ANNUAL
REPORT
ADALTA LTD
ABN 92 120 332 925
FOR THE YEAR ENDED
30 JUNE 2024
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
CONTENTS
CORPORATE DIRECTORY
3
CHAIR'S LETTER
5
CEO AND MANAGING DIRECTOR'S LETTER
6
DIRECTORS' REPORT
8
AUDITOR'S INDEPENDENCE DECLARATION
35
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
36
STATEMENT OF FINANCIAL POSITION
37
STATEMENT OF CHANGES IN EQUITY
38
STATEMENT OF CASH FLOWS
39
NOTES TO THE FINANCIAL STATEMENTS
40
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
60
DIRECTORS' DECLARATION
61
INDEPENDENT AUDITOR'S REPORT TO
THE MEMBERS OF ADALTA LIMITED
62
SHAREHOLDER INFORMATION
67
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
CORPORATE DIRECTORY
DIRECTORS
Dr Paul MacLeman
Dr Timothy Oldham
Dr Robert Peach
Dr David Fuller
COMPANY SECRETARY
Mr Cameron Jones
REGISTERED OFFICE
Room 204, LIMS2
La Trobe Institute for Molecular Science,
Science Drive, La Trobe University, VIC 3086
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
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
CHAIR’S LETTER
Dear fellow shareholder,
On behalf of AdAlta’s Board of Directors, I am pleased to say that your Company has achieved much over the 12 months
ended 30 June 2024 financial year (FY2024).
The year saw AdAlta complete the Phase I clinical development of its lead i-body®-enabled candidate, AD-214 with a
successful Phase I extension study and, at the same time, progress partnering and financing initiatives central to our plans to
advance AD-214 into Phase II clinical trials. All this while we also sought to develop a strategy to rapidly expand AdAlta’s
clinical stage pipeline behind AD-214, and further leverage the i-body® platform to advance new drug discovery programs.
The CEO and Managing Director Letter that follows this letter covers these key deliverables in a little more detail. Thanks to
these achievements, we are now much closer to our aim of realising a return on the investment made by AdAlta to date.
As our FY2025 gets underway in earnest, the Company’s strategy continues to have three distinct components.
The first component is our special purpose vehicle AdSolis which is taking a new approach to fibrotic disease. AdSolis has
been created to advance AdAlta’s lead asset, AD-214 into Phase II clinical trials for fibrotic diseases, specifically Idiopathic
Pulmonary Fibrosis. AdSolis plans to realise this goal either by out-licensing AD-214 to larger pharma companies who will take
over further clinical development; or by securing a small number of strategic and financial investors who will directly invest in
AdSolis to fund Phase II clinical development without requiring further capital from AdAlta itself.
The second component is AdCella, another special purpose vehicle that has been created to provide focus to the Group’s
efforts to develop a clinical stage pipeline behind AD-214 at a faster pace than could be achieved purely by internal
development. AdCella will in-license advanced cellular immunotherapy products for solid cancers and non-cancer indications
from partners across Asia, and will then provide these assets with a pathway to Western-regulated clinical trials via Australia
in return for a share of the economic value of these assets. Partners will also have access to AdAlta’s i-body® platform to
enhance their early stage pipelines.
The third and platform component of AdAlta’s strategy is i-body® discovery and product development. This discovery
business leverages the i-body® platform to discover new drug candidates against validated but challenging disease targets
and advances these candidates through preclinical and manufacturing development. Discovery projects will continue to be
undertaken by AdAlta’s own in-house team of scientists, often in partnership with collaborators and partner companies who
bring complementary skills, knowledge and technology to fully leverage the power of the i-body® platform. AdAlta also
provides capital and human resources to its subsidiaries.
On behalf of the entire AdAlta Board, I would like to thank our management and staff for their commitment to our stated
development strategy over the course of the Company’s FY2024. I also want to take this opportunity to thank our loyal
shareholders for their support, as AdAlta continues to successfully validate the inherent value in its medical platform. This
support was clearly apparent in the capital raisings we undertook in FY2024. This additional funding provides your Company
with the firepower needed to successfully commercialise its unique i-body® technology – be it through the creation of our own
clinical products or licensing agreements with larger pharma groups.
Paul MacLeman
Non-executive Chair
AdAlta’s transformation to a multi-product company advanced significantly over the course of the
Company’s 2024 financial year. It saw AdAlta take significant steps towards realizing the value in its lead
assets and the goal of expanding its clinical stage pipeline. This progress is consistent with AdAlta’s goal of
developing i-body®-enabled protein- and cell therapy-based product candidates, and forming commercial
partnerships with biotechnology and biopharmaceutical companies to realise the value added to these
products.
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
CEO AND MANAGING
DIRECTOR’S LETTER
Dear fellow shareholder,
AdAlta realised material financial and operational milestones over the course of its FY2024 reporting period. They included a
number of notable achievements in the Company’s development strategy and successful capital raises that have given AdAlta
the runway to further progress its stated growth strategy over the coming 12 months.
Just ahead of our FY2024 getting underway, we announced plans for an important clinical study that extended our prior AD-
214 Phase I findings. This Phase I extension study was fully enrolled by September 2023, with final results reported in March
2024. The extension study crucially established safety and tolerability of the target Phase II dose, further supporting partnering.
In other exciting AD-214-related developments, our team established links between levels of receptor occupancy and inhibition
of a model fibrotic process by AD-214, enabling identification of target dosing regimens with potential for clinical efficacy.
They also identified the potential to deliver AD-214 by a more convenient and lower cost subcutaneous route of administration
for lifecycle management. The establishment of the AdSolis subsidiary during the year enables partnering and asset financing
discussions to facilitate advancing AD-214 into Phase II clinical trials independent of our other activities and diversifies the
range of financing options open to us.
Our goal to build a pipeline of clinical stage assets behind AD-214 is now squarely focused on cellular immunotherapies.
In April 2024 AdAlta entered a Memorandum of Understanding with SYNthesis BioVentures (SYNBV) to investigate the
establishment of jointly owned subsidiary AdCella. This will provide a vehicle for both parties to execute an “east to west”
cellular immunotherapy strategy that aims to in-license clinical trial ready innovative cellular immunotherapies for solid cancers
originating in Asia and provide them with a pathway to enter Western-regulated markets. It will leverage AdAlta’s skills and
Australia’s expertise in manufacturing and clinical trials in this field, and give partners access to AdAlta’s i-body® technology
to enhance their early stage pipelines.
In two other cellular immunotherapies-specific operational achievements over FY2024, we executed a Master Services
Agreement with Cell Therapies Pty Ltd (CTPL) in May 2024, establishing them as AdCella’s preferred manufacturer of cellular
immunotherapies, and advanced due diligence on more than 10 assets to select an initial pipeline for AdCella.
AdAlta also successfully progressed its plans to further leverage the i-body® platform to advance new drug discovery
programs. In collaboration with La Trobe University, the i-body® platform was used to identify i-bodies with high potency
inhibition of malaria parasite invasion across multiple malaria parasite strains. This combination of high potency and pan-strain
inhibition appears to be a world first discovery.
From a financial perspective, we took steps to maintain our balance sheet during FY2024. $6.6m was raised (before costs)
over the year from placement and entitlement offers, the exercise of some of the Company’s listed options and flexible
institutional investment facilities from New Life Sciences Capital LLC (NLSC) and major shareholder the Meurs Group. In
addition, AdAlta has access to up to $2.5m additional financing under the NLSC/Meurs Group investment facilities (subject
to various elections by AdAlta, NLSC or both), and there is the potential for an up to $7.5m investment into AdCella if the
objectives of the MoU with SYNBV are achieved.
AdAlta achieved key operational milestones in its FY2024. Completing Phase I clinical development for our
lead i-body®-enabled candidate, AD-214, and progressing partnering and financing initiatives that form
part of AdAlta’s plans to advance AD-214 into Phase II clinical trials give us confidence in our ability to bring
a new approach to IPF for the 500,000 patients around the world essentially living under a death sentence
due to the absence of good therapies. Launching our “east to west” cellular immunotherapy strategy with
the formation of AdCella provides clarity and focus for our plans to build our clinical stage pipeline beyond
AD-214, leveraging the incredible innovation in Asia in this field with AdAlta and Australia’s capabilities to
offer new hope for solid cancer patients.
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
CEO AND MANAGING
DIRECTOR’S LETTER
This extra funding provides us with the runway to further progress our well-enunciated strategy over the coming 12 months.
Over this time we are targeting:
• Execution of a non-dilutive financing or licensing transaction to enable AD-214 to progress to Phase II studies,
with its timing dependent on several factors, including the pace and outcomes of partner technical due diligence
and commercial negotiations.
• Completing the evaluation of, and licensing the initial cellular immunotherapy assets for AdCella as contemplated
by SYNBV MoU, with timing also dependent on factors such as the outcomes of technical due diligence and
commercial negotiations.
• Results of in vivo proof of concept studies of A-i-CAR-T cells with Carina and CXCR4 i-bodies with GPCR
Therapeutics and the commencement of additional i-body discovery programs supporting AdCella.
I want to personally thank the entire AdAlta team for their hard work over the past year. Their unwavering commitment to
delivering the Company’s strategy ensured the development milestones I have outlined in this review were achieved - and
many other targeted milestones progressed to the point that they too are near realisation. I also want to thank the Board of
Directors and our loyal shareholders, particularly those who supported our capital raisings, for their ongoing support as
AdAlta’s team works towards development and commercialisation of the Company’s unique platform.
I now look forward to updating shareholders on further value-enhancing developments over coming months that will
unambiguously demonstrate the true value of our i-body® platform.
Tim Oldham
CEO & Managing Director
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT
Information about the Directors
The names and particulars of the Directors of the Group 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 ASX listed, public unlisted and
private companies. Paul is the Executive Chairman of Island
Pharmaceuticals Limited (ASX:ILA).
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 of 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 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 Dimerix Ltd
(ASX:DXB). Previously David was Chair of EpiAxis Therapeutics,
Chief Medical Officer at Aucentra Therapeutics and 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 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.
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 Directors of AdAlta Limited (“AdAlta” or “the Group”) submit herewith the Annual Report of the Group for the financial year
ended 30 June 2024. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
Company Secretary
The name and particulars of the Company Secretary of the Group during or since the end of the financial year are:
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 transaction advisory, CFO, 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
Group as at the date of this report:
Directors
Fully paid
ordinary shares
Unlisted
Options
(Number)
(Number)
Dr Paul MacLeman
472,970
5,855,000
Dr Timothy Oldham
1,601,750
11,729,060
Dr Robert Peach
1,453,126
2,950,000
Dr David Fuller
294,936
2,950,000
Dividends
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
The holders of these options do not have the right to participate in any share issue of the Group without first exercising the options in
accordance with the terms of any such share issue.
Number of shares under option
Class of shares
Exercise price of option
Expiry date of options
400,000
Ordinary
$0.1744
15 March 2025
3,450,342
Ordinary
$0.2479
26 November 2025
1,478,718
Ordinary
$0.2482
26 November 2025
6,655,000
Ordinary
$0.0845
29 November 2025
450,000
Ordinary
$0.0757
28 February 2026
1,300,000
Ordinary
$0.0397
27 February 2027
100,000
Ordinary
$0.0200
25 August 2027
11,900,000
Ordinary
$0.0200
22 November 2027
1,325,000
Ordinary
$0.0200
26 February 2028
DIRECTORS’ REPORT (Continued)
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Indemnity and insurance of officers and auditors
During the financial year, the Group paid a premium in respect of a contract that insures the Directors of the Group (as named
above), the company secretary and all executive officers of the Group 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 Group 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 Group 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 Group’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 30
June 2024, and the number of meetings attended by each Director were:
Full Board
Remuneration and
Nomination Committee1
Audit and Risk Committee1
Attended
Held
Attended
Held
Attended
Held
Dr Timothy Oldham
6
6
2
2
2
2
Dr Paul MacLeman
6
6
2
2
2
2
Dr Robert Peach
6
6
2
2
2
2
Dr David Fuller
6
6
2
2
2
2
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee.
1 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.
Proceedings on behalf of the Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the
Group is a party for the purpose of taking responsibility on behalf of the Group 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.
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Operating and financial review
1. Summary of principal activities and
purpose
AdAlta Ltd (ASX:1AD) (AdAlta or the Company) is a clinical
stage drug discovery and development company.
The principal business of AdAlta is the discovery and
development of next generation protein and cell-based
therapeutics. The Company’s focus is to go where traditional
antibodies cannot to deliver antibody-like precision in
applications beyond the limits of traditional antibody formats.
AdAlta creates value by:
• discovering new protein and cell therapeutics and
diagnostics using its i-body® platform. i-bodies are a new
class of small, targeted proteins that mimic the properties
of the single domain antibodies found in the shark immune
system: they are the first fully human, single domain
antibody-like proteins. i-bodies are 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. This makes the i-body® platform a powerful
drug discovery tool.
• selectively in-licensing or acquiring pre-clinical stage
product candidates and further developing them or co-
developing them through initial clinical studies. Amongst
other factors, a key selection criteria for these product
candidates will be the potential for a strategic collaboration
with their original owner to utilize i-body® technology in
other pipeline products.
• progressing or developing protein- and cell therapy-based
product candidates through pre-clinical studies, product
development and early-stage clinical trials.
This value is converted to revenue by:
• partnering with biotechnology and biopharmaceutical
companies to co-develop i-body®-enabled products for
targets identified by these partners or by AdAlta. In return,
AdAlta receives combinations of research fees, development
and commercialisation milestones, royalties and equity
interests in these products.
• out-licensing 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.
The primary focus of the FY2024 year was to:
• complete the Phase I clinical development of the Company’s
lead i-body®-enabled candidate, AD‑214, and progress
partnering and financing to advance AD-214 into Phase II
clinical trials and to realise a return on the investment made
by AdAlta to date.
• develop a strategy to rapidly expand AdAlta’s clinical stage
pipeline behind AD-214.
• continue to leverage the i-body® platform to advance new
drug discovery programs.
2. Key achievements in FY2024
AD-214/AdSolis
• Established links between levels of receptor occupancy and
inhibition of a model fibrotic process by AD-214, enabling
identification of target dosing regimens with potential for
clinical efficacy.
• Completed Phase I extension study of AD-214, establishing
safety and tolerability of target Phase II dose.
• Identified potential to deliver AD-214 by a more convenient
and lower cost subcutaneous route of administration for
lifecycle management.
• Established AdSolis subsidiary and advanced partnering
and asset financing discussions to facilitate advancing AD-
214 into Phase II clinical trials.
Cellular immunotherapies/AdCella
• Entered a Memorandum of Understanding with SYNthesis
BioVentures (SYNBV) to investigate the establishment of
jointly owned subsidiary AdCella to execute an “east to
west” cellular immunotherapy strategy that aims to in-license
clinical trial ready innovative cellular immunotherapies for
solid cancers originating in Asia and provide them with a
pathway to enter Western-regulated markets leveraging
AdAlta’s skills and Australia’s expertise in manufacturing
and clinical trials in this field. Partners will also gain access
to AdAlta’s i-body® technology to enhance their early stage
pipelines.
• Executed a Master Services Agreement with Cell Therapies
Pty Ltd (CTPL) establishing them as AdCella’s preferred
manufacturer of cellular immunotherapies.
• Advanced due diligence on more than 10 assets to select an
initial pipeline for AdCella.
i-body® discovery
• In collaboration with La Trobe University, used the i-body®
platform to identify i-bodies with high potency inhibition of
malaria parasite invasion across multiple malaria parasite
strains. This combination of high potency and pan-strain
inhibition appears to be a world first discovery.
Financing
• Raised $6.62m from equity issues, exercise of 1ADOA
listed options and flexible institutional investment facilities
from New Life Sciences Capital LLC (NLSC) and major
shareholder the Meurs Group.
• Access to up to $2.5m additional financing under the
NLSC/Meurs Group investment facilities.
• Potential for up to $7.5m investment into AdCella if the
objectives of the MoU with SYNBV are achieved.
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
3. Company strategy
AdAlta has three core strategies as illustrated in Figure 1:
1. AdSolis: taking a new approach to fibrotic disease with
AD-214
AdSolis is a special purpose vehicle created to advance the
Group’s lead asset, AD-214 into Phase II clinical trials for
fibrotic diseases, specifically Idiopathic Pulmonary Fibrosis.
AdSolis plans to realise this goal either by out-licensing
AD-214 to larger pharma companies who will take over
further clinical development; or by securing a small number
of strategic and financial investors who will directly invest
in AdSolis to fund Phase II clinical development without
requiring further capital from AdAlta.
2. AdCella: “east to west” cellular immunotherapies
AdCella was created to provide focus to the Group’s efforts
to develop a clinical stage pipeline behind AD-214 faster
than could be achieved purely by internal development.
AdCella will in-license advanced cellular immunotherapy
products for solid cancers and non-cancer indications from
partners across Asia, and will then provide these assets with
a pathway to Western-regulated clinical trials via Australia
in return for a share of the economic value of these assets.
Partners will also have access to AdAlta’s i-body® platform
to enhance their early stage pipelines.
3. AdAlta i-body® discovery and product development:
going where antibodies cannot
The discovery business leverages the i-body® platform
to discover new drug candidates against validated but
challenging disease targets and advances these candidates
through preclinical and manufacturing development.
Discovery projects are undertaken by AdAlta’s own
in-house team of scientists, often in partnership with
collaborators and partner companies who bring
complementary skills, knowledge and technology to fully
leverage the power of the i-body® platform. AdAlta
also provides capital and human resources to operate its
subsidiaries.
Figure 1: AdAlta’s core business strategies
AdAlta’s strategy
i-body® enabled next generation protein- and cell-therapeutics
AdCella
Discovery business
i-body® “inventory” of
high value product
candidates for
development or licensing
Product development
businesses
Product candidates progressing
through value-adding clinical
development milestones for out-
licensing or co-development
Larger biopharma companies
Out-licensing and co-development
A new approach to fibrotic disease
East to west cellular immunotherapies
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AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
4. AdSolis – taking a new approach to
fibrosis with AD-214
Fibrosis, or scarring, can affect almost every organ in the
body and may be responsible for organ failure in up to 45%
of deaths in the Western World alone. By way of example,
500,000 patients globally suffer from the rare degenerative
disease, Idiopathic Pulmonary Fibrosis (IPF), and are living
under a death sentence because there are simply no good
therapies available and none that halt progression of this
debilitating disease.
AdAlta’s lead product candidate, AD-214, is taking a whole
new approach to fibrotic disease. AD-214 is a first in class, next
generation protein therapeutic targeting the G-Protein Coupled
Receptor (GPCR) known as CXCR4. AD-214 has demonstrated
efficacy in multiple animal models of fibrotic disease,
particularly in lung and kidney fibrosis. Preclinical research
is on-going in eye fibrosis (a leading cause of blindness in
Western World countries) and in cancer (in collaboration with
South Korean partner GPCR Therapeutics). These demonstrate
the multiple indication potential of AD-214. This drug candidate
has also been shown to be well tolerated when administered
by intravenous infusion in two Phase I clinical trials. The
bioavailability and activity (target engagement) of AD-214
supports AdAlta’s target product profile of 10 mg/kg infusions
every two weeks. Additional studies support the potential for
an even more convenient and lower cost weekly subcutaneous
format of the drug that could be used for lifecycle extension.
AD-214 is protected by composition of matter patents in
all major pharmaceutical markets extending to 2036, with
additional applications filed that if granted would further
extend protection to 2043. AD-214 has been granted Orphan
Drug Designation (ODD) for IPF by the US Food and Drug
Administration (FDA) which confers regulatory and tax
advantages for commercialisation partners and, if approved,
AD-214 would attract 12 years of market exclusivity in the US
and 10 years in EU.
AD-214 is the only antibody-like molecule moving into Phase II
clinical trials and one of only three molecules targeting a novel
pathway where there have not been prior clinical failures. AD-
214’s robust development strategy and its strong competitive
position is summarised in Table 1.
Table 1: A$45m investment to date has built strong AD-214 value proposition
First in class molecule targeting
established mode of action in fibrotic
disease
• Competitively positioned as only antibody-like therapeutic
entering late-stage development pipeline
Pre-clinical efficacy in multiple animal
models of fibrotic disease - derisks
clinical studies
• Led by Idiopathic Pulmonary Fibrosis (IPF): Total Addressable Market (TAM)
US$4.3b
• Multiple US$b indication potentional: kidney, eye, cancer
Phase I successfully completed
• Well tolerated, evidence of target binding
Clinically viable dosing regimen
• Intravenous (IV) every 2 weeks; subcutaneous (SC) every week
• Bridge between preclinical efficacy and Phase I results
Strong intellectual property, regulatory
position
• Patents protecting asset to 2036 and beyond
• US FDA Orphan Drug Designation for IPF
• 10-12 years market exclusivity - US, EU)
14
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
The markets for new antifibrotics are significant. The two
existing therapies approved for IPF and the related family of
Interstitial Lung Diseases (ILDs) generated sales of US$4.3
billion in 2022,1 yet 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 up
front and US$620 million in potential milestones.2 In October
2022, AbbVie purchased DJS Antibodies for US$225 million,
primarily for a preclinical IPF product candidate.3 The markets
for kidney fibrosis and eye fibrosis could be as large as US$10
billion and US$15 billion respectively.4
AdAlta completed Phase I clinical trials in healthy volunteers
showing intravenous (IV) AD-214 is well tolerated in single
doses up to 20 mg/kg and multiple doses of 5 mg/kg in
healthy volunteers. These studies also showed that AD-214
engages its target receptor, CXCR4 (a receptor protein that
spans the outer membrane of cells and is involved in cell
mobility as well as helping regulate various biochemical
processes involved in fibrosis) and sustains higher levels of
receptor occupancy for longer than anticipated.
In March 2024, AdAlta completed a Phase I extension clinical
study of IV AD-214 to evaluate the safety and tolerability of
multiple doses of IV AD-214 at 10 mg/kg, the anticipated
target dose in upcoming Phase II clinical studies.5 AD-214 was
well tolerated at this higher dose, with no dose limiting toxicity,
no need to interrupt doses, no requirement to administer
medication to manage infusion reactions and no adverse events
more serious than “mild”. This establishes the safety profile
necessary to advance this dose to Phase II clinical studies The
availability, or pharmacokinetics (PK) of AD-214 was in line
with expectations from prior studies and consistent across all
doses. The activity, or pharmacodynamics (PD), of AD-214, as
measured by white blood cell mobilization and target receptor
occupancy, were also consistent across all doses and in line
with both prior studies and dose simulation model predictions,
supporting the potential efficacy of the Phase II dose level.
Immune responses to AD-214, which are observed for most
biologics, continue to be very low level and with no evidence
of effect on PK or PD, despite the study being designed to test
the effect of peak immune responses. This supports the claim
that the low-level immune response is unlikely to detract from
clinical efficacy or safety.
Pre-clinical studies have established a link between observable
levels of target receptor occupancy and inhibition of cell
migration, a surrogate model of the fibrotic process, enabling
the efficacy of different AD-214 doses and dose intervals to be
estimated and supporting the potential efficacy of IV delivery of
10 mg/kg of AD-214 every two weeks, the interval required for
commercial viability. These studies also identified that delivery
of AD-214 via subcutaneous administration is plausible.6
Other preclinical studies continued to explore the potential
efficacy of AD-214 in other fibrotic diseases and cancer. These
studies enable improved design and significantly reduced risk
of Phase II clinical studies of AD‑214 and enhanced value
through potential use in broader markets and more convenient
formats. Partner feedback confirms that the potential for SC
administration significantly improves commercial potential,
adding significant value to the asset.
The Company is focused on preparing for Phase II clinical
efficacy trials using intravenous (IV) delivery of AD‑214 for
lung and kidney fibrosis as the fastest and most cost-effective
path to demonstrate efficacy in Phase II clinical studies in
multiple indications. The development of the SC formulation
and Phase I clinical testing could proceed in parallel, providing
commercialization partners with multiple options for Phase III
trial design (see Table 2).
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
3 https://news.abbvie.com/news/press-releases/abbvie-acquires-djs-antibodies-further-strengthening-immunology-pipeline.htm
4 GlobalData, disease analysis reports
5 https://investorhub.adalta.com.au/announcements/6233083
6 https://investorhub.adalta.com.au/announcements/4412522
15
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
AdAlta has established a subsidiary company, AdSolis Pty
Ltd, to pursue two parallel strategies to secure the necessary
financing for Phase II clinical trials and to generate a return on
its investment to date in AD-214:
1. Out-licensing of AD-214 to large biopharmaceutical
companies who would then conduct Phase II and further
studies; or
2. Co-developing AD-214 in AdSolis managed by AdAlta and
financed by third party strategic or financial investors.
The Company is progressing multiple partnering discussions to
progress both these strategies with the objective of executing a
transaction in the near term. The results of the Phase I extension
study were key to progressing these strategies and multiple
interested parties have now received, and are evaluating, the
results. In addition to progressing existing AdSolis pipeline
discussions, AdAlta’s marketing initiatives have also generated
an additional surprising (and highly positive) outcome in the
form of a number of high quality, in-bound enquiries from
new licensing partner and investor prospects, including newly
formed, venture-backed companies. These reflect the record
levels of venture capital raised in the US during 2023 that is
now needing to be deployed, and these new enquiries have
added significant additional momentum and competitive
tension to AdAlta’s partnering discussions.
One example of these newly formed companies has a
therapeutic focus on “lung-related fibrotic conditions, skin-
related fibrosis and pulmonary arterial hypertension”. They
have seed funding from a venture capital firm that has backed
the leadership team in the past and has committed to substantial
funding on in-licensing the right assets. This company is actively
seeking in-licensing and collaboration opportunities at pre-
clinical, Investigational New Drug (IND)-ready, or early clinical
stage and described AD-214 as fitting perfectly with its strategy.
A second example has already raised several hundred million
dollars from blue chip life sciences investors and established a
big data and artificial intelligence platform for drug target and
candidate selection and optimisation, along with a discovery
pipeline. To accelerate time to value creation, they are looking
to in-license late-stage pre-clinical to early-stage clinical assets
in “the inflammation and immunology space including a focus
on fibrosis”, precisely where AD-214 is positioned.
Table 2: AD-214 product development strategy
Potential subcutaneous (SC) product profile
•Patient self-administration at home
• Weekly or daily injections
• Enhanced market share, reduced COGS
Strategy: Develop formulation, progress to Phase I
Target intravenous (IV) product profile
• IV administration in clinic
• Two weeks minimum between infusions
• Fastest, cheapest to clinical proof of concepts
Strategy: Progress to Phase II
Choice of formulation to take through to Phase III
16
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
5. AdCella – “east to west” cellular
immunotherapies
AdAlta announced the creation of AdCella Pty Ltd (AdCella) in
April 2024, providing clarity and focus to AdAlta’s strategy of
building out its product development business and clinical stage
pipeline by in-licensing assets that complement the i‑body®
platform. AdCella will focus on cellular immunotherapies
(living drugs based on engineered human cells), a rapidly
growing market that is transforming outcomes in blood cancer
and is now poised to do so in solid cancers and non-cancer
indications. Asia, and China in particular, is leading innovation
in this field with around half of all companies and 60% of all
clinical trials found in Asia. Australia has specific and globally
recognised expertise in cellular immunotherapy manufacturing
and clinical trials.
Harnessing the cells of the body’s own immune system as a
living drug is opening up new ways to fight cancer and other
chronic diseases. A specific (and today the leading) example is
Chimeric Antigen Receptor (CAR) cell therapies which 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
therapies7 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 2028,8 with more
than 50% of revenues to be derived from CAR-cell therapies
against solid tumours by 2030.9 In 2024 the first cellular
immunotherapies for solid cancers have been approved by the
FDA.10
i-bodies may offer particularly unique advantages in the
field of CAR cell therapy. Until now, fragments of monoclonal
antibodies called scFv’s have been used to target CAR cells to
tumours. The smaller size of i‑bodies makes then suitable for the
creation of combination CARs capable of targeting of multiple
tumour antigens. Their unique targeting capability enable them
to target novel and difficult to access tumour antigens. They
are small enough to be made and secreted by immune cells
to help overcome immune system suppression induced by
tumours. These are significant advantages over scFv fragments,
making i-bodies potentially part of the solution to extending the
potential of these therapies to solid tumours.
More than half of all cellular immunotherapy clinical trials
globally are now conducted in China.11 Chinese (and also
South Korean) companies are able to quickly and cost
effectively design and optimize novel cellular immunotherapy
products, including generating early clinical efficacy data. They
often have extensive product pipelines but lack the financial
and local market operational resources to make these products
available in western regulated markets.
AdCella’s objective is to be a force multiplier for Asian (and
particularly China) innovators by providing a pathway for
clinic ready assets to access Western-regulated markets. With
AdCella as their bridge to the latter target markets, partner
companies will gain unique access to:
· Australia’s cellular immunotherapy clinical and manufacturing
ecosystem.
· AdAlta’s capabilities to conduct clinical trials acceptable to
US FDA at lower cost than in the US.
· AdAlta’s i-body® platform for the next generation of multi-
functional cellular immunotherapy products in their pipeline.
· Access to both public and private sources of capital.
In addition, Australian patients may benefit from earlier access
to these new therapies than would otherwise be possible
without AdCella.
By licensing or acquiring global (outside Asia)
commercialisation rights to these products in return for
conducting initial clinical trials for Western-regulated markets
in Australia, AdCella could add significant value to these assets
for both AdCella and its licensing partners. AdCella’s business
model is illustrated in Figure 2. AdAlta’s i-body® platform can
also be made available to these partners to enhance their
future pipelines.
7 https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/approved-cellular-and-gene-therapy-products
8 Grandview Research, “T-cell Therapy Market Size, Share & Trends Analysis” Feb 2021
9 Polaris Market Research, "CAR-T Cell Therapy Market Share, Size Trends, Industry Analysis Report", June 2021
10 https://www.fda.gov/news-events/press-announcements/fda-approves-first-cellular-therapy-treat-patients-unresectable-or-metastatic-
melanoma and https://www.fda.gov/news-events/press-announcements/fda-approves-first-gene-therapy-treat-adults-metastatic-synovial-
sarcoma
11 GlobalData, Pharma Intelligence Center, (accessed 24 May 2023)
17
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Figure 2: AdCella’s business model
In this way, AdCella aims to develop a pipeline of novel, multi-
functional cellular immunotherapy products addressing the
challenges of trafficking, targeting and immune suppression in
solid tumours and non-cancer indications.
In April 2024, AdAlta announced the execution of a
Memorandum of Understanding (MoU) with SYNthesis
BioVentures (SYNBV) to work towards creating AdCella.
Successfully achieving the objectives of the MoU would result
in SYNBV becoming an investor in and joint owner of AdCella.
SYNBV’s deep expertise in cross border transactions and
access to alternative capital sources, especially with China, is
highly complementary to AdAlta’s operational and technology
skills and enables AdAlta to accelerate execution of its strategy.
SYNBV and AdAlta are collaborating over an initial term of six
months (with option to extend a further six months) to complete
due diligence on more than ten cellular immunotherapy assets
with a view to selecting an initial portfolio for AdCella. Many
of these candidates have already generated clinical data in
their “home” markets, substantially reducing the risk of the initial
clinical trials in Australia.
In May 2024, AdAlta further strengthened AdCella’s execution
capabilities by entering a Master Services Agreement (MSA)
establishing Cell Therapies Pty Ltd (CTPL) as AdCella’s
preferred manufacturer of cellular immunotherapies. This
collaboration provides AdCella with access to expertise in
cellular immunotherapy process development, manufacturing
and supply chain management. CTPL is Australia’s leading
commercial contract development and manufacturing company
specialising in cell therapy, gene therapy, regenerative
medicine, and cellular immunotherapy products. CTPL’s expert
team and world-class facilities have been developing and
manufacturing cutting edge treatments for cancer and rare
diseases on behalf of local and international clients for more
than 20 years and have been approved for commercial CAR-T
cell therapy supply to Australia (TGA) and Japan (PMDA).
The combination of AdAlta’s i-body® platform, SYNBV and
CTPL demonstrates AdCella’s capability to execute its strategy
and is being well received by both Asian partners and global
investors, a clear forward indicator that AdCella will gain
access to the products and capital required to underwrite its
future growth.
1.
In-license market
leading assets from
Asia
3.
Establish global manufacturing network
and on-license to commercialization
partners
AdCella
2.
Build value by establishing western
regulated manufacturing, obtaining first
western regulated clinical data
18
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
6. i-bodies – going where traditional
antibody therapeutics cannot
AdAlta’s i-body® platform continues to enable early discovery
and preclinical development programs across a range of drug
formats and targets. AdAlta’s discovery business includes:
• Ongoing immuno-oncology co-development programs with
Carina Biotech (i-CAR-T), GE Healthcare (i-PET imaging)
and GPCR Therapeutics (CXCR4 i-body® combination
therapies).
• Internal discovery programs supporting AdCella.
• Potential applications of the new antimalarial i-body®
discovered with La Trobe University.
Progress on internal discovery programs has been intentionally
slowed to increase focus on AdSolis and AdCella partnering
programs.
Immuno-oncology co-development programs
i-CAR cell therapies
In August 2021, AdAlta entered a collaboration agreement with
Carina Biotech Pty Ltd (Carina), an Australian biotechnology
company, to develop next generation i-body enabled CAR-T
cell therapies (i-CAR-T’s) for solid tumours.
Under the collaboration, Carina and AdAlta will combine
Carina’s advanced CAR-T cell therapy technology platform
with AdAlta’s i-body platform to develop CAR-T and dual or
bi-specific CAR- T products for up to five different targets. The
companies will share development costs to reach the value
enhancing pre-clinical proof of concept stage, at which point
they will jointly own the products created.
The collaboration has demonstrated that i-bodies can
successfully be incorporated into CAR-T cells that meet
required manufacturing specifications and kill cancer cells
in vitro. This has enabled AdAlta to strategically position its
i-body® technology at the forefront of next generation CAR
cell therapies, providing evidence supporting the potential
synergies between the i-body® platform and AdCella’s in-
licensing partners.
Carina is now evaluating i-CAR-T constructs against an
undisclosed tumour target “A” in in vitro and in vivo efficacy
studies. AdAlta has commenced discovery research for the next
two tumour targets “B” and “C”. These targets could be utilised
in various gastrointestinal, gynecological and neurological
cancers.
CXCR4 – cancer
AdAlta has a collaboration with GPCR Therapeutics Inc (South
Korea) to evaluate AdAlta’s CXCR4 inhibiting i-bodies as
cancer therapeutics, using GPCR Therapeutics’ proprietary
combination inhibition approach. CXCR4 is overexpressed in
more than 23 cancers and drugs targeting the CXCR4 pathway
address a multibillion dollar opportunity. Initial results have
replicated AdAlta’s own laboratory findings about the activity
of these i-bodies and provided encouraging indicators of
synergies with GPCR Therapeutics’ intellectual Property. Should
GPCR Therapeutics Inc’s in vitro and in vivo evaluation be
positive, AdAlta will have a first option to license and further
commercialise any resulting products for the treatment of
cancer.
i-PET-imaging – immuno-oncology
In September 2019, AdAlta commenced a collaboration
with GE Healthcare Technologies Inc (GEHC) to develop
i-body enabled PET (i-PET) imaging agents for use in immuno-
oncology. The aim of these i-PET imaging agents is to enable
identification of patients who are not responding to immune
checkpoint inhibitor therapy well before their tumours progress.
Further updates on this program will be provided in consultation
with GEHC and as milestones are achieved.
Internal i-body® discovery programs supporting AdCella
AdAlta is preparing i-body® discovery campaigns against two
new targets that could be utilized in cellular immunotherapies.
Importantly, these could become “catalogue products” for
cellular immunotherapies that may assist in improving the
potency and persistence of multiple products for AdCella and
other partners and could be licensed multiple times.
19
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
12 WHO, World Malaria Report 2023.
Other i-body® discovery programs
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.
In December 2023, AdAlta announced that its long term collaboration with La Trobe University had yielded an i-body® binding to
a target on the malaria parasite that is believed to be the world’s first antibody-like molecule capable of high potency inhibition of
cell invasion at two life cycle stages by multiple strains of malaria parasites. There are still 247 million malaria cases each year and
647,000 deaths.12 AdAlta and La Trobe University will seek grant financing to advance this discovery.
AdAlta has initiated i-body discovery projects against several other targets and is able to progress these should suitable partnerships
be secured. The Company has received a number of requests for additional information in respect of one of these to enable such
partnerships to be evaluated.
7. Pipeline summary
AdAlta’s pipeline is summarized in Figure 3.
Figure 3: AdAlta pipeline
44
Target
Product
Indication
Discovery
Non-clinical
Clinical
Partner
Discovery
Lead
optimisation
Preclinical
IND enabling
Phase I
Phase II
CXCR4
AD-214
Lung, kidney
fibrosis
Available
to license
Eye fibrosis
Available
to license
TBC
Oncology
GZMB
GZMB-i-
PET
Cancer imaging
Target A
A-i-CAR-T
Oncology
Target B
B-i-CAR-T
Oncology
Target C
C-i-CAR-T
Oncology
AMA1
WB34
Malaria
Available to license
GPCR
Target X
TBC
Fibrosis
Available to co-develop
RANKL
ADR3
Osteoporosis
Available to license
~25 other
targets
i-body
platform
Platform licenses available
IV
SC
IVT
Product discovery and development
i-body® inventory
20
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
8. Future milestones
Key milestones anticipated in the near term are:
• Execution of a non-dilutive financing or licensing transaction
to enable AD-214 to progress to Phase II studies. Timing
depends on the duration and outcomes of partner technical
due diligence and commercial negotiations and the
continued assessment of whether any transaction is in the
best interests of shareholders.
• Progress evaluation of cellular immunotherapy assets
with i-body® synergies and AdCella as contemplated by
SYNBV MoU. Timing depends on the outcomes of technical
due diligence, commercial negotiations and the continued
assessment of whether any transaction is in the best interests
of shareholders.
• Results of in vivo proof of concept studies of A-i-CAR-T cells
with Carina and CXCR4 i-bodies with GPCR Therapeutics.
• The commencement of additional i-body® discovery
programs.
9. 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. New patent applications have been filed
in relation to methods of treatment that if granted would offer
additional protection to 2043.
Patent applications have also been lodged in relation to
AdAlta’s RANKL and AMA1 (malaria) binding i-bodies.
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.
Consolidated
2024
2023
$
$
R&D tax incentive
1,737,798
2,883,125
Other revenue
-
586,054
Research and development expenses (external)
(2,991,706)
(3,646,375)
Research and development expenses (employee benefit expense)
(1,170,573)
(1,046,552)
Corporate administration expenses
(1,941,806)
(1,729,644)
Share based payment expenses
(205,571)
(218,452)
Employee benefit expense
(459,852)
(1,194,710)
Financial results
The loss for the consolidated entity after providing for income tax amounted to $5,381,269 (30 June 2023: $4,851,187).
The year ended 30 June 2024 operating results included the following:
21
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Financial liquidity and capital resources
The Group began the year with $4.79 million cash at bank.
On 13 July 2023 the Group placed a Rights Offer shortfall,
raising $1.87 million, resulting in the issue of 74,846,752 New
Shares together with 37,423,362 New Options (ASX:1ADOA)
to subscribers for the New Shares.
On 3 November 2023 the Group announced a placement
to raising $1.20 million (before costs) resulting in the issue
of 60,000,000 new shares together with 30,000,000 new
options (ASX:1ADOA) to subscribers for the new shares. In
addition, a further $460,000 was raised on the same terms,
requiring shareholder approval at the Extraordinary General
Meeting held on 14 December 2023, resulting in the issue
of 23,000,000 new shares and 53,000,000 new options
(ASX:1ADOA) for participants in the placement. In addition,
12,000,000 options (ASX:1ADOA) were issued to Peak Asset
Management for corporate advisory services provided to the
Group.
On 29 April 2024 the Group announced an institutional
investment (under the “Investment Agreements”) of up to $3.7
million, consisting of up to $3 million (the “NLSC Investment”)
to be invested by NewLife Sciences Capital, LLC (“NLSC”)
and up to $0.7 million (the “Meurs Investment”) to be invested
by an entity associated with an existing shareholder, the
Meurs Group (together, “Investors”). In May 2024, the initial
investment raised $1.2 million for $1.31million worth of
Placement Shares to be determined in accordance with the
Investment Agreements.
The Group made an initial issuance of 3,800,000 Shares to
NLSC at the time of the funding of the initial investment, towards
the ultimate number of Placement Shares to be issued. The
Group also agreed to issue 2,000,000 Shares to NLSC and
466,667 to Meurs Group in satisfaction of a 2% fee in relation
to the investment.
On 3 June 2024 the Group announced 62,542,776 listed
options (ASX:1ADOA) had been exercised raising $1.9 million.
The Group ended the year with $3.13 million cash at bank on
30 June 2024.
Corporate updates
AdAlta employed 9 staff at the end of the reporting period with
a peak of 11 during the year.
Likely developments and expected results
of operations
Information on likely developments in the operations of the
consolidated entity 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
consolidated entity. The strategic goals and objectives of the
Company and set out in the Operating and Financial Review
above.
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.
22
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
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 employed nine staff (22% female) at 30 June
2024, eight of whom were directly involved in the technical
development of AdAlta’s products and platforms. AdAlta’s non-
executive Board is presently 100% male, with one vacancy.
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 98% of average male base
remuneration. The Company offers one month paid maternity
and paternity leave in addition to statutory entitlements.
The Company’s Diversity Policy can be found 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 provide access to its intellectual
property and materials and consumables funding to support
student research projects and training. This has, for example,
resulted in the discovery of world first pan-species high
potency i-body® inhibitors of malaria parasite invasion. During
FY2024, AdAlta hosted two PhD candidates for six month
internships.
The Company also supports patient advocates and clinical
training in therapeutic areas related to its development
programs as its means allow. During FY2024, AdAlta provided
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.
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.
23
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Business Risks
1.1 Risk factors specific to the Group
(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 Group is
to secure agreements with other biopharmaceutical companies
to further develop and commercialize 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
Group 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 Group may need to manufacture additional
drug substance at significant cost and delay) and as a result
the Group 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 Group. As a result, the Group’s ability to complete
its development programs may be delayed or halted until
such funds are raised (if at all), preventing the Group 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 Group 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 Group 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 Group. As a result, the Group’s ability to
complete its development programs may be delayed or halted
until such funds are raised (if at all), preventing the Group
from commercialising its intellectual property and generating
revenues.
There is no guarantee that compliance will be achieved to
support the Group’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 Group’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
(d) Australian Government R&D incentives may change
The Group’s development program includes anticipated
receipt of tax refunds based on the Group’s actual research
and development spending. Certain loan facilities are secured
against these receipts. If the status of the Group 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 Group
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 Group. As a result, the Group’s ability to complete
its development programs may be delayed or halted until
such funds are raised (if at all), preventing the Group from
commercialising its intellectual property and generating
revenues.
24
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
(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
Group’s products are successful.
Failure or material delay at any point of the clinical trial process
will reduce the Group’s ability to commercialize its intellectual
property and generate revenues.
(f) Risk of product development and manufacturing
The Group’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 Group’s
products, including AD-214, are not yet complete. If the Group
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 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
Group’s ability to implement its business plan and partner its
assets would be significantly hindered such this failure and
the Group 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 Group’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 Group has limited history in drug development.
Accordingly, the Group 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 Group’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:
• be 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
scale;
• 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.
25
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
(i) Intellectual property
The Group’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 Group relies on its ability to develop and commercialize
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 Group will seek to protect its intellectual property,
there can be no assurance that these measures will be sufficient.
The Group 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 Group may
own or control or licence now and, in the future, will afford
the Group 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 Group’s
intellectual property position would divert the limited resources
of the Group away from its primary development program and
may result in the Group requiring additional funds to complete
that program. It may also result in the Group 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 Group’s business and its
size, its ability to commercialize 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 Group also faces competition to
employ and retain the services of such individuals.
There can be no assurance that the Group will be able to
attract or retain sufficiently qualified scientific and management
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 Group, and this may adversely affect
the Group by impeding the achievement of its research, product
development and commercialisation objectives.
(k) Competitive risk
There are a number of groups 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 Group is developing.
The Group’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 Group’s products obsolete and/or otherwise uncompetitive.
The Group’s ability to implement its business plan would be
significantly hindered by this and the Group 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 Group’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 Group 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 Group 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 Group. As a result, the Group’s ability to complete
its development programs may be delayed or halted until
such funds are raised (if at all), preventing the Group from
commercialising its intellectual property and generating
revenues.
26
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
(m) Sufficiency of funding
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 group operations. The Group does
not have sufficient capital to fully commercialize its lead
candidate and other programs using its platform technology.
Accordingly, the Group will either have to raise additional
capital through further offers or rely on securing grants or
commercial transactions to further its development programs.
The Group’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 Group
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 Group. As a result, the
Group’s ability to complete its development programs may
be delayed or halted until such funds are raised (if at all),
preventing the Group 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 Group
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 Group to product liability risks and future sales of its
products may, and if the Group decides to develop a product
candidate and take it to market directly will, expose the Group
to product liability risks which are inherent in the research and
development, manufacturing, marketing and use of its products.
The Group 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
Group. A product liability claim may give rise to significant
liabilities as well as damage the Group’s reputation.
(o) Third party service provider risk
The Group 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 Group, 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
Group 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 commercialized by the
Group 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
Group or its commercialisation partners to sell products on a
profitable basis.
27
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Key management personnel
The Directors and other key management personnel of the Group during the financial year were:
Non-Executive Directors
Position
Dr Paul MacLeman
Non-Executive Chairman
Dr Robert Peach
Non-Executive Director
Dr David Fuller
Non-Executive Director
Executive Directors
Position
Dr Timothy Oldham
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 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 2024 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 Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group.
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 Group performance
• details of remuneration
• additional disclosures relating to key management personnel
28
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Remuneration policy
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 Group
has a Remuneration Committee, which consists of Paul
MacLeman (Chair of Remuneration Committee) and Robert
Peach. The remuneration policy, which is set out below, is
designed to promote superior performance and long-term
commitment to the Group.
Non-Executive Director remuneration
Non-Executive Directors are remunerated by way of fees, in the
form of cash, non-cash benefits, superannuation contributions
or salary sacrifice into equity. 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.
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 Group 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
Group. The main principles are:
(a) remuneration reflects the competitive market in which the
Group 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 11% of salary in FY2024
(increasing to 11.5% in FY2025) 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 Group performance
The Board considers that at this time, evaluation of the
Group's financial performance using generally accepted
measures such as profitability, total shareholder return or
per Group comparison are not relevant due to the early
stage of development of the Group'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 Group'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.
29
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
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 Group. 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 Remuneration 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).
Key terms of employment contracts
Arrangements with Directors:
Position
Annual Salary
Non-Executive Chair
$75,000
Non-Executive Directors
$50,000
The Group 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 Group. 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 2023 from $318,552 plus statutory superannuation to $330,200 plus statutory superannuation, all other terms of employment
remain consistent.
30
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity 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
Cash
salary
and fees
Other1
Super-
annuation
Equity-
settled
2024
$
$
$
$
$
$
$
Non-Executive Directors:
Dr Paul MacLeman
67,565
-
7,435
75,000
29,918
104,918
-
Dr Robert Peach
50,000
-
-
50,000
15,340
65,340
-
Dr David Fuller
50,000
-
-
50,000
15,340
65,340
-
Executive Directors:
Dr Timothy Oldham
330,200
29,058
27,399
386,657
36,590
423,247
-
497,765
29,058
34,834
561,657
97,188
658,845
-
1 Bonus accrued for in respect to achievement of short term incentives in the period ending 30 June 2024 of $29,058. Bonus to be remunerated by
the issuance of performance rights, noting the issue is subject to shareholder approval.
31
AdAlta Limited Annual Report 2024 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
Equity-
settled
2023
$
$
$
$
$
$
$
Non-Executive Directors:
Dr Paul MacLeman
67,872
-
7,128
75,000
63,661
138,661
-
Ms Elizabeth McCall1
48,076
-
-
48,076
-
48,076
-
Dr Robert Peach
50,000
-
-
50,000
25,006
75,006
-
Dr David Fuller
50,000
-
-
50,000
25,006
75,006
-
Executive Directors:
Dr Timothy Oldham2
324,875
55,015
18,969
398,859
41,191
440,050
-
540,823
55,015
26,097
621,935
154,864
776,799
-
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.
32
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Balance
at 1 July
Received on
exercise of
options
Balance held on
resignation
Additions
Balance
at 30 June
2024
Number
Number
Number
Number
Number
Dr Timothy Oldham
1,101,750
-
-
500,000
1,601,750
Dr Paul MacLeman
472,970
-
-
-
472,970
Dr Robert Peach
1,453,126
-
-
-
1,453,126
Dr David Fuller
294,936
-
-
-
294,936
Balance
at 1 July
Received on
exercise of
options
Balance held on
resignation
Additions
Balance
at 30 June
2023
Number
Number
Number
Number
Number
Dr Timothy Oldham
501,750
-
-
600,000
1,101,750
Dr Paul MacLeman
472,970
-
-
-
472,970
Dr James Williams (Alternate)
263,751
-
(263,751)
-
-
Ms Elizabeth McCall
166,668
-
(166,668)
-
-
Dr Robert Peach
1,453,126
-
-
-
1,453,126
Dr David Fuller
210,668
-
-
84,268
294,936
Additional disclosures relating to key management personnel
Fully paid ordinary shares of AdAlta Limited
33
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Balance
at 1 July
Granted as
compen-
sation
Cancelled/
Expired
Net other
change1
Balance
at 30 June
Vested and
exercisable
Options
vested
during year
2024
Number
Number
Number
Number
Number
Number
Number
Dr Timothy Oldham
6,429,060
5,600,000
(800,000)
500,000
11,729,060
6,629,060
600,000
Dr Paul MacLeman
3,055,000
2,800,000
-
-
5,855,000
3,055,000
1,527,500
Dr Robert Peach
1,200,000
1,750,000
-
-
2,950,000
1,200,000
600,000
Dr David Fuller
1,242,134
1,750,000
(42,134)
-
2,950,000
1,200,000
600,000
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
6,129,060
-
-
300,000
6,429,060
5,829,060
2,378,718
Dr Paul MacLeman
3,055,000
-
-
-
3,055,000
1,527,500
1,527,500
Dr James Williams (Alternate)
-
-
-
-
-
-
-
Ms Elizabeth McCall
-
-
-
-
-
-
-
Dr Robert Peach
1,200,000
-
-
-
1,200,000
600,000
600,000
Dr David Fuller
1,200,000
-
-
42,134
1,242,134
642,134
642,134
1 Options issued as a result of participation in capital raises undertaken during the period.
1 Options issued as a result of participation in the Rights Offer undertaken during the period.
Share Options of AdAlta Limited
34
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
DIRECTORS’ REPORT (Continued)
Voting and comments made at the Group's 2024 Annual General Meeting (AGM).
At the Group's 2024 Annual General Meeting (AGM), a resolution to adopt the 2023 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
28 August 2024
Melbourne
35
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of AdAlta Limited for the year ended 30 June 2024, 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.
This declaration is in respect of AdAlta Limited and the entities it controlled during the year.
DRY KIRKNESS (AUDIT) PTY LTD
ROBERT HALL CA
Director
Perth
Date: 28 August 2024
36
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
Consolidated
Note
2024
2023
$
$
Revenue and other income
Interest received
46,725
62,570
Other revenue
3
1,737,798
3,469,179
Total revenue and other income
1,784,523
3,531,749
Expenses
Research and development expenses (external)
(2,991,706)
(3,646,375)
Research and development expenses (employee benefit expense)
(1,170,573)
(1,046,552)
Corporate administration expenses (external)
(1,941,806)
(1,729,644)
Corporate and administration (employee benefit expense)
(459,852)
(1,194,710)
Patent and legal costs
(229,883)
(474,773)
Finance costs
(114,999)
(123,751)
Share based payment expenses
17
(205,571)
(218,452)
Depreciation and amortisation expense
9,10
(62,969)
(29,922)
Net foreign exchange (loss) / gain
11,567
81,243
Total expenses
(7,165,792)
(8,382,936)
Loss before income tax expense
(5,381,269)
(4,851,187)
Income tax expense
4
-
-
Loss after income tax expense for the year attributable to the owners of AdAlta Limited
(5,381,269)
(4,851,187)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of AdAlta Limited
(5,381,269)
(4,851,187)
Cents
Cents
Basic earnings per share
5
(1.09)
(1.52)
Diluted earnings per share
5
(1.09)
(1.52)
37
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
The above statement of financial position should be read in conjunction with the accompanying notes
Consolidated
Note
2024
2023
$
$
Assets
Current assets
Cash and cash equivalents
6
3,133,449
4,789,513
Trade and other receivables
7
1,951,186
2,695,440
Other current assets
8
206,282
212,127
Total current assets
5,290,917
7,697,080
Non-current assets
Property, plant and equipment
9
76,543
36,009
Right-of-use asset
10
205,541
-
Total non-current assets
282,084
36,009
Total assets
5,573,001
7,733,089
Liabilities
Current liabilities
Trade and other payables
11
551,010
1,700,147
Borrowings
12
1,405,195
4,013,858
Lease liabilities
13
119,736
-
Provisions
14
144,685
94,188
Total current liabilities
2,220,626
5,808,193
Non-current liabilities
Lease liabilities
13
90,340
-
Provisions
14
31,589
14,942
Financial liabilities
15
1,200,000
-
Total non-current liabilities
1,321,929
14,942
Total liabilities
3,542,555
5,823,135
Net assets
2,030,446
1,909,954
Equity
Issued capital
16
47,399,255
42,175,065
Reserves
17
2,151,428
1,873,857
Accumulated losses
(47,520,237)
(42,138,968)
Total equity
2,030,446
1,909,954
38
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
The above statement of changes in equity should be read in conjunction with the accompanying notes
Issued capital
Reserves
Retained
profits
Total equity
Consolidated
$
$
$
$
Balance at 1 July 2022
41,010,888
1,655,405
(37,287,781)
5,378,512
Loss after income tax expense for the year
-
-
(4,851,187)
(4,851,187)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive income for the year
-
-
(4,851,187)
(4,851,187)
Transactions with owners in their capacity as owners:
Share-based payments
-
218,452
-
218,452
Issue of ordinary shares
1,334,620
-
-
1,334,620
Share issue costs
(170,443)
-
-
(170,443)
Balance at 30 June 2023
42,175,065
1,873,857
(42,138,968)
1,909,954
Issued capital
Reserves
Retained
profits
Total equity
Consolidated
$
$
$
$
Balance at 1 July 2023
42,175,065
1,873,857
(42,138,968)
1,909,954
Loss after income tax expense for the year
-
-
(5,381,269)
(5,381,269)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive income for the year
-
-
(5,381,269)
(5,381,269)
Transactions with owners in their capacity as owners:
Share-based payments
-
205,571
-
205,571
Exercise of options
1,876,583
-
-
1,876,583
Issue of ordinary shares
3,680,169
-
-
3,680,169
Share issue costs
(332,562)
72,000
-
(260,562)
Balance at 30 June 2024
47,399,255
2,151,428
(47,520,237)
2,030,446
39
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
FOR THE YEAR ENDED 30 JUNE 2024
STATEMENT OF CASH FLOWS
The above statement of cash flows should be read in conjunction with the accompanying notes
Consolidated
Note
2024
2023
$
$
Cash flows from operating activities
Receipts from customers
-
684,659
Payments to suppliers and employees
(7,657,497)
(7,957,214)
R & D tax incentive
2,350,940
2,077,927
Interest received
46,725
62,570
Net cash used in operating activities
22
(5,259,832)
(5,132,058)
Cash flows from investing activities
Payments for property, plant and equipment
(62,395)
(2,126)
Net cash used in investing activities
(62,395)
(2,126)
Cash flows from financing activities
Proceeds from issue of shares
3,531,169
1,282,590
Payment of share issue costs
(286,089)
(70,917)
Proceeds from financial liabilities
1,200,000
-
Proceeds from exercise of options
1,876,583
-
Repayment of borrowings
(2,600,000)
-
Proceeds from other financing activities
(55,500)
55,500
Net cash from financing activities
3,666,163
1,267,173
Net decrease in cash and cash equivalents
(1,656,064)
(3,867,011)
Cash and cash equivalents at the beginning of the financial year
4,789,513
8,660,556
Effects of exchange rate changes on cash and cash equivalents
-
(4,032)
Cash and cash equivalents at the end of the financial year
6
3,133,449
4,789,513
40
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024
1. General information
The financial statements cover AdAlta Limited as a
Consolidated Entity consisting of AdAlta Limited and the entities
it controlled at the end of, or during, the financial year. The
financial statements are presented in Australian dollars, which is
AdAlta Limited's functional and presentation currency.
AdAlta Limited is a listed public Group limited by shares,
incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Room 204, LIMS2
La Trobe Institute for Molecular Science,
Science Drive, La Trobe University, VIC 3086
A description of the nature of the group'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 28 August
2024. The Directors have the power to amend and reissue the
financial statements.
2. Material accounting policy
information
The accounting policies that are material to the group are set
out below. The accounting policies adopted are consistent with
those of the previous financial year, unless otherwise stated.
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
Group 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
policy information relating to the preparation of the financial
statements and presented below are consistent with prior
reporting periods 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.
Parent entity information
In accordance with the Corporations Act 2001, these financial
statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed
in note 26.
Principles of consolidation
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of AdAlta Limited ('company'
or 'parent entity') as at 30 June 2024 and the results of all
subsidiaries for the year then ended. AdAlta Limited and
its subsidiaries together are referred to in these financial
statements as the 'consolidated entity' and / or “Group”.
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 Group incurred
losses of $5,381,269 (2023: $4,851,187) and the Group had
net cash outflows from operating activities of $5,259,832
(2023: $5,132,058). As at balance date, the Group had net
current assets of $3,070,291 (2023: $1,888,886).
The Group is required to repay the loan recorded at 30 June
2024 of $1.4 million with Treasury Corporation of Victoria
(TCV) by 31 October 2024, coinciding with the receipt of the
FY24 Research & Development (R&D) tax incentive refund. In
the event the Group does not receive a refund in excess of the
Loan facility the Group will be required to repay the loan with
its cash reserves, noting that the estimated accrued R&D refund
for FY24 is $1.74million.
Although the above are indicative of a material uncertainty
relevant to the going concern consideration, the directors
consider that the Group can pay its debts as and when they
fall due at the date of this report. In actively considering and
managing the Group’s cashflow forecast, the directors consider
that:
• The Group can scale down its operations sufficiently
(and narrow the scope of its planned project activities) as
required;
• The Group has an institutional investment facility of up to a
further $2.5million and;
• The Group has a track record of raising capital as an ASX
listed Company.
41
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Class of Fixed Asset
Depreciation rate
Notes
Office equipment
100.00%
Assets acquired post
31 December 2016
Plant and Equipment
28.57%
2. Material accounting policy
information (continued)
• The Group is in active discussions to license/partner its
technology (in the ordinary course of executing its business
plan); and
• The Group 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
group 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
group not be able to continue as a going concern.
Research and Development Tax Incentive
The Research and Development Tax Incentive is accounted
for in accordance 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 or benefit for the period is the tax
payable on that period’s taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by
the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
Fair value measurement
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.
Property, plant and equipment
Depreciation
The depreciable amount of all fixed assets is depreciated on a
diminishing value basis over the asset’s useful life to the Group
commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets
are:
42
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
2. Material accounting policy
information (continued)
Borrowings
Loans and borrowings are initially recognised at the fair value
of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective
interest method.
Financial Liability - Investment Agreement
The institutional investment (Investment Agreements) are
treated as hybrid financial instruments and separated into the
host liability and embedded derivative components based
on the terms of the agreement. On issuance of the share
subscription agreements, the host liability component is initially
recognised at the residual value by deducting the fair value of
the derivative liability from the amount of financial liabilities.
The embedded derivative component is initially recognised at
fair value. The host debt is carried at amortised cost using the
effective interest method until extinguished on conversion or
redemption.
Where borrowings feature share conversion clauses that entitle
the investor to a variable number of shares, be this through
an entitlement to settle interest through the conversion clause
or through the terms specified in the conversion clause itself,
an embedded derivative is separated from the underlying
borrowing host contract only when the conversion clause
is activated upon a movement in a market price at initial
recognition. Thereafter the embedded derivative is revalued at
each subsequent reporting date with changes taken to the profit
or loss. The underlying host contract following initial recognition
is recognized at amortized cost applying the effective interest
rate method.
Embedded Derivative
An embedded derivative is a component of a hybrid instrument
that also includes a non-derivative host contract with the effect
that some of the cash flows of the combined instrument vary in a
similar way to a standalone derivative.
The embedded derivative is separate from the host contract and
accounted for as a derivative if the economic characteristics
and risks of the embedded derivative are not closely related
to economic characteristics and risks of the host contract. The
embedded derivative is measured at fair value with changes in
value being recorded in profit and loss.
Employee benefits
Equity-settled transactions are awards of shares, or options
over shares, that are provided to employees in exchange for
the rendering of services.
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.
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 Group.
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 Group’s development and its current
environmental impact the Directors believe such treatment is
reasonable and appropriate.
43
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
2. Material accounting policy
information (continued)
(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 Group 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 or amended Accounting Standards and
Interpretations adopted
The group has adopted all the newly issued accounting
standards which are mandatory for the first time in the 2024
financial year.
AASB101 Presentation of Financial Statements has been
revised for annual reporting periods beginning on or after 1
January 2023, to require the disclosure of material accounting
policy information rather than significant accounting policies.
Accounting policy information which does not satisfy one of the
following requirements has been removed from these financials
statements.
• Changes in accounting policy.
• Documentation of choice in the accounting standards.
• An accounting policy developed in the absence of an
explicit accounting standard requirement.
• Significant judgement or estimation.
• Complex transaction and accounting policy need to explain
statement.
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 group for the annual
reporting period ended 30 June 2024. The group has not yet
assessed the impact of these new or amended Accounting
Standards and Interpretations.
Consolidated
2024
2023
$
$
R&D tax incentive
1,737,798
2,883,125
Other revenue
-
586,054
1,737,798
3,469,179
3. Other revenue
44
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
4. Income tax benefit
Consolidated
2024
2023
$
$
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
(5,381,269)
(4,851,187)
Tax at the statutory tax rate of 25%
(1,345,317)
(1,212,796)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income
Non deductible expenses
1,083,838
1,437,281
Non assessable income
(434,450)
(720,781)
Temporary differences
73,308
(100,895)
Benefits of tax losses not brought into account
622,621
597,191
Income tax expense
-
-
The Group has revenue losses of approximately $13,019,957 for which no deferred tax asset has been recognised.
The Group has no franking credits currently available for future offset.
45
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Loss after income tax attributable to the owners of AdAlta Limited
(5,381,269)
(4,851,187)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
494,599,658
318,291,763
Weighted average number of ordinary shares used in calculating diluted earnings per share1
494,599,658
318,291,763
Cents
Cents
Basic earnings per share
(1.09)
(1.52)
Diluted earnings per share
(1.09)
(1.52)
5. Loss per share
1 The group had 13,734,060 options on issue as at 30 June 2024 (2023: 39,835,884) that are not considered to be dilutive due to the exercise
price exceeding the current market price of the underlying ordinary shares.
Consolidated
2024
2023
$
$
Cheque accounts
89,213
903,133
Cash reserve accounts
3,044,236
3,886,380
3,133,449
4,789,513
6. Cash and cash equivalents
46
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Goods and services tax
40,824
102,561
Prepaid expenses
135,832
205,207
R&D tax incentive
1,774,530
2,387,672
1,951,186
2,695,440
7. Trade and other receivables
Consolidated
2024
2023
$
$
Forward exchange contract
-
39,686
Security deposits
206,282
172,441
206,282
212,127
8. Other current assets
On 20 January 2023 the group entered into a Forward Exchange contract to buy USD at a rate of 1AUD = 0.69USD maturing
on 31 July 2023. The amount disclosed at 30 June 2023 was the unrealised gain on the forward exchange contract. This forward
contract was subsequently fully utilised.
47
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Plant and equipment - at cost
228,269
167,233
Less: Accumulated depreciation
(151,926)
(131,282)
76,343
35,951
Office equipment - at cost
46,629
45,270
Less: Accumulated depreciation
(46,429)
(45,212)
200
58
76,543
36,009
Movements in the carrying amounts for each class of
2024
2023
$
$
Plant and equipment
Balance at beginning of year
35,951
50,331
Additions
61,036
-
Disposals
-
-
Depreciation expense
(20,644)
(14,380)
Balance at end of year
76,343
35,951
2024
2023
$
$
Office equipment
Balance at beginning of year
58
13,474
Additions
1,359
2,126
Depreciation
(1,217)
(15,542)
Balance at end of year
200
58
9. Property, plant and equipment
48
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Trade payables
92,947
1,121,891
Accrued expenses
415,801
482,014
PAYG payable
35,412
40,742
Cash received pending approval to issue ordinary shares
-
55,500
Superannuation payable
6,850
-
551,010
1,700,147
Consolidated
2024
2023
$
$
Land and buildings - right-of-use
246,649
-
Less: Accumulated depreciation
(41,108)
-
205,541
-
11. Trade and other payables
10. Right-of-use asset
Additions to the right-of-use assets during the year were $246,649.
The above right-of-use asset (ROU) and lease liability relate to the office and laboratory lease entered into by the Group with La
Trobe University. The lease has been accounted for in accordance with AASB 16.
The ROU asset is measured at the amount equal to the lease liability at initial recognition and then amortised over the life of the
lease. During the prior year, the Group entered into a lease agreement for a period of 24 months from 1 March 2024. The lease
liability and ROU asset at initial recognition for this new lease was $246,649.
The right-of-use asset is being depreciated over the lease term on a straight-line basis. Depreciation expense of $41,108 was
included in depreciation and amortisation expense in the consolidated statement of profit or loss and other comprehensive income.
At initial recognition, the lease liability was measured as the present value of minimum lease payments using the Group’s incremental
borrowing rate of 11.56%. The incremental borrowing rate was based on the unsecured interest rate that would apply if finance was
sought for an amount and time period equivalent to the lease requirements of the Group. Each lease payment is allocated between
the liability and interest expense. The interest expense of $8,548 was included in finance costs in the consolidated statement of profit
or loss and other comprehensive income.
49
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Current liabilities
Loan – R&D advance
1,405,195
4,013,858
12. Borrowings
During FY2022 the Group 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 Group received the first tranche
of $2.4million. In February 2022 the Group received the second tranche of $1.6million. During FY2024 the Group repaid $2.6
million and extended repayment of the remaining balance to 31 October 2024 coinciding with the receipt of the FY24 Research &
Development (R&D) tax incentive refund.
The TCV loan balance as at 30 June 2024 is $1,405,195.
Interest on Facility advances is variable at the “TCV 11am” loan interest rate (4.515% as of 30 June 2024). The security is the R&D
tax incentive refund (for the financial year ended 30 June 2024). On 18 October 2023 the Group announced the extension of
the R&D repayment terms. 50% ($2million) of the loan was repaid by 31 October 2023 and an additional 15% ($600,000) was
repaid on 31 January 2024.
Consolidated
2024
2023
$
$
Current lease liabilities
Lease liability
119,736
-
Consolidated
2024
2023
$
$
Non-current lease liabilities
Lease liability
90,340
-
13. Lease liabilities
50
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
Current provisions
Annual leave
144,685
94,188
Consolidated
2024
2023
$
Non-current provisions
Long service leave
31,589
14,942
14. Provisions
15. Financial liabilities
Consolidated
2024
2023
$
$
Institutional Investment Agreement - debt component
1,089,363
-
Institutional Investment Agreement - embedded derivative component
110,637
-
1,200,000
-
On 29 April 2024 the Group entered into an institutional investment via the Investment Agreements with New Life Sciences Capital, LLC
("NLSC") and the Meurs Group (Meurs Investment) for up to $3.7 million, a total of $1.2 million was received in May 2024, being the
initial investment. The initial investment was recognised as a financial liability with a debt and embedded derivative component.
The Group has the right (but not an obligation) to opt to repay the subscription amount of each investment by making a payment to
NLSC equal to the market value of the shares that would have otherwise been issued, instead of issuing shares to NLSC. If the Group
does not exercise that right, the Group will issue Placement Shares when requested by NLSC, within 36 months of the date of the
related prepayment. The number of shares so issued by the Group will be determined by applying the Purchase Price (as set out below)
to the subscription amount, but subject to the Floor Price (as set out below).
The Purchase Price of the Placement Shares was equal to $0.06 initially, representing a premium of approximately 93.5% to the closing
price of the Group’s shares on 26 April 2024. Subject to the Floor Price described below, after the initial month, the Purchase Price
will reset to the average of the five daily volume-weighted average prices selected by NLSC during the 20 consecutive trading days
immediately prior to the date of NLSC’s notice to issue Placement Shares, less a 10% discount. The Purchase Price will, nevertheless, be
the subject of the Floor Price of $0.02. If the Purchase Price formula would result in a price that is less than the Floor Price, the Group
may forego issuing shares and instead opt to repay the applicable subscription amount in cash (with a 12% premium), subject to
NLSC’s right to receive Placement Shares at the Floor Price in lieu of such cash repayment. For the benefit of the Group, the Purchase
Price will not be the subject of a cap.
The investment is unsecured, and no interest is payable under the Investment Agreements.
51
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
16. Issued capital
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
595,623,520
366,679,546
47,399,255
42,175,065
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group 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.
2024
2023
2024
2023
Shares
Shares
$
$
Balance at beginning of the reporting period
366,679,546
314,184,746
42,175,065
41,010,888
Issued for services in lieu of cash
2,277,779
1,191,181
75,000
52,030
Issue of institutional investment fee shares
2,466,667
-
74,000
-
Issue of unpaid shares under Investment Agreements
3,800,000
-
-
-
Issued on exercise of options
62,552,776
-
1,876,583
-
Issue of ordinary shares
157,846,752
51,303,619
3,531,169
1,282,590
Capital raising costs
-
-
(332,562)
(170,443)
595,623,520
366,679,546
47,399,255
42,175,065
17. Reserves
Consolidated
2024
2023
$
$
Share-based payments reserve
2,151,428
1,873,857
52
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
2024
2023
$
$
At beginning of reporting period
1,873,857
1,655,405
Options issued to Directors and Employees
205,571
218,452
Options issued to Brokers
72,000
-
At end of reporting period
2,151,428
1,873,857
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. 13,325,000 options were issued during the period.
Expiry
Exercise
Balance at
start of year
Granted in
year
Exercised
Expired /
cancelled
Balance at
end of year
Date
Price
Number
Number
Number
Number
Number
26/11/2025
$0.2479
492,906
-
-
-
492,906
26/11/2025
$0.2479
1,478,718
-
-
-
1,478,718
26/11/2025
$0.2479
1,478,718
-
-
-
1,478,718
26/11/2025
$0.2479
1,478,718
-
-
-
1,478,718
15/03/2025
$0.1744
200,000
-
-
-
200,000
15/03/2025
$0.1744
200,000
-
-
-
200,000
29/11/2025
$0.0845
6,655,000
-
-
-
6,655,000
28/02/2026
$0.7570
600,000
-
-
(250,000)
350,000
27/02/2027
$0.0397
1,600,000
-
-
(200,000)
1,400,000
25/08/2027
$0.0200
-
100,000
-
-
100,000
22/11/2027
$0.0200
-
11,900,000
-
-
11,900,000
26/02/2028
$0.0200
-
1,325,000
-
-
1,325,000
14,184,060
13,325,000
-
(450,000)
27,059,060
17. Reserves (continued)
Weighted average exercise price at 30 June 2024 $0.0814 (30 June 2023: $0.1360).
53
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
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
price
Expected
volatility
Dividend
yield
Risk-free
rate
25/08/2023
25/08/2027
$0.023
$0.020
67.67%
0%
4.10%
22/11/2023
22/11/2027
$0.020
$0.020
79.74%
0%
4.35%
15/04/2024
26/02/2028
$0.027
$0.020
85.92%
0%
4.35%
Non-Executive Directors
Position
Dr Paul MacLeman
Non-Executive Chair
Dr Robert Peach
Non-Executive Director
Dr David Fuller
Non-Executive Director
Executive Directors
Dr Timothy Oldham
Chief Executive Officer and Managing Director
18. Related party transactions
Related parties
The Group’s main related parties are as follows:
Consolidated
2024
2023
$
$
Short-term benefits (Including performance bonuses)
526,823
595,838
Post-employment benefits
34,834
26,097
Share based payments
97,188
154,864
658,845
776,799
Transactions with related parties
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 Group is set out below:
17. Reserves (continued)
54
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
19. 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.
20. Commitments
Capital commitments
The Group has no capital commitments.
Other commitments
The Group has no other commitments.
21. Financial risk management
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the Group’s finance function.
The Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the
Group where such impacts may be material. The board receives monthly financial reports through which it reviews the effectiveness
of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the board is to set
policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
Term, conditions and accounting policies
The Group'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:
55
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Recognised Financial
Instruments
Statement of
Financial Position
Notes
Accounting Policies
Terms and Conditions
i) Financial assets
Cheque account
6
Carried at face value.
The cheque account is at call with an interest rate of
0.00% (2023: 0.00%).
Cash reserve
6
Carried at face value.
The cash reserve account is at call with an interest rate
of 1.35% (2023: 1.55%).
R & D tax incentive
7
Recognised on an accrual
basis.
The incentive is claimed annually under an Australia
Taxation Office mechanism which designed to
promote research and development.
Trade receivables
7
Recognised on an accrual
basis.
Normal invoice terms are 14-60 days.
Goods & services tax paid
7
Recognised on an accrual
basis.
Business activity statements are lodged on a quarterly
basis.
ii) Financial liabilities
Trade and other creditors
11
Liabilities are recognised for
amounts to be paid in the
future for goods and services
received, whether or not
billed to the group.
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.
Other liabilities
Other current assets
8
Carried at face value.
Forward exchange contract is entered into on
specific terms as agreed by the Foreign Exchange
intermediary and the Group.
Borrowings
12
Carried at face value.
2024 and 2023: 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 2024 (Rate as at 30
June 2024 of 4.515%).
Financial liabilities
15
Carried at face value.
The institutional investment is recognised based on an
external valuation.
iii) Equity
Ordinary shares
16
Ordinary share capital is
recognised at the fair value of
the consideration received by
the group.
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 16.
21. Financial risk management (continued)
Term, conditions and accounting policies
The Group’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:
56
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
21. Financial risk management (continued)
Carrying value
The carrying value of financial assets and liabilities approximates their fair value.
Financial risk management
The Group'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 Group'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 Group.
i) Market risk
The Group is not exposed to either equity securities price risk or commodity price risk.
The Group 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 Group 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 Group to settle its liabilities.
The contractual undiscounted cash flows of the Group'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 - 2024
1,405,195
-
-
1,405,195
1,405,195
Loan - R&D advance - 2023
4,013,858
-
-
4,013,858
4,013,858
Weighted
average
Balance
Fixed interest
rate exposure
Variable interest
rate exposure
%
$
$
$
Cash and cash Equivalents - 2024
1.35%
3,133,449
3,044,236
89,213
Cash and cash Equivalents - 2023
1.26%
4,789,513
3,886,380
903,133
Borrowings - 2024
2.82%
1,405,195
-
1,405,195
Borrowings - 2023
4.43%
4,013,858
-
4,013,858
iv) Interest Rate Risk
As at the reporting date the Group had the following variable rate bank accounts and borrowings:
57
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Consolidated
2024
2023
$
$
Loss after income tax expense for the year
(5,381,269)
(4,851,187)
Adjustments for:
Depreciation and amortisation
62,969
29,922
Share-based payments
205,571
218,452
Unrealised Foreign exchange differences
-
4,034
Amounts paid directly by issuance of shares
75,000
52,030
Change in operating assets and liabilities:
(Increase) / decrease in receivables
744,252
(905,784)
(Increase) / decrease in current assets
(5,844)
(77,597)
Increase / (decrease) in payables
(1,036,318)
445,571
Increase / (decrease) in provisions
67,144
(58,404)
Increase / (decrease) in borrowings
8,663
10,905
Net cash used in operating activities
(5,259,832)
(5,132,058)
v) Cash flow and fair value interest rate risk
The Group 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 Group 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
22. Reconciliation of loss after income tax to net cash used in operating
activities
Reconciliation of cash flow from operations with profit after income tax
21. Financial risk management (continued)
58
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
23. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Consolidated
2024
2023
$
$
Audit services - Dry Kirkness (Audit) Pty Ltd
Audit and review of the financial statements
25,750
25,000
24. 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 group:
25. Events after the reporting period
No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the consolidated
entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
59
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2024 (Continued)
Parent
2024
2023
$
$
Loss after income tax
(5,381,269)
(4,851,187)
Total comprehensive income
(5,381,269)
(4,851,187)
Statement of financial position
Parent
2024
2023
$
$
Total current assets
5,290,917
7,697,080
Total assets
5,573,001
7,733,089
Total current liabilities
2,220,626
5,808,193
Total liabilities
3,542,555
5,823,135
Equity
Issued capital
47,399,255
42,175,065
Share-based payments reserve
2,151,428
1,873,857
Accumulated losses
(47,520,237)
(42,138,968)
Total equity
2,030,446
1,909,954
26. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
60
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
Entity name
Entity type
Place formed /
Country of
incorporation
Ownership interest
%
Tax residency
AdAlta Limited
Body Corporate
Australia
-
Australia
AdSolis Pty Ltd
Body Corporate
Australia
100.00%
Australia
AdCella Pty Ltd
Body Corporate
Australia
100.00%
Australia
CONSOLIDATED ENTITY DISCLOSURE
STATEMENT
AS AT 30 JUNE 2024
Basis of preparation
This Consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and
includes information for each entity that was part of the Group as at the end of the financial year in accordance with AASB 10
Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act
1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted, and which
could give rise to a different conclusion on residency.
In determining tax residency, the Group has applied the following interpretations:
Australian tax residency
The Group has applied current legislation and judicial precedent, including having regard to the Tax Commissioner’s public
guidance in Tax Ruling TR 2018/5.
Foreign tax residency
Where necessary, the Group has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency
to ensure applicable foreign tax legislation has been complied with (see section 295(3A)(vii) of the Corporations Act 2001).
Partnerships and Trusts
None of the entities noted above were trustees of trusts within.
61
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
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 group’s financial position as at 30 June 2024 and of
its performance for the financial year ended on that date; and
• there are reasonable grounds to believe that the group will be able to pay its debts as and when they become due and payable.
• the information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
DIRECTORS’ DECLARATION
30 JUNE 2024
Paul MacLeman
Chairman
28 August 2024
Melbourne
62
AdAlta Limited Annual Report 2024 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”) and its controlled entities (“the Group”),
which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement
of profit and loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
material accounting policy information, the consolidated entity disclosure statement 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 Group’s financial position as at 30 June 2024 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 Group 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 Group, 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 the Group incurred a loss after tax of
$5,381,269 (2023: $4,851,187) and had net cash outflows from operating activities of $5,259,832 (2023:
$5,132,058) for the year ended 30 June 2024. As at 30 June 2024, the Group had net current assets of
$3,070,291 (2023: $1,888,886).
63
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
The Group is required to repay the loan recorded at 30 June 2024 of $1,405,195 with the Treasury
Corporation of Victoria (TCV) by 31 October 2024, coincident with the receipt of the FY24 Research &
Development (R&D) tax incentive refund. In the event the Group does not receive a refund in excess of the
loan facility the Group will be required to repay the loan with its cash reserves, noting that the estimated
accrued R&D refund for FY24 is $1,774,530.
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 Group’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 notes 16 and 17
During the year, the Group successfully issued fully
paid ordinary shares as well as various options of
which some have been exercised.
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 Group's eligible R&D spend for inclusion in its
submission to the ATO.
Financial Liabilities
Refer note 15
The Group entered into a note institutional
investment agreement where a total of $1.2 million
was received in May 2024. The investment was
recognised as a financial liability with a debt and
embedded derivative component. Management
utilise key assumptions, judgements and estimates in
determining the value of the financial liability
disclosed in note 15 which is material to the financial
Our audit procedures included an examination of each
issue of fully paid ordinary shares during the year as
disclosed in note 16 and an examination of the
movements in the share option reserve as disclosed in
note 17. 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.
Our audit procedures included an evaluation of the
assumptions, methodologies and conclusions utilised
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.
Our audit procedures included an evaluation of the
assumptions, methodologies and conclusions used by
management’s expert in determining the value of the
financial liability as well as the accounting treatment.
We also focused on the adequacy of financial report
disclosures regarding the terms of the financial
liability as disclosed at note 15.
64
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
statements. Management have utilised the services
of an expert to determine the accounting treatment
in accordance with Australian Accounting Standards
and to value the financial liability.
Other information
The directors are responsible for the other information. The other information comprises the information in the
Group’s annual report for the year ended 30 June 2024, 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.
Directors’ responsibilities for the financial report
The directors of the Group are responsible for the preparation of:
a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with the Australian Accounting Standards and the Corporations Act 2001; and
b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001; and
c) for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free from
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’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 Group 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.
65
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
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 an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’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 Group’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 Group 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
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.
66
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included on pages 23 to 27 of the directors’ report for the year ended
30 June 2024.
In our opinion, the Remuneration Report of AdAlta Limited, for the year ended 30 June 2024, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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: 28 August 2024
67
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
SHAREHOLDER INFORMATION
30 JUNE 2024
Ordinary Shares
# of holders
# of units
% Issued share
1 to 1,000
46
5,495
-
1,001 to 5,000
113
380,075
0.06%
5,001 to 10,000
204
1,582,158
0.27%
10,001 to 100,000
642
25,781,643
4.33%
100,001 and over
426
567,874,275
95.34%
1,431
595,623,520
The number of shareholders holding less than a marketable parcel of shares are 590.
The shareholder information set out below was applicable as at 7 August 2024.
(a) Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
(b) Voting rights
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
68
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
SHAREHOLDER INFORMATION
30 JUNE 2024
The names of the twenty largest holders of quoted ordinary shares are:
Position
Holder name
Holding
IC
1
SACAVIC PTY LTD
97,441,722
16.36%
2
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
85,720,663
14.39%
3
YCLP PTY LTD
27,029,924
4.54%
3
FLETCHER MEURS INVESTMENTS PTY LTD
27,029,924
4.54%
4
RADIATA FOUNDATION LTD
20,560,519
3.45%
5
MEURS HOLDINGS PTY LTD
20,123,655
3.38%
6
SKIPTAN PTY LTD
19,407,256
3.26%
7
MR TZU HSUAN TSENG
9,893,171
1.66%
8
BNP PARIBAS NOMINEES PTY LTD
7,058,296
1.19%
9
MR CRAIG GRAEME CHAPMAN
5,000,000
0.84%
9
SCINTILLA STRATEGIC INVESTMENTS LIMITED
5,000,000
0.84%
10
MR JOHN OKROGLIC
4,693,397
0.79%
11
CITYCASTLE PTY LTD
4,302,320
0.72%
12
AZZURRA INVESTMENTS PTY LTD
4,050,000
0.68%
13
MR ALISTAIR DAVID STRONG
4,000,000
0.67%
13
MR KEVIN JOHN CAIRNS & MRS CATHERINE VALERIE CAIRNS
4,000,000
0.67%
14
MR DAVID JOHN ROBINSON
3,833,000
0.64%
15
MRS GWEN MURRAY PFLEGER
3,600,000
0.60%
15
MR PEERA MAYTHA
3,600,000
0.60%
16
CASTLE MANOR PTY LTD
3,503,904
0.59%
17
HUON PINE PTY LTD
3,250,000
0.55%
18
LA TROBE UNIVERSITY
3,041,330
0.51%
19
MR MICHAEL PETER HETRELEZIS
3,000,000
0.50%
19
MR KALPESH VARSANI & MRS RITA VARSANI
3,000,000
0.50%
20
ANDREW P O'BRIEN HOLDINGS PTY LTD
2,944,445
0.49%
Totals
375,083,526
62.97%
Total Issued Capital
595,623,520
100.00%
69
AdAlta Limited Annual Report 2024 ABN 92 120 332 925
SHAREHOLDER INFORMATION
30 JUNE 2024
Number
Number
of holders
Class
Holders of more than 20%
27,059,060
72
Options expiring various dates and various prices
Timothy Oldham 43.35% (11,729,060)
Paul MacLeman 21.64% (5,855,000)
Position
Shareholder
Holding
% IC
1
SACAVIC PTY LTD
97,441,722
16.36%
2
Platinum Investment Management Limited
87,863,7591
14.75%
3
Meurs Group
66,560,835
11.18%
(c) Substantial shareholders
The names of substantial shareholders in accordance with section 671B of the Corporations Act 2001 are:
(d) Unquoted securities
Details of substantial holders:
1Number of shares held per last reported substantial interest notice holding notice.