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2023 ReportPeers and competitors of AdAlta:
UroGen Pharma Ltd.ANNUAL
REPORT
FOR THE YEAR ENDED
30 JUNE 2023
ADALTA LTD
ABN 92 120 332 925
CONTENTS
CORPORATE DIRECTORY
CHAIR’S LETTER
CEO AND MANAGING DIRECTOR’S LETTER
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF ADALTA LIMITED
SHAREHOLDER INFORMATION
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AdAlta Limited Annual Report 2023 ABN 92 120 332 925
CORPORATE DIRECTORY
DIRECTORS
Dr Paul MacLeman
Dr Timothy Oldham
Dr Robert Peach
Dr David Fuller
Ms Elizabeth McCall (Resigned on 24 March 2023)
Dr James Williams (Alternate to Elizabeth McCall)
(Resigned on 24 March 2023)
COMPANY SECRETARY
Mr Cameron Jones
REGISTERED OFFICE
Unit 15 / 2 Park Drive
Bundoora Vic 3083
AUDITOR
Dry Kirkness (Audit) Pty Ltd
Ground Floor,
50 Colin Street
West Perth, Western Australia 6005
SHARE REGISTRY
Automic Registry Services
Level 5
126 Phillip Street
Sydney, NSW 2000
Tel: 1300 288 664
STOCK EXCHANGE LISTING
AdAlta Limited shares are listed
on the Australian Securities Exchange.
ASX CODE
1AD
WEBSITE
www.adalta.com.au
3
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
4
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 CHAIR’S LETTER
Dear fellow shareholder,
During FY23, we were pleased to maintain momentum, while
further extending both the value and scope of AdAlta’s portfolio
of i-body enabled assets.
Our lead product, AD-214, is a first in class, next generation
antibody therapeutic for the treatment of fibrotic diseases
including lung fibrosis (specifically Idiopathic Pulmonary
Fibrosis (IPF) and Interstitial Lung Disease (ILD)), kidney fibrosis,
eye fibrosis and some cancers.
Our priority for AD-214 is to attract partnerships or other
sources of non-dilutive capital to secure the funds necessary
to progress Phase II clinical studies in IPF or kidney fibrosis.
To enable this, AdAlta is making highly targeted, limited
investments in studies that generate meaningful new data to
further derisk future clinical development and to address key
questions that partners are asking or will likely ask.
Consistent with this strategy, we shared important new data
correlating AD-214 Phase I pharmacokinetic and receptor
occupancy outcomes with potential efficacy and commenced
a Phase I extension clinical study to extend the safety profile of
AD-214 and refine Phase II dose selection.
Using an ex vivo model of a key fibrotic process, AdAlta was
able to reproduce the receptor occupancy profile seen in our
earlier Phase I trial and simultaneously show that 57-85%
receptor occupancy was sufficient for maximal inhibition of
the model fibrotic process, cell migration, and that material
inhibition could be achieved at receptor occupancy as low as
11-47%.
This data provides increased confidence that clinically viable
intravenous dosing with a single IV infusion at no more than two
weekly intervals could be efficacious. It also provides the tools
to select doses and dose regimens for Phase II clinical studies
with greater confidence in their likely therapeutic efficacy,
substantially reducing the risk of these studies.
The studies that generated the new data were technically
demanding and we are very proud of the team who performed
them.
At the time of writing, we had just announced that the first
participants had been dosed in our AD-214 Phase I extension
clinical study. The study sees us return to the clinic at least
12 months earlier than would be possible for a full Phase
II program. Interim results are expected in the December
quarter and the final healthy volunteer dose is planned to be
administered before the end of 2023, with top line results in
January 2024.
This study creates value for partners and enhances licensing
transaction potential by extending the safety profile of multiple
doses of AD-214 to doses that will likely be tested in Phase II
and providing additional data to support the dosing regimen
in Phase II studies. This reduces the time required for dose
escalation at the beginning of Phase II studies.
A summary of our programs outside of AD-214 can be found
available in both Dr Tim Oldham’s CEO report, and the
operational review.
Through the period we announced that Yuuwa Capital, who
had been a longstanding major shareholder, successfully
concluded the anticipated closure of its fund. The enduring
support we received from Yuuwa throughout many years has
been immensely valuable for our company, and we express our
sincere gratitude. We extend a warm welcome to the principal
stakeholders of Yuuwa, who subsequently became significant
shareholders of AdAlta.
FY23 again presented a challenging capital markets landscape
for the biotechnology sector, where a significant number of
global biotech enterprises continue to find themselves trading
at, or even below, valuations aligned with their available cash
reserves.
We extend our sincere gratitude to both longstanding
shareholders and those who have recently joined our us, for
their active participation in our Rights Offer through the period
and oversubscribed Shortfall placed post period end. Your
support propels us closer to achieving important therapeutic
advancements for fibrosis and cancer patients and realizing
returns on the investments made in our programs to date.
Paul MacLeman
Chair
5
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 CEO AND MANAGING
DIRECTOR’S LETTER
AdAlta’s core mission revolves around developing an
exceptional, next-generation pipeline of protein and cell
therapy products addressing diseases that are elusive for
conventional antibodies. In short, we aim to go where
antibodies cannot.
What really drives us though, are the patients desperate
for new approaches to disease because what they have is
inadequate.
As I write to you, Bill Van Nierop, who many of you will have
met at previous AdAlta investor days, is preparing to launch
his kayak for his second marathon paddle. The trip will see him
paddle 1400 km of the Murrumbidgee River from Jugiong near
Canberra to west of Balranald, where the Murrumbidgee meets
the Murray River.
Bill was diagnosed in 2015 with the progressive and incurable
lung disease, Idiopathic Pulmonary Fibrosis (IPF). In 2021, he
was fortunate to receive a double lung transplant, making Bill a
rare survivor. He said, “I’ve been given a second chance and
I’m not going to waste it.”
Bill is embarking on his Long Kayak for Lungs 2 to raise
awareness of lung disease and raise funds for research to
improve outcomes for those impacted by this debilitating and
fatal but little understood disease. We are proud to support his
initiative.
While our lead i-body enabled candidate, AD-214 has been
shown to hold promise in many different fibrotic diseases, IPF
is the very definition of unmet need. The existing marketed
therapies slow but do not halt disease and come with
debilitating side effects. Through our work with AD-214, we are
hoping to bring forward a new therapy to help patients like Bill.
It is an exciting time for AD-214, with the molecule now returned
to the clinic earlier than previously forecast and important new
data generated as described in the Chair’s letter. We anticipate
interim results from this study in the December 2023 quarter
and top line results in the first quarter of 2024.
In tandem, we have been working on securing suppliers for
essential toxicology studies and manufacturing campaigns
necessary to initiate Phase II studies, while deferring the
substantial costs of these studies until appropriate funding is
secured.
We have also been able to progress our other i-body
programs. We are excited about the potential role for i-bodies
in bringing the power of CAR-cell therapies to patients with
solid tumors and have progressed our first i-CAR-T product
under our collaboration with Carina Biotech into pilot in vivo
efficacy studies in mice and are currently evaluating those
results to define next steps. We have commenced discovery
activities on two further targets as part of this collaboration.
GPCR Therapeutics’ evaluation of several CXCR4 i-bodies in
cancer applications under the collaboration announced in
October 2022. Importantly initial studies have successfully
replicated AdAlta i-body results in in vitro cell based assays.
Associated with this, through FY23 and beyond, we have
been pleased with the progress of our business and corporate
development activities, with a focus on securing a return
on our investment in AD-214, expanding our “business as
usual” collaboration pipeline, and evaluating complementary
products and technologies.
At the Bio Industry Organisation BIO2023 partnering
conference, AdAlta advanced discussions with multiple
potential partners for AD-214. In general, partners respond
positively to AD-214’s novel model of action and potential
for multiple routes of administration. Importantly, the Phase I
extension study materially enhances partner interest. The new
data linking our prior Phase I results and efficacy at clinically
convenient dosing regimens is perceived to fill an important
gap and reduce risk. These discussions increase and validate
our confidence in the therapeutic potential of AD-214 and our
ability to secure strategic partnerships.
Our “business as usual” partnering program focusses on
additional co-discovery and co-development collaborations
that bring new skills and research funding. AdAlta received
and is evaluating three unsolicited expressions of interest from
BIO23 in one of our early discovery programs, demonstrating
the continued industry awareness and appreciation of the
potential of the i-body platform.
We recognize that clinical stage assets with near term
milestones and commercial transactions are key to growing
our company and creating value for shareholders, particularly
in the current environment. We are continuously evaluating
such assets and technology platforms where there are clear
synergies with our i-body platform and existing skills. The
Company is encouraged by the progress of several of these
opportunities and investor support for them.
I extend my heartfelt gratitude to the entire AdAlta team
and our Board for their contributions throughout the year. A
special acknowledgment goes out to the dedicated volunteers
participating in our clinical trials. Your contributions are key to
advancing AD-214 for the benefit of patients in need.
Finally, my sincere appreciation goes to our valued
collaborators, patients and shareholders, whose enduring
support serves as a constant source of motivation and
encouragement.
We continued our collaboration with GE Healthcare to develop
i-body enabled granzyme B PET imaging agents for use in
immuno-oncology. We are encouraged by the progress of
Tim Oldham
CEO and Managing Director
6
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 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 2023. 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:
Dr Paul MacLeman
MBA, BVSc, Grad Dip Tech, Grad Cert Eng, FAICD, MATT
Chairman, joined the board 16 April 2015. Paul has over 25
years’ experience across all phases of the life sciences sector.
With a career-spanning veterinary practice, pharmaceutical
development and manufacturing, biotechnology, diagnostics
and finance, Paul has expertise in capital management,
business development, technology commercialisation and sales
& marketing globally. Paul has launched products using both
in-house and outsourced sales staff in Australia and the US. He
has 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 Chairman, Director or Managing Director/CEO of several
VC funded, ASX, NASDAQ, CSE and TSX listed companies and
has driven a number of IPOs. Paul Chaired the Industry Review
Committee for the Pharmaceutical Manufacturing National
Training Package for the AISC for approximately 10 years prior
to the establishment of the new Jobs and Skills Councils and
advises the new formed Manufacturing Industry Skills Alliance.
He is also an expert advisor to PharmaVentures plc. (Oxford,
UK) and serves on a number of other NFP and government
advisory groups. He currently Chairs or is a Non-Executive
Director of a number of public unlisted and private companies.
Paul is the Executive Chairman of Island Pharmaceuticals
Limited (ASX:ILA).
Dr David Fuller
MBBS, BPharm(Hons)
Non-Executive Director, appointed 22 July 2020. David has
over 30 years’ experience in pre-clinical, clinical development,
medical and regulatory affairs with specialisations in early
phase development and oncology. He has led five product
approvals in the United States (US) and European Union
(EU) for orphan and major market products, together with
multiple Regulatory Agency (US/EU) interactions including
Investigational New Drug (IND) applications. David has
designed and executed multiple Phase I – III studies in US, EU
and Asia across multiple therapeutic areas. David is currently
Chief Medical Officer for Aucentra Therapeutics and is also
Chair of EpiAxis Therapeutics Pty Ltd. Previously David was
Chief Medical Officer at Race Oncology (ASX:RAC), Senior
Vice President, Oncology, Syneos Health, a Non-Executive
Director of Linear Clinical Research Ltd – a Perth based clinical
trials facility – and a former Chair of Dimerix Ltd (ASX:DXB).
David holds Bachelor of Medicine/Bachelor of Surgery and
Bachelor of Pharmacy degrees from University of Sydney.
Dr Timothy Oldham
BSc(Hons), LLB (Hons), PhD
Managing Director and CEO, joined the Board on 8 October
2019. Tim has more than 20 years of life sciences business
development, alliance management, portfolio and product
development, and commercialisation experience in Europe,
Asia and Australia, with a particular focus on biologics, cell
and gene therapies and pharmaceutical products. Tim was
appointed CEO and MD in October 2019. Immediately
prior to this, he was Executive Leader of Tijan Ventures, an
advisory business focused on growing life sciences companies
through strategic advisory and interim CEO, executive and
non-executive leadership services, with a particular focus
on biologics, cell and gene therapies and immunotherapy.
Previous roles include CEO and Managing Director of Cell
Therapies Pty Ltd, a leading contract manufacturer and
distributor cellular therapies in Asia Pacific, President of Asia
Pacific for Hospira, Inc., and a variety of senior management
roles with Mayne Pharma Ltd prior to its acquisition by Hospira.
Prior to this, Tim was an engagement manager with McKinsey
& Company. He currently serves as a Director of BioMelbourne
Network Inc and as a Non-executive Director at Acrux Ltd
(ASX:ACR).
Dr Robert Peach
BSc, MSc, PhD
Non-Executive Director, appointed 14 November 2016. Robert
has 30 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 US$59M in venture capital and US$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 4 registered drugs. He currently serves on the Board
of Directors of Amplia Therapeutics (ASX:ATX), Rekover
Therapeutics and is a Scientific Advisory Board member of
Eclipse Bioinnovations. Robert is the co-author of 75 scientific
publications and book chapters, and 17 patents. He was
educated at the University of Canterbury and the University of
Otago, New Zealand.
7
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Ms Elizabeth (Liddy) McCall
LLB., B.Juris,B.Com (Hons), GDipApFin (SIA), GAICD
Liddy resigned as Non-Executive Director on 24 March 2023.
Company Secretary
The name and particulars of the Company Secretary of the
Company during or since the end of the financial year are:
Dr James Williams
BSc (Hons), MBA, PhD, GAICD
James resigned as Alternate Non-Executive Director on 24
March 2023.
The above-named Directors held office during the whole of the
financial year and since the end of the financial year, unless
otherwise indicated. The Company is undertaking a search for
a suitably financially qualified director to replace Ms McCall.
Cameron Jones
B.Bus, CA,GIA(Cert)
Cameron is a finance executive and Chartered Accountant
with experience as CFO and Company Secretary of ASX Listed
and Venture Capital healthcare companies. Cameron has
supported companies through IPOs, capital raising and M&A
transactions. Cameron is the Managing Director of Bio101, a
financial services firm providing accounting, tax and company
secretarial services specialising in the healthcare and life
science sectors.
Directors’ shareholdings as at the date of this report
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
Dr Paul MacLeman
Dr Timothy Oldham
Dr Robert Peach
Dr David Fuller
Dividends
Fully paid
ordinary shares
(Number)
472,970
1,101,750
1,453,126
294,936
Unlisted
Options
(Number)
3,055,000
6,129,090
1,200,000
1,200,000
Listed options
(ASX:1ADOA)
(Number)
-
300,000
-
42,134
There were no dividends paid, recommended or declared during the current or previous financial year.
Shares under option as at the date of this report
Number of shares under option
Class of shares
Exercise price of option
Expiry date of options
78,075,186
400,000
4,929,060
6,655,000
600,000
1,600,000
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
$0.03
$0.1744
$0.2479
$0.0845
$0.0757
$0.0397
29 May 2024
15 March 2025
26 November 2025
29 November 2025
28 February 2026
27 February 2027
The holders of these options do not have the right to participate in any share issue of the Company without first exercising the options
in accordance with the terms of any such share issue.
8
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Indemnity and insurance of officers and auditors
During the financial year, the Company paid a premium in respect of a contract that insures 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.
Meetings of Directors
The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended
30 June 2023, and the number of meetings attended by each Director were:
Full Board1
Remuneration and
Nomination Committee1
Audit and Risk Committee1
Attended
Held
Attended
Held
Attended
Held
7
7
4
7
7
5
7
7
5
7
7
7
3
-
2
3
1
2
3
-
2
3
1
2
2
-
1
2
-
1
2
-
2
2
-
2
Dr Paul MacLeman
Dr Timothy Oldham
Ms Elizabeth McCall2
Dr Robert Peach
Mr David Fuller
Dr James Williams3
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee.
1 The June 2022 Board meeting and Remuneration and Nomination Committee meeting was rescheduled to 1 July 2022. In total
6 Board meetings were conducted in respect of the financial year 2023. All non-executive directors are invited to attend all
committee meetings regardless of committee membership. Only committee members are entitled to vote on resolutions of the
committees.
2 Liddy McCall resigned as non-executive director 24 March 2023.
3 James Williams resigned as alternate non-executive director on 24 March 2023.
9
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
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.
Auditor’s independence
declaration
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
immediately after this Directors’ report.
Operating and financial review
Summary of principal activities
AdAlta Ltd (ASX:1AD, AdAlta or the Company) is a clinical
stage drug discovery company developing next generation
protein and cell-based therapeutics.
The Company is using its proprietary i-body® technology
platform to solve drug targeting problems that challenge
traditional antibodies and in doing so generate a pipeline of
protein and cell therapeutics with the potential to treat some of
today’s most challenging medical conditions.
i-bodies are a novel class of small, targeted proteins that
mimic the properties of the unique and versatile single domain
antibodies found in the shark immune system: they are the first
fully human, single domain antibody-like proteins.
i-bodies are a powerful drug discovery tool to engage
targets that are intractable for traditional antibodies. i-bodies
have been engineered so their unique properties (small size,
stability and long, flexible binding domain) make them ideally
suited for addressing drug targets considered challenging or
‘undruggable’ by traditional antibody therapies. They can also
be coupled to diverse therapeutic or diagnostic “cargoes”,
enabling these cargoes to be delivered to difficult to reach
targets within the human body. Figure 1 illustrates some of
the many ways that i-bodies can be used to generate novel
pharmaceutical products.
The primary focus of the FY2023 year was to progress the
development of AdAlta’s lead i-body enabled candidate;
progress partnered immuno-oncology programs via
collaborations with Carina and GE Healthcare; and to expand
internal programs and business development activities.
Figure 1: Features and applications of i-bodies
10
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Company strategy
AdAlta’s purpose is produce a high-value, next generation
protein and cell therapy product pipeline for diseases where
traditional antibodies are ineffective.
The Company is focused on developing both its discovery
business and its product development business, as indicated in
Figure 2. AdAlta creates value by:
(a) Discovering new protein and cell therapeutics exploiting
the unique capabilities of its i-body® platform. The current
focus is on difficult to access targets such as G-protein coupled
receptors (GPCRs) that are implicated in many serious diseases
and on components enabling engineering of multifunctional
CAR cell therapies.
(b) Progressing or developing product candidates through pre-
clinical studies, product development and early-stage clinical
trials. The current focus is in the fields of inflammation/ fibrosis
and immuno-oncology.
This value is converted to revenue by:
(a) Partnering with biotechnology and biopharmaceutical
companies to co-discover and co-develop i-body
enabled products for targets identified by these partners.
In return AdAlta receives research fees, development and
commercialisation milestones, and royalties.
(b) Out-licensing i-body products developed by AdAlta
at various stages of discovery, preclinical or early clinical
development to larger biopharmaceutical and biotechnology
companies. In return AdAlta receives upfront payments, further
development and commercialisation milestones, and royalties.
Figure 2: AdAlta’s company strategy is focused on its discovery and product development businesses
Strategic priorities
AdAlta’s growth and continued success depends on the
Company executing the three key processes:
1. Discovering an inventory of well characterised i-bodies
against therapeutic targets that:
a) are difficult for traditional antibodies to address; and
b) are in demand by potential partners;
2. Progressing selected i-body-enabled products towards
clinical trials, with a focus on opportunities that have the
shortest time and lowest cost to achieve valuable inflection
points such as pre-clinical or clinical evidence of efficacy;
3. Entering co-discovery, co-development and licensing
collaborations with other biopharmaceutical companies to
progress i-body discovery programs, product development
programs and/or to access complementary technology to
enable acceleration of product development opportunities.
11
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
The Company’s near term strategic priorities are:
A. Realising a return on investments in AD-214 by out-licensing
the molecule or otherwise obtaining non-dilutive financing for
Phase II clinical trials.
B. Progress existing and add new i-CAR and other i-body
collaboration programs.
C. Invest in the i-body® platform to maintain competitive
advantage, increase inventory of characterised i-bodies
against valuable targets and access complementary assets and
technology to enhance the clinical stage pipeline.
Significant milestones achieved during the
reporting period
· Entered collaboration with GPCR Therapeutics (Korea) to
evaluate CXCR4-binding i-bodies in combination with beta
blockers for treatment of cancer (October 2022)
· Demonstrated proof of principle that AD-214 could be
delivered via inhalation for IPF, providing a life cycle extension
strategy for partners (November 2022)
· Second Japanese patent protecting AD-214 granted (January
2023), new patent applications filed relating to methods of
treatment with AD-214 (post period end) and a new publication
highlighted potential of a novel i-body in osteoporosis (January
2023)
· Raised $1.28 million in Entitlement Offer (May 2023) and
$1.87 million in oversubscribed Shortfall placement (post
period end) for total $3.15 million
· Obtained approval to commence a phase I extension study
of AD-214, returning to the clinical a more than a year earlier
than previously forecast (June 2023, first participant dosed post
period end)
· Generated new data for AD-214 linking clinically convenient
dosing schedules with potential efficacy (announced post
period end)
· Commenced discovery on second target under Carina
i-CAR-T collaboration (announced post period end)
Pipeline
Figure 3 summarises AdAlta’s current pipeline including five
active programs plus additional partnering opportunities.
Key programs are described in detail below.
Figure 3: AdAlta’s asset pipeline
12
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
1. AD-214 – Fibrosis
Recent updates
AdAlta’s lead product, AD-214, is a first in class, next
generation antibody therapeutic for the treatment of fibrotic
diseases. Since successful completion of a Phase I clinical trial
in mid-2021, development of AD-214 has progressed in four
indications: lung fibrosis (specifically Idiopathic Pulmonary
Fibrosis (IPF) and Interstitial Lung Disease (ILD)), kidney fibrosis,
eye fibrosis and cancer. The Company’s priority for AD-214 is
to attract partnerships or other sources of non-dilutive capital
to secure the funds necessary to progress Phase II clinical
studies in IPF or kidney fibrosis. To enable this, AdAlta is making
modest, targeted investments in studies that generate new data
to address key questions that partners are asking or will likely
ask.
AdAlta has now returned AD-214 to the clinic under a Phase
I extension study in the September quarter of 2023, more
than a year earlier than previously forecasted. In tandem, the
Company is securing suppliers for essential toxicology studies
and manufacturing campaigns necessary to initiate Phase II
studies, while deferring the substantial costs of these studies until
appropriate funding is secured.
Market Potential
The markets for new antifibrotics are significant. Two existing
therapies approved for IPF and ILDs generated sales of US$4.3
billion in 2022[1], have limited efficacy and significant side
effects that limit patient compliance.
The demand for novel antifibrotics continues to be validated
by strong partnering interest shown for AD-214, as well as
recent peer transactions. In August 2022, Genentech licensed
Phase II antifibrotic vixarelimab from Kiniksa Pharmaceuticals
for US$80 million upfront and US$620 million in potential
milestones.[2] In October 2022, AbbVie purchased DJS
Antibodies for US$225 million. DJS Antibodies discovers and
develops antibody therapeutics against G-protein coupled
receptors (GPCRs), an area of focus for AdAlta. The most
advanced program is being developed as a potential first-
in-class lysophosphatidic acid (LPA) receptor 1 antagonist
antibody for IPF and other fibrotic diseases.
In July 2022, the Company modified the scheduling of AD-214
manufacturing campaigns and toxicology studies to better align
key programs with the emerging priorities of potential partners.
AdAlta was able to secure a six-month deferral of pre-booked
and manufacturing campaigns and toxicology studies,
which also ensured that the company could delay financial
commitments to these activities, preserving cash for activities
that would generate new data supportive of partnering. The
Company continues to work closely with third party vendors
to maintain the shortest possible pathway to Phase II studies
without committing capital prior to securing Phase II partners or
financing.
In November 2022, AdAlta reported substantial progress
expanding the potential disease areas (indications) and routes
of delivery for AD-214. With data in hand or being externally
funded demonstrating the potential efficacy of AD-214 in four
indications (lung, kidney and eye fibrosis and cancer) and
feasibility of two routes of administration (intravenous and
inhalation via nebulization), AdAlta elected to prioritise lung
and kidney fibrosis indications and systemic (intravenous)
administration for further investment.
In the March quarter, AdAlta announced it would be taking
AD-214 back into clinical trials earlier than anticipated in
order to develop valuable data to further inform discussions
as partner interest was building, which was more than a year
earlier than previously forecast. Partnering discussions were
also progressing well, where the number of potential partners
that expressed interest in undertaking a detailed technical
review of AD-214 increased. These included multinational
pharmaceutical companies, US specialty pharmaceutical
companies and regional leaders in Japan and China.
AdAlta received Human Research Ethics Committee (HREC)
approval to commence a Phase I extension clinical study of
AD-214 in June 2023. This approval covers both a healthy
volunteer cohort (Part A), and a subsequent patient cohort
(Part B). The first participants in Part A of the Phase I extension
study, titled “Safety, Tolerability, PK and PD Study of AD-214
Administered to Healthy Volunteers and Patients With Interstitial
Lung Disease or Chronic Kidney Disease”, were dosed in
August 2023.
Post reporting period, AdAlta announced new data supporting
the potential efficacy of AD-214 in human patients with
Idiopathic Pulmonary Fibrosis (IPF) and other fibrotic diseases,
when administered using clinically feasible dosing regimens,
substantially de-risking Phase II clinical studies.
[1]Global Data, Idiopathic Pulmonary Fibrosis Competitive Landscape, April 2023
[2] https://investors.kiniksa.com/news-releases/news-release-details/kiniksa-pharmaceuticals-announces-global-license- agreement
13
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
2. i-CAR-cellular immunotherapy –
immuno-oncology
Chimeric Antigen Receptor (CAR) cell therapies involve
modification of a patient’s immune cells (T cells, NK cells,
macrophages, etc) so that they produce a CAR on the cell
surface that enables the patient’s immune system to recognise
and kill diseased cells such as cancer.
CAR-T cell therapies have revolutionised treatment of blood
cell cancers. There are now six USA FDA approved CAR-T cell
therapies[3] which have been successfully used to treat patients
who have failed multiple rounds of chemotherapy. The market
for CAR cell therapies is projected to grow from US$1 billion in
2020 to more than US$20.3 billion by 2028[4], with more than
50% of revenues to be derived from CAR-cell therapies against
solid tumours by 2030.[5]
AdAlta is now working on three targets under its i-CAR-T
collaboration with Carina Biotech (Carina). The companies
have completed initial in vitro screening of multiple candidates
targeting an undisclosed tumour antigen “A” and have selected
three A-i-CAR-T cell candidates to progress. Pilot in vivo proof
of concept studies in mice were completed during the June
2023 quarter and the results are now being analysed prior to
finalising the future development strategy and plans. Discovery
activities against a second tumor antigen target commenced at
AdAlta during the June 2023 quarter, with a third to commence
in the September quarter following preparative activities during
the June quarter.
3. i-PET-imaging – immuno-oncology
AdAlta continues to collaborate with GE Healthcare to develop
i-body enabled granzyme B PET imaging agents for use in
immuno-oncology with positive progress made on several
work streams. Further updates for this program will be provided
in consultation with GE Healthcare and as milestones are
achieved.
4. CXCR4 inhibiting i-bodies
AdAlta and GPCR Therapeutics announced a collaboration in
October 2022 to evaluate AdAlta’s CXCR4 inhibiting i-bodies
as cancer therapeutics in combination with beta blockers, using
GPCR Therapeutics’ proprietary combination GPCR inhibition
approach. CXCR4 is overexpressed in more than 23 cancers
and drugs targeting the CXCR4 pathway address a multi-billion
dollar opportunity, and AdAlta has the first option to license
and further commercialise any products resulting from the
collaboration.
5. Other updates
In January 2023, the Company announced that its
collaborators at University of Western Australia had published
research suggesting the potential to use i-bodies binding to a
cell membrane protein called RANKL as improved therapies
for osteoporosis and other bone diseases. AdAlta is open to
industry collaborations to advance this program.[6]
Partnering opportunities
At the Bio Industry Organization BIO2023 partnering
conference, AdAlta was able to advance discussions with
multiple potential partners for AD-214. In general, partners
responded positively to AD-214’s novel mode of action, the
quality of AdAlta’s in vitro mode of action investigations and the
potential for multiple routes of administration. Importantly, the
Phase I extension study was favourably received and materially
enhanced partner interest. The new data linking Phase I results
and efficacy was perceived to fill an important gap and reduce
risk.
Figure 4 summarises the partnering pipeline after BIO2023. It
shows the number of companies in AdAlta’s advanced pipeline
by headquarters location. Companies under Confidential
Disclosure Agreement (CDA) have generally completed
an initial business and technical evaluation and are now
embarking on detailed due diligence. Companies in active
technical evaluation have completed an initial business and
strategic evaluation and have conducted at least a technical
and scientific due diligence call with AdAlta following review of
a comprehensive non-confidential data package. Companies
in commercial evaluation have confirmed that both fibrosis and
CXCR4 are of strategic interest and their business development
and search, and evaluation teams are reviewing our
nonconfidential data. The figure excludes companies who have
indicated a preference for Phase II data prior to partnering;
those who AdAlta has assessed as unlikely to proceed or
lacking in the required capabilities to support AD-214; or who
have otherwise declined further discussions.
[3] https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/approved-cellular-and-gene-therapy-products
[4] Grandview Research, “T-cell Therapy Market Size, Share & Trends Analysis” Feb 2021
[5] Polaris Market Research, “CAR-T Cell Therapy Market Share, Size Trends, Industry Analysis Report”, June 2021
[6] https://1ad.live.irmau.com/irm/pdf/9e901142-f0fb-40e6-b18c-7839acf0ba9c/Publication-highlights-Ibody-potential-in- osteoporosis.pdf
14
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Figure 4: AD-214 partnering prospects by stage.
To ensure AdAlta maintains and grows a robust pipeline
of assets, it has been continuously evaluating assets and
technology platforms in, or approaching clinical trials, and
where there are clear synergies with the i-body platform and
existing skills. The Company is encouraged by the progress of
several of these opportunities and potential investor interest in
them, both of which were expanded at BIO2023.
Upcoming milestones
AdAlta’s upcoming milestones and data read-outs include:
1. Interim results of AD-214 Phase I extension study (December
quarter 2023)
2. Top line results of AD-214 Phase I extension study in healthy
volunteers (March quarter 2024)
3. In vivo efficacy results for first i-CAR-T program with Carina
Biotech (December quarter 2023)
4. Discovery progress on multiple i-body discovery programs
including next two targets under Carian collaboration (first
half of 2024)
5. Results of investment in next generation i-body program
The Company has a robust pipeline of out-licensing and in-
licensing transactions however for competitive reasons is not
forecasting timelines of potential transactions.
Intellectual property
Robust intellectual property protection is important for
maximization of the commercial potential of AdAlta’s assets.
AdAlta is generally able to obtain additional patents protecting
i-bodies with specific amino acid sequences that bind to
specific targets.
AD-214 is protected by patents granted in Australia, USA,
Europe, China, Japan, India, and Singapore, with applications
pending in other markets. This enables protection in the 8
largest pharmaceutical markets in the world and the largest
biosimilar manufacturing locations. These patents expire on 8
January 2036. These patents include a second Japanese patent
relating to AD-214 that was granted by the Japanese Patent
Office in January 2023 (Patent Number 2020-121974, entitled
“CXCR4 binding molecules”, expiry date 8 January 2036).
AdAlta continues to evaluate opportunities to expand
intellectual property protection for its technology. Two new
patent applications have been lodged and two additional
applications are being prepared. Trademark protection for the
i-body name has now been secured in Australia and is in the
final stages of registration in Europe and US.
15
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Financial results
The loss for the company after providing for income tax amounted to $4,851,187 (30 June 2022: $6,061,015).
The year ended 30 June 2023 operating results included the following:
License and collaboration Income
R&D tax incentive
Other revenue
Research and development expenses (external)
Corporate administration expenses
Share based payment expenses
Employee benefit expense
2023
$
-
2,883,125
586,054
(3,646,375)
(1,729,644)
(218,452)
(2,241,262)
2022
$
987,936
1,391,326
374,359
(4,127,612)
(1,754,925)
(274,318)
(2,301,945)
Financial liquidity and capital resources
Corporate updates
The Company began the year with $8.66 million cash at bank.
In April 2023, AdAlta launched a Rights Offer to raise up
to A$3.15 million (before costs) to fund early return to clinic
for lead asset AD-214 and progress ongoing partnering
discussions. A$1.28 million was received from existing
shareholders during the offer period and received in May
2023. Post reporting period, the Company announced the
over-subscribed shortfall placement raised $1.87 million,
bringing the total amount raised under the Rights Offer to its
target of $3.15 million before costs.
The Company ended the year with $4.79 million cash at bank
on 30 June 2023.
On 13 July 2023 the Company placed the Rights Offer
shortfall, raising $1.87 million, resulting in the issue of
74,846,752 New Shares together with 37,423,362 New
Options to subscribers for the New Shares under the Shortfall
Facility as well as a further 15,000,000 options issued to the
corporate advisor for the Rights Offer on the same terms as the
New Options
During the reporting period, Elizabeth (Liddy) McCall retired
from her role as Non-Executive Director. James Williams PhD,
alternate Non-Executive Director to Liddy McCall therefore
also retired. The Company is undertaking a search for a
suitably financially qualified director to replace Ms McCall.
AdAlta employed 10 staff at the end of the period with a peak
of 13 during the year.
Substantial shareholder Yuuwa Capital LLC (Yuuwa) completed
a planned wind up of its fund in January 2023. The shares
of the Company previously held by Yuuwa were distributed
to its major shareholders. Following this, the Meurs Group
advised that it had increased its substantial holding and a trust
benefiting the Australian Commonwealth Government became
a substantial holder.
16
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Events after the reporting period
Since 30 June 2023, the Company announced:
• On 13 July 2023 the placement of the Rights Offer shortfall,
raising $1.87 million before costs by issuing 74,846,752
ordinary shares at $0.025 per share and 37,423,362 New
Options.
• Important data supporting the potential efficacy of clinically
convenient AD-214 dosing regimens, linking prior Phase I
pharmacology and preclinical efficacy results for the first time
• First participants dosed in Phase I extension study of AD-214
Further details are found elsewhere in this report. No other
matter or circumstance has arisen since 30 June 2023 that has
significantly affected, or may significantly affect the company’s
operations, the results of those operations, or the company’s
state of affairs in future financial years.
Likely developments and expected results
of operations
Information on likely developments in the operations of the
company and the expected results of operations have not been
included in this report because the Directors believe it would be
likely to result in unreasonable prejudice to the company.
Environment, social and governance
statement
AdAlta recognises that good ESG practices protect the social
and environmental assets that underpin the Company’s success.
AdAlta is in an early phase of determining an appropriate
strategy for identifying and managing its ESG footprint
and risks, including a formal governance model. While a
governance model is being developed, the Company’s CEO is
responsible for ensuring the Board has oversight of arising ESG
matters.
Environmental
AdAlta’s laboratories are located within the La Trobe Institute for
Molecular Sciences, La Trobe University, Victoria, Australia and
adopt the environmental policies and procedures of La Trobe
University. The University has comprehensive sustainability and
climate adaption plans in place and has set a target to become
carbon neutral by 2029. Further details including targets
and metrics can be found at https://www.latrobe.edu.au/
sustainability.
The Company’s operations are not subject to significant
environmental regulation under the Australian Commonwealth
or State Law. La Trobe University’s procedures and permits for
OH&S and solid, liquid and hazardous materials and waste
storage and disposal are applied to AdAlta and the Company
laboratories are audited for environmental and OH&S
compliance by La Trobe University.
Social
Pre-clinical and clinical trials: The Company conducts in vivo
pre-clinical and clinical studies in compliance with Australian
and relevant international regulatory and ethical guidelines and
requirements. By strictly adhering to these guidelines, AdAlta
ensures clinical trial participant safety and minimises negative
impacts on animal welfare. The Company also rigorously
evaluates each pre-clinical and clinical trial to ensure that it is
designed to provide actionable data that cannot be obtained
any other way and which minimizes the number of study
subjects.
Diversity, inclusion and employee engagement: AdAlta
proactively supports Science Technology Engineering and
Mathematics (STEM) education by regularly sponsoring
internships. These have led to the subsequent employment of
interns in some instances.
The Company employs 9 full time staff and 2 interns (30%
female) at the date of this report, 10 of whom are directly
involved in the technical development of AdAlta’s products
and technology. AdAlta’s non-executive Board is presently
100% male (75% prior to the retirement of non-executive
director Liddy McCall. The Company is committed to achieving
gender, ethnic and background diversity pending succession
opportunities and consistent with objective, merit-based
performance assessment. Within each level of the organization,
average female base remuneration is at least 99% of average
male base remuneration.
The Company publishes its Diversity Policy on its website.
Scientific and clinical community and patient engagement:
AdAlta considers La Trobe’s graduate and postgraduate
students a part of its direct community. The Company is pleased
to provides access to its intellectual property and materials and
consumables funding to support student research projects and
training.
The Company also supports patient advocates and clinical
training in therapeutic areas related to its development
programs as its means allow. During the FY2023 period,
AdAlta provided financial and faculty support to the Lung
Foundation of Australia’s Centre for Research Excellence
in Pulmonary Fibrosis CREATE Professional Development
Weekend to help shape the next generation of Australian
pulmonary fibrosis clinical researchers and translational
scientists. Post period end, AdAlta announced its sponsorship
(financial and media promotion) of Long Kayak for Lungs 2, an
initiative of IPF survivor Bill van Nierop to raise awareness of
and funding for IPF research.
17
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Governance
The Company’s Corporate Governance Statement and Policies
can be found on its website at: adalta.com.au/investors/
corporate-governance
AdAlta is committed to the highest standard of honesty and
integrity in all its interactions, including interactions with health
care professionals.
The Company’s commitment to the highest ethical standards
includes strict compliance with applicable anti-bribery and
corruption laws in Australia and overseas. This commitment is
reflected in the Company’s Anti-Bribery, Corruption and Fraud
Policy, which is published on the Company’s website.
Business Risks
1.1 Risk factors specific to the Company
(a) Business risks
Shareholders should consider the various risks and difficulties
frequently encountered by companies early in their
commercialisation, particularly companies that develop and
sell biopharmaceuticals. These risks include AdAlta’s ability to:
(a) implement and execute its business strategy; (b) develop
its products; (c) identify and secure capable commercialisation
partners on profitable terms; (d) obtain regulatory and
reimbursement approval for its products (itself or through
partners); (e) establish cost competitive and reliable supply
chains for its products; (f) manage expanding operations;
and (g) respond effectively to competitive pressures and
developments.
In particular, to generate a return on its investment in research
and development of its products, the intention of the Company
is to secure agreements with other biopharmaceutical
companies to further develop and commercialise its products.
There is no guarantee that AdAlta will be able to secure
such agreements or the terms on which they may be secured
in which case the Company may need to secure ongoing
development financing from other sources and delay or halt
development of certain product development programs.
(b) Costs of development program
The development program relies on numerous work items.
The costs of these items cannot be confirmed until each item is
requested from the supplier and the work scope and pricing
agreed. There is a risk that the work items in the proposed
development program may cost more than that budgeted
for, or may require more drug substance than that budgeted
for (and as a result the Company may need to manufacture
additional drug substance at significant cost and delay) and as
18
a result the Company may need to obtain additional funds to
complete the program.
No assurance can be given that future funding will be
available, or that it will be available on terms acceptable to
the Company. As a result, the Company’s ability to complete
its development programs may be delayed or halted until
such funds are raised (if at all), preventing the Company
from commercialising its intellectual property and generating
revenues.
(c) Regulatory risks
AdAlta’s products are subject to various laws and regulations
including but not limited to regulatory approval and quality
compliance. Data obtained from pre-clinical and clinical
activities are susceptible to varying interpretations, which could
delay, limit or prevent regulatory approval or clearance.
Before the Company or its commercialisation partners can
undertake further clinical trials or market and sell its products,
the products must be demonstrated to be safe and effective
and of suitable quality and must obtain necessary approvals
from regulatory authorities (for example, the Australian
Therapeutic Goods Administration and the United States Food
and Drug Administration). Such approval may take longer than
anticipated, require additional trials to be undertaken or may
not be provided at all.
As a result, the Company may require additional funding to
secure the regulatory pathway. No assurance can be given that
future funding will be available, or that it will be available on
terms acceptable to the Company. As a result, the Company’s
ability to complete its development programs may be delayed
or halted until such funds are raised (if at all), preventing the
Company from commercialising its intellectual property and
generating revenues.
There is no guarantee that compliance will be achieved to
support the Company’s commercialisation plans. Regular
reviews by regulatory bodies are also a feature of the industry
in which AdAlta, and its partners, contract service providers
and suppliers, operates. Changes in laws and regulations
(including interpretation and enforcement) could also adversely
affect the Company’s ability to meet compliance costs and
to market, distribute and sell its biopharmaceutical products.
It is not possible to predict the likelihood, nature or extent of
changes in government regulation that may arise.
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
(d) Australian Government R&D incentives may change
The Company’s development program includes anticipated
receipt of tax refunds based on the Company’s actual research
and development spending. Certain loan facilities are secured
against these receipts. If the status of the Company or its
connected entities should change, or the Australian Federal
Government changes its R&D Tax Incentive (RDTI) program in a
manner which adversely affects the amount of funds available
or the timing of receipt of such funds, there is a risk that the
Company may need to obtain additional funds to complete the
program.
No assurance can be given that future funding will be available,
or that it will be available on terms acceptable to the Company.
As a result, the Company’s ability to complete its development
programs may be delayed or halted until such funds are raised
(if at all), preventing the Company from commercialising its
intellectual property and generating revenues.
(e) Clinical trial risk
Moving from discovery to development and subsequent
commercialisation typically involves multiple and progressively
larger clinical trials. Such trials can be expensive, time
consuming, may be delayed or may fail. Clinical trial success
can be impacted by a number of factors including obtaining
ethics approval, incomplete or slower than expected
recruitment of patients, failure to meet trial end points, lack
of product effectiveness during the trial, safety issues and
modifications to trial protocols or changes to regulatory
requirements for trials. Clinical trial protocols routinely provide
discretion to the principle investigator and safety management
committee to modify dose escalation schedules, cohort sizes or
other factors in response to observations during the trial. These
factors can impact the size, cost and duration of a clinical trial.
There is no guarantee that any current or future trials, including
the clinical study of AD-214 planned, will demonstrate that the
Company’s products are successful.
Failure or material delay at any point of the clinical trial
process will reduce the Company’s ability to commercialise its
intellectual property and generate revenues.
be unable to produce the products at a price point which is
profitable or in a format sufficient convenient for patients and
healthcare professionals to adopt in the context of commercial
sales of the product. The Company’s ability to implement its
business plan and partner its assets would be significantly
hindered such this failure and the Company may be unable
to generate a profit, even if its drug development activity is
successful.
(g) Discovery and pre-clinical development of other
assets
The expansion of the Company’s pipeline depends on its
continued ability to be able to discover i-bodies that bind to
desirable drug targets with appropriate affinity and inducing
desired pharmacological and biological functions. The
studies necessary to discover i-body enabled therapeutics,
demonstrate pre-clinical (animal model) proof of efficacy and
safety and to successfully manufacture such products at clinical
and commercial scale may take longer or cost more than is
projected, may not produce the expected or desired outcome
and may not result in partnerable or clinic ready assets.
(h) Risk in drug development
The Company has limited history in drug development.
Accordingly, the Company cannot guarantee that the i-body
platform, its drug discovery, pre-clinical or clinical programs
will result in the development of any products, or even if it
does that the products will be approved or commercialized
successfully. The Company’s ability to generate revenues or
profits, may therefore be adversely affected by this lack of
experience.
The development and commercialisation of pharmaceutical
products is subject to the inherent risk of failure, including the
possibility that products may:
• to found to be unsafe or ineffective;
• fail to demonstrate any material benefit or advancement in
safety and/or efficacy of an existing product;
• fail to receive necessary regulatory approvals;
• be difficult or impossible to manufacture on the necessary
(f) Risk of product development and manufacturing
scale;
The Company’s products, including AD-214, have not yet
been produced on a scale sufficient for large scale clinical
trials, multiple simultaneous trials or commercial production.
The development of formulations and packaging for the
Company’s products, including AD-214, are not yet complete.
If the Company is unable to manufacture products in sufficient
quantities or in suitable formulations and presentations or
at an appropriate cost level, it may not be able to conduct
appropriate clinical tests to prove its product. Further, it may
• be uneconomical to market or otherwise not commercially
exploitable;
• fail to be developed prior to the successful marketing of a
similar product by competitors;
• compete with products marketed by third parties that are
superior; and
• fail to achieve the support or acceptance of physicians,
patients or the medical community.
19
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
i) Intellectual property
The Company’s success depends, in part, on its ability to obtain
patents, maintain trade secret protection and operate without
infringing the proprietary rights of third parties.
The Company relies on its ability to develop and commercialise
intellectual property. A failure to protect its intellectual property
successfully may lead to a loss of opportunities and adversely
impact on AdAlta’s operating results and financial position.
Although the Company will seek to protect its intellectual
property, there can be no assurance that these measures will
be sufficient. The Company gives no guarantee that further
development of its intellectual property will be successful, that
development milestones will be achieved, or that the intellectual
property will be developed into further products that are
commercially exploitable.
There can be no assurance that any patents the Company
may own or control or licence now and, in the future, will
afford the Company a competitive advantage, commercially
significant protection of the intellectual property, or that any
of the projects that may arise from the intellectual property will
have commercial application. Any challenge to the Company’s
intellectual property position would divert the limited resources
of the Company away from its primary development program
and may result in the Company requiring additional funds to
complete that program. It may also result in the Company being
unable to fully utilise its intellectual property portfolio or being
required to in-licence certain intellectual property in order to
be able to conduct its development program in a manner which
will allow commercialisation of its products, and which may
reduce the profits available from such activities.
There is always a risk of third parties claiming involvement in
technological and medical discoveries. The granting of a patent
does not guarantee that the rights of others are not infringed
or that a competitor will not develop competing intellectual
property that circumvents such patents. The patent position
of pharmaceutical companies can be highly uncertain and
frequently involve complex legal and scientific evaluation. The
breadth of claims allowed in pharmaceutical patents and their
enforceability cannot be predicted.
(j) Reliance on key personnel
Due to the specialised nature of the Company’s business and
its size, its ability to commercialise its products and maintain
its research program will depend in part on its ability to
attract and retain suitably qualified management, scientists,
research personnel and consultants. The Company also
faces competition to employ and retain the services of such
individuals.
There can be no assurance that the Company will be able to
attract or retain sufficiently qualified scientific and management
20
personnel or maintain its relationship with key scientific
organisations and contractors.
The loss of key scientific and management personnel, and
the associated corporate knowledge of those people could
have a detrimental impact on the Company, and this may
adversely affect the Company by impeding the achievement
of its research, product development and commercialisation
objectives.
(k) Competitive risk
There are a number of companies with drugs at various stages
of development for the treatment of IPF and other fibrotic
diseases.
There are also a number of companies developing biological
platforms similar to those the Company is developing.
The Company’s potential competitors may include companies
with substantially greater resources and access to more
markets. Therefore, competitors may succeed in developing
products that are safe, more effective or otherwise
commercially superior than those being developed by AdAlta
or which could render the Company’s products obsolete and/
or otherwise uncompetitive. The Company’s ability to implement
its business plan would be significantly hindered by this and the
Company may be unable to generate revenues or profits, even
if its drug development activity is successful.
(l) Currency risk
Expenditure in overseas jurisdictions is subject to the risk of
fluctuations in foreign exchange. The Company’s payment
obligations to many of its third-party service providers,
including its manufacturer and certain pre-clinical testing are
expected to be in foreign currency. The Company intends to
forward purchase foreign currency against known near term
contractual obligations to aid in financial planning. If there are
adverse currency fluctuations against the Australian dollar,
there is a risk that the work items in any proposed development
program may cost more than that budgeted for and as a result
the Company may need to obtain additional funds to complete
the program.
No assurance can be given that future funding will be
available, or that it will be available on terms acceptable to
the Company. As a result, the Company’s ability to complete
its development programs may be delayed or halted until
such funds are raised (if at all), preventing the Company
from commercialising its intellectual property and generating
revenues.
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
(m) Sufficiency of funding
(o) Third party service provider risk
The Company will conduct much of its development and
manufacturing activities through a series of contractual
relationships with third parties. All contracts, including those
entered into by the Company, carry a risk that the respective
parties will not adequately or fully comply with their respective
contractual rights and obligations, or that these contractual
relationships may be terminated. This may adversely affect the
Company by impeding the achievement of its research, product
development and commercialisation objectives.
(p) Healthcare insurers and reimbursement
In many markets, treatment volumes are likely to be influenced
by the availability and amounts of reimbursement of patients’
medical expenses by third party payer organisations including
government agencies, private health care insurers and other
health care payers. There is no assurance that reimbursement
of any products or services developed and commercialised
by the Company will be available to patients at all or without
substantial delay. Even if such reimbursement is provided, the
approved reimbursement amounts may not be sufficient to
enable the Company or its commercialisation partners to sell
products on a profitable basis
AdAlta is currently not profitable and does not expect
to become profitable until after achieving successful
commercialisation of its products to allow sufficient sales
revenue to fund on-going company operations. The Company
does not have sufficient capital to fully commercialize its lead
candidate and other programs using its platform technology.
Accordingly, the Company will either have to raise additional
capital through further offers or rely on securing grants or
commercial transactions to further its development programs.
The Company's ability to raise further capital (equity or
debt) or secure grants or a commercial (including licensing)
transaction within an acceptable time, or a sufficient amount
and on terms acceptable to it will vary according to a number
of factors, including the success of current projects, the result of
research and development and other cyclical factors affecting
the Company and financial and share markets generally. No
assurance can be given that future funding will be available, or
that it will be available on terms acceptable to the Company.
As a result, the Company’s ability to complete its development
programs may be delayed or halted until such funds are raised
(if at all), preventing the Company from commercialising its
intellectual property and generating revenues.
(n) Product liability risk
The process of securing marketing approval of a new product is
both costly and time consuming. The intention of the Company
is to out-license product candidates prior to completion of
clinical trials and obtaining of marketing authorisations from
relevant regulatory authorities. The conduct of clinical trials will
expose the Company to product liability risks and future sales
of its products may, and if the Company decides to develop a
product candidate and take it to market directly will, expose
the Company to product liability risks which are inherent in the
research and development, manufacturing, marketing and use
of its products.
The Company intends to obtain and maintain adequate levels
of insurance to cover product liability risks. Despite this, there
can be no guarantee that adequate insurance coverage will be
available at an acceptable cost (or in adequate amounts), if
at all, or that product liability or other claims will not materially
and adversely affect the operations and condition of the
Company. A product liability claim may give rise to significant
liabilities as well as damage the Company’s reputation.
21
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
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 2023 in accordance with the requirements of
the Corporations Act 2001 and its Regulations.
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
• details of remuneration
• additional disclosures relating to key management
personnel
Key management personnel
The Directors and other key management personnel of the Company during the financial year were:
Non-Executive Directors
Position
Dr Paul MacLeman
Dr Robert Peach
Dr David Fuller
Ms Elizabeth McCall
Dr James Williams
Executive Directors
Dr Timothy Oldham
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director (Resigned on 24 March 2023)
Alternate Director to Elizabeth McCall (Resigned on 24 March 2023)
Position
Chief Executive Officer and Managing Director
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.
Remuneration policy
Non-Executive Director remuneration
The Remuneration and Nominations Committee is currently
responsible for determining and reviewing compensation
arrangements for key management personnel. All
recommendations of the Remuneration and Nominations
Committee require Board approval for adoption. The Company
has a Remuneration Committee, which consists of Paul
MacLeman (Chair of Remuneration Committee), Robert Peach
and Liddy McCall (until her resignation). The remuneration
policy, which is set out below, is designed to promote superior
performance and long-term commitment to the Company.
Non-Executive Directors are remunerated by way of fees, in the
form of cash, non-cash benefits, superannuation contributions
or salary sacrifice into equity. Non-Executive Directors are also
eligible to receive equity grants as a component of fees under
share and option schemes generally made in accordance with
thresholds and on terms set in plans approved by shareholders.
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.
22
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Executive Director and Executive remuneration
Executive Directors and Executives 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 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 monthly
in cash plus superannuation at 10.5% of salary in FY2023
(increasing to 11% in FY2024) on salary up to the statutory
maximum superannuation contribution base;
(b) Cash at risk component (short term incentive) – executives
may receive a variable cash sum up to a maximum
percentage of salary that is payable annually at the end
of each financial year on the basis of performance against
goals set at the beginning of each financial year (as
assessed by the Board);
(c) Equity component (long term incentive) – executives
may participate, at the discretion of the board, in share
and option schemes generally made in accordance
with thresholds and on terms set in plans approved by
shareholders and otherwise at the discretion of the Board.
In exceptional circumstances the Board may, subject to
any necessary shareholder approval, issue shares and
options to executives outside of approved schemes. Long
term incentive awards are typically time limited and are
made on a case by case basis having regard to the overall
number, value and remaining term of unexpired incentive
securities held by the executive, benchmarking and
performance; and
(d) Other benefits – executives may, if deemed appropriate by
the Board, be provided with a fully expensed mobile phone
and other forms of remuneration.
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 due to the early stage
of development of the Company’s assets as outlined in the
Directors’ report. Remuneration is structured to align short term
incentives with the achievement of operational objectives that
meaningfully progress the development of the Company’s
assets each year and to align long term incentives with
increasing shareholder value as a result of developing and
increasing those assets over the mid-term.
Details of remuneration
Remuneration is reported as Earned Remuneration and Realised
Remuneration.
Earned Remuneration is the accounting value of remuneration
awarded in a period as recorded in the financial statements of
the Company. This includes cash payments during the period
plus the value of long term incentives awarded and expensed
during the period which have an accounting value that may
not be immediately realisable by the recipient, for example
because options have an exercise price that is equal to or
below the current share price.
Realised option value is the value of remuneration realised or
becoming realisable by the recipient during the period. This
includes cash payments during the period plus the value of long
term incentive payments from the current or any prior period
that have become immediately realisable by the recipient
during the period. This will include, for example, the value of
shares issued on the exercise of options less the exercise price
(as measured at the time of exercise).
23
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Key terms of employment contracts
Arrangements with Directors:
Position
Non-Executive Chair
Non-Executive Directors
Annual Salary
$75,000
$50,000
The Company has entered into consulting agreements with all Directors. These agreements can be terminated by either party by
giving one month’s notice. Further, continuation of appointment is subject to re-election at a forthcoming AGM.
Until 24 March 2023, Elizabeth McCall was appointed as the nominated Director of Yuuwa Capital LP, with James Williams as Ms
McCall’s Alternate Director. Director fees are not payable to Alternate Directors. The director fees in respect of Ms McCall were paid
to Yuuwa Capital LP and not to the direct benefit of Ms McCall or Dr Williams.
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.
The Board approved the Remuneration and Nominations Committee recommendation to increase Tim Oldham’s salary effective
1 July 2022 from $307,780 plus statutory superannuation to $318,552.30 plus statutory superannuation, all other terms of
employment remain consistent.
Amounts of remuneration
Details of the remuneration of key management personnel of the company are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Total cash
payments
Share-based
payments
Total
earned
remuneration
Realised
option
value
2023
Non-Executive Directors:
Dr Paul MacLeman
Ms Elizabeth McCall1
Dr Robert Peach
Dr David Fuller
Cash
salary
and fees
$
67,872
48,076
50,000
50,000
Dr James Williams1 (Alternate)
-
Executive Directors:
$
-
-
-
-
-
Other
Super-
annuation
Equity-
settled
$
$
$
$
63,661
138,661
7,128
-
-
-
-
75,000
48,076
50,000
50,000
-
-
25,006
25,006
-
48,076
75,006
75,006
-
440,050
776,799
$
-
-
-
-
-
-
-
Dr Timothy Oldham
324,875
55,0153
18,9692
398,859
41,191
540,823
55,015
26,097
621,935
154,864
1 Liddy McCall was contracted under a service agreement with Yuuwa Capital LP. Fees are paid directly to Yuuwa Capital LP. Yuuwa Capital LP is
a venture capital fund that is managed by its General Partner, Yuuwa Management LP/Yuuwa Capital Management Pty Ltd which is associated
with James Williams and Liddy McCall. Alternate Directors do not receive a directors fee.
2 $6,323 required to be paid as statutory superannuation was paid as salary as opted out of superannuation contribution due to combined
employers' concessional super contribution exceeding the cap for FY23.
3 Bonus accrued for in respect to achievement of short term incentives in the period ending 30 June 2023 of $55,015.
24
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
Short-term benefits
Post-
employment
benefits
Total cash
payments
Share-based
payments
Total earned
remuneration
Realised
option
value
Cash salary
and fees
Other3
Super-
annuation
2022
$
$
$
$
Equity-
settled
$
$
$
Non-Executive Directors:
Dr Paul MacLeman
Ms Elizabeth McCall1
Dr Robert Peach
Dr David Fuller
Executive Directors:
68,181
50,000
50,000
50,000
-
-
-
-
6,819
75,000
60,806
135,806
-
-
-
50,000
-
50,000
23,884
50,000
23,884
50,000
73,884
73,884
Dr Timothy Oldham
314,976
66,6623
15,0752
396,713
87,831
484,544
533,157
66,662
21,894
621,713
196,405
818,118
-
-
-
-
-
-
1 Liddy McCall was contracted under a service agreement with Yuuwa Capital LP. Fees are paid directly to Yuuwa Capital LP. Yuuwa Capital LP is a
venture capital fund that is managed by its General Partner, Yuuwa Management LP/Yuuwa Capital Management Pty Ltd which is associated with
James Williams and Liddy McCall. Alternate Directors do not receive a directors fee.
2 $8,493 required to be paid as statutory superannuation was paid as salary as opted out of superannuation contribution due to combined
employers' concessional super contribution exceeding the cap for FY22.
3 Bonus paid in September 2021 in respect to achievement of short term incentives in the period ending 30 June 2021 of $24,662 and Bonus
accrued for in respect to achievement of short term incentives in the period ending 30 June 2022 of $42,000.
Additional disclosures relating to key management personnel
Fully paid ordinary shares of AdAlta Limited
2023
Dr. Timothy Oldham
Dr Paul MacLeman
Dr James Williams (Alternate)1
Ms Elizabeth McCall1
Dr Robert Peach
Dr David Fuller
Balance
at 1 July
Received on
exercise of
options
Balance held on
resignation
Number
Number
Number
501,750
472,970
263,751
166,668
1,453,126
210,668
-
-
-
-
-
-
-
-
(263,751)
(166,668)
-
-
Additions
Number
600,000
-
-
-
-
84,268
Balance
at 30 June
Number
1,101,750
472,970
-
-
1,453,126
294,936
25
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
2022
Dr Timothy Oldham
Dr Paul MacLeman
Dr James Williams (Alternate)1
Ms Elizabeth McCall1
Dr Robert Peach
Dr David Fuller
Balance
at 1 July
Received on
exercise of
options
Balance held on
resignation
Number
Number
Number
211,000
472,970
253,334
166,668
1,295,999
187,260
-
-
-
-
-
-
-
-
-
-
-
-
Additions
Number
290,750
-
10,417
-
157,127
23,408
Balance at 30
June
Number
501,750
472,970
263,751
166,668
1,453,126
210,668
1 James Williams and Elizabeth McCall's interests do not include 54,059,848 ordinary shares beneficially owned by the limited partners of Yuuwa
Capital LP, a venture capital fund. Yuuwa Capital Management Pty Ltd which is associated with James Williams and Elizabeth McCall provides
investment management services to Yuuwa Capital LP.
Share Options of AdAlta Limited
Balance
at 1 July
Granted as
compen-
sation
Cancelled/
Expired
Net other
change1
Balance
at 30 June
Vested and
exercisable
Options
vested
during year
2023
Number
Number
Number
Number
Number
Number
Number
Dr Timothy Oldham
Dr Paul MacLeman
Dr James Williams (Alternate)
Ms Elizabeth McCall
Dr Robert Peach
Dr David Fuller
6,129,060
3,055,000
-
-
1,200,000
1,200,000
-
-
-
-
-
-
-
-
-
-
-
-
300,000
6,429,060
5,829,060
2,378,718
-
-
-
-
3,055,000
1,527,500
1,527,500
-
-
-
-
-
-
1,200,000
600,000
600,000
42,134
1,242,134
642,134
642,134
1 Options issued as a result of participation in the Rights Offer undertaken during the period.
Balance at
1 July
Granted as
compen-
sation
Cancelled/
Expired
Net other
change
Balance at
30 June
Vested and
exercisable
Options
vested
during year
2022
Number
Number
Number
Number
Number
Number
Number
Dr Timothy Oldham
4,929,060
1,200,000
-
Dr Paul MacLeman
30,000
3,055,000
(30,000)
Dr James Williams (Alternate)
Ms Elizabeth McCall
Dr Robert Peach
Dr David Fuller
-
-
-
-
-
-
200,000
1,200,000
(200,000)
-
1,200,000
-
-
-
-
-
-
-
6,129,060
3,450,342
1,478,718
3,055,000
-
-
1,200,000
1,200,000
-
-
-
-
-
-
-
-
-
-
26
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 DIRECTORS’ REPORT (Continued)
Voting and comments made at the company's 2022 Annual General Meeting (AGM).
At the Company's 2023 Annual General Meeting (AGM), a resolution to adopt the 2022 Remuneration Report was put to the vote
and greater than 75% of the votes cast were cast in favour of the resolution.
No comments were made at the AGM by shareholders in relation to the Remuneration Report.
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.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Paul MacLeman
Chairman
25 August 2023
Melbourne
27
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of AdAlta Limited for the year ended 30 June 2023, 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.
DRY KIRKNESS (AUDIT) PTY LTD
ROBERT HALL CA
Director
Perth
Date: 25 August 2023
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Revenue and other income
License and collaboration Income
Interest received
Other revenue
Total revenue and other income
Expenses
Research and development expenses (external)
Corporate administration expenses
Share based payment expenses
Net foreign exchange (loss) / gain
Patent and legal costs
Depreciation and amortisation expense
Employee benefit expense
Finance costs
Total expenses
Note
2023
$
-
62,570
2022
$
987,936
1,602
3
3,469,179
1,765,685
3,531,749
2,755,223
(3,646,375)
(4,127,612)
(1,729,644)
(1,754,925)
14
(218,452)
(274,318)
81,243
47,671
(474,773)
(260,610)
9
(29,922)
(33,112)
(2,241,262)
(2,301,945)
(123,751)
(111,387)
(8,382,936)
(8,816,238)
Loss before income tax expense
(4,851,187)
(6,061,015)
Income tax expense
4
-
-
Loss after income tax expense for the year attributable to the owners of AdAlta Limited
(4,851,187)
(6,061,015)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of AdAlta Limited
(4,851,187)
(6,061,015)
Basic earnings per share
Diluted earnings per share
5
5
Cents
(1.52)
(1.52)
Cents
(2.18)
(2.18)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
29
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2023
$
2022
$
6
7
8
9
10
11
12
11
12
13
14
4,789,513
2,695,440
212,127
8,660,556
1,789,655
134,530
7,697,080
10,584,741
36,009
36,009
63,805
63,805
7,733,089
10,648,546
1,700,147
4,013,858
94,188
1,099,547
2,389,567
145,349
5,808,193
3,634,463
-
1,613,386
14,942
14,942
22,185
1,635,571
5,823,135
5,270,034
1,909,954
5,378,512
42,175,065
41,010,888
1,873,857
1,655,405
(42,138,968)
(37,287,781)
1,909,954
5,378,512
The above statement of financial position should be read in conjunction with the accompanying notes
30
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Issued
capital
$
Reserves
Unissued
share reserve
Retained
profits
$
$
Total
equity
$
Issued
capital
$
Reserves
Unissued
share reserve
Retained
profits
$
$
Total
equity
$
Balance at 1 July 2021
36,232,030
1,381,087
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments
Issue of ordinary shares
Share issue costs
-
-
-
-
5,044,823
(265,965)
-
-
-
274,318
-
-
Balance at 30 June 2022
41,010,888
1,655,405
Balance at 1 July 2022
41,010,888
1,655,405
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments
Issue of ordinary shares
Share issue costs
-
-
-
-
1,334,620
(170,443)
-
-
-
218,452
-
-
Balance at 30 June 2023
42,175,065
1,873,857
The above statement of changes in equity should be read in conjunction with the accompanying notes
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
(31,226,766)
6,386,351
(6,061,015)
(6,061,015)
-
-
(6,061,015)
(6,061,015)
-
-
-
274,318
5,044,823
(265,965)
(37,287,781)
5,378,512
(37,287,781)
5,378,512
(4,851,187)
(4,851,187)
-
-
(4,851,187)
(4,851,187)
-
-
-
218,452
1,334,620
(170,443)
(42,138,968)
1,909,954
31
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
R & D tax incentive
Interest received
Note
2023
$
2022
$
684,659
1,359,730
(7,957,214)
(8,113,530)
2,077,927
2,663,660
62,570
1,602
Net cash used in operating activities
19
(5,132,058)
(4,088,538)
Cash flows from investing activities
Payments for property, plant and equipment
(2,126)
(25,229)
Net cash used in investing activities
(2,126)
(25,229)
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
Proceeds from borrowings
Repayment of borrowings
Proceeds from other financing activities
1,282,590
5,004,337
(70,917)
(265,965)
-
-
4,000,000
(1,715,249)
55,500
-
Net cash from financing activities
1,267,173
7,023,123
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(3,867,011)
2,909,356
8,660,556
5,791,389
(4,032)
(40,189)
Cash and cash equivalents at the end of the financial year
6
4,789,513
8,660,556
The above statement of cash flows should be read in conjunction with the accompanying notes
32
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2023
1. General information
The financial statements cover AdAlta Limited as an individual
entity. The financial statements are presented in Australian
dollars, which is AdAlta Limited’s functional and presentation
currency.
AdAlta Limited is a listed public company limited by shares,
incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Unit 15 / 2 Park Drive
Bundoora VIC 3083
Australia
A description of the nature of the company’s operations and its
principal activities are included in the Directors’ report, which is
not part of the financial statements.
The financial statements were authorised for issue, in
accordance with a resolution of Directors, on 25 August
2023. The Directors have the power to amend and reissue the
financial statements.
2. Significant accounting policies
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
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.
Going concern
The financial statements have been prepared on a going
concern basis which contemplates the realisation of assets and
the settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Company incurred
losses of $4,851,187 (2022: $6,061,015) and the Company
had net cash outflows from operating activities of $5,132,058
(2022: $4,088,538). As at balance date, the Company had
net current assets of $1,888,886 (2022: $6,950,278).
The Company is required to repay the Loan recorded at 30
June 2023 of $4.0 million with Treasury Corporation of Victoria
(TCV) by 31 October 2023, coincident with the receipt of the
FY23 Research & Development (R&D) tax incentive refund. In
the event the Company does not receive a refund in excess of
the Loan facility the Company will be required to repay the loan
with its cash reserves. The Company is currently negotiating an
extension of the maturity beyond October 2023.
Although the above are indicative of a material uncertainty
relevant to the going concern consideration, the directors
consider that the Company can pay its debts as and when
they fall due at the date of this report. In actively considering
and managing the Company’s cashflow forecast, the directors
consider that:
• The Company can scale down its operations sufficiently
(and narrow the scope of its planned project activities) as
required;
• The Company has a track record of raising capital as an
ASX listed Company;
• The Company is in active discussions to license/partner its
technology (in the ordinary course of executing its business
plan); and
• The Company has historically been successful in receiving
Research & Development tax incentive refunds from the
ATO.
In the unlikely event that the activities referred to above
result in a negative outcome, then the going concern basis
of accounting may not be appropriate with the result that the
company may have to realize its assets and extinguish its
liabilities other than in the normal course of business and in
amounts different to that stated within the financial report.
The financial report does not include any adjustments relating
to the recoverability or classification of recorded asset amounts
or classification of liabilities that might be necessary should the
company not be able to continue as a going concern.
33
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
2. Significant accounting policies
(continued)
Revenue recognition
AASB15 Revenue from contracts with customers
The standard provides a single comprehensive model for
revenue recognition. The core principle of the standard is
that an entity shall recognise revenue to depict the transfer
of promised goods or services to customers at an amount
that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The
standard introduced a new contract-based revenue recognition
model with a measurement approach that is based on an
application of the transaction price. This is described further
in the accounting policies below. Credit risk is presented
separately as an expense rather than adjusted against revenue.
Contracts with customers are presented in an entity's statement
of financial position as a contract liability, a contract asset, or a
receivable, depending on the relationship between the entity's
performance and the customer's payment. Customer acquisition
costs and costs to fulfil a contract can, subject to certain criteria,
be capitalised as an asset and amortised over the contract
period.
Interest
Interest revenue is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Research and Development Tax Incentive
Accounted for in line with AASB 120 Government Grants on
an accruals basis when the following recognition criteria have
been met:
(a) the entity reasonably expects it will comply with the
conditions attaching to the grant; and
(b) the grant will be received.
Income tax
The income tax expense (revenue) for the year comprises
current income tax expense (income) and deferred tax expense
(income).
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
34
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.
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 (i.e. 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
instruments, 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.
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
2. Significant accounting policies
(continued)
Cash and cash equivalents
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.
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.
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.
Trade and other receivables
Financial instruments
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.
Property, 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.
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 assets
are:
Class of Fixed Asset Depreciation rate Notes
Office equipment
100.00%
Plant and Equipment
28.57%
Assets acquired post
31 December 2016
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions
of the financial instrument. Financial instruments (except for
trade receivables)are measured initially at fair value adjusted
by transactions costs, except for those carried “at fair value
through profit or loss”, in which case transaction costs are
expensed to profit or loss. Where available, quoted prices in
an active market are used to determine the fair value. In other
circumstances, valuation techniques are adopted. Subsequent
measurement of financial assets and financial liabilities are
described below.
Trade receivables are initially measured at the transaction
price if the receivables do not contain a significant financing
component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights
to the cash flows from the financial asset expire, or when
the financial asset and all substantial risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
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).
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.
35
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 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 high quality
corporate bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary
benefits and 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 liabilities 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 liabilities.
The liabilities are 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.
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
2. Significant accounting policies
(continued)
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 in asset value 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.
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.
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.
Other long-term employee benefits
The liabilities for annual leave and long service leave which
are not expected to be settled within 12 months of the reporting
date are measured at 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
36
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
2. Significant accounting policies
(continued)
Share based payments
Equity-settled and cash-settled share-based compensation
benefits are provided to employees.
Equity-settled transactions are awards of shares, or options
over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of
cash for the exchange of services, where the amount of cash is
determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value
on grant date. Fair value is independently determined using either
the Binomial or Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine whether
the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions is recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to vest and the expired portion
of the vesting period. The amount recognised in profit or loss for
the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each
reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into
consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of
the liability is calculated as follows:
• during the vesting period, the liability at each reporting date
is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
• from the end of the vesting period until settlement of the
award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The
ultimate cost of cash-settled transactions is the cash paid to settle
the liability.
Market conditions are taken into consideration in determining
fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the
consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within
the control of the consolidated entity or employee and is not
satisfied during the vesting period, any remaining expense for the
award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has
vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new
award is treated as if they were a modification.
Foreign exchange gains/losses
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
reporting date are translated to Australian dollars at the foreign
exchange rate at that date. Foreign exchange differences arising
on translation are recognised in the income statement.
Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are retranslated to Australian
dollars using the foreign exchange rate at the date of the
transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are retranslated
to Australian dollars at the exchange rate at the date that the fair
value was determined.
Goods and Services Tax (‘GST’) and other similar
taxes
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the
cost of the acquisition of the asset or as part of the expense.
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 tax authority is included in other
receivables or other payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which
are recoverable from, or payable to the tax authority, are
presented as operating cash flows.
37
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
2. Significant accounting policies
(continued)
Comparative figures
When required by Accounting Standards, comparative figures
have been adjusted to conform to changes in presentation for
the current financial year.
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.
New Accounting Standards and Interpretations
not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet mandatory,
have not been early adopted by the company for the annual
reporting period ended 30 June 2023. The company has not
yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
38
AASB 2020-1: Amendments to Australian
Accounting Standards – Classification of Liabilities
as Current or Non-current
The amendment amends AASB 101 to clarify whether a liability
should be presented as current or non-current.
The Company plans on adopting the amendment for the
reporting period ending 30 June 2024 along with the adoption
of AASB 2022-6. The amendment is not expected to have a
material impact on the financial statements once adopted.
AASB 2022-6: Amendments to Australian
Accounting Standards – Non-current Liabilities
with Covenants
AASB 2022-6 amends AASB 101 to improve the information
an entity provides in its financial statements about liabilities
arising from loan arrangements for which the entity’s right to
defer settlement of those liabilities for at least 12 months after
the reporting period is subject to the entity complying with
conditions specified in the loan arrangement. It also amends an
example in Practice Statement 2 regarding assessing whether
information about covenants is material for disclosure.
The Company plans on adopting the amendment for the
reporting period ending 30 June 2024. The amendment is not
expected to have a material impact on the financial statements
once adopted.
AASB 2021-2: Amendments to Australian
Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates
The amendment amends AASB 7, AASB 101, AASB 108, AASB
134 and AASB Practice Statement 2. These amendments arise
from the issuance by the IASB of the following International
Financial Reporting Standards: Disclosure of Accounting
Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
and Definition of Accounting Estimates (Amendments to IAS 8).
The Company plans on adopting the amendment for the
reporting period ending 30 June 2024. The impact of the initial
application is not yet known.
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
3. Other revenue
R&D tax incentive
Other revenue
2023
$
2,883,125
586,054
2022
$
1,391,326
374,359
3,469,179
1,765,685
1 In FY22 the Company received a R&D tax incentive refund greater than the amount accrued at 30 June 2022 by $495,453. The estimated FY23
R&D tax incentive refund is $2,387,672.
4. Income tax expense/(benefit)
Income tax expense
Current tax
Deferred tax
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income
Non deductible expenses
Non assessable income
Temporary differences
Benefits of tax losses not brought into account
Income tax expense
2023
2022
$
-
-
-
$
-
-
-
(4,851,187)
(6,061,015)
(1,212,796)
(1,515,253)
1,437,281
991,449
(720,781)
(100,895)
(347,832)
(102,826)
597,191
974,462
-
-
The Company has revenue losses of approximately $13,019,957 for which no deferred tax asset has been recognised.
The Company has no franking credits currently available for future offset.
39
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
5. Loss per share
2023
$
2022
$
Loss after income tax attributable to the owners of Adalta Limited
(4,851,187)
(6,061,015)
Weighted average number of ordinary shares used in calculating basic earnings per share
318,291,763
278,410,431
Number
Number
Weighted average number of ordinary shares used in calculating diluted earnings per share1
318,291,763
278,410,431
Basic earnings per share
Diluted earnings per share
Cents
(1.52)
(1.52)
Cents
(2.18)
(2.18)
1 The company had 39,835,884 options on issue as at 30 June 2023 (2022: 14,784,060) that are not considered to be dilutive due to the
exercise price exceeding the current market price of the underlying ordinary shares.
6. Cash and cash equivalents
2023
$
903,133
3,886,380
2022
$
481,045
8,179,511
4,789,513
8,660,556
Cheque accounts
Cash reserve accounts
40
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
7. Trade and other receivables
Trade receivables
Goods and services tax
Prepaid expenses
R&D tax incentive
8. Other current assets
Forward Exchange contract
Security Deposits
2023
$
-
102,561
205,207
2022
$
40,000
48,638
118,544
2,387,672
1,582,473
2,695,440
1,789,655
2023
$
39,686
172,441
2022
$
56,612
77,918
212,127
134,530
On 20 January 2023 the company entered into a Forward Exchange contract to buy USD at a rate of 1AUD = 0.69USD maturing
on the 31 July 2023. As at 30 June 2023 there is a balance on the Forward Exchange contact of $708,220 USD. The amount
disclosed at 30 June 2023 is the unrealised gain on the forward exchange contract. This forward contract was subsequently
extended to 30 September 2023.
41
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
9. Property, plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Movements in the carrying amounts for each class of
Plant and equipment
Balance at beginning of year
Additions
Disposals
Depreciation expense
2023
$
167,233
(131,282)
35,951
45,270
(45,212)
58
2022
$
167,233
(116,902)
50,331
43,144
(29,670)
13,474
36,009
63,805
2023
$
2022
$
50,331
70,463
-
-
-
-
(14,380)
(20,132)
Balance at end of year
35,951
50,331
Office equipment
Balance at beginning of year
Additions
Depreciation
2022
$
13,474
2,126
(15,542)
2021
$
1,226
25,229
(12,981)
Balance at end of year
58
13,474
42
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
10. Trade and other payables
Trade payables
Accrued expenses
PAYG payable
Cash received pending approval to issue Ordinary Shares
11. Borrowings
Current liabilities
Loan – R&D Advance
Non-current liabilities
Loan - R&D Advance
2023
$
1,121,891
482,014
40,742
55,500
2022
$
555,487
488,671
55,389
-
1,700,147
1,099,547
2023
$
2022
$
4,013,858
2,389,567
2023
$
2022
$
-
1,613,386
During FY2022 the Company executed a funding facility (Facility) with Treasury Corporation of Victoria (TCV) as part of the
Victorian Government’s R&D Cash Flow Loan Initiative (Initiative) of up to $4.0million.
In September 2021 the Company received the first tranche of $2.4million.
In February 2022 the Company received the second tranche of $1.6million.
The TCV loan balance as at 30 June 2023 is $4,013,858.
Interest on Facility advances is variable at the “TCV 11am” loan interest rate (4.215% as at 30 June 2023). Repayment of the Facility
is timed to coincide with receipt of AdAlta’s FY2023 RDTI refund, expected by 31 October 2023. The Facility is secured by the
FY2023 RDTI refund. As at 30 June 2023 the total loan facility was $4.0million, being fully drawn. The Company is negotiating with
TCV to extend the maturity date beyond October 2023.
43
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
12. Provisions
Current provisions
Annual leave
Non-current provisions
Long service leave
13. Issued capital
2023
$
94,188
2023
$
2022
$
145,349
2022
$
14,942
22,185
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
366,679,546
314,184,746
42,175,065
41,010,888
Ordinary shares
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.
Balance at beginning of the reporting period
314,184,746
245,175,853
41,010,888
36,232,030
2023
Shares
2022
Shares
2023
$
2022
$
1,191,181
465,365
52,030
-
3,725
-
40,487
926
51,303,619
68,539,803
1,282,590
5,003,410
-
-
(170,443)
(265,965)
366,679,546
314,184,746
42,175,065
41,010,888
Issued for services in lieu of cash
Issued on exercise of options
Issue of ordinary shares
Capital raising costs
44
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
13. Issued Capital (continued)
Options on issue
Expiry date
29 May 2024
15 March 2025
26 November 2025
29 November 2025
28 February 2026
27 February 2027
Number of options
Exercise price
25,651,824
400,000
4,929,060
6,655,000
600,000
1,600,000
$0.0300
$0.1744
$0.2479
$0.0845
$0.0757
$0.0397
As a result of the Rights Offer, all options on issue prior to the Rights Offer were reduced by $0.0003 per option as announced on
22 May 2023.
14. Reserves
2023
$
2022
$
Share-based payments reserve
1,873,857
1,655,405
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and
other parties as part of their compensation for services. 1,800,000 options were issued during the period.
At beginning of reporting period
Recognised during the period
2023
$
1,655,405
218,452
2022
$
1,381,087
274,318
At end of reporting period
1,873,857
1,655,405
45
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
14. Reserves (continued)
Expiry
Date
26/11/2025
26/11/2025
26/11/2025
26/11/2025
20/03/2023
20/03/2023
20/03/2023
20/03/2023
15/03/2025
15/03/2025
29/11/2025
28/02/2026
27/02/2027
Exercise
Balance at
start of year
Granted
in year
Exercised
Expired /
cancelled
Balance at
end of year
Price
Number
Number
Number
Number
Number
$0.2479
$0.2479
$0.2479
$0.2479
$0.0832
$0.0832
$0.0832
$0.0832
$0.1744
$0.1744
492,906
1,478,718
1,478,718
1,478,718
100,000
100,000
200,000
200,000
500,000
500,000
$0.0845
6,655,000
$0.7570
1,600,000
-
-
-
-
-
-
-
-
-
-
-
-
$0.0397
-
1,800,000
14,784,060
1,800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(100,000)
(100,000)
(200,000)
(200,000)
(300,000)
(300,000)
492,906
1,478,718
1,478,718
1,478,718
-
-
-
-
200,000
200,000
-
6,655,000
(1,000,000)
600,000
(200,000)
1,600,000
(2,400,000)
14,184,060
Weighted average exercise price at 30 June 2023 $0.1360 (30 June 2022: $0.1744). 25,651,824 Listed Options are not treated
as share-based payments under AASB 2.
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date
are as follows:
Grant date
Expiry date
Share price at
grant date
Exercise
price1
Expected
volatility
Dividend
yield
Risk-free
rate
27/02/2023
27/02/2027
$0.040
$0.040
64.13%
0%
3.29%
1 As a result of the Rights Offer, all options on issue prior to the Rights Offer were reduced by $0.0003 per option as announced on
22 May 2023.
46
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
15. Related party transactions
Related parties
The Company’s main related parties are as follows:
Non-Executive Directors
Position
Dr Paul MacLeman
Dr Robert Peach
Dr David Fuller
Ms Elizabeth McCall
Dr James Williams
Executive Directors
Dr Timothy Oldham
Transactions with related parties
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director (Resigned on 24 March 2023)
Alternate Director to Ms Elizabeth McCall (Resigned on 24 March 2023)
Chief Executive Officer and Managing Director
Aside from the amounts previously disclosed in the Remuneration Report, there were no other transactions with related parties during
the current and previous financial year. The aggregate compensation made to Directors and other Key Management Personnel of the
Company is set out below:
Short-term benefits (Including performance bonuses)
Post-employment benefits
Share based payments
2023
$
595,838
26,097
154,864
2022
$
599,820
21,894
196,405
776,799
818,119
16. Contingent liabilities and contingent assets
The Directors are not aware of any matters or circumstances which may give rise to a contingent liability or asset.
17. Commitments
Lease commitments
The Company has no lease commitments.
Capital commitments
The Company has no capital commitments.
Other commitments
The Company has significant expenditure expected to be incurred in relation to manufacturing and clinical trial costs for its Phase I
human study.
47
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
18. Financial risk management
The Company does not have any complex financial instruments or derivatives.
Term, conditions and accounting policies
The Company's accounting policies, including the terms and conditions of each class of financial asset, financial liability and equity
instrument, both recognised and unrecognised at the reporting date, are as follows:
Statement of
Financial Position
Notes
Accounting Policies
Terms and Conditions
Recognised Financial
Instruments
i) Financial assets
Cheque account
Cash reserve
R & D tax incentive
Trade receivables
Goods & services tax paid
6
6
7
7
7
ii) Financial liabilities
Trade and other creditors
10
Other liabilities
Other current assets
Borrowings
8
11
iii) Equity
Ordinary shares
13
48
Carried at face value.
The cheque account is at call with an interest rate of
0.00% (2022: 0.00%).
Carried at face value.
The cash reserve account is at call with an interest rate
of 1.55% (2022: 0.35%).
Recognised on an accrual
basis.
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 14-60 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.
Carried at face value.
Carried at face value.
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.
Forward exchange contract is entered into on
specific terms as agreed by the Foreign Exchange
intermediary and the Company.
2023 and 2022: The Loan is a Secured Loan, with
a variable interest rate of the TCV interest rate. The
Security is the R&D Tax Incentive refund for the
financial year ending 30 June 2023 (Rate as at 30
June 2023 of 4.215%).
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 13.
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
18. Financial risk management (continued)
Carrying value
The carrying value of financial assets and liabilities approximates their fair value.
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.
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.
The contractual undiscounted cash flows of the Company’s borrowing commitments is set out in the table below. Balances due within
12 months equal their carrying amounts as the impact of discounting is not significant.
Contractual
maturities
< 1 year
>1 year
< 5 years
>5 years
Total
Carrying
amount
Loan - R&D advance - 2023
4,013,858
-
Loan - R&D advance - 2022
2,389,567
1,613,386
6,403,425
1,613,386
-
-
-
-
4,002,953
4,013,858
4,002,953
4,002,953
8,016,811
iv) Interest Rate Risk
The main interest rate risk arises from cash and cash equivalents with variable interest rates which expose the Company to cash
flow interest rate risk. Excess cash and cash equivalents are invested in fixed interest term reserve accounts which do not expose the
Company to cash flow interest rate risk. Cash and cash equivalents required for working capital are held in variable and non-interest
bearing accounts.
Weighted
average
%
Balance
Fixed interest
rate exposure
Variable interest
rate exposure
$
$
$
Cash and cash Equivalents - 2023
Cash and cash Equivalents - 2022
1.26%
0.01%
4,789,513
8,660,556
3,886,380
8,179,485
903,133
481,071
49
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
18. Financial risk management (continued)
v) 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.
vi) Foreign exchange risk
The Company has contracts denominated in foreign currencies, predominantly in US dollars , Euros and Great Britain Pounds and
may enter into forward exchange contracts where appropriate in light of anticipated future purchases and sales, conditions in foreign
markets, commitments with suppliers and customers and past experience and in accordance with Board-approved limits.
19. Reconciliation of loss after income tax to net cash used in operating
activities
Reconciliation of cash flow from operations with profit after income tax
2023
$
2022
$
Loss after income tax expense for the year
(4,851,187)
(6,061,015)
Adjustments for:
Depreciation and amortisation
Share-based payments
Unrealised Foreign exchange differences
Interest expense and borrowing costs
Amounts paid directly by issuance of shares
Change in operating assets and liabilities:
(Increase) / decrease in receivables
(Increase) / decrease in current assets
Increase / (decrease) in payables
Increase / (decrease) in provisions
Increase / (decrease) in other current liabilities
Increase / (decrease) in Borrowings
29,922
218,452
4,034
-
52,030
(905,784)
(77,597)
445,571
(58,404)
-
10,905
33,112
274,318
-
111,387
-
1,318,731
(56,612)
233,808
96,582
(38,849)
-
Net cash used in operating activities
(5,132,058)
(4,088,538)
50
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2022 (Continued)
20. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
21. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Dry Kirkness (Audit) Pty Ltd, the auditor of
the company:
Audit services - Dry Kirkness (Audit) Pty Ltd
Audit or review of the financial statements
22. Events after the reporting period
Since 30 June 2023, the Company announced:
2023
$
2022
$
25,000
31,993
• On 13 July 2023 the placement of the Rights Offer shortfall, raising $1.87 million before costs by issuing 74,846,752 ordinary
shares at $0.025 per share and 37,423,362 New Options.
• Important data supporting the potential efficacy of clinically convenient AD-214 dosing regimens, linking prior Phase I
pharmacology and preclinical efficacy results for the first time
• First participants dosed in Phase I extension study of AD-214
Further details are found elsewhere in this report. No other matter or circumstance has arisen since 30 June 2023 that has
significantly affected, or may significantly affect the company’s operations, the results of those operations, or the company’s state of
affairs in future financial years.
51
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
DIRECTORS’ DECLARATION
30 JUNE 2023
In the Directors’ opinion:
• the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
• the attached financial statements and notes give a true and fair view of the company’s financial position as at 30 June 2023 and
of its performance for the financial year ended on that date; and
• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
Paul MacLeman
Chairman
25 August 2023
Melbourne
52
AdAlta Limited Annual Report 2023 ABN 92 120 332 925
INDEPENDENT AUDITOR’S REPORT
To the Members of AdAlta Limited
Report on the audit of the annual 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 2023, 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) giving a true and fair view of the Company’s financial position as at 30 June 2023 and of its
financial performance for the year then ended; and
ii) 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
those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report.
We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report which indicates that for the year ended 30 June 2023 the
Company incurred a loss of $4,851,187 (2022: $6,061,015) and had net cash outflows from operating
activities of $5,132,058 (2022: $4,088,538). As at 30 June 2023, the Company had net current assets of
$1,888,886 (2022: $6,950,278). Subsequent to 30 June 2023 the Company completed a capital raise, raising
$1.87 million before costs.
The Company is required to repay the loan recorded at 30 June 2023 of $4,013,858 with Treasury
Corporation of Victoria (TCV) by 31 October 2023, coincident with the receipt of the FY23 Research &
Development (R&D) tax incentive refund. In the event the Company does not receive a refund in excess of
the loan facility the Company will be required to repay the loan with its cash reserves. The Company is
currently negotiating an extension of the maturity beyond October 2023.
As stated in Note 2, these conditions, along with other matters as set forth in Note 2, indicate that a material
uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
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
Equity and Capital Structure
Refer note 13
During the year, the Company successfully issued
fully paid ordinary shares as well as various options
of which some have been exercised.
Our audit procedures included an examination of
each issue of fully paid ordinary shares during the
year as disclosed in note 13. We also assessed
whether 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.
Research and Development Tax Incentive
Refer notes 3 and 7
Management utilise key assumptions, judgements
and estimates
in determining the R&D Tax
Incentive disclosed in note 3 and 7 which is
material to the financial statements. Management
have utilised the services of a tax expert to prepare
the calculation for the company's eligible R&D
spend for inclusion in its submission to the ATO.
Our audit procedures included an evaluation of the
assumptions, methodologies and conclusions used
by management’s expert 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 2.
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 2023, 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:
•
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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
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 22 to 26 of the directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of AdAlta Limited, for the year ended 30 June 2023, 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.
DRY KIRKNESS (AUDIT) PTY LTD
ROBERT HALL CA
Director
Perth
Date: 25 August 2023
SHAREHOLDER INFORMATION
30 JUNE 2023
(a) Distribution of equitable securities
i) Quoted Options, exercisable at $0.03 expiring on 29 May 2024
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
ii) Ordinary Shares
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
# of holders
# of units
% Issued share
8
21
9
57
68
3,433
63,813
68,491
2,606,279
0.00%
0.08%
0.09%
3.34%
75,333,170
96.49%
163
78,075,186
100.00%
# of holders
# of units
% Issued share
42
134
224
641
374
6,592
461,226
1,725,762
24,290,768
415,041,950
1,415
441,526,298
-
0.10%
0.39%
5.50%
94.00%
The number of shareholders holding less than a marketable parcel of shares are 635.
57
AdAlta Limited Annual Report 2023 ABN 92 120 332 925 SHAREHOLDER INFORMATION
30 JUNE 2023
(b) Voting rights
(i) Options
No voting rights. The names of the twenty largest holders of quoted options are:
Position Holder name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10 BOLIVIANOS PTY LTD
MS CHUNYAN NIU
SACAVIC PTY LTD
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