UUV Aquabotix Limited
ABN 52 616 062 072
ANNUAL REPORT
for the year ending
31 December 2020
UUV Aquabotix Limited | 2020 Annual Report
1
Contents
Contents ......................................................................................................................................................................................................... 1
Corporate Information ................................................................................................................................................................................... 2
Directors’ Report ............................................................................................................................................................................................ 3
Auditor’s independence declaration ............................................................................................................................................................ 16
Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................................................................. 17
Consolidated Statement of Financial Position .............................................................................................................................................. 18
Consolidated Statement of Changes in Equity ............................................................................................................................................. 19
Consolidated Statement of Cash Flows ........................................................................................................................................................ 20
Notes to the Financial Statements ............................................................................................................................................................... 21
Directors’ Declaration .................................................................................................................................................................................. 43
Independent Auditor’s Report ..................................................................................................................................................................... 44
UUV Aquabotix Limited | 2020 Annual Report
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Corporate Information
Directors & Management
Winton Willesee (Non-Executive Chairman)
James Bahen (Non-Executive Director)
Erlyn Dale (Non-Executive Director)
Company Secretary
Winton Willesee & Erlyn Dale
Registered Office
Suite 5 CPC
145 Stirling Highway
Nedlands, 6009 WA
Australia
Telephone: +61 8 9389 3160
Email: investors@aquabotix.com
Website: www.aquabotix.com
Auditors
RSM Australia Partners
Level 13, 60 Castlereagh Street
Sydney, NSW 2000
Australia
Share Registry
Link Market Services Limited
Level 4, 152 St Georges Terrace
Perth, WA 6000
Australia
Enquiries (within Australia): 1300 288 664
Enquiries (outside Australia): +61 8 9324 2099
Stock Exchange Listing
UUV Aquabotix Limited shares (ASX code: UUV) and Options (ASX code: UUVOA) are listed on the Australian Securities Exchange.
Website: www.aquabotix.com
Corporate Governance Statement:
https://www.aquabotix.com/investor-relations.html
Directors’ Report
UUV Aquabotix Limited | 2020 Annual Report
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Your Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Company’
or ‘Aquabotix’) consisting of UUV Aquabotix Limited and its controlled entities for the year ended 31 December 2020.
Directors
The following persons were directors of UUV Aquabotix Limited during the financial year and up until the date of this report, unless otherwise
stated.
Winton Willesee - Non-Executive Chairman (appointed 3 October 2020)
James Bahen - Non-Executive Director (appointed 23 October 2020)
Erlyn Dale - Non-Executive Director (appointed 23 October 2020)
Peter James (resigned 2 October 2020)
Admiral Jay M. Cohen (resigned 23 October 2020)
Robert Clisdell (resigned 23 October 2020)
Winton Willesee: Non-Executive Chairman and Joint Company Secretary
Mr. Willesee is an experienced corporate professional with a broad range of skills and experience in strategy, company development, corporate
governance, company public listings, merger and acquisition transactions and corporate finance. Mr Willesee has considerable experience with
ASX listed and other companies over a broad range of industries, having held directorships, chairmanships and company secretarial positions
with a number of ASX-listed companies over many years.
Mr. Willesee holds a Master of Commerce, a Post-Graduate Diploma in Business (Economics and Finance), a Graduate Diploma in Applied Finance
and Investment, a Graduate Diploma in Applied Corporate Governance, a Graduate Diploma in Education and a Bachelor of Business. He is a
Fellow of the Financial Services Institute of Australasia, a Graduate of the Australian Institute of Company Directors, a Member of CPA Australia
and a Fellow of the Governance Institute of Australia and the Institute of Chartered Secretaries and Administrators/Chartered Secretary.
Other ASX Directorships held within the last 3 years:
Nanollose Limited (ASX: NC6) Non-Executive Director (Current)
MMJ Group Holdings Limited (ASX: MMJ) Non-Executive Director (Current)
New Zealand Coastal Seafoods Limited (ASX: NZS) Chairman (Current)
Neurotech International Limited (ASX: NTI) Non-Executive Director (Current)
eSense-Lab Ltd (ASX: ESE) Non-Executive Director (Current)
Ding Sheng Xin Finance Co Limited (ASX: DXF) Non-Executive Director
James Bahen: Non-Executive Director
Mr Bahen is a Corporate Advisory Executive and Chartered Secretary who commenced his career in audit and assurance with a chartered
accounting firm. He is currently a Company Secretary to a number of ASX listed companies.
Mr Bahen is a member of the Governance Institute of Australia (GIA) and holds a Graduate Diploma of Applied Finance and a Bachelor of
Commerce degree majoring in Accounting and Finance.
Other ASX Directorships held within the last 3 years:
MinRex Resources Limited (ASX: MRR) Non-Executive Director (Current)
Directors’ Report (Continued)
Erlyn Dale: Non-Executive Director and Joint Company Secretary
UUV Aquabotix Limited | 2020 Annual Report
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Miss Dale is an experienced corporate professional with a broad range of corporate governance, accounting and capital markets experience.
Miss Dale holds positions as company secretary for a number of ASX listed public companies across a range of industries, with particular expertise
in the facilitation of company listings, merger and acquisition transactions and capital raisings.
Miss Dale holds a Bachelor of Commerce (Accounting and Finance) and a Graduate Diploma in Applied Corporate Governance. She is a member
of the Governance Institute of Australia/Chartered Secretary.
Other ASX Directorships held within the last 3 years:
New Zealand Coastal Seafoods Limited (ASX: NZS) Non-Executive Director (Current)
Meetings of Directors
The Company’s full Board of Directors met 5 times during the year ended 31 December 2020. In addition, there were 5 sub-committee meetings
held during the year ended 31 December 2020. The number of meetings eligible to be attended and the number of meetings attended by each
director were as follows:
Full Board Meetings
Sub Committee Meetings
Name
Eligible to attend
Attended
Winton Willesee
James Bahen
Erlyn Dale
Peter James
Jay M. Cohen
Robert Clisdell
2
2
2
3
3
3
2
2
2
3
3
3
Eligible to attend
-
Attended
-
-
-
5
-
5
-
-
5
-
5
Eligible to attend represents the number of board meetings held during the time the director held office.
Review of Operations and Financial Results
The loss for the Group after providing for income tax and non-controlling interest for the year ended 31 December 2020 amounted to $1,347,290
(31 December 2019 loss of $2,409,264).
The Aquabotix Group started the 2020 calendar year with a significant order backlog, comprised of US government and other foreign defense
contracts. During this reporting period, the Company successfully delivered against those order backlogs as well as newly established contracts,
providing test support and training services and hardware for test and evaluation purposes to the extent practicable given impacts associated
with COVID-19 on travel and customer prioritisation of these types of activities throughout the phases of this pandemic.
The delivery of these contract milestones over the period represented a solid upward trajectory in revenues recognised and increased net cash
from operating activities, with even half-year 2020 figures exceeding those for the total of 2019 calendar year. In addition to the securing and
delivering of contracts to key customers as detailed above, the Company announced in February 2020 that it had entered into a Non-Standard
Navy Cooperative Research and Development Agreement with the United States Naval Undersea Warfare Center Division Newport with the
intention of working together collaboratively on a project related to experimental coordination with swarms.
To complement its increasing revenues, in April 2020, the Company’s United States-based subsidiary, Aquabotix Technology Corporation (“ATC”),
received approval for a non-dilutive loan under the United States Government’s Paycheck Protection program of approximately US$76,000. In
addition to this support, the Company received a cashflow boost from the Australian Tax Office of $10,000 upon filing its first quarter activity
statement. This temporary cashflow boost is non-assessable, non-exempt income intended to support businesses during the economic downturn
associated with COVID-19.
In addition to these nondilutive funding sources, the Company undertook several investment activities to generate needed funds over the fiscal
year. The Company raised $1,769,156 in equity capital through the year including the rights issue funding referred to below.
Notwithstanding the increasing revenues and active financing program, the Company could not reach a point whereby it was operationally
cashflow neutral.
Directors’ Report (Continued)
UUV Aquabotix Limited | 2020 Annual Report
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The advent of COVID-19 pandemic created delays and disruptions that impacted the Company’s ability to deliver products and services in
accordance with its previous plans over the period. These operational impacts ultimately translated to decreased revenues and lagging
cashflows, among other challenges for the Company.
On 23 January 2020, the Group learned that the licensor of one part of its licenced technology, Apium Inc., had filed a lawsuit against ATC in the
U.S. District Court, Central District of California in Los Angeles. The lawsuit included claims for actual and anticipatory breach of the license
agreement, a declaratory judgment that the license was terminated and that Apium itself has not breached the license, as well as a violation of
the U.S. Defend Trade Secrets Act. As disclosed at the time, the Company and ATC believe the lawsuit was without merit and that Apium’s actions
were themselves a breach of the terms of the license agreement.
In November, acknowledging the pressures on the global economy and the business of ATC, both generally and as a result of the legal dispute
with Apium, had made further capital investment into these operations unlikely at that time. The Company advised that ATC ceased the active
conduct of its business operations.
Following shortly after that announcement, in December 2020, ATC filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the
District of Massachusetts. With regard to the legal dispute between Apium and ATC, the Company notes that the filing of bankruptcy
automatically stays the action, and a formal Notice of Stay of Proceedings due to the filing of bankruptcy was filed in December in the United
States District Court, Central District of California in Los Angeles.
In the latter part of the reporting period the Board of directors of the Company changed with the retirement of Peter James, Robert Clisdell and
Jay Cohen, and the appointments of Winton Willesee, Erlyn Dale and James Bahen. The Company wishes to again thank the outgoing directors
for their efforts during their time in office.
In July 2020 the Company completed a rights issue to shareholders and in October 2020 completed the placement of the shortfall to that rights
issue to raise a total of $1,583,823 before costs.
The Company is now in a solid financial situation with a new Board in place consisting of directors experienced in the recapitalisation and
reforming of ASX listed companies.
Principal Activities
During the financial year up until the cessation of the operations of ATC on 30 November 2020, the principal activities of the Group consisted of
designing, developing, manufacturing, and selling underwater drone systems, related technologies, and man-machine teaming solutions.
Significant Changes in the State of Affairs
Other than discussed in the Review of Operations above, there have been no other significant changes in the state of affairs of the Company
during the year ended 31 December 2020.
Contingent Liabilities
During January 2020, the Group learned that a licensor of technology incorporated into the SwarmDiverTM product, Apium Inc. (“Apium”), a
small, privately held U.S. Company, filed a lawsuit against the Company’s subsidiary, Aquabotix Technology Corporation (“ATC”) in the U.S.
District Court, Central District of California in Los Angeles.
The lawsuit includes claims for actual and anticipatory breach of the license agreement, a declaratory judgement that the license is terminated
and that Apium itself has not breached the license, as well as violation of the Defend Trade Secrets Act, a U.S. law often invoked in licensing
disputes. The Company believes that the lawsuit is completely without merit and that Apium’s actions are themselves a breach of the terms of
the license agreement. The Company notes that the filing of the bankruptcy automatically stays the action, and a formal Notice of Stay of
Proceedings due to filing of bankruptcy was filed in December in the U.S. District Court, Central District of California in Los Angeles.
Other than detailed above, as at 31 December 2020 the Company had no contingent liabilities.
Significant Events after the Balance Date
The impact of the COVID-19 pandemic is on-going, and it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. Given the company is largely dormant the pandemic is not expected to have any significant impact at all. The situation is rapidly
developing and could change depending on measures imposed by the Australian Government and other countries, such as maintaining social
distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected or may significantly affect the results of the
Company’s operations, the results of those operations, or the Company’s state of affairs in future financial years.
Directors’ Report (Continued)
Environmental regulation
UUV Aquabotix Limited | 2020 Annual Report
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The Group’s operations are not subject to any significant environmental regulation under either Australian Commonwealth or State legislation.
The Board considers that adequate systems are in place to manage the Group’s obligations and is not aware of any breach of environmental
requirements as they relate to the Group.
Dividends
No dividends were declared or paid to shareholders during the financial year (2019: $nil).
Corporate Governance Statement
The Board of the Company recognises the importance of establishing a comprehensive system of control and accountability as the basis for the
administration of corporate governance.
In establishing its corporate governance framework for the financial year ended 31 December 2020 (Reporting Period), the Board has referred
to the Corporate Governance Principles and Recommendations (4th Edition) published by the ASX Corporate Governance Council. The Company
sets out its compliance with, and departures from the Recommendations for the financial year ended 31 December 2020.
The Company’s Corporate Governance Statement for the financial year ending 31 December 2020 was approved by the Board of Directors on
31 March 2021.
The Company’s Corporate Governance Statement is available at the Company’s website at https://www.aquabotix.com/investor-relations.html.
In the context of the Company’s nature, scale and operations, the Board considers that the current corporate governance regime is efficient,
practical, and cost-effective method of directing and managing the Company.
AGM
The Company anticipates that it will hold its next Annual General Meeting (‘AGM’) on or after 21 May 2021. In accordance with ASX Listing Rule
3.13.1, the closing date for the receipt of nominations from persons wishing to be considered for election as a director of the Company is 9 April
2021. Any nominations must be received in writing no later than 5.00pm (WST) on 9 April 2021 at the Company’s registered office.
Remuneration Report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, 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
Employment 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 Group'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 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 as a whole carry out the function of the Nomination and Remuneration Committee, which is responsible for determining and
reviewing remuneration arrangements for its directors and executives. The performance of the Group depends on the quality of its directors
and executives. The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel.
UUV Aquabotix Limited | 2020 Annual Report
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Directors’ Report - Remuneration Report (audited) (Continued)
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it should seek to enhance
shareholders' interests by:
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.
Non-executive director’s remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments
are reviewed annually by the Nomination and Remuneration Committee. The Nomination and Remuneration Committee may, from time to
time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in
line with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on comparative
roles in the external market. No director is present during any discussions relating to the determination of his or her own remuneration.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and
variable components.
The executive remuneration and reward framework has four components:
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Nomination and
Remuneration Committee based on individual and business unit performance, the overall performance of the Group and comparable market
remunerations.
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 are 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 Group's direct competitors.
Details of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following directors of UUV Aquabotix Limited during the financial year and up to
the date of this report, unless otherwise stated:
Winton Willesee - Non-Executive Chairman (appointed 3 October 2020)
James Bahen - Non-Executive Director (appointed 23 October 2020)
Erlyn Dale - Non-Executive Director (appointed 23 October 2020)
Whitney Million – Chief Executive Officer
Peter James – former Non-Executive Chairman (resigned 2 October 2020)
Admiral Jay Cohen – former Non-Executive Director (resigned 23 October 2020)
Robert Clisdell – former Non-Executive Director (resigned 23 October 2020)
There have been no changes to the key management personnel since the end of the reporting period.
Directors’ Report - Remuneration Report (audited) (Continued)
UUV Aquabotix Limited | 2020 Annual Report
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Executive remuneration governance
The Board reviews and approves the remuneration policy to enable the Company to attract and retain executives and Directors who will create
value for shareholders having consideration to the amount deemed to be commensurate for a company of its size and level of activity as well as
the relevant Directors’ time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and equity-
based plans including the appropriateness of performance hurdles and total payments proposed.
Remuneration committee
Due to the size and nature of the existing Board and the magnitude of the Company’s operations, the Company does not currently have a
Remuneration Committee. Pursuant Schedule 1 point 7 of the Company’s Corporate Governance Plan www.aquabotix.com/investor-
relations.html, the full Board currently carries out the duties that would ordinarily be assigned to the Remuneration Committee under the
written terms of reference for that committee.
The Board will devote time on an annual basis to fulfil the roles and responsibilities associated with setting the level and composition of
remuneration for Directors and senior executives and ensuring that such remuneration is appropriate and not excessive. The Board of Directors
is responsible for overseeing performance evaluations of senior executives on an annual basis. This evaluation is based on specific criteria,
including the business performance of the Company, whether strategic objectives are being achieved and the development of management and
personnel.
Directors’ remuneration
The remuneration of an Executive Director is decided by the Board, without the affected Executive Director participating in that decision-making
process.
In accordance with the Constitution, the total maximum remuneration of Non-Executive Directors is initially set by the Board and subsequent
variation is by ordinary resolution of shareholders in general meeting in accordance with the Constitution, the Corporations Act 2001 and the
ASX Listing Rules, as applicable.
The determination of Non-Executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and
value to the Company of the respective contributions by each Non-Executive Director. The current amount has been set at an amount not to
exceed $300,000 per annum.
In addition, a Director may be paid fees or other amounts, subject to any necessary shareholder approval, including non-cash performance
incentives such as options, as the Directors determine where a Director performs special duties or otherwise performs services outside the scope
of the ordinary duties of a Director.
Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance
of their duties as Directors.
The Group’s remuneration policy for Executive Directors (including the Managing Director) and senior management is designed to promote
superior performance and long-term commitment to the Group. Executives receive a base remuneration which is market related and may also
be entitled to performance-based remuneration at the ultimate discretion of the Board.
Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect competitive market and business
conditions where it is in the interests of the Group and the Company’s shareholders to do so.
Executive remuneration and other terms of employment are reviewed annually by the Board having regard to performance, relevant
comparative information and, where necessary, expert advice.
Executive remuneration framework
The Group’s reward policy reflects the benefits of aligning executive remuneration with shareholders’ interests and to retain appropriately
qualified executive talent for the benefit of the Group. The main principles of the policy are:
(a)
(b)
(c)
remuneration is reasonable and fair, taking into account the Group’s obligations at law, the competitive market in which the Group
operates and the relative size and scale of the Group’s business;
individual reward should be linked to clearly specified performance targets which should be aligned to the Group’s short term and long-
term performance objectives; and
executives should be rewarded for both financial and non-financial performance.
The total remuneration of Executive Directors (including the Managing Director) and other senior managers consist of the following:
(a)
(b)
(c)
Salary - Executive Directors and senior managers may receive a fixed sum payable monthly in cash;
Short term incentive - Executive Directors and nominated senior managers are eligible to participate in a profit participation plan if
deemed appropriate. The Board may at its discretion award bonuses for exceptional performance in relation to each person’s pre-
agreed Key Performance Indicators;
Post-employment benefits – this refers to superannuation schemes; and
Directors’ Report - Remuneration Report (audited) (Continued)
(d)
Long term incentives - Executive Directors may participate in share option schemes with the prior approval of shareholders. Executives
may also participate in employee share option schemes, with any option issues generally being made in accordance with thresholds set
in plans approved by shareholders. The Board however, considers it appropriate to retain the flexibility to issue options to executives
outside of approved Employee Option Plans in exceptional circumstances.
UUV Aquabotix Limited | 2020 Annual Report
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KMP remuneration disclosures in detail
Details of the remuneration of the Directors of UUV Aquabotix Limited and other KMP are set out in tables below:
2020
Short-term benefits
Cash Salary
and fees^^
Cash bonus Other Benefits
Post-
employment
benefits
Super-
annuation
$
$
$
$
Share-based payments
Equity-settled
shares
Equity-settled
options#
$
$
Total
$
Non-Executive Directors:
Winton Willesee
James Bahen
Erlyn Dale
Peter James
Jay M. Cohen
Robert Clisdell
Other Key Management Personnel:
Whitney Million
16,145
6,888
6,871
58,666
19,795
21,250
129,615
170,700
300,315
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,000
-
12,500
37,500
-
-
-
-
-
-
-
16,145
6,888
6,871
83,666
19,795
33,750
167,115
18,128
31,545
220,373
55,628
31,545
387,488
NB: The Company intends to seek shareholder approval for the grant of 40 million and 20 million UUVOA options to Peter James and Rob Clisdell respectively in lieu
of cash fees owed at the time of their resignations.
2019
Short-term benefits
Cash Salary
and fees^^
Cash bonus Other Benefits
Post-
employment
benefits
Super-
annuation
$
$
$
$
Share-based payments
Equity-settled
shares
$
Equity-settled
options#
$
Total
$
Non-Executive Directors:
Peter James
Jay M. Cohen
Robert Clisdell
Other Key Management Personnel:
Whitney Million
41,977
57,680
20,834
120,491
326,087
446,578
-
-
-
-
-
-
-
-
10,901
10,901
-
-
-
-
-
58,333
-
29,166
87,499
36,865
14,746
25,805
77,416
-
36,414
87,499
113,830
136,865
72,426
75,805
285,096
373,402
658,498
Directors’ Report - Remuneration Report (audited) (Continued)
The proportion of remuneration linked to performance and the fixed proportion are as follows:
UUV Aquabotix Limited | 2020 Annual Report
10
Name
2020
2019
2020
2019
2020
2019
Fixed remuneration
At risk – STI
At risk – LTI
Non-Executive Directors:
Winton Willesee
James Bahen
Erlyn Dale
Peter James
Jay M. Cohen
Robert Clisdell
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Other Key Management Personnel:
Whitney Million
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Cash bonuses are dependent on meeting defined performance measures. The amount of the bonus is determined having regard to the
satisfaction of performance measures and weightings as described above in the section 'Group performance and link to remuneration'. The
maximum bonus values are established at the start of each financial year and amounts payable are determined in the final month of the financial
year by the Nomination and Remuneration Committee.
No cash bonuses were paid or are payable for the financial year ended 31 December 2020 (2019: nil). There has been no forfeit of cash bonuses.
Employment agreements with Key Management Personnel
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these
agreements are as follows:
Name:
Title:
Whitney Million
Chief Executive Officer
Agreement commenced:
21 March 2018
Agreement terminated:
2 November 2020
Details:
Base salary of USD$200,000 per annum for the period to 19 March 2020, the reduced to
US$100,000 by the board of Directors. A payment of US$24,000 plus 35,000,000 UUVOA options
valued at $18,128 were paid to Ms Million on termination of employment as full and final
settlement.
Agreement commenced:
2 November 2020
Agreement terminated:
Remains
Details:
Monthly fee of $4,750. Termination notice period of three months.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Directors’ Report - Remuneration Report (audited) (Continued)
Key Management Personnel shareholdings
The number of shares in the Company held during the financial year by each Director of UUV Aquabotix Limited and other key management
personnel, including their personally related entities, are set out in the table below:
UUV Aquabotix Limited | 2020 Annual Report
11
Name
Winton Willesee
James Bahen
Erlyn Dale
Peter James
Robert Clisdell
Jay Cohen
Whitney Million
Balance at 1 January
2020
Shares acquired
Shares issued in lieu
of salary or fees
Other changes during
the year ^
Balance at 31
December 2020
-
-
-
84,723,000
-
5,000,000
-
-
-
-
-
-
84,723,000
-
5,000,000
25,107,126
8,665,197
-
-
-
-
-
-
10,924,867
(36,031,993)
5,462,433
(14,127,630)
-
-
28,164,771
(28,164,771)
-
-
-
-
Total
33,772,323
89,723,000
44,552,071
(78,324,394)
89,723,000
^
Balance at the date of resignation as a Director or termination of employment
Options issued
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:
Name
Number of
options granted
Grant date
Vesting date and
exercisable dated
Expiry date
Exercise
price
Fair value per
option at grant
dated
Whitney Million
35,000,000
26 October 2020
26 October 2020
28 July 2023
$0.001
$18,128
Options granted carry no dividend or voting rights.
All options were granted over unissued fully paid ordinary shares in the Company. The number of options granted was determined having regard
to the satisfaction of performance measures and weightings as described above in the section 'Group performance and link to remuneration'.
Options vest based on the provision of service over the vesting period whereby the executive becomes beneficially entitled to the option on
vesting date. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the
grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their
potential exercise.
Directors’ Report - Remuneration Report (audited) (Continued)
Option holdings
The number of options over ordinary shares in the Company held during the financial year ended 31 December 2020 by each director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
UUV Aquabotix Limited | 2020 Annual Report
12
Balance at the
start of the year
Issued or
Granted
Exercised
Expired forfeited
other (a)
Balance at the
end of the year
Options Vested
at the end of
the year
Options
exercisable at
the end of the
year
Options
unexerciseab
le at the end
of the year
Winton Willesee
James Bahen
Erlyn Dale
-
-
-
74,595,166
-
3,333,334
Peter James (a)
26,000,000
39,046,633
Robert Clisdell (a)
15,000,000
18,357,934
Jay Cohen (a)
8,000,000
-
Whitney Million
31,000,000
35,000,000
80,000,000
135,333,067
-
-
-
-
-
-
-
-
-
-
-
74,595,166
74,595,166
74,595,166
-
-
-
3,333,334
3,333,334
3,333,334
(65,046,633)
(33,357,934)
(8,000,000)
-
-
-
-
-
-
-
-
-
-
66,000,000
66,000,000
66,000,000
(106,404,567)
143,928,500
143,928,500
143,928,500
(a)
Balance of options held as at the date of resignation
-
-
-
-
-
-
-
-
Performance of the Company and shareholder returns
The performance of the Company is summarised below.
Sales revenue
EBITDA
Loss after income tax
Basic loss per share (cents)
Share price as at 31 December (cents)
Dividends proposed or paid in the year
2017
$
2018
$
2019
$
2020
$
747,131
154,494
322,166
457,767
(4,565,627)
(4,803,011)
(2,329,871)
(1,333,812)
(4,559,109)
(4,833,146)
(2,409,264)
(1,347,290)
(4.23)
9.90
Nil
(3.35)
5.00
Nil
(0.75)
0.004
Nil
(0.001)
0.001
Nil
Directors’ Report - Remuneration Report (audited) (Continued)
UUV Aquabotix Limited | 2020 Annual Report
13
Remuneration consultants.
No remuneration consultants were used during the year.
Other transactions with key management personnel and their related parties.
Fees of $44,400 were paid and $2,000 was paid to Azalea Consulting Pty Ltd which is an entity associated with Mr Winton Willesee and Ms Erlyn
Dale for company secretarial services and for the provision of the registered office.
Fees of $708 are payable to Valle Corporate which is an entity associated with Mr Winton Willesee and Ms Erlyn Dale for accounting services.
All amounts were charged at standard commercial rates or less. There were no transactions with key management personnel and their related
parties other than as disclosed above.
This concludes the remuneration report, which has been audited.
Directors’ Report (Continued)
Shares under option
Unissued ordinary shares of UUV Aquabotix Limited under option at the date of this report are as follows:
UUV Aquabotix Limited | 2020 Annual Report
14
Unlisted
Option Class
Class D
Class E
Class F
Class R
Class S
Class T
Class U
Class V
Class W
Class X
Class Y
Class Z
Class AA
Class AB
Class AC
Class AD
Class AE
Class AF
Class AG
Class AH
Listed
Option Class
UUVOA
Grant date
20 April 2017
20 April 2017
20 April 2017
21 March 2018
21 March 2018
21 March 2018
21 March 2018
1 June 2018
Expiry date
20 April 2021
20 April 2021
20 April 2022
18 April 2021
18 April 2022
18 April 2023
18 April 2024
30 May 2021
11 December 2018
21 December 2021
18 July 2018
18 July 2018
18 July 2018
18 July 2021
18 July 2021
18 July 2021
2 November 2018
2 November 2021
2 November 2018
2 November 2021
2 November 2018
2 November 2021
12 and 18 December 2019
24 December 2023
12 and 18 December 2019
24 December 2023
12 and 18 December 2019
24 December 2023
12 and 18 December 2019
24 December 2023
23 June 2020
30 June 2022
Exercise price
Number under option
$0.30
$0.30
$0.30
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.005
$0.010
$0.015
$0.020
$0.008
700,000
5,000,000
3,000,000
1,500,000
1,500,000
1,500,000
1,500,000
1,000,000
300,000
400,000
400,000
400,000
200,000
200,000
200,000
32,750,000
6,000,000
6,500,000
6,500,000
29,687,500
99,237,500
Grant date
28 July 2020
Expiry date
28 July 2023
Exercise price
$0.001
Number under option
1,104,592,677
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company
or of any other body corporate.
Shares issued on the exercise of options
333,334 ordinary shares of UUV Aquabotix Limited were issued during the year ended 31 December 2020 (31 December 2019: none)
upon on the exercise of options granted.
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 executive of the Company
against a liability to the extent permitted by the Corporation Act 2001. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
UUV Aquabotix Limited | 2020 Annual Report 15 Directors’ Report (Continued) 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 17 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. The Directors are of the opinion that the services as disclosed in Note 17 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 RSM Australia Partners There are no officers of the Company who are former partners of RSM Australia Partners. 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 the Section 307C of the Corporations Act 2001 is set out on page 16. Auditor RSM Australia Partners 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 Winton Willesee Chairman 31 March 2021 RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of UUV Aquabotix Limited for the year ended
31 December 2020, I declare that, to the best of my knowledge and belief, there have been no contraventions
of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
G N Sherwood
Partner
Sydney, NSW
Dated: 31 March 2021
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
16
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 17
Revenue
Cost of goods sold
Gross profit
Other income
Gain on deconsolidation of subsidiary
Expenses
General and administrative expense
Selling and marketing expense
Research and development expense
Depreciation expense
Loss on disposal of assets
Impairment of right-of-use asset
Lease liabilities released
Share option expense
Foreign exchange losses
Interest expense
US subsidiary bankruptcy expenses
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income/(loss):
Items that may be reclassified to profit or loss
Translation of foreign controlled entity
Note
4
4
5
31 December
2020
$
31 December
2019
$
457,767
(286,707)
171,060
71,951
228,071
(1,586,553)
(6,072)
(54,335)
(9,163)
(2,668)
-
-
(77,294)
-
(4,532)
(77,755)
322,166
(119,298)
202,868
8,652
-
(2,163,670)
(53,457)
(96,431)
(44,625)
(71,096)
(380,072)
390,313
(160,256)
(6,722)
(34,768)
-
(1,347,290)
(2,409,264)
6
-
-
(1,347,290)
(2,409,264)
23,063
(14,174)
Total comprehensive loss for the year
(1,324,227)
(2,423,438)
Basic loss per share
Diluted loss per share
25
25
Cents
(0.001)
(0.001)
Cents
(0.75)
(0.75)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
17
Consolidated Statement of Financial Position
As at 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 18
31 December
2020
$
31 December
2019
$
Note
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee benefits
Customer deposits
Total current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
7
8
9
10
12
13
20
21
14
911,323
37,265
-
948,588
-
-
260,254
91,204
109,834
461,292
32,752
32,752
948,588
494,044
226,192
-
-
226,192
226,192
722,396
169,245
34,001
12,228
215,474
215,474
278,570
13,779,012
1,216,443
(14,273,059)
12,065,190
1,162,212
(12,948,832)
722,396
278,570
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
18
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 19
Issued
Capital
$
Options
reserve
$
Foreign
exchange
reserve
$
Accumulated
losses
$
Total equity
$
Balance at 1 January 2020
12,065,190
1,139,149
23,063
(12,948,832)
278,570
Loss for the year
Exchange difference on translation of foreign operations
Total comprehensive loss for the year
-
-
-
-
-
-
-
(1,347,290)
(1,347,290)
(23,063)
(23,063)
23,063
(1,324,227)
-
(1,347,290)
Transactions with owners in their capacity as owners:
Shares issued during the year
Share issue costs
Share options lapsed in the year
Share options issued in the year
Share option expense recognised
1,884,009
(170,187)
-
-
-
-
(49,703)
25,402
-
101,595
Balance at 31 December 2020
13,779,012
1,216,443
-
-
-
-
-
-
-
-
-
-
-
1,884,009
(170,187)
(49,703)
25,402
101,595
(14,273,059)
722,396
Balance at 1 January 2019
Loss for the year
Exchange difference on translation of foreign operations
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
10,191,710
978,893
37,237
(10,539,568)
668,272
-
-
-
-
-
-
-
(2,409,264)
(2,409,264)
(14,174)
(14,174)
-
(2,409,264)
(14,174)
(2,423,438)
Shares issued in the year
Share options issued in the year
1,873,480
-
-
160,256
-
-
-
-
1,873,480
160,256
Balance at 31 December 2019
12,065,190
1,139,149
23,063
(12,948,832)
278,570
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
19
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
Operating activities
Receipts from customers
Payments to suppliers and employees
UUV Aquabotix Limited | 2020 Annual Report 20
31 December
2020
$
31 December
2019
$
511,706
(1,440,131)
320,245
(2,327,444)
Net cash flows used in operating activities
27
(928,425)
(2,007,199)
Investing activities
Purchase of plant and equipment
Net cash flows used in investing activities
Financing activities
Net proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Share issue costs
Payments in respect of finance lease
Net cash flows provided by financing activities
Cash and cash equivalents at beginning of period
-
-
1,769,156
-
-
(170,187)
-
-
-
1,772,877
200,000
(200,000)
(133,146)
(90,006)
1,598,969
1,549,725
260,254
704,377
Net increase / (decrease) in cash and cash equivalents
670,544
(457,474)
De-recognition of subsidiary cash balance
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
7
(19,475)
-
911,323
-
13,351
260,254
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
20
Notes to the Financial Statements
For the year ended 31 December 2020
Corporate Information
UUV Aquabotix Limited | 2020 Annual Report 21
The consolidated financial report of UUV Aquabotix Limited (“the Company”) and its controlled entities (together “the Group”) for the
year ended 31 December 2020 was authorised for issue in accordance with a resolution of the Directors on 31 March 2021.
UUV Aquabotix Limited is a company incorporated in Australia, limited by shares which are publicly traded on the Australian Stock
Exchange.
The principal activity of the Company during the period was to design, develop, manufacture and sell unmanned underwater vehicles
(“UUVs”).
1. Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all years presented, unless otherwise stated.
New accounting standards and interpretations
The Company has adopted all of the new, revised or amended Accounting Standards and interpretations issued by the Australian
Accounting Standards Board (AASB) that are mandatory for the current reporting period.
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”).
These financial statements have been prepared on the basis of historical cost as explained in the accounting policies below.
The accounting policies are consistent with prior periods and have been consistently applied unless otherwise stated. The principal
accounting policies are set out below.
Going Concern
During the year ended 31 December 2020, the Group incurred a loss after income tax of $1,347,290 and had net cash outflows used in
operating activities of $928,425.
This consolidated financial report has been prepared on the basis that the Group will continue to meet its commitments and can therefore
continue normal business activities and realise assets and settle liabilities in the ordinary course of business.
The Directors believe that there are reasonable grounds to believe that the Group will continue as a going concern for a period of at least
12 months following the date of this Report, after consideration of the following factors:
the cessation of US-based operations and the filing for bankruptcy of the Group’s former subsidiary Aquabotix Technology
Corporation
the Group had net current assets and net assets of $722,396 including cash and cash equivalents of $911,323 as at 31 December
2020;
the Group has the ability to issue additional shares to raise further working capital and has been successful in doing this
previously, as evidenced by the successful capital raising completed during financial year ended 31 December 2020; and
the Company has scaled down its operations in order to minimise expenditure to ensure that sufficient cash is available to meet
forecast requirements.
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is appropriate to adopt the going
concern basis in the preparation of the financial report.
The report does not include any adjustments relating to the amounts or classification or recorded assets or liabilities that might be
necessary if the Group does not continue as a going concern.
21
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Critical accounting estimates
UUV Aquabotix Limited | 2020 Annual Report 22
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in Note 19.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of UUV Aquabotix Limited ('Company' or
'parent entity') for the period 1 January 2020 to 23 December 2020.
On this date, the Company’s wholly owned US based subsidiary Aquabotix Technology Corporation (“ATC”) filed for Chapter 7 bankruptcy
in the United States Bankruptcy Court in the District of Massachusetts, and which time ATC was de-consolidated.
Subsidiaries are all those entities over which the Company has control, which occurs if the Company 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 acquired and they are de-consolidated from the date that
control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group 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 Group.
Accordingly, the Company’s sole subsidiary ATC was deconsolidated as of 23 December 2020 – refer to Note 5 for further details on the
effect of the deconsolidation on the financial statements.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to
operating segments and assessing their performance. The CODM, who is responsible for allocating resources and assessing performance
of the operating segments is the CEO.
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 Group'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.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
22
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Foreign currency translation
UUV Aquabotix Limited | 2020 Annual Report 23
The financial statements are presented in Australian dollars, which is UUV Aquabotix Limited's functional and presentation currency.
Foreign currency transactions are translated into the functional currency 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 re-measurement of
monetary items at year end exchange rates are recognised in profit or loss.
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.
The table below shows the average exchange rates and the exchange rates as at the reporting date for the period.
As at 31 December
Average rate for the period ending 31 December
Revenue recognition
USD
2020
0.77
0.72
2019
0.70
0.69
Revenue is measured at the fair value of the consideration received or receivable after taking into consideration any trade rebates or
discounts. Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be reliably
measured.
The Group enters into sales transactions involving either a sale to the client or the sale of services. The Group applies the revenue
recognition criteria set out below to each separately identifiable component of the sales transaction in order to reflect the substance of
the transaction.
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: 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.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using
either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining
principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable
consideration is subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred
revenue in the form of a separate refund liability.
Sale of goods
Revenue from sales of goods is recognised when the entity has delivered a product to the customer, which is defined as upon shipment.
The recorded revenue is the gross amount of sale, including any fees payable for the transaction. Such fees are included in cost of goods
sold.
Sale of services
Revenue from sales of services is recognised in the accounting period in which the services are rendered, by reference to completion of
the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Interest income
Interest income 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.
23
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Government grants
UUV Aquabotix Limited | 2020 Annual Report 24
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs
that they are intended to compensate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax
losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable
profits; or
When the taxable temporary difference is associated with interests in subsidiaries and the timing of the reversal can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to
be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable
profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entities which intend to settle simultaneously.
The Group currently does not recognise any deferred tax assets or liabilities.
Goods and services and other value-added taxes (“GST”)
Revenue, expenses and assets are recognised net of the amount of associated GST, except where the amount of GST incurred is not
recoverable from the taxation authority, in which case it is recognised as part of the acquisition cost of an 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 taxation authority is included as part of other receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and
financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term, highly liquid investments with original
maturities of three months or less, and bank overdrafts.
For the statement of cash flows presentation purposes, cash and cash equivalents comprise the above.
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 allowances for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To
measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
24
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Trade and other payables
UUV Aquabotix Limited | 2020 Annual Report 25
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are
unpaid. They are initially recognised at fair value. Due to their short-term nature, they are subsequently measured at amortised cost and
are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis.
Cost comprises of direct materials and delivery costs, import duties and other taxes. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
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 Group 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 Group 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.
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 Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-
of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly
within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Defined contribution superannuation expense
The group makes mandatory fixed percentage contributions for all Australian resident employees to complying third party
superannuation funds.
Contributions to these superannuation funds are expensed in the period they are incurred.
25
UUV Aquabotix Limited | 2020 Annual Report 26
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Share-based payments
Equity-settled share-based compensation benefits are provided to certain key employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering
of services.
The costs of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using 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 and the risk-free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to receive payment.
No account is taken of any other vesting conditions.
The costs of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of
awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Long service leave
The liability for long service leave is measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using interest rates on national government bonds with
terms to maturity that match, as closely as possible, the estimated future cash outflows.
Research and development
Research costs are expensed as incurred. Development costs are capitalised when it is probable that the project will be a success
considering its commercial and technical feasibility; the Group is able to use or sell the asset; the Group has sufficient resources; and
intent to complete the development and its costs can be measured reliably. Otherwise, development costs are expensed as incurred.
Capitalised development costs are amortised on a straight-line basis over the period of their expected benefit.
Property, plant and equipment
Plant and equipment is recorded 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:
Furniture and equipment
Demonstration equipment
Manufacturing tools
Moulds
3 - 5 years
2 years
5 - 7 years
7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated
useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains
and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to
the item disposed of is transferred directly to retained profits.
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.
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.
26
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Earnings per share
UUV Aquabotix Limited | 2020 Annual Report 27
Basic earnings per share is calculated by dividing the profit attributable to the owners of UUV Aquabotix 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.
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.
Financial instruments – recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted by transactions costs.
The Group’s financial assets include loans, trade and other receivables. After initial recognition, financial assets are measured at amortised
cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is
immaterial.
The Group’s financial liabilities include borrowings, trade and other payables. After initial recognition, financial liabilities are measured at
amortised cost using the effective interest method.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset
and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or
expires.
Impairment of assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely dependent
of the cash inflows from other assets or other groups of assets (cash generating units).
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.
Reclassifications
During the period, certain amounts have been reclassified in order to comply with new accounting standards.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian accounting standards and interpretations that have recently been issued or amended but are not mandatory for 31 December
2020 reporting periods have not been early adopted by the Group. The Group has not yet assessed the impact of these new or amended
standards and interpretations.
27
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
2.
Critical accounting judgements, estimates and assumptions
UUV Aquabotix Limited | 2020 Annual Report 28
In the application of the Group’s accounting policies, which are described in Note 1, Management is required to make judgements,
estimates and assumptions in the preparation of the financial statements about matters that are not readily available from other sources.
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. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities (refer to the respective notes) within the next financial year are discussed below.
Share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact
profit or loss and equity.
3. Segment information
Operating segment information
Until the cessation of operations of the Company’s wholly owned US based subsidiary Aquabotix Technology Corporation (“ATC”) and its
subsequent filing for Chapter 7 bankruptcy in the United States Bankruptcy Court in the District of Massachusetts, there was one
operating segment, being the development and sale of unmanned underwater vehicles.
Geographical segment information
The following tables present certain information regarding geographical segments for the years ended 31 December 2020 and 31
December 2019.
Segment performance
31 December 2020
Segment revenue
Other income
Interest income
Depreciation
Finance costs
Income tax credit/(expense)
Loss after income tax expense
Assets and liabilities
Segment assets
Segment liabilities
USA
$
457,767
-
206
(9,163)
-
-
Australia
$
-
71,734
11
-
-
-
(896,342)
(450,948)
-
-
948,588
(226,192)
Elimination
$
-
-
-
-
-
-
-
-
Total
$
457,767
71,734
217
(9,163)
-
-
(1,347,290)
948,588
(226,192)
28
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 29
Segment performance
31 December 2019
Total segment revenue
Other income
Interest income
Depreciation
Finance costs
Income tax credit/(expense)
Loss after income tax expense
Assets and liabilities
Segment assets
Segment liabilities
4. Revenue
Revenue from contracts with customers
Sale of goods
Rendering of services
Other revenue
Interest revenue
Government grant revenue
Other revenue
Total revenue
5. Deconsolidation of subsidiary
Australia
$
Elimination
$
USA
$
322,166
-
1,656
(43,290)
(26,118)
-
-
6,500
496
(1,335)
(8,650)
-
(1,323,787)
(1,085,477)
Total
$
322,166
6,500
2,152
(44,625)
(34,768)
-
(2,409,264)
-
-
-
-
-
-
-
203,675
(6,322,312)
6,546,799
(149,592)
(6,256,430)
6,256,430
494,044
(215,474)
31 December
2020
$
31 December
2019
$
457,767
-
457,767
217
53,634
18,100
71,951
285,013
37,153
322,166
2,152
6,500
8,652
529,718
330,818
On 30 November 2020 the Company’s wholly owned US based subsidiary Aquabotix Technology Corporation (“ATC”) ceased active conduct
of its business operations. Subsequently, on 23 December 2020 ATC filed for Chapter 7 bankruptcy in the United States Bankruptcy Court
in the District of Massachusetts. Accordingly, ATC has been de-consolidated as at that date as the Company no longer has control over ATC.
The effect of the de-consolidation of ATC on the loss before income tax for the period is as follows:
Derecognition of assets
Cash at bank
Trade and other receivables
Plant and equipment
Derecognition of liabilities
Trade and other payables
Unearned income
Borrowings
Net assets de-consolidated
29
31 December
2020
$
(19,475)
(33,055)
(20,921)
(73,451)
156,727
69,312
98,546
324,585
251,134
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
Gain or de-consolidation recognised in net profit before income tax
Foreign currency translation reserve
Net assets de-consolidated
6.
Income taxes
The components of tax recognised in profit or loss include:
Current tax
Deferred tax
Aggregate income tax expense
UUV Aquabotix Limited | 2020 Annual Report 30
31 December
2020
$
228,071
23,063
251,134
31 December
2020
$
31 December
2019
$
-
-
-
-
-
-
The income tax for the year can be reconciled to the accounting profit as follows:
Loss before income tax expense
Income tax credit calculated at the Australian statutory rate of 30%
Tax effect of amounts which are not deductible (taxable) in calculating taxable income
tax:
Other non-allowable items
Carried forward tax benefits not recognised in the current year
(1,347,290)
(404,187)
(2,409,264)
(722,779)
404,187
722,779
Income tax expense/(credit) recognised in profit or loss (relating to continuing
operations)
-
-
As at December 2020, the Group had US domiciled tax losses of approximately $12,972,467 relating to international operations, which
will expire at various dates over the next seven years. Such losses may also be subject to changes in ownership provisions.
The operations of the US subsidiary ATC were discontinued on 30 November 2020 and ATC was placed into bankruptcy on 23 December
2020 and de-consolidated as a result.
Accordingly, some or all of these US domiciled tax losses may be limited in future periods or may expire before being able to be applied
to reduce future foreign income tax liabilities.
The benefit of these losses has not been recognised and will only be recognised in the future when it is probable that future taxable
profits will be available against which the benefits of the deferred tax assets can be utilised. In the opinion of the Directors, it is considered
likely that these tax losses will not be available in the future.
30
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
7. Cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Total cash and cash equivalents
8. Trade and other receivables
Trade receivables
Less: allowance for expected credit losses
Total trade and other receivables
Prepayments and other receivables
Security deposits
Total trade and other receivables
UUV Aquabotix Limited | 2020 Annual Report 31
31 December
2020
$
31 December
2019
$
905,823
5,500
911,323
-
-
-
37,265
-
37,265
37,265
255,254
5,000
260,254
7,130
-
7,130
74,883
9,191
84,074
91,204
Allowance for expected credit losses
The Group has not recognised any loss in profit or loss in respect of allowances for expected credit losses for the year ended 31 December 2020
(2019: $nil).
Past due but not impaired
Customers with balances past due but without allowance for expected credit losses amount to $nil as at 31 December 2020 ($nil as at
31 December 2019).
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers based on recent collection
practices.
The ageing of receivables past due but not impaired are as follows:
0 to 3 months overdue
3 to 6 months overdue
Total
9.
Inventories
Raw materials and finished goods
31 December
2020
$
31 December
2019
$
-
-
-
-
7,130
-
7,130
109,834
31
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
10. Property, plant and equipment
Plant and equipment – at cost
Less: accumulated depreciation
UUV Aquabotix Limited | 2020 Annual Report 32
31 December
2020
$
31 December
2019
$
-
-
-
218,286
(185,534)
32,752
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 January
Additions
Disposals
Depreciation
Exchange differences
Deconsolidation
Balance as at 31 December
11. Right-of-use asset
2020
$
32,752
-
(2,668)
(9,163)
-
(20,921)
-
2019
$
130,741
-
(71,259)
(27,098)
368
32,752
On 1 January 2019, the Company adopted AASB 16, Leases. In doing so, a right of use asset of $387,640 and a corresponding lease liability
of the same amount were recognised on the balance sheet on 1 January 2019. Since then, the Company vacated the property and
negotiated a settlement to prematurely terminate this lease with the landlord.
This resulted in an impairment loss the first half of 2019, with a corresponding adjustment to the outstanding lease liability was recognised
in August 2019 to reflect the updated negotiated position between the parties. The agreed settlement terms effectively reduced the total
expected cash outflow related to this lease by approximately $400,000 over the next four years.
Balance at 1 January
Additions – AASB 16
Exchange differences
Less: accumulated depreciation
Less: Impairment
Balance as at 31 December
2020
$
-
-
-
-
-
-
2019
$
-
387,640
9,959
(17,527)
(380,072)
-
As at 31 December 2020, the Company did not have any property, plant and equipment secured under leases.
32
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
12. Current liabilities – trade and other payables
UUV Aquabotix Limited | 2020 Annual Report 33
Trade payables
Accrued expenses
Other payables and accrued expenses
Trade and other current liabilities
13. Employee benefits
Employee benefits – less than 1 year
Total employee benefits
14. Accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the financial year
Foreign exchange translation
31 December
2020
$
31 December
2019
$
-
11,976
226,192
226,192
-
-
157,269
169,245
34,001
34,001
(12,948,832)
(1,347,290)
23,063
(10,539,568)
(2,409,264)
-
Accumulated losses at the end of the financial year
(14,273,059)
(12,948,832)
15. Loan facility and related parties
On 24 March 2019, UUV Aquabotix Limited entered into a non-convertible unsecured credit facility agreement with Long Hill Capital II,
LLC, one of the Group’s shareholders. Under the agreement, Long Hill Capital II, LLC made available up to AUD$200,000 provided that the
Group draw down on the facility within 60 days of entering into the agreement. No fees were incurred in the set-up of this facility, and
interest is charged at a rate of 12% per annum, payable in arrears each quarter. The facility has a maturity date of 20 March 2020.
The Group drew down on the full facility within 60 days of entering into the agreement and subsequently repaid the full amount plus
interest of $4,035 in June 2019.
On January 28, 2020, UUV Aquabotix Limited entered into a non-convertible unsecured credit facility agreement, replacing the above
facility, with Bergen Global Opportunity Fund LP (“the Lender”), a related party to the Company. Under the agreement, the Lender made
available US$248,000 by way of an unsecured credit facility, to be drawn down at its discretion by the Company over the following 12
months subject to it meeting various administrative conditions precedent. A further US$352,000 may be drawn down by mutual
agreement between the Company and the Lender. Initial fees of US$48,000 will be payable if the Company elects to draw down on the
facility. Interest is payable on any drawn down amount at a rate of 14.99%, payable in arrears on a quarterly basis. The facility is available
for a period of 12 months from the date of execution of the agreement. In the event that facility is drawn down, the maturity date for
repayment of the loans is 21 January 2021. As at the date of this report, the facility had not been drawn down on.
The facility with Bergen Global Opportunity Fund LP was never drawn down and was terminated by mutual consent on 23 October 2020.
33
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
16. Financial risk management
UUV Aquabotix Limited | 2020 Annual Report 34
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable and inter-company funding.
Due to the geographical position of the Group and its activities, it is exposed to a variety of financial risks: market risk (including foreign
currency risk), interest rate risk, credit risk and liquidity risk. The Directors’ overall risk management program focuses on enabling the
Group to meet its financial targets and obligations whilst minimising the potential adverse effects on financial performance.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors. These policies
include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits. Finance
identifies, evaluates and mitigates financial risks within the Group's operating units. Finance reports to the Board on a monthly basis.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Market Risk
Foreign currency risk
The Group operates in both Australia and the United States of America. Transactions occur in both AUD and USD and cash and cash
equivalents used to fund working capital requirements are held in both AUD and USD denominated bank accounts.
Transactional currency exposure arises from sales or purchases other than the group entities’ functional currency. Foreign exchange risk
arises from commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the
reporting Group’s functional currency. The Group uses cashflow forecasting to manage its working capital.
The Group is also exposed to foreign currency exchange risk when capital is raised in AUD and transferred to the US entity. The Group
closely monitors foreign currency movements but does not use hedging instruments to manage such risk. In order to protect against
exchange rate movements, throughout the year, the Group held amounts denominated in foreign currencies as cash and cash equivalents.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date were as
follows:
Cash
Trade and other receivables
Total Financial assets
Trade and other payables
Total Financial liabilities
Price risk
The Group is not exposed to any significant price risk.
31 December
2020
$
31 December
2019
$
-
-
-
-
-
45,279
16,320
61,599
(30,167)
(30,167)
Interest rate risk
The Group is not exposed to any significant interest rate risk. The Group does not have any interest-bearing borrowings.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit
limits. The Group 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 Group does not hold any collateral. Credit risk is limited to
major banks.
34
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
16. Financial risk management (continued)
UUV Aquabotix Limited | 2020 Annual Report 35
Liquidity risk
The Group manages liquidity risk by maintaining sufficient liquid assets (mainly cash and cash equivalents) in both Australia and the USA
to be able to pay debts as and when they become due. The Group achieves this through the continual monitoring of cashflows and the
maturity profile of term deposits. The Group can potentially also raise additional capital as required to manage its liquidity risk.
Financial instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial liabilities.
Less than
6 months
$
6-12
Months
$
Between 1
and 2
years
$
Between 2
and 5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount
(assets)/
liabilities
$
Contractual maturities of
financial liabilities
As at 31 December 2020
Trade and other payables
Other financial liabilities
Total
As at 31 December 2019
Trade and other payables
Other financial liabilities
226,192
-
226,192
-
-
-
168,863
12,228
382
-
Total
181,091
382
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
226,192
-
226,192
-
226,192
226,192
169,245
12,228
169,245
12,228
181,473
181,473
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
17. Remuneration of auditor
During the year, the following fees were paid or payable for services provided by the auditor, RSM Australia Partners and its related
practices:
Audit services
Review services
31 December
2020
$
38,500
-
31 December
2019
$
30,000
12,000
Total auditor’s remuneration
38,500
42,000
35
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
18. Key Management Personnel disclosure and related party transactions
Compensation
UUV Aquabotix Limited | 2020 Annual Report 36
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Share-based payments
Total Key Management Personnel compensation
31 December
2020
$
300,314
87,173
387,487
31 December
2019
$
457,168
201,330
658,498
Details of performance shares granted to directors and other members of key management personnel of the Group are included in
Note 22.
Details of the share options granted to directors and other members of key management personnel of the Group are included in Note 24.
Additional detail in respect of remuneration disclosures for key management personnel are provided in the Remuneration Report on
pages 6- 13.
Fees of $44,400 were paid and $2,000 was paid to Azalea Consulting Pty Ltd which is an entity associated with Mr Winton Willesee and
Ms Erlyn Dale for company secretarial services and for the provision of the registered office.
Fees of $708 are payable to Valle Corporate is an entity associated with Mr Winton Willesee and Ms Erlyn Dale for accounting services.
All amounts were charged at standard commercial rates or less.
19. Parent entity financial information
The individual financial statements for the accounting parent entity, UUV Aquabotix Limited, show the following aggregate amounts:
Statement of profit or loss and other comprehensive income
Loss for the year
Total comprehensive loss
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Share Capital
Share option reserve
Accumulated losses
Total Equity
36
31 December
2020
$
31 December
2019
$
(450,948)
(1,085,477)
(450,948)
(1,085,477)
948,588
948,588
(226,192)
(226,192)
6,546,799
6,546,799
(149,593)
(149,593)
722,396
6,397,206
13,779,012
1,216,443
(14,273,059)
9,480,516
1,139,149
(4,222,458)
722,396
6,397,206
UUV Aquabotix Limited | 2020 Annual Report 37
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
19. Parent entity financial information
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
No guarantees have been entered into by the parent entity as at 31 December 2020 or 31 December 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2020 and 31 December 2019.
Capital commitments
The parent entity had no capital commitments as at 31 December 2020 and 31 December 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following:
● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent en ty.
Issued equity
Note
No. of shares
$
Balance at 31 December 2018
Shares issued during the period with regard to capital raising
Shares issued during the period in lieu of Director fees
Shares issued in exchange for services rendered
Balance at 31 December 2019
Placement – January 2020
Placement – March 2020
Placement – April 2020
Rights issue – July 2020
Shares issued in lieu of payment for services
Shares issued in lieu of Director’s fees
Shares issued on conversion of options
Shares issued to CEO in lieu of salary
Shares issued to employees in lieu of salaries
Capital raising costs
37
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
160,000,001
10,191,711
307,937,592
1,609,729
30,296,611
18,750,000
178,750
85,000
516,984,204
12,065,190
77,500,000
87,500,000
59,375,000
77,500
87,500
47,500
1,583,822,997
1,583,823
6,000,000
16,387,300
333,334
28,164,771
12,307,205
6,000
37,500
333
31,546
12,307
-
(170,187)
2,388,374,811
13,779,012
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 38
Note (a)
Note (b)
Note (c)
During the period ended 31 December 2019, the Company undertook capital raisings and issued 307,937,592 ordinary shares,
raising AUD$1,609,729, net of capital raising costs of $163,146. Of these costs, $30,000 was settled in shares as per Note (c)
below.
During the period ended 31 December 2019, the Company issued 30,296,611 shares in lieu of cash payment for Director fees,
totalling $178,750.
During the period ended 31 December 2019, the Company issued 18,750,000 in exchange for services rendered by
professional advisers, with an aggregate deemed value of $85,000.
Note (d)
Issue of 77,500,000 shares at $0.001 to Azalea Investments Pty Ltd (an entity associated with Winton Willesee)
Note (e)
Issue of 87,500,000 shares at $0.001
Note (f)
Issue of 59,375,000 shares at $0.0008 to Azalea Investments Pty Ltd (an entity associated with Winton Willesee)
Note (g)
Issue of 1,583,822,997 shares at $0.001 pursuant to the Prospectus dated 28 July 2020. Shares were issued as follows:
-
-
-
Share subscriptions - 505,552,088 shares to raise $505,552
Shares issued pursuant to Underwriting - 494,447,909 shares to raise $494,448
Share issued pursuant to Rights Issue shortfall - 583,823,000 shares to raise $583,823
Note (h)
Issue of 6,000,000 shares at $0.001 in lieu of services provided by Azalea Consulting Pty Ltd (an entity associated with
Winton Willesee and Erlyn Dale) for $6,000
Note (i)
Issue of 16,387,300 shares at $0.00228 in lieu of Director’s fees to Peter James (former Director) for $25,000 and Rondy
Investments Pty Ltd (an entity associated with Robert Clisdell a former Director) for $12,500
Note (j)
333,334 options exercised at $0.001
Note (k)
Issue of 28,164,771 shares to Whitney Million (Chief Executive Officer) at $0.00112 in lieu of salary of $31,546
Note (l)
Issue of 12,307,205 shares to employees in lieu of salaries and entitlements of $12,307
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.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group'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 Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Group 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 Group 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.
38
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
20. Reserves
Opening balance at 31 December 2018
Share options issued during the year
UUV Aquabotix Limited | 2020 Annual Report 39
Options reserve
$
Foreign exchange
reserve
$
978,893
160,256
37,237
-
Exchange difference on translation of foreign operations
-
(14,174)
Opening balance at 31 December 2019
1,139,149
23,063
Options issued to employees in lieu of salaries
Share option expense recognised during the financial year
Employee share options lapsed and cancelled
25,402
101,595
(49,703)
-
-
-
Deconsolidation of foreign subsidiary (Note 4)
-
(23,063)
Balance at 31 December 2020
1,216,443
-
Nature and purpose of reserves
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. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Share-based payment reserve
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees,
including key management personnel, as part of their remuneration.
39
UUV Aquabotix Limited | 2020 Annual Report 40
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
21. Changes in composition of entity
Opening balances at 1 January 2020
Shares lapsed during the period
Options lapsed during the period
Options issued to Directors and Management
Closing balances at 31 December 2019
Expiry of Class B options
Expiry of Class C options
Options issued pursuant to the Rights Issue
Underwriter options
Class AH options issued
Options Issued to US Employees in lieu of
cash salaries and wages
Options exercised
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
Number of Unlisted
Options
Number of Listed
UUV options
28,500,000
-
-
78,500,000
107,000,000
(10,000,000)
(700,000)
29,687,500
-
-
-
-
-
-
-
696,458,395
359,423,637
-
49,043,979
(333,334)
Number of
Performance
Shares
45,000,000
(15,000,000)
-
-
30,000,000
-
-
Performance shares lapsed during the period
Note 23
(30,000,000)
Closing balances at 31 December 2020
125,987,500
1,104,592,677
-
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
These performance shares lapsed unexercised on 26 April 2019.
These Class A options were issued to all shareholders who subscribed for shares under the Initial Public Offering. The
options had a strike price of $0.22 and an expiry date of 20 April 2019.
78,500,000 Unlisted Options were issued to Directors and Management during the year to 31 December 2019. These
Options were subject to various escrow and vesting conditions relating to length of employment with the Company. In
2018, 13,200,000 of these unlisted options lapsed unexercised as a result of staff leaving the Company.
These options expired during the financial period.
These options were issued pursuant to the prospectus dated 28 July 2020.
These options were issued as free attaching options to shares subscribed for under a placement to an entity associated
with Winton Willesee prior to him becoming a Director.
These options were issued to US based employees in lieu of unpaid cash salaries and wages of $25,402 during the period.
These options were exercised at a strike price of $0.001 for consideration of $333.
22. Performance shares:
The original shareholders of Aquabotix Technology Corporation were historically granted 45,000,000 Performance Shares, each
convertible into one Ordinary Share in UUV Aquabotix Limited upon achievement of various performance milestones, as detailed in the
table below.
During the period ended 31 December 2019, the Class A Performance Shares lapsed unexercised as the conditions required to convert
them into Ordinary Shares were not met.
The Class B and Class C Performance shares lapsed on 30 November 2020 as the Company’s wholly owned US based subsidiary Aquabotix
Technology Corporation (“ATC”) ceased active conduct of its business operations. Subsequently, on 23 December 2020 ATC filed for
Chapter 7 bankruptcy in the United States Bankruptcy Court in the District of Massachusetts.
40
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
UUV Aquabotix Limited | 2020 Annual Report 41
Class
15,000,000 Class A
Performance Shares
15,000,000 Class B
Performance Shares
15,000,000 Class C
Performance Shares
Performance Shares
each share is convertible into one fully paid ordinary share upon the Shares achieving a
30-day volume weighted average price exceeding $0.30 and the Company securing no
less than 20 paying customers of remotely operated underwater vehicles within 24
months of the date the Company is admitted to the Official List.
each share will convert into one fully paid ordinary share upon the Company achieving,
in relation to the Company’s technology, $7,000,000 of cumulative revenue or
$2,500,000 of annual revenue in any given twelve-month period, within 36 months of
the date the Company is admitted to the Official List.
each share is convertible into one fully paid ordinary share upon the Company achieving,
in relation to the Company’s technology, $3,000,000 of cumulative earnings before
interest and taxes (EBIT) or $1,000,000 of annual EBIT in any given financial year, within
36 months of the date the Company is admitted to the Official List.
Number on issue at
31 December 2020
nil
nil
nil
23. Options issued
A share option plan has been established by the Group and approved by shareholders at a general meeting, whereby the Group may, at
the discretion of the Nomination and Remuneration Committee, grant options over ordinary shares in the company to certain key
management personnel of the Group. The options are issued for nil consideration and are granted in accordance with performance
guidelines established by the Nomination and Remuneration Committee.
During the year ended 31 December 2020 there were no options issued under the share option plan.
During the financial year 26,750,000 Class AE options that were issued to directors and management in 2019 lapsed with the balance of
6,000,000 Class AE options remaining vested.
The movement of options during the period is set out in Note 22.
The total options on issue as at 31 December 2020 was 1,203,830,177, comprising 99,237,500 unlisted options and 1,104,592,677 listed
UUVOA options and details are set out on page 15 of the Directors Report.
24. Earnings (loss) per share
(a)
Loss attributable to the owners of UUV Aquabotix Limited
Loss after income tax attributable to the owners of UUV Aquabotix Limited
(1,347,290)
(2,409,264)
31 December
2020
$
31 December
2019
$
(b)
Loss per share
Basic loss per share
Diluted loss per share
Cents
Cents
(0.001)
(0.001)
(0.75)
(0.75)
Number
Number
(c)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic and
diluted earnings per share
1,267,712,828
321,327,466
All performance shares and share options were considered anti-dilutive in the period ended 31 December 2020 and 31 December 2019.
41
Notes to the Financial Statements (Continued)
For the year ended 31 December 2020
25. Contingent liabilities
UUV Aquabotix Limited | 2020 Annual Report 42
During January 2020, the Group learned that a licensor of technology incorporated into the SwarmDiverTM product, Apium Inc.
(“Apium”), a small, privately held U.S. Company, filed a lawsuit against the Company’s subsidiary, Aquabotix Technology Corporation
(“ATC”) in the U.S. District Court, Central District of California in Los Angeles.
The lawsuit includes claims for actual and anticipatory breach of the license agreement, a declaratory judgement that the license is
terminated and that Apium itself has not breached the license, as well as violation of the Defend Trade Secrets Act, a U.S. law often
invoked in licensing disputes.
The Company believes that the lawsuit is completely without merit and that Apium’s actions are themselves a breach of the terms of the
license agreement.
The Company notes that the filing of the bankruptcy automatically stays the action, and a formal Notice of Stay of Proceedings due to
filing of bankruptcy was filed in December in the U.S. District Court, Central District of California in Los Angeles.
The Company intends to seek shareholder approval for the grant of 40 million and 20 million UUVOA options to Peter James and Rob
Clisdell respectively in lieu of cash fees owed at the time of their resignations.
Other than detailed above, as at 31 December 2020 the Company had no contingent liabilities.
26. Reconciliation from loss after income tax to net cash outflow from operating activities
Operating loss for the year after tax
Add/ (deduct) non-cash items- income and expenses
Depreciation
Share option expense
Effects of foreign currency translation
Impairment of Right-Of-Use asset
Lease liabilities release
Loss on disposal of assets
Operating expenses paid in shares
Effect of deconsolidation of subsidiary working capital
Change in operating assets and liabilities
Increase/(decrease) in trade and other receivables
Decrease/(increase) in inventory
(Decrease)/increase in trade and other payables
(Decrease)/increase in other operating liabilities
31 December
2020
$
(1,347,290)
31 December
2019
$
(2,409,264)
9,163
77,294
-
-
-
-
91,789
66,128
53,939
109,834
56,947
(46,229)
44,625
160,256
6,722
380,072
(390,313)
71,096
145,000
-
(1,247)
21,784
(89,955)
54,025
Net cash flows from (used in) operating activities
(928,425)
(2,007,199)
27. Events after the reporting date
The impact of the COVID-19 pandemic is on-going, and it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. Given the company is largely dormant the pandemic is not expected to have any significant impact at all. The situation
is rapidly evolving and could change depending on measures imposed by the Australian Government and other countries, such as
maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected or may significantly affect the results
of the Company’s operations, the results of those operations, or the Company’s state of affairs in future financial years.
42
UUV Aquabotix Limited | 2020 Annual Report 43 43 Directors’ Declaration In the opinion of the Directors: the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 1 to the financial statements; the attached financial statements and notes give a true and fair view of the Group's financial position as at 31 December 2020 and of its performance for the financial year ended on that date; 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 by the Chief Executive Officer and the Chief Financial Officer for the year ended 31 December 2020 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. This declaration is made in accordance with a resolution of the Directors. On behalf of the Directors Winton Willesee Chairman 31 March 2021 INDEPENDENT AUDITOR’S REPORT
To the Members of UUV Aquabotix Limited
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
Opinion
We have audited the financial report of UUV Aquabotix Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 31 December 2020 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the 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.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
44
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matter
How our audit addressed this matter
Deconsolidation of Subsidiary
Refer to Note 5 in the financial statements
On 30 November 2020, the Company’s wholly
owned US based subsidiary, Aquabotix Technology
Corporation (“ATC”) ceased active conduct of its
business operations. Subsequently, on 23
December 2020, ATC filed for Chapter 7 bankruptcy
in the United States Bankruptcy Court in the District
of Massachusetts. Accordingly, ATC has been de-
consolidated as at that date as the Company no
longer has control over ATC.
proceeds were
No
deconsolidation and
forgiven during the year.
received
inter-company
from
this
loan was
We identified the deconsolidation of ATC as a key
audit matter as it is a significant transaction that has
resulted in the deconsolidation of the Group’s only
subsidiary. In addition, the accounting in relation to
this transaction is non-routine and complex.
Share-based payments
Refer to Note 24 in the financial statements
The Group issued share options to directors and
employees during the year. These were equity-
settled options, which management valued using a
Black Scholes model.
Share-based payments are technically complex to
account for and are subject to significant judgement
by management in determining the inputs used to
determine the fair value.
This was considered a key audit matter due to the
technical complexity and judgments required in
determining if the transactions were appropriately
accounted for in accordance with AASB 2 Share
Based Payments.
Our audit procedures in relation to deconsolidation of
subsidiary included:
Obtaining a detailed understanding of
the
transaction and related accounting entries in
that
relation
occurred in December 2020;
the deconsolidation of ATC
to
Reviewed the ASX announcements and other
documentation in relation to ATC’s filing for
bankruptcy the ensure that control was effectively
lost prior to the financial year end;
Reviewed the Company’s consolidation workings
including the underlying accounting records of
ATC at the time control was lost, and assessed
related
that
adjustments were
the
requirements of AASB 10, Consolidated Financial
Statements; and
treatment and
in accordance with
the accounting
Assessed the presentation and disclosures of
deconsolidation in the financial statements to
evaluate compliance with the requirements of
Australian Accounting Standards.
Our audit procedures in relation to share-based
payments included:
Making inquiries of management and reviewing
relevant agreements to understand the share-
based payment schemes established in the year.
Critically evaluate the key assumptions used in
determining the fair value of the share options at
grant date having consideration of the market, the
share price, the expected volatility, the vesting
period, and the number of options expected to
vest.
Recalculating
the
Statement of Profit or Loss and the related balance
in the Reserves.
the estimated charge
to
Reviewing the accounting treatment adopted by
management and ensuring it is in line with the
treatment set out in AASB 2 Share Based
Payments.
Considering
the Group’s
the adequacy of
disclosures in respect of the judgements taken in
the valuation models.
45
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 31 December 2020, but does not include the financial report and
the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 13 of the directors' report for the year ended
31 December 2020.
In our opinion, the Remuneration Report of UUV Aquabotix Limited, for the year ended 31 December 2020,
complies with section 300A of the Corporations Act 2001.
46
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.
RSM AUSTRALIA PARTNERS
G N Sherwood
Partner
Sydney, NSW
Dated: 31 March 2021
47
ASX ADDITIONAL INFORMATION
UUV Aquabotix Limited | 2020 Annual Report 48
The shareholder information set out below was applicable as at 26 February 2021.
1.
Quotation
Listed securities in UUV Aquabotix Ltd are quoted on the Australian Securities Exchange under ASX code UUV (Fully Paid
Ordinary Shares) and UUVOA (Listed Options).
2.
Voting Rights
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
(a)
(b)
at a meeting of members or classes of members each member entitled to vote may vote in person or by
proxy or by attorney; and
on a show of hands, every person present, who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options on issue.
3.
Distribution of Equity Securities:
i)
Fully paid Ordinary Shares
Shares Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
Holders
32
27
52
235
1,391
1,737
Units
3,482
110,340
451,775
11,694,420
2,376,114,794
%
-
-
0.02
0.49
99.49
2,388,374,811
100.00%
On 26 February 2021, there were 472 holders of unmarketable parcels of less than 28,856,645
ordinary shares (based on the closing share price of $0.003).
ii)
UUVOA Listed Options exercisable at $0.001 on or before 28 July 2023
Shares Range
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
4
5
1
33
199
242
Units
337
15,129
6,000
1,770,026
1,102,801,185
1,104,592,677
%
-
-
-
0.16
99.84
100.00%
iii)
Unlisted Options exercisable at $0.11 on or before 18 April 2021
UUV Aquabotix Limited | 2020 Annual Report 49
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 1,500,000 options
1,500,0001
1,500,000
100.00
100.00%
iv)
Unlisted Options exercisable at $0.11 on or before 18 April 2022
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 1,500,000 options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 1,500,000 options
1,500,0001
1,500,000
100.00
100.00%
1,500,0001
1,500,000
100.00
100.00%
v)
Unlisted Options exercisable at $0.11 on or before 18 April 2023
Shares Range
Holders
Units
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
vi)
Unlisted Options exercisable at $0.11 on or before 18 April 2024
UUV Aquabotix Limited | 2020 Annual Report 50
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 1,500,000 options
1,500,0001
1,500,000
100.00
100.00%
vii)
Unlisted Options exercisable at $0.11 on or before 30 May 2021
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1,000,0001
1,000,000
100.00
100.00%
1Holders who hold more than 20% of securities are:
Rondy Investments Pty Ltd – 1,000,000 options
viii)
Unlisted Options exercisable at $0.11 on or before 18 July 2021
Shares Range
Holders
Units
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
2
2
1Holders who hold more than 20% of securities are:
Matthew Moore – 200,000 options
Crystal Glenn – 200,000 options
400,0001
400,000
100.00
100.00%
ix)
Unlisted Options exercisable at $0.11 on or before 18 July 2021
UUV Aquabotix Limited | 2020 Annual Report 51
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
2
2
1Holders who hold more than 20% of securities are:
Matthew Moore – 200,000 options
Crystal Glenn – 200,000 options
400,0001
400,000
100.00
100.00%
x)
Unlisted Options exercisable at $0.11 on or before 18 July 2021
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
2
2
1Holders who hold more than 20% of securities are:
Matthew Moore – 200,000 options
Crystal Glenn – 200,000 options
400,0001
400,000
100.00
100.00%
xi)
Unlisted Options exercisable at $0.11 on or before 21 December 2021
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Tricity Partners Pty Limited – 300,000 options
300,0001
300,000
100.00
100.00%
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
xii)
Unlisted Options exercisable at $0.0008 on or before 30 June 2022
UUV Aquabotix Limited | 2020 Annual Report 52
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Azalea Investments Pty Ltd – 29,687,500 options
29,687,5001
100.00
29,687,500
100.00%
xiii)
Unlisted Options exercisable at $0.11 on or before 2 November 2021
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Ian Estaphan Owen – 200,000 options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Ian Estaphan Owen – 200,000 options
200,0001
200,000
100.00
100.00%
200,0001
200,000
100.00
100.00%
xiv)
Unlisted Options exercisable at $0.11 on or before 2 November 2021
Shares Range
Holders
Units
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
xv)
Unlisted Options exercisable at $0.11 on or before 2 November 2021
UUV Aquabotix Limited | 2020 Annual Report 53
-
-
-
-
-
-
-
-
-
-
-
-
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Ian Estaphan Owen – 200,000 options
200,0001
200,000
100.00
100.00%
xvi)
Unlisted Options exercisable at $0.005 on or before 24 December 2023
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
7
7
32,750,0001
100.00
32,750,000
100.00%
1Holders who hold more than 20% of securities are:
Peter Richard James – 10,000,000 options
Rondy Investments Pty Ltd – 7,000,000 options
xvii)
Unlisted Options exercisable at $0.010 on or before 24 December 2023
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
7
7
1Holders who hold more than 20% of securities are:
Peter Richard James – 10,000,000 options
Rondy Investments Pty Ltd – 7,000,000 options
32,750,0001
100.00
32,750,000
100.00%
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
xviii)
Unlisted Options exercisable at $0.015 on or before 24 December 2023
UUV Aquabotix Limited | 2020 Annual Report 54
-
-
-
-
-
-
-
-
-
-
-
-
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 6,500,000 options
6,500,0001
6,500,000
100.00
100.00%
xix)
Unlisted Options exercisable at $0.020 on or before 24 December 2023
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Whitney Gayle Million – 6,500,000 options
6,500,0001
6,500,000
100.00
100.00%
xx)
Unlisted Options exercisable at $0.30 on or before 28 April 2021
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
3
3
1Holders who hold more than 20% of securities are:
Peter Richard James – 3,000,000 options
Tricity Partners Pty Limited – 2,000,000 options
5,700,0001
5,700,000
100.00
100.00%
%
-
-
-
-
%
-
-
-
-
%
-
-
-
-
xxi)
Unlisted Options exercisable at $0.30 on or before 28 April 2022
UUV Aquabotix Limited | 2020 Annual Report 55
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
Peter Richard James – 3,000,000 options
4.
Substantial Shareholders
-
-
-
-
%
-
-
-
-
3,000,0001
3,000,000
100.00
100.00%
Notwithstanding the Company has not received a notice of ceasing to be a substantial shareholder from either Deniz Diogo
or Durval Tarvares (both of whom lodged notices of becoming substantial shareholders in 2017 with 6,798,457 and
34,839,787 shares respectively), the Company does not believe those holders to be substantial shareholders and will not
include them in further disclosures.
5.
Restricted Securities
There are no restricted securities on the register as at 26 February 2021.
6.
On market buy-back
There is currently no on market buy-back in place.
7.
Twenty Largest Shareholders:
The twenty largest shareholders of the Company’s quoted securities as at 26 February 2021 are as follows:
UUV Aquabotix Limited | 2020 Annual Report 56
UUV Fully Paid Ordinary Shares:
Name
No. of Shares
SCINTILLA STRATEGIC INVESTMENTS LIMITED
100,000,000
1
2
3
4
SILVERINCH PTY LIMITED
COMSEC NOMINEES PTY LIMITED
BOND STREET CUSTODIANS LIMITED
5 MR MICHAEL SCHLOMAN
6
6
7
8
HONGMEN PTY LTD
8TIVE TRADING PTY LTD
PETER RICHARD JAMES
R J & A INVESTMENTS PTY LTD
9 WHITNEY GAYLE MILLION
10 MR PHILLIP JAMES RAE
84,723,000
73,158,253
55,495,612
50,000,000
40,000,000
40,000,000
32,676,281
30,000,000
28,164,771
25,000,000
10 MR DRAGOSLAV JEVTIC & MRS NICOLE JEVTIC
25,000,000
11 AC YOUNG PTY LTD
12 AQUABOTIX TECH. CORP. 401(K)
13 AMAX PACIFIC PTY LIMITED
14 MR DANIEL ROSS BAOHM
15
SCINTILLA CAPITAL PTY LTD
15 RUI LONG INTERNATIONAL PTY LTD
16 CITICORP NOMINEES PTY LIMITED
17 MR MOHAMMAD MANZUR MURSHED
18 MR HIEN QUANG TRINH
19 MR ADRIAN TREVOR BANDUCCI
20 RONDY INVESTMENTS PTY LTD
24,723,000
23,049,813
22,500,000
22,000,000
20,000,000
20,000,000
19,925,263
18,500,000
18,000,000
16,000,000
15,700,407
%
4.19
3.55
3.06
2.32
2.09
1.67
1.67
1.37
1.26
1.18
1.05
1.05
1.04
0.97
0.94
0.92
0.84
0.84
0.83
0.77
0.75
0.67
0.66
Total
804,616,400
33.69
8.
Twenty Largest Option holders:
The twenty largest option holders of the Company’s quoted securities as at 26 February 2021 are as follows:
UUV Aquabotix Limited | 2020 Annual Report 57
UUVOA Listed Options:
Name
1
2
3
HAMMERHEAD HOLDINGS PTY LTD
GEORDIE BAY HOLDINGS PTY LTD
UPSKY EQUITY PTY LTD
4 MR MICHAEL FRANK MANFORD
No. of Shares
96,000,000
75,476,806
66,666,666
60,903,636
5 MR DRAGOSLAV JEVTIC & MRS NICOLE JEVTIC
50,000,000
6
LONGREACH 52 PTY LTD
7 WHITNEY GAYLE MILLION
38,666,666
35,000,000
8
9
CHRISTIE JAMES FUNDS MANAGEMENT PTY LTD
32,379,966
SILVERINCH PTY LIMITED
28,241,000
10
SCINTILLA STRATEGIC INVESTMENTS LIMITED
26,666,667
11
LOKTOR HOLDINGS PTY LTD
11 AC YOUNG PTY LTD
12 MR ARJUNAN SUNDARAMOORTHY
13 HALE COURT HOLDINGS PTY LTD
14 MR JASON TANG
14 MR JASON PETER WILLARD
15 RONDY INVESTMENTS PTY LTD
16 AZALEA INVESTMENTS PTY LTD
17
PERSHING AUSTRALIA NOMINEES PT Y LTD
18 MR GREGORY MILTS
19 MR MARK ANTHONY BROGLIO
20 MRS LISA MARLANE ROBERTS
24,907,666
24,907,666
22,500,000
21,403,302
20,000,000
20,000,000
18,277,934
16,666,666
15,189,860
13,000,000
12,500,000
12,484,745
%
8.69
6.83
6.04
5.51
4.53
3.50
3.17
2.93
2.56
2.41
2.25
2.25
2.04
1.94
1.81
1.81
1.65
1.51
1.38
1.18
1.13
1.13
Total
731,839,246
66.25