Mobilicom Limited
ABN 26 617 155 978
Annual Report - 31 December 2022
Annual Report – 31 December 2022
For personal use only
Mobilicom Limited
Contents
31 December 2022
Corporate directory
1
Chairman's Letter
2
Directors' report
3
Auditor's independence declaration
17
Consolidated statement of profit or loss and other comprehensive income
18
Consolidated statement of financial position
19
Consolidated statement of changes in equity
20
Consolidated statement of cash flows
21
Notes to the consolidated financial statements
22
Directors' declaration
50
Independent auditor's report to the members of Mobilicom Limited
51
Shareholder information
54
For personal use only
Mobilicom Limited
Corporate directory
31 December 2022
1
Directors
Oren Elkayam (Chairman and Managing Director)
Yossi Segal (Executive Director)
Campbell McComb (Non-executive Director)
Jonathan Brett (Non-executive Director)
Company secretary
Justin Mouchacca
Registered office
C/- JM Corporate Services
Level 21
459 Collins Street
Melbourne, VIC 3000
Ph: 03 8630 3321
Share register
Boardroom Pty Limited
Level 12, 225 George Street
Sydney, NSW, 2000
Ph: 1300 737 760 (within Australia)
Ph: +61 2 9290 9600
Auditor
BDO Audit Pty Ltd
Collins Square, Tower 4
Level 18, 727 Collins Street
Melbourne, Victoria, 3008
Stock exchange listing
Mobilicom Limited shares are listed on the Australian Securities Exchange (ASX
code: MOB) and Mobilicom Limited ADS and warrants are listed on Nasdaq Capital
Market (Nasdaq codes: MOB, MOBBW)
Website
https://ir.mobilicom.com/
Corporate Governance Statement
https://ir.mobilicom.com/corporate governance/
For personal use only
Mobilicom Limited
Chairman’s letter
31 December 2022
2
Dear fellow shareholders,
Having achieved commercial, technological, and financial progress during 2022, Mobilicom is in position to be a leading
end-to-end technology and cybersecurity solutions provider to drone and robotics manufacturers globally. Up to date we
achieved 44 design wins, 8 of them are leading Tier-1 manufacturers in our targeted market and delivered solutions
across 16 countries. During the year, we had a successful Initial public offering on the Nasdaq raising US$13 million in
the U.S., which accounts for the world’s largest drones and robotics market for both defence and commercial segments.
As the conflict in Ukraine surpasses the one-year mark, the widescale use of uncrewed aerial vehicles, or UAV, in the
conflict underscores the urgent need for robust drone hardware, software and communications solutions with the latest
in the cybersecurity systems to protect UAVs from combat attacks. As drone usage continues to increase, the U.S.
Pentagon has reportedly budgeted more spending for drones, counter-drone, and warfare detection equipment as part
of its most recent $2 billion aid package under the Ukraine Security Assistance Initiative, creating a potential step-in for
our products, mainly in the cloud-based software and defensive cybersecurity solutions.
Mobilicom’s AI-based Immunity Cybersecurity and Encryption (ICE) Cybersecurity Suite, is the world’s first AI-based
360° software cybersecurity system that can detect, prevent, and respond to multiple drone and robotics cyber-attacks
in real-time without requiring intervention by an operator. ICE is ideally suited to serve the small-size drone commercial
and defence market which is forecast to grow at a CAGR of 63% to $27 billion by 2028.
Ready to support both the commercial and defence industry meet cybersecurity challenges, we’ve been very active in
helping to set standards in this new technology realm, as we get in front of key procurement decision makers.
This activity during 2022 led to our strategic partnership with Mistral, a US-based provider of high-performance, reliable,
and innovative solutions to U.S. defense and federal agencies. Mistral aims to integrate our solutions into U.S. defense
industry and U.S. Department of Defense (DOD)-related requisitions. We also became a member of the Association for
Uncrewed Vehicle Systems International (AUVSI) and its Cybersecurity Working Group which is developing enterprise
cybersecurity standards to address cyber risks specific to uncrewed systems and robotics. In the Cybersecurity Working
Group, we are honored to be working alongside other leading defense, drone, and cybersecurity companies including
Boeing, Boston Dynamics, Northrup Grumman, and Raytheon.
Operationally, during 2022 we continued to build our highly scalable, repeat transactional business model which includes
hardware and software sales, plus recurring managed services revenues. During the year, we had new and repeat
orders from the Israel Ministry of Defence (IMOD), Israel Aerospace Industries, Teledyne-Flir, Rafael, Elbit Technologies
and several other Tier-1 drone manufacturers, as well as a research grant from USA Space Florida program.
New products launched during the year include SkyHopper Micro, designed to enable mass deployment of small drone
fleets and equipped with ICE Cybersecurity software for secure long range and Non-Line of Sight, and urban
communication. SkyHopper Micro was designed in collaboration with leading Tier-1 manufacturers of small-size drones
to cater to the growing demand for high-use applications including defence intelligence or loitering drones, as well as
commercial inspection, security, disaster relief.
While the conflict in Ukraine has put the spotlight on drones in defence, our growing product suite supports broad
commercial applications, which over the long-term are expected to surpass military applications in scale and value.
Looking ahead to 2023, we expect to win additional design wins, as well as supporting existing design-win under our
pipeline to progress to commercial phase and manufacturing ramp up that will scale our revenues. With a cash balance
of A$19 million at the end of December 2022, we are well funded to execute on these opportunities and our growth
strategy.
On behalf of the board, I thank our loyal shareholders for their support and our hard working employees for their
dedication throughout the year.
We expect 2023 to be a growth year for Mobilicom as we see a convergence of our advanced product portfolio meeting
the evolving demands of a dynamic young market for drones and robotics.
Oren Elkayam
Mobilicom Chairman & Managing Director
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Mobilicom Limited
Directors' report
31 December 2022
3
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Mobilicom Limited (referred to hereafter as the 'Company', 'Mobilicom Australia' or
'parent entity') and the entities it controlled at the end of, or during, the year ended 31 December 2022.
Directors
The following persons were directors of Mobilicom Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Oren Elkayam (Chairman and Managing Director)
Yossi Segal (Executive Director)
Campbell McComb (Non-executive Director)
Jonathan Brett (Non-executive Director)
Principal activities
The Company is an end-to-end provider of cybersecurity and robust solutions for drones, robotics & autonomous platforms.
As a high-tech company it designs, develops and delivers robust solutions focused primarily on targeting global drone,
robotics and autonomous system manufacturers. The Company holds patented technology & unique know-how for Mobile
Mesh networking. It has a large, field proven portfolio of commercialised products used in a variety of applications. The
Company is growing a global customer base with sales to high profile customers including corporates, governments and
military departments. Mobilicom’s competitive advantages include outstanding security capabilities and performance in harsh
environmental conditions. The Company’s large solution portfolio is being deployed worldwide, seeing the Company derive
revenue from hardware, software sales & licensing fees and professional support services for its solutions.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Financial Highlights
Customers revenue in 2022 decreased 35% compared to 2021 to $2.3 million. The decrease was mainly due to supply chain
challenges negatively affecting customers’ production capabilities, which resulted in lower orders for Mobilicom’s products
and services. Furthermore, supply chain challenges limited the company’s ability to deliver on existing orders.
The Company maintained high gross margins of 62% despite global supply chain challenges, reflecting effective planning
and management of component parts and materials.
Government R&D grants of $0.9 million were up 17.2% compared to 2021.
At 31 December 2022, confirmed order backlog to be delivered and invoiced in 2023 totalled $0.6 million.
The Company ended 2022 with a cash balance of $19.0 million, and with net cash used in operating activities during 2021
of $4.5 million. The $19.0 million cash reserve balance provides a healthy runway, assuming operation levels remain
consistent with 2022.
Operational Highlights
●
Commenced trading on Nasdaq Capital Market following $19 million initial public offering, expanding operations in the
world’s largest drone market;
●
Secured12 new design wins across global customers, bringing total wins over the recent years to 44, providing a strong
likelihood of future orders;
●
Secured new Tier-1 customer with initial order, bringing the number of Company’s Tier-1 customers to eight (8);
●
Launched SkyHopper Micro designed to enable mass deployment of small drone fleets followed by Tier-1 drone
manufacturer selecting the product for integration into its new drone platform planned for mass production;
●
Released 2nd Gen SkyHopper Datalinks and MCU Mesh Networking products featuring ICE cybersecurity; and
●
Secured $408,000 in new U.S. Space Florida R&D program, associated with existing innovation projects.
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Mobilicom Limited
Directors' report
31 December 2022
4
Review of Operations
During the year, Mobilicom continued to secure new and repeat purchase orders, fulfilled existing contracts, and achieved
high-profile wins and continued to execute its growth strategy while expanding operations in the US - the world’s largest
drone market for defence and commercial applications.
Nasdaq Capital Market listing & IPO
In August 2022, Mobilicom commenced trading on the NASDAQ under the ticker “MOB”, following an oversubscribed $19
million initial public offering (IPO). Under the IPO, Mobilicom issued 3.22 million units at US$4.13 per unit. Each consisted of
one American Depositary Share (ADS), representing 275 shares in the Company, and one warrant to purchase one ADS.
Funds are being used to expand Mobilicom’s operations in the USA, increase sales and marketing activities, support research
and development, accelerate the commercialisation of its world-first cybersecurity and cloud software solutions, in addition
to providing working capital.
Contracts
In FY22, Mobilicom secured and delivered repeat orders from existing Tier-1 strategic customers, including Israeli MOD,
Teledyne Flir (S&P500), Elbit Systems, Israel Aerospace Industry and Rafael. Mobilicom also secured contracts from new
customers, including leading US commercial drone manufacturer and securing initial order from new large Asia-based Tier-
1 drone manufacturer bringing the total number of the Company’s Tier-1 customers to eight (8). The Company’s operations
are primarily focused on USA, EU and Israel.
Design wins
Mobilicom secured 12 new design wins over the year, bringing total design wins over the recent years, to 44 across its global
customer base of drone and robotics manufacturers.
Design wins are a key leading indicator of future revenue growth, given they represent customer commitments to integrate
Mobilicom products into platform designs.
Launched SkyHopper Micro; Selected for integration into new drone platform by Tier-1 drone manufacturer
Mobilicom continues to improve and expand its end-to-end offering, launching SkyHopper Micro product designed to enable
mass deployment of small drone fleets. This new product was designed in collaboration with small-drone Tier-1
manufacturers to cater for growing demand for high-use applications including commercial inspections, disaster relief and
defence intelligence or loitering drones. SkyHopper Micro is equipped with ICE Cybersecurity software and delivers secure
long range and Non-Line of Sight (N-LOS) communication for small commercial and industrial drones. It is in compliant with
the National Defence Authorization Act (NDAA), a key requirement for U.S. Government agencies.
The SkyHopper Micro was selected by a Tier-1 manufacturer that is a global leader in its field selling similar products for
decades to serve government, military, intelligence, and kamikaze applications. This Tier-1 manufacturer selected
SkyHopper Micro due to its superior performance both in line-of-sight (LOS) and urban non-LOS conditions and its lightweight
miniature size, making it ideal for integration into mini-and-small-sized drones. Following flight testing, the Tier-1 customer
successfully demonstrated SkyHopper Micro to potential customers such as the U.S. Army and European militaries, building
widespread interest and demand for the product.
2nd Gen SkyHopper Datalinks and MCU Mesh Networking release
Mobilicom continues to improve and expand its product offering, releasing 2nd Gen SkyHopper Datalinks and MCU Mesh
Networking products. These 2nd Gen products feature Mobilicom’s ICE cybersecurity software as standard, with the option
to upgrade to professional or premium level coverage through additional software licensing fees.
R&D grants
In 2022, Mobilicom was awarded a net new $408,000 research and development grant under the Space Florida innovation
project for the development of a Multi-Link (MLU) communications system. The new solution will incorporate three concurrent
transmitting transceivers (SDR, cellular, satellite) for auto redundancy capability when operating beyond visual-line-of-sight.
The MLU will include the use of satellite connections for redundancy, enabling the operation of unmanned systems in areas
with no or insufficient network coverage.
The new grant extends Mobilicom’s partnership with US drone company Censys Technologies and is part of an R&D project
with a gross value of $1.4 million.
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Mobilicom Limited
Directors' report
31 December 2022
5
Corporate
In October 2022, Mobilicom appointed highly experienced technology executive Udi Altshuler as General Manager to lead
its global operations hub in Israel and to drive the Company's new product development and commercialization of its ICE
cybersecurity software. Altshuler brings more than 25 years’ operational and executive experience gained at large high-tech
original equipment manufacturers (OEMs). He was most recently Chief Operating Officer of GuardKnox, the automotive
industry’s first cybertech tier supplier to OEMs and has held senior leadership roles in several global defence technology
companies including Elbit Systems, RADA Electronic Industries, BVR Systems, and Cyberbit. During his time in the Israeli
Air Force as a fighter jet pilot, Altshuler led the testing and evaluation of high-end innovative defense systems.
Outlook
Mobilicom remains focused on growing revenue through expansion into the U.S and EU markets, securing new design wins
among other Tier-1 global drone and robotics leaders, fulfilling existing orders and securing new contracts within the
commercial and government drone and robotics market. Mobilicom’s products are imbedded or to be imbedded in 8 Tier 1
customers. Mobilicom is highly dependent on these customers' drone turnover of Mobilicom product imbedded drones. As
the industry’s leader end-to-end provider, Mobilicom offers few key components for drones and robotics and is establishing
itself as a one-stop solution for global manufacturers. Its growing software and cyber offering complements its field-proven
hardware components, enabling cross-sell and generating long-term recurring revenues..
Significant changes in the state of affairs
In August 2022, Mobilicom commenced trading on the NASDAQ under the ticker “MOB”, following an oversubscribed $19
million initial public offering (IPO). Under the IPO, Mobilicom issued 3.22 million units at US$4.13 (~ AUD$6.10) per unit.
Each consisted of one American Depositary Share (ADS), representing 275 shares in the Company, and one warrant to
purchase one ADS. Funds are being used to expand Mobilicom’s operations in the USA, increase sales and marketing
activities, support research and development, accelerate the commercialisation of its world-first cybersecurity and cloud
software solutions, in addition to providing working capital.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Likely developments and expected results of operations
The information on likely development and expected results of operations has been disclosed as part of the Review of
Operations above.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
Risk Statement
The Company is committed to the effective management of risk to reduce uncertainty in the consolidated entity's business
outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on the
achievement of the consolidated entity's strategic objectives and future prospects.
Key risks and mitigation activities associated with the Company's objectives are set out below:
Financial Condition
The Company is predominately in the business of research and development of new products and has had a history of
losses. We expect that we will need to invest significant time and raise substantial additional capital before we can expect to
become profitable from sales of our products. This additional capital may not be available on acceptable terms, or at all.
Failure to obtain this necessary capital when needed may force the Company to delay, limit or terminate our product
development efforts or other operations.
Product quality and safety
The Company focuses on safety through active identification and management of safety hazards and operational risks. The
Company continues to invest in safety in order to mitigate safety hazards and also embeds a culture of safety into its
workplaces.
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Mobilicom Limited
Directors' report
31 December 2022
6
Change in regulations
The Company is subject to a number of regulatory approvals in order to be able to manufacture and sell our products. There
is a risk that failure to obtain necessary regulatory approvals may prevent the Company from selling its hardware products.
The Company ensures that it continues to review regulatory requirements to mitigate any potential risk of not meeting up
with regulatory requirements.
Political, economic and military instability in Israel may impede our ability to operate and harm our financial results. The
Company may become subject to claims for remuneration or royalties for assigned service invention rights by our employees,
which could result in litigation and adversely affect our business.
Intellectual Property
If the Company fails to protect, or incur significant costs in defending, our intellectual property and other know-how or
proprietary rights, our business, financial condition, and results of operations could be materially harmed. Obtaining and
maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and
other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for
non-compliance with these requirements. We may be sued by third parties for alleged infringement of their proprietary rights,
which could be costly, time-consuming and limit our ability to use certain technologies in the future.
Information on directors
Name:
Mr Oren Elkayam
Title:
Chairman and Managing Director
Qualifications:
B.Sc, MBA
Experience and expertise:
Mr Elkayam (CEO and Co-Founder of Mobilicom Israel) has worked at both business
development and CEO levels with leading companies in the wireless communications
space (including as VP Business Development at Runcom Ltd and CEO of Sortech
Ltd). He has been a voting member on both the Institute of Electrical and Electronic
Engineers (IEEE) and WiMAX international committees, and served as an officer in the
Israeli Air Force in an elite research and development unit.
Other current directorships:
No other current directorships of listed companies
Former directorships (last 3 years): No other directorships of listed companies
Special responsibilities:
No special responsibilities
Interests in shares:
38,929,774 Fully paid ordinary shares
Interests in options:
3,000,000 Options to acquire fully paid ordinary shares exercisable at $0.08 and
expiring 15 July 2026.
Name:
Mr Yossi Segal
Title:
Executive Director
Qualifications:
B.Sc, M.Sc, MBA
Experience and expertise:
Mr Segal (Vice President of R&D and Co-Founder of Mobilicom Israel) was the former
CTO and a founding member of Runcom Ltd. Mr Segal is a worldwide expert in
OFDM/A and has written essential patents for OFDM/A technology, being the first to
implement OFDM/A in a working product. He has also previously led the design and
development groups of three mobile integrated circuits (IC chip) and eight wireless
broadband systems which are currently in operation and sold worldwide. Mr Segal has
taken a leading role in several international wireless standards (IEEE and ETSI) as a
committee voting member, and served in the Israeli Army as an officer in an elite
electronic warfare research and development unit.
Other current directorships:
No other current directorships of listed companies
Former directorships (last 3 years): No other directorships of listed companies
Special responsibilities:
No special responsibilities
Interests in shares:
31,092,158 ordinary fully paid shares
Interests in options:
3,000,000 Options to acquire fully paid ordinary shares exercisable at $0.08and
expiring 15 July 2026.
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Mobilicom Limited
Directors' report
31 December 2022
7
Name:
Mr Campbell McComb
Title:
Non-executive Director
Qualifications:
BEc, GAICD, FINSIA
Experience and expertise:
Mr McComb has over 20 years’ experience in funds management and investment
banking and has overseen the development of numerous businesses. He has
significant investment experience across equity securities, venture capital and private
equity. Mr McComb is currently the Managing Director of Auctus (ASX: AVC), a listed
Alternative Investment Management business.
Other current directorships:
Auctus Investment Group Limited
Former directorships (last 3 years): None
Special responsibilities:
Member of Audit Committee
Interests in shares:
3,145,120 Fully paid ordinary shares
Interests in options:
1,000,000 unlisted options to acquire fully paid ordinary shares exercisable at $0.15
expiring 27 June 2025.
1,500,000 unlisted options to acquire fully paid ordinary shares exercisable at $0.08
and expiring 15 July 2026.
Name:
Mr Jonathan Brett
Title:
Non-executive Director
Qualifications:
BCom (Legal), BAcc, MCom (Financial Management), Dip Datametrics (Computer
Science) and is a CA(SA)
Experience and expertise:
Mr Brett is a highly strategic and commercial senior director with a strong track record
of driving transformational business performance and profitability across multiple
geographies. He was also Managing Director and CEO of Techway Limited which
pioneered internet banking in Australia. He is currently Executive Chairman of
Stridecorp Equity Partners, an AFSL licensed fund manager specialising in private
equity.
Other current directorships:
Corporate Travel Management Limited
Former directorships (last 3 years): Vocus Group Ltd, The Pas Group Limited, Godfreys Group Limited and Indoor Skydive
Australia Limited
Special responsibilities:
Chairman of Audit Committee
Interests in shares:
1,500,000 Fully paid ordinary shares
Interests in rights:
1,000,000 unlisted options to acquire fully paid ordinary shares exercisable at $0.15
and expiring 27 June 2025.
2,000,000 unlisted options to acquire fully paid ordinary shares exercisable at $0.08
and expiring 15 July 2026.
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Justin Mouchacca (appointed 1 September 2021)
Justin Mouchacca holds a Bachelor of Business majoring in Accounting, is a Chartered Accountant and Fellow of the
Governance Institute of Australia with over 14 years' experience in public company responsibilities including statutory,
corporate governance and financial reporting requirements. Since July 2019, Justin has been principal of JM Corporate
Services and has been appointed Company Secretary and Financial Officer for a number of entities listed on the ASX and
unlisted public companies.
For personal use only
Mobilicom Limited
Directors' report
31 December 2022
8
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 31 December 2022,
and the number of meetings attended by each director were:
Full Board
Audit Committee
Attended
Held
Committee
Attended
Committee
Held
Mr O Elkayam
7
7
-
-
Mr Y Segal
7
7
-
-
Mr C McComb
7
7
-
-
Mr J Brett
7
7
-
-
Held: represents the number of meetings held during the time the director held office.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional information
●
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
competitiveness and reasonableness
●
acceptability to shareholders
●
performance linkage / alignment of executive compensation
●
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy
is to attract, motivate and retain high performance and high-quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
having economic profit as a core component of plan design
●
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
●
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
●
rewarding capability and experience
●
reflecting competitive reward for contribution to growth in shareholder wealth
●
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
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Mobilicom Limited
Directors' report
31 December 2022
9
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent
remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held in February 2017, where the shareholders
approved a maximum annual aggregate remuneration of $250,000.
Executive remuneration
The consolidated entity 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
●
other remuneration such as Israel social benefits and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, Israel social benefits, superannuation and non-monetary benefits, are
reviewed annually by the Board based on individual and business unit performance, the overall performance of the
consolidated entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the
executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and product
management.
The long-term incentives ('LTI') include long service leave and share-based payments. Shares may be awarded to executives
over a period of three years based on long-term incentive measures. These include increase in shareholders value relative
to the entire market and the increase compared to the consolidated entity's direct competitors.
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Mobilicom Limited
Directors' report
31 December 2022
10
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Mobilicom Limited:
●
Oren Elkayam (Chairman and Managing Director)
●
Yossi Segal (Executive Director)
●
Campbell McComb (Non-executive Director)
●
Jon Brett (Non-executive Director)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Israel deferred payments
Share-based
payments
Cash salary
Cash
Non-
Israel social
Long
service
2021
Deferred
Accumulated
severance
Israel
employment
Equity-
and fees
bonus
monetary
benefits
leave
salary
benefit
settlement
settled
Total
31 December 2022
$
$
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Mr C McComb (1)
40,000
-
-
-
-
-
-
-
14,690
54,690
Mr J Brett
40,000
-
-
-
-
-
-
-
19,586
59,586
Executive Directors:
Mr O Elkayam (2)(3)
355,210
-
14,667
145,967
-
122,275
257,317
102,788
29,380
1,027,604
Mr Y Segal (2)(4)
355,431
-
16,106
148,204
-
122,276
-
49,112
29,380
720,509
790,641
-
30,773
294,171
-
244,551
257,317
151,900
93,036
1,862,389
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Mobilicom Limited
Directors' report
31 December 2022
11
(1)
Mr McComb received his remuneration through Camac Investments Pty Ltd (an entity associated with him).
(2)
During 2020, Mr. Elkayam and Mr. Segal agreed to defer significant portion of their monthly salary to improve the
company’s cash position. In August 2022, the salaries of Mr. Elkayam and Mr. Segal returned to normal (full) level,
retroactively from May 2021. 2022 Remuneration includes non-recurring retroactive payments of $244,551 related with
the period May- December 2021
(3)
Mr. Elkayam remuneration costs include non-recurring payments for unpaid accumulated severance benefit completion
of $257,317 and end of employment settlement cost of $102,788 both related with Mr. Elkayam end of employment
under the Israeli subsidiary, Mobilicom Ltd. on 30 November 2022. On 1 December 2022, Mr. Elkayam started position
under the U.S. subsidiary, Mobilicom Inc.
(4)
Mr. Segal remuneration costs include non-recurring partial redemption of accrued superannuation of $49,112.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Non-
Israel
social
Long
service
Equity-
and fees
bonus
monetary
benefits
leave
settled
Total
31 December 2021
$
$
$
$
$
$
$
Non-Executive Directors:
Mr C McComb (1)
40,000
-
-
-
-
7,345
47,345
Mr J Brett (2)
40,000
-
-
-
-
9,793
49,793
Mr T Psaros (3)
17,100
-
-
-
-
-
17,100
Executive Directors:
Mr O Elkayam (4)
259,478
-
15,596
78,899
-
14,690
368,663
Mr Y Segal (4)
259,478
-
15,596
78,899
-
14,690
368,663
616,056
-
31,192
157,798
-
46,518
851,564
r personal use only
Mobilicom Limited
Directors' report
31 December 2022
12
(1)
Mr McComb received his remuneration through Camac Investments Pty Ltd (an entity associated with him).
(2)
As at the date of this report, $100,000 was owing to Mr Brett.
(3)
Mr Psaros was appointed as a Non-executive Director on 20 January 2021 and resigned on 5 July 2021.
(4) During 2020, the Executive Directors agreed to defer significant portion of their monthly salary to improve the company’s
cash position by reduction of their salaries by 35% during the COVID-19 pandemic, which such reduction remained actively in
place until May 2021 (See 2022 remuneration table above).
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration &
accrued deferred payments
At risk - STI
At risk - LTI
Name
31 December
2022
31 December
2021
31 December
2022
31 December
2021
31 December
2022
31 December
2021
Non-Executive Directors:
Mr C McComb
73%
85%
-
-
27%
15%
Mr M Licciardo
-
100%
-
-
-
-
Mr J Brett
67%
80%
-
-
33%
20%
Executive Directors:
Mr O Elkayam
97%
96%
-
-
3%
4%
Mr Y Segal
96%
96%
-
-
4%
4%
r personal use only
Mobilicom Limited
Directors' report
31 December 2022
13
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Oren Elkayam
Title:
Chairman and Managing Director
Agreement commenced:
28 February 2017
Details:
US$250,000 per annum.
Mr Elkayam's employment with Mobilicom Israel may be terminated upon 60 days’
written notice, or immediately by Mobilicom Israel for cause which include a breach of
trust or fiduciary duty (for example, theft), conviction of a criminal offense and
negligence causing harm to Mobilicom’s business or reputation. If terminated for any
reason other than for cause, Mr Elkayam will be entitled to a paid salary, together with
other benefits detailed in the employment agreements, for a period of 6 months
following termination.
Name:
Yossi Segal
Title:
Executive Director
Agreement commenced:
28 February 2017
Details:
US$250,000 per annum.
Mr Segal’s employment with Mobilicom Israel may be terminated upon 60 days’ written
notice, or immediately by Mobilicom Israel for cause which include a breach of trust or
fiduciary duty (for example, theft), conviction of a criminal offense and negligence
causing harm to Mobilicom Israel’s business or reputation. If terminated for any reason
other than for cause, Mr Segal will be entitled to a paid salary, together with other
benefits detailed in the employment agreements, for a period of 6 months following
termination.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 31 December 2022.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Fair value
Vesting date and
per option
Grant date
exercisable date
Expiry date
Exercise price at grant date
30/05/2019
30/05/2020
25/06/2025
$0.15
$0.0505
09/07/2021
09/07/2022
08/07/2026
$0.08
$0.2938
Options granted carry no dividend or voting rights.
Additional information
The earnings of the consolidated entity for the five years to 31 December 2022 are summarised below:
2022
2021
2020
2019
2018
$
$
$
$
$
Sales revenue
2,327,058
3,578,603
2,066,478
3,435,361
2,640,006
Profit/(Loss) after income tax
(341,469)
(2,704,845)
(2,781,899)
(3,641,406)
(3,176,686)
For personal use only
Mobilicom Limited
Directors' report
31 December 2022
14
2022
2021
2020
2019
2018
Share price at start of financial year (cents)
0.04
0.08
0.13
0.09
0.10
Share price at financial year end (cents)
0.01
0.04
0.08
0.13
0.09
Basic earnings/(loss) per share (cents per
share)
(0.05)
(0.91)
(1.08)
(1.49)
(1.46)
Diluted earnings/(loss) per share (cents per
share)
(0.05)
(0.91)
(1.08)
(1.49)
(1.46)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
other
the year
Ordinary shares*
Mr O Elkayam
38,749,774
-
180,000
-
38,929,774
Mr Y Segal
31,092,158
-
-
-
31,092,158
Mr C McComb
3,145,120
-
-
-
3,145,120
Mr J Brett
1,500,000
-
-
-
1,500,000
74,487,052
-
180,000
-
74,667,052
*
The above disclosures are in relation to the listed entity
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Granted
Expired/
Balance at
the start of
Granted as
as part of the
forfeited/
the end of
the year
remuneration
Advisor and
Director offer
other
the year
Options over ordinary shares*
Mr O Elkayam
3,925,000
-
-
(925,000)
3,000,000
Mr Y Segal
3,925,000
-
-
(925,000)
3,000,000
Mr C McComb
2,500,000
-
-
-
2,500,000
Mr J Brett
3,000,000
-
-
-
3,000,000
13,350,000
-
-
(1,850,000)
11,500,000
*
The above disclosures are in relation to the listed entity.
Other transactions with key management personnel and their related parties
nil
Payables to key management personnel and their related parties
As at 31 December 2022, the Company has director fees payable to Camac Investments Pty Ltd (an entity related to Mr
McComb) of $3,667 (2021: $3,667), and director fees payable to Dalesam Pty Ltd (an entity related to Mr Brett) of $22,000
(2021:nil).
This concludes the remuneration report, which has been audited.
For personal use only
Mobilicom Limited
Directors' report
31 December 2022
15
Shares under option
Unissued ordinary shares of Mobilicom Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
20/10/2016
20/10/2026
$0.05
614,090
05/11/2015
05/11/2025
$0.12
767,611
17/04/2018
16/04/2023
$0.12
1,800,000
30/05/2018
29/05/2024
$0.15
400,000
30/05/2019
25/06/2025
$0.15
3,000,000
29/12/2020
29/12/2025
$0.15
5,120,000
15/07/2021
15/07/2026
$0.08
11,500,000
15/07/2021
15/07/2023
$0.09
64,000,000
13/04/2022
13/04/2027
$0.08
400,000
13/04/2022
13/04/2027
$0.07
573,678
13/04/2022
13/04/2027
$0.05
5,440,000
24/08/2022
24/08/2027
*
2,931,355
96,546,734
*
Warrants issued against pre-funded warrants traded on Nasdaq Capital Market, with an exercise price of US$5.00 per
pre-funded warrant.
No person entitled to exercise the options had or has any right by virtue of the option or warrants to participate in any share
issue of the Company or of any other body corporate.
Shares issued on the exercise of options
During the financial year, the Company issued 123,750,000 shares following the exercise of 450,000 warrants issued during
the year as part of the Company's listing on NASDAQ.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
For personal use only
Mobilicom Limited
Directors' report
31 December 2022
16
The directors are of the opinion that the services as disclosed in note 27 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of BDO Audit Pty Ltd
There are no officers of the Company who are former partners of BDO Audit Pty Ltd.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Oren Elkayam
Chairman and Managing Director
30 March 2023
Tel Aviv
For personal use only
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional
Standards Legislation.
DECLARATION OF INDEPENDENCE BY SALIM BISKRI TO THE DIRECTORS OF MOBILICOM LIMITED
As lead auditor of Mobilicom Limited for the year ended 31 December 2022, I declare that, to the best
of my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Mobilicom Limited and the entities it controlled during the period.
BDO Audit Pty Ltd
Salim Biskri
Director
Melbourne, 30 March 2023
For personal use only
Mobilicom Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2022
Consolidated
Note
31 December
2022
31 December
2021
$
$
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
18
Revenue
5
2,327,058
3,578,603
Cost of sales
6
(850,552)
(1,192,461)
Government grants
923,033
787,544
Interest received
168,843
1,580
Foreign exchange gains/(losses)
1,175,735
(184,743)
Net gain on fair value movement of warrants
18
3,768,466
-
Total income
6,036,077
604,381
Expenses
Selling and marketing expenses
7
(2,415,883)
(1,657,958)
Research and development
8
(2,516,922)
(2,374,700)
General and administration expenses
9
(2,532,033)
(1,376,829)
Share based payments
(309,256)
(223,171)
Finance costs
(65,972)
(53,544)
Loss before income tax expense
(327,483)
(2,695,679)
Income tax expense
10
(13,986)
(9,166)
Loss after income tax expense for the year attributable to the owners of
Mobilicom Limited
(341,469)
(2,704,845)
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Re-measurement of defined benefit plans
366,517
(34,197)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(935,142)
206,363
Other comprehensive income/(loss) for the year, net of tax
(568,625)
172,166
Total comprehensive income for the year attributable to the owners of
Mobilicom Limited
(910,094)
(2,532,679)
Cents
Cents
Basic earnings/(losses) per share
34
(0.05)
(0.91)
Diluted earnings/(losses) per share
34
(0.05)
(0.91)
For personal use only
Mobilicom Limited
Consolidated statement of financial position
As at 31 December 2022
Consolidated
Note
31 December
2022
31 December
2021
$
$
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
19
Assets
Current assets
Cash and cash equivalents
11
18,917,416
3,947,156*
Restricted cash
11
59,126
49,144*
Trade and other receivables
12
828,351
695,541
Inventories
13
838,658
490,990
Total current assets
20,643,551
5,182,831
Non-current assets
Property, plant and equipment
14
135,878
152,571
Right-of-use assets
15
426,817
610,197
Total non-current assets
562,695
762,768
Total assets
21,206,246
5,945,599
Liabilities
Current liabilities
Trade and other payables
16
1,608,846
1,151,455
Lease liabilities
17
333,850
305,414
Warrants financial liability
18
1,097,520
-
Total current liabilities
3,040,216
1,456,869
Non-current liabilities
Lease liabilities
19
95,403
336,246
Employee benefits
20
203,636
818,190
Governmental liabilities on grants received
21
6,084
5,175
Total non-current liabilities
305,123
1,159,611
Total liabilities
3,345,339
2,616,480
Net assets
17,860,907
3,329,119
Equity
Issued capital
22
41,636,762
26,504,136
Reserves
23
276,988
943,297
Accumulated losses
(24,052,843) (24,118,314)
Total equity
17,860,907
3,329,119
* Reclassified
For personal use only
Mobilicom Limited
Consolidated statement of changes in equity
For the year ended 31 December 2022
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
20
Issued
Share based
payments
Foreign
currency
Re-
measuremen
t
Accumulated
Total equity
capital
reserve
translation
reserves
reserves
losses
Consolidated
$
$
$
$
$
$
Balance at 1 January 2021
22,884,795
1,046,869
198,160
(474,752)
(21,635,786)
2,019,286
Loss after income tax expense
for the year
-
-
-
-
(2,704,845)
(2,704,845)
Other comprehensive income
for the year, net of tax
-
-
206,363
(34,197)
-
172,166
Total comprehensive income for
the year
-
-
206,363
(34,197)
(2,704,845)
(2,532,679)
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs (note 22)
3,619,341
-
-
-
-
3,619,341
Share-based payments (note
35)
-
223,171
-
-
-
223,171
Expiry of options
-
(46,425)
-
-
46,425
-
Forfeiture of options
-
(8,806)
-
-
8,806
-
Re-allocation between
accumulated loses and foreign
currency reserve
-
-
(167,086)
-
167,086
-
Balance at 31 December 2021
26,504,136
1,214,809
237,437
(508,949)
(24,118,314)
3,329,119
Issued
Share based
payments
Foreign
currency
Re-
measuremen
t
Accumulated
Total equity
capital
reserve
translation
reserves
reserves
losses
Consolidated
$
$
$
$
$
$
Balance at 1 January 2022
26,504,136
1,214,809
237,437
(508,949)
(24,118,314)
3,329,119
Loss after income tax expense
for the year
-
-
-
-
(341,469)
(341,469)
Other comprehensive income
for the year, net of tax
-
-
(935,142)
366,517
-
(568,625)
Total comprehensive income for
the year
-
-
(935,142)
366,517
(341,469)
(910,094)
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs (note 22)
15,132,626
-
-
-
-
15,132,626
Share-based payments (note
35)
-
309,256
-
-
-
309,256
Expiry of options
-
(311,840)
-
-
311,840
-
Forfeiture of options
-
(95,100)
-
-
95,100
-
Balance at 31 December 2022
41,636,762
1,117,125
(697,705)
(142,432)
(24,052,843)
17,860,907
For personal use only
Mobilicom Limited
Consolidated statement of cash flows
For the year ended 31 December 2022
Consolidated
Note
31 December
2022
31 December
2021
$
$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
21
Cash flows from operating activities
Receipts from customers (inclusive of GST)
2,670,178
3,977,275
Interest received
168,843
1,580
Payments to suppliers and employees (inclusive of GST)
(8,231,267)
(6,572,578)
Government grants received
923,942
787,544
Net cash used in operating activities
33
(4,468,304)
(1,806,179)
Cash flows from investing activities
Payments for property, plant and equipment
(26,628)
(30,534)
Net cash used in investing activities
(26,628)
(30,534)
Cash flows from financing activities
Proceeds from issue of shares
22
22,450,965
3,840,000
Share issue transaction costs
(2,615,470)
(220,659)
Repayment of lease liabilities
(360,321)
(250,983)
Net cash from financing activities
19,475,174
3,368,358
Net increase in cash and cash equivalents and restricted cash
14,980,242
1,531,645
Cash and cash equivalents and restricted cash at the beginning of the financial year
3,996,300
2,464,655
Cash and cash equivalents and restricted cash at the end of the financial year
11
18,976,542
3,996,300
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
22
Note 1. General information
The financial statements cover Mobilicom Limited as a Group consisting of Mobilicom Limited and the entities it controlled at
the end of, or during, the year. The financial statements are presented in Australian dollars, which is Mobilicom Limited's
functional and presentation currency.
The functional currency of Mobilicom Limited's subsidiary, Mobilicom Ltd ("Mobilicom Israel"), is Israeli New Shekels.
Mobilicom Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business are:
Registered office
Principal place of business
C/- JM Corporate Services
Level 21, 459 Collins Street
Level 21, 459 Collins Street
Melbourne, Victoria, 3000
Melbourne, Victoria, 3000
Australia
Australia
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
Note 2. Significant accounting policies
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.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss and other comprehensive income.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Going concern
The consolidated entity incurred a net loss after tax for the year ended 31 December 2022 of $341,469 (2021: $2,704,845)
and had net cash outflows from operating activities $4,468,304. The consolidated entity’s ability to continue as a going
concern is dependent upon it achieving its forecasts. The financial statements have been prepared on the basis that the
consolidated entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets
and settlements of liabilities in the normal course of business for the following reasons:
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 2. Significant accounting policies (continued)
23
●
As at 31 December 2022 the consolidated entity had cash and cash equivalents and restricted cash of $18,976,542,
total assets of $21,206,246 and net assets of $17,860,907;
●
As at the end of the year, the Company had a trade and other receivables balance amounting to $828,351.
●
The Directors have prepared a budget which demonstrates that, based on the above factors the consolidated entity has
sufficient funds available to meet its commitments for at least twelve months from the date of signing of this report.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Mobilicom Limited ('Company'
or 'parent entity') as at 31 December 2022 and the results of all subsidiaries for the year then ended. Mobilicom Limited and
its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
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.
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Mobilicom Limited's presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss. Non-monetary items are converted at the rate of exchange used to convert the related consolidated statements
of financial position items i.e., at the time of the transaction
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
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
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 2. Significant accounting policies (continued)
24
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred.
Development costs are capitalised only when technical feasibility studies identify that the project will develop an intangible
asset that will be completed and available for use or sale, that there are adequate technical, financial and other resources to
complete the development, that it will deliver future economic benefits and these benefits can be measured reliably.
Impairment of financial assets
The consolidated entity assesses at the end of each reporting period whether there is any objective evidence of impairment
of financial assets carried at amortized cost.
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.
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.
Defined benefit plans
The Company operates a defined benefit plan in respect of severance pay pursuant to the Severance Pay Law. According
to the Law, employees are entitled to severance pay upon dismissal retirement and several other events prescribed by that
Law. The liability for termination of employee-employer relationship is measured using the projected unit credit method.
The actuarial assumptions include rates of employee turnover and future salary increases based on the estimated timing of
payment. The amounts are presented based on discounted expected future cash flows using a discount rate determined by
reference to yields on corporate bonds with a term that matches the estimated term of the benefit plan. In respect of its
severance pay obligation to certain of its employees, the Company makes current deposits in pension funds and insurance
companies ("plan assets").
Plan assets comprise assets held by a Long-term employee benefits fund or qualifying insurance policies. Plan assets are
not available to the Company's own creditors and cannot be returned directly to the Company. The liability for employee
benefits presented in the statement of financial position presents the present value of the defined benefit obligation less the
fair value of the plan assets.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net
interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the
net defined benefit liability), are recognized immediately in the statement of financial position with a corresponding debit or
credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or
loss in subsequent periods. Past service costs are recognised in profit or loss.
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.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 2. Significant accounting policies (continued)
25
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 31 December 2022. The
consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
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.
Governmental liabilities on grants received
The Company measures the value of its governmental liabilities on grants received, each period, based on discounted cash
flows derived from the Company's future anticipated revenues.
Share-based payments
The consolidated entity has a share based remuneration scheme for employees. The fair value of share options is estimated
by using the Black-Scholes option pricing model, on the date of grant based on certain assumptions. Those assumptions are
described in the share based payments note and include, among others, the dividend growth rate, expected share price
volatility and expected life of the options. The fair value of the equity settled options granted is charged to statement of
comprehensive income over the vesting period of each tranche and the credit is taken to equity, based on the consolidated
entity's estimate of shares that will eventually vest.
Financial liability
The Company measures the value of the warrants issued under August 2022 Nasdaq IPO & listing. The fair value of these
warrants is estimated by using the Hull-White pricing model (trinomial Lattice model), on the date of the grant and remeasured
at cut-off date (31 December 2022),and is based on certain assumptions. Those assumptions include, among others, the
dividend growth rate, expected share price, volatility and expected life of the warrants, early exercise / exercise multiple,
capital structure effects and trinomial steps.
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required
in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for
anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax
outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 3. Critical accounting judgements, estimates and assumptions (continued)
26
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the consolidated entity's operations; comparison of terms and
conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements;
and the costs and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Employee benefits provision
As discussed in note 2, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Note 4. Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose
operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to
be allocated to the segment and assess its performance and for which discrete financial information is available. This includes
start-up operations which are yet to earn revenues. Management will also consider other factors in determining operating
segments such as the existence of a line manager and the level of segment information presented to the board of directors.
During the year the Company only operated in one segment, which is to further commercialise solutions for mission critical
and remote mobile private communications networks without the need to reply upon or utilise existing infrastructure.
Note 5. Revenue
Consolidated
31 December
2022
31 December
2021
$
$
Sale of goods
2,327,058
3,578,603
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 5. Revenue (continued)
27
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to
the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to
be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Sales by geography
Consolidated
31 December
2022
31 December
2021
$
$
Israel
901,998
2,857,239
Rest of world
1,425,060
721,364
2,327,058
3,578,603
Interest
Interest revenue 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.
Government Grant income
The Company receives government grant income from the Israeli Innovation Authority (formerly the Office of the Chief
Scientist) (Innovation Authority). Grant revenue is accounted for during the period in which it is received.
Fair value gain
The fair value gain relates to the measurement of changes in the fair value of financial liability between the measured periods.
Note 6. Cost of sales
Consolidated
31 December
2022
31 December
2021
$
$
Salaries and benefits
189,762
125,665
Cost of materials
577,902
991,959
Occupancy and office expenses
22,431
14,193
Other
21,507
43,832
Depreciation
38,950
16,812
850,552
1,192,461
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
28
Note 7. Selling and marketing expenses
Consolidated
31 December
2022
31 December
2021
$
$
Salaries and benefits
1,751,265
1,287,439
Marketing services
255,306
158,706
Travel expenses
74,425
38,077
Depreciation
142,325
61,642
Occupancy and office expenses
38,547
21,608
Other
154,015
90,486
2,415,883
1,657,958
Note 8. Research and development
Consolidated
31 December
2022
31 December
2021
$
$
Salaries and benefits
1,937,121
1,604,508
Materials
111,856
247,948
Royalties to/(from) the OCS
6,478
(1,924)
Subcontractors
121,471
275,087
Depreciation
140,426
112,077
Other
199,570
137,004
2,516,922
2,374,700
Note 9. General and administration expenses
Consolidated
31 December
2022
31 December
2021
$
$
Salaries and benefits
1,140,392
678,814
Professional fees
576,254
547,849
Insurance
297,855
24,894
Travel expenses
6,675
231
Depreciation
53,815
33,623
Occupancy and office expenses
48,648
20,112
Other
408,394
71,306
2,532,033
1,376,829
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
29
Note 10. Income tax expense
Consolidated
31 December
2022
31 December
2021
$
$
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
(327,483)
(2,695,679)
Tax at the statutory tax rate of 27.5% (Australian company tax rate)
(90,058)
(741,312)
Share-based payments
85,045
61,372
Other temporary differences not recognised
18,999
689,106
Income tax expense
13,986
9,166
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that is it
probable that future taxable profits will be available against which the benefits of the deferred tax asset can be utilised
Note 11. Current assets - cash and cash equivalents and restricted cash
Consolidated
31 December
2022
31 December
2021
$
$
Cash at bank
18,976,542
3,996,300
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Restricted cash is considered by Mobilicom to be deposits with banks which are used mainly as a security for guarantees
provided against facilities lease agreement.
Note 12. Current assets - trade and other receivables
Consolidated
31 December
2022
31 December
2021
$
$
Trade receivables
203,737
338,859
Other receivables
624,614
356,682
828,351
695,541
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 12. Current assets - trade and other receivables (continued)
30
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
No allowance for expected credit losses or overdue balances are accounted for in the financial statements.
Note 13. Current assets - inventories
Consolidated
31 December
2022
31 December
2021
$
$
Finished goods - at cost
838,658
490,990
Accounting policy for inventories
Inventories are recognised at the lower of cost and net realisable value.
Note 14. Non-current assets - property, plant and equipment
Consolidated
31 December
2022
31 December
2021
$
$
Computer equipment - at cost
275,582
253,564
Less: Accumulated depreciation
(242,159)
(220,715)
33,423
32,849
Office furniture & equipment - at cost
131,728
129,538
Less: Accumulated depreciation
(41,818)
(28,956)
89,910
100,582
Machinery & equipment - at cost
85,309
82,889
Less: Accumulated depreciation
(72,764)
(63,749)
12,545
19,140
135,878
152,571
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 14. Non-current assets - property, plant and equipment (continued)
31
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Computer
Office
furniture &
Machinery &
equipment
equipment
equipment
Total
Consolidated
$
$
$
$
Balance at 1 January 2021
12,141
106,573
24,769
143,483
Additions
30,091
443
-
30,534
Depreciation expense
(9,383)
(6,434)
(5,629)
(21,446)
Balance at 31 December 2021
32,849
100,582
19,140
152,571
Additions
22,018
2,190
2,420
26,628
Depreciation expense
(21,444)
(12,862)
(9,015)
(43,321)
Balance at 31 December 2022
33,423
89,910
12,545
135,878
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Computer equipment
3 years
Machinery and equipment
6-7 years
Office furniture and equipment
10-14 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
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.
Note 15. Non-current assets - right-of-use assets
Consolidated
31 December
2022
31 December
2021
$
$
Buildings - right-of-use
254,409
517,719
Motor vehicles - right-of-use
172,408
92,478
426,817
610,197
Additions to the right-of-use assets during the current financial year were $148,815 (2021: $42,457).
During the 2022 financial year the consolidated entity leased new cars for the Israeli company under agreement for 3 years.
The consolidated entity leases buildings for its offices in Israel under agreements for 5 years and in some cases, options to
extend. On renewal, the terms of the leases are renegotiated.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 15. Non-current assets - right-of-use assets (continued)
32
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Motor
Buildings
Vehicle
Total
Consolidated
$
$
$
Balance at 1 January 2021
697,234
73,214
770,448
Additions
-
42,457
42,457
Depreciation expense
(179,515)
(23,193)
(202,708)
Balance at 31 December 2021
517,719
92,478
610,197
Additions
-
148,815
148,815
Depreciation expense
(263,310)
(68,885)
(332,195)
Balance at 31 December 2022
254,409
172,408
426,817
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Consolidated
31 December
2022
31 December
2021
$
$
Lease interest expenses
22,004
31,382
Total lease cash outflow
509,135
293,441
Variable lease payments
-
-
Maturity of lease liabilities within 5 years
429,253
641,660
Maturity of lease liabilities more than 5 years
-
-
Note 16. Current liabilities - trade and other payables
Consolidated
31 December
2022
31 December
2021
$
$
Trade payables
299,289
214,778
Other payables
1,309,557
936,677
1,608,846
1,151,455
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 16. Current liabilities - trade and other payables (continued)
33
Refer to note 25 for further information on financial instruments.
Amounts noted above in other payables include amounts payable to Directors for wages payable.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year 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.
Note 17. Current liabilities - lease liabilities
Consolidated
31 December
2022
31 December
2021
$
$
Lease liability
333,850
305,414
Refer to note 25 for further information on financial instruments.
Note 18. Current liabilities - Warrants financial liability
Consolidated
31 December
2022
31 December
2021
$
$
Warrants at fair value
1,097,520
-
The Company accounts for warrants issued to investors under AASB 9.
On 24 August 2022 the Company completed its U.S. listing via the issuance of 3,220,338 ADRs (American Depository
Shares) and the accompanying 3,220,338 pre-funded warrants for a total consideration of US$13,299,996. One ADR
represents 275 ordinary shares in the Company. One pre-funded warrant gives the holder the right to purchase one ADR
share. The warrants have 5 year term and they can be exercised any time before expiry date 24 August 2027.
In addition, on 24 August 2022, under the U.S listing the Company granted a total 161,017 representative warrants each
exercised to single ADS at an exercise price of US$5.16. The representative warrant carrying a cashless exercise option
with variable exercise mechanism.
The pre-funded warrant and representative warrant are referred herein together as “warrants”.
The warrants represent financial liabilities at fair value through profit or loss.
The following assumptions were based on observable market conditions market conditions that existed at the issue date and
at 31 December 2022:
Assumption
At issue date
At 31 December 2022
Historical volatility
81%
81%
Exercise price
US$5.0
US$5.0
Share price
US$2.929
US$0.970
Risk-free interest rate
3.3%
4%
Dividend yield
0%
0%
Fair value per warrant
US$1.2005
US$0.2555
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
34
Note 18. Current liabilities - Warrants financial liability (continued)
(a) The Company recorded the pre-funded warrants as a financial liability which represents the fair value of the warrants
on the transaction date due to the fact that they do not meet the criteria for a fixed number of equity instruments in
exchange for a fixed amount of cash. The financial liability is re-measured at each reporting date, with changes in
fair value recognized under fair value gains/(losses) from financial liability. The financial liability as of 24 August
2022, amounted to AUD$5,598,835 (US$3,865,996). On 31 December 2022 it amounted to AUD$1,044,955
(US$707,957). The amounts were recorded at fair value according to a valuation performed by an independent third-
party appraiser. The fair value of the pre-funded warrants was classified as a level 2 fair value measurement.
On 31 August 2022, 450,000 pre-funded warrants were exercised into ADS for AUD$3,259,925 (US$2,250,000).
The fair value of the pre-funded warrants on 31 August 2022 (exercise date), measured using a Hull-White trinomial
option pricing model, was AUD$825,609 (US$569,832).
(b) The Company recorded the representative warrants as a financial liability which represents the fair value of the
warrants on the transaction date due to the fact that they do not meet the criteria for a fixed number of equity
instruments in exchange for a fixed amount of cash. The financial liability is re-measured at each reporting date, with
changes in fair value recognized under fair value gains/(losses) from financial liability. The financial liability as of 24
August 2022 amounted to AUD$281,436 (US$194,332), reflecting the average between high & low valuation inputs.
On 31 December 2022, it amounted to AUD$52,565 (US$39,272) reflecting the average between high and low
valuation inputs. The fair value of the representative warrants was classified as a level 2 fair value measurement.
For the year ended 31 December 2022, the Company recorded fair value gains, net of AUD$3,768,466 (US$2,548,932)
under the statement of comprehensive loss as a result of the change in the fair value of warrants.
A summary of changes in share purchase warrants issued by the Company during the year ended 31 December 2022 is as
follows:
Number of Warrants
Weighted Average
Exercise Price (US$)
Balance, December 31, 2021
-
Issuance of warrants
3,381,355
5.01
31 August 2022 warrants exercise
(450,000)
5.00
Balance, December 31, 2022
2,931,355
5.01
Fair value measurements using input type
Level 1
Level 2
Level 3
Total
Balance as of December 31, 2021
-
-
-
-
Warrants issued during the period
-
5,598,835
-
5,598,835
Fair value gain recognized in cconsolidated
statement of profit or loss and other
comprehensive income
-
(3,768,466)
-
(3,768,466)
Transfer upon exercise
-
(825,609)
-
(825,609)
Translation adjustments
92,760
92,760
Warrant liability as of December 31, 2022
-
$1,097,520
-
$1,097,520
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
35
Note 19. Non-current liabilities - lease liabilities
Consolidated
31 December
2022
31 December
2021
$
$
Lease liability
95,403
336,246
Refer to note 25 for further information on financial instruments.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of
the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments
comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments
arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Note 20. Non-current liabilities - employee benefits
Consolidated
31 December
2022
31 December
2021
$
$
Net Employee benefits
203,636
818,190
The Group has a defined benefit pension plan in Israel for two employees. The Group’s defined benefit pension plan is a final salary plan for those two Israeli employees, which
requires contributions to be made to a separately administered fund.
Each year the Board reviews the level of funding in the pension plan as required by the Israeli employment legislation. Such a review includes the asset-liability matching strategy.
In 2022, one of the employees under the fund terminated its contract with the Israeli subsidiary and his entitlement was settled.
At 31 December 2022, only one employee remains in the pension plan. The expected payment of his pension entitlements will be upon his retirement or when he terminates his
employment with the Israeli subsidiary
The company's liabilities for severance pay retirement and pension pursuant to Israeli law and employment agreements are recognized by full - in part by managers' insurance
policies, for which the company makes monthly payments and accrued amounts in severance pay funds and the rest by the liabilities which are included in the financial statements.
r personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 20. Non-current liabilities - employee benefits (continued)
36
The amounts funded displayed above include amounts deposited in severance pay funds with the addition of accrued income. According to the Severance Pay Law, the
aforementioned amounts may not be withdrawn or mortgaged as long as the employer’s obligations have not been fulfilled in compliance with Israeli law.
Statement of financial position amounts
The amounts recognised in the statement of financial position are determined as follows:
Consolidated
2022
2021
$
$
Present value of the defined benefit obligation
313,227
1,026,565
Fair value of defined benefit plan assets
(109,591) (208,375)
Net liability in the statement of financial position
203,636
818,190
2022 changes in the defined benefits obligation and fair value of plan assets
Pension cost charged to profit or loss
Remeasurement gains/(losses) in OCI
1 January
2022
Service cost
Net interest
income/(exp
ense)
Subtotal
included in
profit or loss
Benefits
paid
Return on
plan assets
(excluding
amounts
included in
net interest
expense)
Actuarial
changes
arising from
changes in
demographic
assumptions
Actuarial
changes
arising from
changes in
financial
assumptions
Experience
adjustments
Sub-total
included in
OCI
Contributions
by employer
Foreign
exchanges
differences
31 December
2022
$
$
$
$
$
$
$
$
$
$
$
$
$
Defined
benefit
obligation
(1,026,565)
(40,309)
(11,149)
(51,458)
384,273
-
-
57,461
283,448
340,909
-
39,614
(313,227)
Defined
benefit
plan
assets
208,375
-
3,002
3,002
(120,412)
6,432
-
-
-
6,432
21,432
(9,238)
109,591
Net
benefit
liability
(818,190)
(40,309)
(8,147)
(48,456)
263,861
6,432
-
57,461
283,448
347,341
21,432
30,376
(203,636)
r personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 20. Non-current liabilities - employee benefits (continued)
37
2021 changes in the defined benefits obligation and fair value of plan assets
Pension cost charged to profit
Remeasurement gains/(losses) in OCI
1 January
2021
Service cost
Net interest
income/(exp
ense)
Subtotal
included in
profit or loss
Benefits
paid
Return on
plan assets
(excluding
amounts
included in
net interest
expense)
Actuarial
changes
arising from
changes in
demographic
assumptions
Actuarial
changes
arising from
changes in
financial
assumptions
Experience
adjustments
Sub-total
included in
OCI
Contributions
by employer
Foreign
exchanges
differences
31 December
2021
$
$
$
$
$
$
$
$
$
$
$
$
$
Defined
benefit
obligation
(869,550)
(65,917)
(14,831)
(80,748)
-
-
22,659
11,123
(19,363)
14,419
-
(90,686)
(1,026,565)
Defined
benefit
plan
assets
166,437
-
2,472
2,472
-
824
-
-
-
824
20,591
18,051
208,375
Net benefit
liability
(703,113)
(65,917)
(12,359)
(78,276)
-
824
22,659
11,123
(19,363)
15,243
20,591
(72,635)
(818,190)
The principal assumptions used in determining defined benefits obligation and fair value of plan assets are shown below:
Consolidated
2022
2021
%
%
Discount rate
5.04
1.64
Future salary increase
1.00
1.00
Future consumer price index increases
2.90
2.60
r personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 20. Non-current liabilities - employee benefits (continued)
38
A quantitative sensitivity analysis for significant assumptions as at 31 December is, as shown below:
Impact on Net Employee
benefits
2022
2021
$,000
$,000
Discount rate:
1% increase
13
54
1% decrease
(14)
(57)
Future salary:
1% increase
(15)
(57)
1% decrease
14
54
The sensitivity analysis above has been determined based on a method that extrapolates the impact on the defined benefit obligation as a result of reasonable changes in key
assumptions occurring at the end of the reporting period. The sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant. The
sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one
another.
r personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
39
Note 21. Non-current liabilities - Governmental liabilities on grants received
Consolidated
31 December
2022
31 December
2021
$
$
Governmental liabilities on grants received
6,084
5,175
Accounting policy for Government liabilities on grants received
The Company measured the value of its governmental liabilities on grants received, each period, based on discounted cash
flows derived from Company's future anticipated revenues.
The Company participates in programs sponsored by the Israeli Innovation Authority- Office of Chief Scientist ("OCS"), for
the support of research and development projects. Several programs are subjected to royalties, while others are not (the
company is committed to pay royalties for the R&D programs, while the research programs does not required repayment).
In exchange for the Chief Scientist's participation in the programs, the Company is required to pay royalties to the Chief
Scientist at a rate between 3% and 3.5% of sales of developed products linked to U.S dollars, until repayment of 100% of
the amount of grants received, plus annual interest at the LIBOR rate. The company is required to pay royalties, to the OCS,
of sales to end customers of products developed with funds provided by the Chief Scientist, if and when such sales are
recognized. The obligation to pay these royalties is contingent on actual sales of the products. Changes in the liability are
recognized in research and development expenses. The exceptions of the Company to pay the grants are based on its
estimation at the end of the each year.
Note 22. Equity - issued capital
Consolidated
31 December
2022
31 December
2021
31 December
2022
31 December
2021
Shares
Shares
$
$
Ordinary shares - fully paid
1,331,279,665
321,936,715
41,636,762
26,504,136
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
1 January 2021
257,936,715
22,884,795
Placement *
17 May 2021
64,000,000
$0.06
3,840,000
Capital raising costs
-
-
(220,659)
Balance
31 December 2021
321,936,715
26,504,136
Issue of NASDAQ IPO shares (net of warrant fair
value)**
29 August 2022
885,592,950
$0.015
13,662,563
Exercise of 450,000 NASDAQ warrants**
31 August 2022
123,750,000
$0.026
4,085,533
Capital raising costs
-
-
(2,615,470)
Balance
31 December 2022
1,331,279,665
41,636,762
*On 15 July 2021, the Company issued 64,000,000 options to investors in the Company’s May 2021 capital raising. The
options have an exercise price of $0.09, expire July 15, 2023.
**On 24 August 2022, the Company issued 3,220,338 units to shareholders in the Company’s August 2022 Nasdaq listing &
IPO. Each unit consists of a single ADS and a single pre-funded warrant exercisable to a single ADS. The warrants have an
exercise price of US$5.00, expiring on 24 August, 2027.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 22. Equity - issued capital (continued)
40
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current Company's share price at the time of the investment. The consolidated entity is not
actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in
order to maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the financial
year.
Accounting policy for issued capital
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.
Note 23. Equity - reserves
Consolidated
31 December
2022
31 December
2021
$
$
Foreign currency reserve
(697,705)
237,437
Share-based payments reserve
1,117,125
1,214,809
Re-measurements reserve
(142,432)
(508,949)
276,988
943,297
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 23. Equity - reserves (continued)
41
Re-measurements reserves
The reserve is used for remeasurements comprising actuarial gains and losses on the net defined benefit liability.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Re-
measurement Share based
Foreign
currency
reserve
payments
reserve
Total
Consolidated
$
$
$
$
Balance at 1 January 2021
(474,752)
1,046,869
198,160
770,277
Foreign currency translation
-
-
206,363
206,363
Share based payments
-
223,171
-
223,171
Forfeiture of options
-
(8,806)
-
(8,806)
Lapse of options
-
(46,425)
-
(46,425)
Re-measurement of defined benefits plans
(34,197)
-
-
(34,197)
Re-allocation between accumulated losses and foreign
currency reserve
-
-
(167,086)
(167,086)
Balance at 31 December 2021
(508,949)
1,214,809
237,437
943,297
Foreign currency translation
-
-
(935,142)
(935,142)
Share based payments
-
309,256
-
309,256
Forfeiture of options
-
(95,100)
-
(95,100)
Lapse of options
-
(311,840)
-
(311,840)
Re-measurement of defined benefits plans
366,517
-
-
366,517
Balance at 31 December 2022
(142,432)
1,117,125
(697,705)
276,988
Note 24. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 25. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks,
ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 25. Financial instruments (continued)
42
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows (holdings are shown in AUD equivalents):
Assets
Liabilities
31 December
2022
31 December
2021
31 December
2022
31 December
2021
Consolidated
$
$
$
$
US dollars
18,061,483
548,764
31,233
39,979
Euros
1,826
2,272
871
-
Israeli New Shekel
1,849,492
1,535,738
-
-
19,912,801
2,086,774
32,104
39,979
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis.
Price risk
Price risk is the risk that future cashflows derived from financial instruments will be changed as a result of a market price
movement, other than foreign currency rates and interest rates. The consolidated entity is not exposed to any significant
price risk.
Interest rate risk
The consolidated entity’s exposure to the risk of changes in market interest rates relates primarily to the consolidated entity’s
cash deposits with floating interest rates. These financial assets with variable rates expose the consolidated entity to interest
rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to
mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The consolidated entity does not hold any collateral.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
At 31 December 2022, the Group had 5 customers (2021: 5 customers) that represented over 80% of the trade receivables
balance.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 25. Financial instruments (continued)
43
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 31 December
2022
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
299,289
-
-
-
299,289
Other payables
-
1,309,557
-
-
-
1,309,557
Government liabilities
-
-
-
-
6,084
6,084
Total non-derivatives
1,608,846
-
-
6,084
1,614,930
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 31 December
2021
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
214,778
-
-
-
214,778
Other payables
-
936,677
-
-
-
936,677
Government liabilities
-
-
-
-
5,175
5,175
Total non-derivatives
1,151,455
-
-
5,175
1,156,630
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 26. Key management personnel disclosures
Directors
The following persons were directors of Mobilicom Limited during the financial year:
Mr Oren Elkayam (Chairman and Managing Director)
Mr Yossi Segal (Executive Director)
Mr Campbell McComb (Non-executive director)
Mr Jon Brett (Non-executive director)
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 26. Key management personnel disclosures (continued)
44
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Consolidated
31 December
2022
31 December
2021
$
$
Short-term employee benefits
821,414
647,248
Post-employment benefits
294,171
157,798
Israel deferred payments
653,768
-
Share-based payments
93,036
46,518
1,862,389
851,564
Note 27. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Ltd, the auditor of
the company, and its network firms:
Consolidated
31 December
2022
31 December
2021
$
$
Audit services - BDO Audit Pty Ltd
Audit or review of the financial statements
79,500
56,000
Other services - BDO Audit Pty Ltd
Tax compliance services
5,000
4,500
BDO Audit Pty Ltd total
84,500
60,500
Audit services - BDO Israel
Audit or review of the financial statements
189,324
45,813
Other services - BDO Israel
IPO assurance services and others
177,546
36,821
Tax compliance services
11,112
8,850
Others
2,226
2,219
188,884
47,890
BDO Israel total
378,208
93,703
Note 28. Contingent liabilities
There were no contingent liabilities at 31 December 2022 and 31 December 2021.
Note 29. Related party transactions
Parent entity
Mobilicom Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 31.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 29. Related party transactions (continued)
45
Key management personnel
Disclosures relating to key management personnel are set out in note 26.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
31 December
2022
31 December
2021
$
$
Current payables:
Payables to related parties
25,667
3,667
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
31 December
2022
31 December
2021
$
$
Profit/(loss) after income tax
(18,542,719)
(1,768,488)
Total comprehensive income
(18,542,719)
(1,768,488)
Statement of financial position
Parent
31 December
2022
31 December
2021
$
$
Total current assets
382,354
2,653,687
Total assets
382,354
2,653,687
Total current liabilities
105,273
179,519
Warrants financial liability
1,097,520
-
Total liabilities
1,202,793
179,519
Equity
Issued capital
35,673,114
20,540,488
Share-based payments reserve
832,239
716,753
Accumulated losses
(37,325,792) (18,783,073)
Total equity
(820,439)
2,474,168
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2022.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 30. Parent entity information (continued)
46
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except
for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 31. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Ownership interest
Principal place of business /
31 December
2022
31 December
2021
Name
Country of incorporation
%
%
Mobilicom Ltd ("Mobilicom Israel")
Israel
100.00%
100.00%
Mobilicom Inc
United States
100.00%
-
In late December 2022 and following the Company's listing on NASDAQ and increased operations in the United States, the
Company incorporated a wholly owned subsidiary Mobilicom Inc, a Delaware incorporated Company. As at 31 December
2022, there were no significant operations which commenced as the Company was in an incorporation phase.
Note 32. Events after the reporting period
No matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
47
Note 33. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
31 December
2022
31 December
2021
$
$
Loss after income tax expense for the year
(341,469)
(2,704,845)
Adjustments for:
Depreciation and amortisation
375,516
224,154
Share-based payments
309,256
223,171
Foreign exchange differences
(428,414)
172,573
Net gain on fair value movement of warrants
(3,768,466)
-
Lease interest
22,004
31,382
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
88,317
(239,623)
Decrease/(increase) in inventories
(347,668)
312,014
Increase in prepayments
(221,127)
(70,763)
Increase in trade and other payables
457,392
132,260
Increase/(decrease) in employee benefits
(614,554)
115,077
Increase/ (decrease) in Government liabilities
909
(1,579)
Net cash used in operating activities
(4,468,304)
(1,806,179)
Note 34. Earnings per share
Consolidated
31 December
2022
31 December
2021
$
$
Loss after income tax attributable to the owners of Mobilicom Limited
(341,469)
(2,704,845)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
664,158,704
297,914,797
Weighted average number of ordinary shares used in calculating diluted earnings per share
664,158,704
297,914,797
Cents
Cents
Basic earnings/(losses) per share
(0.05)
(0.91)
Diluted earnings/(losses) per share
(0.05)
(0.91)
The rights to options held by option holders have not been included in the weighted average number of ordinary shares for
the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 “Earnings per Share”.
The rights to options are non-dilutive as the consolidated entity is loss generating.
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Mobilicom Limited , excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 34. Earnings per share (continued)
48
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Note 35. Share-based payments
Set out below is a summary of options granted and on issue at the end of the year.
31 December
2022
Balance at
Balance at
Exercise
the start of
Expired/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
forfeited
the year
27/04/2017
27/04/2022
$0.200
1,850,000
-
-
(1,850,000)
-
20/10/2016
20/10/2026
$0.120
614,090
-
-
-
614,090
05/11/2015
05/11/2025
$0.120
767,611
-
-
-
767,611
17/04/2018
16/04/2023
$0.150
2,200,000
-
-
(400,000)
1,800,000
30/05/2018
29/05/2024
$0.150
400,000
-
-
-
400,000
30/05/2019
25/06/2025
$0.150
3,000,000
-
-
-
3,000,000
05/08/2019
05/08/2022
$0.150
1,500,000
-
-
(1,500,000)
-
29/12/2020
29/12/2025
$0.080
9,400,000
-
-
(4,280,000)
5,120,000
15/07/2021
15/07/2026
$0.080
11,500,000
-
-
-
11,500,000
08/04/2022
08/04/2027
$0.080
-
400,000
-
-
400,000
08/04/2022
08/04/2027
$0.070
-
573,678
-
-
573,678
08/04/2022
08/04/2027
$0.050
-
6,530,000
-
(1,090,000)
5,440,000
31,231,701
7,503,678
-
(9,120,000)
29,615,379
During the year, the company granted 7,503,678 unlisted options to employees and consultant of the Company. 1,380,000
options are fully vested at date of grant, 573,678 options are vested after 18 months, 2,000,000 options are vested after 3
years, and 3,550,000 options are vested after 4 years.
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Share price
Exercise
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant date
price
volatility
yield
interest rate
at grant date
13/04/2022
13/04/2027
$0.044
$0.080
80.40%
-
0.02%
$0.0238
13/04/2022
13/04/2027
$0.044
$0.070
80.40%
-
0.02%
$0.0250
13/04/2022
13/04/2027
$0.044
$0.050
80.40%
-
0.02%
$0.0278
Accounting policy for share-based payments
Equity-settled and cash-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. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the
consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
For personal use only
Mobilicom Limited
Notes to the consolidated financial statements
31 December 2022
Note 35. Share-based payments (continued)
49
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The
cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the 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.
Note 35. Variation from Appendix 4E Preliminary Final Report
Since the ASX lodgment of the Appendix 4E and Preliminary Final Report, which were unaudited, on 28 February 2023,
following the finalisation of the audit an adjustment has been made on the inventory balance. The nature of the adjustment
is related to incorrect treatment of costing of assembled inventories. The value of the adjustment is amounted to $221,287.
As a result of the adjustment net asset has increased by $221,287 to $17,860,907 and loss for the year has decreased by
$221,287 to $341,469.
For personal use only
Mobilicom Limited
Directors' declaration
31 December 2022
50
In the directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Australian Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
31 December 2022 and of its performance for the financial year ended on that date; and
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Oren Elkayam
Chairman and Managing Director
30 March 2023
Tel Aviv
For personal use only
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR'S REPORT
To the members of Mobilicom Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Mobilicom Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of Mobilicom Limited, is in accordance with the
Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
For personal use only
Accounting for warrants
Key audit matter
How the matter was addressed in our audit
As described in Note 18 of the consolidated financial
statements, the Company issued warrants as part of its
listing on Nasdaq.
The accounting for the warrants was a key audit
matter due to:
•
The value of the transaction.
•
The judgment involved in determining the inputs
used in the valuation.
•
The accounting complexity in relation to the
classification of the warrants in the consolidated
statement of financial position.
Our procedures included, but were not limited to:
• Reviewing the key terms and conditions attached
to the warrants issued during the year.
• Involving our internal accounting technical team
to determine the classification of the warrants.
• Obtaining a copy of the external valuation report
and, in conjunction with our valuation specialists,
we:
✓
Assessed the reasonableness of the
methodology adopted by the
external valuer
✓
Evaluated the appropriateness of
the key assumptions used, including
the exercise price, volatility, risk-
free rate, dividend yield and
exercise restrictions.
• Evaluating the disclosure made in the
consolidated financial statements and the
compliance with the accounting standards.
Other information
The directors are responsible for the other information. The other information obtained at the date of
this auditor’s report is information included in the Group’s annual report for the year ended 31
December 2022, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
For personal use only
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 (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar3.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 7 to 13 of the directors’ report for the
year ended 31 December 2022.
In our opinion, the Remuneration Report of Mobilicom Limited, for the year ended 31 December 2022,
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.
BDO Audit Pty Ltd
Salim Biskri
Director
Melbourne, 30 March 2023
For personal use only
Mobilicom Limited
Shareholder information
31 December 2022
54
The shareholder information set out below was applicable as at 8 March 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Options over ordinary
shares
% of total
% of total
Number
shares
Number
shares
of holders
issued
of holders
issued
1 to 1,000
24
-
-
-
1,001 to 5,000
39
0.01
-
-
5,001 to 10,000
108
0.07
-
-
10,001 to 100,000
292
0.86
-
-
100,001 and over
218
99.06
34
100.00
681
100.00
34
100.00
Holding less than a marketable parcel
365
-
-
-
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
HSBC Custody Nominees (Australia) Limited
986,294,215
74.09
Citicorp Nominees Pty Limited
36,830,176
2.77
IBI Trust Management (Oren Elkayam A/C)
36,404,774
2.73
IBI Trust Management (Yossi Segal A/C)
30,167,158
2.27
Zelwer Superannuation Pty Ltd (Zelwer Super Benefit Fnd A/C)
16,102,282
1.21
IBI Trust Management (Shalom Elkayam A/C)
12,051,511
0.91
UBS Nominees Pty Ltd
11,500,000
0.86
Mr Stephen J Ryan
11,316,682
0.85
IBI Trust Management (Asher Segal A/C)
10,132,481
0.76
IBI Trust Management (Luiza Segal A/C)
9,632,481
0.72
Muhlbauer Investments Pty Ltd (Muhlbauer Family A/C)
8,993,358
0.68
Mr Stephen J Pearce
6,867,687
0.52
Unavala Nominees Pty Ltd - Unaval Management Retirement A/C
5,500,000
0.41
Nabe Pty Ltd (The Glass A/C)
5,000,000
0.38
Geoff Shaw Hospitality Management Pty Limited
4,255,066
0.32
Hersham Holdings LLC
4,074,370
0.31
Mr Alan Hirmes
3,894,864
0.29
BNP paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
3,739,932
0.28
HSBC Custody Nominees (Australia) Limited - A/C 2
3,475,000
0.26
Mrs Narelle Fay
2,615,145
0.20
1,208,847,182
90.82
For personal use only
Mobilicom Limited
Shareholder information
31 December 2022
55
Unquoted equity securities
The total number of options over ordinary shares issued as at the date of this report are as
follows:
Number
Number
on issue
of holders
Options over ordinary shares issued
93,615,379
34
Warrants issued in accordance with NASDAQ Listing
2,931,355
18
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
% of total
shares
Number held
issued
HSBC Custody Nominees (Australia) Limited
986,294,215
74.09
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
For personal use only