FINANCIAL
REPORT
FOR THE YEAR ENDED
30 JUNE 2017
ADALTA LTD
ABN 92 120 332 925
(formerly AdAlta Pty Ltd)
CORPORATE DIRECTORY
DIRECTORS
Dr Paul MacLeman
Ms Samantha Cobb
Dr James Williams
Ms Elizabeth McCall
Dr John Chiplin
Dr Robert Peach (appointed 14 November 2016)
COMPANY SECRETARY
Cameron Jones (appointed 31 May 2017)
Ian Hobson (resigned 31 May 2017)
REGISTERED OFFICE
Unit 15
2 Park Drive
Bundoora VIC 3083
Telephone: +61 3 9479 5159
Email: enquiries@adalta.com.au
Website: adalta.com.au
STOCK EXCHANGE
Australian Securities Exchange Limited
2 The Esplanade
Perth WA 6000
ASX CODE
1AD
SHARE REGISTRY
Automic Registry Services
Suite 310, Level 3
50 Holt Street
Surrey Hills NSW 2010
Telephone: 1300 288 664
Website: automic.com.au
AUDITOR
Butler Settineri (Audit) Pty Ltd
Unit 16, First Floor
100 Railway Road
Subiaco WA 6008
BANKERS
Westpac Banking Corporation
SOLICITORS
Hive Legal Pty Ltd
Level 4, 50 Market Street
Melbourne VIC 3000
AdAlta Limited Annual Report 2017
2
CONTENTS
CHAIRMAN’S LETTER ....................................................... 4
DIRECTORS’ REPORT ........................................................ 6
OPERATING AND FINANCIAL REVIEW ............................. 9
FINANCIAL YEAR 2017 –
A YEAR OF MEASURABLE PROGRESS .............................10
INDEPENDENT AUDITOR’S REPORT .................................22
AdAlta Limited Annual Report 2017
3
AdAlta Limited Annual Report 20174CHAIRMAN’S LETTERIt is my pleasure to open the financial year 2017 annual report looking back upon a year where AdAlta achieved some very significant milestones. During the year we made great advances in demonstrating the strength of the AdAlta drug development platform. In addition, the successful listing of the Company on the ASX has brought additional capital, investors and financial market validation of the products and value creation that AdAlta is working to create.In August of 2016, AdAlta executed a successful listing on the Australian Securities Exchange, closing the fund raising oversubscribed and hence with good aftermarket support. The quality of incoming investors was outstanding for a company of AdAlta’s size and stage of development, with a mix of institutional, existing and new retail investors participating. The listing raised $10 million, in addition to approximately $2 million in interest and the 2016/2017 financial year Research and Development Tax incentive refund (received August 2017).Our key area of focus – Idiopathic Pulmonary Fibrosis (IPF) – was chosen as it enabled AdAlta to fast track the commercial application of AD-114 in a patient population where there remains a very high unmet medical need. This need was reinforced during the year when the US Food and Drug Administration granted “Orphan Drug Designation” to AdAlta for AD-114. The orphan drug pathway allows AdAlta to benefit from incentives for the development of AD-114 until it is given marketing approval. These measures apply to all stages of the drug development and include tax credits on clinical research; technical assistance with filing of the investigational new drug application as well as a reduction of the registration fees; and exclusivity of 7 years after the marketing approval is granted.With 130,000 IPF sufferers in the US alone each year and 50% dying within 2-3 years, the race is on to find better treatment options for these patients. According to Fierce Biotech, the two currently marketed IPF drugs, Boehringer Ingelheim’s Ofev (nintedanib) and Roche’s Esbriet (pirfenidone), posted sales of around $500 million and $430 million respectively in the first half of this year, illustrating the large market opportunity despite the small patient numbers. While these marketed treatments have finally provided relief for some IPF patients, not all can tolerate the side effects nor respond to these available treatments and further treatment options are needed.Later in this report, we set out the competitive landscape for IPF treatments in more detail. Unlike other disease areas, the drug development field for IPF treatments is small, and with drugs being partnered either during or at the end of Phase 1, companies developing drugs in the space can deliver short term returns to investors.Several major de-risking activities occurred on the AD-114 program during the year to advance closer to human studies and our target of licensing after Phase 1 human trials.Pre-clinical studies were conducted which determined safety and tolerability, distribution and elimination profiles for the AD-114 drug in multiple animal species, including non-human primates.The range of indications for AD-114 against the G-Protein Coupled Receptor (GPCR) CXCR4 target was expanded through the year using a series of commercially accepted animal models. This work also involved studies that delivered improved understanding of the mode of action of the drug, an important component of drug development and approval. This important work increases the number of fibrotic disease areas where AD-114 could be applied as a new treatment. AdAlta Limited Annual Report 20175With additional disease areas come more market opportunities and we have evidence that in addition to IPF, AD-114 could be applied across the areas of fibrotic liver disease, wet Acute Macular Degeneration (wet-AMD) of the eye and in fibrotic kidney disease. Each of these disease areas represent large markets in their own right, and this early work has been important to building a package of data that our potential pharmaceutical partner would need, to assess the broad applicability of AD-114 as a new therapy. Manufacturing has advanced through the year, with strong relationships with FujiFilm Diosynth, Lonza and other manufacturing partners continuing to provide information and materials needed for both pre-clinical and laboratory proof of concept studies. Optimisation of these processes by our partners is ongoing.In addition to the extensive work taking place with AD-114 in our core indications of Idiopathic Pulmonary Fibrosis and other fibrotic diseases dependent upon the CXCR4 target, we are also working to strengthen our i-body pipeline via exploration of new targets.On behalf of the Board, sincere thanks to all investors who have supported us through our first year on market. We expect the upcoming year to continue to deliver strong growth for AdAlta and its investors. DIRECTORS’ REPORT
The Directors of AdAlta Limited (“AdAlta” or “the Company”) submit herewith the annual report of the Company for the financial
year ended 30 June 2017. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Information about the Directors
The names and particulars of the Directors of the Company during or since the end of the financial year are:
Paul MacLeman MBA, BVSc, Grad Dip Tech, Grad Cert Eng, GAICD, MATT
Chairman and non-executive Director, joined the Board 16 April 2015. Paul has over 20 years’ experience across the life sciences sector;
encompassing technical, commercial and financial areas. With a career-spanning veterinary practice, pharmaceuticals, biotechnology,
diagnostics and finance, Paul has expertise in capital raising, business development, research management, technology commercialisation,
staff development, and sales and marketing. He has also founded life sciences start-ups in the biologics area and worked in investment banking
focusing on the analysis and financing of technology companies. Paul has previously served as CEO of several VC funded, ASX, and TSX listed
companies. Paul is also a current a director of CMAX Clinical Research Pty Limited, a clinical services business based in Adelaide, and Protec
Groupe an environmental and industrial analysis company with operations in France, the UK and the USA.
Samantha Cobb BSc, MApL, GAICD
Managing Director / CEO, appointed 29 June 2007. Sam is the founding CEO of AdAlta and has over fifteen years experience in business
development and commercialisation of early stage scientific technologies. Prior to AdAlta, Sam was the Business Development Director at the
Co- operative Research Centre for Diagnostics. Sam has also worked for the biotech start-up companies Sensologix Inc and Nephrogenix Pty Ltd
and at the University of Queensland’s technology commercialisation companies, Uniquest Pty Ltd and IMBcom Pty Ltd. Sam has a Bachelor of
Science, a Masters of Intellectual Property Law and has completed the Australian Institute of Company Directors course.
Dr James Williams BSc (Hons), MBA, PhD, GAICD
Non-Executive Director, joined the Board 16 December 2010. Dr Williams is the Executive Chairman of Dimerix Limited as well as co-founder
and investment Director of Yuuwa Capital LP, a venture capital firm based in Western Australia. Prior to establishing Yuuwa Capital, he was
managing Director of two medical device companies, ASX-listed Resonance Health Limited and Argus Biomedical Pty Ltd, both of which secured
regulatory approvals under his leadership. Dr Williams conceived, co-founded and is a former CTO and Director of iCeutica Inc., a clinical stage
nano drug reformulation company. iCeutica was acquired by Philadelphia-based Iroko Pharmaceuticals in 2011. Dr Williams is non-executive
Director of Dimerix Limited (ASX:DXB) and a Director of Yuuwa investee companies PolyActiva Pty Ltd and Nexgen Plants Pty Ltd. He is also a
Director of Linear Clinical Research Ltd, a specialist early phase trial unit and a member of the “Panel of Experts” for the University of Western
Australia’s Pathfinder Fund.
Elizabeth (Liddy) McCall LLB., B.Juris, B.Com (Hons), GDipApFin (SIA), GAICD
Non-Executive Director, joined the Board 16 December 2010. Liddy is a co- founder and Investment Director of Yuuwa Capital LP. Liddy is also
a Director of various unlisted Yuuwa investee companies. Her experience includes a range of roles in drug development and medical device
companies, including business development and finance. She was co- founder and Director of iCeutica Inc. Liddy was also a co-founder
of Dimerix Limited (now an ASX-listed clinical stage drug discovery and development company) and held various executive roles during its
establishment and growth. Liddy was co-founder and Director of Tessitura Pty Ltd, a consulting company providing services to the biotechnology
industry. Previously, Liddy was an Associate Director in the Corporate Advisory Company of Macquarie Bank and prior to that worked as a
lawyer with a leading Australian law firm.
Dr John Chiplin BPharm, PhD, MRPharmS
Non-Executive Director, appointed 16 May 2014. John has significant international experience in the life science and technology industries, from
both an operational and investment perspective. Recent transactions in which John has been instrumental include Benitec BioPharma (US IPO),
Medistem Inc. (acquired by Intrexon Corporation for US$26 million), former CEO of ASX-listed Arana Therapeutics (acquired by Cephalon Inc. for
US$200 million), and Domantis (acquired by GSK for £230 million). Immediately prior to running Arana, John was head of the ITI Life Sciences
investment fund in the UK, negotiating significant funding with Government Ministers. His own investment company, Newstar Ventures Ltd., has
funded more than a dozen early stage companies in the past ten years. John currently serves on the boards of Batu Biologics, Benitec BioPharma
(NASDAQ: BNTC), The Coma Research Institute, Cynata Therapeutics Limited (ASX: CYP), Prophecy Inc, Scancell Holdings plc (LSE: SCLP), Sienna
Cancer Diagnostics Limited (ASX: SDX) and ScienceMedia Inc.
Dr Robert Peach BSc, MSc, PhD
Non-Executive Director, appointed 14 November 2016. Dr Peach has over 25 years of drug discovery and development experience in the
Pharmaceutical and Biotechnology industry. In 2009 he co-founded Receptos, becoming Chief Scientific Officer and raising $59M in venture
capital and $800M in an IPO and three subsequent follow-on offerings. In August 2015 Receptos was acquired by Celgene for $7.8B. Robert
held senior executive and scientific positions in other companies including Apoptos, Biogen Idec, IDEC and Bristol-Myers Squibb, supporting
in-licensing, acquisition and venture investments. His extensive drug discovery and development experience in autoimmune and inflammatory
diseases, and cancer has resulted in multiple drugs entering clinical trials and 3 registered drugs. He currently serves on the Board of Directors
of Innate Immunotherapeutics (ASX:IIL) and Avalia Immunotherapies and is a consultant for several other biotechnology companies. Robert is the
co-author of 70 scientific publications and book chapters, and 17 patents. He was educated at the University of Canterbury and the University
of Otago, New Zealand.
The above named Directors held office during the whole of the financial year and since the end of the financial year unless
otherwise indicated.
AdAlta Limited Annual Report 2017
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Directors’ shareholdings
The following table sets out each Director’s relevant interest in shares, debentures and rights or options in shares or debentures of
the Company as at the date of this report:
Directors
Paul MacLeman
Samantha Cobb
James Williams1
Liddy McCall1
John Chiplin
Robert Peach
Fully paid ordinary shares Number
Options under ESOP Number
293,092
1,087,449
54,159,848
54,159,848
810,883
-
146,544
356,394
-
-
-
-
1James Williams and Elizabeth McCall’s interests are partly held (54,059,848 ordinary shares) indirectly through Yuuwa Capital LP, a venture
capital firm managed by its General Partner which is associated with James Williams and Elizabeth McCall
Company Secretary
Cameron Jones B.Bus, CA
Cameron Jones is a Chartered Accountant and holds a Certificate in Governance (Practice) from the Governance Institute of
Australia. Cameron is a Director of Bio101Group Pty Ltd, a wholly owned subsidiary of Biotech Capital Limited providing life
science companies with accounting, back office administration and company secretarial solutions.
Dividends
No dividends have been paid or declared since the start of the financial year and the Directors have not recommended the
payment of a dividend in respect of the financial year.
Shares under option or issued on exercise of options
(a) Details of unissued shares or interests under option as at the date of this report are:
Number of shares under option
Class of shares
Exercise price of option
Expiry date of options
145,976
20,569
73,272
129,913
365,225
234,472
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
$0.17*
$0.17*
$0.17*
$0.17*
$0.17*
$0.17
1 July 2018
21 September 2018
1 November 2018
1 July 2019
1 November 2019
1 November 2020
*50% of 734,955 Options have an exercise price of $0.0002 if exercised within 3 months of vesting, and with the exercise price of the
remaining 50% of those options being $0.09 if exercised within 12 months of vesting. Otherwise the exercise price is $0.17.
The holders of these options do not have the right to participate in any share issue of the Company.
(b) Details of ordinary shares issued by the Company during the year on the exercise of options are:
Date option exercised
Issue price of shares
Number of shares issued
27 September 2016
27 September 2016
27 September 2016
21 October 2016
21 October 2016
7 November 2016
7 November 2016
21 December 2016
AdAlta Limited Annual Report 2017
$0.17
$0.09
$0.0002
$0.09
$0.0002
$0.09
$0.0002
$0.0002
222,061
73,273
493,140
117,237
43,963
43,963
43,964
73,273
7
Indemnification of officers and auditors
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company (as named
above), the company secretary and all executive officers of the Company and of any related body corporate against a liability
incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified
or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such
an officer or auditor.
Directors’ meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the
financial year and the number of meetings attended by each Director (while they were a Director or committee member). During
the financial year, 9 Board meetings were held.
Directors
Paul MacLeman
Samantha Cobb
James Williams
Liddy McCall
John Chiplin
Board of Directors
Held
Attended
9
9
9
9
9
9
9
7
9
9
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in
note 19 to the financial statements.
In the event non-audit services are provided, the Board has established procedures to ensure that the provision of non-audit services
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. These include:
• all non-audit services are reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
• non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of
Ethics for Professional Accountants’ issued by the Accounting Professional & Ethical Standards Board, including reviewing or
auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for
the Company or jointly sharing economic risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 22 of the financial report.
AdAlta Limited Annual Report 2017
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AdAlta Limited Annual Report 20179OPERATING AND FINANCIAL REVIEWSummary of principal activitiesThe principal focus for AdAlta Limited (ASX: 1AD) during the course of 2016/17 financial year was to advance its lead i-body candidate AD-114 towards the clinic and generate additional i-bodies from its novel platform technology. I-bodies are a new class of small, targeted, fully-human protein treatments which are being used to make medicines for hard to treat diseases.i-bodies are a promising, novel class of drugs that offer a new and more effective approach to treating a wide range of human diseases. While the i-body platform will enable the Company to develop a number of new medicines over time, initial focus during 2016/17 financial year related to development of AdAlta’s lead i-body candidate, AD-114, for the treatment of idiopathic pulmonary fibrosis (IPF) and other human fibrotic diseases.StrategyAdAlta Limited intends to develop its novel i-body platform with a focus on its lead candidate AD-114, a first-in class treatment for Idiopathic Pulmonary Fibrosis (IPF) and other fibrotic diseases. AdAlta’s lead drug candidate, AD-114, is undertaking manufacturing scale up to commence clinical trials for the treatment of IPF and other human fibrotic diseases, for which current therapies are sub-optimal and there is a high unmet medical need.Outside of IPF, potential applications exist for AD-114 in the treatment of other fibrotic diseases. Using animal models of disease and with human tissues, AD-114 has demonstrated broad anti-fibrotic and anti-inflammatory effects in fibrosis models of lung, eye, liver, skin and kidney fibrosis.In conjunction with work on AD-114, the Company also plans to continue further drug discovery and development, directed towards other drug targets and diseases using its i-body technology platform. This work is completed at La Trobe University and directed by AdAlta’s Chief Scientific Officer, Mick Foley. The pipeline of i-bodies being developed are focusing on difficult targets, including other G-Protein Coupled Receptors (GPCRs) and ion channel targets. AdAlta’s focus is to “drug these undrugable targets” with the i-body platform. FINANCIAL YEAR 2017 – A YEAR OF
MEASURABLE PROGRESS
Overview and market conditions
About AD-114
AdAlta’s lead i-body drug candidate is called AD-114. An i-body is a new class of small, targeted, fully-human protein treatments
used to make new medicines for hard to treat diseases.
AD-114 has demonstrated significant anti-fibrotic and anti-inflammatory activity in human tissue and multiple animal models. Over
the past twelve months the Company has further strengthened the pre-clinical data of AD-114 demonstrating broad anti-fibrotic
application in the lung, liver, kidney, eye and skin in various models of fibrotic disease.
AD-114 has been shown to specifically bind to the G-protein coupled receptor (GPCR) CXCR4. This data has been peer reviewed
and published in the Journal of Biological Chemistry (June 2016). Pre-clinical comparisons to existing drugs show that AD-114
operates through a different mechanism and is more effective. CXCR4 is a novel disease target pathway in IPF and AD-114 would
be a “first in class” drug for treatment of this “orphan disease” indication. Drugs are recognised by industry participants as “first in
class” when, for example, they use a new and unique mechanism of action for treating a medical condition.
Pre-clinical studies have shown AD-114:
• has specificity for diseased human tissue with effects only shown on IPF tissue and no effects displayed on normal lung tissue
nor any evidence of off target effects;
• is more effective than existing IPF approved drugs showing greater in vitro efficacy compared to the only approved therapies
Nintedanib and Pirfenidone;
• demonstrates both anti-fibrotic and anti-inflammatory effects in multiple animal models; and is a novel mechanism of action for
fibrosis making AD-114 a potential “first in class” therapy for the treatment of IPF.
Idiopathic Pulmonary Fibrosis – a large market with high unmet medical need
A specific form of lung fibrosis is Idiopathic pulmonary fibrosis (IPF), which is a chronic and ultimately fatal disease.
• IPF is categorized as a rare disease, but still affects an estimated:
• 135,000 people in the United States (US), with about 48,000 new cases being diagnosed annually. In the US 50,000 people
die each year from IPF; the same mortality rate as breast cancer;
• 100,000 people in Europe; and
• 10,000 people in Australia.
AdAlta Limited Annual Report 2017
10
Japan
EU
US
The treatment of IPF was greatly improved in 2014 with the United States FDA approval of two anti-fibrotic agents – Pirfenidone
and Nintedanib. Despite different modes of action, Pirfenidone and Nintedanib are deemed by respiratory clinicians to be
equally effective, with both compounds slowing the reduction in lung volume that is characteristic in IPF patients. In 2015,
sales of these two drugs was approximately $0.9b and by 2025 this market is expected to grow to $3.2b (Global Data IPF
Forecast 2016).
These compounds only slow the progression of the disease, they do not act as a cure and cannot halt or reverse the decline in
lung function, with the median survival from diagnosis 2 ½ to 3 ½ years1. The world urgently needs improved treatment of IPF.
IPF programs are attracting deals early in the development pathway
AdAlta currently intends to license the lead candidate to a pharmaceutical or biotechnology company to generate up-front,
milestone payments and licensing revenues.
Comparable transactions confirm that big pharma are actively acquiring fibrosis assets at an early stage – typically based on
Phase I results. These are detailed in the table below.
1Ley B, Collard HR, King TE. Clinical course and prediction of survival in idiopathic pulmonary fibrosis. Am J Respir Crit Care Med. 2011;
183:431–40
AdAlta Limited Annual Report 2017
11
Date
Company Target
Acquired by Deal value (US$)
Deal commentary
SEP – 15
Adheron
Therapeutics
SDP051
Roche
$105M upfront, plus
$475M in milestones
SDP-51 at end of Phase I for IPF
AUG – 15 Promedior
PRM-151
BMS
$150m upfront + $1.25B
Phase II IPF and myelofibrosis
NOV – 14
Galecto
Biotech AB
AUG – 14 Intermune
JUN – 13
MicroDose
Therapeutx
TD139
BMS
$444M
Option to acquire at end of clinical POC (no later
than 60 days following Ph 1b for IPF completion)
Esbriet /
Pirfenidone
MMI0100
Roche
$8.3B
Approval in Europe / Japan, phase III in the US
Teva
Pharmaceuticals
$40M upfront
$125M milestones
MMI0100 was in pre-clinical development
MAR – 12 Stromedix
STX100
Biogen Idec
JUL – 11
Amira /
BMS
BMS-
986020
BMS
$75M upfront
$487.5M milestones
$325M upfront
$150M milestones
End of phase I for IPF
End of phase I for IPF
Significant milestones achieved during the reporting period
Pre-clinical toxicology studies show no adverse effects
Immediately post the year end, AdAlta was able to report the early results of two toxicology studies in non-human primates.
These pharmacokinetic and dose escalating studies looked at preliminary safety and demonstrated no adverse side effects.
Importantly, it was shown that AD-114 did not mobilise stem cells, unlike all other cells which work by antagonizing the CXCR4
receptor pathway. This result is a potential advantage for AD-114 in the long term treatment of diseases such as fibrosis.
The data also demonstrates that the long loop of the i-body has a distinct activity, differentiating AD-114 from other CXCR4
antagonist products.
The completion of pre-clinical toxicology trials will allow AdAlta to begin Phase 1 trials in humans in 2018. The Phase 1 trial is
estimated to be completed in the second half of calendar 2018 and will deliver a further major milestone.
Lung
IPF
Eye
Wet-AMD & PVR
Liver
NASH & CIRRHOSIS
Kidney
RENAL FIBROSIS
Skin
SCLERODERMA
Heart
CARDIAC FIBROSIS
We have now demonstrated broad treatment potential for fibrosis in the lung, liver, skin and eye using a number therapeutic
mouse models. Such data further validates previous in vitro (in the lab) studies.
i-body manufacturing and research advancement
During the period, we have manufactured AD-114 material for these pre-clinical trials with our partner FujiFilm Diosynth and
continue to work with them for the supply of materials into Phase 1 in human clinical trials.
Contract manufacturer Lonza, made research advancements by successfully demonstrating scalability and efficacy of expression
levels of the AdAlta’s i-body platform using its XSTM Pichia (or yeast) Expression Technology with another i-body. This important
work demonstrated that AdAlta’s i-body platform can be expressed in an alternative system to the current standard bacterial
system which is able to potentially provide higher yields, using a simple, fast fermentation method, achieving almost double the
yield in half the fermentation time.
AdAlta Limited Annual Report 2017
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Orphan Drug Designation provides faster path to market and extended IP
In January 2017 AdAlta was granted Orphan Drug Designation from the United States Food and Drug Administration (FDA) for
AD-114. Orphan Drug status allows for significant Research and Development tax credits, new drug application fee waivers and
a seven-year period of market exclusivity from the FDA after approval.
Orphan Drug status is expected to ultimately help accelerate our commercial development path and is a recognition of the high
unmet need that exists in the area of Idiopathic Pulmonary Fibrosis.
Collaborations, grants and commercialisation agreements provide
valuable non-dilutive funding
Collaborations
An ongoing clinical collaboration between with The Alfred hospital in Melbourne, Australia was extended and expanded.
Funding for the collaboration was provided by an Innovation Connection grant from the Australian Federal Government as well as
AdAlta’s research and development, and clinical budget.
The collaboration with The Alfred was overseen by the clinical research team’s Dr Glen Westall, an expert in lung fibrosis and
Idiopathic Pulmonary Fibrosis (IPF). The hospital importantly brought to AdAlta access to human IPF patient tissue for evaluation
with AD-114.
In late 2016, AdAlta signed a collaboration with XL-protein GmbH to develop a long acting version of AD-114. This collaboration
will see XL-protein apply its proprietary technology to extend the circulation half life of AD-114, thereby increasing the duration
of therapeutic action and allow less frequent administration and lower dosing. The modifications to AD-114 by XL-protein will be
progressed towards the clinic by early 2018.
Grants
AdAlta, together with La Trobe University was the recipient of a Science and Industry Endowment Fund (SIEF) Business Fellowship
to identify and develop new novel i-bodies and thereby further build on AdAlta’s i-body pipeline.
The fellowship will strengthen the collaboration between AdAlta and La Trobe and will accelerate the adoption of new ideas and
technology. Dr Chris Hosking at La Trobe will support Associate Professor Mick Foley, AdAlta’s Chief Scientific Officer, at the
La Trobe Institute for Molecular Science.
Commercialisation agreements
AdAlta out-licensed a number of shark antibodies to Crossbeta Biosciences. Crossbeta is a biotechnology company with unique
technology for therapeutic and diagnostic use in neurodegenerative disorders, such as Alzheimer’s disease. The agreement
provides Crossbeta a license to three shark antibodies that bind to beta-amyloid oligomer, which were identified from the long-
term collaboration with AdAlta dating back to 2013.
The agreement with Crossbeta Biosciences will generate royalties on future revenues from successful commercialisation of these
specific shark antibodies.
Industry presentations position AdAlta in view of partners
We continue to engage key industry stakeholders across the fibrosis space, vital in gaining and maintaining awareness for our
activities with potential partners and industry peers.
On the industry front, we presented at the Annual General Meeting at the Association for Research in Vision and Ophthalmology
(ARVO) in May 2017 in Baltimore, Maryland, USA.
Post the period, CEO Samantha Cobb presented to an international audience of major competitors in the IPF space, biopharma
and academic stakeholders at the inaugural Idiopathic Pulmonary Fibrosis Summit. The event was designed to highlight the work
being undertaken in the world on IPF treatment and also new advancements being made with the aim to reduce the expansive
translational gap that exists in IPF drug development.
AdAlta Limited Annual Report 2017
13
Strong investor outreach program drives awareness in AdAlta
Domestically we hosted an inaugural Fibrosis Symposium in Melbourne in February 2017 bringing together many of Australia’s
leading authorities in the fibrosis space and a range of financial market participants. This was an excellent forum which enabled
AdAlta to educate interested investors on developments in the fibrosis space.
Throughout the year we presented to a range of investors in a range of forums, including investor conferences and 1:1 roadshow
meetings. Post the period we held shareholder information sessions in key Australian cities to update shareholders on the
Company’s progress, moving AD-114 towards the clinic.
Offshore we presented at the Biotech Showcase during JP Morgan healthcare week in the US and conducted a number of investor
road shows through the year. Immediately post the period, we were invited to present on the topic of Fibrosis at the annual
Bioshares Investment Summit in Queenstown, NZ.
Summary of operating results
The Company reported a loss for the year ended 30 June 2017, after accounting for income tax benefit, of ($2,832,517) (30 June
2016: ($1,163,056)). The year ended 30 June 2017 operating results are attributed to the following:
• Research and Development tax incentive refund: $1,777,030 (30 June 2016: $738,046);
• Cost of services expense of $3,598,678 (30 June 2016: $1,413,975); and
• Employment benefit expense of $404,669 (30 June 2016: $224,620).
The increase in cash and cash equivalents, net assets, contributed equity and accumulated losses was largely the result of the ASX
listing and AdAlta’s IPO and the Research and Development tax incentive.
Financial liquidity and capital resources
AdAlta ended the financial year with $6,224,617 in the bank, and received a Research and Development tax incentive refund
of $1,777,030 following 30 June 2017, further boosting capital resources.
As a result, the Directors believe the Company is in a strong and stable financial position to expand and grow its current
operations and has the capital resources required to take the company through to the end of Phase 1 trials in IFP.
Significant changes in state of affairs
On 8 July 2016, the Company lodged a prospectus with ASIC for the offer of 32,000,000 and up to 40,000,000 ordinary fully
paid shares at a price of $0.25 per share to raise a minimum of $8,000,000 and a maximum of $10,000,000. On 12 August
2016, the Prospectus closed over-subscribed. The Company was admitted to the official list of the ASX on 22 August 2016.
On 12 August 2016, the Company’s convertible notes and Series A Preference shares converted to ordinary shares.
On 24th August 2016, the Company received a Research and Development tax incentive refund of $738,046 for the 2015/2016
financial year.
On 18 August 2017 the Board approved a short term cash incentive for Samantha Cobb of $66,300 plus superannuation.
Events after the reporting period
On 7th August 2017, the Company received a Research and Development tax incentive refund of $1,777,030 for the 2016/2017
financial year.
Otherwise, there has not been any matter or circumstance that has arisen subsequent to the end of the financial year that has
significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of
affairs of the Company in future financial years.
AdAlta Limited Annual Report 2017
14
Future developments, prospects and business strategies
AdAlta’s strategy is to develop its lead i-body drug candidate, AD-114, to demonstrate safety and advance the lead to the
clinic for treatment of fibrosis related diseases. Demonstration of the lead i-body drug candidate in the clinic is also expected to
increase interest in wider applications of the i-body platform and its unique features of safety and efficacy.
AdAlta currently intends to license the lead candidate to a pharmaceutical or biotechnology company to generate up-front,
milestone payments and licensing revenues.
The i-body platform provides an opportunity for the expansion of the pipeline of i-body drug candidates in multiple therapeutic
areas as well as potential partnering.
The Company plans to maximise the benefits of its i-body platform and i-body libraries through partnerships, while retaining the
ability to resource and focus on its own in-house discovery and development activities. Development of additional i-body drug
candidates provides potential for additional revenue, including up-front, milestone payments and licensing payments.
We will continue to engage all relevant stakeholders in order to ensure the best commercial outcome can be secured.
Environmental issues
The Company’s operations are not subject to significant environmental regulation under the Australian Commonwealth or
State Law.
Remuneration report (audited)
This remuneration report, which forms part of the Directors’ report, sets out information about the remuneration of AdAlta Limited’s
key management personnel for the financial year ended 30 June 2017.
The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and
controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the
Company. The prescribed details for each person covered by this report are detailed below under the following headings:
• key management personnel
• remuneration policy
• relationship between the remuneration policy and Company performance
• remuneration of key management personnel
• key terms of employment contracts.
Key management personnel
The Directors and other key management personnel of the Company during the financial year were:
Non-executive Directors
Position
Paul MacLeman
Chairman & Non-executive Director
John Chiplin
Liddy McCall
Robert Peach
Non-executive Director
Non-executive Director
Non-executive Director (appointed 14 November 2016)
James Williams
Non-executive Director
Executive Directors
Samantha Cobb
Managing Director & CEO
The named persons held their current position for the whole of the financial year and since the end of the financial year unless
otherwise indicated.
AdAlta Limited Annual Report 2017
15
Remuneration policy
The Board of Directors of the Company is currently responsible for determining and reviewing compensation arrangements for
key management personnel. The Company has a Remuneration Committee, which consists of John Chiplin (Chair of Remuneration
Committee), Paul MacLeman and Liddy McCall. The remuneration policy, which is set out below, is designed to promote superior
performance and long-term commitment to the Company.
Non-Executive Director remuneration
Non-executive Directors are remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions
or salary sacrifice into equity and do not normally participate in schemes designed for the remuneration of executives.
Shareholders approval must be obtained in relation to the overall limit set for the non-executive Directors’ fees. The maximum
aggregate remuneration approved by shareholders for non-executive Directors is $350,000 per annum. The Directors set the
individual non-executive Director fees within the limit approved by shareholders. Non-executive Directors are not provided with
retirement benefits.
Executive Director remuneration
Executive Directors receive a base remuneration which is at market rates, and may be entitled to performance based
remuneration, which is determined on an annual basis. Overall remuneration policies are subject to the discretion of the Board
and can be changed to reflect competitive and business conditions where it is in the interests of the Company and shareholders
to do so. Executive remuneration and other terms of employment are reviewed annually by the Board having regard to the
performance, relevant comparative information and expert advice.
The Board’s remuneration policy reflects its obligation to align executive remuneration with shareholders’ interests and to retain
appropriately qualified executive talent for the benefit of the Company. The main principles are:
(a) remuneration reflects the competitive market in which the Company operates;
(b) individual remuneration should be linked to performance criteria if appropriate; and
(c) executives should be rewarded for both financial and non-financial performance.
The total remuneration of executives consists of the following:
(a) salary – executives receive a fixed sum payable fortnightly in cash plus superannuation at 9.5% of salary;
(b) cash at risk component – executives may participate in share and option schemes generally made in accordance with
thresholds set in plans approved by shareholders if deemed appropriate. However, the Board considers it appropriate to issue
shares and options to executives outside of approved schemes in exceptional circumstances;
(c) other benefits – executives may, if deemed appropriate by the Board, be provided with a fully expensed mobile phone and
other forms of remuneration; and
(d) performance bonus.
The Board has not formally engaged the services of a remuneration consultant to provide recommendations when setting the
remuneration received by Directors or other key management personnel during the financial year.
Relationship between the remuneration policy and
Company performance
The Board considers that at this time, evaluation of the Company’s financial performance using generally accepted measures such
as profitability, total shareholder return or per Company comparison are not relevant as the Company is at an early stages of
development trial which is continuing as outlined in the Directors’ report.
AdAlta Limited Annual Report 2017
16
Remuneration of key management personnel
2017
Non-executive
Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Robert Peach*
Executive
Directors
Samantha Cobb
Total
Short-term
employee
benefits
Post-
employment
benefits
Salary & fees
$
Other
$
Superannuation
$
Share-
based
payment
Options
$
60,108
38,650
38,650
41,503
28,125
-
-
-
-
-
-
-
-
-
-
218,135
425,171
67,500
67,500
27,680
27,680
-
-
-
-
-
-
-
*Appointed 14 November 2016
Short-term
employee
benefits
Post-
employment
benefits
Salary & fees
$
Other
$
Superannuation
$
Share-
based
payment
Options
$
2016
Non-executive
Directors
Paul MacLeman
30,000
-
-
20,000
-
-
-
-
-
-
-
-
James Williams
Liddy McCall
John Chiplin
Executive
Directors
Samantha Cobb
Total
151,376
201,376
45,413
45,413
18,695
18,695
-
-
-
-
-
-
Total
$
60,108
38,650
38,650
41,503
28,125
313,315
520,351
Total
$
30,000
-
-
20,000
215,484
265,484
No share options were issued to key management personnel as remuneration during the financial year as set out in the following
table. 903,303 share options were exercised by key management personnel during the year (2015: 40,200, pre-split amount).
2017
Samantha Cobb
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Robert Peach
Balance at
1 July
No.
790,751
366,363
-
-
249,127
-
Total
1,406,241
Granted as
compensation
No.
-
-
-
-
-
-
-
Exercised
(434,357)
(219,819)
-
-
(249,127)
-
(903,303)
Net other
change
No.
-
-
-
-
-
-
-
Balance at
30 June
No.
356,394
146,544
-
-
-
-
502,938
AdAlta Limited Annual Report 2017
17
2016
Balance at
1 July
No.*
Granted as
compensation
No.*
Samantha Cobb
150,099
Exercised*
(15,200)
(12,500)
-
-
Net other
change
No.**
655,852
303,863
-
-
Balance at
30 June
No.**
790,751
366,363
-
-
-
75,000
-
-
55,000
(12,500)
206,627
249,127
150,099
130,000
(40,200)
1,166,342
1,406,241
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Total
*Pre-split amounts.
-
-
-
-
**On 9 May 2016 the options were split on the basis that every 1 option be split into 5.8618 options.
The value of the options at their date of grant has been taken as zero because, at the time of grant, the Company was an unlisted
entity and the equity structure operated such that any returns were paid to convertible note holders with any residual being paid
to holders of Series A Preference shares with any final amount being available to ordinary shareholders. Based on the Company’s
net assets at the date of grant there was no value attributable to ordinary shares.
Options have been granted to the Managing Director on a case by case basis since 2011 based on the achievement of
milestones which varied for the relevant year depending on the stage of the Company’s research projects and the achievement
of funding. The milestones selected were considered relevant to enable the Company to progress its research projects and the
assessment as to their achievement was performed by the Board.
Options granted to the non-executive Directors related to their efforts in securing additional funding for the Company.
A performance condition is attached to a portion of the options issued being that the options can only be exercised in the event
of a transaction or exit of the Company.
All other options are subject to time based vesting conditions with no specific performance condition attached.
Key terms of employment contracts
Samantha Cobb is employed in the position of Managing Director/CEO of the Company on the following material terms:
1. Effective 12 August 2016 (completion of the capital raising), a salary of $225,000 plus superannuation, which was
subsequently modified effective 1 June 2017, to $260,000 plus superannuation.
2. A short term cash incentive of up to 30% of the annual salary subject to achieving key performance indicators as set by the
Board from time to time.
3. Either party is entitled to terminate the employment contract by giving 3 months’ notice.
4. After termination of employment, Ms Cobb is subject to a non-compete condition within Australia for a period of 3 months,
non-solicitation of employees and customers for a period of 6 months.
AdAlta Limited Annual Report 2017
18
Set out below are the remuneration arrangements with Non-Executive Directors Effective 12 August 2016 (completion of the
capital raising):
Name
Paul MacLeman
James Williams
Elizabeth McCall
John Chiplin
Robert Peach
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Annual Salary
(inclusive of superannuation)
$65,000
$45,000
$45,000
$45,000
$45,000
The Company has entered into consulting agreements with both Paul MacLeman (Chairman), Robert Peach and John Chiplin as
independent Directors of the Board. Under the terms of these consulting agreement, the agreements can be terminated by either
party by giving one months’ notice. Further, continuation of appointment is subject to re-election at a forthcoming AGM. The
Directors fees for Paul MacLeman are paid to Dalroar Pty Ltd, ATF MacLeman Investment Trust, which is his personal company.
Both Elizabeth McCall and James Williams are currently appointed as nominated Directors of Yuuwa Capital LP. Their annual
fixed fees of $45,000 is paid to Yuuwa Capital LP.
No additional fees are payable to Directors for their involvement in Board committees.
On appointment to the Board, all non-executive Directors are required to sign a letter of appointment with the Company. The letter
of appointment summarises the Board policies and terms, including compensation relevant to the office or Director.
On 31 May 2017, Mr Cameron Jones was appointed as Company Secretary. His services are provided through Bio101Group Pty Ltd.
Key management personnel equity holdings
Fully paid ordinary shares of AdAlta Limited
Balance at
1 July
Received on
exercise of options
Net other
change *
Additions
Balance at
30 June
2017
Samantha Cobb
Paul MacLeman
James Williams1
Liddy McCall1
John Chiplin
Robert Peach
No.
653,092
73,273
-
-
73,273
-
No.
434,357
219,819
-
-
No.
-
-
54,059,848
54,059,848
249,127
488,483
-
-
-
-
100,000
100,000
-
-
No.
1,087,449
293,092
54,159,848
54,159,848
810,883
-
*The net other change relates to the conversion of Convertible Notes and Series A Preference Shares to Ordinary Shares upon
ASX conditionally confirming that it will admit the Company to the Official List.
1James Williams and Elizabeth McCall’s interests are partly held (54,059,848 ordinary shares) indirectly through Yuuwa Capital LP, a venture
capital firm managed by its General Partner which is associated with James Williams and Elizabeth McCall
2016
Samantha Cobb
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Balance
at 1 July
No.
96,215
-
-
-
-
Additions
No.
-
-
-
-
-
Received on
exercise of options
Net other
change *
Balance at
30 June
No.
15,200
12,500
-
-
No.
541,677
60,773
-
-
No.
653,092
73,273
-
-
12,500
60,773
73,273
*The net other change relates to the share and option split at 5.8618 as approved by shareholders at a meeting on 9 May 2016.
AdAlta Limited Annual Report 2017
19
Share Options of AdAlta Limited
2017
Balance at
1 July
Granted
as compen
-sation
Exercised Net other
change*
Balance at
30 June
Balance
vested at
30 June
Vested
and
exercise
-able
Options
vested
during
year
No.
No.
No.
No.
No.
No.
No.
No.
Samantha Cobb
790,751
Paul MacLeman
366,363
James Williams
Liddy McCall
-
-
John Chiplin
249,127
Robert Peach
-
-
-
-
-
-
-
(434,357)
(219,819)
-
-
(249,127)
-
-
-
-
-
-
-
356,394
356,394
356,394
534,591
146,544
146,544
146,544
-
-
-
-
-
-
-
-
-
-
-
-
293,090
-
-
175,854
-
2016
Balance at
1 July
Granted
as compen
-sation
Exercised Net other
change*
Balance at
30 June
Balance
vested at
30 June
Vested
and
exercise
-able
Options
vested
during
year
No.
Samantha Cobb
150,099
No.
-
No.
No.
No.
No.
No.
No.
(15,200)
655,852
790,751
256,160
256,160
178,798
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
-
-
-
-
75,000
(12,500)
303,863
366,363
73,273
73,273
73,273
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,000
(12,500)
206,627
249,127
73,273
73,273
73,273
*The net other change relates to the share and option split at 5.8618 as approved by shareholders at a meeting on 9 May 2016
Series A Preference shares of AdAlta Limited
2017
Samantha Cobb
Paul MacLeman
James Williams1
Liddy McCall1
John Chiplin
Robert Peach
Balance at
1 July
No.*
-
-
2,394,454
2,394,454
-
-
Granted as
compensation No.
Net other
change No.*
Balance at
30 June No.
-
-
-
-
-
-
-
-
(2,394,454)
(2,394,454)
-
-
-
-
-
-
-
-
*Upon ASX conditionally confirming that it will admit the Company to the Official List, all Preference Shares automatically converted into
Ordinary Shares. The conversion ratio for each Preference Share was adjusted as provided in the relevant subscription agreement and for the
Share Split. As a result of listing, 2,394,454 Preference Shares converted to 17,235,679 Ordinary Shares.
1These share are held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital
Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding).
AdAlta Limited Annual Report 2017
20
AdAlta Limited Annual Report 2017212016Balance at1 July No.Granted ascompensation No.Net otherchange No.Balance at30 June No.Samantha Cobb----Paul MacLeman----James Williams12,394,454--2,394,454Liddy McCall12,394,454--2,394,454John Chiplin----Robert Peach----1Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding)Convertible notes of AdAlta Limited 2017 Balance at 1 JulyNo.*Subscriptions/conversionsNo.Net other change No.*Balance at30 June No.Samantha Cobb----Paul MacLeman----James Williams12,500,000-(2,500,000)-Liddy McCall12,500,000-(2,500,000)-John Chiplin50,000-(50,000)-*Upon ASX conditionally confirming that it will admit the Company to the Official List, all Preference Shares automatically converted into Ordinary Shares. The conversion ratio for each Preference Share was adjusted as provided in the relevant subscription agreement and for the Share Split. As a result of listing, 2,394,454 Preference Shares converted to 17,235,679 Ordinary Shares. 1Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding). 2016 Balance at 1 JulyNo.Subscriptions/conversionsNo.Net other change No.Balance at30 June No.Samantha Cobb----Paul MacLeman----James Williams11,000,0001,500,000-2,500,000Liddy McCall11,000,0001,500,000-2,500,000John Chiplin25,00025,000-50,0001Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding).This Directors’ report, incorporating the remuneration report, is signed in accordance with a resolution made pursuant to s.298(2) of the Corporations Act 2001.On behalf of the DirectorsPaul MacLeman ChairmanMelbourne, 6 September 2016 AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of AdAlta Limited for the year ended 30 June 2017, I
declare that, 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.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE
Director
Perth
Date: 6 September 2017
ADALTA LTD
ABN 92 120 332 925
CORPORATE GOVERNANCE
The Board of Directors of AdAlta Limited is responsible for the corporate governance of the Company
and guides and monitors the business and affairs of the Company on behalf of its shareholders.
To ensure the Board is well equipped to discharge its responsibilities it has guidelines for the
nomination and selection of Directors and for the operation of the Board.
The key charters and policies associated with AdAlta’s corporate governance practices are:
(cid:120) Constitution
(cid:120) Board Charter
(cid:120) Code of Conduct
(cid:120) Securities Trading Policy
(cid:120) Continuous Disclosure Policy
(cid:120) Shareholders Communication Policy
(cid:120) Risk Management Policy
(cid:120) Diversity Policy
(cid:120) Audit & Risk Committee Charter
(cid:120) Remuneration & Nomination Committee Charter
The Board has also reviewed its compliance with the ASX Corporate Governance Principles and
Recommendations (3rd Edition).
The Board has also reviewed its skill matrix setting out the mix of skills and diversity that the Board
currently has.
In accordance with Listing Rule 4.10.3, the Company has elected to disclose its Corporate
Governance policies and its compliance with them on its website, rather than in the Annual Report.
Accordingly the information detailed above about the Company’s Corporate Governance practices is
set out on the Investor page of the Company’s website at www.adalta.com.au
Page 23
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Note
2017
$
2016
$
Revenue
Interest Received
Other Revenue
Expenses
Cost of services
Depreciation and amortisation expenses
Employee benefit expense
Travel expense
Board fees
Patent and legal costs
Other expenses
Profit (loss) before income tax
Tax expense
Profit (loss) for the year
Earnings per Share
Basic and diluted loss per share (cents)
2
7
3
4
170,926
1,796,754
1,967,680
8,902
738,046
746,948
(3,598,678)
(5,435)
(404,669)
(76,575)
(207,037)
(73,310)
(434,493)
(4,800,197)
(1,413,975)
(684)
(224,620)
(57,127)
(50,000)
(44,556)
(119,042)
(1,910,004)
(2,832,517)
(1,163,056)
-
-
(2,832,517)
(1,163,056)
(3.15)
(32.59)
The accompanying notes form part of these financial statements.
Page 24
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings (accumulated losses)
TOTAL EQUITY
Note
2017
$
2016
$
5
6
7
8
9
10
6,224,617
1,862,673
485,558
897,247
8,087,290
1,382,805
-
2,600
2,600
282
-
282
8,089,890
1,383,087
285,915
58,597
344,512
178,797
36,402
215,199
344,512
215,199
7,745,378
1,167,888
11
12
17,560,338
3,908
(9,818,868)
8,150,331
3,908
(6,986,351)
7,745,378
1,167,888
The accompanying notes form part of these financial statements.
Page 25
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Balance at 1 July 2015
Comprehensive income
Profit (loss) for the year
Total comprehensive income for the
year attributable to the member of the company
Transactions with the owner, in capacity as owner and other transfers
Shares issued during the year
Convertible notes converted
Total transactions with the owner and other transfers
Share Capital
Series A
Preference
Shares
$
Convertible
Notes
$
2,999,998
1,035,000
Ordinary
$
2,490,279
Retained
Earnings
$
(5,823,295)
Share based
payment
reserve
$
3,908
-
-
54
-
54
-
-
-
-
-
-
-
(1,163,056)
(1,163,056)
-
1,625,000
1,625,000
-
-
-
-
-
-
-
-
Balance at 30 June 2016
2,490,333
2,999,998
2,660,000
(6,986,351)
3,908
Total
$
705,890
(1,163,056)
(1,163,056)
54
1,625,000
1,625,054
1,167,888
Balance at 1 July 2016
Comprehensive income
Profit (loss) for the year
Total comprehensive income for the
year attributable to the member of the company
Transactions with the owner, in capacity as owner and other transfers
Issue of ordinary shares
Conversion of options to shares
Share issue costs
Conversion of Preference Shares
Conversion of Convertible Notes
Total transactions with the owner and other transfers
Balance at 30 June 2017
2,490,333
2,999,998
2,660,000
(6,986,351)
3,908
1,167,888
-
-
10,000,000
58,984
(648,977)
-
-
-
-
-
2,999,998
(2,999,998)
-
-
-
-
-
-
2,660,000
-
(2,660,000)
15,070,005
(2,999,998)
(2,660,000)
(2,832,517)
(2,832,517)
-
-
-
-
-
-
-
-
-
-
(2,832,517)
(2,832,517)
10,000,000
58,984
-
(648,977)
-
-
-
-
-
9,410,007
17,560,338
-
-
(9,818,868)
3,908
7,745,378
The accompanying notes form part of these financial statements.
Page 26
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Note
2017
$
2016
$
Cash flows from operating activities
Payments to suppliers and employees
R & D tax incentive
Interest received
Grants received
Net cash provided by (used in) operating activities
(4,632,076)
738,046
147,483
19,724
(3,726,823)
(2,061,656)
878,394
8,902
-
(1,174,360)
20 (b)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
Payments for property, plant and equipment
Payments for other assets
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from convertible notes
Proceeds from share capital
Proceeds from option conversions
Payment of share issue costs
Net cash provided by financing activities
1,000
(6,745)
(2,600)
(8,345)
-
-
-
-
-
10,000,000
58,984
(584,757)
9,474,227
1,625,000
54
-
-
1,625,054
Net increase (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
20 (a)
5,739,059
485,558
6,224,617
450,694
34,864
485,558
The accompanying notes form part of these financial statements.
Page 27
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
The financial statements cover AdAlta Ltd as an individual entity. AdAlta Ltd is a company limited
by shares, incorporated and domiciled in Australia.
The financial statements were authorised for issue on 6 September 2017 by the Directors of the
company.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance
with Australian Accounting Standards, Australian Accounting
Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The financial report is presented in Australian Dollars. The Company is
a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded
would result in a financial report containing relevant and reliable information about
transactions, events and conditions to which they apply. Material accounting policies adopted
in the preparation of this financial report are presented below. They have been consistently
applied unless otherwise stated.
Except for cash flow information, the financial report has been prepared on an accruals basis
and is based on historical costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial liabilities.
(b) Going Concern
These financial statements have been prepared on the going concern basis, which
contemplates the continuity of normal business activities and the realisation of assets and
settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Company incurred losses of $2,832,517 (2016:
$1,163,056) and the Company had net cash outflows from operating activities of $3,726,823
(2016: $1,174,360). As at balance date, the Company had net current assets of $7,744,378
(2016: $1,167,888).
The Directors believe that it is reasonably foreseeable that the Company will continue as a
going concern and that it is appropriate to adopt the going concern basis in the preparation of
the financial report.
(c) Income Tax
The income tax expense (revenue) for the year comprises current income tax expense
(income) and deferred tax expense (income).
Page 28
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Income tax (continued)
Current income tax expense charged to profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at reporting
date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss
when the tax relates to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to
the period when the asset is realised or the liability is settled and their measurement also
reflects the manner in which management expects to recover or settle the carrying amount of
the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised
only to the extent that it is probable that future taxable profit will be available against which the
benefits of the deferred tax asset can be utilised.
(d) Fair value measurement
Fair value is the price the Company would receive to sell an asset or would have to pay to
transfer a liability in an orderly (ie unforced) transaction between independent, knowledgeable
and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing
information is used to determine fair value. Adjustments to market values may be made having
regard to the characteristics of the specific asset or liability. The fair values of assets and
liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data.
For non-financial assets, the fair value measurement also takes into account a market
participant's ability to use the asset in its highest and best use or to sell it to another market
participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to
share-based payment arrangements) may be valued, where there is no observable market
price in relation to the transfer of such financial instrument, by reference to observable market
information where such instruments are held as assets. Where this information is not available,
other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
(e) Plant and Equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Page 29
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Plant and Equipment (continued)
Plant and equipment are measured on the cost basis and are therefore carried at cost less
accumulated depreciation and any accumulated impairment losses. In the event the carrying
amount of plant and equipment is greater than its estimated recoverable amount, the carrying
amount is written down immediately to its estimated recoverable amount and impairment
losses recognised either in profit or loss or as a revaluation decrease if the impairment losses
relate to a revalued asset.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the
asset's useful life to the Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Asset:
Computer software
Office equipment
Office equipment
Depreciation Rate
13.17%
17.31%
100%
Notes
Assets acquired pre 31 December 2016
Assets acquired post 31 December 2016
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the
end of each reporting period. 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.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains or losses are recognised in profit or loss when the item is derecognised.
When revalued assets are sold, amounts included in the revaluation reserve relating to that
asset are transferred to retained earnings.
(f) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions of the instrument. For financial assets, this is equivalent to the date that
the Company commits itself to either purchase or sell the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transactions costs, except where
the instrument is classified 'at fair value through profit or loss' in which case transactions costs
are recognised as expenses in profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the
effective interest method or cost. Where available, quoted prices in an active market are used
to determine fair value. In other circumstances, valuation techniques are adopted.
Page 30
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Financial Instruments (continued)
Amortised cost is calculated as the amount at which the financial asset or financial liability is
measured at initial recognition less principal repayments and any reduction for impairment, and
adjusted for any cumulative amortisation of the difference between that initial amount and the
maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that exactly discounts estimated future cash
payments or receipts (including fees, transaction costs and other premiums or discounts)
through the expected life (or when this cannot be reliably predicted, the contractual term) of the
financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying
amount with a consequential recognition of an income or expense item in profit or loss.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at 'fair value through profit or loss' when they are held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or
when they are designated as such to avoid an accounting mismatch or to enable performance
evaluation where a group of financial assets is managed by key management personnel on a
fair value basis in accordance with a documented risk management or investment strategy.
Such assets are subsequently measured at fair value with changes in carrying amount being
included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market and are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the
financial asset is derecognised.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and
fixed or determinable payments, and it is the Company's intention to hold these investments to
maturity. They are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the
financial asset is derecognised.
(iv) Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of
being classified into other categories of financial assets due to their nature or they are
designated as such by management. They comprise investments in the equity of other entities
where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with any re-measurements other than
impairment losses and foreign exchange gains and losses recognised in other comprehensive
income. When the financial asset is derecognised, the cumulative gain or loss pertaining to
that asset previously recognised in other comprehensive income is reclassified into profit or
loss.
Page 31
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Financial Instruments (continued)
Available-for-sale financial assets are classified as non-current assets when they are not
expected to be sold within 12 months after the end of the reporting period. All other available-
for-sale financial assets are classified as current assets.
(v) Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured
at amortised cost. Gains or losses are recognised in profit or loss through the amortisation
process and when the financial liability is derecognised.
Impairment
At the end of each reporting period, the Company assesses whether there is objective
evidence that a financial asset has been impaired. A financial asset (or a group of financial
assets) is deemed to be impaired if, and only if, there is objective evidence of impairment as a
result of one or more events (a 'loss event') having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the
market value of the instrument is considered to constitute a loss event. Impairment losses are
recognised in profit or loss immediately. Also, any cumulative decline in fair value previously
recognised in other comprehensive income is reclassified into profit or loss at this point.
(g) Impairment of assets
At the end of each reporting period, the Company assesses whether there is any indication
that an asset may be impaired. The assessment will include considering external sources of
information and internal sources of information, including dividends received from subsidiaries,
associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication
exists, an impairment test is carried out on the asset by comparing the recoverable amount of
the asset, being the higher of the asset's fair value less costs to sell and value in use to the
asset's carrying amount. Any excess of the asset's carrying amount over its recoverable
amount is recognised immediately in profit or loss, unless the asset is carried at a revalued
amount in accordance with another Standard (e.g. in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is
treated as a revaluation decrease in accordance with that other Standard.
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.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(h) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within 12
months of the end of the reporting period are classified as current assets. All other receivables
are classified as non-current assets.
Page 32
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long
service leave expected to be settled within 12 months of the reporting date are recognised in
current liabilities in respect of employees' services up to the reporting date and are measured
at the amounts expected to be paid when the liabilities are settled.
The Company's obligations for short-term employee benefits such as wages, salaries and sick
leave are recognised as a part of current trade and other payables in the statement of financial
position.
Long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12
months of the reporting date are recognised in non-current liabilities, provided there is an
unconditional right to defer settlement of the liability. The liability is measured as the present
value of expected future payments to be made in respect of services provided by employees
up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
(j) Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a
result of past events, for which it is probable that an outflow of economic benefits will result
and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the
obligation at the end of the reporting period.
(k) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks,
other short-term highly liquid investments with original maturities of 12 months or less, and
bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities
in the statement of financial position.
(l) Revenue
Revenue is recognised when it is probable that the economic benefit will flow to the Company
and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Income from the Research and Development tax incentive is recognised on an accrual basis in
the year to which the incentive relates.
All revenue is stated net of the amount of goods and services tax.
Page 33
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m) Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the
Company that remain unpaid at the end of the reporting period. The balance is recognised as
a current liability with the amounts normally paid within 30 days of recognition of the liability.
(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 Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable.
The net amount of GST recoverable from, or payable to, the ATO is included with other
receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST component of cash flows arising from
investing or financing activities which are recoverable from, or payable to, the ATO are
presented as operating cash flows included in receipts from customers or payments to
suppliers.
(o) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform
to changes in presentation for the current financial year.
(p) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements
based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data,
obtained both externally and within the Company.
Key Estimates
(i) Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any
pending or enacted environmental legislation, and the Directors understanding thereof. At the
current stage of the Company's development and its current environmental impact the
Directors believe such treatment is reasonable and appropriate.
(ii) Taxation
Balances disclosed in the financial statements and the notes hereto, related to taxation are
based on the best estimates of Directors. These estimates take into account both the financial
performance and position of the Company as they pertain to current income tax legislation and
the Directors understanding thereof. No adjustment has been made for pending or future tax
legislation. The current income tax position represents that Directors' best estimate, pending
an assessment by the Australian Taxation Office.
Page 34
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective.
The Company is currently assessing the impact on the financial statements from the adoption of
these standards.
Standard / Interpretation
AASB9 'Financial Instruments'
AASB15 'Revenue from Contracts with Customers'
AASB 2014-10 'Amendments to Australian
Accounting Standards - Sale or Contribution of
Assets between an investor and its Associate or Joint
Venture'
AASB 16 'Leases'
AASB 2016-1 'Amendments to Australian Accounting
Standards - Recognition of Deferred Tax Assets for
Unrealised Losses'
AASB 2016-2 'Amendments to Australian Accounting
Standards - Disclosure Initiative: Amendments to AASB
107'
Application date
of standard
1 January 2018
1 January 2018
1 January 2018
Expected to be
initially applied in the
financial year ended
30 June 2019
30 June 2019
30 June 2019
1 January 2019
1 January 2017
30 June 2020
30 June 2018
1 January 2017
30 June 2018
(r) Operating Segments
The Company only operates in one segment.
(s) Earnings per Share
Basic earnings per shares
Basic earnings per share is calculated by dividing the profit attributable to the owners of
AdAlta Limited, 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 financial year.
(t) Capital Risk Management
The Company’s objectives when managing capital are to safeguard its ability to continue
as a going concern, so that it can continue to fund research and development project
activities.
The Company monitors capital on the basis of working capital requirements and during the
year, the Company's strategy, which was unchanged from 2016, was to maintain a current
account balance sufficient to meet the Company's day to day expenses with the balance
held in accounts with higher interest rates.
Page 35
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
2.
REVENUE AND OTHER INCOME
R & D Tax incentive
Grant Income
Total revenue
3.
TAX EXPENSE
(a) Tax expense
Current tax
Deferred tax
Income tax expense
(b)Tax reconciliation
2017
$
2016
$
1,777,030
19,724
1,796,754
738,046
-
738,046
-
-
-
-
-
-
Profit (loss) before income tax expense
(2,832,517)
(1,163,056)
Prima facie tax payable at 27.5% (2016:28.5%)
Non deductible expenses
Non assessable income
Temporary differences
Benefits of tax losses not brought into account
(778,942)
1,142,978
(488,683)
(45,841)
170,488
-
(331,471)
467,429
(250,342)
(26,713)
141,097
-
(c)The Company has revenue losses of approximately $1,010,000 for which no deferred tax
asset has been recognised.
(d)The Company has no franking credits currently available for future offset.
4.
EARNINGS PER SHARE
(a) Loss used to calculate basic EPS
(2,832,517)
(1,163,056)
(b) Weighted average number of ordinary shares outstanding
during the year used in calculating basic and diluted EPS.
Number of
shares
90,035,620
Number of
shares
3,574,154
The 969,427 options (2016: 2,144,423) are not considered to be dilutive.
5.
CASH AND CASH EQUIVALENTS
Cheque account
Cash reserve account
Savings - bonus
Term Deposit
20,189
275,009
929,419
5,000,000
6,224,617
8,632
455,822
21,104
-
485,558
Page 36
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
6.
TRADE AND OTHER RECEIVABLES
CURRENT
Sundry receivable - R&D tax incentive
Trade receivables
Good and services tax
Prepaid expenses
Prepayments – IPO Costs
Accrued income
7.
PLANT AND EQUIPMENT
Computer software
Less accumulated depreciation
Office equipment
Less accumulated depreciation
Total plant and equipment
Movements in carrying amounts
Movements in the carrying amounts for each class of
(a)Office Equipment
Balance at beginning of year
Additions
Disposals
Loss on sale
Depreciation expense
Balance at end of year
OTHER ASSETS
NON-CURRENT
Security Deposit/Bond
8.
9.
2017
$
2016
$
1,777,030
-
39,009
23,192
-
23,442
1,862,673
1,241
(1,241)
-
6,908
(6,908)
-
-
282
6,745
(1,000)
(592)
(5,435)
-
2,600
2,600
738,046
2,657
21,830
57,894
76,820
-
897,247
1,241
(1,241)
-
3,952
(3,670)
282
282
966
-
-
(684)
282
-
-
TRADE AND OTHER PAYABLES
CURRENT
Accrued expenses
Trade creditors
PAYG and super payable
254,504
10,406
21,005
285,915
145,241
29,940
3,616
178,797
Page 37
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
10.
11.
PROVISIONS
CURRENT
Provision for annual leave
Provision for long service leave
ISSUED CAPITAL
Fully paid ordinary shares
Fully paid Series A Preference shares
Fully paid convertible notes
(a)Ordinary Shares
At beginning of reporting period
Issued on exercise of options
Issued as part of share split
Issue of ordinary shares
Conversion of Preference Shares
Conversion of Convertible Notes
At the end of the reporting period
2017
$
2016
$
11,153
47,444
58,597
11,539
24,863
36,402
17,560,338
-
-
17,560,338
2,490,333
2,999,998
2,660,000
8,150,331
No.
12,418,223
1,110,874
-
40,000,000
21,594,477
25,987,316
101,110,890
No.
2,065,000
53,500
10,299,723
-
-
-
12,418,223
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding
up of the Company in proportion to the number of and amounts paid on the shares held. On
a show of hands, every holder of ordinary shares present at a meeting in person or by
proxy is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental
costs directly attributable to the issue of the new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(b)Series A Preference Shares
At beginning of reporting period
Conversion to Ordinary Shares
At the end of the reporting period
No.
2,999,998
(2,999,998)
-
No.
2,999,998
-
2,999,998
The conversion ratio for each Preference Share was adjusted as provided in the relevant
subscription agreement and for the Share Split. Accordingly, 2,999,998 Preference Shares
converted to 21,594,477 Ordinary Shares.
Page 38
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
11.
ISSUED CAPITAL (continued)
(c)Convertible Notes
At beginning of reporting period
Mezzanine Finance
Conversion to Ordinary Shares
At the end of the reporting period
No.
2,660,000
-
(2,660,000)
-
No.
1,035,000
1,625,000
-
2,660,000
All Convertible Notes (which were issued at a price of $1.00) converted to 25,987,316
Ordinary Shares (based on the terms of the relevant Convertible Note deed and the effect of
the Share Split).
(d)Options on issue
Expiry date
1 July 2018*
21 September 2018*
1 November 2018*
1 July 2019*
1 November 2019*
1 November 2020
Number of
options
145,976
20,569
73,272
129,913
365,225
234,472
969,427
*50% of 734,955 Options have an exercise price of $0.0002 if exercised within 3 months of
vesting, and with the exercise price of the remaining 50% of those options being $0.09 if
exercised within 12 months of vesting. Otherwise the exercise price is $0.17.
12. RESERVES
Share Based Payment Reserve
At beginning of reporting period
Issued during the year
At the end of the reporting period
2017
$
2016
$
3,908
-
3,908
3,908
-
3,908
Page 39
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
12.
RESERVES (continued)
The Company has established an Employee Share Option Plan where employees, Directors
and Officers of the Company are issued with options over ordinary shares of AdAlta Limited.
The options, issued for no consideration, are in general exercisable at a fixed price at
commencement date, unless otherwise stated and ending on the expiry date and are subject
to the achievement of certain milestones, unless otherwise stated.
On 10 May 2016 the Board approved changes to the ESOP in alignment with a publicly
listed company, capping the ESOP at 5% of capital issued.
The Options cannot be transferred and are not quoted on the ASX.
During the year no options were granted under the Employee Options Plan.
Expiry
Exercise Price
Date
No. at the start
of year
Granted in
the year
27-Sep-16
$0.17 *
252,057
01-Jul-18
$0.17 *
145,976
21-Sep-18
$0.17 *
20,569
01-Nov-18
$0.17 *
381,018
01-Jul-19
$0.17 *
291,953
01-Nov-19
$0.17 *
818,378
01-Nov-20
$0.17
234,472
2,144,423
-
-
-
-
-
-
-
-
Exercised
Expired No. at the
end of
year
(222,061)
(29,996)
-
-
-
(307,746)
-
-
-
145,976
20,569
73,272
(127,914)
(34,126)
129,913
(453,153)
-
-
-
365,225
234,472
(1,110,874)
(64,122)
969,427
Weighted average exercise price
$0.17 *
$0.0531
NA
$0.17 *
50% of options designated with * have an exercise price of $0.0002 if exercised within 3
months of vesting with the exercise price of the remaining 50% being $0.09 if exercised within
12 months of vesting otherwise the exercise price is $0.17.
The weighted average remaining contractual life of options on issue at 30 June 2017 is 816 days.
Page 40
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
13.
RELATED PARTY TRANSACTIONS
Related Parties
The Company's main related parties are as follows:
John Chiplin
Elizabeth McCall
James Williams
Samantha Cobb
Paul MacLeman
Robert Peach
Ian Hobson
Cameron Jones
Non Executive Director (appointed 16 May 2014)
Non Executive Director (appointed 16 December 2010)
Non Executive Director (appointed 16 December 2010)
Managing Director & CEO (appointed 29 June 2007)
Chairman & Non-Executive Director (appointed 16 April 2015)
Non Executive Director (appointed 14 November 2016)
Company Secretary (resigned 31 May 2017)
Company Secretary (appointed 31 May 2017)
The Company had no other key management personnel during the period.
(a) Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any Director (whether executive or
otherwise) of that entity, is considered key management personnel.
Remuneration of key management personnel
Short-term
employee benefits
Post-
employment
benefits
2017
Non-executive
Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Robert Peach*
Salary
& fees
$
60,108
38,650
38,650
41,503
28,125
Other
$
Superannuation
$
-
-
-
-
-
-
-
-
-
-
Executive
Directors
Samantha Cobb
Total
*Appointed 14 November 2016
218,135
425,171
67,500
67,500
27,680
27,680
Share-
based
payment
Options
$
-
-
-
-
-
-
-
Total
$
60,108
38,650
38,650
41,503
28,125
313,315
520,351
Page 41
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
13.
RELATED PARTY TRANSACTIONS (continued)
Short-term employee
benefits
Salary &
fees
$
Other
$
Post-
employment
benefits
Superannuation
$
Share-
based
payment
Options
$
30,000
-
-
20,000
-
-
-
-
-
-
-
-
151,376
201,376
45,413
45,413
18,695
18,695
Total
$
30,000
-
-
20,000
215,484
265,484
-
-
-
-
-
-
2016
Non-executive
Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Executive
Directors
Samantha Cobb
Total
No share options were issued to key management personnel as remuneration during the
financial year as set out in the following table. 903,303 share options were exercised by key
management personnel during the year (2016: 40,200, pre-split amount).
2017
Samantha Cobb
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Robert Peach
Total
Balance at
1 July No.
790,751
366,363
-
-
249,127
-
1,406,241
Balance at
2016
1 July No.*
Samantha Cobb
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Total
*Pre-split amounts.
150,099
-
-
-
-
Granted as
compensation
No.
Exercised
Net other
change
No.
Balance at
30 June
No.
-
-
-
-
-
-
-
(434,357)
(219,819)
-
-
(249,127)
-
(903,303)
-
-
-
-
-
-
-
356,394
146,544
-
-
-
-
502,938
Granted as
compensation
No.*
Exercised* Net other
change
No.**
Balance at
30 June
No.**
-
75,000
-
-
55,000
(15,200)
(12,500)
-
-
655,852
303,863
-
-
(12,500)
206,627
790,751
366,363
-
-
249,127
150,099
130,000
(40,200)
1,166,342
1,406,241
**On 9 May 2016 the options were split on the basis that every 1 option be split into 5.8618 options.
Page 42
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
14.
15.
CONTINGENT LIABILIATIES & CONTINGENT ASSETS
The Directors are not aware of any matters or circumstances which may give rise to a
contingent liability or asset.
EVENTS AFTER THE REPORTING PERIOD
On 7 August 2017, the Company received a Research and Development tax incentive refund
of $1,077,030 for the 2016/2017 financial year.
On 18 August 2017 the Board approved a short term cash incentive for Samantha Cobb of
$66,300 plus superannuation.
Otherwise, there has not been any matter or circumstance that has arisen subsequent to the
end of the financial year that has significantly affected, or may significantly affect, the
operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.
16.
COMMITMENTS FOR EXPENDITURE
a) Lease commitments
The Company has a lease agreement with Collins Street Business Centre at the
business address of Level 14, 330 Collins Street Melbourne. This lease terminates on
31 January 2018.
Payable – minimum lease payments
Not later than 12 months
Between 12 months and 5 years
Total
2017
$
18,200
-
18,200
2016
$
-
-
-
b) Capital commitments
The Company has no capital commitments.
c) Other commitments
The Company is currently not contracted to significant expenditure.
17.
FINANCIAL RISK MANAGEMENT
The Company does not have any complex financial instruments or derivatives.
a) Terms, conditions and accounting policies
The Company's accounting policies, including the terms and conditions of each class of
financial asset,
instrument, both recognised and
unrecognised at the balance sheet date, are as follows:
liability and equity
financial
Recognised Financial
Instruments
Statement
of Financial
Position
Notes
Accounting
Policies
Terms and Conditions
i) Financial assets
Cheque account
Cash reserve
Savings
5
5
5
Carried at face value. The cheque account is at call with an
interest rate of 0.00% (2016: 0.00%).
Carried at face value. The cash reserve account is at call
with an interest rate of 0.60% (2016:
1.05%).
Carried at face value. The savings bonus account is at call
with an interest rate of 1.05% (2016:
1.54%).
Page 43
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
17.
FINANCIAL RISK MANAGEMENT (Continued)
5
6
6
6
8
Term Deposit
R & D tax incentive
Trade receivables
Goods & services
tax paid
ii) Financial
liabilities
Trade and other
creditors
iii) Equity
Carried at face value.
Recognised on an accrual basis.
The term deposit has an interest rate
of 2.60%.
The incentive is claimed annually
under an Australia Taxation Office
mechanism which designed to
promote research and development.
Recognised on an accrual basis. Normal invoice terms are 14-30 days.
Recognised on an accrual basis. Business activity statements are
lodged on a quarterly basis.
Liabilities are recognised for
amounts to be paid in the future
for goods and services received,
whether or not billed
to the company.
The majority of costs are invoiced on
a quarterly basis and hence liabilities
accrue for up to 90 days. Trade
liabilities are normally settled on 14-
30 day terms.
Ordinary shares
10 Ordinary share capital is
recognised at the fair value of
the consideration received by
the company.
Details of the shares issued and the
terms and conditions of the options
outstanding over ordinary shares at
balance date are set out in Note 11.
Series A preference
shares
10
Convertible Notes
10
Series A Preference
share capital is recognised at
the fair value of the
consideration received.
Convertible notes are
recognised at the fair value of
the consideration received by
the company .
Details of the Series A Preference
shares issued and the terms and
conditions at balance date are set out
in Note 11.
Details of the convertible notes
issued and the terms and conditions
at balance date are set out in Note
11.
b) The carrying value of financial assets and liabilities approximates their fair value
c) Financial risk management
The Company's activities expose it to a variety of financial risks; market risk (fair value
interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.
The Company's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial
performance of the Company.
(i) Market risk
The Company is not exposed to either equity securities price risk or commodity price risk.
The Company has an exposure to foreign currency risk because several contracts relating
to cost of services are denominated in foreign currencies. When the service agreement is
signed the Company seeks to lock-in a foreign exchange rate to minimise the risks
associated with fluctuating currency markets.
Page 44
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
17.
FINANCIAL RISK MANAGEMENT (Continued)
(ii) Credit Risk
The maximum credit risk is total current assets of which the vast majority is either in the
form of cash or amounts receivable from the Australian Taxation Office in the form of the
Research and Development tax incentive and GST refundable.
(iii) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and short term
assets to enable the Company to settle its liabilities.
With no long term debt or contractual commitments the Company's exposure to liquidity
risk is minimal.
(iv)Cash flow and fair value interest rate risk
As the Company has no interest-bearing liabilities, cash out flows are not exposed to
changes in market interest rates.
The Company maintains a current cheque account balance sufficient to meet day to day
expenses with the balance of cash held in accounts designed to maximise interest income.
18.
DIVIDENDS
No dividends were paid or declared since the start of the financial year and no
recommendation for payment of dividends has been made.
2017
$
2016
$
19.
AUDITORS REUMERATION
Audit services
Auditors of the Company
Butler Settineri (Audit) Pty Ltd
Other Services
Butler Settineri (Audit) Pty Ltd
Related practice entity
21,092
16,434
8,000
-
8,000
12,500
7,500
20,000
Page 45
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
20.
CASH FLOW INFORMATION
(a)Reconciliation of Cash
2017
$
2016
$
Cash at the end of financial year as included in the statement of cash flows is reconciled to
the related items in the statement of financial position as follows
Cheque account
Cash reserve account
Savings - bonus
Term Deposit
20,189
275,009
929,419
5,000,000
6,224,617
8,632
455,822
21,104
-
485,558
(b)Reconciliation of cash flow from operations with profit
after income tax
Loss attributable to members
Non-cash flows in profit:
Depreciation
Loss on sale of plant and equipment
Prior year receivables classified as capital
(Increase) / decrease in receivables
Increase / (decrease) in payables
Increase / (decrease) in provisions
(2,832,517)
(1,163,056)
5,435
592
(65,220)
(965,426)
107,118
23,195
684
-
-
33,994
(53,852)
7,870
Net cash provided by (used in) operating activities
(3,726,823)
(1,174,360)
Page 46
ADALTA LTD
ABN 92 120 332 925
DIRECTOR DECLARATION
In accordance with a resolution of the Directors of AdAlta Ltd, the Directors of the Company declare
that:
1. The financial statements and notes as set out on pages 34 to 53 presents fairly the
Company's financial position as at 30 June 2017 and its performance for the year ended on
that date in accordance with Australian Accounting Standards;
2.
In the Directors' opinion there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable; and
3. The Directors have been given the declarations required by s 295A of the Corporations Act
2001.
The declaration is made in accordance with a resolutions of the Board of Directors pursuant
to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors:
Director
Paul MacLeman
Dated
6 September 2017
Page 47
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ADALTA LIMITED
Report on the Financial Report
Opinion
We have audited the financial report of AdAlta Limited (the Company), which comprises
the statement of financial position as at 30 June 2017, the statement of profit and loss
and other comprehensive income, the statement of changes in equity and the statement
of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of AdAlta Limited, is in accordance
with the Corporations Act 2001, including:
i)
ii)
giving a true and fair view of the Company’s financial position as at 30 June
2017 and of its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
Basis for Opinion
We have conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under
the Auditor’s
in
those Standards are
Responsibilities for the Audit of the Financial Report section of our report.
further described
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 ethical requirements in accordance with the
Code.
We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of the Company, would be in the same terms if
given to the directors as at the date of this auditor’s report.
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 judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed the key audit
matter
Intellectual Property Rights
and
Obligations arising from Research and
Development Agreements
research
in place multiple
The Company has
agreements
and
with
development providers whereby certain
services and facilities are supplied
in
exchange for payment. To enable the
delivery of these services and facilities, the
Company’s intellectual property is made
available to the research and development
providers.
Management have written specific clauses
the Research and Development
into
Agreements to protect the Company’s
intellectual property
rights and also
exercise their judgment in interpreting the
agreements and the recognition of any
potential
liabilities and/or commitments
arising therefrom.
Equity and Capital Structure
Refer note 11
in
resulting
During the year, the company successfully
the Australian Securities
listed on
Exchange
the
(ASX)
conversion of convertible notes and
preference shares to “fully paid” ordinary
shares. Furthermore, in addition to fully
paid ordinary shares, the Company has
issued various options of which some have
been exercised and fully paid ordinary
shares issued.
Research and Development Tax
Incentive
Refer notes 2 and 6
Management utilise key assumptions,
judgements and estimates in determining
the R&D Tax Incentive disclosed in note 2
and 6 which is material to the financial
statements.
Our audit procedures included obtaining
copies of major agreements and reviewing
them to determine if any commitments,
provisions or payables needed
to be
accounted for and disclosed in line with the
applicable
Accounting
Australian
Standards. Furthermore, we reviewed the
agreements
to ensure clauses were
present to protect the intellectual property
rights of AdAlta Limited.
Our audit procedures
included an
examination of each conversion to, and
issue of, fully paid ordinary shares during
the year as shown in note 11. We also
assessed whether or not share-based
payments should have been recognised in
relation to the Employee Share Option
Plan. Further, we reconciled the third party
share registry to information announced to
the public.
of
included an
Our audit procedures
evaluation
assumptions,
the
methodologies and conclusions used by
the Company in preparing the R&D Tax
Incentive application. We also focused on
the adequacy of financial report disclosures
regarding these assumptions as disclosed
at note 1.
Deferred Taxation
Refer notes 3
The Company relies on the use of an
expert to prepare the Company income tax
return and taxation disclosures which are
financial statements.
material
Further, management
key
utilise
assumptions, judgements and estimates in
calculating the deferred tax disclosed in
note 1.
the
to
of
taxes.
included an
Our audit procedures
assumptions,
the
evaluation
methodologies and conclusions used by
the company in preparing their estimate of
deferred
In accordance with
Australian Auditing Standards, we relied on
the work of management's expert with
respect to the assumptions used in the
calculation of deferred taxes. This included
examining the qualifications, objectivity and
experience of management's expert. We
also focused on the adequacy of financial
report
these
assumptions as disclosed at note 1.
disclosures
regarding
Other information
The directors are responsible for the other information. The other information comprises
the information in the Company’s annual report for the year ended 30 June 2017, but
does not include the financial report and the 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.
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 the 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
related 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 the financial
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We
also:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Identify and assess 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.
Obtain and 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.
the appropriateness of accounting policies used and
Evaluate
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 with the directors, we determine those matters that
were of most significance in the audit of the financial report of the current period and are
therefore 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 public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 15 to 21 of the
directors’ report for the year ended 30 June 2017.
In our opinion, the Remuneration Report of AdAlta Limited, for the year ended
30 June 2017, complies with section 300A of the Corporations Act 2001.
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.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE
Director
Perth
Date: 6 September 2017
ADALTA LTD
ABN 92 120 332 925
SHAREHOLDER INFORMATION
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this
report is as follows. The information is current as at 6 September 2017.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Number of holders
Number of units
% Issued Share
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
6
34
77
245
64
426
1,035
111,280
682,610
9,342,799
90,973,166
101,110,890
The number of shareholders holding less than a marketable parcel of shares are: 12
(b) Voting rights
Each fully paid ordinary share carries voting rights of one vote per share.
The names of the twenty largest holders of quoted ordinary shares are:
Position Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
YUUWA CAPITAL LP
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITYCASTLE PTY LTD
LA TROBE UNIVERSITY
NATIONAL NOMINEES LIMITED
MR ROBIN BEAUMONT & MS HELEN SHINGLER
SAMANTHA COBB
VEDDEREDDIE PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
DR FRANCIS JOHN BALLARD &
DR LEANNA CHRISTINE READ
QUTBLUEBOX PTY LTD
JOHN CHIPLIN
JONTRA HOLDINGS PTY LTD
CSIRO
MICHAEL FOLEY
MR MATTHEW TURNER
MR IAIN ROSS
JOHN ALUN SIEBERT
JAMES & MARY-ANNE KALOKERINOS
PAUL MACLEMAN
Total
Total issued capital - selected security class(es)
Page 53
Holding
54,059,848
8,151,963
5,311,856
3,041,330
2,162,635
1,888,559
1,087,449
1,000,000
995,758
995,239
898,116
810,883
808,828
614,621
473,040
320,100
320,000
319,900
312,929
293,092
83,866,146
101,110,890
Capital
0.00%
0.11%
0.68%
9.24%
89.97%
100.00%
% Issued
Share
Capital
53.47%
8.06%
5.25%
3.01%
2.14%
1.87%
1.08%
0.99%
0.98%
0.98%
0.89%
0.80%
0.80%
0.61%
0.47%
0.32%
0.32%
0.32%
0.31%
0.29%
82.94%
100.00%
ADALTA LTD
ABN 92 120 332 925
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act 2001 are:
Position
Shareholder
1
2
3
YUUWA CAPITAL LP
PLATINUM INVESTMENT MANAGEMENT
LIMITED (HELD BY HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED)
CITYCASTLE PTY LTD
Number of
Shares
54,059,848
8,000,000
% IC
53.47%
7.91%
5,311,856
5.25%
(d) Unquoted equity securities:
Number
Number
of
+
Class
Escrow
Period
Holders of more than
20%
145,976
129,913
365,225
234,472
23,900,594
20,569
207,571
73,272
Holders
2
2
3
3
5
1
1
2
Unlisted options exercisable
at $0.17* expiring 1/7/2018
Unlisted options exercisable
at $0.17* expiring 1/7/2019
Unlisted options exercisable
at $0.17* expiring 1/11/2019
Unlisted options exercisable
at $0.17* expiring 1/11/2020
22/08/2018
22/08/2018
22/08/2018
Ordinary Shares, subject to
24 months escrow from listing
22/08/2018
Samantha Cobb (89,099)
Michael Foley (56,877)
Samantha Cobb (89,099)
Michael Foley (40,814)
Samantha Cobb (178,196)
Michael Foley (113,757)
Paul MacLeman (73,272)
David McGibney (117,236)
Brian Richardson (58,618)
John Westwick (58,618)
Yuuwa Capital LLP
(22,082,027)
Samantha Cobb (914,592)
John Chiplin (610,883)
Paul MacLeman (219,819)
Dalroar Pty Ltd (73,273)
Michael Foley (20,569)
Unlisted options exercisable
at $0.17* expiring 21/9/2018
Ordinary Shares, Voluntary
Escrow
Unlisted options exercisable
at $0.17* expiring 1/11/2018
27/09/2017
Michael Foley (207,571)
22/08/2018
Paul MacLeman (73,272)
*50% of 734,955 Options have an exercise price of $0.0002 if exercised within 3 months of vesting, and with the exercise price of
the remaining 50% of those options being $0.09 if exercised within 12 months of vesting. Otherwise the exercise price is $0.17.
(e) Use of funds
Since admission the Company has used its cash in a way consistent with its business objectives.
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