ELSIGHT LIMITED — Capital/Financing Update 2020

Dec 13, 2020

Elsight Limited

ACN 616 435 753

SUPPLEMENTARY PROSPECTUS

Important Information

This is a supplementary prospectus ( Supplementary Prospectus ) intended to be read with the prospectus dated 16 November 2020 ( Prospectus ) issued by Elsight Limited ( Company ).

This Supplementary Prospectus is dated 11 December 2020 and was lodged with the Australian Securities and Investments Commission ( ASIC ) on that day. Neither ASIC nor ASX (and their respective officers) take any responsibility as to the contents of this Supplementary Prospectus.

To the extent of any inconsistency between this Supplementary Prospectus and the Prospectus, this Supplementary Prospectus will prevail. Unless otherwise indicated, terms defined and used in the Prospectus have the same meaning in this Supplementary Prospectus.

This is an important document and should be read in its entirety. If you do not understand it you should consult your professional advisors without delay.

1 ISSUE OF FURTHER SECURITIES UNDER THE PROSPECTUS

The Company advises that, as a result of excess demand under the Shortfall Offer it has today agreed to issue a 6,295,556 New Shares and 3,147,775 attaching New Options under the Prospectus to raise an additional A$2,833,000 ( Follow-on Placement ). Additional funds raised will be used for the purposes set out in the Prospectus.

The Follow-on Placement is made without Shareholder approval, and the securities will be issued under the Company’s existing capacity under Listing Rule 7.1 and Listing Rule 7.1A.

The New Options will be listed under the ASX code ELSOA.

Attached to this Supplementary Prospectus is an announcement made by the Company to ASX today.

The Company now closes the Shortfall Offer and no further issues will be made under the Prospectus.

2 AMENDMENTS TO PROSPECTUS

The following sections of the Prospectus are amended as follows:

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2.1 Capital structure

Sections 2 and 5.4 of the Prospectus are amended to reflect the current number of securities on issue:

Shares on issue prior to the Offer	108,896,599
New Shares issued under the Prospectus	24,444,989
Total Shares on issue	133,341,587
Total Options on issue prior to the Offer	26,915,983
New Options issued under the Prospectus	23,222,739
Total Options on issue	50,138,722
Amount raised under the Prospectus (before costs)	$11,000,245

2.2 Use of funds

Sections 4 and 5.2 of the Prospectus are amended to reflect the increased amount raised:

Use of funds (approx.)	Amount (A$)
Sales	3,472,075
Marketing	1,533,000
Halo development	1,678,769
New product development	1,198,093
Working Capital	1,648,573
Other	739,384
Costs of the Offer	730,351
Total use of funds	11,000,245

2.3 Statement of financial position

Set out in the annexure to this Supplementary Prospectus is the reviewed Statement of Financial Position for the Company, as at 30 June 2020 and on the basis of the following assumptions:

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Set out in section 13 is the reviewed Statement of Financial Position of the Company and the Pro-Forma Statement of Financial Position, as at 30 June 2020 and on the basis of the following assumptions:

• (a) the Offer was effective on 30 June 2020;

• (b) adjustments to reflect changes between 1 July 2020 and 30 September 2020 as a result of the Company’s trading activities and the exercise of 1,880,000 Options (raising $376,000);

• (c) an exchange rate of A$1:US$0.70;

• (d) no further Shares are issued other than all Shares offered under this Prospectus;

• (e) $11,000,245 is received under the Offers; and

• (f) (cash) costs of the Offer are $730,351.

The pro-forma Statement of Financial Position has been prepared to provide investors with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company set out in the annexure to this Supplementary Prospectus. The pro-forma financial information is presented in US$ and in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

2.4 Dilution

Shareholders who did not participate in the Offer will have their holdings diluted. Following is a table which sets out the dilutionary effect on the basis of the full amount raised under the Prospectus and assuming no further Shares are issued or Options exercised:

Holder	Holding at Record Date Entitlement Number %	Holding following the Offer if no Entitlement taken up
		Number %
1 2 3 4	108,897 0.10 18,149 217,793 0.20 36,299 1,088,966 1 181,494 2,177,932 2 362,989	108,897 0.08 217,793 0.16 1,088,966 0.82 2,177,932 1.63

2.5 Consents

Each of the persons referred to in this section:

• (a) has given and has not, before the date of lodgement of this Supplementary Prospectus with ASIC withdrawn their written consent:

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• (i) to be named in the Supplementary Prospectus in the form and context which it is named; and

• (ii) where applicable, to the inclusion in this Supplementary Prospectus of the statement(s) and/or reports (if any) by that person in the form and context in which it appears in this Supplementary Prospectus;

• (b) has not caused or authorised the issue of this Supplementary Prospectus;

• (c) has not made any statement in this Supplementary Prospectus or any statement on which a statement in this Supplementary Prospectus is based, other than specified below;

• (d) to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representation regarding, and takes no responsibility for, any part of this Supplementary Prospectus, other than the references to their name and the statement(s) and/or report(s) (if any) specified below and included in this Supplementary Prospectus with the consent of that person.

Name	Role
Mahe Capital Pty Limited	Lead Manager and Underwriter

2.6 Expenses of the Offer

The total (cash) expenses of the Offer are estimated to be $730,351, consisting of the following:

**Cost1 **	A$
Legal fees	13,000
ASX and ASIC fees	30,000
Capital raising fees2	657,351
Printing, postage and other expenses	30,000
Total	730,351

• 1 These expenses have or will be paid by the Company.

• 2 The Company has also agreed to issue 1 New Option for every $1 raised under the Prospectus to the Underwriter or 11,000,245 New Options.

The Directors do not consider the circumstances disclosed in this Supplementary Prospectus to be materially adverse from the point of view of an investor, and no withdrawal rights will be offered to investors.

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This Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors. In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Supplementary Prospectus with ASIC. Dated: 11 December 2020

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Ami Shafran Chairman On behalf of Elsight Limited

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SCHEDULE 1 ASX ANNOUNCEMENT MADE ON 11 DECEMBER 2020

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SCHEDULE 2 PRO FORMA STATEMENT OF FINANCIAL POSITION

	CONSOLIDATION SHEET	USD	USD
	30/6/2020	Consolidated	Adjustments for material items betw een 30 June 2020 and 16 November Adjustments for rights issue (full subscription) Consolidated pro- forma (full subscription)
Current assets Cash and cash equivalents Trade receivables Other receivables Inventory Short-term deposit Total current assets Non current assets Investment in subsidiary Provision for impairment Intercompany loans Provision for impairment Long-term deferred tax assets Total non current assets Fixed assets Cost accumulated depreciation Total fixed assets Intangible assets Cost accumulated amortization Total intangible assets Lease asset Cost accumulated amortization Total intangible assets Goodwill Total assets Current liabilities Credit from banking entities Trade payables Other payables Current maturity - lease liability Total current liabilities Long-term liabilities Loans from banking entities Liabilities to employees Shareholders loans Share based payments Long-term deferred tax liabilities Lease liability Total long-term liabilities Capital and reserves		1,786,809 208,301 199,716 356,838 79,159	(971,158) 7,188,926 8,004,577 24,317 232,618 59,650 259,365 62,428 419,266 79,159 (824,764) 7,188,926 8,994,985 - - - - (0) - - (0) - - 585,132 (33,070) (384,825) (33,070) 200,307 - - 210,519 (20,789) 189,730 - - 344,878 (43,371) (311,235) (43,371) 33,643 - - - (901,204) 7,188,926 9,418,666 - - (31,489) 25,791 (85,785) 154,644 66,037 687,192 (42,543) 37,925 (93,781) 905,551 - - 27,343 32,024 108,947 - - - - 27,343 140,971 - -
		2,630,823 - - (0) - -
		(0) 585,132 (351,755)
		233,377 210,519 (20,789)
		189,730 344,878 (267,864)
		77,014 -
		3,130,944
		57,280 240,428 621,155 80,468
		999,332 4,681 108,947 - - - -
		113,628
Share capital		15,315,771	7,700,172 23,015,942
Cost of capital Share based payment reserve		(1,250,247) 2,293,231	(511,246) (1,761,492) 2,293,231
Exchange rate capital reserve Capital reorganisation/acquisition reserve		(742,512) (296,796)	57,813 (684,699) (296,796)
Current period earnings/(losses)		(1,811,052)	(892,580) (2,703,632)
Retained earnings/(losses) attributable to equity holders of the parent minority interests Total capital and reserves Total equity and liabilities		(11,490,412)	(11,490,412) (834,767) 7,188,926 8,372,142 - (834,767) 7,188,926 8,372,142 - (901,204) 7,188,926 9,418,664
		2,017,983 -
		2,017,983
		3,130,943

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