Private ruling: ESIC eligibility
Date of advice: 25 March 2025
Published: 19 May 2025
Ruling period: DD MM YYYY to DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: 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 period DD MM YYYY to DD MM YYYY? | A1: Yes

Relevant facts and circumstances: Background facts The Company is an Australian proprietary company incorporated in Australia on DD MM YYYY. The Company is not part of an income tax consolidated group and is a single company with no subsidiaries. The Company's registered office and principal place of business is situated at XXX. For the financial year ending DD MM YYYY, The Company did not earn any income and did not incur any expenses. 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. The Company has three primary exit strategies under consideration; Acquisition or Merger; Alliance and Licensing Model and Initial Public Offering (IPO). The Company will actively evaluate and pursue these exit strategies based on market conditions and regulatory milestones. The Company is seeking to raise AUD$X by the issue of ordinary shares at an offer price of AUD$X per share. Minimum subscriptions being AUD$X. Product development The Company is developing a product. Commercialisation Strategy The Company is solely focused on commercialising its novel and innovative technology. The Company is in the early phases of raising capital and conducting research and development and supporting activities to bring its product to market. 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 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. The Company's market during the first several years of commercial operation is likely to include those regions/countries that have regulatory frameworks that are defined as easy to navigate. Scale up the business. The Company's business model is scalable and is based upon the building on the innovation and commercial success achieved. Prior to entering global markets, 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 The Company has identified that the global market is large and continues to grow. The opportunity to develop new products in this market appears to be significant. Product differentiation and reputation enhancement could possibly lead to an increase in global market share through sustainable competitive advantage. Competitive advantages 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. The Company is the only Company in Australia, that is known to be on the path to developing this product. The Company owns all improvements made to The Company intellectual property. The Company is confident that being the first business to develop its products it will have significant potential value in the market. Intellectual property: Intellectual Property: The Company has entered into a licensing agreement with Company X providing the rights to utilise the technology from YYYY to YYYY. Information provided: The Company has provided a number of documents containing detailed information in relation to The Company's product, including: Private Binding Ruling ('PBR') Application dated DD MM YYYY. Various documents. We have referred to the relevant information within these documents in applying the relevant tests to your circumstances. Assumption(s): 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 | Income Tax Assessment Act 1997 section 974-70(1) Further issues for you to consider: | Not applicable.