Edited version of private advice

Authorisation number:1052401936530

Date of advice: 04 June 2025

Ruling

Subject: ESIC eligibility

Question 1

Does The Company meet the criteria of an Early Stage Innovation Company (ESIC) under subsection 360-40(1) of the Income Tax Assessment Act 1997 ('ITAA 1997') for the periods DD MM YYYY to DD MM YYYY.

Answer 1

Yes

This ruling applies for the following periods:

DD MM YYYY to DD MM YYYY

The scheme commences on:

DD MM YYYY

Relevant facts and circumstances:

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect, and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

Background facts:

1.              The Company was incorporated in Australia within the last 6 income years on DDMMYYY under the registered name of XXX. On DDMMYYY, the Company changed its name to XXX.

2.              The Company is not part of an income tax consolidated group and is a single Company with no subsidiaries.

3.              Person A is the Company's Founder, General Manager and Principal.

4.              The Company's registered office and principal place of business is situated at XXX.

5.              The Company is developing its own Intellectual Property.

6.              Across the last X income years before the current year, The Company incurred total expenses of AUD$X or less. The Company incurred the following: YYYY, YYYY & YYYY - Total expenses = AUD$XX.

7.              For the financial year ending DDMMYYYY, The Company earning the following: Total income of AUD$XX.

8.              The Company's equity interests are not listed for quotation in the official list of any stock exchange, either in Australia or a foreign country.

9.              During YYYY, The Company issued ordinary shares in the Company on three occasions.

Product Development

10.          The Company is building a unique cloud based digital screening platform that is intended on reducing time and cost for its current and future customers.

Commercialisation Strategy

11.          The Company is solely focused on commercialising its novel and innovative technology. The Company is raising capital and conducting research and development and supporting activities to bring its technology to market.

12.          Further development and testing activities are required on the Product.

13.          The Company is genuinely focused on commercialisation. The Company's development and commercialisation team are fully committed to the translation of its product ideas into reality and have established a business structure and plan to do so.

High growth potential

14.          The value proposition of the Company's product addresses a local and international readily addressable market opportunity of approximately $X based on research conducted by The Company.

15.          The Company's market during the first several years of commercial operation is likely to include those regions/countries that accept the cost advantages within the product.

Scale up the business.

16.          The Company's business model is scalable and is based upon the building on the innovation and commercial success previously achieved.

17.          Prior to entering global markets at scale, development work needs to be undertaken to meet regulatory requirements, identify and substantiate product claims and then, gain product acceptance in the market as a solution to the market's problems and aspirations.

Broader than local market

18.          The Company has identified that the global market is large, continues to grow and currently lacks innovation. The opportunity to develop new products in this market appears to be significant.

19.          Product differentiation and reputation enhancement could possibly lead to an increase in global market share through sustainable competitive advantage.

20.          The Company plans to continue to conduct parallel activities with overseas customers. Successful trials in Australia and overseas, should allow international markets to be established.

Competitive advantages

21.          The Company is an Australian Company that will be creating Australian jobs and products powered by Australian innovation, and accordingly eligible for certain grant funding and co-funded opportunities.

22.          The Company is the only Company in Australia and globally that is known to be on the path to developing its product on The Company technology platform.

23.          The Company owns all improvements made to The Company intellectual property.

24.          The Company is confident that being the first business to develop its products it will have significant potential value in the market.

Information provided:

1.              You have provided a number of documents containing detailed information in relation to The Company's product, including:

•                Private Binding Ruling ('PBR') Application information dated DD MM YYYY.

•                Responses to further questions provided.

2.              We have referred to the relevant information within these documents in applying the relevant tests to your circumstances.

Assumptions:

Not applicable.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 360-A

Income Tax Assessment Act 1997 section 360-15

Income Tax Assessment Act 1997 section 360-40

Income Tax Assessment Act 1997 section 360-45

Further issues for you to consider:

Not applicable.