CARDIEX LIMITED
AND CONTROLLED ENTITIES
ABN 81 113 252 234
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2024
TABLE OF CONTENTS
Cardiex Limited
1
Corporate Directory
2
Chairman’s Letter
3
CEO’s Report and Overview of Operations
4
Directors’ Report
6
Remuneration Report
19
Auditor’s Independence Declaration
24
Consolidated Statement of Profit or Loss and Other Comprehensive Income
25
Consolidated Statement of Financial Position
26
Consolidated Statement of Changes in Equity
27
Consolidated Statement of Cash Flows
28
Notes to the Consolidated Financial Statements
29
Consolidated Entity Disclosure Statement
62
Directors’ Declaration
63
Independent Auditor’s Report
64
Additional Shareholder Information
68
CORPORATE DIRECTORY
Cardiex Limited
2
DIRECTORS
Mr. Niall Cairns
Mr. Craig Cooper
Mr. King Nelson
Mr. Charlie Taylor
COMPANY SECRETARY
Ms. Louisa Ho
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
24-26 Kent Street
Millers Point NSW 2000
Website: www.traverseaccountants.com.au
STOCK EXCHANGE LISTING
Cardiex Limited’s shares are listed on the Australian Securities Exchange (ASX code: CDX).
CHAIRMAN’S LETTER
Cardiex Limited
3
My Fellow Shareholders,
On behalf of the Board of Cardiex Limited, I am pleased to present the Company’s Annual Report for the 2024 Financial Year
(FY24).
As detailed in the following “Chief Executive Officers Report and Overview of Operations” we have continued to make significant
progress in the financial performance of your company while also continuing to execute on the operating and strategic plan for the
business. This included delivering record revenues in the FY24 year and positioning the company for the first revenues from the
launch of CONNEQT Pulse and our suite of digital solutions.
During the financial year we also overcome significant challenges to complete the three-part $14 million capital raising and
recommence trading on the ASX in February. This followed the Company’s withdrawal of its NASDAQ listing and subsequent
voluntary suspension from ASX securities trading, whilst appropriate replacement capital was put in place to support the execution
of our strategic plan and provide a path towards sustainable profitability.
Cardiex’s largest shareholder C2 Ventures, jointly owned by Craig Cooper and Niall Cairns, supported the placement, partially
underwrote the Entitlement Offer, and have committed to provide a further $6 million under a Funding Commitment Agreement
(FCA) for a total of $8.5 million of new investment. The FCA is being drawn down and will be fully invested by 31 December 2024
at which time it will be immediately converted into shares as per the shareholder approval received earlier this year.
With the requisite funding in place, a strong outlook for our traditional business and new products and regulatory clearances set to
significantly expand our market opportunities in the short term, we are excited about the future and look forward to updating you on
our progress in the coming year.
In closing, I would like to thank my fellow Board members for their support and guidance throughout the year, our employees for
their hard work and dedication, and our loyal shareholders for the continuing support.
My best regards,
Niall Cairns
Executive Chairman
Cardiex Limited
CHIEF EXECUTIVE OFFICERS REPORT & OVERVIEW OF OPERATIONS
Cardiex Limited
4
Dear Shareholders,
I’m pleased to report that Cardiex achieved record financial results for FY24, while advancing our pipeline of innovative products
and forging strategic partnerships that position us for continued success in FY25. Looking forward, we are poised to leverage our
industry-leading vascular biomarker technology to deliver transformative cardiovascular monitoring solutions across a broader range
of healthcare markets.
One of the key highlights for the year was the strong financial performance of our ATCOR division, which saw group revenues and
other income rise to a record $13.1 million (including $7.67 in revenue recorded upon the early conclusion and subsequent payment
in full of the multi-year Clinichain clinical trial), up from $6.0 million in FY23. This growth is set to continue as we prepare to
introduce innovative new solutions tailored to our core clinical, pharmaceutical, and healthcare markets.
Our leadership team has also been strengthened by key appointments, particularly within our sales, marketing, and pharmaceutical
divisions. And we have also increased our direct and digital sales initiatives expanding our participation in major industry
conferences and launching online demand generation campaigns targeting both existing and new clients. The growing interest we
have seen from these initiatives has resulted in a material expansion of our pipeline of opportunities for deploying devices and
services in large-scale clinical trials, providing much confidence in the continued growth for the ATCOR division in the years ahead.
A major focus of the year has been the launch of the CONNEQT Pulse, a world's-first arterial health monitor incorporating our
market leading SphygmoCor technology. Initial shipments of the Pulse arrived in the U.S. and Australia in July 2024, post-period
end. These units incorporate critical Over-the-Air (OTA) firmware upgrades, which are vital for improving the functionality,
security, and user experience of the Pulse.
While the inclusion of OTA upgrades resulted in a delay to the Pulse’s market launch, early user feedback has been overwhelmingly
positive, affirming management’s decision to ensure this feature was integrated prior to a full market launch. To further underscore
the growing demand for the Pulse, as of September 30, 2024, our waitlist has surpassed 15,000 pre-registered customers. This strong
interest has prompted us to significantly increase our initial production orders to ensure we can meet this high level of demand.
In addition, we have taken a more strategic marketing approach this year, developing partnerships to integrate the Pulse into broader
health solutions. Notably, our collaboration with PhysioAge will integrate Pulse into their global health analytics platform,
expanding our reach into the concierge and functional medicine markets. This partnership enhances the ability of physician’s to
deliver comprehensive health assessments and unique insights into cardiovascular health.
We also announced a partnership with Heartbeat Health in the U.S., a network of cardiologists that will enable the prescription of
the Pulse to consumers through both clinical and our e-Commerce channels. This partnership ensures broader and more convenient
access to our advanced cardiovascular monitoring tools, enabling better health management and proactive care.
By fostering such partnerships, we’re opening new channels for the distribution and mass-market adoption of the Pulse. Initial
shipments have undergone rigorous testing, and select pilot programs with key opinion leaders are underway. Feedback from these
groups will help us refine the Pulse ahead of its full launch.
In addition to the Pulse, we’re making great strides with the development of our wearable technology. In the final quarter of FY24,
we initiated the first phase of a clinical validation study in collaboration with Macquarie University, comparing the Band’s
performance to our industry-standard XCEL device. This study is a key step in preparing for our FDA 510(k) submission of our
wearable technology in Q1 FY25.
We are also pursuing multiple other regulatory clearances in the U.S. and other regions, including OTC (Over-the-Counter) clearance
for the Pulse. Having completed our usability study for this submission, we’re on track to file for additional clearance in Q2 FY25,
with further regulatory filings planned in Australia, New Zealand, Europe, and the UK.
Protecting our intellectual property also remains a top priority. Subsequent to period end, the U.S. Patent and Trademark Office
granted a key wearable patent (Patent #US12,029,5380), which protects our advanced method for converting photoplethysmography
CHIEF EXECUTIVE OFFICERS REPORT & OVERVIEW OF OPERATIONS
Cardiex Limited
5
(PPG) signals into high-fidelity central aortic pressure waveforms. This patent strengthens our position as a leader in wearable
technology, and we remain committed to delivering cutting-edge solutions that drive better health outcomes.
As outlined in the Chairman’s letter, our FY24 capital raise provided the financial flexibility needed to support the company's growth
and operations. I extend my thanks to our new shareholders and to our existing shareholders for their continued support.
Looking ahead to FY25, we are well-positioned to build on the strong momentum of FY24. With the successful launch of the
CONNEQT Pulse, FDA clearance of our wearable technology, and the continued strong performance of our pharmaceutical sales
division, we are poised for significant growth. Our strategic partnerships and innovative product pipeline have created new
opportunities across healthcare markets, and the overwhelming interest in our solutions affirms our vision. I am confident that FY25
will be a year of continued transformation and success as we work to bring our groundbreaking cardiovascular health technologies
to an even wider global audience.
Thank you for your continued trust and support.
Sincerely,
Craig Cooper
Chief Executive Officer
Cardiex Limited
DIRECTOR’S REPORT
Cardiex Limited
6
The Directors of Cardiex Limited (the “Company”) submit the financial report of the Company for the year ended 30 June 2024,
which comprises the results of Cardiex Limited and the entities it controlled during the period (the “Group”).
Review of Operations
Revenue and Expenses
Revenue from ordinary activities increased by 137% to $10,905,636, primarily due to revenue recorded upon the early conclusion
and subsequent payment in full of the multi-year Clinichain clinical trial resulting in the recognition of $7.67m in revenue.
The Group’s net loss for the period attributable to members decreased by 64% to $6,765,365, largely due to the increase in revenue
as well as the following:
•
A decrease of $698,195 (55%) in marketing and sales expenses, primarily due to costs incurred in the prior year relating
to the CES exhibition, as well as the streamlining of other marketing initiatives.
•
A decrease of $1,418,683 (36%) in product development expenditure, primarily due to higher costs incurred in the prior
year relating to the FDA clearance for the CONNEQT Pulse, as well as a scale down of software development costs for
the CONNEQT product ecosystem.
•
A decrease of $1,951,641 (94%) in share based payments (non-cash), due to the expiry of options and performance rights.
•
A decrease of $2,314,972 (38%) in administration expenses (including US listing expenses). A credit of US$731,950 was
received during the year towards the US legal fees outstanding following the withdrawal of the Company’s Form F-1
registration statement.
•
An increase of $774,793 (190%) in interest expense, due to interest incurred on convertible notes, as well as effective
interest adjustments on embedded derivatives.
•
A $786,388 fair value loss (2023: $159,904), primarily due to fair value movements to Cardiex’s InHealth Convertible
Note and InHealth equity investment as per the half year accounts.
Statement of Financial Position
The Group’s Balance Sheet has significantly changed during the financial year, with large decreases in both Current Liabilities and
Current Assets. This has been driven by a combination of factors that are outlined below:
•
Current Assets decreased by $1,465,249 (12%) during the financial year, as follows:
o
Trade and other receivables decreased by 84% to $350,987 due to the receipt of amounts owing from Clinical
trials, specifically $6.25m received from Clinichain.
o
Inventory has increased by 54% to $2,553,503 as stock levels increased to meet forecast demand from Clinical
trials and sales, in addition to purchase of components for Pulse and Xcel future builds.
o
Financial assets have decreased by 16% to $4,870,169, as a result of fair value movements of the inHealth
convertible note investment.
•
Liabilities and Current Liabilities decreased in the year, driven by:
o
A 48% decrease in trade and other payables to $3,890,519 due to a significant paydown of creditors in the year.
o
A 90% decrease in unearned revenue to $309,353, due to the conclusion of the Clinichain clinical trial and
subsequent revenue recognition.
o
A 40% decrease in borrowings to $880,000, due to the repayment of the Company’s R&D funding facility out
of proceeds from the FY2023 R&D tax incentive.
o
All convertible note financial liabilities on hand at 30 June 2023 ($2,175,794), as well as new notes issued during
the year, were converted into equity resulting in a $3,620,000 increase in share capital.
o
The closing balance of financial liabilities of $2,347,752 (US$1.5m plus accrued interest) reflects a promissory
note held with Wilson Sonsini Goodrich & Rosati, and relates to the balance of US legal fees owing for the
withdrawn Form F-1 registration statement. The promissory note is due in April 2025, however, subsequent to
balance date the terms have been renegotiated to the following:
US$250k before 31 January 2025.
US$250k before 31 July 2025.
The final balance of US$1m plus interest repayable by 31 October 2025.
•
During the year, Cardiex issued 150,709,047 new shares as follows:
o
50,000,004 shares upon the completion of a placement raising $4,000,000.
o
50,000,000 shares upon the completion of an entitlements office raising $4,000,000.
o
45,250,000 shares upon the conversion of convertible notes to a value of $3,620,000.
DIRECTOR’S REPORT
Cardiex Limited
7
o
5,459,043 shares issued to suppliers, employees, and for the deferred settlement of intangible assets, collectively
reducing liabilities by $484,685.
•
As a result of the above, the Group’s strengthened Statement of Financial Position shows net assets of $4,087,481,
compared to net liabilities of $748,405 in the prior year.
Cashflows
•
Net cash used in operating activities decreased to $7,721,600 (2023: $11,996,350) as a result of a significant increase in
receipts from customers.
•
Receipts from customers for the year increased to $10,195,319 (2023: $5,332,700), primarily due to the Clinichain clinical
trial.
Net cash used in investing activities increased to $118,413 (2023: $57,703) primarily due to expenditure incurred in the
current year on procuring manufacturing equipment for new and existing devices.
Net cash provided by financing activities was $7,591,778 (2023: $11,352,381), as required by the Group to support its
growth initiatives.
Please refer to the Chief Executive Officers Report and Overview of Operations 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.
As disclosed in the financial statements, the Group incurred a loss after tax of $6,765,365 (2023: $18,886,936), had a net asset
position of $4,087,481 (2023 net liability position: $748,405) and had net cash outflows from operating activities of $7,721,600
for the year ended 30 June 2024 (2023: $11,996,530).
The Company has encountered challenges in relation to its financial performance, having incurred operating losses in the past, and
there is no certainty that it will achieve or maintain profitability in the future. There are a number of risks to the Company’s
commercial operations which, if any one or more of them occur, could adversely affect the Company's business, financial condition,
and operating results. These risks include, but are not limited to:
(i)
Failure of the Company’s SphygmoCor technology-enabled products, from which the majority of the Company's
revenue is currently derived, to gain market acceptance.
(ii)
The Company's limited operating history with certain products which are still in development makes it challenging
to predict long-term performance based solely on historical financial results.
(iii)
Accurate demand forecasting for products and effective inventory management are crucial for the Company's
financial success. Increases in component costs, supply shortages, and supply changes could disrupt the supply
chain.
(iv)
The inability to anticipate appropriate pricing levels for its products, and economic downturns or uncertainties could
reduce consumer discretionary spending and demand for its products and services.
(v)
Consolidation in the healthcare industry may result in demands for price concessions or the exclusion of existing
market participants from certain markets.
(vi)
Inefficient management of growth and expansion, including cost-effective and timely scaling of operations.
As a result of these matters, there is a material uncertainty related to events or conditions that may cast significant doubt on whether
the Group will continue as a going concern and, therefore, the Group may be unable to realise its assets and discharge its liabilities
and commitments in the normal course of business and at the amount stated in the financial report.
Following the withdrawal of the registration statement for a US IPO in September 2023, the Board, with the support of the Group’s
senior executive team and advisors, have been focused on alternative solutions to its capital raising to support its corporate strategy
and which will provide enough funding and capital runway to allow the Company to both progress its new product launch initiative
DIRECTOR’S REPORT
Cardiex Limited
8
and execution of its overall business plan. During the 2024 financial year, the Group was successful in raising $4m by way of a
Placement to institutional, family office, and sophisticated investors, and a further $4m from an Entitlement Offer. In November
2023, the Group also entered into a Funding Commitment Agreement with C2 Ventures Pty Ltd, a Company jointly owned by
Directors Niall Cairns and Craig Cooper to provide total capital of $8.5m, including participation in the Placement and Entitlement
Offer in February 2024. The remaining drawdowns of this facility are $3.75m and are expected to be received throughout the
balance of the 2024 calendar year. A summary of key terms of the Funding Commitment Agreement are below:
•
The Facility Limit is reduced by amounts advanced to, loaned to, owed by or received by the Company from C2V and
related parties, including under the proposed Placement and Entitlement Offer.
•
Cardiex may require C2V (or its nominee) to advance a loan under the loan facility at any time between the date of the
Agreement and 31 December 2024 by giving notice to the C2V.
•
Some or all of the outstanding moneys may be repaid by the Company by issuing securities to the C2V, such as under
the proposed Placement and Entitlement Offer.
•
Interest will accrue on the principal outstanding at 10% per annum during the period commencing on the date of the FCA
and ending on, if shareholder approval is not obtained to convert loans into equity, the day of the shareholders meeting;
and otherwise, the Maturity Date of 31 December 2025.
•
The Company may at any time prepay all or part of the outstanding moneys without premium or penalty.
•
If, after 31 December 2025 there are any outstanding moneys, the Company must repay the outstanding moneys at the
request of the Lender, on at least 30 days’ notice.
The Directors are of the opinion that there are reasonable grounds that the Group will be able to continue as a going concern, after
consideration of the following factors:
•
Since the 30 June 2024 Balance date, $2.25m in drawdowns have been received from the Funding Commitment
Agreement entered into with C2 Ventures, with the remaining $3.75m in drawdowns expected during the balance of the
2024 calendar year.
•
Cardiex continues to conduct a strategic review to streamline its operations and continues to take measures to reduce
cash outgoings for employee benefits, product development costs, and administration costs. There were significant costs
incurred in FY2023 and FY2024 relating to the development and subsequent FDA clearance of the CONNEQT Pulse,
the withdrawn US listing, and subsequent re-compliance with the ASX that have since been curtailed. This reduced cost
base is evidenced from internal financial results received for the first quarter of FY2025.
•
Sales from the CONNEQT Pulse device are expected in Q2 of FY2025, and our waitlist has surpassed 15,000 pre-
registered customers.
•
Cardiex recently received approval from AusIndustry for the inclusion of overseas software development costs in its
R&D Tax Incentive claims for FY2024-FY2026 and is anticipating a refund of $1.4 million in Q2 of FY2025, a
significant increase from prior year claims. This is secured against Cardiex’s R&D funding facility with Mitchell Asset
Management, and the Group may consider extending this facility against the following years R&D claim.
•
There is currently a robust pipeline for deploying devices and services in large-scale clinical trials.
•
The Group has a successful track record of being able to raise both equity and debt financing and are prepared to raise
additional funds if required. Preliminary discussions have taken place with various debt funders and equity providers
both in Australia and the US, which may be required to progress further should sales of the CONNEQT Pulse be lower
than anticipated, or if there are delays to clinical trial cash flows.
The Directors are of the opinion that the Group will be successful in managing the above matters and accordingly, they have prepared
the financial report on a going concern basis. At this time, the Directors are of the opinion that no asset is likely to be realised for an
amount less than the amount at which it is recorded in the consolidated financial report as at 30 June 2024.
Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset
carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as a going
concern.
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 2024.
DIRECTOR’S REPORT
Cardiex Limited
9
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Likely Developments and Expected Results of Operations
The Group will continue to focus on its core business strategy of developing and selling medical and home health care devices and
digital solutions for hypertension, cardiovascular disease, and other vasuclar health disorders. The Groups is positioned to build on
the strong momentum from FY24, with a key focus on the launch of the CONNEQT Pulse, and the performance of its pharmaceutical
sales division.
Matters Subsequent to Year End
Subsequent to the balance date the Group announced the following material events:
•
On 9 August 2024, the Group announced that it had entered into a new R&D Term Loan Facility of up to $1,120,000
with Mitchell Asset Management Pty Ltd (“MAM”), which will be advanced as a prepayment of forecast Research and
Development Tax Incentives (“R&D Tax Incentive”) that are anticipated to be receipted by the Company for the 30 June
2024 and 30 June 2025 financial years.
•
On 17 September 2024, the Group formalised amended repayment terms for its promissory note held with Wilson Sonsini
Goodrich & Rosati to the following:
o
US$250k before 31 January 2025.
o
US$250k before 31 July 2025.
o
The final balance of US$1m plus interest repayable by 31 October 2025.
No other significant subsequent event has arisen that significantly affects the operations of the Group.
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. King Nelson – Non-Executive Director
Mr. Charlie Taylor – Non-Executive Director (appointed 1 March 2024)
Mr. Jarrod White – Executive Director (resigned 26 September 2023)
Ms. Lesa Musatto – Non-Executive Director (resigned 18 October 2023)
Company Secretary
Ms. Louisa Ho
DIRECTOR’S REPORT
Cardiex Limited
10
Information on Directors
Mr. Niall Cairns
Executive Chairman and Director
Qualifications:
B.Ec, CA and FAICD
Appointed:
20 December 2017, appointed Chairman on 27 February 2019
Experience and expertise:
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.
Other current directorships:
Kestrel Capital, Kestrel Growth Companies Limited, DTS Limited, Listing Logic
Limited, Harri LLC, St Andrews College Foundation and Tambla Limited.
Former directorships (last 3 years):
Consolidated Financial Holdings Limited.
Special responsibilities:
•
Chairman of the Board.
•
Chairman of the audit and risk committee.
•
Member of remuneration and nomination committee.
Mr. Craig Cooper
Executive Director, Chief Executive Officer
Qualifications:
B.Ec, LLB (Hons)
Appointed:
1 December 2017
Experience and expertise:
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:
None.
Former directorships (last 3 years):
None.
Special responsibilities:
None.
DIRECTOR’S REPORT
Cardiex Limited
11
Mr. King Nelson
Non-Executive Director
Qualifications:
BA, MBA
Appointed:
13 November 2015
Experience and expertise:
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 specialised 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:
None.
Former directorships (last 3 years):
Uptake Medical Corporation
Special responsibilities:
•
Chairman of remuneration and nomination committee.
•
Member of audit and risk committee.
Mr. Charlie Taylor
Non-Executive Director
Qualifications:
EC, LLB, MPHIL Economics
Appointed:
1 March 2024
Experience and expertise:
Charlie has over 30 years’ experience in international advisory firms, including as
Senior Partner at McKinsey where he led the Health and Public Sector practices.
He has advised many of Australia’s private and public sector healthcare
organisations and initiated multi-year research efforts on healthcare, Covid
response, productivity and innovation. He has published research articles and
reports on healthcare reform lessons from around the globe. Charlie is currently a
Non-executive Director of Healius Limited, a board advisor at McKinsey for the
Health and Public Sector practice, a member of the strategic advisory committee
For Purpose Investment Partners and was recently appointed as Chair of the NSW
Innovation and Productivity Commission. Charlie is the Honorary Federal
Treasurer for the Liberal Party and a Board member on the Federal Executive.
Charlie holds a Bachelor of Economics (First Class) and Laws (Hons) and a
Masters in Philosophy Economics.
Other current directorships:
Healius Limited
Former directorships (last 3 years):
None.
Special responsibilities:
None.
DIRECTOR’S REPORT
Cardiex Limited
12
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 2024 and the number of meetings attended by each Director were:
Directors Meetings
Director
Held Whilst in Office
Attended
Niall Cairns
5
5
Craig Cooper
5
5
King Nelson
5
4
Charlie Taylor
1
1
Jarrod White
3
3
Lesa Musatto
4
3
Directors’ Interests
Information on the Directors’ and their associates’ interests in shares and options of the Company at 30 June 2024 can be found in
the Remuneration Report on page 19.
Shares Issued on the Exercise of Options
During the financial year ended 30 June 2024 no shares (2023: none) were issued to Directors on the exercise of options, see the
Remuneration Report for more detail.
Risks and governance
The following is a summary of material business risks that could adversely affect our financial performance and growth potential
in future years and how we propose to mitigate such risks.
a)
Company specific risks
Commercial operations risks
The Company has encountered challenges in relation to its financial performance, having incurred operating losses in the past, and
there is no certainty that it will achieve or maintain profitability in the future. There are a number of risks to the Company’s
commercial operations which, if any one or more of them occur, could adversely affect the Company's business, financial condition,
and operating results. These risks include, but are not limited to:
(i)
Failure of the Company’s SphygmoCor technology-enabled products, from which the majority of the Company's
revenue is currently derived, to gain market acceptance.
(ii)
The Company's limited operating history with certain products which are still in development makes it challenging
to predict long-term performance based solely on historical financial results.
(iii)
Accurate demand forecasting for products and effective inventory management are crucial for the Company's
financial success. Increases in component costs, supply shortages, and supply changes could disrupt the supply
chain.
(iv)
The inability to anticipate appropriate pricing levels for its products, and economic downturns or uncertainties could
reduce consumer discretionary spending and demand for its products and services.
(v)
Consolidation in the healthcare industry may result in demands for price concessions or the exclusion of existing
market participants from certain markets.
(vi)
Inefficient management of growth and expansion, including cost-effective and timely scaling of operations.
DIRECTOR’S REPORT
Cardiex Limited
13
The Company's business can also be significantly impacted by political events, international disputes, natural disasters, public
health issues, industrial accidents, and other interruptions. Unforeseen accidents, safety incidents, or workforce disruptions may
also adversely affect the Company's business, while certain segments of the business may be influenced by seasonality.
Product risks
The Company's success is closely tied to maintaining the value and reputation of its brands, which may not be as successful as
anticipated. The Company's products and services may encounter design and manufacturing defects, whether real or perceived,
which could have adverse effects on its business and damage its reputation. The Company offers, and will offer, complex hardware
and software products and services that can be affected by design and manufacturing defects. Sophisticated applications, such as
the CONNEQT Portal, CONNEQT App and other products, often have issues that can unexpectedly interfere with the intended
operation of hardware or software products. Defects may also exist in components and products that we source from third parties,
or may arise from upgrades or changes to hardware that the Company or its third party manufacturing partners may make in the
ordinary course of a product’s lifecycle. Major defects could make the Company’s products and services unsafe and create a risk
of environmental or property damage and/or personal injury. Quality problems could also adversely affect the user’s experience,
and result in harm to the Company’s brand or reputation, loss of competitive advantage, poor market acceptance, reduced demand
for its products, delay in new product introductions, and lost revenue.
Users may rely on CONNEQT products and companion digital solutions to track and record health data accurately. Any failure to
provide accurate metrics and data could harm the Company’s brand and reputation, making it challenging to retain users.
Unsuccessful clinical trials related to products under development could adversely affect the Company’s ability to obtain necessary
clearance or approval of its new products and have a material adverse effect on the Company's future prospects. Such clinical trials
are inherently uncertain and there can be no assurance that any clinical trial we conduct or sponsor will be completed in a timely
or cost- effective manner or result in a commercially viable product.
Product liability
As with all products, there is no assurance that unforeseen adverse events or defects will not arise in the Company’s products. The
Company may be subject to warranty claims that result in significant direct or indirect costs, or it could experience more extensive
product returns than expected, both of which could negatively affect its business, financial condition, and operating results. Adverse
events could also expose the Company to product liability claims or litigation, resulting in the removal of regulatory approval for
the relevant products and/or monetary damages being awarded against the Company. In such event, the Company's liability may
exceed the Company's insurance coverage, if any.
Supply chain
The Company relies on a limited number of global suppliers, contract manufacturers, and logistics partners to manufacture its
products, and any loss of supply or supply interruption from these partners could negatively affect its operations. A large portion
of the Company’s contract manufacturers’ primary facilities are located in Australia and for the Company’s new products in China.
Thus, its business could be adversely affected if one or more of its suppliers is impacted by a natural disaster, an epidemic such as
the current COVID-19 pandemic, or other interruption at a particular location. Certain interruptions may be due to, among other
things:
(i)
Temporary closures of the Company’s facilities or those of its manufacturers, and other vendors in the supply chain.
(ii)
Restrictions on or delays surrounding travel or the import/export of goods and services from certain ports used by
the Company.
(iii)
Local quarantines or other public safety measures.
Furthermore, the Company has limited control over suppliers, contract manufacturers and logistics partners, which may result in
production delays or insufficient product quantities being available to the Company. If any of these suppliers, contract managers
or logistics partners do not perform their obligations or meet the Company’s and users’ expectations, the Company’s brand,
reputation and business could suffer.
DIRECTOR’S REPORT
Cardiex Limited
14
Cybersecurity risks
Expanding the company’s solutions and capabilities that rely on network communications expose the Company to risks including
cybersecurity threats, interruptions or delays in telecommunications systems, or data service losses, all of which could impair
product and service delivery.
Despite the Company’s efforts and processes to prevent security breaches and incidents, its products and services, as well as its
servers, computer systems, and those of third parties that it uses in its operations are vulnerable to cybersecurity risks, which could
lead to interruptions, delays, loss, corruption, unavailability, and unauthorised processing of critical data, unauthorized access to
or other processing of user health data, a negative impact on users’ experience, and loss of consumer confidence. In the event of a
breach or incident, the Company could be required to expend additional significant capital and other resources in an effort to
prevent further breaches or incidents. In addition, the Company’s insurance applicable to these matters may not be adequate to
cover a potential claim and may be subject to exclusions.
Intellectual property risks
The Company heavily relies on patent, intellectual property and other proprietary rights, and failing to protect these rights or
succeed in litigation related to them could result in significant monetary damages and royalty payments, negatively impacting its
ability to sell current or future products. Protecting intellectual property rights worldwide may present challenges, and issued
patents covering the Company’s products and technologies could be found invalid or unenforceable if challenged. Failure to protect
the confidentiality of trade secrets could materially adversely affect the value of the Company’s technology and harm its business.
The value of the Company's products and brand is closely tied to its intellectual property rights. Infringement or perceived
infringement of others' intellectual property rights by the Company's products could lead to costly patent and intellectual property
litigation, substantial damages or royalties, limitations on technology essential to its products, or discontinuation of product sales.
Obtaining and maintaining patent protection relies on compliance with various required procedures, document submissions, fee
payments, and other requirements imposed by governmental patent agencies, and non-compliance with these requirements could
reduce or eliminate patent protection.
The Company's use of open-source software and failure to comply with the terms of underlying open-source software licenses
could impose limitations on commercialising its products and providing third parties access to its proprietary software.
Additional capital requirements
The Company may require capital to execute its business plan and maintain ongoing operations in the future. It is also possible that
further capital may be required at an earlier stage if any risks, including those described in this Section 5 materialise. Any additional
equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the then market price (or Offer Price) or
may involve restrictive covenants which limit the Company’s operations and business strategy. Debt financing, if available, may
involve restrictions on financing and operating activities or the registering of security interests over the Company’s assets. Although
the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or funding, if and
when needed, will be available on terms favourable to the Company or at all. The Company may undertake additional offerings of
Securities in the future. The increase in the number of Shares issued and outstanding and the possibility of sales of such Shares
may have a depressive effect on the price of Shares. In addition, as a result of the offering of such additional Shares, the voting
power of the Company’s existing Shareholders will be diluted.
Potential acquisitions
The Company may in the future pursue strategic investments or acquisitions to add new products and technologies, acquire talent,
gain new sales channels, or enter into new markets or sales territories. Growth through investment and acquisitions entails numerous
operational and financial risks. These include, but are not limited to, execution risk, poor integration of the acquired business, entry
into market segments with more risk than existing operations and loss of managerial focus on existing business. These risks may
have an adverse effect on the Company’s financial performance.
DIRECTOR’S REPORT
Cardiex Limited
15
Unforeseen expenses
The Company’s cost estimates and financial forecasts include what are believed to be appropriate provisions for material risks and
uncertainties and are considered to be fit for purpose for the proposed activities of the Company. If risks and uncertainties prove
to be greater than expected, or if new currently unforeseen material risks and uncertainties arise, the expenditure proposals of the
Company are likely to be adversely affected.
b)
Industry risks
Regulatory risks
Extensive government regulation and oversight in the United States, Australia, and in other jurisdictions apply to the Company's
products and operations, and noncompliance with these requirements could harm its business. Regulatory clearances, approvals,
and certifications are vital for marketing and commercial distribution, and the revocation or revision of such authorisations by
agencies such the U.S. Food and Drug Administration or the Australian Therapeutic Goods Administration could harm the
Company's commercial operations. Failure to comply with healthcare and other governmental regulations could result in substantial
fines and penalties, adversely affecting the Company's business, results of operations, and financial condition.
Misuse or off-label use of the Company's products may harm its reputation in the marketplace, result in injuries leading to product
liability suits, or result in costly investigations, fines, or sanctions by regulatory bodies, which could be costly to the Company.
Misconduct or improper activities by employees, consultants, and commercial partners, including non-compliance with regulatory
standards and requirements, pose further risks.
Changes in healthcare policies may also have a material adverse effect on the Company, including making it more difficult and
costly for the Company to obtain regulatory clearances or approvals for its products or to manufacture, market, or distribute its
products after clearance or approval is obtained. Further, healthcare providers and related facilities are generally reimbursed for
their services through payment systems managed by various governmental agencies worldwide, private insurance companies, and
managed care organisations. A decline in coverage and reimbursement from government and third-party payors could lead to
reduced product usage and sales.
Failure to comply with anti-corruption and anti-money laundering laws, including the Australian Anti-Money Laundering and
Counter-Terrorism Financing Act 2006 and the Financial Transactions Reports Act 1988 in Australia, the U.S. Foreign Corrupt
Practices Act (FCPA) and similar laws related to activities in other jurisdictions, could materially adversely affect the Company's
business and result in civil and/or criminal sanctions.
Numerous laws and regulations, including the U.S. Health Insurance Portability and Accountability Act (HIPAA) and the U.S.
Health Information Technology for Economic and Clinical Health Act (HITECH Act), govern the collection, dissemination,
security, use and confidentiality of patient-identifiable health information. Failure to comply with HIPAA, the HITECH Ac), and
similar laws and regulations in Australia and other jurisdictions and implementing those regulations could result in significant
penalties, and regulations requiring the use of "standard transactions" for healthcare services under HIPAA (and other regulations
in Australia and other jurisdictions) may negatively affect profitability and cash flows. Enforcement of laws and regulations
regarding privacy and security of patient information may adversely affect the Company's business, financial condition, or
operations.
Competition
The Company operates in a highly competitive market and may struggle to attract and retain users, hindering its business growth.
As the health wearable market is relatively new, any failure of the general market or specific demand for the Company's products
to meet expectations, or if growth slows, could adversely impact its business, financial condition, and operating results. There is
no assurance that the Company will be able to successfully compete in this landscape. Some of these competing companies may
possess or develop technologies that are superior to the Company's, or have substantially greater financial, technical, and human
resources. As a result, the Company’s services, expertise, or products could be rendered obsolete, less attractive, or uneconomical
due to advances in technology or alternative approaches developed by the Company’s competitors.
DIRECTOR’S REPORT
Cardiex Limited
16
Data security and privacy
The collection, storage, processing, and use of personal data subject the Company to legal obligations and regulations related to
security and privacy. Failure to meet these obligations, whether actual or perceived, could harm the Company's reputation and
business. Data collection is further governed by restrictive regulations regarding the use, processing, and cross-border transfer of
personal information.
Foreign exchange
The Company operates in a variety of jurisdictions, including Australia, the United States, Europe and China, and as such, expects
to generate revenue and incur costs and expenses in AUD, USD, EUR and CNY.
Consequently, movements in currency exchange rates may adversely or beneficially affect the Company’s results or operations
and cash flows. For example, the appreciation or depreciation of the US dollar relative to the Australian dollar would result in a
foreign currency loss or gain. Any depreciation of currencies in foreign jurisdictions in which the Company operates may result in
lower than anticipated revenue, profit and earnings of the Company.
a)
General risks
Economic risks
General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency
exchange rates may have an adverse effect on the Company’s business activities and potential exploration and development
programs, as well as on its ability to fund those activities.
Force majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including
labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics or
epidemics or quarantine restrictions.
Infectious diseases
The Company’s share price may be adversely affected by the economic uncertainty caused by COVID-19 or other infectious
diseases. Measures to limit the transmission of the virus or other infectious diseases implemented by governments around the world
(such as travel bans and quarantining) may adversely impact the Company’s operations. It could interrupt the Company carrying
out its contractual obligations, cause disruptions to supply chains or interrupt the Company’s ability to access capital.
Market conditions
Share market conditions may affect the value of the Company’s Shares regardless of the Company’s operating performance. Share
market conditions are affected by many factors such as:
(i)
General economic outlook.
(ii)
Introduction of tax reform or other new legislation.
(iii)
Interest rates and inflation rates.
(iv)
Changes in investor sentiment toward particular market sectors.
(v)
The demand for, and supply of, capital.
(vi)
Terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for
equities in general and resources stocks in particular. Neither the Company nor the Directors warrant the future performance of the
Company or any return to Shareholders.
DIRECTOR’S REPORT
Cardiex Limited
17
Government and legal risk
Changes in government, monetary policies, taxation and other laws can have a significant impact on the Company’s assets,
operations and ultimately the financial performance of the Company and its Shares. Such changes are likely to be beyond the
control of the Company and may affect industry profitability as well as the Company’s capacity to explore and mine. The Company
is not aware of any reviews or changes that would affect its permits. However, changes in community attitudes on matters such as
taxation, competition policy and environmental issues may bring about reviews and possibly changes in government policies. There
is a risk that such changes may affect the Company’s development plans or its rights and obligations in respect of its permits. Any
such government action may also require increased capital or operating expenditures and could prevent or delay certain operations
by the Company.
Taxation
The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial
affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the
consequences of acquiring Securities from a taxation point of view and generally. To the maximum extent permitted by law, the
Company, its officers and each of their respective advisers accept no liability and responsibility with respect to the taxation
consequences of applying for Securities under this Prospectus.
Unforeseen risk
There may be other risks which the Directors are unaware of at the time of issuing this Prospectus which may impact on the
Company, its operations and/or the valuation and performance of its Shares.
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 2024 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.
DIRECTOR’S REPORT
Cardiex Limited
18
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
24. The external auditor did not provide non-audit services to the Company during the year ended 30 June 2024.
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.
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
24.
REMUNERATION REPORT
Cardiex Limited
19
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 Sect 308 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 caliber 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
Executive Director and Chairman
Mr. Craig Cooper
CEO and Executive Director
Mr. King Nelson
Non-executive Director
Mr. Charlie Taylor
Non-executive Director (appointed 1 March 2024)
Mr. Jarrod White
Executive Director (resigned 26 September 2023)
Ms. Lesa Musatto
Non-executive Director (resigned 18 October 2023)
REMUNERATION REPORT
Cardiex Limited
20
Key Management Personnel Compensation
Salary and directors fees
Share Based
Payment Benefits
Total
$
$
$
2024
Niall Cairns
300,000
188,427
488,427
Craig Cooper
945,670
188,427
1,134,097
King Nelson
76,264
8,818
85,082
Charlie Taylor1
20,000
4,138
24,138
Jarrod White2
23,667
30,236
53,903
Lesa Musatto3
-
-
-
Total Compensation
1,365,601
420,046
1,785,647
2023
Niall Cairns
300,000
706,996
1,006,996
Craig Cooper
772,175
706,996
1,479,171
King Nelson
74,247
41,405
115,652
Jarrod White
92,800
259,310
352,110
Lesa Musatto
-
36,212
36,212
Total Compensation
1,239,222
1,750,919
2,990,141
1Appointed 1 March 2024
2 Resigned 26 September 2023
3 Resigned 18 October 2023
Shares held by key management personnel and their associates
Balance
01 July 2023
Additions
Balance
30 June 2024
Niall Cairns
26,634,394
35,560,998
62,195,3924
Craig Cooper
26,124,394
39,818,674
65,943,0684
King Nelson
15,385
-
15,385
Charlie Taylor
-
-
-
Jarrod White
1,028,880
-
1,028,8805
Lesa Musatto
-
-
-
Total
53,803,053
75,379,672
129,182,725
4A total of 59,448,630 shares held Mr Cairns and Mr Cooper are indirectly held by C2 Ventures, in which Mr Cairns and Mr Cooper
are directors.
5Held at date of resignation.
REMUNERATION REPORT
Cardiex Limited
21
Balance
01 July 2022
Additions
Balance
30 June 2023
Niall Cairns
23,559,394
3,075,000
26,634,3946
Craig Cooper
23,099,394
3,025,000
26,124,3946
King Nelson
15,385
-
15,385
Jarrod White
576,551
452,329
1,028,880
Lesa Musatto
-
-
-
Total
47,250,724
6,552,329
53,803,053
6A total of 25,524,294 shares held Mr Cairns and Mr Cooper are indirectly held by C2 Ventures, in which Mr Cairns and Mr Cooper
are directors.
Options held by key management personnel and their associates
Balance
01 July 2023
Additions
Expired
Balance
30 June 2024
Niall Cairns
1,150,000
38,553,668
(1,150,000)
38,553,6687
Craig Cooper
1,150,000
39,772,892
(1,150,000)
39,772,8927
King Nelson
650,000
1,000,000
(150,000)
1,500,000
Charlie Taylor
-
1,000,000
-
1,000,000
Jarrod White
261,444
-
-
261,4448
Lesa Musatto
500,000
-
-
500,0008
Total
3,711,444
80,326,560
(2,450,000)
81,588,004
7Directors Mr. Cairns and Mr. Cooper hold 37,808,079 options indirectly through C2 Ventures Pty Limited, of which they are both
directors.
8Held at date of resignation.
Balance
01 July 2022
Additions
Expired
Balance
30 June 2023
Niall Cairns
150,000
1,000,000
-
1,150,0009
Craig Cooper
150,000
1,000,000
-
1,150,0009
King Nelson
150,000
500,000
-
650,000
Jarrod White
150,000
111,444
-
261,444
Lesa Musatto
-
500,000
-
500,000
Total
600,000
3,111,444
-
3,711,444
9Directors Mr. Cairns and Mr. Cooper hold 1,150,000 options indirectly through C2 Ventures Pty Limited, of which they are both
directors.
REMUNERATION REPORT
Cardiex Limited
22
Performance rights held by key management personnel and their associates
On 30 November 2022, 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 6,750,000 and expire on 30 November 2027. The terms of the
Director rights on issue are as follows:
Number of
performance rights
Vesting conditions
Issue Date
Expiry
Date
2,250,000
Vest upon the Company successfully achieving a
Secondary Listing on a US exchange
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $10
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $20
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
Balance
01 July 2023
Additions
Expired
Balance
30 June 2024
Niall Cairns
9,800,000
-
(6,800,000)
3,000,000
Craig Cooper
9,800,000
-
(6,800,000)
3,000,000
King Nelson
350,000
-
(350,000)
-
Jarrod White
2,850,000
-
(2,100,000)
750,00010
Lesa Musatto
-
-
-
-
Total
22,800,000
-
(16,050,000)
6,750,000
10Held at date of resignation.
Balance
01 July 2022
Additions
Expired
Balance
30 June 2023
Niall Cairns
6,800,000
3,000,000
-
9,800,000
Craig Cooper
6,800,000
3,000,000
-
9,800,000
King Nelson
350,000
-
-
350,000
Jarrod White
2,100,000
750,000
-
2,850,000
Lesa Musatto
-
-
-
-
Total
16,050,000
6,750,000
-
22,800,000
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.
REMUNERATION REPORT
Cardiex Limited
23
Craig Cooper – Chief Executive Officer
•
Current agreement commenced on 1 September 2021.
•
Base salary of US$420,000 per annum.
•
Bonuses to be paid at discretion of the Group based on performance reviews. During the year, Mr Cooper received
US$200,000 in bonuses.
•
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 September 2021.
•
Monthly consulting fee for strategic review and consulting services of A$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.
•
During the year, Mr Nelson received 1,000,000 vested options.
Charlie Taylor – Non-Executive Director
•
Current agreement commenced with an effective date of 1 March 2024.
•
Base salary of A$60,000 per annum.
•
During the year, Mr Taylor received 1,000,000 vested options.
Loans to Directors and Key Management Personnel
There were no loans made to directors or key management personnel of the Company and the Group during the period during the
financial years ended 30 June 2024 and 2023 commencing at the beginning of the financial year and thereafter up to the date of this
report.
Group Performance
2024
2023
2022
2021
2020
Net loss after tax ($)
(6,765,365)
(18,886,936)
(11,809,634)
(5,180,098)
(3,320,427)
Basic loss per share (cents)
(3.4)
(14.5)
(11.5)
(5.9)
(4.6)
Diluted loss per share (cents)
(3.4)
(14.5)
(11.5)
(5.9)
(4.6)
Share price ($)
0.07
0.14
0.28
0.64
0.19
Dividends paid
-
-
-
-
-
This concludes the remuneration 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 2024
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
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.
DECLARATION OF INDEPENDENCE BY TIM AMAN TO THE DIRECTORS OF CARDIEX LIMITED
As lead auditor of CardieX Limited for the year ended 30 June 2024, 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.
Tim Aman
Director
BDO Audit Pty Ltd
Sydney
30 September 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
25
Note
2024
2023
Revenue
2
$
10,905,636 $
4,604,284
Other income
3
2,183,955
1,411,884
Total revenue & other income
13,089,591
6,016,168
Expenses
Cost of goods sold
(797,873)
(905,849)
Bad debts expense
(26,217)
10,513
Marketing and sales expense
(573,904)
(1,272,099)
Product development and regulatory expense
(2,489,589)
(3,908,272)
Occupancy expense
(313,791)
(293,467)
Employee benefits expense
(9,864,015)
(9,879,027)
Share based payments expense
4
(116,058)
(2,067,699)
Administration expense
(3,265,399)
(2,726,428)
US listing expense
(438,460)
(3,292,403)
Interest expense
(1,183,262)
(408,469)
Fair value loss
(786,388)
(159,904)
Total expenses
(19,854,956)
(24,903,104)
Net loss before income tax expense
(6,765,365)
(18,886,936)
Income tax expense
5
-
-
Net loss for the period
$
(6,765,365) $
(18,886,936)
Other comprehensive loss for the period, net of tax – Exchange differences
on translation to the presentation currency
(108,291)
(118,695)
Total comprehensive loss for the period attributable to the members
of Cardiex Limited
$
(6,873,656) $
(19,005,631)
Loss per share attributable to the members of Cardiex Limited:
Basic loss per share (cents)
7
$
(3.4) $
(14.5)
Diluted loss per share (cents)
7
$
(3.4) $
(14.5)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Cardiex Limited
26
Note
30 Jun 2024
30 Jun 2023
Assets
Current assets
Cash and cash equivalents
8
$
481,429 $
716,319
Trade and other receivables
9
350,987
2,239,241
Inventory
10
2,553,503
1,661,896
Financial assets
14
4,870,169
5,792,386
Other current assets
11
2,121,784
1,433,279
Total current assets
10,377,872
11,843,121
Non-current assets
Property, plant and equipment
12
1,215,816
1,471,717
Intangible assets
13
619,701
633,048
Financial assets
14
392,854
510,167
Other non-current assets
43,551
78,636
Total non-current assets
2,271,922
2,693,568
Total assets
$
12,649,794 $
14,536,689
Liabilities
Current liabilities
Trade and other payables
15
$
3,890,519 $
7,459,729
Unearned revenue
16
309,353
3,041,633
Provisions
17
490,604
488,774
Financial liabilities
18
2,347,751
2,175,794
Lease liabilities
19
158,920
168,951
Borrowings
20
880,000
1,460,959
Total current liabilities
$
8,077,147 $
14,795,840
Non-current liabilities
Provisions
17
8,976
6,158
Lease liabilities
19
476,190
483,096
Total non-current liabilities
485,166
489,254
Total liabilities
$
8,562,313 $
15,285,094
Net assets / net (liabilities)
$
4,087,481 $
(748,405)
Contributed equity
21
$
88,108,332 $
76,615,802
Reserves
23
2,669,839
6,389,306
Accumulated losses
(86,690,690)
(83,753,513)
Total equity
$
4,087,481 $
(748,405)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
27
Note
Contributed
equity
Reserves
Accumulated
losses
Total
equity
Balance at 1 July 2022
$
67,552,468
$
3,925,422
$
(64,866,577)
$
6,611,313
Loss after income tax expense for the
period
-
-
(18,886,936)
(18,886,936)
Other comprehensive loss for the period,
net of tax – Exchange differences on
translation to the presentation currency
-
(118,695)
-
(118,695)
Total comprehensive loss for the
period
$
-
$
(118,695)
$
(18,886,936)
$
(19,005,631)
Transactions with owners in their
capacity as owners:
Capital placement
21
9,913,412
-
-
9,913,412
Shares issued in lieu of payments to
employees
21
35,000
-
-
35,000
Shares issued in lieu of payments to
suppliers
21
89,715
-
-
89,715
Performance rights vesting expense
23(b)
-
1,666,546
-
1,666,546
Options vesting expense
23(a)
-
670,140
-
670,140
Options issuable for convertible notes
23(a)
-
75,996
-
75,996
Costs of issuing share capital
21
(974,793)
169,897
-
(804,896)
Balance at 30 June 2023
$
76,615,802
$
6,389,306
$
(83,753,513)
$
(748,405)
Loss after income tax expense for the
period
-
-
(6,765,365)
(6,765,365)
Other comprehensive loss for the period,
net of tax – Exchange differences on
translation to the presentation currency
-
(108,291)
-
(108,291)
Total comprehensive loss for the
period
$
$
(108,291)
$
(6,765,365)
$
(6,873,656)
Transactions with owners in their
capacity as owners:
Capital placement
21
8,000,000
-
-
8,000,000
Shares issues on conversion of
convertible notes
21
3,620,000
-
-
3,620,000
Shares issued in lieu of payments to
employees
21
97,642
-
-
97,642
Shares issued in lieu of payments to
suppliers
21
157,299
-
-
157,299
Shares issued in lieu of payments for
intangible assets
21
229,744
-
-
229,744
Performance rights vesting expense
23(b)
-
14,973
-
14,973
Options vesting expense
23(a)
-
101,086
-
101,086
Options issuable for convertible notes
23(a)
-
100,953
-
100,953
Costs of issuing share capital
21
(612,155)
-
-
(612,155)
Options/Rights expired
-
(3,828,188)
3,828,188
-
Balance at 30 June 2024
$
88,108,332
$
2,669,839
$
(86,690,690)
$
4,087,481
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
28
Note
30 Jun 2024
30 Jun 2023
Cash flows used in operating activities
Receipts from customers
$
10,195,319
$
5,332,700
Payments to suppliers and employees
(19,174,796)
(18,416,625)
Cash receipts from other income
550,870
363,947
Receipt for Research and Development Tax Incentives
691,624
723,628
Interest received
15,383
-
Net cash used in operating activities
8
$
(7,721,600)
$
(11,996,350)
Cash flows used in investing activities
Payments for property, plant and equipment
(118,413)
(57,703)
Payments for intangible assets
-
(22,573)
Net cash (used in)/from investing activities
$
(118,413)
$
(80,276)
Cash flows from financing activities
Proceeds from shares issued
21
8,000,000
9,913,412
Share issue costs
21
(673,039)
(535,910)
Proceeds from issue of convertible debt
18
1,445,000
2,175,000
Borrowings received, net of transaction costs
20
-
800,000
Borrowings repaid
20
(728,922)
(724,923)
Convertible notes repaid
18
(220,215)
(66,778)
Lease principal repayments
(231,046)
(208,420)
Net cash from financing activities
$
7,591,778
$
11,352,381
Net (decrease) in cash and cash equivalents
(248,235)
(724,245)
Cash and cash equivalents at the beginning of the fiscal period
716,319
1,455,590
Effects of foreign currency exchange
13,345
(15,026)
Cash and cash equivalents at the end of the period
8
$
481,429
$
716,319
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
29
NOTE 1. MATERIAL 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 2024 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 2024 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.
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 25 to the financial statements. All controlled entities have a 30 June 2024
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.
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.
As disclosed in the financial statements, the Group incurred a loss after tax of $6,765,365 (2023: $18,886,936), had a net
asset position of $4,087,481 (2023 net liability position: $748,405) and had net cash outflows from operating activities of
$7,721,600 for the year ended 30 June 2024 (2023: $11,996,530).
The Company has encountered challenges in relation to its financial performance, having incurred operating losses in the
past, and there is no certainty that it will achieve or maintain profitability in the future. There are a number of risks to the
Company’s commercial operations which, if any one or more of them occur, could adversely affect the Company's business,
financial condition, and operating results. These risks include, but are not limited to:
(vii)
Failure of the Company’s SphygmoCor technology-enabled products, from which the majority of the
Company's revenue is currently derived, to gain market acceptance.
(viii)
The Company's limited operating history with certain products which are still in development makes it
challenging to predict long-term performance based solely on historical financial results.
(ix)
Accurate demand forecasting for products and effective inventory management are crucial for the Company's
financial success. Increases in component costs, supply shortages, and supply changes could disrupt the supply
chain.
(x)
The inability to anticipate appropriate pricing levels for its products, and economic downturns or uncertainties
could reduce consumer discretionary spending and demand for its products and services.
(xi)
Consolidation in the healthcare industry may result in demands for price concessions or the exclusion of
existing market participants from certain markets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
30
NOTE 1. MATERIAL ACCOUNTING POLICIES (CONTINUED)
(xii)
Inefficient management of growth and expansion, including cost-effective and timely scaling of operations.
As a result of these matters, there is a material uncertainty related to events or conditions that may cast significant doubt on
whether the Group will continue as a going concern and, therefore, the Group may be unable to realise its assets and discharge
its liabilities and commitments in the normal course of business and at the amount stated in the financial report.
Following the withdrawal of the registration statement for a US IPO in September 2023, the Board, with the support of the
Group’s senior executive team and advisors, have been focused on alternative solutions to its capital raising to support its
corporate strategy and which will provide enough funding and capital runway to allow the Company to both progress its new
product launch initiative and execution of its overall business plan. During the 2024 financial year, the Group was successful
in raising $4m by way of a Placement to institutional, family office, and sophisticated investors, and a further $4m from an
Entitlement Offer. In November 2023, the Group also entered into a Funding Commitment Agreement with C2 Ventures Pty
Ltd, a Company jointly owned by Directors Niall Cairns and Craig Cooper to provide total capital of $8.5m, including
participation in the Placement and Entitlement Offer in February 2024. The remaining drawdowns of this facility are $3.75m
and are expected to be received throughout the balance of the 2024 calendar year. A summary of key terms of the Funding
Commitment Agreement are below:
•
The Facility Limit is reduced by amounts advanced to, loaned to, owed by or received by the Company from C2V
and related parties, including under the proposed Placement and Entitlement Offer.
•
Cardiex may require C2V (or its nominee) to advance a loan under the loan facility at any time between the date
of the Agreement and 31 December 2024 by giving notice to the C2V.
•
Some or all of the outstanding moneys may be repaid by the Company by issuing securities to the C2V, such as
under the proposed Placement and Entitlement Offer.
•
Interest will accrue on the principal outstanding at 10% per annum during the period commencing on the date of
the FCA and ending on, if shareholder approval is not obtained to convert loans into equity, the day of the
shareholders meeting; and otherwise, the Maturity Date of 31 December 2025.
•
The Company may at any time prepay all or part of the outstanding moneys without premium or penalty.
•
If, after 31 December 2025 there are any outstanding moneys, the Company must repay the outstanding moneys at
the request of the Lender, on at least 30 days’ notice.
The Directors are of the opinion that there are reasonable grounds that the Group will be able to continue as a going concern,
after consideration of the following factors:
•
Since the 30 June 2024 Balance date, $2.25m in drawdowns have been received from the Funding Commitment
Agreement entered into with C2 Ventures, with the remaining $3.75m in drawdowns expected during the balance
of the 2024 calendar year.
•
Cardiex continues to conduct a strategic review to streamline its operations and continues to take measures to
reduce cash outgoings for employee benefits, product development costs, and administration costs. There were
significant costs incurred in FY2023 and FY2024 relating to the development and subsequent FDA clearance of
the CONNEQT Pulse, the withdrawn US listing, and subsequent re-compliance with the ASX that have since been
curtailed. This reduced cost base is evidenced from internal financial results received for the first quarter of
FY2025.
•
Sales from the CONNEQT Pulse device are expected in Q2 of FY2025, and our waitlist has surpassed 15,000 pre-
registered customers.
•
Cardiex recently received approval from AusIndustry for the inclusion of overseas software development costs in
its R&D Tax Incentive claims for FY2024-FY2026 and is anticipating a refund of $1.4 million in Q2 of FY2025,
a significant increase from prior year claims. This is secured against Cardiex’s R&D funding facility with Mitchell
Asset Management, and the Group may consider extending this facility against the following years R&D claim.
•
There is currently a robust pipeline for deploying devices and services in large-scale clinical trials.
•
The Group has a successful track record of being able to raise both equity and debt financing and are prepared to
raise additional funds if required. Preliminary discussions have taken place with various debt funders and equity
providers both in Australia and the US, which may be required to progress further should sales of the CONNEQT
Pulse be lower than anticipated, or if there are delays to clinical trial cash flows.
The Directors are of the opinion that the Group will be successful in managing the above matters and accordingly, they have
prepared the financial report on a going concern basis. At this time, the Directors are of the opinion that no asset is likely to
be realised for an amount less than the amount at which it is recorded in the consolidated financial report as at 30 June 2024.
Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the
asset carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue
as a going concern.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
31
NOTE 1. MATERIAL ACCOUNTING POLICIES (CONTINUED)
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.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
32
NOTE 1. MATERIAL ACCOUNTING POLICIES (CONTINUED)
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.
Financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments. Financial
liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated
a financial liability at FVTPL.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, 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).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
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 and Conneqt Inc is United States dollars (US$).
The functional currency of Cardiex (Shanghai) Medical Technology Co., Ltd. Is Chinese Yuan (CNY).
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at
the end of the reporting period. Foreign exchange gains and losses resulting from settling foreign currency transactions, as
well as from restating foreign currency denominated monetary assets and liabilities, are recognised in profit or loss, except
when they are deferred in other comprehensive income as qualifying cash flow hedges or where they relate to differences on
foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
33
NOTE 1. MATERIAL ACCOUNTING POLICIES (CONTINUED)
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair
value was determined.
Presentation currency
The financial statements are presented in Australian dollars, which is the Group’s presentation currency.
Functional currency balances are translated into the presentation currency using the exchange rates at the balance sheet date.
Value differences arising from movements in the exchange rate is recognised in the statement of comprehensive income.
Critical accounting estimates and judgements
The Group has operations in both the US and Australia; however, the functional currency is deemed to be Australian dollars
as the Group is listed on the Australian stock exchange and the main operations are located in Australia.
Functional currency of AtCor Medical Inc. and Conneqt Inc.
In determining that United States dollar (US$) is the functional currency of AtCor Medical Inc. and Conneqt Inc., management
have applied judgement to assess the currency that most faithfully represents the economic effects of the underlying
transactions, events and conditions in the entities. 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.
CURRENT AND NON-CURRENT CLASSIFICATION
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is current when it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held
primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is
cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is current when it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading;
it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of
the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
PARENT ENTITY INFORMATION
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in Note 29.
OPERATING SEGMENTS
Operating segments are presented using the 'management approach', where the information presented is on the same basis as
the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance. As disclosed in Note 27, the Group has one operating
segment.
NEW, REVISED OR AMENDED ACCOUNTING STANDARDS ADOPTED
The Group has retrospectively adopted all of the new, revised or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are relevant to its operations and effective for the year commencing
1 July 2023. There was no material impact on the group’s financial statements on the adoption of these Standards and
Interpretations.
Revised or amending Accounting Standards or Interpretations that are not yet mandatory for the year ended 30 June 2024 have
not been early adopted.
OTHER SIGNIFICANT ACCOUNTING POLICIES
Other significant accounting policies for transactions and balances are disclosed throughout the notes to the consolidated
financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
34
NOTE 2. REVENUE
Revenue consists of the following:
30 Jun 2024
30 Jun 2023
Sale of goods revenue
$
2,607,900 $
2,613,940
Lease revenue
8,004,6821
1,121,588
Service revenue
247,655
556,396
Freight revenue
45,399
206,934
Royalty income
-
105,426
$
10,905,636 $
4,604,284
1Includes $7,669,307 in revenue recognised upon the early conclusion and subsequent payment in full of the multi-year Clinichain
clinical trial.
Accounting policy for revenue recognition
To determine whether to recognise revenue and what price, the Group follows a 5-step process:
1.
Identifying the contract with a customer
2.
Identifying the performance obligations
3.
Determining the transaction price
4.
Allocating the transaction price to the performance obligations
5.
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 revenue
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. The transaction price is stipulated in the sales contract. Performance
obligations after the transfer of control of the goods (such as after sales service) are measured and recorded separately, as detailed
in Other revenue below. Amounts disclosed as revenue are net of sales returns and trade discounts.
Lease revenue
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.
Service revenue
Service income is recognised over time in line with management’s assessment of the performance obligations under each contract.
Freight revenue
Freight income is recognised when the control is transferred to the customer and there is a valid sales contract.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
35
NOTE 2. REVENUE (CONTINUED)
Royalty income
Royalty income is recognised when entitled under royalty agreements.
NOTE 3. OTHER INCOME
Other income consists of the following:
30 Jun 2024
30 Jun 2023
Research and development tax incentive scheme
$
1,357,061 $
722,971
Foreign exchange gains
5,813
67,310
Interest income
270,645
257,657
Grant and award income
527,356
140,424
Miscellaneous other income
23,080
223,522
$
2,183,955 $
1,411,884
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.
NOTE 4. EXPENSES
Net loss before income tax expense includes the following specific expenses:
30 Jun 2024
30 Jun 2023
Depreciation on plant and equipment
$
59,624 $
58,268
Depreciation on right of use assets
154,194
152,817
Amortisation of intangible assets
13,497
14,508
Share based payments
116,058
2,067,699
NOTE 5. INCOME TAX EXPENSE
Income tax expense consists of the following:
30 Jun 2024
30 Jun 2023
Deferred tax expense
$
- $
-
Current tax expense
-
-
Aggregate income tax expense
$
- $
-
Effective tax rate reconciliation (in thousands):
30 Jun 2024
30 Jun 2023
Loss before income tax expense
$
(6,765,365) $
(18,886,936)
Tax at the statutory tax rate of 25% (2023: 25%)
(1,691,341)
(4,721,734)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Other non-allowable items
1,489,209
2,721,599
Items not assessable for taxation
(404,632)
(239,322)
Items deductible for taxation but not accounting
(452,542)
(441,468)
Differences in overseas tax rates
(78,952)
187,852
Benefit of tax losses and temporary differences not recognised
1,138,258
2,493,073
Income tax expense
$
- $
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
36
NOTE 5. INCOME TAX EXPENSE (CONTINUED)
The Group has carried forward tax losses, calculated according to Australian income tax legislation of $67,381,568 (2023:
$63,144,343) 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 $16,845,392 at 30
June 2024 (2023: $15,786,086) 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.
Accounting policy for income tax
The income tax expense for the year comprises current income tax expenses and deferred tax expenses.
Current income tax expense charged to the profit or loss in the tax payable on taxable income for the current period. Current
tax liabilities are measured as the amounts expected to be paid to the relevant tax authority using the tax rates and tax laws that
have been enacted or substantively enacted by the end of the reporting period.
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.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well as unused tax losses.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised, or the liability is settled, and their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are only recognised to the extent that it is probably
that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Critical accounting judgements, estimates and assumptions
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining
the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business
for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on
the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is
made.
NOTE 6. AUDITOR REMUNERATION
30 Jun 2024
30 Jun 2023
Remuneration of the auditor (BDO) of the Group for:
Audit and review services for ASX and ASIC requirements for the financial
year
$
274,500 $
60,000
Audit and review services in relation to the US IPO for the financial year
(current and historical PCAOB audits)
80,000
460,000
Audit services for comfort and consent letters provided in relation to the US
IPO
90,000
265,000
444,500
785,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
37
NOTE 7. LOSS PER SHARE
The calculation of the basic and diluted loss per share is based on the following information:
30 Jun 2024
30 Jun 2023
Reconciliation of earnings used in calculating earnings per share
Net loss after tax
$
(6,765,365)
$
(18,886,936)
No. of shares
No. of shares
Weighted average number of ordinary shares1
200,550,522
130,110,549
Basic and diluted loss per share (cents)
$
(3.4)
$
(14.5)
1Performance 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. Refer to Note 23 for
additional details in relation to the performance rights.
NOTE 8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consisted of the following:
30 Jun 2024
30 Jun 2023
Cash at bank
$
481,429 $
716,319
$
481,429 $
716,319
There are no restrictions or limitations on the use of cash and cash equivalents.
Accounting policy for cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less or that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
Reconciliation of Cash Flow from Operations with net loss for the period:
30 Jun 2024
30 Jun 2023
Net loss for the year
$
(6,765,365) $
(18,886,936)
Depreciation and amortisation expense
227,315
225,593
Share based payments expense
116,058
2,067,699
Interest income on convertible notes
(255,262)
(257,657)
Unrealised foreign exchange difference
(5,813)
(67,310)
Interest expense
963,047
165,401
Fair value loss
786,388
159,904
Other non-cash expenses
484,685
97,988
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
1,199,749
(1,293,164)
(Increase) in inventories - net
(891,607)
(667,122)
(Decrease) / increase in trade and other payables
(3,569,210)
5,004,329
(Decrease) / increase in unearned revenue
(2,732,280)
2,164,321
Increase / (decrease) in provisions
4,648
(33,430)
Transfer of trade and other payables to financial liabilities
2,287,912
-
Transfer to property plant and equipment
428,135
(675,966)
Net cash outflow used in operating activities
$
(7,721,600) $
(11,996,350)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
38
NOTE 9. TRADE AND OTHER RECEIVABLES
Trade and other receivables consisted of the following:
30 Jun 2024
30 Jun 2023
Trade receivables
$
373,648
$
2,276,474
Less: Provision for impairment
(22,661)
(37,233)
$
350,987
$
2,239,241
Provision for impairment:
30 Jun 2024
30 Jun 2023
Balance at beginning of period
$
37,233
$
47,600
Provision for doubtful debts recognised during the year
18,447
2,446
Reversal of provision upon receipt of payment
-
(11,614)
Receivables written off during the year as uncollectible
(33,019)
(1,199)
Balance at end of period
$
22,661
$
37,233
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any 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 (2023: $Nil). A specific provision of $22,661 (2023: $37,233) was recognised at
each financial year end.
Critical accounting judgements, estimates and assumptions
The provision for impairment of receivables and the ECL calculation assessment requires a degree of estimation and judgment.
The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical
collection rates and specific knowledge of the individual debtor’s financial position.
NOTE 10. INVENTORY
Inventories consisted of the following:
30 Jun 2024
30 Jun 2023
Raw materials
$
1,531,730
$
775,102
Finished goods
1,021,773
886,794
Inventories
$
2,553,503
$
1,661,896
Accounting policy for inventories
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 judgements, estimates and assumptions
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect
inventory obsolescence.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
39
NOTE 11. OTHER CURRENT ASSETS
Other current assets consisted of the following:
30 Jun 2024
30 Jun 2023
Prepaid expenses
$
686,560
665,267
Contract assets
-
6,735
Research and development tax incentive receivable (Note 3)
1,399,806
734,369
Deposits
35,418
26,908
$
2,121,784 $
1,433,279
NOTE 12. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
30 Jun 2024
30 Jun 2023
Manufacturing plant & equipment - at cost
$
477,097
$
474,710
Less: Accumulated depreciation
(370,687)
(356,640)
Manufacturing plant & equipment
$
106,410
$
118,070
Furniture, fixtures and equipment
$
580,801
566,025
Less: Accumulated depreciation
(293,520)
(248,107)
Furniture, fixtures and equipment
$
287,281
$
317,918
Devices leased to customers
$
855,681
$
854,907
Less: Accumulated depreciation
(548,977)
(337,047)
Devices leased to customers
$
306,704
$
517,860
Property under lease (right-of use asset)
$
1,051,900
$
900,417
Less: Accumulated depreciation
(536,479)
(382,548)
Property under lease (right-of use asset)
$
515,421
$
517,869
Property, plant and equipment
$
1,215,816
$
1,471,717
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
40
NOTE 12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Movements:
Manufacturing
plant &
equipment
Furniture,
fixtures and
equipment
Devices leased to
customers
Property under
lease (right-of use
asset)
Total
Balance at 1 July 2022
$
1,744 $
319,852 $
80,181 $
668,013 $
1,069,790
Additions
129,844
40,767
535,113
-
705,724
Foreign exchange
differences
-
2,049
9,856
2,673
14,578
Disposals
-
-
-
-
-
Expenses to COGS
-
-
(107,290)
-
(107,290)
Depreciation expense
(13,518)
(44,750)
-
(152,817)
(211,085)
Balance at 30 June 2023
$
118,070 $
317,918 $
517,860 $
517,869 $
1,471,717
Additions
2,387
14,607
-
152,846
169,840
Foreign exchange
differences
-
333
2,658
(1,100)
1,891
Disposals
-
-
-
-
-
Expenses to COGS
-
-
(213,814)
-
(213,814)
Depreciation expense
(14,047)
(45,577)
(154,194)
(213,818)
Balance at 30 June 2024
$
106,410 $
287,281 $
306,704 $
515,421 $
1,215,816
Accounting policy for property, plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assets carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably.
Plant and equipment are depreciated over their estimated useful lives using the straight-line method.
The expected useful lives of the assets are as follows:
Manufacturing plant and equipment
3-10 years
Furniture, fixtures and equipment
3-5 years
Devices leased to customers
3-4 years
Lease improvements
Life of lease
The residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date or
when there is an indication that they have changed.
A carrying amount is written down immediately to its recoverable amount if the carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
41
NOTE 12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
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 judgements, estimates and assumptions
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.
NOTE 13. INTANGIBLE ASSETS
Intangible assets consisted of the following:
30 Jun 2024
30 Jun 2023
Capitalised development costs - at cost
$
456,747
$
456,747
Less: Accumulated amortisation of capitalised development costs
(90,909)
(90,909)
Website costs – at cost
73,746
73,680
Less: Accumulated amortisation of website costs
(73,226)
(59,813)
Other intangible assets - at cost
253,343
253,343
Less: Accumulated amortisation of other intangible assets
-
-
Intangible assets
$
619,701
$
633,048
Capitalised
development costs
Website costs
Other intangible
assets
Total
Balance at 1 July 2022
$
293,357 $
27,528 $
- $
320,885
Additions
72,481
-
253,343
325,824
Foreign exchange differences
-
847
-
847
Disposals
-
-
-
-
Amortisation expense
-
(14,508)
-
(14,508)
Balance at 30 June 2023
$
365,838 $
13,867 $
253,343 $
633,048
Additions
-
-
-
-
Foreign exchange differences
150
150
Disposals
Amortisation expense
(13,497)
(13,497)
Balance at 30 June 2024
$
365,838 $
520 $
253,343 $
619,701
Accounting policy for capitalised development costs
Development costs on an individual project are recognised as an intangible asset when the Group can demonstrate:
•
The technical feasibility of completing the intangible asset so that the asset will be available for use or sale.
•
Its intention to complete and its ability and intention to use or sell the asset.
•
How the asset will generate future economic benefits.
•
The availability of resources to complete the asset.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
42
NOTE 13. INTANGIBLE ASSETS (CONTINUED)
The costs that are eligible for capitalisation of development costs are the following:
•
Engineers’ compensation for time directly attributable to developing the project.
•
An allocated amount of direct costs, such as overhead related to the project and the facilities they occupy.
•
Costs associated with testing of the product for market.
•
Patents acquisition and registration costs (patents, application fees, and legal fees).
•
Other direct developing costs that are incurred to bring the product to market.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete, and the
asset is available for use. Development costs are amortised on a straight-line basis over the period of expected future sales
from the related project which is 5 years. Amortisation is recorded in profit or loss.
Critical accounting judgements, estimates and assumptions
Capitalised development costs
The Group capitalises development costs for a project in accordance with the above accounting policy. Initial capitalisation
of cost is based on management’s judgement that technological and economic feasibility is confirmed. In determining the
amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project,
discount rates to be applied and the expected period of the benefits.
Impairment of intangible assets
The Group assesses impairment of intangible assets other than goodwill at each reporting date by evaluating conditions specific
to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount
of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate several
key estimates and assumptions.
NOTE 14. FINANCIAL ASSETS
Financial assets consisted of the following:
30 Jun 2024
30 Jun 2023
Current
inHealth Medical Services convertible note (a)
$
4,870,169 $
5,558,069
Derivative financial asset (b)
-
234,317
4,870,169
5,792,386
Non-current
inHealth Medical Services investment (a)
392,854
510,167
$
392,854 $
510,167
Total financial assets
$
5,263,023 $
6,302,553
(a) inHealth Medical Services investment & convertible note
•
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 as
there is an embedded conversion feature. It is measured at FVTPL as a single instrument to significantly reduce
any measurement or recognition inconsistencies that would arise from other methods.
•
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.
•
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 A$338,373 in return
for a further 1% of fully diluted equity of inHealth to Cardiex.
•
In March 2022, the inHealth Note was extended to November 2023, incorporating all interest for the period 1
July 2021 to 28 February 2022 to the principal value of the inHealth Note totalling US$2,875,317. Following the
end of this term, the Note maturity was further extended to 31 May 2024.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
43
NOTE 14. FINANCIAL ASSETS (CONTINUED)
•
As at 30 June 2024, the face value of the inHealth Note was A$4,340,757 (US$2,875,317) and A$599,465
(US$397,086) in interest had accrued, including A$255,262 of interest income recognised in FY2024.
•
Prior to the balance date, the Cardiex Board had commenced discussions with inHealth regarding its options
following the extended maturity date of 31 May 2024. No extension had been formally set while these discussions
are ongoing. Since balance date and up until the date of this report, Caridex and InHealth have continued to
negotiate terms in relation to converting the Notes to Preference Shares. Negotiations are expected to be
completed shortly, and an announcement will be made once the transaction is completed.
•
Due to the ongoing negotiations, the Convertible Note investments do not qualify for derecognition during the
reporting period ended 30 June 2024 as the contractual cash flows from the financial asset have not expired and
the entity has not transferred the asset.
•
At the balance date of 30 June 2024, the total convertible note asset was fair valued by an external expert at
A$4.87m (US$3.23m) (30 June 2023: A$5.56m (US$3.69m)). The external valuers used a Black-Scholes
Calculation for Option-Pricing Model to value the proposed preference shares, based on conversion of current
principal and interest. The fair value of the Notes at 30 June 2024 were subsequently deemed to be the lower of
o
The face value of the Notes plus interest, being A$4,940,222.
o
The present value of the proposed preference shares derived from the Black-Scholes
Calculation for Option-Pricing Model, being A$4,870,169.
A discounted cash flow valuation for InHealth was also prepared by the external valuers, as required for the inputs
into the valuation and calculation of Cardiex’s equity interest in InHealth.
•
As at 30 June 2024, the Company holds 7.64% equity in inHealth Medical Services, Inc, currently valued at
A$393k (30 June 2023: A$510k), based on an equity value of A$5.14m, (US$3.41m).
NOTE 15. TRADE AND OTHER PAYABLES
Trade and other payables consisted of the following:
30 Jun 2024
30 Jun 2023
Trade payables
$
3,529,785 $
6,592,028
Other payables
360,734
867,701
$
3,890,519 $
7,459,729
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the fiscal year and which
are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
NOTE 16. UNEARNED REVENUE
Unearned revenue consisted of the following:
30 June 2024
30 June 2023
Advances received from clinical trial contracts
$
109,662 $
2,908,456
Unearned revenue from sales of goods
-
16,409
Unearned revenue from customer service contracts
199,691
116,768
$
309,353 $
3,041,633
Accounting policy for unearned revenue
The above unearned revenue relates to contracts where payments have been received, but revenue has not yet been recognised
due to the fact revenue recognition criteria under AASB 15 has not yet been met as goods and services have not yet been
provided to the customers.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
44
NOTE 17. PROVISIONS
Provisions consisted of the following:
30 Jun 2024
30 Jun 2023
Current
Employee benefits
$
490,604 $
488,774
490,604
488,774
Non-current
Employee benefits
8,976
6,158
$
8,976 $
6,158
Total provisions
$
499,580 $
494,932
Accounting policy for 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.
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.
NOTE 18. FINANCIAL LIABILITIES
Financial liabilities consisted of the following:
30 Jun 2024
30 Jun 2023
Convertible note liabilities
Host contract debt liability (a)
$
- $
1,680,008
Derivative financial liability (a)
$
- $
495,786
Promissory Note (b)
$
2,347,751 $
-
$
2,347,751 $
2,175,794
(a) Convertible note liabilities
In June 2023, the Company established a Convertible Note Facility, of which $1,500,000 had been received in
Convertible Note subscriptions and $2,120,000 received in Converting Note subscriptions. Key terms of the Convertible
Note Facility were:
•
10% interest rate.
•
Conversion (subject to shareholder approval):
o
Convertible Notes convert at the holder’s option.
o
Converting Notes convert at the Company’s option, at the next capital raising (Australia or
another jurisdiction) of A$5,000,000 or more.
•
Conversion Pricing:
o
The higher of the Floor Price (being the lower of $0.30 and the price of any capital raising
prior to conversion); and
o
A 20% discount to the 20-day VWAP at conversion.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
45
NOTE 18. FINANCIAL LIABILITIES (CONTNIUED)
•
Option coverage (subject to shareholder approval):
o
Convertible Notes: 1 option (exercise price of $0.45) for every $2 invested.
o
Converting Notes: 2 options (exercise price of $0.45) for every $1 invested.
•
Maturity date:
o
Convertible Notes: 15 July 2024 (unless the holder elects to extend maturity on the same terms
as the Converting Notes.
o
Converting Notes: 15 July 2025.The holder may also elect to redeem these Notes at any time
after 15 January 2025.
the conversion terms listed above were satisfied upon completion of the capital raising in February 2024, and 45,250,000
ordinary shares were issued to settle all Converting Note and Convertible Note subscriptions. Outstanding interest of
$220k was repaid to the Noteholders in cash.
(b) Promissory note
On 7 November 2023, Cardiex entered into a Promissory Note with Wilson Sonsini Goodrich & Rosati, Professional
Corporation for a principal sum of US$1,500,000. This amount reflects the balance owing of US legal fees in relation to the
US listing, post a credit received of US$731,950 (A$1,104,997). The Promissory Note attracts an interest rate of 5.5% and is
repayable on the earliest of:
a)
20 April 2025;
b)
the closing of debt financing or equity financing of Cardiex after 1 January 2024, the gross proceeds of which equal
or exceeds US$6,000,000;
c)
the closing of a change of control transaction;
d)
the Company becomes cash flow positive and is in a position to make payment of the outstanding invoices;
e)
upon the occurrence of an event of default.
Subsequent to balance date the repayment terms have been renegotiated to the following:
•
US$250k before 31 January 2025.
•
US$250k before 31 July 2025.
•
The final balance repayable by 31 October 2025.
Accounting policy for convertible notes
For the Convertible Notes, the conversion feature results in the conversion of a fixed amount of stated principal into a variable
number of shares, as such it fails the ‘fixed for fixed’ criterion and, therefore, classified as financial liability. The value of the
liability component and the derivative financial liability were determined at the date the instrument was issued.
The fair value of the derivative financial liability at inception was calculated using a variation of the binomial option pricing
model that takes into account factors specific to the convertible note agreements. As the derivative is recognised at fair value
through profit or loss, a revaluation occurs at a modification date or at a reporting date.
The fair value of the host debt component at inception was calculated as the residual value after deducting the value of the
derivative financial liability and costs from the face value of the convertible notes. They are subsequently measured at
amortised cost using the effective interest method.
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 amortized
cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognized in profit or loss (other than derivative financial instruments that are
designated and effective as hedging instruments).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
46
NOTE 19. LEASE LIABILITIES
Lease liabilities consisted of the following:
30 Jun 2024
30 Jun 2023
Current
$
158,920 $
168,951
Non-current
476,190
483,096
$
635,110 $
652,047
Net present value of lease liabilities:
Less than 6 months
6 to 12 months
Between 1 and 5
years
Total
Lease payments
$
108,324
118,210
546,356
772,890
Finance charges
(36,350)
(31,263)
(70,167)
(137,780)
$
71,974
86,947
476,189
635,110
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 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.
NOTE 20. BORROWINGS
Borrowings includes the following liabilities carried at amortised cost:
30 Jun 2024
30 Jun 2023
R&D loan facility
$
- $
580,959
Working capital loan facility
$
880,000 $
880,000
$
880,000 $
1,460,959
Working capital loan facility
In December 2022, wholly owned subsidiary Atcor Medical Pty Ltd entered into a short-term working capital loan facility
for up to $880,000, to support product and development expansion initiatives. The facility attracts an interest rate of 1.33%
per calendar month (16%p.a). The expiry of the facility was initially 30 October 2023, and subsequently extended to 31
October 2024. A general security is held over the Company. As at 30 June 2024 the facility was fully drawn, with $80,000
withheld for prepaid interest and establishment fees.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
47
NOTE 21. CONTRIBUTED EQUITY
Contributed equity consisted of the following:
30 Jun 2024
30 Jun 2023
Shares (No)
$
Shares (No)
$
Ordinary shares
294,174,568
$
88,108,332
143,465,521 $
76,615,802
294,174,568
$
88,108,332
143,465,521 $
76,615,802
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares, warrants or options are shown in equity as a deduction, net
of tax, from the proceeds.
Movements in ordinary shares:
Shares (No)
$
Balance as at 1 July 2022
110,003,700
67,552,468
Ordinary shares issued on equity capital raise
27,734,710
8,320,412
Ordinary shares issued as a result of a share purchase plan
5,310,061
1,593,000
Shares issued in lieu of payments to suppliers
299,052
89,715
Shares issued in lieu of payments to employees
117,998
35,000
Cost of raising capital
-
(974,793)
Balance as at 30 June 2023
143,465,521
76,615,802
Ordinary shares issued on equity capital raise
100,000,004
8,000,000
Ordinary shares issued on conversion of convertible notes
45,250,000
3,620,000
Shares issued in lieu of payments to suppliers
1,366,724
157,299
Shares issued in lieu of payments to employees
1,220,516
97,642
Shares issued in lieu of payments for intangible assets
2,871,803
229,744
Cost of raising capital
-
(612,155)
Balance as at 30 June 2024
294,174,568
88,108,332
Terms and conditions of contributed equity
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.
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.
NOTE 22. CAPITAL AND FINANCIAL RISK MANAGEMENT
Capital management
Capital managed by the Board comprises contributed equity totaling $88.1 million (2023: $76.6 million). When managing
capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to
shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest
cost of capital available to the entity. Managed capital is disclosed on the face of the statement of financial position and
comprises contributed equity and reserves. Management may adjust the capital structure to take advantage of favorable costs
of capital or higher returns on assets. As the market is constantly changing, management may issue new shares or sell assets
to raise cash, change the amount of dividends to be paid to shareholders (if at all) or return capital to shareholders.
During the fiscal period ending 30 June 2024 management did not pay a dividend and does not expect to pay a dividend in
the foreseeable future. The Group encourages employees to be shareholders through the Cardiex Employee Share Option
Plan (ESOP).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
48
NOTE 22. CAPITAL AND FINANCIAL RISK MANAGEMENT (CONTINUED)
There were no changes in the Group’s approach to capital management during the year. Risk management policies and
procedures are established with regular monitoring and reporting. Neither the Company nor its subsidiaries are subject to
externally imposed capital requirements.
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, which is Australian Dollars. 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 at follows:
30 June 2024
30 June 2023
In USD
In EUR
In USD
In EUR
Cash and Cash Equivalents
44,668
90,511
25,816
55,184
Trade Receivables
202,275
25,621
1,388,969
44,610
Trade Payables
(1,367,873)
(8,252)
(3,404,735)
(9,038)
Sensitivity
Based on the financial instruments held at 30 June 2024, 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
$169,223/($153,839) (2023: $300,143/($272,858)). 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 $(17,411)/$15,828
(2023: $(22,407)/$5,946).
(b) Credit risk
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial
institutions, as well as credit exposure 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. Refer to Note 9 for additional information in relation to the
expected credit loss (ECL) from trade receivables.
(c) Liquidity risk
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. The Group does not have any significant long-term borrowings other than lease liabilities (Note 19).
(d) Interest rate risk
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
49
NOTE 22. CAPITAL AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Fair value estimation
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 23. RESERVES
Reserves consisted of the following:
30 Jun 2024
30 Jun 2023
Share-based payments reserve
$
2,260,543 $
5,871,719
Foreign currency translation reserve
409,296
517,587
$
2,669,839 $
6,389,306
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.
Movements in reserves were as follows:
Share-based
payments reserve
Foreign currency
translation reserve Derivative reserve
Total
$
$
$
$
Balance at 1 July 2022
3,289,140
636,282
-
3,925,422
Performance rights vesting expense 23(b)
1,666,546
-
-
1,666,546
Options vesting expense
23(a)
670,140
-
-
670,140
Options issuable for convertible
notes
23(a)
75,996
75,996
Options issued to brokers
23(a)
169,897
169,897
Other comprehensive loss
-
(118,695)
-
(118,695)
Balance at 30 June 2023
5,871,719
517,587
-
6,389,306
Performance rights vesting expense 23(b)
14,973
-
-
14,973
Options vesting expense
23(a)
101,086
-
-
101,086
Options issuable for convertible
notes
23(a)
100,953
-
-
100,953
Options issued to brokers
23(a)
-
-
-
Expiry of options and performance
rights
(3,828,188)
-
-
(3,828,188)
Other comprehensive loss
-
(108,291)
-
(108,291)
Balance at 30 June 2024
2,260,543
409,296
-
2,669,839
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
50
NOTE 23. RESERVES (CONTINUED)
Share-based payments reserve
(a) Options issued as share based payments
Options on issue
30 Jun 2024
30 Jun 2023
No of Options
$
No of Options
$
At the beginning of reporting period
24,866,499
2,210,913
6,580,000
1,294,880
Free attaching options (1 for 3) as attaching to
placement
76,416,851
-
4,811,122
-
Free attaching options (1 for 2) as attaching to
placement
-
-
6,740,689
-
Options issued to brokers and consultants
-
-
2,909,688
438,884
Options issued to Directors
2,000,000
-
1,000,000
-
Options issued to employees
-
-
2,825,000
-
Options issuable for convertible notes
4,990,000
100,953
75,996
Options vesting expense
101,086
-
401,153
Expired and lapsed options
(13,381,811)
(540,012)
Closing balance at reporting date
94,891,539
1,872,940
24,866,499
2,210,913
Employee Share Option Plan (ESOP)
The current Cardiex Employee Option Plan was approved by shareholders at the 2023 annual general meeting. 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 employee share option plan.
2024:
Grant Date Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Expired/
Forfeited
during the
year
Balance at
end of the
year
Exercisable at
end of the year
Number
Number
Number
Number
Number
Number
15-Jan-19
15-Jan-24
$0.50
1,530,000
-
-
(1,530,000)
-
-
26-Feb-19
26-Feb-24
$0.50
300,000
-
-
(300,000)
-
-
15-Feb-21
15-Feb-26
$0.80
2,925,000
-
-
-
2,925,000
2,925,000
15-Feb-21
15-Feb-26
$0.50
400,000
-
-
-
400,000
400,000
11-Jun-21
11-Jun-26
$0.80
125,000
-
-
-
125,000
125,000
30-Jun-22
30-Jun-27
$0.80
1,300,000
-
-
-
1,300,000
966,667
16-Dec-22
16-Dec-27
$0.50
1,000,000
-
-
-
1,000,000
500,000
30-Jun-23
30-Jun-28
$0.50
1,825,000
-
-
-
1,825,000
787,500
Total
9,405,000
-
-
(1,830,000)
7,575,000
5,704,167
Weighted average exercise price ($)
0.64
-
-
0.50
0.67
0.71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
51
NOTE 23. RESERVES (CONTINUED)
2023:
Grant Date Expiry date
Exercise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Expired/
Forfeited
during the
year
Balance at
end of the
year
Exercisable at
end of the year
Number
Number
Number
Number
Number
Number
15-Jan-19
15-Jan-24
$0.50
1,530,000
-
-
-
1,530,000
1,530,000
26-Feb-19
26-Feb-24
$0.50
300,000
-
-
-
300,000
300,000
15-Feb-21
15-Feb-26
$0.80
2,925,000
-
-
-
2,925,000
2,193,750
15-Feb-21
15-Feb-26
$0.50
400,000
-
-
-
400,000
300,000
11-Jun-21
11-Jun-26
$0.80
125,000
-
-
-
125,000
83,333
30-Jun-22
30-Jun-27
$0.80
1,300,000
-
-
-
1,300,000
533,333
16-Dec-22
16-Dec-27
$0.50
-
1,000,000
-
-
1,000,000
166,667
30-Jun-23
30-Jun-28
$0.50
-
1,825,000
-
-
1,825,000
179,167
Total
6,580,000
2,825,000
-
-
9,405,000
5,286,250
Weighted average exercise price ($)
0.70
0.50
-
-
0.64
0.66
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.
No employee options were granted during the year ended 30 June 2024.
The model inputs for options granted during the year ended 30 June 2023 included:
Grant Date
Number
issued
Exercise
price
Term
Share
price at
grant
date
Share
price
volatility
Expected
dividend
yield
Risk-free
interest
rate
16 December 2022
1,000,000
$0.50
5 years
$0.31
77%
0.00%
3.42%
30 June 2023
1,825,000
$0.50
5 years
$0.16
75%
0.00%
3.79%
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.
(b) Performance rights
Performance rights on issue
30 Jun 2024
30 Jun 2023
No of Rights
$
No of Rights
$
At the beginning of reporting period
22,800,000
3,660,806
16,050,000
1,994,260
Issued under Performance Rights Plan
-
-
6,750,000
-
Rights expired during the year
(16,050,000)
-
-
-
Rights vesting expense during the year
-
14,973
-
1,666,546
Transfer to retained earnings
-
(3,288,176)
-
-
Closing balance at reporting date
6,750,000
387,603
22,800,000
3,660,806
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
52
NOTE 23. RESERVES (CONTINUED)
Details of performance rights relating to Directors that were issued with shareholder approval on 16 December 2022 under
the Company’s Performance Rights and Options Plan are as follows:
Number of
performance rights
Vesting conditions
Issue Date
Expiry
Date
2,250,000
Vest upon the Company successfully achieving a
Secondary Listing on a US exchange
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $10
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $20
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
(c) 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:
30 Jun 2024
30 Jun 2023
Rights issued under Option and Performance Rights Plan
$
14,973 $
1,666,546
Options issued under Employee Share Option Plan
92,810
401,153
$
107,783 $
2,067,699
Accounting policy for share-based payments
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 profit or loss and other comprehensive income
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.
NOTE 24. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
53
NOTE 24. FAIR VALUE MEASUREMENT (CONTINUED)
2024
Level 1
$
Level 2
$
Level 3
$
Total
$
Assets
Convertible notes
-
-
4,870,169
4,870,169
Shares at FVTPL
-
-
392,854
392,854
Total Assets
-
-
5,263,023
5,263,023
Liabilities
Promissory note
-
-
2,347,751
2,347,751
Total Liabilities
-
-
2,347,751
2,347,751
2023
Level 1
$
Level 2
$
Level 3
$
Total
$
Assets
Convertible notes
-
-
5,558,069
5,558,069
Derivative financial assets
234,317
234,317
Shares at FVTPL
-
-
510,167
510,167
Total Assets
-
-
6,302,553
6,302,553
Liabilities
Convertible notes
-
-
2,175,794
2,175,794
Total Liabilities
-
-
2,175,794
2,175,794
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 2022,
and 30 June 2023, which used a Monte Carlo Simulation to value the assets.
•
Derivative financial assets (Level 3) – the embedded derivative of the Converting Subscriptions are valued as a put
option using the Binomial Method.
•
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
$
Total
$
Balance at 1 July 2022
648,461
5,431,848
6,080,309
Interest income
-
256,188
256,188
Foreign exchange adjustment
-
125,960
125,960
Fair value adjustment
(138,294)
(255,927)
(394,221)
Balance at 30 June 2023
510,167
5,558,069
6,068,236
Interest income
-
255,262
255,262
Foreign exchange adjustment
11,993
(24,611)
(12,618)
Fair value adjustment
(129,306)
(918,551)
(1,047,857)
Balance at 30 June 2024
392,854
4,870,169
5,263,023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
54
NOTE 24. FAIR VALUE MEASUREMENT (CONTINUED)
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.
NOTE 25. RELATED PARTY TRANSACTIONS
Subsidiaries
The consolidated financial statements include the financial statements of Cardiex Limited and the following
subsidiaries:
Name
Country of
incorporation
Beneficial interest (%)*
30 Jun 2024
30 Jun 2023
AtCor Medical Pty Limited
Australia
100
100
AtCor Medical Inc
USA
100
100
Cardiex (Shanghai) Medical Technology Co., Ltd.
China
100
100
Conneqt Inc
USA
100
100
*Percentage of voting power is in proportion to ownership.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
55
NOTE 25. RELATED PARTY TRANSACTIONS (CONTINUED)
Key Management Personnel Compensation
Salary and directors fees
Share Based
Payment Benefits
Total
$
$
$
2024
Niall Cairns
300,000
188,427
488,427
Craig Cooper
945,670
188,427
1,134,097
King Nelson
76,264
8,818
85,082
Charlie Taylor1
20,000
4,138
24,138
Jarrod White2
23,667
30,236
53,903
Lesa Musatto3
-
-
-
Total Compensation
1,365,601
420,046
1,785,647
2023
Niall Cairns
300,000
706,996
1,006,996
Craig Cooper
772,175
706,996
1,479,171
King Nelson
74,247
41,405
115,652
Jarrod White
92,800
259,310
352,110
Lesa Musatto
-
36,212
36,212
Total Compensation
1,239,222
1,750,919
2,990,141
1Appointed 1 March 2024
2 Resigned 26 September 2023
3 Resigned 18 October 2023
Shares held by key management personnel and their associates
Balance
01 July 2023
Additions
Balance
30 June 2024
Niall Cairns
26,634,394
35,560,998
62,195,3924
Craig Cooper
26,124,394
39,818,674
65,943,0684
King Nelson
15,385
-
15,385
Charlie Taylor
-
-
-
Jarrod White
1,028,880
-
1,028,8805
Lesa Musatto
-
-
-
Total
53,803,053
75,379,672
129,182,725
4A total of 59,448,630 shares held Mr Cairns and Mr Cooper are indirectly held by C2 Ventures, in which Mr Cairns and Mr
Cooper are directors.
5Held at date of resignation.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
56
NOTE 25. RELATED PARTY TRANSACTIONS (CONTINUED)
Balance
01 July 2022
Additions
Balance
30 June 2023
Niall Cairns
23,559,394
3,075,000
26,634,3946
Craig Cooper
23,099,394
3,025,000
26,124,3946
King Nelson
15,385
-
15,385
Jarrod White
576,551
452,329
1,028,880
Lesa Musatto
-
-
-
Total
47,250,724
6,552,329
53,803,053
6A total of 25,524,294 shares held Mr Cairns and Mr Cooper are indirectly held by C2 Ventures, in which Mr Cairns and Mr
Cooper are directors.
Options held by key management personnel and their associates
Balance
01 July 2023
Additions
Expired
Balance
30 June 2024
Niall Cairns
1,150,000
38,553,668
(1,150,000)
38,553,6687
Craig Cooper
1,150,000
39,772,892
(1,150,000)
39,772,8927
King Nelson
650,000
1,000,000
(150,000)
1,500,000
Charlie Taylor
-
1,000,000
-
1,000,000
Jarrod White
261,444
-
-
261,4448
Lesa Musatto
500,000
-
-
500,0008
Total
3,711,444
80,326,560
(2,450,000)
81,588,004
7Directors Mr. Cairns and Mr. Cooper hold 37,808,079 options indirectly through C2 Ventures Pty Limited, of which they
are both directors.
8Held at date of resignation.
Balance
01 July 2022
Additions
Expired
Balance
30 June 2023
Niall Cairns
150,000
1,000,000
-
1,150,0009
Craig Cooper
150,000
1,000,000
-
1,150,0009
King Nelson
150,000
500,000
-
650,000
Jarrod White
150,000
111,444
-
261,444
Lesa Musatto
-
500,000
-
500,000
Total
600,000
3,111,444
-
3,711,444
9Directors Mr. Cairns and Mr. Cooper hold 1,150,000 options indirectly through C2 Ventures Pty Limited, of which they are
both directors.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
57
NOTE 25. RELATED PARTY TRANSACTIONS (CONTINUED)
Performance rights held by key management personnel and their associates
On 30 November 2022, 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 6,750,000 and expire on 30 November 2027.
The terms of the Director rights on issue are as follows:
Number of
performance rights
Vesting conditions
Issue Date
Expiry
Date
2,250,000
Vest upon the Company successfully achieving a
Secondary Listing on a US exchange
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $10
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
2,250,000
Vest upon the Company achieving an audited $20
million in Revenue from third parties in any
financial year prior to the expiry date
16/12/2022
30/11/2027
Balance
01 July 2023
Additions
Expired
Balance
30 June 2024
Niall Cairns
9,800,000
-
(6,800,000)
3,000,000
Craig Cooper
9,800,000
-
(6,800,000)
3,000,000
King Nelson
350,000
-
(350,000)
-
Jarrod White
2,850,000
-
(2,100,000)
750,00010
Lesa Musatto
-
-
-
-
Total
22,800,000
-
(16,050,000)
6,750,000
10Held at date of resignation.
Balance
01 July 2022
Additions
Expired
Balance
30 June 2023
Niall Cairns
6,800,000
3,000,000
-
9,800,000
Craig Cooper
6,800,000
3,000,000
-
9,800,000
King Nelson
350,000
-
-
350,000
Jarrod White
2,100,000
750,000
-
2,850,000
Lesa Musatto
-
-
-
-
Total
16,050,000
6,750,000
-
22,800,000
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.
Craig Cooper – Chief Executive Officer
•
Current agreement commenced on 1 September 2021.
•
Base salary of US$420,000 per annum.
•
Bonuses to be paid at discretion of the Group based on performance reviews. During the year, Mr Cooper received
US$200,000 in bonuses.
•
Reimbursement for reasonable expenses incurred in running the US business, paid on a monthly basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
58
NOTE 25. RELATED PARTY TRANSACTIONS (CONTINUED)
Niall Cairns – Executive Chairman and Director
•
Current agreement commenced with an effective date of 1 September 2021.
•
Monthly consulting fee for strategic review and consulting services of A$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.
•
During the year, Mr Nelson received 1,000,000 vested options.
Charlie Taylor – Non-Executive Director
•
Current agreement commenced with an effective date of 1 March 2024.
•
Base salary of A$60,000 per annum.
•
During the year, Mr Taylor received 1,000,000 vested options.
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 during
the financial years ended 30 June 2024 and 2023 commencing at the beginning of the financial year and thereafter up to the
date of this report.
NOTE 26. EVENTS AFTER THE REPORTING PERIOD
Subsequent to the balance date the Group announced the following material events:
•
On 9 August 2024, the Group announced that it had entered into a new R&D Term Loan Facility of up to $1,120,000
with Mitchell Asset Management Pty Ltd (“MAM”), which will be advanced as a prepayment of forecast Research
and Development Tax Incentives (“R&D Tax Incentive”) that are anticipated to be receipted by the Company for
the 30 June 2024 and 30 June 2025 financial years.
•
On 17 September 2024, the Group formalised amended repayment terms for its promissory note held with Wilson
Sonsini Goodrich & Rosati to the following:
o
US$250k before 31 January 2025.
o
US$250k before 31 July 2025.
o
The final balance of US$1m plus interest repayable by 31 October 2025.
No other significant subsequent event has arisen that significantly affects the operations of the Group.
NOTE 27. OPERATING SEGMENTS
In the 2024 financial year, the Group operated in one operating segment and has identified only one reportable segment being
sales of cardiovascular devices and services to hospitals, clinics, research institutions and pharmaceutical companies.
Note 2 contains detailed information in relation to the Consolidate Group’s product and services.
Geographically, the Group prepares information based on the location of its customers, being:
•
Americas (includes global pharmaceutical trials business)
•
Europe (includes Middle East and Africa)
•
Asia Pacific (includes Asia & Australia/NZ)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
59
NOTE 27. OPERATING SEGMENTS (CONTINUED)
Geographical information:
2024
Americas
Europe
Asia Pacific
Inter-
segment
eliminations/
unallocated
Consolidated
$
$
$
$
$
Sales to external customers
10,228,942
340,725
335,969
-
10,905,636
Intersegment sales
-
-
1,962,696
(1,962,696)
-
Total sales revenue
10,228,942
340,725
2,298,665
(1,962,696)
10,905,636
Other income
556,754
-
1,627,201
-
2,183,955
Total segment revenue/income
10,785,696
340,725
3,925,866
(1,962,696)
13,089,591
Segment loss before income tax
2,067,958
97,311
(8,619,348)
(311,286)
(6,765,365)
Income tax expense
-
Loss for the year
(6,765,365)
Segment assets
13,439,418
-
82,290,150
(83,079,774)
12,649,794
Segment liabilities
42,744,792
-
63,992,028
(98,174,507)
8,562,313
2023
Americas
Europe
Asia Pacific
Inter-
segment
eliminations/
unallocated
Consolidated
$
$
$
$
$
Sales to external customers
3,495,752
427,298
681,234
-
4,604,284
Intersegment sales
-
-
4,306,337
(4,306,337)
-
Total sales revenue
3,495,752
427,298
4,987,571
(4,306,337)
4,604,284
Other income
189,443
-
1,222,441
-
1,411,884
Total segment revenue/income
3,685,195
427,298
6,210,012
(4,306,337)
6,016,168
Segment loss before income tax
(6,284,080)
328,563
(10,081,222)
(2,850,197)
(18,886,936)
Income tax expense
-
Loss for the year
(18,886,936)
Segment assets
17,148,504
-
81,746,388
(84,358,203)
14,536,689
Segment liabilities
48,472,296
-
66,635,502
(99,822,704)
15,285,094
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
During the 2024 financial year, $7,669,307 in revenue was recognised upon the early conclusion and subsequent payment in
full of the multi-year Clinichain clinical trial.
There was no significant concentration of revenue attributable to one customer in the 2023 financial year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
60
NOTE 27. OPERATING SEGMENTS (CONTINUED)
Disaggregation of revenue
2024
Americas
Europe
Asia Pacific
Consolidated
$
$
$
$
Sale of goods
1,959,979
330,780
317,141
2,607,900
Lease revenue
8,004,682
-
-
8,004,682
Service revenue
229,911
2,621
15,123
247,655
Freight revenue
34,370
7,324
3,705
45,399
Royalty income
-
-
-
-
Total sales revenue
10,228,942
340,725
335,969
10,905,636
Other income
556,754
-
1,627,201
2,183,955
Total revenue/income
10,785,696
340,725
1,963,170
13,089,591
2023
Americas
Europe
Asia Pacific
Consolidated
$
$
$
$
Sale of goods
1,626,455
416,594
570,891
2,613,940
Lease revenue
1,121,588
-
-
1,121,588
Service revenue
553,486
1,615
1,295
556,396
Freight revenue
194,223
9,089
3,622
206,934
Royalty income
-
-
105,426
105,426
Total sales revenue
3,495,752
427,298
681,234
4,604,284
Other income
189,443
-
1,222,441
1,411,884
Total revenue/income
3,685,195
427,298
1,903,675
6,016,168
NOTE 28. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Group has no other material contingent liabilities or contingent assets as at 30 June 2024 (30 June 2023: $Nil).
NOTE 29. PARENT ENTITY INFORMATION
30 Jun 2024
30 Jun 2023
Current assets
$
6,390,040 $
6,621,208
Total assets
$
44,505,274 $
41,941,591
Current liabilities
4,229,849
6,889,119
Total liabilities
$
8,124,576 $
13,820,675
Net Assets
$
36,380,698 $
28,120,916
Contributed equity
$
94,565,622 $
83,073,092
Reserves
2,260,543
5,871,718
Accumulated losses
(60,445,467)
(60,823,894)
Total shareholders’ equity
$
36,380,698 $
28,120,916
Loss of the parent entity
$
(3,449,761) $
(6,908,608)
Total comprehensive loss of the parent entity
$
(3,449,761) $
(6,908,608)
Guarantees entered into by the parent entity
No guarantees have been entered into by the parent entity during FY2024 or FY2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Cardiex Limited
61
NOTE 29. PARENT ENTITY INFORMATION (CONTINUED)
Commitments and contingent liabilities of the parent entity
See Note 28 for details on contingent liabilities of the parent entity.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Cardiex Limited
62
Entity name
Entity type
Trustee in a Trust,
Partner in a
Partnership or a
participant in a Joint
Venture
Place formed /
Country of
incorporation
Ownership
interest
%
Tax residency
Cardiex Limited
Body corporate
N/A
Australia
-
Australia
Atcor Medical Pty Ltd
Body corporate
N/A
Australia
100.00%
Australia
AtCor Medical Inc
Body corporate
N/A
USA
100.00%
USA
Cardiex (Shanghai) Medical
Technology Co., Ltd.
Body corporate
N/A
China
100.00%
China
Conneqt Inc
Body corporate
N/A
USA
100.00%
USA
Cardiex Limited
63
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 25 to 61, are in accordance with the Corporations Act 2001 and:
a.
comply with Accounting Standards and the Corporations Regulations 2001; and
b.
give a true and fair view of the financial position as at 30 June 2024 and of the performance for the year ended
on that date of the Consolidated Group.
2.
The information disclosed in the consolidated entity disclosure statement on page 62 is true and correct.
3.
the Company has included in note 1 to the financial statements an explicit and unreserved statement of compliance with
International Financial Reporting Standards;
4.
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 2024;
5.
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
6.
the remuneration disclosures included on pages 19 to 23 of the Directors’ Report (as part of the Audited Remuneration
Report) for the year ended 30 June 2024, 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 2024
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
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.
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 2024, 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 material accounting policy information, the consolidated entity
disclosure statement 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 2024 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.
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
2
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.
Key audit matter - Investments in convertible notes
and shares
How the matter was addressed in our audit
The Group carries investments in convertible notes
and shares, classified at fair value through profit and
loss, totalling $5,263,023 as at 30 June 2024 (30 June
2023: $6,068,236), as disclosed in Note 14 to the
financial statements.
The financial assets at fair value through profit and
loss is a key audit matter due to:
•
The significance of the total balance;
•
The complexities involved in determining the
accounting treatment under Australian
Accounting Standards; and
•
The determination of the fair value of the
convertible notes and shares involves
significant judgement on the valuation
methodology and the inputs and assumptions
applied by management.
We challenged management in respect of the
appropriateness of the carrying value of the
investments as financial assets at fair value through
profit and loss.
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 documentation;
•
Reviewing the accounting treatment applied
to the investments with reference to reports
from management’s external experts and
assessing the key judgements applied;
•
Obtaining a copy of the external valuation
report and in conjunction with internal
experts, evaluating the appropriateness of
the valuation methodology applied, including
an assessment of the significant inputs
applied by management in the valuation
models; and
•
Reviewing management’s 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.
3
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2024, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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:
a) the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i) the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error; and
ii) the consolidated entity disclosure statement that is true and correct and is free of 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.
4
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 23 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of CardieX Limited, for the year ended 30 June 2024, 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
Tim Aman
Director
Sydney, 30 September 2024
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
Cardiex Limited
68
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 27 September 2024
Holding Ranges
Holders
Total Units
% Issued Share Capital
above 0 up to and including 1,000
392
204,152
0.07%
above 1,000 up to and including 5,000
660
1,786,430
0.61%
above 5,000 up to and including 10,000
321
2,458,546
0.84%
above 10,000 up to and including 100,000
671
24,086,910
8.19%
above 100,000
269
265,638,530
90.30%
Totals
2,313
294,174,568
100.00%
There is a total of 294,174,568 fully paid ordinary shares on issue, all of which are listed on the ASX.
Voting Rights
At shareholder 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.
Unmarketable parcels
There were 1,261 shareholders holding less than a marketable parcel totaling 3,370,200 shares as at 27 September 2024, which
is less than a marketable parcel of shares in Cardiex at $0.059 per share. Under the ASX Listing Rules, any shareholding values
at less than $500 is considered to be un unmarketable parcel.
Top 20 Holdings as at 27 September 2024
Holder Name
Balance at
27 September
2024
%
C2 VENTURES PTY LIMITED
59,448,630
20.21%
MR JOHN CHARLES PLUMMER
17,843,316
6.07%
MR DARRYL PATTERSON & MRS MARGARET STEWART PATTERSON
10,267,877
3.49%
CITICORP NOMINEES PTY LIMITED
10,256,094
3.49%
TOWNS CORPORATION PTY LTD
8,650,000
2.94%
MR PAUL COZZI
7,266,821
2.47%
MS KRISTA O'SULLIVAN
7,005,000
2.38%
MR CRAIG COOPER & MRS MARIA COOPER
6,494,438
2.21%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
6,276,858
2.13%
CRAVE CAPITAL PTY LTD
6,250,000
2.12%
UBS NOMINEES PTY LTD
4,874,685
1.66%
DIXSON TRUST PTY LTD
4,229,423
1.44%
MR PAUL JOSEPH COZZI
3,997,000
1.36%
BRAIDWOOD - WHITE PTY LTD
3,517,815
1.20%
MR PAUL ALEXANDER EHRLICH & MRS LAUREN STACEY EHRLICH
3,488,250
1.19%
SR MILJKOVIC SUPER PTY LTD
3,475,332
1.18%
ALIANDA OAKS PTY LTD
3,250,000
1.10%
MR LAWRENCE WING MING HO & MRS YING HO
3,125,000
1.06%
ANGELO SKLAVOS
2,860,000
0.97%
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
Cardiex Limited
69
SCINTILLA STRATEGIC INVESTMENTS LIMITED
2,000,000
0.68%
Total
174,576,539
59.34%
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
59,448,630
20.21%
MR JOHN CHARLES PLUMMER
17,843,316
6.07%
Restricted Securities
The Company has no securities which are Restricted Securities as at 27 September 2024.
Utilisation of Cash for Business objectives
The Company confirm that it has used cash and cash equivalents held at the time of listing in a way consistent with stated
business objectives.
Company Secretary:
Louisa Ho
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