Audio Pixels Holdings Limited (AKP) 2024年年度報告「ASX」.pdf

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1、Audio Pixels Holdings LimitedACN 094 384 273AnnUAL RePoRt2024DirectorsFred Bart(Chairman)Cheryl Bart AOMark Ureda(resigned 16 July 2024)Shawn van Boheemen(appointed 16 July 2024)Company secretaryShawn van BoheemenRegistered off ice Suite 3,Level 1275 Elizabeth StreetSYDNEY NSW 2000AustraliaTelephone

2、:+61 2 9233 3915Facsimile:+61 2 9232 3411Email:.auW.auAuditorMoore AustraliaLevel 44 600 Bourke Street Melbourne VIC 3000Australiashare RegistryComputershare Investor Services Pty Limited6 Hope StreetErmington NSW 2115AustraliaGPO Box 7045Sydney NSW 1115AustraliaTelephone:1300 855 080 or+61 3 9415 5

3、000 outside AustraliaFacsimile:1300 137 341Israel off ice3 Pekris StreetRehovotISRAEL 76702Telephone:+972 73 232 4444Facsimile:+972 73 232 4455Email:BankersSt George Bank200 Barangaroo AvenueBarangarooSYDNEY NSW 2000AustraliaCORPORATE DIRECTORYDirectors Report 2Auditors Independence Declaration 14Di

4、rectors Declaration 15 Consolidated Statement of Profit or Loss and Other Comprehensive Income 16Consolidated Statement of Financial Position 18Consolidated Statement of Changes in Equity 19Consolidated Statement of Cash Flows 20Notes To and Forming Part of the Financial Statements 21Consolidated En

5、tity Disclosure Statement 54Independent Audit Report 55ASX Additional Information 59Twenty Largest Ordinary Shareholders 60ContentsAudio Pixels Holdings Limited ACN 094 384 2731Annual Report 2024TheDirectors of Audio Pixels Holdings Limited submit herewith the financial report of the company for the

6、 financial year ended 31December 2024 Inorder to comply with the provisions of the Corporations Act 2001,the directors report as follows:Thenames and particulars of the directors of the company during or since the end of the financial year are:nameParticularsFred BartChairman and Chief Executive Off

7、icer Adirector since 5 September 2000 He has been Chairman and Managing Director of numerous private companies since 1980,specialising in manufacturing,property and marketable securities He is a member of the Audit Committee and a member of the Nomination and Remuneration CommitteeHe is also Chairma

8、n of Noxopharm Limited and Chairman of Phoslock Environmental Technologies LimitedCheryl Bart AONonexecutive director Appointed to the Board on 26 November 2001 Cheryl Bart is a lawyer and company director She is Chairman of Tilt Renewables Limited and Ted X Sydney Cheryl is a nonexecutive director

9、of SG Fleet Group Limited and the Moriah College FoundationShe is a fellow of the Australian Institute of Company Directors,Patron of SportsConnect and a member of Chief Executive Women She is a member of the Audit Committee and a member of the Nominations and Remuneration CommitteeMark UredaNonexec

10、utive director Mr Ureda brings to the company extensive executive experience in audio systems,technology trends and product strategies In2010 he joined Harman International as president of JBL Professional He subsequently served as VP/CTO and then senior vice president of Harman Professional He reti

11、red in 2018 and joined Biamp Systems as executive advisor and continues to serve on the boards of Loud Audio and Bose ProfessionalPrior to joining Harman,Mr Ureda was senior vice president of corporate strategy at Northrop Grumman specializing in mergers and acquisitions and held board positions at

12、Navia Aviation AS,and Remotec UK LimitedShawn van BoheemeNonexecutive director Mr van Boheemens experience in commercial finance leadership spans 30 years across various sectors,including healthcare,manufacturing,biotech and financial servicesHis expertise includes Australian ASX and ASIC reporting,

13、SEC reporting in the USA,compliance and regulatory affairs,internal and external audit work,taxation,business and financial analytics,IP protection,as well as regulatory and financial reporting locally and in the United StatesHe has held senior financial positions in both Australian and multinationa

14、l organisations,including Covance,Unomedical,MD Sass,and New York Life Insurance He is currently CFO of Noxopharm Limited(ASX:NOX)and a Nonexecutive director/company secretary of Phoslock Environmental Technologies Limited(ASX:PET)Shawn holds a Master of Commerce degree with a major in Accounting(UW

15、S)and a Bachelor of Business degree in Accounting and Commercial Law(UWS)He is a Fellow of the Australian Society of Certified Practising Accountants and a Justice of the Peace in NSWDIReCtoRs RePoRtAudio Pixels Holdings Limited ACN 094 384 2732Annual Report 2024DIReCtoRs RePoRtDirectorships of othe

16、r listed companiesTheabovenamed directors held office during the whole financial year except for:MrMark Ureda resigned 16 July 2024Shawn van Boheemen appointed 16 July 2024Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are as

17、 follows:nameCompanyPeriod of directorshipFred BartWeebit Nano LimitedNoxopharm LimitedPhoslock Environmental Technologies LimitedMarch 2018 to 27 June 2023Since 8 May 2020 Since 18 January 2024Mark UredaN/AN/ACheryl Bart SG Fleet Australia LimitedSinceFebruary2014Shawn van BoheemenPhoslock Environm

18、ental Technologies LimitedSince 18 January 2024Principal activitiesTheprincipal activity of the Company is holding an investment in Audio Pixels Limited of Israel Audio Pixels Limited is engaged in the development of digital speakers ResultsThenet loss for the financial year ended to 31December 2024

19、 was$8,170,538(2023:$14,614,491)DividendsThedirectors recommend that no dividend be paid and no amount has been paid or declared by way of dividend since the end of the previous financial year and up to the date of this reportReview of operationsDuring the reporting period,the companys achievements

20、wereprimarily technical,focused on advancing ourproven Digital Sound Reconstruction(DSR)technologytowardmass production and commercialisationBuilding on the success of ourGENI development platform,we have been transitioning from a companywholly dedicated to R&Dinto an organizationdriven by commercia

21、l objectives and market opportunitiesOur efforts have been concentrated ondelivering customer engineering samplesin a manner that seamlessly scales tolargescale mass production This process involves:Close collaboration with vendorsto refine and optimize fabrication techniques used during prototyping

22、Redesign and fabrication of our embedded highvoltage mixedsignal controller(HVD)to meet commercial requirementsEnhancements to chip assembly and packaging,ensuring alignment withperformance and cost targetsfor the final commercial productAdditionally,we are placing strong emphasis onmitigating suppl

23、y chain dependenciesandexpanding our intellectual property portfolio,ensuring themaximum possible protectionfor ourindustryalteringtechnology as it enters the marketManagement will continue to update stakeholders as specific milestones and developments are solidifiedAudio Pixels Holdings Limited ACN

24、 094 384 2733Annual Report 2024DIReCtoRs RePoRtReview of operations(Cont.)Placement to earthMountainEarth Mountain committed in writing to take 308,325 ordinary shares($4,316,550)at$1400 per share in the placement announced on 24 August 2022 subject to receiving approvals from Jiangsu Province Branc

25、h of the Ministry of Commerce,National Development and Reform Commission and the State Administration of Foreign Exchange to settle their commitment Asat the date of this report and as advised by Earth Mountain in writing on 23 January 2024,EarthMountain had yet to receive the necessary approvals fr

26、om the Jiangsu Province Branch of the Ministry of Commerce,National Development and Reform Commission and the State Administration of Foreign Exchange in China to settle their commitment Due to the prolonged delay in EarthMountains committed placement stemming from continued regulatory obstacles in

27、China,until such time as EarthMountain provide a meaningful and verifiable update,the Board can no longer consider that the placement funds will be received Unsecured LoansThetotal unsecured loans outstanding at 31December 2024 from 4F Investments Pty Limited,a company associated with MrFred Bart,wa

28、s$5,188,353(2023:$2,469,988)Theoutstanding unsecured loan attracts an interest rate of 12%per annum(accruing from 1 January 2024 until maturity)Thefirst$969,988 of the loan balance is repayable on receipt of the EarthMountain placement proceeds,with the balance of the loan repayable from the proceed

29、s of a capital raise by the Company If a capital raise in undertaken before the EarthMountain placement funds are received,the entire loan balance and accrued interest is repayable from the proceeds of the capital raise Theunsecured loan facility has a maturity date of 31December 2025 Convertible no

30、tesOf the$5,000,000 of Convertible Notes issued during 2023,2 note holders redeemed their notes on maturity(30 April 2024),and were repaid$450,000 in cash plus accrued interest Thenote issued to 4F Investments Pty Limited(a Company controlled by Fred Bart,Chairman)in October 2023 for$500,000 was can

31、celled and converted into the unsecured loan facility on 29 May 2024,as it was issued to a related party without shareholder approval At 31December 2024,the balance of the notes issued during 2023 is$4,050,000These Convertible Notes were previously modified to mature on 31January 2024,however were s

32、ubsequently modified to mature on 30 April 2024,30 September 2024 and 31December 2025 Themodifications have not changed any other terms,these notes are unsecured,unlisted and attract an interest rate of 12%per annum payable quarterly in arrears and convertible into ordinary shares at$904,based on th

33、e fiveday volume weighted average share price of Audio Pixels Holdings Limited on the date of the agreement,unless a share capital raise is undertaken at a lower price,with a conversion price floor of$500Inorder to meet ASX Listing Rule 61 requirements,the Company obtained noteholder approval on 5 S

34、eptember to include a conversion floor price of$500 to the existing notes so the maximum dilutionary impact on conversion of the notes can be calculated These modifications to the Notes issued during 2023 referenced above were not deemed substantial and have been accounted for with a$711,270 modific

35、ation gain and$237,000 derivative liability loss on modification of the Convertible Notes recorded during the yearOn 5 September 2024,21 November 2024 and 9 December 2024,the Company announced it has issued an additional aggregate$8,450,000 in Convertible Notes to sophisticated investors Theterms of

36、 the Convertible Note will include a maturity date of 31December 2025,are unsecured,attract an interest rate of 12%per annum capitalised until the Note is fully repaid or converted into Shares TheNotes are convertible to ordinary shares at$904,or a lower price if the Company undertakes a placement o

37、f ordinary shares at any time prior to the expiry date TheNotes have conversion price floor of$500 Asan incentive for participating in the Notes,the investors will receive 1,690,000 unlisted options(100,000 options per$500,000 invested)at a strike price of 20%higher than the conversion price of$904,

38、namely$1084 These unlisted options expire on 4 May 2027Further informationFurther information concerning the operations and financial condition of the entity can be found in the financial report and in releases made to the Australian Stock Exchange(ASX)during the yearChanges in state of affairsThere

39、 was no significant change in the state of affairs of the company or the consolidated entity other than that referred to in the financial statements or notes theretoAudio Pixels Holdings Limited ACN 094 384 2734Annual Report 2024DIReCtoRs RePoRtReview of operations(Cont.)significant events after bal

40、ance dateOn 26 March 2025,the Unsecured loans with carrying amount of$5,188,353 as at 31December 2024 was approved and converted to Convertible Notes on the same terms given to the existing convertible note subscribers with 1,354,698 maximum number of ordinary shares to be issued Other than the abov

41、e,there has not been any other matters or circumstance that has arisen since the end of the financial year which is not otherwise dealt with in this report or in the financial statements,that has significantly affected or may significantly affect the operations of the company or the consolidated ent

42、ity,the results of those operations or the state of affairs of the company or the consolidated entity in subsequent financial yearsFuture developmentsTheconsolidated entity will continue to focus on the development of its digital speaker technologyenvironmental regulationsInthe opinion of the direct

43、ors the company and the consolidated entity are in compliance with all applicable environmental legislation and regulations TheDirectors have considered the environmental,social and governance(ESG)aspects of the operations of the consolidated entity and do not believe that the consolidated entity is

44、 exposed to any material climaterelated or other emerging risksIndemnification and Insurance of officers and AuditorsTheCompany has agreed to indemnify the current Directors,Company Secretary and Executive Officers against all liabilities to other persons that may arise from their position as Direct

45、ors or Officers of the Company and its controlled entities,except where to do so would be prohibited by law Theagreement stipulates that the Company will meet the full amount of any such liabilities,including costs and expenses Thecontract of insurance prohibits disclosure of the nature of the liabi

46、lity and the amount of the premiumTheCompany has not,during or since the financial year indemnified or agreed to indemnify an auditor of the company or of any related body corporate against any liability incurred as such an auditorDirectors interests and benefitsTherelevant interest of each director

47、 in the share capital of the Company as notified by the directors to the Australian Stock Exchange in accordance with Section 205G(1)of the Corporations Act 2001 as at the date of this report are:nameordinary sharesFred Bart5,984,480Cheryl Bart500,000Shawn van BoheemenNilRemuneration report(Audited)

48、Since the end of the previous financial year no director of the Company has received or become entitled to receive any benefit(other than a benefit included in the aggregate amount of remuneration received or due and receivable by directors as shown in the financial statements)because of a contract

49、made by the Company or related corporation with the director or with a firm of which the director is a member,or with a company in which the director has a substantial financial interest There are no employment contracts for any of the directorsThis report outlines the remuneration arrangements in p

50、lace for Directors and key management personnel of the Company TheDirectors are responsible for remuneration policies and packages applicable to the Board members of the Company Theentire Board makes up the Nomination and Remuneration Committee TheBoard remuneration policy is to ensure the remunerat

51、ion package properly reflects the persons duties and responsibilitiesThere are currently no performancebased incentives to directors or executives based on the performance of the Company There are standard employment contracts for the executives of Audio Pixels Limited including at will employment a

52、nd a notice period of three months for terminationAudio Pixels Holdings Limited ACN 094 384 2735Annual Report 2024DIReCtoRs RePoRtRemuneration report(Audited)(Cont.)Thekey management personnel of Audio Pixels Holdings Limited during the year were:Fred Bart Chairman and Chief Executive Officer Cheryl

53、 Bart Non executive director Mark Ureda Nonexecutive director(resigned 16 July 2024)Shawn van Boheemen Nonexecutive director and Company Secretary(appointed 16 July 2024)Danny Lewin CEO and director of Audio Pixels Limited Yuval Cohen Chief Technical Officer of Audio Pixels Holdings LimitedThedirect

54、ors fees are not dependent on the earnings of the Company and the consequences of the Companys performance on shareholder wealth On 24 September 2010,the maximum total directors fees were increased to a total of$250,000 per annum in line with the increased activities of the company Theactual directo

55、rs fees paid were within the approved limit of$250,000 per annum approved by shareholders at the Annual General Meeting held on 24 September 2010Thetable below sets out summary information about the Companys earnings and movements in shareholder wealth for the last 5 financial yearsYear ended31Decem

56、ber 2024$Year ended 31December 2023$Year ended31December 2022$Year ended31December 2021$Year ended31December2020$Income248,771286,824482,841108,691191,434Net(loss)before tax(8,170,538)(14,614,491)(2,435,719)(3,309,869)(12,102,367)Net(loss)after tax(8,170,538)(14,614,491)(2,435,719)(3,309,869)(12,102

57、,367)Year ended31December2024$Year ended31December2023$Year ended31December2022$Year ended31December2021$Year ended31December2020$Share price at start of year 8181000225024051535Share price at end of year620818100022502405Dividend Paid000000000000000Thefollowing table sets out each key management pe

58、rsonnels equity holdings(represented by holdings of fully paid ordinary shares in Audio Pixels Holdings Limited)as at the date of this reportordinary sharesno.Granted as remunerationno.Received on exercise of optionsno.number of options over ordinary sharesno.Purchases/(sales)no.MrFred Bart5,984,480

59、*500,000*MrsCheryl Bart500,000MrDanny Lewin1,438,619MrYuval Cohen1,397,876*Included in the above shareholdings in respect to both Fred Bart and Cheryl Bart are 782,777(2023:782,777)shares in Audio Pixels Holdings Limited held by the Bart Superannuation Fund,in respect to which each has a relevant in

60、terest*Held by a related party to the DirectorAudio Pixels Holdings Limited ACN 094 384 2736Annual Report 2024DIReCtoRs RePoRtRemuneration report(Audited)(Cont.)transactions with related entitiesAll transactions with KMP and their related parties are made on terms equivalent for those that prevail i

61、n arms length transactionsDuring the year ended 31December 2024,the Company paid a total of$109,355(2023:$109,456)to 4F Investments Pty Limited,a company associated with MrFred Bart in respect of directors fees and superannuation for MrFred Bart and MrsCheryl BartDuring the year,the Company paid$45,

62、000(2023:$37,500)to Noxopharm Limited,a company associated with MrFred Bart who is chairman,in respect of consulting fees for company secretarial and accounting services provided by Shawn van Boheemen At 31December 2024 the Company has an accrued payable owing to Noxopharm Limited for$45,000Thetotal

63、 unsecured loans outstanding at 31December 2024 from 4F Investments Pty Limited was$5,188,353(2023:$2,469,988)Theoutstanding unsecured loan attracts an interest rate of 12%per annum(accruing from 1 January 2024 until maturity)Thefirst$969,988 of the loan balance is repayable on receipt of the EarthM

64、ountain placement proceeds,with the balance of the loan repayable from the proceeds of a capital raise by the Company If a capital raise in undertaken before the EarthMountain placement funds are received,the entire loan balance and accrued interest is repayable from the proceeds of the capital rais

65、e Theunsecured loan facility has a maturity date of 31December 2025 During the year,the Company paid$74,709(2023:$135,673)interest on the unsecured loan to 4F Investments Pty Limited Nominal interest has been accrued in the financial statements at 31December 2024 of$520,542(2023:$74,709)Inaddition,a

66、n effective interest expense was recognised at 31December 2024 of$335,567(2023:Nil)During the reporting period,4F Investments Pty Limited purchased a convertible note from an existing note holder for a face value of$250,000 with unlisted options of 25,000 There is no change to the original terms of

67、the convertible note agreementThelease in respect of office premises at Suite 3,Level 12,75 Elizabeth Street Sydney expired on 30 March 2022 TheCompany has not renewed the lease and continues to occupy the premises on a month to month basis TheCompany recharged rent and other tenancy charges of$36,0

68、45(2023:$34,790)to 4F Investments Pty Limited,a company controlled by Fred BartAll Executive KMPs are employed under a contract with the consolidated entity Theterms of the contracts are as follows:(a)Danny LewinContract term Ongoing contract with no fixed termNotice period 3 monthsTermination right

69、s Entitled to a 3 times the employee salary at the timer of termination(b)Yuval CohenContract term Ongoing contract with no fixed termNotice period 6 monthsTermination rights in accordance with the relevant state lawsAudio Pixels Holdings Limited ACN 094 384 2737Annual Report 2024Remuneration report

70、(Audited)(Cont.)Thefollowing table sets out the remuneration of each key management personnel of the Company:short termLong term employee benefitstotalDecember 2024Directors fees/salary$non-monetary$superannuation$socialsecurity$Long service leave$Fred Bart60,8646,84767,711Cheryl Bart37,4154,20941,6

71、24Mark Ureda20,81320,813Shawn van Boheemen*107,1431,971109,114Danny Lewin220,41165,054285,465Yuval Cohen267,30038,35230,071 8,810344,533713,94638,35243,09865,0548,810869,260December 2023Fred Bart61,0006,92567,925Cheryl Bart37,5004,03141,531Ian Dennis*41,875*2,31344,188Mark Ureda20,81320,813Danny Lew

72、in170,68041,27762,337274,294Yuval Cohen255,15024,26027,459 3,563310,432587,01865,53740,72862,3373,563759,183*Theamounts disclosed for Ian Dennis include directors fees of$24,188 and consulting fees of$20,000(2023:directors fees$41,625 and consulting fees$30,000)*Theamounts disclosed for Shawn van Bo

73、heemen include directors fees of$19,114 and consulting fees of$90,000(2023:consulting fees$37,500)*Thedirectors do not have share based payments Other nonmonetary benefits include annual leave and long service leave provision increases during the yearEND AUDITED REMUNERATION REPORTDIReCtoRs RePoRtAu

74、dio Pixels Holdings Limited ACN 094 384 2738Annual Report 2024Audit CommitteeTheAudit Committee was formally constituted on 29 August 2014 with all three directors appointed to the Audit Committee Shawn van Boheemen is appointed chair of the Audit CommitteeDirectors meetingsDuring the year the Compa

75、ny held three meetings of directors,one meeting of the Audit Committee and one meeting of the Nomination and Remuneration Committee Theattendances of the directors at meetings of the Board were:Board of directorsAudit committeenomination and Remuneration committeeDirectorsHeldAttendedHeldAttendedHel

76、dAttendedMrFred Bart331111MrsCheryl Bart33111MrMark Ureda331111MrShawn van BoheemenAll current board members are on the Audit Committee and the Nomination and Remuneration CommitteeInterests under optionsAsat the date of this report,the unissued ordinary shares of the Company under options are:Grant

77、 dateexpiry dateexercise Pricenumber outstanding16/4/2116/4/25$2770122,0001/12/221/12/25$140030,0001/12/22 1/2/26$1400110,0005/5/20234/5/2026$759500,00022/5/20234/5/2026$1084500,00023/11/20234/5/2026$1084400,0005/9/20244/5/2027$10841,290,00021/11/20244/5/2027$1084200,0009/12/20244/5/2027$1084200,000

78、3,352,000Theholders of these options do not have any rights to participate in any share issue of the company or receive dividends before the options are exercised DIReCtoRs RePoRtAudio Pixels Holdings Limited ACN 094 384 2739Annual Report 2024Ethical LabourTheconsolidated entity has established meas

79、ures regarding fair labour practices and guidelines that create a respectful and safe work environment for our employees globally We are committed to treat all of our employees with respect and we strictly prohibit the use of slavery,forced labour and human trafficking To prevent the occurrence of f

80、orced,compulsory or child labour,we have implemented local labour policies and practices to comply with the Modern Slavery ActAny person who applies for employment at AKP does so on a voluntary basis and all employees are legally entitled to leave upon reasonable notice without penaltyInaccordance w

81、ith AKPs global recruiting guidelines,offers of employment must be conditional upon completion of required background checks Background checks are required to protect the safety of employees and to ensure that employees meet the standards of AKPDiversityTheCompany values diversity and recognises the

82、 benefits it can bring to the organisations ability to achieve its goals TheCompanys diversity policy(“Diversity Policy”)was updated on 31December 2021 and outlines its diversity policy in relation to gender,age,cultural background,ethnicity,employment of veterans and other factors to leverage the w

83、ides pool of available talent Acopy of the Companys Diversity Policy is available on the Companys web siteMaterial Business RisksSince its founding management has openly and frequently delineated its assessment of the ongoing and emerging risks,challenges and concerns that might influence the compan

84、y success and opportunities Infact,as a technology company engaged in transforming century old technological conventions;continual analysis of risks and failures have been baked into the companys DNAas the guiding principle of operation 1.technological Viability AKP is engaged in revolutionizing an

85、incumbent technology that has been an important and prevalent technological staple,used extensively by mankind,since its advent by Alexander Graham Bell roughly 150 years ago Theindustry at large has unsuccessfully spent many,many billions of dollars over decades searching for ways to advance sound

86、reproduction to the modern era AKPs radical approach is the best chance the industry has to succeed in its ambition to evolve sound reproduction into the digital era,for example in the same manner that the LCD has completely replaced the CRT and digital memory has replaced magnetic media for data st

87、orageHowever,this effort requires the expansion and advent of many technological disciplines,some of which were either unknown or not fully understood Achieving sufficient understanding as to the intersection of varying physical regimes prevalent in micromechanical structures was impossible before s

88、tructures of this scale could be physically fabricated and characterized This achievement alone required very deep understanding of the capabilities and limitations of available microfabrication tools and techniques AKP has and continues to be engaged in a comprehensive research and development effo

89、rt to bring our technology to fruition Assuch and until completion of the technology,its products,production methods,fulfillment of the technological vision and mission will by its very nature maintain certain levels of technological uncertainties and risks Throughout and to the best of reason,manag

90、ement has tried to share its assessment at common sense intervals of the remaining risks,challenges and concerns,based on technical progress actualities,competitive concerns,and in consideration of confidentiality and intellectual property considerationsDIReCtoRs RePoRtAudio Pixels Holdings Limited

91、ACN 094 384 27310Annual Report 2024Material Business Risks(Cont.)2.Finance and Capital TheCompany requires additional capital to execute and support its plans Thecompanys ability to secure capital in a timely manner depends among other factors on its development status,investor interest,as well as t

92、he financial state of capital markets TheDirectors have determined that the best result for a capital raise at this stage of the company,is obtainable after the company has the ability to properly demonstrate its technologies to potential investors Inthe interim the Company has been funding its oper

93、ations utilising unsecured loans from related parties and convertible notes Thedirectors continue to monitor in real time the status of achieving the demonstration milestone and may choose to take further unsecured loans and/or convertible notes if the capital raise is further delayed3.Intellectual

94、PropertyAsa pioneer,the company has managed to amass an impressive technology portfolio covering over 200 patents(and counting)in over a dozen patent families Nonetheless financial and human constraints limit our ability to:a Legally protect every aspect of the technology;andb Limit the jurisdiction

95、s in which we are able file and maintain patent protectionTheCompany is extremely diligent ensuring that all developments are originated within the company using licensed and authorised tools However,the very nature of multidisciplinary development entangling a multitude of technologies and tools mi

96、ght expose the company to claims of IP infringement by various third parties Since its founding the company has used Israels leading IP firm to advise and guide our IP strategies To the best of its ability and available resources the company has developed methods,procedures and strategies to ensure

97、originality and or legal license as well as to protect its IP worldwide Thecompany also put in place routine procedures to investigate and react if needed to possible infringement or unauthorized replication of its technologies Furthermore,our IP portfolio includes considerable knowhow Inherent to t

98、he model of a fabless company is the necessity to sharing of such knowhow with third party partners,vendors and service providers Given our limited ability to control or monitor third parties management maintains reasonable caution when divulging certain critical aspects and knowhow of our technolog

99、y Thesharing of critical information when required is done in a manner that tries to minimise the risk of IP leakage,which at time can come at the expense of elongating timelines4.Development timeline/time to MarketThere are a number of factors that have,and will continue,to influence the pace of pr

100、ogress(beyond the technological uncertainties associated with research and development as stated above),namely:Fabrication MEMS fabrication differs greatly when compared to fabrication of“traditional”integrated circuitry,despite the fact that they many of the same tools,techniques and facilities are

101、 used;mainly in that there are no rigid design rules and highly standardized batch processing techniques in MEMS By its very nature MEMS designs vary in their electromechanical and operational requirements,requiring fabrication processes flow to be tailored to the specific materials,dimensions,toler

102、ances,etc This“one designone process”,necessitates an iterative,trialanderror approach,whereby designs are fabricated,results are characterized,and then either the fabrication process flow,and or the design or both are modified,refined,or optimized accordingly in order to achieve the desired end res

103、ults often a cycle that needs to be repeated a number of times Historically converting the companys MEMS into silicon has taken between 10 and 14 months for each major integration cycle Such timelines are more or less confirmative with the cycle times throughout the fabless MEMS sector,even though A

104、KPs designs require extending the electromechanical specifications beyond the conventional norms of associated with MEMS fabrication TheCompany originally started its development works with Sony Semiconductor as its primary MEMS fabricator,and after evaluation of a number of additional Fabs ultimate

105、ly shifted priority to Tower Semiconductor in attempt to reduce production cycle timelines More recently,the company established a relationship with Earth Mountain a Chinese based entity having highly advanced facilities and expansive resources After extensive evaluation EarthMountain was deemed cap

106、able of delivering faster turnaround with superior results,a collaboration that has recently borne the success that management was hoping to achieve This collaboration was memorialized in Dec 2021 in a comprehensive manufacturing agreement which is subject to confidentiality clauses,however as has b

107、een reported the agreement includes substantial production capacity,which comes at a time that the industry at large is struggling to overcome capacity shortagesDIReCtoRs RePoRtAudio Pixels Holdings Limited ACN 094 384 27311Annual Report 2024Material Business Risks(Cont.)Fab Prioritization Thebusine

108、ss models of silicon foundries are rooted in volume production and therefore the Fabs tend to avoid conducting any kind of development work especially for innovative and nonconforming fabless companies such as AKP It is understood that even when a fab undertakes development work,such endeavors must

109、play“second fiddle”to production customers,influencing timelines(always for the worse)Exacerbating the situation are the unprecedented global shortages of semiconductor capacity experienced worldwide These unprecedented shortages have impacted virtually every industry in particular those that heavil

110、y rely on semiconductors such as the automotive and consumer electronic industries,forcing companies such as Apple and Ford,to delay,suspend,or even shutdown various aspects of their production Apopular countermeasure by some industry conglomerates to stockpile inventory and“acquire”long term capaci

111、ty,has put even further strain on smaller companies,such as AKPUnfortunately,Silicon production cannot be turned on or off with the flick of a switch;any change to production lines can take months;while adding additional capacity can take years and hundreds if not many billions of dollars Absent of

112、the company owning its own silicon foundry,the reality is that it must endure disruption and unpredictability within its supply chain 5.Reliance on third Parties for supply and Production By its very nature a fabless company such as ours is wholly dependent on the production and assembly services th

113、at are provided by third party suppliers Management works very closely with its providers,most recently with Earth Mountain and its ASIC foundry as well as a number of other related vendors,to ensure continuity of production and packaging requirements,however,any disruption to their business,for any

114、 reason,may materially impact AKP 6.Key Personnel and Competition for Human Resources as we manage growthAswe near our commercialization objectives we anticipate considerable attention and demand for our revolutionary products technologies To support this transition and growth,additional resources w

115、ill be required to be added to the companyTraditionally the technology sector,in Israel in particular,experience unprecedented shortages of human capital when segments of the industry experience unprecedented growth,or when capital becomes capital readily available,or during expansion cycles by mult

116、inational companies in Israel This reality not only makes recruiting talent extremely competitive but induces the“poaching”of our exceptionally talented staff Management continues to work on ways to enhance our employee incentive programs to better attract,recruit,and retain the talent needed to exe

117、cute our plans7.Cyber securityLike every company in the world AKPs systems,data,and networks are subject and vulnerable to malicious attacks,including computer viruses,spyware,ransomware,and hosts of other emerging security concerns Thecompany has spent and continues to spend considerable resources

118、to prevent unauthorized accesses,data loss,and cyber malicious attacks,using the best of breed cyber security systems Asa company poised to disrupt a multibilliondollar industry management must also assume that the company is,or it will become a heightened target for IP theft and disruption is there

119、fore applying every reasonable means possible to protect its intellectual property 8.Currency FluctuationAsan Australian company our finances and financials are rooted in the Australian dollar,however the overwhelming portion of expenditures and cashflow requirements are conducted in Israeli and US

120、currencies Any fluctuation in any of these currencies may have adverse effects on the companys capital requirements 9.Conflicts in IsraelWith the ongoing geopolitical instability and conflict in Israel,this increases the risk of conflict and instability,which in turn pose a risk to the Israel operat

121、ion due to the potential for operations to be disrupted,supply chains impacted or the economic conditions in Israel to deteriorate TheCompany continues to monitor these risks to the Israel operations10.Goods and services CostsGlobal shortages throughout the semiconductors have spurred a meaningful i

122、ncrease in the costs of obtaining parts Scarce components and services not only saw a dramatic and continual increase in pricing,but also demand for larger and longerterm commitments in order to secure product and services11.taxation Asan Australian resident company dealing in several foreign jurisd

123、ictions,we need to continually assess the taxation position of the whole group and keep abreast of any changes in legislation which may have affect future income DIReCtoRs RePoRtAudio Pixels Holdings Limited ACN 094 384 27312Annual Report 2024Nonaudit servicesDetails of amounts paid or payable to th

124、e auditor for nonaudit services provided during the year by the auditor are outlined in Note 4 to the financial statementsThedirectors are satisfied that the provision of nonaudit services,during the year,by the auditor(or by another person or firm on the auditors behalf)is compatible with the gener

125、al standard of independence for auditors imposed by the Corporations Act 2001Thedirectors are of the opinion that the services disclosed in Note 4 to the financial statements do not compromise the external auditors independence for the following reasons:All nonaudit services have been reviewed and a

126、pproved to ensure that they do not impact the integrity and objectivity of the auditor,andNone of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants(including Independence Standards)issued

127、by the Accounting Professional&Ethical Standards Board,including reviewing or auditing the auditors own work,acting in a management or decisionmaking capacity for the company,acting as advocate for the company or jointly sharing economic risks and rewardsAuditors independence declarationTheauditors

128、independence declaration is included on page 14Signed in accordance with a resolution of directors made pursuant to s298(2)of the Corporations Act 2001On behalf of the DirectorsFred Bart DirectorDated at Sydney this 31day of March 2025DIReCtoRs RePoRtAudio Pixels Holdings Limited ACN 094 384 27313An

129、nual Report 2024Audio Pixels Holdings Limited ACN 094 384 273Annual Report 202414DIReCtoRs DeCLARAtIonThedirectors declare that:(a)in the directors opinion,there are reasonable grounds to believe the company will be able to pay its debts as and when they become due and payable;(b)in the directors op

130、inion,the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,including compliance with accounting standards and give a true and fair view of the financial position and performance of the company and the consolidated entity;(c)the directors have been give

131、n the declarations required by s295Aof the Corporations Act 2001;and(d)the attached financial statements are in compliance with International Financial Reporting Standards,as stated in note 1 to the financial statements(e)the information disclosed in the attached consolidated entity disclosure state

132、ment is true and correctSigned in accordance with a resolution of the directors made pursuant to s295(5)of the Corporations Act 2001.On behalf of the DirectorsFred Bart DirectorDated at Sydney this 31day of March 2025Audio Pixels Holdings Limited ACN 094 384 27315Annual Report 2024ConsoLIDAteD stAte

133、Ment oF PRoFIt oR Loss AnD otHeR CoMPReHensIVe InCoMe FoR tHe YeAR enDeD 31DeCeMBeR 2024noteConsolidatedYear ended31December2024$ConsolidatedYear ended31December2023$Income2248,771286,824Administrative expenses(1,378,451)(1,251,112)Amortisation(44,139)Depreciation(371,596)(388,918)Directors fees and

134、 superannuation(149,262)(154,456)Foreign exchange(losses)(18,426)(96,037)Finance costs(2,462,138)(4,373,002)Goodwill impairment(2,399,168)Intangible asset impairment(110,686)Gain in fair value of derivative liability136,000373,000Gain on modification of convertible notes711,270162,235Loss on initial

135、 recognition of convertible notes(71,000)(2,678,000)Research and development expenses(4,644,969)(3,433,939)Share based payments(170,737)(507,093)(Loss)before income tax2(8,170,538)(14,614,491)Income tax benefit3 (Loss)for the year(8,170,538)(14,614,491)Other comprehensive(loss)Items that may be recl

136、assified subsequently to profit and loss:Exchange differences arising on translation of foreign operations 18(29,130)(756)Other comprehensive income/(loss)for the year,net of tax(29,130)(756)Total comprehensive(loss)for the year(8,199,668)(14,615,247)Notes to the financial statements are included on

137、 pages 21 to 53Audio Pixels Holdings Limited ACN 094 384 27316Annual Report 2024ConsoLIDAteD stAteMent oF PRoFIt oR Loss AnD otHeR CoMPReHensIVe InCoMeFoR tHe YeAR enDeD 31DeCeMBeR 2024noteConsolidatedYear ended31December2024$ConsolidatedYear ended31December2023$(Loss)attributable to:Owners of the c

138、ompany(8,170,538)(14,614,491)Total comprehensive(loss)attributable to:Owners of the company(8,199,668)(14,615,247)Earnings per shareBasic and diluted(cents per share)22(2797)(5015)Notes to the financial statements are included on pages 21 to 53Audio Pixels Holdings Limited ACN 094 384 27317Annual Re

139、port 2024ConsoLIDAteD stAteMent oF FInAnCIAL PosItIonAs At 31DeCeMBeR 2024noteConsolidatedDecember2024$ConsolidatedDecember2023$CURRENT ASSETS Cash and cash equivalents55,452,6902,279,051 Financial assets held at fair value through P&L61,000,000 Other receivables7256,965336,356 Prepayment8 618,039 6

140、19,699TOTAL CURRENT ASSETS7,327,6943,235,106NONCURRENT ASSETS Right of use asset952,915151,430 Property,plant and equipment10698,679614,153 Other receivables7 13,994 12,771 TOTAL NONCURRENT ASSETS765,588 778,354TOTAL ASSETS8,093,2824,013,460CURRENT LIABILITIES Trade and other payables111,901,6201,74

141、8,977 Lease liabilities1231,544111,286 Unsecured loans135,188,3532,469,988 Convertible notes1411,457,3054,921,037 Provisions15571,280311,578TOTAL CURRENT LIABILITIES19,150,1029,562,866NONCURRENT LIABILITIES Lease liabilities1217,10645,051 Provisions1526,28817,478TOTAL NONCURRENT LIABILITIES43,39462,

142、529TOTAL LIABILITIES19,193,4969,625,395NET(LIABILITIES)/ASSETS(11,100,214)(5,611,935)EQUITY Issued capital1680,067,61080,067,610 Reserves18(16,275,779)(18,958,038)Accumulated losses19(74,892,045)(66,721,507)Equity attributable to owners of the company(11,100,214)(5,611,935)TOTAL DEFICIENCY IN EQUITY

143、(11,100,214)(5,611,935)Notes to the financial statements are included on pages 21 to 53Audio Pixels Holdings Limited ACN 094 384 27318Annual Report 2024ConsoLIDAteD stAteMent oF CHAnGes In eQUItYFoR tHe YeAR enDeD 31DeCeMBeR 2024December 2024 ConsolidatedIssuedCapital$equity settled option Reserve$e

144、xchange translation reserve$MinorityAcquisition Reserve$Capital Contri-bution Reserve$Accumul-ated Losses$total$Balance at 1 January 202480,067,61012,925,519(6,344,865)(25,538,692)(66,721,507)(5,611,935)(Loss)for the year (8,170,538)(8,170,538)Other comprehensive loss for the year (29,130)(29,130)To

145、tal comprehensive(loss)for the year(29,130)(8,170,538)(8,199,668)Capital contribution reserve1,250,6521,250,652Recognition of sharebased payments 170,737 170,737Options issued 1,290,000 1,290,000Balance at 31December 202480,067,61014,386,256(6,373,995)(25,538,692)1,250,652(74,892,045)(11,100,214)Dec

146、ember 2023 ConsolidatedIssuedCapital$equity settled option Reserve$exchange translation reserve$MinorityAcquisition Reserve$Capital Contri-bution Reserve$Accumul-ated Losses$total$Balance at 1 January 202377,752,5976,385,427(6,344,109)(25,538,692)(52,107,016)148,207(Loss)for the year (14,614,491)(14

147、,614,491)Other comprehensive loss for the year (756)(756)Total comprehensive(loss)for the year(756)(14,614,491)(14,615,247)Share placements at$14002,315,0132,315,013Recognition of sharebased payments 507,093 507,093Options issued6,032,9996,032,999Balance at 31December 202380,067,61012,925,519(6,344,

148、865)(25,538,692)(66,721,507)(5,611,935)Notes to the financial statements are included on pages 21 to 53Audio Pixels Holdings Limited ACN 094 384 27319Annual Report 2024ConsoLIDAteD stAteMent oF CAsH FLoWsFoR tHe YeAR enDeD 31DeCeMBeR 2024notesConsolidatedYear ended31December2024$ConsolidatedYear end

149、ed31December2023$Cash flows from operating activities Receipts from rent22,939 Receipts from government grants206,563196,572 Payments to suppliers and employees(5,590,531)(4,840,177)Interest paid(639,693)(456,397)Interest received75,53812,521Net cash(used by)operating activities20(5,948,123)(5,064,5

150、42)Cash flows from investing activities Payment for property,plant and equipment(288,035)(308,348)Purchase of financial assets(1,000,000)Net cash(used by)investing activities(1,288,035)(308,348)Cash flows from financing activities Proceeds from unsecured loans2,613,0001,500,000 Repayment of converti

151、ble notes14(450,000)Proceeds from convertible notes148,450,0005,000,000 Repayment of lease liabilities(139,929)(197,065)Net cash provided by financing activities10,473,0716,302,935Net increase in cash and cash equivalents held3,236,913930,045Cash and cash equivalents at the beginning of the financia

152、l year2,279,0511,339,961Effects of exchange rate fluctuations on the balances of cash held in foreign currencies(63,274)9,045Cash and cash equivalents at the end of the financial year55,452,6902,279,051Notes to the financial statements are included on pages 21 to 53Audio Pixels Holdings Limited ACN

153、094 384 27320Annual Report 20241.Summary of Material Accounting Policies1(a)statement of complianceThefinancial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001,Accounting Standards and Interpretations,and complies with other requireme

154、nts of the law Accounting Standards include Australian equivalents to International Financial Reporting Standards(“AASBs”)Compliance with AASBS ensures that the financial statements and notes comply with International Financial Reporting Standards(“IFRS”)Thefinancial statements comprise the consolid

155、ated financials of the Group For the purposes of preparing the consolidated financial statements,the Company is a for profit entityTheconsolidated financial statements were approved and authorised for issue by the Directors on 31March 20251(b)Basis of preparationThefinancial report has been prepared

156、 on the basis of historical cost Cost is based on the fair values of the consideration given in exchange for assets All amounts are expressed in Australian dollars1(c)Adoption of new and revised standardsNew and amended IFRS Standards that are effective for the current yearInthe current year,the con

157、solidated entity has applied a number of amendments to AASB Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after 1 January 2024 Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial

158、statementsNew and revised Australian Accounting Standards and Interpretations on issue but not yet effectiveThefollowing standards and amendments are not yet effective but may have a material impact on the financial statements of the consolidated entity in the future AASB 20242 Amendment to Australi

159、an accounting Standards Classification and Measurement of Financial InstrumentsThese amendments update AAS 9 Financial Instruments and AASB 7 Financial Instruments:Disclosures to change the requirements as to when a financial liability can be derecognised when it is settled via electronic transfer a

160、s well as when cash flows can be considered simply payments of principal and interest and hence the ability to classify assets as at amortised cost Whilst the consolidated entity is still assessing the impacts,the current expectation is that the amendments relating to the timing of derecognition of

161、the liabilities may impact consolidated entitys financial liabilities,however the amendment relating to the classification of financial assets Is not expected to have an impact on the consolidated entity AASB 18 Presentation and Disclosure of Financial Statements This standard will replace AASB 101

162、Presentation of Financial Statements Whilst many of the requirements will remain consistent,the new standard will have impacts on the presentation of the Statement of Profit and Loss and consequential impacts on the Statement of Cash Flows It will also require the disclosure of nonIFRS management pe

163、rformance measures and may impact the level of aggregation and disaggregation throughout the primary financial statements and the notes AASB 18 applies for periods beginning on or after 1 January 2027 and will be applied retrospectively Theconsolidated entity is still currently assessing the impact

164、that AASB 18 will have on the consolidated entity There are no other new standards or amendments that are expected to have a material impact on the consolidated entity 1(d)Going ConcernThefinancial report has been prepared on the going concern basis which assumes the continuity of normal business ac

165、tivities and the realisation of assets and the settlement of liabilities in the ordinary course of business Asat 31December 2024,the consolidated entitys current liabilities exceeded its current assets by$11,822,408(2023:$6,327,760)Inaddition,the consolidated entity incurred a consolidated loss of$8

166、,170,538(2023:$14,614,491)and used net cash in operating activities of$5,948,123(2023:$5,064,542)Asat 31December 2024,the consolidated entity had cash of$5,452,690(2023:$2,279,051)of which$61,398(2023:$61,343)is restricted as it secures future lease payments Together,these are indicators that a mate

167、rial uncertainty existsnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27321Annual Report 20241.Summary of Material Accounting Policies(Cont.)Theconsolidated entity has prepared a cash flow forecast which extends 12 mon

168、ths from the date of signing these financial statements and indicates that the consolidated entity will have sufficient funds to meet its expenditure commitments for this period based on that forecast This forecast excludes the repayment of convertible notes and unsecured loans with carrying value o

169、f$16,645,658 maturing on 31December 2025Within this forecast are key material uncertainties and assumptions,namely:No repayment of convertible notes and unsecured loans with a carrying value of$16,645,658 for reasons outlined below Base development spend to take the Company through to its next miles

170、tone precommercialisation Assumes no cash outflows associated with any contingent liabilities and/or spend with the companys chip supplier for the fully tested packaged production chipsNominal expenditure profile for the period;andPossible further extensions of the unsecured loans and convertible no

171、tesInthe opinion of the directors,the ability of the consolidated entity to continue as a going concern is dependent upon:Theability of the Company to negotiate with the related party and convertible noteholders to further defer the maturity of the loans with carrying value of$16,645,658 beyond 31De

172、cember 2025 TheBoard believes that this is reasonable given that similar extensions have been granted and received historicallyThereceipt of the 40,000 preproduction chips to specification from Earth Mountain to enable testing and subsequent demonstration of the product Thesuccessful completion of t

173、he current testing phase of the technology,enabling the consolidated entity to successfully demonstrate the technologys capabilities and negotiate commercial contracts with interested parties;and Further spend on development of the current chip to enable full scale commercialisation not currently in

174、cluded in the forecastIf the consolidated entity is unable to achieve successful outcomes in relation to the above matters,a material uncertainty would exist that may cast significant doubt as to the ability of the consolidated entity to continue as a going concern and therefore,it may be required t

175、o realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report No adjustments have been made to the financial report relating to the recoverability and classification of recorded asset amounts or to t

176、he amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern Further testing and enhancement of the technology is continuing as the consolidated entity works towards achievement of the demonstrator milestone to begin the transiti

177、on to volume production Once this occurs the consolidated entity plans to commit further spend for fully tested packaged production chips1(e)Revenue Recognition Interest revenue is recognised using the effective interest rate method Other income is largely comprised of the Research and development(R

178、&D)tax incentive This refundable research and development tax offset is accrued when it can be reliably measured,and it is probable the Company will receive the claim based on the AusIndustry and Australian Taxation Office R&D guidelines For the year ended 31December 2024,the research and developmen

179、t tax offset is accounted for as a government grant in accordance with AASB 120 Government Grants by recognising a credit in profit or loss as other income with the expected collection as an other receivable1(f)Financial instruments Financial assets and financial liabilities are recognised in the co

180、nsolidated entitys statement of financial position when the consolidated entity becomes a party to the contractual provisions of the instrument Financial assets and financial liabilities are initially measured at fair value Transaction costs that are directly attributable to the acquisition or issue

181、 of financial assets and financial liabilities(other than financial assets and financial liabilities at fair value through profit or loss)are added to or deducted from the fair value of the financial assets or financial liabilities,as appropriate,on initial recognition Transaction costs directly att

182、ributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or lossnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27322Annual Repo

183、rt 20241.Summary of Material Accounting Policies(Cont.)Financial assets Financial assets which comprise cash and cash equivalents,trade receivables,other assets and investments in mutual funds are classified into the following categories:Financial assets at fair value through profit or loss(“FVTPL”)

184、(mutual funds);andFinancial assets at amortised cost(all others)Financial assets at amortised costTheamortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments,plus the cumulative amortisation using the effective i

185、nterest method of any difference between that initial amount and the maturity amount,adjusted for any loss allowance Thegross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowanceFinancial assets at FVtPLFinancial assets that do not m

186、eet the criteria for being measured at amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss(FVTPL)Financial assets at FVTPL are measured at fair value at the end of each reporting period,with any fair value gains or losses recognised in pr

187、ofit or loss to the extent they are not part of a designated hedging relationship Thenet gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the Income line item(note 2)Impairment Theconsolidated entity assesses on a forward lo

188、oking basis the expected credit losses associated with its financial assets carries at amortised cost Theimpairment methodology applied depends on whether there has been a significant increase in credit risk For trade receivables,the consolidated entity applies the simplified approach permitted by A

189、ASB 9,which requires expected lifetime losses to be recognised from initial recognition of the receivables 1(g)Financial LiabilitiesFinancial LiabilitiesAll financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPLFinancial liabilities that are

190、 not(i)contingent consideration of an acquirer in a business combination,(ii)heldfor trading,or(iii)designated as at FVTPL,are measured subsequently at amortised cost using the effective interest rate method Compound and Derivative Financial InstrumentsThecomponent parts of compound instruments(conv

191、ertible notes)issued by the consolidated entity are classified separately as financial liability and derivative in accordance with the substance of the contractual arrangements and the definitions of a financial liability and derivativesAt the date of issue,the fair value of the liability component

192、is estimated using the prevailing market interest rate for similar nonconvertible instruments Theamount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instruments maturity dateDerivativesDerivatives are initially

193、 recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their value at the end of each reporting period Derivatives embedded in nonderivative host contract s are treated as separate derivatives when they meet the definition of a derivative,the

194、ir risk and characteristics are not closely related to those of the host contracts and the host contract are not measured at FVTPLother financial liabilitiesOther financial liabilities representing trade and other payables and unsecured loans are subsequently measured at amortised cost using effecti

195、ve interest method Theeffective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period Theeffective interest rate is the rate that exactly discounts estimated future cash payments(including all fees and

196、points paid or received that form an integral part of the effective interest rate,transaction costs and other premiums or discounts)through the expected life of the financial liability,or(where appropriate)a shorter period,to the amortised cost of a financial liabilitynotes to AnD FoRMInG PARt oF tH

197、e FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27323Annual Report 20241.Summary of Material Accounting Policies(Cont.)Derecognition of financial liabilitiesTheconsolidated entity derecognises financial liabilities when,and only when,the consolidated

198、 entitys obligations are discharged,cancelled or have expired Thedifference between the carrying amount of the financial liability derecognised and the consideration paid or payable is recognised in the profit and lossWhen the consolidated entity exchanges with the existing lender one debt instrumen

199、t into another one with substantially different terms,such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability Similarly,the consolidated entity accounts for substantial modification of terms of an existing liability or

200、part of it as an extinguishment of the original financial liability and the recognition of a new liabilityIt is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms,including any fees paid net of any fees received and discounted usi

201、ng the original effective interest rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability If the modification is not substantial,the difference between:(1)the carrying amount of the liability before the modification;an

202、d(2)the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses1(h)employee benefitsProvision is made for benefits accruing to employees in respect of wages and salaries,annual leave,and long service leave when

203、 it is probable that settlement will be required and they are capable of being measured reliablyProvisions made in respect of short term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlementProvisions made in respect of long te

204、rm employee benefits are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to the reporting date1(i)Foreign currencyForeign currency transactionsAll foreign currency transactions during the financ

205、ial year are brought to account using the exchange rate in effect at the date of the transaction Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date Nonmonetary assets and liabilities carried at historic cost that are denominated in foreig

206、n currencies are translated using historic ratesExchange differences are recognised in profit and loss in the period they ariseForeign operationsOn consolidation,the assets and liabilities of the consolidated entitys overseas operations are translated at exchange rates prevailing at the reporting da

207、te Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly Exchange differences arising,if any,are recognised in the foreign currency translation reserve,and recognised in profit and loss on disposal of the foreign operation1

208、(j)Impairment of assetsAt each reporting date,the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss If any such indication exists,the recoverable amount of the asset is estimated i

209、n order to determine the extent of the impairment loss(if any)Where the asset does not generate cash flows that are independent from other assets,the entity estimates the recoverable amount of the cashgenerating unit to which the asset belongsIf the recoverable amount of an asset(or cashgenerating u

210、nit)is estimated to be less than its carrying amount,the carrying amount of the asset(cashgenerating unit)is reduced to its recoverable amount An impairment loss is recognised in profit or loss immediatelyWhere an impairment loss subsequently reverses,the carrying amount of the asset(cashgenerating

211、unit)is increased to the revised estimate of its recoverable amount,but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset(cashgenerating unit)in prior years Areversal of an im

212、pairment loss is recognised in profit or loss immediately notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27324Annual Report 20241.Summary of Material Accounting Policies(Cont.)1(k)Income taxCurrent taxCurrent tax is ca

213、lculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date Current tax for current and prior periods is recognis

214、ed as a liability(or asset)to the extent that it is unpaid(or refundable)Deferred taxDeferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those itemsInprinciple,deferred tax liabilities

215、 are recognised for all taxable temporary differences Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised However,deferred tax assets

216、 and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities(other than as a result of business combination)which affects neither taxable income nor accounting profitDeferred tax assets and liabilities are measured

217、at the tax rates that are expected to apply to the period(s)when the assets and liability giving rise to them are realised or settled,based on tax rates(and tax laws)that have been enacted or substantively enacted by reporting dateThemeasurement of deferred tax liabilities and assets reflects the ta

218、x consequences that would follow from the manner in which the entity expects,at the reporting date,to recover or settle the carrying amount of its assets and liabilities Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the comp

219、any intends to settles its current tax assets and liabilities on a net basisCurrent and deferred tax is recognised as an expense or income in profit or loss,except when it relates to items credited or debited directly to equity,in which case the deferred tax is also recognised directly in equity,or

220、where it arises from the initial accounting for a business combination,in which case it is taken into account in the determination of goodwill or excess1(l)ProvisionsProvisions are recognised when the entity has a present obligation as a result of a past event,the future sacrifice of economic benefi

221、ts is probable,and the amount of the provision can be measured reliablyWhen some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,the receivable is recognised as an asset if it is virtually certain that recovery will be received and the a

222、mount of the receivable can be measured reliablyTheamount recognised as a provision is the best estimate of the consideration required to settle the present obligation,taking into account the risks and uncertainties surrounding the obligation Where a provision is measured using the cash flows estima

223、ted to settle the present obligation,its carrying amount is the present value of those cash flows1(m)Basis of consolidationTheconsolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company Control is achieved when the Company:Has power ov

224、er the investee;Is exposed,or has rights,to variable returns from its involvement with the investee;andHas the ability to use its power to affect its returnsTheCompany reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the t

225、hree elements of control listed aboveConsolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiarySpecifically,income and expenses of a subsidiary acquired or disposed of during the year are included in the conso

226、lidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiaryAll intragroup assets and liabilities,equity,expenses and cash flows relating to transactions between members of the consolidated

227、 entity are eliminated in full on consolidationnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27325Annual Report 20241.Summary of Material Accounting Policies(Cont.)1(n)Property,plant and equipmentProperty,plant and eq

228、uipment are stated at cost less accumulated depreciation and accumulated impairment lossesDepreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives,using the straightline method Theestimated useful lives,residual values and depre

229、ciation method are reviewed at each year end,with the effect of any changes in estimate accounted for on a prospective basisThefollowing estimated useful lives are used in the calculation of depreciation:Computers and related equipment3 to 5 yearsLeasehold improvements3 to 4 yearsOffice furniture an

230、d equipment5 to 15 years1(o)share based paymentsEquitysettled sharebased payments are measured at fair value at the date of the grant Fair value is measured by use of a BlackScholes Option Pricing model Theexpected life used in the model has been adjusted,based on management best estimates,for the e

231、ffects of nontransferability,exercise restrictions and behavioural considerations Thefair value determined at the grant date of the equitysettled share based payments is expensed on a straightline basis over the vesting period,based on the consolidated entitys estimate of shares that will eventually

232、 vestAt each reporting date,the group revises its estimate of the number of equity instruments expected to vest as a result of the effect of nonmarketbased vesting conditions Theimpact of the revision of the original estimates,if any,is recognised in profit or loss such that the cumulative expense r

233、eflects the revised estimate,with a corresponding adjustment to reserves1(p)Critical accounting judgementsInthe application of the consolidated entitys accounting policies,management is required to make judgements,estimates and assumptions about carrying values of assets and liabilities that are not

234、 readily apparent from other sources Theestimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance,the results of which form the basis of making these judgements Actual results may differ from these esti

235、matesTheestimates and underlying assumptions are reviewed on an ongoing basis Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period,or in the period of the revision and future periods if the revision affects both curr

236、ent and future periods1(q)Key sources of estimation uncertaintyThefollowing are the key assumptions concerning the future,and other key sources of estimation uncertainty at the balance sheet date,that have a significant risk of causing a material adjustment to the carrying amounts of assets and liab

237、ilities within the next financial year:(a)Deferred taxThedirectors made a critical judgement in relation to not recognising the deferred tax assets described in Note 3(a)Given the current stage of development,the directors do not currently consider its probable that sufficient taxable amounts will b

238、e available against which deductible temporary differences can be utilised(b)Convertible Note and Option ValuationTheconvertible notes and associated options were externally valued during the reporting period These valuations involved a number of estimates used in the valuation models,including the

239、risk free interest rate and share volatility Therisk free interest rate is estimated based on the comparable yield on Commonwealth Bonds matching the assumed life of the convertible note and options Theshare volatility is based on the historical volatility of the consolidated entitys shares and comp

240、arable entities These valuation estimates can change over time,impacting the valuations of the convertible notes and optionsTheconvertible note valuations at the end of the reporting period included estimates of the risk free interest rate of 38%and share volatility 60%At recognition date the value

241、adopted for the debt portion of the convertible note was calculated with reference to the transaction price of the convertible note,and the fair value of the embedded conversion option and other financial instruments issued in conjunction with the convertible notenotes to AnD FoRMInG PARt oF tHe FIn

242、AnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27326Annual Report 20241.Summary of Material Accounting Policies(Cont.)During the first half of the period,the term on certain convertible notes were modified and the modification was determined to be substa

243、ntial based on the change in net present value of the modified debt based on the original effective interest rate Themodification resulted to a derecognition of the existing debt liability and a recognition creation of a new liability based on the fair value at the point in time Theassociated modifi

244、cation gain was recognised in the profit or loss during the period Further,during the second half of the period,the term of these certain convertible notes were modified,and the modification was not determined to be substantial based on the change in net present value of the modified debt based on t

245、he original effective interest rate Thegain on the modification was recognised in the profit or loss during the period Theoptions were valued at the end of the reporting period using the BlackScholes options pricing model using a risk free interest rate of 38%and share volatility of 60%Thedirectors

246、consider the estimates used in the valuations to be appropriate(c)Research&Development refundable taxation offsetThedirectors have calculated the estimated refundable offset in respect of eligible research&development expenditure incurred during the year ended 31December 2024 An amount of$211,627 ha

247、s been recorded as other receivables and revenue in the year ended 31December 2024(2023:$253,449)Post year end,the claim will be submitted Thedirectors consider that the entity has complied with the conditions of the R&D scheme and as such the grant will be received once the claim is submitted(d)Sha

248、rebased PaymentsTheconsolidated entity measures the cost of equitysettled sharebased payment transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted Thefair value is determined by using the Black Scholes model considering the terms a

249、nd conditions upon which the instruments were granted Theaccounting estimates and assumptions relating to equitysettled sharebased payment transactions include the share price on date of grant,the volatility applied,and the expected timeframe to exercise the option Judgement was applied for these es

250、timate and assumptions based on the facts and circumstances that existed on grant date Theaccounting estimates and assumptions relating to equitysettled sharebased payment transactions would have no significant impact on the carrying amounts of assets and liabilities within the next annual reporting

251、 period but may impact profit or loss and equitynotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27327Annual Report 20242.(Loss)from operations31December2024$31December2023$(a)RevenueInterest income84,03012,521Recharge r

252、ental income20,854Government grant R&D tax incentive164,741 253,449 Total revenue248,771286,824(b)expensesAmortisation44,139Depreciation of property,plant and equipment249,851183,217Depreciation of rightofuse assets121,745205,701Interest expense2,462,1384,373,002Employee benefits expense:Salary and

253、other employee benefits2,795,2932,710,730 Share based payments 170,737507,093 Superannuation43,09940,7283,009,1293,258,5513.Income taxes(a)Income tax recognised in profit or lossTheCompany is in a lossmaking position and therefore does not pay income tax in both Australia and Israel Therefore income

254、 tax payable is nil(2023:nil)TheCompany does not recognise any deferred tax assets on balance sheet as management does not believe that there will be sufficient taxable profits in the foreseeable future that deferred tax assets can be utilised against Theamount of unrecognised deferred tax assets at

255、 reporting date is$8,716,665(2023:$7,138,422)$2,545,804(2023:$2,213,840)of this unrecognised deferred tax relates to the parent company in Australia and$6,170,861(2023:$4,924,582)relate to the subsidiary in Israel These unrecognised deferred tax assets are able to be carried forward indefinitelyAcor

256、porate tax rate of 25%is payable by Australian corporate entities on taxable profits under Australian tax law and 23%(2023:23%)under Israeli law There has been no change in the corporate tax rate when compared with the previous reporting periodnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR

257、 tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27328Annual Report 20244.Remuneration of auditors31December2024$31December2023$Audit or review of the financial reports Group*128,000 Group(Other auditors)39,799184,968 Subsidiary(Other auditors)85,18887,950252,987272,918Statut

258、ory assurance services required by legislation to be provided by the auditor6,000Other services by other auditors Taxation consulting service8,150 Taxation consulting service(other auditors)24,67516,50032,82516,500285,812295,418*Theauditor of Audio Pixels Holdings Limited is Moore Australia Audit(Vi

259、c)for the financial statement audit Theauditor for the 31December 2023 financial statements was Deloitte Touche Tohmatsu5.Cash and cash equivalents31December2024$31December2023$Unrestricted cash5,391,2922,217,708Restricted cash(noninterest bearing)61,39861,343Cash on hand and at bank5,452,6902,279,0

260、516.Financial Assets31December2024$31December2023$Financial assets at fair value through profit or lossInvestments in Mutual Funds1,000,0001,000,000Thefair value of mutual fund investments is determined based on the quoted Net Asset Value(NAV)per unit as provided by the fund managers These investmen

261、ts are categorised as Level 1 financial assets under AASB 13 Fair Value Measurement,as they are actively traded in open markets There have been no transfers between levels during the year(2023:no transfers)notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio P

262、ixels Holdings Limited ACN 094 384 27329Annual Report 20247.Other receivables31December2024$31December2023$CurrentGST receivable11,496Other receivables256,965324,860256,965336,356Non CurrentOther receivables13,99412,771Other receivables comprise security deposits with government bodies and the Resea

263、rch&Development refundable offset estimated receivable8.Prepayments31December2024$31December2023$Prepayments other31,18532,845Prepayments in respect of preproduction chips 586,854 586,854618,039619,6999.Right of use assets31December2024$31December2023$Office premises at cost1,207,867950,614Less accu

264、mulated depreciation(1,207,867)(878,781)71,833Motor vehicle at cost148,514128,043Less accumulated depreciation(95,599)(48,446)52,91579,597Total net book value of Right of use assets52,915151,430CostOffice premisesBalance at 1 January 950,614778,223Additions172,348Net foreign currency exchange differ

265、ences257,254 43Balance as at 31December1,207,868950,614notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27330Annual Report 202431December2024$31December2023$CostMotor VehiclesBalance at 1 January 128,04346,467Additions81

266、,546Net foreign currency exchange differences20,471 30Balance as at 31December148,514128,043Accumulated depreciationOffice premisesBalance as at 1 January(878,781)(698,628)Net foreign currency exchange differences(244,221)Depreciation expense(84,865)(180,153)Balance at 31December (1,207,867)(878,781

267、)Motor vehicleBalance as at 1 January(48,446)(22,900)Net foreign currency exchange differences(10,273)Depreciation expense(36,880)(25,546)Balance at 31December(95,599)(48,446)On 1 January 2019,the subsidiary company,Audio Pixels Limited exercised an option to renew a lease in respect of facilities a

268、t 3 Pekris Street Rehovot,Israel for a period of twentyeight months to 31May 2021 Effective on 1 June 2021,the subsidiary company,Audio Pixels Limited exercised an option to renew a lease in respect of facilities at 3 Pekris Street Rehovot,Israel for a period of twentyfour months to 31May 2023 This

269、lease was extended on 31May 2023 for a twelve month period until 31May 2024 This lease was further extended on 31May 2024 for a twelve month period until 31May 2025Amounts recognised in profit and lossDepreciation expense on right of use assets121,745205,701Interest expense on lease liabilities8,417

270、11,500Expense relating to short term leases110,950157,350Thetotal cash outflow for leases amount to$139,929 including interest payments of$8,417(2023:$197,065)9.Right of use assets(Cont.)notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limi

271、ted ACN 094 384 27331Annual Report 202410.Property,Plant and Equipment31December2024$31December2023$Computers and related equipment at cost1,254,064959,939Less accumulated depreciation(887,470)(665,925)366,594294,014Leasehold improvements at cost414,930378,688Less accumulated depreciation(351,926)(3

272、07,307)63,00471,381Office furniture and equipment at cost1,871,3261,631,823Less accumulated depreciation(1,602,245)(1,383,065)269,081248,758Total net book value of Property,Plant and Equipment698,679614,153CostComputers and related equipmentBalance at 1 January959,939689,197Additions202,256279,487Di

273、sposals(9,230)Net foreign currency exchange differences91,869485Balance as at 31December1,254,064959,939Leasehold improvementsBalance at 1 January378,688378,466Net foreign currency exchange differences36,242222Balance as at 31December414,930378,688Office furniture and equipmentBalance at 1 January1,

274、631,8231,602,009Additions85,77928,861Disposals(2,449)Net foreign currency exchange differences156,173953Balance as at 31December1,871,3261,631,823notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27332Annual Report 202410

275、.Property,Plant and Equipment(Cont.)31December2024$31December2023$Accumulated depreciationComputers and related equipmentBalance as at 1 January(665,925)(582,614)Net foreign currency exchange differences(70,951)(366)Disposal6,987Depreciation expense(150,594)(89,932)Balance at 31December(887,470)(665

276、,925)Leasehold improvementsBalance as at 1 January(307,307)(293,256)Net foreign currency exchange differences(30,107)(176)Depreciation expense(14,512)(13,875)Balance at 31December(351,926)(307,307)Office furniture and equipmentBalance as at 1 January(1,383,065)(1,302,862)Net foreign currency exchang

277、e differences(136,423)(793)Disposal1,989Depreciation expense(84,746)(79,410)Balance at 31December(1,602,245)(1,383,065)notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27333Annual Report 202411.Trade and other payables31

278、December2024$31December2023$CurrentTrade payables and accruals1,901,6201,748,977Thepayables are noninterest bearing and have an average credit period of 30 days12.Lease liabilities31December2024$31December2023$Analysed as:Current31,544111,286NonCurrent17,10645,05148,650156,337Disclosure required by

279、AASB 16 Maturity AnalysisYear 134,709111,286Year 218,34573,233Year 39,14553,054193,664Theconsolidated entity does not face a significant liquidity risk with regard to its lease liabilities All lease obligations in Australia are denominated in Australian dollars and the leases in Israel are denominat

280、ed in Israeli shekelsnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27334Annual Report 202413.Unsecured loans 31December2024$31December2023$Face value of unsecured loans5,582,9882,469,988Discount taken to capital contr

281、ibution reserve(1,250,652)Add finance charges amortisation 856,017 Carrying value of unsecured loans5,188,3532,469,988TheCompany has an unsecured loan facility with 4F Investments Pty Limited,a company associated with MrFred Bart,with carrying amount of$5,188,353(2023:$2,469,988)at an interest rate

282、of 12%at 31December 2024 Theloan is repayable in two components as follows:a)$969,988 is due for repayment on receipt of the placement monies of$4,316,550(US$3m)from Earth Mountain or upon the Company undertaking a capital raisingb)Thebalance is repayable on the Company undertaking a capital raising

283、During the year,the fair value of the unsecured loans was measured using a market discount rate averaging 325%Asthe loans were provided by a related party,a key shareholder,the difference between the fair value and the carrying amount was recognised as a capital contribution reserve(note 18)During t

284、he year ended 31December 2024,the Company paid$74,709(2023:$208,997)on the unsecured loan to 4F Investments Pty Limited Nominal interest has been accrued in the financial statements at 31December 2024 of$520,542(2023:$74,709)Inaddition,an effective interest expense was recognised at 31December 2024

285、of$335,567(2023:Nil)4F Investments Pty Limited have agreed to extend the expiry date of the unsecured loan agreement until 31December 2025,with all accrued interest to be capitalised until the end of the loan termnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024

286、Audio Pixels Holdings Limited ACN 094 384 27335Annual Report 202414.Convertible notes31December2024$31December2023$Borrowings Convertible notesCarrying amount at start of period4,639,037 Face value of notes issued8,450,0005,000,000Face value of notes redeemed(450,000)Face value of notes cancelled(50

287、0,000)Convertible notes conversion feature on issue(573,000)(655,000)Value of options issued taken to equity settled share option reserve(1,290,000)(2,678,000)10,276,0371,667,000Add Convertible note finance charges1,102,538456,272Add loss on initial recognition of convertible notes(equity component)

288、71,0002,678,000Less net gain arising on the modification of convertible notes(711,270)(162,235)Current Liability at end of period10,738,3054,639,037Derivative liabilityCarrying value at start of the period282,000Fair value of the convertible note conversion feature at issue573,000655,000Fair value m

289、ovement on modification of the convertible notes237,000Fair value movement to the end of the reporting period(373,000)(373,000)Derivative liability719,000282,000Total current liability11,457,3054,921,037Face value of convertible notes12,500,0005,000,000Of the$5,000,000 of Convertible Notes issued du

290、ring 2023,2 note holders redeemed their notes on maturity(30 April 2024),and were repaid$450,000 in cash Thenote issued to 4F Investments Pty Limited(a Company controlled by Fred Bart,Chairman)for$500,000 was cancelled and converted into the unsecured loan facility on 29 May 2024,as it was issued to

291、 a related party without shareholder approval On 5 September 2024 all remaining noteholders agreed to extend the maturity date of their notes until 31December 2025 Thebalance of the notes of that on issue as at 31December 2024 is$4,050,000Inorder to meet ASX Listing Rule 61 requirements,the Company

292、obtained noteholder approval on 5 September 2024 to include a conversion floor price of$5 to the existing notes so the maximum dilutionary impact on conversion of the notes can be calculated notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings

293、Limited ACN 094 384 27336Annual Report 202414.Convertible notes(Cont.)On 5 September 2024,21 November 2024 and 9 December 2024,the Company announced it has issued an additional$8,450,000 in Convertible Notes to sophisticated investors Theterms of the Convertible Note include a maturity date of 31Dec

294、ember 2025,are unsecured,attract an interest rate of 12%per annum capitalised until the Note is fully repaid or converted into Shares TheNotes are convertible to ordinary shares at$904,or a lower price if the Company undertakes a placement of ordinary shares at any time prior to the expiry date TheN

295、otes have conversion price floor of$500 Asan incentive for participating in the Notes,the investors received 1,690,000 unlisted options(100,000 options per$500,000 invested)at a strike price of 20%higher than the conversion price of$904,namely$1084 These unlisted options expire on 4 May 2027 Outstan

296、ding unlisted options from prior year issuance of convertible notes is 900,000 at a strike price of$1084 expiring 4 May 2026During the first half of the period,the term on certain convertible notes were modified and the modification was determined to be substantial based on the change in net present

297、 value of the modified debt based on the original effective interest rate Themodification resulted to a derecognition of the existing debt liability and a recognition creation of a new liability based on the fair value at the point in time Theassociated modification gain was recognised in the profit

298、 or loss during the period Further,during the second half of the period,the term of these certain convertible notes were modified,and the modification was not determined to be substantial based on the change in net present value of the modified debt based on the original effective interest rate Theg

299、ain on the modification was recognised in the profit or loss during the period 15.Provisions31December2024$31December2023$CurrentEmployee benefits 571,280311,578NoncurrentEmployee benefits26,28817,478notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels

300、Holdings Limited ACN 094 384 27337Annual Report 202416.Issued Capital31December2024$31December2023$Issued and paid up capitalFully paid Ordinary SharesBalance at the beginning of the financial year80,067,61077,752,597Placements for cash at$1400 per share 31May 2023 2,315,013Balance at the end of the

301、 financial year80,067,61080,067,610numbernumberFully paid Ordinary SharesBalance at the beginning of the financial year29,210,10029,044,742Placements for cash at$1400 per share 31May 2023 165,358Balance at the end of the financial year29,210,10029,210,100Fully paid ordinary shares carry one vote per

302、 share and carry the rights to dividendsTheshares have no par value and the company does not have a limited amount of authorised capitalCapital risk managementTheconsolidated entity manages its capital to ensure that entities in the consolidated entity will be able to continue as going concerns whil

303、e maximising the return to shareholders through the optimisation of the debt and equity balance Thegroups overall strategy remains unchanged from 2023Thecapital structure of the consolidated entity consists of net debt and equity of the consolidated entityDebt is defined by the group as lease liabil

304、ities,unsecured loans and convertible notes(excluding derivatives)as disclosed in notes 11,13 and 14 Net debt is defined as debt after deducting cash and cash equivalents and investments in mutual fundsEquity includes capital,reserves and retained earningsTheconsolidated entity is not subject to any

305、 externally imposed capital requirementsGearing ratio31December2024$31December2023$Debt15,975,3097,265,362Less:Cash and cash equivalents(including investments in mutual funds)(6,452,690)(2,279,051)Net debt9,522,6194,986,311Equity(11,100,214)(5,611,935)Gearing ratio(8579%)(8889%)notes to AnD FoRMInG

306、PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27338Annual Report 202417.Employee Share Option PlanTheconsolidated entity has an ownershipbased compensation scheme for employees(including directors)of the company Inaccordance with the prov

307、isions of the scheme,as approved by shareholders at a previous annual general meeting,employees with more than three months service with the company may be granted options to purchase ordinary shares at exercise prices determined by the directors based on market prices at the time the issue of optio

308、ns were madeEach share option converts to one ordinary share in Audio Pixels Holdings Limited No amounts are paid or payable by the recipient on receipt of the options Theoptions carry neither rights to dividends nor voting rights Options may be exercised at any time from the date of vesting to the

309、date of expiryThenumber of options granted is determined by the directors and takes into account the companys and individual achievements against both qualitative and quantitative criteria On 13 January 2011,shareholders approved the adoption of an Employee Share Option Plan(a)Unlisted Options issue

310、d under the Employee Share Option Plan20242023numberWeighted average exercise price$numberWeighted average exercise price$Balance at the beginning of the financial year(i)287,0001982287,0001982Granted during the year(ii)173,0001620Exercised during the year(iii)Forfeited and lapsed during the year(iv

311、)(25,000)1400(173,000)1620Balance at the end of the financial year(v)262,0002038287,0001982Exercisable at end of the year133,2002654101,2602770(i)Balance at the beginning of the yearnumberGrant dateexpiry dateexercise PriceFair value at grant date2024122,00016/4/2116/4/25$2770$1,241,96030,0001/12/22

312、 1/12/25$1400$124,800135,0001/12/22 1/2/26$1400$662,850287,0002023122,00016/4/2116/4/25$2770$1,241,96030,0001/12/22 1/12/25$1400$124,800135,0001/12/22 1/2/26$1400$662,850287,000Staff options carry no rights to dividends and no voting rightsnotes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe

313、 YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27339Annual Report 202417.Employee Share Option Plan(Cont.)(ii)Granted during the yearnumberGrant dateexpiry dateexercise PriceFair value at grant date2024Staff options2023Staff options173,0005/6/2317/12/231620$377,140(iii)exercise

314、d during the yearThere were no options exercised during the year(iv)Forfeited and lapsed during the year25,000 employee options was forfeited during the year(2023:173,000 lapsed)(v)Balance at the end of the financial yearnumber outstandingGrant dateexpiry dateexercise PriceFair value at grant date20

315、24Staff options122,00016/4/2116/4/25*$2770$1,241,960Staff options30,0001/12/22 1/12/25*$1400$124,800Staff options110,0001/12/22 1/2/26*$1400$540,100262,0002023Staff options122,00016/4/2116/4/25*$2770$1,241,960Staff options30,0001/12/22 1/12/25*$1400$124,800Staff options135,0001/12/22 1/2/26*$1400$66

316、2,850287,000Staff options carry no rights to dividends and no voting rights*All options granted to staff have a vesting condition that the employee must be employed by the consolidated entity at the time of vesting These options start to vest after two years continuous employment on the basis of one

317、 twelfth of the total number each month for a twelve month periodThedifference between the total fair value of the options issued during the financial year,at the date of issue,and the total amount received from the employees(nil)is recognised in the financial statements over the vesting periodnotes

318、 to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 27340Annual Report 202418.Reserves31December2024$31December2023$Foreign currency translationBalance at the beginning of the financial year(6,344,865)(6,344,109)Translation of f

319、oreign operations(29,130)(756)Balance at end of financial year(6,373,995)(6,344,865)Exchange differences relating to the translation of the results and net assets of the consolidated entitys foreign operations from their functional currencies to the consolidated entitys presentation currency(ie Aust

320、ralian dollars)are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve Exchange differences previously accumulated in the foreign currency translation reserve are reclassified to profit and loss on the disposal of the foreign operationEquity

321、settled option reserveBalance at the beginning of the financial year12,925,5196,385,427Add share based payments in respect of options vested immediately 1,290,0006,032,999Add recognition of share based payments to employees170,737507,093Balance at end of financial year14,386,25612,925,519Theabove eq

322、uitysettled option reserve relates to share options granted by the CompanyCapital contribution reserveBalance at the beginning of the financial yearAdd transfer to capital contribution reserve1,250,652Balance at the end of the financial year1,250,652Theabove capital contribution reserve relates to t

323、he difference in the fair value and carrying amount of the unsecured loans received from related party(note 13)Minority acquisition reserveBalance at the beginning and end of the financial year(25,538,692)(25,538,692)Theabove minority acquisition reserve relates to the difference between the purchas

324、e consideration paid for the minority interest(noncontrolling interest)and the carrying amount of the minority interest acquired Total Reserves(16,275,779)(18,958,038)notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Audio Pixels Holdings Limited ACN 094 384 2734

325、1Annual Report 202419.Accumulated losses31December2024$31December2023$Balance at the beginning of the financial year(66,721,507)(52,107,016)(Loss)for the year attributable to owners of the Company(8,170,538)(14,614,491)Balance at the end of the financial year(74,892,045)(66,721,507)20.Notes to the s

326、tatement of cash flows(a)Reconciliation of cash and cash equivalentsFor the purposes of the statement of cash flows,cash includes cash on hand and at call deposits with banks or financial institutions,investments in money market instruments maturing within less than 3 months at the date of acquisiti

327、on Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:31December2024$31December2023$Cash and cash equivalents5,452,6902,279,051(b)Restricted cashCash held as security

328、for future lease payments61,39861,343Restricted cash amounts are included in the cash and cash equivalents amounts aboveReconciliation of(loss)for the period to net cash outflows from operating activitiesLoss after related income tax(8,170,538)(14,614,491)Amortisation44,139Depreciation 371,596388,91

329、8Foreign exchange gains(3,628)(41,059)Loss on sale of property,plant and equipment4392,243Share based payments170,7373,862,093Goodwill impairment2,399,168Intangible asset impairment110,686Gain of movement in fair value of derivative liability(136,000)(373,000)Loss on initial recognition of financial

330、 liabilities measured at fair value71,0002,678,000Gain on modification of convertible notes(711,270)(162,235)Finance charges on convertible notes1,102,538456,272Finance charges on unsecured loan facility856,017notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMentsFoR tHe YeAR enDeD 31DeCeMBeR 2024Aud

331、io Pixels Holdings Limited ACN 094 384 27342Annual Report 202431December2024$31December2023$Changes in assets and liabilities(Increase)/decrease in assetsCurrent trade and other receivables79,391(75,982)Prepayments1,660(32,845)Noncurrent trade and other receivables(1,223)(3,592)Increase/(decrease)in

332、 liabilitiesProvisions268,51238,621Current trade payables152,646258,522Net cash(used in)operating activities(5,948,123)(5,064,542)Reconciliation of liabilities arising from financing transactions2024Balance as at 1 JanuaryCashMovementnon-Cash MovementBalance as at 31December Unsecured loans2,469,988

333、2,613,000105,3655,188,353Convertible notes4,921,0378,000,000(1,463,732)11,457,305Lease liabilities156,377(139,929)32,20248,6502023Balance as at 1 JanuaryCashMovementnon-Cash MovementBalance as at 31December Unsecured loans3,285,0001,500,000(2,315,012)2,469,988Convertible notes5,000,000(78,963)4,921,037Lease liabilities99,477(197,065)253,925156,33720.Notes to the statement of cash flows(Cont.)notes