WEEBIT NANO LTD
ACN: 146 455 576
ACN 146 455 576
ANNUAL REPORT
for the year ended 30 June 2019
CONTENTS
WEEBIT NANO LTD
ACN: 146 455 576
CORPORATE INFORMATION ..................................................................................................................... 1
DIRECTORS’ REPORT ................................................................................................................................. 2
OPERATING AND FINANCIAL REVIEW ........................................................................................................6
REMUNERATION REPORT (AUDITED) ....................................................................................................... 11
CORPORATE GOVERNANCE STATEMENT ................................................................................................. 20
AUDITOR’S INDEPENDENCE DECLARATION .............................................................................................. 24
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................................................ 25
STATEMENT OF FINANCIAL POSITION ...................................................................................................... 26
STATEMENT OF CHANGES IN EQUITY ...................................................................................................... 27
STATEMENT OF CASH FLOWS ..................................................................................................................28
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................. 29
DIRECTORS’ DECLARATION ...................................................................................................................... 55
INDEPENDENT AUDIT REPORT ................................................................................................................. 56
ASX ADDITIONAL INFORMATION ............................................................................................................. 60
This Annual Report covers Weebit Nano Ltd (“WBT” or the “Company”) as a Group consisting of Weebit
Nano Ltd and its subsidiaries, collectively referred to as the “Group”. The financial report is presented in
Australian currency.
WBT is a company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Weebit Nano Ltd
C/- Mertons Corporate Services Pty Ltd
Level 7
330 Collins Street
Melbourne VIC 3000
CORPORATE INFORMATION
WEEBIT NANO LTD
ACN: 146 455 576
Directors:
David Perlmutter
Chairman
Jacob Hanoch
Managing Director and CEO
Fred Bart
Non-Executive Director
Yossi Keret
Non-Executive Director
Ashley Krongold
Non-Executive Director
Yoav Nissan-Cohen
Executive Director
Atiq Raza
Non-Executive Director
Company Secretaries:
Mark Licciardo
Tamara Barr
Auditors:
Nexia Perth Audit Services Pty Ltd
Level 3, 88 William Street
PERTH WA 6000
Registered & Principal Office:
C/- Mertons Corporate Services Pty Ltd
Level 7
330 Collins Street
Melbourne VIC 3000
+61 3 8689 9997
Postal Address:
C/- Mertons Corporate Services Pty Ltd
Level 7
330 Collins Street
Melbourne VIC 3000
Home Stock Exchange:
Australian Securities Exchange Limited
Level 40
152-158 St Georges Terrace
PERTH WA 6000
ASX Code:
WBT
Share Registry:
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth, WA 6000 Australia
Website:
Bankers:
www.weebit-nano.com
Westpac Banking Corporation
108 Stirling Highway
NEDLANDS WA 6009
Solicitors - Sydney:
King & Wood Mallesons
Level 61
Governor Phillip Tower
1 Farrer Place
Sydney NSW 2000
1
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT
Your Directors have pleasure in submitting their report on the Company and its subsidiaries for the year ended
30 June 2019.
DIRECTORS
David ‘Dadi’ Perlmutter - Chairman (Appointed 01/08/2016)
EXPERIENCE AND EXPERTISE
Mr David (Dadi) Perlmutter is focused on investment in growing technology companies in Israel. Mr Perlmutter
also serves as a member of the Board of Directors of Mellanox Technologies, chairs various non-profit
organisations, is a member of the Board of Governors of the Technion – Israel Institute of Technology and sits
on the board of directors of various startups.
Mr Perlmutter served until early 2014 as Executive Vice President and General Manager of the Intel
Architecture Group (IAG) and chief product officer of Intel Corporation. He was responsible for the business
and development of Intel’s platform solutions for all computing and communication segments including
datacenters, desktops, laptops, handhelds, embedded devices, and computer electronics. In his tenure he
grew the business from $35 billion in 2008 to more than $50 billion in 2013, managed 35,000 people
worldwide and made investments and acquisitions exceeding $2.5 billion.
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Mellanox Technologies (MLNX (NASDAQ))
Jacob ‘Coby’ Hanoch - Managing Director and CEO (Appointed 01/10/2017)
EXPERIENCE AND EXPERTISE
Mr Jacob (Coby) Hanoch comes to Weebit Nano with 15 years’ experience in engineering and engineering
management and 24 years’ experience in sales management and executive roles. Coby was Vice President
Worldwide Sales at Verisity where he was part of the founding team and grew the company to over $100M in
annual sales which facilitated its acquisition by Cadence Design Systems (NASDAQ: CDNS).
He was also Vice President Worldwide Sales at Jasper, doubling sales in 3 years before it was acquired by
Cadence. As CEO of PacketLight, Coby helped steer the company away from bankruptcy. Coby set up a
consulting company, EDAcon Partners, which helps startups define their corporate strategies, set up their
worldwide sales channel and raise capital.
Coby holds a Bachelor of Science in Systems Design from Technion – Israel Institute of Technology.
NO OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Fred Bart - Non-Executive Director (Appointed 05/03/2018)
EXPERIENCE AND EXPERTISE
Mr. Fred Bart has an extensive track record of business success behind him and brings decades of business
know-how to Weebit Nano. Starting his career in the bed linen retail and fashion industries, Fred’s business
interests diversified to include genetics, securities, electro-optics, hospitality and more. In the 1980s he was
responsible for transforming his family business from a small operation to a 1,200 employee corporation with
a $200 million turnover. He acquired and turned around several businesses during his impressive career,
expanding their operations, growing revenue and helping them to become publicly listed. Currently, he is
Chairman and major shareholder of Electro Optics Systems Limited (ASX: EOS) and Chairman of Audio Pixels
Holdings Limited (ASX: AKP). Mr Bart also holds a wide range of private companies worldwide.
2
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Electro Optics Systems Limited – Chairman
Audio Pixels Holdings Limited – Chairman
Yossi Keret- Non-Executive Director (Appointed 01/08/2016)
EXPERIENCE AND EXPERTISE
Mr Yossi Keret has extensive managerial and financial experience and has led a variety of international
companies in different fields including industrial, financing, biotech and high-tech startups both in Europe and
the USA. Mr Keret has a vast experience in public and private companies and took a major part in M&A
negotiations and implementation as well as in complex international tax planning. Mr Keret has played a major
part in initial public offerings on NASDAQ and has led successful private equity raising for public companies.
Mr Keret was formerly the Managing Director and CEO of Weebit Nano Limited and announced his resignation
for personal reasons on 30 June 2017, effective 30 September 2017 when he became a non-executive director.
Yossi currently serves as the CEO of Nanorobotics Ltd, an Israeli Biotech company. Yossi also serves as a board
member in Wize Pharma a traded company on the OTCQB (WIZP).
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Wize Pharma (OTCQB(WIZP) – Non-Executive Director
Ashley Krongold – Non-Executive Director (Appointed 29/09/2016)
Mr Ashley Krongold is the CEO of The Krongold Group, a third-generation, family-run group of companies
based in Melbourne, Australia with businesses spanning various industries. Prior to Krongold Group, Ashley
spent 15 years in the Investment Banking and Accounting industries. He was a founding member of Investec
Bank Australia, worked at William Buck Chartered Accountants, ANZ Corporate Finance (London) and ANZ
Private Bank (Australia).
OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
Dotz Nano Limited – Non-Executive Director
Dr Yoav-Nissan Cohen – Executive Director (Appointed 15/02/2018)
Dr Yoav Nissan-Cohen’s career covers nearly 40 years of scientific research, technology development and
executive management in the hi-tech industry. He is currently Chairman and CEO of Zullavision, a company
which leverages Israeli technologies to provide innovative solutions for film and TV productions.
Yoav received his PhD researching non-volatile memories, under the supervision of Prof Dov Frohman, the
inventor of the first non-volatile memory technology.
in
He started his illustrious career as a research scientist in GE’s R&D centre in New York where he studied the
use of silicon dioxide in semiconductor memory devices. He then led the spin-off of National Semiconductor’s
fabrication facility
Israel, establishing Tower Semiconductor, a Nasdaq-listed, global specialty
semiconductor foundry leader with a market cap of US$3.4 billion, where he served as CEO for nine years. Dr.
Nissan-Cohen also played a key role in establishing a non-volatile technology startup, Saifun Semiconductor,
which was subsequently sold to Spansion. After two years in the venture capital industry, he returned to his
entrepreneurial origins taking up Chairman and CEO positions in Amimon which provides wireless
transmissions of HD Video at zero latency. Dr. Nissan-Cohen holds a PhD in Applied Physics where his focus
was on semiconductor device physics.
NO OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
3
DIRECTORS’ REPORT (continued)
Atiq Raza – Non-Executive Director (Appointed 01/07/2019)
WEEBIT NANO LTD
ACN: 146 455 576
EXPERIENCE AND EXPERTISE
Atiq Raza is currently the Chairman and CEO of Virsec, a next generation Cybersecurity software company.
He has served as Chairman of the board at Validity, a biometric solutions company acquired by Synaptics and
was also on the board of Seeo, a next generation Li-ion battery company acquired by Bosch. Atiq served on
the Stanford University School of Engineering Advisory Council for eight years until 2016.
Atiq Raza is an industry veteran and has been working in engineering leadership and senior management
positions for the past thirty-two years. He was Chairman and CEO of NexGen, the first company to challenge
Intel in microprocessors. NexGen became a public company and subsequently was acquired by AMD for
approximately $850 million in AMD stock. Atiq became the President and COO of AMD and served on its Board
of Directors. At AMD he laid the foundation of its processor business and brought the AMD-K6 and Athlon
products to market and established the Opteron 64-bit instruction set architecture. Prior to NexGen, Atiq held
various management positions at VLSI technology Incorporated, most notably the president of Technology
Centers.
Post AMD, Atiq founded Raza Microelectronics Incorporated (RMI). RMI was acquired by NetLogic in October
2009 and Atiq served as Chief Technology Advisor to NetLogic. NetLogic in turn was acquired by Broadcom
on the strength of the RMI Processor.
Atiq has been on the boards of several successful start-ups including Mellanox (now a public company), SiByte
(acquired by Broadcom for $2.2 billion), Siara (acquired by Redback for $4 billion), VxTel (acquired by Intel for
$500 million) and Magma (now a public company).He has several degrees, including his Bachelor’s degree
with honors in Physics from Punjab University, with a double bachelor’s degree in Philosophy, his Bachelor’s
degree in Electrical Engineering with honours from the University of London, and his Master’s degree in
Materials Science & Engineering from Stanford University.
NO OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES
COMPANY SECRETARY
Mark Licciardo (Appointed 01/02/2017)
Mark Licciardo is Managing Director of Mertons Corporate Services Pty Ltd (Mertons) which provides company
secretarial and corporate governance consulting services to ASX listed and unlisted public and private
companies.
As a former Company Secretary of ASX 50 companies, Transurban Group and Australian Foundation
Investment Company Limited, his expertise includes working with Boards of Directors in the areas of corporate
governance, business management, administration, consulting and company secretarial matters. Mark is also
an experienced Chairman and non-executive Director of a number of ASX listed public and private companies.
Mark holds a Bachelor of Business Degree (Accounting) from Victoria University and a Graduate Diploma in
Company Secretarial Practice, is a Fellow of the Australian Institute of Company Directors, the Governance
Institute of Australia and the Institute of Company Secretaries and Administrators.
4
FORMER SECRETARIES DURING THE YEAR ENDED 30 JUNE 2019
Adam Sutherland (Resigned 07/05/2019)
WEEBIT NANO LTD
ACN: 146 455 576
Adam Sutherland is an experienced corporate governance professional and is Company Secretary for a
number of ASX listed entities. He has expertise in corporate compliance obligations, including ASX and ASIC
requirements. Currently a Corporate Governance Advisor at Mertons Corporate Services, Adam has also held
legal support and corporate compliance roles with Crown Resorts Limited and Crown Melbourne Limited
He holds an Advanced Diploma of Business (Legal Practice) from RMIT and Certificate in Corporate
Governance from the Governance Institute of Australia.
Tamara Barr (Appointed 21/08/2019)
Tamara Barr has extensive experience as a Company Secretary, working predominantly within the financial
services sector for both Australian ASX listed companies and UK unlisted companies. Her experience includes
leading a team of company secretaries for a prominent Lloyd’s of London insurance company, Assistant
Company Secretary for Australia’s largest listed investment company (Australian Foundation Investment
Company), and its sister companies, and providing company secretarial services to corporate finance clients.
As a corporate governance professional, she has solid experience in due diligence, corporate finance
administration, market research, investor relations and restructuring (procedure and process development).
Tamara is currently a Corporate Governance Advisor and Company Secretary to various public and private
companies.
5
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
PRINCIPAL ACTIVITIES
Weebit Nano Ltd (“WBT” or the “Company”) develops a next generation Non-Volatile Memory using a
Resistive RAM (ReRAM) technology based on Silicon Oxide (SiOx).
On 24 November 2017 Weebit Nano Israel, a wholly owned subsidiary, incorporated a 100% held R&D
subsidiary in France- Weebit Nano France.
RESULTS
As the group is in the research and development stage it does not yet generate revenue. The Loss for the year
attributable to members of the Company for the year ended 30 June 2019 amounted to $6,693,803 (2018-
$4,301,869). The loss mainly reflects the research and development activities of the Group as well as
administration costs.
DIVIDENDS
No dividends were paid or declared during the year or in the period from the year end to the date of this
report.
OPERATING AND FINANCIAL REVIEW
Overview
As described above, the Company’s strategy is to develop a next generation Non-Volatile Memory made of
Silicon Oxide (SiOx).
The Company, through its R&D French subsidiary, signed a collaboration agreement with CEA-Leti (Leti), a
leading French microelectronics research institute, for the development and prototyping of advanced ReRAM
memories based on switching SiOx materials. This created a team of highly-skilled scientists based in a world-
class facility to further develop the technology.
The first phase of development started in mid-September 2016, which was the development and engineering
of the base technology, bringing it to a production-level geometry of 40 nanometers and demonstrating an
initial 1 Mb (Mega-bit) memory array.
In May 2018 the agreement with Leti was extended to enable improving the “baseline parameters” bringing
the memory array closer to the level required for production. In May 2019 the Company announced it has
reached technical results at the forefront of the market which enabled it to engage with an initial potential
customer. The Company is now in the process of adapting its technology to the specification given by this
potential customer.
The Company has also announced it has registered 3 patents related to its technology.
6
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
Financial Position
The financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the normal course of
business.
The Group has incurred a loss for the year ended 30 June 2019 of $6,693,803, (2018- Loss of $4,301,869) and
experienced net cash outflows from operating activities of $5,745,444 (2018: $3,454,282). As at 30 June
2019 the Group had cash on hand of $1,670,912 (2018: $3,356,748) and net working capital of $1,522,767
(2018: $3,402,537). The loss mainly reflects the research and development activities of the Group, as well as
administration costs.
Management has prepared a cash flow forecast for 14 months from the commencement of the 2020 financial
year. The directors are confident that, subject to being able to raise further capital, the Group will be able to
continue its operations as a going concern. The directors also carefully manage discretionary expenditure in
line with the Group’s cash flow.
Subsequent to year-end and as disclosed to the ASX on 27 August 2019, the Company received commitments
from existing and new wholesale and sophisticated investors to place approximately 6.4 million new ordinary
shares to raise $2.5 million. In addition, the company is also expecting receipt of approximately AU$1.5 million
in respect of the 2018 R and D claim lodged in France (not provided for in the attached financial statements
and as disclosed in note 3(s) and note 6) which will further increase the company’s funding.
Based on the matters described above, the Directors consider the going concern basis of preparation to be
appropriate.
Financial review
As the group is in the research and development stage it does not yet generate revenue. The Loss for the
year ended 30 June 2019 was $6,693,803 (2018: $4,301,869).
The Loss for the year ended 30 June 2019 mainly comprised the following:
Research and development
$ 3,766,411
For the development process of Non-Volatile
Memory made of Silicon Oxide.
Cost of development with Leti was $2,556,092 in
2019 (2018: $816,579).
is entitled to receive
Weebit Nano France
Research and Development grants (tax refunds)
from the French government. Such grants are
recognised as revenue upon receipt. During 2018,
Weebit Nano France received grants of $388,191
which partly offsets the R&D expenses. The 2019
grant has not yet been received.
R&D expenses include $427,147 for share based
compensation (2018: $203,530).
General and Administrative
$ 3,114,453
Of which $636,686 was
compensation (2018: $1,269,261)
for share based
7
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
As at 30 June 2019, the total current assets of the group were $1,891,933 (2018: $3,914,139) out of which
$1,670,912 (2018-$3,356,748) was cash and cash equivalents. Total assets were $1,973,601 (2018:
$4,005,966).
Total liabilities (trade and other payables) as at 30 June 2019 were $369,166 (2018: $511,602).
Total Equity as at 30 June 2019 was $1,604,435 (2018: $3,494,364). The decrease in Equity is mainly due to
the 2019 Comprehensive loss, offset by share issuance, net of capital raising costs.
Net cash used in operating activities for the year ended 2019 was $5,745,444 (2018: $3,454,282), mainly in
respect of payments to suppliers, consultants and employees. Net cash flows provided by financing activities
for the year ended 2019 were $4,061,262 from share issuance, net of capital raising costs (2018: $5,169,682).
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Weebit Nano is currently focused on the adaptation of its technology to the specification given by the first
potential customer. It is engaging with additional potential customers and partners as part of its move from
development to commercialisation and productisation. It will also continue to develop the technology with a
focus on moving to the more advanced 28nm node on 300mm wafers.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 1 July 2019 Atiq Raza was appointed to the Board of directors as a non-executive director. Independently,
Yossi Keret will retire from the board of directors at the next annual general meeting.
On 14 August 2019 the Board of directors approved the grant of 160,000 options and 128,000 performance
rights to Mr. Atiq Raza. This grant is pending shareholder approval at the next annual general meeting.
On 14 August 2019 the Board of directors approved the grant of options to directors and employees. The
options granted to directors are pending shareholder approval at the next annual general meeting.
On 12 August 2019 the company signed a letter of intent with XTX technology (a Chinese provider of high
quality memory solutions for consumer electronics, industrial embedded system, telecom and networking
markets), to cooperate in investigating ways in which XTX can use Weebit’s technology in its products.
On 27 August 2019, the Company announced to the ASX that it had received commitments from existing and
new wholesale and sophisticated investors of $2.5 million.
ENVIRONMENTAL REGULATION
The Group’s operations are not subject to environmental regulations in the jurisdictions in which it operates.
8
WEEBIT NANO LTD
ACN: 146 455 576
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company has paid a premium of $70,000 (2018: $60,519) excluding GST to
insure the Directors and officers of the Company for a 12 months period.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Company, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such
liabilities that arise from conduct involving a willful breach of duty by the officers or the improper use by the
officers of their position or of information to gain advantage for themselves or someone else or to cause
detriment to the Company.
9
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
Details of relevant interests of current Directors in Weebit Nano’s shares as at the date of this report are as
follows:
Director
Held Directly Held Indirectly Held Directly Held Indirectly Held Directly
Held Indirectly
Shares
Options
Performance Rights
Dadi Perlmutter
Coby Hanoch
Fred Bart
Yossi Keret
Ashley Krongold
Yoav Nissan-Cohen
Atiq Raza
TOTAL
97,977
45,641
-
-
-
-
-
143,618
1,153,500
-
233,143
753,500
1,429,150
28,572
-
3,597,865
800,000
1,520,000
160,000
-
-
160,000
-
2,640,000
-
-
-
-
-
160,000
-
160,000
-
300,000
128,000
-
-
88,000
-
516,000
-
180,000
-
-
-
88,000
-
268,000
On 8 August 2019 the Board preapproved the grant of options and performance rights to Mr Atiq Raza. On
14 August 2019 the Board preapproved the grant of additional options to several Directors. These grants are
subject to approval by the Shareholders of the Company and thus are not included in the above table.
MEETINGS OF DIRECTORS
Set out below are details of the number of Board meetings held by Weebit Nano during the 2019 financial
year with each director’s attendance details.
Dadi Perlmutter
Coby Hanoch
Fred Bart
Yossi Keret
Ashley Krongold
Yoav Nissan-Cohen
Board Meetings
Held
23
23
23
23
23
23
Attended
20
23
20
21
20
21
Under Weebit Nano’s Constitution, documents containing written resolutions assented to by Directors are to
be taken as a minute of a meeting of Directors. There was one written resolution assented to by the Board
this financial year.
10
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and Key Management Personnel
of the Company for the year ended 30 June 2019. The information contained in this report has been audited
as required by section 308(3C) of the Corporations Act 2001.
This remuneration report details the remuneration arrangements for key management controlling the major
activities of the Company and the Group, directly or indirectly, including any director (whether executive or
otherwise) of the parent company, and includes those executives in the Parent and the Group receiving the
highest remuneration.
Key Management Personnel
Directors:
Mr David Perlmutter (Chairman)
Mr Jacob Hanoch (CEO and MD)
Mr Fred Bart (Non-Executive Director)
Mr Yossi Keret (Non-Executive Director)
Mr Ashley Krongold (Non-Executive Director)
Dr Yoav Nissan-Cohen (Executive Director)
Mr Atiq Raza (Non-Executive Director) (appointed on 01/07/2019)
Remuneration Policy
The Company’s performance relies heavily on the quality of its Key Management Personnel (KMP) which
currently consists of directors only. The Company has therefore designed a remuneration policy to align
director and executive reward with business objectives and shareholder value.
The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain
high calibre management personnel and directors to run and manage the Group.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director and any
executive remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board policy is to remunerate non-executive Directors at market rates for comparable companies for
time, commitment and responsibilities. The Board determines payments to the non-executive Directors and
reviews their remuneration annually, based on market practice, duties and accountability. Independent
external advice is sought when required.
The maximum aggregate amount of annual fees that can be paid to non-executive Directors is subject to
approval by shareholders at the Annual General Meeting (currently $300,000).
Fees for non-executive Directors are not linked to the performance of the Group. However, to align Directors’
interests with shareholder interests, the Directors are encouraged to hold shares in the Company and are
able to participate in employee incentive option plans that may exist from time to time.
Executive Remuneration
Executive Remuneration currently consists of fixed remuneration only, and the board is considering variable
remuneration (comprising short-term and long-term incentive schemes).
11
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
WEEBIT NANO LTD
ACN: 146 455 576
Fixed Remuneration
The Company’s performance relies heavily on the quality of its Key Management Personnel. The Company
has therefore designed a remuneration policy to align director and executive reward with business objectives
and shareholder value.
The fixed remuneration of the Company’s Key Management Personnel is detailed in page 13.
Variable Remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and directors
and key management personnel. Currently this is facilitated through bonus plans and through the issue of
options and performance rights to key management personnel to encourage the alignment of personal and
shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth.
Directors and executives may be issued options to encourage the alignment of personal and shareholder
interests. Options and performance rights issued to Directors may be subject to market-based price hurdles
and vesting conditions and the exercise price of options is set at a level that encourages the Directors to focus
on share price appreciation. The Company believes this policy will be effective in increasing shareholder
wealth. Key Management Personnel are also entitled to participate in the employee share and option
arrangements.
The Board may exercise discretion in relation to approving incentives such as options. The policy is designed
to reward key management personnel for performance that results in long- term growth in shareholder value.
Remuneration of Directors and Executives
Details of the remuneration of the Directors and the key management personnel (as defined in AASB 124
Related Party Disclosures) of Weebit Nano Ltd are set out in the following tables.
12
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
Key management personnel of Weebit Nano Limited
2019
Short Term
Benefits
Key Management
Personnel
Salary
and
Fees
$
Non-
Monetary
$
David Perlmutter
96,147
Jacob Hanoch
471,761
Fred Bart
Yossi Keret
Ashley Krongold
45,000
44,854
45,000
Yoav Nissan Cohen
192,113
Total
894,875
-
-
-
-
-
-
-
2018
Short Term
Benefits
Non-
Monetary
$
Key Management
Personnel
David Perlmutter
Jacob Hanoch
Fred Bart
Yossi Keret
Ashley Krongold
Yoav Nissan Cohen
Kobi Ben Shabat
Ananda Kathiravelu
Total
Salary
and
Fees
$
98,306
247,927
14,577
163,798
45,000
66,545
18,750
31,612
686,615
Post
Employment
Benefits
$
Share
Based
Payments
$
Total
$
% of
remuneration
consisting of
options and
performance
rights
-
-
-
-
-
-
-
144,126
240,273
60%
719,962
1,191,723
37,873
-
-
82,873
44,854
45,000
40,120
232,233
942,081
1,836,956
58%
46%
-
-
17%
-
Post
Employment
Benefits
$
Share
Based
Payments
$
Total
$
% of
remuneration
consisting of
options and
performance
rights
-
-
-
-
-
-
-
3,003
-
98,306
548,813
796,740
64,407
78,984
-
163,798
504,000
549,000
165,220
231,765
-
-
18,750
34,615
3,003
1,282,440
1,971,958
-
68%
82%
-
92%
71%
-
-
-
-
-
-
-
-
-
-
-
-
13
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
a)
Shareholdings of key management personnel
The number of ordinary shares of Weebit Nano Ltd held directly, indirectly or beneficially, by each Director,
including their personally-related entities, as at balance date:
2019:
Directors
D. Perlmutter
J. Hanoch
F. Bart
Y. Keret
A. Krongold
Y. Nissan Cohen
A Raza**
Total
Held at
1 July 2018
Movement during
year*
29,858,321
426,724
4,400,000
28,837,489
35,728,729
-
-
99,251,263
(28,606,844)
(381,083)
(4,166,857)
(28,083,989)
(34,299,579)
28,572
-
(95,509,780)
Held Prior to
Resignation
-
-
-
-
-
-
-
-
Held at
30 June 2019
1,251,477
45,641
233,143
753,500
1,429,150
28,572
-
3,741,483
* Figures were adjusted to reflect a 1:25 share consolidation that was finalised on 25 February 2019.
** Appointed on 1 July 2019.
Held at
30 June 2018
29,858,321
426,724
4,400,000
28,837,489
35,728,729
-
-
-
99,251,263
2018:
Directors
D. Perlmutter
J. Hanoch
F. Bart
Y. Keret
A. Krongold
Y. Nissan Cohen
K. Ben Shabat*
A. Kathiravelu**
Total
Held at
1 July 2017
Movement during
year
28,837,488
-
-
28,837,489
28,728,729
-
4,104,104
130,000
90,637,810
* Resigned on 30 November 2017.
** Resigned on 5 March 2018.
Held Prior to
Resignation
-
-
-
-
-
-
4,104,104
30,000
1,020,833
426,724
4,400,000
-
7,000,000
-
-
-100,000
12,747,557
4,134,104
14
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
b) Options and Performance Rights holdings of Key Management Personnel
The number of options over ordinary shares in Weebit Nano Ltd held directly, indirectly or beneficially, by each
specified Director and specified executive, including their personally-related entities, as at the balance date is
as follows:
2019 (Options):
Directors
F. Bart
Y. Nissan-Cohen
J. Hanoch
Total
Held at
1 July 2018
4,000,000
8,000,000
28,000,000
40,000,000
Movement
during year
(3,840,000)
(7,680,000)
(26,480,000)
(38,000,000)
2019 (Performance Rights):
Held prior to
resignation
Held at 30
June 2019
Vested and
exercisable at 30 June
2019
Refer (a)
Refer (b)
Refer (c)
160,000
320,000
1,520,000
2,000,000
Directors
F. Bart
Y. Nissan-Cohen
J. Hanoch
Total
Held at
1 July 2018
Movement
during year
Held prior to
resignation
3,200,000
6,400,000
-
9,600,000
(3,072,000)
(6,144,000)
480,000
(8,736,000)
Vested and
exercisable at 30
June 2019
Refer (a)
Refer (b)
Refer (c)
Held at 30
June 2019
128,000
256,000
480,000
864,000
-
-
-
-
-
-
-
-
(a) Mr Bart’s options and performance rights were issued on 24 December 2018; both classes of securities
were subject to the 1:25 securities’ consolidation finalised on 25 February 2019. The option and
performance rights vest over 4 years: 25% after 1 year, and 12 equal quarterly portions thereafter. These
options and rights will expire 10 years from the date of grant. For further details on the valuation
assumptions, refer to Note 13 to the financial statements.
(b) Mr Nissan-Cohen’s options and performance rights were issued on 24 December 2018; both classes of
securities were subject to the 1:25 securities’ consolidation finalised on 25 February 2019. The instruments
shall vest over 4 years: 25% after 1 year, and 12 equal quarterly portions thereafter. These options and
rights will expire 10 years from the date of grant. For further details on the valuation assumptions, refer
to Note 13 to the financial statements.
(c) 28,000,000 options were approved by Shareholders to J. Hanoch on 30 November 2017. A further
10,000,000 options and 12,000,000 performance rights were granted to Mr Hanoch on 24 December 2018;
both classes of securities were subject to the 1:25 securities’ consolidation finalised on 25 February 2019.
These vest over 4 years: 25% after 1 year and 12 equal quarterly portions thereafter. These options and
rights will expire 10 years from the date of grant. For further details on the valuation assumptions, refer
to Note 13 to the financial statements.
15
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (AUDITED) (continued)
WEEBIT NANO LTD
ACN: 146 455 576
2018: (Options)
Directors
A. Kathiravelu*
F. Bart***
Y. Nissan-Cohen***
J. Hanoch
Total
2018: (Performance
Rights)
Directors
F. Bart***
Y. Nissan-Cohen***
Total
Held at
1 July 2017
20,385,000
-
-
-
20,385,000
Movement
during year
(2,000,000)**
4,000,000
8,000,000
28,000,000
26,000,000
Held prior to
resignation
18,385,000
N/A
N/A
-
18,385,000
Held at 30
June 2018
-
4,000,000
8,000,000
28,000,000
40,000,000
Held at
1 July 2017
Movement
during year
Held prior to
resignation
Held at 30
June 2018
-
-
-
3,200,000
6,400,000
9,600,000
N/A
N/A
N/A
3,200,000
6,400,000
9,600,000
Vested and
exercisable at 30 June
2018
-
Refer (a) above
Refer (b) above
Refer (c) above
Vested and
exercisable at 30
June 2018
Refer (a)
Refer (b)
*Resigned 05/03/2018.
**Expired 31/10/2017.
***Shares, options and performance rights issued to F. Bart on 26 February 2018 and Y. Nissan Cohen on 15
February 2018 were approved by shareholders at the 2018 Annual General Meeting.
**********END OF REMUNERATION REPORT**********
16
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such proceedings during the year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Other than as disclosed elsewhere in the report, no other likely developments, future prospects and business
strategies of the operations of the Company have been included in this report as the Directors believe that the
inclusion of such information would be likely to result in unreasonable prejudice to the Company.
SHARE OPTIONS/PERFORMANCE RIGHTS
Shares under Option
At the date of this report there are 8,933,187 unissued shares under option outstanding as summarised below:
Date Granted
Security Type
Expiry Date
Exercise Price
Number of shares under
option
25-Oct-17
Unlisted Options
30-Jun-20
30-Nov-17
Unlisted Options
02-Oct-21
12-Oct-18
12-Oct-18
Unlisted Options
Unlisted Options
12-Oct-22
12-Oct-22
24-Dec-18
Unlisted Options
01-Jan-28
24-Dec-18
Unlisted Options
29-Jan-28
24-Dec-18
Unlisted Options
15-Feb-28
24-Dec-18
Unlisted Options
05-Mar-28
24-Dec-18
Unlisted Options
16-Oct-28
24-Dec-18
Unlisted Options
01-Oct-27
24-Dec-18
Performance Rights
1-Oct-27
24-Dec-18
Performance Rights
1-Jan-28
24-Dec-18
Performance Rights
29-Jan-28
24-Dec-18
Performance Rights
15-Feb-28
24-Dec-18
Performance Rights
5-Mar-28
30-Jul-16
Performance Shares
30-Jul-21
$0.75000
$0.43875
$1.31250
$1.53125
$1.44500
$1.71750
$1.56500
$1.27250
$0.84750
$0.43875
Nil
Nil
Nil
Nil
Nil
Nil
1,977,096
1,120,000
180,000
180,000
160,000
290,000
160,000
160,000
800,000
400,000
480,000
128,000
296,000
128,000
128,000
346,091
These options do not entitle the holders to participate in any share issue of the Company or any other body
corporate.
The Board of Directors approved additional options and performance rights granted to several Directors. These
grants are pending approval by the Shareholders of the company and thus are not included in the above table.
17
WEEBIT NANO LTD
ACN: 146 455 576
DIRECTORS’ REPORT (continued)
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the
year ended 30 June 2019 has been received and can be found on page 24.
AUDITOR
Nexia Perth Audit Services Pty Ltd continues in office in accordance with section 327 of the Corporations Act
2001.
AUDIT SERVICES
During the year the following fees were paid or payable for services provided by the auditor.
Amounts received or due and receivable by Nexia Perth
Audit Services Pty Ltd
An audit and review of the financial report of the parent and any other
entity in the Group
Other services in relation to the parent and any other entity in
the Group
Amounts received or due and receivable by BDO Israel
BDO Israel – Audit and review of the subsidiary Weebit Nano Ltd (Israel)*
Consolidated
2019
$
Consolidated
2018
$
40,800
43,070
5,600
7,400
62,884
109,284
65,345
115,815
*The fee for BDO Israel includes the audit of statutory financial statements for Weebit Nano Ltd (Israel) and
Weebit Nano SARL (France), as well as the audit of the tax return for Weebit Nano Ltd (Israel).
18
DIRECTORS’ REPORT (continued)
WEEBIT NANO LTD
ACN: 146 455 576
Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations
Act 2001.
David Perlmutter
Chairman
Melbourne
27 August 2019
19
Corporate Governance Statement
WEEBIT NANO LTD
ACN: 146 455 576
The Board is responsible for establishing the Company’s corporate governance framework. In establishing its
corporate governance framework, the Board has referred to the 3rd edition of the ASX Corporate Governance
Councils’ Corporate Governance Principles and Recommendations. The Corporate Governance Statement
discloses the extent to which the Company follows the recommendations. The Company will follow each
recommendation where the Board has considered the recommendation to be an appropriate benchmark for
its corporate governance practices. Where the Company’s corporate governance practices will follow a
recommendation, the Board has made appropriate statements reporting on the adoption of the
recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration,
the Company’s corporate governance practices will not follow a recommendation, the Board has explained
its reasons for not following the recommendation and disclosed what, if any, alternative practices the
Company will adopt instead of those in the recommendation. The Company’s governance-related documents
can be found on its website at www.weebit-nano.com under the section marked Corporate Governance.
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.1 – Recommendation followed
The Company has established the respective roles and responsibilities of its Board and management, and
those matters expressly reserved to the Board and those delegated to management, and has documented
this in its Board Charter.
The responsibilities of the Board include but are not limited to:
a) setting and reviewing strategic direction and planning;
b) reviewing financial and operational performance;
c)
identifying principal risks and reviewing risk management strategies; and
d) considering and reviewing significant capital investments and material transactions.
In exercising its responsibilities, the Board recognises that there are many stakeholders in the operations of
the Company, including employees, shareholders, co-ventures, the government and the community.
Recommendation 1.2 – Recommendations followed
The Board carefully considers the character, experience, education and skillset, as well as interests and
associations of potential candidates for appointment to the Board and conducts appropriate checks to verify
the suitability of the candidate, prior to their election. The Company has appropriate procedures in place to
ensure that material information relevant to a decision to elect or re-elect a director is disclosed in the notice
of meeting provided to shareholders.
Recommendation 1.3 – Recommendations followed
The Company has a written agreement with each of the Directors. The material terms of any employment,
service or consultancy agreement the Company, or any of its child entities, has entered into with its Chief
Executive Officer, any of its directors, and any other person or entity who is a related party of the Chief
Executive Officer or any of its directors will be disclosed in accordance with ASX Listing Rule 3.16.4 (taking
into consideration the exclusions from disclosure outlined in that rule).
Contract details of senior executives who are KMP are summarised in the Remuneration Report in the
Company’s Annual Report.
Recommendation 1.4 – Recommendations followed
The Company Secretary is accountable to the Board for facilitating the Company’s corporate governance
processes and the proper functioning of the Board. Each Director is entitled to access the advice and services
of the Company Secretary.
In accordance with the Company’s Constitution, the appointment or removal of the Company Secretary is a
matter for the Board as a whole. Details of the Company Secretary’s experience and qualifications are set out
in the Annual Report.
20
WEEBIT NANO LTD
ACN: 146 455 576
Corporate Governance Statement (continued)
Recommendation 1.5 – Recommendation not followed
The Company is committed to creating a diverse working environment and promoting a culture which
embraces diversity. Given the size of the Company and scale of its operations, however, the Board is of the
view that a written diversity policy with measurable objectives for achieving gender diversity is not required
at this time. Further as the Company has not established measureable objectives for achieving gender
diversity, the Company has not reported on progress towards achieving them.
Recommendations 1.6 and 1.7 – Recommendations not followed
Whilst the Company has a written policy, the Board recognises that as a result of the Company’s size and the
stage of the entity’s life as a public listed junior technology company, the assessment of the directors’ and
executives’ overall performance and its own succession plan is conducted on an informal basis. Whilst this is
at variance with the ASX Recommendations, for the financial year ended June 2019, the Directors consider
an appropriate and adequate process for the evaluation of Directors is in place.
Principle 2 – Structure the board to add value
Recommendation 2.1 – Recommendation followed
As a result of the Company’s size and the stage of the entity’s life as a publicly listed junior technology
company and given the size of the Board at present a Nomination Committee has not been established. The
Board meets as a whole to consider. The Board from time to time reviews the skill mix required for the Board
and, where gaps are identified, embarks on a process to fill those gaps.
Recommendation 2.2 – Recommendation followed
The details of the skill set of the current Board members are set out in the description of each Director in the
Annual Report. The Board has adopted the following Board Skills Matrix which sets out the mix of skills and
diversity that the Board is looking to achieve in its membership. The Board Skills Matrix highlights the key
skills and experience of the Board and the extent to which those skills are currently represented on the Board.
Skills and experience
Number of Directors/
Board representations
(out of 7*)
Executive leadership - Senior executive experience including
international experience.
Board experience - Experience as a board member or member of a
governance body.
Financial acumen - Senior executive or equivalent experience in financial
accounting and reporting, corporate finance, risk and internal controls.
Semiconductor - Experience related to the Semiconductor market,
connections to key companies in the domain.
ASX and Australian public market - Experience in raising capital in Australia,
knowledge of the Australian regulations.
Strategy - Experience in developing, implementing and challenging a plan of
action designed to achieve the long-term goals of an organisation, including
information technology and digital experience.
Capital management - Experience in capital management strategies,
including capital partnerships, debt financing and capital raisings.
* Including Atiq Raza, who was appointed on 1 July 2019.
7
7
7
4
5
7
7
19
Corporate Governance Statement (continued)
Recommendation 2.3 – Recommendation followed
WEEBIT NANO LTD
ACN: 146 455 576
As at 30 June 2019, the board consisted of six directors, four of whom are non-executive and three of whom
are Independent Directors. Since 30 June 2019, Mr Atiq Raza was also appointed to the board as an
independent non-executive. The Board considers David Perlmutter (Non-executive Chairman), Ashley
Krongold (Non-executive Director), Fred Bart (Non-executive Director) and Atiq Raza (Non-executive Director)
to be Independent Directors.
Recommendation 2.4 – Recommendation not followed
As noted under Recommendation 2.3, the Board comprises seven Directors of whom four are considered
Independent Directors. The Board comprises a majority of independent directors and is satisfied that its
current composition is suitable for the Company given its resources, size and operations. The current
structure and composition of the Board has been determined having regard to the nature and size of the
Company, the skill set of The Company’s directors both individually and collectively, and the best interests of
shareholders. The Board believes that independent judgment is achieved and maintained in respect of its
decision-making processes. Furthermore, all directors are entitled to seek independent professional advice
as and when required. The directors believe that they are able to objectively analyse the issues before them
in the best interests of all shareholders and in accordance with their duties as directors.
Recommendation 2.5 – Recommendation followed
The Chairman, Mr Perlmutter, is an Independent Director. His role as Chairman of the Board is separate from
that of the Managing Director (who is responsible for the day to day management of the Company) and is in
compliance with the ASX Recommendation that these roles not be exercised by the same individual.
Recommendation 2.6 – Recommendation not followed
The Board recognises that as a result of the Company’s size and the stage of the entity’s life as a publicly listed
junior technology company, the Board has not put in place a formal program for inducting new directors.
However, it does provide a package of background information on commencement and provides ready
interaction with the Company’s personnel to gain a stronger understanding of the business. Similarly, the
Company does not at this stage provide professional development opportunities for Directors. More formal
processes for both of these areas will be considered in the future as the Company develops.
Principle 3 – Act ethically and responsibly
Recommendation 3.1 – Recommendation followed
The Company is committed to promoting good corporate conduct grounded by strong ethics and
responsibility. The Company has established a Code of Conduct (Code), which addresses matters relevant to
the Company’s legal and ethical obligations to its stakeholders. It may be amended from time to time by the
Board and is disclosed on the Company’s website. The Code applies to all Directors, employees, contractors
and officers of the Company.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.1 – Recommendation followed
WBT was not a Company required by ASX Listing Rule 12.7 to have an Audit Committee although it is included
in the ASX Recommendations. The Board has not established an audit committee at this point in the
Company’s development. It is considered that the size of the Board along with the level of activity of the
Company renders this impractical and the full Board considers in detail all of the matters for which the
directors are responsible. The Board has adopted an Audit Committee Charter and is disclosed on the
Company’s website.
20
Corporate Governance Statement (continued)
Recommendation 4.2 – Recommendation followed
WEEBIT NANO LTD
ACN: 146 455 576
In accordance with ASX Recommendation 4.2 the Chief Executive Officer (or their equivalent) and Chief
Financial Officer (or their equivalent) are required to provide assurances that the written declarations under
s295A of the Corporations Act (and for the purposes of ASX Recommendation 4.2) are founded on a sound
framework of risk management and internal control and that the framework is operating effectively in all
material respects in relation to financial reporting risks. Both the Chief Executive Officer and Chief Financial
Officer provide such assurances at the time the s295A declarations are provided to the Board.
Recommendation 4.3 – Recommendation followed
The Company’s external audit function is performed by Nexia Perth Audit Services Pty Ltd (Nexia).
Representatives of Nexia attend the Annual General Meeting and are available to answer shareholder
questions regarding the audit.
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1 – Recommendations followed
The Company operates under the continuous disclosure requirements of the ASX Listing Rules and has
adopted a policy. The Continuous Disclosure Policy sets out policies and procedures for the Company’s
compliance with its continuous disclosure obligations under the ASX Listing Rules, and addresses financial
markets communication, media contact and continuous disclosure issues. It forms part of the Company’s
corporate policies and procedures and is available to all staff. A copy of the Continuous Disclosure Policy is
available on the Company’s website.
Principle 6 – Respect the rights of security holders
Recommendation 6.1 – Recommendations followed
The Company keeps investors informed of its corporate governance, financial performance and prospects via
its website – www.weebit-nano.com. Investors can access copies of all announcements to the ASX, notices of
meetings, annual reports and financial statements, and Investor presentations via the ‘Investor Information’
tab and can access general information regarding the Company and the structure of its business under the
‘Company’ and ‘Projects’ tabs.
Recommendation 6.2 – Recommendations followed
The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s
state of affairs. In accordance with the ASX Recommendations, information is communicated to shareholders
as follows:
the annual financial report which includes relevant information about the operations of the
Company during the year, changes in the state of affairs of the entity and details of future
developments, in addition to the other disclosures required by the Corporations Act 2001;
the half yearly financial report lodged with the Australian Securities Exchange and Australian
Securities and Investments Commission and sent to all shareholders who request it;
notifications relating to any proposed major changes in the Company which may impact on share
ownership rights that are submitted to a vote of shareholders;
notices of all meetings of shareholders;
publicly released documents including full text of notices of meetings and explanatory material-
made available on the Company’s website at www.weebit-nano.com; and
disclosure of the Company’s Corporate Governance practices and communications strategy on the
entity’s website.
21
WEEBIT NANO LTD
ACN: 146 455 576
Corporate Governance Statement (continued)
Recommendation 6.2 – Recommendations followed (continued)
While the Company aims to provide sufficient information to Shareholders about the Company and its
activities, it understands that Shareholders may have specific questions and require additional information.
To ensure that Shareholders can obtain all relevant information to assist them in exercising their rights as
Shareholders, the Company has made available a telephone number and relevant contact for Shareholders
to make their enquiries.
Recommendation 6.3 – Recommendation followed
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level
of accountability and identification with the Company’s strategy and goals. Important issues are presented
to the shareholders as single resolutions. The external auditor of the Company is also invited to the Annual
General Meeting of shareholders and is available to answer any questions concerning the conduct,
preparation and content of the auditor’s report. Pursuant to section 249K of the Corporations Act 2001 the
external auditor is provided with a copy of the notice of meeting and related communications received by
shareholders.
Recommendation 6.4 – Recommendation followed
The Company provides its investors the option to receive communications from and send communications
to, the Company and the share registry electronically.
Principle 7 – Recognise and manage risks
Recommendation 7.1 – Recommendations followed
Due to the size of the Board, the Company does not have a separate Risk Committee. The Board is responsible
for the oversight of the Company’s risk management and control framework. The Board has adopted a Risk
Management Policy, which is disclosed on the Company’s website.
Recommendation 7.2 – Recommendations not followed
The Board recognises that there are inherent risks associated with the Company’s operations including
technological, legal and other operational risks. The Board endeavours to mitigate such risks by continually
reviewing the activities of the Company in order to identify key business and operational risks and ensuring
that they are appropriately assessed and managed. No formal report in relation to the Company’s
management of its material business risks is presented to the Board. The Board reviews the risk profile of the
Company and monitors risk informally throughout the year.
Recommendation 7.3 – Recommendation not followed
The Company does not have an internal audit function. This is due to the size of the Company and the stage
of life of the entity. To evaluate and continually improve the effectiveness of the Company’s risk management
and internal control processes, the Board relies on ongoing reporting and discussion of the management of
material business risks as outlined in the Company’s Risk Management Policy.
22
WEEBIT NANO LTD
ACN: 146 455 576
Corporate Governance Statement (continued)
Recommendation 7.4 – Recommendation followed
As already outlined above in relation to various ASX Recommendations, the Company constantly monitors
and reviews the key risks that affect the Company and the management of those risks. They include economic,
environment and sustainability risks. The risks which the Company has identified that it has a material
exposure to are its ability to raise funds within an acceptable time frame and on terms acceptable to it
(“Capital Risk”); and that its existing technology, or any other technologies that it may acquire in the future,
will be able to be economically exploited (“Commercialisation Risk”).
The manner in which the Company manages those risks, in the case of Capital Risk, to monitor the market
and investment appetite and to raise further required capital in a timely manner such that the Company’s
operations are adequately funded; in the case of Commercialisation Risk, to adopt a focused approach using
modern techniques, seek partnerships with world-leading organisations and seeking to lay off risk where
possible.
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1 – Recommendation followed
Due to the size of the Board, the Company does not have a separate remuneration committee. The roles and
responsibilities of a remuneration committee are currently undertaken by the Board. The duties of the full
board in its capacity as a remuneration committee are set out in the Company’s Remuneration Committee
Charter. Items that are usually required to be discussed by a Remuneration Committee are marked as
separate agenda items at Board meetings when required. The Board has adopted a Remuneration Committee
Charter which describes the role, composition, functions and responsibilities of the Remuneration Committee
and is disclosed on the Company’s website.
Recommendation 8.2 – Recommendations followed
Details of the Company’s policies on remuneration are set out in the Company’s ”Remuneration Report” in
each Annual Report published by the Company. This disclosure will include a summary of the Company’s
policies regarding the deferral of performance-based remuneration and the reduction, cancellation or
clawback of the performance-based remuneration in the event of serious misconduct or a material
misstatement in the Company’s financial statements.
Recommendation 8.3 - Recommendation followed
The Company’s Security Trading Policy includes a statement prohibiting directors, officers and employees
entering into transactions (whether through the use of derivatives or otherwise) which limit the economic
risk of their security holding in the Company or of participating in unvested entitlements under any equity
based remuneration schemes.
Security Trading Policy
In accordance with ASX Listing Rule 12.9, the Company has adopted a trading policy which sets out the
following information:
a)
b)
c)
closed periods in which directors, employees and contractors of the Company must not deal in the
Company’s securities;
trading in the Company’s securities which is not subject to the Company’s trading policy; and
the procedures for obtaining written clearance for trading in exceptional circumstances.
23
Lead auditor’s independence declaration under section 307C of the Corporations Act 2001
To the directors of Weebit Nano Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended
30 June 2019 there have been:
(i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Nexia Perth Audit Services Pty Ltd
M. Janse Van Nieuwenhuizen
Director
Perth
27 August 2019
WEEBIT NANO LTD
ACN: 146 455 576
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Note
For the year ended 30 June 2019
Research and Development expenses
Sales and Marketing expenses
General and Administrative expenses
3(s)
8
Finance income (costs)
Other Income (expenses)
Loss before tax
Income tax expense
Loss for the year
Consolidated
2019
$
Consolidated
2018
$
(3,766,411)
(184,432)
(3,114,453)
371,493
-
(6,693,803)
(1,079,476)
(140,423)
(3,216,571)
150,266
(15,665)
(4,301,869)
5
-
(6,693,803)
-
(4,301,869)
Other Comprehensive Income potentially reclassified subsequently
to profit or loss:
Foreign currency translation differences for foreign operations
Total Comprehensive Loss for the year
Total Comprehensive Loss attributable to:
Owners of the parent entity
(371,625)
(7,065,428)
(198,039)
(4,499,908)
(7,065,428)
(4,499,908)
Basic and Diluted Loss per share
4
(0.108)*
(0.080)*
*The comparative has been adjusted to reflect the 25:1 share consolidation effected during the year ended
30 June 2019.
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
25
WEEBIT NANO LTD
ACN: 146 455 576
Statement of Financial Position
As at 30 June 2019
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Long term deposit
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
Consolidated
30 June
2019
$
Consolidated
30 June
2018
$
6
1,670,912
221,021
3,356,748
557,391
1,891,933
3,914,139
68,854
12,814
81,668
35,787
56,040
91,827
1,973,601
4,005,966
369,166
369,166
511,602
511,602
369,166
511,602
1,604,435
3,494,364
31,552,035
5,585,389
(35,532,989)
27,269,973
5,063,577
(28,839,186)
1,604,435
3,494,364
7
9
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
26
Statement of Changes in Equity
For the year ended 30 June 2019
CONSOLIDATED 2019
Balance at 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with equity holders:
Contributions of capital
Capital raising costs
Exercise of options
Share-based payments
Balance at 30 June 2019
CONSOLIDATED 2018
Balance at 1 July 2017
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with equity holders:
Contributions of capital
Capital raising costs
Exercise of options
Share-based payments
Balance at 30 June 2018
WEEBIT NANO LTD
ACN: 146 455 576
Foreign
currency
translation
differences
for foreign
operations
$
(219,069)
-
(371,625)
(371,625)
Note
Issued
Capital
$
27,269,973
-
-
-
Option
Reserve
$
5,282,646
-
-
-
Accumulated
Losses
$
(28,839,186)
(6,693,803)
-
(6,693,803)
Total Equity
$
3,494,364
(6,693,803)
(371,625)
(7,065,428)
9
9
9
13
4,819,550
(537,488)
-
-
31,552,035
-
-
-
-
(590,694)
-
-
-
893,437
6,176,083
-
-
-
-
(35,532,989)
4,819,550
(537,488)
-
893,437
1,604,435
Foreign
currency
translation
differences
for foreign
operations
$
(21,030)
-
(198,039)
(198,039)
Note
Issued
Capital
$
23,795,057
-
-
-
Option
Reserve
$
2,114,857
-
-
-
Accumulated
Losses
$
(24,537,317)
(4,301,869)
-
(4,301,869)
Total Equity
$
1,351,567
(4,301,869)
(198,039)
(4,499,908)
9
9
9
13
2,500,000
(2,042,420)
3,017,336
-
27,269,973
-
-
-
-
(219,069)
-
-
-
3,167,789
5,282,646
-
-
-
-
(28,839,186)
2,500,000
(2,042,420)
3,017,336
3,167,789
3,494,364
The above statement of changes in equity should be read in conjunction with the accompanying notes.
27
WEEBIT NANO LTD
ACN: 146 455 576
Statement of Cash Flows
For the year ended 30 June 2019
Cash flows from operating activities
Interest Paid
Payments to suppliers and employees
Consolidated
2019
$
Note
Consolidated
2018
$
-
(5,745,444)
-
(3,454,282)
Net cash used in operating activities
10
(5,745,444)
(3,454,282)
Cash flows from investing activities
Payments for Property, Plant and Equipment
Decrease/(Increase) in deposits and restricted cash
(44,880)
43,226
(6,923)
(46,817)
Net cash used in investing activities
(1,654)
(53,740)
Cash flows from financing activities
Proceeds from issues of share capital
Proceeds from conversion of options
Capital Raising Costs
9
9
9
4,450,000
-
(388,738)
2,500,000
3,017,336
(347,496)
Net cash flows provided by financing activities
4,061,262
5,169,682
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(1,685,836)
3,356,748
1,661,660
1,695,088
Cash and cash equivalents at the end of the year
1,670,912
3,356,748
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
28
WEEBIT NANO LTD
ACN: 146 455 576
Notes to the Financial Statements
For the year ended 30 June 2019
NOTE 1: REPORTING ENTITY
Weebit Nano Ltd (the “Company”) is a company domiciled in Australia. The consolidated financial statements
of the Company as at and for the year ended 30 June 2019 comprise the Company and its subsidiaries
(collectively referred to as the “Group”).
A description of the nature of the Group’s operations and its principal activities is included in the review of
operations and activities in the Directors’ Report on page 6, which does not form part of this financial report.
NOTE 2: BASIS OF PREPARATION
This General Purpose Financial Report has been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001.
The Consolidated Financial Statements and Notes of the Group comply with International Financial Reporting
Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB).
Weebit Nano Ltd is a company limited by shares. The financial report is presented in Australian Dollars which
is the Group’s reporting currency and monetary amounts are rounded to the nearest dollar, except for
earnings per share.
This Consolidated Financial Report was approved and authorised for issue by the Board of Directors on 27
August 2019.
Financial Position
The financial report has been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the normal course of
business.
The Group has incurred a loss for the year ended 30 June 2019 of $6,693,803, (2018: Loss of $4,301,869) and
experienced net cash outflows from operating activities of $5,745,444 (2018: $3,454,282). As at 30 June 2019
the Group had cash on hand of $1,670,912 (2018: $ 3,356,748) and net working capital of $1,522,767 (2018:
$3,402,537). The loss mainly reflects the research and development activities of the Group, as well as
administration costs.
Management has prepared a cash flow forecast for 14 months from the commencement of the 2020 financial
year. The directors are confident that, subject to being able to raise further capital, the Group will be able to
continue its operations as a going concern. The directors also carefully manage discretionary expenditure in
line with the Group’s cash flow.
Subsequent to year-end and as disclosed to the ASX on 27 August 2019, the Company received commitments
from existing and new wholesale and sophisticated investors to place approximately 6.4 million new ordinary
shares to raise $2.5 million. In addition, the company is also expecting receipt of approximately AU$1.5 million
in respect of the 2018 R and D claim lodged in France (not provided for in the attached financial statements
and as disclosed in note 3(s) and note 6) which will further increase the company’s funding.
Based on the matters described above, the Directors consider the going concern basis of preparation to be
appropriate.
Historical cost convention
These financial statements have been prepared on an accruals basis and under the historical cost convention.
29
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
The preparation of the financial reports requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expense. Actual results may differ from these estimates.
The significant policies which have been adopted in the preparation of this financial report are:
(a) Principles of Consolidation
Subsidiaries
The consolidated financial statements comprise the assets and liabilities of Weebit Nano Ltd and its
subsidiaries at 30 June 2019 and the results of the subsidiaries for the year ended. A subsidiary is any entity
controlled by Weebit Nano Ltd.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. The financial statements of subsidiaries are prepared for
the same reporting period as the Parent Company, using consistent accounting policies. Adjustments are
made to bring into line any dissimilar accounting policies that may exist.
All inter-company balances and transactions, including unrealised profits arising from intra- entity
transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Weebit Nano
Ltd. Subsidiaries are consolidated from the date on which control is obtained by the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Where there is a loss of control
of a subsidiary, the consolidated financial statements include the results for the part of the reporting period
which Weebit Nano Ltd has control.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition
method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable
assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable
assets acquired and the liabilities assumed are measured at their acquisition date fair values (see note 3(g)).
30
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Segment Reporting
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity) whose operating results are regularly reviewed by the entity's chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance
and for which discrete financial information is available. This includes startup operations which are yet to
earn revenues. Management will also consider other factors in determining operating segments such as the
existence of a line manager and the level of segment information presented to the board of directors.
Operating segments have been identified based on the information provided to the chief operating decision
maker – being the board of directors.
The group aggregates two or more operating segments when they have similar economic characteristics, and
the segments are similar in nature.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements.
Information about other business activities and operating segments that are below the quantitative criteria
are combined and disclosed in a separate category for “all other segments”.
(c) Income Tax
The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is
made for certain temporary differences arising from the initial recognition of an asset or a liability. No
deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit or loss.
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.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
31
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Income Tax (continued)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax
balances attributable to amounts recognised directly in equity are also recognised directly in equity.
(d) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authorities,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense item as applicable and receivables and payables in the balance sheet are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the Statement of Financial Position. Cash flows are included the Cash Flow
Statement on a gross basis and the GST component of cash flows arising from investing and financing
activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash
flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(e) Trade and Other Receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They arise when the Group provides money, goods or services directly to
another party with no intention of selling the receivables. They are included in current assets, except for those
with maturities greater than 12 months after the balance date which are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently carried at amortised cost
using the effective interest method, less any impairment losses.
(f) Property, Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the items. Repairs and maintenance are charged to the
Statement of Profit or Loss and Other Comprehensive Income during the reporting period in which they are
incurred.
Depreciation is calculated using the straight-line method to allocate asset costs over their estimated useful
lives, as follows:
Computer equipment
Software
Plant & equipment
3 years
3 years
5 years
33
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Property, Plant and Equipment (continued)
Each asset’s residual value and useful life is reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the Statement of Profit or Loss and Other Comprehensive Income.
(g) Business Combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given,
securities issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to
the acquisition.
Where equity instruments are issued in an acquisition, the fair value of the instruments is their published
market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the
published price at the date of exchange is an unreliable indicator of fair value and that other evidence and
valuation methods provide a more reliable measure of fair value. Transaction costs, other than those
associated with the issue of equity instruments, that the Group incurs in connection with a Business
Combination are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any minority
interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net
assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group's share of the fair value
of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in the Statement
of Profit or Loss and Other Comprehensive Income, but only after a reassessment of the identification and
measurement of the net assets acquired.
(h) Impairment of Non-Financial Assets
Where an indicator of impairment exists, the Group makes a formal estimate of the recoverable amount.
Where the carrying amount of an asset or cash generating unit exceeds its recoverable amount the asset or
cash generating unit is considered impaired and is written down to its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets or groups of assets that generate cash inflows from
continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-
generating unit” or ”CGU”). Subject to an operating segment ceiling test, for the purposes of goodwill
impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which
impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from
the synergies of combination.
34
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Share-Based Payments
The Group has provided payment to service providers and related parties in the form of share-based
compensation whereby services are rendered in exchange for shares or rights over shares (‘equity-settled
transactions’). The cost of these equity-settled transactions is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using an appropriate
option valuation model for services provided by employees or where the fair value of the goods and services
received cannot be reliably estimated.
For goods and services received where the fair value can be determined reliably, the goods and services and
the corresponding increase in equity are measured at that fair value. The fair value of the options granted is
adjusted to reflect market vesting conditions but excludes the impact of any non-market vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected
to become exercisable.
At each balance date, the entity revises its estimates of the number of options that are expected to become
exercisable subject to non-market vesting conditions.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance conditions are fulfilled, ending on the date on which the relevant parties
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects the number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This
opinion is formed based on the best available information at balance date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
(j) Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-
term deposits with an original maturity of three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(k) Finance income and expense
Finance income comprises interest income on funds invested, gains on disposal of financial assets and
changes in fair value of financial assets held at fair value through profit or loss. Finance expenses comprise
changes in the fair value of financial assets held at fair value through profit or loss and impairment losses on
financial assets.
Interest income is recognised as it accrues in profit or loss, using the effective interest rate method.
35
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Issued Capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are
recognised directly in equity as a reduction of the share proceeds received.
(m) Earnings per Share
i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year.
ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(n) Trade and other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
Trade and other payables are stated at amortised cost, using the effective interest method.
(o) Foreign Currency Translation
i) Functional and presentation currency
The functional currency of Weebit Nano Ltd (Israel) (Weebit Israel) is US dollars. The functional currency of
Weebit Nano Ltd is Australian Dollars. The functional currency of Weebit France (SARL) is Euro Dollars. The
presentation currency of the Group is Australian Dollars.
ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was determined.
36
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Significant Accounting Estimates and Assumptions
Critical accounting estimates
The preparation of financial statements in conformity with Australian Accounting Standards 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 Directors evaluate estimates and judgements incorporated
into the financial report based on historical knowledge and best available current information. Estimates
assume a reasonable expectation of future events and are based on current trends and economic data,
obtained both externally and within the Group.
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting
period are Share-based payment transactions.
The Company measures the cost of equity-settled transactions with management and other parties by
reference to the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by the Board of Directors using either the Binomial or the Black-Scholes valuation methods,
taking into account the terms and conditions upon which the equity instruments were granted. The
assumptions in relation to the valuation of the equity instruments are detailed in Note 13. 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 expenses
and equity.
(q) Comparative Information
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(r) Revenue Recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent
it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised.
Interest revenue
Revenue is recognised as interest is earned.
(s) Research and Development grants
Research and Development grants are recognised as and when the receipts are virtually certain. Weebit Nano
SARL (France) recognised grants of $388,191 during the year ended 30 June 2018 which partly offsets the R&D
expenses in the Statement of Comprehensive Income. No grants were recognised in the year ended 30 June
2019 as such grants had not yet been received and is not included in trade and other receivables.
37
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Intangible Assets
An intangible asset is recognised, whether purchased or self-created (at cost) if, and only if:
it is probable that the future economic benefits that are attributable to the asset will flow to the
entity; and
the cost of the asset can be measured reliably
Initial recognition: research and development costs:
All research costs are expensed as incurred:
Development costs are capitalised only after technical and commercial feasibility of the asset for sale
or use have been established. This means that the Company must intend and be able to complete
the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate
future economic benefits.
(u) Adoption of New and Revised Accounting Standards
The following new accounting standards came into effect on 1 July 2018:
AASB 15 Revenue from Contracts with Customers
AASB 15 Revenue from Contracts with Customers replaces AASB 118 Revenue and AASB 111 Construction
Contracts and related interpretations and it applies to all revenue arising from contracts with customers,
unless those contracts are in the scope of other standards. AASB 15 establishes a comprehensive framework
for determining whether, how much and when revenue is recognised, including in respect of multiple element
arrangements. The core principle of AASB 15 is that it requires identification of discrete performance
obligations within a transaction and associated transaction price allocation to these obligations, Revenue is
recognised upon satisfaction of these performance obligations, which occur when control of goods or services
is transferred, rather than on transfer of risks or rewards. Revenue received for a contract that includes a
variable amount is subject to revised conditions for recognition, whereby it must be highly probable that no
significant reversal of the variable component may occur when the uncertainties around its measurement are
removed.
The Group does not have any revenue from contracts with customers for the current period and in prior
periods. There is no material impact to profit or loss or net assets on the adoption of this new standard in the
financial year ended 30 June 2019 or comparative years.
38
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u) Adoption of New and Revised Accounting Standards (continued)
AASB 9 Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes changes to a
number of areas including classification of financial instruments, measurement, impairment of financial assets
and hedge accounting model. Financial instruments are classified as either held at amortised cost or fair value.
Financial instruments are carried at amortised cost if the business model concept can be satisfied.
All equity instruments are carried at fair value and the cost exemption under AASB 139 which was used where
it was not possible to reliably measure the fair value of an unlisted entity has been removed. The Group did
not early adopt any of the new and revised accounting standards. The impact of the new and revised
accounting standards is disclosed below.
Equity instruments which are non-derivative and not held for trading may be designated as fair value through
other comprehensive income (FVOCI). Previously classified available-for-sale investments, now carried at fair
value are exempt from impairment testing and gains or loss on sale are no longer recognised in profit or loss.
The AASB 9 impairment model is based on expected loss at day 1, rather than needing evidence of an incurred
loss, this is likely to cause earlier recognition of bad debt expenses.
The Group has applied AASB 9 retrospectively with the effect of initially applying this standard recognised at
the date of initial application, being 1 July 2018 and has elected not to restate comparative information
Accordingly, the information presented for 30 June 2018 has not been restated. The Group’s financial
instruments consist of cash, trade payables & other debtors. There is no impact to profit or loss or net assets
on the adoption of this new standard in the financial year ended 30 June 2019 or comparative years.
(v) New accounting standards issued but not yet effective
AASB 16 Leases (Effective annual reporting periods commencing on or after 1 January 2019)
AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities
for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is
required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease
liability representing its obligations to make lease payments.
A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and
equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises
depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of
the lease liability into a principal portion and an interest portion and presents them in the statement of cash
flows applying AASB 107 Statement of Cash Flows. Under AASB 16, right of use assets will be tested for
impairment in accordance with AASB 136 Impairment of Assets. This will replace the previous requirement to
recognise a provision for onerous lease contracts.
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117 Leases. Accordingly, a
lessor continues to classify its leases as operating leases or finance leases.
Transition to AASB16
The Group will recognise new assets and liabilities for its long term operating leases. The nature of expenses
related to those leases will now change because the Group will recognise a depreciation charge for right-of-
use assets and interest expense on lease liabilities. Previously, the Group recognised operating lease expense
on a straight-line basis over the term of the lease, and recognised assets and liabilities only to the extent that
there was a timing difference between actual lease payments and the expense recognised.
39
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v) New accounting standards issued but not yet effective (continued)
The Group will elect to use the exemptions proposed by the standard on lease contracts for which the lease
terms ends within 12 months as of the date of initial application, and lease contracts for which the underlying
asset is of low value.
The Group intends to initially apply the new standard using the modified retrospective approach, which
requires no restatement of comparative information. As is permitted by the standard, the Group intends to
recognise the opening balance of right of use assets to be equal to the opening lease liability, adjusted for any
prepayment or accrued lease payments recognised in the financial position prior to adoption.
As at 30 June 2019 the Group had non-cancellable operating lease commitments of approximately $188,364
(see Note 18). A preliminary assessment indicates that all of these arrangements relate to leases other than
short term leases and leases of low value assets, and hence the Group will recognise a right of use asset of
$169,348 and a corresponding lease liability of $169,348 in respect of all these leases. The impact on profit or
loss is to increase depreciation by approximately $84,760 and to increase interest expense by approximately
$13,831.
NOTE 4: LOSS PER SHARE
Basic and diluted loss per share -cents
Loss used in the calculation of basic and diluted loss per
share
Consolidated
2019
$
Consolidated
2018*
$
(0.108)
(0.080)*
(6,693,803)
(4,301,869)
Weighted average number of ordinary shares outstanding
during the year used in calculation of basic loss per share
Weighted average number of ordinary shares outstanding during
the year used in calculation of diluted loss per share
61,869,341
54,027,660
61,869,341
54,027,660
Options outstanding during the year have not been taken into account in the calculation of the weighted
average number of ordinary shares as they are considered anti-dilutive.
* The comparative has been adjusted to reflect the 25:1 share consolidation effected during the year ended
30 June 2019 (see Note 9).
40
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 5: INCOME
TAX
reconciliation between aggregate
tax expenses
Numerical
recognised
in the Statement of Profit or Loss and Other
comprehensive Income and tax expense calculated per the
statutory income tax rate
A reconciliation between tax expense and the product of accounting
profit before income tax multiplied by the Group’s applicable
income tax rate is as follows:
Consolidated
2019
$
Consolidated
2018
$
Accounting loss before income tax
(6,693,803)
(4,301,869)
Income tax (benefit) using the domestic corporation tax rate of
30.0% (2018: 30%)
Effect of tax rates in foreign jurisdictions
Opening balance of Weebit Israel Tax Losses
Change in tax rate
Non-deductible expenses
Non-assessable income
Share based payments
Capital raising costs deductible
Unrecognised temporary differences
Unrecognised tax losses
Income tax (expense)/benefit
(2,008,141)
286,715
(34,114)
-
(63,394)
-
334,150
(209,117)
(16,124)
1,710,024
-
(1,290,561)
143,278
2,370,865
7,582
137,358
-
441,837
(177,937)
(43,208)
(1,589,214)
-
Weebit Nano Ltd has unrecognised tax losses arising in Australia & Israel which are available indefinitely to
offset against future profits of the Group on the condition that the tests for deductibility against future profits
are met.
(a) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
In AUD
Deductible temporary differences
Tax losses
2019
758,175
5,876,767
6,634,942
2018
690,999
4,239,546
4,930,545
41
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Grant receivable from French authorities
GST Recoverable
Other receivables
Total
Consolidated
2019
$
Consolidated
2018
$
-
122,477
98,544
221,021
389,816
88,895
78,680
557,391
The above amounts do not bear interest and their carrying amounts are equivalent to their fair value. Weebit
Nano SARL (France) participates in a French government R&D incentive plan. According to this plan, Weebit
Nano SARL (France) may claim each calendar year a partial refund on its R&D expenses. During 2018, Weebit
Nano SARL (France) filed its request for a refund on 2017 R&D costs. The refund was received in July 2018.
During 2019, Weebit Nano SARL (France) filed its request for a refund on 2018 R&D costs. The refund has not
yet been received and is not included in the above trade and other receivables.
Other receivables include mainly prepaid expenses.
NOTE 7: TRADE AND OTHER PAYABLES
Trade payables (a)
Accruals & accrued employee entitlements
Other payables (b)
Consolidated
2019
$
Consolidated
2018
$
92,291
266,131
10,744
369,166
129,699
366,312
15,591
511,602
(a) Trade payables are non-interest bearing and are normally settled on 30-day terms.
(b) Other payables are non-trade payables, are non-interest bearing and have an average term of 3 months.
NOTE 8: GENERAL AND ADMINISTRATIVE
Administration, insurance and compliance costs
Consultants and contractors
Depreciation
Employee benefits expenses
Other expenses
Consolidated
2019
$
294,913
1,070,745
11,814
1,399,511
337,470
3,114,453
Consolidated
2018
$
243,526
721,923
11,156
1,984,653
255,313
3,216,571
42
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 9: ISSUED CAPITAL & RESERVES
CONSOLIDATED AND PARENT ENTITY
In February 2019 the General Meeting of the company approved a share consolidation so that every 25 ordinary
shares were consolidated into one share.
(a)Issued and Paid up Capital
Fully paid ordinary shares
(b) Movements in fully paid shares
on issue
Balance at the start of the year
June 2019
No
June 2019
$
June 2018
No
June 2018
$
63,648,648
31,552,035
1,442,815,483
27,269,973
1,442,815,483
27,269,973
1,175,576,215
23,795,057
Shares issued in the year:
Capital Raising
Options and performance rights
converted to shares
Capital Raising Costs*
Share consolidation
Balance at end of year
139,748,449
4,819,550
166,666,668
2,500,000
8,652,274
-
(1,527,567,558)
63,648,648
-
(537,488)
-
31,552,035
100,572,600
-
-
1,442,815,483
3,017,336
(2,042,420)
-
27,269,973
* $148,750 of the capital raising costs (2018: $1,695,000) were settled via the issue of options to the broker. Refer
to Note 13 Share Based Payments. The balance of $388,738 (2018: $347,420) was paid in cash.
NOTE 10: OPERATING CASH FLOW INFORMATION
Reconciliation of cash flow from operations with loss after
income tax:
Loss for the year
Adjusted for – Non-cash items:
Depreciation
Share-based payments (Note 13)
Changes in assets and liabilities
Increase/(Decrease) in trade creditors and accruals
Decrease/(Increase) in other debtors
Movement in FCTR
Cash flows used in operations
Consolidated
2019
$
Consolidated
2018
$
(6,693,803)
(4,301,869)
11,814
1,114,237
9,009
1,472,789
(142,436)
336,370
(371,626)
(5,745,444)
41,811
(478,217)
(197,805)
(3,454,282)
43
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 11: INTEREST IN CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Weebit Nano Ltd and the subsidiaries
listed in the following table.
Name
Country of
Incorporation
Weebit Nano Ltd (Israel)
Weebit Nano SARL
(France)*
Israel
France
* held by Weebit Nano Ltd (Israel).
% Equity
Interest
2019
100%
100%
$ Investment
2019
100%
100%
% Equity
Interest
2018
100%
100%
$ Investment
2018
100%
100%
NOTE 12: RELATED PARTY TRANSACTIONS
a)
Parent and ultimate controlling party
The parent entity and ultimate controlling party is Weebit Nano Ltd.
Related party compensation and Equity Interests of Key Management Personnel
b)
Information on remuneration of Directors and Key Management Personnel including details of shares and
option holdings is contained in the Remuneration Report within the Directors’ Report.
c)
Loans to and from related parties
Terms and Conditions of loans
On 8 August 2016, Weebit Nano Ltd signed a loan agreement with its 100% subsidiary Weebit Nano Israel,
for up to AUD $4,000,000. Weebit Nano Ltd granted Weebit Nano Israel additional funds on the same terms
during the financial year. Repayment terms were not defined. The loan bears no interest. As at 30 June 2019
the loan balance was $6,392,196 (2018: $3,982,660).
d)
Other related party transactions
In November 2017, Weebit Nano (Israel) signed an agreement with Weebit Nano (France), whereby Weebit
Nano France performs R&D Services for Weebit Nano (Israel). In consideration for the services rendered,
Weebit Nano (Israel) pays Cost + 5% of the R&D cost incurred by Weebit Nano (France).
Related party transactions that occurred during the year were in the form of short term employee and
advisory benefits, payments to directors and officers and share based payments. Transactions between
related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
44
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS
Share-based payment transactions
Consistent with the disclosure in Note 9, at a General Meeting in February 2019 the Company approved a share
consolidation so that every 25 shares were consolidated into one share. Consequently, every 25 options and
every 25 performance rights were also consolidated into one option and one performance right respectively. The
exercise prices of existing options were adjusted accordingly. The details of options and performance rights
granted prior to February 2019 have been adjusted to reflect the effect of the 25:1 consolidation.
The Company completed the following share-based payment transactions during the year:
Options
2019
Performance
Rights
2019
Shares
2019
$
$
$
345,264
243,430
-
144,126
99,037
-
148,750
-
(245,000)
-
9,934
-
-
-
-
-
-
-
-
-
-
147,896
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
245,000
74,550
-
-
-
-
-
-
-
-
Options/
Performance
Rights
2018
$
-
-
-
-
-
-
-
-
548,813
762,500
932,500
149,754
205,815
504,000
24,772
39,635
Expense of options granted in previous periods
(i.e. expensed over the vesting period)
800,000 options granted to Chairman
400,000 options granted to CEO
480,000 performance rights granted to CEO
360,000 options granted to a consultant*
57,139 shares issued to a consultant
Shares issued to a director, previously included in
options reserve
Shares issued to a past director
248,000 options granted to employees
1,120,000 options granted to CEO
5,000,000 options granted to a consultant of the
company*
1,000,000 options granted to a consultant of the
company*
610,000 Options issued to employees & directors
on 30 January 2018
552,000 Performance Rights issued to employees
& directors on 30 January 2018
280,000 shares issued to a director on 30 January
2018
160,000 options issued to directors and
employees on 26 February 2018
128,000 performance rights issued to employees
and directors
Total
502,111
391,326
369,550
3,167,789
* 360,000 options (2018: 6,000,000 options) were issued to consultants for services in relation to a capital raising.
As such, a share-based payment expense was booked to capital raising of $148,750 (2018: $1,695,000).
The balance of $1,114,237 (2018: $1,472,789) has been recognised in the profit and loss.
Total share based payments for the year ended 30 June 2019 were $1,262,987 (2018: $3,167,789).
45
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS (CONTINUED)
The options and performance rights detailed above and those granted in a previous period, vesting during the
year, were issued on the following terms and conditions (the details of options and performance rights granted
prior to February 2019 have been adjusted to reflect the effect of the 25:1 consolidation):
Date of Grant Grantee
30.11.2017
CEO
No. of options/
performance
rights
1,120,000
Exercise
price $ Vesting Schedule
0.43875 4 years: 25% after 1 year, and
Contractual
Term
10 years
Fair Value A$
1.2625 (1)
12 equal quarterly portions
thereafter
30.01.2018
Employees
290,000
1.7125 4 years: 25% after 1 year, and
10 years
1.0975-1.1475 (2)
30.01.2018
Employees
296,000
30.01.2018
30.01.2018
Director
Director
280,000
160,000
N/A
12 equal quarterly portions
thereafter
4 years: 25% after 1 year, and
12 equal quarterly portions
thereafter
Vesting immediately
1.4450 4 years: 25% after 1 year, and
-
10 years
1.8000 (2)
-
10 years
0.7000 (3)
0.3625 (4)
15.02.2018
Director
160,000
1.5650 4 years: 25% after 1 year, and
10 years
0.3500 (5)
12 equal quarterly portions
thereafter
15.02.2018
Director
128,000
15.02.2018
Director
128,000
-
-
12 equal quarterly portions
thereafter
4 years: 25% after 1 year, and
12 equal quarterly portions
thereafter
4 years: 25% after 1 year, and
12 equal quarterly portions
thereafter
10 years
0.7000 (6)
10 years
0.7000 (6)
26.02.2018
Director
160,000
1.2725 4 years: 25% after 1 year, and
10 years
0.3800 (7)
26.02.2018
Director
128,000
-
12 equal quarterly portions
thereafter
4 years: 25% after 1 year, and
12 equal quarterly portions
thereafter
10 years
0.7000 (7)
28.11.2018
Director
800,000
0.8475 25% vest on 16/10/2019 and
16.10.2028
0.5350 (8)
28.11.2018
CEO
400,000
0.43875 25% vested on grant date and
01.10.2027
0.5625 (9)
6.25% on quarterly basis
thereafter
28.11.2018
CEO
480,000
-
6.25% on quarterly basis
thereafter
25% vested on grant date and
6.25% on quarterly basis
thereafter
01.10.2027
0.7000 (10)
12.10.2018
12.10.2018
14.04.2019
Consultant
Consultant
Employees
180,000
180,000
248,000
1.3125 Fully vested
1.53125 Fully vested
0.4286 25% vested after 1 year and
11.10.2022
11.10.2022
14.04.2029
0.4275 (11)
0.4000 (11)
0.3306 (12)
6.25% on quarterly basis
thereafter
46
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS (CONTINUED)
(1) The 1,120,000 Options granted to the CEO on 30 November 2017 were valued at $1.2625 per option using
the Black & Scholes option model based on the following inputs:
Underlying share price
Option exercise price
Effective date
Option expiry date
Share price volatility
Risk free interest rate
$1.525 per share
$0.43875 per share
November 30, 2017
November 30, 2027
65.17% - 67.51% (calculated separately for each portion)
2.49% - 2.66% (calculated separately for each portion)
(2) The 290,000 Options granted to employees on 30 January 2018 were valued at $1.0975-$1.1475 per option
using the Black & Scholes option model based on the following inputs:
$1.80 per share
Underlying share price
$1.7125 per share
Option exercise price
30 January 2018
Effective date
29 January 2028
Option expiry date
65.54%-69.60% (calculated separately for each portion)
Share price volatility
2.47% - 2.75% (calculated separately for each portion)
Risk free interest rate
The 7,400,000 performance rights granted to directors and employees on January 30, 2018 were valued
at $1.8000 per right based on the following inputs:
Underlying share price
Effective date
Expiry date
$1.8000 per share
30 January 2018
29 January 2028
(3) The 280,000 shares issued to a director on 30 January 2018 were initially valued at $1.80 per share being
the share price on grant date. The shares were subject to shareholder approval at the 2018 Annual General
Meeting and were subsequently re-estimated at $0.70.
(4) The 160,000 options were granted to an advisor (who is also a director). The options granted on 30 January
2018 were valued at $1.2225 per option. The options issued were initially valued using the Black & Scholes
option model. The options were subject to shareholder approval at the 2018 Annual General Meeting and
were subsequently re-estimated at $0.3625 based on the following inputs:
Underlying share price
Option exercise price
Effective date
Option expiry date
Share price volatility
Risk free interest rate
$0.70 per share
$1.445 per share
30 January 2018
29 January 2028
65.54%-69.60%
2.47% - 2.75%
(5) The 160,000 options were granted to a director. The options granted on 15 February 2018 were valued at
$0.93 per option. The options issued were valued using the Black & Scholes option model. The options were
subject to shareholder approval at the 2018 Annual General Meeting and were subsequently re-estimated
at $0.3500 based on the following inputs:
Underlying share price
Option exercise price
Effective date
Option expiry date
Share price volatility
Risk free interest rate
$0.70 per share
$1.565 per share
15 February 2018
14 February 2028
65.54%-69.60%
2.47% - 2.75%
47
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS (CONTINUED)
(6) The 256,000 performance rights granted to a director/advisor (Tranche 1: 128,000 rights as director on 15
February 2018 and Tranche 2: 128,000 rights as advisor on 30 January 2018) were initially valued at $1.80.
The options were subject to shareholder approval at the 2018 Annual General Meeting and were
subsequently re-estimated at $0.70 per right based on the following inputs:
Underlying share price
Underlying Share price
Expiry date
Expiry date
$0.70 per share for Tranche 1
$0.70 per share for Tranche 2
29 January 2028 (Tranche 1)
14 February 2028 (Tranche 2)
(7) The 160,000 options granted to a director on 26 February 2018 were initially valued at $0.875 using the Black
& Scholes option model. The options were subject to shareholder approval at the 2018 Annual General
Meeting and were subsequently re-estimated at $0.3800 per right based on the following inputs:
Underlying share price
Option exercise price
Effective date
Option expiry date
Share price volatility
Risk free interest rate
$0.70 per share
$1.2725 per share
26 February 2018
25 February 2028
65.54%-69.60% (calculates separately for each portion)
2.47% - 2.75% (calculates separately for each portion)
128,000 performance rights granted to a director on 26 February 2018 were initially valued at $1.40. The
performance rights were subject to shareholder approval at the 2018 Annual General Meeting and were
subsequently re-estimated based on the following inputs:
Underlying share price
Effective date
Option expiry date
$0.70 per share
15 February 2018
14 February 2028
(8) The 800,000 options granted to a director on 28 November 2018 were valued at $0.535 per option using the
Black & Scholes options model based on the following inputs:
Underlying share price
Option exercise price
Grant date
Share price volatility
Risk free interest rate
$0.70
$0.8475
November 28, 2018
71.34%-74.25%
2.58%-2.62%
(9) The 400,000 options granted to the CEO were valued at $0.5625 per option using the Black & Scholes options
model based on the following inputs:
Underlying share price
Option exercise price
Grant date
Risk free interest rate
Share price volatility
$0.70
$0.43875
November 28, 2018
2.58%-2.62%
71.34%-74.25%
48
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS (CONTINUED)
(10) The 480,000 performance rights granted to the CEO were valued on the following inputs:
Underlying share price
$0.70
(11) The 360,000 options issued to the broker in relation to the share placement in two tranches were valued
using the Black & Scholes options model based on the following inputs:
First Tranche
Underlying share price
Option exercise price
Grant date
Option expiry date
Share price volatility
Risk free interest rate
180,000
$0.825
$1,3125
12 October 2018
12 October 2022
83%
2.36%
Second Tranche
Underlying share price
Option exercise price
Grant date
Option expiry date
Share price volatility
Risk free interest rate
The cost of options issued to the broker was recorded against capital raising costs as a cost of equity.
180,000
$0.825
$1.53125
12 October 2018
12 October 2022
83%
2.36%
(12) 248,000 options were granted to employees, valued at $0.33060 per option using the Black & Scholes
options model based on the following inputs:
Underlying share price
Option exercise price
Grant date
Option expiry date
Risk free interest rate
Share price volatility
$0.475
$04286
14 April 2019
23 January 2029
1.64%-1.79%
74.18%-79.23%
A summary of the movements of all Company options issued as share-based payments is as follows:
Outstanding at the
beginning of the year
Granted
Exercised
Expired
25:1 consolidation
Outstanding at year-end
2019
151,677,400
39,248,000
-
(5,000,000)
(178,250,304)
7,675,096
Weighted
Average Price
$
0.04
0.04
-
0.03
-
1.01
2018
63,000,000
197,250,000
(100,572,600)
(8,000,000)
-
151,677,400
Weighted Average
Price
$
0.06
0.03
0.03
0.05
-
0.04
The outstanding options have a weighted average contractual life of 4.22 years (2018: 4.71 years)
49
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 13: SHARE BASED PAYMENTS (CONTINUED)
A summary of the movements of all Company performance rights issued as share-based payments
is as follows
Outstanding at the beginning of the year
Granted
Exercised/vested
25:1 consolidation
Outstanding at the end of the year
NOTE 14: AUDITORS’ REMUNERATION
2019
2018
41,304,545
12,000,000
(15,652,274)
(36,146,180)
1,506,091
17,304,545
24,000,000
-
-
41,304.545
Amounts received or due and receivable by Nexia Perth Audit Services
Pty Ltd:
An audit or review of the financial report of the parent and any other
entity in the Group
Other services in relation to the parent and any other entity in the
Group
Amounts received or due and receivable by BDO Israel
*Audit and review of the subsidiaries Weebit Nano Ltd (Israel) and
Weebit Nano SARL (France)
Consolidated
2019
$
Consolidated
2018
$
40,800
43,070
5,600
7,400
62,884
65,345
109,284
115,815
*The fee for BDO Israel includes the audit of statutory financial statements for Weebit Nano Ltd (Israel) and
audit of tax return for Weebit Nano Ltd (Israel).
50
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 15: FINANCIAL RISK MANAGEMENT
Risk management is carried out by the CEO.
Foreign Currency Risk
As a result of significant operations in the Israel and France, the Group's statement of financial position can be
affected significantly by movements in the NIS/USD, EURO/AUD USD/AUD exchange rates. As at the end of the
reporting period the Group’s exposure to foreign currency risk was considered immaterial by the Company and
therefore no sensitivity analysis has been disclosed.
The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an
operating entity in currencies other than the functional currency.
Price risk
The Company is not directly exposed to any price risk.
Interest rate risk
The Group’s cash balances are subject to changes in interest rates.
Credit Risk
a)
The Group has no significant concentrations of credit risk except cash at bank with various banks
Liquidity Risk
b)
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate working
capital is maintained for the coming months. Upcoming capital needs and the timing of raisings are assessed
by the Board at each Meeting of Directors.
51
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 15: FINANCIAL RISK MANAGEMENT (CONTINUED)
The following are the contractual maturities of the financial liabilities, including estimated interest payments
and excluding the impact of netting arrangements:
Nature of financial
liabilities
Trade and other payables
Carrying
Amount
$
Contractual
cash flows
$
At 30 June 2019
369,166
369,166
At 30 June 2018
511,602
511,602
< 3 months
3-6 months
> 6 months
$
-
-
$
-
-
$
-
-
Cash flow and Interest Rate Risk
c)
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as
a result in changes in market interest rates and the effective weighted average interest rates on classes of
financial assets and financial liabilities, only cash is affected by interest rate risk as cash is the Group’s only
financial asset exposed to fluctuating interest rates.
In accordance with AASB 9 the following sensitivity analysis has been performed for the Group’s Interest Rate
risk:
Consolidated Risk
Variable
Interest Rate
Effect On:
Profit
2019
$
16,709
(16,709)
Effect On:
Equity
2019
$
16,709
(16,709)
Effect On:
Profit
2018
$
33,500
(33,500)
Effect On:
Equity
2018
$
33,500
(33,500)
Sensitivity
1%
-1%
* It is considered that 100 basis points a ‘reasonably possible’ estimate of the sensitivity in the interest rate.
The fair values of all financial assets and liabilities of the Group approximate their carrying values.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Group’s capital includes ordinary share
capital and share options, supported by financial assets.
There were no changes in the Group’s approach to capital management during the year ended 30 June 2019.
Neither the Company nor the Group are subject to externally imposed capital requirements.
52
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 16: SUBSEQUENT EVENTS
On 1 July 2019 Atiq Raza was appointed to the Board of directors as a non-executive director. Independently,
Yossi Keret will retire from the board of directors at the next annual general meeting.
On 14 August 2019 the Board of directors approved the grant of 160,000 options and 128,000 performance
rights for Mr. Atiq Raza. This grant is pending approval at the next annual general meeting.
On 14 August 2019 the Board of directors approved the grant of options to directors and employees. The
options granted to directors are pending approval at the next annual general meeting.
On 12 August 2019 the company signed a letter of intent with XTX technology (a Chinese provider of high
quality memory solutions for consumer electronics, industrial embedded system, telecom and networking
markets), to cooperate in investigating ways in which XTX can use Weebit’s technology in its products.
On 27 August 2019, the Company announced to the ASX that it had received commitments from existing and
new wholesale and sophisticated investors of $2.5 million.
NOTE 17: COMMITMENTS
As at 30 June 2019, the Group had the following commitments:
Contracted future payments to Leti*
Contracted future payments for rent
Contracted future payments for leased cars
Within 1 year
$750,584
$60,480
$49,804
Greater than 1 year
$-
$60,480
$70,160
* In July 2019 the agreement with Leti was amended and an additional $243,696 will be paid within 1 year.
NOTE 18: SEGMENT REPORTING
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components
of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision
maker to make decisions about resources to be allocated to the segment and assess its performance and for
which discrete financial information is available. This includes start-up operations which are yet to earn
revenues. Management will also consider other factors in determining operating segments such as the
existence of a line manager and the level of segment information presented to the board of directors.
During the year the Company has only operated in one segment and that was the development of the next
generation of Non-Volatile Memory made of Silicon Oxide (SiOx).
53
WEEBIT NANO LTD
ACN: 146 455 576
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 19: PARENT COMPANY DISCLOSURES
Results of the parent entity
Loss for the year
Financial position of the parent entity at year end
Current assets
Non-Current Assets
Provision for non-recovery of loans
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising:
Share capital
Reserves
Accumulated losses
Total equity
Parent Entity Contingencies
2019
$
2018
$
(7,065,428)
(4,499,719)
940,757
10,209,312
(9,459,206)
1,690,863
2,611,725
5,482,960
(4,443,156)
3,651,529
86,428
86,428
157,165
157,165
28,960,576
6,176,083
(33,532,224)
1,604,435
24,678,514
5,282,646
(26,466,796)
3,494,364
The Directors are not aware of any contingent liabilities that may arise from the Company’s operations as at
30 June 2019 apart from as disclosed elsewhere in this report.
54
WEEBIT NANO LTD
ACN: 146 455 576
Directors’ Declaration
In the Directors’ opinion:
a) the financial statements and notes set out on pages 25 to 54 and the Remuneration Report in the Directors’
Report are in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Group's financial position as at 30 June 2019 and of its
performance, as represented by the results of its operations, changes in equity and its cash flows,
for the year ended on that date; and
complying with Australian Accounting Standards, Corporations Regulations 2001 and other
mandatory professional reporting requirements.
b) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become
due and payable.
c) the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
This declaration is made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the year ended 30 June 2019.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the Board
David Perlmutter
Chairman
27 August 2019
Melbourne
55
Independent Audit Report to the Members of Weebit Nano Limited
Report on the financial report
Opinion
We have audited the financial report of Weebit Nano Limited (“the Company”), including its subsidiaries
(“the Group”) which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2019 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 entity in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (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.
56
Key audit matter
Future Funding
(Refer to Note 2)
The Group’s primary activity is research and
development which is funded through equity
raisings as the Group does not yet have revenue
generating activities.
As disclosed in Note 2, the Group reported an
operating loss after tax for the year ended 30
June 2019 of $6,693,803, of which $1,114,833
represented a share based payment expense.
The Group reported net cash outflows from
operating activities of $5,745,444.
The adequacy of funding and liquidity, as well as
the relevant impact on the going concern
assessment, is a key audit matter due to the
significance of management’s judgments and
estimates in respect of this assessment.
How our audit addressed the key audit
matter
Our audit procedures included, amongst others:
Checking the mathematical accuracy of the
cash
by
management;
prepared
forecast
flow
Evaluating the reliability and completeness
of management’s
by
comparing them to our understanding of
the Group’s future plans and operating
conditions;
assumptions
Obtaining
an
understanding
of
management’s forecast and evaluating the
sensitivity of assumptions made by
management;
Checking the available placement capacity
of the Company;
Checking the progress on the receipt of the
company’s R and D claim;
Obtaining board meeting minutes and ASX
announcements subsequent to year end to
assess the impact of any additional facts or
information
management’s
assumptions; and
on
Verifying the commitments received in
respect of the placement announced on 27
August 2019.
57
Other information
The directors are responsible for the other information. The other information comprises the information
in the Weebit Nano Limited annual report for the year ended 30 June 2019, but does not include the
consolidated financial report and the auditor’s report thereon.
Our opinion on the consolidated financial report does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated 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 the
other information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the consolidated 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 consolidated financial report, the directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the entity or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibility 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 include
sour 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
Australian
at:
www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report.
Assurance
Standards
Auditing
website
Board
and
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
58
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 16 of the Directors’ Report for the
year ended 30 June 2019. In our opinion, the Remuneration Report of Weebit Nano Limited for the
year ended 30 June 2019 complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Nexia Perth Audit Services Pty Ltd
M. Janse Van Nieuwenhuizen
Director
Perth
27 August 2019
59
WEEBIT NANO LTD
ACN: 146 455 576
ASX Additional Information
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report
is set out below. This information is dated as at 16 August 2019.
CAPITAL
a) Ordinary Share Capital
63,649,257 ordinary fully paid shares. All ordinary shares carry one vote per share.
b) Unlisted Options over Unissued Shares
7,427,096 unlisted options.
1,977,096
1,120,000
180,000
180,000
160,000
160,000
160,000
800,000
290,000
400,000
$0.75000
$0.43875
$1.31250
$1.53125
$1.56500
$1.44500
$1.27250
$0.84750
$1.71750
$0.43875
30-Jun-20
2-Oct-21
12-Oct-22
12-Oct-22
15-Feb-28
1-Jan-28
5-Mar-28
16-Oct-28
29-Jan-28
1-Oct-27
c) Performance Rights
1,160,000 Performance Rights with an exercise price of $NIL.
180,000
40,000
32,000
40,000
128,500
346,091
300,000
88,000
88,000
96,000
167,500
1-Oct-27
1-Jan-28
5-Mar-28
15-Feb-28
29-Jan-28
30-Jul-21
1-Oct-27
1-Jan-28
15-Feb-28
5-Mar-28
29-Jan-28
d) Performance Shares
346,091 Performance Shares escrowed until 30 July 2018 (following which the holder may elect to convert
each Performance Share into one ordinary share) and expiring on 30 July 2021.
60
WEEBIT NANO LTD
ACN: 146 455 576
The voting rights attached to each class of equity security are as follows:
Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each
member present at a meeting or by proxy has one vote on a show of hands.
Unlisted Options, Performance Rights and Performance Shares: Options and performance rights do
not entitle the holders to vote in respect of that equity instrument, nor participate in dividends, when
declared, until such time as the options are exercised or performance rights convert and
subsequently registered as ordinary shares.
61
WEEBIT NANO LTD
ACN: 146 455 576
TOP 20 SHAREHOLDERS AS AT 16 AUGUST 2019
Rank Holder Name
Designation
LTD
1 CITICORP NOMINEES PTY
LIMITED
2
IBI TRUST MANAGEMENT
3 SILVER HORIZON PTY LTD
4
IBI TRUST MANAGEMENT
5 BNP PARIBAS NOMINEES PTY
6 DROXFORD INTERNATIONAL
LIMITED
IBI TRUST MANAGEMENT
7
IBI TRUST MANAGEMENT
8
9
IBI TRUST MANAGEMENT
10 MRS ANNE LE
11 MR ERIC MARK CASPARY
12 EVERBLOOM TRADING PTY
13 MR ELI STAUB
14 SHINEWARM RESOURCES
(HK) GROUP LIMITED
15
IBI TRUST MANAGEMENT
16 MR FABIAN SEIBOLD + DR
SILVIA MARIA SEIBOLD
17 BT PORTFOLIO SERVICES
18 MR FABIAN SEIBOLD + MRS
SILVIA MARIA SEIBOLD
19 BT PORTFOLIO SERVICES
20 HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
LIMITED
LIMITED
LTD
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
Total Remaining Holders Balance
No. of
Shares Held
3,589,897
1,509,462
1,429,150
1,153,500
1,132,404
1,044,000
753,500
688,355
576,874
531,489
523,731
456,000
425,144
400,000
388,728
377,832
340,222
333,333
330,222
315,458
16,299,301
47,349,956
% Held
5.64
2.37
2.25
1.81
1.78
1.64
1.18
1.08
0.91
0.84
0.82
0.72
0.67
0.63
0.61
0.59
0.53
0.52
0.52
0.50
25.61
74.39
62
TOP 20 SHAREHOLDERS AS AT 16 AUGUST 2019 (CONTINUED)
WEEBIT NANO LTD
ACN: 146 455 576
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
No. of Holders
994
1,254
538
874
101
3,761
No. of Shares
525,753
3,364,253
4,084,532
25,417,365
30,257,354
63,649,257
Number of shareholders holding less than a marketable parcel at $0.043 per share
1,058
There is no current on-market buy-back.
SUBSTANTIAL SHAREHOLDERS AS AT 16 AUGUST 2019
There are no substantial shareholder of the Company as at 16 August 2019.
No. of Shares
Held
% Held
1
* Includes pre and post share consolidation share sales between 7 January and 21 February 2019.
RESTRICTED SECURITIES
The Company had no Ordinary Shares subject to Voluntary Escrow as at the date of this report.
PRINCIPAL REGISTERED OFFICE
As disclosed in the Corporate directory on page 1 of this Annual Report.
REGISTERS OF SECURITIES
As disclosed in the Corporate directory on page 1 of this Annual Report.
STOCK EXCHANGE LISTING
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Securities Exchange Limited, as disclosed in the Corporate directory on page 1 of this Annual Report.
USE OF FUNDS
The Company has used its funds in accordance with its initial business objectives.
63