ANNUAL
REPORT
for the year ended 30 June 2021
Adherium Limited
ABN 24 605 352 510
Company
Overview
Adherium is a provider of digital health solutions
and a global leader in connected respiratory
medical devices, with more than 170,000 sold
globally. The company develops, manufactures
and supplies a broad range of connected medical
devices for respiratory medications for patients,
pharmaceutical companies, healthcare providers
and contract research organisations. Adherium’s
Hailie® solution is designed to achieve better
adherence for patients and provide visibility to
parents and caregivers. It does this by tracking
medication use and reminding the user when it is
time to take doses, and by providing physicians
access to usage history to better understand
patients’ patterns in their Asthma and COPD.
These tools ultimately enable people who live
with Asthma or COPD to more easily manage
their condition with input from their physician.
2
Annual Report 2021 Adherium Ltd Report
Statement
Independence Declaration
(including Remuneration Report)
and Other Comprehensive Income
Contents
02 Chairman’s
04 CEO’s
06 Directors’ Report
21 Auditor’s
23 Consolidated Statement of Profit or Loss
24 Consolidated Statement
25 Consolidated Statement
26 Consolidated Statement
27 Notes to the
47 Directors’
48 Independent Auditor’s
53 Australian Securities Exchange
Consolidated Financial Statements
Additional Information
of Changes in Equity
of Financial Position
of Cash Flows
Declaration
Report
1
Annual Report 2021 Adherium Ltd Chairman's
Statement
I am pleased to once again provide the Chairman’s
report for Adherium and comment on progress made
in the business in what have been unprecedented
circumstances. Following a business turnaround in
the prior year Adherium has faced intense challenges
in the external environment in 2020-21. Despite these
challenges the business has made good progress with its
Research & Development portfolio, successfully resolved
an unsolicited takeover offer and moves into 2021-22 with
a solid funding base enabling prosecution of its plan
to establish leadership in the respiratory remote digital
monitoring market.
Given the progress made, the global acceleration
in remote patient monitoring driven by COVID and
improved reimbursement environment for digital device
data capture, the prospects for meaningful revenue
generation over the next 12 -24 months are increasingly
promising.
Environment and Opportunity
The opportunity for Adherium and relevance for remote
patient monitoring has increased significantly in the
last twelve months with COVID changing expectations
in healthcare delivery. In April 2020 nearly half of US
Medicare primary care visits were provided through
telehealth compared with less than one percent in
February of the same year before the COVID public
health emergency. This has been reflected in an
estimated increase of 66% (up from 24% to 80%) in
the benefits of telehealth compared to pre-pandemic
levels alongside a 50-175% increase in reported use
of telehealth in healthcare systems and practices. As
noted last year the introduction of reimbursement codes
for remote patient monitoring is reinforcing the rapid
increase in the market opportunity for digital device data
capture.
At the same time the unmet healthcare need for better
assessment and management of adherence in the
respiratory field remains as critical today as ever.
2
Approximately $34 billion is estimated to be spent in
the USA annually on avoidable healthcare costs for
uncontrolled COPD and Asthma patients. Patients
and carers struggle with poor inhalation technique
aggravated by the range and complexity of different
devices provided by pharmaceutical companies.
Clear Strategy
Adherium has a clearly articulated strategy to establish
an industry leading position in the development and
commercialisation of an integrated multi-sensor
respiratory management “ecosystem”, providing
clinicians and payors a unique capability to track both
the use of the inhaled medicine as well as clinically
assess the overall respiratory disease control, initially
focusing on uncontrolled, difficult to treat Asthma and
COPD patients.
Adherium believes there are multiple avenues through
which to generate revenue including specialist
distribution (hospitals and clinics), payers (including
insurance companies), and disease management
providers in addition to supporting clinical trials etc.
Revenue streams include value based and risk share
contracts in addition to sale of sensors and software
licencing fees.
The primary geographical focus is on the United States in
part because reimbursement for specific Remote Patient
Monitoring activities is available for physicians through
the Current Procedural Terminology (CPT) codes. As
indicated Adherium believes this reimbursement is likely
to act as a catalyst for physicians to adopt the Hailie®
solution once next generation sensors incorporating a
physiological measurement are available.
As noted progress in the last twelve months has
continued despite the challenging external environment
including progression of its active Research &
Development roadmap which is planned to deliver:
Annual Report 2021 Adherium Ltd a) “next generation” sensors with physiological
measures which specifically meet the requirements
for physician reimbursement through the
appropriate CPT codes for remote patient
monitoring of patients in the US. Adherium
submitted a 510(k) application to the US FDA
in April 2021 for the first of its “next generation”
sensors with physiological measures, with further
submissions to follow in the coming months;
increased market coverage of inhaled medications
reaching more patients; and
b)
c) enhanced patient application and platform
features and capabilities.
Progression of the multi-sensor device ecosystem
is underway. An internal assessment of the value of
different types of clinical and other data to physicians
in diagnosing and managing Asthma and COPD has
been made enabling the prioritisation for the next wave
of digital health technologies to be incorporated onto
the Hailie® platform. These include integration plans for
peak flow meter and spirometer devices. Discussions are
continuing with other potential partners to add further
devices.
COVID has certainly presented challenges in progressing
our planned pilot evaluations with our partners in the
US. With the easing of lockdown and hospital access
improving Adherium is expecting a strong series of
positive commercial and Research & Development
newsflow in the next 12 months.
Fundraising
Adherium enters the second half of calendar 2021 with
a strong balance sheet and free of debt. On 26 October
2020 Adherium announced the agreement of a
$3 million convertible note from Viburnum Funds. This
was followed with a wider subscription placement with
$18 million commitments secured in March including
cornerstone investments from existing shareholders
Trudell Medical and BioScience Managers Translation
Fund 1 (BMTF1) for $5 million each. In addition, Viburnum
Funds agreed terms under which its Secured Convertible
Notes would convert into ordinary shares in conjunction
with completion of the placement. The Extraordinary
General Meeting held on 30 April 2021 secured the
necessary amendment of the terms of the Secured
Convertible Notes, and enabled these to be converted to
shares in conjunction with the completion of the
$18 million capital raise. As a result of the fundraising
process Regal Funds and Viburnum Funds became
substantial shareholders of Adherium, joining existing
substantial shareholders Trudell Medical, BMTF1 and
FIL (Fidelity).
Respiri
Shareholders will be well aware of the unsolicited,
conditional, off market, all share offer by Respiri Limited
for the shares of Adherium. As stated in our Target’s
Statement Adherium’s Board was clear that the takeover
offer was unacceptable. We are pleased that the Respiri
unsolicited offer is now resolved and Adherium can now
fully focus on the business at hand without distraction.
Board and Business Leadership
The Adherium Board has continued to evolve with the
appointment in May 2021 of Mr George Baran as a
non-executive director replacing Mr Bryan Mogridge
who retired from the Board in January. George brings
over 35 years of medical device industry experience to
the Board including business and technical leadership
in the acquisition and development of novel medical
device technologies. George serves as Executive Chair
of the Trudell Medical Limited Board of Directors and his
appointment reflects Trudell’s commitment to Adherium’s
success both as investors and as strategic partners
developing integrated digital solutions for a range of
devices in the respiratory setting.
Mr Rick Legleiter was appointed Chief Executive Officer
in May 2021 following Mr Mike Motion’s decision to step
down from the Board and CEO position for personal
reasons. Rick brings to the business a strong career track
record of global systems business development and
partnering at Siemens along with successful Australia-
based CEO business turnaround performance whilst
at Universal Biosensors. Rick combines a clear vision
for the business with strong detail focus and execution
orientation. Rick has now arrived in Australia, based in
Melbourne from where he will directly oversee the further
development of the business.
Conclusion
Following a turnaround re-boot in the prior year I believe
Adherium has faced intense challenges in the external
environment in 2020-21. Despite these challenges the
business has made good progress with its Research
& Development portfolio, successfully resolved an
unsolicited takeover offer and moves into 2021-22 with
a solid funding base to prosecute its plan to meaningful
commercial revenue in an increasingly attractive remote
monitoring market environment.
On behalf of the Board I would particularly like to thank
all the investors who have participated in the funding
of the business and all shareholders for their continued
commitment to the business. I would also like to thank
Bryan Mogridge for his strong contribution to the Board
since 2015 and to Mike Motion for his leadership role in
the turnaround of the business from November 2019.
In addition, I would like to thank all the Adherium team
who, despite the challenges faced by the business
remain motivated, focused and engaged in supporting
continued progress and strategy implementation.
James Ward-Lilley
Non-Executive Chairman
3
Annual Report 2021 Adherium Ltd
CEO's
Report
Dear Shareholder,
Over the past year Adherium made important progress
on our digital health strategy that underpins our $18
million placement, updating the product roadmap of
physiologically enabled inhalation sensors and third-
partner product integration, and applying lessons
learned from commercial pilots. All this was achieved
despite the challenges of the pandemic. Adherium’s
strategy is consistent and continues to be providing the
key building blocks in the digital ecosystem for respiratory
disease management through the extension of our
technology offering beyond adherence by establishing a
complementary, multi-sensor digital product offering and
software platform.
The digital health landscape fortifying our strategy is
very important and compelling with a huge US$34 billion
market opportunity:
01
There is a convergence underway in healthcare which
has been stimulated and accelerated over the past
year by the SARS-CoV-2 pandemic. This includes a
paradigm shift in the way patients interact with medical
providers including remote monitoring and telemedicine
and in which medicine is practiced and patients are
managed by their doctors. In this respect, COVID-19
has worked as a positive driver for our business. The
convergence is comprised of advanced technologies,
software innovation, and data analytics for improved
clinical outcomes. Adherium’s next generation sensors,
physiological measurement capture, and data
generation applied to respiratory disease does just that,
we improve clinical outcomes.
4
02
Globally healthcare systems are increasingly under
cost and performance pressures. Payers both public
and private want to lower risk and reduce total cost of
care and they demand that biotechnology companies
demonstrate brand value. Adherium’s complementary
suite of respiratory digital devices in development
builds on and extends our brand value from when the
company was first founded. We are stepping up to payer
demands and demonstrating value creation. Built on
Adherium’s existing software platform, and supporting
next generation adherence sensors with physiological
measurement, these additional digital devices will
provide supplementary data on the underlying disease
status. With more than 170,000 sensors sold globally,
your Company is uniquely positioned with the history and
experience to benefit from the rapidly developing remote
patient monitoring and telehealth trends and positive
reimbursement environment in, for example, the USA. This
digital respiratory management ecosystem will broaden
Adherium’s clinical offering providing a more complete
data set to physicians, payers and providers for new and
recurring revenue streams.
03
Providers require reimbursement for their services
and workflow productivity improvement to lower their
costs. Reimbursement criteria is one and the same with
Adherium’s product design criteria. Even further our key
commercial pilot programs and partner engagement
in the USA, UK and Australia are focused on real-
world workflow design improvements and empowering
provider telemedicine. For example, recent and
continuing evolution to the USA health payment structure
function to our advantage by reimbursing providers
approximately $1,400 per year for each patient utilizing
remote patient monitoring devices such as ours. Our
Annual Report 2021 Adherium Ltd next phase proof-of-concept pilots and commercial
demonstrations to show that automated physiological
data capture and reporting provide the services and
workflow improvements to improve productivity and
lower medical costs.
To deliver on the strategy outlined above we must first
and foremost execute on our product roadmap. Time to
market is time to revenue. Bridging our execution results
from 2020 to 2021 is the FDA clearance just this month of
our first physiological enabled sensor for Symbicort. This
is a very important milestone for us from a development,
a regulatory and commercial standpoints. It is upon this
milestone in which over the coming year we will add
more sensors and third-party enabled devices to our
next generation product portfolio. We will announce
each new device as our development progress through
the design stages. Our focus on execution, and time
to market is how we generate revenue and top-line
growth creating the results and returns expected from
our shareholders and investors. We are taking a two-fold
approach to deliver on the product roadmap. First, we
are continuing our strategically critical relationship with
Planet Innovation (PI). From my firsthand experience, PI
is a well-respected Melbourne-based, award winning,
innovation company. Our device hardware and software
development collaboration with PI has even deepened
as they also became an ADR shareholder in this latest
funding round. Second, from an organization design and
capabilities standpoint we are recruiting and staffing
a Melbourne-based software engineering team. This
is important for delivering on the product roadmap as
a complement to PI with our own in-house staff to be
closer to the user experience, associated sustaining
engineering requirement, build internal capabilities for
further roadmap development, and better manage and
control development costs. We have already made good
progress recruiting and filling open positions to achieve
this objective.
Our commercial strategy is focused initially on the
USA and the UK leveraging Adherium’s technology to
address the high unmet need of patients with severe
and ‘difficult- to-treat’ asthma and chronic obstructive
pulmonary disease. The outcome is to reduce the
frequency and severity of exacerbations and the number
of ER admissions, which represent a very high-cost
burden to healthcare systems worldwide and may
even incur provider and insurance penalties due to
poor performance. These are patients who represent
that preventable healthcare cost of US$34 billion. The
typical business models in this disease management
approach include customers who are charged a per-
patient, per-sensor, per-month fee and for payors to
participate, for example, in a proportion of any risk-share
savings realized. In addition, once doctors gain access
to reimbursement with our physiological data capture
technology, we will levy a charge for services providing
that access. Through our distributor channel we gain
revenue from both sensor sales and the licensing of
software and data access. As the ecosystem develops
for respiratory disease management, we will follow the
optimum revenue generating approaches which are
most advantageous for our investors and shareholders.
In addition to new partners and customers, we are
continuing to work closely with our long-term pharma
partner AstraZeneca by supporting their clinical trials
work.
From a clinical perspective, our primary focus is on
solving the persistent medical problem of prescription
non-adherence and patient inhaler and treatment
challenges. Adherium’s Hailie® sensor technology and
cloud-based data platform have been shown in clinical
studies to improve patient outcomes and reduce acute
respiratory attacks by transforming the way in which
patients with asthma and COPD follow their prescribed
inhaled medication dosage and schedule and even use
their inhalers. By using Adherium’s systems, doctors also
collect and understand using longitudinal medical data
to help them better diagnose, manage, advise and treat
patients.
Finally on a personal note, I am thrilled to be back in
Melbourne as Adherium’s CEO. Having successfully
repositioned organizations and grown laboratory
diagnostics and imaging diagnostics businesses in the
past, I am fully engaged to lead Adherium in working
with partners, payers and providers to deliver on our
business strategy as I outlined above and generate
returns for our shareholders. All types of respiratory
disease are on the rise globally and nothing could be
more of an indicator than the SARS-CoV-2 pandemic
as the greatest respiratory infection in over 100 years.
Being situated in the right place at the right time is very
compelling and this is Adherium’s position. We have
the technological solutions within our grasp with our
development of next generation sensors, physiological
measurement, and data analytics to answer the
demands of the providers, payers and partners to
deliver every step in the value chain. This is how we
will generate revenue and top-line growth creating the
results and returns for our shareholders and investors.
I am convinced Adherium has a bright outlook.
Rick Legleiter
Group CEO
“ Over the past year
Adherium made
important progress
on our digital health
strategy despite the
challenges of the
pandemic.”
5
Annual Report 2021 Adherium Ltd Directors’ Report
The Directors present their report on the consolidated entity (the Group), consisting of Adherium Limited (the Company
or Adherium) and the entities it controlled at the end of, or during, the year ended 30 June 2021, together with the
independent auditor’s report thereon.
Directors
The Directors of the Company at any time during the year and until the date of this report are:
Mr James Ward-Lilley, BA (Hons), MBA. Age 56.
Independent Non-Executive Chair
Appointed as a Director and Chairman 14 April 2020.
Mr Ward-Lilley had an extensive 28-year global pharmaceutical career at AstraZeneca before becoming Chief
Executive Officer of Vectura Group PLC (the inhaled formulation and device development specialist) in September 2015.
At Vectura he was responsible for leading the business through a critical transformation period including the successful
merger with Skyepharma. James stepped down in June 2019 leaving Vectura as a growing, cash generative business
with a strong balance sheet and positive pipeline momentum positioned to take a new CDMO focussed approach.
At AstraZeneca James had a number of increasingly senior roles including leading the business in China to become the
number one pharmaceutical company in the market in 2008. He went on to become Regional Vice President for Central
Eastern Europe and the Middle East and led AstraZeneca’s investor relations team during the transition of Chair, CEO
and strategy as Leif Johansson and Pascal Soriot joined the business.
Mr Ward-Lilley’s last role at AstraZeneca was to lead the Respiratory, Inflammation & Autoimmunity franchise with
responsibility for the revitalisation of one of AstraZeneca’s three core therapeutic areas including the acquisitions of
Almirall’s respiratory business and Pearl Therapeutics. He was responsible for leading AstraZeneca’s corporate device
strategy in 2014/15 and was the key sponsor for AstraZeneca’s initial investment in Adherium at the time of the IPO
in 2015.
Mr Ward-Lilley is Chief Commercial Officer of the Galway, Ireland Aerogen Group and Board Director of Aerogen
Pharma Ltd. He has not held any other Australian public company directorships in the last three years.
Mr George Baran, MBA. Age 61.
Non-Executive Director
Appointed as a Director on 13 May 2021.
Mr Baran has over 35 years of experience in the medical device industry and serves as Executive Chair of the Trudell
Medical Limited Board of Directors as well as being a significant shareholder. In addition to his role at Trudell, Mr Baran
is an active investor in and Director of several medical device and e-health / connected care companies including
Sensory Technologies, Mozzaz Corporation, and Sky Medical Technology Inc. He was also a lead investor and a former
Director of Vanrx Phamasystems, which was recently acquired by Cytiva Life Sciences.
Mr Baran has been responsible for the marketing of new drug delivery technologies to medical opinion leaders and
major pharmaceutical companies. This has included collaboration with business and clinical partners in the design and
co-ordination of clinical studies. He has also been granted several US and international patents for medical devices for
drug delivery and minimally invasive surgery.
Mr Baran holds an MBA from the Richard Ivey School of Business, Western University, London (ON) where he currently
serves on the Advisory Board of the Lawrence National Centre for Policy and Management. Mr Baran has not held any
other Australian public company directorships in the last three years.
Mr Jeremy Curnock Cook, MA. Age 72.
Independent Non-Executive Director
Appointed as a Director on incorporation of Adherium Limited on 17 April 2015.
Mr Curnock Cook was formerly head of the life science private equity team at Rothschild Asset Management in the UK
and is an active investor in the Australian life science sector. At Rothschild, Mr Curnock Cook was responsible for the
launch of the first dedicated biotechnology fund for the Australian market. Over his 40-year career, Mr Curnock Cook
has specialised in creating value in emerging biotech enterprises, through active participation with management. He
has served on over 40 boards in various roles, including chair of private and public biotechnology companies listed on
NASDAQ, AMEX, LSE, TSX and ASX. Mr Curnock Cook received his MA in Natural Sciences from Trinity College in Dublin,
6
Annual Report 2021 Adherium Ltd Ireland. He is currently Managing Director of BioScience Managers (manager of a major shareholder in Adherium), and
sits on the board of Avita Medical, Rex Bionics Pty, GEN InCode Ltd, Cambridge Respiratory Innovations Ltd, and Sea
Dragon Ltd. Mr Curnock Cook was previously a director of Bioxyne Limited and Phylogica Limited. He has held no other
Australian public company directorships in the last three years.
As noted, Mr Curnock Cook has an association with significant shareholders through his capacity as Managing Director
of BioScience Managers Pty Ltd. The board of directors is of the opinion that this does not compromise the independence
of Mr Curnock Cook as, to the best of the Board’s knowledge and based on advice recieved, he is not involved in
decision making by the shareholders, and also does not control BioScience Managers Pty Ltd.
Dr William Hunter, MD. Age 58.
Independent Non-Executive Director
Appointed as a Director on 17 December 2015.
Dr Hunter has extensive experience in commercialising medical device technologies. He co-founded Angiotech
Pharmaceuticals in 1992 and assumed the position of CEO in 1997 when Angiotech was a venture-stage, private,
pre-clinical company with less than 50 employees. He led Angiotech through its IPO and listing on the Toronto Stock
Exchange and NASDAQ. Dr Hunter has over 200 patents and patent applications to his name and products in which he
was an inventor or co-inventor, including the TAXUS Drug-Eluting Coronary Stent, the Zilver PTX Peripheral DrugEluting
Stent, the Quill barbed wound closure device and the 5-FU Anti-Infective Catheter. Combined, these products have
generated revenues of over $12 billion and have helped the lives of over 15 million patients globally. He is currently
President and CEO of Canary Medical Inc. and formerly Correvio Pharma Corp (NASDAQ: CORV). Dr Hunter is also a
Director of Rex Bionics and an Industry Expert Advisor for BioScience Managers (manager of a major shareholder in
Adherium). He has previously served as a director of Epirus Biopharmaceuticals (NASDAQ: EPRS) and Union Medtech.
Dr Hunter completed his BSc from McGill University and a MSC and MD from the University of British Columbia. Dr
Hunter served as a practising physician in British Columbia for five years. Dr Hunter held no other Australian public
company directorships in the last three years.
Mr Bruce McHarrie, B.Com, FCA, GAICD. Age 63.
Independent Non-Executive Director
Appointed as a Director on 20 July 2015.
Mr McHarrie is a company director and adviser in the health and life sciences sectors with over 25 years’ experience. He
was formerly with Telethon Kids Institute in Perth, Western Australia, for 15 years, where his roles included Chief Financial
Officer, Director of Operations and Director of Strategic Projects. Prior to joining Telethon Kids, Mr McHarrie was a Senior
Manager at Deloitte in London before moving to Rothschild Asset Management as Assistant Director of the Bioscience
Unit, a life sciences private equity group investing in early stage biotechnology and healthcare companies. Outside his
role at Adherium, he is currently an advisor to BioScience Managers (manager of a major shareholder in Adherium), a
director at AusCann (Australasian Medical Cannabis) and Pharmamark Nutrition (nutritional foods). Mr McHarrie is a
Fellow of the Institute of Chartered Accountants Australia and New Zealand. He holds a Bachelor of Commerce from the
University of Western Australia and is a graduate member of the Australian Institute of Company Directors. Mr McHarrie
has held no other Australian public company directorships in the last three years.
As noted, as an advisor to BioScience Managers, Mr McHarrie has an association with a significant shareholder of the
Company. The board of directors is of the opinion that this does not compromise Mr McHarrie’s independence as to
the best of the board’s knowledge he is not involved in decision making by BioScience Managers and the value of the
advisory services provided is not material.
Mr Matthew McNamara BSc (Hons), MBA, GAICD. Age 57.
Independent Non-Executive Director
Appointed 18 October 2019.
Mr McNamara is currently the Chief Investment Officer and director of Horizon 3 Biotech Pty Ltd. Mr McNamara has
over 35 years’ experience in the Healthcare & Medical Sciences sector. After initially being a Molecular Biology Research
Assistant, he spent 11 years in sales & marketing and general management with Merck &Co. and Johnson and Johnson
Medical Pty Ltd respectively. He was CEO of a Life Sciences Venture Capital Fund, SciCapital Pty Ltd. and from 2005
–2019 was CIO of BioScience Managers’ healthcare funds. Mr McNamara is also a director of Avecho Biotechnology
Limited (ASX: AVE).
Mr Bryan Mogridge BSc, ONZM, FNZIOD was an Independent Non-Executive Director until his resignation on
29 January 2021.
Mike Motion, B.Sc (Hons) was Group CEO and Executive Director until his resignation on 13 May 2021.
7
Annual Report 2021 Adherium Ltd Joint Company Secretaries
Mr Rob Turnbull, B.Com, CA. Age 54.
General Manager and Joint Company Secretary
Appointed 21 August 2015.
Mr Turnbull has over 25 years’ corporate experience, starting his career with PricewaterhouseCoopers where he
worked in Auckland, Toronto, and London; and has almost 20 years’ experience with technology and life-sciences
companies. Mr Turnbull has also been Chief Financial Officer for an ASX-listed biotech company undertaking multiple
international studies ranging from preclinical to clinical Phase 3, and with operations in the United States, Australia and
New Zealand. In addition to capital markets financing and compliance, treasury, tax, financial reporting, commercial
contract negotiations and general management, he has been involved in M&A activity to acquire and develop specific
technologies. Mr Turnbull graduated from Auckland University with a Bachelor of Commerce, and is a Chartered
Accountant and member of Chartered Accountants Australia and New Zealand.
Mr Mark Licciardo, B.Bus (Acc), GradDip CSP, FCSA, FCIS, FAICD. Age 57.
Joint Company Secretary
Appointed 10 May 2016.
Mr Licciardo is Managing Director of Mertons Corporate Services Pty Ltd (Mertons) which provides company
secretarial and corporate governance consulting services to ASX listed and unlisted public and private companies.
Prior to establishing Mertons, Mr Licciardo was Company Secretary of the Transurban Group (2004-07) and Australian
Foundation Investment Company Limited, Djerriwarrh Investments Limited, AMCIL Limited and Mirrabooka Investments
Limited (1997-2004). Mr Licciardo has also had an extensive commercial banking career with the Commonwealth
Bank and State Bank Victoria. Mr Licciardo is a former Chairman of Governance Institute of Australia (GIA) (formerly
the Chartered Secretaries Australia) in Victoria, a fellow of both GIA and the Australian Institute of Company Directors
(AICD), former Chairman of Melbourne Fringe Limited and a director of ASX listed Frontier Digital Ventures and several
unlisted public and private companies.
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of directors) held during the period and the
number of meetings attended by each Director was as follows:
Directors’ Meetings
Audit & Risk Committee
Meetings
Nomination & Remuneration
Committee Meetings
Meetings
eligible
to attend
Meetings
attended
Meetings
eligible
to attend
Meetings
attended
Meetings
eligible
to attend#
Meetings
attended
James Ward-Lilley
George Baran
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara
Mike Motion
Bryan Mogridge
16
1
16
16
16
16
15
9
16
1
15
13
16
14
14
9
1
-
-
-
2
2
2*
1
1
-
-
-
2
2
2*
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* In attendance ex-officio.
# Nomination & Remuneration Committee business was dealt with at Board meetings during this period.
Committees of the Board
The Company has established the following committees of the board, with membership in the year to 30 June 2021 as noted:
Committee
Audit & Risk
Nomination & Remuneration
Membership
Bruce McHarrie (Chair), Non-Executive Director
Matthew McNamara, Non-Executive Director
James Ward-Lilley, Non-Executive Director (appointed 29 January 2021)
Bryan Mogridge, Non-Executive Director (until resignation 29 January 2021)
Jeremy Curnock Cook (Chair), Non-Executive Director
James Ward-Lilley, Non-Executive Director
Matthew McNamara, Non-Executive Director (appointed 29 January 2021)
Bryan Mogridge, Non-Executive Director (until resignation 29 January 2021)
The committees’ Charters are contained in the Corporate Governance Policy which is available on the Company’s website.
8
Annual Report 2021 Adherium Ltd Principal Activities
During the year, the principal continuing activity of the Group was the development, manufacture and supply of its
Hailie® (formerly Smartinhaler®) digital health technologies which address sub-optimal medication use and improve
health outcomes in chronic disease.
Results and Dividends
The net loss after tax of the Group for the year ended 30 June 2021 was $15,036,000.
No dividends were paid, declared or recommended during the year ended 30 June 2021.
Review of Operations
Whilst progress in executing our strategy in the 2021 financial year has been hampered by the pandemic, there has
nonetheless been significant developments which are building towards the future success of Adherium.
•
•
In the course of the year a total of $21 million was raised, initially $3 million through a convertible note
issued to Viburnum Funds which subsequently converted at the time a further $18 million capital raising was
completed in April 2021. The raising was strongly supported by existing investors including BioScience Managers
Translation Fund 1, Trudell Medical, K One W One and Fidelity International. Regal Funds an earlier investor also
participated as did several investors new to Adherium including Planet Innovation, our Research & Development
partner. These funds will be directed towards commercialisation and the Research and Development roadmap.
Initial pilots with Adherium’s partners Monaghan Medical Corporation (a Trudell Medical Limited company) and
HGE Health (a Vapotherm company) are advancing albeit more slowly than originally planned due to COVID
related issues. The outcomes are expected to support value propositions around improved patient outcomes,
reduced costs to treat, and access to reimbursement.
• The Research & Development programme in association with our partner Planet Innovation progressed with the
510 (k) for first sensor equipped with a physiological measure being submitted in April 2021 – further sensors with
this capability will be submitted for registration in the coming months enabling Adherium to offer payers and
providers the opportunity to access reimbursement codes for remote patient monitoring activities in the United
States. The addition of further digitalised respiratory medical devices to the Hailie® platform is underway. The
“Zero Touch” feature which will allow patients to connect the sensor to the Hailie® application with improved
Bluetooth connectivity and minimal interaction was successfully piloted and is under development.
Adherium is now well placed with a clear strategy, growing market recognition of the digital remote patient monitoring
opportunity and a strong Research & Development programme to advance the commercialisation of the Hailie® solution.
The loss for the year after tax was $15,036,000 compared to $11,397,000 in 2020.
Revenue to 30 June 2021 was $401,000, compared with $2,218,000 in the prior year. Revenue increased in two
geographies however the principal reductions occurred with a major customer in line with existing contracts. The
reductions were across both sensor sales and engineering services.
Research and development activities to 30 June 2021 amounted to $5,477,000 compared with $3,953,000 in the prior
year, the increased expenditure supporting the programme outlined above.
Sales and Marketing costs were $845,000 to 30 June 2021, compared with $1,766,000 in the prior year. This reduction
was a result of reducing contract personnel and consultants in addition to associated costs including travel, in the light
of COVID impacts on commercialisation activities.
Administrative expenses increased from $3,769,000 in year ended 30 June 2020 to $6,143,000 in the year ended 30 June
2021. The increase had two primary components - a non-cash component reflecting net unrealised foreign currency
losses of $888,000 compared to unrealised foreign currency gains of $144,000 in the prior year relating to intercompany
loan balances, and a cash component reflecting the increase in the Administrative payroll from $728,000 in the prior
year to $1,751,000 comprising in large part the full year/near full year impact of appointments of senior personnel at the
end of the prior year and early in the year ended 30 June 2021.
Adherium ended the year to 30 June 2021 with cash of $15,178,000.
9
Annual Report 2021 Adherium Ltd
Significant Changes in the State of Affairs
There have been no significant changes in the state of affairs of the Group during the financial year ended 30 June 2021.
Events since the end of the Financial Year
On 29 April 2021, Respiri Limited announced a takeover bid for all of the ordinary shares of Adherium Limited. The
takeover bid closed on 16 July 2021, failed to meet the offer conditions and so lapsed.
There are no other matters or circumstances that have arisen since the end of the financial year that have significantly
affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs in
future years.
Likely Developments and Expected Results
Commentary on the Group’s strategic direction and plan is set out in the Chairman's Report and CEO's Report on pages
2 to 5.
Environmental Regulation
The Group’s operations are not subject to any significant environmental Commonwealth or State regulations or laws.
Directors’ Interests
The relevant interest of each Director in shares and options over shares in the Company as notified by the Directors to
the ASX in accordance with section 205G of the Corporations Act 2001 as at 30 June 2021 is:
Director
James Ward-Lilley
George Baran*
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara
Ordinary Shares
Options over Ordinary Shares
2,167,412
422,697,512
2,276,439
2,696,439
2,861,292
1,206,743
10,000,000
10,485,950
-
-
-
-
* Shares and options disclosed are registered to Trudell Medical Limited, in which Mr Baran has a 33,33% beneficial interest.
Indemnification and Insurance of Directors and Officers
The Company has entered into deeds of access, insurance and indemnity with each director and officer which contain
rights of access to certain books and records of the Group for a period of seven years after the director or officer ceases
to hold office. This seven-year period can be extended where certain proceedings or investigations commence before
the seven-year period expires.
In respect of the indemnity of the directors and officers, the Company is required, pursuant to the constitution, to
indemnify all directors and officers, past and present, against all liabilities allowed under law. Under the deed of
access, insurance and indemnity, the Company indemnifies parties against all liabilities to another person that may
arise from their position as a director or an officer of the Company or its subsidiaries to the extent permitted by law. The
deed stipulates that the Company will meet the full amount of any such liabilities, including reasonable legal costs
and expenses.
In respect of insurance being obtained on behalf of the directors and officers, the Company may arrange and maintain
directors’ and officers’ insurance for its directors and officers to the extent permitted by law. Under the deed of access,
insurance and indemnity, the Company must obtain such insurance during each director’s and officer’s period of
office and for a period of seven years after a director or an officer ceases to hold office. This seven-year period can be
extended where certain proceedings or investigations commence before the seven-year period expires.
Disclosure of the insurance premiums and the nature of liabilities covered by such insurance are prohibited by the
relevant contracts of insurance.
10
Annual Report 2021 Adherium Ltd
Shares Under Option
Unissued shares
As at the date of this report, unissued ordinary shares of the Company under options comprised:
Exercise price
Total Number of Options
Vested Options
Expiry Date
$0.060000
$0.134039
$0.030000
$0.020000
$0.030000
$0.040000
$0.021900
$0.040000
83,333,333
173,238
104,855,877
25,000,000
25,000,000
25,000,000
27,519,467
20,000,000
83,333,333
17 February 2022
173,238
31 March 2022
104,855,877
25 October 2022
25,000,000
25,000,000
25,000,000
27,519,467
6,666,667
7 May 2023
7 May 2023
7 May 2023
29 January 2027
14 April 2027
Outstanding at 26 August
2021
310,881,915
297,548,582
The options over unissued ordinary shares do not entitle the holder to participate in any share issue of the Company or
any entity in the Group.
During the year ended 30 June 2021 and to the date of this report the following Directors of the Company or other key
management personnel of the Group were granted options:
Director/KMP
Number of Options
Exercise Price
Expiry Date
Bryan Mogridge
William Hunter
1,500,000
1,500,000
$0.04
$0.04
7 August 2021
7 August 2021
Details of fully paid ordinary shares issued on exercise of options in the year to 30 June 2021 are contained in the
accompanying consolidated financial statements.
Proceedings on behalf of the Company
There are no legal or other proceedings being made on behalf of the Company or against the Company as at the date
of this report.
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important.
The fees paid to PricewaterhouseCoopers for other services set out in note 6 of the Group’s financial statements for the
year ended 30 June 2020 related to advice in relation to employee incentive plan structures. The directors are satisfied
that the provision of these services during the year by the auditor did not impair the auditors’ independence. There were
no fees paid to PricewaterhouseCoopers for other services in the year ended 30 June 2021.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 in
relation to the audit for the financial year is provided with this report.
11
Annual Report 2021 Adherium Ltd Corporate Governance Statement
The board of Directors of Adherium Limited is responsible for corporate governance. The board has prepared the
Corporate Governance Statement (CGS) in accordance with the fourth edition of the ASX Corporate Governance
Council’s Principles and Recommendations under which the CGS may be made available on the Company’s website.
Accordingly, a copy of the Company’s CGS is available on the Adherium website at www.adherium.com under the
Investors/Corporate Governance section.
12
Annual Report 2021 Adherium Ltd
Remuneration Report (Audited)
The Directors present the Group’s 2021 remuneration report which sets out the remuneration information for the
Company’s Non-Executive Directors, Executive Director and other key management personnel of the Group.
The report contains the following sections:
(a) Details of key management personnel disclosed in this report
(b) Remuneration governance
(c) Executive remuneration policy and framework
(d) Relationship between remuneration and Group performance
(e) Non-Executive director remuneration policy
(f) Details of remuneration of key management personnel
(g) Service agreements
(h) Details of share and option based compensation
(i) Equity instruments held by key management personnel
(j) Other transactions with key management personnel
(a) Details of key management personnel disclosed in this report
The following persons acted as key management personnel of the Company and the Group during the year ended
30 June 2021.
(i) Non-Executive and Executive Directors
•
•
•
•
•
•
•
•
James Ward-Lilley
Non-Executive Chairman (appointed 14 April 2020)
George Baran
Non-Executive Director (appointed 13 May 2021)
Jeremy Curnock Cook
Non-Executive Director (appointed on incorporation 17 April 2015)
William Hunter
Non-Executive Director (appointed 17 December 2015)
Bruce McHarrie
Non-Executive Director (appointed 20 July 2015)
Matthew McNamara
Non-Executive Director (appointed 18 October 2019)
Bryan Mogridge
Non-Executive Director (appointed 20 July 2015, resigned 29 January 2021)
Mike Motion
Executive Director and Group CEO (appointed 24 April 2020, resigned 13 May 2021)
(ii) Other key management personnel
•
•
•
•
•
Rick Legleiter
Chief Executive Officer (appointed 13 May 2021)
Anne Bell
Geoff Feakes
Rob Turnbull
Chief Financial Officer (appointed 20 April 2020)
Chief Technology Officer (appointed 3 August 2020)
Joint Company Secretary (appointed 21 August 2015) and General Manager
Mark Licciardo
Joint Company Secretary (appointed 10 May 2016)
(iii) Changes since the end of the reporting period
There have been no other changes in key management personnel.
(b) Remuneration Governance
The Nomination and Remuneration Committee is a committee of the board. Its responsibilities include assisting the
board in ensuring that the Company:
• has coherent remuneration policies and practices which are observed and which enable it to attract and
retain executives and directors who will create value for shareholders;
• fairly and responsibly rewards executives having regard to the performance of the Company,
the performance of the executive and the general pay environment;
• provides disclosure in relation to the Company’s remuneration policies to enable investors to understand the
costs and benefits of those policies and the link between remuneration paid to directors and key executives
and corporate performance; and
• complies with the provisions of the ASX Listing Rules and the Corporations Act.
13
Annual Report 2021 Adherium Ltd
The primary purpose of the Nomination and Remuneration Committee is to support and advise the board in fulfilling its
responsibilities to shareholders in ensuring that the board is appropriately remunerated, structured and comprised of
individuals who are best able to discharge the responsibilities of directors by:
• assessing the size, composition, diversity and skills required by the board to enable it to fulfil its
responsibilities to shareholders, having regard to the Company’s current and proposed scope of activities;
• assessing the extent to which the required knowledge, experience and skills are represented on the board;
• establishing processes for the identification of suitable candidates for appointment to the board;
• overseeing succession planning for the board and the Chief Executive Officer;
• establishing processes for the review of the performance of individual directors and the board as a whole;
• assessing the terms of appointment and remuneration arrangements for non-executive directors; and
• assessment and reporting to the board in relation to:
the remuneration of executive directors;
the remuneration of persons reporting directly to the Chief Executive Officer;
- executive remuneration policy;
-
-
- diversity plans, measurable diversity objectives and ensuring equality in remuneration across gender
aligned, where relevant, with the ASX Corporate Governance Guidelines;
-
- superannuation arrangements; and
- all equity-based plans.
the Company’s recruitment, retention and termination policies and procedures;
(c) Executive remuneration policy and framework
Remuneration policy
The policy for determining the nature and amount of remuneration of key management personnel is agreed by the
board of directors as a whole on advice from the Nomination and Remuneration Committee. The board obtains
professional advice where necessary to ensure that the Group attracts and retains talented and motivated directors and
employees who can enhance the performance of the Group through their contributions and leadership. The Nomination
and Remuneration Committee makes specific recommendations on the remuneration package and other terms of
employment for the CEO having regard to his or her performance, relevant comparative information, and if appropriate,
independent expert advice.
For key management personnel, the Group provides a remuneration package that incorporates both cash-based
remuneration and, if appropriate, share or option based remuneration. The contracts for service between the Group
and key management personnel are on a continuing basis, the terms of which are to align executive performance-
based remuneration with Group objectives.
The Nomination and Remuneration Committee is also responsible for making recommendations to the board in relation
to the terms of any issue of equity-based remuneration to employees, as part of their individual package, or a wider staff
incentive and retention scheme, and for ensuring that any such issue is made in accordance with the ASX Listing Rules.
Executive pay
The executive pay and reward framework has three components:
• base pay and benefits, including legislative superannuation;
• short-term performance incentives; and
•
long-term incentives through participation in the Adherium employee share and option plans.
A combination of some or all of these components comprises an executive’s total remuneration.
Base pay
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for
executives is reviewed annually to ensure that executive remuneration is competitive with the market. There are no
guaranteed base pay increases included in any executives’ contracts.
Short-term incentives (STI)
Executives have a target STI opportunity depending on the accountabilities of the role and impact on the organisation.
The STI is a cash and equity based incentive which forms part of the executive’s total compensation, representing
between 0% and 150% of base salary. Each year, the Nomination and Remuneration Committee in conjunction with
the CEO, will consider the appropriate targets and key performance indicators (KPIs) of each executive to link the STI
plan and the level of payout if targets are met. This will include setting any maximum payout under the STI plan, and
minimum levels of performance to trigger payment of STI. The targets and KPIs selected are chosen to align executive
performance with the Group’s annual business objectives set by the board and encompassing business development,
research & development, and cash management.
14
Annual Report 2021 Adherium Ltd
The STI achievement is calculated and paid annually. The Nomination and Remuneration Committee in conjunction with
the CEO assesses the extent to which targets and KPIs have been achieved at a Company and individual performance
level to determine the STI to be paid. Measurement of achievement of the business objectives does not involve
comparison with factors external to the Company.
Long-term incentives (LTI)
Long-term incentives are provided to certain employees via the Adherium Employee Share Plans and Executive Share
Option Plan (the Plans).
The board has the discretion to offer and issue to eligible employees including directors:
• ordinary shares in the Company issued at an issue price determined by the board, with limited recourse loans
where some or all of the issue price of the share awards are funded by way of a loan from the Company; or
• options over ordinary shares in the Company with an exercise price determined by the board.
The Plans are designed to focus directors, executives and staff on delivering long-term shareholder returns.
Share and option awards issued under the Plans generally vest in three equal tranches over three years of continuing
employment. If the vesting condition is not met, the related share or option award is forfeited and, where relevant, the
loan cancelled such that the participant receives no benefit from unvested shares where the related loan is not repaid.
Participation in the Plans is at the board’s discretion and staff do not have a contractual right to participate in the Plans.
(d) Relationship between remuneration and Group performance
The Group continues in a business growth phase, as it undertakes continued product development, and seeks relevant
regulatory approvals for its technologies and market penetration for its products, and this is the focus of executives and
the board. During this phase expenditures continue to exceed revenues, and in the year ended 30 June 2021 the Group
incurred a loss after tax of $15,036,000 (1.7 cent loss per share). In the year to 30 June 2021 the Company’s shares traded
between 1.5 and 5.1 cents per share. Given the stage of the Group’s commercial development, the board does not utilise
earnings per share as a performance measure and does not presently include the Company’s share price as a measure
of executive performance.
No dividends were paid, declared or recommended during the period ended 30 June 2021.
(e) Non-Executive Director remuneration policy
On appointment to the board, Non-Executive Directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office
of director.
Non-Executive Directors receive a fee which is inclusive of fees for chairing or participating on board committees. They
do not receive performance-based pay. Non-Executive Directors’ fees and payments are reviewed annually by the
board. The Non-Executive Chairman’s fees are determined independently of the fees of Non-Executive Directors based
on comparative roles in the external market. At the 2016 Annual General meeting shareholders approved an aggregate
annual non-executive director fee pool of $500,000. From this the Non-Executive Chairman is paid $100,000 per annum
and each Non-Executive Director is paid $50,000 per annum. Legislative superannuation contributions are also paid
where applicable.
A Non-Executive Director may be paid fees or other amounts as the board determines where a Director performs ser-
vices outside the scope of the ordinary duties of a Director. The Company may reimburse Non-Executive Directors for
their expenses properly incurred as a Director or in the course of office.
15
Annual Report 2021 Adherium Ltd
(f) Details of remuneration of key management personnel
Remuneration for the
year ended 30 June 2021
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
$
Superannuation
$
Severance
Loan Funded Shares6
Remuneration
Remuneration
Value of Options/
Performance Related
Directors’ remuneration
James Ward-Lilley
George Baran4
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara
Bryan Mogridge4
Sub-total Directors
Executives’ remuneration
Mike Motion1
Rick Legleiter2
Anne Bell
Geoff Feakes3
Mark Licciardo5
Rob Turnbull
Sub-total executives
Total key management personnel
100,000
6,720
50,000
50,000
50,000
50,000
29,167
335,887
540,923
36,669
287,494
201,679
6,180
234,299
1,307,244
1,643,131
-
-
-
-
-
-
-
-
327,993
-
116,485
95,504
-
58,462
598,444
598,444
-
-
-
-
-
-
-
-
-
91,546
-
-
-
-
91,546
91,546
1. Mike Motion resigned from the role of Group CEO on 13 May 2021.
2. Rick Legleiter was appointed Group CEO 13 May 2021.
3. Geoff Feakes was appointed CTO 3 August 2020.
4. Bryan Mogridge resigned as a director 29 January 2021, and George Baran was appointed 13 May 2021.
-
-
-
-
4,750
4,750
-
9,500
98,227
3,487
27,881
19,159
-
8,715
157,469
166,969
Remuneration for the
year ended 30 June 2020
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
$
Superannuation
$
Severance
Loan Funded Shares7
Remuneration
Remuneration
Value of Options/
Performance Related
Directors’ remuneration
James Ward-Lilley
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara5
Bryan Mogridge
Thomas Lynch
John Mills5
Sub-total Directors
Executives’ remuneration
Mike Motion2
Anne Bell3
Peter Stratford4
Mark Licciardo6
Rob Turnbull
Sub-total executives
Total key management personnel
259,782 1
50,000
50,000
50,000
37,351
50,000
75,000
16,667
588,800
385,349
52,514
299,086
7,083
229,030
973,062
1,561,862
-
-
-
-
-
-
-
-
-
35,418
10,503
-
-
57,241
103,162
103,162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,755
3,068
-
-
861
7,684
4,250
4,989
-
-
6,871
16,110
23,794
1. Consulting fee for the period to 30 June 2020.
2. Mike Motion was appointed CCO 22 November 2019, COO 14 April 2020, and CEO 24 April 2020.
3. Anne Bell was appointed CFO on 20 April 2020.
4. Peter Stratford was appointed CEO 22 November 2019 and resigned from the role 11 February 2020.
John Mills resigned, and Matthew McNamara was appointed, as directors on 18 October 2019.
5.
6. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
allocated to the reporting period.
7. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
16
5. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
allocated to the reporting period.
6. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
87,913
1,054,056
20,958
280,740
Total
$
187,913
6,720
50,000
64,232
59,494
54,750
43,399
466,508
131,702
494,485
348,922
6,180
303,265
2,339,610
2,806,118
Total
$
50,621
50,621
54,376
40,419
50,621
76,242
18,149
621,789
445,975
68,006
299,086
7,083
315,178
1,135,328
1,757,117
87,913
14,232
4,744
14,232
121,121
$
-
-
-
-
-
62,625
32,580
1,789
184,907
306,028
$
621
621
621
-
621
1,242
621
25,305
20,958
-
-
-
22,036
42,994
68,299
%
47%
22%
8%
33%
39%
36%
37%
20%
-
-
-
-
-
%
7%
1%
1%
1%
-
1%
2%
3%
13%
15%
-
-
25%
Fixed
%
53%
100%
100%
78%
92%
100%
67%
61%
100%
64%
63%
100%
80%
Fixed
%
93%
99%
99%
99%
100%
99%
98%
97%
87%
85%
100%
100%
75%
Annual Report 2021 Adherium Ltd (f) Details of remuneration of key management personnel
Remuneration for the
year ended 30 June 2021
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
Superannuation
Severance
$
Value of Options/
Loan Funded Shares6
$
Total
$
Performance Related
Remuneration
%
Fixed
Remuneration
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
87,913
-
-
14,232
4,744
-
14,232
121,121
87,913
-
62,625
32,580
-
1,789
184,907
306,028
187,913
6,720
50,000
64,232
59,494
54,750
43,399
466,508
1,054,056
131,702
494,485
348,922
6,180
303,265
2,339,610
2,806,118
47%
-
-
22%
8%
-
33%
39%
-
36%
37%
-
20%
53%
100%
100%
78%
92%
100%
67%
61%
100%
64%
63%
100%
80%
1. Mike Motion resigned from the role of Group CEO on 13 May 2021.
2. Rick Legleiter was appointed Group CEO 13 May 2021.
3. Geoff Feakes was appointed CTO 3 August 2020.
4. Bryan Mogridge resigned as a director 29 January 2021, and George Baran was appointed 13 May 2021.
5. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
6. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
allocated to the reporting period.
Remuneration for the
year ended 30 June 2020
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
$
Superannuation
Severance
$
Value of Options/
Loan Funded Shares7
$
Total
$
Performance Related
Remuneration
%
Fixed
Remuneration
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,958
621
621
621
-
621
1,242
621
25,305
20,958
-
-
-
22,036
42,994
68,299
280,740
50,621
50,621
54,376
40,419
50,621
76,242
18,149
621,789
445,975
68,006
299,086
7,083
315,178
1,135,328
1,757,117
7%
1%
1%
1%
-
1%
2%
3%
13%
15%
-
-
25%
93%
99%
99%
99%
100%
99%
98%
97%
87%
85%
100%
100%
75%
6. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
7. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
allocated to the reporting period.
17
Directors’ remuneration
James Ward-Lilley
George Baran4
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara
Bryan Mogridge4
Sub-total Directors
Executives’ remuneration
Mike Motion1
Rick Legleiter2
Anne Bell
Geoff Feakes3
Mark Licciardo5
Rob Turnbull
Sub-total executives
Total key management personnel
Directors’ remuneration
James Ward-Lilley
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara5
Bryan Mogridge
Thomas Lynch
John Mills5
Sub-total Directors
Executives’ remuneration
Mike Motion2
Anne Bell3
Peter Stratford4
Mark Licciardo6
Rob Turnbull
Sub-total executives
327,993
116,485
95,504
58,462
598,444
598,444
91,546
91,546
91,546
100,000
6,720
50,000
50,000
50,000
50,000
29,167
335,887
540,923
36,669
287,494
201,679
6,180
234,299
1,307,244
1,643,131
259,782 1
50,000
50,000
50,000
37,351
50,000
75,000
16,667
588,800
385,349
52,514
299,086
7,083
229,030
973,062
1,561,862
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,418
10,503
57,241
103,162
103,162
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total key management personnel
1. Consulting fee for the period to 30 June 2020.
2. Mike Motion was appointed CCO 22 November 2019, COO 14 April 2020, and CEO 24 April 2020.
3. Anne Bell was appointed CFO on 20 April 2020.
4. Peter Stratford was appointed CEO 22 November 2019 and resigned from the role 11 February 2020.
5.
John Mills resigned, and Matthew McNamara was appointed, as directors on 18 October 2019.
$
-
-
-
-
-
4,750
4,750
9,500
98,227
3,487
27,881
19,159
-
8,715
157,469
166,969
$
-
-
-
-
-
-
-
3,755
3,068
861
7,684
4,250
4,989
6,871
16,110
23,794
Annual Report 2021 Adherium Ltd (g) Service agreements
Joint Company Secretary - Mr Mark Licciardo
Mr Licciardo currently provides company secretarial and corporate governance services under a service arrangement
between the Company and Merton Corporate Services Pty Ltd, a company associated with Mr Licciardo. The current
arrangement has no predetermined termination date, with each party having the right to terminate the arrangement by
giving ninety days’ notice in writing to the other party.
Other key management personnel of the Group
Remuneration and other terms of employment for other key management personnel of the Group are formalised in
employment agreements which specify the components of remuneration, benefits and notice periods. Participation
in the STI and LTI plans is subject to the board’s discretion. Other major provisions of the agreements relating to
remuneration are set out below:
Name
Rick Legleiter
Mike Motion, CEO
Anne Bell, CFO 4
Geoff Feakes, CTO
Rob Turnbull, Joint Company Secretary and
General Manager
Term of
Agreement
Notice Period 1
Base Salary 2
Termination
Payments 3
No fixed term
6 months
A$275,000
A$52,000
1 September 2021
-
£300,000
No fixed term
No fixed term
No fixed term
4 months
A$320,000
4 months
A$220,000
2 months
NZ$251,200
2 months
-
-
-
1. The notice period applies without cause equally to either party unless otherwise stated.
2. Base salaries quoted are annual as at 30 June 2021; they are reviewed annually by the Nomination and Remuneration Committee.
3. Amount or base salary payable if the Group terminates employees with notice, and without cause (e.g. for reasons other than unsatisfactory
performance).
4. Paid 50% in cash and 50% shares in lieu valued at the 5-day VWAP at the end of each pay period.
(h) Details of share and option based compensation
Executive Share Option Plan
The board has established the Adherium Executive Share Option Plan (ESOP).
Awards under the ESOP typically vest one third annually over three years of continued employment from the grant date.
The fair value of the awards of options are calculated at the date of grant using a Black-Scholes pricing model, which is
allocated over the vesting periods as share and option based compensation.
In the year ended 30 June 2021 the board made offers to key management personnel under the ESOP which were
accepted as follows:
Key Management
Personnel
Options Exercise Price
Term
Vesting
Total Value1
2021 Expense
Allocation
William Hunter
Bryan Mogridge
1,500,000
1,500,000
$0.04
$0.04
1 year
1 year
Immediate
Immediate
$15,885
$15,885
$14,232
$14,232
1. Valuation at the date of award, using the Black & Scholes option pricing model, to be allocated over the vesting periods as
share-based compensation.
All options over ordinary shares issued by the Company are exercisable on a one-for-one basis, and any shares issued
on exercise are fully paid and rank pari passu with existing ordinary shares.
No options over ordinary shares were exercised during the period to 30 June 2021 and to the date of this report. The
awards noted above lapsed unexercised on 7 August 2021.
18
Annual Report 2021 Adherium Ltd Loan funded Employee Share Plan
The board has established the loan funded Adherium Employee Share Plans (Plans).
Awards under the Plans typically vest one third annually over three years of continued employment from the grant date.
After vesting the participant may take title to the shares by repaying to the Company the proportion of the loan related to
those shares.
The fair value of the awards of loan funded shares are calculated at the date of grant using a Black-Scholes pricing
model, which is allocated over the vesting periods as share based compensation.
In the year ended 30 June 2021 the board made offers to key management personnel under the Plans which were
accepted as follows:
Key Management
Personnel
Shares
Price
Loan
Term
Vesting Total Value1
2021 Expense
Allocation
Bruce McHarrie
Anne Bell
Geoff Feakes
500,000
8,250,000
4,500,000
$0.04
$0.04
$0.05
$20,000
$330,000
$225,000
1 year
Immediate
$5,295
7 years
7 years
3 years
3 years
$148,430
$77,220
$4,744
$62,625
$32,580
1. Valuation at the date of award, using the Black & Scholes option pricing model, to be allocated over the vesting periods as
share-based compensation.
The award noted above to Bruce McHarrie lapsed unexercised on 7 August 2021.
(i)
Equity instruments held by key management personnel
Shareholdings
The numbers of ordinary shares in the Company held during the year to 30 June 2021 by each director and other key
management personnel of the Group, including their personally related parties, are set out below:
Name
Balance at the start
of the year
Purchases
Other changes
during the period
Balance at the end
of the year
James Ward-Lilley
George Baran
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matthew McNamara
Anne Bell
Geoff Feakes
Rob Turnbull 1
Mike Motion
Bryan Mogridge
-
422,697,5124
1,192,734
1,612,734
1,277,587
123,038
601,151
-
2,559,645
600,000
12,858,9651
-
-
-
-
-
-
-
-
-
-
-
2,167,4122
-
1,083,7052
1,083,7052
1,583,7052
1,083,7052
9,222,0952
4,500,0002
-
1,061,9512
-
2,167,412
422,697,512
2,276,439
2,696,439
2,861,292
1,206,743
9,823,246
4,500,000
2,559,645
1,661,9513
12,858,9653
1.
Includes ordinary shares held jointly with the General Manager in their capacity as trustees of the Company’s Employee Share Plan.
At 30 June 2021: 10,003,149 (30 June 2020: 10,003,149) ordinary shares were held in this capacity.
2. Shares issued in lieu of salary/fees and as awards under the Company's Employee Share Plan.
3. Holding as at date directorship ended.
4. Holding as of date directorship commenced. The registered holder of the ordinary shares is Trudell Medical Limited, in which the director
has a 33.33% beneficial interest.
19
Annual Report 2021 Adherium Ltd
Options
The numbers of options over ordinary shares in the Company held during the year to 30 June 2021 by each director and
other key management personnel of the Group, including their personally related parties, are set out below:
Balance
at the
start of
the year Awarded Exercised Lapsed
Balance
at the
end of
the year
Name
Vested
Vested and
exercisable
Vested and
unexercisable
James Ward-Lilley
10,000,000
George Baran1
10,485,950
-
-
William Hunter
-
1,500,000
Mike Motion
10,000,000
-
Bryan Mogridge2
-
1,500,000
-
-
-
-
-
-
-
-
-
-
10,000,000
3,333,333
3,333,333
10,485,950 10,485,950
10,485,950
1,500,000
1,500,000
1,500,000
10,000,000
3,333,333
3,333,333
1,500,000
1,500,000
1,500,000
-
-
-
-
-
1. Holding as of date directorship commenced. The registered holder of the options is Trudell Medical Limited, in which the director has
a 33.33% beneficial interest.
2. Holding as at date directorship ended.
(j) Other transactions with key management personnel
Transactions with directors or other key personnel are set out in note 18 of the accompanying Group financial statements
for the year ended 30 June 2021.
End of audited Remuneration Report.
This report is made in accordance with a resolution of the directors.
James Ward-Lilley
Non-Executive Chairman
Melbourne
26 August 2021
20
Annual Report 2021 Adherium Ltd
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Adherium Limited for the year ended 30 June 2021, 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 Adherium Limited and the entities it controlled during the period.
Scott Walsh
Partner
PricewaterhouseCoopers
Sydney
26 August 2021
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
21
Annual Report 2021 Adherium Ltd
Financial
Statements
Consolidated Statement of Profit
or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
22
Annual Report 2021 Adherium Ltd Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the year
ended 30 June 2021
Notes
June 2021
$000
June 2020
$000
Continuing Operations
Sales
Cost of sales
Gross profit
Other income - Covid 19 payroll support
Other income - R&D tax credit
Manufacturing support
Research and development costs
Sales and marketing costs
Administrative expenses
Operating loss
Finance income
Finance expense
Finance income (cost) - net
Loss before income tax
Income tax credit (expense)
5
7
5
15
7
401
(426)
(25)
61
370
(764)
(5,477)
(845)
(6,143)
(12,823)
23
(2,236)
(2,213)
(15,036)
-
2,218
(814)
1,404
-
-
(727)
(3,953)
(1,766)
(3,769)
(8,811)
15
(2,601)
(2,586)
(11,397)
-
Loss for the period attributable to equity holders
(15,036)
(11,397)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss when
certain conditions are met: Foreign exchange differences on
translation of foreign operation
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period
Total comprehensive loss attributable to:
Equity holders of Adherium Limited
864
864
(209)
(209)
(14,172)
(11,606)
(14,172)
(11,606)
Basic and diluted loss per share
8
(1.7) cents
(3.6) cents
The accompanying notes form part of the financial statements.
23
Annual Report 2021 Adherium Ltd Consolidated Statement of Financial Position
as at 30 June 2021
Notes
June 2021
$000
June 2020
$000
9
10
11
12
13
14
16
15,178
567
962
202
16,909
127
3
17,039
2,319
685
3,004
4,584
624
1,120
150
6,478
235
5
6,718
2,646
688
3,334
110,172
(73,385)
(22,752)
14,035
17,039
87,682
(58,349)
(25,949)
3,384
6,718
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Income received in advance
Total current liabilities
EQUITY
Share capital
Accumulated deficit
Other reserves
Total equity
Total liabilities & equity
The accompanying notes form part of the financial statements.
24
Annual Report 2021 Adherium Ltd Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Share & Option
Compensation
Reserve
Foreign
Currency
Translation
Reserve
Merger
Reserve
$000
$000
Total
Equity
$000
Share
Capital
Accumulated
Deficit
$000
$000
Equity as at 1 July 2019
74,349
(46,952)
Loss for the period
Other comprehensive
income
Total comprehensive loss
Transactions with owners:
Non-renounceable
Rights Issue
Shares and options issued
on conversion of convertible
notes
Shares issued in placement
Share issue costs
Share and option grants for
services
-
-
-
5,392
4,816
3,128
(180)
177
(11,397)
-
(11,397)
-
-
-
-
-
$000
1,010
-
-
-
-
711
-
-
116
(42)
(27,535)
830
-
(209)
(209)
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,397)
(209)
(11,606)
5,392
5,527
3,128
(180)
293
Equity as at 30 June 2020
87,682
(58,349)
1,837
(251)
(27,535)
3,384
Loss for the period
Other comprehensive
income
Total comprehensive loss
Transactions with owners:
Shares and options issued
on conversion of convertible
notes
Shares and options issued in
placements
Share and option grants for
services
Share issue costs
-
-
-
(15,036)
-
(15,036)
4,063
19,014
222
(809)
-
-
-
-
Equity as at 30 June 2021
110,172
(73,385)
The accompanying notes form part of the financial statements.
-
-
-
1,165
858
310
-
4,170
-
864
864
-
-
-
-
-
-
-
-
-
-
-
(15,036)
864
(14,172)
5,228
19,872
532
(809)
613
(27,535)
14,035
25
Annual Report 2021 Adherium Ltd Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Notes
June 2021
$000
June 2020
$000
Cash flows from operating activities:
Receipts from customers
Interest received
Interest paid
Resident withholding tax refunded (paid)
Payments to employees
Payments to suppliers
Net cash provided from (used in) operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from the issue of shares
Proceeds from the issue of convertible notes
Payment of capital raising costs
Net cash provided from financing activities
Net increase (decrease) in cash
Cash at the beginning of the year
Effect of exchange rate changes on cash balances
Cash at the end of the year
Reconciliation with loss after income tax:
Loss after income tax
Non-cash and non-operating activities items requiring
adjustment:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Fixed assets (gain) loss on disposal
Convertible notes finance cost
Convertible notes issue cost
Share and option compensation expense
Shares granted for services
Foreign exchange (gain)
Changes in working capital:
Trade and other receivables
Inventories
Trade and other payables
Income received in advance
Net cash provided from (used in) operating activities
The accompanying notes form part of the financial statements.
26
782
23
(8)
-
(4,536)
(7,534)
(11,273)
(29)
(29)
19,872
3,000
(968)
21,904
10,602
4,584
(8)
15,178
2,731
15
-
13
(2,736)
(7,340)
(7,317)
(138)
(138)
8,520
2,926
(105)
11,341
3,886
763
(65)
4,584
(15,036)
(11,397)
142
3
(5)
2,228
94
310
222
888
(1)
150
(268)
-
(11,273)
249
86
32
2,601
-
116
177
(144)
(178)
(720)
1,203
658
(7,317)
9
12
13
15
Annual Report 2021 Adherium Ltd Notes to the consolidated financial
statements for the year ended 30 June 2021
1. General Information
Adherium Limited (the Company or Adherium) is a company domiciled in Australia. The address of the Company’s
registered office is Collins Square, Tower Four, Level 18, 727 Collins Street, Melbourne, VIC 3008. The consolidated
financial statements of the Company as at and for the year ended 30 June 2021 comprise the Company and its
subsidiaries (together referred to as the Group and individually as Group entities). The Group is a for-profit entity and
primarily develops, manufactures and supplies digital health technologies which address sub-optimal medication use
and improve health outcomes in chronic disease.
The separate financial statements of the parent entity, Adherium Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The consolidated financial statements were authorised for issue by the Board on 26 August 2021.
2. Basis of Preparation
This general purpose consolidated financial report for the twelve months ended 30 June 2021 has been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001.
The consolidated financial statements have been prepared on a going concern basis, meaning the Group has the
intention to continue its business for the foreseeable future.
As of June 30, 2021, the Group had net cash of $15,178,000 (2020: $4,584,000) and recorded a loss after tax of
$15,036,000 (2020: $11,397,000) and operating cash outflows of $11,273,000 (2020: $7,317,000) for the year then ended.
The Directors have approved cash flow forecasts. These forecasts indicate in order for the Group to meet its operating
requirements for the 12 months from the date of authorisation of these financial statements, the Group must raise
additional capital or alternative funding. The cash flow forecast indicates this additional funding would be required by
the end of financial year 2022.
The Directors considered the achievability of the assumptions underlying the forecast, and as with any forecast, there
are uncertainties within the assumptions required to meet the Group’s expectations. Whether the Group can raise
additional capital or alternative funding until the group is supported by cash flows from operations represents a
material uncertainty that casts significant doubt over the Group’s ability to continue as a going concern and therefore
whether it will be able to realise its assets and discharge its liabilities in the normal course of business. Despite this
uncertainty, the Directors are of the view that the company will be successful in raising additional capital or alternative
funding and accordingly have adopted the going concern basis for the preparation of this financial report.
(a) Compliance with International Financial Reporting Standards
These consolidated financial statements comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(b) Historical cost convention
These financial statements have been prepared under the historical cost convention as modified by
certain policies below.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s
functional currency.
(d) Critical accounting estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on
an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is
revised and in any future periods affected.
27
Annual Report 2021 Adherium Ltd
The significant areas of estimate, uncertainty and critical judgements in applying accounting policies that have
the most significant effect on amounts recognised in the financial a statements are:
(ii) Convertible notes
The assumptions applied in recording the recognition and conversion of the convertible notes are set out
in note 15.
(ii)
Impairment of non-current assets
The Company reviews annually whether any property, plant and equipment have suffered any
impairment in accordance with the accounting policy stated in note 3.10. In making this assessment,
the extent of the likely future use of these assets is required to be estimated in determining if their
value is impaired at the balance sheet date. The Company evaluates indicators of impairment,
including expected future demand for devices, in relation to each type of asset at the balance sheet date.
(iii) Recognition of deferred tax assets
As at 30 June 2021, the Company has not recognised as an asset tax losses which could be offset
against future taxable profits. These tax losses would only be recognised to the extent that it is
expected that there will be future taxable profits and such losses will be available in the future (after
shareholder continuity tests) to offset those future taxable profits. The Company has considered
its future expected profitability and shareholder continuity and has concluded that sufficient certainty
does not yet exist to recognise these tax losses as an asset.
(e) Rounding of amounts
The Company has applied the relief available to it under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. Accordingly, amounts in the consolidated financial statements
and Directors’ Report have been rounded to the nearest $1,000.
3. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all periods presented, unless otherwise stated.
3.1 Principles of consolidation:
The consolidated financial statements incorporate all of the assets, liabilities and results of Adherium
Limited and all subsidiaries. Subsidiaries are all entities over which the Group has control. The Group
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity. A list of the
subsidiaries is provided in note 21. All intercompany transactions are eliminated. The assets and liabilities
of Group companies whose functional currency is not Australian dollars are translated into Australian
dollars at the period-end exchange rate. The revenue and expenses of these companies are translated
into Australian dollars at rates approximating those at the dates of the transactions. Exchange differences
arising on this translation are recognised in the foreign currency translation reserve. On disposal or partial
disposal of an entity, the related exchange differences that were recorded in equity are recognised in the
income statement as part of the gain or loss on sale.
3.2 Segment Reporting
The Company has considered the requirements for segmental reporting as set out in AASB 8: Operating
Segments. The standard requires that operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The chief operating decision-maker
has been identified as the Chief Executive Officer. The Company has determined that one segment exists
for the Company’s Hailie® (formerly known as Smartinhaler®) business.
3.3 Foreign currency translation
(a) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the Statement of Profit & Loss and
Other Comprehensive Income.
28
Annual Report 2021 Adherium Ltd
(b) Group Companies
The financial results and position of foreign operations whose functional currency is different from
the Group’s presentation currency is translated as follows:
• Assets and liabilities are translated at period end exchange rates prevailing at that reporting date.
•
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period.
3.4 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
receivable for goods supplied, stated net of discounts, returns and taxes. The Company recognises revenue
when specific criteria have been met for each of the Company’s activities,as described below. Amounts
received from customers in accordance with contractual sales terms before these revenue recognition criteria
are met are deferred and recorded as Income Received in Advance until such time as the criteria for
recognition as revenue are met.
(a) Sales of devices
The Company manufactures and sells a range of inhaled medication monitoring devices and related
equipment. Sales of products are recognised when they have been delivered to the customer and there
is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery does
not occur until the products have been shipped to the specified location, and either the customer has
accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or
the Company has objective evidence that all criteria for acceptance have been satisfied. No element of
financing is deemed present as the sales are made with a credit term of 30-60 days.
(b) Grants
Grants received for research and development are recognised in the Statement of Profit & Loss and Other
Comprehensive Income when the requirements under the grant agreement have been met. Any grants
for which the requirements under the grant agreement have not been completed are carried as liabilities
until all the conditions have been fulfilled.
(c) Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
3.5 Research and development
Research costs include direct and directly attributable overhead expenses for product invention and
design. Research costs are expensed as incurred.
When a project reaches the stage where it is reasonably certain that future expenditure can be
recovered through the process or products produced, development expenditure is recognised as a
development asset within Intangible Assets when:
•
•
•
•
a product or process is clearly defined and the costs attributable to the product or process can be
identified separately and measured reliably;
the technical feasibility of the product or process can be demonstrated;
the existence of a market for the product or process can be demonstrated and the Company
intends to produce and market the product or process;
adequate resources exist, or their availability can be reasonably demonstrated to complete the
project and market the product or process.
In such cases the asset is amortised from the commencement of commercial production of the product
to which it relates on a straight-line basis over the years of expected benefit. Research and
development costs are otherwise expensed as incurred.
3.6 Employee benefits
(a) Wages, salaries and annual leave
Liabilities for wages and salaries, bonuses and annual leave expected to be settled within 12
months of the reporting date are recognised in accrued liabilities in respect of employees’ services
up to the reporting date and are measured at the amounts expected to be paid when the liabilities
are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
29
Annual Report 2021 Adherium Ltd
(b) Share-based payments
The Company operates equity-settled share and option plans and awards certain employees,
directors and consultants shares and options, from time to time, on a discretionary basis. The fair
value of the services received in exchange for the grant of the options is recognised as an expense
with a corresponding increase in the share and option compensation reserve over the vesting
period. The total amount to be expensed over the vesting period is determined by reference to the
fair value of the options at grant date. At each balance sheet date, the Company revises its
estimates of the number of options that are expected to vest and become exercisable. It recognises
the impact of the revision of original estimates, if any, in the Statement of Profit & Loss and Other
Comprehensive Income, and a corresponding adjustment to equity over the remaining vesting period.
3.7 Leases
At lease commencement, as Lessee an asset (the right to use the leased item) and a financial liability to pay
rentals across all leases are recognised unless the lease term is 12 months or less, or the underlying asset has
a low value. The right-of-use assets recognised comprise the initial measurement of the corresponding lease
liability, lease payments made at or before the commencement day, less any lease incentives received and
any initial direct costs. They are subsequently measured at cost less accumulated depreciation and
impairment losses.
3.8
Income Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Profit
& Loss and Other Comprehensive Income, except to the extent that it relates to items recognised in directly in
equity. In this case, the tax is also recognised directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company generated taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
3.9 Goods and Services Tax (GST)
The Statement of Profit & Loss and Other Comprehensive Income has been prepared so that all components
are stated exclusive of GST. All items in the balance sheet are stated net of GST, with the exception of
receivables and payables, which include GST invoiced.
3.10
Impairment of non-financial assets
Assets that are subject to amortisation and depreciation are reviewed whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be recoverable. The carrying
amount of an asset is considered impaired when its recoverable amount is less than its carrying value.
In that event, a loss is recognised in the the Statement of Profit & Loss and Other Comprehensive Income
based on the amount by which the carrying amount exceeds the recoverable amount.
3.11 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.12 Trade receivables
The Company makes use of a simplified approach in accounting for trade and other receivables, and records
any loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash
flows, considering the potential for default at any point during the life of a financial instrument.
In calculating expected credit losses, the Company uses its historical experience, external indicators and
forward-looking information using a provision matrix. The Company assesses impairment of trade receivables
on a collective basis and as they possess shared credit risk characteristics, grouped them based on the days
past due.
3.13
Inventories
Inventories are stated at the lower of cost or net realisable value. Cost is determined using the first-in,
first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct
labour, other direct costs and related production overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
30
Annual Report 2021 Adherium Ltd
3.14 Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation and any impairments
recognised. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Company and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the Statement of Profit & Loss and Other Comprehensive Income during the financial period in
which they are incurred.
Depreciation is determined principally using the diminishing value method to allocate their cost, net of
their residual values, over their estimated useful lives, as follows:
Manufacturing tooling equipment
Computer equipment
Office furniture, fixtures & fittings
4 years
2 years
4 years
3.15
Intangible assets
(a) Intellectual property
Costs in relation to protection and maintenance of intellectual property are expensed as incurred.
Acquired patents, trademarks and licences have finite useful lives and are carried at cost less
accumulated amortisation and impairment losses. Amortisation is calculated using the straight line
method to allocate the cost over the anticipated useful lives, which are aligned with the unexpired
patent term or agreement over trademarks and licences.
(b) Acquired software
Acquired software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specific software. These costs are amortised over their estimated useful lives (two to three years).
3.16 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
3.17 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
ordinary shares or options are deferred until the issue of the shares or options, and then shown in equity
as a deduction, net of tax, from the proceeds.
3.18 Financial assets
(a) Financial assets recognised in the Statement of Financial Position include cash and cash
equivalents, and trade and other receivables. The Company believes that the amounts reported for
financial assets approximate fair value.
(b) Financial assets: Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are classified as non-current assets.
The Company’s loans and receivables comprise “trade and other receivables” and “cash and cash
equivalents” in the Statement of Financial Position. Loans and receivables are measured at
amortised cost using the effective interest method less impairment.
3.19 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial
statements in the period in which the dividends are approved by the Company’s shareholders.
3.20 Comparative Information
Where necessary, certain comparative information has been reclassified in order to provide a more
appropriate basis for comparison.
3.21 New Accounting Standards for application in future periods
There are no other standards, amendments, or interpretations to existing standards that have been issued
and yet to be adopted by the Company that are likely to have a material impact on the financial statements.
31
Annual Report 2021 Adherium Ltd
4. Segment Information
The chief operating decision maker is the Chief Executive Officer, who reviews financial information for the Company as
a whole. The information reviewed is prepared in the same format as included in the financial statements. The Company
has therefore determined that one reportable segment exists for the Company’s Hailie® business.
(a) Geographic segment information
The Company operates predominantly from New Zealand, with some manufacturing also undertaken
by suppliers in Asia at which the Company locates equipment and tools:
Domicile of non-current assets
New Zealand and Australia
South-East Asian Countries
Other Countries
June 2021
$000
June 2020
$000
57
71
2
130
137
100
3
240
The Company sells its products and services domestically and internationally. Revenues by customer region of
domicile are:
Location of customer sales
New Zealand and Australia
Europe
North America
Asia
b) Major customers
Revenues are derived from major external customers as follows:
Major customers
Customer A group entities
5. Revenue
Income from continuing operations:
Sensor sales and monitoring services
New product design and engineering services
June 2021
$000
June 2020
$000
53
231
116
1
401
2
2,147
25
44
2,218
June 2021
$000
148
June 2020
$000
2,110
June 2021
$000
June 2020
$000
264
137
401
1,171
1,047
2,218
32
Annual Report 2021 Adherium Ltd
6. Expenses
Loss before income tax includes the following specific expenses:
June 2021
$000
June 2020
$000
Fees paid to PricewaterhouseCoopers for:
- audit of the financial statements
- interim report review
Fees paid to PricewaterhouseCoopers for non-audit services:
- fees in respect of other advice and services
Total fees to PricewaterhouseCoopers
Depreciation and amortisation
Directors’ remuneration
- director fees
- consulting fees
- share and option based compensation
Total Directors’ remuneration
Employee benefits expense
- wages and salaries
- share and option based compensation
Total employee benefits expense
Foreign exchange (gain) loss
Operating lease costs
7.
Income tax
Current tax
Deferred tax
Income tax expense
Numerical reconciliation of income tax expense to prima facie tax
payable (receivable):
Loss before income tax
Tax calculated at domestic tax rates
Tax effects of:
Expenses not deductible for tax purposes
Under (over) provision in prior year
Deferred tax assets not recognised (note 17)
Income tax expense
The weighted average applicable tax rate was 29% (2020: 28%).
91
37
-
128
145
345
-
121
466
4,661
189
4,850
888
89
93
36
35
164
335
337
260
25
622
3,039
91
3,130
(144)
93
June 2021
$000
June 2020
$000
-
-
-
(15,036)
(4,293)
905
968
2,420
-
-
-
-
(11,397)
(3,206)
220
62
2,924
-
33
Annual Report 2021 Adherium Ltd Research & development (R&D) tax credit
The company is eligible to participate in the Research and Development (R&D) Tax Incentive Offset scheme to
potentially obtain a tax rebate or credits equivalent to the entitlements under the scheme operating at the time. These
are only recognised when it is probable that it is to be available to be offset against income tax payable or when
actual cash payment is considered receivable. As at 30 June 2021, an amount of $370,000 is receivable for the R&D Tax
Incentive Offset scheme for income tax year 2020.
8. Earnings per share
Basic loss per share is based upon the weighted average number of outstanding ordinary shares. For all periods
presented, the Company’s potentially dilutive ordinary share equivalents (being the Convertible Notes discussed
in note 15 and the Options set out in note 16) have an anti-dilutive effect on loss per share and, therefore, have not
been included in determining the total weighted average number of ordinary shares outstanding for the purpose of
calculating diluted loss per share.
Profit (loss) after income tax attributable to equity holders
(15,036)
(11,397)
June 2021
$000
June 2020
$000
Weighted average shares outstanding (basic)
Weighted average shares outstanding (diluted)
Basic and diluted loss per share
9. Cash and cash equivalents
Cash at bank and on hand
Deposits at call
10. Trade and other receivables
Trade receivables and accruals
R&D tax credit receivable
GST and other taxes receivable
Security deposits
11. Inventories
Raw materials and components
Finished goods
900,972,255
900,972,255
(1.7) cents
June 2021
$000
162
15,016
15,178
316,010,977
316,010,977
(3.6) cents
June 2020
$000
114
4,470
4,584
June 2021
$000
June 2020
$000
100
370
77
20
567
489
-
115
20
624
June 2021
$000
June 2020
$000
868
94
962
1,021
99
1,120
The cost of inventories recognised as an expense and included in 'cost of sales' amounted to $276,000 (2020: $633,000).
34
Annual Report 2021 Adherium Ltd 12. Property, plant and equipment
Manufacturing
Equipment
$000
Computer
Equipment
$000
Fixtures
& Fittings
$000
Office
Equipment
$000
As at 1 July 2019
Cost
Accumulated depreciation
Net book value
Movements in the year
ended 30 June 2020
Opening net book value
Additions
Disposals
Depreciation
Foreign currency translation
Closing net book value
As at 30 June 2020
Cost
Accumulated depreciation
Net book value
Movements in the year
ended 30 June 2021
Opening net book value
Additions
Disposals
Depreciation
Foreign currency translation
Closing net book value
As at 30 June 2021
Cost
Accumulated depreciation
Net book value
809
(603)
206
206
167
(9)
(176)
(4)
184
763
(579)
184
184
11
-
(119)
(1)
75
770
(695)
75
248
(201)
47
47
-
(6)
(25)
-
16
123
(107)
16
16
24
-
(12)
-
28
154
(126)
28
182
(126)
56
56
-
(27)
(19)
-
10
20
(10)
10
10
-
-
(1)
-
9
20
(11)
9
122
(51)
71
71
-
(17)
(29)
-
25
60
(35)
25
25
-
-
(10)
-
15
60
(45)
15
Total
$000
1,361
(981)
380
380
167
(59)
(249)
(4)
235
966
(731)
235
235
35
-
(142)
(1)
127
1,004
(877)
127
35
Annual Report 2021 Adherium Ltd 13. Intangible assets
As at 1 July 2019
Cost
Accumulated amortisation
Net book value
Movements in the year ended 30 June 2020
Opening net book value
Additions
- External costs
Disposals
Amortisation
Foreign currency translation
Closing net book value
As at 30 June 2020
Cost
Accumulated amortisation
Net book value
Movements in the year ended 30 June 2021
Opening net book value
Additions
- External costs
Disposals
Amortisation
Foreign currency translation
Closing net book value
As at 30 June 2021
Cost
Accumulated amortisation
Net book value
14. Trade and other payables
Trade payables
Accruals
Employee benefits
36
Software
$000
388
(296)
92
92
-
-
(86)
(1)
5
300
(295)
5
5
-
-
(3)
1
3
299
(296)
3
Total
$000
388
(296)
92
92
-
-
(86)
(1)
5
300
(295)
5
5
-
-
(3)
1
3
299
(296)
3
June 2021
$000
June 2020
$000
701
365
1,253
2,319
1,003
1,063
580
2,646
Annual Report 2021 Adherium Ltd 15. Convertible Notes
June 2021
During the year to 30 June 2021 the Company issued Secured Convertible Notes (“2020 Notes”) with a face value of
$3 million, an interest rate of 9% per annum, and maturity date of 25 October 2022. The terms of the 2020 Notes
included conversion features, which allowed the noteholder to convert the principal and accrued interest to shares in
the Company at 3 cents per share after the occurrence of certain events, including partnering and funding milestones.
The 2020 Notes were accounted for as two separate liability components from their issue date – the debt portion
recorded at amortised cost and the embedded derivative conversion option recorded at fair value. In accounting for the
debt portion of the 2020 Notes, settlement was assumed to take place on 25 October 2022 with interest accruing at 9%
per annum to that date. The calculation of the fair value of the embedded derivative conversion option took into account
the probability of the noteholder converting and the market price of the ordinary shares.
On 18 March 2021 the Company and noteholder agreed to modify the 2020 Notes’ terms to:
• automatically convert the 2020 Notes principal plus interest to ordinary shares at the same time and price as
•
under a capital raise for at least $15 million; and
in consideration of the variation of the 2020 Notes to provide for the automatic conversion mechanism referred to
above; at closing of the capital raising to issue to the noteholder various options over ordinary shares.
On 30 April 2021, the Company received shareholder approval to amend the 2020 Notes and proceed with the capital
raise. This was completed on 7 May 2021 for a total of $18 million, and accordingly the 2020 Notes automatically
converted to 238,989,991 ordinary shares in addition to the grant to the noteholder of:
• 25,000,000 options with an exercise price of $0.02 and an expiry date of 7 May 2023;
• 25,000,000 options with an exercise price of $0.03 and an expiry date of 7 May 2023;
• 25,000,000 options with an exercise price of $0.04 and an expiry date of 7 May 2023; and
• 104,855,877 options with an exercise price of $0.03 and an expiry date of 25 October 2022.
The fair value of the modification of the 2020 Notes terms was assessed at $1,344,000, and the fair value of the options
granted $1,165,000, with both recorded as a finance cost.
June 2020
During the year to 30 June 2020 the Company issued Secured Debt Notes (“2019 Notes”) with a face value of $2.926
million and maturity date of 31 January 2020. The terms of the 2019 Notes included conversion features, which were
subject to shareholder approval. These entitled the noteholders to convert the 2019 Notes and accrued interest to
ordinary shares and options at a discount to the market price of the ordinary shares, or for the 2019 Notes and accrued
interest to mandatorily convert to shares and options should the Company raise $2.5 million or more of capital prior to
maturity. Shareholder approval of the conversion features was received in November 2019.
The 2019 Notes were accounted for as two separate liability components from their issue dates – the debt portion
recorded at amortised cost and the embedded derivative conversion option recorded at fair value. In accounting for
the debt portion of the 2019 Notes, settlement was assumed to take place on 29 January 2020 with interest accruing
at 9% to that date. The calculation of the fair value of the embedded derivative conversion option took into account
the probability of shareholders approving the conversion features, the market price of the ordinary shares, potential
discount options, and the fair value of options that would be granted on conversion.
On the Company raising $5.4 million in the Rights Issue completed in January 2020, the 2019 Notes mandatorily
converted into 137,597,321 ordinary shares and 27,519,467 options over ordinary shares, with an exercise price of $0.0219
per option, expiring 29 January 2027.
37
Annual Report 2021 Adherium Ltd June 2021
Embedded
derivative
conversion
option at
fair value
$000
Debt
component
at amortised
cost
$000
Debt
component
at amortised
cost
$000
Total
$000
June 2020
Embedded
derivative
conversion
option at
fair value
$000
Total
$000
Convertible Notes
Recognition at Note issue
1,622
1,378
3,000
933
1,993
2,926
Financing cost:
- Amortised cost
- Fair value change
- Modification
Total financing cost
Carrying value at conversion
Conversion:
- Shares issued
- Options issued
16. Share capital
2,080
-
-
2,080
3,013
-
521
-
521
2,514
519
-
1,444
1,963
3,585
-
(800)
(100)
(900)
478
519
(800)
1,344
1,063
4,063
4,063
-
4,063
Share capital as at 1 July 2019
Shares issued in employee share plans
Shares issued in Non-renounceable Rights Issue
Shares issued on conversion of Convertible Notes
Shares issued in placement
Shares issued for services
Share issue costs
Share capital as at 30 June 2020
Shares issued in employee share plans
Shares issued in placements
Shares issued on conversion of Convertible Notes
Shares issued for services
Share issue costs
Share capital as at 30 June 2021
Ordinary Shares
167,015,351
7,016,635
179,723,413
137,597,321
104,261,036
6,292,578
-
601,906,334
13,250,000
1,262,405,631
238,989,991
9,181,155
-
2,125,733,111
2,080
521
-
2,601
5,527
4,816
711
5,527
$000
74,349
-
5,392
4,816
3,128
177
(180)
87,682
-
19,014
4,063
222
(809)
110,172
(a) Ordinary Shares
The ordinary shares have no par value and all ordinary shares are fully paid-up and rank equally as to
dividends and liquidation, with one vote attached to each fully paid ordinary share.
(b) Employee incentive plans
Adherium Executive Share Option Plan (Adherium ESOP)
The Company operates an employee share option plan for employees, directors and consultants within the Group.
Participants are invited by the Board of Directors and awards typically vest one third annually over a three-year period.
38
Annual Report 2021 Adherium Ltd
The tables below set out the movements in options within relevant exercise price ranges:
Exercise
price range
$0.075268 –
0.134039
Outstanding at
1 July 2019
Granted
Exercised
Lapsed
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contract
Life (years)
Weighted
Average
Exercise
Price
Weighted
Average
Share Price
at Exercise
Exercisable
$
$
$
0.1254
1.4
2,822,581
$
0.1254
-
-
Options
2,822,581
-
-
(589,892)
$ 0.0925
Outstanding at
30 June 2020
2,232,689
Granted
Exercised
Lapsed
Outstanding at
30 June 2021
-
-
(2,059,451)
173,238
$
$
$
$
$
0.1340
0.6
2,232,689
$
0.1340
-
-
0.1340
0.1340
0.8
173,238
$
0.1340
Exercise
price range
$0.04
Outstanding
at 1 July 2019
Granted
Exercised
Lapsed
Outstanding at
30 June 2020
Granted
Exercised
Lapsed
Outstanding at
30 June 2021
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contract
Life (years)
Weighted
Average
Exercise
Price
Weighted
Average
Share Price
at Exercise
Exercisable
Options
-
$
-
-
$
20,000,000
$ 0.0400
-
-
$
$
-
-
20,000,000
$ 0.0400
6.8
-
$
-
-
7,500,000
$ 0.0400
-
(4,500,000)
$
$
-
-
23,000,000
$ 0.0400
5.1
9,666,667
$
0.0400
-
-
The weighted average fair value of options granted during the periods was estimated using the Black-Scholes
valuation model:
Significant Black-Scholes valuation model inputs
June 2021
June 2020
Share price at grant date
Exercise price
Volatility
Dividend yield
Expected option life
Annual risk-free interest rate
Weighted average fair value of options granted
$0.0300
$0.0400
114.4%
0%
1 year
0.27%
$0.0106
The Company has no legal or constructive obligation to repurchase or settle the options in cash.
$0.0240
$0.0400
101.6%
0%
5 years
0.45%
$0.0163
39
Annual Report 2021 Adherium Ltd
Adherium Employee Share Plans (Adherium ESP)
The Company operates employee share plans for employees, directors and consultants within the Group.
Participants are invited by the Board of Directors and those who accept an offer of ESP shares are provided with
an interest free loan from the Company to finance the whole of the purchase of the ESP shares they were invited to
apply for (ESP Loan). The ESP Loans are provided to participants on a non-recourse basis and upon vesting must be
repaid in order to remove trading restrictions on vested ESP shares. The term of the ESP Loan is five years, however
participants may forfeit their ESP shares if they do not repay the ESP Loan or leave employment with the Company.
Awards typically vest one third annually over a three-year period, and are subject to restriction until vesting
conditions are met.
The assessed weighted average fair value at grant date of the awards made during the 2020 financial period is 1.3
cents per ESP share awarded. The awards were priced using a Black-Scholes option pricing model that takes into
account the exercise price, the term of the award, 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 award. There were no
new awards under the Adherium ESP during fiscal 2019.
The following incentive awards have been made and are on issue under the Adherium ESP:
Grant date
Shares granted
Issue price
Vested as at
30 June 2021
Restricted as at
30 June 2021
Share price
at grant date
16 May 2016
2,569,609
8 November 2016
2,100,000
14 December 2016
23 December 2016
10 July 2019
10 July 2019
10 July 2019
10 July 2019
7 August 2020
21 October 2020
21 October 2020
173,277
243,628
3,553,866
1,154,251
1,154,251
1,154,251
500,000
8,250,000
4,500,000
$0.500
$0.500
$0.500
$0.500
$0.027
$0.075
$0.150
$0.250
$0.040
$0.040
$0.050
-
2,569,609
900,000
2,100,000
-
-
3,377,435
1,099,872
-
-
500,000
-
-
173,277
243,628
3,553,866
1,154,251
1,154,251
1,154,251
500,000
8,250,000
4,500,000
$0.500
$0.350
$0.305
$0.260
$0.028
$0.028
$0.028
$0.028
$0.030
$0.026
$0.026
(c) Other option issues
June 2021
In August 2020 the Company completed a shareholder approved placement of shares and related options.
83,333,333 options with an exercise price of $0.0600 per option and an expiry date of 17 February 2022 were issued.
The options' fair value at grant date of $858,000 ($0.0103 per option) was estimated using a Black-Scholes option
pricing model, and was been recorded in equity in conjunction with the placement. The significant inputs to the
option pricing model were a grant date share price of $0.0270, a 0% dividend yield, an expected option life of 1.5
years, an annual risk-free rate of 0.27%, and a volatility of 125.6%.
As set out in Note 15, in October 2020 the Company issued Convertible Notes (“2020 Notes”). The terms of these
were amended in March 2021 and as consideration the options set out in Note 15 were issued in May 2021. The
options' fair value at grant date of $1,165,000 was estimated using a Black-Scholes option pricing model, and was
recorded as a finance cost related to the 2020 Notes (refer note 15). The significant inputs to the option pricing
model were a grant date share price of $0.0170, a 0% dividend yield, an expected option life to expiry, an annual
risk-free rate of 0.09%, and a volatility of 103.3% - 113.6%.
June 2020
During the year ended 30 June 2020 the Company issued Convertible Notes (“2019 Notes”). These converted in
January 2020, resulting in the issue of 27,519,467 options over ordinary shares, with an exercise price of $0.0219 per
option, expiring 29 January 2027. No options were exercised in the period to 30 June 2020.
The options' fair value at grant date of $711,000 ($0.0258 per option) was estimated using a Black-Scholes option
pricing model, which has been recorded in equity on conversion of the Convertible Notes (refer note 15). The
significant inputs to the option pricing model were a grant date share price of $0.0350, a 0% dividend yield, an
expected option life of 5 years, an annual risk-free rate of 0.71%, and a volatility of 84.7%.
The Company has no legal or constructive obligation to repurchase or settle any options in cash.
40
Annual Report 2021 Adherium Ltd
17. Deferred Income Tax
June 2021
$000
June 2020
$000
Movements:
Deferred tax asset (liability) at the beginning of the year
Credited (charged) to the income statement (note 7)
Change in unrecognised deferred tax assets
Deferred tax asset (liability) at the end of the year
-
2,420
(2,420)
-
The movement in deferred income tax assets and liabilities during the period is as follows:
Deferred tax assets (liabilities)
Provisions
and accruals
$000
Intangible
assets
$000
As at 1 July 2019
Credited (charged) to the income statement
Effect of exchange rate changes
Change in unrecognised deferred tax assets
As at 30 June 2020
Credited (charged) to the income statement
Effect of exchange rate changes
Change in unrecognised deferred tax assets
As at 30 June 2021
-
40
(1)
(39)
-
424
-
(424)
-
-
(1)
(6)
7
-
5
(1)
(4)
-
-
2,924
(2,924)
-
Total
$000
-
2,924
(73)
(2,851)
Tax
losses
$000
-
2,885
(66)
(2,819)
-
-
1,973
(409)
(1,564)
2,420
(410)
(2,010)
-
-
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related
tax benefit through future taxable profits is probable, or to the extent that they can be set off against deferred income
tax liabilities. The Company did not recognise deferred income tax assets of $16,384,000 (2020: $14,632,000) in respect
of losses amounting to $52,994,000 (2020: $47,262,000) that can be carried forward against future taxable income. The
Company also did not recognise further deferred income tax assets of $862,000 (2020: $412,000) in respect of other
timing differences amounting to $2,969,000 (2020: $1,467,000).
41
Annual Report 2021 Adherium Ltd 18. Related party transactions
(a) Key management personnel
The key management personnel include the directors of the Company, the CEO, and senior executives
responsible for the planning, directing and controlling of the Group’s activities. Compensation for this
group was as follows:
Directors
- director fees and other legislated superannuation
- consulting fees
- share and option based compensation
CEO and management
- short-term benefits
- post-employment benefit contributions
- share and option based compensation
June 2021
$000
June 2020
$000
345
-
121
1,998
157
185
2,806
337
260
25
1,076
16
43
1,757
Key management personnel and their associates subscribed for share capital in the Company as follows:
June 2021
Ordinary Shares
June 2021
$000
June 2020
Ordinary Shares
June 2020
$000
Shares issued in
Rights Issue
-
-
-
-
600,000
600,000
18
18
(b) Related parties
There were no other transactions with related parties in the periods presented.
19. Financial instruments and risk management
(a) Categories of financial instruments
Financial assets
Loans and receivables classification:
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Measured at amortised cost:
Trade and other payables
Total financial liabilities
June 2021
$000
June 2020
$000
15,178
100
15,278
2,319
2,319
4,584
489
5,073
2,646
2,646
(b) Risk management
The Company is subject to a number of financial risks which arise as a result of its activities.
42
Annual Report 2021 Adherium Ltd
Foreign exchange risk
During the normal course of business the Company enters into contracts with overseas customers or suppliers or
consultants that are denominated in foreign currency. As a result of these transactions there is exposure to fluctuations in
foreign exchange rates.
The Company does not utilise derivative financial instruments. It operates a policy of holding cash and cash equivalents
in the currency of near-term estimated future supplier payments, however it does not designate formal hedges and as
such remains unhedged against foreign currency fluctuations. A foreign exchange loss of $888,000 is included in results
for the period ended 30 June 2021 (2020: $144,000 gain).
The carrying amounts of foreign currency denominated financial assets and financial liabilities are as follows:
June 2021
$000
June 2020
$000
Assets
New Zealand Dollars
US dollars
UK pound
Liabilities
New Zealand Dollars
US dollars
UK pound
Hong Kong dollars
Japanese Yen
425
35
3
674
38
176
-
85
70
501
16
414
530
517
26
-
The following table details the sensitivity of financial assets and financial liabilities to a 10% increase and decrease in
each of the currencies noted against the Australian dollar as at the reporting date.
Decrease (increase) in loss after income tax
10% strengthening of Australian dollar against:
New Zealand dollars
US dollars
UK pound
Hong Kong dollars
10% weakening of Australian dollar against:
New Zealand dollars
US dollars
UK pound
Hong Kong dollars
June 2021
$000
June 2020
$000
21
(4)
26
-
(26)
11
(35)
-
-
-
33
2
-
(40)
(3)
Cash flow and fair value interest rate risk
The Company is exposed to interest rate risk as it holds cash and cash equivalents (refer note 9).
Trade and other receivables and payables do not bear interest and are not interest rate sensitive.
The Company’s interest bearing financial assets bear interest at deposit rates for up to 90 days and accordingly any
change in interest rates would have an immaterial effect on reported loss after tax.
43
Annual Report 2021 Adherium Ltd Credit risk
The Company incurs credit risk from transactions with trade receivables and financial institutions in the normal course of
its business. The credit risk on financial assets of the Company, which have been recognised in the statement of financial
position, is the carrying amount, net of any allowance for doubtful debts.
The Company does not require any collateral or security to support transactions with financial institutions or customers.
The counterparties used for banking activities are financial institutions with an A1/A2 credit rating (2020: A-2) and the
Company assesses the credit quality of customers by taking into account their financial position, past experience and
other factors. The credit quality of trade receivables can be assessed by reference to external credit ratings (if available)
or to historical information about counterparty default rates:
Counterparties with external credit rating:
• A-2
Counterparties without external credit rating:
• existing customers (more than 6 months) with no defaults in the past
Total trade receivables
June 2021
$000
June 2020
$000
57
43
100
468
14
482
The Company applies the simplified model of recognising lifetime expected credit losses for all trade receivables
as these items do not have a significant financing component. In measuring the expected credit losses, the trade
receivables have been assessed on a collective basis as they possess shared credit risk characteristics and have
been grouped based on the days past due. In calculating the expected credit losses, the Company uses its historical
experience, external indicators and forward-looking information.
On this basis, the loss allowance as at 30 June 2020 and 30 June 2021 for trade and other receivables was determined to
be $nil.
Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to
make payments within 180 days from the invoice date and failure to engage with the Company on alternative payment
arrangements, amongst others, are considered indicators of no reasonable expectation of recovery.
The Company is exposed to a concentration of credit risk as 57% of accounts receivable are with one counterparty
(2020: 97%). The customer has an external credit rating of A-2.
Liquidity risk
The table below shows the Company’s non-derivative financial liabilities by relevant maturity grouping based on the
remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
As at 30 June 2021
Trade and other payables
As at 30 June 2020
Trade and other payables
Less than
3 months
$000
Between 3 months
and 1 year
$000
2,319
2,646
-
-
Capital risk
The Company manages its capital to ensure that it is able to continue as a going concern. The capital structure of the
Company consists of cash and cash equivalents, and equity comprising issued capital, reserves and accumulated deficit.
44
Annual Report 2021 Adherium Ltd Fair value estimation
Financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value
hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
- Level 3: unobservable inputs for the asset or liability.
20. Parent entity information
The following details information related to the legal parent, Adherium Limited as at 30 June 2021. During the year
ended 30 June 2021 Adherium Limited recognised an impairment on the carrying value of its investments in and loans
to subsidiaries to record those at the Group carrying value. This resulted in an impairment charge of $5,096,000 (2020:
$9,372,000 impairment) The information presented here has been prepared using consistent accounting policies as
presented in Note 1.
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated deficit
Reserves
Total equity
Statement of Profit and Loss and Comprehensive Income
Loss after tax
Total comprehensive loss
21. Interests in controlled entities
Parent
June 2021
$000
Parent
June 2020
$000
15,309
20
15,329
1,318
-
1,318
14,011
110,172
(99,916)
3,755
14,011
(14,348)
(14,348)
4,708
-
4,708
1,172
-
1,172
3,536
87,682
(85,568)
1,422
3,536
(14,511)
(14,511)
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 3:
Name of Entity
Status
Country of incorporation
Percentage owned
Adherium (NZ) Limited
Adherium North America, Inc.
Adherium Europe Ltd
Nexus6 Limited
Operating
Operating
Operating
Dormant shell
New Zealand
United States
United Kingdom
New Zealand
June 2021
June 2020
100%
100%
100%
100%
100%
100%
100%
100%
45
Annual Report 2021 Adherium Ltd
22. Contingencies and commitments
The Company had no contingencies or commitments to purchase any property, plant or equipment at 30 June 2021 (2020: nil).
The following aggregate future non-cancellable minimum lease payments for premises have been committed to by the
Company, but not recognised in the financial statements.
Not later than one year
Later than one year and not later than five years
Later than five years
23. Events occurring after balance date
June 2021
$000
June 2020
$000
23
-
-
23
47
-
-
47
On 29 April 2021, Respiri Limited announced a takeover bid for all of the ordinary shares of Adherium Limited. The
takeover bid closed on 16 July 2021, failed to meet the offer conditions and so lapsed.
There are no other events occurring after the balance sheet date which require disclosure or adjustment in the financial
statements.
46
Annual Report 2021 Adherium Ltd
Directors’ Declaration
The Directors declare that the financial statements and notes set out on pages 23 to 46 in accordance with the
Corporations Act 2001:
(a) comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory professional
reporting requirements;
(b) as stated in note 2, the consolidated financial statements also comply with International Financial Reporting
Standards; and
(c) give a true and fair view of the financial position of the consolidated entity as at 30 June 2021 and of its
performance for the financial year ended on that date.
In the Directors’ opinion there are reasonable grounds to believe that Adherium Limited will be able to pay its debts
as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer
and Chief Financial Officer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the year
ended 30 June 2021.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the board.
James Ward-Lilley
Non-Executive Chairman
Melbourne
26 August 2021
47
Annual Report 2021 Adherium Ltd
Independent Auditor’s Report
Independent auditor’s report
To the members of Adherium Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Adherium Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated statement of financial position as at 30 June 2021
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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 & 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 other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
48
Annual Report 2021 Adherium Ltd
Independent Auditor’s Report
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report, which indicates that the Group incurred a net loss
after tax of $15,036,000 during the year ended 30 June 2021 and as of that date the Group had a
surplus of current assets to current liabilities of $13,905,000. In order for the Group to meet its
operating requirements over the coming twelve months, it is dependent on raising capital or
alternative funding, until it is able to generate positive cash flows from operations.
These conditions, along with other matters 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.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
Key audit matters
● For the purpose of our audit we
used overall Group materiality
of $751,000, which represents
approximately 5% of the
Group’s loss before tax.
● We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
● Our audit focused on
● Amongst other relevant topics, we
where the Group made
subjective judgements;
for example, significant
accounting estimates
involving assumptions
and inherently uncertain
future events.
communicated the following key
audit matter to the Audit and Risk
Committee:
− Recognition and measurement
of convertible notes
● This is further described in the Key
audit matters section of our
report, except for the matter which
is described in the material
uncertainty related to going
concern section.
49
Annual Report 2021 Adherium Ltd
Independent Auditor’s Report
misstatements on the financial
report as a whole.
● We chose Group loss before tax
because, in our view, it is the
benchmark against which the
performance of the Group is
most commonly measured.
● We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the key audit matter to be communicated in our
report.
Key audit matter
How our audit addressed the key audit
matter
Recognition and measurement of convertible
notes
(Refer to note 15)
We performed the following procedures, amongst
others:
● Read the relevant minutes and convertible
This was a key audit matter because there is
significant judgement involved in preparing the
estimates relating to the valuation of the debt
portion of the notes, the embedded derivative and
the fair value of options granted on conversion
date.
notes deed and developed an
understanding of the key terms of the
convertible notes.
● Considered whether the accounting for the
initial recognition and subsequent
conversion was in accordance with the
requirements of Australian Accounting
Standards.
● Assessed the methodology adopted by the
Group to value the embedded derivative
and together with PwC technical
accounting specialists, considered the
accounting treatment adopted by the
Group.
50
Annual Report 2021 Adherium Ltd
Independent Auditor’s Report
● Tested the mathematical accuracy, on a
sample basis, of the calculations and
assessed whether they were in accordance
with the valuation methodology.
● Considered the subsequent conversion
outcomes to verify the appropriateness of
key estimates and judgements including
the probability of conversion outcomes.
● Evaluated the reasonableness of the
disclosures, against the requirements of
Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
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 on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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.
51
Annual Report 2021 Adherium Ltd
Independent Auditor’s Report
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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 13 to 20 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the remuneration report of Adherium Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Scott Walsh
Partner
52
Sydney
26 August 2021
Annual Report 2021 Adherium Ltd
Australian Securities Exchange Additional Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as
follows. The shareholder information set out below was applicable as at 19 August 2021.
(a) Distribution of equity securities
Ordinary share capital
As at 19 August 2021 there were 2,129,085,960 ASX quoted ordinary shares held by 774 shareholders. All issued
ordinary shares carry one vote per share and carry the right to dividends.
Range (size of holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number of
Ordinary Shares
Holders
8,845
237,399
563,724
14,271,973
2,114,004,019
2,129,085,960
33
69
67
333
272
774
There were 320 shareholders holding less than a marketable parcel of ordinary shares at a price of $0.0160,
totalling 4,020,319 ordinary shares.
Unquoted options over ordinary shares
As at 19 August 2021 there were 310,881,915 options over ordinary shares held by 11 holders.
b) Twenty largest holders of quoted equity securities as at 19 August 2021
Shareholders
Phillip Asset Management Limited
Trudell Medical Ltd
J P Morgan Nominees Australia Pty Limited
CS Third Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
K One W One Ltd
One Funds Management Limited
Citicorp Nominees Pty Limited
Summatix Pty Ltd
National Nominees Limited
BNP Paribas Noms (NZ) Ltd
Planet Innovation Pty Ltd
JMID Pty Ltd
Anne Bell
HSBC Custody Nominees (Australia) Limited - A/C 2
Adherium ESP Trustee Limited
Calcium Investments Limited
Mr Carlsen Wilson Henry Marks + Mrs Edwina Mary Marks
Mr Garth Campbell Sutherland
CS Fourth Nominees Pty Limited
Ordinary Shares
Units
% Units
500,000,000
422,697,512
246,069,991
222,266,463
220,770,692
80,503,018
48,808,957
39,820,698
35,496,341
30,000,000
28,616,873
26,666,667
25,550,000
13,176,095
11,204,336
10,303,149
7,112,779
6,250,000
5,174,885
4,703,232
23.48
19.85
11.56
10.44
10.37
3.78
2.29
1.87
1.67
1.41
1.34
1.25
1.20
0.62
0.53
0.48
0.33
0.29
0.24
0.22
Total top 20 holders of fully paid ordinary shares
1,985,190,688
93.24
53
Annual Report 2021 Adherium Ltd
(c) Substantial shareholders
In accordance with ASX Listing Rule 4.10.4, a listing of substantial holding and other notices provided to the
Company and released to the ASX are included below:
Substantial shareholders
Phillip Asset Management Limited
Trudell Medical Ltd
Notification
Date
Ordinary Shares
Held
10/05/2021
500,000,000
19/05/2021
422,697,512
Viburnum Funds Pty Ltd and subsidiaries and associates
10/05/2021
238,989,991
Regal Funds Management Pty Ltd
FIL Limited
I.G. Investment Management, Ltd and associates
AstraZeneca PLC and its related bodies
11/05/2021
222,266,463
10/05/2021
211,645,356
01/09/2015
26/08/2015
9,535,000
8,079,720
(d) Voting Rights
On a show of hands, every shareholder present in person or by proxy holding stapled securities in the
Company shall have one vote and upon a poll each stapled security shall have one vote.
54
Annual Report 2021 Adherium Ltd Corporate
Information
ASX code: ADR
Share Registry
Directors
Mr James Ward-Lilley (Chair)
Mr George Baran
Mr Jeremy Curnock Cook
Dr William Hunter
Mr Bruce McHarrie
Mr Matthew McNamara
Joint Company Secretaries
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067, Australia
Solicitors
K&L Gates
Level 25 South Tower
525 Collins Street
Melbourne VIC 3000, Australia
Mr Rob Turnbull
Mr Mark Licciardo
Auditors
PricewaterhouseCoopers
One International Towers, Watermans Quay,
Barangaroo NSW 2000, Australia
Shareholder Enquiries
1300 850 505 (+61 3 9415 4000)
Shareholders requiring clarification of holdings,
or requesting changes of name or address should
contact Computershare Investor Services directly
on the above number. Shareholders wishing to
create an online account with Computershare
should visit https://www.investorcentre.com
Registered Office
Collins Square, Tower 4
Level 18, 727 Collins St
Melbourne VIC 3000, Australia
+61 3 86575540
NZ Office
(Prinicipal Administrative Office)
Level 11, 16 Kingston Street
Auckland 1010, New Zealand
+64 9 307 2771
Website
www.adherium.com
www.hailie.com
www.adherium.com