Biotron Limited Annual Report 2021

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FY2021 Annual Report · Biotron Limited

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ANNUAL REPORT 2021

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BIOTRON LIMITED
ABN 60 086 399 144

www.biotron.com.au

Contents

Operating and Financial Review ...................................................................................................... 1

Corporate Governance Statement .................................................................................................. 5

Directors’ Report .............................................................................................................................. 6

Lead Auditor’s Independence Declaration ....................................................................................16

Statement of Profit or Loss and Other Comprehensive Income .................................................17

Statement of Financial Position ....................................................................................................18

Statement of Changes in Equity ....................................................................................................19

Statement of Cash Flows ...............................................................................................................20

Notes to the Financial Statements ................................................................................................21

Directors’ Declaration ....................................................................................................................38

Independent Auditor’s Report .......................................................................................................39

Additional Stock Exchange Information .......................................................................................44

Corporate Directory ........................................................................................................................46

Operating and Financial Review

REVIEW OF OPERATIONS

Biotron Limited (‘Biotron’ or ‘the Company’) has completed several significant milestones during the 2020-2021
financial year. These include:

> Identified a lead series of compounds with promising activity against SARS-CoV-2, the causative agent of

COVID-19, to progress into preliminary safety studies and animal models of disease.

> Finalised the designs of two clinical trials of the Company’s lead anti-HIV-1 drug, BIT225, and progressed

documentation for ethics and regulatory approvals.

> Continued the design, synthesis and testing of new compounds under its HIV-1 program, with the aim of

identifying a next-generation lead anti-HIV-1 drug.

> Continued the design, synthesis and testing of new compounds under its Hepatitis B program.

> Publication of a peer-reviewed scientific paper on its lead anti-HIV-1 drug BIT225 in a prestigious

international scientific journal.

> Received an R&D Tax Incentive refund of $1,411,944 for the 2019/20 financial year.

SARS-CoV-2

Biotron’s core expertise lies in the design and
development of drugs that target virus-encoded
proteins known as viroporins. Viroporins are found
in a broad range of viruses and play key roles in
viral pathogenesis. Viroporins are central to viruses
modifying host immune responses so that they can
‘fly under the radar’ and establish and maintain
ongoing cycles of infection. Biotron has designed and
developed a library of compounds that target viroporins
from a broad range of different viruses that cause
serious infections in humans and other hosts.

Throughout the last 12 months, Biotron has designed
and tested small molecule drugs designed to target
SARS-CoV-2, the virus that causes COVID-19.

Despite the progress the world has seen over the past
year with vaccines, COVID-19 remains a worldwide
health issue. Health authorities know that vaccines are
not 100% effective and the focus is starting to shift to
drugs to treat COVID-19.

It is apparent that people who are vaccinated against
COVID-19 can still become infected with, and transmit, the
virus. As new strains of COVID-19 emerge, the vaccines
may need updating, which means additional delays.

Throughout the last 12 months, Biotron
has designed and tested small molecule
drugs designed to target SARS-CoV-2, the
virus that causes COVID-19.

As announced in March this year, Biotron announced a
lead series of new novel compounds with good activity
against SARS-CoV-2 in a series of cell culture-based
assays undertaken at The Scripps Research Institute.

These compounds are currently undergoing testing in
mice to determine dose and safety profiles, ahead of
testing in a specialised mouse model of COVID-19. This
work is progressing well. Demonstration of reduced
virus levels in the lungs of these mice will validate
Biotron’s approach and represent a key milestone for
the program.

In parallel with the mouse studies, work is continuing in
cell-based studies to further elucidate the mechanism
of action of Biotron’s anti-SARS-CoV-2 drugs.
Together, these assays will provide the best overall
understanding of the potential of Biotron’s compounds
to treat COVID-19.

Annual Report 2021 1

BIT225 will be added to this group’s ART treatment for
a period of three months. The endpoints will include
measurements of improved immune function and
markers that link to immune reconstitution.

The proposed Thai trial (BIT225-010) will be conducted
on a treatment-naïve group (a population not available
in Australia) – meaning they have just been diagnosed
with HIV-1 and yet to start ART. This group will
have BIT225 added to their ART at the beginning of
treatment for a period of six months, a dosing period
twice as long as in the earlier BIT225-009 trial.

Successful completion of long-term toxicology studies
of BIT225 in late 2020 was an important milestone, as
the results support and enable long-term dosing of
BIT225 in this next stage of clinical development.

Both of these trials will investigate in more detail the
immune changes observed in the BIT225-009 trial.
Positive changes such as immune function restoration
go hand-in-glove with eradication of HIV reservoirs and
are surrogate markers of reduction of virus below the
level of quantitation.

Protocols for the trials are currently progressing
through relevant ethics and regulatory processes.
Subject to receipt of the necessary approvals,
recruitment is expected to commence in the third
quarter of 2021 and be complete by mid-2022, with
data available in the second half of 2022.

Operating and Financial Review

HIV-1 Program

During the 2020-21 Financial Year, the Company’s
HIV-1 clinical program has remained at the forefront of
development activities.

Biotron’s anti-HIV-1 drug BIT225 is unique. It is the first
drug of its kind to act as both a direct-acting antiviral
drug and an immune enhancer. The addition of BIT225
to anti-HIV-1 drugs stimulates the body’s immune
system so that it can find HIV-infected reservoir cells and
take the necessary steps to eliminate any residual virus.
This effect of ‘unmasking’ infected cells within cellular
reservoirs would solve a huge problem in treating HIV-1
by allowing the body’s immune system to work together
with the anti-HIV drugs to clear out inaccessible pockets
of virus and annihilate the infection for good – opening
up the potential for HIV-infected people to avoid lifetime
drug treatment.

Recently, Biotron finalised the design of two clinical
trials, BIT225-010 and BIT225-011, of its lead anti-
HIV-1 drug in consultation with the Company’s Chief
Medical Officer and international Scientific Advisory
Board. The trials, to be done in HIV-positive populations,
will be undertaken in Thailand and Australia, building
on the positive results from the completed BIT225-009
Phase 2 trial. The BIT225-010 and BIT225-011 trials
are designed to generate data that will be central to
demonstrating to potential pharmaceutical partners
and regulatory authorities how BIT225 can be used to
improve patient outcomes and address currently unmet
medical needs.

The goal with BIT225 is to eliminate the reservoirs of
HIV-1 in the body. Improvements in immune function
that appear to be a direct result of BIT225 in the
presence of HIV-1 may have additional key health
benefits. Improvements in these immune functions
in patients can be readily assessed by measuring key
immune cell populations and markers.

The next two clinical trials are central to demonstrating
to potential pharmaceutical partners and regulatory
authorities how BIT225 can be used to improve patient
outcomes and address currently unmet medical needs.

The proposed Australian trial (BIT225-011) will
include people who have been on approved anti-HIV-1
treatment (ART) for an extended period, with well-
controlled HIV-1 infection, but who have not achieved
full immune reconstitution. It has been estimated
that up to 40% of HIV-infected people do not achieve
immune reconstitution despite virus levels below the
level of detection. This population is at an increased
risk of clinical progression to AIDS and non-AIDS events
and has higher rates of mortality than HIV-infected
individuals with adequate immune reconstitution.

2 Biotron Limited

During the last 12 months Biotron has also continued
additional laboratory studies to investigate the
mechanisms by which BIT225 induced the positive
changes observed in the Phase 2 BIT225-009 clinical
trial.

In July 2020, Biotron presented data from cell-based
studies in collaboration with researchers at The Scripps
Research Institute, California, which showed that
BIT225 restored key receptors on HIV-infected cells in
culture through the drug’s targeting of Vpu.

In October 2020, a manuscript containing data
from the BIT225-009 clinical trial was accepted for
publication following peer-review in a prestigious
international journal. The paper, entitled ‘Human
immunodeficiency virus type-1 Vpu inhibitor, BIT225,
in combination with 3-drug antiretroviral therapy
modulates inflammation and immune cell function’ has
published in the Journal of Infectious Diseases.

In parallel with the continued development of its
HIV-1 clinical program, the Company has advanced
the design, synthesis and screening of new chemical
entities with the aim of identifying a follow-on, next-
generation lead compound. The aim is to identify a lead
candidate to progress to formal safety studies. The
work is progressing well and the Company anticipates
identifying a lead compound during the second half
of 2021.

Hepatitis B Virus Program

Hepatitis B Virus (HBV) is an important early-stage
program for Biotron. Biotron continues to progress
its HBV program. Like HIV-1, HBV can be treated with
drugs that stop the virus replicating, but these do not
eradicate the virus. Chronic infection with HBV can
lead to complications such as cirrhosis and liver cancer
which cause close to one million deaths worldwide each
year. Over 2 billion people worldwide have been infected
with HBV. The World Health Organisation estimates
that over 250 million are chronically infected.

Biotron’s compounds have demonstrated significant
anti-viral activity against HBV in pre-clinical studies
in cell-cultures, reducing levels of cccDNA (covalently
closed circular DNA), as well as other key viral markers.

Characterisation of the mechanism of action of the
HBV compounds is continuing and the focus is on
progressing studies to select a lead drug candidate to
take forward to safety studies. While Biotron’s work on
its HBV compounds is pre-clinical, the data from these
studies further validate the Company’s approach to
anti-viral drug development and may lead to an early
stage development opportunity with an appropriate
partner.

Operating and Financial Review

Commercialisation

The Company is focused on achieving a commercial
outcome for its promising antiviral programs whilst
continuing to progress its clinical HIV-1 program to
prepare for more advanced clinical trials, including
Phase 3 studies.

The current pandemic highlights the importance
of novel approaches such as Biotron’s viroporin
compounds which have the potential to target a broad
range of existing and emerging viruses.

The Company has been sharing information on its
antiviral programs with potential partners in the
pharmaceutical industry since early preclinical
development. This has included regular updates
on progress and discussions of the next stage of
development. The Company has good relationships
with the pharmaceutical companies active in this space
and ongoing dialogue on these programs is in progress
and ongoing.

Discussions with pharmaceutical companies are
iterative in nature. Every successful series of
experiments or clinical trial generates another series
of questions that will guide the decision-making
process on the side of commercial partners. Good,
well-founded science is core to success. Biotech
companies, such as Biotron, need to demonstrate
how their drug(s) will fit within a changing treatment
landscape, especially with new mode of action drugs
such as BIT225.

Annual Report 2021 3

Operating and Financial Review

The two proposed HIV-1 clinical trials that the Company
will run over the next 12 months were designed in
consultation with internationally recognised HIV-1
experts with extensive expertise in clinical development
of HIV-1 treatments, as well as experience in
advising the pharmaceutical industry. The aim is to
generate data that will clearly demonstrate to the
pharmaceutical industry how BIT225 can be best used
in the treatment of HIV-1 infections.

The positive outcomes from the body of Biotron’s work
to date mean that the Company is able to continue
discussions with key potential partners with compelling
Phase 2 data in hand. Phase 2 is generally considered
the best time to license technology to a major
pharmaceutical company as they have the expertise and
resources necessary for late stage clinical development
and regulatory approvals in major markets such as the
USA. This is not a rapid process, nor is there a guarantee
of a successful commercial outcome.

Sharing of data and ongoing discussions are continuing
throughout the COVID-19 outbreak. We appreciate
the ongoing support and patience of shareholders
while we work to achieve the long-awaited commercial
outcomes.

Patents

Biotron continues to progress patents related to its
antiviral programs through the international patenting
process. The Company recognises that the key to
establishment of partnerships is the expansion and
continued strengthening of Biotron’s intellectual
property portfolio. Strong, defensible, international
patents are essential to attract partners and to ensure
a competitive advantage for the Company’s products in
the marketplace.

Title

Status

WO04112687
Antiviral compounds and methods
Priority – 26 June 2003

Granted in Australia, Brazil, Canada, China, India, Japan, Korea,
New Zealand, Singapore, USA and South Africa

Under examination elsewhere (Europe and Hong Kong)

WO06135978
Antiviral compounds and methods
Priority – 24 June 2005

Granted in Austria, Australia, Belgium, Brazil, Canada,
Switzerland, China, Germany, Denmark, Spain, Finland, France,
United Kingdom, Hong Kong, Ireland, Italy, Japan, Korea,
Luxembourg, Monaco, The Netherlands, New Zealand, Poland,
Portugal, Sweden, Singapore, Turkey, South Africa and USA

Under examination elsewhere (India)

WO2009/018609
Hepatitis C antiviral compounds
and methods
Priority – 3 August 2007

WO/2018/145148
Methods of Treating Influenza
Priority – 8 February 2017

Under examination in elsewhere (India)

Granted in USA

Under examination in Europe, China, Hong Kong, Mexico, Russia,
Singapore and South Africa

Application filed in Australia, Brazil, Canada, Guatemala, Japan,
Korea, New Zealand, El Salvador and Thailand

Provisional (New)
Methods of Treating HIV-1 Infection
Priority – 26 November 2019

Applications filed in USA and Australia

4 Biotron Limited

Operating and Financial Review

Corporate

Biotron’s cash position as at the end of the financial year of $4,210,624 places the Company in sound financial
position to focus on achieving commercial outcomes for its programs. The Company expects that these funds, along
with future R&D Tax Incentive refunds, will be sufficient to complete the studies outlined above.

During the next financial year, the Company will be focused on:

> Progressing the development of SARS-CoV-2 program through testing of promising lead compound(s) in cell

and animal models of infection, and into formal safety studies ahead of progressing to human trials as soon as
possible.

> Undertaking the HIV-1 clinical program as outlined above.

> Ongoing sharing of data and discussions on its antiviral programs including the HIV-1 Phase 2 clinical trial with
potential pharmaceutical company partners regarding commercialisation opportunities for the Company’s
antiviral intellectual property.

> Identifying a next-generation lead compound for HIV-1 and progressing it into formal safety studies.

> Identifying a lead compound for HBV, while continuing to characterise the mechanism of action, for progressing

into animal model(s) of infection and formal safety studies.

Subsequent Events

No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.

We look forward to the next year with confidence.

Michael J. Hoy
Chairman

Michelle Miller
Managing Director

CORPORATE GOVERNANCE STATEMENT

The Board is committed to maintaining the highest
standards of Corporate Governance. Corporate
Governance is about having a set of core values and
behaviours that underpin the Company’s activities
and ensure transparency, fair dealing and protection
of the interests of stakeholders. The Company
has reviewed its corporate governance practices
against the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX
Corporate Governance Council.

The 2021 Corporate Governance Statement, dated as at
and approved by the Board on 27 August 2021, reflects
the corporate governance practices throughout the
2021 financial year. A description of the Company’s
current corporate governance practices is set out in
the Company’s corporate governance statement which
can be viewed at http://www.biotron.com.au/corporate-
governance.

Annual Report 2021 5

Directors’ Report

Directors

The names and particulars of the directors of the
Company at any time during or since the end of the
financial year are:

Mr Michael J. Hoy

Dr Susan M. Pond AM, MD DSc, FTSE FAHMS

Independent and Non-Executive Chairman
Mr Hoy has more than 30 years’ corporate experience
in Australia, the United Kingdom, USA and Asia. He is
Chairman of Lipotek Pty Limited and a former director
of John Fairfax Holdings Limited and FXF Trust.

Mr Hoy has been a Director since 7 February 2000 and
Chairman since 16 March 2000.

Dr Michelle Miller, BSc, MSc, PhD, GCertAppFin
(Finsia)

Managing Director
Dr Miller has worked for over 25 years in the bioscience
industry, with extensive experience in commercial drug
development. She completed her PhD in the Faculty of
Medicine at Sydney University investigating molecular
models of cancer development. Her experience includes
several years at Johnson & Johnson developing anti-
HIV gene therapeutics through preclinical research to
clinical trials. She has finance industry experience from
time spent as an Investment Manager with a specialist
bioscience venture capital fund.

Dr Miller was appointed as Managing Director on 21
June 2002.

Independent and Non-Executive Director
Dr Pond has a strong scientific and commercial
background having held executive positions in the
biotechnology and pharmaceutical industry for 12
years, most recently as chairman and managing
director of Johnson & Johnson Research Pty Limited
(2003 - 2009). Previous non-executive positions
include chair of AusBiotech Limited and director
of Australian Nuclear Science and Technology
Organisation, Wound Management Innovation CRC and
Australian Academy of Technological Sciences and
Engineering (ATSE). Dr Pond also served as a board
member of Commercialisation Australia and Innovation
Australia.

Dr Pond is currently chair of the New South Wales
Smart Sensing Network, director of the Trusted
Autonomous Systems Defence Cooperative Research
Centre, Vectus Biosystems Ltd, Cannatrek Ltd and the
Australian Phenomics Network and Governor in Council
of the Queensland University of Technology. She is a
Fellow of the Australian Institute of Company Directors,
the Academy of Technological Sciences & Engineering,
the Academy of Health and Medical Sciences and the
Royal Society of NSW.

Dr Pond holds a first-class honours degree in
Bachelor of Medicine and Surgery from the University
of Sydney and a Doctor of Medicine degree from
the University of New South Wales. She obtained
specialist clinical credentials in internal medicine,
clinical pharmacology and clinical toxicology and held
academic appointments at the University of California
San Francisco and the University of Queensland before
joining industry.

Dr Pond was appointed as a Director on 7 March 2012.

6 Biotron Limited

Mr Robert B. Thomas BEc, MSDIA, SF Fin, FICD

Independent and Non-Executive Director
Mr Thomas has over 35 years’ experience in the
securities industry, with Potter Partners (now UBS),
County NatWest and Citigroup.

He is the chairman of Starpharma Holdings Limited and
a director of Clarity Pharmaceuticals Limited. He chairs
Grahger Retail Securities Pty Ltd and is a director of
O’Connell Street Associates Pty Limited.

Mr Thomas has a Bachelor of Economics degree from
Monash University (1963 - 1966). He has been a
member of the Securities Institute of Australia since
1976 and was appointed as a Fellow to the Institute in
1997. He is a Master Stockbroker and is a Fellow of the
Institute of Company Directors.

Mr Thomas was appointed as a Director on 7 March
2012.

Prof Stephen Locarnini, BSc(Hons), PhD,
MBBS, FRC(Path)

Independent and Non-Executive Director
Professor Locarnini is a past director of the World
Health Organisation (WHO) Regional Reference
Laboratory for Hepatitis B and D for the Western Pacific
Region (WPRO). His current major research interests
include viral hepatitis, hepatitis vaccines and antiviral
chemotherapy with an emphasis on the basic virology
of the various agents of hepatitis, the molecular
pathogenesis of hepatitis, as well as prevention and
public health control measures.

Curative treatments for hepatitis B infections
with antiviral agents represent the current focus
for Professor Locarnini who is also interested in
intellectual property issues when applied to clinical and
diagnostic virology. He is a named inventor on over 20
internationally granted patents.

He worked at the Victorian Infectious Diseases
Reference Laboratory (VIDRL, originally Fairfield
Hospital Virus Laboratory) from 1989, as Director of
Laboratory Services from 1990 to 1998 and, in 1993,
he oversaw the amalgamation of all the Fairfield
Laboratories into the one service of the VIDRL. He
subsequently assumed the position of Head, Research
& Molecular Development of VIDRL when the laboratory
relocated to Melbourne Health in 1998.

Directors’ Report

Professor Locarnini is the recipient of numerous
awards including the European Association for the
Study of Liver Disease (EASL) International Recognition
Award in 2010, the Malaysian Liver Foundation’s
Medal for work on Viral Hepatitis in 2003 and the
Gastroenterological Society of Australia (GESA)
Distinguished Research Prize in 2013. In 2019 he
received the William H. Prusoff HEP DART Lifetime
Achievement Award. He is author of 289 peer-reviewed
articles, 24 invited editorials and 100 book chapters
and reviews and every year delivers numerous invited,
plenary, and named lectures at major international
meetings and conferences.

Professor Locarnini currently has an academic
appointment at the University of Melbourne.

He is a member of the Scientific Advisory Board
of a number of emerging as well as established
pharmaceutical and biotechnology companies. In 2017,
he co-founded the biotech start-up company CLEAR-B
with the Morningside-Newton Investment group in
Boston, USA focusing on curative strategies for chronic
hepatitis B.

Professor Locarnini was appointed as a Director on 23
October 2018.

Mr Peter J. Nightingale

Company Secretary
Mr Nightingale graduated with a Bachelor of Economics
degree from the University of Sydney and is a member
of the Chartered Accountants Australia and New
Zealand. He has worked as a chartered accountant in
both Australia and the USA.

As a director or company secretary Mr Nightingale
has, for more than 25 years, been responsible for
the financial control, administration, secretarial and
in-house legal functions of a number of private and
public listed companies in Australia, the USA and
Europe including Argent Minerals Limited, Bolnisi
Gold N.L., Cockatoo Coal Limited, Callabonna Uranium
Limited, Mogul Mining N.L., Pangea Resources Limited,
Perseverance Corporation Limited, Sky Metals Limited
(previously Planet Gas Limited), Sumatra Copper &
Gold plc, Timberline Minerals, Inc. and Valdora Minerals
N.L. Mr Nightingale is currently a director of Alpha HPA
Limited, Nickel Mines Limited and Prospech Limited.

Mr Nightingale has been Company Secretary since 23
February 1999.

Annual Report 2021 7

Directors’ Report

Directors’ Meetings

The number of directors’ meetings held and number of meetings attended by each of the directors of the Company,
while they were a director, during the year are:

Director

Michael J. Hoy

Michelle Miller

Susan M. Pond

Robert B. Thomas

Stephen Locarnini

Directors’ Meetings

No. of Eligible Meetings to Attend

No. of Meetings Attended

Remuneration Committee Meetings

The remuneration committee meets when required to review matters concerning the committee. During the year, no
meetings were held.

Directors’ Interests

At the date of this report, the beneficial interests of each director of the Company in the issued share capital of the
Company and options, each exercisable to acquire one fully paid ordinary share of the Company are:

Directors

Michael J. Hoy

Michelle Miller

Fully Paid
Ordinary Shares

Options

Option Terms (Exercise Price and Term)

9,347,793

3,156,250

5,000,000

1 $0.25 from 26 November 2019 up to 29 November 2021

1,000,000

2 $0.20 from 26 November 2020 up to 29 November 2022

1,000,000

2 $0.20 from 26 November 2021 up to 29 November 2023

Susan M. Pond

654,295

Robert B. Thomas

3,663,195

Stephen Locarnini

800,000

1 Vesting date is subject to the completion of a commercialisation transaction.
2 Vesting conditions are based on minimum service periods being achieved.

Following shareholder approval in November 2019, 5,000,000 unlisted options with an exercise price of $0.25 and
2,000,000 unlisted options with an exercise price of $0.20 were granted to Michelle Miller.

There were no options over unissued ordinary shares granted as compensation to directors or executives of the
Company during or since the end of the financial year.

8 Biotron Limited

Directors’ Report

Unissued Shares Under Option

At the date of this report, unissued ordinary shares of the Company under option are:

Number of Options

Exercise Price

1 5,000,000

2 1,000,000

2 2,500,000

$0.25

$0.20

Expiry Date

29 November 2021

29 November 2022

29 November 2023

31 January 2023

1 Vesting date is subject to the completion of a commercialisation transaction.
2 Vesting conditions are based on minimum service periods being achieved.

All options expire on the earlier of their expiry date or termination of the employee’s employment provided the
exercise period has been reached. In the event that the employment of the option holder is terminated, any options
which have not reached their exercise period will lapse and any options which have reached their exercise period may
be exercised within two months of the date of termination of employment. Any options not exercised within this two
month period will lapse. The persons entitled to exercise the options do not have, by virtue of the options, the right to
participate in a share issue of the Company or any other body corporate.

Principal Activities

The principal activities of the Company during the financial year were the funding and management of intermediate
and applied biotechnology research and development projects.

Financial Result and Review of Operations

The operating loss of the Company for the financial year after income tax was $3,194,347 (2020 - $3,575,959 loss).

A review of the Company’s operations for the year is set out in the Operating and Financial Review.

Impact of Legislation and Other External Requirements

There were no changes in environmental or other legislative requirements during the year that have significantly
impacted the results or operations of the Company.

Dividends

The directors recommend that no dividend be paid by the Company. No dividend has been paid or declared since the
end of the previous financial year.

State of Affairs

In the opinion of the directors, there were no significant changes in the state of affairs of the Company that occurred
during the year ended 30 June 2021.

Environmental Regulations

The Company’s operations are not subject to significant environmental regulations under Commonwealth or State
legislation in relation to its research projects.

Annual Report 2021 9

Directors’ Report

Events Subsequent to Balance Date

There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in
future financial years.

Likely Developments

During the year ended 30 June 2021, the Company continued to fund and manage its research and development
projects. The success of these research projects, which cannot be assessed on the same fundamentals as trading
and manufacturing enterprises, will determine future likely developments.

Indemnification of Officers and Auditors

During or since the end of the financial year, the Company has not indemnified or made a relevant agreement to
indemnify an officer or auditor of the Company against a liability incurred by such an officer or auditor. In addition,
the Company has not paid or agreed to pay, a premium in respect of a contract insuring against a liability incurred by
an officer or auditor.

Remuneration Report - Audited

Principles of compensation - Audited
Key management personnel have authority and responsibility for planning, directing and controlling the activities of
the Company. Key management personnel comprise the directors of the Company and the Company Secretary. No
other employees have been deemed to be key management personnel.

The policy of remuneration of directors and senior executives is to ensure the remuneration package properly
reflects the person’s duties and responsibilities, and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality. The Board is responsible for reviewing its own performance. The non-
executive directors are responsible for evaluating the performance of the executive directors who, in turn, evaluate
the performance of all other senior executives. The evaluation process is intended to assess the Company’s
business performance, whether long term strategic objectives are being achieved and the achievement of individual
performance objectives.

Remuneration generally comprises salary and superannuation. Longer term incentives are able to be provided
through the Company’s Incentive Option Plan at the discretion of the directors, which acts to align the directors and
senior executives’ actions with the interests of the shareholders. The vesting conditions of options issued under the
plan are based on a minimum service periods being achieved.

The Constitution and ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting.

In the event that the employment or office of the option holder is terminated, any options which have not reached
their vesting conditions will lapse and any options which have reached their vesting conditions may be exercised
within two months of the date of termination of employment. Any options not exercised within this two month period
will lapse. The remuneration disclosed below represents the cost to the Company for the services provided under
these arrangements.

No directors or senior executives receive performance related remuneration in the prior year.

There were no remuneration consultants used by the Company during the year ended 30 June 2021 or in the prior
year. Remuneration is determined based on prevailing market conditions.

10 Biotron Limited

Directors’ Report

Remuneration Report - Audited (continued)

Consequences of performance on shareholder wealth - Audited
In considering the Company’s performance and benefits for shareholders wealth, the Board have regard to the
following indices in respect of the current financial year and the previous four financial years.

Net loss attributable to equity
holders of the Company

2021

2020

2019

2018

2017

$3,194,347

$3,575,959

$1,611,799

$1,593,645

$3,093,405

Dividends paid

Change in share price

(0.03) cents

0.07 cents

0.05 cents

(0.1) cents

(4.0) cents

The overall level of key management personnel’s compensation is assessed on the basis of market conditions, status
of the Company’s projects, and the strategic performance of the Company.

Details of remuneration for the year ended 30 June 2021 - Audited
Details of director and senior executive remuneration and the nature and amount of each major element of the
remuneration of each director of the Company, and other key management personnel of the Company are set out
below:

Primary
Fees
$

Super-
annuation
$

Year

Share Based
Payments -
Options
$

Long term
benefits
$

Total
$

Remuneration subject
to a performance
condition
%

Directors

Non-executive

Michael J. Hoy
(Chairman)

2021

75,000

2020

74,853

Susan M. Pond

2021

40,000

2020

39,922

Robert B. Thomas

2021

40,000

2020

39,922

Stephen Locarnini

2021

40,000

2020

39,922

Executive

7,125

7,272

3,800

3,878

3,800

3,878

3,800

3,878

82,125

43,800

Michelle Miller
(Managing Director)

2021 328,766

31,233

2020 323,285

31,233

39,593

21,338

5,481

405,073

5,481

381,337

Executives

Peter J. Nightingale
(Company Secretary)

2021

84,000

2020

84,000

4.5%

2.1%

No bonuses were paid during the financial year. Options granted to Michelle Miller include performance based vesting
conditions, refer below for further details. The Company employed no other key management personnel.

Annual Report 2021 11

Directors’ Report

Remuneration Report - Audited (continued)

Options granted as compensation – Audited
Details of options granted as compensation to each key management person:

Director

Grant Date

Number of Options
Granted

Fair Value at Grant
Date

Option Terms
(Exercise Price and Term)

Michelle Miller

26 November 2019

1 5,000,000

$30,625

Michelle Miller

26 November 2019

2 1,000,000

$14,215

Michelle Miller

26 November 2019

3 1,000,000

$19,502

$0.25 from 26 November 2019
to 29 November 2021

$0.20 from 26 November 2020
to 29 November 2022

$0.20 from 26 November 2021
to 29 November 2023

1 Vesting date is subject to the completion of a commercialisation transaction and continuing employment. The options can be exercised
at any time after a commercialisation transaction through to the expiry date of the option (or within 2 months of termination).
2 Vesting condition of 1 year service period. To exercise, option holders must remain with the Company or exercise within 2 months of the
termination of their employment.
3 Vesting condition of 2 years service period. To exercise, option holders must remain with the Company or exercise within 2 months of the
termination of their employment.

During the year, no options were granted to Michelle Miller as compensation and during 2020 financial year
7,000,000 options were granted. The number of options that vested as at 30 June 2021 was 1,000,000 (2020 - nil).

∆

The fair value of the 5,000,000 options at grant date was determined based on a Black-Scholes formula. The
model inputs of the options issued, were the Company’s share price of $0.064 at the grant date, a volatility factor
of 75.77% based on historic share price performance, a risk free rate of 0.77% based on the 2 year government
bond rate and no dividends paid. The value also considered the vesting conditions in relation to the options.

The fair value of the 1,000,000 options at grant date was determined based on a Black-Scholes formula. The
model inputs of the options issued, were the Company’s share price of $0.064 at the grant date, a volatility factor
of 75.77% based on historic share price performance, a risk free rate of 0.73% based on the 3 year government
bond rate and no dividends paid.

The fair value of the 1,000,000 options at grant date was determined based on a Black-Scholes formula. The
model inputs of the options issued, were the Company’s share price of $0.064 at the grant date, a volatility factor
of 75.77% based on historic share price performance, a risk free rate of 0.81% based on the 5 year government
bond rate and no dividends paid.

No options lapsed during the 2021 and 2020 financial years.

Modification of terms of equity-settled share-based payment transactions - Audited
No terms of equity-settled share-based payment transactions (including options granted as compensation to a key
management person) have been altered or modified by the Company during the 2021 financial year.

Exercise of options granted as compensation - Audited
There were no shares issued on the exercise of options previously granted as compensation during 2021 and 2020.

12 Biotron Limited

Directors’ Report

Remuneration Report - Audited (continued)

Analysis of options and rights over equity instruments granted as compensation - Audited
All options refer to options over ordinary shares of Biotron Limited, which are exercisable on a one-for-one basis.

Options granted

Director

Number

Date

% Vested
at year end

Exercised/ forfeited
during the year

Balance at
year end

Financial year in
which grant vests

Michelle Miller

5,000,000 26 November 2019

1,000,000 26 November 2019

100%

1,000,000 26 November 2019

5,000,000

1 30 June 2022

1,000,000

2 30 June 2021

1,000,000

2 30 June 2022

The number of options that had vested as at 30 June 2021 is 1,000,000 (2020 - nil). No options were granted
subsequent to year end.

Options and rights over equity instruments - Audited
The movement during the reporting period in the number of options over ordinary shares in the Company held
directly, indirectly or beneficially, by each key management person, including their personally related entities, is as
follows:

Option holdings 2021 - Audited

Held at
1 July 2020

Granted/
Purchased

Exercised/
Sold

Expired

Held at
30 June
2021

Vested and
exercisable at
30 June 2021

Vested and
un-exercisable at
30 June 2021

Directors

Michael J. Hoy

Michelle Miller

7,000,000

Susan M. Pond

Robert B. Thomas

Stephen Locarnini

Executives

Peter J. Nightingale

7,000,000

1,000,000

6,000,000

Loans to key management personal and their related parties - Audited
There were no loans made to key management personnel or their related parties during the 2021 and 2020 financial
years and no amounts were outstanding at 30 June 2021 (2020 - $nil).

Annual Report 2021 13

Directors’ Report

Remuneration Report - Audited (continued)

Other transactions with key management personnel - Audited
The following key management person holds a position in another entity that results in them having control or joint
control over the financial or operating policies of that entity, and this entity transacted with the Company during the
year as follows:

During the year ended 30 June 2021, Peter J. Nightingale had a controlling interest in an entity, MIS Corporate Pty
Limited, which provided full administrative services, including rental accommodation, administrative staff, services
and supplies, to the Company. Fees paid to MIS Corporate Pty Limited during the year amounted to $144,000 (2020
- $144,000). There were no outstanding amounts at 30 June 2021 (2020 - $nil).

Movements in shares - Audited
The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly
or beneficially, by each key management person, including their personally-related entities, is as follows:

Fully paid ordinary shareholdings and transactions 2021 - Audited

Held at
1 July 2020

Purchased

Received on
exercise of options

Sales

Held at
30 June 2021

Directors

Michael J. Hoy

Michelle Miller

Susan M. Pond

Robert B. Thomas

Stephen Locarnini

Executives

9,347,793

3,156,250

654,295

3,663,195

800,000

Peter J. Nightingale

6,594,903

9,347,793

3,156,250

654,295

3,663,195

800,000

6,594,903

Service contracts - Audited
In accordance with best practice corporate governance, the Company provided each key management personnel
with a letter detailing the terms of appointment, including their remuneration.

Michelle Miller’s is employed by the Company as Managing Director and is required to provide the Company
with three months’ notice in order to terminate employment. The contractual salary is $360,000 (including
superannuation).

Non-executive directors - Audited
Total compensation for all non-executive directors is determined by the Board based on market conditions.

14 Biotron Limited

Directors’ Report

Non-audit Services

During the year KPMG, the Company’s auditor, performed no other services in addition to their statutory duties.

A copy of the auditors’ independence declaration as required under Section 307C of the Corporations Act 2001 is
included in the Directors’ Report.

Details of the amounts paid and accrued to the auditor of the Company, KPMG, and its related practices for audit and
non-audit services provided during the year are set out below.

2021
$

2020
$

Statutory audit

Audit and review of financial reports - KPMG

52,500

59,270

Lead Auditor’s Independence Declaration

The Lead Auditor’s Independence Declaration is set out on page 16 and forms part of the Directors’ Report for the
year ended 30 June 2021.

This report has been signed in accordance with a resolution
of the directors and is dated 27 August 2021:

Michael J. Hoy
Chairman

Michelle Miller
Managing Director

Annual Report 2021 15

Lead Auditor’s Independence Declaration

To the Directors of Biotron Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Biotron Limited for the financial
To the Directors of Biotron Limited
year ended 30 June 2021 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
I declare that, to the best of my knowledge and belief, in relation to the audit of Biotron Limited for the financial
year ended 30 June 2021 there have been:

no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and

ii.
i.

ii.

no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Adam Twemlow

Partner
Brisbane
27 August 2021
Adam Twemlow

Partner
Brisbane
27 August 2021

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independed member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

16 Biotron Limited

Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2021

Notes

2021
$

2020
$

1,461,945

803,026

(228,000)

(47,336)

(893,535)

(237,223)

(50,119)

(875,774)

(3,136,626)

(2,857,383)

(10,647)

(837)

(11,099)

(16,931)

(349,369)

(394,670)

(3,204,405)

(3,640,173)

11,319

(1,261)

10,058

69,332

(5,118)

64,214

(3,194,347)

(3,575,959)

(3,194,347)

(3,575,959)

Continuing operations

Other income

Administration and consultants’ expenses

Depreciation

Employee and director expenses

Direct research and development expenses

Rent and outgoings expenses

Travel expenses

Other expenses from ordinary activities

Operating loss before financing income

Interest income

Interest expense

Net financing income

Loss before tax

Income tax expense

Loss for the year

Other comprehensive income

Total comprehensive loss for the year

(3,194,347)

(3,575,959)

Basic and diluted loss per share (cents)

(0.46) cents

(0.55) cents

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.

Annual Report 2021 17

Statement of Financial Position
As at 30 June 2021

Current assets

Cash and cash equivalents

Other assets

Total current assets

Non-current assets

Plant and equipment

Other financial assets – bond deposit

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Employee entitlements

Lease liability

Total current liabilities

Non-current liabilities

Employee entitlements

Lease liability

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Total equity

Notes

2021
$

2020
$

4,210,624

7,660,903

51,062

58,240

4,261,686

7,719,143

30,875

33,943

64,818

73,203

33,855

107,058

4,326,504

7,826,201

191,079

253,793

6,347

451,219

12,291

463,510

556,406

243,640

40,709

840,755

9,126

3,312

12,438

853,193

3,862,994

6,973,008

52,843,994

105,915

74,081

(49,086,915)

(45,945,067)

3,862,994

6,973,008

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

18 Biotron Limited

Statement of Changes in Equity
For the year ended 30 June 2021

Attributable to equity holders of the Company

Notes

Issued
Capital
$

Option
Reserves
$

Accumulated
Losses
$

Total
$

Balance at 1 July 2019

47,523,320

284,758

(42,369,108)

5,438,970

Total comprehensive income for the year

Loss for the year

Other comprehensive income

Total comprehensive loss for the year

Transactions with owners, recorded directly
in equity

Contribution by and distribution to owners

Ordinary shares/options issued

Cost of shares issued

Exercise of options

Share based payment

5,311,343

(275,427)

284,758

(284,758)

74,081

(3,575,959)

5,311,343

(275,427)

74,081

Balance at 30 June 2020

52,843,994

74,081

(45,945,067)

6,973,008

Balance at 1 July 2020

52,843,994

74,081

(45,945,067)

6,973,008

Total comprehensive income for the year

Loss for the year

Other comprehensive income

Total comprehensive loss for the year

Transactions with owners, recorded directly
in equity

Contribution by and distribution to owners

Transfer from reserves to expired options

Share based payment

Balance at 30 June 2021

(3,194,347)

(52,499)

84,333

52,499

84,333

52,843,994

105,915

(49,086,915)

3,862,994

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Annual Report 2021 19

Statement of Cash Flows
For the year ended 30 June 2021

Cash flows from operating activities

Cash receipts from government grants

Cash payments to suppliers and employees
(excluding research and development costs)

Payments for research and development

Interest received

Finance costs

Notes

2021
$

2020
$

1,461,945

786,906

(1,380,565)

(1,421,280)

(3,499,035)

(2,510,694)

11,319

(1,261)

68,364

(5,118)

Net cash used in operating activities

(3,407,597)

(3,081,822)

Cash flows from investing activities

Payments for plant and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issue of shares and options

Cost of issue of shares and options

Lease Payments

Net cash from financing activities

Net increase/(decrease) in cash held

Cash and cash equivalents at 1 July

Cash and cash equivalents at 30 June

(5,723)

(36,959)

(3,450,279)

7,660,903

4,210,624

5,311,343

(275,427)

(32,979)

5,002,937

1,921,115

5,739,788

7,660,903

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

20 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

1. REPORTING ENTITY

Biotron Limited (‘the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered office
is at Level 2, 66 Hunter Street, Sydney, NSW 2000. The Company is a for-profit entity and is primarily engaged in the
funding and management of intermediate and applied biotechnology research and development projects.

2. BASIS OF PREPARATION

(a) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board (‘AASB’) and the
Corporations Act 2001. The financial statements of the Company also comply with International Financial Reporting
Standards (‘IFRSs’) adopted by the International Accounting Standards Board (‘IASB’).

The financial report was authorised for issue by the directors on 27 August 2021.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis, unless otherwise stated.

These financial statements are presented in Australian dollars, which is the Company’s functional currency.

(d) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements are
described in the following notes:

∆ Note 2 (e) – Going concern

Annual Report 2021 21

Notes to the Financial Statements
For the year ended 30 June 2021

2. BASIS OF PREPARATION (continued)

(e) Going concern

The financial statements have been prepared on a going concern basis which contemplates the realisation of assets
and settlement of liabilities in the ordinary course of business.

The Company has incurred a trading loss of $3,194,347 for the year ended 30 June 2021 and has accumulated
losses of $49,086,915 at 30 June 2021. The Company has cash on hand of $4,210,624 at 30 June 2021, used
$4,879,600 of cash in operations for the year ended 30 June 2021 and received $1,461,495 in research and
development government incentives. As at 30 June 2021, the Company had net assets of $3,862,994. These
conditions give rise to a material uncertainty that may cast significant doubt upon the Company’s ability to continue
as a going concern.

The ongoing operation of the Company is dependent on:

∆

the Company raising additional funding from shareholders or other parties; and/or

the Company reducing expenditure in line with available funding.

The directors have prepared cash flow projections that support the ability of the Company to continue as a
going concern for the period 1 July 2021 to 31 August 2022. These cash flow projections include significant
ongoing expenditure on research and development activities and assume the Company receives the research and
development government incentives and sufficient additional funding from shareholders or other parties. If such
funding is not achieved, the Company plans to reduce expenditures in line with available funding.

In the event that the Company does not obtain additional funding and/or reduce expenditure in line with available
funding, the achievement of which is significantly uncertain until secured or realised, it may not be able to continue
its operations as a going concern and therefore may not be able to realise its assets and extinguish its liabilities in
the ordinary course of operations and at the amounts stated in the financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Application of accounting policies

The accounting policies set out below have been applied to all periods presented in these financial statements and
have been applied consistently by the Company.

(b) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are able to be early adopted for annual
periods beginning after 1 July 2020 and have not been applied in preparing these financial statements. None of
these are expected to have a significant effect on the financial statements of the Company.

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or
less.

(d) Trade and other receivables

Trade and other receivables are stated at their amortised cost less impairment losses.

(e) Property, plant and equipment

Property plant and equipment are stated at their historical cost less accumulated depreciation and accumulated
impairment losses. Depreciation is recognised in profit or loss using the reducing balance method from the date of
acquisition at rates between 13% and 40% per annum.

22 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Government grants

Where a grant is received relating to research and development costs that have been expensed, the grant is
recognised as other income when the grant becomes receivable and the Company complies with all attached
conditions.

Research and development costs
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge
and understanding, is recognised in profit and loss when incurred.

Development activities involve a plan or design for the production of new or substantially improved products and
processes. Development expenditure is capitalised only if development costs can be measured reliably, the product
or process is technically and commercially feasible, future economic benefits are probable, and the Company
intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure
capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing
the asset for its intended use. Otherwise, development expenditure is recognised in profit or loss when incurred.

Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated
impairment losses.

(g) Trade and other payables

Trade and other payables are stated at their amortised cost, are non-interest bearing and are normally settled within
60 days.

(h) Employee entitlements

Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid under short term cash bonus or profit sharing plans if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation
can be estimated reliably.

Long term employee benefits
The Company’s net obligation in respect of long term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. That benefit is discounted to
determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise.

Share-based payment transactions
The grant-date fair value of share-based payment awards granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees become unconditionally
entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which
the related service and non-market vesting conditions are expected to be met, such that the amount ultimately
recognised as an expense is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the
grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.

(i) Share capital

Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.

Annual Report 2021 23

Notes to the Financial Statements
For the year ended 30 June 2021

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Tax

Income tax comprises of current tax and deferred tax 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 in other comprehensive income.

Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous
years. 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 amount 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.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

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. Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied
by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is 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.

Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where
the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the ATO is included as a current asset or liability in the balance sheet.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.

(k) Finance income

Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or
loss, using the effective interest method.

(l) Earnings per share

The Company presents basic and diluted earnings per share (‘EPS’) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for
the effects of all dilutive potential ordinary shares, which comprise share options.

24 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(m) Impairment

Financial instruments
The Company recognises expected credit losses (‘ECLs’), where material, on financial assets measured at amortised
cost. The Company measures loss allowances at an amount equal to lifetime ECLs.

Loss allowances are always measured at an amount equal to lifetime ECLs. At each reporting date, the Company
assesses whether financial assets carried at amortised cost and debt securities at fair value through other
comprehensive income are credit-impaired.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof.

(n) Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
the current market assessments of the time value of money and the risks specific to the liability. The unwinding of
the discount is recognised as a finance cost.

(o) Segment reporting

Determination and presentation of operating segments
The Company determines and presents operating segments based on the information that is provided internally to
the Managing Director, who is the Company’s chief operating decision maker.

An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
other components. All operating segments’ operating results are regularly reviewed by the Company’s Managing
Director to make decisions about resources to be allocated to the segment and assess its performance.

Segment results that are reported to the Managing Director include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily
the Company’s headquarters), head office expenses, and income tax assets and liabilities.

4. DETERMINATION OF FAIR VALUES

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. Where applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific to that asset or liability.

Share-based payment transactions
The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include
share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historic volatility adjusted for changes expected due to publicly available information), weighted average expected
life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and
the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached
to the transactions are not taken into account in determining fair value. Share-based payment arrangements in
which the Company receives goods or services as consideration for its own equity instruments are accounted for as
equity-settled share-based payment transactions.

Non-derivative financial liabilities
Non-derivative financial liabilities are measured at fair value, at initial recognition, and for disclosure purposes, at
each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest at the measurement date.

Annual Report 2021 25

Notes to the Financial Statements
For the year ended 30 June 2021

5. OTHER INCOME
Research and development rebate

Other government grant

6. LOSS FROM OPERATING ACTIVITIES
Loss from ordinary activities has been arrived at after
charging the following items:

Auditors’ remuneration paid to KPMG

- Auditor’s and review of financial reports

Depreciation

- Office equipment

- Plant and equipment

- Right of use asset

Direct research and development expenditure expensed
as incurred

Employee entitlements expense

Superannuation expense

Note

2021
$

1,411,945

50,000

1,461,945

2020
$

753,026

50,000

803,026

52,500

59,270

11,651

759

34,926

10,719

3,861

35,539

3,136,626

2,857,383

51,718

66,383

53,842

66,765

Total employee expenses, including those recognised as direct research and development expenditure for the period
ended 30 June 2021 is $1,114,138 (2020 - $1,111,196).

7. LOSS PER SHARE

The calculation of basic and diluted loss per share at 30 June 2021 was based on the loss attributable to ordinary
shareholders of $3,194,347 (2020 - $3,575,959 loss) and a weighted average number of ordinary shares
outstanding during the financial year ended 30 June 2021 of 701,932,713 (2020 - 654,163,613), calculated as
follows:

Net loss for the year

3,194,347

3,575,959

Weighted average number of ordinary shares (basic and diluted)

Issued ordinary shares at 1 July

Weighted average number of ordinary shares at 30 June

2021
Number

2020
Number

701,932,713

595,705,860

701,932,713

654,163,613

As the Company is loss making, none of the potentially dilutive securities are currently dilutive.

26 Biotron Limited

8. CASH AND CASH EQUIVALENTS
Cash at bank

Cash and cash equivalents in the statement of cash flows

9. INCOME TAX EXPENSE
Current tax expense

Current year

Tax losses not recognised

Deferred tax expense

Current year

De-recognition of temporary differences

Notes to the Financial Statements
For the year ended 30 June 2021

2021
$

2020
$

4,210,624

7,660,903

(1,296,550)

(1,176,698)

1,296,550

1,176,698

107,970

(107,970)

(6,093)

6,093

Numerical reconciliation between tax expense and pre-tax net profit

Loss before tax - continuing operations

(3,194,347)

(3,575,959)

Prima facie income tax benefit at the Australian tax rate of 26%
(2020 - 27.5%)

Increase in income tax expense due to:

- Adjustments not resulting in temporary differences

- Effect of tax losses not recognised

- Unrecognised temporary differences

Income tax expense current and deferred

Deferred tax assets have not been recognised in respect of the
following items

Deductible temporary differences (net)

Tax losses

Net

(830,530)

(983,388)

499,644

438,856

(107,970)

276,537

700,759

6,092

164,008

9,667,804

9,381,812

294,609

10,170,409

10,465,018

The deductible temporary differences and tax losses do not expire under the current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be available
against which the Company can utilise the benefits of the deferred tax asset. Deferred tax assets not recognised are
calculated at a tax rate of 26% (2020 - 27.5%) which is the company tax rate that applies from 1 July 2021.

Annual Report 2021 27

Notes to the Financial Statements
For the year ended 30 June 2021

10. OTHER ASSETS
Current prepayments

11. PLANT AND EQUIPMENT
Office equipment - at cost

Accumulated depreciation

Plant and equipment - at cost

Accumulated depreciation

Rights of use assets

Accumulated depreciation

Total plant and equipment - net book value

Reconciliations

2021
$

51,062

244,840

(225,088)

19,751

514,442

(509,139)

5,303

77,001

(71,180)

5,821

30,875

Reconciliations of the carrying amounts for each class of plant and equipment are set out below:

Office equipment

Balance at 1 July

Additions

Depreciation

Carrying amount at the end of the financial year

Plant and equipment

Balance at 1 July

Additions

Depreciation

Carrying amount at the end of the financial year

Right of use asset

Balance at 1 July

Adoption of AASB16 (Note3(a))

Rental relief granted

Depreciation

Carrying amount at the end of the financial year

Total carrying amount at the end of the financial year

28 Biotron Limited

25,679

5,723

(11,651)

19,751

6,062

(759)

5,303

41,462

(715)

(34,926)

5,821

30,875

2020
$

58,240

239,116

(213,437)

25,679

514,442

(508,380)

6,062

77,001

(35,539)

41,462

73,203

36,398

(10,719)

25,679

9,923

(3,861)

6,062

77,001

(35,539)

41,462

73,203

Notes to the Financial Statements
For the year ended 30 June 2021

2021
$

2020
$

138,160

52,919

191,079

309,994

246,412

556,406

98,651

155,142

253,793

96,176

147,464

243,640

12,291

9,126

6,347

40,709

3,312

12. TRADE AND OTHER PAYABLES
Current

Creditors

Accruals

13. EMPLOYEE ENTITLEMENTS
Current

Employee annual leave provision

Long service leave provision

Non-current

Long service leave provision

14. LEASE LIABILITY
Current

Lease liability

Non-current

Lease liability

Set out below are the carrying amounts of the lease liabilities recognised and the movements during the year:

Adjustment at 1 July on adoption of AASB 16

Interest expense

Rental relief granted

Payments

Balance at 30 June 2021

Office Premises
2021
$

Office Premises
2020
$

44,021

1,261

(715)

(38,220)

6,347

77,001

5,118

(38,098)

44,021

Annual Report 2021 29

Notes to the Financial Statements
For the year ended 30 June 2021

15. CAPITAL AND RESERVES
Issued and paid up capital

701,932,713 (2020 - 701,932,713) fully paid ordinary shares

52,843,994

2021
$

2020
$

2021

2020

Nº

(a) Fully paid ordinary shares
Balance at the beginning of the financial year

Issue of shares 12 December 2019 1

Costs of issue

701,932,713

52,843,994

595,705,860

47,523,320

106,226,853

5,596,101

(275,427)

Balance at the end of financial year

701,932,713

52,843,994

701,932,713

52,843,994

1 During the year ended 30 June 2020,106,226,853 fully paid ordinary shares were issued through the exercise of 12 December 2019
$0.05 listed options for cash totalling $5,596,101. The fair value of the options issued at the grant date was $284,758.

Terms and conditions – Shares

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at the shareholders meetings. In the event of winding up of the Company, ordinary shareholders rank
after creditors and are fully entitled to any proceeds of liquidation.

(b) Share Options

The following unlisted options were on issue at 30 June 2021:

∆

5,000,000 options with a fair value at grant date of $0.006 cents, each exercisable at 25 cents to acquire
one fully paid ordinary share at any time after the 26 November 2019 (subject to the completion of a
commercialisation transaction) up to 29 November 2021. The fair value of the options at grant date was
determined based on Black-Scholes formula. The model inputs of the options issued, were the Company’s share
price of $0.064 at the grant date, a volatility factor of 75.77% based on historic share price performance, a risk
free rate of 0.77% based on the 2-year government bond rate and no dividends paid. The value also considered
the vesting conditions in relation to the options.

1,000,000 options with a fair value at grant date of $0.014 cents, each exercisable at 20 cents to acquire one
fully paid ordinary share at any time after the 26 November 2020 up to 29 November 2022. The fair value of the
options at grant date was determined based on Black-Scholes formula. The model inputs of the options issued,
were the Company’s share price of $0.064 at the grant date, a volatility factor of 75.77% based on historic share
price performance, a risk free rate of 0.73% based on the 3-year government bond rate and no dividends paid.

30 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

15. CAPITAL AND RESERVES (continued)

∆

1,000,000 options with a fair value at grant date of $0.02 cents, each exercisable at 20 cents to acquire one
fully paid ordinary share at any time after the 26 November 2021 up to 29 November 2023. The fair value of the
options at grant date was determined based on Black-Scholes formula. The model inputs of the options issued,
were the Company’s share price of $0.064 at the grant date, a volatility factor of 75.77% based on historic share
price performance, a risk free rate of 0.81% based on the 5-year government bond rate and no dividends paid.

2,500,000 (2020 - 5,000,000) options with a fair value at grant date of $0.021 cents, each exercisable at 20
cents to acquire one fully paid ordinary share at any time after the 31 January 2021 up to 31 January 2023. The
fair value of the options at grant date was determined based on Black-Scholes formula. The model inputs of the
options issued, were the Company’s share price of $0.064 at the grant date, a volatility factor of 87.62% based
on historic share price performance, a risk free rate of 0.73% based on the 5-year government bond rate and no
dividends paid.

The following unlisted options were on issue as at 30 June 2021.

Opening Balance
1 July 2020
Number

Exercise
Price
$

Granted
during the year
Number

Expired
during the year
Number

Exercised
during the year
Number

Closing Balance
30 June 2021
Number

5,000,000

7,000,000

0.25

0.20

(2,500,000)

5,000,000

4,500,000

Option Reserves

Equity based compensation reserve

Movements during the period

Equity based compensation reserve

Balance at the beginning of period

Share based payment expense

Options exercised during the period

Options expired during the period transferred to retained earnings

Balance at end of period

2021
$

2020
$

105,915

74,081

84,333

284,758

74,081

(284,758)

(52,499)

105,915

74,081

Nature and purpose of reserves

Equity based compensation reserve:
The equity based compensation reserve is used to recognise the grant date fair value of options issued but not
exercised

Option premium reserve:
The option premium reserve is used to accumulate proceeds received from the issuing of options.

Annual Report 2021 31

Notes to the Financial Statements
For the year ended 30 June 2021

16. STATEMENT OF CASH FLOWS
Reconciliation of cash flows from operating activities

Loss for the period

Adjustments for:

Other income

Depreciation of plant and equipment

Provisions for employee entitlements

Share based payments

Effect of exchange rate adjustments

Changes in assets and liabilities

Decrease/(Increase) in other assets

(Decrease)/Increase in trade and other payables

Net cash used in operating activities

2021
$

2020
$

(3,194,347)

(3,575,959)

(17,088)

47,336

13,318

84,333

50,119

37,234

74,081

7,178

(365,415)

(20,270)

370,061

(3,407,597)

(3,081,822)

17. RELATED PARTIES

Key management personnel and director transactions

The following key management person holds a position in another entity that results in them having control or joint
control over the financial or operating policies of that entity, and this entity transacted with the Company during the
year as follows:

During the year ended 30 June 2021, Peter J. Nightingale had a controlling interest in an entity, MIS Corporate Pty
Limited, which provided full administrative services, including rental accommodation, administrative staff, services
and supplies, to the entity. Fees paid to MIS Corporate Pty Limited during the year, amounted to $144,000 (2020 -
$144,000). There were no outstanding amounts at 30 June 2021 (2020 - $nil).

Key management personnel compensation

During the year ended 30 June 2021, compensation of key management personnel totalled $702,598 (2020 -
$678,862), which comprised primary salary and fees of $607,766 (2020 - $601,904), superannuation of $49,758
(2020 - $50,139), share based payments of $39,593 (2020 - $21,338) and long service leave of $5,481 (2020 -
$5,481). During the 2021 and 2020 financial years, no long term benefits or termination payments were paid.

32 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

18. SHARE BASED PAYMENTS

The Company has an Incentive Option Plan to provide eligible persons, being employees or directors, or individuals
whom the Plan Committee determine to be employees for the purposes of the Plan, with the opportunity to acquire
options over unissued ordinary shares in the Company. The number of options granted or offered under the Plan will
not exceed 10% of the Company’s issued share capital and the exercise price of options will be the greater of the
market value of the Company’s shares as at the date of grant of the option or such amount as the Plan Committee
determines. Options have no voting or dividend rights. The vesting conditions of options issued under the plan are
based on minimum service periods being achieved ranging from 2 to 4 years. There are no other vesting conditions
attached to options issued under the plan.

In the event that the employment or office of the option holder is terminated, any options which have not reached
their exercise period will lapse and any options which have reached their exercise period may be exercised within two
months of the date of termination of employment. Any options not exercised within this two month period will lapse.

No options were issued during the year ended 30 June 2021 and 2,500,000 options expired. During the year ended
30 June 2020, the Company issued 12,000,000 unlisted options 7,000,000 to key management personnel and
5,000,000 to employees of the Company. At 30 June 2021, 9,500,000 options were on issue (2020 - 12,000,000) as
detailed in note 15.

The terms and conditions of the options key management personnel options outstanding for the year ended 30 June
2021:

Grant date

Expiry date

Vesting date

26 November
2019

29 November
2021

1 26 November
2019

26 November
2019

29 November
2022

2 26 November
2020

26 November
2019

29 November
2023

3 26 November
2021

Exercise
price
$

Fair value
of options
granted
$

Total
granted
Number

Total
Exercised/
Expired
Number

Exercisable
at 30 June
2021
Number

Balance
30 June
2021
Number

0.25

30,625

5,000,000

0.20

14,215

1,000,000

0.20

19,502

1,000,000

64,342

7,000,000

- 5,000,000

1,000,000 1,000,000

- 1,000,000

1,000,000 7,000,000

Annual Report 2021 33

Notes to the Financial Statements
For the year ended 30 June 2021

18. SHARE BASED PAYMENTS (continued)

The terms and conditions of the employee options outstanding for the year ended 30 June 2021:

Grant date

Expiry date

Vesting date

26 November
2019

31 January
2023

1 31 January
2021

Exercise
price
$

Fair value
of options
granted
$

Total
granted
Number

Total
Exercised/
Expired
Number

Exercisable
at 30 June
2021
Number

Balance
30 June
2021
Number

0.20

102,756 5,000,000 2,500,000 1,000,000 2,500,000

1 Vesting condition of 1 year service period. To exercise, option holders must remain with the Company or exercise
within 2 months of the termination of their employment

Weighted average of options in the equity based compensation reserve during the year

Number of options
2021

Weighted average
exercise price
2021

Number of options
2020

Weighted average
exercise price
2020

Outstanding

7,000,000

$0.236

7,000,000

$0.236

The equity based compensation reserve is used to record the options issued to employees, directors and executives
of the Company as compensation. Options are valued using the Black-Scholes option pricing model. The weighted
average remaining contractual life of share options outstanding at the end of the year in the equity based
compensation reserve was 1.85 years (2020 - 2.16).

During the year, no ordinary shares were issued as a result of the exercise of options granted pursuant to the
Incentive Option Plan (2020 - nil).

Fair value of options

The fair value of options granted is measured at grant date and recognised as an expense over the period during
which the employee becomes unconditionally entitled to the options. The fair value of the options granted is
measured using an option valuation methodology, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is adjusted to reflect the actual number of options that
vest.

When options on issue are modified and the modification is beneficial to the other party the incremental fair value
at the date of the modification is recognised over the remaining modified vesting period and the original grant-
date fair value is recognised over the remaining original vesting period. When the modification is to options on
issue that have fully vested the incremental fair value is recognised as an expense in the period the modification
occurs. The incremental fair value is the difference between the fair value of the share based payment at the date of
modification between the old and new terms.

Expenses arising from share-based payment transactions

Total expenses arising from share based payment transactions recognised during the year ended 30 June 2021 was
$84,333 (2020 - $74,081).

34 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

19. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

The Company’s financial instruments comprise deposits with banks, trade and other payables and from time to time
short term loans from related parties. The Company does not trade in derivatives or in foreign currency.

The Company manages its risk exposure of its financial instruments in accordance with the guidance of the Board of
Directors. The main risks arising from the Company’s financial instruments are market risk, credit risk and liquidity
risks. This note presents information about the Company’s exposure to each of these risks, its objectives, policies
and processes for measuring and managing risk, and the Company’s management of capital.

Risk management framework

The Board has overall responsibility for the establishment and oversight of the risk management framework.
Informal risk management policies are established to identify and analyse the risks faced by the Company.

The primary responsibility to monitor the financial risks lies with the Managing Director and the Company Secretary
under the authority of the Board.

Credit risk

Credit risk arises mainly from the risk of counterparties defaulting on the terms of their agreements.

The carrying amounts of the following assets represent the Company’s maximum exposure to credit risk in relation
to financial assets:

Cash and cash equivalents

Security deposits

Note

Carrying amount

2021
$

2020
$

4,210,624

7,660,903

33,943

33,855

4,244,567

7,694,758

Cash and cash equivalents
The Company mitigates credit risk on cash and cash equivalents by dealing with regulated banks in Australia.

Security deposits
Credit risk on security deposits is very low as it usually consists predominantly of amounts recoverable from a
regulated bank in Australia.

Annual Report 2021 35

Notes to the Financial Statements
For the year ended 30 June 2021

19. FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation.

The ultimate responsibility for liquidity management rests with the Board. The Company monitors rolling forecasts of
liquidity on the basis of expected fund raisings, trade payables and other obligations for the ongoing operation of the
Company. At balance date, the Company has available funds of $4,210,624 for its immediate use.

The following are the contractual maturities of financial liabilities, including estimated interest payments:

Carrying
amount
$

Contractual
cash flows
$

Less than
one year
$

Between one
and five years
$

30 June 2021

Trade and other payables

Lease liability

30 June 2020

Trade and other payables

Lease liability

191,079

(191,079)

6,347

(6,347)

556,406

44,021

(556,406)

(46,118)

(42,806)

(3,312)

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at
significantly different amounts.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest rate risk
The Company’s income statement is affected by changes in interest rates due to the impact of such changes on
interest income from cash and cash equivalents and interest bearing security deposits. The average interest rate on
funds held during the year was 0.20% (2020 - 0.94%).

At balance date, the Company had the following mix of financial assets exposed to variable interest rate risk.

Financial assets

Cash and cash equivalents

Security deposits

Net exposure

Note

2021
$

2020
$

4,210,624

7,660,903

33,943

33,855

4,244,567

7,694,758

The Company had the following fixed interest bearing financial liabilities in the current year.

Financial liabilities

Lease liability

Net exposure

6,347

44,021

The Company does not have interest rate swap contracts.

36 Biotron Limited

Notes to the Financial Statements
For the year ended 30 June 2021

19. FINANCIAL INSTRUMENTS (continued)

Sensitivity analysis
The following sensitivity analysis is based on the interest rate risk exposures at balance date.

An increase of 100 basis points in interest rates throughout the reporting period would have decreased the loss
for the period by the amounts shown below, whilst a decrease would have increased the loss by the same amount.
The Company’s equity consists of fully paid ordinary shares. There is no effect on fully paid ordinary shares by an
increase or decrease in interest rates during the period.

2021
$

2020
$

56,768

73,410

Currency risk
The Company is exposed to currency risk on cash and cash equivalents that are denominated in United States
currency. The company’s gross financial exposure to foreign currency risk at balance date was US$97 (2020 -
US$97).

The Company is not exposed to price risks.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business.

The Board ensures costs are not incurred in excess of available funds and will seek to raise additional funding
through issues of shares for the continuation of the Company’s operations. There were no changes in the Company’s
approach to capital management during the year.

The Company is not subject to externally imposed capital requirements.

Estimation of fair values

The carrying amounts of financial assets and liabilities approximate their net fair values, given the short time frames
to maturity and or variable interest rates.

20. FINANCIAL REPORTING BY SEGMENTS

The Company operates in one reportable operating segment, being the biotechnology industry in Australia.

21. COMMITMENTS AND CONTINGENCIES

The Company may be party to commercial disputes and litigation in the normal course of business. No material
liabilities are expected to arise in respect of the commercial disputes and litigation existing at balance date.

There are no capital commitments at the date of these financial statements.

22. SUBSEQUENT EVENTS

There have been no matters arise in the interval between the end of the financial year and the date of this report
any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company,
to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.

Annual Report 2021 37

Directors’ Declaration

In the opinion of the directors of Biotron Limited:

the financial statements and notes set out on pages 17 to 37, and the Remuneration Report in the
Directors’ Report, set out on pages 10 to 14, are in accordance with the Corporations Act 2001, including:

(i)

(ii)

giving a true and fair view of the Company’s financial position as at 30 June 2021 and of its
performance for the financial year ended on that date; and

complying with Australian Accounting Standards (including Australian Accounting Interpretations) and
the Corporations Regulations 2001;

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 from the
chief executive officer and chief financial officer for the financial year ended 30 June 2021.

The directors draw attention to note 2(a) of the financial statements, which includes a statement of compliance
with International Financial Reporting Standards.

This report has been signed in accordance with a resolution
of the directors and is dated 27 August 2021:

Michael J. Hoy
Chairman

Michelle Miller
Managing Director

38 Biotron Limited

Independent Auditor’s Report

To the shareholders of Biotron Limited

Report on the audit of the Financial Report

To the shareholders of Biotron Limited

Opinion

Report on the audit of the Financial Report

We have audited the Financial Report of
Biotron Limited (the Company).

The Financial Report comprises:

• Statement of financial position as at 30 June 2021

•

Opinion

In our opinion, the accompanying Financial
Report of the Company is in accordance
We have audited the Financial Report of
with the Corporations Act 2001, including:
Biotron Limited (the Company).

giving a true and fair view of the
In our opinion, the accompanying Financial
Company’s financial position as at 30
Report of the Company is in accordance
June 2021 and of its financial
with the Corporations Act 2001, including:
performance for the year ended on that
date; and

•

giving a true and fair view of the
Company’s financial position as at 30
complying with Australian Accounting
June 2021 and of its financial
Standards and the Corporations
performance for the year ended on that
Regulations 2001.
date; and

•

• Statement of profit or loss and other comprehensive

The Financial Report comprises:

income, Statement of changes in equity, and
Statement of cash flows for the year then ended

• Statement of financial position as at 30 June 2021

• Notes including a summary of significant accounting

• Statement of profit or loss and other comprehensive

policies; and

income, Statement of changes in equity, and
• Directors’ Declaration.
Statement of cash flows for the year then ended

• Notes including a summary of significant accounting

policies; and

• Directors’ Declaration.

•

Basis for opinion

complying with Australian Accounting
Standards and the Corporations
Regulations 2001.

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Basis for opinion

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 conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
We are independent of the Company in accordance with the Corporations Act 2001 and the ethical
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report section of our report.
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with the Code.

We are independent of the Company 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 fulfilled our other ethical responsibilities in
accordance with the Code.

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.

Annual Report 2021 39

Independent Auditor’s Report

Material uncertainty related to going concern

We draw attention to Note 2(e), “Going Concern” in the financial report. The conditions disclosed in
Note 2(e), indicate a material uncertainty exists that may cast significant doubt on the Company’s
ability to continue as a going concern and, therefore, whether it will realise its assets and discharge
its liabilities in the normal course of business, and at the amounts stated in the financial report. Our
opinion is not modified in respect of this matter.

In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Company’s assessment of
going concern. This included:

• Analysing the cash flow projections by:

Evaluating the underlying data used to generate the projections for consistency with other
information tested by us, our understanding of the Company’s intentions, and past results
and practices;
Assessing the planned levels of operating and capital expenditures for consistency of
relationships and trends to the Company’s historical results since year end, and our
understanding of the business, industry and economic conditions of the Company;

• Assessing significant non-routine forecast cash inflows and outflows including the expected

impact of planned capital raisings for feasibility, quantum and timing. We used our knowledge of
the client, its industry and current status of those initiatives to assess the level of associated
uncertainty.

• Reading minutes of directors’ meetings and relevant correspondence with the Company’s

advisors to understand the Company’s ability to raise additional shareholder funds, and assess
the level of associated uncertainty;

•

Evaluating the Company’s going concern disclosures in the financial report by comparing them to
our understanding of the matter, the events or conditions incorporated into the cash flow
projection assessment, the Company’s plans to address those events or conditions, and
accounting standard requirements. We specifically focused on the principle matters giving rise to
the material uncertainty.

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.

In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the Key Audit Matter.

40 Biotron Limited

Independent Auditor’s Report

Direct research and development expenditure - $3,136,626

Refer to Note 6 to the Financial Report

The key audit matter

How the matter was addressed in our audit

Direct research and development expenditure is
a key audit matter due to the significance of the
amount (being 67% of total expenses) and the
audit effort associated with assessing the
completeness, existence and accuracy of the
amounts recorded by the Company.

Our procedures included:

•

Assessing the Company’s accounting policy
for research and development expenditure
against the requirements of the accounting
standards;

Selecting a statistical sample of items
recorded as direct research and development
expenditure and checking the expenditure
amount recorded for consistency to invoices
from third parties or other underlying
documentation;

For the sample identified above, checking the
nature of the expenditure for consistency
with its classification as direct research and
development expenditure, in accordance with
the Company’s accounting policy and the
criteria in the accounting standards; and

Testing the completeness of direct research
and development expenditure recorded in the
year by checking payments recorded since
year end and unprocessed invoices for
evidence of the timing of the transactions.
We selected our sample from the Company’s
payments made since balance date, and
unprocessed invoices at the date of our
testing, and checked the timing of the
transaction to the underlying documentation.

Annual Report 2021 41

Independent Auditor’s Report

Other Information

Other Information is financial and non-financial information in Biotron Limited’s annual reporting which is
provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for
the Other Information.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.

We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

• preparing the Financial Report that gives a true and fair view in accordance with Australian

Accounting Standards and the Corporations Act 2001

•

implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error

• assessing the Company’s ability to continue as a going concern and whether the use of the going
concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

•

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 Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.

A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our
Auditor’s Report.

42 Biotron Limited

Independent Auditor’s Report

Report on the Remuneration Report

Opinion

Directors’ responsibilities

In our opinion, the Remuneration Report
of Biotron Limited for the year ended 30
June 2021, complies with Section 300A of
the Corporations Act 2001.

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 responsibilities

We have audited the Remuneration Report included in
pages 10 to 14 of the Directors’ report for the year ended
30 June 2021.

Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

KPMG

Adam Twemlow
Partner

Brisbane
27 August 2021

Annual Report 2021 43

Additional Stock Exchange Information

Home Exchange

The Company is listed on the ASX Limited. The home exchange is Sydney.

Use of Cash and Assets

Since the Company’s listing on the ASX, the Company has used its cash and assets in a way consistent with its
stated business objectives.

Class of Shares and Voting Rights

There is only one class of shares in the Company, fully paid ordinary shares.

The rights attaching to shares in the Company are set out in the Company’s Constitution. The following is a summary
of the principal rights of the holders of shares in the Company.

Every holder of shares present in person or by proxy, attorney or representative at a meeting of shareholders has
one vote on a vote taken by a show of hands, and, on a poll every holder of shares who is present in person or by
proxy, attorney or representative has one vote for every fully paid share registered in the shareholder’s name on the
Company’s share register.

A poll may be demanded by the chairperson of the meeting, by at least 5 shareholders entitled to vote on the
resolution or shareholders with at least 5% of the votes that may be cast on the resolution on a poll.

Distribution of Equity Securityholders

As at 31 July 2021, the distribution of each class of quoted equity securityholders was as follows:

Range

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

Fully Paid
Ordinary
Share Holders

197

1,121

1,258

3,085

1,048

Total Number
of Shares

50,766

4,060,880

10,151,555

117,839,979

569,829,533

6,709

701,932,713

29 November
2021
$0.25 unlisted
Options

29 November
2022
$0.20 unlisted
Options

29 November
2023
$0.20 unlisted
Options

31 December
2023
$0.20 unlisted
Options

At 31 July 2021, 2,010 shareholders held less than a marketable parcel of shares.

Type of securities

Ordinary shares

Unlisted options

Number of holders

Number of securities

6,709

701,932,713

9,500,000

44 Biotron Limited

Additional Stock Exchange Information

Twenty Largest Quoted Shareholders

At 31 July 2021 the twenty largest fully paid ordinary shareholders held 17.75% of fully paid ordinary as follows:

Name

Jey Investment Pty Ltd

Dr Angela Fay Dulhunty

Umbiram Pty Ltd

Citicorp Nominees Pty Limited

Jimmy Thomas and Ivy Ruth Ponniah

DNS Accounting and Law Consultancy Pty Ltd

Armco Barriers Pty Ltd

Fordholm Investments Pty Ltd

Rookharp Capital Pty Limited

10 Pathold No 222 Pty Ltd

11 Scott’s A V Pty Ltd

12 Edstop Pty Limited

13 William John Dunn

14 Attollo Copia Pty Ltd

15 Travis Paul Gloury

16 Robert Thomas and Kyrenia Thomas

17 Dr Sanjiv Pathak

18 Peter James Nightingale

19 Alpha Matilda Trading Pty Ltd

20 Mark Andrew Peterson

There are no current on-market buy-backs.

Fully Paid
Ordinary Shares

14,440,945

10,000,000

9,347,793

8,427,055

8,372,057

8,254,558

7,000,000

5,250,000

4,918,000

4,571,588

4,400,000

4,300,565

3,779,784

3,663,195

3,632,313

3,594,903

3,337,472

3,332,000

2.06

1.42

1.33

1.20

1.19

1.18

1.00

0.75

0.70

0.65

0.63

0.61

0.54

0.52

0.51

0.48

0.47

Annual Report 2021 45

Principal Administration Office:

Suite 3.3, 56 Delhi Road
NORTH RYDE NSW 2113
Phone: 61-2 9805 0488
61-2 9805 0688
Fax:

Corporate Directory

Directors:

Mr Michael J. Hoy (Chairman)
Dr Michelle Miller (Managing Director)
Dr Susan M. Pond
Mr Robert B. Thomas
Prof Stephen Locarnini

Company Secretary:

Mr Peter J. Nightingale

Registered Office:

Level 2, 66 Hunter Street
SYDNEY NSW 2000
Phone: 61-2 9300 3344
Fax:
61-2 9221 6333
E-mail: enquiries@biotron.com.au
Homepage: www.biotron.com.au

Share Registrar:

Computershare Investor Services Pty Limited
Level 4, 60 Carrington Street
SYDNEY NSW 2000
Phone: 1300 787 272

Fax: 61-3-9473 2500

Auditors:

KPMG Level 16, Riparian Plaza
71 Eagle Street
BRISBANE QLD 4000

Home Exchange:

ASX Limited 20 Bridge Street
SYDNEY NSW 2000

Solicitors:

Minter Ellison
88 Phillip Street
SYDNEY NSW 2000

Biotron Limited, incorporated and domiciled in Australia,
is a publicly listed company limited by shares.

46 Biotron Limited

ANNUAL REPORT 2021

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BIOTRON LIMITED
ABN 60 086 399 144