Year Ended 30 June 2021
Appendix 4E Preliminary Final Report
and
Annual Financial Report
Atomo Diagnostics Limited
Appendix 4E
Preliminary Final Report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Atomo Diagnostics Limited
37 142 925 684
For the year ended 30 June 2021
For the year ended 30 June 2020
2. Results for announcement to the market
Revenues from ordinary activities
up
25.1%
to
$
6,715,659
Loss from ordinary activities after tax attributable to the owners of
Atomo Diagnostics Limited
Loss for the year attributable to the owners of Atomo Diagnostics
Limited
down
(34.7%)
to
$
6,021,215
down
(39.7%)
to
$
5,797,563
AUD
Dividends
No dividends were paid or proposed during the year ended 30 June 2021 (2020: Nil).
Comments
Refer to the ‘Operating and Financial Review’ within the Directors’ Report of the Annual Financial Statements for
further commentary on the year’s results, financial position and likely developments in future years.
3. Net tangible assets
Net tangible assets per ordinary security
Reporting
period
AUD Cents
Previous
period
AUD Cents
4.76
6.15
The net tangible assets / (liabilities) per ordinary security is calculated based on 568,597,807 ordinary shares on issue
as at 30 June 2021, and 561,077,807 shares that were on issue as at 30 June 2020 (post-share split).
4. Control gained over entities
Not applicable
5. Loss of control over entities
Not applicable
6. Details of associates and joint ventures entities
Not applicable
Atomo Diagnostics Limited
Appendix 4E
Preliminary Final Report
7. Audit qualification or review
The financial statements have been audited and an unqualified opinion has been issued.
8. Attachments
The Annual Financial Report of Atomo Diagnostics Limited for the year ended 30 June 2021 is attached.
9. Signed
Signed
John Keith
Chair
Sydney
Date:
27 August 2021
Atomo Diagnostics Limited
ABN 37 142 925 684
Annual Financial Report
For the Year Ended 30 June 2021
Atomo Diagnostics Limited
Corporate Directory
30 June 2021
Directors
John Keith (Chair & Non-Executive Director)
John Kelly (Managing Director)
Curt Labelle (Non-Executive Director)
Paul Kasian (Non-Executive Director)
Connie Carnabuci (Non-Executive Director)
Company secretary
Gillian Nairn
Registered office
Principal place of business
Share registry
Auditor
Solicitors
Level 2
701 - 703 Parramatta Road
Leichhardt NSW 2040
Level 2
701 - 703 Parramatta Road
Leichhardt NSW 2040
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
BDO Audit Pty Ltd
Level 11, 1 Margaret Street
Sydney NSW 2000
HWL Ebsworth Lawyers
Level 14, Australia Square
264 - 278 George Street
Sydney NSW 2000
Stock exchange listing
Atomo Diagnostics Limited shares are listed on the Australian Securities
Exchange (ASX code: AT1)
Website
www.atomodiagnostics.com
Page 1
Atomo Diagnostics Limited
Directors' Report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Atomo Diagnostics Limited (referred to hereafter as the 'Company' or 'Parent Entity') and the entities
it controlled at the end of, or during, the year ended 30 June 2021.
All amounts are presented in Australian dollars (AUD) unless otherwise stated.
Directors
The following persons were directors of Atomo Diagnostics Limited during the year and up to the date of this report. The
directors were in office for this entire period unless otherwise stated:
Director
John Keith (Chair & Non-Executive Director)
John Kelly (Managing Director)
Curt LaBelle (Non-Executive Director)
Paul Kasian (Non-Executive Director)
Connie Carnabuci (Non-Executive Director)
Appointed
2 December 2011
1 April 2010
21 October 2016
4 February 2020
4 February 2020
Resigned
n/a
n/a
n/a
n/a
n/a
The Company Secretary is Gillian Nairn who was appointed on 4 February 2020.
Operating & Financial Review
Principal activities
The principal activities of the Group during the course of the year were the development and sale of medical devices.
There were no significant changes in the nature of the activities of the Group during the year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $6,021,215 (2020: loss of $9,218,105).
Revenue from customers increased by 25.1% for the year, from $5.37 million in 2020 to $6.72 million in 2021. This growth in
revenue was driven by:
•
•
•
•
demand for the Group's devices from customers in Europe and North America for the production of COVID-19 antibody
tests;
sales in Australia of Atomo branded COVID-19 rapid antibody and antigen tests;
growth in demand from other OEM customers for the Group's devices for use in their finished products; and
sales of the Group's HIV products in Australia and internationally through global health channels and in the European
market.
Cash and cash equivalents as at 30 June 2021 amounted to $17.9 million compared to $27.1 million as at 30 June 2020. The
decrease in cash and cash equivalents during the year is attributable to substantial investment in intangibles and plant and
equipment as the business continued its research and development activities, accelerated scale-up in manufacturing capacity
and as a result of ongoing operating losses as the business drives forward with a growth agenda.
Page 2
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Significant changes in the state of affairs
•
•
•
On 4 September 2020, the Company issued 320,000 ordinary shares to various employees under the Company's
Exempt Employee Share Plan. None of these shares were issued to key management personnel.
During the period, 7,200,000 options were exercised resulting in the issue of 7,200,000 ordinary shares and a $1.31
million cash contribution when the exercise price was paid.
On 31 May 2021, the Company issued 4,000,000 options to Bondi Partners in consideration for provision of strategic
advisory services. These options were issued as part of Bondi Partners' appointment to assist with the development
and execution of Atomo's US go-to-market strategy and commercial engagements across both private and public
sectors.
Tranche 1 (2,000,000 options) will vest on 31 October 2022 subject to Atomo extending Bondi Partners' consultancy
engagement for a further period of at least six (6) months (in Atomo's sole discretion). These options are excercisable
at an exercise price of $0.40 per option and expire on 30 April 2024.
Tranche 2 (2,000,000 options) are excercisable at $0.60, vest on 30 April 2022 and expire on 30 April 2024.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group during the financial
year.
Matters subsequent to the end of the financial year
•
•
•
Mr Fabio Baglioni, a former executive of the Group, resigned on 30 July 2021. Consequently, 1,600,000 options issued
to Mr Baglioni under the Company's Post-IPO option plan, lapsed.
1,733,333 options issued to executives under the Company's Post-IPO option plan lapsed as the KPIs applicable to the
options were not satsified with respect to the year ended 30 June 2021.
The Board has exercised its discretion to allocate 759,999 options to executives under the Company's post-IPO option
plan to reward the diligent execution of the corporate strategy and to ensure retention of the key talent needed to
deliver strategic outcomes in the interest of shareholders.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
Group’s operations, the results of those operations, or the Group's state of affairs in future financial years.
Impacts of Covid-19
Atomo's activities continued throughout FY21 nothwithstanding the COVID-19 pandemic. There were some delays in activity
caused by the pandemic, for example, the global tender for HIV Self Tests run by Unitaid was substantially delayed, the
consequence of which was that Atomo's revenue from that tender was modest and primarily occured at the very end of the
financial year. That said, a significant portion of additional revenue was driven by demand for Atomo's COVID-19 products in
Australia and for its platforms for use by OEM customers in their own COVID-19 rapid tests internationally.
Likely developments and expected results of operations
As Atomo moves into the new financial year, it remains in a very strong financial position and, having invested substantially
during the period in scaling up capacity, is well placed to leverage that capacity in FY22. The primary focus moving into FY22
will be on:
•
•
•
•
ramping up production and supply into the global HIV self-test market following Viatris' success late in FY21 in the
Unitaid tender for which Atomo is the sole manufacturer and supplier of the HIV self-tests;
increase access to new markets globally for its devices, in particular in North America where investment is underway in
business development and market entry opportunities, particularly in light of the rapid expansion in acceptance and
uptake of at-home testing, telehealth and self-testing;
ongoing investment and resourcing applied to research and development aimed at continuing to develop best-in-class
user friendly diagnostic devices for a variety of sample types, expanding beyond blood into saliva and swab samples;
and
continue to supply into demand created by COVID-19 internationally and domestically in light of ongoing global testing
requirements driven by the increased prevalence of the Delta strain of the virus.
Environmental Regulation
The Group’s operations are not subject to any significant environmental regulation under Australian Commonwealth or State
law. The Board believes that the Group has adequate systems in place for the management of its environmental
requirements.
Page 3
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Information on Directors
Name:
Title:
John Keith
Non-Executive Chair
Experience and expertise:
John Keith has served as a Non-Executive Director of Atomo since December 2011 and
became Chair in 2014.
Mr Keith is a Managing Director of BNP Paribas, establishing and leading its financial
institutions coverage team. Prior to joining BNP Paribas in 2011, Mr Keith held country
management and senior business and coverage positions for Nomura Securities in
Sydney and Hong Kong. His career comprises working with supranational, sovereign
and institutional clients across all areas of investment and institutional banking. He has
also served on the boards of ASIA Limited, Calliva Limited, Room to Read Australia
Foundation and Ascham Foundation.
Mr Keith holds a Bachelor of Arts (Hons) majoring in Economic History from the Victoria
University of Wellington, a Master of Applied Finance from Macquarie University and a
Global Executive MBA from the University of Sydney.
Nil
Other current directorships:
Former directorships (last 3 years):
Nil
Special responsibilities:
Member of the Audit and Risk Committee and Member of the People, Culture &
Remuneration Committee.
Interests in shares:
Interests in options:
3,261,056
3,600,000
Contractual rights to shares:
Nil
Name:
Title:
John Kelly
Managing Director and CEO
Experience and expertise:
John Kelly is the Managing Director and CEO of Atomo.
For more than 20 years Mr Kelly has focused on developing and commercialising
medical devices to enhance usability and performance, having started with CR Bard in
Europe developing Class III implantable cardiology products.
Prior to co-founding Atomo in 2010, Mr Kelly acted as the Chief Operating Officer (COO)
of Unilife Corporation, which was previously an ASX-listed company (ASX:UNS) and
subsequent to his departure, a Nasdaq listed company (NASDAQ:UNIS). At Unilife
Corporation, he led the global operations team from 2005 to 2008, developing ‘Unifill’,
the world’s first glass prefilled drug delivery device with integrated auto retract safety
feature, and this technology was successfully licensed to Sanofi Aventis for US$47
million. Prior to joining Unilife in 2005, Mr Kelly spent five years at ResMed where he led
the New Product Implementation Group and managed the development of the ground-
breaking Mirage Swift and Activa mask systems.
Mr Kelly holds an Honours degree in Mechanical Engineering from the University of
Liverpool, a Master’s degree in Manufacturing Systems Engineering from Queen’s
University Belfast, and an Executive MBA from the University of Sydney, where he was
awarded the Business School’s inaugural ‘Excellence in Leadership’ scholarship.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Nil
Nil
Nil
73,530,248
1,333,333
Contractual rights to shares:
Nil
Page 4
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Name:
Title:
Curt LaBelle
Non-Executive Director
Experience and expertise:
Curt LaBelle has served as a Non-Executive Director of Atomo since October 2016.
Dr LaBelle has been actively involved in the healthcare industry for over 20 years, both
operationally and as an investor. Dr LaBelle is President at the Global Health Investment
Fund (GHIF), a social impact investment fund, which manages approximately US$108
million backed by the Gates Foundation, JP Morgan and others. He also serves as a
director on the boards of Z Optics, Evenovia, Revelation Bio and Atticus Medical.
Prior to joining GHIF, Dr LaBelle was Managing Director at Tullis Health Investors and
Vice President at Investor Growth Capital. He is a former chairman of Impulse
Monitoring (acquired by Nuvasive), Exagen Inc. (NASDAQ:XGN) and a former director of
Sirion Therapeutics (products acquired by Alcon and Bausch), SafeOp Surgical
(acquired by AlphaTec) and KAI Pharmaceuticals (acquired by Amgen).
As Dr LaBelle is President at GHIF, a substantial shareholder of Atomo, Dr LaBelle is not
considered to be an independent Director.
Dr LaBelle holds a Bachelor of Economics from Brigham Young University, and MD and
MBA degrees from Columbia University.
Other current directorships:
Director of Eyenovia Inc. (NASDAQ:EYEN)
Former directorships (last 3 years):
Former chairman of Exagen Inc. (NASDAQ: XGN)
Special responsibilities:
Member of the Audit and Risk Committee
Interests in shares:
Interests in options:
65,051,280
2,400,000
Contractual rights to shares:
Nil
Name:
Title:
Experience and expertise:
Other current directorships:
Paul Kasian
Non-Executive Director
Dr Kasian is an experienced executive director with demonstrated success in both
domestic and international companies encompassing senior leadership, strategy,
investment and risk roles.
His other roles have included Chief Investment Officer and Head of Global Financials at
HSBC Asset Management, Founding Director of Accordius and Founding Director of
Wallara Asset Management.
He holds a PhD in Microbiology and a Master of Business Administration, both from the
University of Melbourne, and is a Graduate Member of the Australian Institute of
Company Directors.
Dr Kasian is currently Non-Executive Director (appointed 31 August 2016) and Chair
(appointed 15 September 2018) of IODM Limited (ASX: IOD). He is also Non-Executive
Director of Zucero Therapeutics Ltd (appointed 10 March 2021) and Eco Systems Ltd
(appointed 16 October 2019).
Former directorships (last 3 years):
Previously he served as a Non-Executive Director, then Chairman and CEO of Genetic
Technologies Limited (appointed 12 December 2013 and resigned 23 September 2019).
Special responsibilities:
Chair of the Audit and Risk Committee
Interests in shares:
100,000
Interests in options:
Contractual rights to shares:
Nil
Nil
Page 5
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Name:
Title:
Experience and expertise:
Connie Carnabuci
Non-Executive Director
Connie Carnabuci has over 35 years' experience advising intellectual property and
technology intensive businesses in Australia and across Asia on commercial, corporate
and regulatory matters.
She was recognised by the 2021 Australasian Law Awards as one of the most influential
lawyers in Australia.
She is a professional Non-Executive Director and currently serves on the Board and
Remuneration Committee of OFX Group Limited (ASX: OFX). Ms Carnabuci is the
former General Counsel of the Australian Broadcasting Corporation and a former partner
of Mallesons Stephen Jacques and Freshfields Bruckhaus Deringer.
She is a member of the Business Advisory Council of the UNSW Business School.
She was a director and the Chair of the NFP, Kids Giving Back, from 2015 to 2018.
Ms Carnabuci is a graduate of UNSW (B.Commerce (Marketing), with merit/LLB, 1986)
and the Australian Institute of Company Directors.
Other current directorships:
Connie Carnabuci currently serves as a Non-Executive Director on the Board, and the
Remuneration Committee of OFX Group Limited (ASX: OFX).
Former directorships (last 3 years):
Nil
Special responsibilities:
Chair of the People, Culture & Remuneration Committee.
Interests in shares:
75,000
Interests in options:
Contractual rights to shares:
Nil
Nil
Other current and former (last 3 years) directorships' quoted above are directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company Secretary
Gillian Nairn has over 20 years legal and governance experience in various listed and public companies, as well as in private
practice.
Ms Nairn is a founder and director of Dolmatoff Nairn Corporate Governance, a company secretarial service provider. Prior to
founding Dolmatoff Nairn Corporate Governance, Ms Nairn held various company secretarial roles, predominantly with listed
entities, in a variety of sectors including healthcare, manufacturing, resources, professional services and education.
Ms Nairn holds a Bachelor of Laws and Bachelor of Arts from UNSW and a Graduate Diploma in Applied Corporate
Governance. She is a Fellow of the Governance Institute of Australia and holds a current NSW legal practising certificate.
Ms Nairn was appointed as Company Secretary on 4 February 2020.
Page 6
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Meetings of Directors
The number of meetings of the Company's Board of Directors (' the Board') and of each Board Committee held during the year ended 30
June 2021, and the number of meetings attended by each director were:
Board
Held^
Attended
Audit & Risk Committee
Attended
Held^
People, Culture
& Remuneration
Committee
Held^
Attended
John Keith
John Kelly
Curt LaBelle
Connie Carnabuci
Paul Kasian
13
13
13
13
13
13
13
13
13
13
7
-
7
-
7
7
-
7
-
7
3
-
-
3
3
3
-
-
3
3
^
Represents the number of meetings when the director was eligible to attend as a member of the relevant committee.
Remuneration Report (Audited)
This Remuneration Report details the remuneration arrangements of the key management personnel of the Group, in accordance with
the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel ( 'KMP') are those persons having authority and responsibility for planning, directing and controlling the
activities of the Group, directly or indirectly, including all Directors of the Company.
The key management personnel of the Group during the financial year consisted of the following Directors of the Company:
•
•
•
•
•
John Keith – Non-Executive Chair
John Kelly – Founder and Managing Director
Curt LaBelle – Non-Executive Director
Paul Kasian – Independent Non-Executive Director
Connie Carnabuci – Non-Executive Director
And the following executives:
•
•
•
William Souter – Chief Financial Officer
Mark Smith – Chief Operating Officer
Fabio Baglioni – Chief Commercial Officer (Resigned on 30 July 2021)
The information in this Remuneration Report is set out under the following headings:
•
•
•
•
•
•
Remuneration governance
Non-Executive Directors' remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to KMP
Remuneration Governance
To assist the Board in fulfilling its responsibilities in respect of remuneration and nomination related matters, shortly prior to listing, the
Board established a Nomination and Remuneration Committee. During the financial year, on the recommendation of the Nomination and
Remuneration Committee, the Board extended the scope of the Nomination and Remuneration Committee’s responsibilities to include
monitoring and making recommendations to the Board in relation to:
(i)
(ii)
recruitment, retention and termination policies and practices for Executive Directors and direct reports to the Managing Director
and the alignment of the policies and practices with the promotion and sustainment of a culture aligned with Atomo’s values, the
promotion of long-term sustainable success and the achievement of the Company’s business objectives;
people strategies and practices which will instil and reinforce the Company’s purpose and values, ensure health and wellbeing
(physical and mental) and support the achievement of the Company’s long-term business objectives; and
(iii)
the development of, and progress in meeting, the Company’s diversity objectives.
To reflect the extended scope of the Nomination and Remuneration Committee's responsibilities, the Board renamed the Committee the
'People, Culture & Remuneration Committee' and the Board resumed nomination responsibilities. The members of the People, Culture
and Remuneration Commitee at the date of this report are:
•
•
•
Connie Carnabuci (Chair)
John Keith
Paul Kasian
Page 7
Atomo Diagnostics Limited
Directors' Report
30 June 2021
The role and responsibilities, composition, structure and membership requirements of the People, Culture and Remuneration Committee
are documented in the People, Culture and Remuneration Committee Charter available on Atomo’s website at:
https://atomodiagnostics.com/governance/.
The People, Culture and Remuneration Committee Charter provides that the Committee should comprise at least three members, all of
whom are Non-Executive Directors and a majority of whom are independent Directors and the Chair of the Committee should be an
independent Director who is not Chair of the Board.
All of the current members of the PCRC have been assessed by the Board as being independent Non-Executive Directors and the Chair
of the Committee is not Chair of the Board.
Principles used to Determine the Nature and Amounts of Remuneration
Non-Executive Directors Remuneration
Each of the Non-Executive Directors has entered into appointment letters with Atomo confirming the terms of their appointment and their
roles and responsibilities. The appointment letters are on standard commercial terms.
The Chair, John Keith, receives an annual fee of $130,000 and each Non-Executive Director receives an annual fee of $50,000.
Each Chair of a Board Committee receives an additional amount of $20,000 per annum. The Chairs of the Board Committees are Paul
Kasian (Audit and Risk Committee) and Connie Carnabuci (People, Culture and Remuneration Committee).
Directors may also be reimbursed for expenses properly incurred by them in dealing with the Company’s business or in carrying out their
duties as a Director.
Under the Constitution, the Board decides the amount paid to each Non-Executive Director as remuneration for their services as a
Director. However, under the ASX Listing Rules, the total amount of fees paid to all Non-Executive Directors for their services must not
exceed in aggregate in any financial year the amount fixed by the Company’s shareholders in general meeting. This amount has been
fixed initially in the Company’s Constitution at $500,000 per annum in aggregate and may be varied by ordinary resolution in a general
meeting.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed
and variable components.
The executive remuneration and reward framework has four components:
•
•
•
•
base pay and non-monetary benefits;
short-term performance incentives;
long-term performance incentives; and
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the People, Culture
and Remuneration Committee based on individual and business unit performance, the overall performance of the Group and comparable
market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it
does not create any additional costs to the consolidated entity and provides additional value to the Executive.
The Company's short-term incentives (' STI') plan is designed to align the targets of the business units with the performance hurdles of
executives. STI payments are granted to Executives based on specific targets and key performance indicators (' KPI's') being achieved.
Details of STIs paid to executives during the year can be found under the heading 'Amounts of remuneration" below.
The Company's long-term incentive (' LTI') plan includes share-based payments. Upon Atomo’s admission to ASX, Atomo increased the
fixed remuneration of its executives to align their remuneration with the market, and granted each of the executives an allocation of
options under Atomo’s Employee Share Option Plan (' ESOP'). Further details can be found under the heading “Share-based
compensation” below.
Page 8
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Details of Remuneration
Amounts of remuneration
Details of the remuneration of the KMP of the Group are set out in the following tables. Where individuals were KMP for only part of the
year, only remuneration relating to that period is included in the tables below.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long service
leave
$
Share-based payments
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
2021
Non-Executive
John Keith
Curt LaBelle *
Paul Kasian
Connie Carnabuci
130,000
50,000
63,927
70,000
-
-
-
-
Executive Directors:
John Kelly
372,262
84,000
Other Key Management
Personnel:
William Souter
Mark Smith
Fabio Baglioni
280,902
287,360
230,480
1,484,931
45,000
41,391
-
170,391
-
-
-
-
-
-
-
-
-
-
-
6,073
-
-
-
-
-
36,438
7,023
26,027
-
-
68,538
601
257
-
7,881
-
-
-
-
-
-
-
-
-
20,337
22,730
-
-
150,337
72,730
70,000
70,000
(32,422)
467,301
(25,938)
(25,938)
(25,938)
(67,169)
326,592
303,070
204,542
1,664,572
*
Amounts included under “Equity-settled options” include amounts paid to GHIF, of which Curt LaBelle is President.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long service
leave
$
Share-based payments
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
54,272
31,950
17,500
17,500
3,023
9,821
21,772
19,450
-
-
3,023
9,821
32,422
610,945
25,938
25,938
25,938
164,302
130,299
234,862
117,503
1,227,675
2020
Non-Executive
John Keith
Curt LaBelle *
Paul Kasian
Connie Carnabuci
George Sidis **
Doris-Ann Williams
Executive Directors:
John Kelly
Other Key Management
Personnel:
William Souter
Mark Smith
Fabio Baglioni
32,500
12,500
15,982
17,500
-
-
-
-
-
-
-
-
298,083
209,384
94,651
208,924
91,565
771,705
-
-
-
209,384
-
-
-
-
-
-
-
-
-
-
-
-
-
1,518
-
-
-
-
-
-
-
-
-
46,101
24,955
8,309
-
-
55,928
1,401
-
-
26,356
-
-
-
-
-
-
-
-
-
-
-
*
**
Amounts included under “Equity-settled options” include amounts paid to GHIF, of which Curt LaBelle is President.
Amounts included under “Equity-settled options” include amounts paid to ID&E Pty Ltd, which is controlled by George Sidis.
Page 9
Atomo Diagnostics Limited
Directors' Report
30 June 2021
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
John Keith
Curt LaBelle
Paul Kasian
Connie Carnabuci
George Sidis
Doris-Ann Williams
Executive Directors:
John Kelly
Other Key Management Personnel:
William Souter
Mark Smith
Fabio Baglioni
Fixed remuneration
2021
2020
At risk - STI
At risk - LTI
2021
2020
2021
2020
100%
100%
100%
100%
100%
n/a
100%
100%
100%
100%
100%
100%
-
-
-
-
-
n/a
-
-
-
-
-
-
-
-
-
-
-
n/a
-
-
-
-
-
-
89%
59%
18%
35%
-7%
6%
94%
95%
100%
79%
89%
78%
14%
14%
-
-
-
-
-8%
-9%
-
21%
11%
22%
Cash bonuses are dependent on meeting defined performance measures. The maximum bonus values are established at the start of
each financial year and amounts payable to KMPs are determined by the Board in consultation with the People, Culture and
Remuneration Committee.
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Non-Executive Directors:
John Keith
Curt LaBelle
Paul Kasian
Connie Carnabuci
George Sidis
Doris-Ann Williams
Executive Directors:
John Kelly
Other Key Management Personnel:
William Souter
Mark Smith
Fabio Baglioni
Cash bonus
paid/payable
Cash bonus forfeited
2021
2020
2021
2020
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
75%
75%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Page 10
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Service Agreements
Remuneration and other terms of employment for KMPs are formalised in service agreements. Details of these agreements are as
Name:
Title:
John Kelly
Managing Director.
Employment commenced:
1 October 2011
Term of agreement:
Not specified.
Details:
Name:
Title:
Annual salary of $420,000 (including superannuation) plus a cash bonus of up to 20% of base
salary (subject to the satisfaction of performance criteria), to be reviewed annually by the People,
Culture & Remuneration Committee.
John Kelly is entitled to participate in the Company’s share and option plans. Please refer to the
section titled “Share-based compensation” for further details.
Ten (10) week termination notice by either party however this notice period does not apply if the
employment is terminated for serious and wilful misconduct or any conduct by John Kelly that
amounts to fraud, theft, violence, harassment, gross negligence or any other action that may
otherwise bring the Company into disrepute.
William Souter
Chief Financial Officer.
Employment commenced:
10 March 2020
Term of agreement:
Not specified.
Details:
Name:
Title:
Annual salary of $300,000 (including superannuation) plus a cash bonus of up to 20% of base
salary (subject to the satisfaction of performance criteria), to be reviewed annually by the People,
Culture & Remuneration Committee.
William Souter is entitled to participate in the Company’s share and option plans. Please refer to
the section titled “Share-based compensation” for further details.
Ten (10) week termination notice by either party however this notice period does not apply if the
employment is terminated for serious and wilful misconduct or any conduct by William Souter
that amounts to fraud, theft, violence, harassment, gross negligence or any other action that may
otherwise bring the Company into disrepute.
Mark Smith
Chief Operating Officer.
Employment commenced:
1 October 2019
Term of agreement:
Not specified.
Details:
Annual salary of GBP 150,000 plus a cash bonus of up to 20% of base salary (subject to the
satisfaction of performance criteria), to be reviewed annually by the People, Culture &
Remuneration Committee.
Mark Smith is entitled to participate in the Company’s share and option plans. Please refer to the
section titled “Share-based compensation” for further details.
The agreement will terminate automatically without further action if the parties mutually agree to
terminate the agreement. Additionally, either party may terminate the agreement:
a.
b.
by providing eight (8) weeks’ notice; or
by providing written notice, if the other party has breached the agreement and
either the breach is not capable of rectification or the other party had not complied
with a notice to perform or rectify the breach.
Page 11
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Name:
Title:
Fabio Baglioni
Chief Commercial Officer.
Employment commenced:
17 February 2020
Agreement terminated:
30 July 2021
Term of agreement:
Not specified.
Details:
Share-Based Compensation
Share plan details
Annual salary of kr 1,320,000 plus a cash bonus of up to 20% of base salary (subject to the
satisfaction of performance criteria) to be reviewed annually by the Nomination and
Remuneration Committee / Company. In addition, the Company will also pay the COO’s
occupational pension to Collectum under the terms of the benefit of ITP1.
Prior to his resignation, Fabio Baglioni was entitled to participate in the Company’s share and
option plans. Please refer to the section titled “Share-based compensation” for further details.
Eight (8) week termination notice by either party however this notice period does not apply if the
employment is terminated for serious and wilful misconduct or any conduct by Fabio Baglioni
that amounts to fraud, theft, violence, harassment, gross negligence or any other action that may
otherwise bring the Company into disrepute.
Prior to being listed on the ASX, the Company established a tax exempt employee share plan (“ Tax Exempt Plan”). Under the Tax
Exempt Plan, the Company may offer an eligible person restricted shares in the Company which are subject to a three year holding lock
while the person remains employed by the Company. Offers of restricted shares under the Tax Exempt Plan not exceeding a total value
of A$1,000 or such other amount as permitted under Subdivision 83A-B of the Tax Act may be reduced from the assessable income of
that eligible person for the income year in which the eligible person acquires those restricted shares. The objective of the Tax Exempt
Plan is to align the interests of eligible Atomo employees and contractors with shareholders through the sharing of a personal interest in
the future growth and development of the Company and to provide a means of attracting and retaining skilled and experienced eligible
persons.
As at the date of this report, 320,000 share have been granted under the Tax Exempt Plan.
Option plan details
1. Pre-IPO option plan details
In prior financial years, the Company issued options to employees, directors and key stakeholders to align the interests of those parties
through the sharing of a personal interest in the future growth and development of the Company and to provide a means of attracting and
retaining skilled and experienced eligible persons.
As at the date of this report, the Company had the following options outstanding under the pre-IPO option plans:
Expiry Date
14 April 2022
6 April 2022
11 April 2023
Total
Exercise
price
Number of
options
$0.03
$0.16
$0.16
2,293,184
6,800,000
4,800,000
13,893,184
All options were granted over unissued fully paid ordinary shares in the Company. Options granted carry no dividend or voting rights.
Page 12
Atomo Diagnostics Limited
Directors' Report
30 June 2021
2.
Post-IPO Option plan details
Shortly prior to being listed on the ASX, the Company established a new employee option plan to align the interests of eligible employees
and Directors with shareholders through the sharing of a personal interest in the future growth and development of the Company and to
provide a means of attracting and retaining skilled and experienced eligible persons.
Upon Atomo’s admission to the official list of ASX, Atomo granted a total of 6,800,000 options under the post-IPO option plan to the four
(4) executive KMPs exercisable at $0.25 within thirty six (36) months from the date of vesting. The options vest in three equal tranches in
12 months, 24 months and 36 months respectively, subject to the satisfaction of vesting conditions relating to KPIs determined by the
Managing Director or in the case of the Managing Director, determined by the Board in consultation with the People, Culture and
Remuneration Committee, as follows:
KPI 1: ROI Hurdle:
15% per annum calculated using the following formula:
Change in EBITDA year on year / amount invested in operating assets during the year.
KPI 2: Revenue Hurdle:
Tranche 1 / FY21 - Revenue growth of 60%
Tranche 2 / FY22 - Revenue growth of 40%
Tranche 3 / FY23 - Revenue growth of 25%
As at the date of this report, the Company had on issue 3,466,667 options to KMPs under the post-IPO option plan.
Name
John Kelly
John Kelly
William Souter
William Souter
Mark Smith
Mark Smith
Total
Vesting date
and
exercisable
date
14-Apr-22
14-Apr-23
14-Apr-22
14-Apr-23
14-Apr-22
14-Apr-23
Grant date
14-Apr-20
14-Apr-20
14-Apr-20
14-Apr-20
14-Apr-20
14-Apr-20
Expiry
date
14-Apr-25
14-Apr-26
14-Apr-25
14-Apr-26
14-Apr-25
14-Apr-26
Number of
options
granted
666,667
666,666
533,333
533,334
533,333
533,334
3,466,667
Exercise
Fair value
per option at
grant date
price
$0.25
$0.25
$0.25
$0.25
$0.25
$0.25
$0.131
$0.141
$0.131
$0.141
$0.131
$0.141
In addition to the above, subsequent to 30 June 2021, the Board has exercised its discretion to allocate the following options to
management as part of the Company's remuneration scheme to reward the diligent execution of the corporate strategy and to ensure
retention of the key talent needed to deliver strategic outcome in the interest of shareholders:
John Kelly
William Souter
Mark Smith
Total
333,333 options
213,333 options
213,333 options
759,999 options
These options are exercisable at $0.25 per option and expire on 14 April 2024. In addition, these options are conditional upon the
executive remaining employed by the Company and in the case of John Kelly, on Shareholder approval of the allocation.
All options were granted over unissued fully paid ordinary shares in the Company. Options granted carry no dividend or voting rights.
Page 13
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Additional Disclosures Relating to Key Management Personnel
Shareholding:
The number of shares in the Company held during the financial year by each Director and other members of the KMP of the Group,
including their personally related parties, is set out below:
Ordinary shares*
John Keith
John Kelly
Curt LaBelle**
Paul Kasian
Connie Carnabuci
William Souter
Mark Smith
Fabio Baglioni^
Totals
Balance at
the start of
the year
Exercise
of
options
Balance at
the end of
the year
3,261,056
73,530,248
63,851,280
100,000
75,000
250,000
7,790,224
-
-
-
1,200,000
-
-
-
-
-
3,261,056
73,530,248
65,051,280
100,000
75,000
250,000
7,790,224
-
148,857,808
1,200,000
150,057,808
*
**
^
All share numbers are presented on a post share split basis.
Includes shares held by Global Health Investment Fund LLC. Curt LaBelle is President at GHIF.
Resigned on 30 July 2021.
Option holding:
The number of options over ordinary shares in the Company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Options over ordinary shares *
John Keith
John Kelly
Curt LaBelle ^
Paul Kasian
Connie Carnabuci
William Souter
Mark Smith
Fabio Baglioni
Totals
Balance at
the start of
the year
3,600,000
2,000,000
3,600,000
-
-
1,600,000
1,600,000
1,600,000
14,000,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
( 666,667)
( 1,200,000)
-
-
-
-
-
( 1,200,000)
-
-
-
( 533,333)
( 533,333)
( 1,600,000)
( 3,333,333)
3,600,000
1,333,333
2,400,000
-
-
1,066,667
1,066,667
-
9,466,667
*
^
All option numbers are presented on a post share split basis.
Includes options held by Global Health Investment Fund LLC. Curt LaBelle is President at GHIF.
Page 14
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Other transactions with key management personnel and their related parties:
Transactions between related parties are on normal commercial terms and conditions and no more favourable than those available to
other parties, unless stated otherwise. The following transactions occurred with related parties:
ID&E Pty Ltd, a company controlled by Mr George Sidis, previously a Non-Executive Director of the
Company, provided the following services during the year whilst Mr George Sidis was a Non-Executive
Director:
Purchase of inventory
Research and development
Plant and equipment
Other services
Total
Consolidated
2021
2020
n/a - see note
n/a - see note
n/a - see note
n/a - see note
n/a - see note
1,383,733
1,524,861
670,401
560,306
4,139,301
At the end of the financial year, the following amounts were shown owing to related parties in trade and
other payables:
n/a - see note
640,615
Note: As Mr George Sidis resigned as a Non-Executive Director of Atomo on 3 February 2020, no transactions between
ID&E Pty Ltd and the Company are included in the table above with respect to the financial year to 30 June 2021 as he is
no longer considered a related party.
Curt LaBelle is a Non-Executive Director of the Company and is also President of GHIF. GHIF is a substantial shareholder of the
Company holding 11.4% of the issued capital of the Company as at 30 June 2021 (2020: 11.4%).
Statutory performance indicators
The Company aims to align its executive remuneration to its strategic and business objective and the creation of shareholder wealth. The
table below shows measures of the Group’s financial performance over the last three years (being the extent of available historic audited
performance information) as required by the Corporations Act 2001 . However, these are not necessarily consistent with the measures
used in determining the variable amounts of remuneration to be awarded to KMPs. As a consequence, there may not always be a direct
correlation between the statutory key performance measures and the variable remuneration awarded.
Measure
2021
2020
2019
2018
Loss for the year attributable to the Company ($)
Basic earnings per share (cents)
Dividend payments
Dividend payout ratio^
Increase / (decrease) in share price^^
( 6,021,215)
( 1.07)
-
-
(46%)
( 9,218,105)
( 2.59)
-
-
70%
( 5,055,112)
( 1.81)
-
-
-
( 4,900,173)
( 1.86)
-
-
-
Total KMP incentives as a percentage of profit / (loss) for the year
(27.6%)
(13.3%)
(9.3%)
(6.1%)
^ The dividend payout ratio is calculated on dividends paid and profit for the year.
^^ Atomo’s shares first traded on the ASX on 16 April 2020 after successful completion of its IPO. Accordingly, no share price information has been provided prior to
FY20. For FY20, the movement in shares price has been calculated as the difference between the IPO price (i.e. $0.20) and the closing price as at 30 June 2020 (i.e.
$0.34).
This concludes the Remuneration Report, which has been audited.
Page 15
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Shares Under Option
Unissued ordinary shares of Atomo Diagnostics Limited under option as at the date of this report are as follows:
Expiry Date
14 April 2022
6 April 2022
11 April 2023
14 April 2024
14 April 2025
14 April 2026
30 April 2024
30 April 2024
Total
Exercise
Price
Number of
Options
$0.03
$0.16
$0.16
$0.25
$0.25
$0.25
$0.40
$0.60
2,293,184
6,800,000
4,800,000
533,333
2,266,666
2,266,668
2,000,000
2,000,000
22,959,851
In addition to the above, the Board has exercised its discretion to allocate the following new options to management as part of the
Company's remuneration scheme to reward the diligent execution of the corporate strategy and to ensure retention of the key talent
needed to deliver strategic outcome in the interest of shareholders:
John Kelly
William Souter
Mark Smith
Total
333,333 options
213,333 options
213,333 options
759,999 options
These options are exercisable at $0.25 per option and expire on 14 April 2024. In addition, these options are conditional upon the
executive remaining employed by the Company and in the case of John Kelly, on Shareholder approval of the allocation.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or
of any other body corporate.
Shares Issued on the Exercise of Options
The following ordinary shares of Atomo Diagnostics Limited were issued during the year ended 30 June 2021 and up to the date of this
report on the exercise of options granted:
Date options granted
24 November 2016
6 April 2017
15 September 2018
Total
Indemnity and Insurance of Officers
Exercise
Price
Number of
Options
$0.16
$0.16
$0.16
4,000,000
2,400,000
800,000
7,200,000
The Company has indemnified the Directors and Executives of the Group for costs incurred, in their capacity as a Director or Executive,
for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Group paid a premium in respect of a contract to insure the Directors and Executives of the Group against a
liability to the extent permitted by the Corporations Act 2001 . The contract of insurance prohibits disclosure of the nature of the liability and
the amount of the premium.
Indemnity and Insurance of the Auditor
The Group has not, during or since the end of the financial year end, indemnified or agreed to indemnify the auditor of the Group or any
related entity against any liability incurred by the auditor.
During the financial year, the Group has not paid a premium in respect of a contract to insure the auditor of the
Group or any related entity.
Page 16
Atomo Diagnostics Limited
Directors' Report
30 June 2021
Proceedings on behalf of the Group
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Group, or to intervene in any proceedings to which the Group is a party for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the Company’s auditors for non-audit services provided during the financial year by the auditors
are outlined in Note 19 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditors (or by another person or firm
on the auditors’ behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 .
The Directors are of the opinion that the services as disclosed in Note 19 to the financial statements do not compromise the external
auditors’ independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditors; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the
auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
Officers of the company who are former partners of the Company’s Auditors
There are no officers of the company who are former partners of BDO Australia.
Rounding of Amounts
The Group is of a kind referred to in Corporations Instrument 2016/191 , issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest dollar.
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001
is set out immediately after this Directors' Report.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001 .
This report is made in accordance with a resolution of Directors, pursuant to Section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors:
John Keith
Chair
27 August 2021
Sydney
Page 17
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF ATOMO DIAGNOSTICS
LIMITED
As lead auditor of Atomo Diagnostics Limited for the year ended 30 June 2021, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Atomo Diagnostics Limited and the entities it controlled during the
period.
Gareth Few
Director
BDO Audit Pty Ltd
Sydney
27 August 2021
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Atomo Diagnostics Limited
Contents
30 June 2021
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 financial statements
Directors' declaration
Independent auditor's report to members of Atomo Diagnostics Limited
20
21
22
23
24
52
53
General Information
The financial statements cover Atomo Diagnostics Limited as a consolidated entity consisting of Atomo
Diagnostics Limited and the entities it controlled at the end of, or during, the year.
The financial statements are presented in Australian Dollars, which is Atomo Diagnostics Limited's functional
and presentation currency.
Atomo Diagnostics Limited is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business are:
Registered office
Level 2
701 - 703 Parramatta Road
Leichhardt NSW 2040
Principal place of business
Level 2
701 - 703 Parramatta Road
Leichhardt NSW 2040
A description of the nature of the Group's operations and its principal activities are included in the Directors'
Report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on
27 August 2021. The Directors have the power to amend and reissue the financial statements.
Page 19
Atomo Diagnostics Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2021
Revenue
Cost of sales
Gross profit
Other income
Employee benefits expenses
Foreign exchange gains / (losses)
Depreciation and amortisation
Research and development expenses
Insurance
Inventory obsolescence expense
IPO expenses not taken up in equity
IT expenses
Occupancy expenses
Professional and consulting fees expense
Regulatory expenses
Travel expenses
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance income / (cost)
Loss before income tax
Income tax (expense) / benefit
Loss for the year
Other comprehensive income and expenses
Foreign currency translation reserve
Note
2021
2020
Consolidated
3
3
4(a)
4(b)
4(c)
4(c)
4(c)
5(a)
6,715,659
(3,296,835)
3,418,824
5,368,698
(2,173,731)
3,194,967
814,226
844,518
(3,813,094)
(408,689)
(1,318,327)
(820,640)
(349,621)
(332,332)
-
(214,862)
(6,417)
(1,786,510)
(397,854)
12,573
(901,403)
(6,104,126)
90,696
(7,785)
82,911
(2,972,709)
(556,249)
(687,087)
(695,009)
(86,981)
223,752
(883,866)
(146,958)
(32,724)
(929,695)
(293,594)
(131,294)
(801,856)
(3,954,785)
21,858
(5,285,178)
(5,263,320)
(6,021,215)
(9,218,105)
-
-
(6,021,215)
(9,218,105)
223,652
(395,849)
Total comprehensive income for the period
(5,797,563)
(9,613,954)
Loss per share for profit attributable to owners of Atomo
Diagnostics Limited
Basic earnings per share
Diluted earnings per share
27
27
Cents
(1.07)
(1.07)
Cents
(2.59)
(2.59)
The above statement of profit or loss and other comprehensive income should be
read in conjunction with the accompanying notes
Page 20
Atomo Diagnostics Limited
Consolidated Statement of Financial Position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefits
Total non-current liabilities
Total Liabilities
Net assets
Equity
Issued capital
Foreign currency translation reserve
Share based payment reserve
Accumulated losses
Total equity
Note
2021
2020
Consolidated
6(a)
7
8
9
10
11
12
13
14
13
14
15
16
16
17,946,517
4,494,368
3,042,245
25,483,130
3,687,705
66,865
3,001,106
6,755,676
27,103,838
4,760,722
1,209,676
33,074,236
1,452,598
55,710
1,518,334
3,026,642
32,238,806
36,100,878
1,783,958
67,589
276,804
2,128,351
-
23,074
23,074
1,296,904
47,866
162,570
1,507,340
7,675
105,023
112,698
2,151,425
1,620,038
30,087,381
34,480,840
67,921,661
(227,690)
713,027
(38,319,617)
30,087,381
66,514,571
(451,342)
746,970
(32,329,359)
34,480,840
The above statement of financial position should be read in conjunction with the accompanying notes
Page 21
Atomo Diagnostics Limited
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Foreign
Currency
Translation
Reserve
Share Based
Payment
Reserve
Issued Capital
Accumulated
Losses
Total Equity
Balance as at 1 July 2019
17,110,055
(55,493)
585,105
(23,111,254)
(5,471,587)
Loss for the year
Other comprehensive income
Total other comprehensive income for the year
-
-
-
-
(395,849)
(395,849)
Transactions with owners, recorded directly in equity
Ordinary shares issued during the year
Capital raising costs
Equity-settled share-based payments
Exercise of options
Total transactions with owners
51,143,218
(2,245,060)
-
506,358
49,404,516
-
-
-
-
-
-
-
-
-
-
490,542
(328,677)
161,865
(9,218,105)
-
(9,218,105)
(9,218,105)
(395,849)
(9,613,954)
-
-
-
-
-
51,143,218
(2,245,060)
490,542
177,681
49,566,381
Balance as at 30 June 2020
66,514,571
(451,342)
746,970
(32,329,359)
34,480,840
Balance as at 1 July 2020
66,514,571
(451,342)
746,970
(32,329,359)
34,480,840
Loss for the year
Other comprehensive income
Total other comprehensive income for the year
-
-
-
-
223,652
223,652
-
-
-
(6,021,215)
-
(6,021,215)
(6,021,215)
223,652
(5,797,563)
Transactions with owners, recorded directly in equity
Equity-settled share based payments
Exercise of options
Issue costs
Lapsed and Cancelled Options
Total transactions with owners
108,000
1,311,482
(12,392)
-
1,407,090
-
-
-
-
-
320,951
(188,373)
-
(166,521)
(33,943)
-
-
-
30,957
30,957
428,951
1,123,109
(12,392)
(135,564)
1,404,104
Balance as at 30 June 2021
67,921,661
(227,690)
713,027
(38,319,617)
30,087,381
The above statement of changes in equity should be read in conjunction with the accompanying notes
Page 22
Atomo Diagnostics Limited
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2021
Cash flows from operating activities
Receipts from customers (inc. GST)
Payments to suppliers and employees (inc. GST)
Cash used in operations
Interest received
Interest paid
IPO costs not taken up in financing activities
R&D and other government incentives received
Net cash from / (used in) operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Net cash from / (used in) investing activities
Cach flows from financing activities
Repayment of borrowings
Repayment of leases
Net proceeds from issue of share capital
Net proceeds from issue of convertible notes
Net cash from / (used in) financing activities
Note
2021
2020
Consolidated
6(b)
8,012,295
(13,480,610)
(5,468,315)
90,696
(5,430)
-
1,157,798
(4,225,251)
(3,119,797)
(2,777,775)
(5,897,572)
-
(113,347)
1,110,718
-
997,371
(9,125,452)
27,103,838
(31,869)
17,946,517
2,463,182
(7,135,970)
(4,672,788)
21,858
(1,498,548)
(883,866)
771,416
(6,261,928)
(818,690)
(1,174,451)
(1,993,141)
(9,342,512)
(79,169)
27,806,235
15,221,874
33,606,428
25,351,360
1,855,706
(103,228)
27,103,838
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the financial year
6(a)
The above statement of cash flows should be read in conjunction with the accompanying notes
Page 23
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 1: Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
(a) New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The Directors have reviewed all of the new and revised accounting standards and interpretations issued by the
Australian Accounting Standards Board for annual reporting periods beginning or after 1 July 2020. It has been
determined that there is no impact, material or otherwise, of any other new or revised accounting standards and
interpretations.
(b) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001 , as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through
other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative
financial instruments.
Reclassification of prior year amounts and balances:
In certain circumstances, prior year amounts and balances have been reclassified for comparability.
Critical accounting estimates:
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in Note 2.
(c) Parent entity
In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in Note 24.
(d) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Atomo Diagnostics
Limited ('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended.
Atomo Diagnostics Limited and its subsidiaries together are referred to in these financial statements as the
'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an
entity when the consolidated entity 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. Subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from
the date that control ceases.
Page 24
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity
are eliminated except where such amounts arise on monetary items that form part of the net investments in a foreign
operation, in which case they are recognised in reserves. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even
if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
(e) Operating segments
The Group manages its operations as a single business operation and there are no parts of the Group that qualify as
operating segments under AASB 8 Operating Segments. The CEO (Chief Operating Decision Maker or “CODM”)
assesses the financial performance of the Group in an integrated basis only and accordingly, the Group is managed
on the basis of a single segment, being medical device research and development. Information presented to the
CODM on a monthly basis is categorised by type of expenditure.
(f) Foreign currency translation
The financial statements are presented in Australian dollars, which is Atomo Diagnostics Limited's functional and
presentation currency.
Foreign currency transactions:
Foreign currency transactions are translated into Australian dollars 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 financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Foreign operations:
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed
of.
(g) Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers and sale of goods
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises
revenue when it transfers control over a good or service to a customer.
Customers obtain control of the HIV self-testing kits when the goods are ready and released by Quality Assurance
Page 25
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(QA). It is then the responsibility of the customer to make the necessary arrangements for freight and the collection of
goods from the Group’s warehouse. Invoices are generated once the goods are released by QA and ready for
collection by the customer. Invoices are usually payable within 30 to 75 days, dependent on the contracted agreement.
The contracts do not allow the customers to return the goods as the testing kits have a set shelf-life and have gone
through vigorous testing prior to delivery.
Where sales are made to customers on an OEM basis for use in their own test, including for COVID-19, revenue is
recognised at the point transfer of control over those products at the warehouse delivery point.
Since none of the contracts permit the customer to return an item, revenue is recognised for all the goods once the
goods have been released by QA and are available for collection at the Group’s warehouse.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(h) Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax:
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax also includes any tax liability arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss, or on taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that could follow the manner in which the Group
expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Page 26
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
R&D tax incentives:
R&D tax incentives received by the Group are recognised as other income over the periods necessary to match the
benefit of the incentive with the costs for which it is intended to compensate (“associated costs”). Such periods will
depend on whether the associated costs are capitalised or expensed as incurred.
Under this policy, for that portion of associated costs which are expensed during the period, the proportional incentive
is recognised in other income in full during the same period. For that portion of associated costs which are capitalised
during the period, the proportional incentive is initially offset against the capitalised associated costs and recognised
against amortisation expense on a systematic basis matching the useful life of the capitalised asset.
(i) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as
non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(j) 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.
(k) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days but certain customers have longer payment terms.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(l) Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first
in first out' basis.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Page 27
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(m) Property, plant and equipment
Recognition and measurement:
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Any gain and loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditure:
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the
expenditure will flow to the Group.
Depreciation:
Depreciation is calculated based on the cost of property, plant and equipment less their estimated residual values
using the straight-line basis over their estimated useful lives, and is generally recognised in profit or loss.
The estimated useful lives of property, plant and equipment are as follows:
Plant and equipment
2 - 5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(n) Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of
right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use
asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the
discount rate.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate
of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of
whether it will exercise a purchase, extension or termination option.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
Page 28
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(o) Intangible assets
Recognition and measurement:
Computer software:
Computer software comprises computer application system software and licenses. Costs incurred in developing
products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial
benefits through revenue generation and/or cost reduction are capitalised to computer software. Costs capitalised
include external direct costs of materials and services, direct payroll and payroll-related costs.
Patents, trademarks and licences:
Other intangible assets, including patents, trademarks and licences that are acquired by the Group and have finite
useful lives are measured at cost less any accumulated amortisation and impairment losses.
Capitalised development costs:
Capitalised development costs relate to the Company’s rapid test platforms and associated manufacturing assets and
are capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete
development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial
recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated
impairment losses.
Expenditure on research activities is recognised in profit or loss as incurred.
Subsequent expenditure:
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is
recognised in profit or loss as incurred.
Amortisation:
Amortisation is calculated based on the cost of intangible assets less their estimated residual values using the straight-
line method over their estimated useful lives, and is generally recognised in profit or loss.
The estimated useful lives of intangible assets are as follows:
Patents and trademarks
Other intangibles
Capitalised development costs
10 - 20 years
10 years
10 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(p) Impairment
Non-financial assets:
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than deferred tax
assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or cash generating units ("CGUs").
Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit
from the synergies of the combination.
Page 29
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value
in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any
goodwill allocated to the CGU, and then to reduce the carrying amount of assets in the CGU on a pro rata basis. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(q) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
(r) Financial instruments
Classification and measurement – non-derivative financial assets and financial liabilities:
The Group's management assessed which business models applied to the financial assets held by the Group and
classified its financial instruments into the appropriate AASB 9 categories.
Financial assets classified as held-to-maturity and loans and receivables under AASB 139 that were measured at
amortised cost continued to be measured at amortised cost under AASB 9 as they are held within a business model to
collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal
amount outstanding.
In relation to the impairment of financial assets, AASB 9 requires an expected credit loss model as opposed to an
incurred credit loss model under AASB 139. The expected credit loss model requires the Group to account for
expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit
risk since initial recognition of the financial assets. Consequently, it is no longer necessary for a credit event to have
occurred before credit losses are recognised.
The Group has one type of financial assets (trade and other receivables) that are subject to AASB 9's new expected
credit loss model.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at
FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective
interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or
loss on derecognition is also recognised in profit or loss.
Apart from the above, the application of AASB 9 had no impact on the classification and measurement of the Group's
financial assets and liabilities.
Page 30
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(s) Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it
is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the
liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
(t) Employee benefits
Short-term employee benefits:
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits:
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense:
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments:
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the
amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price,
the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the services that entitle the employees to
receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. Where early exercise has occurred, this cost is accelerated. The cumulative charge to profit or loss is
calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to
vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either
the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the
award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at
the reporting date.
Page 31
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
(u) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on
its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is
either not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
(v) Issued capital
Ordinary shares, Class B shares and Ord+ shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
(w) Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Page 32
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(x) Earnings per share
Basic earnings per share:
Basic earnings per share is calculated by dividing the profit attributable to the owners of Atomo Diagnostics Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share:
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(y) Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
(z) Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest dollar.
Note 2: Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
Revenue recognition:
When recognising revenue in relation to the sale of goods to customers, the key performance obligation is considered
to be the point the customer obtains control of the goods as outlined in the arrangement.
Page 33
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of options is determined by using the Black-Scholes
model taking into account the terms and conditions upon which the instruments were granted and includes
assumptions which require judgement.
The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on
the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity.
Allowance for expected credit losses:
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent sales experience and historical collection
rates.
Write-down of inventories:
Any write-down of inventories requires a degree of estimation and judgement. The level of the write-down is assessed
by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory
obsolescence.
Fair value measurement hierarchy:
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to
determine what is significant to fair value and therefore which category the asset or liability is placed in can be
subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
Estimation of useful lives of assets:
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
Impairment of intangible assets:
The Group tests intangible assets for impairment for each reporting period or more frequently if events or changes in
circumstances indicate it has suffered any impairment, in accordance with the accounting policy stated in Note 3(o).
The recoverable amount of a cash generating unit ("CGU") is determined based on value-in-use calculations whereby
cash flows are projected and extrapolated over a five year period with growth rates that do not exceed the long-term
average growth rate for the market in which the Group operates. The discount rate used reflects the Group's pre-tax
weighted average cost of capital.
Page 34
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 3: Revenue and other income
Revenue:
Revenue from sale of goods
Covid-19
HIV
Other OEM
Other
Other income:
R&D tax rebate
R&D tax rebate overprovisioned in prior year
Covid-19 Government grants
Other income
Total revenue and other income
Note 4: Expenses
Profit / (loss) before income tax from continuing operations includes the following
specific expenses:
(a)
(b)
(c)
Employee benefits expense
Salaries, wages and directors' fees
Contributions to superannuation
Equity-settled share-based payments
Other employment related expenses
Depreciation and amortisation expense
Depreciation expense (Note 9)
Amortisation expense (Note 11)
Right-of-use assets (Note 10)
Net finance income / (cost)
Interest income
Cash interest expense
Effective Interest Expense
Borrowing Costs
Fair value gain / (loss) on financial liabilities
Consolidated
2021
2020
3,664,613
1,082,528
1,942,878
25,640
6,715,659
754,676
(161,808)
108,588
112,770
814,226
3,397,307
1,184,743
522,626
264,022
5,368,698
807,018
-
-
37,500
844,518
7,529,885
6,213,216
Consolidated
2021
2020
3,141,315
267,779
293,386
110,614
3,813,094
884,690
319,396
114,241
1,318,327
2,118,598
161,061
616,930
76,120
2,972,709
519,388
90,090
77,609
687,087
90,697
(2,880)
(4,906)
-
-
82,911
21,858
(1,207,464)
(7,055,755)
(826,397)
3,804,438
(5,263,320)
Page 35
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 5: Income tax
(a)
Income tax benefit
Income tax benefit comprises current and deferred tax expense and is recognised in profit or loss, except to the extent that it
relates to a business combination or items recognised directly in equity or other comprehensive income. The components of
income tax benefit comprise:
Current tax
Deferred tax
Total income tax benefit
The prima facie tax on profit before income tax is reconciled to the income tax benefit as follows:
Loss before income tax
Tax using the Company’s domestic Australian tax rate of 26.0% (2020: 27.5%)
Permanent and temporary differences
Other
Tax losses not brought to account
Total income tax benefit
(b) Deferred tax assets and liabilities
Consolidated
2021
2020
-
-
-
-
-
-
Consolidated
2021
2020
(6,021,215)
(9,218,105)
1,444,097
(1,093,633)
-
(350,464)
-
2,534,979
(1,783,117)
50,813
(802,675)
-
Due to the uncertainty of the Group generating sufficient taxable income to offset tax losses carried forward, the future tax benefits
of these losses, to the extent that they do not set off temporary differences that have resulted in deferred tax liabilities, has not
been brought to account in these financial statements.
Net tax effect of carried forward losses not brought to account
2,804,480
2,547,090
Note 6: Current assets - cash and cash equivalents
(a) Cash and cash equivalents in statement of cash flows
Cash at bank
(b)
Reconciliation of cash flows from operating activities
Loss for the year
Adjustments for:
Depreciation and amortisation
Unrealised currency translation movements
Equity-settled share-based payment transactions
Fair value (gain) / loss on financial liabilities
Finance costs
Consolidated
2021
2020
17,946,517
17,946,517
27,103,838
27,103,838
(6,021,215)
(9,218,105)
1,318,327
255,522
293,386
-
-
1,867,235
687,087
556,249
616,930
(3,804,438)
7,882,152
5,937,980
Operating profit before changes in working capital and provisions
(4,153,980)
(3,280,125)
Page 36
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 6: Current assets - cash and cash equivalents (continued)
Changes in working capital and provisions:
Change in trade and other receivables
Change in trade and other payables
Change in inventories
Change in employee benefits
Net cash from operating activities
Note 7: Current assets - trade and other receivables
Receivables from trade customers
Expected credit loss / bad debt provision
R&D Tax Rebate Receivable
Other receivables
1,369,989
359,024
(1,832,569)
32,285
(71,271)
(2,941,119)
247,027
(421,958)
134,246
(2,981,804)
(4,225,251)
(6,261,928)
Consolidated
2021
2020
1,934,717
(70,433)
1,823,828
806,256
4,494,368
3,003,406
-
1,273,201
484,115
4,760,722
Allowance for expected credit losses:
The Group monitors its level of debt recovery at each reporting date (including interim reporting dates) in order to assess for any
changes in the probability of customers' ability to pay, including due to external factors such as the Covid-19 pandemic.
The ageing of receivables from trade customers and allowance for expected credit losses provide for above are as follows:
Consolidated - 2021
Days
Days
Days
Days
0 to 30
31 to 60
61 to 90
91 to 120
121 +
Days
Total
Trade receivables
Allowance for expected credit losses
Carrying value of trade receivables
before additional bad debt provisions
678,108
-
346,824
(3,468)
168,189
-
684,297
(41,058)
57,299
(25,907)
1,934,717
(70,433)
678,108
343,356
168,189
643,239
31,392
1,864,284
Note 8: Current assets - inventories
Raw materials
Raw materials provision
Work in progress
Finished goods
Finished goods provision
Consolidated
2021
2020
1,809,489
(8,247)
130,498
1,309,497
(198,992)
3,042,245
876,105
(24,764)
22,498
335,837
-
1,209,676
Page 37
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 9: Non-current assets - property, plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
Consolidated
2021
2020
6,170,381
(2,482,676)
3,687,705
3,050,584
(1,597,986)
1,452,598
3,687,705
1,452,598
Reconciliations:
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Depreciation expense
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Depreciation expense
Balance at 31 June 2021
Note 10: Non-current assets - right-of-use-assets
Land and buildings - right-of-use (Note 13)
Less: Accumulated depreciation (Note 13)
Plant and equipment - right-of-use (Note 13)
Less: Accumulated depreciation (Note 13)
Total right-of-use assets
Plant and
equipment
1,153,296
818,690
(519,388)
1,452,598
1,452,598
3,119,797
(884,690)
3,687,705
Total
1,153,296
818,690
(519,388)
1,452,598
1,452,598
3,119,797
(884,690)
3,687,705
Consolidated
2021
2020
68,136
(8,517)
59,619
14,493
(7,247)
7,246
118,727
(73,887)
44,840
14,493
(3,623)
10,870
66,865
55,710
Additions to the right-of-use assets during the year were $Nil.
The Group leases land and buildings for its offices in Sydney Australia and warehouse in South Africa under agreements of
between one (1) to two (2) years with, in some cases, options to extend. The Group also leases a single piece of office equipment
under a five (5) year agreement.
The Company entered into a new lease prior to 30 June 2021 but which does not commence until September 2021. Upon
commencement, a lease liablity in the amount of $320,711 will be recognised along with a corresponding right-of-use asset. Refer
to Note 22 for further details.
Page 38
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 11: Non-current assets - intangible assets
Patents and trademarks - at cost
Less: accumulated amortisation
Total patents and trademarks
Product development assets - at cost
Less: accumulated amortisation
Total product development assets
Other intangibles - at cost
Less: accumulated amortisation
Total other intangibles
Total intangible assets
Reconciliations:
Consolidated
2021
2020
1,555,258
(598,715)
956,543
2,317,974
(291,428)
2,026,546
91,429
(73,412)
18,017
1,449,224
(536,164)
913,060
621,840
(36,845)
584,995
91,429
(71,150)
20,279
3,001,106
1,518,334
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Amortisation expense
Capitalisation of R&D rebate
Capitalised R&D rebate recognised in profit and loss
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Amortisation expense
Capitalisation of R&D rebate
Reversal of over-accrued capitalised R&D rebate from prior year
Capitalised R&D rebate recognised as income
Balance at 30 June 2021
Note 12: Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Product
Patents and development
trademarks
costs
Other
intangibles
868,208
102,215
(57,363)
-
-
913,060
913,060
106,034
(62,551)
-
-
-
956,543
-
1,072,234
(36,846)
(466,421)
16,028
584,995
584,995
2,671,740
(254,583)
(1,162,207)
93,546
93,055
2,026,546
32,188
-
(11,909)
-
-
20,279
20,279
-
(2,262)
-
-
-
18,017
Total
900,396
1,174,449
(106,118)
(466,421)
16,028
1,518,334
1,518,334
2,777,774
(319,396)
(1,162,207)
93,546
93,055
3,001,106
Consolidated
2021
2020
654,502
825,188
304,268
1,783,958
930,035
302,350
64,519
1,296,904
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
Page 39
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 13: Lease liabilities
Current:
Lease liabilities (Note 10)
Non-current:
Lease liabilities (Note 10)
Total lease liabilities
Note 14: Employee benefits
Current:
Liability for annual leave
Liability for long service leave
Non-current:
Liability for long service leave
Total employee benefits
Consolidated
2021
2020
67,589
67,589
47,866
47,866
-
-
7,675
7,675
67,589
55,541
Consolidated
2021
2020
204,561
72,243
276,804
162,570
-
162,570
23,074
23,074
105,023
105,023
299,878
267,593
The current provision for employee benefits includes all unconditional entitlements where employees have completed the required
period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is
presented as current since the consolidated entity does not have an unconditional right to defer settlement.
Page 40
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 15: Equity - issued capital
Movements in ordinary share capital:
Number of shares:
On issue as at 1 July
Issue of Shares Under Employee Share Plan
Impact of 1:8 share split
Conversion of Ord+ shares
Conversion of Class B shares
Exercise of Options
Exercise of GHIF Warrants
Conversion of Converting Notes
Shares issued at IPO
On issue as at 30 June
Value ($):
On issue as at 1 July
Issue of Shares Under Employee Share Plan
Impact of 1:8 share split
Conversion of Ord+ shares
Conversion of Class B shares
Exercise of Options
Exercise of GHIF Warrants
Conversion of Converting Notes
Shares issued at IPO
Costs Associated with the Issues of Shares
On issue as at 30 June
Ordinary Shares
2021
2020
Class B Shares
2021
2020
Ord+ Shares
Total
2021
2020
2021
2020
561,077,807
320,000
-
-
-
7,200,000
-
-
-
568,597,807
66,514,571
108,000
-
-
-
1,311,482
-
-
-
(12,392)
67,921,661
28,458,647
-
199,210,529
15,630,816
47,838,768
8,768,491
10,868,183
100,302,363
150,000,010
561,077,807
8,630,940
-
-
2,442,315
6,036,800
506,358
1,082,743
20,060,473
30,000,002
(2,245,060)
66,514,571
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,979,846
-
41,858,922
-
(47,838,768)
-
-
-
-
-
6,036,800
-
-
-
(6,036,800)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,953,852
-
13,676,964
(15,630,816)
-
-
-
-
-
-
2,442,315
-
-
(2,442,315)
-
-
-
-
-
-
-
561,077,807
320,000
-
-
-
7,200,000
-
-
-
568,597,807
66,514,571
108,000
-
-
-
1,311,482
-
-
-
(12,392)
67,921,661
36,392,345
-
254,746,415
-
-
8,768,491
10,868,183
100,302,363
150,000,010
561,077,807
17,110,055
-
-
-
-
506,358
1,082,743
20,060,473
30,000,002
(2,245,060)
66,514,571
Page 41
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 15: Equity - issued capital (continued)
Ordinary shares:
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to
the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not
have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Class B shares:
During the year ended 30 June 2020 and concurrently with the IPO, 47,838,768 B Class shares (post share split) were converted
into ordinary shares on a 1:1 basis pursuant to approval by shareholders on 19 December 2019. As at 30 June 2020, no B Class
shares remained on issue.
B Class shares had the same rights as ordinary voting shares and were subject to the terms of the Investors Agreements and the
Company's Constitution, save for the special terms that attached to B Class shares which were as follows:
i.
upon winding-up of the Company, each B Class share would convert into 1.2 ordinary shares;
ii.
in the event of sale of all the shares in the Company for a total consideration of not more than US$20,000,000, each B
Class share would convert into 1.2 ordinary shares with effect immediately prior to the sale. If the sale price was more than
US$20,000,000 then the B Class shares would convert into ordinary shares on a 1 for 1 basis;
iii.
iv.
in the event of listing of the Company’s shares on a securities exchange at an initial price implying a total company market
capitalisation of not more than US$20,000,000, each B Class share would convert into 1.2 ordinary shares with effect
immediately prior to the sale. If the initial price implies a total company market capitalisation of more than US$20,000,000
then the B class shares would convert into ordinary shares 1 for 1; and
for any period when a B Class shareholder holds a minimum of 2 million shares in the Company (whether B class or
ordinary shares), the shareholder would have the right to appoint a Director to the board.
Ord+ shares:
During the year ended 30 June 2020, 15,630,816 Ord+ shares (post share split) were converted into ordinary shares on a 1:1
basis pursuant to approval by shareholders on 19 December 2019. As at 30 June 2020, no Ord+ shares remained on issue.
Ord+ shares had the same rights as ordinary voting shares and were subject to the terms of the Investors Agreements and the
Company's Constitution, save for the special terms that attached to Ord+ shares which were as follows:
i.
the shares were issued with an accompanying entitlement to bonus shares which were to be issued in the event that a
subsequent capital activity occurred at a price less than $1.50 per ordinary share; and
ii.
the bonus shares entitlement applied in respect of the next capital activity that had one of the following characteristics:
a.
b.
if the company issued further ordinary shares for a price less than $1.50 ($0.1875 on a post share split basis) per
share (other than in response to the exercise of existing share options or warrants), with an aggregate issue offer
value in excess of $3,000,000; or
if an agreement was made by which all of the ordinary shares in the Company were to be sold at an average price of
less that $1.50 ($0.1875 on a post share split basis) per share.
Capital risk management:
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders, maintain sufficient financial flexibility to pursue its growth objectives
and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as
total borrowings less cash and cash equivalents.
Page 42
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 15: Equity - issued capital (continued)
In order to maintain or adjust the capital structure, the Group may take one of several actions which may include the issue of new
shares, the payment of dividends, a return capital to shareholders, or sell assets to reduce debt. The Group is not actively
pursuing or consideraing any of these options at the time of this report.
The Company may look to raise capital when an opportunity to invest in a business or company was seen as value adding relative
to the current Company's share price at the time of the investment. The Group is not actively pursuing additional investments in
the short term as it continues to grow its existing businesses.
The Group currently has no debt and is not subject to any finance arrangement covenants.
Note 16: Equity - reserves
Foreign currency translation reserve
Share based payment reserve
Foreign currency translation reserve:
Consolidated
2021
2020
(227,690)
713,027
485,337
(451,342)
746,970
295,628
This reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars and the effect of permanent loans with foreign operations within the Group.
Share based payment reserve:
This reserve is used to recognise the fair value of equity-settled share-based payments where they related to yet-to-be exercised
options.
Movements in reserves:
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Equity-settled share-based payments
Exercise of options
Foreign currency translation
Balance at 30 June 2020
Balance at 1 July 2020
Equity-settled share-based payments
Exercise of options
Lapsed and Cancelled Options
Foreign currency translation
Balance at 30 June 2021
Note 17: Equity - dividends
Foreign
currency
Share based
payment
Total
(55,493)
-
-
(395,849)
(451,342)
(451,342)
-
-
-
223,652
(227,690)
585,105
490,542
(328,677)
-
746,970
746,970
320,951
(188,373)
(166,521)
-
713,027
529,612
490,542
(328,677)
(395,849)
295,628
295,628
320,951
(188,373)
(166,521)
223,652
485,337
No dividends were paid or declared during the financial year (2020: Nil).
Franking credits:
Franking credits available for subsequent financial years.
Consolidated
2021
2020
-
-
Page 43
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 18: Financial risk management
Financial risk management objectives:
The Group's activities expose it to a variety of financial risks including market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management objectives seek to minimise potential adverse
effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to which it
is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing
analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the
Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls
and risk limits. Finance identifies and evaluates financial risks within the Group. Finance reports to the Board on a monthly basis.
Market risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices, such as foreign exchange rates and interest rates. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return.
Foreign currency risk:
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US Dollars
British Pounds
South African Rand
Japanese Yen
EURO
Swedish Krona Sek
Swiss Franc
Assets
Liabilities
2021
2020
2021
2020
2,693,426
4,455
491,346
3,564,797
15,990
203,623
-
-
-
-
-
-
-
-
3,189,227
3,784,410
240,296
11,163
33,990
-
-
-
14,420
299,869
144,256
5,212
25,719
3,308
3,215
3,618
-
185,328
Reasonably possible movements in the Australian dollar against all other currencies as at 30 June 2021 would have affected the
measurement of financial instruments denominated in a foreign currency and affected profit or loss and equity by the amounts
shown below. This analysis assumes that all other variables remain constant and ignores any impact of forecast sales and
purchases:
Consolidated
Profit Before Tax
Equity
2021
2020
2021
2020
AUD Strengthening by 10%
(262,669)
(327,189)
(262,669)
(327,189)
AUD Weakening by 10%
321,040
399,898
321,040
399,898
Price risk:
The Group is not exposed to any significant price risk.
Interest rate risk:
As at 30 June 2021, the Group was not exposed to any significant interest rate risk. There is minimal exposure to the impact of
adverse changes in benchmark interest rates.
The Group was exposed to variable interest rate risks on cash and short-term deposits. A reasonably possible change of 100
basis points in interest rates during the year would have increased or decreased profit before tax by $198,794 (2020: $100,041).
This analysis assumes that all other variables remain constant.
Page 44
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 18: Financial risk management (continued)
Credit risk:
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has a code of credit, including undertaking customer due diligence, confirming references and setting appropriate
credit limits as appropriate. The maximum exposure to credit risk at the reporting date to recognised financial assets is the
carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes
to the financial statements.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a
period greater than 1 year.
Liquidity risk:
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group manages liquidity risk by maintaining adequate cash reserves
and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Financing arrangements:
The Group has no used or unused financing facilities in place as at 30 June 2021 (2020: Nil).
Remaining contractual maturities:
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities
are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities
and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
Lease liabilities
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
Lease liabilities
Total non-derivatives
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
-
-
654,502
1,129,456
-
-
-
-
-
-
-
-
7.00% 67,589
1,851,547
-
-
-
-
-
-
-
-
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
-
-
930,035
366,869
-
-
-
-
-
-
-
-
7.00% 47,866
1,344,770
7,675
7,675
-
-
-
-
-
-
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Page 45
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 19: Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by the Company’s auditors, their network
firms and unrelated firms:
Audit and assurance services:
KMPG Australia:
Audit of financial statements
BDO Australia:
Audit of financial statements
Total audit and assurance services
Other services:
KMPG Australia:
Tax advisory services
BDO Australia:
Independent limited assurance services in relation to the prospectus
Tax advisory services
Other services
Total other services
Total auditors’ remuneration
Note 20: Contingent assets
There were no contingent assets as at 30 June 2021.
Note 21: Contingent liabilities
There were no contingent liabilities as at 30 June 2021.
Note 22: Commitments
Capital commitments
Committed at the reporting date but not recognised as liabilities payable:
Plant and equipment and intangibles
Other commitments
Inventory
Lease liabilities
Total commitments
Consolidated
2021
2020
-
108,790
81,000
81,000
46,000
154,790
-
23,140
-
30,000
11,442
41,442
164,897
-
-
188,037
122,442
342,827
Consolidated
2021
2020
2,189,174
2,668,969
1,037,221
320,711
2,463,221
-
3,547,106
5,132,190
Capital commitments relate to the expansion of manufacturing capacity to support growth. Plant and equipment to be purchased
includes additional tooling, assembly lines and associated machinery to support increased production of Atomo’s suite of devices.
Inventory commitments relate to volumes of devices committed to be purchased throughout the year for sale to customers.
Lease liabilities relate to a new lease which the Company entered into prior to 30 June 2021 but which does not commence until
September 2021. Upon commencement, a lease liablity in the amount of $320,711 will be recognised along with a corresponding
right-of-use asset.
Page 46
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 23: Related party transactions
Parent entity:
Atomo Diagnostics Limited is the parent entity.
Subsidiaries:
Interests in subsidiaries are set out in Note 25.
Key management personnel compensation:
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Total key management personnel compensation
Consolidated
2021
2020
1,655,322
68,538
7,881
(67,169)
1,664,572
981,089
55,928
26,356
164,302
1,227,675
Further details relating to key management personnel compensation are set out in the remuneration report included in the
directors' report.
Transactions with other related parties:
Transactions between related parties are on normal commercial terms and conditions and no more favourable than those
available to other parties, unless stated otherwise. The following transactions occurred with related parties:
ID&E Pty Ltd, a company controlled by Mr George Sidis, previously a Non-Executive Director
of the Company, provided the following services during the year whilst Mr George Sidis
was a Non-Executive Director:
Purchase of inventory
Reseach and development
Plant and equipment
Other services
Total
Consolidated
2021
2020
n/a - see note
n/a - see note
n/a - see note
n/a - see note
n/a - see note
1,383,733
1,524,861
670,401
560,306
4,139,301
At the end of the financial year, the following amounts were shown owing to
related parties in trade and other payables
n/a - see note
640,615
Note: As Mr George Sidis resigned as a Non-Executive Director of Atomo on 3 February 2020, no transactions
between ID&E Pty Ltd and the Company are included in the table above with respect to the financial year to 30
June 2021 as he is no longer considered a related party.
Key management personnel transactions:
Directors and other key management personnel hold 26.4% of the issued capital of the company as at 30 June 2021 (30 June
2020: 28.2%).
Page 47
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 24: Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive income
Statement of financial position
Assets
Total current assets
Total non-current assets
Total assets
Liabilities
Total current liabilities
Total non-current liabilities
Total liabilities
Total net assets
Equity
Share capital
Share based payment reserve
Retained earnings
Total equity
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
None.
Contingent liabilities
There were no contingent liabilities attributed to the parent entity as at 30 June 2021 (2020: Nil).
Commitments
Capital commitments
Committed at the reporting date but not recognised as liabilities payable:
Plant and equipment and intangibles
Other commitments
Inventory
Lease liabilities
Total commitments
Parent
2021
2020
(11,982,954)
(9,392,919)
-
-
(11,982,954)
(9,392,919)
Parent
2021
2020
24,096,206
7,031,323
31,127,529
38,388,486
2,787,862
41,176,348
2,059,279
23,074
2,082,353
1,447,299
105,023
1,552,322
29,045,176
39,624,026
67,921,661
713,027
(39,589,512)
29,045,176
66,514,571
746,970
(27,637,515)
39,624,026
Consolidated
2021
2020
2,106,035
2,668,969
1,037,221
320,711
2,463,221
-
3,463,967
5,132,190
Capital commitments relate to the expansion of manufacturing capacity to support growth. Plant and equipment to be purchased
includes additional tooling, assembly lines and associated machinery to support increased production of Atomo’s suite of devices.
Inventory commitments relate to volumes of devices committed to be purchased throughout the year for sale to customers.
Lease liabilities relate to a new lease which the Company entered into prior to 30 June 2021 but which does not commence until
September 2021. Upon commencement, a lease liablity in the amount of $320,711 will be recognised along with a corresponding
right-of-use asset.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1, except for
the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Page 48
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 25: Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries and
branch operations in accordance with the accounting policy described in Note 1:
Name
Parent entity:
Atomo Diagnostics Limited
Subsidiaries:
Atomo Australia Pty Limited
Atomo Limited
Branch operations:
Atomo South Africa (operating branch of
Atomo Australia Pty Limited)
Note 26: Events after the reporting period
Principal place of business /
Country of incorporation
Ownership interest
2021
2020
%
%
Australia
Australia
United Kingdom
100%
100%
100%
100%
South Africa
100%
100%
•
•
•
Mr Fabio Baglioni, a former executive of the Group, resigned on 30 July 2021. Consequently, 1,600,000 options issued to
Mr Baglioni under the Company's Post-IPO option plan, lapsed.
1,733,333 options issued to executives under the Company's Post-IPO options plan lapsed as the KPIs applicable to the
options were not satisfied with respect to the year ended 30 June 2021.
The Board has exercised its discretion to allocate 759,999 new options to executives under the Company's post-IPO option
plan to reward the diligent execution of the corporate strategy and to ensure retention of the key talent needed to deliver
strategic outcomes in the interest of shareholders.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Note 27: Earnings per share
Loss after income tax attributable to the owners of Atomo Diagnostics Limited
(6,021,215)
(9,218,105)
Consolidated
2021
2020
Loss after income tax attributable to the owners of Atomo Diagnostics Limited
used in calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares:
Weighted average number of ordinary shares used in calculating basic earnings
per share
Adjustments for calculation of diluted earnings per share:
No adjustments given that in a loss situation, this would be anti-dilutive
Weighted average number of ordinary shares used in calculating diluted earnings
per share
(6,021,215)
(9,218,105)
Cents
Cents
(1.07)
(1.07)
(2.59)
(2.59)
Number
Number
564,334,355
355,359,884
-
-
564,334,355
355,359,884
The weighted average number of ordinary shares used in the calculation for earnings per share for 2020 has been
amended to reflect the 1:8 share split which took place on 21 February 2020.
Page 49
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
Note 28: Share-based payments
Set out below are summaries of options granted:
2021
Grant date
Note
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
20/04/2012
21/11/2012
27/06/2014
24/11/2016
6/04/2017
6/04/2018
15/09/2018
11/04/2019
14/04/2020
14/04/2020
14/04/2020
31/05/2021
31/05/2021
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(b)
28(b)
28(b)
28(c)
28(c)
14/04/2022
14/04/2022
14/04/2022
24/11/2020
6/04/2021
6/04/2022
15/09/2022
11/04/2023
14/04/2024
14/04/2025
14/04/2026
30/04/2024
30/04/2024
$0.03
$0.03
$0.08
$0.16
$0.16
$0.16
$0.16
$0.16
$0.25
$0.25
$0.25
$0.40
$0.60
-
2,293,184
-
5,000,000
3,600,000
6,800,000
800,000
4,800,000
2,799,999
2,799,999
2,800,002
-
-
31,693,184
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
4,000,000
-
-
-
-
-
-
(4,000,000)
(2,400,000)
(1,000,000)
(1,200,000)
-
(800,000)
-
-
-
-
-
-
(7,200,000)
-
-
-
(2,266,666)
(533,333)
(533,334)
-
-
(5,533,333)
Weighted average exercise price
Weighted average remaining contractual life (years)
$0.17
$0.50
$0.16
$0.21
-
2,293,184
-
-
-
6,800,000
-
4,800,000
533,333
2,266,666
2,266,668
2,000,000
2,000,000
22,959,851
$0.23
2.1
2020
Grant date
Note
Expiry date
Exercise
price
20/04/2012
21/11/2012
27/06/2014
24/11/2016
6/04/2017
6/04/2018
15/09/2018
11/04/2019
14/04/2020
14/04/2020
14/04/2020
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(a)
28(b)
28(b)
28(b)
14/04/2022
14/04/2022
14/04/2022
24/11/2020
6/04/2021
6/04/2022
15/09/2022
11/04/2023
14/04/2024
14/04/2025
14/04/2026
$0.03
$0.03
$0.08
$0.16
$0.16
$0.16
$0.16
$0.16
$0.25
$0.25
$0.25
Balance at
the start of
the year
480,000
8,862,624
800,000
10,400,000
4,800,000
9,200,000
2,000,000
4,800,000
-
-
-
41,342,624
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
2,799,999
2,799,999
2,800,002
8,400,000
(480,000)
(6,569,440)
(800,000)
(5,400,000)
(1,200,000)
(2,400,000)
(1,200,000)
-
-
-
-
(18,049,440)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,293,184
-
5,000,000
3,600,000
6,800,000
800,000
4,800,000
2,799,999
2,799,999
2,800,002
31,693,184
$0.17
2.4
Weighted average exercise price
Weighted average remaining contractual life (years)
(a) Pre-IPO Options
$0.13
$0.25
$0.11
n/a
In prior financial years, the Company issued options to employees, directors and key stakeholders to align the interests of those parties through
the sharing of a personal interest in the future growth and development of the Company and to provide a means of attracting and retaining skilled
and experienced eligible persons.
All options were granted over unissued fully paid ordinary shares in the Company. Options granted carry no dividend or voting rights.
Page 50
Atomo Diagnostics Limited
Notes to the Financial Statements
30 June 2021
(b) Post-IPO Options
Shortly prior to being listed on the ASX, the Company established a new employee option plan to align the interests of eligible employees and
Directors with shareholders through the sharing of a personal interest in the future growth and development of the Company and to provide a
means of attracting and retaining skilled and experienced eligible persons.
Upon Atomo’s admission to the official list of ASX, Atomo granted a total of 8,400,000 options under the post-IPO option plan to the four (4)
executive KMPs exercisable at $0.25 within thirty six (36) months from the date of vesting. The options vest in three equal tranches in 12
months, 24 months and 36 months respectively, subject to the satisfaction of vesting conditions relating to KPIs determined by the Managing
Director or in the case of the Managing Director, determined by the Board in consultation with the People, Culture and Remuneration Committee
as follows:
KPI 1: ROI Hurdle:
15% per annum calculated using the following formula:
Change in EBITDA year on year / amount invested in operating assets during the year.
KPI 2: Revenue Hurdle:
Tranche 1 / FY21 - Revenue growth of 60%
Tranche 2 / FY22 - Revenue growth of 40%
Tranche 3 / FY23 - Revenue growth of 25%
Subsequent to 30 June 2021, 1,600,000 of these options lapsed as a result of the resignation of Mr Fabio Baglioni on 30 July 2021. In addition,
KPIs with respect to an additional 1,733,333 options with an expiry date of 14 April 2024 were not satsified and have subsequently lapsed.
Accordingly, as at the date of this report, the Company had on issue 3,466,667 options to KMPs under the post-IPO option plan.
In addition, subsequent to 30 June 2021, the Board has exercised its discretion to allocate the following new options to management as part of
the Company's remuneration scheme to reward the diligent execution of the corporate strategy and to ensure retention of the key talent needed
to deliver strategic outcome in the interest of shareholders:
John Kelly
William Souter
Mark Smith
Total
333,333 options
213,333 options
213,333 options
759,999 options
These options are exercisable at $0.25 per option and expire on 14 April 2024. In addition, these options are conditional upon the executive
remaining employed by the Company and in the case of John Kelly, on Shareholder approval of the allocation.
(c) Other Options
During the current financial year, the Company issued 4,000,000 new options to Bondi Partners as part of Bondi Partenrs' appointment to assist
with the development and execution of its US go-to-market strategy and commecial engagements across both private and public sectors as
announced to the ASX on 30 April 2021.
Tranche 1 (2,000,000 options) will vest on 31 Octover 2022 subject to Atomo extending Bondi Partners' consultancy engagement for a further
period of at least six (6) months (in Atomo's sole discretion). These options are exercisable at an exercise price of $0.40 per option and expire on
30 April 2024.
Tranche 2 (2,000,000 options) are exercisable at $0.60, vest on 30 April 2022 and expire on 30 April 2024.
The Company has adopted the 'Black-Scholes' option model to determine the fair value of these options. The valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
31/05/2021
31/05/2021
30/04/2024
30/04/2024
$0.22
$0.22
$0.40
$0.60
60.00%
60.00%
0.00%
0.00%
0.25%
0.25%
$0.051
$0.031
In estimating the expected volatility, management relied on historical volatility trends applicable to the Company's shares. Accordingly,
the expected volatility used to assess the fair value of options may not necessarily be indicative of the actual volatility of Atomo's shares
over the exercise period(s).
Page 51
Atomo Diagnostics Limited
Directors' Declaration
30 June 2021
In the Directors' opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001 , the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as
at 30 June 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001 .
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001 .
On behalf of the Directors:
John Keith
Chair
27 August 2021
Sydney
Page 52
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Atomo Diagnostics Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Atomo Diagnostics Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Revenue recognition
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 3, the Group
Our procedures, amongst others, include:
recognised revenue from the sale of goods
and revenue from freight of $6,715,659 for
the year ended 30 June 2021. Revenue was
identified as a key audit matter as it is a
key performance indicator to the users of
the financial report.
-
-
-
Reviewed whether the revenue recognition policies are in
accordance with Australian Accounting Standards and the
Group’s accounting policies described in Note 1;
Substantive testing around year end to ensure revenue is
correctly recorded in the period to which it relates;
Selected a sample of revenue transactions during the
year and substantively test to ensure revenue has been
appropriately reflected in the financial statements for
the year ended 30 June 2021; and
-
Reviewed material revenue contracts and assessed if the
Group’s accounting treatment is in accordance with the
Australian Accounting Standards.
Share based payments
Key audit matter
How the matter was addressed in our audit
As disclosed in the remuneration report
Our procedures, amongst others, include:
and note 28 of the financial statements, in
prior periods, the company issued
incentive options to key management
personnel, which the company has
accounted for as share-based payments.
During the period the company also issued
share options to other stakeholders.
Share-based payments and the subsequent
measurement is a complex accounting area
including assumptions utilised in the fair
value calculations and judgements
regarding the incentive options issued
during the year and the subsequent meas-
urement of those issued in prior periods.
There is a risk in the financial statements
that amounts are incorrectly recognised
and/or inappropriately disclosed.
Refer to note 1 and 2 of the financial
report for a description of the accounting
policy and significant estimates and
judgements applied to these transactions.
-
-
-
-
-
Ensured that any share based payments issued during
the financial period have been valued appropriately as
at grant date;
Performed a review of the key estimates and
assumptions applied in the accounting for share based
payments, making an assessment as to whether they
remain appropriate for the current period;
Performed a review of the share based payments to
ensure these are being accounted for appropriately
across the vesting period;
Ensured that options have been accounted for
appropriately in accordance with AASB 2 Share Based
Payments; and
Ensured disclosure in the financial statements and
remuneration report are adequate to meet the
requirements of the applicable accounting standards and
the Corporations Act 2001.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with 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 has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) 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
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Atomo Diagnostics 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.
BDO Audit Pty Ltd
Gareth Few
Director
Sydney, 27 August 2021