ACTINOGEN MEDICAL LIMITED
ABN 14 086 778 476
ANNUAL FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2018
ACTINOGEN MEDICAL LIMITED
C O N T E N T S P A G E
ContentsPageCorporate Directory1Chairman’s Address2Corporate Governance Statement4Directors’ Report:• Information on Directors12• Operations and Financial Review16• Remuneration Report (Audited)23Auditor’s Independence Declaration40Statement of Comprehensive Income41Statement of Financial Position42Statement of Cash Flows43Statement of Changes in Equity44Notes to the Financial Statements45Directors’ Declaration80Independent Auditor’s Report81Shareholder Information86
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Board of DirectorsAuditorsNon-Executive Chairman – Dr Geoffrey BrookeErnst & YoungManaging Director – Dr Bill KetelbeyErnst & Young BuildingNon-Executive Director – Dr Jason Loveridge11 Mounts Bay RoadNon-Executive Director – Dr George MorstynPerth WA 6000Company SecretaryLawyersCompany Secretary - Peter WebseK&L GatesLevel 25 South TowerPrincipal Place of Business / Registered Office525 Collins StreetSuite 901, Level 9, 109 Pitt StreetMelbourne VIC 3000Sydney NSW 2000GTP LegalContact Details68 Aberdeen StreetTelephone: 02 8964 7401Northbridge WA 6003www.actinogen.com.auABN 14 086 778 476BankersNational Australia BankShare Register1232 Hay StreetLink Market ServicesWest Perth WA 6005Level 12680 George StreetSydney NSW 2000Actinogen Medical Limited shares are listed on the Australia Securities Exchange ('ASX'). ASX Code: ACW
ACTINOGEN MEDICAL LIMITED
C H A I R M A N ’ S A D D R E S S
Dear Shareholder,
It is with great pleasure that I present to you this year’s annual report. I’d like to take this opportunity to
extend a warm welcome to all the new shareholders and to thank our existing shareholders for their
continued support. This year saw a number of institutional investors join the register, including leading US
specialist biotech fund, Biotechnology Value Fund (‘BVF’), and well-known Australian institutional investors:
Australian Ethical Investment, and Platinum Investment Management Limited.
In addition to a strong institutional presence on the register, we have a highly supportive investor base, with
many existing shareholders opting to participate in the Share Purchase Plan, which closed post the year
end.
This year has been a landmark year for Actinogen Medical Limited (‘Actinogen Medical’ or ‘the
Company’). From the early research beginnings at Edinburgh University, in May 2017 we enrolled the first
patient into XanADu, our Phase II clinical trial in Alzheimer’s disease, and now we are only months away
from completing enrolment.
We are enrolling patients into XanADu in line with our previously announced timelines and with the latest
addition of five new trial sites in the United States, we expect to complete enrolment before the end of
calendar year 2018. We eagerly await the opportunity to inform the market of this key milestone and to
report the top line trial results in the second quarter of calendar 2019, less than 12 months from now.
The hypothesis underpinning the development of Xanamem is that, by decreasing excess cortisol (the
“stress hormone”) in the brain, there should be an improvement in cognition in Alzheimer’s disease patients,
and potentially other diseases. There’s compelling research to support this hypothesis, and XanADu, our
Phase II study is specifically designed to demonstrate this in patients with mild Alzheimer’s disease.
In ongoing support of the development of Xanamem, independent research published during the year
provided further endorsement of the cortisol hypothesis. Research by Wheelan et al. (2017) concluded that
exposure to a period of stress in midlife results in cognitive decline in old age. These findings were supported
in another recent study by Stuart et al. (2017), published in the esteemed scientific journal, Nature, which
also concluded that stress may worsen cognitive decline with age. Both studies, performed in animal
models of aging and Alzheimer’s, demonstrate that an increase in stress hormones is associated with
cognitive decline.
The latest round of capital raising that Actinogen Medical has just concluded, provided the Company with
the opportunity to fund a significant acceleration in the development of Xanamem in Alzheimer’s disease,
as well as other potential applications, in order to enhance the value of our lead compound.
A number of new Xanamem studies have initiated or will do so before the end of calendar year 2018. These
include a study to explore the safety of a higher dose of Xanamem and a target occupancy study to
demonstrate the effect different doses of Xanamem have in the human brain. Additionally, the Company
will undertake a series of additional animal toxicology studies, which will expand the growing data-set for
Xanamem and substantially value-add to the Company’s ongoing plans for the future clinical
development and commercialisation of Xanamem.
Raised cortisol has also been associated with a number of diseases, offering the possibility for Xanamem to
be used in the treatment and management of conditions other than only Alzheimer’s disease. A review is
underway on the potential to expand Xanamem’s development and use in cognitive deficiency
associated with various neurological and metabolic diseases. Possible new indications include cognitive
impairment associated with diabetes, Parkinson’s disease, epilepsy and schizophrenia, amongst others,
and we look forward to announcing our plans on the development of Xanamem beyond Alzheimer’s
disease.
We cannot underestimate the achievements of the Company over this past year. At the end of financial
year 2018, we had enrolled 116 patients into XanADu and we completed the independent Interim Analysis
on the first 50 evaluable completed patients. The Interim Analysis was undertaken by an independent Data
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C H A I R M A N ’ S A D D R E S S
Safety Monitoring Board (DSMB) and the DSMB recommended the study continue as planned without
modification. Importantly, the Interim Analysis also reported no treatment-related serious adverse events in
the trial.
Never before has there been such an urgency to develop, and bring to market, a new therapy for the
treatment of Alzheimer’s disease. This year, Alzheimer’s disease became the leading cause of death in
Australian women and the second leading cause of death overall. The importance of the development of
a drug such as Xanamem cannot be overstated as it is imperative to find a new treatment for this
devastating disease. I’d like to take this opportunity to thank all our shareholders for their continued support
of the Company’s endeavours.
This financial year promises to be another year of significant milestones for the Company as we advance
towards completion of XanADu and to reporting the top-line results in the second quarter of calendar year
2019. Not only are we focused on completing the Phase II trial, but we are initiating further studies to ensure
we have the necessary additional data in place to advance the future clinical development and
commercialisation of Xanamem.
We have an exceptionally busy and exciting year ahead. With the XanADu trial completion pending, we
expect 2019 to be a particularly busy and fruitful year. I’d like to take this opportunity to thank all our staff
and partners for their ongoing hard work and dedication, and to my fellow Board members for their
commitment to Actinogen Medical.
Yours faithfully,
Dr Geoffrey Brooke
Chairman
29 August 2018
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ACTINOGEN MEDICAL LIMITED
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
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This Corporate Governance Statement (‘Statement’) outlines the key aspects of Actinogen Medical
Limited’s (‘Actinogen Medical’ or ‘the Company’) governance framework and main governance
practices. The Company’s charters, policies and procedures are regularly reviewed and updated to
comply with law and best practice. These charters and policies can be viewed on the Company’s website
located at www.actinogen.com.au.
This Statement is structured with reference to the Australian Securities Exchange (‘ASX’) Corporate
Governance Council’s (‘the Council’s’) ‘Corporate Governance Principles and Recommendations 3rd
Edition’ (‘the Recommendations’).
The Board of Directors has adopted the Recommendations to the extent that is deemed appropriate
considering the current size and operations of the Company. Therefore, considering the size and financial
position of the Company, where the Board considers that the cost of implementing a Recommendation
outweighs any potential benefits, those Recommendations have not been adopted.
This Statement was approved by the Board of Directors and is current as at 29 August 2018.
➢ Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The Board is responsible for evaluating and setting the strategic direction for the Company, establishing
goals for management and monitoring the achievement of these goals.
The Managing Director is responsible to the Board for the day-to-day management of the Company.
The principal functions and responsibilities of the Board include, but are not limited to, the following:
• appointment, evaluation and, if necessary, removal of the Managing Director, any other Executive
Directors, the Company Secretary and the Chief Financial Officer (if applicable) and approval of
their remuneration;
• determining, in conjunction with management, corporate strategy, objectives, operations, plans,
and approving and appropriately monitoring plans, new investments, major capital and operating
expenditures, capital management, acquisitions, divestitures and major funding activities;
• establishing appropriate levels of delegation to the Managing Director to allow the business to be
managed efficiently;
• approval of remuneration methodologies and systems;
• monitoring actual performance against planned performance expectations and reviewing
operating information at a requisite level to understand at all times the financial and operating
conditions of the Company;
• monitoring the performance of senior management, including the implementation of strategy and
•
ensuring appropriate resources are available;
identifying areas of significant business risk and ensuring that the Company is appropriately
positioned to manage those risks;
• overseeing the management of safety, occupational health and environmental issues;
•
satisfying itself that the financial statements of the Company fairly and accurately set out the
financial position and financial performance of the Company for the period under review;
satisfying itself that there are appropriate reporting systems and controls in place to assure the Board
that proper operational, financial, compliance, risk management and internal control processes are
in place and functioning appropriately;
•
• ensuring that appropriate internal and external audit arrangements are in place and operating
effectively;
• authorising the issue of any shares, options, equity instruments or other securities within the constraints
of the Corporations Act 2001 and the ASX Listing Rules; and
• ensuring that the Company acts legally and responsibly on all matters and assuring itself that the
Company has adopted, and that its practice is consistent with, a number of guidelines including:
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a. Code of Conduct;
b. Continuous Disclosure Policy;
c. Diversity Policy;
d. Performance Evaluation Policy;
e. Procedures for Selection and Appointment of Directors;
f. Remuneration Policy;
g. Risk Management and Internal Compliance and Control Policy.
h. Securities Trading Policy; and
i.
Shareholder Communications Policy.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board has delegated
to the Managing Director responsibility for the management and operation of Actinogen Medical. The
Managing Director is responsible for the day-to-day operations, financial performance and administration
of Actinogen Medical within the powers authorised to him from time-to-time by the Board. The Managing
Director may make further delegation within the delegations specified by the Board and is accountable to
the Board for the exercise of those delegated powers. Further details of Board responsibilities, objectives
and structure are set out in the Board Charter on the Actinogen Medical website.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to
justify the formation of separate Committees at this time, including Audit, Risk, Remuneration or Nomination
Committees, preferring at this stage, to manage the Company through the full Board of Directors. The Board
assumes the responsibilities normally delegated to the Audit, Risk, Remuneration and Nomination
Committees. If the Company’s activities increase in size, scope and nature, the appointment of separate
Committees will be reviewed by the Board and implemented if appropriate.
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a Director or putting that
person forward as a candidate to ensure that person is competent, experienced, and would not be
impaired in any way from undertaking the duties of Director. The Company provides relevant information
to shareholders for their consideration about the attributes of candidates together with whether the Board
supports the appointment or re-election. The terms of the appointment of a Director, Executive Director
and senior executive are agreed upon and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do
with the proper functioning of the Board, including agendas, Board papers and minutes, advising the Board
and its Committees (as applicable) on governance matters, monitoring that the Board and Committee
policies and procedures are followed, communication with regulatory bodies and the ASX and statutory
and other filings.
Diversity
The Company has adopted a formal Diversity Policy with a particular focus on the representation of women
at the senior level of the Company. At present, due to the size and scale of the Company, representation
of women at a Board level has not yet been achieved; however, the Company remains committed to
workplace diversity and representation of women at all levels of management.
The Company is currently in an early stage of its development and given that it currently has a limited
number of employees, the application of measurable objectives in relation to gender diversity, at various
levels of the Company’s business, is not considered to be appropriate nor practical.
The Board will review this position on an annual basis and will implement measurable objectives as and
when they deem the Company to require them.
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The proportion of women in the Company as at 29 August 2018 is as follows:
• Women on the board: 0 of 4 (0%)
• Women in senior executive positions: 1 of 4 (25%)
• Women in the organisation: 4 of 11 (36%)
The Company’s Diversity Policy is available on its website.
Board and Management Performance Review
On an annual basis, the Board conducts a review of its structure, composition and performance. The annual
review includes consideration of the following measures:
• comparing the performance of the Board against the requirements of its Charter;
• assessing the performance of the Board over the previous 12 months having regard to the corporate
strategies, operating plans and the annual budget;
reviewing the Board’s interaction with management;
reviewing the type and timing of information provided to the Board by management;
reviewing management’s performance in assisting the Board to meet its objectives; and
identifying any necessary or desirable improvements to the Board Charter.
•
•
•
•
The method and scope of the performance evaluation is set by the Board and may include a Board self-
assessment checklist to be completed by each Director. The Board may also use an independent adviser
to assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive Directors,
in conjunction with them, having particular regard to:
• contribution to Board discussion and function;
• degree of independence including relevance of any conflicts of interest;
• availability for and attendance at Board meetings and other relevant events;
• contribution to Company strategy;
• membership of and contribution to any Board committees; and
•
suitability to Board structure and composition.
The Board conducts an annual performance assessment of the Managing Director against agreed key
performance indicators. Board and management performance reviews were conducted during the
financial year in accordance with the above processes.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in
fulfilling their duties and responsibilities, to obtain independent professional advice on any matter
connected with the discharge of their responsibilities, with prior notice to the Chairman, at Actinogen
Medical’s expense.
➢ Principle 2: Structure the board to add value
Board Composition
During the financial year and to the date of this report the Board was comprised of the following members:
Dr Geoffrey Brooke
Dr Bill Ketelbey
Dr Jason Loveridge
Dr George Morstyn
Dr Anton Uvarov
Non-Executive Chairman (appointed 1 March 2017);
Managing Director (appointed 18 December 2014);
Non-Executive Director (appointed 1 December 2014)
Non-Executive Director (appointed 1 December 2017); and
Non-Executive Director (appointed 16 December 2013, resigned 14 August 2017).
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The Company currently has one Executive Director, the Managing Director, and three Non-Executive
Directors. The Board is currently comprised of a majority of independent Directors, being Dr Geoffrey Brooke
(the Company’s Non-Executive Chairman) Dr Jason Loveridge and Dr George Morstyn. Actinogen Medical
has adopted a definition of 'independence' for Directors that is consistent with the Recommendations.
None of the Directors are substantial shareholders in the Company despite holding interests in the
Company.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required in
order to effectively govern Actinogen Medical. The Board believes that orderly succession and renewal
contributes to strong corporate governance and is achieved by careful planning and continual review.
The Board is responsible for the nomination and selection of Directors. The Directors review the size and
composition of the Board regularly and at least once a year as part of the Board evaluation process. The
Board has a skills matrix covering the competencies and experience of each member. When the need for
a new Director is identified, the required experience and competencies of the new Director are defined in
the context of this matrix and any gaps that may exist.
Generally, a list of potential candidates is identified based on these skills required and other issues such as
geographic location and diversity criteria. Candidates are assessed against the required skills and on their
qualifications, backgrounds and personal qualities. In addition, candidates are sought who have a proven
track record in creating security holder value and the required time to commit to the position.
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions of
their appointment, including Director's duties, rights and responsibilities, the time commitment envisaged,
and the Board's expectations regarding involvement with any Committee work. An induction program is in
place and new Directors are encouraged to engage in professional development activities to develop
and maintain the skills and knowledge needed to perform their role as Directors effectively.
➢ Principle 3: Act ethically and responsibly
The Company has implemented a Code of Conduct, which provides guidelines aimed at maintaining high
ethical standards, corporate behaviour and accountability within the Company.
All employees and Directors are expected to:
respect the law and act in accordance with it;
respect confidentiality and not misuse Company information, assets or facilities;
•
• maintain high levels of professional conduct;
•
• avoid real or perceived conflicts of interest;
• act in the best interests of shareholders;
• by their actions contribute to the Company’s reputation as a good corporate citizen which seeks
the respect of the community and environment in which it operates;
• perform their duties in ways that minimise environmental impacts and maximise workplace safety;
• exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace
and with customers, suppliers and the public generally; and
• act with honesty, integrity, decency and responsibility at all times.
An employee that breaches the Code of Conduct may face disciplinary action including, in the case of a
serious breach, dismissal. If an employee suspects that a breach of the Code of Conduct has occurred or
will occur, he or she must report that breach to the Company Secretary. If the suspected breach pertains
to the Company Secretary, the report should be made to the Chairman. No employee will be
disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted
upon and kept confidential.
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➢ Principle 4: Safeguard integrity in corporate reporting
The Board as a whole fulfills the functions normally delegated to the Audit Committee as detailed in the
Audit Committee Charter. The Board is responsible for the initial appointment of the external auditor and
the appointment of a new external auditor when any vacancy arises. Candidates for the position of
external auditor must demonstrate complete independence from the Company through the engagement
period. The Board may otherwise select an external auditor based on criteria relevant to the Company’s
business and circumstances. The performance of the external auditor is reviewed on an annual basis by
the Board.
The Board receives regular reports from management and from external auditors. It also meets with the
external auditors as and when required. The external auditors attend Actinogen Medical's Annual General
Meeting (‘AGM’) and are available to answer questions from security holders relevant to the conduct of
the audit, preparation and content of the Independent Auditor’s Report, the accounting policies adopted
by the Company is in relation to the preparation of the financial statements and the independence of the
auditor in relation to the conduct of the audit. Prior approval of the Board must be gained for non-audit
work to be performed by the external auditor. There are qualitative limits on this non-audit work to ensure
that the independence of the auditor is maintained.
There is also a requirement that the Audit Partner responsible for the audit not perform in that role for more
than five years.
CEO & CFO Certifications
The Board has received certifications from the CEO and CFO equivalent in connection with the financial
statements for Actinogen Medical for the reporting period. The certifications state that the declaration
provided in accordance with Section 295A of the Corporations Act 2001as to the integrity of the financial
statements is founded on a sound system of risk management and internal control which is operating
effectively.
➢ Principle 5: Make timely and balanced disclosure
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the Company
as required under the ASX Listing Rules and the Corporations Act 2001. The Policy is designed to ensure that
procedures are in place so that the market is properly informed of matters which may have a material
impact on the price at which Company securities are traded.
The Board considers whether there are any matters requiring disclosure in respect of each and every item
of business that it considers in its meetings. Individual Directors are required to make such a consideration
when they become aware of any information in the course of their duties as a Director of the Company.
The Company is committed to ensuring all investors have equal and timely access to material information
concerning the Company.
The Board has designated the Company Secretary as the person responsible for communicating with the
ASX. The Chairman, Managing Director and the Company Secretary are responsible for ensuring that:
a) Company announcements are made in a timely manner, that announcements are factual and do
not omit any material information required to be disclosed under the ASX Listing Rules and
Corporations Act 2001; and
b) Company announcements are expressed in a clear and objective manner that allows investors to
assess the impact of the information when making investment decisions.
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➢ Principle 6: Respect the rights of security holders
The Company recognises the value of providing current and relevant information to its shareholders. The
Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the
Company is committed to:
• communicating effectively with shareholders through releases to the market via the ASX, the
Company’s website, information emailed or mailed to shareholders and the General Meetings of
the Company;
• giving shareholders ready access to clear and understandable information about the Company;
and
• making it easy for shareholders to participate in General Meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to make
enquiries of the Company. These contact details are available on the “Contact Us” page of the
Company’s website. Shareholders may elect to, and are encouraged to, receive communications from
Actinogen Medical and the Company’s securities registry electronically.
The Company maintains information in relation to its Constitution, governance documents, Directors and
senior executives, Board and Committee Charters, Annual Reports and ASX announcements on the
Company’s website.
➢ Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout Actinogen
Medical's business activities. The Board is responsible for the oversight of the Company’s risk management
and internal compliance and control framework. Responsibility for control and risk management is
delegated to the appropriate level of management within the Company with the Managing Director
having ultimate responsibility to the Board for the risk management and internal compliance and control
framework. Actinogen Medical has established policies for the oversight and management of material
business risks.
Actinogen Medical's Risk Management and Internal Compliance and Control Policy recognises that risk
management is an essential element of good corporate governance and fundamental in achieving its
strategic and operational objectives. Risk management improves decision making, defines opportunities
and mitigates material events that may impact security holder value.
Actinogen Medical believes that explicit and effective risk management is a source of insight and
competitive advantage. To this end, Actinogen Medical is committed to the ongoing development of a
strategic and consistent enterprise wide risk management program, underpinned by a risk conscious
culture.
Actinogen Medical accepts that risk is a part of doing business. Therefore, the Company’s Risk
Management and Internal Compliance and Control Policy is not designed to promote risk avoidance.
Rather Actinogen Medical's approach is to create a risk conscious culture that encourages the systematic
identification, management and control of risks whilst ensuring it does not enter into unnecessary risks or
enter into risks unknowingly.
Actinogen Medical assesses its risks on a residual basis; that is, it evaluates the level of risk remaining and
considering all the mitigation practices and controls. Depending on the materiality of the risks, Actinogen
Medical applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal
compliance and control system to manage Actinogen Medical's material business risks. It receives regular
reports on specific business areas where significant business risk or exposure may exist. The Company faces
risks inherent to its business, including economic risks, which may materially impact the Company’s ability
to create or preserve value for security holders over the short, medium or long term.
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The Company has in place policies and procedures, including a risk management framework (as described
in the Company’s Risk Management and Internal Compliance and Control Policy), which is developed and
updated to help manage these risks. The Board does not consider that the Company currently has any
material exposure to environmental or social sustainability risks.
The Company’s process of risk management and internal compliance and control includes:
•
•
identifying and measuring risks that might impact upon the achievement of the Company’s goals
and objectives and monitoring the environment for emerging factors and trends that affect those
risks;
formulating risk management strategies to manage identified risks and designing and implementing
appropriate risk management policies and internal controls; and
• monitoring the performance of, and improving the effectiveness of, risk management systems and
internal compliance and controls, including regular assessment of the effectiveness of risk
management and internal compliance and control.
The Board reviews the Company’s risk management framework at least annually to ensure that it continues
to effectively manage risk. Management reports to the Board as to the effectiveness of Actinogen
Medical's management of its material business risks at each meeting.
➢ Principle 8: Remunerate fairly and responsibly
Actinogen Medical’s Remuneration Policy was designed to recognise the competitive environment within
which Actinogen Medical operates and to emphasise the requirement to attract and retain a high caliber
of expertise in order to achieve sustained improvement in Actinogen Medical’s performance.
The overriding objective of the Remuneration Policy is to ensure that an individual’s remuneration package
accurately reflects their experience, level of responsibility, individual performance and the performance of
Actinogen Medical.
The key principles are to:
link executive reward with strategic goals and sustainable performance of Actinogen Medical;
•
• apply challenging corporate and individual key performance indicators that focus on both short-
term and long-term outcomes;
• motivate and recognise superior performers with fair, consistent and competitive rewards;
•
•
•
remunerate fairly and competitively in order to attract and retain a high calibre of expertise;
recognise capabilities and promote opportunities for career and professional development; and
through employee ownership of Actinogen Medical shares, foster a partnership between employees
and other security holders.
The Board determines the Company’s remuneration policies and practices and assesses the necessary and
desirable competencies of Board members. The Board is responsible for evaluating Board performance,
reviewing Board and management succession plans and determines remuneration packages for the CEO,
Non-Executive Directors and senior management based on an annual review.
Actinogen Medical’s executive remuneration policies and structures and details of remuneration paid to
Directors are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their
services, the reimbursement of reasonable expenses and, in certain circumstances, options. They do not
receive any termination or retirement benefits, other than statutory superannuation. The maximum
aggregate remuneration approved by shareholders for Non-Executive Directors is $500,000 per annum. The
Directors set the individual Non-Executive Directors fees within the limit approved by shareholders. The total
fees paid to Non-Executive Directors during the reporting period were $188,841. Refer to Section 4 of the
Remuneration Report.
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Executive Directors and other senior executives are remunerated using combinations of fixed and
performance-based remuneration. Fees and salaries are set at levels reflecting market rates and
performance-based remuneration is linked directly to specific performance targets that are aligned to both
short and long-term objectives.
In accordance with the Company’s Securities Trading Policy, participants in an equity-based incentive
scheme are prohibited from entering into any transaction that would have the effect of hedging or otherwise
transferring the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to
any other person.
Further details in relation to the Company’s Remuneration Policies are contained in the Remuneration Report,
within the Directors’ Report.
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D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Your Directors present their report pertaining to Actinogen Medical Limited (‘the Company’ or ‘Actinogen
Medical’) for the year ended 30 June 2018.
➢
INFORMATION ON DIRECTORS
BOARD OF DIRECTORS
1.
The names and details of the Company’s Directors in office during the financial year and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Dr Geoffrey Brooke (appointed 1 March 2017)
MBBS, MBA
Non-Executive Chairman
Dr Brooke is a healthcare industry and venture capital veteran with over 30 years’ international experience as
the founder, lead investor and/or Chairman/Director of numerous healthcare companies with a realised value
of more than $1.5 billion. Most notably, he was the Managing Director and Founder of leading life sciences
venture capital firm, GBS Ventures - one of Asia Pacific’s premier investors in the healthcare space. There, Dr
Brooke was responsible for GBS’s healthcare venture activity in the region and raised $450 million in venture and
private equity funds, focused on biopharmaceuticals, medical devices and services.
Dr Brooke was also responsible for numerous investments and exits via NASDAQ and ASX public listings and
trade sales, as well as being lead investor in numerous investments syndicated in multiple rounds with premier
US venture firms. Dr Brooke was also President and Founder of US-based seed healthcare venture capital firm,
Medvest Inc., with investors including the venture capital arm of leading global multinational medical devices,
pharmaceutical and consumer packaged goods manufacturer, Johnson & Johnson. Medvest was focused on
founding companies based upon health care-related technology, including pharmaceuticals, biotechnology,
therapeutic devices, medical services and information systems.
Dr Brooke now acts as a private investor in, and independent director for, a number of small to medium-sized
Australian and US private and public companies. He holds a Bachelor of Medicine and a Bachelor of Surgery
from Melbourne University and a Masters of Business Administration from IMEDE (Switzerland) now IMD.
During the past three years Dr Brooke has served as a Director of the following ASX-listed companies:
• Non-Executive Director of Acrux Limited (ASX:ACR). Appointed 1 June 2016 – Current.
Dr Bill Ketelbey (appointed 18 December 2014)
MBBCh, FFPM, MBA, GAICD
Managing Director and Chief Executive Officer
Dr Ketelbey is a highly experienced and successful healthcare and pharmaceutical sector professional, with
more than 30 years’ experience in the industry, including senior medical and management roles with global
pharmaceutical giant, Pfizer. Dr Ketelbey has a medical degree from the University of the Witwatersrand (South
Africa), is a Fellow of the Faculty of Pharmaceutical Medicine with the Royal College of Physicians (UK), has an
MBA from Macquarie University (Australia), and is a Graduate of the Australia Institute of Company Directors.
12
NamePositionAppointedResignedDr Geoffrey BrookeNon-Executive Chairman1/03/2017CurrentDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014CurrentDr Jason LoveridgeNon-Executive Director1/12/2014CurrentDr George MorstynNon-Executive Director1/12/2017CurrentDr Anton UvarovNon-Executive Director16/12/201314/08/2017
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Prior to joining Actinogen Medical, Dr Ketelbey was the APAC Regional Vice President of Medical Affairs for
Pfizer’s Primary Care Business Unit and Country Medical Director for Pfizer, Australia and New Zealand. At Pfizer,
Dr Ketelbey was responsible for leading the development of numerous medicines across a broad range of
therapeutic areas, including Aricept, the market-leading therapy for Alzheimer’s disease.
Dr Ketelbey is a Non-Executive Director of the Westmead Institute of Medical Research (WIMR) and chairs
the IP and Commercialisation Committee of WIMR.
Dr Ketelbey has held no other ASX-listed directorships during the past three years.
Dr Jason Loveridge (appointed 1 December 2014)
BSc PhD FRSM
Non-Executive Director
Dr Loveridge has been working in the biotech and medtech industries for over 28 years and brings extensive
experience in the commercialisation of medical research to the Board of Actinogen Medical. As a venture
investor with JAFCO Nomura, Dr Loveridge invested in over 28 companies in Europe, the US and Israel and
has been directly involved in the management of a number of innovative companies in the medical arena.
During the past three years Dr Loveridge has served as a Director of the following ASX-listed companies:
• Non-Executive Director of Resonance Health Limited (ASX: RHT) – Appointed February 2013 – Resigned
30 June 2017.
Dr George Morstyn (appointed 1 December 2017)
MBBS FRACP PhD FTSE
Non-Executive Director
Dr Morstyn has more than 25 years’ experience in the biotechnology industry including as Senior Vice President
of Development and Chief Medical Officer at Amgen Inc. Dr Morstyn had overall responsibility globally for drug
development in all therapeutic areas including neuroscience at Amgen Inc. and was a member of the
Operating Committee. Many new products were approved and launched during Dr Morstyn’s tenure. Prior to
joining Amgen Inc. Dr Morstyn was the principal investigator on the earliest clinical studies of the haemopoietic
colony stimulating factors (‘CSFs’). The CSFs were subsequently approved and launched and were a major
medical breakthrough that have been used to reduce side effects of chemotherapy and enable
transplantation in more than 20 million patients worldwide. The CSFs have become multi-billion dollar drugs.
Since returning to Australia, Dr Morstyn has been a Non-Executive Director of various for-profit and not for profit
companies, including many biotechnology companies.
Dr Morstyn is a medical graduate of Monash University (Australia), and obtained a PhD at the Walter and Eliza
Hall Institute of Medical Research (Australia) and a FRACP in Medical Oncology following a Fellowship at the
National Cancer Institute in the USA. He is currently on the Board of the Cooperative Research Centre for
Cancer Therapeutics, Symbio (Tokyo) and Biomedical Research Victoria. He is a Member of the Australian
Institute of Company Directors and a Fellow of the Australian Academy of Technological Sciences and
Engineering.
Dr Morstyn has held no other ASX-listed directorships during the past three years.
The following Director resignations occurred during the year ended 30 June 2018:
Dr Uvarov, appointed on 16 December 2013 as a Non-Executive Director, resigned on 14 August 2017.
13
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares and options of the Company were as
follows:
j
(a) Of Dr Brooke’s and Dr Ketelbey’s fully paid ordinary shares, 300,000 and 600,000, respectively, were purchased under
the Share Purchase Plan subsequent to year end.
(b) Of Dr Ketelbey’s LTI Rights, 6,000,000 relate to Class I and Class J LTI Rights that have not yet vested due to the
performance milestone not being achieved as yet. For further information on the key terms of the LTI Rights, refer to
Section 3(C)(b) Remuneration Report.
2. DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Company’s Directors held while each Director was
in office and the number of meetings attended by each Director.
Due to size and scale of the Company, there are no Remuneration, Nomination or Audit Committee at
present. Matters typically dealt with by these Committees are, for the time being, reverted to the Board of
Directors. For details of the function of the Board please refer to the Corporate Governance Statement which
is included as part of this financial report.
3. COMPANY SECRETARY
Peter Webse (appointed 10 October 2013)
B.Bus, FGIA, FCPA, MAICD
Mr Webse has over 25 years’ company secretarial experience and is Managing Director of Platinum Corporate
Secretariat Pty Ltd, a company specialising in providing company secretarial, corporate governance and
corporate advisory services. Mr Webse holds a Bachelor of Business with a double major in Accounting and
Finance,
Fellow Certified
Institute of Australia, a
the Governance
Practicing Accountant and a Member of the Australian Institute of Company Directors.
Fellow of
is a
14
NameFully paid ordinary sharesLTI Rights (b)Total unlisted optionsTotal listed optionsDr Geoffrey Brooke (a)1,325,000 - 5,000,000 365,833 Dr Bill Ketelbey (a)953,803 12,000,000 - 1,647,172 Dr Jason Loveridge21,875,078 6,000,000 - 3,716,677 Dr George Morstyn200,000 - 1,500,000 - Total24,353,881 18,000,000 6,500,000 5,729,682 Dr Geoffrey Brooke88Dr Bill Ketelbey88Dr Jason Loveridge88Dr George Morstyn44Dr Anton Uvarov11DirectorNumber of meetings attendedNumber of meetings available to attend
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
4. CORPORATE GOVERNANCE
The Board recognises the recommendations of the ASX Corporate Governance Council and has disclosed its
level of compliance with those guidelines within the Corporate Governance Statement which is included as
part of this financial report.
5.
SHARES UNDER OPTION
As at the date of this report, there were 189,548,031 unissued ordinary shares under option:
(a) These options were issued to employees of the Company and are subject to vesting conditions.
(b) These options were issued to Dr Geoffrey Brooke (Appointed as Non-Executive Chairman of the Company on 1 March
2017) and are subject to vesting conditions.
(c) These options were issued to Dr George Morstyn (Appointed as Non-Executive Director of the Company on 1
December 2017) and are subject to vesting conditions.
(d) These options were issued to participants of the Capital Raising Tranche 1 and Tranche 2 (8 December 2017 and
22 January 2018, respectively) following shareholder approval at the Extraordinary General Meeting of
Shareholders held on 18 January 2018.
(e) These options were issued to employees of the Company and are subject to vesting conditions.
During the year and up to the date of this report the following options were exercised or lapsed:
(a) 400,000 lapsed options were forfeited due to the vesting condition of achieving a target of 65 patients dosed by
31/12/2017 having not being achieved by their vesting date; and
(b) 1,093,750 lapsed options were forfeited during the year due to an employee ceasing employment with the
Company.
No option holder has any right, by virtue of the option, to participate in any share issue of the Company.
15
QuantityTypeIssue DateExercise PriceExpiry DateVesting ConditionsComment30,500,000 Unlisted Placement Options12/12/20130.02$ 30/11/2018None attached.2,900,000 Unlisted Employee Options (Tranche 1)6/02/20170.10$ 5/02/2021Vesting conditions apply. (a)5,000,000 Unlisted Director Options24/03/20170.10$ 24/03/2022Vesting conditions apply. (b)417,188 Unlisted Employee Options (Tranche 2)12/07/20170.10$ 5/02/2021None attached.1,500,000 Unlisted Director Options1/12/20170.10$ 1/12/2022Vesting conditions apply. (c)81,876,233 Listed Loyalty Options21/12/20170.06$ 31/03/2019None attached.66,000,000 Listed Placement Options22/01/20180.06$ 31/03/2019None attached.(d)417,110 Unlisted Employee Options (Tranche 3)3/04/20180.10$ 5/02/2021None attached.937,500 Unlisted Employee Options (Tranche 3)3/04/20180.10$ 5/02/2021Vesting conditions apply. (e)189,548,031 Total shares under optionQuantityTypeLapsed or ExercisedLapsed Date / Exercise DateExercise PriceComment400,000 Unlisted Employee Options (Tranche 1)Lapsed2/01/20180.10$ (a)1,093,750 Unlisted Employee Options (Tranche 1)Lapsed22/09/20170.10$ (b)3,000,000 Unlisted Placement OptionsExercised18/04/20180.02$ 3,000,000 Unlisted Placement OptionsExercised14/05/20180.02$ 4,000,000 Unlisted Placement OptionsExercised4/07/20180.02$ 11,493,750 Total shares under options that were exercised or lapsed
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
➢ OPERATIONS AND FINANCIAL REVIEW
6.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the year focussed on the development of Xanamem, a novel
treatment for Alzheimer’s disease and the cognitive deficiency associated with other neurological and
metabolic diseases.
The Company’s drug candidate, Xanamem, has been specifically designed to block the production of
cortisol in the brain. Actinogen Medical is currently conducting XanADu, an international multi-site Phase II
efficacy and safety trial of Xanamem in patients with mild Alzheimer’s disease. Recruitment and treatment of
patients started in 2017, with results expected between April and June 2019.
7.
REVIEW OF OPERATIONS
Highlights for the Financial Year (and subsequent to year end)
(i) XanADu progress - Patient recruitment into XanADu trial continues in line with previously announced
timelines;
(ii) Data Safety Monitoring Board (DSMB) Interim Analysis of XanADu - Successful completion of XanADu
Interim Analysis by DSMB with recommendation to continue the trial without modification;
(iii) Cortisol Hypothesis strengthened – Further compelling evidence published in support of the cortisol
hypothesis;
(iv) Strengthened patent portfolio – Published patents now covering all major markets;
(v) Financial Position - Well-funded following various capital raisings including Biotechnology Value
Fund (‘BVF’), Australian Ethical Investment, and Platinum Investment Management Limited;
(vi) Enhanced Board - Appointment of Dr George Morstyn to the Board; and
(vii) Raising awareness of Actinogen Medical and Xanamem – With biotechs, researchers and investors.
(i) XanADu Progress
XanADu, the Company’s Phase II study evaluating the safety and efficacy of Xanamem in mild Alzheimer’s
disease, enrolled the first patient in May 2017 and the priority for the 2018 financial year was to ensure that
patient enrolment continued on target. Pleasingly, at the end of the financial year 116 patients had been
enrolled and the trial is expected to enrol the final patient in the second quarter of the 2019 financial year.
As projected, the top-line results are expected to read out in less than 12 months, between April and June
2019.
The first patient was treated in May 2017 at the study’s Central Coast Neurosciences Research site in New
South Wales, Australia. This was followed soon after by the treatment of the first USA patient at the Atlanta
Centre for Medical Research in Atlanta, Georgia, in June 2017.
Building on these significant milestones, the Company continued to make steady progress with the trial and
successfully recruited its first UK patient in mid-August, signalling the achievement of enrolment for the trial
across all three of its geographic territories. The first patient completed the full 12-week treatment and the
4-week follow up in early September 2017, reflecting another important milestone for the Company.
Furthermore, in March 2018 XanADu passed the midway point in patient enrolment and the study continues
on track with the last patient expected to be enrolled by quarter two of the 2019 financial year (October
to December 2018). Top line results are expected by quarter four of the 2019 financial year, less than 12
months from now.
16
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(ii) Data Safety Monitoring Board (DSMB) Interim Analysis of XanADu
In November 2017, Actinogen Medical announced that it would commission an independent Data Safety
Monitoring Board (DSMB) to undertake an Interim Analysis (IA) on the first 50 patients completing the
XanADu 12-week trial and 4-week follow up.
The IA was undertaken on the first 50 evaluable completed patients in May 2018: the IA was on both safety
and efficacy unblinded data. An additional 37 patients’ safety data for those patients still ongoing in the
study at the time, was also included in the IA.
Based on their analysis and review of the study data, the independent DSMB recommended that the
XanADu study continue as planned without modification and, importantly, confirmed that no treatment-
related serious adverse events had been reported.
The positive outcome from the IA supported the continuation of XanADu in Alzheimer’s disease and the
further development of Xanamem in other potential indications.
The XanADu patient data remained blinded to the Company and to all non-DSMB personnel involved in
the clinical study. This safeguarded the integrity and credibility of the clinical data and ensured that no
potential biases were introduced into the study.
(iii) Cortisol Hypothesis
A number of new independent studies published during the year lent strong support to the Company’s
cortisol hypothesis – the hypothesis underpinning Xanamem’s development. The hypothesis holds, that by
reducing cortisol (the “stress hormone”) in the brain, the cognitive decline associated with Alzheimer’s
disease could be slowed, or even prevented. Two studies highlighted by the Company endorse the growing
evidence supporting the association between stress and age-related cognitive (learning and memory)
decline. Both studies, performed in animal models of aging and Alzheimer’s, demonstrate that an increase
in stress hormones is associated with cognitive decline. The research by Wheelan et al. (published in 2017)
concluded that exposure to a period of stress in midlife results in cognitive decline in old age.
These research findings were supported by another study by Stuart et al. (published in 2017) in the esteemed
scientific journal, Nature, that also concluded that stress may worsen cognitive decline with age. These
studies provide strong validation and support for the development of Xanamem, which is specifically
designed to block the production of the stress hormone, cortisol, in the brain.
In the early development of Xanamem, Actinogen Medical demonstrated that blocking the production of
cortisol in the brain significantly improved cognition. If the XanADu study in Alzheimer’s disease is able to
replicate the results seen in these earlier studies, Xanamem could prove to be the most significant advance
in decades in the management of this devastating disease.
(iv) Patent Portfolio
The Company has a comprehensive portfolio of patents covering Xanamem and its use in Alzheimer’s
disease and other neurological and metabolic diseases associated with chronically raised cortisol.
During the year, the Company’s patent portfolio was further strengthened when the Canadian Intellectual
Property Office granted a key patent for Xanamem. The Canadian patent represents the final major market
patent to be granted for Xanamem.
The Company now holds key patents for Xanamem in all major geographic markets, including the USA, UK,
EU, Japan, China, Canada and Australia. These patents extend out to at least 2031, offering the Company
strong composition of matter intellectual property protection.
17
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(v) Financial Position
The Company’s financial year end position was substantially strengthened during the year, and subsequent
to year end, following various capital raisings that brought in $14,636,150 during the year, and a further
$7,156,350 post year-end. Refer to the table below. Additionally, the Company received a research and
development tax rebate of $1,214,754 that related to the prior year’s claim.
(a) Capital raising of $3,660,000 and $1,620,000 - December 2017 and January 2018, respectively
The Company launched a successful and oversubscribed placement to raise $5,280,000 through the issue
of 132 million fully paid ordinary shares at $0.04 per share. The proceeds from the capital raising fully fund
the completion of the XanADu trial.
All shares were entitled to free attaching options on a 1:2 basis, exercisable at $0.06 each on or before 31
March 2019 (Listed Placement Options), which were issued on 22 January 2018. Additionally, on the same
basis as the Listed Placement Options, existing shareholders as at 21 December 2017, received two free
loyalty bonus options for every 15 ordinary shares held (Listed Loyalty Options).
(b) Private Placement of $9,356,150 and $5,643,850 – May 2018 and July 2018, respectively
In May 2018 and July 2018, Actinogen Medical secured a further combined total of $15,000,000 through an
institutional placement. The placement received strong interest from institutional investors, with specialist
USA biotech investment fund, Biotechnology Value Fund (‘BVF’), taking a cornerstone position of $10.5
million alongside other leading Australian institutional investors: Australian Ethical Investment, and Platinum
Investment Management Limited.
The shares were issued in two tranches: Tranche 1 issued 187,122,994 fully paid ordinary shares raising
$9,356,150; and Tranche 2 issued 112,877,006 fully paid ordinary shares raising $5,643,850. The shares were
issued at $0.05 per share, representing a 13.4% premium to the 5-day volume weighted average price
(VWAP).
18
DateDuring the financial year ended 30 June 2018 $Subsequentto year ended30 June 2018 $Total Capital Raisings $Capital Raising Tranche 1 and 2 (a)Capital Raising Tranche 18/12/20173,660,000- 3,660,000 Capital Raising Tranche 222/01/20181,620,000- 1,620,000 Total 5,280,000 - 5,280,000 Private Placement Tranche 1 and 2 (b)Private Placement Tranche 118/05/20189,356,150- 9,356,150 Private Placement Tranche 212/07/2018- 5,643,8505,643,850 Total 9,356,1505,643,85015,000,000 Share Purchase Plan and Shortfall (c)Share Purchase Plan13/07/2018- 952,500952,500 Share Purchase Plan Shortfall17/07/2018- 560,000560,000 Total - 1,512,5001,512,500 Total Capital Raisings (d)14,636,150 7,156,350 21,792,500
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(c) Share Purchase Plan raising $952,500 and Shortfall $560,000 – July 2018
A Share Purchase Plan (‘SPP’) was launched offering existing eligible shareholders the opportunity to
purchase up to $15,000 of new fully paid ordinary shares at $0.05 per share. The SPP closed on 11 July 2018,
raising a total of $952,500 from the issue of 19,050,000 fully paid ordinary shares. BVF and Australian Ethical
Investment elected to participate in the SPP Shortfall which raised a further $560,000 from the issue of
11,200,000 fully paid ordinary shares.
Following completion of the private placement and SPP, BVF is now the largest shareholder in Actinogen
Medical holding 19.97% of the ordinary shares on issue.
(d) Total capital raised
Total capital raised during the year of $14,636,150 plus capital raised subsequent to year-end of $7,156,350,
brings the total combined capital raised to $21,792,500. The Company is also due to receive approximately
$3,158,000 in other income which relates to the research and development rebate receivable recognised
at year end.
The funds raised will be deployed to advance the development plan of Xanamem (for details, see Outlook
and Business Strategy in the Directors’ Report).
(vi) Board Changes
Dr Anton Uvarov stepped down from his role as Non-Executive Director of the Company and Dr George
Morstyn was appointed to the Board as Non-Executive Director. Prior to joining Actinogen Medical, Dr
Morstyn (MBBS, PhD, FRACP) was Senior Vice President of Development and Chief Medical Officer at US
biotech giant, Amgen Inc. and brings extensive drug development experience, having developed and
launched a number of new drugs during his tenure.
(vii) Raising Awareness of Actinogen Medical and Xanamem
Actinogen Medical continued to enhance its awareness activities of the Company and Xanamem among
the investor and scientific communities by attending and presenting at a number of conferences including;
the AC4R (Australasian Consortium of Centres for Clinical Cognitive Research) Annual Scientific Meeting;
the 8th Australian MicroCap Conference; BioShares Biotech 2017 Summit in Queenstown, New Zealand; JP
Morgan Healthcare Conference in San Francisco; Australia Biotech Invest; BIO International in San Diego
and Boston; the Ausbiotech National Conference and the 17th Alzheimer’s Australia Biennial National
Dementia Conference.
Raising awareness of Actinogen Medical and Xanamem among the biotechnology and investment
communities forms a key plank of the Company’s development strategy. Significant progress was made
during the year in building a strong profile for the business and for Xanamem in the domestic and
international biotech and investment markets.
8.
FINANCIAL PERFORMANCE
The financial performance of the Company during the year ended 30 June 2018 is as follows:
19
Full-year endedFull-year ended30/06/201830/06/2017$ $Revenue and other income ($)(a)3,343,1801,415,486Net loss after tax ($)(6,230,609)(3,190,338)Loss per share (cents)(0.88)(0.52)Dividend ($) - -
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(a) The Company recognised $91,897 in revenue from ordinary activities and $3,251,283 in other income (of which
$3,158,000 relates to a research and development rebate for the 2018 financial year that has been raised as a
receivable at year end).
9.
FINANCIAL POSITION
The financial position of the Company as at 30 June 2018 is as follows:
(a) Refer to Section 7(v) above for further information on cash received during the financial year and post year-end.
(b) For further information on movements in equity, refer to Note 14 of the Financial Statements.
10. SHARE PRICE PERFORMANCE
The table below sets out the performance of the Company and the consequences of performance on
shareholders’ wealth over the past five years:
11. DIVIDENDS
No amounts have been paid or declared by way of dividend since the date of incorporation. The Directors
recommend that no final dividend be paid.
12. EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Other than what is stated below, there are no matters or circumstances that have arisen since the end of the
financial year which significantly affected, or may significantly affect, the operations of the Company, the
results of those operations, or the state of the Company in subsequent financial years.
The following inflow of cash was due to the issue of fully paid ordinary shares subsequent to year end:
20
As atAs at30/06/201830/06/2017$ $Cash and cash equivalents (a)10,003,7971,894,605Available-for-sale listed investments - 2,094,833 Net assets / Total equity17,257,9119,365,766Contributed equity (b)40,438,23826,578,391Accumulated losses(29,308,635)(23,078,026)20182017201620152014Quoted price of ordinary shares at year end (cents) 4.80 6.00 7.20 7.20 1.10 Quoted price of options at year end (cents)-----Loss per share (cents)0.880.520.540.600.29Dividends paid-----
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
13. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Company during the financial year.
14. OUTLOOK & BUSINESS STRATEGY
(i) Completion of XanADu
The highest priority for the Company over the 2019 financial year is the completion and data read-out of
XanADu, the Company’s clinical trial of Xanamem in Alzheimer’s disease. Enrolment of patients into XanADu
continues across all sites in the US, UK and Australia. Five additional sites were added in the US, post the
financial year end, bringing the total number of active sites to 25. These new sites are expected to
accelerate patient recruitment and to ensure the achievement of full patient recruitment before the end
of the 2018 calendar year.
As at 29 August 2018, 79% of the total patient cohort have been enrolled into XanADu representing 138 of
the 174 patients planned for the study. Importantly, most trial sites continue to make excellent progress in
screening patients for the trial, reflecting a major positive lead indicator to future enrolment. The Company
anticipates enrolling the final patient in the last quarter of calendar year 2018 and commencing data
analysis in 2019. Top-line results are expected to be available in the second quarter of the 2019 calendar
year, less than 12 months from now.
These results will be pivotal in the Company’s development as they are expected to establish the safety
and efficacy of Xanamem in the treatment of Alzheimer’s disease and place the Company an important
step closer to bringing to market a new and novel treatment for this devastating disease.
(ii) Clinical Development Program
Following the successful completion of the recent capital raising, the Company announced a significant
expansion of its Xanamem clinical development program. The funds will be used to undertake a number of
important value adding studies to expand the growing data-set on Xanamem.
The updated program will include:
•
•
A Target Occupancy Study - a highly specialised study that aims to accurately demonstrate the effect
different doses of Xanamem has on the 11B-HSD1 enzyme in the human brain. This is the enzyme
responsible for the production of cortisol. The initial work on the Target Occupancy Study is already
underway, with the results anticipated in the April to June 2019 quarter, in line with the expected top-
line results for XanADu;
A Higher Dose Safety Study - to expand the safety data-set for Xanamem and allow for higher doses
of the drug to be used, if required, including in non-Alzheimer’s indications. This human study is
expected to initiate in the second quarter of the 2019 financial year (October to December 2018); and
21
DateQuantityUnit Price $Total $Exercise of unlisted options4/07/20184,000,000 0.02 80,000Private Placement Tranche 212/07/2018112,877,006 0.05 5,643,850Capital raising costs - - - (282,200)Share Purchase Plan13/07/201819,050,000 0.05 952,500Share Purchase Plan Shortfall17/07/201811,200,000 0.05 560,000147,127,0066,954,150
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
•
Additional Safety Toxicology Studies - to allow for longer treatment periods, as normally required by
global regulatory authorities in the development of any drug. Likewise, these studies are expected to
initiate in second quarter of the 2019 financial year.
Additionally, multiple promising new clinical indications for Xanamem are under evaluation, to expand the
market potential for Xanamem beyond Alzheimer’s disease. These indications include a number of
conditions considered to be associated with cortisol induced cognitive impairment, such as diabetes,
depression, Parkinson’s disease, schizophrenia, as well as conditions like post-traumatic stress disorder (PTSD)
and post myocardial infarction. Timing for the initiation of these studies is dependent on the outcome of an
ongoing review of all potential indications that will complete within the next few months.
(iii) A landmark year for Actinogen Medical
Financial year 2019 is expected to be a landmark year for the Company. During the financial year, the
Company expects that the XanADu study will read out top-line results and a number of new studies will be
initiated, with some reporting out, as detailed above. Results from these studies will be pivotal in defining
the effectiveness and safety of Xanamem in Alzheimer’s disease and form the foundation for the next stage
of the Xanamem development program. They will also help establish the true value of the Company. We
eagerly await these results.
It is expected therefore that in the April to June 2019 quarter, data from key studies will become available
that will substantially shape and value-add to the data package for Xanamem.
(iv) Continuing to raise awareness
A further priority for the Company over the year is to continue to drive awareness of Actinogen Medical
and Xanamem to ensure that the biotech and pharmaceutical industries recognise the significant
development progress of the drug and its future potential in treating this devastating disease.
The Company’s executives and business development team will continue to participate in international
biotech industry partnering conventions and events and take every opportunity to showcase the significant
potential for Xanamem.
Equally the Company will continue to raise awareness within the Alzheimer’s research community through
presentation and publication of the Xanamem clinical data. Two papers have been accepted for
presentation at the prestigious international congress, Clinical Trials in Alzheimer’s Disease, in Barcelona in
October 2018 – this includes an oral presentation by Professor Craig Ritchie on the excellent progress made
to date with XanADu. The presentation will be particularly noteworthy as it will coincide closely with the last
patient being enrolled into the study.
(v)
In Summary
The Company is very excited about the anticipated positive progress expected with the development of
Xanamem over the 2019 financial year. We look forward to progressing XanADu and the expanded
Xanamem development program over the 2019 financial year and to updating the market as the final data
read-out approaches in less than 12 months from now.
15. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Should any likely developments of the Company eventuate, this information will be made available to the
market in accordance with its continuous disclosure obligations under the ASX Listing Rules.
22
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
➢ REMUNERATION REPORT (AUDITED)
The information contained in the Remuneration Report has been audited as required by Section 308(3C) of
the Corporations Act 2001. The Remuneration Report is set out under the following main headings:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Introduction
Remuneration Governance
Executive remuneration arrangements
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Detail of incentive plans
Executive remuneration outcomes (including link to performance)
Executive contracts
Non-Executive Director fee arrangements
Additional disclosures relating to options and shares
Loans to Key Management Personnel (‘KMP’) and their related parties
Other transactions and balances with KMP and their related parties
1.
INTRODUCTION
The Remuneration Report details the remuneration arrangements for Key Management Personnel (‘KMP’)
who are defined as those having authority and responsibility for planning, directing and controlling the
major activities of the Company, directly or indirectly, including any Director (whether executive or
otherwise). The performance of the Company depends upon the quality of its KMP. To prosper, the
Company must attract, motivate and retain appropriately skilled Directors and Executives.
The Company’s broad remuneration policy is to ensure the remuneration package properly reflects the
person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality.
The people considered to be KMP during the financial year were:
There were no other changes to KMP after the reporting date and before the date that the financial report
was authorised for issue.
23
NamePositionAppointedResignedDr Geoffrey BrookeNon-Executive Chairman1/03/2017CurrentDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014CurrentDr Jason LoveridgeNon-Executive Director1/12/2014CurrentDr George MorstynNon-Executive Director1/12/2017CurrentDr Anton UvarovNon-Executive Director16/12/201314/08/2017
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
2.
REMUNERATION GOVERNANCE
The Board has not established a separate Remuneration Committee at this point in the Company’s
development nor has the Board engaged the services of a remuneration consultant to provide
recommendations when setting the remuneration received by Directors. Therefore, remuneration of
Directors is currently set by the Board of Directors, which is put to shareholders at the Annual General
Meeting (‘AGM’). At the AGM held on 29 November 2017, Actinogen Medical received 99.6% of votes in
favour of its Remuneration Report for the 2017 financial year. The Company did not receive any specific
feedback at the AGM or throughout the year on its remuneration practices.
It is considered that the size of the Board, along with the level of activity of the Company, renders having a
Remuneration Committee impractical and the full Board considers in detail all of the matters for which the
Directors are responsible. All matters of remuneration are done in accordance with the Corporations Act
2001 requirements, especially in respect of related party transactions. Refer to the Corporate Governance
Statement for further information.
3.
EXECUTIVE REMUNERATION ARRANGEMENTS
(A) Remuneration principles and strategy
The Company aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Company and aligned with market practice.
Executive remuneration must be:
• aligned with the Company’s vision, values and overall business objectives; and
• must be designed to motivate management to pursue the Company’s long-term growth and
success.
The nature and amount of remuneration of executives is assessed on a periodic basis by the Board (in the
absence of a Remuneration Committee) for their approval, with the overall objective of ensuring maximum
stakeholder benefit from the retention of high performing executives. The main objectives sought when
reviewing executive remuneration is that the Company has:
Executives who will create value for shareholders;
• coherent remuneration policies and practices to attract and retain executives;
•
• competitive remuneration offered benchmarked against the external market; and
•
fair and responsible rewards to executives having regard to the performance of the Company, the
performance of the executives and the general pay environment.
(B) Approach to setting remuneration
The Company aims to reward executives with a level and mix of remuneration appropriate to their position
and responsibilities, while being market competitive. The Company’s remuneration structure for Executives
can include a mix of fixed remuneration, short term incentive (STI) and long-term incentive (LTI) as outlined
below.
Fixed remuneration component:
Fixed remuneration is represented by total employment cost and comprises base salary, statutory
superannuation contributions (where applicable) and other benefits. It is paid by the Company to
compensate fully for all requirements of the executive’s employment with reference to the market and the
individual’s role and experience. It is subject to annual review considering market data and the
performance of the Company and individual. The Company benchmarks the fixed component against
appropriate market comparisons with the comparator group criteria being market capitalisation.
24
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
STI component:
The STI component is in the form of a cash bonus to executives of the Company (bonuses are also
applicable to employees). Payment of the cash bonus is entirely discretionary and rewards the KMP for their
contribution to achievement of business goals. The business goals are determined annually by the Board
and are linked to the strategic and operational plans of the Company, including budgets agreed for each
financial year.
A specific STI component is also provided for within the Managing Director’s remuneration package.
Currently this includes a performance condition whereby at the annual review of the Managing Director’s
salary, one of the factors to be considered by the Board when granting an increase will be the Company’s
market capitalisation against appropriate ASX benchmarks with an aim for 50th percentile pay on ASX
market capitalisation. The Managing Director and the remainder of the Board will agree benchmarks for
each year of the term.
LTI component:
The LTI component is in the form of Employee Options, Director Options and LTI Rights. The Board is of the
opinion that the shares and options currently on issue provide a sufficient long-term incentive to align the
goals of the KMP with those of the shareholders to maximise shareholder wealth. The Board will continue to
monitor this policy to ensure that it is appropriate for the Company in future years.
(C) Details of incentive plans
(a) Short Term Incentives (‘STIs’)
Short Term Incentives (STI’s) are set each calendar year, with any unmet milestones expiring at the end of
each calendar year ending 31 December. During the financial year ended 30 June 2018, the Board of
Directors put in place various STI’s, and when achieved, a cash bonus was paid out to the following KMPs:
➢ Dr Ketelbey – Managing Director and Chief Executive Officer
An STI was put in place for the achievement of a number of various short-term performance conditions
being met during the calendar year including first patient enrolment, all study sites initiated, various number
of subjects enrolled, dose-escalation, as well as milestones relating to investor relations, capital raisings,
business development, and the appointment of a new Chairman. Dr Ketelbey met a certain portion of
these milestones and was paid $48,450 on 22 February 2018.
(b) Long Term Incentives (‘LTI’s’)
(i)
Employee Options
In the prior year, and current year, remuneration in the form of Employee Options were granted to
employees and consultants of the Company pursuant to the Company’s Employee Option Plan.
Due to the vesting conditions attached to the Employee Options, they have been independently valued
using a Black-Scholes methodology, whereby the total share-based payment is being expensed over the
vesting period. Directors are not eligible to receive options under this Plan.
In the prior year ended 30 June 2017, the key terms of the options offered to Mr Ruffles are outlined below:
•
2,500,000 Employee Options (Tranche 1) granted on 23 January 2017 (See vesting conditions
below);
25
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Vesting Dates, Vesting Conditions and Percentages:
(a) Achieving XanADu regulatory approval in all three countries and nine patients dosed by mid-year
– 12.5%. This vesting condition was not met by 30 June 2017 and subsequently, 312,500 options
(12.5% of 2.5 million granted) lapsed and the corresponding share-based payment expense
reversed.
(b) Achieving target of 65 patients dosed by year end 2017 – 12.5%. This vesting condition was not
met by 31 December 2017 and subsequently, 312,500 options (12.5% of 2.5 million granted) lapsed
and the corresponding share-based payment expense reversed.
(c) Achieving dosing of more than 30 patients at 20mg or higher Xanamem by 30th October 2018 –
25%
(d) Achieving 174 patients dosed by 30th October 18 – 50%
Entitlement: Each Option gives the holder (Option holder) the right to subscribe for one fully paid ordinary
share in the Company (Share) upon exercise of the Option
Issue price of Options: Options are issued for no consideration.
Exercise Price and Expiry Date: The exercise price payable upon exercise of each Option is $0.10, on or
before 5 February 2021.
Other terms: The rights, restrictions and obligations which apply to Options, including in relation to vesting,
disposal and forfeiture, are set out in the Employee Option Plan.
(ii) Director Options
➢ Dr Geoffrey Brooke – Non-Executive Chairman:
In the prior year, on 24 March 2017, remuneration in the form of 5,000,000 Director Options were granted to
Dr Brooke as part of his appointment as Non-Executive Chairman.
The key terms of the offer are outlined below:
Entitlement: Each Option gives the holder (Option holder) the right to subscribe for one fully paid ordinary
share in the Company (Share) upon exercise of the Option.
Issue Price of Options: Options are issued for no consideration.
Exercise Price and Expiry Date: The exercise price payable upon exercise of each Option is $0.10, on or
before 24 March 2025.
Vesting Conditions:
(a) 2,000,000 Director Options to vest one year after the date of grant;
(b) 1,500,000 Director Options to vest two years after the date of grant; and
(c) 1,500,000 Director Options to vest three years after the date of grant.
In each case, subject to continuous service to the Company by Dr Brooke as Non-Executive Chairman
during the period from the date of grant up to and including the applicable vesting date. Due to the vesting
conditions attached to the Director Options, they have been independently valued using a Black-Scholes
methodology, whereby the total share-based payment is being expensed over the vesting period. Refer to
Note 21: Share-based Payments for further information.
Other terms: The rights, restrictions and obligations which apply to Options, including in relation to vesting,
disposal and forfeiture, are pursuant to the terms of Dr Brooke’s engagement with the Company.
26
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
➢ Dr George Morstyn – Non-Executive Director:
On 18 January 2018, at a General Meeting of Shareholders, remuneration in the form of 1,500,000 Director
Options were approved and granted to Dr Morstyn as part of his appointment as Non-Executive Director
on 1 December 2017.
The key terms of the offer are outlined below:
Entitlement: Each Option gives the holder (Option holder) the right to subscribe for one fully paid ordinary
share in the Company (Share) upon exercise of the Option.
Issue Price of Options: Options are issued for no consideration.
Exercise Price and Expiry Date: The exercise price payable upon exercise of each Option is $0.10, on or
before 1 December 2022.
Vesting Conditions:
(a) 700,000 Options to vest one year after the date of appointment as a Non-Executive Director;
(b) 400,000 Options to vest two years after the date of appointment as a Non-Executive Director; and
(c) 400,000 Options to vest three years after the date of appointment as a Non-Executive Director.
In each case, subject to continuous service to the Company by Dr Morstyn as Non-Executive Director. While
the terms of Dr Morstyn’s engagement state that the vesting periods commence from date of grant of the
Options, the intention when granting the options, was that the vesting period would commence from date
of appointment as a Non-Executive Director, which is 1 December 2017.
Due to the vesting conditions attached to the Director Options, they have been independently valued
using a Black-Scholes option valuation methodology, whereby the total share-based payment is being
expensed over the vesting period. Refer to Note 21: Share-based Payments for further information.
Other terms: The rights, restrictions and obligations which apply to Options, including in relation to vesting,
disposal and forfeiture, are pursuant to the terms of Dr Morstyn’s engagement with the Company.
(iii) LTI Rights
During a prior year, ended 30 June 2015, 45,000,000 shares, which are considered to be “in substance
options’ or rights (‘LTI Rights’) under Generally Accepted Accounting Principles, were issued to various KMP
at the time by way of provision of a limited recourse loan (subject to approval at an Annual General
Meeting of shareholders on 19 November 2014). They were independently valued using the Black-Scholes
option valuation methodology. Due to the vesting conditions attached to these LTI Rights, they are
expensed over the vesting period.
These LTI Rights were issued to the majority of KMP with performance conditions attached. The performance
conditions consist of a number of Key Performance Indicators (KPI’s) covering both financial and non-
financial measures of performance. Typically included are measures such as contribution to research &
development success, share price appreciation and tenure. There is no expiry date on these vesting rights
but there must be continuity of employment to receive the vesting benefits.
The key terms of the Employee Share Plan and of each limited recourse loan provided under the Plan are
as follows:
(i) the loan may only be applied towards the subscription price for the LTI Rights;
(ii) the loan will be interest free, provided that if the loan is not repaid by the repayment date set by the Board,
the loan will incur interest at 9% per annum after that date (which will accrue on a daily basis and
compound annually on the then outstanding loan balance);
27
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(iii) by signing and returning a limited recourse loan application, the participants of the Plan (each a
Participant) acknowledges and agrees that the Loan Shares will not be transferred, encumbered,
otherwise disposed of, or have a security interest granted over it, by or on behalf of the Participant until the
loan is repaid in full to the Company;
(iv) the Company has security over the Loan Shares as security for repayment of the loan;
(v) the loan becomes repayable on the earliest of:
a) five years from the date on which the loan is advanced to the Participant;
b) one month after the Participant resigns or ceases to be employed by the Company other than:
(i) where the Participant is removed from office by shareholders of the Company, or
(ii) where the Company does not renew the Participant's executive employment agreement or
(iii) where the Company dismisses the Participant other than for cause; and
c) (by the legal personal representative of the Participant) six months after the Participant ceases to be
an employee of the Company due to their death.
Repayment Date:
(vi)
(vii)
notwithstanding paragraph (v) above, the Participant may repay all or part of the loan at any time
before the Repayment Date; and
the loan will be limited recourse such that on the Repayment Date the repayment obligation under the
limited recourse loan will be limited to the lesser of (i) the outstanding balance of the limited recourse
loan and (ii) the market value of the shares on that date. In addition, where the Participant has elected
for the Loan Shares to be provided to the Company in full satisfaction of the loan, the Company must
accept the Loan Shares as full settlement of the repayment obligation under the limited recourse loan.
Vesting conditions:
The Directors may issue the LTI Rights subject to vesting conditions (including performance milestones and
time-based retention hurdles), such that the holder is only entitled to the benefit of the LTI Rights once the
vesting conditions are met. If the vesting conditions are not met, the holder will lose their entitlement to the
LTI Rights and the Company may buy back or arrange for the sale of those LTI Rights. This enables the Board
to attract, incentivise and retain key personnel and to align the interests of those personnel and shareholders
through equity participation.
Due to the vesting conditions attached to the LTI Rights, they have been independently valued using a
Black-Scholes methodology, whereby the total share-based payment is being expensed over the vesting
period. Refer to Note 21: Share-based Payments for further information.
Refer to the table below setting out the vesting conditions attached to the LTI Rights.
28
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
During the year ended 30 June 2018, the following LTI Rights (‘Rights’) vested or lapsed:
(i) On 27 October 2017, the vesting condition on the 3,000,000 Class G Rights issued to Mr Ruffles were met.
(ii) On 18 December 2017, the vesting condition on the 6,000,000 Class H Rights issued to Dr Ketelbey were
met.
(iii) On 14 December 2017, the shares attached to the 5,000,000 Class F Rights were cancelled by the
Company during the year due to the vesting condition not being met. However, the share-based
payment expense attached to these Rights, were reversed in the prior year ending 30 June 2017
according to when the 5,000,000 Class F Rights were forfeited which was when the former director, Mr
Rogers, resigned from the Company, this being 30 November 2016.
As at 30 June 2018, Class I and Class J Rights remain unvested as the vesting condition has not yet been
met despite the share-based payment expense against these Rights being fully expensed in prior years
based on the expected vesting date at that time:
(iv) 3,000,000 Class I Rights were fully expensed as at 30 June 2015 despite vesting condition remaining
unmet; and
(v) 3,000,000 Class J Rights were fully expensed as at 30 June 2015 despite vesting condition remaining
unmet.
29
RecipientClass of LTI RightsQuantity of LTI RightsVesting Date / ConditionVested, unvested or lapsedRef.Jason LoveridgeClass A 3,000,000 Upon successful completion of the phase 1b multiple ascending dose study.VestedviiiJason LoveridgeClass B 3,000,000 Upon funding of the phase 2a proof of concept study.VestedviiMartin RogersClass C7,500,000 Upon Shares trading on the ASX above $0.04 for ten consecutive trading days.VestedxMartin RogersClass D7,500,000 Upon Shares trading on the ASX above $0.06 for ten consecutive trading days.VestedviMartin RogersClass E5,000,000 Upon recruitment of the phase 1b multiple ascending dose study.VestedixMartin RogersClass F- Upon recruitment of the phase 2a proof of concept study.LapsediiiVincent RufflesClass G2,000,000 Three years from commencement of employment.VestediBill KetelbeyClass H6,000,000 Three years from commencement of employment.VestediiBill KetelbeyClass I3,000,000 Upon Share trading on the ASX at 150% of the share price on the date of commencement of employment for 10 consecutive trading days.UnvestedivBill KetelbeyClass J3,000,000 Upon recruitment of Phase II Xanamen Study.Unvestedv40,000,000
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
In prior years, the following Rights vested or lapsed:
(vi) On 24 February 2015, the vesting condition on the 7,500,000 Class D Rights issued to Mr Rogers were met.
(vii) On 21 May 2015, the vesting condition on the 3,000,000 Class B Rights issued to Dr Loveridge were met.
(viii) On 12 August 2015, the vesting condition on the 3,000,000 Class A Rights issued to Dr Loveridge were
met.
(ix) On 11 August 2015, the vesting condition on the 5,000,000 Class E Rights issued to Mr Rogers were met.
(x) On 16 December 2014, the vesting condition on the 7,500,000 Class C Rights issued to Mr Rogers were
met.
4.
Executive Remuneration Outcomes
During the financial years ended 30 June 2018 and 30 June 2017 the KMP’s received either or all of the
following benefits:
-
-
-
Short-term benefits: cash salary, cash fees and cash bonuses;
Post-employment benefits: retirement benefits; and
Share-based payments.
All remuneration paid to Directors and other KMP is valued at the cost to the Company and expensed. Refer
to Table 1 and Table 2 below.
Table 1 - Remuneration of KMP for the year ended 30 June 2018:
(a) The total Non-Executive Director Fees during the year totalled $188,841.
(b) During the year the following appointments and resignations occurred:
-
-
Dr Uvarov resigned as Non-Executive Director on 14 August 2017;
Dr Morstyn was appointed as Non-Executive Director on 1 December 2017; and
(c) Refer to Section 3(C)b of the Directors Report and Note 21: Share-based Payments for further information.
30
As at 30/6/2018Post-employmentCash salary and feesCash bonusSuper-annuationLTI Rights / OptionsShares$$$$ (c)$$ %Directors (a)Geoffrey Brooke 83,714 - 7,953 130,068 - 221,735 59%Bill Ketelbey 322,451 48,450 20,049 33,256 - 424,206 8%Jason Loveridge 60,000 - - - - 60,000 - George Morstyn (b) 30,000 - - 7,705 - 37,705 20%Anton Uvarov (b) 6,552 - 622 - - 7,174 - Total Directors 502,717 48,450 28,624 171,029 - 750,820 Value of share-based payments as a % of total remunerationTotalShort term benefitsShare-based payments
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Table 2 - Remuneration of KMP for the year ended 30 June 2017:
(a) Mr Rogers resigned as Non-Executive Chairman on 30 November 2016.
(b) Mr Ruffles was deemed to be a KMP in the prior year ended 30 June 2017, however, in the current financial year
ended 30 June 2018, he no longer fulfils this definition.
5.
Executive Contracts
During the financial year the following executive was remunerated accordingly for his role and was subject
to the following contractual arrangement:
•
Dr Bill Ketelbey – Managing Director and Chief Executive Officer
- Commencement of employment: 18 December 2014.
-
Received wages totaling $356,517 (including a bonus payment of $48,450 during the year) plus
superannuation of $34,433;
-
-
-
-
Remuneration packaged was increased from $335,000 per annum (including statutory
superannuation) to $350,000 per annum, with effect from 1 January 2018.
Included within the remuneration package is an STI scheme which is put in place by the Board
of Directors for the achievement of a number of various short-term performance conditions being
met. For further information on the STI’s refer to Section 3(C) of the Remuneration Report.
Term: the appointment of the employee will continue on an ongoing basis unless terminated
earlier in accordance with termination provisions.
Termination: the Company or the individual may terminate the contract by giving three months’
written notice. In the event of breach or criminal activity, termination is effective immediately
without payment other than the fee accrued to the date of termination.
6.
Non-Executive Director Fee Arrangements
Non-Executive Directors are remunerated by way of fees, in the form of cash, non-cash benefits and
superannuation contributions and do not normally participate in schemes designed for the remuneration
of Executives. As noted above, fees for Non-Executive Directors are generally not directly linked to the
performance of the Company, however, to align Directors’ interests with shareholder interests, the Directors
are encouraged to hold shares in the Company.
31
As at 30/6/2017Post-employmentCash salary and feesCash bonusSuper-annuationLTI's / OptionsShares$$$$$$ %DirectorsBill Ketelbey 315,692 - 19,308 115,035 - 450,035 26%Geoffrey Brooke 30,441 - 2,892 41,996 - 75,329 56%Martin Rogers (a) 52,085 - 4,948 - - 57,033 0%Jason Loveridge 60,000 - - - - 60,000 0%Anton Uvarov 54,795 - 5,205 - - 60,000 0%Total Directors 513,013 - 32,353 157,031 - 702,398 Vincent Ruffles (b) 179,604 7,410 17,766 46,315 - 251,095 18%Total Senior Executives 179,604 7,410 17,766 46,315 - 251,095 Total KMP 692,617 7,410 50,120 203,346 - 953,493 - Value of share-based payments as a % of total remunerationTotalSenior ExecutivesShort term benefitsShare-based payments
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors, at an
Annual General Meeting held on 12 November 2015, is $500,000 per annum. The Directors set the individual
Non-Executive Directors fees within the limit approved by shareholders. Total fees paid to Non-Executive
Directors during the year were $188,841.
During the financial year the following Non-Executive Directors were remunerated for their respective roles
and were subject to the following contractual arrangements:
•
Dr Geoffrey Brooke – Non-Executive Chairman
- Date of Appointment: 1 March 2017.
-
-
-
-
Received Director’s fees totaling $83,714 (plus GST) plus statutory superannuation totaling $7,953
during the year ended 30 June 2018.
Remuneration package is set at $100,000 per annum (inclusive of GST) (plus superannuation
prescribed by the relevant law). Subject to annual review.
Term: Dr Brooke’s appointment is subject to retirement by rotation under the Company’s
Constitution.
Termination: The other members of the Board may request that the officer resign with immediate
effect in the event that the Board deems the individual’s performance is unsatisfactory, or the
Company’s shareholders may resolve to seek the officer’s removal by members’ resolution.
Alternatively, the individual may resign from the Board.
•
Dr Jason Loveridge – Non-Executive Director
- Date of Appointment: 1 December 2014.
- Director’s fees received totaled $60,000 (GST not applicable) during the year ended 30 June
2018.
-
-
-
Remuneration package is set at $60,000 per annum (excluding GST) with effect from 1 February
2016. Subject to annual review.
Term: Dr Loveridge was elected as a Director at the Company‘s 2014 Annual General Meeting,
with effect from 1 December 2014 following the acquisition of Corticrine Limited; and thereafter
is subject to retirement by rotation under the Company’s Constitution.
Termination: The other members of the Board may request that the officer resign with immediate
effect in the event that the Board deems the individual’s performance is unsatisfactory, or the
Company’s shareholders may resolve to seek the officer’s removal by members’ resolution.
Alternatively, the individual may resign from the Board.
•
Dr George Morstyn – Non-Executive Director
- Date of Appointment: 1 December 2017.
- Director’s fees received totaled $30,000 (plus GST and exclusive of superannuation) during the
-
-
-
year ended 30 June 2018.
Remuneration package is set at $60,000 per annum (plus GST and exclusive of superannuation).
Subject to annual review.
Term: Dr Morstyn’s appointment is subject to retirement by rotation under the Company’s
Constitution.
Termination: The other members of the Board may request that the officer resign with immediate
effect in the event that the Board deems the individual’s performance is unsatisfactory, or the
Company’s shareholders may resolve to seek the officer’s removal by members’ resolution.
Alternatively, the individual may resign from the Board.
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ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
•
Dr Anton Uvarov – former Non-Executive Director
- Date of Appointment: 16 December 2013.
- Director’s fees received totaled $6,552 plus superannuation of $622 during the year ended 30
June 2018.
-
-
7.
(i)
Remuneration package is set at $60,000 per annum (including statutory superannuation), with
effect from 1 February 2016. Subject to annual review.
Termination Date: Dr Uvarov resigned on 14 August 2017.
Additional disclosures relating to options
Option holding of KMP
At the date of this report, the unissued ordinary shares of Actinogen Medical under option carry no dividend
or voting rights. When exercisable, each option is convertible into one fully paid ordinary share of the
Company.
Although Dr Anton Uvarov was a Director of the Company from 16 December 2013 through to 14 August
2017, and therefore a KMP, he did not receive any options during his tenure and is therefore not disclosed
in the following tables relating to options issued.
Option holding of KMP as at 30 June 2018:
(a) As at 30 June 2018, Class I and Class J LTI Rights remain unvested as the vesting condition has not yet been met
despite the share-based payment expense against these LTI Rights being fully expensed in prior years based on the
expected vesting date at that time.
(b) George Morstyn commenced as Non-Executive Director on 1 December 2017. He was issued Director Options as
part of his appointment. Refer to Section 3(C)(b)(ii) within the Remuneration Report for further information.
33
Class of OptionsBalance at beginning of year 1/7/2017Granted as remunerationNet change otherBalance at end of year 30/6/2018Vested at 30/6/2018Not vested at 30/6/2018DirectorsGeoffrey BrookeDirector Options5,000,000 - - 5,000,000 2,000,000 3,000,000 5,000,000 - - 5,000,000 2,000,000 3,000,000 Bill KetelbeyClass H LTI Rights6,000,000 - - 6,000,000 6,000,000 - Bill Ketelbey (a)Class I LTI Rights3,000,000 - - 3,000,000 - 3,000,000 Bill Ketelbey (a)Class J LTI Rights3,000,000 - - 3,000,000 - 3,000,000 12,000,000 - - 12,000,000 6,000,000 6,000,000 Jason LoveridgeClass A LTI Rights3,000,000 - - 3,000,000 3,000,000 - Jason LoveridgeClass B LTI Rights3,000,000 - - 3,000,000 3,000,000 - 6,000,000 - - 6,000,000 6,000,000 - George Morstyn (b)Director Options- 1,500,000 - 1,500,000 - 1,500,000 - 1,500,000 - 1,500,000 - 1,500,000 Total Directors23,000,000 1,500,000 - 24,500,000 14,000,000 10,500,000
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Option holding of KMP as at 30 June 2017:
(a) Geoffrey Brooke commenced as Non-Executive Chairman on 1 March 2017. He was issued Director Options as part
of his appointment as Non-Executive Chairman. Refer to Section 3(C)(b) within the Remuneration Report for further
information.
(b) As at 30 June 2018, Class I and Class J LTI Rights remain unvested as the vesting condition has not yet been met
despite the share-based payment expense against these LTI Rights being fully expensed in prior years based on the
expected vesting date at that time
(c) Martin Rogers resigned on 30 November 2016 and 5,000,000 Class F LTI Rights lapsed due to forfeiture.
(d) During the year, 312,500 of Mr Ruffles Employee Options (Tranche 1) were forfeited due to the vesting condition
attached to these options not being met by the milestone date, this being, achieving XanADu regulatory approval
in all three countries and nine patients dosed by 30 June 2017.
34
Class of OptionsBalance at beginning of year 1/7/2016Granted as remunerationNet change otherBalance at end of year 30/6/2017Vested at 30/6/2017Not vested at 30/6/2017DirectorsGeoffrey Brooke (a)Director Options- 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 Bill KetelbeyClass H LTI Rights6,000,000 6,000,000 - 6,000,000 Bill Ketelbey (b)Class I LTI Rights3,000,000 - - 3,000,000 - 3,000,000 Bill Ketelbey (b)Class J LTI Rights3,000,000 - - 3,000,000 - 3,000,000 12,000,000 - - 12,000,000 - 12,000,000 Jason LoveridgeClass A LTI Rights3,000,000 - - 3,000,000 3,000,000 - Jason LoveridgeClass B LTI Rights3,000,000 - - 3,000,000 3,000,000 - 6,000,000 - - 6,000,000 6,000,000 - Martin Rogers (c)Class C to F LTI Rights25,000,000 - (25,000,000) - - - 25,000,000 - (25,000,000) - - - Total Directors43,000,000 5,000,000 (25,000,000) 23,000,000 6,000,000 17,000,000 Senior ExecutivesVincent RufflesClass G LTI Rights2,000,000 - - 2,000,000 - 2,000,000 Vincent Ruffles (d)Employee Options (T1)- 2,500,000 (312,500) 2,187,500 - 2,187,500 Total Senior Executives2,000,000 2,500,000 (312,500) 4,187,500 - 4,187,500 Total KMP45,000,000 7,500,000 (25,312,500) 27,187,500 6,000,000 21,187,500
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(ii)
Value of options awarded, vested and lapsed during the year
The value of the options awarded, vested and lapsed during the year are outlined in the Table below.
(a) During the year, the vesting condition attached to the Class H LTI Rights were met; this being that Dr Ketelbey serves three years with the Company from
commencement of employment (18 December 2014).
(b) Class I and Class J LTI Rights remain unvested despite the share-based payment expense against these LTI Rights being fully expensed in prior years
based on the expected vesting date at that time.
Refer to Section 3(C) within the Remuneration Report for further information as to the vesting conditions attached to these LTI Rights.
35
RecipientTotal share-based payment valuationValue vested during the year Total share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Total share-based payments expensed as at 30 June 2018Value to be recognised in future yearsRemuneration consisting of option for the year (%)DirectorsG. Brooke98,114$ -$ 26,343$ 71,771$ -$ 98,114$ -$ 32%G. Brooke73,586$ -$ 9,879$ 36,793$ -$ 46,672$ 26,914$ 17%G. Brooke73,586$ -$ 5,774$ 21,504$ -$ 27,278$ 46,308$ 10%B. Ketelbey (a)218,886$ 218,886$ 185,630$ 33,256$ -$ 218,886$ -$ 8%B. Ketelbey (b)109,443$ -$ 109,443$ -$ -$ 109,443$ -$ 0%B. Ketelbey (b)109,443$ -$ 109,443$ -$ -$ 109,443$ -$ 0%J. Loveridge112,848$ -$ 112,848$ -$ -$ 112,848$ -$ 0%J. Loveridge112,848$ -$ 112,848$ -$ -$ 112,848$ -$ 0%G. Morstyn9,030$ -$ -$ 5,220$ -$ 5,220$ 3,810$ 14%G. Morstyn5,160$ -$ -$ 1,491$ -$ 1,491$ 3,669$ 4%G. Morstyn5,160$ -$ -$ 993$ -$ 993$ 4,167$ 3%Total Directors
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(iii)
Number of options awarded, vested and lapsed during the year
(a) During the year, the vesting condition attached to the Class H LTI Rights were met, this being that Dr Ketelbey serves three years with the Company from
commencement of employment (18/12/2014).
(b) Class I and Class J LTI Rights remain unvested despite the share-based payment expense against these LTI Rights being fully expensed in prior years
based on the expected vesting date at that time.
Refer to Section 3(C) within the Remuneration Report for further information as to the vesting conditions attached to these LTI Rights.
36
RecipientGrant DateFair value per option at grant dateFinacial YearVesting dateExercise priceExpiry dateQuantity as at 1 July 2017Quantity lapsed during the year Quantity as at 30 June 2018Quantity vested during the yearDirectorsG. Brooke24/03/20170.049$ 201724/03/20180.10$ 24/03/20252,000,000 - 2,000,000 - G. Brooke24/03/20170.049$ 201724/03/20190.10$ 24/03/20251,500,000 - 1,500,000 - G. Brooke24/03/20170.049$ 201724/08/20200.10$ 24/03/20251,500,000 - 1,500,000 - B. Ketelbey (a)15/12/20140.036$ 201518/12/20170.04$ 15/12/20196,000,000 - 6,000,000 6,000,000 B. Ketelbey (b)15/12/20140.036$ 201530/06/20150.04$ 15/12/20193,000,000 - 3,000,000 - B. Ketelbey (b)15/12/20140.036$ 201530/06/20170.04$ 15/12/20193,000,000 - 3,000,000 - J. Loveridge19/11/20140.038$ 201530/09/20150.02$ 30/11/20193,000,000 - 3,000,000 - J. Loveridge19/11/20140.038$ 201531/12/20150.02$ 30/11/20193,000,000 - 3,000,000 - G. Morstyn18/01/20180.013$ 20181/12/20180.10$ 1/12/2022700,000 - 700,000 - G. Morstyn18/01/20180.013$ 20181/12/20190.10$ 1/12/2022400,000 - 400,000 - G. Morstyn18/01/20180.013$ 20181/12/20200.10$ 1/12/2022400,000 - 400,000 - Total Directors24,500,000 - 24,500,000 6,000,000
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
8.
Additional disclosures relating to shares
There were no shares issued as compensation to KMP during the financial year ended 30 June 2018. LTI
Rights held by KMP, despite being ordinary fully paid shares, represent an option arrangement and
have not been included in the table below. Refer to Section 7(a) above which discloses the option
holdings of KMPs including the LTI Rights held by KMP.
Shareholding of KMP as at 30 June 2018:
(a) Movement relates to shares purchased on-market during the year; other than Anton Uvarov’s movement
which represents his resignation on 14 August 2017
Shareholding of KMP as at 30 June 2017:
(a) Movement relates to shares purchased on-market during the year; other than Martin Rogers’
movement which represents his resignation on 30 November 2016.
37
Balance at beginning of year 1/7/2017Granted as remunerationOn exercise of optionsNet change other (a)Balance at end of year 30/6/2018DirectorsGeoffrey Brooke400,000 - - 625,000 1,025,000 Bill Ketelbey353,803 - - - 353,803 Jason Loveridge21,875,078 - - - 21,875,078 George Morstyn- - - 200,000 200,000 Anton Uvarov4,187,244 - - (4,187,244) - Total Directors26,816,125 - - (3,362,244) 23,453,881 Balance at beginning of year 1/7/2016Granted as remunerationOn exercise of optionsNet change other (a)Balance at end of year 30/6/2017DirectorsGeoffrey Brooke- - - 400,000 400,000 Bill Ketelbey353,803 - - - 353,803 Martin Rogers11,407,894 - - (11,407,894) - Jason Loveridge21,875,078 - - - 21,875,078 Anton Uvarov4,187,244 - - - 4,187,244 Total Directors37,824,019 - - (11,007,894) 26,816,125 Senior ExecutivesVincent Ruffles- - - - - Total Senior Executives- - - - - Total KMP37,824,019 - - (11,007,894) 26,816,125
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
9.
Loans Made to Key Management Personnel
No loans were made to any Director or KMP or any of their related entities during the reporting period.
Under the LTI Rights (section 3(C)(b) (iii)) of the Directors’ Report, limited recourse interest free loans
have been provided to Directors and KPM in prior years. The total value of the loans outstanding as at
30 June 2018 is $1,491,035. The loans are not recognised in the financial statements on the basis the LTI
Rights are accounted for as “in-substance options”.
10.
Other Transactions with Key Management Personnel
There were no other transactions with any Director of KMP or any of their related entities during the
reporting period.
End of Audited Remuneration Report
16.
INDEMNIFICATION OF AUDITORS
To the extent permitted by Law, the Company has agreed to indemnify its auditors, Ernst & Young, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit
(for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the
financial year.
17.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, Actinogen Medical paid a premium to insure the Directors and officers of the
Company. The liabilities insured are legal costs that may be incurred in defending civil or criminal
proceedings that may be brought against the officers in their capacity as officers in the Company, and
any other payments arising from liabilities incurred by the officers in connection with such proceedings.
This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers
or the improper use by the officers of their position or of information to gain advantage for themselves or
someone else or to cause detriment to the Company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
18. PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court, under section 237 of the Corporations Act 2001, to bring
proceedings on behalf of the Company or intervene in any proceedings to which the Company is party
for the purpose of taking responsibility on behalf of the Company for all or part of these proceedings. The
Company was not a party to any such proceedings during the year.
19. ENVIRONMENTAL REGULATIONS
The Company's operations are not subject to significant environmental regulation under the Australian
Commonwealth or State law.
38
ACTINOGEN MEDICAL LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
20. NON-AUDIT SERVICES
No fees were paid for non-audit services to the external auditors and their associated entities during the
years ended 30 June 2018 and 30 June 2017.
21. AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
for the year ended 30 June 2018 forms a part of the Directors’ Report and can be found on page 40.
Signed in accordance with a resolution of the Board of Directors.
Dr Bill Ketelbey
Managing Director
Sydney, New South Wales
29 August 2018
39
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Actinogen
Medical Limited
As lead auditor for the audit of Actinogen Medical Limited for the financial year ended 30 June 2018, I
declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
Ernst & Young
T G Dachs
Partner
29 August 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TD:KG:ACTINOGEN:007
ACTINOGEN MEDICAL LIMITED
S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 8
__________________________________________________________________
The above Statement of Comprehensive Income should be read in conjunction with the accompanying
Notes.
41
Full year endedFull year ended30/06/201830/06/2017Note$ $ Revenue from continuing operations 91,897 155,768 Other income 3,251,283 1,259,718 Total revenue & other income6 3,343,180 1,415,486 Business development (528,418) (361,341)Corporate administration expenses (696,654) (578,468)Research & development expenses6 (7,741,706) (3,190,450)Finance costs (11,457) (8,532)Share-based payment expenses (239,514) (106,415)Amortisation expense (353,500) (353,501)Depreciation expense11 (2,540) (7,117)Total expenses (9,573,789) (4,605,824)Loss Before Income Tax (6,230,609) (3,190,338)Income tax expense7 - - Loss for the Year(6,230,609)(3,190,338)Other comprehensive incomeNet fair value (gain)/losses for available-for-sale listed investments - 54,335 Transfer of available-for-sale reserve to profit and loss upon disposal of available-for-sale investments (76,607) - Total comprehensive loss for the Year(6,307,216)(3,136,003)Loss per share for attributable to the ordinary equity holders of the CompanyBasic loss per share (cents)16(0.88)(0.52)Dilutive loss per share (cents)16(0.88)(0.52)Items that may be reclassified subsequently to profit and loss:
ACTINOGEN MEDICAL LIMITED
S T A T E M E N T O F F I N A N C I A L P O S I T I O N
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 8
_________________________________________________________________
The above Statement of Financial Position should be read in conjunction with the accompanying Notes.
42
Full year endedFull-year ended30/06/201830/06/2017Note$ $CURRENT ASSETSCash and cash equivalents810,003,7971,894,605Trade and other receivables93,532,4141,374,868Available-for-sale listed investments10 - 2,094,833 TOTAL CURRENT ASSETS13,536,2115,364,306NON-CURRENT ASSETSProperty, plant and equipment11 - 2,266Intangible assets124,489,953 4,843,453 TOTAL NON-CURRENT ASSETS4,489,9534,845,719TOTAL ASSETS18,026,16410,210,025CURRENT LIABILITIESTrade and other payables13649,225763,682Provision for employee entitlements119,028 80,577 TOTAL LIABILITIES768,253844,259NET ASSETS 17,257,9119,365,766EQUITYContributed equity1440,438,23826,578,391Reserve shares14(1,040,000) (1,140,000)Reserves157,168,308 7,005,401 Accumulated losses(29,308,635)(23,078,026)TOTAL EQUITY 17,257,9119,365,766
ACTINOGEN MEDICAL LIMITED
S T A T E M E N T O F C A S H F L O W S
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 8
_________________________________________________________________
The above Statement of Cash Flows should be read in conjunction with the accompanying Notes.
43
Full year endedFull year ended30/06/201830/06/2017$ $CASH FLOWS FROM OPERATING ACTIVITIESDividends received 53,182 118,233 Interest received38,71537,535Interest paid(11,457) (8,532)Payments to suppliers and employees(1,170,799) (824,224)Payments for research and development(8,086,285) (3,261,087)Research and development rebate received 1,265,592 2,829,276Net cash (outflow) from operating activities8(7,911,052)(1,108,799)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment11(274) (1,025)Proceeds on sale of available-for-sale listed investments102,060,671 1,982,451 Net cash inflow from investing activities2,060,3971,981,426CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares 14,756,150 270,000 Transaction costs associated with issue of shares (796,303) - Net cash inflow from financing activities 13,959,847 270,000 Net increase in cash and cash equivalents8,109,1921,142,627Cash and cash equivalents at beginning of the year1,894,605751,978CASH AND CASH EQUIVALENTS AT END OF THE YEAR810,003,7971,894,605Note
ACTINOGEN MEDICAL LIMITED
S T A T E M E N T O F C H A N G E S I N E Q U I T Y
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 8
_________________________________________________________________
The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
44
Contributed EquityAccumulated LossesAvailable-for-sale ReserveOption ReserveReserve SharesTotalFull year ended 30/6/2018$$$$$$Balance as at 1/7/201726,578,391(23,078,026) 76,607 6,928,794(1,140,000)9,365,766Loss for the year - (6,230,609) - - - (6,230,609)Other comprehensive income - - (76,607) - - (76,607)Total comprehensive loss for the year - (6,230,609) (76,607) - - (6,307,216)Transactions with equity holders in their capacity as equity holders:Shares issued during the year 14,756,150 - - - - 14,756,150 Capital raising costs (796,303) - - - - (796,303)Cancellation on unvested loan shares (100,000) - - - 100,000 - Share-based payments - - - 239,514 - 239,514 Balance as at 30/6/201840,438,238(29,308,635) - 7,168,308(1,040,000)17,257,911Contributed EquityAccumulated LossesAvailable-for-sale ReserveOption ReserveReserve SharesTotalFull year ended 30/6/2017$$$$$$Balance as at 1/7/201626,308,391(19,887,688) 22,272 6,822,379(1,140,000)12,125,354Loss for the year - (3,190,338) - - - (3,190,338)Other comprehensive income - - 54,335 - - 54,335 Total comprehensive loss for the year - (3,190,338)54,335 - - (3,136,003)Transactions with equity holders in their capacity as equity holders:Shares issued during the year 270,000 - - - - 270,000 Share-based payments - - - 106,415 - 106,415 Balance as at 30/6/201726,578,391(23,078,026)76,6076,928,794(1,140,000)9,365,766
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
1.
CORPORATE INFORMATION
The financial statements of Actinogen Medical Limited (‘Actinogen Medical’ or ‘the Company’) for the
year ended 30 June 2018 were authorised in accordance with a resolution of Directors on 29 August
2018.
Actinogen Medical Limited is a for profit company limited by shares incorporated and domiciled in
Australia whose shares are publicly traded on the Australian Securities Exchange (‘ASX’). The nature of
operations and principal activities of the Company are described in the Directors’ Report. Information
on other related party relationships is provided in Note 20.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements of the Company are for the financial year ended 30 June 2018.
(a)
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board, and the Corporations Act 2001. The financial statements have been prepared on a going
concern basis. The financial statements are presented in Australian dollars.
(b) Going concern basis
This financial report has been prepared on the going concern basis which contemplates the continuity
of normal business activity and the realisation of assets and settlement of liabilities in the normal course
of business.
The Company has incurred a total comprehensive loss for the year ended 30 June 2018 of $6,230,609
(30 June 2017: $3,190,338) and experienced net cash outflows from operating activities of $7,911,052
(30 June 2017: $1,108,799).
In arriving at this position, the Directors have had regard for the fact that based on the matters noted
below the Company has, or in the Directors’ opinion will have access to, sufficient cash to fund
administrative and other committed expenditure for a period of not less than 12 months from the date
of this report. In forming this view the Directors have taken into consideration the following:
•
•
•
The Company has $10,003,797 in cash and cash equivalents as at 30 June 2018 and received
proceeds of $7,156,350 subsequent to year end as a result of cash received from share
placements. The Company is listed on the ASX and therefore has access to the Australian equity
capital markets. Accordingly, the Company considers it maintains a reasonable expectation of
being able to raise funding from the market as and when required, although it cannot determine
in advance the terms upon which it may raise such funding.
The Company is achieving key milestones with respect to its XanADu trial, an international multi-
site Phase II efficacy and safety trial of Xanamem, Actinogen Medical’s drug candidate that has
been specifically designed to block the production of cortisol in the brain. This provides confidence
for the Company’s prospects of generating positive cash flow from operations in the future.
The Company will be submitting a claim for the Research & Development Tax Incentive in respect
of the 2018 tax year. The Company is satisfied that it meets the criteria to qualify for a cash refund
and is confident the expenditure to be claimed will satisfy the tests of eligibility. The amount of
eligible expenditure in the 2018 financial year is estimated to be $7,259,769, and if approved, would
lead to a cash refund of $3,158,000 which has been recognised in the current year financial
statements. Refer to Note 6, Note 8 and Note 9.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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(c) Compliance with IFRS
The financial statements of the Company also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(d)
Historical cost convention
These financial statements have been prepared under the historical cost convention, except for
available-for-sale financial investments which have been measured at fair value.
(e) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are disclosed in Note 4.
(f)
Plant & equipment
Each asset of plant and equipment is stated at cost, net of accumulated depreciation and impairment
losses, if any. Assets are depreciated from the date the asset is ready for use.
Items of plant and equipment are depreciated using the diminishing value method over their estimated
useful lives to the Company. The depreciation rates used for each class of asset for the current period
are as follows:
Computer Equipment
•
• General Pool Assets >$1,000
25% to 66.67%
37%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. The recoverable amount is assessed on the
basis of expected net cash flows that will be received from the assets continual use or subsequent
disposal. The expected cash flows have been discounted to their present value in determining the
recoverable amount.
An asset is de-recognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in the Statement of
Comprehensive Income when the asset is de-recognised.
The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if
appropriate, at each balance date.
(g)
Impairment of non-financial assets
At each reporting date, the Company reviews the carrying values of its assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the assets carrying value. Any excess of the assets carrying value over its recoverable
amount is expensed to the Statement of Comprehensive Income. Where it is not possible to estimate
the recoverable amount of an individual asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less cost to sell, recent market transactions are taken into
account. If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.
(h)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their fair value at the date of acquisition. Following initial
46
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles, excluding capitalised development costs, are not
capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure
is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite
lives are amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting
period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates and adjusted on a prospective basis.
The amortisation expense on intangible assets with finite lives is recognised in the Statement of
Comprehensive Income.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from
derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the Statement of Comprehensive
Income when the asset is derecognised.
Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at each financial year
end. Intangible assets, excluding development costs, created within the business are not capitalised
and expenditure is charged against profits in the period in which the expenditure is incurred. Intangible
assets are tested for impairment where an indicator of impairment exists and in the case of indefinite
lived intangibles annually, either individually or at the cash generating unit level. Useful lives are also
examined on an annual basis and adjustments, where applicable, are made on a prospective basis.
(i) Research and development costs
Development expenditures on an individual project are recognised as an intangible asset when the
Company can demonstrate:
•
•
•
•
•
•
The technical feasibility of completing the intangible asset so that the asset will be available for
use or sale
Its intention to complete and its ability to use or sell the asset
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development
The ability to use the intangible asset generated
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less
any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins
when development is complete and the asset is available for use. It is amortised over the period of
expected future benefit. During the period of development, the asset is tested for impairment annually.
The Company assessed whether the above criteria had been met for the financial year ended 30 June
2018. The Company did not meet this criteria and as a consequence all research and development
costs were expensed to profit and loss for the current year.
(ii)
Intellectual property
The Company’s intangible assets relate to intellectual property for upfront payments to purchase
patents and licenses. The patents and licenses have been granted for a period of 20 years by the
relevant government agency with the option of renewal at the end of this period. As a result, those
patents and licenses are amortised on a straight-line basis over the period of the patent patents and
license. The remaining life of the patents and licenses is 13 years. Refer to Note 12.
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(i)
Income tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the end of the reporting period.
Deferred income tax is accounted for using the liability method on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, the deferred income tax from the initial recognition of an asset or liability, in a transaction
other than a business combination is not accounted for if it arises that at the time of the transaction
affects either accounting or taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the asset is realised or
liability is settled. Deferred tax is credited in the Statement of Comprehensive Income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity. Deferred tax assets are recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
(j)
Employee benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have
been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits discounted using the interest rate on
corporate bonds with terms to maturity approximating the terms of the liability.
(k)
Share-based payments
The Company provides benefits to employees (including Directors) of the Company in the form of share-
based payment transactions, whereby employees render services in exchange for shares or rights over
shares (‘equity-settled transactions’). The cost of these equity-settled transactions with employees is
measured by reference to the fair value at the date at which they are granted. The fair value is
determined by an internal valuation using a Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that,
in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the
best available information at balance date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of
fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition. Where an equity-settled award is cancelled, it is treated as if it
had vested on the date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the cancelled award; and
designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award.
48
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
(l)
Cash and cash equivalents
For the purpose of the Statement of Cash Flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, bank overdrafts and other short term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
(m)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity
and the revenue can be reliably measured. The following specific recognition criteria must also be met
before revenue is recognised:
Interest revenue is recorded using the effective interest rate method (EIR). EIR is the rate that exactly
discounts the estimated future cash payments or receipts over the expected life of the financial
instrument, or a shorter period, where appropriate, to the net carrying amount of the financial asset or
liability. Interest income is included in finance income in the Statement of Comprehensive Income.
Research and development tax rebates are treated as a government grant. Government grants are
recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income
on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed.
Investment income is recognised when the Company’s right to receive payment is established.
(n) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the ATO. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense. Receivables and payables in the Statement
of Financial Position are shown inclusive of GST. Cash flows are presented in the Statement of Cash
Flows on a gross basis, except for the GST component of investing and financing activities, which are
disclosed as operating cash flows.
(o) Contributed equity
Ordinary issued share capital is recognised at the fair value of the consideration received by the
Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity
as a reduction in share proceeds received.
(p)
Trade and other payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the
Company. Interest, when charged by the lender, is recognised as an expense on an accrual basis.
(q)
Provisions
Provisions for legal claims and make good obligations are recognised when the Company has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the reporting date. The discount rate used to determine the
present value reflects current market assessments of the time value of money and the risks specific to
the liability. The increase in the provision due to the passage of time is recognised as interest expense.
49
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
(r)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
(s)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effect interest method, less allowance for impairment. Trade receivables are generally due
for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account (provision
for impairment of trade receivables) is used when there is objective evidence that the Company will
not be able to collect all amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered
indicators that the trade receivable is impaired.
The amount of the impairment allowance is the difference between the asset’s carrying amount and
the present value of estimated future cash flows, discounted at the original effective interest rate. Cash
flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the Statement of Comprehensive Income within
impairment losses – financial assets. When a trade receivable for which an impairment allowance has
been recognised becomes uncollectible in a subsequent period, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited against impairment
losses – financial assets in the Statement of Comprehensive Income.
(t)
Financial instruments – initial recognition and subsequent measurement
(i)
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments, AFS financial assets, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially
at fair value plus, in the case of financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
•
Loans and receivables
This category is the most relevant to the Company. Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortised cost using the EIR
method, less impairment. Amortised cost is calculated by taking into account any discount or premium
50
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the Statement of Comprehensive Income. The losses arising from impairment are
recognised in the Statement of Comprehensive Income in finance costs for loans and in cost of sales
or other operating expenses for receivables. This category generally applies to trade and other
receivables. For more information on receivables, refer to Note 9.
•
AFS financial assets
AFS financial assets include equity investments and debt securities. Equity investments classified as AFS
are those that are neither classified as held for trading nor designated at fair value through profit or loss.
Debt securities in this category are those that are intended to be held for an indefinite period of time
and that may be sold in response to needs for liquidity or in response to changes in market conditions.
After initial measurement, AFS financial assets are subsequently measured at fair value with unrealised
gains or losses recognised in other comprehensive income (‘OCI’) and credited to the AFS reserve until
the investment is derecognised, at which time, the cumulative gain or loss is recognised in other
operating income, or the investment is determined to be impaired, when the cumulative loss is
reclassified from the AFS reserve to the Statement of Comprehensive Income in finance costs. Interest
earned whilst holding AFS financial assets is reported as interest income using the EIR method. Fair value
is determined to be the quoted market price of the investment as at the reporting period end.
The Company evaluates whether the ability and intention to sell its AFS financial assets in the near term
is still appropriate. When, in rare circumstances, the Company is unable to trade these financial assets
due to inactive markets, the Company may elect to reclassify these financial assets if management
has the ability and intention to hold the assets for the foreseeable future or until maturity.
For a financial asset reclassified from the AFS category, the fair value at the date of reclassification
becomes its new amortised cost and any previous gain or loss on the asset that has been recognised
in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any
difference between the new amortised cost and the maturity amount is also amortised over the
remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the
amount recorded in equity is reclassified to the Statement of Comprehensive Income.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the Company’s Statement of Financial Position)
when:
•
The rights to receive cash flows from the asset have expired; or the Company has transferred its
rights to receive cash flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a ‘pass-through’ arrangement; and
• either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset
but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to
the extent of its continuing involvement. In that case, the Company also recognises an associated
liability. The transferred asset and the associated liability are measured on a basis that reflects the rights
and obligations that the Company has retained. Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
The Company assesses, at each reporting date, whether there is objective evidence that a financial
asset or a group of financial assets is impaired. An impairment exists if one or more events that has
occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the
estimated future cash flows of the financial asset or the group of financial assets that can be reliably
estimated. Evidence of impairment may include indications that the debtor or a group of debtors is
51
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
experiencing significant financial difficulty, default or delinquency in interest or principal payments, the
probability that they will enter bankruptcy or other financial reorganisation and observable data
indicating that there is a measurable decrease in the estimated future cash flows, such as changes in
arrears or economic conditions that correlate with defaults.
•
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Company first assesses whether impairment exists
individually for financial assets that are individually significant, or collectively for financial assets that are
not individually significant. If the Company determines that no objective evidence of impairment exists
for an individually assessed financial asset, whether significant or not, it includes the asset in a group of
financial assets with similar credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is, or continues to
be, recognised are not included in a collective assessment of impairment.
The amount of any impairment loss identified is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows (excluding future expected
credit losses that have not yet been incurred). The present value of the estimated future cash flows is
discounted at the financial asset’s original EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the loss is
recognised in the Statement of Comprehensive Income. Interest income (recorded as finance income
in the Statement of Comprehensive Income) continues to be accrued on the reduced carrying amount
using the rate of interest used to discount the future cash flows for the purpose of measuring the
impairment loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of
future recovery and all collateral has been realised or has been transferred to the Company. If, in a
subsequent year, the amount of the estimated impairment loss increases or decreases because of an
event occurring after the impairment was recognised, the previously recognised impairment loss is
increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery
is credited to finance costs in the Statement of Comprehensive Income.
•
AFS financial assets
For AFS financial assets, the Company assesses at each reporting date whether there is objective
evidence that an investment or a group of investments is impaired. In the case of equity investments
classified as AFS, objective evidence would include a significant or prolonged decline in the fair value
of the investment below its cost. ‘Significant’ is evaluated against the original cost of the investment
and ‘prolonged’ against the period in which the fair value has been below its original cost. When there
is evidence of impairment, the cumulative loss – measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that investment previously recognised in the
Statement of Comprehensive Income – is removed from OCI and recognised in the Statement of
Comprehensive Income. Impairment losses on equity investments are not reversed through profit or loss;
increases in their fair value after impairment are recognised in OCI.
The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this judgement,
the Company evaluates, among other factors, the duration or extent to which the fair value of an
investment is less than its cost. In the case of debt instruments classified as AFS, the impairment is
assessed based on the same criteria as financial assets carried at amortised cost. However, the amount
recorded for impairment is the cumulative loss measured as the difference between the amortised cost
and the current fair value, less any impairment loss on that investment previously recognised in the
Statement of Comprehensive Income.
Future interest income continues to be accrued based on the reduced carrying amount of the asset,
using the rate of interest used to discount the future cash flows for the purpose of measuring the
impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the
fair value of a debt instrument increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised in the Statement of Comprehensive Income, the
impairment loss is reversed through the Statement of Comprehensive Income.
52
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
(ii)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable transaction costs. The
Company’s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative financial instruments.
The only financial liabilities the Company has are trade payables. Refer to Note 13 for more detail.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the Statement of Comprehensive
Income.
(u)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors.
(v)
New accounting standards and interpretations adopted
The financial report complies with Australian Accounting Standards and International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Since 1 July
2017, Actinogen Medical has adopted all Accounting Standards and Interpretation, mandatory for
annual periods beginning on or before 1 July 2017.
Adoption of these new and amended Standards and Interpretations did not have any significant effect
on the financial position or performance of Actinogen Medical.
(w) New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2018 reporting periods and have not been early adopted by the Company. These new standards and
interpretations, and the status of the Company’s assessment of impact on the Company, are set out below.
Reference
Title
Summary
AASB 9, and
relevant
amending
standards
Financial
Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement.
Except for certain trade receivables, an entity initially measures a financial asset
at its fair value plus, in the case of a financial asset not at fair value through profit
or loss (FVTPL), transaction costs.
Debt instruments are subsequently measured at FVTPL, amortised cost, or fair
value through other comprehensive income (FVOCI), on the basis of their
contractual cash flows and the business model under which the debt instruments
are held.
There is a fair value option (FVO) that allows financial assets on initial recognition
to be designated as FVTPL if that eliminates or significantly reduces an accounting
mismatch.
Equity instruments are generally measured at FVTPL. However, entities have an
irrevocable option on an instrument-by-instrument basis to present changes in the
Application
date of
standard*
Application
date for
Company*
1 January
2018
1 July 2018
53
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
Reference
Title
Summary
Application
date of
standard*
Application
date for
Company*
fair value of non-trading instruments in other comprehensive income (OCI)
without subsequent reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO, the amount of change
in the fair value of such financial liabilities that is attributable to changes in credit
risk must be presented in OCI. The remainder of the change in fair value is
presented in profit or loss, unless presentation in OCI of the fair value change in
respect of the liability’s credit risk would create or enlarge an accounting
mismatch in profit or loss.
All other AASB 139 classification and measurement requirements for financial
liabilities have been carried forward into AASB 9, including the embedded
derivative separation rules and the criteria for using the FVO.
The incurred credit loss model in AASB 139 has been replaced with an expected
credit loss model in AASB 9.
The requirements for hedge accounting have been amended to more closely
align hedge accounting with risk management, establish a more principle-based
approach to hedge accounting and address inconsistencies in the hedge
accounting model in AASB 139.
Current status of impact assessment: The Company’s only financial asset at the
present time is the R&D Tax Rebate receivable with the ATO. Adoption of AASB9
is not expected to have a significant impact on the Company’s measurement or
presentation of this financial asset.
AASB 15 replaces all existing revenue requirements in Australian Accounting
Standards (AASB 111 Construction Contracts, AASB 118 Revenue, AASB
Interpretation 13 Customer Loyalty Programmes, AASB
Interpretation 15
Agreements for the Construction of Real Estate, AASB Interpretation 18 Transfers
of Assets from Customers and AASB Interpretation 131 Revenue – Barter
Transactions Involving Advertising Services) and applies to all revenue arising from
contracts with customers, unless the contracts are in the scope of other standards,
such as AASB 117 Leases (or AASB 16 Leases, once applied).
The core principle of AASB 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which an entity expects to be entitled in exchange for those
goods or services. An entity recognises revenue in accordance with the core
principle by applying the following steps:
► Step 1: Identify the contract(s) with a customer
► Step 2: Identify the performance obligations in the contract
► Step 3: Determine the transaction price
► Step 4: Allocate the transaction price to the performance obligations in the
contract
► Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
Current status of impact assessment: The Company is currently in the early stages
of the development of Xanamem and as such has not yet reached a stage where
revenue is generated from commercial operations. As a consequence, the
Company has not yet performed a detailed analysis of AASB15. Preliminary
considerations of the adoption of AASB15 is not expected to have any impact on
the Company until it is generating operational revenue.
AASB 16 requires lessees to account for all leases under a single on-balance
sheet model in a similar way to finance leases under AASB 117 Leases. The
standard includes two recognition exemptions for lessees – leases of ’low-value’
assets (e.g., personal computers) and short-term leases (i.e., leases with a lease
term of 12 months or less). At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e., the lease liability) and an asset
representing the right to use the underlying asset during the lease term (i.e., the
right-of-use asset).
Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of
certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine those
54
1 January
2018
1 July 2018
1 January
2019
1 July 2019
AASB 15 and
relevant
amending
standards
Revenue
from
Contracts
with
Customers
AASB 16
Leases
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
Reference
Title
Summary
payments). The lessee will generally recognise the amount of the
remeasurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from today’s accounting under
AASB 117. Lessors will continue to classify all leases using the same classification
principle as in AASB 117 and distinguish between two types of leases: operating
and finance leases.
Current status of impact assessment: The Company has scheduled performing
the impact assessment for AASB16, which becomes applicable from 1 July 2019,
for the first half of the 2019 financial year.
This Standard amends AASB 2 Share-based Payment, clarifying how to account
for certain types of share-based payment transactions. The amendments
provide requirements on the accounting for:
► The effects of vesting and non-vesting conditions on the measurement of
cash-settled share-based payments
► Share-based payment transactions with a net settlement feature for
withholding tax obligations
► A modification to the terms and conditions of a share-based payment that
changes the classification of the transaction from cash-settled to equity-settled.
AASB 2016-5 Amendmen
ts to
Australian
Accounting
Standards –
Classificatio
n and
Measureme
nt of Share-
based
Payment
Transaction
s
Application
date of
standard*
Application
date for
Company*
1 January
2018
1 July 2018
3.
FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks: market risk, (including interest rate risk and
price risk), credit risk and liquidity risk. The Company’s overall risk in these areas is not significant enough to
warrant a formalised specific risk management program. Risk management is carried out by the Board of
Directors in their day to day function as the overseers of the business.
Set out below is an overview of the financial instruments held by the Company as at 30 June 2018:
55
Cash and cash equivalentsLoan and receivablesAvailable-for-saleAs at 30/6/2018$$$Cash & cash equivalents10,003,797 - - Trade and other receivables- 3,532,414 - Total current assets10,003,797 3,532,414 - Total assets10,003,797 3,532,414 - Financial liabilities:Trade and other payables- 649,225 - Total current- 649,225 - Total liabilities- 649,225 - Net exposure10,003,797 2,883,189-
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
Set out below is an overview of the financial instruments held by the Company as at 30 June 2017:
(a) Market Risk
(i) Price risk
Equity price risk represents the risk that the value of a financial instrument will fluctuate as a result of changes
in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer
or factors affecting all instruments in the market.
Equity price risk is minimised through ensuring that investment activities are undertaken in accordance with
the Board’s established mandate limits and investment strategies.
During the year the Company’s main equity price risk exposure related to the Company’s available-for-sale
financial assets which comprised of various ASX-listed investments. All the investment assets were securities
from major banks and were considered low risk investments, and during the year the Company sold it’s
available-for-sale financial assets.
(ii) Interest rate risk
The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as result of changes in market interest rates and the effective weighted average interest rates on classes of
financial assets and financial liabilities is as follows:
Variable rate instruments:
56
Cash and cash equivalentsLoan and receivablesAvailable-for-saleAs at 30/6/2017$$$Financial assets:Available-for-sale-investments- - 2,094,833 Total non-current assets- - 2,094,833 Cash & cash equivalents1,894,605 - - Trade and other receivables- 1,374,868 - Total current assets1,894,605 1,374,868 - Total assets1,894,605 1,374,868 2,094,833 Financial liabilities:Trade and other payables- 763,682 - Total current liabilities- 763,682 - Total liabilities- 763,682 - Net exposure1,894,605 611,1862,094,833 $%%Cash and cash equivalents10,003,7971.021,894,6051.220172018
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
Sensitivity analysis:
(b) Credit risk
Credit risk is the risk of financial loss to the Company if a counter party to a financial instrument fails to meet its
contractual obligations. The Company’s main credit risk exposure relates to the financial assets of the
Company, which comprise cash and cash equivalents and trade and other receivables. The Company’s
exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to
the carrying amount of these instruments.
The carrying amount of financial assets included in the Statement of Financial Position represents the
Company’s maximum exposure to credit risk in relation to those assets. The Company does not hold any credit
derivatives to offset its credit exposure.
The Company trades only with recognised, credit worthy third parties and as such collateral is not requested
nor is it the Company’s policy to securitise its trade and other receivables. Receivable balances are monitored
on an ongoing basis with the result that the Company does not have a significant exposure to bad debts. The
Company has the following concentrations of credit risk:
(i) Cash
The Directors believe that there is negligible credit risk with the Company’s cash and cash equivalents, as
funds are held at call with National Australia Bank, a reputable Australian Banking institution.
(ii) Trade and other receivables
While the Company has policies in place to ensure that transactions with third parties have an appropriate
credit history, the management of current and potential credit risk exposures is limited as far as is considered
commercially appropriate. Up to the date of this report, the Board has placed no requirement for collateral
on existing debtors. This is because the current Research and Development Rebate Receivable is with the
ATO, a reputable Australian government agency.
(c)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial liabilities as and when they fall
due. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to close out
market positions.
The Company manages liquidity risk by continuously monitoring forecast and actual cash flows. Surplus funds
are generally only invested at call or in bank bills that are highly liquid and with maturities of less than six months.
57
-1%+1%Carrying amountProfitProfit30 June 2018$$$Financial AssetsCash10,003,797(100,038) 100,038 30 June 2017Financial AssetsCash1,894,605(18,946) 18,946 Interest rate risk
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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(i) Financing arrangements:
The Company does not have any financing arrangements.
(ii) Maturities of financial liabilities:
The Company’s only debt relates to trade payables, where payments are generally due within 30 days.
(d)
Fair Value Measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
Accounting standards require disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2); and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
There were no financial assets and financial liabilities to measure and recognise at fair value as at 30 June
2018.
The following table presents the Company’s assets and liabilities measured and recognised at fair value at 30
June 2017.
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based
on quoted market prices at the reporting date. The quoted market price used for financial assets held by the
Company is the current bid prices at the end of the financial year. These instruments are included in Level 1.
The carrying amount of financial assets and financial liabilities recorded in the financial statements
approximates their respective fair values, determined in accordance with the accounting policies disclosed
in Note 2.
58
As at 30/6/2017Level 1Level 2Level 3TotalFinancial assetsAvailable-for-sale financial investments 2,094,833 - - 2,094,833 Total financial assets 2,094,833 - - 2,094,833
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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4.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
•
Key estimates: Impairment
The Company assesses impairment of all assets (including intangible assets) at each reporting date by
evaluating conditions specific to the Company and to the particular asset that may lead to impairment. These
include product, technology, economic and political environments and future expectations. If an impairment
trigger exists, the recoverable amount of the asset is determined.
•
Key estimates: Share-based payments
The Company initially measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. Estimating fair value for share-based
payment transactions requires determination of the most appropriate valuation model, which is dependent
on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the
expected life of the share option, volatility and dividend yield and making assumptions about them. The
assumptions and models used for estimating fair value for share-based payment transactions are disclosed in
Note 21.
•
Key estimates: Going concern basis
For further information on going concern basis refer to Note 2 (b).
•
Key estimates: Intangible Assets
For further information on intangible assets refer to Note 2 (i).
•
Key Estimates: Research & development tax rebate
In line with accounting policy (m) Revenue recognition, research & development tax rebates are treated as
government grants and are recognised where there is reasonable assurance that the grant will be received
and all attached conditions will be complied with. The Company applies judgment in assessing that all
attached conditions will be complied with based on the nature of the expenditure incurred and the activities
of the Company undertaken during the year.
5.
SEGMENT INFORMATION
The Company’s sole operations are within the biotechnology industry within Australia. Given the nature of the
Company, its size and current operations, the Company’s management does not treat any part of the
Company as a separate operating segment. Internal financial information used by the Company’s decision
makers is presented on a “whole of entity” manner without dissemination to any separately identifiable
segments.
Accordingly, the financial information reported elsewhere in this financial report is representative of the nature
and financial effects of the business activities in which it engages and the economic environments in which it
operates. All non-current assets are held in Australia and all revenue is derived in Australia.
59
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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6.
REVENUE, OTHER INCOME AND EXPENSES
60
Full year endedFull year ended30/06/201830/06/2017$ $RevenueDividends received on listed investments 53,182 118,233 Interest Revenue 38,715 37,535 91,897 155,768 Other incomeExport market development grant 50,838 44,964 Research and development tax rebate 3,158,000 1,214,754Realised gain on sale of listed investments 42,445 - Total other income 3,251,283 1,259,718 Total revenue 3,343,180 1,415,486 Full year endedFull year ended30/06/201830/06/2017$ $ExpensesResearch and development ('R&D') expenses:Research consultants 188,459 294,952 Administrative 72,842 90,372 Laboratory expenses 5,955,423 1,584,211 Travel & accommodation costs 265,057 180,295 R&D employee expenses 1,259,925 1,040,620 7,741,706 3,190,450 Non-R&D employee expenses 195,493 175,173 195,493 175,173
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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8.
CASH AND CASH EQUIVALENTS
During the year ended 30 June 2018, the Company’s cash position increased due to a number of capital
raisings and exercise of options. Refer the Directors’ Report: Review of Operations: Section 7(v) and Note 14:
Contributed Equity for further information on the capital raisings and exercise of options that occurred during
the year.
Post year-end the Company continued to increase its cash position through the completion of its capital
raisings and additional exercise of options; refer to Note 23: Events Occurring After the Reporting Period.
Furthermore, the Company is due to receive an estimated $3,158,000 in other income which relates to the
research and development rebate receivable recognised at year end. Refer to Note 9(c) below.
Reconciliation of net cash flows from operating activities
Non-cash financing and investing activities
No non-cash financing and investing activities occurred during the year ended 30 June 2018.
Financing facilities available
As at 30 June 2018, the Company had no financing facilities available. For the purposes of the Statement of Cash
Flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding
bank overdrafts.
62
As atAs at30/06/201830/06/2017$ $Cash at bank and on hand9,829,7961,757,834Short term deposits 174,001 136,771Total cash and cash equivalents10,003,7971,894,605Full year endedFull year ended30/06/201830/06/2017$ $Loss for the year (6,230,609) (3,190,338)Non cash items:Realised loss from available-for-sale listed investments (42,445) 3,042 Depreciation 2,540 7,117 Amortisation expense 353,500 353,501 Share-based payment expense 239,514 106,415 Change in assets and liabilities:(Increase)/decrease in receivables (2,157,546) 1,591,408 Increase/(decrease) in trade creditors and other payables (114,457) (20,286)Increase/(decrease) in employee entitlements 38,451 40,342 (7,911,052) (1,108,799)
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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Interest rate risk exposure
The Company’s exposure to interest rate risk is discussed in Note 3.
Credit risk exposure
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of
cash and cash equivalents mentioned above.
9.
TRADE AND OTHER RECEIVABLES
(a) Prepayments
This amount relates to prepaid insurances.
(b) Goods and services tax receivable
This amount relates to net good and services tax (GST) paid during the quarter ended 30 June 2018.
(c) Research and development tax rebate receivable
This amount relates to the Research and Development Tax Rebate that the Company is entitled to claim
on research and development costs incurred during the financial year.
None of the current receivables are impaired or past due but not impaired. Due to their short-term nature,
carrying amounts approximate their fair value.
10. AVAILABLE-FOR-SALE LISTED INVESTMENTS
During the prior year the Company’s available-for-sale listed investments comprised of securities from major
banks; these are considered low risk investments. The fair value of listed investments in listed corporations is
based on the bid price on the ASX prior to close of business on balance date.
63
As atAs at30/06/201830/06/2017$ $Prepayments (a) 47,375 33,024Goods and services tax receivable (b)312,904127,090Research and development tax rebate receivable (c) 3,158,000 1,214,754Other receivable14,135 - Total trade and other receivables3,532,4141,374,868As atAs at30/06/201830/06/2017$ $Listed investments at fair value - 2,094,833 Fair value - 2,094,833
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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Movements during the year:
11.
PROPERTY, PLANT AND EQUIPMENT
Movements during the year:
64
As atAs at30/06/201830/06/2017$ $At beginning of the year 2,094,833 4,025,987 Proceeds on sale of available-for-sale listed investments (2,060,671) (1,982,451)Realised loss on listed investments (34,162) (3,038)Unrealised loss on listed investments - 54,335 At end of the year - 2,094,833 As atAs at30/06/201830/06/2017$ $At cost24,222 23,948 Accumulated depreciation(24,222)(21,682)Total property, plant and equipment - 2,266Plant and EquipmentOffice EquipmentComputer EquipmentGeneral PoolTotalBalance at 1 July 2017 - - - 2,266 2,266 Acquisitions - - - 274 274 Depreciation - - - (2,540) (2,540)Balance at 30 June 2018 - - - - - Plant and EquipmentOffice EquipmentComputer EquipmentGeneral PoolTotalBalance at 1 July 2016 - - 3,8194,5398,358Acquisitions - - - 1,025 1,025 Depreciation - - (3,819) (3,298) (7,117)Balance at 30 June 2017 - - - 2,266 2,266
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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12.
INTANGIBLE ASSETS
Movements during the year:
Intellectual property totalling $4,489,953 comprises patents and licences initially acquired through Corticrine
Limited. On 8 December 2014, Actinogen Medical entered into an Assignment of Licence Agreement with
Corticrine for the assignment of all of Corticrine’s interest in, to and under the Licence Agreement to Actinogen
Medical and the assumption by the Company of all of Corticrine's obligations in respect of such Assignment.
The intellectual property is supported by seven patent families, the most recent of which will expire in 2031. The
patent useful life has been aligned to the patent term and as a result, those patents are amortised on a
straight-line basis over the period of the patent. The Board has performed various internal and external
assessments of potential impairment triggers during the financial year and have concluded there was no
impairment. For further information refer to the accounting policy in Note 2.
13.
TRADE AND OTHER PAYABLES
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days.
65
As atAs at30/06/201830/06/2017$ $ At cost 5,756,743 5,756,743 Accumulated amortisation (1,266,790)(913,290)Total intangible assets 4,489,953 4,843,453 Intellectual Property$ Balance at 1/7/2017 4,843,453 Amortisation expense (353,500)Balance at 30/6/20184,489,953 Balance at 1/7/2016 5,196,954 Amortisation expense (353,501)Balance at 30/6/2017 4,843,453 As atAs at30/06/201830/06/2017$ $Trade payables 507,399 649,110Accruals and other payables 25,500 78,065Goods and services tax payable 108 - NAB credit cards 54,574 1,747 Provision for payroll tax 27,445 11,723 PAYG payable 34,199 23,037 Total trade and other payables 649,225 763,682
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
14.
CONTRIBUTED EQUITY
(a) Share Capital
Ordinary shares: These shares entitle the holder to participate in dividends and the proposed winding up of
the Company in proportion to the number and amount paid on the share held.
(b) Movement of fully paid ordinary shares during the period were as follows:
Refer to the Directors’ Report: Review of Operations: Section 7(v) for further information on the capital raisings
completed during the year.
(c) Reserve Shares
During a prior year (year ended 30 June 2015), the Company issued 45,000,000 shares, which are considered
to be “in substance options’ or rights (‘LTI Rights’) under Generally Accepted Accounting Principles, to various
KMP by way of provision of a limited recourse, interest free loan (subject to approval at an Annual General
Meeting of shareholders on 19 November 2014). The details of these LTI Rights are summarised below.
•
•
33,000,000 shares issued at $0.02 each on 3 December 2014; and
12,000,000 shares issued at $0.04 each on 12 December 2014.
66
As atAs at30/06/201830/06/2017$ $ Fully paid ordinary shares (940,316,552)43,514,54128,858,391Capital raising costs(3,076,303)(2,280,000)Total contributed equity40,438,23826,578,391DateQuantityUnit Price $Total $Opening balance 1 July 2016606,693,55826,308,391Exercise of options26/04/2017 10,000,000 0.020 200,000 Exercise of options9/05/2017 3,500,000 0.020 70,000 Balance at 30 June 2017620,193,55826,578,391Opening balance 1 July 2017620,193,55826,578,391Capital Raising Tranche 1 8/12/2017 91,500,000 0.04 3,660,000 Capital raising costs - - - (219,600)Less cancellation of loan shares14/12/2017(5,000,000) 0.02 (100,000)Capital Raising Tranche 222/01/201840,500,000 0.04 1,620,000Capital raising costs - - - (97,200)Exercise of unlisted options12/04/20183,000,000 0.02 60,000Exercise of unlisted options14/05/20183,000,000 0.02 60,000Private Placement Tranche 128/05/2018187,122,994 0.05 9,356,150Capital raising costs - - - (479,503)Balance at 30 June 2018940,316,55240,438,238
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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As at 30 June 2018, all LTI Rights have vested, except for the following:
•
•
3,000,000 Class I LTI Rights due to the performance milestones not being met as yet.
3,000,000 Class J LTI Rights due to the performance milestones not being met as yet.
During the year, the following LTI Rights were cancelled:
•
5,000,000 Class F LTI Rights: The shares attached to the 5,000,000 Class F LTI Rights were cancelled by
the Company during the year due to the vesting condition not being met. However, the share-based
payment expense attached to these LTI Rights, were reversed in the prior year ended 30 June 2017
according to when they were forfeited which was when former director, Mr Rogers, resigned from the
Company on 30 November 2016.
For more detailed information refer to Section 3(C) within the Remuneration Report and Note 21: Share-based
payments.
(d) Share Options
As at 30 June 2018, there were 193,548,031 unissued ordinary shares under option:
(a) These options were issued to employees of the Company are subject to vesting conditions.
(b) These options were issued to Dr Geoffrey Brooke (Appointed as Non-Executive Chairman on 1 March 2017) and are
subject to vesting conditions.
(c) These options were issued to Dr George Morstyn (Appointed as Non-Executive Director on 1 December 2017) and are
subject to vesting conditions.
(d) Options were issued following shareholder approval at the Extraordinary General Meeting of Shareholders held on 18
January 2018,
(e) These options were issued to employees of the Company and are subject to vesting conditions.
67
Reserve sharesDateQuantityUnit Price $Total $Balance at 30 June 2016(45,000,000) (1,140,000) Balance at 30 June 2017(45,000,000) (1,140,000) Cancellation of unvested loan shares14/12/20175,000,000 0.02100,000 Balance at 30 June 2018(40,000,000) (1,040,000) QuantityTypeIssue DateExercise PriceExpiry DateVesting ConditionsComment34,500,000 Unlisted Placement Options12/12/20130.02$ 30/11/2018None attached.2,900,000 Unlisted Employee Options (Tranche 1)6/02/20170.10$ 5/02/2021Vesting conditions apply. (a)5,000,000 Unlisted Director Options24/03/20170.10$ 24/03/2022Vesting conditions apply. (b)417,188 Unlisted Employee Options (Tranche 2)12/07/20170.10$ 5/02/2021None attached.1,500,000 Unlisted Director Options1/12/20170.10$ 1/12/2022Vesting conditions apply. (c)81,876,233 Listed Loyalty Options21/12/20170.06$ 31/03/2019None attached.66,000,000 Listed Placement Options22/01/20180.06$ 31/03/2019None attached.(d)417,110 Unlisted Employee Options (Tranche 3)3/04/20180.10$ 5/02/2021None attached.937,500 Unlisted Employee Options (Tranche 3)3/04/20180.10$ 5/02/2021Vesting conditions apply. (e)193,548,031 Total shares under option
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
During the year the following options were exercised or lapsed:
(a) 400,000 options were forfeited due to the vesting condition of achieving a target of 65 patients dosed by 31
December 2017 having not being achieved by their vesting date (31 December 2017).
(b) 1,093,750 options were forfeited during the year due to an employee ceasing employment with the Company.
No option holder has any right, by virtue of the option, to participate in any share issue of the Company or any
related body corporate.
(e) Terms and Conditions of Issued Capital
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to
the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll
is called, otherwise each shareholder has a vote on a show of hands. Ordinary shares have no par value.
(f) Capital risk management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern,
so it can provide returns to shareholders and benefits to other stakeholders. The Company considers capital
to consist of cash reserves on hand and available-for-sale listed investments.
Consistent with the Company’s objective, it manages working capital by issuing new shares, investing in and
selling assets, submitting Research and Development rebates from the Australian Tax Office or modifying its
planned research and development program as required.
Given the stage of the Company’s development there are no formal targets set for return on capital. The
Company is not subject to externally imposed capital requirements. The net equity of the Company is
equivalent to capital. Net capital is obtained through capital raisings on the ASX and receipt of Research
and Development rebates from the Australian tax Office.
15.
RESERVES
Reserves are made up of the options reserve. The option reserve records items recognised as share-based
payment (‘SBP’) expenses on valuation of employee and Director options. Details of the movement in reserves is
shown below.
68
QuantityTypeLapsed or ExercisedLapsed Date / Exercise DateExercise PriceComment400,000 Unlisted Employee Options (Tranche 1)Lapsed2/01/20180.10$ (a)1,093,750 Unlisted Employee Options (Tranche 1)Lapsed22/09/20170.10$ (b)3,000,000 Unlisted Placement OptionsExercised18/04/20180.02$ 3,000,000 Unlisted Placement OptionsExercised14/05/20180.02$ 7,493,750 Total shares under options that were exercised or lapsedAs atAs at30/06/201830/06/2017$ $Option Reserve7,168,3086,928,794Available-for-sale Investments Reserve - 76,607Total reserves7,168,3087,005,401
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
Movements in Option Reserve during the year:
Refer to Note 14(d) for further information on unissued ordinary shares under option.
Refer to Note 21: Share-based payments for further information on share-based payments recognised and
lapsed during the year.
Movements in Available-for-sale Investments Reserve during the year:
69
As atAs at30/06/201830/06/2017$ $Option ReserveBalance at the beginning of the year6,928,7946,822,379Share-based payment expense on LTI Rights41,428175,812Lapse of Class F LTI Rights - (152,955)Share-based payment expense on director options 130,068 41,996 SBP expense on employee options (Tranche 1)76,388 61,142 Lapse of employee options (Tranche 1) (37,078) (19,580)SBP expense on employee options (Tranche 2) 10,188 - SBP expense on employee options (Tranche 3) 10,815 - Share-based payment expense on director options 7,705 - Balance at end of year7,168,3086,928,794As atAs at30/06/201830/06/2017$ $Available-for-sale Investments ReserveBalance at the beginning of the year 76,607 22,272 Transfer of available-for-sale reserve upon disposal of available-for-sale-listed investments (76,607) - Unrealisedgainonavailable-for-salelistedinvestments - 54,335 Balance at end of year - 76,607
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
_________________________________________________________________
16.
EARNINGS PER SHARE
As at 30 June 2018, there were 193,548,031 unissued ordinary shares under option excluded from the
calculation of diluted earnings per share that could potentially dilute basic earnings per share in the future
because they are anti-dilutive for the current period presented.
Subsequent to year end, 4,000,000 options unlisted options, exercisable at $0.02 each and expiring on 30
November 2018, were exercised on 4 July 2018.
There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of authorisation of these financial statements. As at the date of this report, there are
189,548,031 unissued ordinary shares under option:
17.
COMMITMENTS
Other than what is mentioned below, the Company has no future commitments existing as at 30 June 2018 (2017:
Nil).
Rental Agreement
During the prior year the Company entered into a property rental lease agreement for a term of three years
which commenced from 1 June 2018 with an option to renew for a period of three years from 1 June 2021 to 31
May 2024 included in the agreement. There are no restrictions placed upon the Company by entering into this
lease. The lease includes a clause to enable upward revision of the rental charge on an annual basis according
to prevailing market conditions.
Future minimum rentals payable under non-cancellable operating leases as at 30 June 2018 are as follows:
70
Full-year endedFull-year ended30/06/201830/06/2017$ $Basic EPS from continuing operations attributable to the ordinary shareholders of the Company (cents)(0.88) (0.52) Weighted number of ordinary shares used as the denominator705,094,056 609,009,996 Net loss used in calculating EPS(6,230,609) (3,190,338) Diluted EPS from continuing operations attributable to the ordinary shareholders of the Company (cents)(0.88) (0.52) Weighted number of ordinary shares used as the denominator705,094,056 609,009,996 Net loss used in calculating diluted EPS(6,230,609) (3,190,338) As atAs at30/06/201830/06/2017$ $Within one year96,180 119,419 After one year but not more than five years184,345 - More than five years - - 280,525 119,419
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
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18.
CONTINGENCIES
The Directors are not aware of any contingent liabilities or assets as at 30 June 2018 (2017: Nil).
Research and development claims recognised are subject to review within the time period stipulated by the
Australian Tax Office (‘ATO’).
19.
KEY MANAGEMENT PERSONNEL DISCLOSURES
Key Management Personnel of Actinogen Medical Limited are listed below:
(a) Key Management Personnel Compensation:
There were no other long-term benefits or termination benefits paid out during the years ended 30 June 2018 and
30 June 2017. The detailed remuneration disclosures and relevant interest of each Key Management Personnel
in fully paid ordinary shares and options of the Company are provided in the audited Remuneration Report on
pages 23 to 38.
20.
RELATED PARTY TRANSACTIONS
(a) Transactions with Key Management Personnel
Details of transactions with Key Management Personnel are set out in Note 19. There were no other related party
transactions that occurred during the year.
71
NamePositionAppointedResignedDr Geoffrey BrookeNon-Executive Chairman1/03/2017CurrentDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014CurrentDr Jason LoveridgeNon-Executive Director1/12/2014CurrentDr George MorstynNon-Executive Director1/12/2017CurrentDr Anton UvarovNon-Executive Director16/12/201314/08/2017Full-year endedFull-year ended30/06/201830/06/2017$ $Short-term employee benefits 551,167 700,027 Post employment benefits 28,624 50,120 Share-based payment 171,029 203,346 750,820 953,493
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
21.
SHARE – BASED PAYMENTS
The table below summarises the options on issue (including the LTI Rights that are in substance options) that had share-based payments applied as at 30 June 2018:
(a) LTI Rights
During a prior year, ended 30 June 2015, 45,000,000 shares, which are considered to be “in substance options’ or rights (‘LTI Rights’) under Generally Accepted Accounting
Principles, were issued to various KMP at the time by way of provision of a limited recourse loan. They were independently valued using the Black-Scholes option valuation
methodology taking into account the terms and conditions upon which the LTI Rights were granted. Due to the vesting conditions attached to these LTI Rights, they are
expensed over the vesting period. Refer to Section 3(C)(b) within the Remuneration Report for further information on vesting conditions.
The approximate interest rate over a five year term was used. The assumed dividend payable in the next five years was deemed to be nil. A volatility of the share price
fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to predict the
distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The contractual
term of the share options is five years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash settlement for
these awards.
The fair value of options granted during the prior year ended 30 June 2015 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
• Weighted average share price ($) 0.04
Expected volatility (%) 100
Risk-free interest rate (%) 5.0%
Expected life (years) 5.0
72
QuantityTypeGrantDateExercise PriceExpiry DateRemaning lifeVesting ConditionsReference below28,000,000 LTI Rights Class A to Class G19/11/20140.02$ 19/11/20191Vesting conditions apply. (a)12,000,000 LTI Rights Class H to J15/12/20140.04$ 15/12/20191Vesting conditions apply. (a)5,000,000 Unlisted Director Options24/03/20170.10$ 24/03/20257Vesting conditions apply. (b)1,500,000 Unlisted Director Options18/01/20180.10$ 1/12/20224Vesting conditions apply. (b)2,900,000 Unlisted Employee Options (Tranche 1)23/01/20170.10$ 5/02/20213Vesting conditions apply. (c)417,188 Unlisted Employee Options (Tranche 2)12/07/20170.10$ 5/02/20213None attached.(c)417,110 Unlisted Employee Options (Tranche 3)20/03/20180.10$ 5/02/20213None attached.(c)937,500 Unlisted Employee Options (Tranche 3)20/03/20180.10$ 5/02/20213Vesting conditions apply. (c)51,171,798 Total shares under option
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
(i)
The shares attached to the 5,000,000 Class F LTI Rights were cancelled by the Company during the year due to the vesting condition not being met. However, the
share-based payment expense attached to these LTI Rights, were reversed in the prior year ending 30 June 2017 according to when the 5,000,000 Class F LTI Rights
were forfeited which was when former director, Mr Rogers, resigned from the Company on 30 November 2016.
(b) Director Options
(i) Director Options issued to Dr Geoffrey Brooke
5,000,000 Director options were granted to Dr Geoffrey Brooke as part of his appointment to the Board as Non-Executive Chairman. These options over shares will vest over a
period of three years subject to meeting various vesting conditions. Refer to Section 3(C)(b) within the Remuneration Report for further information on vesting conditions.
The fair value of options granted have been valued using a Black-Scholes methodology, taking into account the terms and conditions upon which the share options were
granted. The approximate interest rate over a five year term was used. The assumed dividend payable during the term of the Options is deemed to be nil. A volatility of the
share price fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to
predict the distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The
contractual term of the share options is eight years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash
settlement for these awards.
73
RecipientGrant DateClassQuantity of LTI rights as at 1 July 2017Quantity of LTI Rights lapsed during the year (Note 1)Quantity of LTI Rights as at 30 June 2018Fair value per LTI RightTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsJ. Loveridge19/11/2014Class A LTI Rights 3,000,000 - 3,000,000 $ 0.0376 112,848$ 112,848$ -$ -$ 112,848$ -$ J. Loveridge19/11/2014Class B LTI Rights 3,000,000 - 3,000,000 $ 0.0376 112,848$ 112,848$ -$ -$ 112,848$ -$ M. Rogers19/11/2014Class C LTI Rights7,500,000 - 7,500,000 $ 0.0376 282,120$ 282,120$ -$ -$ 282,120$ -$ M. Rogers19/11/2014Class D LTI Rights7,500,000 - 7,500,000 $ 0.0376 282,128$ 282,128$ -$ -$ 282,128$ -$ M. Rogers19/11/2014Class E LTI Rights5,000,000 - 5,000,000 $ 0.0376 188,085$ 188,085$ -$ -$ 188,085$ -$ M. Rogers (i)19/11/2014Class F LTI Rights5,000,000 (5,000,000) - $ 0.0376 -$ -$ -$ -$ -$ -$ V. Ruffles19/11/2014Class G LTI Rights2,000,000 - 2,000,000 $ 0.0376 75,234$ 67,062$ 8,172$ -$ 75,234$ -$ B. Ketelbey15/12/2014Class H LTI Rights6,000,000 - 6,000,000 $ 0.0365 218,886$ 185,630$ 33,256$ -$ 218,886$ -$ B. Ketelbey15/12/2014Class I LTI Rights3,000,000 - 3,000,000 0.0365$ 109,443$ 109,443$ -$ -$ 109,443$ -$ B. Ketelbey15/12/2014Class J LTI Rights3,000,000 - 3,000,000 0.0365$ 109,443$ 109,443$ -$ -$ 109,443$ -$ Total Rights45,000,000 (5,000,000) 40,000,000 1,491,035$ 1,449,607$ 41,428$ -$ 1,491,035$ -$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
The fair value of options granted during the prior year ended 30 June 2017 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
Expected volatility (%) 100
Risk-free interest rate (%) 2.61%
Expected life (years) 5.0
(ii) Director Options issued to Dr George Morstyn
1,500,000 Director options were granted to Dr George Morstyn as part of his appointment to the Board as Non-Executive Director. These options over shares will vest over a
period of three years subject to meeting various vesting conditions. Refer to Section 3(C)(b) within the Remuneration Report for further information on vesting conditions.
The fair value of options granted have been valued using a Black-Scholes methodology, taking into account the terms and conditions upon which the share options were
granted. The approximate interest rate over a five-year term was used. The assumed dividend payable during the term of the Options is deemed to be nil. A volatility of the
share price fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to
predict the distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The
contractual term of the share options is five years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash
settlement for these awards.
The fair value of options granted during the prior year ended 30 June 2017 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
Expected volatility (%) 60%
Risk-free interest rate (%) 2.44%
Expected life (years) 5.0
74
RecipientGrant DateQuantity as at 1 July 2017Quantity lapsed during the year Quantity as at 30 June 2018Fair value per optionTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsG. Brooke24/03/20172,000,000 - 2,000,000 0.0491$ 98,114$ 26,343$ 71,771$ -$ 98,114$ -$ G. Brooke24/03/20171,500,000 - 1,500,000 0.0491$ 73,586$ 9,879$ 36,793$ -$ 46,672$ 26,914$ G. Brooke24/03/20171,500,000 - 1,500,000 0.0491$ 73,586$ 5,774$ 21,504$ -$ 27,278$ 46,308$ Total5,000,000 - 5,000,000 245,285$ 41,996$ 130,068$ -$ 172,064$ 73,222$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
(c) Employee Options
Under the Employee Option Plan (approved by shareholders on 12 November 2015), awards are made to employees of the Company. The Plan awards are delivered in the
form of options over shares. The fair value of share options granted have been valued using a Black-Scholes methodology, taking into account the terms and conditions upon
which the share options were granted. Where vesting conditions are applicable, they are expensed over the vesting period. Refer to Section 3(C)(b) within the Remuneration
Report for further information on vesting conditions.
During the year and prior year, various issue of options to employees were made and are outlined below:
(i) 4,950,000 Employee Options were granted on 23 January 2017 (Tranche 1);
(ii) 417,188 Employee Options were granted on 12 July 2017 (Tranche 2); and
(iii) 1,354,610 Employee Options were granted on 20 March 2018 (Tranche 3).
(i)
Employee Options granted on 23 January 2017 (Tranche 1)
The approximate interest rate over a five year term was used. The assumed dividend payable during the term of the Options is deemed to be nil. A volatility of the share price
fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to predict the
distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The contractual
term of the share options is five years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash settlement for
these awards.
The fair value of options granted during the prior year ended 30 June 2017 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
Expected volatility (%) 100%
Risk-free interest rate (%) 2.17%
Expected life (years) 5.0
75
RecipientGrant DateQuantity as at 1 July 2017Quantity lapsed during the year Quantity as at 30 June 2018Fair value per optionTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsG. Morstyn18/01/2018700,000 - 700,000 0.0129$ 9,030$ -$ 5,220$ -$ 5,220$ 3,810$ G. Morstyn18/01/2018400,000 - 400,000 0.0129$ 5,160$ -$ 1,491$ -$ 1,491$ 3,669$ G. Morstyn18/01/2018400,000 - 400,000 0.0129$ 5,160$ -$ 993$ -$ 993$ 4,167$ Total1,500,000 - 1,500,000 19,350$ -$ 7,705$ -$ 7,705$ 11,645$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
Note 1: During the year the following options lapsed due to forfeiture:
•
•
400,000 options forfeited due to the vesting condition attached to these options (this being, 65 patients enrolled by 31 December 2017) not being entirely met by 31
December 2017. Subsequently, the share-based payment expense of $14,080 that was expensed during the vesting period was reversed as at 30 June 2018.
1,093,750 options forfeited due to the employee, Kerrie Boyd, ceasing employment during the year. Subsequently, the share-based payment expense of $22,998
that was expensed during the vesting period was reversed as at 30 June 2018.
76
RecipientGrant DateQuantity as at 1 July 2017Quantity lapsed during the year (Note 1)Quantity as at 30 June 2018Fair value per optionTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year (Note 1)Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsV. Ruffles23/01/2017- - - 0.0352$ 11,000$ -$ -$ -$ -$ -$ V. Ruffles23/01/2017312,500 (312,500) - 0.0352$ 11,000$ 5,082$ 5,918$ (11,000)$ -$ -$ V. Ruffles23/01/2017625,000 - 625,000 0.0352$ 22,000$ 5,389$ 12,450$ -$ 17,839$ 4,161$ V. Ruffles23/01/20171,250,000 - 1,250,000 0.0352$ 44,000$ 10,778$ 24,899$ -$ 35,677$ 8,323$ T. Woolley23/01/2017200,000 - 200,000 0.0352$ 7,040$ 1,495$ 3,454$ -$ 4,949$ 2,091$ P. Webse23/01/2017300,000 - 300,000 0.0352$ 10,560$ 2,243$ 5,180$ -$ 7,423$ 3,137$ T. Russell23/01/2017- - - 0.0352$ 880$ -$ -$ -$ -$ -$ T. Russell23/01/201725,000 (25,000) - 0.0352$ 880$ 407$ 473$ (880)$ -$ -$ T. Russell23/01/201750,000 - 50,000 0.0352$ 1,760$ 431$ 996$ -$ 1,427$ 333$ T. Russell23/01/2017100,000 - 100,000 0.0352$ 3,520$ 862$ 1,992$ -$ 2,854$ 666$ K. Boyd23/01/2017- - - 0.0352$ 5,500$ -$ -$ -$ -$ -$ K. Boyd23/01/2017156,250 (156,250) - 0.0352$ 5,500$ 2,541$ 2,959$ (5,500)$ -$ -$ K. Boyd23/01/2017312,500 (312,500) - 0.0352$ 11,000$ 2,695$ 3,138$ (5,833)$ -$ -$ K. Boyd23/01/2017625,000 (625,000) - 0.0352$ 22,000$ 5,389$ 6,276$ (11,665)$ -$ -$ B. Rooney23/01/2017- - - 0.0352$ 2,200$ -$ -$ -$ -$ -$ B. Rooney23/01/201762,500 (62,500) - 0.0352$ 2,200$ 1,016$ 1,184$ (2,200)$ -$ -$ B. Rooney23/01/2017125,000 - 125,000 0.0352$ 4,400$ 1,078$ 2,490$ -$ 3,568$ 832$ B. Rooney23/01/2017250,000 - 250,000 0.0352$ 8,800$ 2,156$ 4,979$ -$ 7,135$ 1,665$ Total4,393,750 (1,493,750) 2,900,000 174,240$ 41,562$ 76,388$ (37,078)$ 80,872$ 21,208$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
(ii)
Employee Options granted on 12 July 2017 (Tranche 2)
The approximate interest rate over a four year term was used. The assumed dividend payable during the term of the Options is deemed to be nil. A volatility of the share price
fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to predict the
distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The contractual
term of the share options is four years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash settlement for
these awards.
The fair value of options granted during the year ended 30 June 2018 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
Expected volatility (%) 75%
Risk-free interest rate (%) 2.29%
Expected life (years) 4.0
77
RecipientGrant DateQuantity as at 1 July 2017Quantity lapsed during the year Quantity as at 30 June 2018Fair value per optionTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsV. Ruffles12/07/2017234,375 - 234,375 0.0244$ 5,723$ -$ 5,723$ - 5,723$ - T. Russell12/07/201718,750 - 18,750 0.0244$ 458$ -$ 458$ - 458$ - K. Boyd12/07/2017117,188 - 117,188 0.0244$ 2,862$ -$ 2,862$ - 2,862$ - B. Rooney12/07/201746,875 - 46,875 0.0244$ 1,145$ -$ 1,145$ - 1,145$ - Total417,188 - 417,188 10,188$ -$ 10,188$ -$ 10,188$ -$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
(iii)
Employee Options granted on 20 March 2018 (Tranche 3)
The approximate interest rate over a three year term was used. The assumed dividend payable during the term of the Options is deemed to be nil. A volatility of the share
price fluctuation was calculated by considering the historical movement of the share price over period of time as well factoring market conditions of its competitors to predict
the distribution of relative share performance. The exercise price of the share options is equal to the market price of the underlying shares on the date of grant. The contractual
term of the share options is four years and there are no cash settlement alternatives for the employees. The Company does not have a past practice of cash settlement for
these awards.
The fair value of options granted during the year ended 30 June 2018 was estimated on the date of grant using the following assumptions:
• Dividend yield (%) nil
•
•
•
Expected volatility (%) 65%
Risk-free interest rate (%) 2.101%
Expected life (years) 3.0
78
RecipientGrant DateQuantity as at 1 July 2017Quantity lapsed during the year Quantity as at 30 June 2018Fair value per optionTotal share-based payment valuationOpening value of share-based payments expensed as at 1 July 2017Value recognised during the year Value lapsed during the year Closing value of share-based payments expensed as at 30 June 2018Value to be recognised in future yearsV. Ruffles20/03/2018296,875 - 296,875 0.0128$ 3,804$ -$ 3,804$ -$ 3,804$ -$ T. Russell20/03/201823,750 - 23,750 0.0128$ 304$ -$ 304$ -$ 304$ -$ T. Miller20/03/201837,110 - 37,110 0.0128$ 476$ -$ 476$ -$ 476$ -$ T. Miller20/03/2018312,469 - 312,469 0.0128$ 4,004$ -$ 1,823$ -$ 1,823$ 2,181$ T. Miller20/03/2018625,031 - 625,031 0.0128$ 8,009$ -$ 3,647$ -$ 3,647$ 4,362$ B. Rooney20/03/201859,375 - 59,375 0.0128$ 761$ -$ 761$ -$ 761$ -$ Total1,354,610 - 1,354,610 17,358$ -$ 10,815$ -$ 10,815$ 6,543$
ACTINOGEN MEDICAL LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 8
22.
REMUNERATION OF AUDITOR
23.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
Other than what is mentioned below, there are no matters or circumstances that have arisen since the end of
the financial year which significantly affected or may significantly affect the operations of the Company, the
results of those operations, or the state of the Company in subsequent financial years.
The following inflow of cash was due to the issue of fully paid ordinary shares subsequent to year end:
79
Full-year endedFull-year ended30/06/201830/06/2017$ $Amounts paid or payable to Ernst & Young for:- Anauditorreviewofthefinancialstatements of the entity 40,502 40,225 40,502 40,225 DateQuantityUnit Price $Total $Exercise of unlisted options4/07/20184,000,000 0.02 80,000Private Placement Tranche 212/07/2018112,877,006 0.05 5,643,850Capital raising costs - - - (282,200)Share Purchase Plan13/07/201819,050,000 0.05 952,500Share Purchase Plan Shortfall17/07/201811,200,000 0.05 560,000147,127,0066,954,150
ACTINOGEN MEDICAL LIMITED
DIRECTORS’ DECLARATION
In the Directors’ opinion:
1.
The Financial Statements and Notes set out on pages 41 to 79, are in accordance with the
Corporations Act 2001 including:
(a) complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(b) giving a true and fair view of the Company’s financial position as at 30 June 2018 and of
its performance for the year ended on that date;
The remuneration disclosure included in the audited Remuneration Report in the Directors’
Report complies with Section 300A of the Corporations Act 2001.
The Directors have been given the declaration by the Managing Director and Chief Financial
Officer (or equivalent) as required by section 295A of the Corporations Act 2001.
The Company has included in the Notes to the Financial Statements an explicit and unreserved
statement of compliance with International Financial Reporting Standards.
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
2.
3.
4.
5.
This declaration is made in accordance with a resolution of the Directors.
Dr Bill Ketelbey
Managing Director
Sydney, New South Wales
29 August 2018
80
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Actinogen Medical
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Actinogen Medical Limited (the Company), which comprises the
statement of financial position as at 30 June 2018, the statement of comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration of the
Company.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the Company's financial position as at 30 June 2018 and of its
financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Company in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context. We have determined the matters described below to be the key audit matters
to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
report section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial report. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TD:KG:ACTINOGEN:006
1. Research and development rebate
Why significant
How our audit addressed the key audit matter
The Company has lodged a claim with the Australian Taxation
Office (ATO) for a rebate of eligible Research & Development
(R&D) expenditure (R&D rebate program) relating to its
ongoing research activities for the development of Xanamem.
Included in trade and other receivables on the Statement of
Financial Position is an amount for $3.16 million related to the
R&D rebate calculated for the year ended 30 June 2018.
Due to judgment involved in determining whether expenditure
incurred in R&D activities meets the eligibility criteria to qualify
for inclusion in the R&D rebate calculation and the significance
of this source of cash inflow for the Company, we considered
this to be a key audit matter. Refer to Note 9 to the financial
report.
2. Intangible assets
We involved our R&D taxation specialists to assess the
appropriateness of the R&D rebate calculated by the
Company’s third party expert.
We evaluated the qualifications, competency and objectivity of
the Company’s third party expert.
We assessed the Company’s accounting treatment of the R&D
rebate under Australian Accounting Standard - AASB 120
Accounting for Government Grants and Disclosure of
Government Assistance.
Why significant
How our audit addressed the key audit matter
Included in the Statement of Financial Position as at 30 June
2018 is an amount for $4.49 million relating to intangible
assets which consists of patents and licences. This amount
represents 26% of total assets.
Due to the significance to the Company’s financial report and
level of judgment involved in assessing whether there are
indicators of impairment present, we consider this to be a key
audit matter. Refer to Note 12 to the financial report.
We evaluated the appropriateness of the Company’s judgment
and conclusion that there were no impairment indicators
present as at 30 June 2018. In doing so, we examined the
patent and license agreement, considered internal and
external impairment factors and assessed the appropriateness
of the amortisation period of the patents and licences pursuant
to the requirements of Australian Accounting Standards.
3. Share based payments
Why significant
How our audit addressed the key audit matter
During the year ended 30 June 2018, The Company issued the
following options:
• 1,771,198 options to employees of the company; and
• 1,500,000 options to a non-executive director of the
We assessed the assumptions used in the Company’s
calculation including the share price of the underlying equity,
interest rate, volatility, time to maturity (expected life), grant
date and granting criteria. We involved our valuation
specialists in performing these procedures.
We assessed the adequacy of the share based payment
disclosure in the financial report.
company.
Under Australian Accounting Standards, equity settled awards
are measured at fair value on grant date taking into
consideration the probability of the vesting conditions
attached. This amount is recognised as an expense over the
relevant vesting period.
Due to the complex and judgmental estimates used in
determining the valuation of the share based payments, we
consider the Company’s calculation of the share based
payment expense to be a key audit matter. Refer to Note 21 to
the financial report for details.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Information other than the financial report and auditor’s report
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2018 Annual Report, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 23 to 38 of the directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of the Company for the year ended 30 June 2018, complies with
section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
T G Dachs
Partner
Perth
29 August 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ACTINOGEN LIMITED
S H A R E H O L D E R I N F O R M A T I O N
___________________________________________________________
Substantial shareholders
The following substantial shareholders have lodged notices with the company as at 1 October 2018:
Holders
BVF Partners L.P. on its own behalf and on behalf of BVF Inc.,
Mark N Lampert, Biotechnology Value Fund, L.P.; and
Biotechnology Value Fund II, L.P.
Distribution of ordinary shareholders as at 1 October 2018
Shares
Percentage of
Issued Capital
187,122,994
19.90%
Range of Holding
1-1,000
1,001-5,000
5,001-10,000
10,001 - 100,000
100,001 – over
Shareholders with less than a
marketable parcel.
Shares
2,864
284,724
2,188,215
47,647,641
1,040,070,114
1,090,193,558
Holders
41
89
247
1,096
685
2,158
380
Voting Rights
Each fully paid ordinary share carries voting rights of one vote per share.
Twenty Largest holders of quoted ordinary shares as at 1 October 2018
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Edinburgh Technology Fund Limited
JK Nominees Pty Ltd
Citicorp Nominees Pty Ltd
CS Fourth Nominees Pty Ltd
Warambi Sarl
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd DRP
Mr Martin Rogers
Sunset Capital Management Pty Ltd
Bannaby Investments Pty Ltd
Denlin Nominees Pty Ltd
Tisia Nominees Pty Ltd
Oaktone Nominees Pty Ltd
Mr Benjamin Cranstoun Dark
Tisia Nominees Pty Ltd
BNP Parabis Nominees Pty Ltd
Newfound Investments Pty Ltd
Dr John William Ketelbey
Ms Margaret Elizabeth Livingston
TOTAL
Number of
Shares
266,523,399
48,799,117
48,147,864
32,500,000
23,076,834
22,139,577
21,875,078
21,034,703
20,000,000
20,000,000
16,376,781
15,282,816
14,717,184
14,717,184
13,222,064
13,150,000
13,143,792
12,500,000
12,157,894
9,654,749
659,019,036
Percentage
of Issued
Capital
24.45
4.48
4.43
2.98
2.12
2.03
2.01
1.93
1.83
1.83
1.50
1.40
1.35
1.35
1.21
1.21
1.21
1.15
1.12
0.89
60.48
86
ACTINOGEN LIMITED
S H A R E H O L D E R I N F O R M A T I O N
___________________________________________________________
Twenty Largest holders of quoted $0.06 31 March 2019 options as at 1 October 2018
Ms Sihol Marito Gulton
Edinburgh Technology Fund Limited
Osiris Capital Investments Pty Ltd
Sunset Capital Management Pty Ltd
Bannaby Investments Pty Ltd
Mr Raymond Laurence Carroll
Kobia Holdings Pty Ltd
Warambi Sarl
Mr Martin Rogers
Servbond Pty Limited
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd DRP
Cabletime Pty Ltd
Donkey Trading Pty Ltd
Denlin Nominees Pty Ltd
1215 Capital Pty Ltd
Oaktone Nominees Pty Ltd
Tisia Nominees Pty Ltd
Mr Peter John Hardiman
Tisia Nominees Pty Ltd
Tradewest Investments Pty Ltd
TOTAL
Number of
Options
Percentage
of Issued
Capital
10,000,000
6,419,715
5,500,000
4,579,166
3,283,570
3,009,439
3,000,000
2,916,677
2,666,666
2,600,000
2,504,626
2,500,000
2,145,561
2,037,708
2,012,974
1,962,291
1,962,291
1,839,784
1,753,333
1,737,466
64,431,267
6.76
4.34
3.72
3.10
2.22
2.04
2.03
1.97
1.80
1.76
1.69
1.69
1.45
1.38
1.36
1.33
1.33
1.24
1.19
1.17
43.57
Unquoted Securities as at 1 October 2018
There were 27,750,000 unlisted options exercisable at $0.02 each and expiring on 30 November
2018 held by five holders, on issue.
Details of the holders holding more than 20% of the above:
Tisia Nominees Pty Ltd
Oaktone Nominees Pty Ltd
TOTAL
Number of
Options
10,000,000
10,000,000
35,000,000
Percentage
32.79
32.79
65.58
There were 4,671,798 unlisted employee share option plan options exercisable at $0.10 each and
expiring on 5 February 2021 held by seven holders, on issue.
There were 5,000,000 unlisted options exercisable at $0.10 each and expiring on 24 March 2025
held by one holder, on issue.
Details of the holders holding more than 20% of the above:
Geoffrey Edward Duncan Brooke
Number of
Options
5,000,000
Percentage
100.00
87
ACTINOGEN LIMITED
S H A R E H O L D E R I N F O R M A T I O N
___________________________________________________________
There were 1,500,000 unlisted options exercisable at $0.10 each and expiring on 1 December
2022 held by one holder, on issue.
Details of the holders holding more than 20% of the above:
George Morstyn
Number of
Options
1,500,000
Percentage
100.00
Restricted Securities
The Company has no securities on issue that are subject to either ASX or voluntary escrow.
On-Market Buy-Back
There is no current on-market buy back in place.
88