Surflakes ESIC

Surf Lakes ESIC Strategy 

Summary Surf Lakes Holdings Ltd is an innovative, early stage company that is looking for quick and effective commercialisation of their market leading offering to capitalise on their competitive advantages. To assist with this process Biig Trend will provide advice to maximise the Early Stage Innovation Company (ESIC) program for the company, and it’s investors where possible.

The program affords the investor a 20% tax offset for funds invested, and altered CGT status which offers reductions to Capital Gains Tax of up to 0% if shares are held for more than 12 months.

We are delighted that Surf Lakes Holdings Ltd appear to be eligible for the Early Stage Innovation Company (ESIC) program in the 2017 financial year, as the company satisfies the technical requirements to apply, including being early stage, innovative and structurally compliant. Surf Lakes will not comply for investors in the FY18 financial year.

ESIC Details – Surf Lakes 

We have reviewed the eligibility details and are satisfied that the information provided matches the criteria to allow eligible investors to take advantage of the ESIC Tax Incentive. We summarise the reasons for eligibility below:

•  Early Stage: The company is deemed to be early stage by having:
  • less than $1m expenses in prior year.
  • less than $200k income in the prior year.
  • We deem that the company is in its first year, having been created via a scrip for scrip rollover of a different company and different business the prior year. This position is to be confirmed by Surf Lakes. This is to be confirmed via Private Ruling.
• Innovative: The company is deemed to be innovative by the Principle’s Test method:
  • 100 Point Test (Not Satisfied)
  • 75 points.  50% + total expenses qualify for R&D Grant.
  • 50 points.  15%-50% total expenses qualify for R&D Grant.
  • 50 points. Undertaking qualified accelerator program.
  • 50 points. Min $50k seed investment prior.
  • 50 points. Standard Patents lodged.
  • 25 points. Innovation or design patent lodged.
  • 25 points. JV with Higher Education or Research Institution.
• Principles Test. All 5 are required. (Satisfied – See Business Plan)
  • The company must be genuinely focused on developing one or more new or significantly improved innovations for commercialisation.
  • The business relating to that innovation must have a high growth potential.
  • The company must demonstrate that it has the potential to be able to successfully scale up that business.
  • The company must demonstrate that it has the potential to be able to address a broader than local market, including global markets, through that business.
  • The company must demonstrate that it has the potential to be able to have competitive advantages for that business.
• Structural: The company has the required structural items including:
  • Must be an unlisted company.
  • New shares must be issued.
  • New shares must not equate to more than 30% of shares at the time the new shares are issued, per investor.

We have also reviewed the investor circumstances as provided by Surf Lakes and we deem that certain investors are likely to be eligible for the ESIC tax offset, pending confirmation of investors:

• being a sophisticated investor.
• not being an affiliate.
• Not investing under an Employee Share Scheme.

As we are not aware of the circumstances of the investor, we recommend that they review this with their advisors as applicable.

For more information please click on the attachement on the right hand side.