is:
Level 1 / 113-115 Oxford Street
Level 1 / 113-115 Oxford Street
Darlinghurst NSW 2010
Darlinghurst NSW 2010
Note 31. Events A�er the Reporting Period
Other than the events described below, there are no other events or circumstances that have
arisen that would require disclosure in the financial report.
On 10 September 2020, the Company entered into a convertible note agreement with Songtradr
Inc. for a principal value of $1,420,000. Conversion would result in the issue of 40,571,429 fully
paid ordinary Jaxsta shares for the principal value of the note. The conversion is at the right of the
noteholder, except if:
●
●
the Company registers a full year net profit of $5,000,000 at which time 100% of the note is
converted automatically; or
the Company registers a full year net profit of $2,500,000 at which time 50% of the note is
converted automatically.
The noteholder can convert or seek repayment of the note at the expiration of the term of the
note. The note has a term of up to 3 years and carries a coupon rate of 7.5% which will be accrued
and paid at the end of the term or capitalised and converted at the time of conversion or
repayment. The note is secured by a first ranking security over the assets of the Company and its
subsidiaries.
80
80
Jaxsta Limited
2020 Annual Report | Director’s Declaration
Jaxsta Limited
2020 Annual Report | Notes to the Consolidated Financial Statements
In addition, on 10 September 2020 the Company also entered into a five year commercial
agreement with Songtradr to deliver an end-to-end integrated platform solution for Jaxsta Pro
members to use Songtradr’s neighbouring rights collection service, powered by Jaxsta’s global
performer metadata. The Group expects the integration to be completed by November 2020. The
agreement includes an upfront license fee of $500,000 paid by Songtradr to Jaxsta (the “License
Fee”) and provides Jaxsta with 20% of net neighbouring rights revenues received by Songtradr
from Jaxsta users adopting the service a�er recoupment of the License Fee.
Note 32. Difference to Preliminary Financial Report and Appendix 4E
Since the lodgement of the company’s Appendix 4E and the Preliminary Financial Report with the
ASX on 31 August 2020, Jaxsta has completed its R&D rebate estimates and its annual audit. This
resulted in a difference of $76,632 between the Preliminary Financial Report and this Final Audited
Financial Report, which is summarised below:
Loss a�er income tax expense for the year attributable
to the owners of Jaxsta LImited
Preliminary
FInancial
Report
Adjustment
Posted
Final Audited
FInancial
Report
(10,515,297)
76,632
(10,438,665)
Net Assets
3,254,125
76,632
3,330,757
81
81
Jaxsta Limited
2020 Annual Report | Director’s Declaration
Jaxsta Limited
2020 Annual Report | Director’s Declaration
Director’s Declaration
In accordance with a resolution of the Directors of Jaxsta Limited, the Directors of Jaxsta declare
that:
●
the consolidated financial statements and notes, as set out on pages 33 to 81, are in
accordance with the Corporations Act 2001 (Cth) and:
o comply with the Australian Accounting Standards and the Corporations Regulations 2001,
which, as stated in accounting policy Note 2 to the financial statements, constitutes
compliance with International Financial Reporting Standards; and
o give a true and fair view of the financial position as at 30 June 2020 and of the performance
for the year ended on that date of the consolidated Group;
●
●
in the Directors’ opinion there are reasonable grounds to believe that Jaxsta Limited will be
able to pay its debts as and when they become due and payable; and
the Directors have been given the declarations required by s295A of the Corporations Act 2001
(Cth) from the Chief Executive Officer and Chief Financial Operations Officer.
On behalf of the Directors
JLS Signature
Jacqueline Louez Schoorl
Executive Director
30 September 2020
Sydney, New South Wales
82
82
Jaxsta Limited
2020 Annual Report | Auditor’s Independence Declaration
Auditor’s Independence Declaration
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Jaxsta Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of (Jaxsta
Limited) for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
R J Isbell
Partner – Audit & Assurance
Sydney, 30 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
83
83
Jaxsta Limited
2020 Annual Report | Independent Auditor’s Report
Independent Auditor’s Report
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Jaxsta Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jaxsta Limited (the Company) and its subsidiaries (the Group), which comprises
the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
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2020 Annual Report | Independent Auditor’s Report
Material uncertainty related to going concern
We draw attention to Note 2(b) in the financial statements, which indicates that the Group incurred a net loss of $10,438,665
during the year ended 30 June 2020, and had a net operating cash outflow of $5,670,183. As stated in Note 2(b), these
events or conditions, along with other matters as set forth in Note 2(b), indicate that a material uncertainty exists that may cast
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
Impairment of Goodwill
(Note 2, 3 and 15)
How our audit addressed the key audit matter
The Group carried on its statement of financial position a
Goodwill balance of $4,025,904 which was recognised on the
purchase of Jaxsta Pty Limited by Jaxsta Holdings in 2018.
AASB 136 Impairment of Assets requires an entity to annually
assess any goodwill acquired in a business combination, for
impairment. In doing this, they must estimate the recoverable
amount of the asset, being the higher of its value in use or fair
value less costs to dispose.
Assessing the recoverable amount of goodwill involves a high
degree of judgement.
This area is a key audit matter due to the complexities and
high degree of judgement required in determining the
assumptions used to perform the impairment testing.
Our procedures included, amongst others;
reviewing and assessing management’s impairment
paper documenting its considerations against the
requirements of AASB 136;
making enquiries with management to understand the
basis of any assumptions used, as well as obtaining
available evidence to support these assumptions;
reviewing management’s basis and conclusion for any
write down of other assets in the CGU;
evaluating how the Group has considered the ongoing
impact of COVID-19 in the impairment assessment; and
assessing the adequacy of the relevant disclosures in
the financial statements.
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2020 Annual Report | Independent Auditor’s Report
Recognition of R&D tax incentive (Note 2, 3, 5, 7 & 13)
Under the research and development (R&D) tax incentive
scheme, the Group receives a 43.5% refundable tax offset of
eligible expenditure if its turnover is less than $20 million per
annum, provided it is not controlled by income tax exempt
entities. A Registration of R&D Activities Application is filed
with AusIndustry in the following financial year and, based on
this filing, the Group receives the incentive in cash.
Management engaged an R&D expert to perform a detailed
review of the Group’s total R&D expenditure to determine the
potential claim under the R&D tax incentive legislation. The
receivable at year-end for the incentive was $1,125,323. This
represents an estimated claim for the period 1 July 2019 to 30
June 2020.
This area is a key audit matter due to the size of the
receivable and because there is a degree of judgement and
interpretation of the R&D tax legislation required by
management to assess the eligibility of the R&D expenditure
under the scheme.
Our procedures included, amongst others:
• obtaining and documenting, through discussions with
management, an understanding of the process to estimate
the claim;
evaluating the competence, capabilities and objectivity of
management's expert;
utilising an internal R&D tax specialist in:
•
•
•
•
reviewing the methodology used by management for
consistency with the R&D tax offset rules; and
considering the nature of the expenses against the
eligibility criteria of the R&D tax incentive scheme to
assess whether the expenses included in the
estimate were likely to meet the eligibility criteria.
• inspecting supporting documentation for a sample of
expenses claimed to assess validity of the claimed amount
and eligibility against the R&D tax incentive scheme criteria;
comparing the nature of the R&D expenditure included in
the current year estimate to the prior year claim;
comparing the eligible expenditure used in the receivable
calculation to the expenditure recorded in the general
ledger;
considering the entity's history of successful claims;
inspecting copies of relevant correspondence with
AusIndustry and the Australian Taxation Office related to
the claims; and
assessing the adequacy of the relevant disclosures in the
financial statements.
•
•
•
•
•
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, 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 we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’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 Group or to cease operations, or have no realistic alternative but to do so.
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2020 Annual Report | Independent Auditor’s Report
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 18 to 28 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Jaxsta Limited, for the year ended 30 June 2020 complies with section 300A
of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
R J Isbell
Partner – Audit & Assurance
Sydney, 30 September 2020
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Additional Shareholder Information
2020 Annual Report | Additional Shareholder Information
Additional Shareholder Information
Shareholder Information required by the Australian Securities Exchange Limited ( ASX ) Listing
Rules and not disclosed elsewhere in the Report is set out below. The shareholder information is
current as at 15 September 2020.
Jaxsta Limited shares are traded on the ASX under the code ‘JXT’. Jaxsta’s securities are not traded
on any other exchange.
Share Registry
Automic Pty Limited
Registered Office
Level 1, 113-115 Oxford St
Principal Place of Business
Level 1, 113-115 Oxford St
Level 2
Darlinghurst NSW 2010
Darlinghurst NSW 2010
267 St Georges Terrace
T: +61 2 8317 1000
T: +61 2 8317 1000
Perth WA 6000
T: 1300 288 664 or +61 2
8072 1400
(International)
The details of Jaxsta’s current Company Secretary, Jorge Nigaglioni, is set out in the Directors’
Report.
A review of the operations of Jaxsta and its other Group members for the reporting period is set
out in the Directors’ Report.
Corporate Governance
In accordance with the 3rd edition ASX Corporate Governance Council’s Principles and
Recommendations, the 2020 Corporate Governance Statement, as approved by the Board, is
available on Jaxsta’s website at: https://jaxsta.com/info/governance-documents . The Corporate
Governance Statement sets out the extent to which Jaxsta has followed the ASX Corporate
Governance Council’s 29 Recommendations during the 2020 financial year.
Substantial Shareholders of Fully Paid Ordinary Shares
The number of securities held by substantial shareholders and their associates, as disclosed to the
ASX are set out below:
Name
Ms Jacqueline Samantha Louez Schoorl
Mr Louis Schoorl
Gleneagle Securities Nominees Pty Limited
Jaxsta Limited
Number
Percentage
25,920,004
25,920,000
15,400,000
86,760,617
10.49%
10.49%
6.23%
35.10%
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Jaxsta Limited
2020 Annual Report | Additional Shareholder Information
Jaxsta Limited
2020 Annual Report | Additional Shareholder Information
Distribution of Security Holders and Holdings
Fully Paid Ordinary Shares
Holding Ranges
Ordinary
Shares
%
Number of
Holders
%
1 up to and including 1,000
1,001 up to and including 5,000
31,209
930,795
5,001 up to and including 10,000
2,445,880
0.01%
0.38%
0.99%
10,001 up to and including 100,000
22,012,596
8.91%
72
292
299
562
195
5.07%
20.56%
21.06%
39.58%
13.73%
221,769,850
89.72%
247,190,330
100.00%
1,420
100.00%
Above 100,000
Totals
Options
Holding Ranges
Options
%
Number of
Holders
%
1 up to and including 1,000
1,001 up to and including 5,000
5,001 up to and including 10,000
-
-
-
-
-
-
10,001 up to and including 100,000
76,923
0.28%
Above 100,000
Totals
Warrants
27,675,000
99.72%
27,751,923
100.00%
Holding Ranges
Warrants
%
Number of
Holders
1 up to and including 1,000
1,001 up to and including 5,000
5,001 up to and including 10,000
10,001 up to and including 100,000
-
-
-
-
-
-
-
-
Above 100,000
Totals
8,147,223
100.00%
8,147,223
100.00%
-
-
-
1
6
7
-
-
-
-
6
6
-
-
-
14.29%
85.71%
100.00%
%
-
-
-
-
100.00%
100.00%
The number of shareholders holding less than a marketable parcel of ordinary shares is 210 based
on Jaxsta’s closing share price of $0.16, on 15 September 2020.
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89
VALUE NOMINEES PTY LTD
8,481,841
Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Additional Shareholder Information
2020 Annual Report | Additional Shareholder Information
Twenty Largest Shareholders
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MS JACQUELINE SAMANTHA LOUEZ SCHOORL
MR LOUIS SCHOORL
GLENEAGLE SECURITIES NOMINEES PTY LIMITED
GLENEAGLE SECURITIES NOMINEES PTY LIMITED
MS PATRYCJA DORATA PROTASIUK
JJC CAPITAL PTE LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MRS MELANIE THERESE VERHEGGEN
BLAZZED PTY LTD
SANDHURST TRUSTEES LTD
MR KEVIN BARRY
MR JUSTIN KENNETH BRADFIELD
COMSEC NOMINEES PTY LIMITED
JUNIOR JAY PTY LTD
NEWD CORP PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MR JUN GU
MR GARY DARREN HASLER
Total
Balance of the register - ordinary shares
Total issued capital - ordinary shares
Number of
ordinary
shares
25,920,004
25,920,000
15,400,000
11,580,470
11,052,989
10,000,000
8,271,368
6,860,337
5,618,455
5,044,016
4,517,020
4,458,000
3,390,001
3,233,524
2,400,000
2,065,220
2,060,996
2,000,244
2,000,000
%
10.49%
10.49%
6.23%
4.68%
4.47%
4.05%
3.43%
3.35%
2.78%
2.27%
2.04%
1.83%
1.80%
1.37%
1.31%
0.97%
0.84%
0.83%
0.81%
0.81%
160,274,485
64,84%
86,915,845
35.16%
247,190,330
100.00%
Escrowed Securities
Fully Paid Ordinary Shares
Jaxsta has 86,760,617 fully paid ordinary shares that are subject to escrow until 28 December 2020
(being 24 months from the date on which Jaxsta’s shares were reinstated to the official list of the
ASX on 28 December 2018).
Options
There are 21,000,000 options that are subject to escrow until 28 December 2020 (being 24 months
from the date on which Jaxsta’s shares were reinstated to the official list of the ASX on 28
December 2018).
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Jaxsta Limited
Jaxsta Limited
2020 Annual Report | Additional Shareholder Information
2020 Annual Report | Additional Shareholder Information
Unquoted securities
Options
Jaxsta has issued 27,591,923 options at various exercise prices and expiry dates under the Jaxsta
Incentive Options Plan. The Jaxsta Incentive Options Plan was approved by shareholders in a
general meeting on 17 August 2018.
Jaxsta has issued 1,000,000 options to Bell Potter Securities Limited which are exercisable at
A$0.30 per option and will expire at 5:00pm (WST) on 16 November 2023.
Warrants
Jaxsta has issued 8,417,223 unlisted warrants to six warrant holders which remain unexercised.
Details of holders of 20% or more of the warrants are as follows:
Number of
Warrants
2,852,420
2,048,554
3,246,249
%
35.0%
25.1%
39.8%
8,147,223
100.0%
Name
Universal Music Investments Association Ltd
Sony Music Entertainment Inc.
Other
Total
On Market Buy-Back
There is no current on market buy-back.
Voting Rights
The voting rights attached to ordinary shares are that on a show of hands, every member present,
in person or proxy, has one vote and upon a poll, each share shall have one vote.
Option holders do not have any voting rights on the options held by them.
Warrant holders do not have any voting rights on the warrants held by them.
Statement Regarding Use of Cash and Assets
During the period between 28 December 2018 and 30 June 2020, Jaxsta has used its cash and
assets readily convertible to cash that it had at the time of ASX admission in a way consistent with
its business objectives set out in the Prospectus dated 7 September 2018.
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Photo credit: Taylor Bryant
Corporate Directory
Directors
Linda Jenkinson
Chair
Jacqueline Louez Schoorl
Executive Director, CEO and Co-founder
Jorge Nigaglioni
Executive Director, CFO and Company Secretary
Brett Cottle
Independent, Non-Executive Director
Ken Gaunt
Non-Executive Director
Key Executives
Jacqueline Louez Schoorl
Executive Director, CEO and Co-founder
Jorge Nigaglioni
Executive Director, CFO and Company Secretary
Registered Office
Level 1/ 113-115 Oxford Street
Darlinghurst NSW 2010
Contact Details
Web:
Tel:
Email:
https://www.jaxsta.com/
(02) 8317 1000
jaxstainvestors@jaxsta.com
Auditors
Grant Thornton Audit Pty Ltd
17/383 Kent St,
Sydney NSW 2000
https://www.automicgroup.com.au/
Principle Place of Business
Level 1/ 113-115 Oxford Street
Darlinghurst NSW 2010
Share Registry
Automic Pty Limited
Level 2, Canning Highway
Perth WA 6000
93
Jaxsta Limited ordinary shares are listed on the Australian
Stock Exchange (ASX) under the ticker JXT.
The story behind the music
Photo credit: Soundtrap
Jaxsta Ltd
ABN 15 106 513 580
Level 1 / 113-115 Oxford Street
Darlinghurst NSW 2010 Australia
info@jaxsta.com
www.jaxsta.com
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