CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2022
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CORPORATE DIRECTORY
DIRECTORS
Mr. Niall Cairns
Mr. Craig Cooper
Mr. Jarrod White
Mr. King Nelson
Ms. Lesa Musatto (appointed 26 April 2022)
JOINT COMPANY SECRETARIES
Mr. Jarrod White
Mr. Nicholas Marshall
CHIEF FINANCIAL OFFICER
Mr. Jarrod White
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Suite 301, Level 3
55 Lime Street
Sydney NSW 2000
Telephone: (02) 9874 8761
Email: info@CardieX.com
Website: www.CardieX.com
SHARE REGISTRY
Automic Pty Ltd
Level 5/126 Phillip St
Sydney NSW 2000
Telephone: (02) 9698 5414
Website: www.automicgroup.com.au
AUDITOR
BDO Audit Pty Ltd
Level 11, 1 Margaret Street
Sydney NSW 2000
Telephone: (02) 9251 4100
Facsimile: (02) 9240 9821
Website: www.bdo.com.au
CORPORATE ACCOUNTANT
Traverse Accountants
Suite 305, Level 3
35 Lime Street
Sydney NSW 2000
Website: www.traverseaccountants.com.au
STOCK EXCHANGE LISTING
CardieX Limited’s shares are listed on the Australian Securities Exchange (ASX code: CDX).
1
TABLE OF CONTENTS
Chairman’s Report
CEO’s Report and Overview of Operations
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Page
Page
3
4
Page
11
Page
18
Page
23
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Page
24
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Page
25
Page
26
Page
27
Page
28
Page
63
Page
64
Page
68
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CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
Chairman’s Report
My Fellow Shareholders,
On behalf of the Board of CardieX Limited, it is my great pleasure to present the Company’s Annual Report for the
2022 Financial Year (FY22).
Our focus is to create and own a significant new global health category in “vascular health” with multiple new
products on track for launch over the next year - including two “world-first” devices targeting the home health and
wearable markets.
The past year has seen the Company achieve significant milestones in executing on our strategic plan. Strong
progress has been made in both our traditional ATCOR business as well as in the product development and
regulatory approval programs for our new suite of CONNEQT products.
We lodged our first FDA 510(k) application in over 10 years for the CONNEQT App, which has since been classified
by the FDA as a ‘Medical Device Data System’ (MDDS). This enables the Company to proceed with its launch. We
also lodged a second 510(k) application for our CONNEQT Pulse "dual blood pressure monitor".
Whilst our ATCOR business had a tough year, it has entered the new financial year with the largest pipeline for
clinical trial services and contracts in the history of the Company. We see this business as delivering strong revenue
growth to the group in FY23 and look forward to providing updates as we convert the pipeline into sales.
Finally, I would like to thank our loyal shareholders for their continued support and welcome all new shareholders
who have joined us in this exciting journey over the last 12 months. We look forward to delivering on the next stage
of CardieX’s strategic plan, reporting on the progress of our multiple new product launches and growing the
business towards greater and sustainable success.
My best regards,
Niall Cairns
Executive Chairman
CardieX Limited
3
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
Chief Executive Officer’s Report & Overview of Operations
My Fellow Shareholders,
I am pleased to report that CardieX has delivered on all key operational objectives set in 2022 to progress the
Company’s strategy of becoming a leading multi-platform developer of consumer and medical devices &
software/SaaS based healthcare solutions.
We are forecasting another exciting year of continued growth in revenue, expansion of our product portfolio, and
development of new markets through new sales channels and strategic partnerships. Importantly, we are also
making excellent progress in achieving our mission of making a positive impact on global health outcomes which
is fundamental to our vision of “improving humanity through technology”.
Going into this next year, I continue to be excited and passionate about the growth opportunity and the disruptive
nature of our vision. More detail is provided in my “CEO Overview of Operations” below.
I would like to thank my fellow Board members, management and staff at CardieX who have worked tirelessly to
realise our vision as we continue to grow shareholder value.
My best regards,
Craig Cooper
CEO & Managing Director
CardieX Limited
CEO Overview of Operations
During FY22, the Company continued to make significant progress on all fronts for both our traditional ATCOR
business as well as the product development and regulatory approvals for our new suite of CONNEQT products.
ATCOR continues to focus on devices and solutions for hospitals, research & pharma, and specialist clinician
markets while our new brand, CONNEQT, is focused on devices and solutions for home health, remote patient
monitoring, and decentralised clinical trials.
Under the CONNEQT brand, the Company is on track to launch multiple new products and devices in FY23. One
of these products is the CONNEQT “Pulse” – a world-first dual blood pressure monitor, which will also be the first
consumer vital signs monitor to include central blood pressure and ATCOR’s patented SphygmoCor® technology.
The other major product targeted for release in FY23 is the CONNEQT Band wearable – which will include a full
suite of patented heart health parameters as well as a comprehensive ecosystem of unique health and wellness
features focused on heart health.
During the year, our partner Mobvoi also successfully launched a world’s-first smartwatch featuring advanced heart
health features developed by ATCOR, a significant achievement for the Company.
4
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CONNEQT Digital Health and Remote Patient Monitoring Platforms
OPERATIONAL UPDATE
Since the establishment of the CONNEQT brand and business in April 2021, significant progress has been made
in all aspects of the business on the path to becoming a global leader in wearable and home vascular health
solutions.
CONNEQT remains focused on devices and solutions for home health, remote patient monitoring and
decentralised clinical trials and solutions that seamlessly connect patients and their doctors with the data they
require to provide better health treatment and outcomes. The Company is in the process of seeking FDA clearance
for these products and digital solutions.
(a) CONNEQT Product Development
During FY22, the Company made significant progress in relation to regulatory approvals that are required for the
CONNEQT Pulse Dual Blood Pressure Monitor (Pulse) and CONNEQT Companion App (app).
The app is part of a new digital ecosystem for both consumers and clinicians all based on CardieX subsidiary,
ATCOR’s FDA-cleared SphygmoCor ® technology. The app will integrate with the CONNEQT Pulse device, a new
home-based heart health vital signs monitoring system, that measures central blood pressure, arterial waveforms,
and multiple other proprietary arterial health parameters based on the existing FDA-cleared SphygmoCor®
technology used in the Company’s other devices.
Towards the end of June, a US FDA 510(k) clearance submission for the CONNEQT Pulse was made in
conjunction with our manufacturing partner, Andon, who are responsible for FDA lodgement – representing a
significant milestone for the Company.
Subject to final FDA clearance, Pulse will be the first arterial health monitor to incorporate a full suite of patented
and trademarked heart and vascular health parameters beyond traditional blood pressure focused on our specific
target markets.
Pulse will integrate with the app to provide medical-grade health insights into a unique and world-first suite of
arterial health features – enabling consumers and patients to make more informed decisions about their health.
Pulse also features cloud-based remote patient monitoring, patient record sharing, and health coaching features.
Towards the end of the financial year, the Company also reported the FDA classification of the app as a “Medical
Device Data System” (MDDS), enabling the Company to proceed with its launch upon FDA clearance of the Pulse.
The app forms the hub of CONNEQT’s device ecosystem and will also have the ability in the future to pair with the
CONNEQT Band, a smart wearable also featuring a range of patented health and wellness features focused on
heart and arterial health, including a world’s first blood pressure monitoring PPG sensor powered by ATCOR’s
SphygmoCor ® technology.
The Company has received its first round of comments on its clearance submission for Pulse from the FDA and
has responded to those questions. We anticipate 510(k) clearance for the Pulse late 2022 in advance of our
participation and exhibition at the Consumer Electronics Show (CES) in January 2023 where we plan to formally
launch the product.
(b) CONNEQT Band (Band)
During FY22, CardieX’s consumer subsidiary, CONNEQT, Inc (CONNEQT), entered into a manufacturing &
development partnership agreement with Fenda Technology Co., Ltd (Fenda), a leading Chinese wireless solutions
provider and manufacturer of smart wearable products. The Company also announced a strategic collaboration
agreement with LifeQ, Inc (LifeQ), a world- leading provider of biometrics and health information metrics for
wearable devices. Fenda will be responsible for the co-development and manufacture of the Band whereas LifeQ
will be responsible for the non-medical grade consumer health parameters that will be incorporated into the device.
Since the announcement of our strategic relationships with Fenda and LifeQ, significant progress has been made
on the development of the Band. To accelerate these development efforts, the Company recently announced the
establishment of “CONNEQT Labs”, a partnership between CONNEQT, Macquarie University, and other global
institutions – to be jointly located in Sydney CBD and at the Macquarie University campus.
5
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
OPERATIONAL UPDATE
CONNEQT Labs is the epicentre of our development and validation protocols for the Band and is comprised of
some of the leading global authorities in cuffless blood pressure monitoring, led by our own Chief Science &
Research Officer, Dr. Ahmad Qasem.
CONNEQT Labs positions us to have a meaningful impact on the world’s largest health disorder – cardiovascular
disease – and to be a leader in the development of novel solutions for identifying and managing patients at risk for
multiple other disorders including preeclampsia, Alzheimer’s, kidney disease, and stroke risk.
Upon launch, the Band will be the first-to-market smart wearable to feature a full suite of patented health and
wellness features focused on heart and arterial health, including a first-in-kind blood pressure monitoring PPG
sensor powered by ATCOR's patented SphygmoCor® technology.
ATCOR
Our ATCOR clinical trial business unit remains strong and continues to generate consistent revenue for the group.
ATCOR contracts with pharmaceutical companies for the use of SphygmoCor® XCEL devices and the provision
of core lab and data management services for clinical trials — providing end-to-end service that ultimately delivers
clean datasets to study sponsors.
The ATCOR business is largely dependent on the timing of clinical trials, some of which have been impacted and
delayed over the course of the year due to the lack of patients and issues surrounding the COVID-19 pandemic.
Despite delays, the Company continued to progress clinical trials, releasing a number of important announcements
over the course of the year.
(a) ATCOR Clinical Trial Contracts
In FY22, our clinical trial services market continued to expand and remained the focus of our ATCOR business
development efforts.
In October 2021, Bayer AG and CardieX entered into a new Amended Agreement for both the lease of ATCOR
devices and the provision of expanded data management services for Bayer’s ‘CONCORD’ clinical trial that is
being conducted in patients with chronic diseases - diabetes and/or hypertension.
This latest increase in the Concord trial brings that the total contract value to in excess of $US2m (AU$2.76m). The
CONCORD trial now has ATCOR technology being used at 84 sites across 13 counties for this contract alone.
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CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
OPERATIONAL UPDATE
In February 2022, CardieX announced that its subsidiary, ATCOR, had entered into a new global Clinical Trial
Services Agreement (“the Agreement”) with Andwin Scientific for both the lease of ATCOR XCEL devices and the
provision of data management services for a new global clinical trial sponsored by Philip Morris.
The total revenue for the Agreement is likely to be ~US$936,000 (~AU$1,300,000) over a 19-month period with
the majority having been recognised in FY22. Currently, the study is for 19 months across 22 sites. Results and
any extension in the length of the trial or expansion in the number of sites will be beneficial to CardieX and will
result in an increase in services and revenue.
The Company also announced a search to recruit a new “Head of Clinical Trial Services” to lead the expansion of
what we believe will be a significant revenue generator for the Company going forward – especially with the launch
of the Pulse device which provides a full decentralized clinical trial solution for our traditional Pharma partners such
as Bayer, Novartis, AstraZeneca, GSK, and others.
Our current (in negotiation) pipeline for clinical trials is over $USD7.2m, the largest pipeline for clinical trial contract
services in the history of the Company.
(b) Other ATCOR Corporate Activity
Separate to our clinical trial efforts the Company has also been aggressively pursuing multiple other business
development opportunities for the licensing of its SphygmoCor® technology to third-party medical device
companies. We anticipate an announcement regarding the first of these new efforts shortly.
Multiple trade shows and other events have also been scheduled for the ATCOR sales team in FY23.
Mobvoi Product Launch Update
In March 2022, following a two-year commercial partnership, Mobvoi, a leading global consumer electronics and
enterprise AI developer, successfully launched the world’s first heart health monitoring smartwatch based on
CardieX subsidiary, ATCOR’s FDA-cleared SphygmoCor® technology.
The TicWatch GTH Pro smartwatch includes ATCOR’s proprietary ArtyTM Heart Health analytics platform, which
is an advanced heart and arterial health management platform. The device gives users insight into their overall
wellness and cardiovascular health via ‘Arty Heart Health powered by ATCOR’ and Mobvoi’s own smartwatch
metrics.
Significantly for the Company, the TicWatch GTH Pro represents the first commercial implementation of ATCOR’s
proprietary heart monitoring technology in a wearable device.
The TicWatch GTH Pro was launched on 1 March 2022 via Mobvoi.com, Amazon, and GTHPro.com for customers
in the United States. Online ordering has also been available for customers from Australia and New Zealand on
Amazon and Mobvoi.com.
Towards the end of the financial year, Mobvoi expanded the sale of the GTH Pro to the United Kingdom and
Canada. This new expanded release by Mobvoi into additional markets is strong validation for the product and its
success to date.
Since the initial limited market release of the GTH Pro this financial year, positive customer reviews and feedback
have been received on the Amazon website in both the United States and Australia, with the product achieving a
solid “4-star +” rating as at June quarter.
Finally, the Company also collaborated with Mobvoi to successfully launch the first software update to the
Company’s “Arty Heart Health Platform” that powers the arterial health insights features on the GTH Pro.
7
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
OPERATIONAL UPDATE
COVID-19 Update on Operations
Like all global companies, CardieX has continued to feel the impacts of the COVID-19 pandemic; however, we
have continued to achieve significant milestones for the business in FY22. The Company’s management and staff
have seamlessly converted to communicating via digital channels, with some office locations able to migrate back
to the office while upholding appropriate safety protocols. Travel restrictions to China have impacted new product
and device launches, creating initial delays in obtaining sample and test units, but the team is largely on target to
release its new suite of devices to market in FY23.
Board Appointments
The Company announced expansion of the senior executive team with the appointment of US-based Non-
Executive Director, Lesa Musatto, to its Board of Directors.
With the Company’s recent expansion into the consumer space through subsidiary CONNEQT, CardieX is thrilled
to have Lesa join the board and bring valuable, hands-on insight to our medical and consumer device strategies
as we prepare to launch multiple new products.
Corporate Update
(a) NAM R&D Loan Facility
During the year, the Company repaid the outstanding balance of its $1.04 million loan facility with Mitchell Asset
Management Pty Ltd (“MAM”). This included the repayment of $594k in December 2021, with the balance of the
facility paid in the March 2022 quarter following the receipt of proceeds from the Company’s 2021 R&D Tax
Incentive of ~$480,000.
Following the repayment of the outstanding balance owed to MAM, the Company was able to renegotiate terms for
an extension of the facility terms which has provided for a new drawdown by the Company, allowing it to access a
total of $1,294,125 as a prepayment of forecasted R&D tax incentive claim for the year ended 30 June 2022.
As per the preceding loan arrangement with MAM, the use of funds from the facility funds will be utilised to continue
R&D programs and for working capital, which allows CardieX to fully commit to its previously announced product
development initiatives without the need for immediate further equity capital or dilution to existing shareholders.
8
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
OPERATIONAL UPDATE
(b) Placement and SPP
Subsequent to the end of FY22, CardieX successfully completed a placement of 14,433,337 new fully paid ordinary
shares in the Company raising $4.33 million at an issue price of $0.30 per share with a 1 for 3 free attaching unlisted
option, exercisable at $0.45, and expiring one year from the date of issue.
In addition to the placement, CardieX announced a share purchase plan (SPP) offering existing shareholders an
opportunity to apply for up to $30,000 of new shares in the Company at $0.30 per share. The Company received
applications for fully paid ordinary shares from eligible shareholders under the SPP at an issue price of $0.3per
share in the amount of $1.6 million (before costs) representing a 59.3% over-subscription over the originally
targeted raise of $1.0 million. The Company elected to accept the full $1.6 million of valid applications.
Funds raised from the Placement and SPP will primarily be used to support and accelerate new product initiatives
related to the Company’s CONNEQT subsidiary as well as corporate initiatives in the USA.
As at 30 June 2022, the Company had a cash balance of AU$1.46 million.
In November 2021, the Company reported the results of its listed options (ASX:CDXO - $0.05 exercise price,
November 2021 expiry). Of the 127,675,656 listed CDXO Options and 37,500,000 unlisted options on issue, being
a total of 165,175,656 November Options, 153,330,197 were fully exercised by November Option holders, raising
a total of $7,666,510 representing a conversion of 92.82%.
In addition, the Company advised that C2 Ventures Pty Ltd (“C2V”), an entity jointly controlled by Craig Cooper
(CEO), and Niall Cairns (Chairman), had exercised 2,420,455 listed CDXO Options and 37,500,000 unlisted
Options at $0.05, representing a $1,996,023 contribution of working capital of CardieX.
Importantly, all directors exercised all of their Options available for conversion taking total board participation
inclusive of C2V beyond $2,000,000 of the total November Options exercised.
The funds raised through the exercise of Options are being used to accelerate the Company’s strategic vision,
including new product development and go-to-market strategy, partnerships, FDA clearances, and other strategic
initiatives across its medical and new consumer device divisions.
(c) USA Listing
In January 2022, the Company announced that it had commenced the process to apply for an OTCQX quotation
on the OTC Markets in the US.
The Board subsequently decided to focus their efforts on progressing a dual ASX/ NASDAQ or NYSE listing rather
than pursuing a “quotation” of the ASX shares on the OTC market. The rationale for this strategy is as follows:
•
•
•
•
•
•
•
It broadens our investor base to include investors in one of the major global capital markets;
It enables us to better attract strategic and institutional investors otherwise unable to invest in offshore
securities on non-USA exchanges;
It enhances our visibility and global presence among investors, consumers, and customers - especially in
the single biggest market for our products and services;
It provides us with a way to better compensate and attract U.S. employees - particularly given the
competition for engineering talent;
It increases liquidity of our shares by attracting new investors looking for exposure to our sector -
especially given the valuations of other health-tech/wearable companies based in the USA that have
significantly greater valuation comps.
It can facilitate merger and acquisition activity by creating a desirable stock-swap “acquisition currency”;
and
It enables us to have better communication with all our shareholders globally.
The Company and its advisory team have made significant progress over the year to achieve this key corporate
objective.
9
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
OPERATIONAL UPDATE
(d) Share Consolidation
On 16 February 2022, there was a share consolidation of the issued capital of the Company on the basis of one
(1) security for every ten (10) securities held. Where the consolidation resulted in a fraction of a Share, Performance
Right or Option being held, the Company rounded that fraction up to the next whole number. The FY21 number of
equity instruments have been adjusted throughout the financial statements for the share consolidation to ensure
the numbers are comparable.
Outlook
Throughout FY22 we continued to achieve a number of significant milestones which has positioned the Company
for major new product launches in FY23. These product launches will significantly expand the commercial
opportunities for the Company into multiple new markets and sales channels.
Finally, based on the strong growth we are seeing in all market segments and with the addition of new product
launches, our internal sales target for FY23 is for a significant increase over our FY22 results.
10
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT
The Directors of CardieX Limited (the “Company”) submit the financial report of the Company for the year ended
30 June 2022, which comprises the results of CardieX Limited and the entities it controlled during the period (the
“Group”).
Review of Operations
The loss for the Group after income tax amounted to $11,809,634 (30 June 2021 $5,180,098).
The Group has generated total revenue of $4,499,562, down 14% from $5,257,624 in the previous year.
Please refer to the operational update on page 4 for further information.
Principal Activities
During the year the principal continuing activities of the Group consisted of designing, manufacturing and marketing
medical devices for use in cardiovascular health management.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and the discharge of liabilities in the normal course of business.
At the date of signing, the Directors have assessed that there is a material uncertainty related to going concern
that may cast significant doubt over the ability of the Group to continue as a going concern given that the Group
incurred a loss after tax of $11,809,634 (2021: $5,180,098), had net cash outflows from operating activities of
$9,150,712 for the year ended 30 June 2022 (2021: $3,989,135) and had a net current liability position as at year-
end of $285,915 (2021: net asset position of $7,457,455). As a result of these conditions the Group may be unable
to realise its assets and discharge its liabilities in the normal course of business.
The Directors believe that there are reasonable grounds that the Group will be able to continue as a going concern,
after consideration of the following factors:
• On 22 August 2022, CardieX announced that it had completed a $4.33m placement, as well as the launch
of a share purchase plan (SPP) where proceeds exceeded the target of $1m;
• On 29 September 2022, the Company announced the results of the SPP and raised $1.6m – this
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•
•
represents a 59.3% over-subscription over the originally targeted raise of $1.0 million;
The Company is the process of progressing a dual ASX/NASDAQ or NYSE listing, and if successful, this
would raise significant equity funding for the Company, along with improving the Company’s options with
regards to equity raising;
If required, the Group has the ability to continue to raise additional funds on a timely basis pursuant to
the Corporations Act 2001. The Group has a strong track record of successful equity funding in the
preceding financial years. The Directors have no reason to believe that it will not be able to continue to
source equity or alternative funding if required.
There is a term loan facility of $1,297,505 repayable in October 2022, however this will be partially offset
by R&D tax rebates expected in the same month. The Group are also currently reviewing options to
extend or refinance the facility.
Accordingly, the Directors believe that the Group will be able to continue as a going concern, and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
Dividends
No dividends were paid or declared by the Group since the end of the previous financial year and the Directors do
not recommend dividends be paid for the year ended 30 June 2022.
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the Group during the financial year.
11
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
Likely Developments and Expected Results of Operations
Further information on likely developments in the operations of the Group and the expected results of operations
have not been included in this annual financial report because the directors believe it would be likely to result in
unreasonable prejudice to the Group.
Matters Subsequent to Year End
Subsequent to the balance date the Group announced the following material events:
• On 29 July 2022, CardieX announced that it has changed its provider for shareholder registry services
from Link Market Services to Automic Pty Ltd.
• On 22 August 2022, CardieX announced that it had completed a $4.33m placement.
• On 26 August 2022, CardieX announced the launch of a share purchase plan (SPP), with a target of $1m
to be raised.
• On 28 September 2022, CardieX announced the successful completion of its SPP, which closed on 26
September 2022. The Company received applications for fully paid ordinary shares (Shares) from eligible
shareholders (which included Directors) under the SPP at an issue price of $0.30 per share in the amount
of $1.593 million (before costs) representing a 59.3% over-subscription over the originally targeted raise
of $1.0 million.
• As disclosed in the SPP Offer Booklet (refer ASX release 26 August 2022), the Company reserved the
right to conduct either a scale-back of over-subscriptions above the targeted of $1.0 million, or to accept
over-subscriptions above the target. In response to the strong demand from shareholders, the Company
has elected to accept the full $1.593 million of valid applications including the $593,000 in
oversubscriptions and therefore not conduct any scale-back
No other significant subsequent event has arisen that significantly affects the operations of the Group.
12
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
Directors
The following persons held office as Directors of CardieX Limited at any time during or since the end of the financial
year:
Mr. Niall Cairns – Executive Chairman and Director
Mr. Craig Cooper – Executive Director, Chief Executive Director
Mr. Jarrod White – Executive Director
Mr. King Nelson – Non-Executive Director
Ms. Lesa Musatto – Non-Executive Director (appointed 26 April 2022)
Joint Company Secretaries
Mr. Jarrod White
Mr. Nicholas Marshall
Chief Financial Officer
Mr. Jarrod White
Information on Directors
Mr. Niall Cairns
Executive Chairman and Director
Qualifications:
Appointed:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
B.Ec, CA and FAICD
20 December 2017, appointed Chairman on 27 February 2019
Mr. Cairns is a Sydney based technology growth company director
and investor with over 25 years of track record of value creation,
restructuring, and exits in both listed and unlisted companies. As a
founding partner of Nanyang Ventures, Kestrel Capital and C2
Ventures, Niall has managed significant institutional and private
capital, whilst raising capital for and driving the global growth of over
50 companies in sectors as diverse as Agtech, Medtech, digital and
SaaS based businesses. These have included Tru-Test Corporation,
Intrapower, Gale Pacific (AVCAL Award winner) and Australian
Helicopters. Niall is currently the Non-Executive Chairman of Tambla
Limited and the St Andrews College Foundation.
Consolidated Financial Holdings Limited, Kestrel Capital, Kestrel
Growth Companies Limited, DTS Limited, Listing Logic Limited, Harri
LLC, St Andrews College Foundation and Tambla Limited.
Tru-Test Corporation Limited.
•
•
•
Chairman of the Board.
Chairman of the audit and risk committee.
Member of remuneration and nomination committee.
13
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
Mr. Craig Cooper
Executive Director, Chief Executive Officer
Qualifications:
Appointed:
Experience and expertise:
B.Ec, LLB (Hons)
1 December 2017
Mr. Cooper was appointed as Chief Executive Officer effective 1
December 2017. Mr Cooper has founded multiple successful health,
digital media, technology, and wellness businesses – and was also
the co-founder of the telecommunications company Boost Mobile -
one of the leading mobile phone businesses in the USA. He is
recognised as a global expert and thought leader in mobile and
wireless technology as well as digital health and med-tech-related
businesses. His venture capital funds have raised over A$1 billion in
capital and have funded some of the most significant global digital
media technology companies including Buzzfeed and The Huffington
Post.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
None.
None.
None.
Mr. Jarrod White
Executive Director
Qualifications:
Appointed:
Experience and expertise:
B.Bus, CA, CTA
21 May 2020
Mr. White is a Chartered Accountant and founding Director of
Traverse Accountants Pty Ltd, a Corporate Advisory and Chartered
Accounting Firm. In conjunction with his Corporate Advisory roles at
Traverse Mr. White has been appointed Company Secretary and
Chief Financial Officer of several other listed entities that operate on
the Australian Stock Exchange and has a sound knowledge of
corporate governance and compliance. Jarrod has also been an
advisor to a wide range of capital raisings, IPO’s and reverse
takeover transactions and has a focus on working with growing
Companies in the exploration, technology and biotech space.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
None.
High Peak Royalties Limited (ASX.HPR)
None.
14
Mr. King Nelson
Non-Executive Director
Qualifications:
Appointed:
Experience and expertise:
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
BA, MBA
13 November 2015
Mr. King was elected to the Board in November 2015. He brings more
than 30 years of diverse experience and expertise with medical
devices. He is a former President and CEO of Uptake Medical
Corporation, a company focused on treatments for emphysema and
lung cancer. Previously, he served as president and CEO of
Kerberos Proximal Solutions, which was acquired by FoxHollow
Technologies, and as president and CEO of VenPro, a heart valve
business acquired by Medtronic. Both these companies specialized
in devices for the cardiovascular system. Prior to that, he spent 19
years with Baxter International and American Hospital Supply
Corporation in roles of increasing responsibility that included division
president for Dade Diagnostics, Bentley Labs, and Baxter’s Perfusion
Services. King is also currently CEO of Q’Apel Medical – a medical
device company focused on Neurovascular disease
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
None.
Uptake Medical Corporation
•
•
Chairman of remuneration and nomination committee.
Member of audit and risk committee.
Ms. Lesa Musatto
Non-Executive Director
Appointed:
26 April 2022
Experience and expertise:
for companies ranging
Ms. Musatto serves as the Chief Marketing Officer at Auction
Technology Group (LSE:ATG), after being in multiple executive and
marketing strategy roles
large
corporations to start-ups. Her ability to execute successful marketing
campaigns has allowed her to take on roles in different industries –
from consumer retail experience with Levi Strauss, Gap, Inc. and
Safeway to health tech experience with Nuelle and more recently with
ATG – a leading publicly listed exchange and marketplace
technology platform.
from
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
None.
None.
None.
15
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
Meetings of Directors
The number of meetings of the Group’s Board of Directors and of each Board Committee held during the financial
year ended 30 June 2022 and the number of meetings attended by each Director were:
Director
Niall Cairns
Craig Cooper
Jarrod White
King Nelson
Lesa Musatto
Directors Meetings
Held Whilst in Office
Attended
4
4
4
4
-
4
4
4
4
-
Directors’ Interests
Information on the Directors’ and their associates’ interests in shares and options of the Company at 30 June 2022
can be found in the Remuneration Report on page 18.
Shares Issued on the Exercise of Options
During the financial year ended 30 June 2022, 80,238,638 shares were issued to Directors on the exercise of
options, see the Remuneration Report for more detail.
Environmental Regulations
The Group’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a state or territory.
Indemnity and Insurance of Directors and Officers
During the financial year the Group paid premiums in respect of a contract insuring Directors and Executives
against a liability incurred in the ordinary course of business.
Proceedings on Behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Corporate Governance Statement
A copy of the Corporate Governance Statement has not been disclosed within the Annual Report but is available
on the website http://www.CardieX.com in accordance with the ASX Listing Rule 4.10.3.
Declaration by Directors
Before it approved the Company’s 2022 financial statements, the Board was satisfied that the financial records
have been properly maintained and that the financial statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and performance of the Group, and their opinion has been
formed on the basis of a sound system of risk management and internal control which is operating effectively.
Non-audit Services
The Directors received the Auditor’s Independence Declaration under s.307 of the Corporations Act 2001, which
is set out on page 23. The external auditor did not provide non-audit services to the Company during the year
ended 30 June 2022.
16
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ REPORT (CONT.)
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Officers of the Company who are former partners of BDO
There are no officers of the Company who are former partners of BDO.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out on page 23.
17
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
REMUNERATION REPORT
This report outlines the remuneration arrangements in place for Directors and executives of CardieX Limited. The
information in this report has been audited as required by 308(3C) of the Corporations Act 2001.
Principles used to determine the nature and amount of remuneration
Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of,
the directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Board also
refers to external surveys to ensure non-executive directors’ fees and payments are appropriate and in line with
the market. The Chairman’s fees are determined independently to the fees of non-executive directors based on
comparative roles in the external market. The Chairman is not present at any discussions relating to determination
of his own remuneration. Non-executive directors are entitled to receive share options, following approval by the
shareholders of CardieX Limited.
Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The pool was increased to $500,000 at the 2021 shareholder meeting,
excluding share-based payments that are subject to separate shareholder approval.
Executives
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with achievement of strategic
objectives and the creation of value for shareholders.
The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
•
•
•
•
•
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation;
transparency; and
capital management.
Alignment to shareholders’ interests:
•
•
•
has Company growth as a core component of plan design;
focuses on sustained long-term growth in shareholder wealth; and
attracts and retains high calibre executives.
Alignment to program participants’ interests:
•
•
•
•
rewards capability and experience;
reflects competitive reward for contribution to growth in Company value;
provides a clear structure for earning rewards; and
provides recognition for contribution.
Details of the nature and amount of each element of the emoluments of each Director of CardieX Limited are set
out below.
Directors
Names and positions held of key management personnel in office at any time during the financial year are:
Mr. Niall Cairns
Mr. Craig Cooper
Mr. King Nelson
Mr. Jarrod White
Ms. Lesa Musatto
Executive Director and Chairman
CEO and Executive Director
Non-executive Director
Executive Director
Non-executive Director
18
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
REMUNERATION REPORT (CONT.)
Key Management Personnel Compensation
2022
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto
Salary and directors
fees
Share Based
Payment Benefits
$
$
260,000
716,421
55,915
116,500
-
499,325
499,325
30,845
187,489
-
Total
$
759,325
1,215,746
86,760
303,989
-
Total Compensation
1,148,836
1,216,984
2,365,820
2021
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total Compensation
204,000
528,953
36,697
102,000
871,650
247,611
545,759
15,295
96,507
905,172
451,611
1,074,712
51,992
198,507
1,776,822
Shares Held by Key Management Personnel and Their Associates
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto
Total
Balance
01 July 2021
Additions
Share
consolidation
181,842,010
53,751,9221
(212,034,538)
177,242,010
53,751,9221
(207,894,538)
153,846
4,857,577
-
-
(138,461)
907,933
(5,188,559)
-
-
Balance
30 June 2022
23,559,394
23,099,394
15,385
576,951
-
364,095,443
108,411,777
(425,256,096)
47,251,124
1. A total of 47,751,922 pre consolidated shares acquired by Mr Cairns and Mr Cooper in the year are indirectly
held by C2 Ventures, in which Mr Cairns and Mr Cooper are directors. These shares are subject to the
Restriction Agreement and Deed of Undertaking as approved by members at the Extraordinary General
Meeting held on 28 May 2018.
19
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
REMUNERATION REPORT (CONT.)
Shares Held by Key Management Personnel and Their Associates (Cont.)
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
Balance
01 July 2020
Additions
Balance
30 June 2021
161,960,192
19,881,8181
181,842,010
158,960,192
18,281,8181
177,242,010
153,846
3,257,577
-
1,600,000
153,846
4,857,577
324,331,807
39,763,636
364,095,443
1. A total of 18,281,818 pre consolidated shares acquired by Mr Cairns and Mr Cooper in the year are indirectly
held by C2 Ventures, in which Mr Cairns and Mr Cooper are directors. These shares are subject to the
Restriction Agreement and Deed of Undertaking as approved by members at the Extraordinary General
Meeting held on 28 May 2018.
Options Held by Key Management Personnel and Their Associates
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto
Total
Balance
01 July 2021
Exercised
Transferred
Share
consolidation
Balance
30 June 2022
43,420,455
(39,920,455)
(2,000,000)
(1,350,000)
43,420,455
(39,920,455)
(2,000,000)
(1,350,000)
1,500,000
-
1,897,728
(397,728)
-
-
-
-
-
(1,350,000)
(1,350,000)
-
150,0002
150,0002
150,000
150,000
-
90,238,638
(80,238,638)
(4,000,000)
(5,400,000)
600,000
2. Directors Mr Cairns and Mr Cooper hold 150,000 options indirectly through C2 Ventures Pty Limited, of
which they are both directors.
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
Balance
01 July 2020
39,000,000
39,000,000
1,500,000
1,897,728
81,397,728
Expired
Additions
Balance
4,420,455
4,420,455
-
-
30 June 2021
43,420,4553
43,420,4553
1,500,000
1,897,728
8,840,910
90,238,638
-
-
-
-
-
3. Directors Mr Cairns and Mr Cooper hold 41,920,455 options indirectly through C2 Ventures Pty Limited, of
which they are both directors.
20
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
REMUNERATION REPORT (CONT.)
Performance Rights Held by Key Management Personnel and Their Associates
On 11 December 2020 shareholders approved the issue of performance rights to be issued to the Directors under
the Company’s Performance Rights and Option Plan. These performance rights total 160,500,000 and expire on
11 December 2023. The terms of the Director rights on issue are as follows:
Tranche
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
Number of
performance rights
Will vest if share price
trade at or above:
1,100,000
1,100,000
2,450,000
5,700,000
5,700,000
$0.12
$0.15
$0.20
$0.25
$0.50
Expiry Date of
Performance
Milestone
11/12/2023
11/12/2023
11/12/2023
11/12/2023
11/12/2023
Balance
01 July 2021
Converted
Expired
Share
consolidation
Balance
30 June 2022
Niall Cairns
68,000,000
-
-
(61,200,000)
Craig Cooper
104,000,000
(12,000,000)
(24,000,000)
(61,200,000)
King Nelson
Jarrod White
Lesa Musatto
Total
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
3,500,000
21,000,000
-
-
-
-
-
-
-
(3,150,000)
(18,900,000)
-
196,500,000
(12,000,000)
(24,000,000)
(144,450,000)
16,050,000
Balance
01 July 2020
-
36,000,000
-
-
36,000,000
Expired
Additions
Balance
30 June 2021
68,000,000
68,000,000
68,000,000
104,000,000
3,500,000
21,000,000
3,500,000
21,000,000
160,500,000
196,500,000
-
-
-
-
-
6,800,000
6,800,000
350,000
2,100,000
-
Employment Agreements
Remuneration and other terms of employment for the CEO and the other key management personnel are
formalised in employment agreements. Each of these agreements provide for the provision of performance related
cash bonuses, other benefits including health insurance and car allowances, and participation, when eligible, in the
CardieX Limited Employee Share Option Plan. Other major provisions of the agreements relating to remuneration
are set out below.
All contracts with executives may be terminated early by either party with variable notice periods, subject to
termination payments as detailed below.
21
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
REMUNERATION REPORT (CONT.)
Craig Cooper – Chief Executive Officer
• Agreement commenced on 1 December 2017.
• Base salary of US$420,000 per annum.
• Bonuses to be paid at discretion of the Group based on performance reviews.
• Reimbursement for reasonable expenses incurred in running the US business, paid on a monthly basis.
Niall Cairns – Executive Chairman and Director
• Current agreement commenced with an effective date of 1 August 2019.
• Monthly consulting fee for strategic review and consulting services of AU$25,000 per month.
• Reimbursement for reasonable expenses incurred.
King Nelson – Non-Executive Director
• Current agreement commenced with an effective date of 13 November 2015.
• Base salary of US$50,000 per annum.
Jarrod White – Director
•
Jarrod White is the principal of Traverse Accountants Pty Ltd, who holds an engagement with the Group
covering CFO services, Company Secretarial services, and other general accountancy services.
• Mr. White received Directors Fees of $35,000 in shares for this reporting year in addition to the arms’
length services paid to Traverse Accountants Pty Ltd.
Lesa Musatto – Non-Executive Director
•
Lesa Musatto is remunerated in options for her services as Non-Executive Director.
Loans to Directors and Key Management Personnel
There were no loans made to directors or key management personnel of the Company and the Group during the
period commencing at the beginning of the financial year and up to the date of this report.
Signed in accordance with a resolution of the Board of Directors, made pursuant to s298(2) of the Corporations
Act 2001.
Niall Cairns
Executive Chairman
Sydney, 30 September 2022
22
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY GRANT SAXON TO THE DIRECTORS OF CARDIEX LIMITED
As lead auditor of CardieX Limited for the year ended 30 June 2022, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of CardieX Limited and the entities it controlled during the period.
Grant Saxon
Director
BDO Audit Pty Ltd
Sydney
30 September 2022
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
23
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR YEAR ENDED 30 JUNE 2022
Sales revenue
Other revenue
Other income
Total income
Cost of sales
Provision for doubtful debts
Marketing and sales expense
Product development and regulatory expense
Occupancy expense
Employee benefits expense
Administration expense
Interest expense
Foreign exchange gain / (loss)
Fair value loss
Loss before income tax expense
Income tax expense
Note
3
3
4
10
2022
$
4,066,982
432,580
4,499,562
671,048
5,170,610
(1,006,703)
(373)
(1,540,278)
(2,376,723)
(341,339)
(9,769,755)
(1,738,425)
(227,945)
296,307
(275,010)
2021
(restated)
$
5,001,134
256,490
5,257,624
839,647
6,097,271
(905,282)
(41,911)
(182,167)
(918,112)
(294,658)
(6,628,530)
(1,498,018)
(268,384)
(484,452)
(55,855)
(11,809,634)
(5,180,098)
6
-
-
Loss attributable to members of the parent entity
(11,809,634)
(5,180,098)
Other comprehensive income
Items that will be reclassified subsequently to profit or
loss when specific conditions are met:
Exchange differences on translating foreign operations
(20,247)
87,036
Total comprehensive loss for the period
(11,829,881)
(5,093,062)
Basic loss per share (cents)
Diluted loss per share (cents)
8
8
(11.5)
(11.5)
(5.9)
(5.9)
These financial statements should be read in conjunction with the accompanying notes.
24
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventory
Financial assets
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Financial assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Unearned revenue
Provisions
Financial liabilities
Lease liabilities
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Note
9
10
11
18
12
14
18
12
15
16
17
20
21
22
17
21
2022
$
1,455,590
813,138
994,774
-
2021
(restated)
$
3,665,259
555,504
444,226
4,937,483
1,566,218
1,100,304
4,829,720
10,702,776
1,069,790
320,885
6,080,309
77,160
352,068
331,577
642,392
32,150
7,548,144
1,358,187
12,377,864
12,060,963
2,224,631
877,312
526,538
66,778
122,871
1,297,505
5,115,635
1,074,799
430,181
404,793
275,209
70,616
989,723
3,245,321
1,824
649,092
650,916
218
108,292
108,510
5,766,551
3,353,831
6,611,313
8,707,132
23(a)
24
26
67,552,468
3,925,422
59,286,666
3,086,032
(64,866,577)
(53,665,566)
6,611,313
8,707,132
These financial statements should be read in conjunction with the accompanying notes.
25
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2022
Shares on
Issue
Note
Reserves Accumulated
Total
$
$
losses
$
$
Balance at 1 July 2020
53,127,941
1,969,548
(49,217,488)
5,880,001
Restatement of retained earnings
2
-
-
431,284
431,284
Restated total equity at the beginning of
the financial year
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their
capacity as owners
53,127,941
1,969,548
(48,786,204)
6,311,285
-
-
-
-
(5,180,098)
(5,180,098)
87,036
-
87,036
87,036
(5,180,098)
(5093,062)
Capital placement
Share issue costs
Shares issued in lieu of payments to
employees
Performance rights vesting expense
Options vesting expense
Options expired
23(a)
23(a)
6,385,478
(333,405)
23(a)
106,652
23(b)
23(c)
23(c)
-
-
-
-
-
-
898,020
432,164
-
-
-
-
-
6,385,478
(333,405)
106,652
898,020
432,164
(300,736)
300,736
-
Balance at 30 June 2021
59,286,666
3,086,032
(53,665,566)
8,707,132
Balance at 1 July 2021
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their
capacity as owners
Shares issued on conversion of options
Performance rights converted to shares
Conversion of convertible notes
Shares issued in lieu of payments to
employees
Performance rights vesting expense
Options vesting expense
Share issue costs
Performance rights expired
Transfer to retained earnings
59,286,666
3,086,032
(53,665,566)
8,707,132
-
-
-
-
(11,809,634) (11,809,634)
(20,247)
-
(20,247)
(20,247)
(11,809,634) (11,829,881)
23(a)
23(c)
20
7,602,431
-
422,557
(422,557)
270,663
(35,719)
23(a)
118,965
-
-
-
1,432,148
494,388
(148,814)
-
23(b)
23(c)
23(a)
23(b)
23(b)
-
-
(573,032)
573,032
(35,591)
35,591
-
-
-
-
-
-
-
7,602,431
-
234,944
118,965
1,432,148
494,388
(148,814)
-
-
Balance at 30 June 2022
67,552,468
3,925,422
(64,866,577)
6,611,313
These financial statements should be read in conjunction with the accompanying notes.
26
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Receipt for R&D tax incentives
Interest received
Note
2022
$
2021
$
4,291,582
(13,911,521)
(9,619,939)
468,927
300
4,511,959
(9,024,602)
(4,512,643)
522,779
729
Net cash used in operating activities
27
(9,150,712)
(3,989,135)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property, plant and equipment
Payments for intangible assets
Repayment of convertible notes
Net cash (used in)/from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shares issued
Share issue costs
Borrowings received, net of transaction costs
Borrowings repaid
Finance costs
Repayment of lease liabilities
Net cash provided by financing activities
23(a)
23(a)
22
22
Net (decrease)/increase in cash held
Cash and cash equivalents at beginning of financial year
Effects of foreign currency exchange
Cash and cash equivalents at end of financial year
9
(420,986)
(17,070)
-
(438,056)
7,602,431
(148,814)
1,199,285
(1,055,591)
(26,322)
(157,487)
7,413,502
(2,175,266)
3,665,259
(34,403)
1,455,590
(71,184)
(287,155)
721,500
363,161
6,385,478
(333,405)
13,750
(459,778)
(175,138)
(144,977)
5,285,930
1,659,956
2,061,642
(56,339)
3,665,259
These financial statements should be read in conjunction with the accompanying notes.
27
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
The financial report includes the consolidated financial statements and notes of CardieX Limited and controlled
entities (‘Consolidated Group’ or ‘Group’). The separate financial statements and notes of CardieX Limited as an
individual parent entity (‘Company’) have not been presented within the financial report as permitted by the
Corporations Act 2001. CardieX Limited is a for-profit entity.
The financial statements were authorised for issue on 30 September 2022 by the directors of the Company.
Basis of Preparation
The financial report is a general-purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board (“AASB”) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they
apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation
of this financial report are reported below. They have been consistently applied unless stated otherwise. All
applicable new accounting standards have been adopted for the year ended 30 June 2022 unless otherwise stated
and their adoption did not have a significant impact on the financial performance or position of the consolidated
entity.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and the discharge of liabilities in the normal course of business.
At the date of signing, the Directors have assessed that there is a material uncertainty related to going concern
that may cast significant doubt over the ability of the Group to continue as a going concern given that the Group
incurred a loss after tax of $11,809,634 (2021: $5,180,098), had net cash outflows from operating activities of
$9,150,712 for the year ended 30 June 2022 (2021: $3,989,135) and had a net current liability position as at year-
end of $285,915 (2021: net asset position of $7,457,455). As a result of these conditions the Group may be unable
to realise its assets and discharge its liabilities in the normal course of business.
The Directors believe that there are reasonable grounds that the Group will be able to continue as a going concern,
after consideration of the following factors:
• On 22 August 2022, CardieX announced that it had completed a $4.33m placement, as well as the launch
of a share purchase plan (SPP) where proceeds exceeded the target of $1m;
• On 29 September 2022, the Company announced the results of the SPP and raised $1.6m – this
•
•
•
represents a 59.3% over-subscription over the originally targeted raise of $1.0 million;
The Company is the process of progressing a dual ASX/NASDAQ or NYSE listing, and if successful, this
would raise significant equity funding for the Company, along with improving the Company’s options with
regards to equity raising;
If required, the Group has the ability to continue to raise additional funds on a timely basis pursuant to
the Corporations Act 2001. The Group has a strong track record of successful equity funding in the
preceding financial years. The Directors have no reason to believe that it will not be able to continue to
source equity or alternative funding if required.
There is a term loan facility of $1,297,505 repayable in October 2022, however this will be partially offset
by R&D tax rebates expected in the same month. The Group are also currently reviewing options to
extend or refinance the facility.
Accordingly, the Directors believe that the Group will be able to continue as a going concern, and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
28
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Principles of Consolidation
A controlled entity is any entity CardieX Limited has the power to control the financial and operating policies of so
as to obtain benefits from its activities.
A list of controlled entities is contained in Note 13 to the financial statements. All controlled entities have a 30 June
2022 financial year-end for this current year.
As at the reporting date, the assets and liabilities of all controlled entities have been incorporated into the
consolidated financial statements as well as their results for the year ended.
All inter-company balances and transactions between entities in the Group, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistencies with those policies applied by the Company.
Where controlled entities have entered or left the Group during the year, their operating results have been
included/excluded from the date control was obtained or until the date control ceased.
Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except
for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent
measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and substantially all the risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price in accordance with AASB 9, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Hybrid contracts
If a hybrid contract contains a host that is a financial asset, the policies applicable to financial assets are applied
consistently to the entire contract.
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as
hedging instruments, are classified into the following categories upon initial recognition:
•
•
•
•
financial assets at amortised cost
financial assets at fair value through profit or loss (FVPL)
debt instruments at fair value through other comprehensive income (FVOCI)
equity instruments at fair value through other comprehensive income (FVOCI)
Classifications are determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
29
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated
as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The Company’s cash and cash equivalents, trade and most
other receivables fall into this category of financial.
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a business model other than ‘hold to collect’ or ‘hold to collect and sell’ are
categorised at fair value through profit and loss. Further, irrespective of business model, financial assets whose
contractual cash flows are not solely payments of principal and interest are accounted for at FVPL. All derivative
financial instruments fall into this category, except for those designated and effective as hedging instruments, for
which the hedge accounting requirements apply.
Debt instruments at fair value through other comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing solely payments of principal and interest and held within
a business model of collecting the contractual cash flows and selling the assets are accounted for at FVOCI. Any
gains or losses recognised in OCI will be recycled upon derecognition of the asset.
Equity instruments at fair value through other comprehensive income (Equity FVOCI)
Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to
be measured at FVOCI. Under this category, subsequent movements in fair value are recognised in other
comprehensive income and are never reclassified to profit or loss. Dividend income is taken to profit or loss unless
the dividend clearly represents return of capital.
Impairment of Financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance
depends upon the Group's assessment at the end of each reporting period as to whether the financial instrument's
credit risk has increased significantly since initial recognition, based on reasonable and supportable information
that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses
that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become
credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on
the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis
of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at
the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance
is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other
cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
30
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST components of
investing and financing activities, which are disclosed as operating cash flows. There is provision made in the
Statement of Cash Flows to disclose the applicable GST refunds/payments that have been remitted to the ATO to
accurately show the cash position of CardieX Limited.
Foreign Currency Translation
Functional currency
Items included in the financial statements of the Group’s operations are measured using the currency of the primary
economic environment in which it operates (‘the functional currency’).
The functional currency of the Company and controlled entities registered in Australia is Australian dollars (AU$).
The functional currency of the AtCor Medical Inc is United States dollars (US$).
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the end of the reporting period. Foreign exchange gains and losses resulting from settling
foreign currency transactions, as well as from restating foreign currency denominated monetary assets and
liabilities, are recognised in profit or loss, except when they are deferred in other comprehensive income as
qualifying cash flow hedges or where they relate to differences on foreign currency borrowings that provide a hedge
against a net investment in a foreign entity.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the
date when fair value was determined.
Presentation currency
The financial statements are presented in Australian dollars, which is the Group’s presentation currency.
Functional currency balances are translated into the presentation currency using the exchange rates at the balance
sheet date. Value differences arising from movements in the exchange rate is recognised in the statement of
comprehensive income.
Critical accounting estimates and judgements
The Group has operations in both the US and Australia; however, the functional currency is deemed to be
Australian dollars as the Group is listed on the Australian stock exchange and the main operations are located in
Australia.
Functional currency of AtCor Medical Inc.
In determining that United States dollar (US$) is the functional currency of AtCor Medical Inc., management have
applied judgement to assess the currency that most faithfully represents the economic effects of the underlying
transactions, events and conditions in AMI. Management have considered the currency that mainly influences sales
prices for goods and services and labour, material and other costs of providing goods or services.
New accounting standards and interpretations adopted
The Group has adopted all other new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
As at 30 June 2022, the group has adopted all new and revised mandatory accounting standards applicable. Any
new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
31
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: RESTATEMENT OF COMPARATIVE FIGURES
The 2021 consolidated statement of profit or loss and other comprehensive income and statement of financial
position have been restated as a result of a revaluations of the Group’s financial assets. Refer note 17 for further
details.
Consolidated statement of profit or loss and other comprehensive income for year ended 30 June 2021
Sales revenue
Interest revenue
Other income
Total income
Cost of sales
Bad debts expense
Marketing and sales expense
Product development and regulatory expense
Occupancy expense
Employee benefits expense
Administration expense
Interest expense
Loss of forgiveness of debt
Foreign exchange loss
Fair value loss
Loss before income tax expense
Income tax expense
Loss attributable to members of the parent
entity
Other comprehensive income
Exchange differences on translating foreign
operations
Total comprehensive loss for the period
2021
Reported
$
5,001,134
256,490
5,257,624
839,647
6,097,271
(905,282)
(41,911)
(182,167)
(918,112)
(294,658)
(6,628,530)
(1,498,018)
(268,384)
(338,373)
(567,433)
-
(5,545,597)
-
2021
Adjustments
$
-
-
-
-
-
-
-
-
-
-
-
-
-
338,373
82,981
(55,855)
365,499
-
2021
Restated
$
5,001,134
256,490
5,257,624
839,647
6,097,271
(905,282)
(41,911)
(182,167)
(918,112)
(294,658)
(6,628,530)
(1,498,018)
(268,384)
-
(484,452)
(55,855)
(5,180,098)
-
(5,545,597)
365,499
(5,180,098)
87,036
(5,458,561)
-
87,036
365,499
(5,093,062)
32
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: RESTATEMENT OF COMPARATIVE FIGURES (CONT.)
Consolidated statement of financial position as at 30 June 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventory
Financial assets
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Financial assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Unearned revenue
Provisions
Financial liabilities
Lease liabilities
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2021
Adjustments
$
-
-
-
1,406,520
-
1,406,520
-
-
(609,737)
-
(609,737)
796,783
-
-
-
-
-
-
-
-
-
-
-
2021
Restated
$
3,665,259
555,504
444,226
4,937,483
1,100,304
10,702,776
352,068
331,577
642,392
32,150
1,358,187
12,060,963
1,074,799
430,181
404,793
275,209
70,616
989,723
3,245,321
218
108,292
108,510
3,353,831
796,783
8,707,132
-
-
796,783
796,783
59,286,666
3,086,032
(53,665,566)
8,707,132
2021
Reported
$
3,665,259
555,504
444,226
3,530,963
1,100,304
9,296,256
352,068
331,577
1,252,129
32,150
1,967,924
11,264,180
1,074,799
430,181
404,793
275,209
70,616
989,723
3,245,321
218
108,292
108,510
3,353,831
7,910,349
59,286,666
3,086,032
(54,462,349)
7,910,349
33
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 3: REVENUE
Sales revenue
Sale of goods
Lease income
Service income
Freight income
Royalty income
Other revenue
Interest revenue
Total revenue
2022
$
2,334,130
1,185,293
395,332
93,766
2021
$
2,104,182
2,165,120
595,562
81,674
58,461
54,596
4,066,982
5,001,134
432,580
4,499,562
256,490
5,257,624
Accounting policy for revenue recognition
To determine whether to recognise revenue and what price, the Group follows a 5-step process:
1.
2.
3.
4.
5.
Identifying the contract with a customer
Identifying the performance obligations
Determining the transaction price
Allocating the transaction price to the performance obligations
Recognising revenue when/as performance obligation(s) are satisfied.
Total transaction price for a contract is allocated amongst the various performance obligations based on their
relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf
of third parties.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance
obligations by transferring the promised goods or services to its customers.
The Group has identified the following revenue streams:
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the
goods, the control is transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue
are net of sales returns and trade discounts.
Service income
Service income is recognised over time in line with management’s assessment of the performance obligations
under each contract.
Freight income
Freight income is recognised when the control is transferred to the customer and there is a valid sales contract.
Royalty income
Royalty income is recognised when entitled under royalty agreements.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
34
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 3: REVENUE (CONT.)
Lease Income
Lease income accounting policy
The Group earned lease income from both finance and operating lease of goods and continues to recognise
related income in line with AASB 16 Leases. The Group recognises unearned revenue for lease income received
in advance where the benefit from the use of the underlying asset has not been diminished. The unearned revenue
is reported in the statement of financial position. Similarly, if the Group provides benefits from the underlying asset
before it receives the consideration, the Group recognises either a contract lease asset or a receivable in its
statement of financial position, depending on whether something other than the passage of time is required before
the consideration is due.
For operating leases, the lease income and interest in relation to the goods are recognised over time per the
terms set in the contract with the customer.
For goods sold on a finance lease, income is recognised at the point of sale, which is where the customer has
taken delivery of the goods, the control is transferred to the customer and there is a valid sales contract. Any
associated interest income is recognised over the life of the lease in line with the terms set in the contract with
the customer.
CardieX leases multiple medical devices to customers as part of pharmaceutical trials. The amounts are paid over
an accelerated term per the signed contract, and then revenue is recognised on a straight-line basis based on the
amount of equipment delivered. The equipment is leased to the customer for approximately 2 years which is not
considered to be a major part of the economic life of the asset. The equipment is returned to CardieX at the end
of the lease and the equipment can continue to be used without any major modification.
Lessor commitments
Minimum lease commitments receivable but not
recognised in the financial statements:
Within one year
One to five years
More than five years
Total
NOTE 4: OTHER INCOME
R&D tax concession from the Australian Tax Office
Covid-19 Stimulus benefits from the Australian Tax Office
PPP loan forgiveness
Other
Total
2022
$
123,748
2,540
-
126,288
661,030
-
-
10,018
671,048
2021
$
603,316
3,166
-
606,482
536,008
63,000
233,479
7,160
839,647
Accounting policy for research and development grant income
Research and development grant income is recognised when the Group is entitled to the research and development
grant. The amount is treated as other income in the period in which the research and development costs were
incurred.
35
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: EXPENSES
2022
$
2021
(restated)
$
Loss before income tax includes the following specific
expenses:
Depreciation on plant and equipment
58,451
73,805
Depreciation on right of use assets
14
160,348
108,624
Share based payments
23
2,010,500
1,406,836
Rental expense relating to short term leases
-
62,820
NOTE 6: INCOME TAX EXPENSE
Loss from continuing operations before income tax
expense
Prima facie tax benefit on loss from ordinary activities
before income tax at 25% (2021: 26%):
Add tax effect of:
— Other non-allowable items
Subtotal
Less tax effect of:
—
—
Items not assessable for taxation
Items deductible for taxation but not accounting
Differences in overseas tax rates
Benefit of tax losses and temporary differences not
recognised
Income tax expense
(11,809,634)
(5,180,098)
(2,952,408)
(1,346,825)
1,096,025
(1,856,384)
(165,257)
(270,269)
127,355
652,622
(694,203)
(295,248)
(116,116)
(4,492)
2,164,555
1,110,059
-
-
The Group has carried forward tax losses, calculated according to Australian income tax legislation of $51,027,938
(2021: $38,636,618), which will be deductible from future assessable income provided that income is derived,
and:
a) The Company and its controlled entities carry on a business of, or a business that includes software
development in Australia; and
b) No change in tax legislation adversely affects the Group and its controlled entities in realising the benefit
from the deduction for the losses.
The benefit of these losses will only be recognised where it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can be utilised. Deferred tax assets are estimated but not
recognised at $12,756,984 at 30 June 2022 (2021: $10,045,521) so as to enable the Board to determine more
reliably the probability of utilising these tax assets in the foreseeable future.
As at the date of this report the entities in the tax consolidation group had not entered into a tax sharing agreement.
No compensation has been received or paid for any current tax payable or deferred tax assets relating to tax
losses assumed by the parent entity since implementation of the tax consolidation regime.
36
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 6: INCOME TAX (CONT.)
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
CardieX Limited and its wholly owned Australian controlled entities have implemented the tax consolidation
legislation as of July 1, 2005.
The head entity, CardieX Limited, and the controlled entities in the tax consolidated group account for their own
current and deferred tax amounts. These amounts are measured as if each entity in the tax consolidated group
continues to be a standalone taxpayer in its own right.
NOTE 7: AUDITOR REMUNERATION
Remuneration of the auditor of the Group for:
Audit services for the financial year – BDO
NOTE 8: LOSS PER SHARE
Reconciliation of loss:
Loss after tax
2022
$
2021
$
95,000
99,000
2022
$
2021
(restated)
$
(11,809,634)
(5,180,098)
Weighted average number of ordinary shares
outstanding during the year used in calculating loss
per share1
103,005,388
87,278,943
Basic and diluted loss per share
(11.5)
(5.9)
Performance rights and options to acquire shares that would be dilutive if the Group was generating a profit have
been excluded from the weighted average number of issued ordinary shares as the Group is generating a loss.
1On 16 February 2022, there was a share consolidation of the issued capital of the Company on the basis of one
(1) security for every ten (10) securities held. Where the consolidation resulted in a fraction of a Share, Performance
Right or Option being held, the Company rounded that fraction up to the next whole number. The prior year
weighted average number of ordinary shares has been adjusted accordingly so that the basic and diluted los per
share are comparable.
37
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Total
2022
$
2021
$
1,455,590
3,665,259
1,455,590
3,665,259
Accounting policy for cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly
liquid investments with original maturities of three months or less.
NOTE 10: TRADE AND OTHER RECEIVABLES
Trade receivables
Less: Provision for doubtful debts
Provision for doubtful debts
2022
$
860,738
(47,600)
813,138
2021
$
604,011
(48,507)
555,504
As at 30 June 2022 current trade receivables of the Group with a nominal value of $47,600 (2021: $48,507) were
fully impaired.
At 1 July
Provision for doubtful debts recognised during the year
Reversal of provision upon receipt of payment
Receivables written off during the year as uncollectible
At 30 June
2022
$
48,507
373
(1,280)
-
47,600
2021
$
68,164
41,911
-
(61,568)
48,507
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortized cost using the
effective interest method, less any provision for impairment. Trade and other receivables are non-interest bearing
and are generally on 30 to 60 day terms.
Collectability of trade receivables is reviewed on an ongoing basis in accordance with the expected credit loss
(“ECL”) model. Credit losses are measured at the present value of all cash shortfalls (i.e. the difference between
the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to
receive). ECLs are discounted at the effective interest rate of the financial asset.
The ECL assessment completed by the Group as at year end has resulted in an immaterial credit loss and no
impairment allowance has been recognised by the Group (2021: $Nil). A specific provision of $47,600 (2021:
$48,507) was recognised at each financial year end.
Critical accounting estimates and judgements
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based
on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an
overall expected credit loss rate for each group. These assumptions include recent sales experience, historical
collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is
available.
38
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 11: INVENTORY
Raw materials and stores - at cost
Finished goods at cost
2022
$
2021
$
517,013
283,938
477,761
160,288
994,774
444,226
Accounting policy for inventory
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly attributable
to the manufacturing process as well as suitable portions of related production overheads, based on normal
operating capacity. Costs are assigned using the first in, first out cost formula. Net realisable value is the estimated
selling price in the ordinary course of business less any applicable selling expenses.
Critical accounting estimates and judgements
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level
of the provision is assessed by considering the recent sales experience, the ageing of inventories and other factors
that affect inventory obsolescence.
NOTE 12: OTHER ASSETS
CURRENT
Prepayments
Contract assets
R&D tax incentive receivable
Deposits
Other
NON-CURRENT
Deposits
2022
$
2021
$
816,388
445,627
12,179
83,935
735,026
542,923
-
25,195
2,625
2,624
1,566,218
1,100,304
77,160
32,150
NOTE 13: CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of CardieX Limited, and the following
subsidiaries:
AtCor Medical Pty Limited
AtCor Medical Inc
CardieX (Shanghai) Medical Technology Co., Ltd.
Conneqt Inc
* Percentage of voting power is in proportion to ownership
Country of
Incorporation
Beneficial Interest (%)*
2022
2021
Australia
USA
China
USA
100
100
100
100
100
100
100
100
39
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 14: PLANT AND EQUIPMENT
Manufacturing
plant and
equipment
Furniture,
fixtures and
equipment
Devices
leased to
customers
Property
under lease
(right-of use
asset)
$
$
$
$
Total
$
Year ended 30 June 2021
Opening net book amount
16,951
102,358
183,408
262,919
565,636
Additions
Exchange differences
Depreciation charge
-
-
20,621
(4,915)
50,563
(9,720)
-
71,184
(14,201)
(28,836)
(13,979)
(46,506)
(86,826)
(108,382)
(255,693)
Disposal Adjustments to Cost
(163,813)
(634,405)
(37,897)
Disposal Adjustments to
Depreciation
163,787
634,208
37,897
-
-
(836,115)
835,892
Closing net book amount
2,946
71,361
137,425
140,336
352,068
At 30 June 2021
Cost
344,867
230,362
231,145
418,689 1,225,063
Accumulated depreciation
(341,921)
(159,001)
(93,720)
(278,353)
(872,995)
Net book amount
2,946
71,361
137,425
140,336
352,068
Manufacturing
plant and
equipment
Furniture,
fixtures and
equipment
Devices
leased to
customers
Property
under lease
(right-of use
asset)
$
$
$
$
Total
$
Year ended 30 June 2022
Opening net book amount
2,946
71,361
137,425
140,336
352,068
Additions
Disposal Adjustments to Cost
Disposal Adjustments to
Depreciation
Exchange differences
Depreciation charge
-
-
-
-
290,186
25,864
677,701
993,751
-
-
-
-
(218,015)
(218,015)
218,015
218,015
3,712
12,548
10,324
26,584
(1,202)
(45,407)
(95,656)
(160,348)
(302,613)
Closing net book amount
1,744
319,852
80,181
668,013
1,069,790
At 30 June 2022
Cost
344,867
517,431
299,676
892,043
2,054,017
Accumulated depreciation
(343,123)
(197,579)
(219,495)
(224,030)
(984,227)
Net book amount
1,744
319,852
80,181
668,013
1,069,790
40
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 14: PLANT AND EQUIPMENT (CONT.)
Accounting policy for plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Group
commencing from the time the asset is held ready for use.
The useful lives used for depreciable assets are:
• Manufacturing plant and equipment
•
Furniture, fixtures and equipment
• Devices leased to customers
•
Lease improvements
3 – 10 years
3 – 5 years
3 – 4 years
Life of lease
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are included in the Statement of Profit or Loss and
Other Comprehensive Income.
Right of Use Asset
The right-of-use asset is initially measured at cost, which comprised the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying or the site on which it
is located, less any lease incentives received.
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-
line basis over the term of the lease unless another systematic basis is more representative of the time pattern in
which economic benefits from the leased assets are consumed.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.
Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible assets to determine whether there is
any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s
carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Statement
of Profit or Loss and Other Comprehensive Income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Critical accounting estimates and judgements
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful
lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
41
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: TRADE AND OTHER PAYABLES
Trade creditors
Other payables
2022
$
1,940,158
284,473
2021
$
776,976
297,823
2,224,631
1,074,799
Accounting policy for trade and other payables
Liabilities for creditors and other amounts are carried at amortised cost, which is the present value of the
consideration to be paid in the future for goods and services received, whether or not billed to the Group. The
carrying period is dictated by market conditions but is generally less than 30 days.
NOTE 16: UNEARNED REVENUE
Unearned Revenue
2022
$
877,312
877,312
2021
$
430,181
430,181
The above unearned revenue relates to contracts where payments have been received, but revenue has not yet
been recognised.
NOTE 17: PROVISIONS
CURRENT
Employee benefits
NON-CURRENT
Employee benefits
Accounting policy for provisions
2022
$
2021
$
526,538
404,793
1,824
528,362
218
405,011
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service. Examples of such
benefits include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee
benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are
not expected to be settled wholly within 12 months after the end of the period in which the employees render the
related service. They are measured at the present value of the expected future payments to be made to employees.
The expected future payments incorporate anticipated future wage and salary levels, experience of employee
departures and periods of service, and are discounted at rates determined by reference to market yields at the end
of the reporting period on high quality corporate bonds that have maturity dates that approximate the timing of the
estimated future cash outflows. Any re-measurements arising from experience adjustments and changes in
assumptions are recognised in profit or loss in the periods in which the changes occur. The Group presents
employee benefit obligations as current liabilities in the statement of financial position if the Group does not have
an unconditional right to defer settlement for at least 12 months after the reporting period, irrespective of when the
actual settlement is expected to take place.
42
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 18: FINANCIAL ASSETS
CURRENT
inHealth convertible note
NON-CURRENT
Blumio convertible note
inHealth investment
inHealth convertible note
TOTAL FINANCIAL ASSETS
Blumio Inc
2021
2022
(restated)
$
-
-
-
648,461
5,431,848
6,080,309
6,080,309
$
4,937,483
4,937,483
-
642,392
-
642,392
5,579,875
• In March 2018, the Company entered into a convertible note purchase agreement for the acquisition of a
Convertible Note (the “Blumio Note”) issued by Blumio Inc, payable in two instalments. The full principal balance
of US$600,000 payable under the Blumio Note agreement was met on 14 March 2019.
• Both the debt and derivative components of the Blumio Note are measured as a single instrument at fair value
through profit and loss (FVTPL). It is measured at FVTPL as there is an embedded conversion feature. The term
of the Blumio Convertible Note continues until a fundraising event of more than $8,000,000 occurs at which point
the investment will convert into shares in the Blumio at a 20% discount to the price of the fundraising.
• As part of a detailed review of all financial assets in the Group as at 30 June 2022, management determined that
the fair value of the Blumio Note should have been written down to nil as at 30 June 2021. This is due to the
following indicators of impairment:
- CardieX was unable to obtain sufficient financial information from Blumio in previous financial years, and as
such, the fair value of the investment was assumed to be equal to the consideration paid for the Blumio Note.
- The auditors qualified their opinion in the previous financial year as a result of a lack of evidence to support
the fair value of the investment.
- During the 2022 financial year, the Company obtained financial statements from Blumio which indicated that
Blumio was in a net liabilities position as at 30 June 2020, 30 June 2021 and 30 June 2022. The financial
statements also indicated that Blumio has not generated any income to date, other than research grants.
- Based on this new information, the Company has restated the balance sheet as at 30 June 2020 and 30 June
2021 to reflect the nil value of the Blumio Note as management consider there to be a low probability of
repayment of the Note. See Note 2 of the financial statements for detail on the prior period restatement.
inHealth Medical Services
• On 31 January 2019, the Company exercised in full its option under the agreement to purchase US$3,000,000
of inHealth Medical Services “Tranche 2” (T2) Convertible Note (the “inHealth Note”) securities;
• Both the debt and derivative components of the inHealth Note are measured as a single instrument at FVTPL;
• By 31 December 2019, the Company had paid the full US$3,000,000 to inHealth under the Agreement for the
T2 Notes;
• In July 2020, the Company and inHealth had signed an agreement to restructure the partnership. Key changes
were reducing the outstanding convertible note to US$2,500,000 by repayment of US$500,000, extending the
maturity date to 1 July 2021, and exchanging the option to move to 50.5% for the issuance of 1% of the fully
diluted equity of inHealth.
43
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 18: FINANCIAL ASSETS (CONT.)
inHealth Medical Services (cont.)
• In July 2021 it was agreed to further extend the maturity date of the convertible note to 31 December 2021, and
further agreed between the parties to forgive accrued interest up until 30 June 2020 totalling $338,373 in return
for a further 1% of fully diluted equity of inHealth to CardieX.
• In March 2022, the inHealth Note was extended a further term to November 2023.
• As at 30 June 2022, the total convertible note asset was fair valued at AU$5,431,848 (2021: restated value of
$4,937,483).
• As at 30 June 2022, the Company holds 8.35% equity in inHealth Medical Services, Inc, currently valued at
$648,461 (2021: restated value of $642,392)
NOTE 19: FAIR VALUE MEASUREMENT
Fair value measurement hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair using a three-level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
•
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
• Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine
what is significant to fair value and therefore which category the asset or liability is placed in can be
subjective.
2022
Assets
Convertible notes
Shares at FVTPL
Total Assets
Liabilities
Convertible notes
Total Liabilities
2021
(restated)
Assets
Convertible notes
Shares at FVTPL
Total Assets
Liabilities
Convertible notes
Total Liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
-
-
-
-
5,431,848
5,431,848
648,461
648,461
6,080,309
6,080,309
66,778
66,778
66,778
66,778
Total
$
Level 1
$
Level 2
$
Level 3
$
-
-
-
-
-
4,937,483
4,937,483
642,392
642,392
5,579,875
5,579,875
275,209
275,209
275,209
275,209
-
-
-
-
-
44
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 19: FAIR VALUE MEASUREMENT (CONT.)
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables are assumed to approximate their fair value due to their short-
term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities are the current
market interest rate that is available for similar financial liabilities.
The following valuation techniques are used for instruments categorised in Level 3:
• Convertible notes (Level 3) – The Group’s holding of convertible notes issued by Blumio and inHealth are
classified as loans held at FVTPL. The Group obtained a third party valuation of inHealth for the years
ended 30 June 2020, 2021, and 2022, which used a Monte Carlo Simulation to value the assets.
• Shares in inHealth (Level 3) – The fair value of this investment was also determined from the third party
valuation that was obtained.
Shares in
inHealth
$
inHealth
convertible
note
$
Blumio
convertible
note
$
Total
$
527,626
-
-
-
114,766
642,392
-
-
6,069
648,461
5,932,050
206,999
(721,501)
(358,207)
(121,858)
4,937,483
382,671
343,165
(231,471)
5,431,848
-
6,459,676
48,763
-
-
(48,763)
255,762
(721,501)
(358,201)
(55,855)
-
5,579,875
49,609
-
(49,609)
-
432,280
343,165
(275,011)
6,080,309
Balance at 30 June 2020
(restated)
Interest income
Repayments
Forex adjustment
Fair value adjustment
Balance at 30 June 2021
(restated)
Interest income
Forex adjustment
Fair value adjustment
Balance at 30 June 2022
Critical estimates and judgements
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level
1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability.
Considerable judgement is required to determine what is significant to fair value and therefore which category the
asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These
include discounted cash flow analysis or the use of observable inputs that require significant adjustments based
on unobservable inputs.
45
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 20: FINANCIAL LIABILITIES
Convertible note liabilities
Total financial liabilities
2022
$
66,778
66,778
2021
$
275,209
275,209
In January 2019, C2 Ventures Pty Ltd applied to the Company for 2,500,000 convertible notes at $1 per note.
On 6 March 2019, 1,638,503 notes were converted to shares and a further 640,303 notes were converted to
shares on 21 November 2019. The remaining 221,194 notes were approved in the 2021 AGM and subsequently
converted on 7 December 2021. The balance of $66,778 reflects unpaid interest.
Accounting policy for financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are
measured at amortised cost using the effective interest method except for derivatives and financial liabilities
designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss
(other than derivative financial instruments that are designated and effective as hedging instruments).
NOTE 21: LEASE LIABILITIES
CURRENT
Lease liabilities
NON-CURRENT
Lease liabilities
TOTAL LEASE LIABILITIES
Maturity analysis
2022
$
2021
$
122,871
70,616
649,092
771,963
108,292
178,908
Less than 6
months
6 months to
1 year
1 to 5 years
5+ years
$
$
$
$
Total
$
Lease payments
Finance charges
103,218
107,987
786,616
31,295
1,029,116
(46,106)
(42,229)
(168,344)
(474)
(257,153)
Net present values
57,112
65,758
618,272
30,821
771,963
Accounting policy for lease liabilities
Where a lease is identified at inception, the Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which comprises the ignition amount of
the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying
asset or the site on which it is location, less any leased incentives received.
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined at leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense son a straight-
line basis over the term of the lease unless another systematic basis is more representative of the time pattern in
which economic benefits from the leased assets are consumed.
46
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 21: LEASE LIABILITIES (CONT.)
The Group used the following practical expedients when applying AASB 16 to leases previously classified as
operating leases under AASB117.
•
Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12
months of lease term.
•
Excluded initial direct costs from measuring the right-of-use asset at the date of initial acquisition.
• Used hindsight when determining the lease term if the contract contains options to extend or terminate
the lease.
NOTE 22: BORROWINGS
CURRENT
Term loan facility
2022
$
2021
$
1,297,505
1,297,505
989,723
989,723
Term Loan Facility
On 24 March 2022, the Company entered into a new term loan facility secured against future R&D refunds to be
received by the Company and its wholly owned subsidiary AtCor Medical Pty Ltd. The facility is a prepayment of
forecasted R&D tax incentive claim for the year ended 30 June 2022, with a termination date of 31 October 2022.
The Facility attracts interest at 1% per calendar month. Net cash received from the facility in the quarter was
$1,199,285 with the difference of $98,220 withheld for establishment costs and prepaid interest. The Company
also repaid $1,055,591 during the financial period.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
NOTE 23: ISSUED CAPITAL
(a) Ordinary shares
2022
20211
No of Shares
$
No of Shares
$
At the beginning of reporting period
926,038,155
59,286,666
753,209,290
53,127,941
Capital placement
Shares issued on conversion of
options
Shares issued on conversion of
performance rights
Shares issued on conversion of
convertible notes
Shares issued in lieu of payments to
employees
-
-
169,670,063
6,385,478
23(c)
152,048,619
7,602,431
23(b)
12,000,000
422,557
24
7,831,467
270,663
-
-
-
-
-
-
1,614,480
103,465
3,158,802
106,652
Share consolidation1
(989,579,021)
-
(833,434,339)
Shares issued in lieu of payments to
employees post share consolidation
Cost of raising capital
50,000
15,500
-
(148,814)
-
-
-
-
(333,405)
Closing balance at reporting date
110,003,700
67,552,468
92,603,816
59,286,666
47
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: ISSUED CAPITAL (CONT.)
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held. At the shareholders meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on a show of hands.
1.
On 16 February 2022, there was a share consolidation of the issued capital of the Company on the basis
of one (1) security for every ten (10) securities held. Where the consolidation resulted in a fraction of a Share,
Performance Right or Option being held, the Company rounded that fraction up to the next whole number. The
prior year number of shares has been adjusted for the share consolidation to ensure the numbers are comparable.
Accounting policy for ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
2022
2021
No of Rights
$
No of Rights
$
(b) Rights on Issue
At the beginning of reporting period
196,500,000
1,593,292
36,000,000
695,272
Issued under Performance Rights Plan
-
-
160,500,000
Rights converted during the year
(12,000,000)
(422,557)
Rights expired during the year
(24,000,000)
(573,032)
Rights vesting expense during the year
Transfer to retained earnings
Share consolidation1
-
-
1,432,148
(35,591)
(144,450,000)
-
(176,850,000)
-
-
-
-
-
-
-
898,020
-
-
Closing balance at reporting date
16,050,000
1,994,260
19,650,000
1,593,292
1See Note 23(a) for further detail on the share consolidation.
Details of performance rights relating to Directors that were issued with shareholder approval under the
Company’s Performance Rights and Options Plan are as follows:
Number of
performance rights
1,100,000
1,100,000
2,450,000
5,700,000
5,700,000
Will vest if share
price trades at or
above:
$0.12
$0.15
$0.20
$0.25
$0.50
Issue Date
Expiry Date
11/12/2020
11/12/2020
11/12/2020
11/12/2020
11/12/2020
11/12/2023
11/12/2023
11/12/2023
11/12/2023
11/12/2023
48
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: ISSUED CAPITAL (CONT.)
2022
2021
No of Options
$ No of Options
$
(c) Options on Issue
At the beginning of reporting period
213,555,201
800,492
167,423,535
Options vesting expense
Options issue to employees
-
-
Expired and lapsed employee options
(11,123,249)
Options converted to shares
(152,048,619)
Free attaching options (1 for 5) as attaching
to placement
Share consolidation
Options issue to employees post share
consolidation
-
(45,103,333)
1,300,000
494,388
-
-
-
-
-
-
-
34,500,000
(5,035,000)
-
16,666,666
-
-
669,064
432,164
-
(300,736)
-
-
-
-
Closing balance at reporting date
6,580,000
1,294,880
213,555,201
800,492
The weighted average assessed fair value at grant date of options granted during the year ended 30 June 2022 was
20¢ cents per option (2021: 40¢). The fair value at grant date is determined using a Black-Scholes option pricing
model that considers the exercise price, the term of the option, the impact of dilution, the share price at grant date
and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the
term of the option.
The model inputs for options granted during the year ended 30 June 2022 included:
Grant Date
30 June 2022
30 June 2022
Number
issued
300,000
1,000,000
Exercise
price
$0.80
$0.80
Term
5 years
5 years
Share
price at
grant
date
$0.31
$0.31
Share
price
volatility
98%
98%
Expected
dividend
yield
0.00%
0.00%
Risk-free
interest
rate
3.50%
3.50%
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted
for any expected changes to future volatility due to publicly available information.
Accounting policy for equity settled compensation
Options issues have their fair value determined with reference to an approved valuation methodology, such as the
Black-Scholes valuation method. On issue, the fair value of an option is taken to the Income Statement as equity
settled compensation, with a corresponding credit to the options reserve. This is then disclosed as other
comprehensive income in the Statement of Comprehensive Income to show other net profit position of the Group
from a third party perspective. Shares have their value determined using the direct method of share price at date of
issue multiplied by the number of shares issued.
Critical Accounting Judgements. Estimates and Assumptions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity.
49
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 23: ISSUED CAPITAL (CONT.)
Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the group can fund its operations and continue as a going
concern.
The Group’s capital includes ordinary share capital, shares and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distribution to shareholders and share issues.
NOTE 24: RESERVES
Share-based payments reserve
Foreign currency translation reserve
Derivative reserve
2022
$
3,289,140
636,282
-
2021
$
2,393,784
656,529
35,719
3,925,422
3,086,032
Share-based
payments reserve
Foreign currency
translation reserve
Derivative
reserve
$
$
$
Total
$
Balance at 30 June 2020
Performance rights vesting expense
23(b)
Options vesting expense
Options expired
Other comprehensive loss
Balance at 30 June 2021
23(c)
23(c)
Performance rights vesting expense
23(b)
Options vesting expense
Performance rights converted
Performance rights expired
Transfer to retained earnings
Conversion of convertible notes
Other comprehensive loss
Balance at 30 June 2022
23(c)
23(b)
23(b)
23(b)
20
1,364,336
898,020
432,164
(300,736)
-
2,393,784
1,432,148
494,388
(422,557)
(573,032)
(35,591)
-
-
3,289,140
569,493
35,719
1,969,548
-
-
-
87,036
656,529
-
-
-
-
898,020
432,164
(300,736)
87,036
35,719
3,086,032
-
-
-
-
-
-
(20,247)
636,282
-
-
-
-
-
(35,719)
-
-
1,432,148
494,388
(422,557)
(573,032)
(35,591)
(35,719)
(20,247)
3,925,422
Share-based payments reserve
The share based-payments reserve records the fair value of options and performance rights on issue.
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of
foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net
investments in foreign operations.
Derivative reserve
The derivative reserve records the issue date value of the derivative financial instruments recognised in equity.
50
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 25: SHARE BASED PAYMENTS
Employee Share Option Plan (ESOP)
The CardieX Employee Option Plan was approved by shareholders at the 2005 annual general meeting and
amendments were approved at the 2006 & 2008 annual general meetings. All staff are eligible to participate in
the plan at the discretion of the directors (including executive directors) following recommendations from the
remuneration committee, a sub-committee of the CardieX Limited Board of Directors.
Options are granted under the plan for no consideration. Options are granted for a 5-year period, with vesting
conditions over 3 years from the date of grant. Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into 1 ordinary share.
The exercise price of options is no less than the weighted average price at which the Company’s shares are
traded on the Australian Stock Exchange during the 5 trading days immediately before the options are granted.
Set out below are summaries of options granted under the plan. All figures are post share consolidation:
2022:
Grant
Date
Expiry date
Exercise
price
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Number
Expired/
Forfeited
during the
year
Number
Balance at
end of the
year
Number
Exercisable
at end of the
year
Number
15-Jan-19
15-Jan-24
$0.50
1,530,000
26-Feb-19
26-Feb-24
$0.50
300,000
15-Feb-21
15-Feb-26
$0.80
2,925,000
15-Feb-21
15-Feb-26
$0.50
400,000
11-Jun-21
11-Jun-26
$0.80
125,000
-
-
-
-
-
30-Jun-22
30-Jun-27
$0.80
-
1,300,000
Total
5,280,000
1,300,000
Weighted average exercise price
$0.67
$0.80
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,530,000
1,530,000
300,000
300,000
2,925,000
1,218,750
400,000
166,667
125,000
41,667
1,300,000
100,000
6,580,000
3,357,084
$0.70
$0.68
51
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 25: SHARE BASED PAYMENTS (CONT.)
Set out below are summaries of options granted under the plan. All figures have been adjusted for the share
consolidation:
2021 (Adjusted to account for share consolidation in FY22):
Grant
Date
Expiry date
Exercise
price
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Number
Expired/
Forfeited
during the
year
Number
Balance at
end of the
year
Number
Exercisable
at end of the
year
Number
20-Aug-15
20-Aug-20
$2.56
153,500
13-Nov-15
13-Nov-20
$2.50
100,000
15-Jan-19
15-Jan-24
$0.50
1,530,000
26-Feb-19
26-Feb-24
$0.50
300,000
-
-
-
-
15-Feb-21
15-Feb-26
15-Feb-21
15-Feb-26
11-Jun-21
11-Jun-26
$0.80
$0.50
$0.80
-
-
-
2,925,000
400,000
125,000
Total
2,083,500
3,450,000
Weighted average exercise price
$0.80
$0.77
-
-
-
-
-
-
-
-
-
(153,500)
(100,000)
-
-
-
-
-
-
-
-
-
1,530,000
768,333
300,000
300,000
2,925,000
231,250
400,000
33,333
125,000
-
(253,500)
5,280,000
1,332,916
$2.54
$0.67
$0.55
Performance rights
Details of performance rights relating to Directors that were issued with shareholder approval on 11 December
2020 under the Company’s Performance Rights and Options Plan are as follows:
Number of
performance rights
1,100,000
1,100,000
2,450,000
5,700,000
5,700,000
Will vest if share
price trades at or
above:
$0.12
$0.15
$0.20
$0.25
$0.50
Issue Date
Expiry Date
11/12/2020
11/12/2020
11/12/2020
11/12/2020
11/12/2020
11/12/2023
11/12/2023
11/12/2023
11/12/2023
11/12/2023
(a)
(b)
(c)
(d)
the fair value of the Performance Rights is based upon the price of CDX at issue date and adjusted
for the probability of their performance milestones being achieved. The value of the Performance
Rights, together with the probability of milestones being achieved is assessed by the Directors at
least annually.
the Performance Rights will be issued for no consideration if they vest and are exercised, the resulting
Shares will be fully paid ordinary shares in the capital of the Company issued on the same terms and
conditions as the Company’s existing ordinary shares.
no individual has previously received securities under this scheme as this is the first time the
Company has proposed an issue of securities under the Scheme; and
no loans or other financial assistance have or will be made by the Company in connection with the
issue of the relevant Performance Rights.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows.
52
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 25: SHARE BASED PAYMENTS (CONT.)
Rights issued under Option and Performance Rights Plan
Options issued under Employee Share Option Plan
Shares issued in lieu of payments to employees (a)
2022
$
1,397,138
494,397
118,965
2021
$
898,020
432,164
76,652
2,010,500
1,406,836
(a) During the financial year, 25,847 shares were issued to employees for their services in lieu of cash payment.
NOTE 26: ACCUMULATED LOSSES
Opening balance at 1 July
Restatement of retained earnings
Losses for the year
Transfer from share-based payments reserve
Closing balance at 30 June
NOTE 27: CASH FLOW INFORMATION
Reconciliation of Cash Flow from Operations with Loss after
Income Tax
Loss after income tax
Non-cash flows in loss:
Depreciation and amortisation
Share based payments expense
Interest income on convertible notes
Unrealised foreign exchange difference
Interest expense
Changes in current assets and liabilities:
Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Increase / (decrease) in unearned revenue
Increase in provisions
2022
$
2021
(restated)
$
(53,665,566)
(49,217,488)
-
431,284
(11,809,634)
(5,180,098)
608,623
300,736
(64,866,577)
(53,665,566)
2022
$
2021
(restated)
$
(11,809,634)
(5,180,098)
222,633
2,010,500
(432,580)
(296,307)
244,150
(257,634)
(550,548)
1,149,832
447,131
121,745
255,693
1,406,836
(256,490)
484,452
160,319
(26,135)
(184,547)
363,269
(1,094,680)
82,246
Net cash used in operating activities
(9,150,712)
(3,989,135)
53
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 28: CAPITAL AND FINANCIAL RISK MANAGEMENT
Capital management
The group’s objectives when managing the Company’s share capital, reserves and accumulated losses, which
represents the group’s capital, are to:
•
•
safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders; and
sustain future product development.
Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk), credit risk, and
liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of foreign exchange risk and aging analysis for credit risk.
Financial risk management is carried out by the Chief Financial Officer (CFO) and overseen by the Audit & Risk
Committee, a subcommittee of the Board of Directors.
(a)
Market risk
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity
analysis and cash flow forecasting.
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to
the US Dollar and the Euro.
The Group’s exposure to foreign currency exchange risk at the reporting date was as follows:
Cash and Cash Equivalents
Trade Receivables
Trade Payables
30 June 2022
30 June 2021
In USD
383,109
405,817
(710,333)
In EUR
251,694
56,659
(4,872)
In USD
247,898
326,133
(326,477)
In EUR
269,639
80,933
-
Sensitivity
Based on the financial instruments held at 30 June 2022, had the Australian dollar weakened/strengthened by
10% against the US dollar with all other variables held constant, the Group’s pre-tax result for the year would
have varied by $10,371/($11,408) (2021: $29,935/($32,928)). Had the Australian dollar weakened/strengthened
by 10% against the Euro with all other variables held constant, the Group’s pre-tax result for the year would have
varied by $41,872/($46,059) (2021: $52,152/($57,367)).
Credit risk
(b)
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposures to customers, including outstanding receivables and committed
transactions. The Group has no significant concentrations of credit risk. For banks and financial institutions, only
independently rated and reputable parties are accepted. The Group has policies in place to ensure that sales of
products and services are made to customers with an appropriate credit history. Terms of trade provided to
creditworthy customers are between 30 and 90 days, whilst customers deemed higher risk arrange a letter of
credit or prepay for goods. The maximum exposure to credit risk at the reporting date is the carrying amount of
the financial assets.
54
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 28: CAPITAL AND FINANCIAL RISK MANAGEMENT (CONT.)
Liquidity risk
(c)
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability
of funding through an adequate amount of committed credit facilities and the ability to close out market positions.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
Interest rate risk
(d)
The consolidated entity's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable
rates expose the consolidated entity to interest rate risk. Borrowings obtained at fixed rates expose the
consolidated entity to fair value risk.
Fair value estimation
(e)
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes. The carrying value less impairment provision of trade receivables and payables are
assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities
approximates their carrying values.
NOTE 29: SEGMENT REPORTING
Description of segments
(a)
In the 2022 financial year, the Group operated in one operating segment, being sales of cardiovascular devices
and services to hospitals, clinics, research institutions and pharmaceutical companies.
Management has determined the reporting segments based on the reports reviewed by the Board of Directors
that are used to make strategic decisions. The Board generally considers the business from a geographical
perspective and has identified three reportable segments by geographic area.
Geographic areas are:
-
-
-
Americas (includes global pharmaceutical trials business)
Europe (includes Middle East and Africa)
Asia Pacific (includes Asia & Australia/NZ)
(b)
Segmental information provided to the Board
2022
Americas
Europe Asia Pacific
$
$
$
Sales to external customers
3,168,257
472,029
426,696
Inter-
segment
eliminations
/
unallocated
Consolidate
d
$
-
$
4,066,982
Intersegment sales
Total sales revenue
Interest revenue
1,045,319 (1,045,319)
-
3,168,257
472,029
1,472,015 (1,045,319)
4,066,982
-
-
432,580
-
432,580
Total segment revenue/income
3,168,257
472,029
1,904,595 (1,045,319)
4,499,562
Segment loss before income tax
(4,578,606)
191,648
(6,984,150)
(438,526) (11,809,634)
Income tax expense
Loss for the year
Segment assets
Segment liabilities
-
71,135,687
(11,809,634)
(72,915,120) 12,377,864
57,918,055
(90,312,044)
5,766,551
-
-
14,157,297
38,160,540
55
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 29: SEGMENT REPORTING (CONT.)
2021
(restated)
Americas
Europe Asia Pacific
unallocated Consolidated
Inter-
segment
eliminations/
Sales to external customers
4,217,518
389,153
394,463
$
$
$
$
-
$
5,001,134
Intersegment sales
Total sales revenue
Interest revenue
-
-
1,298,159
(1,298,159)
-
4,217,518
389,153
1,692,622
(1,298,159)
5,001,134
-
-
256,490
-
256,490
Total segment revenue/income
4,217,518
389,153
1,949,112
(1,298,159)
5,257,624
Segment loss before income tax
77,160
281,764
(4,985,941)
(553,081)
(5,180,098)
Income tax expense
Loss for the year
Segment assets
Segment liabilities
12,435,649
30,010,191
-
-
59,729,405
(60,104,091)
12,060,963
49,451,769
(76,108,129)
3,353,831
-
(5,180,098)
(c)
Notes to and forming part of the segment information
Inter-segment transfers
Segment revenues, expenses and results include transfers between segments. The group transfer inventory and
finished goods between its group companies. Such transfers are priced on an ''arm’s-length'' basis and are
eliminated on consolidation.
Segment revenue
There was no significant concentration of revenue attributable to one customer in 2021 (2021: $NIL).
(d)
Disaggregation of revenue
Revenue is disaggregated by the country in which the customer is located as this depicts how the nature, amount,
timing and uncertainty of our revenue and cash flows are affected by economic factors.
2022
Sale of goods
Lease revenue
Service revenue
Freight revenue
Royalty income
Total sales revenue
Interest revenue
Total revenue/income
Americas
Europe Asia Pacific Consolidated
$
$
$
$
1,520,651
457,599
355,880
2,334,130
1,185,293
379,418
82,895
-
7,219
7,211
-
1,185,293
8,695
3,660
395,332
93,766
58,461
-
-
58,461
3,168,257
472,029
426,696
4,066,982
-
-
432,580
432,580
3,168,257
472,029
859,276
4,499,562
Americas
Europe Asia Pacific Consolidated
56
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 29: SEGMENT REPORTING (CONT.)
2021
Sale of goods
Lease income
Service income
Freight income
Royalty income
Total sales revenue
Other revenue/income
Total revenue/income
$
$
$
$
383,492
336,305
2,104,182
1,384,385
2,165,120
591,408
76,605
-
-
1,384
4,277
-
4,217,518
389,153
-
-
-
2,165,120
2,770
792
54,596
394,463
256,490
595,562
81,674
54,596
5,001,134
256,490
4,217,518
389,153
650,953
5,257,624
NOTE 30: RELATED PARTY TRANSACTIONS
Subsidiaries
The group’s principal subsidiaries at 30 June 2022 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership
interests held equals the voting rights held by the group. The country of incorporation or registration is also their
principal place of business.
Name of entity
Country of
incorporation
AtCor Medical Pty Ltd
AtCor Medical, Inc. (Delaware C Corp)
CardieX (Shanghai) Medical Technology Co., Ltd.
Conneqt Inc
Australia
USA
China
USA
Percentage owned
2022
100%
100%
100%
100%
2021
100%
100%
100%
100%
Key Management Personnel Compensation
2022
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto1
Salary and directors
fees
Share Based
Payment Benefits
$
$
260,000
716,421
55,915
116,500
-
499,325
499,325
30,845
187,489
-
Total
$
759,325
1,215,746
86,760
303,989
-
Total Compensation
1,148,836
1,216,984
2,365,820
2021
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total Compensation
1. Appointed as a director on 26 April 2022.
57
204,000
528,953
36,697
102,000
871,650
247,611
545,759
15,295
96,507
905,172
451,611
1,074,712
51,992
198,507
1,776,822
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 30: RELATED PARTY TRANSACTIONS (CONT.)
Shares Held by Key Management Personnel and Their Associates
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto1
Total
Balance
01 July 2021
Additions
Share
consolidation
181,842,010
53,751,9222
(212,034,538)
177,242,010
53,751,9222
(207,894,538)
153,846
4,857,577
-
-
(138,461)
907,933
(5,188,559)
-
-
Balance
30 June 2022
23,559,394
23,099,394
15,385
576,951
-
364,095,443
108,411,777
(425,256,096)
47,251,124
2. A total of 47,751,922 pre consolidated shares acquired by Mr Cairns and Mr Cooper in the year are indirectly held by
C2 Ventures, in which Mr Cairns and Mr Cooper are directors. These shares are subject to the Restriction Agreement
and Deed of Undertaking as approved by members at the Extraordinary General Meeting held on 28 May 2018.
Shares Held by Key Management Personnel and Their Associates (Cont.)
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
Balance
01 July 2020
Additions
Balance
30 June 2021
161,960,192
19,881,8181
181,842,010
158,960,192
18,281,8181
177,242,010
153,846
3,257,577
-
1,600,000
153,846
4,857,577
324,331,807
39,763,636
364,095,443
1. A total of 18,281,818 pre consolidated shares acquired by Mr Cairns and Mr Cooper in the year are indirectly
held by C2 Ventures, in which Mr Cairns and Mr Cooper are directors. These shares are subject to the
Restriction Agreement and Deed of Undertaking as approved by members at the Extraordinary General
Meeting held on 28 May 2018.
Options Held by Key Management Personnel and Their Associates
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Lesa Musatto
Total
Balance
01 July 2021
Exercised
Transferred
Share
consolidation
Balance
30 June 2022
43,420,455
(39,920,455)
(2,000,000)
(1,350,000)
43,420,455
(39,920,455)
(2,000,000)
(1,350,000)
1,500,000
-
1,897,728
(397,728)
-
-
-
-
-
(1,350,000)
(1,350,000)
-
150,0002
150,0002
150,000
150,000
-
90,238,638
(80,238,638)
(4,000,000)
(5,400,000)
600,000
2. Directors Mr Cairns and Mr Cooper hold 150,000 options indirectly through C2 Ventures Pty Limited, of
which they are both directors.
58
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 30: RELATED PARTY TRANSACTIONS (CONT.)
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
Balance
01 July 2020
39,000,000
39,000,000
1,500,000
1,897,728
81,397,728
Expired
Additions
Balance
4,420,455
4,420,455
-
-
30 June 2021
43,420,4553
43,420,4553
1,500,000
1,897,728
8,840,910
90,238,638
-
-
-
-
-
3. Directors Mr Cairns and Mr Cooper hold 41,920,455 options indirectly through C2 Ventures Pty Limited, of
which they are both directors.
Performance Rights Held by Key Management Personnel and Their Associates
On 11 December 2020 shareholders approved the issue of performance rights to be issued to the Directors under
the Company’s Performance Rights and Option Plan. These performance rights total 160,500,000 and expire on
11 December 2023. The terms of the Director rights on issue are as follows:
Tranche
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
Number of
performance rights
Will vest if share price
trade at or above:
1,100,000
1,100,000
2,450,000
5,700,000
5,700,000
$0.12
$0.15
$0.20
$0.25
$0.50
Expiry Date of
Performance
Milestone
11/12/2023
11/12/2023
11/12/2023
11/12/2023
11/12/2023
Balance
01 July 2021
Converted
Expired
Share
consolidation
Balance
30 June 2022
Niall Cairns
68,000,000
-
-
(61,200,000)
Craig Cooper
104,000,000
(12,000,000)
(24,000,000)
(61,200,000)
King Nelson
Jarrod White
Lesa Musatto
Total
Niall Cairns
Craig Cooper
King Nelson
Jarrod White
Total
6,800,000
6,800,000
350,000
2,100,000
-
3,500,000
21,000,000
-
-
-
-
-
-
-
(3,150,000)
(18,900,000)
-
196,500,000
(12,000,000)
(24,000,000)
(144,450,000)
16,050,000
Balance
01 July 2020
-
36,000,000
-
-
36,000,000
Expired
Additions
Balance
30 June 2021
68,000,000
68,000,000
68,000,000
104,000,000
3,500,000
21,000,000
3,500,000
21,000,000
160,500,000
196,500,000
-
-
-
-
-
59
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 30: RELATED PARTY TRANSACTIONS (CONT.)
Employment Agreements
Remuneration and other terms of employment for the CEO and the other key management personnel are
formalised in employment agreements. Each of these agreements provide for the provision of performance related
cash bonuses, other benefits including health insurance and car allowances, and participation, when eligible, in the
CardieX Limited Employee Share Option Plan. Other major provisions of the agreements relating to remuneration
are set out below.
All contracts with executives may be terminated early by either party with variable notice periods, subject to
termination payments as detailed below.
Craig Cooper – Chief Executive Officer
• Agreement commenced on 1 December 2017.
• Base salary of US$420,000 per annum.
• Bonuses to be paid at discretion of the Group based on performance reviews.
• Reimbursement for reasonable expenses incurred in running the US business, paid on a monthly basis.
NOTE 30: RELATED PARTY TRANSACTIONS (CONT.)
Niall Cairns – Executive Chairman and Director
• Current agreement commenced with an effective date of 1 August 2019.
• Monthly consulting fee for strategic review and consulting services of AU$25,000 per month.
• Reimbursement for reasonable expenses incurred.
King Nelson – Non-Executive Director
• Current agreement commenced with an effective date of 13 November 2015.
• Base salary of US$50,000 per annum.
Jarrod White – Director
•
Jarrod White is the principal of Traverse Accountants Pty Ltd, who holds an engagement with the Group
covering CFO services, Company Secretarial services, and other general accountancy services.
• Mr White received Directors Fees of $35,000 in shares for this reporting year in addition to the arms’
length services paid to Traverse Accountants Pty Ltd.
Loans to Directors and Key Management Personnel
There were no loans made to directors or key management personnel of the Company and the Group during the
period commencing at the beginning of the financial year and up to the date of this report.
60
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 31: MATTERS SUBSEQUENT TO YEAR END
Subsequent to balance date the Group announced the following material events:
• On 29 July 2022, CardieX announced that it has changed its provider for shareholder registry services
from Link Market Services to Automic Pty Ltd.
• On 22 August 2022, CardieX announced that it had completed a $4.33m placement.
• On 26 August 2022, CardieX announced the launch of a share purchase plan, with a target of $1m to be
raised.
• On 28 September 2022, CardieX announced the successful completion of its SPP, which closed on 26
September 2022. The Company received applications for fully paid ordinary shares (Shares) from eligible
shareholders (which included Directors) under the SPP at an issue price of $0.30 per share in the amount
of $1.593 million (before costs) representing a 59.3% over-subscription over the originally targeted raise
of $1.0 million.
• As disclosed in the SPP Offer Booklet (refer ASX release 26 August 2022), the Company reserved the
right to conduct either a scale-back of over-subscriptions above the targeted of $1.0 million, or to accept
over-subscriptions above the target. In response to the strong demand from shareholders, the Company
has elected to accept the full $1.593 million of valid applications including the $593,000 in
oversubscriptions and therefore not conduct any scale-back
No other significant subsequent event has arisen that significantly affects the operations of the Group.
NOTE 32: PARENT ENTITY DISCLOSURES
Financial position
Assets
Total current assets
Inter-company loans
Total assets
Liabilities
Total current liabilities
Inter-company loans
Total liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2022
$
1,355,562
27,404,035
35,691,871
1,836,433
9,751,264
12,308,260
74,009,758
3,289,139
2021
(restated)
$
8,395,395
19,439,124
28,526,914
1,560,076
10,613,236
12,173,312
65,743,956
2,429,503
(53,915,286)
(51,819,857)
23,383,611
16,353,602
(2,704,052)
(2,768,825)
-
-
(2,704,052)
(2,768,825)
Guarantees entered into by the parent entity
(a)
No guarantees have been entered into by the parent entity during 2022 or 2021.
Contingent liabilities of the parent entity
(b)
The parent entity did not have any contingent liabilities as at 30 June 2022 or 30 June 2021.
61
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
NOTE 33: CAPITAL COMMITMENTS
CardieX subsidiary, AtCor Medical Pty Ltd has an open purchase order to the value of US$279,000 for microchips.
There were no other capital commitments as at 30 June 2022.
62
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 24 to 62, are in accordance with the Corporations
Act 2001 and:
a.
b.
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the financial position as at 30 June 2022 and of the performance for the
year ended on that date of the Consolidated Group.
2.
3.
4.
5.
the Company has included in note 1 to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards;
the Directors have been given the declaration required by Section 295A of the Corporations Act from the
Chief Executive Officer for the financial year ended 30 June 2022;
in the Director’s opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
the remuneration disclosures included on pages 18 to 22 of the Directors’ Report (as part of the Audited
Remuneration Report) for the year ended 30 June 2022, comply with section 300A of the Corporations Act
2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Niall Cairns
Executive Chairman
Sydney, 30 September 2022
63
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of CardieX Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CardieX Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
64
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying Value of Convertible Notes and Shares
Key audit matter
How the matter was addressed in our audit
The Group carries investments in convertible
We challenged management in respect of the
notes and shares, classified as fair value through
appropriateness of the carrying value of the investments as
profit and loss, totalling $6,080,309 as at 30 June
financial assets at fair value through profit and loss.
2022 (30 June 2021: $5,579,875), as disclosed in
Note 18 to the financial statements.
The financial assets at fair value through profit
and loss is a key audit matter due to:
Our procedures included, amongst others:
• Obtaining from management a schedule of
investments in convertible notes and shares held
by the Group and vouching these to supporting
•
•
•
The significance of the total balance;
documentation;
the complexities involved in determining
•
Reviewing the accounting treatment applied to
the accounting treatment under
the investments with reference to reports from
Australian Accounting Standards; and
management’s external experts and assessing the
the determination of the fair value of
key judgements applied;
the convertible notes and shares involves
• Obtaining a copy of the external valuation report
significant judgement on the valuation
and in conjunction with internal experts,
methodology and the inputs and
evaluating the appropriateness of the valuation
assumptions applied by management.
methodology applied, including an assessment of
the significant inputs applied by management in
the valuation models; and
•
Reviewing managements' assessment of the
movements in fair value of the convertible notes
and shares, ensuring that all gains and losses have
been treated and disclosed appropriately.
65
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
66
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 22 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of CardieX Limited, for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Grant Saxon
Director
Sydney, 30 September 2022
67
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out
below.
Distribution Schedule of Equity Securities as at 28 September 2022
Spread of Holdings
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
No. of Holders
166
659
363
841
464
Shares
93,525,215
22,267,109
2,802,500
2,254,735
253,147
2,493
121,102,706
Unmarketable parcels
There were 683 shareholders holding less than a marketable parcel totalling 542,878 shares as at 28 September
2022.
Top 20 Holdings as at 28 September 2022
Holder Name
C2 VENTURES PTY LIMITED
MR DARRYL PATTERSON & MRS MARGARET STEWART PATTERSON
MR PAUL COZZI
MR PAUL JOSEPH COZZI
CITICORP NOMINEES PTY LIMITED
MR JOHN CHARLES PLUMMER
MR MICHAEL JOHN JEIL & MRS JOANNE LEE KEIL
CB CO PTY LTD
BNP PARIBAS NOMINEES PTY LTD
TOWNS CORPORATION PTY LTD
KEIL INVESTMENTS PTY LTD
MRS GLENIS NITA O’DONNELL
SR MILJKOVIC SUPER PTY LTD
MR JON PHILIPPE WEBSTER
MR HENDRIK HARTMANN & MS JIN KI PARK
DOSSMAN PTY LTD
DRUMNADROCHIT FUTURES PTY LTD
DIXSON TRUST PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR PHILIP WAYNE RIECK
TOTAL
Balance at
28 Sep 2022
%
22,499,394
18.58
5,002,195
4,800,000
3,997,000
3,052,511
2,300,000
1,875,000
1,574,000
1,447,539
1,133,000
1,043,667
1,004,000
958,897
953,003
902,163
897,062
875,609
833,334
785,511
784,850
4.13
3.96
3.30
2.52
1.90
1.55
1.28
1.20
0.94
0.86
0.83
0.79
0.79
0.75
0.74
0.72
0.69
0.65
0.65
56,691,735
46.81
68
CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with Section 671B of the
Corporations Act 2001 are:
Holder Name
Number of Ordinary Fully Paid
Shares Held
% Held of Issued Ordinary
Capital
C2 VENTURES PTY LIMITED
22,499,394
18.58
Voting rights
Every member is entitled to be present at a meeting and may vote. Options do not carry a right to vote.
On a show of hands, every Member has one vote.
On a poll, every Member has:
One vote for each fully paid share; and
Voting rights pro rata to the amount paid up on each partly paid share held by the Member.
The name of the Joint Company Secretaries are:
Jarrod Travers White
Nicholas Marshall
Registered Office and Principal Place of Business
Suite 301, Level 3
55 Lime Street
Sydney NSW 2000
Telephone: (02) 9874 8761
Email: info@CardieX.com
Website: www.CardieX.com
69